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THE SITUATION ROOM
NTSB: Pilots Miss by 150 Miles; New Film Documents Subway Crash; Health Care Rip-Offs; Education Secretary Blasts Teacher Training; Diversity in the Military
Aired October 22, 2009 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ABBI TATTON, CNN INTERNET REPORTER: These guys actually went through the 105 days and they invited some of them back to do the longer trial. They were like, yes, no, no, thank you.
So they're inviting people to apply again. November 5th is the deadline. But you do have to be European or Canadian to do it. So sorry -- Wolf.
WOLF BLITZER, CNN ANCHOR: No fresh air, no sunshine, no nothing.
TATTON: For a year-and-a-half.
BLITZER: Oh, it's tough business.
All right. Thanks very much for that.
BLITZER: We're watching.
Abbi Tatton reporting.
And to our viewers, you're in THE SITUATION ROOM.
Happening now, U.S. agents take on a brutal Mexican drug gang, making hundreds of arrests all across this country.
As the cartels take hold of America, we're going to take you inside the drug wars in a city just across the border, with one of the highest murder rates in the world. Stand by.
And we also have some dramatic undercover video coming in, as organized crime steals billions from taxpayers by targeting government health care programs. Stand by for this story, as well.
And angry critics are calling it a fat tax -- with his budget on a strict diet, New York's governor, David Paterson, is pushing a tax on sugary soft drinks.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
A brutal Mexican drug gang, whose trademark violence includes beheadings, has dug in across -- guess what -- the United States. Now federal authorities are fighting back with a coast to coast sweep and hundreds of arrests.
Let's go live to CNN's senior Latin American affairs editor, Rafael Romo.
He's joining us at the CNN Center.
This is an ugly story, but what do we know -- Rafael?
RAFAEL ROMO, CNN SENIOR LATIN AMERICAN AFFAIRS EDITOR: It can be called massive, Wolf. In fact, Attorney General Eric Holder says it's the largest operation ever against the Mexican drug cartels. In the last two days alone, there were more than 300 arrests in 19 states and federal agents confiscated large amounts of drugs, weapons and cash.
ROMO (voice-over): Raids like this one in suburban Atlanta mirror what happened throughout the US. In a massive anti-drug operation, federal agents targeted a Mexican drug cartel known as La Familia.
ERIC HOLDER, ATTORNEY GENERAL: This unprecedented, coordinated United States law enforcement action is the largest ever undertaken against a Mexican drug cartel.
ROMO: The attorney general says that as part of this three-and- a-half year long operation against the Mexican drug cartel, federal agents arrested 1,200 suspects and confiscated 11.7 tons of narcotics, as well as almost $33 million.
HOLDER: While this cartel may operate from Mexico, the toxic reach of its operations extends to nearly every state within our own country.
ROMO: The news about the operation came one day after authorities in the Mexican border town of Ciudad Juarez acknowledged the death toll there has reached 2,000. The city that borders El Paso, Texas is considered one of the hot spots for Mexico's war against drugs and a contested territory for several drug cartels that rival La Familia in scope and power.
As the Mexican government tightens its grip on cartels, arresting their leaders and disrupting their operations, the criminal organizations have reacted by killing more police officers and soldiers than ever and increasing their level of violence and cruelty throughout Mexico.
ROMO: On the other side of the border, the Mexican Army captured yesterday yet another leader of a drug cartel. He is identified as Carlos Adrian Martinez Muniz, the number two boss of a Mexican criminal organization known as Los Zetas -- Wolf, back to you.
BLITZER: Rafael, President Calderon of Mexico, he certainly declared a war on drugs in Mexico. But so far, it's come at a pretty severe price in terms of lives lost.
ROMO: That's right, Wolf. So far this year, 5,600 people have died in this war. But if you ask the Mexican government what's up with that number, they will tell you that most of the people who have died are drug trafficant -- traffickers themselves and, also, police and the Mexican Army fighting them.
Let's remember that in Mexico, the army is allowed to fight drug cartels.
BLITZER: Rafael Romo is our senior Latin America affairs editor, based at the CNN Center in Atlanta.
Rafael, thanks very much.
And we'll have you, certainly, back here in THE SITUATION ROOM.
As the Mexican cartels extend their reach in this country, how ominous is that bloody reign of terror just south of the border in Juarez, with 2,000 deaths this year alone in Juarez?
In an extraordinary report, CNN's Karl Penhaul takes us inside that long-running drug war.
