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ERIN BURNETT OUTFRONT

AIG Thanks America, Might Sue; Iran Cheers Hagel Nomination; A Deadly Trap In Colorado

Aired January 8, 2013 - 19:00   ET

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


ERIN BURNETT, CNN ANCHOR: OUTFRONT next, insurance giant AIG got a $182 billion taxpayer bailout. You may remember that. You were probably angry about it. Now they're thanking America and they might sue us.

Plus new information about the Aurora theatre massacre tonight. Details of an elaborate trap and bizarre trap set by the alleged shooter that may give a window into the troubled state of his mind.

And demonstrations raging in Southeast Asia tonight in response to the brutal rape and murder of a 23-year-old Indian woman. Indian- born Padma Lakshmi speaks out for the first time about the attack. Let's go OUTFRONT.

Good evening. I'm Erin Burnett. OUTFRONT tonight, thank you, America. Insurance giant AIG says it's very grateful for the $182 billion in taxpayer money that saved it from I don't even know if bankruptcy's the right word, how about complete and utter obliteration at the height of the financial crisis.

Now AIG, of course, has become a symbol of the financial meltdown of 2008 so it's nice that they are now running ads to thank taxpayers for all that money.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We repaid every dollar America lent to us.

UNIDENTIFIED FEMALE: Everything plus a profit of more than $22 billion.

UNIDENTIFIED FEMALE: For the American people.

UNIDENTIFIED FEMALE: Thank you, America.

(END VIDEO CLIP)

BURNETT: Thank you, America, but now we may sue you. Well, they left that part out because AIG's board tomorrow morning is going to be deciding whether or not to join a $25 billion lawsuit against the government for rescuing the company.

Let me just explain. Here's why. Taxpayers profited from the deal. That may surprise you but it is true. Frankly, it surprised a whole lot of people in the financial world who thought it would never happen. They did.

Now, that's the $22.7 billion that was just mentioned in that ad. But shareholders including AIG's former boss, Hank Greenberg, say taxpayers profited because the deal terms weren't fair.

Michael Waldman is president of Brennan Center for Justice at NYU School of Law. Stephen Moore, senior economics writer for the "Wall Street Journal" editorial page. OK, so Michael, let me start with this.

The Treasury ended up owning almost all of AIG. Nobody thought they were going to pay this money back. So they shocked everybody by doing so, but the lawsuit says you can't take private property for public use without just compensation. That's the Fifth Amendment. They're saying the compensation was not just. You're a lawyer. Does AIG have a case?

MICHAEL WALDMAN, BRENNAN CENTER FOR JUSTICE, NYU SCHOOL OF LAW: I'm a lawyer and a taxpayer and this is the legal technical Latin term for this would be chutzpa if they did bring this suit.

The bottom line is the board of AIG in the middle of this financial calamity had a choice. They could take the bailout or the value of their shares as you said would vanish and shareholders would be left with nothing. So they chose the bailout.

They don't actually have to bring the suit. I would be frankly quite surprised if they did. Hank Greenberg, as you know, was the former CEO, he was forced out, he's sort of disgruntled anyway --

BURNETT: He has a personal connection to this.

WALDMAN: He's making a presentation to their board saying you need to join this suit. They may feel they have a legal obligation to hear him out, but they don't have a legal obligation to do it and they are even allowed to kind of snicker behind their hands at the time.

BURNETT: Unfortunate timing of the ad. Steven, let me ask you this because the lawsuit contends the government's a loan shark. The lawsuit that Hank Greenberg --

STEPHEN MOORE, SENIOR ECONOMICS WRITER, "WALL STREET JOURNAL" EDITORIAL PAGE: They said that many times.

BURNETT: Here -- 14.5 percent. Now a lot of people watching might say all right, if I didn't know it was AIG and it was me I would think that was a loan shark rate, but you know, just looking at the effective rate at that time to even borrow money for companies rated poorly, but not horribly, companies in better shape than AIG, they were borrowing at 18 percent. So the way I see it is 14.5 percent was a steal. What do you mean, you didn't get just compensation?

