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STARTING POINT WITH SOLEDAD O'BRIEN

In The Morning Papers; Searching For Isabel; Interview with Sen. Jeff Merkley; Edwards Trial Enters Fourth Week; Fisherman Sues Princess Cruise Lines; Romney Heads To Iowa; "The Good Food Revolution"

Aired May 15, 2012 - 06:59   ET

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


BROOKE BALDWIN, CNN HOST: Hey, good morning, guys. I'm Brooke Baldwin in this morning for Soledad O'Brien.

Coming up here on "Starting Point," we're talking criminal charges here. Rebekah Brooks facing big fallout for her alleged role in that UK phone hacking scandal. We have those breaking details coming in this morning.

Also, heads up here, new calls for stricter rules on Wall Street, all of this, after JPMorgan's $2 billion trading disaster. The bank's CEO facing the shareholders this morning. We're all over that.

Plus, band halt. New fallout this morning for the Florida A&M marching band, really a symbol of this school in Florida after this drum major was hazed to death after a game. We're going to speak to a former band member who stood up to the culture of hazing at that school.

And the president's "view" after publicly supporting same-sex marriage. Did he just put Congress on notice for a fight over it?

It is Tuesday, May 15th, and "Starting Point" begins right now.

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BALDWIN: And our "Starting Point" this morning, breaking news here. Criminal charges for former "News International" CEO, Rebekah Brooks, for her role in that UK phone hacking scandal. She is accused of conspiracy to pervert the courts of justice. In investigation into Rupert Murdoch's media empire, her husband, Charlie Brooks, has also been charged here.

Let's go straight to London live to Dan Rivers with the latest. Dan, good morning.

DAN RIVERS, CNN INTERNATIONAL CORRESPONDENT: Good morning to you. Yes, just to sort of translate this into language that you and the viewers may understand, it basically means that Rebekah Brooks and her husband, Charlie, have been charged with effectively concealing evidence from the police, as they looked into phone hacking at the disgraced tabloid owned by Rupert Murdoch, "The News of the World." That tabloid closed down last summer but the repercussions of the phone hacking scandal continue to ripple through British society, and internationally as well, of course, but this is significant, because it's the first set of charges to be brought since the original scandal broke back in 2006, and the royal reporter, Clive Goodman and another were charged with phone hacking.

Now the CEO of the parent company, news international, and her husband and various other staff members have been charged with perverting the course of justice, concealing evidence from the police, attempting, it is alleged, to effectively cover up what was going on from the police, specifically with removing documents from the archive of "News of the World" and removing computers or disposing of computers and phones and so on that the police may have wanted to look at.

BALDWIN: Dan Rivers for us in London, Dan, thank you.

Lawmakers there about to get their chance to investigate JP Morgan's deepening trading losses potentially even topping that $2 billion number we've been talking about the last 24, 48 hours here. This comes as CEO Jamie Dimon prepares to go before the bank. Shareholders at the company meeting which happens today and among other things we'll be voting on, Dimon's $23 million pay package, $23 million. President Obama actually addressed the $2 billion blunder on ABC's "The View." Take a listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is why we passed Wall Street reform. This is the best managed banks. You can have a bank isn't as strong and profitable making the same bets and we might have had to step in. And that's exactly why Wall Street reform is so important.

(END VIDEO CLIP)

BALDWIN: Speaking of that meeting happening today, let's go straight to Poppy Harlow in Tampa where the shareholder meeting is being held. Poppy, set the scene. I imagine the pressure is high.

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: The pressure is very high. Shareholders haven't arrived yet, kicks off 10:30 a.m., but around me you can see a host of media here, every network you can imagine and that is because this could not have come at a worse time for JP Morgan, the news of the $2 billion potentially plus loss coming late last week the annual shareholder meeting being held.

Three big things when we're inside we expect to hear from shareholders. Who knew what when? Did Jamie Dimon know what was going on since he is at the helm of this bank? Who is responsible for overseeing these losses? These came in a division of the bank that is supposed to manage risk, not necessarily take risk. So that went way wrong. Jamie Dimon in April said media reports were making basically a tempest in a teapot, saying this was not such a big deal. He has since said he was dead wrong on that. We'll expect more from Jamie Dimon on that today.

He also will hear shareholders voting, say on pay, that's there under Wall Street reform on his and other top lieutenant executive pay packages, what they'll have to say about that.

And finally, should Jamie Dimon remain at the helm of the bank in terms of having the chairman and the CEO role? There are some that are fighting to split that role up and they have even before this loss, so those are going to be the three big focuses from shareholders today. I think a lot of questions about who knew what when, that's key.

