Return to Transcripts main page
ANDERSON COOPER 360 DEGREES
Defense Rests in John Edwards Trial; Debt Ceiling Deja Vu?; Attorneys General Call for BackPage.com to End Adult Services Ads
Aired May 16, 2012 - 22:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Good evening, everyone. It's 10:00 here on the East Coast.
And we begin tonight "Keeping Them Honest" with a report about a group that claims to be raising money for disabled veterans. Now, when you hear someone say they're helping disabled veterans, it certainly sounds like a great cause, a great organization.
But we have been investigating this organization for years now, about two years now. We brought you our reports last week. And what we have discovered is going to outrage you. It is called the Disabled Veterans National Foundation. According to their own tax filings, they have raised nearly $56 million in the past three years, $56 million.
With that kind of money, you would think there would be a lot of disabled veterans who they had helped directly. But that's not what we found. In fact, one man who runs a group for veterans accuses them of stealing, out-and-out stealing. For months, we tried to get them to answer our questions and you would think they would want to, wouldn't you?
You would think they'd want to show exactly where the money has gone. But they have slammed doors in our reporters' face and refused to answer questions. Of that nearly $56 million, how much do you think has gone to directly help disabled veterans, 90 percent, 50 percent?
We haven't been able to find any of it that has actually gone to help disabled veterans directly. They do send stuff to some veterans groups, truckloads of stuff, stuff that they actually get for free, stuff that veterans groups that we have talked to say they didn't want, they didn't ask for and they don't even need.
Here's what one veterans center director told us.
(BEGIN VIDEO CLIP)
J.D. SIMPSON, SAINT BENEDICT'S VETERANS SHELTER: They sent us 2,600 bags of cough drops and 2,200 little bottles of sanitizer. And the great thing they sent us is 11,520 bags of Coconut M&Ms.
(END VIDEO CLIP)
COOPER: Coconut M&Ms, thousands of bags, more than 11,000 bags. We have reported on this group a couple of times the last few weeks and our Drew Griffin wanted to ask the president of this group, the DVNF, about those Coconut M&Ms and the $56 million.
Here's what happened when he originally tracked her down.
(BEGIN VIDEO CLIP)
PRECILLA WILKEWITZ, CEO, DVNF: You're the one from CNN that's...
DREW GRIFFIN, CNN CORRESPONDENT: That's right.
Meet Precilla Wilkewitz, president of the Disabled Veterans National Foundation, whom we found at a small VFW office in Baton Rouge, Louisiana.
WILKEWITZ: Well, this is the Veterans of Foreign Wars, and I really didn't think you'd do something like this. We've agreed to talk to you and answer questions.
GRIFFIN: Nobody has agreed. So here is the question raised over three years.
WILKEWITZ: Only in writing. Thank you so much.
GRIFFIN: And none of the money has gone to any veterans, ma'am.
(END VIDEO CLIP)
COOPER: Again, they have raised $56 million. You would think they would want to clarify exactly where that money went, right?
Well, Drew discovered that that woman, Precilla Wilkewitz, was scheduled to speak today at a veterans conference in Sacramento. So Drew went there hoping she might finally answer his questions. Guess what? She canceled her appearance,but Drew was able to find someone else from this organization, the vice president of the Disabled Veterans National Foundation. But apparently she wasn't too happy to see us.
Drew joins me live now from Sacramento. Also with us is CNN senior legal analyst Jeffrey Toobin.
So, Drew, you tracked down this vice president of this group. Did you get any idea of where all the money is going?
DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: I sure did, and I think the headline here, Anderson, is if you gave money, if you donated money to the Disabled Veterans National Foundation, like so many of our viewers tell us they did, and you thought the money was going to actual disabled vets, that is not what this board of directors thought when they started this campaign to raise money.
And the first vice president today, Valerie Conley, basically said she has no apologies for how that money was raised and where it went.
(BEGIN VIDEO CLIP)
GRIFFIN: I'm here asking actually questions from your donors and our viewers who want to know what happened to that $56 million that they thought they were giving to actual deserved veterans.
VALERIE CONLEY, DISABLED VETERANS NATIONAL FOUNDATION: Well, the cost of fund-raising is high, as you know. And it has been for many veteran service organizations who use this kind of direct-paying approach.
GRIFFIN: What is the point of a fund-raiser when all of the funds go to your private fund-raising company?
CONLEY: Well, not all of the funds do.
GRIFFIN: Well, according to the documents we have seen filed by your organization, they all do and more, $56 million, plus your other $7 million.
CONLEY: Well, I think you need to talk to our Washington, D.C., office.
GRIFFIN: Well, quite frankly, I have been trying for two years to talk to them and I haven't got any answers. That's why I had to resort to this kind of nonsense.
CONLEY: Well, I am a volunteer on the board,.
GRIFFIN: Are you concerned about how this fund-raising drive has gone with your private fund-raiser?
CONLEY: No, we have done nothing illegal.
GRIFFIN: I know you have done nothing illegal, but have you done -- would you like to have more money going to the veterans or some money going to the veterans?
