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JPMorgan's Massive Loss; Interview with Rep. Rob Wittman; Sandbox Politics; Secret Negotiations; How Same-Sex Marriage Could Swing the Election

Aired May 10, 2012 - 19:00   ET


ERIN BURNETT, HOST: OUTFRONT, breaking news. JPMorgan Chase, the biggest bank in this country, suffering a massive loss. Moments ago we found out about it. We're going to tell you and the Obama administration throwing the vice president under the bus literally for his comments on gay marriage.

The search intensifies tonight for a man wanted for killing a teenager and her mother, disappearing with two of her daughters. We have an FBI agent leading the manhunt OUTFRONT tonight. Let's go.

"OutFront 1" breaking news tonight. America's biggest bank hosting an emergency call tonight as its stock falls. Why? Well JPMorgan is facing significant losses and says it took more risks than it should have. The losses to this point, the company says, to the tune of $3 billion. Here are some of the things CEO Jamie Dimon just said moments ago on the call.

He said the trades were, quote, "flawed, complex, poorly-reviewed, poorly-executed and poorly-monitored. These were egregious mistakes. They were self-inflicted. Just because we were stupid doesn't mean anyone else was. There were many errors, sloppiness and bad judgment."

Now, this adds to what the company released in a filing today, which is amazing. Quote, "this portfolio has proven to be riskier, more volatile and less effective as an economic hedge than the firm previously believed." The portfolio in question a portfolio of synthetic credit securities, I'll get to that in a moment. But this is bigger than JPMorgan.

"The Wall Street Journal" recently wrote about a secretive unit in JPMorgan that makes massive trades in things like synthetic credit securities and what are these? Well basically trades that bet on which way oil prices will go or interest rates or Greek debt or anything like that, mortgages. Remember that what caused? The star of the JPMorgan trading unit is a guy named Bruno Ixil (ph) "The Wall Street Journal" reports. He's nicknamed the "London whale" because his influence on global markets is so massive.

So if he gets a bet wrong, the whole bank could be at risk. Yes. Post the 2008 financial crisis when American taxpayers poured about $250 billion into our biggest banks to save them from bets on top of bets on top of bets. That's with things like names people can't understand like synthetic credit securities. Those are still alive and thriving. Now, JPMorgan paid its TARP money back.

Its CEO Jamie Dimon is known for being a straight shooter and he's embarrassed tonight. The bottom line from him, quote, "this trading violates the Dimon principle", but Jamie Dimon usually refers to JPMorgan's balance sheet as a fortress so how could this happen? Are America's banks still running wild? John Avlon joins us from "Newsweek", "Daily Beast", former Labor Secretary Robert Reich of U.S. Barkley (ph) and Jim Bianco of Bianco Research. Great to have all of you with us; let me start with you Bob Reich. Are you surprised?

ROBERT REICH, UNIV. OF CALIFORNIA BERKELEY: Erin I am surprised because Jamie Dimon and JPMorgan Chase have made such an issue out of the fact that they say we don't need more bank regulation. They have dragged their feet. They have criticized the fed and others publicly for trying to regulate derivatives. They have said that we don't want to invoke a rule, we don't want -- certainly don't want to resurrect anything close to the Glass-Steagall Act (ph), which used to separate commercial from investment banking. In other words, JPMorgan Chase and its head, Jamie Dimon have said we are purer than pure, we don't need regulation. And then comes this.

BURNETT: Right. And Jim Bianco, this is -- I mean really this took a lot of people by surprise. And you have to have a surprise conference call, an emergency conference call, your stock falls six percent. I mean this is not good.

JIM BIANCO, BIANCO RESEARCH: No, it's not good. And it was somewhat out of the blue in that, yes, we knew that these banks were taking big risks but there wasn't any real big move in the credit markets, in the corporate bond markets where they say that they have the losses. And more disturbing than that is that the positions that they have are so large, they can't get rid of most of it so they're going to sit there exposed. And if the market moves against them, these losses are going to grow. And the best they can tell us is that they have got a lot of smart people working on it and they're trying to figure out what to do with humpty dumpty right now, so none of it -- what he said today is any good.

BURNETT: The best they could say is just trust me, I know I messed up. Just trust me. That's it?

BIANCO: Yes, well that's all we have right now. There's no one else that we can trust. We've got to hope that the market doesn't move against them. If credit deteriorates and if the markets turn south, these losses are going to get a lot bigger in a hurry.

BURNETT: Bob, would the Dodd-Frank legislation that obviously presidential candidate Mitt Romney says that he would get rid of that is still controversial to some, would that have stopped this? Do we even know whether the reform on the table that's still being fought by the banks would have addressed it?

REICH: Erin, the reforms that are being fought by the banks, including notably JPMorgan Chase, would have addressed it, but the reforms as they are emerging are so full of holes, so full of loopholes like Swiss cheese. As a result of what the lawyers and lobbyists for JPMorgan Chase and others have done that the current Volcker Rule, for example, probably would not have stopped this.