BALDWIN: Poppy, you bring up pay and I know shareholders are raising the question, what about these incentives, these big bonuses that perhaps lead to some riskier bets. "The Wall Street Journal" is reporting that JP Morgan may call back some of that compensation. What are you hearing?

HARLOW: They might. That is what "The Journal" is reporting. Any big bank in the new area of post Wall Street reform is doing that, looking at claw-backs. The way Wall Street works is that you get paid for short term gains, but then those bets you made can look very bad a few years later. That's exactly what happened in the housing crisis. Things looked good, they turned very sour. Now there may be claw- backs, may be for some of the top lieutenants who oversaw this chief investment office that had these bets that were really hundreds of billions of dollars of insurance bets, trying to manage risk but obviously not following through on that. So that's going to be a big focus as well.

I will also say expect the Volcker rule to be addressed. You talked to Sheila Bair about this yesterday. The Volcker rule would say when it comes out this summer that banks can't make big directional markets with their own money and act like, quote/unquote, "casinos" critics would say. Jamie Dimon said even this move wouldn't have fallen under the auspices of the Volcker rule because he says it would be economic hedging trying to prevent risks in other parts of the banks. That will be a key we'll focus on as well today.

BALDWIN: Poppy Harlow, thank you. We'll bring in Senate Democrat Jeff Merkley of Oregon, a member of the banking committee and coauthor of this rule, which we've been talking about recently, part of this Wall Street financial reform but yet to be implemented. The Volcker rule goes into effect this July. Good morning to you.

SEN. JEFF MERKLEY, (D) OREGON: Good morning, Brooke.

BALDWIN: I know you have a series of financial regulatory hearings. Obviously you're going to be talking JP Morgan, but, really, what do you expect to come out of it? What will you be learning?

MERKLEY: Well, really, the key thing will be to emphasize and understand that this sort of portfolio hedging or market hedging is not allowed under the Volcker rule. It certainly shouldn't be allowed under the rules produced for the Volcker rule. That piece has been absolutely clear.

This is the type of investing, proprietary trading if you will, hedge fund style investing that specifically the Volcker rule was designed to prevent. If you want to be in the hedge fund business, great, sever your ties with insured deposits and take the big risks and the only people who get burned are your investors or your own funds but don't do it and try to be inside the banking system where we subsidize operations and provide loans, liquidity to families and businesses.

BALDWIN: We talked Volcker rule and all of the other entities who have been watching this. The "L.A. Times" is reporting about these upcoming Senate hearings where we're going to be hearing from Federal Reserve, the SEC, Securities and Exchange Commission and also Treasury. I talked yesterday to Sheila Bair, former head of the FDIC. She suggested the fed is part of the problem. Here she was.

(BEGIN VIDEO CLIP)

SHEILA BAIR, FORMER FDIC CHAIR: I think the government structure of the fed's regional banks is a real issue. The New York fed is the primary regulator of these large constitutions, yet they have industry people sitting on their boards, and that's true with the other regional banks.

(END VIDEO CLIP)

BALDWIN: Having someone sitting on the board, right, perhaps a conflict of interest, I just wanted your take on that and also just when you look at all of these different agencies and you still see this $2.3 billion trade happened, can really anything prevent this Volcker rule or not?

MERKLEY: Certainly the Fed is one of the major regulators. This regulation that's being put together in draft form right now is the combined product of multiple regulators, and the Fed plays a lead role. My hope is that for this to happen at this time and create this discussion that will end up with regulations unlike the draft, which go on for 300 pages of guidance.

It is a result of two years of intense lobbying by major Wall Street firms trying to carve out loopholes, trying to expand loopholes, be it in market making, wealth management, or certainly in this case portfolio investing or hedging. And so hopefully it will be a wake-up call to the entire set of regulators, saying this is absolutely unacceptable. We're going to write the clear, crisp line rule that will enable regulators to say, again, if you want to be in the high risk investing business, go do it. Don't do it inside our banking system.

BALDWIN: Clear, crisp line. It's obviously very complex stuff but here is something Senator Merkley that people do understand, it's money and bonuses. Poppy was just talking about this outside of this meeting, what's going to happen with JP Morgan in Tampa, essentially shareholders calling into question all these bonuses and compensation some of the folks at the massive financial institutions get. Obviously if they lose that affects the American taxpayer if these banks fail. Will you be looking into those bonuses, those incentives?

MERKLEY: You know it may be a piece of what the banking committee looks at and certainly it's of considerable concern that bonuses are structured in a fashion it does not encourage this type of gambling, because that's exactly what the rules were designed.

BALDWIN: You're saying it is gambling?