MOORE: I'm a taxpayer, too, and I didn't like bailouts. I didn't like this one. It certainly smells bad. It certainly seems ungrateful to taxpayers that there's this lawsuit. But let's look at what they're basically alleging. The shareholders are saying look, we weren't actually -- we might have come out better in bankruptcy if we had gone through a formal bankruptcy hearing, our shares might have been worth more than they were in this case.

And that they never really actually got to vote on this because the government took over 80 percent control of the organization. So that's the allegation, that shareholders' interests weren't really fully protected.

BURNETT: So I think that's crazy. I have to say. I think that AIG, I mean, the whole financial system could have crashed. Those guys are lucky to have gotten anything. That's one person's opinion from covering that story.

MOORE: Right. But you never really know. I think they're making the case if we had gone through a normal bankruptcy proceeding, that it wouldn't -- the value of the shares wouldn't have gone down to zero and who knows. But that's their allegation.

BURNETT: OK, I know you don't like bailouts so you have to say that. I think that's crazy.

WALDMAN: The gumption of arguing that. The fact is we all saw it in real-time. This wasn't a normal company in a normal situation, that might have been the case, but this was the world -- AIG and the world financial system hurtling toward oblivion.

And there's a really, really powerful lengthy opinion by Judge Engelmyer, very well respected federal judge, which dismissed this case very witheringly and said the allegations made by Mr. Greenberg read like they were in an Oliver Stone movie.

It's pretty clear that look, the board of directors had an obligation to act on behalf of the company and the shareholders, but they were within their power, it would seem, to say that the shareholders would benefit from the bailout as opposed to the nuclear explosion.

BURNETT: One final point, Stephen. Is this going to open up the door to newly sworn in Senator Elizabeth Warren?

MOORE: Not my favorite senator.

BURNETT: All right, she's on the banking committee.

MOORE: She will have a field day with this.

BURNETT: She said the government provides an ongoing stealth bailout even now to AIG with special tax breaks. So AIG even if they don't join the suit, and they're saying thank you and paid everything back with interest, they're now suddenly in the spotlight again. Does this mean Elizabeth Warren is going to get a green light?

MOORE: I don't know what special interest tax break she's talking about. I don't like corporate loopholes any more than anybody, as we talked about last night. We'll see if they're there. This is going to be a very difficult case for AIG to win, both in court and in the court of public opinion.

WALDMAN: If this gets before Congress you will finally see a return of bipartisanship.

MOORE: You may be right about that one.

BURNETT: You know what? If this is what it takes, you know, then I'll take it.

MOORE: But you know, the big winner here actually was the federal government. I mean, the federal government actually made a lot of money on this transaction. I think that's actually one of --

BURNETT: Hank Paulson and Tim Geithner in the darkest moments when people thought they couldn't get money out of the ATM, put terms on it. That's something to be allotted.

All right, OUTFRONT next, President Obama's pick for defense secretary got a ringing endorsement today. The problem was, it came from the Islamic Republic of Iran.

Plus, the president cleans out his cabinet and all of his new picks are white men. No offense to white men who are sitting on this set, but some people are upset about that.

And then first it was fire, the next day it was leaking fuel. What is going on with Boeing's Dreamliner?

(COMMERCIAL BREAK)

BURNETT: Our second story, OUTFRONT, Iran in Chuck Hagel's corner. The country's foreign minister applauding President Obama's pick for the next defense chief. He said and I'll quote him, "We hope there will be practical changes in America's foreign policy and that Washington becomes respectful of the rights of nations."

Now Hagel's comments about Iran have become lightning rods. Critics point back to his push in 2005 for direct negotiations with Iran and to his past statements like in 2006, when he said I would say that a military strike against Iran, a military option, is not a viable feasible responsible option. I believe a political settlement will be the answer.

In 2005 and 2006 was a long time ago. His views have tempered perhaps, who knows. OUTFRONT tonight, Peter Brookes, former deputy assistant secretary of defense under the Bush administration and John Avlon.

Let me start with you, Peter. Obviously the Iranian government loves to get involved in these things at times and stir the pot. They seem to love to do that. But how much does this seeming endorsement affect this potential nomination?

PETER BROOKES, SENIOR FELLOW FOR NATIONAL SECURITY AFFAIRS, HERITAGE FOUNDATION: Well, I guess you have to ask the Senate. I doubt very much that they'll take the Ayatollah's advice -- take it under advisement, I suppose.

