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STARTING POINT WITH SOLEDAD O'BRIEN

Interview with Representative Trent Franks; Paterno's Family: Remained Upbeat Until the End; Taking On Iran In An Election Year; Mitt Romney Releases Taxes for Two Years; Analysts Debate Political Consequences of Romney's Tax Record; Football and Concussions; Oscar 2012 Nominations

Aired January 24, 2012 - 08:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. Welcome, everybody. You're watching STARTING POINT.

And we are live from The Diner in Washington, D.C., this morning. Lots to talk about. We're going to get right to it.

This morning -- thank you so much. Could I grab some milk?

Romney's tax release. We know that in 30 minutes or so, he's going to be releasing some numbers. He's already released a little bit. We'll talk about what we know so far.

We know that he's paid more than $21 million in 2010. We do know that he paid lower than a 14 percent tax rate.

So, the question is, is this issue heating up or is it finally dead for the candidate?

Plus, the new Mitt Romney. If you watched the debate last night, you noticed that he was more aggressive and even said, "I'm not going to sit around and just take it anymore." We'll talk about that debate strategy this morning.

Plus, this morning, Joe Paterno, two of his children will join me live to talk about their father's legacy.

STARTING POINT begins right now.

(MUSIC)

O'BRIEN: Good morning. Welcome, everybody.

We're coming to you live from The Diner this morning where I've gotten my fresh cup of coffee. I'm going to get that all set.

Welcome.

We're back with our panel, too. Let's introduce everybody.

From the far, far end over there is Grover Norquist. He is with us.

Nice to talk to you.

Far end right there.

David Frum is back with us as well. Roland Martin is making trouble this morning.

Good morning again.

And also this morning, we are joined by our guest who is Trent Franks, representative from the state of Arizona. He's also a surrogate for Newt Gingrich.

It's nice to have you.

REP. TRENT FRANKS (R), ARIZONA: Nice to meet you.

O'BRIEN: Thank you. Feel free to order coffee in the middle of the show.

FRANKS: Thank you.

O'BRIEN: Let's talk taxes.

FRANKS: Taxes.

O'BRIEN: Your candidate has been pushing and pushing and pushing Mitt Romney to release the taxes. And, finally, this morning, there was a release. We'll have the more full release for the years 2010 and 2011 in about half hour.

As far as you're concerned, is the issue settled for you?

FRANKS: Well, I don't want to counteract -- contradict the candidate. I'm convinced that if there were an issue that could hurt us in the general election, Mr. Romney's taxes, it would be in those tax returns prior to him beginning to run for president because a person running for office, I'm assuming, would pay very close attention to those kinds of things. And perhaps if there were any issues, it would be more focused on those returns prior to him running for election.

But Mr. Gingrich has made his comment and I certainly understand that.

O'BRIEN: Right. Let's get a little bit of crunch of the numbers. Christine has that first.

Go ahead, Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, you know, it's interesting, Soledad, because in 2011, he had a much better year in his investments than 2010. When you compare the two side by side, you can see that 2011, he's estimated to have made maybe $21 million. Compare that with last year, that's quite a bit more.

Taxes though just a little bit more, about $3 million in taxes. He gave almost $3 million to charity. His effective tax rate for this year, they're estimating, about 15.4 percent.

Also in these numbers according to "Reuters", "The Washington Post" and "The Wall Street Journal", who've seen a little sneak preview, we'll get all of them in about 28 minutes ourselves.

But there was a closed account in Switzerland. They closed that in 2010, a Romney advisor telling "Reuters" that they realized that might not look so great. So, they're, quote, "perfectly legal." They say they weren't hiding anything in it. But he just did have a Swiss bank account, or Swiss account. There's also investment vehicles that run through the Cayman Islands and Bermuda. Again, the campaign telling some of those people who got the sneak preview that it was all legal and all fine.