MERKLEY: Absolutely. What we saw was JP Morgan decided to sell a lot of insurance betting that the credit worthiness of companies was better than the market viewed it. They hoped to make a lot of money on this, and it turned out that the credit worthiness was less than -- they were wrong and the folks on the other sides of the swaps, the derivatives, on the sales were correct. And so they had to pay out the insurance that resulted in huge losses. This is truly high-risk gambling when you're waging which side of credit default swaps you're going to play.

BALDWIN: Finally, since you co-authored the Volcker rule, we heard from Senator Corker recently who said it might not have applied. Take a listen.

(BEGIN VIDEO CLIP)

SEN. BOB CORKER, (R) TENNESSEE: We've been in conversations all weekend with the OCC, the Office of Currency, that basically the examiner in charge that oversees the book of business at JP Morgan, that they've been very adamant that even if the Volcker rule which the senator was referring to was fully implemented, that this would have been permitted activity. During the course of the day, we were just talking, they've altered their position and said that this is more complex than they thought, and they really want to hold off.

(END VIDEO CLIP)

BALDWIN: Senator Merkley, this was so complex that even Jamie Dimon, a week ago, thought this would be fine, didn't realize the complexities that really it has as part of it. The regulators don't know if this is proprietary trading or not. So when the head of this massive financial institution doesn't quite understand it, do you think anyone else can understand it? Do you think the Volcker rule would have stopped it?

MERKLEY: Yes. As written, it only allows drawing up insurance against specific risks. It does not at all allow this market-based risk or portfolio-based risk. The rules must be written in that matter.

Senator Corker is right. If you take the draft rules as currently written, because of the lobbying on Wall Street, which created a huge loophole, then he'd be right. But those rules are inconsistent with the statute as it is written.

This is a classic example of a large bank saying OK, we're not allowed to be in proprietary trading or hedge fund business so we will hide it, take the same traders and put them in our risk mitigation unit and pretend it's about risk. If this is allowed the firewall designed as the Volcker rule that says if you want to be in a hedge fund, don't be in a bank, is meaningless. So this is critical as the rules are finalized and hopefully its lesson will be taken to heart and we'll have the stable banking system providing credit to businesses and families that will help for a two or three-decade expansion as we had after the great depletion. If we don't get this right now we'll continue to have this shaky financial system and be in condition use high-risk of a meltdown.

BALDWIN: Senator Jeff Merkley of Oregon, Democrat, thank you, sir, appreciate you getting up early with us.

Let's go to Christine Romans with a look at the other top stories. Good morning, Christine.

CHRISTINE ROMANS, CNN ANCHOR: Good morning, Brooke, thank you.

France ushering in a brand new era this morning with the swearing in of new president Francois Hollande. Hollande has blasted the austerity measures that have defined Europe's response to the crises of the past two years. Hollande is France's first socialist president since 1995.

A manhunt happening right now in Mississippi. Police say a killer may be posing as a fake cop, pulling people over and shooting them dead. There were two fatal shootings just 50 miles apart in the past week. The victims, a 74-year-old man, and a 48-year-old woman, both found dead in their cars on the side of the road. Police in the state are actually telling people don't pull over in Mississippi if you see flashing lights.

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UNIDENTIFIED MALE: The things that we want people to realize if they feel like they're going to be pulled over, the first thing you do is turn on your flashers and dial 911.

(END VIDEO CLIP)

ROMANS: One of the convicted felons pardoned by former Mississippi governor Haley Barbour is facing new charges in a deadly drunk-driving accident. Harry Bostick is accused of causing a wreck that killed on 18-year-old woman in October. If convicted he could face at least 30 years in prison. This isn't Bostick's first brush with the law. He's been convicted in three drunk-driving cases. He was pardoned after his third conviction, one of nearly 200 people to receive a pardon from Haley Barbour.

President Obama explaining to the ladies of "The View" why he decided it was time to publicly support same-sex marriage.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My Justice Department has said to the courts, we don't think the Defense of Marriage Act is constitutional. This is something that historically had been determined at the state level, and, you know, part of my believing ultimately that civil unions weren't sufficient. BARBARA WALTERS, CO-HOST, "THE VIEW": Will you personally fight to repeal that act?

OBAMA: Well, look, Congress is clearly on notice that I think it's a bad idea.

(END VIDEO CLIP)

ROMANS: And that's the trick, Brooke. We know what he feels publicly about the subject, but what can he do about it? That's what many advocates are asking.

BALDWIN: Christine Romans, we shall see. Thank you.

Still ahead on STARTING POINT, Florida has its marching band banned for an entire year after a drum major was hazed so badly, horrifically he died. We'll ask a former member whether they're doing enough to change the culture of hazing at FAMU.

Also, she left the courtroom in tears over the course of the trial. Today John Edwards' daughter, Cate Edwards, expected to take to the stand in her father's corruption trial. We'll go there live.