CONLEY: Absolutely. There is money going to the veterans. We approve grants to individual veterans and veterans organizations on a monthly basis.
GRIFFIN: I have seen no evidence of that other, than some gifts in kind program.
(END VIDEO CLIP)
COOPER: So, Drew, help me out here. She's saying, we have done nothing illegal and she claims money is going to veterans and veterans groups. But have you been able to find any evidence of that?
GRIFFIN: We have not.
And, Anderson, I want to reiterate, we have been asking for that specific information now from this very organization for two years. We have yet to see it. We are basing these reports on the tax filings they are required to file.
And from what we can tell, they are a legitimate, registered, 501(c)(3) in the eyes of the IRS, so perhaps it's true they're not doing anything illegal. But I can't imagine anybody who's donating to this group thinks that all their money should be going to a private fund-raising company and not any of it to the disabled vets.
COOPER: So, Drew, that's what you found is that this $56 million that they have raised over three years is just going back into more fund- raising?
GRIFFIN: It's actually going directly to a company named Quadriga Art, which we have been reporting, Anderson, is one of the largest groups that helps support these fund-raising outfits, these charity outfits across the nation, across the world, 500 charities, Quadriga boasts.
And Quadriga sent us a statement basically saying, yes, this is pretty much legit. Let me read you that -- this was part of the campaign. "The Disabled Veterans National Foundation approached us with a unique mission that we believed in. They lacked a donor file and a name recognition and indicated that they needed a significant and accelerated public awareness and education initiative, given the large number of wounded soldiers returning home amidst insufficient resources to support them."
So they say, "Given their objective, Anderson, the client knowingly chose an aggressive direct-mail strategy that resulted in an expected high cost in the beginning of the program."
That program has been going on for three years. It's raised $56 million in private donations. And as far as we can tell, all of that money went to pay for a mailing list. I brought that direct quote right to Valerie Conley, the vice president today, and she basically said, yes, that was the strategy. Take a listen.
(BEGIN VIDEO CLIP)
GRIFFIN: As a board member, did you have any idea that the costs would be this high, $56 million would be paid for just to get a list of people?
CONLEY: We did not know how fast this would take off and how well it would do.
GRIFFIN: How can you say how well it would do when the money is going to Quadriga?
CONLEY: When we first started this, we didn't know how fast it would take off.
GRIFFIN: You're basically taking money that people want to go into veterans' pockets and giving it to a private company.
CONLEY: It's worth it for every veteran that we can help.
GRIFFIN: No matter what the cost?
CONLEY: Well, I put on women veterans conferences in my home state. And we spend several thousands of dollars. And they are donated dollars, and my philosophy, my personal philosophy has always been that if we can help one veteran, then every dollar we spend is worth it.
GRIFFIN: Even if it's $56 million?
CONLEY: Well, I'm not going to answer that question.
(END VIDEO CLIP)
GRIFFIN: And she didn't answer any more questions, but basically $56 million raised from the public, they thought they were giving it to disabled vets. It went to this charity's ongoing mailing list and as far as we can tell continues to fund the actual private fund-raiser who is making money off of this.
It's upside-down according to every single charity watchdog group we have talked to, Anderson. It makes no sense.
COOPER: Right. They grade this group with like an F. It's outrageous that that woman can stand there and used that cliched phrase, if we can help one veteran.
If they can only help one veteran with $56 million, that's pathetic. And, I mean, I think the people who have donated money would be shocked at that.
GRIFFIN: And when the help is a bag of Coconut M&Ms, I think that's really shocking. Or, as some -- some people have told us, it's just disgusting.
COOPER: With $56 million, you should be able to help a lot more than just one vet, if they have even helped that.
Jeff Toobin is here for the legal aspect of that.
We got a digital dashboard question on Google+. A viewer, Lauren Bradshaw (ph), asks: "Are the DVNF's activities or lack thereof actually illegal or just horribly deceptive?"
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: You know, I think there's a clear answer to this, horribly deceptive, not illegal.
This is a weird little corner of the law frankly that I didn't know about. A number of states over the years have tried to regulate charities. This is not a new kind of behavior,these charities that basically raise money to support themselves and don't do any good.
And what the Supreme Court has said in a series of cases is that raising money for a charity, a 501(c)(3), is an act protected by the First Amendment. So states that attempt to criminalize how much you use in administrative overhead are unconstitutional, they're violations of the First Amendment.
So every attempt to crack down criminally on these kind of operations has failed. And, frankly, the only answer seems to be is that donors have to beware. They have to do the research and see that these sort of generically good-sounding organizations are actually -- and there are these watchdog organizations that Drew mentioned and you have got to go to them and see that you're giving a decent...
COOPER: And, Drew, when they talk about a mailing list, basically that's a mailing list so that they can raise more money down the road?
GRIFFIN: That's all it is. It's a cycle of funding that perpetuates on its own self.
The idea is to get this mailing list so you continue to make more and more money down the road. What's unnerving -- and I think we're going to have a follow-up report tomorrow -- is another group that contracted with Quadriga Art saying they were basically deceived by this and they're not getting any payoff.