I don't think it will have much at all. I mean, Senator Hagel had some views about Iran in the next couple weeks, I suppose we're going to have another airing of those views and I'm sure it's a very important question that senators are ling up to ask him.

BURNETT: So John, let me ask you. Chuck Hagel has a long record of talking about this and he said that in 2005 and 2006, but here's what he said just last year in an op-ed about Iran written with four other political leaders in the "Washington Post."

Our position is fully consistent with the policy of presidents for more than a decade of keeping all options on the table, including the use of military force, thereby increasing the pressure on Iran while working toward a political solution.

So still saying he wants a political solution, but military option on the table. So what is that, when you pull all that together, is this a guy who changed his point of view?

JOHN AVLON, CNN CONTRIBUTOR: That is a mainstream position, one the president has articulated, clearly in the mainstream of American foreign policy. What's important to note about the comments Hagel made in 2006 and 2007 and his memoir, 2008, it's in the context of someone who has been a consistent conservative, a Vietnam vet who felt burned by America's venture into Iraq when we started getting all the information.

And he started saying look, we blundered into this war because of flawed intelligence, because of ideology and in that context he was saying war with Iran should not be our first option. That is not in America's interests. What's extraordinary to me is how that perspective, that consistent small government conservatism is being called out of the mainstream by some in the conservative movement today.

It raises question about who's in the mainstream because Colin Powell, Bob Gates, Frank Carlucci, Reagan's secretary of defense all strongly support Chuck Hagel. So who is really outside the mainstream here?

BURNETT: That's a pretty interesting point. Peter, most people would say the United States is war-weary. If we are looking at a deadline, Israel would like there to be a deadline of late spring, early summer in terms of a decision on Iran.

Leon Panetta, the defense secretary, current defense secretary, told me he thinks we have more time than that. The U.S. isn't on the same page as Israel. Isn't it just the reality that America doesn't want a war at all? I mean, there wouldn't be the political will for it anyway.

BROOKES: I don't think anybody does. Do we ever really want war? I don't think that's the case, Erin. I think the issue here is that most people don't realize that we have been negotiating with Iran for nearly a decade on their nuclear program.

In 2003, when it was finally, the world finally became aware of Iran's nuclear program which didn't come from the Iranian government, by the way. It came from another group. So I mean, we've made no progress. The centrifuges keep spinning. Sanctions haven't really worked.

We've had -- they've had little effect, although they have some effect but no effect on changing the policy of Iran. So you know, the question is can you live with a nuclear Iran or are you going to have to take some sort of action, perhaps a military action, to deal with it.

That's the tough question and that's a very difficult question that policy makers are going to have to face in the coming years. The other thing is that Iran is very close on having an intercontinental ballistic missile capability. The U.S. Air Force said publicly, and I think this is the government's position.

That by 2015, we're already in 2013, that Iran may have an ICBM so if you put a nuclear program that everybody believes is nuclear weapons and an ICBM program, that's not good news for American security.

BURNETT: John, I want to ask a question. Do you think what Chuck Hagel is doing is putting out the president's point of view on Iran, which is that he's trying to say we might need to back off a little bit? I'm asking that because of something that Leon Panetta said. I just want to play exactly what he said about how the U.S. disagrees with Israel. I think this is new information. Let's play it.

(BEGIN VIDEO CLIP)

LEON PANETTA, DEFENSE SECRETARY: When you look at the intelligence, you know, it can be a lot more complicated. So I would just caution everybody that the intelligence on this issue raises a lot more questions about timing and when this will happen.

(END VIDEO CLIP)

AVLON: Erin, what Secretary Panetta is saying there is that let's be wary of false choices and timetables, which is essentially the message Chuck Hagel has been sending for years on this. The Obama administration has been pretty tough on Iran behind the scenes.

Hagel has been consistent himself, saying look, we cannot allow a nuclear Iran, war should not be our first choice, and that also is consistent with the president. The president began by thinking perhaps he could negotiate more with Ahmadinejad than has proven to be the case. He's evolved on this issue. My guess is Chuck Hagel as secretary of defense will reflect that evolution as well.