KARL PENHAUL, CNN CORRESPONDENT: (voice-over): The police radio crackles. Shots are being fired downtown. A city cop asks these transvestite prostitutes if they heard. Six shots, they say, a few blocks away.
It's midnight in Juarez. It's Mexico's most dangerous city. The gunmen seem to have faded away, so the patrol heads up into gang land -- the hillside slums that ring Juarez.
"We're arresting gang members before they get together, because then there'll be killings," he says.
Police say there are a thousand gangs in the city. They go by names like The Skulls, The Sharks, The Aztecs and The Artist Assassins. They peddle cocaine, crack and heroin and fight gun battles for turf. The gangs, too, have become a recruiting ground for narcotraffickers looking to hire hit men.
"Organized crime recruits from these gangs. There's evidence they come and choose the most dangerous members," the captain says.
Captain Tanedo (ph) and his men on the anti-gang patrol know the labyrinth of alleyways by heart. They pull suspected gang members out of vehicles, even sniffing their fingers to see if they've been using drugs.
"A lot of them don't have any I.D. and they look like gang bangers," he says.
For the last year, Juarez's best-selling newspaper has been filled with gory photos of drug war hits as the Sinaloa Cartel battles for the Juarez mob's trafficking routes. Bodies hanging from a bridge; other victims stuffed into cooking part of this; another murdered and his face covered with a pig mask. Police say many of the victims have been young gang members recruited as cartel foot soldiers.
We head back into our Juarez neighborhood, this time without the police, to try and discover why young men have been lured by the drug mobs. This small gang calls itself Below 13. None of its members seem to know why. The few who say they work earn less than $50 a week in assembly plants. The cartel war now raging offers a chance of quick money.
"Some of the gang members here have joined organized crime groups and some are in prison because they were busted for selling drugs," this young man tells me. He knows working for the cartels can mean a short life expectancy.
"Of course, it's easy money because you can earn serious cash. But it's dangerous, too. Like they say, it's easy money until they kill you," he says.
Sixteen hundred people died in drug cartel killings last year in Juarez. But in this neighborhood, there's little sense the war will end.
"Thank God we're alive. We're going to show all the hit men that Juarez is number one," he boasts.
Fighting talk that bodes of more untimely deaths.
Karl Penhaul, CNN, Juarez, Mexico.
BLITZER: Around the world right now, the United States is helping deliver ballots and voting kits across Afghanistan, as that nation rushes to get ready for the November 7th presidential runoff election. It will pit incumbent president, Hamid Karzai, against the former foreign minister, Abdullah Abdullah. President Karzai bowed to U.S. pressure and accepted a runoff this week, after falling short of the 50 percent threshold needed for a victory in the August vote. But he's downplaying accusations of widespread fraud in that first round and he says he agreed to the runoff to ensure peace and stability.
President Karzai spoke with CNN's Fareed Zakaria.
(BEGIN VIDEO CLIP FROM "FAREED ZAKARIA GPS")
FAREED ZAKARIA, HOST, "FAREED ZAKARIA GPS": And you know there are many people who worry that there will be a lot of fraud in this runoff election.
Is there anything you can do?
Is there anything you can say that would -- that would assure people that this will -- this election will be free of fraud?
PRES. HAMID KARZAI, AFGHANISTAN: Well, the last election wasn't as bad as it was claimed. It was a lot better. This election we should try to have better. Afghanistan is a poor country, in the Western terminology, a Third World country.
It has gone through years of war. The institutions are just young -- toddlers. And this democracy that resembles a toddler, it walks and -- and -- and falls.
We have to understand that and we have to accept the Afghan result -- elections in the context of the Afghan situation and the -- the poverty and the lack of -- of means in this country.
Whatever happens, this election must present a clear result and that result must be respected. But, of course, the international community and us, the Afghans, must do everything that we can to make it better, to make it much more legitimate and to make it worthwhile of the effort of the Afghan people.
(END VIDEO CLIP)
BLITZER: And within the past hour, we've received word of a strong earthquake in Afghanistan, about 100 miles or so outside of Kabul -- a 6.2 magnitude earthquake. That's certainly going to further complicate this effort to get these runoff elections underway on November 7th. We're watching that story.
Please make sure to see the entire interview with President Karzai on "FAREED ZAKARIA GPS." That airs this Sunday at 1:00 p.m. and 5:00 p.m. Eastern, only here on CNN.
Here's a question -- shouldn't hard work be rewarded?
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is America. We don't disparage wealth. We don't begrudge anybody for doing well. We believe in success.