That's what's happening here. By now, this group should have had some kind of money in their bank account. They don't. It's all going to the private fund-raiser. And like Jeffrey says, you know, the numbers all line up for the IRS, so it's legal.
TOOBIN: Well, and let's be clear. Quadriga is making profits off of this. Quadriga is a private company.
You know, maybe these -- the woman you interviewed, she's a volunteer and that the people who actually are involved with this group are sort of good-hearted, if empty-headed, people who want to help veterans. Quadriga knows exactly what it's doing. It's making a ton of money, of profit off of these contributions.
COOPER: Well, Drew, it's also fascinating to hear that woman to say, A., that she's a volunteer on the board and that they didn't know it was going to take off.
I mean, the people that -- that other woman who slammed the door in your face and has avoided your questions for two years, I mean, they seem like not-ready-for-prime-time players. This Quadriga, as Jeff said, certainly seems to know what they're doing. These other folks, I mean, maybe they are thinking they're doing some good, but $56 million they have raised and it's not going directly to veterans. That's -- it just boggles my mind.
And I think Jeffrey's point is correct. These are not -- these are not bad people that are slamming doors in our face. At least they don't appear to be. They have a long service record. They're involved with many volunteer groups.
Perhaps they got hoodwinked, duped, got into a contract that they can't seem to get out of. Quadriga Art, they tell us that they're not making any money, though they will not talk to us on camera, and they won't show us any of their books. They are a private company. They're a huge company. And they draw up specific contracts which lock these fund-raising at least charities for long periods of time, six years.
And so I think maybe there's a little bit of problem between the company and some people who are not used to dealing in hardball fund- raising, for-profit enterprises.
COOPER: Right. The flip side of that, though, is if you are a good person and you care about disabled vets and you are raising $56 million and you feel like, you know what? it's not going to the right place, you have a duty to say it or resign.
They're still slamming doors in your face, not answering questions, and still out there raising money and defending this stuff, which again we are going to keep reporting on it. Drew Griffin is working on this for two years.
Drew, appreciate it, Jeff Toobin as well.
Let us know what you think. We're on Facebook, Google+. Have you ever heard of anything like this? Follow me on Twitter @AndersonCooper. I have been tweeting about this. Let me know what you think about it right now on Twitter.
If you're feeling debt ceiling deja vu tonight, you are not alone. Your Congress, well, they're at it again, drawing lines in the sand as they gear up for what looks to be another bitter standoff. Is this just about election-year politics? Find out ahead.
COOPER: In "Raw Politics" tonight, your lawmakers are at it again.
Remember last year's bitter showdown over a deficit reduction plan that led to the brink of a government shutdown, led to the first ever downgrade of the U.S. credit rating by Standard & Poor's? The markets tanked. Your 401(k) probably lost a lot of money.
Well, perhaps get ready for the remake. At the White House today, President Obama met with four top Senate and House leaders and much of the meeting focused on the next debt ceiling increase. It's set to go to vote at the end of the year. And familiar lines are already being drawn in the sand.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase.
(END VIDEO CLIP)
COOPER: That was House Speaker John Boehner yesterday. His office says he delivered the same message today to President Obama.
Now, there are conflicting reports about President Obama's response. According to Boehner's office, the president said he would propose a debt hike that does not include spending cuts, but House Democratic Leader Nancy Pelosi said he talked about honoring the debt deal reached last year, which included spending cuts.
And White House spokesman Jay Carney said this.
(BEGIN VIDEO CLIP)
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: You have to ask the speaker of the House whether or not he intends or he believes that it is the right thing to do for the American people, the American economy to play chicken with the full faith and credit of the United States government.
(END VIDEO CLIP)
COOPER: Now, the only thing both sides could agree on today, and this is maybe fitting, were the sandwiches the president brought to the lunch. That's him to going to a local deli to buy the hoagies. Good sandwiches, good times, "Raw Politics."
Joining me now, political contributors Ari Fleischer and Paul Begala.
So, Paul, John Boehner is saying the next increase in the debt limit has to be accompanied by dollar-for-dollar cuts. But the GOP budget, Paul Ryan's budget, according to the Congressional Budget Office, it increases the debt by some $5 trillion over 10 years. Why is that OK?
PAUL BEGALA, CNN POLITICAL ANALYST: Right. Well, you would have to ask the speaker that.
I think,first, let me just say, John Boehner's patriotic American, he's a good man, he's a good congressman. He leads his party ably. But what he is proposing is to purposefully damage our country, to take the full faith and credit of our nation to the brink.
And they did this once and as you noted it hurt the country. It didn't just hurt the Democrats or the Republicans. It hurt a lot of middle-class families, and we should never do that again. The debt ceiling has been raised for 95 years. We used to not have a debt ceiling, and there's no real need to have it. It's a contrivance that Congress put in in 1917.
But every time we have done it for 95 years, until this past time, it's been done in a bipartisan way because no one has ever wanted to risk our full faith and credit, because then you're really risking hurting the country. And I hate to see Speaker Boehner do that. But it's clearly what he's doing. And I have to say it looks like it's just politics.