And watch us live on your computer and mobile phone, whether you're at home, at work. Just go to CNN.com/live. You hear them. We've got our guests, and Christine Romans' playlist, Modest Mouse, "Float On." You're watching STARTING POINT on this Tuesday.

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BALDWIN: And welcome back. Good morning.

An alleged hazing death at Florida A&M University will keep the renowned marching band off the field through all of next year. The university suspended them as it works to make new rules to address this hazing. The student at the center of this, 26-year-old Robert Champion, he died last November, and prosecutors allege he was so badly beaten during an initiation event, remember they called it crossing Bus C, 13 of his band mates face charges for his death.

I want to bring in Travis Roberts, he was a band mate of Robert Champion's. I just want to make it clear you're not at all accused of any hazing activities. Travis, good morning.

TRAVIS ROBERTS, FLORIDA A&M UNIVERSITY STUDENT: Good morning.

BALDWIN: What is your reaction when you hear this band, I'm sure that you loved? So many people go to FAMU just to take part in this tradition. When you hear it's suspended for a year, what's your reaction?

ROBERTS: My reaction is that it's a great start, and that's pretty much what it is, a great start, but sometimes at some points in life we lack consistency, and I would like for us to take this year off and to revamp the laws and rules and regulations that we need to abide by within the state of Florida and also on the campus of Florida A&M University.

One thing that we need to make sure that we create when we're creating the laws is to create laws that adhere to different organizations, because the same things they go through and endure will not be the same thing other organizations do on our campus, let alone in the state of Florida.

BALDWIN: Let me ask you before we go any further, when you were a member of the band, were you ever hazed?

ROBERTS: See, and that's the question a lot of people throw out and want a yes or no answer.

BALDWIN: Is there not a yes or no?

ROBERTS: No, there's no yes or no answer to the actual question you threw out to me because some things that you would classify as hazing for your son or your daughter, my mom would possibly not classify as hazing or I would not classify it as hazing.

BALDWIN: Give me an example, Travis.

ROBERTS: OK. Do we go through some things that some people would look at as, you know, that would be kind of crazy? When we came to school, our first year we were told that we had to purchase white T-shirts, and we were only able to wear white T-shirts. Another thing told to me was I was able to go to three places, that was class, practice, and my dorm. Outside from the eateries and things like that, but the extracurricular things like the mall and things like that, I didn't have time for. People would classify that as hazing.

BALDWIN: If you give those examples, did anyone ever threaten bodily harm to you? Was anyone violent as part of hazing potentially or not at all?

ROBERTS: No. No, but that's -- that's not the only aspect of hazing as well, because you have the verbal abuse. You have different things that would constitute as hazing -- standing at attention in 98- degree weather for 20 minutes at a time without moving, no wiping your per separation, things like that. So it's kind of hard to just answer your question and say yes, I was hazed or no, I wasn't hazed or bodily harm is the only thing that actually means hazing.

BALDWIN: I understand. I hear you loud and clear it's not a black and white issue to you but because of these allegations, perhaps because of what you're talking about. You do agree that you say the suspension of this band for the next year absolutely should happen, to begin discussion, new rules.

But my question to you, fear the suspension will hurt school enrollment, band members will leave the school and the president of the university said two of the biggest performances bring in $1.5 million, which is nine percent of the budget, that's a little bit of a chunk. Does that concern you?

ROBERTS: It does not, because the band only makes up not even 10 percent of the population here at the university. Now, do some people come to this school because we have the best band and for that major? Yes, it's an incentive. But we also have some of the top programs here in the state of Florida, yet alone across the nation. So the band's disappearance or ban on the field at the stadium does not, it should not make a difference. You know, $1.5 million, yes, that's a lot of money. Imagine where the rest of the money is coming from to keep our university afloat.

BALDWIN: Travis, do you think one year is enough?

ROBERTS: I think one year -- I think, too, that's not a yes and no answer. I think that if we do what we need to do within the one year, we will be OK.

BALDWIN: Final question, 30 seconds, do you think the president of the school should step down? There are a lot of calls for him to step down.

ROBERTS: No. I don't think that is right, just like I didn't think that Dr. Wecht should have stepped down.

BALDWIN: Travis Roberts, former band mate to Champion, pleasure to meet you and thank you so much.

ROBERTS: Thank you.

BALDWIN: Still ahead this morning on STARTING POINT, we'll look at the headlines that caught our eye including stimulus dollars to study arousal? Oh, yes, the jokes write themselves.

And cue the panel as we talk about that and the panel heading in here with much more, Margaret Hoover, Ali Velshi, Will Cain, fighting over the seats. Good morning, good morning. Welcome. Wow, we're lively on this Tuesday. You're watching STARTING POINT. We'll be right back.