I mean this is exactly the kind of behavior that got Wall Street and the rest of the economy in such trouble just five years ago. I mean nobody has learned anything. And for JPMorgan Chase and Jamie Dimon to say, oops, sorry, we made a terrible mistake after what has occurred on Wall Street is really a kind of arrogance, it seems to me. What they ought to be saying right now is now we recognize we need regulation.

BURNETT: Yes, John, is this going to be a wake-up call? Three and a half years after $250 billion went into these banks, Dodd-Frank passed. It's still -- lines are still not filled in. We still don't know what the regulations are. Some of them are probably incredibly worthwhile, some of them not. Is this going to make Washington do anything? Should it?

JOHN AVLON, CNN CONTRIBUTOR: I mean how many more wake-up calls are we going to need to get. This validates the frustration that people feel. The feeling that deep down the recess (ph) of these banks there are still people dancing to that music that got us into trouble in the first place. As Bob Reich just said, the lessons haven't been learned. And so for the folks who are saying they want to resist regulation, well it just hurts their credibility on this front going forward because that music is still being played, credit default swaps are still being moved around, and at great vulnerability because over leveraging and ultimately it's that old problem. That even though this is one of the more responsible banks by reputation it's an old problem of privatizing profits, socializing losses that have people rightfully frustrated.

BURNETT: All right, well thanks very much to all three of you. John Avlon, Robert Reich and of course Jim Bianco from our economic "Strike Team", thanks to all of you. Please let us know what you all think about this on Twitter tonight.

Well next House Republicans they tried to weasel out of those automatic spending cuts but it's all a waste of time.

And the father of a soldier being held by the Taliban says politics are being put before his son's life. Will President Obama negotiate with the Taliban? That is the fundamental question tonight.

And will President Obama's endorsement of gay marriage deal a winning hand to Mitt Romney? That's next.


BURNETT: Our second story OUTFRONT tonight, sandbox politics in Washington. In a vote that was almost entirely along party lines, the House of Representatives passed a Republican bill that cuts $243 billion from the budget. That's over 10 years, so really it's nothing compared to what we're spending, OK, absolutely nothing, but nonetheless, still there was no agreement on it. The cuts are really meant to help offset the mandatory cuts that are coming to defense spending at the end of the year. There's about $500 billion of those coming our way and they're going to happen if Congress cannot agree on 1.2 trillion in overall cuts. That's the magic number from the super committee. Remember they had to cut 1.2 trillion or else. And then they said, well, we can't do it so at the end of next year we'll get 600 from domestic spending and we'll get 600 from defense. Republicans now are trying to find a way to not get those defense cuts.

So today nobody agreed. Democrats supported the Republicans -- said the Republicans bill was just not going anywhere; it was dead on arrival in the Senate. The cuts are to social programs like Medicaid, food stamps, health care. Now, the Congressional Budget Office looked at it, said that about 1.8 million people would be affected by the food stamp program cuts alone and Democrats not going for it.


REP. STENY HOYER (D-MD), MINORITY WHIP: The challenging times we live in force us to make difficult choices about our priorities. The reconciliation bill before us today is an example of choosing the wrong priorities.


BURNETT: All right. So the Democrats, well, look, they don't want the defense cuts either, but they would solve the problem another way. They would raise more money. They would end oil and gas subsidies and they would increase taxes on the wealthy, which of course the Republicans say nope.


REP. PAUL RYAN (R), WISCONSIN: We're leading. The president, no plan to fix this. The Senate, no budget since 2009. And our friends on the other side of the aisle, tax increases, spending increases, no spending cuts.


BURNETT: So here's the problem with this whole situation, which is putting out bills that you know the other side isn't even going to take a look at for even a second puts you in a position where the clock keeps ticking. It keeps ticking and ticking and at the end of the year we're going to hit what everyone, CEOs, economists, entrepreneurs tell me is truly a fiscal clip. The super committee as you know utterly failed at its task of cutting $1.2 trillion.

Well that means that money is going to be cut. Well who's the winner tonight? Who's the one person that really called this out like it is? That would be the defense secretary. Ironically the guy you'd think would be fighting to say, that's right, whatever you need to do to save my $600 billion. No, that's not what he's doing. Here's Leon Panetta today.

(BEGIN VIDEO CLIP) LEON PANETTA, DEFENSE SECRETARY: By taking these funds from the poor, middle class Americans, homeowners and other vulnerable parts of our American constituencies, the guaranteed results will be confrontation, gridlock and a greater likelihood of sequester.


BURNETT: And of course what he's saying there is a greater likelihood of $600 billion coming out of his defense budget. I think that Leon Panetta nailed it. More confrontation and more gridlock doesn't leave U.S. taxpayers in a good place or anyone in the country. OUTFRONT tonight, Congressman Rob Wittman, a member of the Armed Services Committee and voted for the bill today. And Congressman Wittman, I just want to ask you, you know you voted for the super committee you know that they would exist and they had this job of cutting $1.2 trillion.