COOPER: Well, Ari, A., is it just politics? Is it a good thing for the country if the debt ceiling vote becomes a regular battle over spending?
ARI FLEISCHER, CNN POLITICAL ANALYST: Well, Anderson, I think it's a mixture. Anything I think of this nature has a political element to it. You can't deny that.
But on the same token, who is going to try to finally do something about the debt? And that's why this does become a showdown because Washington for too long for both parties have never done anything about the debt.
And you're right. Paul Ryan, the Republicans' budget would increase the debt by $5 trillion over 10 years. But President Obama's budget, if he gets everything he's asked for, would increase it by $10 trillion, twice the amount, taking us from $15 trillion in the hole to $25 trillion in the hole.
So the question is, why are politicians in both parties not doing anything about it before the election. We have massive tax hikes going to hit. The payroll tax reduction gets taken away. We have massive sequestered across-the-board cuts coming in defense and in health care providers and a debt ceiling which we face.
Why are they punting? Isn't this what we elect them for, to judge them so we can vote them in or vote them out?
COOPER: Well, Paul, since they're punting, isn't -- doesn't that make the argument that this is just about election-year politics all the stronger? And the fact that this is going to get negotiated basically after the election, the fact that it's -- they're now kind of rattling sabers, it's just about kind of jockeying?
BEGALA: I think so. As I say, I think that Speaker Boehner is a good person, but I think what he is doing here is really dangerous.
And it's really surprising to me, because we went through this before. And, by the way, I will note -- and I will correct the record -- Ari said, well, both parties do it. And that's the false equivalency that pundits have to say. But it's a falsehood.
Bill Clinton, a Democratic president with a Democratic House and a Democratic Senate passed through tax increases and spending cuts that put us on the path toward a balanced budget. The final deal then was cut with a Republican Congress and a Democratic president, again, President Clinton.
You can do this, but it takes both the -- it takes more revenue, we hope from the rich, because they can afford it, and it takes spending cuts. But that's the obvious thing.
And for Speaker Boehner to say we're going to risk the full faith and credit of the United States, it's just something you should never mess around with.
FLEISCHER: But, Anderson, here's the problem on the path we're on.
If we don't do anything about our debt, we're risking the full faith and credit of the United States. We can't go on having trillion- dollar deficits. We do turn into Greece. We have never had trillion- dollar deficits until the last three years. And they don't end. That's the problem.
You can blame it on George Bush if you want, but then...
BEGALA: I want.
FLEISCHER: ... why do they continue for the next 10 years under the president's policies?
And as Paul looked into the past, I do have to remind you that of course when Barack Obama was a United States senator, he opposed raising the debt limit. He called it unpatriotic to raise the debt limit. And now of course he wants to do it so-called clean. Well, clean means we don't cut anything.
FLEISCHER: You can't raise the debt limit and not cut spending. That's acquiescence. That's quitting and that's saying we get conquered by debt.
BEGALA: Ari makes one really important point I agree one with and one I disagree with. Senator Obama did vote exactly the way Ari said. And he has said now that he regrets that, but that was, I suspect, political.
It was certainly a mistake and Ari is right and fair to point that out. But when he talks about the path we're on and staying on it, again, I served President Clinton. I saw how hard it was for him to balance that budget. We handed it off to Ari's boss, Mr. Bush, and he squandered it.
And so my Republican friends just don't have credibility talking about debt. And I know Ari cares about it and he knows a lot about it. And we worked together back on the Hill back in the day, Ari, when you were at the Ways and Means Committee staff.
So I know that you care about it. But you have got to say the path we're on, we got on because if we'd have stayed on the path President Clinton and the Democrats put us on, we would have zero national debt today, zero, but we diverted from that path, mostly with tax cuts for the rich and wars that we put on the national credit card, both of which were passed and signed into law by President Bush.
COOPER: Ari, final thought.
FLEISCHER: Number one, what happened in 2001 is we had an Internet bubble that burst, we had an economy that was in decline already in 2000. George Bush inherited that, inherited a recession, actually turned it around and 2003 to 2007 were robust years.
The deficit was only $161 billion in 2007. We'd love to have that again today. But the problem is not what Bill Clinton did or what George Bush did. It's what Barack Obama is doing. He's our leader. We look to all of them in Washington. We can't have a debt this high.
COOPER: But, Ari, you're saying the wars in Iraq and Afghanistan did nothing in terms of the debt?
FLEISCHER: No, of course they did, Anderson.
And here's another bigger issue too. Every president has to deal with the issues that are on the plate in the era in which they serve. On September 11, 2001, everyone's response in this country was fight terrorism. Nobody said we need to do something different on how to pay for the war in Afghanistan.
Iraq was an arguable difference, but nobody objected to it on a cost basis. There were other objections to it. That was the era of terrorism and that's how it was fought. Every generation then has another issue. Barack Obama's issue today is debt. It's his job to deal with it, just as it was George Bush's job to deal with terrorism. That's the major issue we face today, and the Republicans too. They have to face it as well.
COOPER: Ari, Paul, appreciate it. Thanks.