BURNETT: There's one other thing I want to ask you each about. This is relevant -- well, we'll ask you whether you think it's relevant in terms of timing. In terms of topic I think this is relevant. The number of sexual assaults in the military each year is about 19,000.

It is a serious issue. There are women in the military now and in 1996, when running for Senate, the literature from Chuck Hagel reportedly said quote, "I am pro-life with one exception, the life of the mother."

Now, who knows, people agree and disagree with that. I'm simply curious about Democrats are not noticing that, talking about that.

AVLON: Well, first of all, I think because it's irrelevant to the job of a secretary of defense. But it does remind us and highlight that President Obama has nominated a Republican, a consistent small government conservative to be secretary of defense.

His position on social issues are really irrelevant to the office of secretary of defense, but it's a reminder the president is trying to bridge divides and reassert the old idea that partisanship ought to end at the water's edge.

BURNETT: Although interesting, you know, if he says only in the life of the mother and sexual assaults are 19,000, you could have rapes and children --

AVLON: And the secretary of defense will execute the administration's policy.

BURNETT: Whatever that might be.

AVLON: A 100 percent.

BURNETT: Peter Brookes, so what's the bottom line? You think he's actually going to get this confirmation? It appears that even though there is some resistance that it is going to be surmountable. Am I wrong?

BROOKES: Well, I can't predict the future, Erin, but my sense is that the legislative staff and the White House probably went around and counted noses in the Senate before they put his name up there. Something could come up between now and then, but my sense is they feel they have a very good chance and a Democratic majority Senate of getting Senator Hagel confirmed as the next secretary of defense.

BURNETT: Maybe they will sneak Brennan by with all of this brouhaha going on. Thanks to both of you.

Still to come, new developments in the Aurora theatre massacre. Prosecutors today described a deadly trap that the shooter set to kill police officers. We will describe it to you. It's sort of hard to imagine what he thought would happen. But we'll tell you about it.

Protests raging in Asia tonight in response to the brutal rape and murder of an Indian woman. Padma Lakshmi, she is the star of "Top Chef," born in India, had her own story of men there when she comes OUTFRONT.

(COMMERCIAL BREAK) BURNETT: Our third story, OUTFRONT, a deviant trap. Prosecutors in Aurora, Colorado say 25-year-old James Holmes set a deadly trap at his apartment. It was designed to kill police officers. He did that just before he went to the movie theatre on July 20th and allegedly killed 12 people.

On the second day of Holmes' preliminary hearing, a crowded courtroom also heard the 911 calls from the night of the shooting. Ed Lavandera is at the courthouse tonight and has the latest.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: They're saying somebody's shooting in the auditorium.

ED LAVANDERA, CNN CORRESPONDENT (voice-over): The first 911 call came from inside theatre nine just 18 minutes after the start of "The Dark Knight Rises." The call lasted just 27 seconds. The caller's words drowned out by the sounds of constant boom, boom, boom.

Thirty gun shots could be heard in that one call alone. Six minutes later, the shots have stopped. A teenaged relatively of 6- year-old Veronica Sullivan calls 911, in tears the girl struggles to explain how Veronica can't breathe. The dispatcher tells her to start CPR and the girl could only respond "I can't hear you, it's too loud, I'm sorry."

Veronica would be the youngest victim to die in the theatre that night. It's an excruciating four-minute phone call and it left many watching the James Holmes preliminary hearing in tears. The family members of some of the victims wish James Holmes would simply plead guilty.

TOM TEVES, FATHER OF SHOOTING VICTIM: What I would really like to see honestly, I would like to see them throw him in a room with a toilet and nothing else, a window that he can at least see that the day is passing and that's it. No bed, nothing and let him just sit with his thoughts.

LAVANDERA: Even more stunning was the most descriptive explanation yet of the boobytrap James Holmes left in his apartment. According to an FBI bomb technician, Holmes mixed and created the explosive chemicals himself, including explosive powders and live ammunition, and homemade napalm. He then saturated his carpet in gasoline and oil and rigged an elaborate system of containers to explode.

(END VIDEOTAPE)

BURNETT: You're talking about that he rigged that elaborate system to explode. The way he did that was really bizarre and when I saw kind of what he did and what he thought might happen, I don't know, it gave a sense of how deviant his mind is. Can you tell everyone about that?