BURNETT: They failed. So now 600 billion of defense cuts are sitting out there and you're voting against those cuts but you had agreed on them before by voting for the super committee so why are you going back on your original vote.

WITTMAN: Well my original vote was for the super committee to do its job and that is to cut the $1.2 trillion out of spending over the next 10 years and I truly believed that they would stand up and do their duty. Short of that, now it's up to us as Congress to act to make sure that those $500 billion in cuts for our defense don't go into place. We cannot balance this budget on the backs of our men and women in uniform. And again, I go back to believing that the obligation that would have been lived up to by folks on both sides of the aisle on that super committee.

BURNETT: Leon Panetta, though, the guy who really doesn't want you to cut his budget, thinks that what happened today was a bad idea. That doing something that's just going to go straight and cut social programs, you don't get a single Democrat to vote for it, you know it will fail so all that happens is the clock keeps getting closer and closer to his cuts, this isn't the way to go about it.

WITTMAN: Well, I think that it is. It is for the House to make sure we put our ideas out there to begin this discussion about how do we fix this $500 billion in reductions that we know will be catastrophic to our military. We agree with Secretary Panetta on that. The issue today is pretty simple. How do we make sure, too that we look at those other areas of spending now there's 60 percent of other areas of spending and make those areas efficient. We cannot balance the budget just by continuing to go to defense.

You know, defense is 25 percent of spending, yet this proposal and the lack of action by the super committee puts 50 percent of those cuts into defense. What we're looking at is making the other areas of spending more efficient. You know folks that today are eligible for food stamps will still be eligible tomorrow and the day after and the day after. This is looking to make those systems more efficient and to make sure that we rein them in to be manageable.

BURNETT: So you dispute the CBO which said that 1.8 million Americans would lose food stamps as a result of your bill?

WITTMAN: I do. I think that if you look at this, the eligibility standards do not change. What we're looking at is to make sure we pick up efficiencies with the expenditure of those making sure that people that are eligible truly are eligible and making sure that we have the standard necessary to make sure that there's not waste, fraud and abuse in that program.

BURNETT: And asking for things like Social Security number is a whole another conversation, but I wanted to ask you this though because we looked at her your donors were, sir, and Representative Wittman, five of your top six donors are defense contractors, Northrop, Boeing, Lockheed, SAIC and American Maritime Officers. Was your vote today influenced by that?

WITTMAN: No, it wasn't. It was influenced by what's best for this nation. We have a constitutional responsibility to defend this nation. That is absolutely critical. I want to make sure we're doing the right job there. We owe it to our men and women who defend this nation to make sure that we support them. To do anything less is absolutely unconscionable. That's my number one effort is to make sure that that happens.

I represent a district that has a large number of active military personnel and veterans. I want to make sure we're there helping them to defend this nation, making sure we're there supporting them and their families. Today they're doing a fantastically difficult job. Their families are there supporting them. They are in harm's way.

BURNETT: No one --

WITTMAN: We owe it to them to make sure that they have the resources necessary going forward.

BURNETT: Right and I think it's important to emphasize that there are people on both sides of the aisle who want to avoid a lot of these defense cuts. But the frustration as you said a moment ago, you want to begin this discussion. I mean you know sir we began this discussion a long time ago. The super committee failed at doing it. Congress, it's just so frustrating to see each side come up with a bill that they know 100 percent of the people on the other side of the aisle won't vote for. How is that progress? How is that discussion?

WITTMAN: Well we want to make sure that our ideas are out there. We would certainly urge the president and the Senate to put their ideas out there. I think that's part of this process is the back-and-forth and trading of ideas --

BURNETT: But that's -- we keep doing that.


BURNETT: We keep doing that. At the end of the day people say I will not allow a tax cut or I will not allow a cut to social spending. You can't -- nobody moves.

WITTMAN: Well, but we want to make sure that the other side puts ideas out there too. It's very easy to say I don't like your ideas, but let's make sure there's an exchange of those ideas. I haven't heard a plan from the president or from the Senate to say what do we do to counter the lack of action by the super committee. That's --

BURNETT: Well they said they'd raise taxes on the wealthy and some in your own party have said that they were open to revenue increases to some in this country who happen to be the wealthiest paying more money. Would you be?

WITTMAN: Well I want to make sure that we're there helping our job creators. I think especially during this time in our economy that tax increases are not the right way to go. In fact you heard the president say not long ago that he didn't believe that tax increases were the right way to go. I'm concerned to make sure that today we're doing everything we can to help our small businesses, to help them through some very difficult times.

If you go there and you increase taxes at this time in our economy, I think it's going to be counter. If you look at many economists out there, they say taking those dollars out of that stream of dollars that go to the private sector is not where we need to go these days. We need to make sure Washington lives within its means.