(END VIDEO CLIP)
BLITZER: So why is the Obama administration ordering bailout companies to slash the salaries of their top earning executives?
What's going on?
We'll ask the so-called pay czar, Ken Feinberg.
He's in THE SITUATION ROOM.
And an airliner overshoots an airport -- guess what -- by 150 miles. Not feet, not yards, 150 miles. Federal authorities are investigating whether the pilots may have fallen asleep.
And it was a catastrophic rail crash -- the deadliest ever for Washington, D.C.'s subway system. A new documentary takes all of us inside the disaster.
BLITZER: The federal government today flexed its muscles against Wall Street's pay practices, forcing the biggest bailed out companies to slash salaries of their top executives.
President Obama led the charge.
(BEGIN VIDEO CLIP)
OBAMA: I've always believed that our system of free enterprise works best when it rewards hard work. This is America. We don't disparage wealth. We don't begrudge anybody for doing well. We believe in success. But it does offend our values when executives of big financial firms -- firms that are struggling -- pay themselves huge bonuses, even as they continue to rely on taxpayer assistance to stay afloat.
(END VIDEO CLIP)
BLITZER: The administration's so-called pay czar, Ken Feinberg, says the measures are not meant to be punitive or political, adding that the goal is simply to get the taxpayers' money back. One measure -- compensating executives with stock that they must wait to sell at least a few years.
Our national political correspondent, Jessica Yellin, is here, just back from the Department of Treasury, where you had a chance, Jessica, to sit down with Ken Feinberg.
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: I did, Wolf. And the so-called pay czar, Kenneth Feinberg, says that public outrage did not factor into his decision. He says he found the salaries at these bailed out companies, as he put it, "inconsistent with the public interest."
And something else we learned today -- of the seven bailed out companies, the only one where a few executives were allowed to keep their old cash contract was insurance giant AIG -- the very company whose pay practices sparked the outrage to begin with.
YELLIN: Tell us first, we've just learned that three AIG executives are getting exemptions. This is the company that got the biggest bailout. They didn't comply with your requests to roll over their contracts.
Are you rewarding them?
KENNETH FEINBERG, OBAMA ADMINISTRATION "PAY CZAR": No. And that's the wrong word to use, exemption. What these three AIG officials are entitled to is a prior valid contract, entered into long before the law was passed or I arrived. And the fact of the matter is that I met with the AIG officials and there's clearly an understanding that these contracts are valid.
However, since those contracts are valid, I did take those dollars into account in setting compensation for 2009 and going forward into 2010.
YELLIN: Well, let's talk about your role. Some of these companies, when they accepted the bailout, did not know that their salaries -- their executive salaries would be capped.
Is it un-American for the government to tell companies what they can pay employees?
FEINBERG: It's not a good idea for -- for the United States government to start micro-managing compensation practices at American businesses. But that's not this case. These are, under the statutes, seven specific companies that are, in effect, owned by the taxpayers of the United States. And that's a much different situation.
I do not believe that it is wise nor prudent to expand this program to corporate America generally or anything like that. But I'm interpreting a statute, which is limited, very limited, to these seven companies.
YELLIN: And yet speaking to reporters earlier, you said you hoped Wall Street could learn something from what you're doing here.
How would you like to see Wall Street's pay practices change to avoid another financial collapse?
FEINBERG: I would hope, voluntarily, that corporate America would take a look at the structure that we have developed here, involving less cash for salaries, more long-term stock tied to company performance and the repayment to the taxpayer of the money that is owed.
YELLIN: What would you say to critics who say these companies are going to lose talent, people will go to where they can get paid more?
FEINBERG: I think we have struck the right balance between retaining key officials and dealing with legitimate public concern about arbitrary compensation practices.
YELLIN: Thank you for your time.
FEINBERG: Thank you.
YELLIN: Now, Feinberg explained that the new payrolls apply only to the remainder of 2009. 2010 salaries have yet to be decided. And here's a reminder, Wolf, his job was created by Congress. He said the White House had nothing to do with his decision-making, the president cannot even veto his plan.
BLITZER: Yes. YELLIN: It's up to Feinberg.
BLITZER: This is the second high profile job he's had. Remember, after 9/11, he was in charge of distributing the funds to the families of the 9/11 victims, which was a tough job. He really -- I think you could see it in that little interview you had -- he really gets into these projects.
YELLIN: A huge responsibility and he takes it fully on board. He seems very authoritative. It's his decision.
BLITZER: Ken Feinberg and Jessica Yellin.
Thanks very much for that.