The defense rested in the John Edwards trial today, no Rielle Hunter, no John Edwards. The question, did they rest because they simply didn't believe the prosecution made a convincing case? Details ahead.
COOPER: New pressure on Backpage.com to shut down its notorious adult services section. Last week, I spoke with an attorney for the Web site who claimed police and child advocates say closing shop is not the answer. Well, we made some calls and found out that's not exactly true. We're "Keeping Them Honest" next.
COOPER: In "Crime & Punishment": Lawyers for John Edwards rested their case today without calling their client to testify, also not called, Edwards' former mistress, Rielle Hunter, or his daughter Cate.
Now, both sides are set for closing arguments tomorrow. The case could be in the jury's hands Friday. If Edwards is found guilty on all six counts, he faces up to 30 years in prison and a $1.5 million fine.
Now, I spoke to Diane Dimond, a special correspondent for "Newsweek" and The Daily Beast, who's been in the courtroom following the case.
COOPER: Diane, a lot of people thought that Edwards might testify so the jury could hear directly from him. He's obviously got experience winning over juries. Any idea why that didn't happen?
DIANE DIMOND, INVESTIGATIVE JOURNALIST: Well, I can only imagine that his attorney said no way, Jose. You know, because if he had taken the stand, Anderson, he would have been open to all sorts of cross- examination. You know, about his wife, about his mistress, about the time he was caught at the Beverly Hills Hotel visiting the mistress and his infant daughter. It would have probably done more harm than good, and I think they probably convinced him of that.
COOPER: There had been talk also of his daughter being called, Cate, or even Rielle Hunter to testify.
DIMOND: Yes, you know, we got a big tease yesterday. Abbe Lowell, I wrote in the Daily Beast, he didn't quite know what to say when the judge asked him, "Who are your witnesses going to be?"
So he got up and he said, "Well, you know, maybe Cate. Maybe the defendant. Maybe Rielle Hunter," and we all went crazy. But in the end, none of those three were called.
I was a little surprised about Cate not being called. She looked all dressed up yesterday and ready to go. They didn't call her. So I thought, well, today's the day. She didn't even show up in court, Anderson. So something happened there.
Perhaps it was John Edwards himself thinking, "You know what? I've done enough damage here. I don't want to put my 30-year-old daughter through this, too."
COOPER: What do you make of his defense overall, how they did?
DIMOND: Well, you know, they may have thought that seven witnesses over two days and a little smidge today was enough, because the prosecution didn't prove their case.
But I was surprised that they did not put on more witnesses, especially a friend of John Edwards named David Kirby. This is an attorney who had dealings with Andrew Young. And they sort of set it up during the trial that he was going to come here and say that Andrew Young was full of beans. Well, David Kirby never showed up here at all.
So, again, maybe they thought that the prosecution did not prove its case.
And, I'll tell you, the prosecution has a very high bar to cross here. They have to prove, after all is said and done, that John Edwards knowingly and willfully broke the campaign finance law.
Now, you know, they have to prove that he knew what the law was and that, "Oh, well, I'm going to go ahead and break it anyway." That's pretty tough to prove.
COOPER: The jury might get the case by Friday. Do you -- I mean, what's your sense, do you think -- have they been watching attentively? Do you think this is going to be a long deliberation?
DIMOND: You know, I do think it's not going to be a short deliberation, because there's a lot of layers here for them to decide. There was the affair they're going to have to sift through. That doesn't really have anything to do with campaign contributions, except that -- all that money that came to hide the affair. There's so many different layers here, I think that they will take their time.
COOPER: Interesting. Diane Dimond. Appreciate it, Diane, thanks.
DIMOND: You bet.
COOPER: Coming up, calls for BackPage.com to shut down its adult services section amid accusations that it contains ads for underage girls and victims of sex trafficking.
A lawyer for the site tells me it actually works with law enforcement to track down child sex traffickers. They say they're part of the solution. Law enforcement, though, and child advocates say that's just not true. We're "Keeping Them Honest" next.
COOPER: Within two days of saying "I do" she was dead. A manhunt underway now for the groom suspected of murdering his bride within hours of their wedding. Details ahead.
COOPER: The most popular Internet site for escorts is called BackPage.com. And in recent weeks we've reported on growing pressure by law enforcement officials and anti-sex trafficking groups for BackPage to shut down its adult services section, the section where authorities say underage girls are sometimes sold for sex.
Now, last week I spoke with a lawyer for BackPage who said the site is not a prostitution site, does not encourage illegal activity. And they say it actually works hard with law enforcement to identify and track down child sex traffickers.
The country's 51 attorneys general, however, are calling for BackPage adult section to be shut down. They say time and time again they've seen kids trafficked by pimps on BackPage. Here's some of the reporting done by our own Deb Feyerick.
UNIDENTIFIED MALE: When we get a case involving the trafficking or prostitution, usually the story is going to start on BackPage.com.
"DAWN," MOTHER OF SEX TRAFFICKING VICTIM: The daughter I know is a kid that likes to color.