A couple of things we're watching as well. You know, David Cay Johnston, who is a tax expert, was on the show a couple hours ago. And he said that, you know, there are special rich for super rich hedge fund types. You've talked about carried interest with Grover Norquist and the others as well.

But he was able to gift $100 million to a trust fund for his sons tax-free. That will likely get scrutiny today as well as where in the world he's making these millions, Soledad.

O'BRIEN: All right. Christine, thank you for that.

We're back with Congressman Trent Franks.

So, let's talk. If everything is open and on the table, the candidates sort of said, listen, taxes, people got to dig through it because you don't want any kind of October surprise, does that same thing apply for Newt Gingrich and the ethics investigation?

FRANKS: I think it does. If people will go to Newt.org/answers, they will see the entire ethics issue laid out for everyone to see.

O'BRIEN: Funny you mention that because we actually have a slide of that. Let's throw that up. And it says this, "Newt has never engaged in lobbying, period. Newt made a decision after resigning that he would never be a lobbyist so that nobody would ever question the genuine nature of his advice and perspectives."

DAVID FRUM, CNN CONTRIBUTOR: Hilariously he said last night, I took legal advice on how to not be a lobbyist.

Now, when somebody asked that question, where is the bright line, that is not because I don't want to go anywhere near that bright line. That's a question asking you then to walk right up to the bright line and stay away from it.

You know, with Gingrich, one of the things that is, is this is an example of the limits of disclosure, because the things we would like to know about the Newt Gingrich enterprises are not contained in his tax returns. He built, as he said, a whole series of interlocking entities that have received a great deal of money from we don't know exactly who and we don't exactly why, but from companies whom he advocated. And those are the things we are never going to know about.

O'BRIEN: Can you walk us through --

FRANKS: I would just take issue with that. I mean, I asked for counsel and advice all the time from my House counsel and from the ethics committee because I want to stay as far away from those lines as possible. And the complexity of the rules in Congress is just profound.

O'BRIEN: So walk me through the definition then. What's the definition of a lobbyist? What's the definition of someone who's an influence peddler? And what's the definition of a consultant?

Because Newt Gingrich said, I was a well-paid consultant. And my expertise was in how Congress works.

FRANKS: He was also a visionary leader. I can say this to you from personal experience. Many times, we would, as a conference, as a Republican conference, would ask Newt Gingrich to come to speak to us on different issues because we knew that we would find prodigious insight and have the wealth of knowledge that this man seems to just embody. And I will say to you that he has a tremendous influence on policies simply because he knows so much about it and because he has had so much experience. So, sometimes we need that.

O'BRIEN: When you add $1 million plus salary to that influence, isn't that the definition of a lobbyist?

FRANKS: Well, I mean, every -- no. A lobbyist is someone who is paid by someone to go and affect or to persuade people to pass legislation on their behalf that's important to them.

ROLAND MARTIN, CNN CONTRIBUTOR: Congressman, you are a member of Congress.

FRANKS: Yes.

MARTIN: Are you trying to tell me that if Newt Gingrich is being paid by Freddie Mac who is hired by the chief lobbyist, when the former speaker of the House walks into your office and that other house Republican conference, that he does not carry the same sway as a regular public citizen? Last time he said I'm a public citizen. But a public citizen can't come address the House Republican conference?

(CROSSTALK)

FRANKS: Sure, they can. Sure, they can. That's completely false.

FRUM: He's for Freddie Mac.

FRANKS: That's completely false. The public -- we invite public citizens to come and address our conference all the time on retreats, all the things. That's what we did with Newt Gingrich.

I would suggest to you that if he was such an advocate for Fannie Mae and Freddie Mac, I remember when they were voting to bail out Fannie and Freddie Mac, and Newt Gingrich advocated voting against that. I voted against it. He was against bailing them out.

So if he was such an advocate for Fannie Mae and Freddie Mac, why would he vote -- work to stymie them on one of the most important issues that they would ever face?

O'BRIEN: We've got to end our conversation here because we're out of time. Congressman, thank you for joining.