CNN's Allan Chernoff investigates criminal gangs stealing billions of dollars from Medicare and Medicaid.
(BEGIN VIDEO CLIP)
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: The Khacheryan gang filed Medicare claims for patients receiving treatment at an office here in downtown Los Angeles. But there's no doctor's office here, only a mail drop. The prosecutors say the crime ring received hundreds of thousands of dollars of Medicare reimbursement checks.
(END VIDEO CLIP)
BLITZER: It's an extraordinary report you don't want to miss. You're going to see it coming up right here in THE SITUATION ROOM.
Also, a television anchor upstaged by a bird.
BLITZER: The U.S. Senate has just passed hate crimes legislation that defines attacks against gays as a hate crime. The measure passes 68 in favor, 29 opposed. The House of Representatives already passed it. It now goes to the president of the United States. President Obama will sign it into law in the coming days.
Jessica -- excuse me, Dana Bash, our senior Congressional correspondent, reported on this in the last hour. She'll have much more coming up on this in our next hour.
But significant legislation, historic legislation -- a federal hate crimes bill that includes attacks on gays now about to become the law of the land, 6829 in the Senate.
Some other important news incoming into THE SITUATION ROOM right now.
Let's check in with Fredricka Whitfield.
She's monitoring those stories.
What else is going on -- Fred?
FREDRICKA WHITFIELD, CNN ANCHOR: Hello again, Wolf.
Well, the Pakistani government continues to truck in food rations and household items, as tens of thousands flee their homes because of fighting in South Waziristan. As many as 100,000 have left the region since the government began a major offensive six days ago. Some refugees say the insurgents are remaining in the Taliban stronghold along the Afghan border despite reports of bombings from army jets and helicopters.
And the president of Somalia was boarding a plane today when insurgents actually began firing mortars at the Mogadishu airport. The president was unhurt. Return fire killed at least 24 and injured 60. Violence is common in Somalia, as insurgents try to overthrow the U.N.-backed government and remove 5,000 African Union peacekeepers.
And Grammy-winning rapper Lil Wayne sings about romancing a female police officer in one of his songs, but he actually may soon have a date with a jail. Lil Wayne has pleaded guilty to attempted weapon possession after a gun was found on his tour bus two years ago. The New York D.A.'s office says the judge agreed to a one year prison term. Formal sentencing is in February.
And here's something that you don't see every day. A newscaster -- right there -- in Australia reads a story about a murder when a giant seagull demanded some air time right there. The strutting seagull was magnified by cameras focused on the Melbourne city skyline. Apparently, as you see there, video camera operators kind of hid behind the cameras, not even letting the anchor know what was going on because they were laughing so hard, they knew that they would be distracting him.
I can't imagine, Wolf, you ever being upstaged by the likes of anything like that.
BLITZER: Fred, as you and I both know, but for the grace of God. That could clearly happen to all of us, as well. Stuff happens, especially in live TV.
WHITFIELD: It could.
BLITZER: All right, Fred. Thanks.
WHITFIELD: you've just got to have a sense of humor about it.
BLITZER: Absolutely. And we do, fortunately.
Were the pilots distracted or were they sleeping -- federal authorities are investigating how an airliner could overshoot the airport by -- get this -- 150 miles.
And it was the deadliest ever crash for Washington, D.C.'s subway system. Now you can get an extraordinary inside look at the disaster and the rescue effort.
Plus, organized crime stealing billions from taxpayers by targeting Medicare and Medicaid -- we have the undercover video.
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now, is President Obama afraid to make a decision on Afghanistan?
That's the accusation being leveled by former vice president, Dick Cheney. The best political team on television standing by to weigh in.
The recession is still battering the average American, but an administration economist says don't expect any more help from the stimulus.
Candy Crowley on how the economy has people running scared.
I'm Wolf Blitzer.
You're in THE SITUATION ROOM.
It's the kind of little error that anyone could make. Anyone but the pilots of a commercial airliner. The National Transportation Safety Board today reported that a Northwest Airlines jet with 147 passengers on board flew 150 miles past the airport where they were supposed to land. The NTSB is investigating whether the pilots were having a, quote, heated discussion or, possibly, were even sleeping. Everyone landed safely, but how could this happen? Let's get some answers from CNN's Chad Myers. He's working this story for us.
This is pretty alarming, Chad.