BURNETT: OK. All right, well thank you very much, Representative Wittman. Appreciate your taking the time.

And John is here with me. You were upset at the banks a few moments ago, now you can be upset at Congress.

AVLON: Yes. That was a great example of why Congress has a lower approval rating than criminals. I mean look, you know I looked at Representative Wittman's website when he was campaigning and he said his number one priority is reining in out-of-control spending. He said at some point some tough decisions have to be made and I'm ready for this challenge. Well no, he's not. No he's not because taking the tough decisions means taking cuts in defense spending as well as social spending or embracing a grand bargain and we don't know --

BURNETT: A grand bargain which would get -- neither one of them like the sequestration.


BURNETT: That was the whole point, right?

AVLON: That's right.

BURNETT: It's so nasty that you do a deal.

AVLON: How many times do we have to learn that all or nothing is not going to happen in a divided Congress? We're going to have to -- you can close loopholes and lower rates and raise revenue but you're going to have to have entitlement reform and spending cuts and you know what, it's going to have to come out of everything. If you campaign on fiscal (INAUDIBLE) responsibility you have got to be serious about it and not say no, but not in the industry that's represented me or that my donors represent.

BURNETT: All right, thanks very much to John Avlon. We are rooting for a grand bargain here on this show.

Well ahead OUTFRONT Vice President Joe Biden gets thrown under the bus for his comments on gay marriage.

And a father calls for the swap of prisoners in Gitmo. Gitmo prisoners for the return of his son, a soldier right now being held captive by the Taliban.


BURNETT: So today Freddie Mac said mortgage rates hit an all-time low. It's a pretty stunning number. Rates fell by 0.01 percent so not a lot, but they fell to 3.83 percent. I mean that's for a 30-year fixed mortgage. That is stunning. So you could save a lot at those levels, assuming you could refi. If your home is worth $100,000, at these rates you'd save $46 a month and that is a lot, but $16,000 over the life of a mortgage is serious money. But of course here's the problem. The catch is those rates are hard to come by. In a speech today, Fed Chairman Ben Bernanke said that residential mortgage lending has been particularly sluggish.

Tight lending standards and terms remain especially evident. Current standards may be limiting or preventing lending to many creditworthy borrowers, so for new home buyers as you are probably aware banks make it a lot harder to get a mortgage. You need a higher credit score and you need most likely to put down a 20 percent down payment and then of course you have to pay the fees, which brings me to our number tonight, $2,035. That's the average closing cost last year on a $100,000 mortgage.

That's according to the math at It's a very high number and it's only going to go higher because of all the regulation. Talk about wanting to have more regulation but this is a flip side to it. It will make fees go up on mortgages.

Well our second story OUTFRONT tonight, secret negotiations -- secret negotiations under way between the U.S. and the Taliban for a prisoner swap to exchange the only American prisoner of war in Afghanistan in exchange for five Gitmo prisoners. Now the potential deal was not -- was revealed not by the United States government but actually by the parents of the captured American soldier, Bowe Bergdahl who has been held for nearly three years by the Taliban.

Bergdahl's parents haven't heard from him in over a year but they're speaking out now because they say they're frustrated that the talks have stalled and they're upset because they haven't heard from the president. Now Chris Lawrence has been following this story and Chris, has the Pentagon confirmed the swap and the parents' version of the tale? CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Publicly, Erin, no. But our sources are telling us this is part of the deal that was on the table. A lot of reporters have actually known about these negotiations for months, but they weren't reporting it because they didn't want to jeopardize any potential negotiations. Now that the parents themselves have gone public, you're getting sort of a peek behind the curtain at sort of this covert diplomacy.

One official tells us the way the swap might have worked is that the U.S. would not have released, say, all five of these Taliban prisoners from Guantanamo at once but they may release two. And then if the Taliban release Bowe Bergdahl, the captured soldier, then maybe the military would go ahead and work out an arrangement to transfer the other three to a third country like Qatar. Of course now that deal has sort of fallen apart because the negotiations have stalled, but Pentagon officials say they still are paramount in thinking of getting Bowe Bergdahl back home.


GEN. MARTIN DEMPSEY, CHAIRMAN JOINT CHIEFS OF STAFF: If you go to the CENTCOM Command Center where, you know their conference room, there's about a four-by-six foot poster of Bowe Bergdahl sitting in front of the podium to remind them and therefore us every day that he remains missing in action.


LAWRENCE: And the chairman says he's actually hosted the parents of Bowe Bergdahl in his office to give them regular briefings -- Erin.

BURNETT: Thank you very much, Chris. An amazing story. We'll be seeing whether that swap happens.

Up next, where the killer is hiding. Two young girls that he kidnapped, are they still alive? The FBI agent in charge of the multi-state manhunt OUTFRONT next. And a new development in the John Edwards' case.


BURNETT: Welcome back to the second half of OUTFRONT.