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): For Dawn, that's exactly where the story took her 15-year-old girl, a child who apparently ran away with a man who seduced her online. Within days that man had posted pictures of the child on BackPage.com, selling the girl into prostitution. Allegations detailed in a criminal complaint.
DAWN: He officially took her and beat her into submission to raping her and then held her into prostitution. It totally, totally crushed me to know that somebody actually did this to her. FEYERICK: The accused pimp in that case has pleaded not guilty, pending trial. It's one of more than 50 cases in 22 states of people charged with advertising underaged girls for sex on BackPage.com.
COOPER: Well, last week I spoke with Liz McDougal, an attorney for Village Voice Media, which owns BackPage.com. She said the attorneys general are just pounding their chests.
(BEGIN VIDEO CLIP)
LIZ MCDOUGAL, ATTORNEY FOR VILLAGE VOICE MEDIA: Talk to the people who really know how the Internet works and what's going on on the ground, and they don't agree. Talk to Dana Boyd at Harvard from the Berkman Institute on Internet and Society. Talk to David Finkelhor at the University of New Hampshire. Talk to Dr. Mark Latinero that is now heading research on human trafficking and technology. There are a multitude of academics out there who are saying, as well as the vice cops on the ground, this is not the answer.
(END VIDEO CLIP)
COOPER: Talking about shutting down the adult services section. She says it's not the answer.
It took us a couple of days, but we did talk to the people she suggested would back up her argument that shutting the site down isn't the answer.
The first one she mentioned didn't want to comment. The second, David Finkelhor, the director of the Crimes Against Children Research Center at the University of New Hampshire, did talk to us. He said, quote, "They seem to be doing a very poor job of policing their site," talking about BackPage, "and I think it would help the situation if BackPage were to shut down."
She also mentioned Dr. Mark Latinero as someone who would back up her contention that, if BackPage shut down, the ads would definitely be pushed further underground to sites that wouldn't cooperate with law enforcement.
Latinero told us, "Maybe that's true, but maybe it isn't." He said there's simply not enough credible data to predict at this point.
Liz McDougal also claimed that BackPage wants to be the sheriffs of the Internet. That's the term she uses. I said to her, well, then how come the real sheriffs, the states' attorneys general, want it shut down? Here's what she said.
(BEGIN VIDEO CLIP)
MCDOUGAL: If you talk to the vice officers on the ground -- and I provided a list of those officers to your producer to talk to -- they say just the opposite. They say that BackPage is the most cooperative and one of the most valuable tools they have. (END VIDEO CLIP)
VELEZ-MITCHELL: "Keeping Them Honest," though, that's not really what police officers told us, not by a long shot.
From New York, quote, "The NYPD does not agree with the Village Voice Media lawyer. 'The Village Voice' and its ads are part of the problem. 'The Village Voice' is making a buck at the expense of exploiting women."
From Las Vegas, the police department there, quote, "Nothing that in any way promotes criminal activity and trafficking of underage individuals is supported by this or any other law enforcement organization. To say that we want these sites up so we can track them is a misstatement."
From Los Angeles from the LAPD, quote, "I have never received a call from BackPage.com indicating that there are suspicious ads."
Now, to be fair, the law enforcement officer that McDougal gave us contact information for in San Francisco did back up a lot of what she had to say, but even he, speaking for himself and not on behalf of the police department on a whole, suggested that BackPage should donate the tens of millions of dollars they apparently make on adult services ads each year.
Quote, "If it's not about money and it's just about law enforcement, then take your money and give it to groups that support victims of human trafficking, and you'll have a clear conscience."
So let's just talk about the money that BackPage is making. More than $2.5 million in ad revenues in the month of March alone, according to a group called AIM. That's a conservative estimate.
Liz McDougal says it's not about money. That was her line when we talked about why BackPage isn't verifying the ages of the people who are advertised on the site. Why not actually make the people go to a local BackPage office in person and show an I.D.? Here's what she said.
(BEGIN VIDEO CLIP)
MCDOUGAL: Money is not the issue. The issue is how do you functionally implement this?
COOPER: Unless the person comes directly in and you have to show an I.D.
MCDOUGAL: Right. Which, if you have any knowledge and understanding of how the Internet works, is a practical impossibility in the Internet realm.
COOPER: Do you know when you'll be able to decide whether or not you can do that, whether you can have physical verification?
MCDOUGAL: It's a matter of exploring and programming and collaboration with other service -- online service providers, other technology providers, with law enforcement.
(END VIDEO CLIP)
COOPER: So what about that idea of actually having a physical office in various locations that someone has to come to show an I.D.? We'll let law enforcement have the last word on that.
This from the LAPD. Quote, "I would certainly support the idea of offices set up to verify someone's age. If we can do anything to rescue and save our children from getting caught up in sexual exploitation, we should do it."
Now, BackPage.com says one of its biggest allies is the National Center for Missing and Exploited Children, but it turned out the head of that organization, Ernie Allen, is actually one of its biggest critics also. He wants BackPage to remove the adult services section.
I spoke with him and with "New York Times" columnist Nick Kristof, who's done a lot of reporting on this issue.