CHAD MYERS, CNN METEROLOGIST: It alarmed me when I was finding out all these things about this story. What should have taken about three hours was a four-hour flight as the pilots flew right over Minneapolis. The flight scheduled to take off actually right about now. It took off 30 minutes late at 5:01 p.m. central time. I'm going to go with central time the whole time because that's where it landed, in the central time zone. The last contact was with the tower in Denver at 6:56. An hour and a half later this plane was supposed to start to descend. It never did. It never took the power off. It kept flying. Flew over Minneapolis and kept right ongoing. Now, it flew 150 miles too far. And at 450 miles per hour, that's not very long. But for 30 minutes this thing should have been on its way down. It kept going in a straight line. Because that's where the last weight point was. It's going to keep right ongoing until the pilots tell it to do something else, still on autopilot, obviously. At 8:14, which is plane should have been on the ground already; the pilots realized they were too far. They turned the plane around and landed here in Minneapolis.
This was a crazy little flight. And I think the NTSB will have a lot to say about this. They have the voice recorder and they also have the flight data recorder. They have taken those out of the plane. They've taken them back to D.C. they will download all the data. And they'll know by tomorrow what actually happened in this cockpit.
BLITZER: They'll be able to hear the conversations that were going on. Is that right?
MYERS: Or lack thereof. Absolutely. This isn't like we have to go find the black box somewhere, bring it, see if it's working. We know everything. We know all the data on this is going to be perfect.
BLITZER: Thank God everyone is OK. But God forbid, who knows what could have happened. Chad, thank you.
When two subway trains crashed in Washington, D.C. on June 22nd it was the deadliest accident in the history of the Washington, D.C. subway system. And now a new documentary takes us inside the disaster and gives us a unique, up-close view of the brave men and women who first rushed to the rescue. CNN's Brian Todd was among the first journalists on the scene that day as well.
I remember you rushed out there. You've seen this film now, Brian. It's got some dramatic stuff there.
BRIAN TODD, CNN CORRESPONDENT: It really does, Wolf. Brings back so many dramatic and graphic images from that day and shows in graphic detail what these teams went through. Some 200 responders from Washington's fire and EMS services swarmed those trains that June evening. Now they're speaking out about what they encountered.
TODD (voice-over): The story broke during rush hour and THE SITUATION ROOM on a serene summer evening.
UNIDENTIFIED FEMALE: Information is trickling in right now Wolf. What we're getting from D.C. Metro is there are massive injuries.
TODD: We soon learned the scope of it. A metro rail train in Washington has slammed into a stopped train in front of it, catapulted in the air and landed on top. Nine people killed. The deadliest accident in the Washington subway's history. Dozens injured. What we've not heard until now are wide ranging accounts from first responders. Fire crews, EMS paramedics who had to navigate through the wreckage and pull people out.
CHIEF LAWRENCE SCHULTZ, ASST. CHIEF-OPERATIONS, D.C. FIRE DEPT.: Probably 150 people wandering around the track bed. I was looking at our members physically picking people up and carrying them out in their hands.
TODD: A new documentary takes you where many news cameras could not, a short film produced by the D.C. fire and emergency management service. Their video teams are right on the tracks. And their responders give graphic accounts.
NICOLE NORRIS, FIREFIGHTER/PARAMEDIC: We saw a lady who had -- her leg was partially amputated. Her arm was partially amputated. And she had a hole in the left side of her chest. She had, like, tissue coming out of her chest.
TODD: The responders indicate that woman survived. Vito Maggiolo is an assignment editor in CNN's Washington bureau. In his spare time, he's a volunteer civilian photographer for the D.C. fire and EMS teams. He's on the credits for this film as the videographer. Maggiolo says he was the only person taking video on the tracks. Tell us what you saw that was really horrific.
VITO MAGGIOLO, DOCUMENTARY VIDEOGRAPHER: Well I saw one of the dead victims being removed. In fact at one point the fire department chaplain saw their wives arrived on the scene and I saw him there. I said, father, come with me. There's somebody who needs you.
TODD: He says that chaplain then delivered the last rites to the victim who did die. He said the film was a commemoration but also commissioned as a training tool. There's a lot to learn from this group. One of the team leaders commented when the responders arrived on the scene they did not know whether the 750 volt rails on the tracks were still live. But they plowed ahead anyway. They later made sure the power was shout down. In the first moments it was very tense.
BLITZER: What's the status of the investigation now?
TODD: The NTSB tells us the investigation is ongoing. They've not yet reached a final conclusion. The agency did say last month a faulty sensor on the track has led to a false signal being sent, telling the oncoming train there was no train stopped ahead of it when, of course, there was. They're now trying to remedy that problem.