We start the second half of the show with stories we care about, where we focus on our own reporting from the front lines.

Number one: America's biggest bank, JPMorgan Chase, forced late today to hold an after-market conference call, an emergency call, to explain why it's facing up to $3 billion in losses due to bad trades. CEO Jamie Dimon described the trades as flawed, complex, poorly reviewed, poorly executed and poorly monitored. The portfolio was theoretically designed to hedge risks.

JPMorgan shares are taking a hit after hours and there is concern about how this could happen at this country's biggest bank after the financial crisis of 2008. Well, the prosecution rested its case today in the John Edwards trial. He's accused of course of using campaign funds to hide an extramarital affair. Prosecutors closed the case by showing records detailing the money spent to hide the existence of his mistress, Rielle Hunter.

Our Joe Johns was there and he says that when prosecutors announced their final witness, close friends and advisers, Edwards was seen turning to his lawyers and saying, "That's their case?" The defense team is expected to ask the judge to dismiss the case, arguing that the government didn't prove it.

The Institute for Science and International Security has new satellite images saying what they say is activity at a suspected Iranian nuclear site. We wanted to show you the photo. So look carefully.

This was taken on March 4th of this year. It shows that Parchin site, we've talked a lot about it. It's a key area of focus for the International Atomic Energy Agency.

And now, we'll show you this one taken a month later on April 9th. You can see there's a big change. It shows streams of water coming out of the building, objects lined up outside. ISIS analysts say the images suggest that Iran might be trying to wash the inside of the building. The group says other images don't show similar activity at the site, so whatever was going on when this was taken is likely not a regular occurrence. There's a crucial about what it means because, of course, in two weeks, we're going to have the next round of talks between Iran and the countries of the West over its program.

Well, it's been 288 days since America lost its top credit rating. What are we doing to get it back?

Well, you head us earlier in the show. Congress is really not helping today, frankly really putting us in a bad spot. But you know what? There was some good news on jobs. So, let's highlight that now. Initial jobless claims fell by 1,000 to 367,000, below that key level of 400,000, which indicates job growth in America.

OUTFRONT 4: the Mississippi manhunt for a suspected killer and kidnapper believed to be on the run with two young girls. The FBI has added Adam Mayes to its 10 most wanted list. There's a $175,000 reward on his head. They're searching the forests of northern Mississippi, which is close to where the bodies of Jo Ann Bain and her oldest daughter were found.

Now, authorities are hoping the 8-year-old daughter and 12-year-old daughter are still alive. The fugitive's wife and wife have both been arrested as accomplices. Mayes was a family friend who disappeared with the mother and dangers from their home in Mississippi about two weeks ago. He told relatives he believed he was the father of the two younger girls.

Daniel McMullen is the FBI special agent in charge of the search joins us from downtown Mississippi tonight.

Thank you very much, sir. Really appreciate your taking the time. Do you think that Mayes and the two girls are still alive?

DANIEL MCMULLEN, FBI SPECIAL AGENT IN CHARGE: Well, certainly that is our hope, that the girls are still alive. We continue our efforts in this area. We've obviously made Mayes one of our FBI's top 10 most wanted. That significantly increased the number of leads that we have to cover. We're covering a significant number of leads in this area.

BURNETT: And do you think that someone is helping him? I mean, what is your sense of where he could be with a manhunt of this scale in progress?

MCMULLEN: Well, we're here because this is the last place that he was seen. He has family and friends here. And there's a very large geographic area that we're searching.

This is a very forested area. There are many cabins and structures and so forth in this area, and we have to clear all of these structures. We have to understand whether or not anyone is there, have they been there, are there people that may have seen something.

So it's quite an undertaking just based on the geography of this area.

BURNETT: I know we were just talking about how at least it appears from our understanding that Mr. Mayes thought he was the father of the two younger children. That he's now with.

I mean, what is the relationship between Mayes and the Bain family? What have you been able to figure out?

MCMULLEN: Well, there was a close relationship. But there are a lot of different stories, so to speak, that have been put out with their relationship, internally with their family and friends and so forth.

But our focus here is really about where these girls are, and to make sure that they're safe and to recover them. So, the focus here is on locating them.

BURNETT: And $175,000 for an FBI 10 most wanted. Is that one of the highest, you know, bounties, I guess? How does that scale relative to others in this country that are on that list that you're looking for?

MCMULLEN: Well, I can't put it as far as how does this scale, but it does include an amount from the United States Marshal Service, also the Tennessee bureau of investigation and it's my understanding the governor's office in Tennessee.

So there are additional dollars on top of the dollars that are a part of the FBI's most wanted list reward.

BURNETT: We talk about how this has been two weeks since this began. I mean, at what point do you say it's been a certain period of time and just in terms of your historical ratio of finding people, it's unlikely that you'll find them?