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BALDWIN: This is me, you like Van?

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BALDWIN: On our Tuesday morning, Van Morrison, "Caravan." Mr. Drawing Stick figures over here. I welcome Margaret Hoover, Will Cain, and Mr. Ali Velshi. Good morning all.

ALI VELSHI, CNN ANCHOR: Good morning.

MARGARET HOOVER, CNN CONTRIBUTOR: Good morning.

BALDWIN: Let's start with the stick figures, Velshi. What is going on. VELSHI: I haven't been here for a while, so I didn't know I had to bring a newspaper. So everybody else has newspapers so I'm making my newspaper called "The News" I don't know if you can see that, but it's called "The News."

BALDWIN: We can't see it.

VELSHI: I put "Europe" as one of my headlines, and "JP Morgan" as one of my headlines, and I'm working on it.

BALDWIN: Why don't you keep drawing and we're moving on.

(LAUGHTER)

HOOVER: I just read this article a couple days ago how two- thirds of Americans didn't believe the stimulus, federal stimulus programs had worked. And I ran across this, you paid for it, stimulus dollars funds studies into sexual history and erectile dysfunction and America wonders $1.5 million distributed by the University of California of San Francisco to a study on erectile dysfunction.

VELSHI: I'm going to help Margaret download apps to help stories about the bridges and built and the roads that were built and jobs saved and two million plus that got saved or created.

HOOVER: Saved or created. And the reality is a lot of the programs, the university and the NBC affiliate in the bay area has been looking into why so many stimulus dollars didn't even get spent for the first two years. These were not shovel-ready programs. You can see why American see this and get frustrated. Unemployment is still over eight percent and it has been for 39 months.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Red Herring -- the unemployment rate, right? We've been creating jobs for 20 some odd months so the unemployment rate measures a moving target. But the number of jobs created is very real on a monthly basis.

WILL CAIN, CNN CONTRIBUTOR: Way to take a topic about erectile dysfunction and make it boring, Velshi.

BALDWIN: Hold that paper up.

CAIN: Contagion fears hit the markets. There's no way to overstate the importance of the story. As bonds in Spain and Italy get absolutely shaken the ground underneath Europe is shaking starting with Greece and the ripple effects will hit this country.

The United States presidential election will have much more to do with Germany and Greece than it does with gay marriage. Paul Krugman yesterday wrote a four-step process for the way the eurozone will fall apart.

It's fascinating four-step process, but ends with the end of the eurozone within months, not years, months before this presidential election, I'm telling you guys, gay marriage will not be the issue.

BALDWIN: We'll see. Thanks you, guys. We'll talk in just a moment.

Meantime coming up on STARTING POINT, new attack ads from Mitt Romney and President Obama's campaigns questioning big money from big business, but are the ads hypocritical? That's what we want to ask on both sides here.

Plus a pro basketball player leaves the court and heads to the farm. Will Allen is here to explain why what you can eat can change everything in your own town. This is fascinating, wrote this book. Check it out.

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BALDWIN: Will is like, this is me. I get credit. This is Everclear, nice job, Will Cain.

CAIN: Thank you.

BALDWIN: You could check out our entire playlist, go to cnn.com/startingpoint. Time now though, let's talk to Christine Romans, and see what's going on today in terms of other big stories? Christine, good morning.

BALDWIN: Good morning, Brooke. The father of a missing 6-year- old Arizona girl has been told by police he cannot have any contact with his two sons. Isabel Celes has been missing now for more than three weeks.

Police won't say exactly why Sergio Celes is being denied contact with his other children. The 911 call he made the morning Isabel disappeared just released.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I need to report a missing child. I believe she was abducted from my house.

UNIDENTIFIED FEMALE: How old?

UNIDENTIFIED MALE: Six years old.

UNIDENTIFIED FEMALE: Your daughter?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Why do you think she was abducted?

UNIDENTIFIED MALE: I have no idea. We woke up this morning. I went to go get her up for her baseball game and she's gone. I woke up my sons, looked everywhere in the house and my oldest son noticed that her window was wide open and the screen was laying in the backyard.

(END VIDEO CLIP) BALDWIN: Police have been searching a three-mile radius around the family's Tucson home as well as the local landfill. Authorities in Mexico are also helping in the search.

John Edwards' daughter, Cate, could be called to testify as the former senator's defense team tries to convince jurors that nearly $1 million used to cover up Edwards' extramarital affair was gifts. It wasn't an illegal campaign contribution.

Laura Haggard, the former chief financial officer for the Edwards' presidential campaign in 2008 testified yesterday she never considered the money to be a campaign contribution.