BLITZER: Leave it to Vito to get the pictures. That's his real passion.
TODD: He's often there first.
BLITZER: As I know firsthand in the 20 years we've worked together. Congratulations to Vito for getting those amazing images. Thanks Brian.
BLITZER: Appreciate it.
Organized gangs are stealing your money. Yes, your tax money is being ripped off by criminals defrauding government-run health care. CNN's Allan Chernoff has an exclusive investigation.
Will being overweight cost you money? The story of the so-called fat tax that could -- could be in your future.
BLITZER: While politicians wrangle over the cost of health care reform on Capitol Hill, organized crime is stealing billions, yes, billions of dollars from both Medicare and Medicaid right now. Our senior correspondent, Allan Chernoff, has been investigating these crimes. He's joining us from New York with an exclusive report.
It really is amazing, when I heard about this. Tell our viewers.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Medicare and Medicaid fall victim to tens of billions of dollars of fraud every single year. And organized crime is grabbing a cut of the action. It's safer than running drug, prostitution or gambling rings. And it can be more profitable.
CHERNOFF (voice-over): Federal agents in Los Angeles last week arresting two Nigerian members of an organized crime ring. They're charged with defrauding Medicare of $6 million. It's the latest strike in a growing battle against organized crime's newest scheme. Ripping off taxpayer funded Medicare and Medicaid programs.
GLENN FERRY, SPEC. AGENT IN CHARGE, HHS OIG: They are definitely well organized, well schooled in how to commit Medicare fraud. He was sort of the heavy hand.
CHERNOFF: Organized crime groups of multiple ethnicities and nationalities are muscling in on the action in health care fraud hot spots like Los Angeles. A former Soviet Army colonel. He pled guilty to stealing $20 million from Medicare. Boss of a crime gang. Stealing doctor identities in a $2 million scam. A gang filed Medicare claims for patients receiving treatment at an office here in downtown Los Angeles. But there's no doctor's office here, only a mail drop. Prosecutors say the crime ring received hundred of thousands of dollars of Medicare reimbursement checks.
FERRY: Medicare was -- had no idea that a lot of this was going on because they assumed a legitimate doctor was providing services.
CHERNOFF: In this undercover sting, he was out giving instructions on how to set up bogus medical clinics that bill Medicare using stolen doctor ids.
UNIDENTIFIED MALE: The doctors that do know, they can claim --
CHERNOFF: Dr. Gianfranco Burdi had his identity stolen when he was recruited to join what appeared to be a new medical practice here. After the managers failed to show a business license, the doctor pulled out. Two years later the FBI came calling.
DR. GIANFRANCO BURDI, PSYCHIATRIST: I was actually pretty, pretty frightened.
CHERNOFF: The FBI questioned the doctor, a psychiatrist, whether he had prescribed electric wheelchairs for Medicare patients. $800,000 worth.
BURDI: I said, no. I'm a psychiatrist. Why would I prescribe an electric wheelchair?
CHERNOFF: To file fraudulent claims, criminals need beneficiary id numbers. They're easy to collect along L.A.'s skid row. Residents tell CNN they've accepted cash from recruiters known as cappers to go to bogus medical clinics. There they share what they call their red, white and blue. Their Medicare card that has a beneficiary number for billing the government. And that happens all the time around here?
UNIDENTIFIED MALE: Yes. All the time.
UNIDENTIFIED MALE: Yes?
UNIDENTIFIED MALE: Every day.
CHERNOFF: Jimmy Rogers says he went three times a week to a clinic, receiving $100 a visit.
JIMMY ROGERS, MEDICARE BENEFICIARY: There were no doctors. They were just -- somebody had their hand out. Ripped the system off.
CHERNOFF: Ripoffs that cost taxpayers billions of dollars. And because government health programs operate on the honor system, it's easy for organized crime rings to cash in at the taxpayers' expense. The two Nigerians this week pled not guilty to defrauding Medicare. They're being held without bail in a federal detention center.
BLITZER: Do we have a good sense of how much fraud is actually out there?
CHERNOFF: The best estimate is that every year there is ripoffs of about $70 billion. Not only Medicare and Medicaid, but also private insurance. Now, how much of that is organized crime? Nobody really knows. But the health and human services department, the office of inspector general, they expect to recover about $4 billion this year alone from uncovering fraud.
BLITZER: Solid reporting from Allan Chernoff. Thanks very much for doing this report. We'll stay on top of it.
Training the next generation of teachers. Why the secretary of education is delivering low grades and a tough lecture to colleges.