MCMULLEN: Well, our number one thing is to make sure that we've left no stone unturned. Again, the geography here is such that there's a lot of work to be done to cover all of the ground. We have specialty teams here from the state of Mississippi. We have law enforcement from all throughout this area that know this territory.

And we're all working collectively. We have over a dozen agencies that are here working this matter. So with the geography, we have an extended timeline to clear these areas. Again, with the number of cabins here, there are hundreds of cabin in the area that we're looking so it's going to take a while --

BURNETT: How many people are looking?

MCMULLEN: I wouldn't give you a number, but we have a significant number of folks, investigators and officers and so forth that are a part of this.

BURNETT: Before we go, Jo Ann Bain, her husband was not harmed, I understand. Do you -- where is he? Is he a part of this?

MCMULLEN: Well, he's certainly being kept apprised of the developments in this investigation. It's obviously a very, very tragic situation.

BURNETT: All right, well thank you very much, sir. Appreciate you taking the time -- Of course leading the FBI manhunt for Mr. Mayes and those two young children.

Well, OUTFRONT next, Vice President Joe Biden thrown under the bus by the Obama administration.

And what is Prince Charles doing?


PRINCE CHARLES: In the west, rain will be lighter and patchier. There'll be maybe a few drier interludes over Dumfries house in Ayrshire. Aha!



MATTHEWS: We're back with tonight's "Outer Circle" where we reach out to our sources around the world.

And we begin in Syria tonight. A double suicide attack in Damascus killed at least 55, injured 370. Two cars packed with more than a ton of explosives targeted a Syrian government intelligence agency building and this is the worst attack that we have known about in Syria since fighting began more than a year ago.

Arwa Damon is in Beirut following the story and I asked her who could be behind the attack.

(BEGIN VIDEO CLIP) ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, Erin, there's been no claim of responsibility just yet, but the al-Nusra front, which is actually a homegrown militant organization calling for violent jihad against the Syrian government, has claimed responsibility for similar attacks that took place in Damascus and Aleppo since this year began.

Of course the underlying concern is that the chaotic situation in Syria is ideal ground for extremist al Qaeda-style groups to thrive and grow. And that is becoming a greater concern the longer this uprising drags on, Erin.


BURNETT: Thanks to Arwa.

And now, we go to Egypt where the country's first televised debate took place between the two leading presidential candidates. It's two weeks before the election and polls show the former Arab League secretary, General Amr Moussa, has a comfortable lead.

Ben Wedeman is in Cairo and I asked him whether this changed Egyptians' point of view.


BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Erin, it was a grueling three-hour debate with only brief breaks. It was the first- ever presidential debate in a land where dictatorship is indeed as old as the pyramids themselves. The two candidates were Amr Moussa, the former secretary general of the Arab League and former Egyptian foreign minister, facing off against Islamist independent, Abdel Moneim Abul Fotouh.

Now, the sparks did not fly, but they talked about everything -- education, housing, law and order, the economy, and in a very uncharacteristic thing for what was once a dictatorship, they also talked about their personal, financial and health records.

The whole thing was mesmerizing for Egyptians. One young man I spoke to saying watching them was like breathing freedom, hearing these two on television speaking their minds-- Erin.


BURNETT: All right. Thanks to Ben Wedeman.

And now to something a little bit lighter in Britain. TV viewers in Scotland were surprised by -- I don't know what he was thinking. A new weatherman during a BBC news broadcast, Prince Charles. He was visiting the BBC studio in Glasgow to celebrate its 60th anniversary and heir to the British said, hey, you know what? I'm going to deliver the weather.

Max Foster is in London. I asked him how Prince Charles' turn as the weatherman was received.


MAX FOSTER, CNN ROYAL CORRESPONDENT: Well, Erin, it is quite an extraordinary piece of footage, isn't it? And it's being played over and over on the TV networks here in the U.K. Essentially what happened was Prince Charles was visiting Glasgow in Scotland and took in some TV studios on the way and was asked whether he wanted to do a weather bulletin and to everyone's surprise, he said yes.

I think he did quite a good job as well, but don't let me be the judge. The rather high-brow newspaper here in the U.K., "The Telegraph" has a television reviewer and he said this of Charles' performance. "Charles was an undoubted hit. Engaging, avuncular, a natural in front of the camera. His cold front melted to produce a warm wave of affection across the U.K.

But you be your own judge, Erin.


BURNETT: Well, yes. You know what, I have to say for all of you out there, check it out because you know what he said? The first thing he said? Who the hell wrote this? I'm sorry, I got people on set here.

Anderson Cooper is up next on "A.C. 360." You know, Anderson, I just -- I enjoyed the Prince Charles bit today.

ANDERSON COOPER, HOST, "A.C. 360": It was quite something. Never thought I would see that actually.


COOPER: Erin, tonight on the program we are covering a lot of stuff. One day after the president's historic comments in support of same-sex marriage, we're taking a closer look at Mitt Romney's own views on the issue and particular statements that he made nearly 20 years ago when he talked about establishing, quote, "full equality for America's gays and lesbians." Question tonight: what did he mean then by full equality and what does he believe now? We're keeping them honest.