LAVANDERA: Absolutely. Remember, all of this, he had hoped, would have gone off before he started shooting in the theatre to distract first responders, take them to his apartment and then several miles away, he would be entering the movie theatre.

There were a couple ways to trigger these explosive devices, the IEDs. One would have been by opening the door, which would hit a trip wire and cause chemicals to mix, exploding on to the floor and causing the entire apartment to explode.

Another one which was I thought stunning, we had not heard this, was that there was a pyrotechnic remote control device on top of the refrigerator connected to some of these canisters and these jars on the ground in the living room, which was then connected to a boom box he had put in a white trash bag outside of the apartment building with a remote control car.

And he had hoped, he had told the FBI technician that he was being interviewed by, the remote control device he had hoped would start playing music about 40 minutes after he left really loud, that somebody would come by, pick up the remote control and start playing with it.

And then that would not really control the car, it would trigger the device inside the apartment. That never happened. Ironically, investigators found the boom box, but they never found the remote control car.

BURNETT: I mean, that was just so bizarre when I read that about that he had that remote control car and hoped someone would just pick it up and play with it. How did prosecutors use this evidence of the way he thought the apartment would explode to try to paint a picture of his state of mind?

LAVANDERA: Well, couple different things going on here. Prosecutors are really trying to show in this preliminary hearing, anticipating that James Holmes' attorneys will use some sort of mental health defense here down the road so they're trying to show that look, this isn't just some guy who snapped in the early morning hours of July 20th, decided to walk in a movie theatre and start killing people.

That this was an elaborate plan that he spent weeks and months planning. All of these materials according to investigators who testified, he made himself. He spent weeks buying the ammunition, 6,300 rounds, and all of the weaponry used, and what's interesting is that defense attorneys, when they get a chance to talk and cross examine these witnesses.

They focus especially today on the demeanor after he was arrested and they asked one of the detectives how James Holmes acted after he had been taken into custody, and the detective told the story about how the detectives had put paper bags over his hands to preserve any evidence on his fingertips and fingers.

And at one point he started picking up the paper bags and started using them as hand puppets, talking back and forth to each other although there are many relatives and victims' family members who say that they believe James Holmes is simply putting on an act.

BURNETT: All right, thanks very much, Ed Lavandera. It's going to be big decision whether this trial goes ahead or not.

Coming up later this week, still OUTFRONT, some say he's hiring too many white men. Point blank. Where are the binders of women, President Obama?

Later, a dispute over a marriage dowry in Saudi Arabia has sparked outrage. The man is 70, his bride, 15.

(COMMERCIAL BREAK)

BURNETT: Welcome back to the second half of OUTFRONT.

We start with stories we care about where we focus on reporting from the front lines. While the only known person that has been held in connection with the attack on the American consulate in Libya has been released by a judge in Tunisia. The news agency in Tunisia reports Ali Harzi was questioned as a witness, not a suspect, but an American federal law enforcement official tells our Susan Candiotti that the freed man remains a suspect.

Beyond Harzi, the company -- the official says investigators have identified 15 other individuals that he believes will eventually be indicted.

CNN contributor Tom Fuentes so says bringing any suspects to justice is going to be very difficult because of the chaos in the aftermath of the attack. He says the FBI also lacks a strong investigative partner in Libya.

Well, for the second day in a row, the same airline, at the same Boston airport, is having a problem with Boeing's Dreamliner. This is Japan Airlines. There was a flight carrying 181 people. It was turned around today after the cockpit crew discovered the 787 was leaking fuel. Yesterday, an apparent electrical fire sent smoke through a different Dreamliner.

Boeing analyst Carter Leake of BB&T tells OUTFRONT that electrical problems on new planes are to be expected, except when they result in fires or flight diversions. He downgraded Boeing stock today.

Now, Boeing says Monday's fire appeared unrelated to other problems it had before. The company didn't have an immediate comment on today's fuel spill and, of course, this follows the fact the Dreamliner has been delayed again and again and again. Many airlines are already angry it's taken this long to even get delivery of their Dreamliners.