And should the military look more like the United States of America? We're taking you to West Point Army leaders is still mostly white, mostly men.
BLITZER: If there's one central theme to President Obama's vision for long-term economic recovery, it's educating young people for the jobs of the future. But to have well educated students, you also have to have well educated teachers. And today the secretary of education Arnie Duncan said colleges are failing that assignment, failing. Let's go to CNN's Kate Bolduan. She's been digging into this story.
Kate, what's going on here?
KATE BOLDUAN, CNN CORRESPONDENT: Hey there, Wolf. The secretary of education has told parents since day one, teacher accountability is a top priority. He suggested linking student achievement to teacher evaluations. And today he took on the programs that train those teachers.
BOLDUAN: The country's education chief delivering a harsh lecture to not students, but the colleges preparing the nation's teachers.
ARNE DUNCAN, EDUCATION SECRETARY: By almost any standard, many if not most of the nation's 1,450 schools, colleges and department of education are doing a mediocre job of preparing teachers for the realities of the 21st century classroom.
BOLDUAN: Secretary Arne Duncan described the programs that train more than half the nation's teachers as cash cows. Most of which, he says, aren't delivering first-rate instructors.
DUNCAN: Teaching has never been more difficult. It has never been more important. And the desperate need for more student success has never been more urgent. Are we adequately preparing future teachers to win in this critical battle?
BOLDUAN: In Washington American university's dean of teaches says, yes, they are.
SARAH IRVINE BELSON, DEAN, AMERICAN UNIV. SCHOOL OF EDUCATION: When we throw everybody into one big bucket, this is what schools of education do, it's as much as saying here's what every engineering program is like. But if you look closely at this teacher ed programs and what they're doing, then you can actually find that there are actually great pockets of excellence.
BOLDUAN: At the same time Dean Sarah Bell John agrees with one change Duncan is going for. More firsthand training.
SARAH BELL JOHN, DEAN: We try to spend as much time as we possibly can with these teachers in real classrooms and getting real education experience with.
BOLDUAN: You think that's a key hands on?
BOLDUAN: And senior Jenna Ward says she knows she's about to take on a tough job.
JENNA WARD, AMERICAN UNIVERSITY STUDENT: It's a challenge to be able to teach to the whole class, but also be able to teach to every student within that class. But I think I'm definitely ready to do it. (END VIDEOTAPE)
BOLDUAN: Secretary Duncan also talked about the need for hard numbers. Test scores. Grades. Attendance. Just to name a few. To better track student progress and train teachers how to use it to improve instruction -- Wolf?
BLITZER: Kate, why now? Why is this so critical now? The timing of all of this?
BOLDUAN: Besides that it's always critical to have good teachers to teach children, Duncan reminds us of the exodus of teachers due to the baby boomers retiring.
BLITZER: Yes. We need a lot of good teachers, new teachers coming up. All right. Thanks very much, Kate Bolduan.
Will the U.S. military's future commanding officers reflect the diversity of America? Our pentagon correspondent Barbara Starr has been taking a closer look into this question. And what are you finding out?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well Wolf, we wanted to go up to West Point to look at the struggle of this elite military academy to become more diverse.
STARR: The U.S. military academy at West Point, these cadets are the Army's next generation of leaders. And after more than 200 years, still overwhelmingly white and male.
UNIDENTIFIED FEMALE: Go ahead and take your seats.
STARR: Across the military the push is on to diversify the force to look more like America. We asked to speak to minority cadets preparing to become officers in an Army that is still over 70% Caucasian, the ratio was much the same in the other military services. The academy provided us with three cadets. Chave Williams was born in Trinidad and raised in Brooklyn.
You have to look at the numbers and there's no way around it's guys and white guys.
She says she won't be someone else's idea of a stereotype in her classes.
CHAVE WILLIAMS, WEST POINT CADET : Just like that you turn and sometimes they expect you to be the voice of women, of, you know, African-Americans and I would say to someone coming here is just remember that you don't have to be that voice.
STARR: Andrew Branch grew up in a small Mississippi town. He recalls over hearing a mother telling her young son that he would never reach his dream of becoming an astronaut.
ANDREW BRANCH, WEST POINT CADET: That crushed me, I have never been so hurt before in my life.
BO HILLAND, WEST POINT CADET: I think it has to do obviously with our upbringing.
STARR: Bo Hilland says he hasn't thought a lot about being a Hispanic at west point, but his family has.
HILLAND: In a Hispanic family, it's huge, predominantly what I was taught when I was younger, you work as hard as you can.