FRANKS: Thank you.

O'BRIEN: We truly appreciate it.

FRANKS: Thank you very much.

O'BRIEN: Still ahead this morning, there are flags across Pennsylvania flying at half staff in honor of Joe Paterno. The winningest coach in Division I college football died, as you know, passed away on Sunday, less than three months after coaching his final game. Paterno's career came to an abrupt end after those child molestation charges came to light.

One of Paterno's former assistants, of course, and two of Joe Paterno's children join us. His daughter is Mary Kay Paterno and his son is Jay Paterno.

Thanks for talking us. We certainly appreciate your time. And our condolences to your family.

Tell us a little bit about Joe Paterno's last day. Was he just in such decline that he couldn't communicate or was he aware of his family around him?

JAY PATERNO, SON OF JOE PATERNO: Go ahead, Mary.

MARY KAY PATERNO HORT, DAUGHTER OF JOE PATERNO: OK.

He was communicating with us. We were all there. All 17 grandchildren came to see him. My mom, some close friends and all of the children and spouses.

And he was communicating with us. We were doing most of the talking, but he would -- he would look at us and we knew he was hearing what we were saying.

O'BRIEN: I know that President H.W. Bush reached out to the family. I know that President Obama reached out to the family.

What did they say? What message did they have?

J. PATERNO: Well, the president called and basically just told us that he and Michelle were thinking about us, offered us their condolences. One of the neat things was he said to my mom that he had great respect for the work that both of my parents did to build Penn State into a great institution. That obviously meant a lot to my mom. And he told my mom how thrilled he was to have gotten the chance to meet both my mom and my dad last February when he came into town.

So it was very meaningful to my mother and very moving. It was awfully nice of the president to call us.

O'BRIEN: Depending on where you stand, there's lots of questions about your dad's legacy. There are those who look at his winningest record and say that is the legacy. There are others who look at the scandal and say that's part of the legacy.

What do you think the complex picture of your father's legacy is going to be, Mary Kay?

HORT: I'm sorry. Did you ask me that question?

PATERNO: Yes.

O'BRIEN: I did. Yes. Did you hear it?

HORT: My father lived -- yes, I can. My father lived a full life. He lived his life -- he was -- what you saw is what you got with my dad.

He was honest. He had integrity. He was committed to doing the right thing, and there was no question in any of our minds or his that he always did the right thing, even if it wasn't easy. I think back on -- I remember one time I had an argument with him I think when I was in high school, and he and my mom had gone shopping. We were on vacation.

They came back from their trip with this little plaque. It had a hippo and a rhino on it. It said it is better to be hated for what one is than loved for what one is not.

And that's been hanging in their kitchen ever since then, which is probably close to 30 years now. That really defines him.

He was what he was and he didn't worry about what other people thought about him. He was most concerned about doing what he believed was right.

PATERNO: I would just add as far as the 409 -- I would just add as far as the 409 wins, wins were probably the least important thing he would look at as part of his legacy. He was always -- even after a big win, he was onto the next thing and the next. He was more interested in winning over young people and took great pride in the fact that the ones that were the toughest to reach, that he helped save, were the ones, you know, the guys that had the toughest road academically, the toughest backgrounds, were the biggest challenge to him.

Those ones that graduated are the ones that gave the most satisfaction, more so than anything he did on the field.

HORT: And I'll add, too, that it's interesting how his legacy and his impact extended well beyond those who he coached. I didn't know him as a coach, I knew him as a father.

And one of the things that's really amazed me with all this amazing outpouring of support for him and my mother has been how many people who also viewed him somewhat as a father.

I just read a note the other night someone had sent talking about how her husband had abandoned her with a son. And the son was having some issues, and a child psychologist said to her, you need to find some positive role models for your son to help him get his life back in order.

And she never met my dad, but she used his values and things that he had said publicly to motivate her son and to keep her son. And so, she wrote this beautiful letter saying you helped me raids my son. You taught me how my -- you taught my son how to be a man when his own father wasn't there.