COOPER: Ernie, Liz McDougal often says -- she cites your organization as someone that BackPage works with, and she says that they're part of the solution, not part of the problem. To that you say what?
ERNIE ALLEN, NATIONAL CENTER FOR MISSING AND EXPLOITED CHILDREN: Well, I say yes, they've been working with us, as have 900 other Internet companies. We are the central repository of reports for child sexual exploitation in this country. And we commend their reporting.
But reporting and screening is not a panacea, and it's not a solution to the problem. Our goal is to end the sexual trafficking of children, not simply to create reports.
COOPER: They portray themselves as the sheriffs of the Internet and that they're all about, you know, stopping illegal activity. Do you buy that?
ALLEN: I don't. What is happening is that the Internet has become the primary resource, the information clearinghouse for the purchase of children for sex and for illegal prostitution. We've got to do more.
And the reality is what law enforcement is telling us, is that these leads aren't terribly useful in most cases. Because the pimps are smart and they don't always post the photo of the person who shows up at the hotel room, or they don't post photos at all, or there's misleading information. These are very difficult cases for law enforcement to work.
COOPER: So while shutting down BackPage.com would not end child trafficking, and no one is making that argument, do you think it would be a step in the right direction? ALLEN: I certainly do. We worked for two years with Craigslist in the same way. They reported to us aggressively. They screened and monitored. After two years, they concluded that it wasn't working and that they needed to do something else.
One of the challenges with sites like Craigslist and BackPage is they're so multi-faceted. It's a site where you can look at a job ad, you can sell your used car, you can buy a toaster and also, you can buy a kid for sex.
COOPER: And you think that, in a way, normalizes the illegal activity?
ALLEN: I don't think there's any question but that it not only normalizes it, but facilitates it.
COOPER: Nick, what BackPage.com, their attorneys say, is "Look, if we shut down, these ads and these customers are just going to gravitate to shadier areas of the Internet: offshore, foreign countries that aren't even reporting to a group like Ernie's."
NICK KRISTOF, "NEW YORK TIMES": And there will be those who do. I mean, there is going to be some migration.
But if you're talking about bank robbers, you don't, well, say there's no point in arresting these bank robbers, because there will be others that will take their place. You do what you can.
In the case of BackPage, with 81 percent of the market for prostitution advertising, it would make, I think, a vast difference. Sure, there will be some who are going to find other forum, but it would make a huge dent in the business.
COOPER: Do you agree with that, Ernie, that some customers will not necessarily track down other more specific sites?
ALLEN: Well, I think it was proven by the decision that Craigslist made. The volume of ads dropped dramatically when Craigslist shut down its adult ads. Some of that migrated to BackPage, but much of it hasn't.
COOPER: I think a lot of people -- and I was surprised to hear this, Ernie, because BackPage says, "Well, look, we report to your organization. We send the information and photos." But I was surprised to learn they don't actually take down the ads of people they believe might be children.
ALLEN: Well, and much of that is because law enforcement wants the ads to stay up so that they can investigate them and try to develop the nexus with the purchasers.
But one of the real challenges with these ads, and reporting the ads, you know, we handled 326,000 reports last year, most of them for child pornography. When we get an ad -- or we get a report with a child pornography image, that's contraband. That's illegal in and of itself. So when we send that to law enforcement, they can act immediately.
When we send an ad with a picture of somebody who may or may not be the person being advertised, who may or may not be a kid, who may or may not be engaged in broader kinds of illegal activities, what's law enforcement supposed to do with that? And it's frustrating to law enforcement.
COOPER: So the sheer volume of stuff they're sending you is not-- is not indicative of stuff that's actually being helpful, some of is it is just too much?
ALLEN: Some of is it not helpful, some of it is. Some of it has led to prosecutions. But again, our goal is not just three or four successful prosecutions; it's ending the problem.
COOPER: You also make the point that just because somebody is 18 years old doesn't mean that they haven't been trafficked for years before that.
ALLEN: Not only does it not mean that they haven't been trafficked for years before that, but by the accident of their birth, it suddenly doesn't make their behavior voluntary and consensual. We believe there are 18- and 19- and 20-year-olds and probably older who are being trafficked, who are being victimized, who are not engaging in this in a willful, intentional way.
COOPER: Nick, you call for advertisers to pull out of advertising with Village Voice Media, and many have. Starbucks, Best Buy, Ikea. Some of these big advertisers. Do you think that's the solution?
KRISTOF: I mean, it's really painful as a journalist to suggest that advertisers drop advertising in a newspaper. I have tremendous admiration for "Village Voice" as a newspaper, for its history. It has done some great reporting more recently.
But at the end of the day, you can't fund great reporting by advertisements for underage girls being sold for sex.
COOPER: Nick Kristof, I appreciate it. Ernie Allen, thank you very much.
KRISTOF: Thank you.
COOPER: We invited BackPage attorney Liz McDougal to come on the program again. We didn't actually hear back until less than an hour before the show started, so it didn't work out for tonight. Our invitation obviously stands. We welcome her response, and we'll have her on tomorrow if she agrees to come on the program.