Well, the IRS is going to begin processing tax returns for most filers on January 30th. Now, that's actually eight days later than you usually could do it. The reason the IRS moved the date is because, oh, yes, Congress, it took you too long to pass the new tax provisions. So, we asked our tax strike team member Martin Sullivan of Tax Analyst what part of the tax legislation is going to have the biggest effect on the average 2012 return. You know, most of these laws are 2013 and 2012. He says the AMT patch, that 30 million people, 30 million of you out there, are going to be saved from the AMT and that is why the IRS had to cause the delay.

The White House officials say the United States could pull every single troop out of Afghanistan after 2014 when the NATO mission officially ends. The White House deputy national security advisor Ben Rhodes said the administration has been considering a range of troop levels in Afghanistan and that one of them is zero troops -- zero troops.

The latest assessment from General John Allen, the top American commander in Afghanistan, is to keep between 6,000 and 15,000 troops in Afghanistan. Last month, I asked Defense Secretary Leon Panetta in Kabul when we're finally going to get word on troop level numbers and he told me sometime soon.

Well, it's been 523 days since this country lost its top credit rating. What are we doing to get it back? Well, an index that tracks small business sentiment registered its second lowest reading since March of 2010. Fiscal cliff was the problem. So maybe it's backward looking, maybe they're happier. I don't know. We can hope.

And now our fifth story -- fourth story OUTFRONT: the White House boys club. White boys club.

After being propelled to a re-election with the help of women and minority voters, the nation's first black president appears to be stacking his second term cabinet with white men. The president's choice for treasury secretary is expected to be Jack Lew. So, he could surprise us there. We don't know. But that's the expectation.

That's after nominating John Kerry for State, Chuck Hagel for Defense and John Brennan for CIA chief. Obviously as you can see, they are all white men.

Now, with Hillary Clinton exiting the State Department and Lisa Jackson stepping down as head of the EPA, the Obama administration's at a net loss when it comes to women and minorities in the cabinet.

OUTFRONT tonight, Roland Martin, Reihan Salam, and former Pentagon official Rosa Brooks, a columnist for "Foreign Policy' magazine.

Rosa, let me start with you. Because, you know, this is a president who campaigned aggressively on women's reproductive rights and equal pay for equal work. It was a big part of his campaign. He won the women's vote by double digits over Mitt Romney. Should the president be asking for something that he mocked, i.e., binders of women?

ROSA BROOKS, FOREIGN POLICY MAGAZINE: I'm tempted to send him a few binders, because I know a lot of fantastic women. I mean, I think this isn't an issue of affirmative action here. This is an issue of having to reach far down in order to find a woman who is a little bit less qualified than man and putting her up there.

This is a question of you got a bunch of equally qualified people, one of whom is a Democratic woman in a lot of these cases, why are we not trying to put those women in these positions?

BURNETT: Roland, this is pretty interesting, because Jay Carney, White House spokesman, said, look, we want the best person for the job, and we value diversity. But, obviously, so far, they have picked all white men. Is the truth just that the president is saying, look, in these cases, the best person is white and male, or is Rosa right? They are equally qualified women or minorities for these jobs?

ROLAND MARTIN, CNN CONTRIBUTOR: First of all, they have tons of qualified people out there, for any of these particular jobs. What the White House said, as I talked to senior officials on my way over here, they said, look, look at the totality of our cabinet, not just the national security team. They haven't made all those announcements yet.

Attorney General Eric Holder was the first African-American. He's likely going to continue. You did see Lisa Jackson step down. You also had Trade Representative Ron Kirk, we'll see whether or not he stays in that job. Hilda Solis was a woman, also Latino, whether or not she will continue as secretary of labor. So, those are there.

Also, I find it to be interesting. I went to the National Organization of Women Web site. When Ambassador Susan Rice was being attacked, they didn't say a word. They weren't rising to her defense. Her name was the only one of the national security team being floated out there and you would have thought they would have come to her defense.

Now, a group of black women, the National Black Women's Roundtable, they stepped out there. And you had folks at the Congressional Black Caucus.

So, where was NOW when they could have defended Susan Rice and possibly kept her name alive to be nominee for secretary of state? They should be answering that question.

REIHAN SALAM, CNN CONTRIBUTOR: Well, the Susan Rice contrast is a very interesting one for a number of reasons. One of them is that Susan Rice technically took herself out of contention, but there was a perception that she had been abandoned by the White House.