An 18-year-old fisherman from Panama who survived 28 days drifting at sea is suing Princess Cruise Lines. Adrian Vasquez says one of the company's ships could have stopped and rescued him and his two companions, but the ship just kept going. Listen to two passengers who were on the ship last month and they spotted Vasquez desperately signalling for help.

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JUDY MEREDITH, CRUISE SHIP PASSENGER: You could see him doing this, with this shirt over and over and over.

JEFF GILLIGAN, CRUISE SHIP PASSENGER: While we were on the ship, the feeling of powerlessness because we would have liked to somehow gone over there and rescued them.

(END VIDEO CLIP)

ROMANS: Princess Cruises calls the incident a case of unfortunate miscommunication. Vazquez's two fishing companions who were signalling with him at the time and were seen from the ship did not survive.

The end is near for Ron Paul's presidential bid. He's not officially suspending his campaign for the White House, but the Texas congressman won't be spending any more money on it.

Trying instead to compete in the remaining primary contest he plans to collect as many delegates as he can at the state conventions so that he could have more of a voice at the national GOP convention in Tampa in August -- Brooke.

BALDWIN: Christine Romans, thank you very much.

And speaking of presidential campaigns, Mitt Romney trying to capture some crucial swing state voters today, where is he headed? Des Moines, Iowa, he's going to deliver what's being billed really as the major policy speech on spending and the debt.

And check out the latest polls here because they show that Romney is ahead of President Obama. You see the number 46 percent to 43 percent. This is among registered voters nationwide, which is within the poll's margin of error.

Joining me now the national co-chair of Romney's 2012 presidential campaign and the former candidate in this race himself, former Minnesota Governor Tim Pawlenty.

Governor, nice to see you this morning. Let's talk about the speech today. I know last year Romney introduced his 59-point economic plan. February he had that major economic speech, which he tweeted a little bit in Detroit, talking about today, anything new?

TIM PAWLENTY (R), FORMER GOVERNOR, MINNESOTA: Well, what is new is this. You look at this race. One of the most important issues is going to be the runaway government spending that reflects an area where President Obama again has broken his promises. He came in early in his administration, said he was going to cut the budget deficit in half, he's nearly tripled it.

Currently approximately 40 cents of every dollar the federal government spends they don't have, deficit spending in contrast to Mitt Romney's established record when he was governor of Massachusetts, balancing budgets, reducing spending, increasing employment, reducing unemployment, cutting the state workforce.

And President Obama you have somebody who has never balanced a budget in his life, and Mitt Romney you have an established leader who is actually not just talking about getting government spending under control, but he's actually done it.

WILL CAIN, CNN CONTRIBUTOR: Governor Pawlenty, this is Will Cain. You know, I think the message over debt and deficit is going to resonate and we only have to look across the Atlantic to see the potential problems.

But it strikes me that Governor Romney's opponent, President Obama, is going to offer stimulus. He's going to offer things that he suggests will jump-start the economy.

What does Governor Romney offer? What are his jumper cables he's going to attach to this economic engine, tax reform? What is something positive you guys can put out there?

PAWLENTY: Well, as you mentioned earlier on the panel discussion the stimulus is quite controversial. In fact that approach to having a government-centered approach to stimulating the economy is going to be one of the key points of debate in this race.

If you look at Governor Romney's proposal, he's talking about reducing tax rates to stimulate the economy. He's talking about lowering regulation. He's talking about revising labor laws in a way that are more friendly not just towards a labor.

But also towards job growth and job development, and this is somebody who has got an established record of not just working in government and taking a government-centric approach to things, but he's actually started businesses, grown businesses, provided jobs.

He understands and respects the private economy, and that's in stark contrast to President Obama, who has never essentially worked in the private sector, doesn't understand it, doesn't respect it, and his record as president with respect to the growth of the private economy in this country is terrible.

BALDWIN: Mr. Pawlenty, you mentioned reform. I just want to ask you when it comes to financial reform, I know that Romney has yet to really actually specifically comment on the news that we've been reporting on the past couple of days with the tremendous loss that $2.3 billion loss by JPMorgan.

He was calling for the repeal of the Dodd-Frank financial reform, part of that, of course, the Volcker rule, which many hoped, doesn't go into effect until July, would prevent something as egregious about this. Last August, Romney spoke to a roundtable to businessmen in New Hampshire, here he was.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I certainly think that the extent of the regulation of the banking industry has become extraordinarily burdensome following Dodd-Frank. I would like to repeal Dodd-Frank and -- yes, recognizing that some provisions make sense.

(END VIDEO CLIP)

BALDWIN: So does he still want to repeal Dodd-Frank after what we have seen this last week? And what would the governor do to prevent this from ever happening again?

PAWLENTY: Well, as your discussion earlier in the show indicated, it's not clear that Dodd-Frank or even the Volcker Rule would necessarily apply to the situation with JPMorgan. We need to develop more facts in that regard.