In a southern state, there's fear on the roadways tonight. The search is on for a man who may be posing as a cop and killing drivers. The latest on the investigation next.
ISHA SESAY, CNNI ANCHOR: I'm Isha Sesay with a "360 Bulletin." Six U.N. observers stranded overnight following a bomb blast in Syria have made their way to safety. This video purportedly shows the bomb hitting their convoy yesterday, damaging three vehicles. No U.N. personnel were hurt. Human rights group reported at least 15 people died in violence across Syria today.
Mississippi authorities believe a 74-year-old Nebraska man may have been killed by someone who's posing as a police officer and pulling over cars. Police have linked his murder to another days later.
And a 30-year-old Chicago man is wanted for murder after his new bride was found dead in her bath tub days after their wedding. Isila (ph) Cabrera was still wearing the dress she wore to celebrate their marriage.
President Obama today awarded a medal of honor posthumously to a Vietnam hero. Army Specialist Leslie Sabo Jr. died in a fire fight 42 years ago while shielding his comrades from a grenade. His widow accepted the medal.
And this Sunday a rare solar eclipse will be visible across much of the western U.S. and Asia. The moon will be in one of its farthest positions from earth, so its shadow will not be able to completely hide the sun. Astronomers warn against looking directly at the eclipse -- Anderson.
COOPER: Time for "The Shot." The teachers at the Abby Kelly Foster High School in Massachusetts are using a year-end video to prove they really are the class clowns. Just like Whitney Houston singing, they want to dance with somebody. But you better watch your back. Take a look.
(BEGIN VIDEO CLIP)
(MUSIC: "I Wanna Dance with Somebody")
(END VIDEO CLIP)
COOPER: I don't really know what's going on there. I don't quite understand it.
SESAY: So the kids are being asked to, you know, talk about their favorite memories from the school.
COOPER: They don't realize the teachers are in the background, dancing.
SESAY: They don't realize the teachers are out there busting some moves.
COOPER: That's funny.
SESAY: I thought it was pretty cool.
COOPER: All right. "The RidicuList" is next. We'll be right back.
COOPER: Time for "The RidicuList." And tonight we're adding the folks behind a line of sneakers called Skechers Shape-ups.
Now, according to the FTC, the Federal Trade Commission, Skechers has been acting kind of a little sketchy. The FTC says the company agreed to pay a whopping $40 million fine to settle complaints about the sneaker line, specifically, quote, "unfounded claims that Shape-ups would help people lose weight and strengthen and tone their buttocks."
When it came to buttocks, Skechers reached for the stars.
(BEGIN VIDEO CLIP)
KIM KARDASHIAN, REALITY TV STAR: I don't really know how to say this, other than to just say it. You're amazing. The best I've ever had.
(END VIDEO CLIP)
COOPER: I'm sorry. I think that's the beginning of the Kim Kardashian sex tape, isn't it? No, it's not? Oh, that's the actual ad she did for Skechers? All right, fine. Let's take another look.
(BEGIN VIDEO CLIP)
KARDASHIAN: But things just aren't working out. Well, that's not completely true. I am working out. It's not someone else; it's something else. Bye-bye, trainer. Hello, Shape-ups. Nice shoes.
(END VIDEO CLIP)
COOPER: So Kim Kardashian did an ad for Skechers Shape-ups, but no, the company cannot back up the implication that, by wearing the sneakers you build your own pair of the world's most famous buns.
By the way, Kanye West's girlfriend wasn't the only celebrity that Skechers enlisted to sell Shape-ups. The company also did ads with "Dancing with the Stars" co-host Brooke Burke.
(BEGIN VIDEO CLIP)
BROOKE BURKE, CO-HOST, ABC'S "DANCING WITH THE STARS": The newest move in fitness is tying your shoelaces. Because once my Skechers Shape-ups are on snug and comfy, I'm toning my muscles, strengthening my core, burning calories. Why? Because Shape-ups really work.
(END VIDEO CLIP)
COOPER: According to the government watchdogs, not so much actually.
Now, before Brooke Burke sends that cranky British judge from "Dancing with the Stars" to yell at me or I get an angry call from Kris Jenner, I should point out the FTC complaint is not against the spokespeople; it's against the company. It's also not a court ruling or even an admission of any wrongdoing.
And I'm certainly no expert, but if you're trying to sell a product, how about a little demonstration of the end result?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: GLH means great-looking hair. Just spray GLH on, and it instantly covers your bald spot, leaving you with great-looking hair.
(END VIDEO CLIP)
COOPER: Now, that's what I'm talking about. And frankly, I don't care who you get to sell your sneakers. It's going to take more than Kim Kardashian to top what I think we can all agree is America's most talked-about television ad. Ladies and gentlemen, the Shake Weight.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This is not a workout. This is a revolution. This is Shake Weight for men, and it's going to kick your butt.
(END VIDEO CLIP)
COOPER: The Shake Weight.
As for Skechers Shape-ups, the Federal Trade Commission has spoken, and we heard them loud and clear on "The RidicuList."
That's it for us. Thanks for watching. "ERIN BURNETT OUTFRONT" starts now.