Also, more on a story we've covered extensively, the growing push to shut down the adult services section on Critics say it's a haven for child predators and sex traffickers. We'll speak to the attorney for who says shutting it down would only make it harder to track down the bad guys. We're keeping them honest on that as well.

Those stories and tonight's "Ridiculist" all at the top of hour, Erin.

BURNETT: All right. Anderson, see in just a few minutes.

OUTFRONT 5 tonight, Joe Biden apologizes to President Obama for coming out in support of gay marriage over the weekend. Who wrote that?

OK. Our Jessica Yellin reports the two met in the Oval Office yesterday where Biden apologized to the president for putting him in a tough position. The president admitted his V.P. forced his hand on the timing of the announcement.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: He probably got out a little bit over his skis, but out of generosity of spirit.

ROBIN ROBERTS, ABC NEWS: So you're not upset with anybody?

OBAMA: Would I have preferred to have done this in my own way, in my own terms, without, I think, there being a lot of notice to everybody? Sure.


BURNETT: The campaign has reason to be anxious about this issue. Take a look at CNN's electoral map. So, this is how we've done it. Bear me with me here.

The blue states, these are safe for the president. No matter what, it's going to go for him. The red states for Romney. And the yellow states, that's what's going to determine this election.

Of the yellow states that you see there, 12 have banned gay marriage and most of those were done through a ballot initiative, meaning voters directly approved the ban. In fact 10 of the 12 were done that way.

So, let's just say all those states were turned off by the president's support for gay marriage and they still care about it come November and they all went red. Well, as you can see, Mitt Romney would win that election.

John Avlon is here, senior contributing editor for "Newsweek" and Daily Beast"; Michelle Goldberg also with us, and Kevin Madden, adviser to Mitt Romney.

Kevin Madden, do you look at that electoral map and think that the gay marriage issue could hand you 10 states?

KEVIN MADDEN, ROMNEY CAMPAIGN ADVISOR: Well, I think there are a number of voters there that are older in population, a little bit more cultural conservative, particularly in some of those states where there's going to be turnout models that are dependent upon some of those culturally conservative areas in those states, that if their main motivator for voting for president is going to be cultural issues, they will find a candidate in Governor Romney that is aligned with them on those particular issues. And they don't line up with where President Obama is.

But I still think that the main motivator here for voters that are right now un-persuaded and haven't made up their mind is still going to be the economy.

BURNETT: Michelle, I know you also think that that map will not move on gay marriage. What is going to drive voters? MICHELLE GOLDBERG, NEWSWEEK: Well there's two things. First of all, I don't think that anybody who cares that much about opposition to gay marriage, that it would drive their vote was going to vote for Obama anyway. And then the other part of that is in a way it works in Obama's favor that those states already have their anti-gay initiatives, because one reason why these were so effective for George W. Bush in 2004 is that they drove turnout.

BURNETT: They put them on the ballot.

GOLBERG: Right. They put them on the ballot and allowed the churches to become adjuncts of the Republican Party. I remember going to mega churches in Ohio where they were doing the voter registration, and doing kind of get out to vote stuff. They don't have that same kind of -- I certainly think that this is going to galvanize some social conservatives but it won't play the same organizing role that it played in 2004.

BURNETT: It's interesting, John Avlon, though -- when you look at some of these states, the margin of victory was very, very, very small. I mean, a razor thin margin could make a difference.

JOHN ALVON, CNN CONTRIBUTOR: Absolutely. In particular, states like North Carolina and Virginia, the president won narrowly last time. We just saw just early this week, North Carolina overwhelming by 20 point margin approving a ban on gay marriage.

So it does indicate again how this particular profile in courage by the president, which is a risky political move, could have real consequences. And Kevin just acknowledged there are turnout models, that this could turn an advantage to Mitt Romney. But the calculation is, is that by galvanizing his base and taking a statement of principle, the president is going to come in with a big wind in his sails.

But it is a risky political move, there's no doubt about.

BURNETT: Kevin, it's interesting, though, the country's changed on this issue. You know, 10 years ago, as Barney Frank said, we were talking about this yesterday there is no president in the United States that would have indicated it was on the table for men and men being together and women and women being together. But now here we are. Do you have a fear you are on the wrong side of this in the next six months?

MADDEN: Well, I think that's the political calculation comes out, Erin. I think, you know, Governor Romney and the campaign, I think the charge here for the campaign is to go out and talk about what Governor Romney believes. On this issue whether or not we should define marriage between a man and a woman, he happens to line up with those that agree with him on that particular issue.

So, I think that's the most important. Which is that the voters that are -- this is something that is an animating issue for them. They have to ask themselves which candidate lines up with them. On this particular issue, we happen to be with folks that -- you know, it may be a little bit more of a motivator on Election Day.