O'BRIEN: Mary Kay Paterno Hort joining us this morning and Jay Paterno -- thanks to both of you for being with us. We appreciate it.

It's time now to check in with CNN's Christine Romans. She's got a look at some of the other stories that are making news this morning.

Hey, Christine.

ROMANS: Good morning, Soledad.

A massive cleanup underway in Alabama after tornadoes touched down in Jefferson and Tuscaloosa Counties.

CNN now confirms an 83-year-old man and a 16-year-old girl were killed. The twisters destroyed some 200 homes. Alabama's governor has declared a state of emergency.

And breaking news just in to CNN, rescuers say another body has been recovered from the wreckage of the cruise ship that sank off the coast of Italy. That brings the total number of victims to 16.

Seventeen people are still unaccounted for this morning. Salvage workers are now pumping fuel out of that cruise liner.

And you're looking at brand new home video of people evacuating the Costa Concordia after it crashed. Survivors Denise and David Saba filmed it. They were on their honeymoon. They say there were so many people inside the life boat that they thought that they were going to go under there.

The pardoned Mississippi murders will remain free. They ruled yesterday that there will be no change in conditions Haley Barbour granted full pardons to close to 200 people as he closed out his second term as governor.

Federal employees reportedly owe more than $1 billion in unpaid taxes. The "Washington Post" says that includes some 98,000 federal postal and congressional workers, this according to IRS records from 2010. The number of delinquent employees was down slightly from the year before. But the amount owed jumped by 32 million bucks -- a billion in taxes. Wow.

And Aretha Franklin getting off the freeway of love after three weeks. The queen of soul releasing a statement that she's calling off her engagement and planned wedding to her long-time companion Willie Wilkerson.

Soledad, we just reported on this.

O'BRIEN: Did you see him there. He was escorting her in the blue gown. That was Willie right there. What happened? I just did the story.

ROMANS: I know.

O'BRIEN: Wow. Well, I think she was sort of saying like they wanted to take it more slowly. She didn't want to rush into things.

ROMANS: She's fabulous single, she's fabulous engaged. She's just fabulous.

O'BRIEN: Yes, I would agree.

All right. Christine, thank you very much.

What?

MARTIN: (INAUDIBLE)

O'BRIEN: (INAUDIBLE) says Roland.

And the music should be Aretha Franklin.

MARTIN: That's right. The music should be Aretha.

O'BRIEN: Oh, come on, come on.

Ahead this morning on STARTING POINT, the Obama memos. Hundreds of pages of internal White House documents. What do they show us about the president's leadership? We'll take a look.

Plus, bomb Iran to stop its nuclear program or stick with sanctions? "New York Times" columnist Bill Keller will join us to weigh on that.

Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. You're watching STARTING POINT. Iran accusing Europeans of wagging psychological warfare after the EU banned imports of Iranian oil. It's part of some new sanctions aimed at preventing Iran from getting nuclear weapon. Santorum, the candidate, addressed the issue at last night's debate. Here's what Rick Santorum had to say.

(BEGIN VIDEO CLIP)

RICK SANTORUM, (R) PRESIDENTIAL CANDIDATE: It would be reckless not to do something to stop them from getting this nuclear weapon.

(END VIDEO CLIP)

O'BRIEN: "New York Times" columnist, Bill Keller, joins us this morning with a solution, I suppose. You satirized one option, Bill. You say, you even call it operation, yes, we can. Tell me about this option.

BILL KELLER, NEW YORK TIMES COLUMNIST: Well, this is a proposal that was made in foreign affairs magazine by a young analyst who spent a little bit of time in the Pentagon and who's now proposing that now is the best time for the United States to launch a military strike against Iran's far-flung and largely protected nuclear industry.

But that's part of -- you know, I don't think that there is a stampede to go to war with Iran, but there are -- there's a lot of testosterone in the air. Israel is sounding more and more itchy about Iran's nuclear program. And, the electoral rhetoric probably ratchets up this kind of sense that something is impending.