Governor Romney has said, look, we don't necessarily need more regulation, but we need more effective or different regulation. He believes people should be held accountable for their decisions in a marketplace.

And so when you have reckless behavior or stupid behavior, there should be some consequences for that. If you look at the effects of the Volcker Rule and Dodd-Frank, Congress passed it. It's been caught up in the bureaucracy. It's created uncertainty.

They still don't even have a deadline for it being finished. There's a great deal of debate about how it might be implied or interpreted. So what they've added is a layer of confusion or uncertainty in the markets.

But when you have banks or other institutions that engage in reckless or irresponsible behavior, they should suffer a consequence in the marketplace.

BALDWIN: We did speak with the co-author of the legislation, of the Volcker rule specifically and he said that it would have prevented, but you're correct and they're looking at the language and perhaps tightening some loopholes. I want to bring in Margaret Hoover. Go ahead, Margaret.

MARGARET HOOVER, CNN CONTRIBUTOR: Hi, Governor Pawlenty. Margaret Hoover. Can you follow up on your point? Because oftentimes Republicans are categorized as not being for any regulations at all and people like you come back and say no, we're for regulations, but we're for smart regulations.

Can you give us an example? What would Governor Romney be for? What are smart regulations that could be implemented that we think this market calls for?

PAWLENTY: Well, Governor Romney hasn't gotten into the details what would be more effective regulatory approach than Dodd-Frank, but what he had said is obviously Dodd-Frank has turned out to be a point of first of all missing deadlines, unclear on its face, slow, and it's created a chill or uncertainty in the financial markets.

But number two, he has said let's hold people responsible for their decisions. So if you look at the auto bailout, for example, both President Obama and Mitt Romney suggested a form of bankruptcy, but in the case of President Obama, he gave special favors to one group in that process, the UAW.

Mitt wouldn't have done that and he's spoken against his concerns about that. President Obama also provided some cash payouts as a way of distributing money politically in that context that Governor Romney has taken issue with.

But in terms of the regulation of the finance and banking industry, Governor Romney has said the Dodd-Frank legislation has created too much vagueness and too much uncertainty in the market.

And he is proposing and will propose I think a better way to do it. He's not saying we need more regulation. He's saying we need different and more effective regulation.

BALDWIN: Governor, we've got to move on. I know, Ali, you want to jump in but governor I had to ask you about these ads that have just come out. Obama camp, they've been hitting Romney pretty hard on the Bain Capital front. Here is their new ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: If we lost, they made money. If we survive, they made money. It's as simple as that. He promised us the same things he's promising the United States. He'll give you the same thing he gave us, nothing.

(END VIDEO CLIP)

BALDWIN: So Obama campaign hits. Romney hits back. Here you go.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Mitt Romney's private sector leadership team stepped in.

UNIDENTIFIED MALE: Building a dream with over 6,000 employees today.

UNIDENTIFIED FEMALE: If it wasn't for a company like Steel Dynamic, this county wouldn't have a lot.

(END VIDEO CLIP)

BALDWIN: Yet both groups are going to the financial sector looking to financial support. Let's take a look at the numbers here, Obama $7.8 million, Romney $18 million. Isn't that a bit hypocritical here?

PAWLENTY: Well on the very day that the Obama election team released that ad, he was in New York raising money from the private equity industry so it goes to President Obama's hypocrisy, number one.

BALDWIN: What about both sides with all due respect?

PAWLENTY: Well, President Obama is the one launching the attack, initiating the attack in this area. Number two, every third party group who has looked at that attack ad on the Obama election campaign has said it's misleading, false and unfair.

When that set of events occurred, Mitt Romney had left Bain Capital two years removed from Bain Capital, was leading the charge to restore and turn around the Olympics.

And if you look at his record at Bain overall, all the jobs that were added, it's a story of net job increases, not net job losses. And on the increase side, Steel Dynamics situation that the Romney campaign is highlighting was a situation where Mitt and Bain capital grew jobs in the steel industry.

But overall, it's a positive growth record for jobs when he was under Bain Capital.

BALDWIN: Tim Pawlenty, I appreciate it this morning, former Minnesota governor and national co-chair of Romney's 2012 presidential campaign. Thank you, sir.

PAWLENTY: You're welcome.

BALDWIN: Still ahead on STARTING POINT, he is probably the last person who comes to mind when you think of a farmer, but farmer, pro basketball player, Will Allen revolutionizing the way your community grows, and the hint, eating fresh, good food. Welcome sir, good morning.

UNIDENTIFIED MALE: Good morning.

BALDWIN: Here you go. From Will Allen's playlist, Marvin Gaye.