STARR: In the last four years, the number of Latinos admitted here has grown 25%. West Point officials say that's for two reasons, the growth of the Latino population in this country and family emphasis on education. The military says it doesn't make academic concessions at its schools just to ensure diversity, but Bruce Fleming, a tenured navy academy professor disagrees. He says the quality of the officer core is weakened by lowering the standards for the sake of diversity.
PROF. BRUCE FLEMING, U.S. NAVAL ACADEMY: Because I taught the remedial in the English department in the last several years, I know that minorities and recruited athletes are widely overrepresented. They are overfilling our remedial courses and now we'll do anything to graduate them.
STARR: Lieutenant General Willie Williams a member of a pentagon diversity commission says diversity can make the military stronger, but the military rejects the notion of quotas.
LT. GEN. WILLIE WILLIAMS, U.S. MARINE CORPS: I don't necessarily look at the body counts, if you will. That is not something that we in leadership look at. What we look for is how we can be the most productive within the construct of our military.
STARR: So in the end, officially, it's not a numbers game, the goal is to make the officer corps representative of America, but, Wolf, there's just one problem, the young cadets that we spoke to, like so many others say right now they're not planning to make the military their full-time career. They're very concerned about having to go to war.
(CLARIFICATION: While several military officers have told CNN that concern about the war is a reason often cited for junior officers choosing not to make the military a long term career, it is not the reason why the three cadets in this story say they are not planning to stay in the military.)
BLITZER: As they should be, that's a life and death decision, obviously. But the military has been known over all of these years for great diversification, going back to the early '50s, the whole desegregation of the military worked out great.
STARR: They're making progress at it and certainly what you find is the enlisted corps is more diverse. But right now consider this, there is one African-American four-star general in the U.S. military, just one.
BLITZER: OK. Thanks very much.
Tonight, Latino in America seen as a ground breaking look on how Latinos are changing America, Latino in America will be simulcast in Spanish on CNN en espaniol.
Former Vice President Dick Cheney is speaking out again. This time he's accusing President Obama of dithering on whether to send more troops to Afghanistan.
BLITZER: Faced with a projected $300 billion budget deficit, New York's Governor David Paterson says he's open to trying to get a tax on sugary sodas into next year's budget. It's a very unpopular idea. But opponents are calling it a fat tax. Let's go to New York. CNN's Mary Snow is working this story.
What's going on, Mary?
MARY SNOW, CNN CORRESPONDENT: Hi Wolf. What better place to talk about this story than one of the more popular places in our office, and a lot of other offices too, a break room with vending machines. Would these vending machines be so popular if you had to pay an extra tax on soda and drinks with sugar in them? It's an idea that's being looked at far beyond New York. It's being welcomed by public health advocates but it's met by fierce resistance.
SNOW (voice-over): All Marion Nestle sees is sugar.
MARION NESTLE, NYU STEINHARDT SCHOOL: I think liquid candy. That's what this is. You might as well just main line sugar.
SNOW: A 20-ounce bottle like this, she says, contains roughly six tablespoons of sugar. With little nutritional value, she calls soda an easy target for taxes. Even though New York bailed to make a tax on sugar this year, she's not surprised it may be revisited next year. She also sees other states jumping on a so-called fat tax.
NESTLE: I think lots of states are thinking about it, because as the economy gets worse and worse, they're increasingly worried about where they're going to get money.
SNOW: Recently an op ed said that Coke didn't make America fat, but that Americans need to exercise, not a tax. But if there's a penny tax on every ounce of sugar drinks it will make a difference. He co-authored a proposal in the New England Journal of Medicine calling for a national tax. Add it up, he says, and it will bring nearly $15 billion in the first year. Money that could be used for anti-obesity program.
KELLY BROWNELL, YALE UNIV. RUDD CENTER: If there's any indication on how this tax will work, it's because the soda industry is lobbying against it.
SNOW: Representatives for the beverage industry say Arkansas and West Virginia have targeted taxes on sugar drinks are also among states with the highest obesity rates and they point out, that the economy is the reason not to raise taxes.
SUSAN NEELY, PRESIDENT, AMERICAN BEVERAGE ASSOCIATION: In these economic times, people don't want to pay one penny more on anything, let alone a penny an ounce, which would be a 12 cent increase on a regular can of soft drink. People don't want to pay that for items that are in all of our refrigerators.
SNOW: But some public health advocates do see states adopting these so-called taxes before there's any kind of movement on a national level -- Wolf.
BLITZER: Mary Snow reporting. Thank you.