AVLON: Yes. But quickly, but Romney does not want to talk about social problems.


AVLON: And that's one of the ironies here. They want to be focused on the economy. So, the more time they spent galvanizing on the religious right on this social issue, the more they run the risk of alienating suburban swing voters.

GOLDBERG: But in a way, that tells you how much progress we've made, that this could kind of potentially be a wedge issue for Obama. And the other thing that I think is really important here is that this puts Romney on the defensive, because Romney just doesn't just oppose gay marriage. Romney also opposes civil unions, you know, he said he opposes civil unions --

BURNETT: Different than Jon Huntsman, who got the Log Cabin Republicans --

GOLDBERG: Different than George W. Bush, he said he opposes civil unions if they provide all the same rights as marriage. I mean, to me, the questions that needs to be asked of Romney again and again and again, are: which rights do the couples need to be denied?

BURNETT: And, Kevin, are you going to be able to get specific answers to that, in the belief that you are going to have to answer it?

MADDEN: I think that this is something that liberals and many on the left always try to frame the argument as what you are against.

I think when Governor Romney talks about this issue, he talks about it from the heart, and he talks about what he's for. He believes that marriage is between a man and a woman. That's -- when he's asked the question, he answers it very clearly.

I think that's the interesting thing about this issue. Right now, we have a clear contrast. Both campaigns agree that we have a clear contrast.

Going back to John's point, this is still going to be a campaign that is framed around the big issue of the economy.


MADDEN: I think the voters up there that haven't yet made up their mind whether or not they're going to support Barack Obama or Mitt Romney, the economy and the performance of the economy is going to be the number one issue.

BURNETT: All right. Kevin, I want to get on the record on something else. I'm sure you don't want to talk about. "The Washington Post" report today, for those of you out there who don't know it. "The Washington Post" put out a report saying that when Mitt Romney was a senior at a prep school, boarding school, he was the leader of an assault on a gay student, leading a gang of boys to tackle the student. Mitt Romney was the one apparently who cut his hair with scissors as other kids held him down.

Today, he was asked about it, Kevin, on FOX News radio, and he said I don't -- he said he didn't recall it. And the quote was, "Back in high school, I did dumb things. If anyone was hurt or offended, obviously, I apologize."

MADDEN: Right.

BURNETT: Kevin, you know, we didn't have social media and camera phones and things like that. So, it's going to be impossible to tell that it happened. But is it an ugly story.

MADDEN: Well, look, I've known Governor Romney now for a very long time. I know that he is a very kind and considerate man. And I think -- particularly as a parent, he made sure he teaches those same values to his children and his grandchildren. So, I think that his point today, which was that this is something he doesn't recall, and that while he may have been a prankster in high school, that no way did he ever tried to do anything in a mean-spirited way.

That was a heartfelt point that he made, and he did apologize for anyone that would have been offended.

I think that's what, you know, people take away from this. This is a long time ago. Fifty years is a long time. And I think that this is not going to define him. What defines him is how he acts today.

BURNETT: John, does this story have staying power? These are the kinds of stories that come and go.

AVLON: Look, I mean, this contributes to the narrative -- but look, we've all done dumb things in high school. But not all of us held kids down and cut off their hair. So, I mean, this is a specific allegation and it's ugly. But granted we have all done dumb things growing up and people should be defined on their vision of the future and the content of their present, not the sins of their past always.

BURNETT: All right. Thanks very much to all three of you. Appreciate it.

All right. We just heard Prince William delivering the weather cast for BBC. And, you know, you listen to yourself. And I said he said, who, the you-know-what wrote this. So, you know what? You be the judge of Prince Charles. Next.


BURNETT: So we teased you with this Prince Charles reading the weather thing and couldn't resist. You know, Prince Charles is one of those people you always see but don't often hear. Those royals where you see what's their voice really sound like and you wonder what their personality is really like or if they have one.

Well, I think he sort of put those all questions to rest but, you know, you be the judge. Here's his performance reading the weather.


PRINCE CHARLES: The rain, of course, will be heaviest over the borders and around Edinburgh, where it could lead to difficult conditions on the roads. In the west, rain will be lighter and patchier. There'll be maybe a few drier interludes over Dumfries house in Ayrshire. Aha!

There will be snow for the higher ground of the Highlands and Aberdeenshire. The potential for a few flurries over Balmoral -- who the hell wrote this script? As the afternoon goes on.


BURNETT: I mean, you know, who the hell wrote this script. The guy had courage. I cannot blame him at this time of year for not wanting snow to be falling, Balmoral, right? I mean, isn't that sort of, you know, he wants his spring flowers.

Just sort of nice to see the guy has personality. I really appreciate seeing it. I thought you would enjoy it.

Let us know what you think of course as always on Twitter. And thanks so much for watching. We'll see you again same place, same time tomorrow night.

In the meantime, "ANDERSON COOPER 360" starts right now.