O'BRIEN: Well, in some ways, and I want you to walk through the options for us, because this represents the classic between a rock in a hard place. Sanctions, sanctions, sanctions versus military action which could be -- you even say this, much more devastating the impact of those than the problem originally.

KELLER: Yes. I mean, there are no easy solutions to Iran, and one of the problems with, you know, campaign season when everything gets full of sound bites is that the people talk about easy solutions at one extreme. And among the Republican candidates, probably the closest to this point of view, is Rick Santorum. It's the idea that we should do something preemptive, military and soon.

At the other end, which is represented by Ron Paul and virtually nobody else, there's the idea that, well, let Iran be Iran. We'll mind our own business. They don't represent a threat to us. Everybody else is pretty much in between. And, American policy has been remarkably consistent through Republican and Democratic administrations.

It's been sanctions to try and push Iran to the bargaining table. Various notions of what we might do to sweeten the pot, supply them the fuel they need for non-military nuclear things like medical isotopes. Restraining Israel from doing something preemptively, wishing we had a different regime to deal with in Iran but aware that there's probably not much we can do to make that happen.

Interestingly enough, the policy now is biting harder than it did under the Bush administration, and that it has it anytime as you're seeing from the Iranians reaction, not just the kind of blaster about minding the Strait of Hormuz, but some signs --

O'BRIEN: Well, lets a play a little bit of that, because that was -- forgive me for interrupting you, but since you mentioned it, let's play a little chunk from the debate last night about that very issue, the Strait of Hormuz. Listen.

(BEGIN VIDEO CLIP)

MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: Of course, it's an act of war. It is appropriate and essential for our military, for our navy to maintain open seas.

NEWT GINGRICH, (R) PRESIDENTIAL CANDIDATE: Dictatorships respond to strength. They don't respond to weakness, and I think there's a very grave danger that the Iranians think that, in fact, this president is so weak they could close the Straits of Hormuz and not suffer substantial consequences.

(END VIDEO CLIP)

O'BRIEN: Bill, ultimately is what we're hearing here from the candidates, is this just debate spin because, as you say, the position's actually been fairly consistent over years?

KELLER: Yes. And if you go to Romney's website and read what he practically prescribes doing about Iran, it's virtually identical to what Obama is doing. Gingrich doesn't really have an Iran policy on his website. He's sort of played it shoot from the hip. But, you know, the idea that Iran thinks Obama is weak, they sailed the "Abraham Lincoln" carrier battle group through the Strait of Hormuz.

We just sold $30 billion worth of new military hardware to Saudi Arabia with Iran in mind. They're sending all the right signals. The question is, you know, if Iran expressed, which they have not, some willingness to actually deal on this issue, could an American president in the middle of this kind of re-election campaign take yes for an answer?

O'BRIEN: And the answer to that hypothetical question that you're posing is?

KELLER: Well, I hope so. I mean, I hope that there's an opening from Iran to sit down and start talking about how we stop their program, we will take it, even at the risk that the Republican nominee, whoever it is, will beat up on him for it.

O'BRIEN: Bill Keller is the "New York Times" columnist. Thanks for talking with us this morning. We appreciate it.

Still ahead on STARTING POINT, the Obama memos. Boy, the panelists dig into that, but you got wait for our commercial break, first. That's tantalizing glimpse into President Obama's decision making based on hundreds of pages of these internal White House documents. We'll have the author of that article up next. You're watching STARTING POINT. We're back in just a moment.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. You're watching STARTING POINT. There is a fascinating picture emerging of really the struggle inside the Obama administration, and the source is a mountain of internal White House memos. Ryan Lizza is the staff writer for "The New Yorker" has been reviewing more than 1,000 pages of these documents, and he's here to talk about them. Nice to have you.

RYAN LIZZA, STAFF WRITER, THE NEW YORKER: Thanks for having me.