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BALDWIN: I know a lot of us have long battles with our own weight. Imagine trying to get everyone you know not just to eat healthy, but to use healthy food, to change an entire community.

This whole story is amazing. It started back in 1993 with a greenhouse, and this organization called "Growing Power," which now provides enough vegetables and fish every year really to feed thousands upon thousands of people.

It is run by former pro basketball player, Will Allen, who wrote about his passion and his grassroots movement in his new book. It's called "The Good Food Revolution" and Will, good morning.

WILL ALLEN, AUTHOR, "THE GOOD FOOD REVOLUTION": Good morning, it's great to be here.

BALDWIN: Great to have you here. You write this -- I'm fascinated by your family story, which is sort of how you begin the book telling the story about your mother who was a share cropper in South Carolina who, you know, is part of the great migration said I don't want a part of this life.

And I want to leave and head to Washington, D.C. And here you are returning to the roots of your mother that she wanted to leave.

ALLEN: Yes, I had a similar story because I grew up on a farm outside of Washington, D.C. and when I was 18, I had about 100 scholarship offers at different universities.

And at that point when I left to go to University of Miami where I became the first African-American basketball player there, I said never again will I do this farming so you probably should never say never.

BALDWIN: Never say never. So you end up playing basketball. You wind up playing basketball in Belgium. That's when your passion for farming -- I don't want to say reignited, but ignited for the first time. Tell me about what happened there.

ALLEN: Well, one of my Belgium teammates, a family had a farm. I went out one day and helped them plant some potatoes. Once I touched the soil, something really came alive.

I really wanted to start growing food again. I must have had some hidden passion that was reignited like you said. So from that point on, I wanted to grow food. I started over in Belgium actually.

BALDWIN: But then you brought it to the Milwaukee area.

ALLEN: Right. When I came back, I wanted to farm, but I had to have a farm job and I worked for the Markets Corporation and then Procter & Gamble. And in 1993, I was driving down a street and one of my Procter visits to a store and I ran across this vacant piece of property, old greenhouse operation. And the city owned it and to make a long story short I was able to make the purchase and really start the journey.

VELSHI: Great to see you. I remember our last conversation about this. There's a struggle here is that as an African-American migration went to the north and just generally the way we live in cities, these are food deserts. You were trying to -- you ultimately have tried to change that environment.

ALLEN: What typically happened back in n those days and happened with my parents, but for some reason my father wanted me and my brothers to learn about where our food came from and for practical reasons that we didn't have a lot spendable income so we grew about 95 percent of the food that we ate.

So I'm now using those skills to teach others because we're in a situation where obesity is at an all-time high. One out of three of us by statistics are obese and by 2030, 42 percent of Americans if we don't change the way we eat our food.

And, you know, our structure of our system is that two-thirds is based on nutrition and the other two is stress management and exercise. So if we're able to get that two-thirds fixed, we would have a healthier community and healthier nation.

HOOVER: So what would you say is the goal, 10 years, 20 years out for good food revolution?

ALLEN: Well, I think it's reached that revolutionary stage. It was a movement. Thousands and hundreds of thousands of people and it really ramped up a few years ago when first lady Michelle Obama put small garden on the White House lawn and estimate that 10 million people started growing food and many people of color went back to growing food.

BALDWIN: How can other communities do this? Take what you have done in the Milwaukee area and do it elsewhere to feed those who need it.

ALLEN: We're training thousands of people. Each year we train over 1,000 farmers. We have workshops from January throughout the year. We'll have national conferences, 3,000 conference on urban agriculture and small farms on September 8th in Milwaukee.

And I hope the book teaches younger people, especially high school and college age folks about the history and legacy of what happened during the great black migration to the south because much of the skill sets were left and for obvious reasons African-American folks that knew a lot about growing food over 300,000 were farmers at one time.

Now we have less than 18,000 African-Americans that are farming in this country. Didn't pass onto several generations and we're paying for it as we look at this food deserts.

BALDWIN: You're passing it on. You're passing it on now and so much of this book is how you did it down to the soil, but also how these greenhouses and these farms have really become safe shelters for so many young people in the community.

So I commend you for that. You're an inspiration. It's the "Good Food Revolution." Will Allen, thank you so much. Pleasure meeting you.

ALLEN: Good to see you all again.

BALDWIN: Great book.

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BALDWIN: Coming up next hour in STARTING POINT, a window into never before seen evidence in the case against George Zimmerman. I'm talking about 911 calls, photos, surveillance videos so what do all of this -- what does it do against the case against this neighborhood watchman, George Zimmerman?

And it's like a monty python routine. The government spending itself dizzy in red tape, issuing a study about studying studies. Don't miss our get real this morning. You're watching STARTING POINT.

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