Whereas Chuck Hagel, a ton of people not only on the political right were raising objections to Hagel and yet the White House hung tough on behalf of Hagel which is very telling, I would suggest.

I think when you're looking at Senator Kerry and Senator Hagel, you are looking at two people who served as mentors to President Obama when he first entered the Senate, with whom he feels he has a shared world view. But let's not forget that President Obama had been praised for his team of rivals, that his having diverse voices, when he first came into office. So there's a question of whether or not he's stepping away from that.

Rosa Brooks hasn't just talked about diversity and representativeness in the cabinet. She has also talked about deeper problems with President Obama's national security team and his national security approach. I wonder if this is emblematic of a deeper problem.

BURNETT: Rosa, let me ask you this, now that there's a scrutiny and, you know, I understand Roland's point about the cabinet overall. But, you know, defense secretary and EPA chief are two very different things in the public eye in terms of the attention that they get, the authority that they have.

At this point, would a woman want to be nominated? If the president comes out for the next thing and nominates a woman, is that woman is going to feel whether it's true or not, everyone is going to think she's just getting it because she's a woman?

BROOKS: It's possible but I think it wouldn't be true. I think there are fantastic women out there. I think that they know that they're good and they are good. There would be plenty of people who would rise to their defense.

But I think that that earlier point is a really important one. This isn't just about being nice to women or something. There's a ton of evidence out there that if you have more diverse decision making groups, they make better, smarter decisions. They make more creative decisions. They are more likely to think of a lot of alternatives.

You know, if you have a homogenous group, whether it's homogenous on gender or on race or on education or ideology, you just get worse decision-making.

BURNETT: Right.

BROOKS: And I think a real problem for many presidents is getting into a bubble where everybody shares your views and you are shielded from hearing what you don't like. That's what I really worry about here.

MARTIN: You know, Erin, one thing, though, is also is a reality. That is groups out there who have been supportive of the president, they also can't be quiet. They also can't just sort of sit back and say, well, let's see what happens. We have actually seen that, where from Hispanics, African-Americans, also women's groups.

Look, Frederick Douglass said, agitate, agitate, agitate. Power can seize nothing without a demand. And so, you can't just sit here and complain after the fact. When these names are being floated, you should have seen women's groups and other groups saying, we want to see these folks not just sort of lay back and see what happens.

BURNETT: Right.

MARTIN: No. It should be far more aggressive.

BURNETT: Rosa, do women, though, suffer from -- your former boss, Michelle Flournoy, who had been floated as a front-runner for defense secretary, had recently stepped aside from her job because she wanted to spend more time with her family. Now, Leon Panetta flew home every weekend to see his family, right? So, it happens for men, it happens for women.

But I'm wondering, you know, I want to play something President Obama said about John Brennan, his CIA chief, today. Let me play that and then I will explain why I did.

Here it is.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: John is legendary even in the White House for working hard. He is one of the hardest working public servants I have ever seen. I'm not sure he's slept in four years.

(END VIDEO CLIP)

BURNETT: Now, Rosa, it's true, this is the kind of person the president wants, right? Someone who doesn't have a family, who doesn't have anything else to do but work.

BROOKS: To me, that -- obviously, President Obama is saying that for effect, but I don't want a secretary of defense who never sleeps. I want a guy who gets some rest every now and then because those are pretty important decisions that person is going to have to make, and the same way I don't want a pilot flying who hasn't had any sleep and I don't want a neurosurgeon operating on me who hasn't had any sleep.

MARTIN: Come on.

BROOKS: It's better for national security to have people who are rested.

You know, I'm serious about this. I mean, I think this often gets -- we get into this fantasy of oh, well, the world never sleeps so we're so important, we're here 24/7. That's just bad management. That's just a recipe for bad decision making and it happens to have a differential effect on women and men who want to have families as well.

MARTIN: Erin --

BURNETT: Final quick word. Yes?

MARTIN: This family thing, let's remember, Condoleezza Rice wasn't married. She was secretary of state. Janet Napolitano, head of Homeland Security --

BURNETT: That's my point. This isn't gender. It's people who don't have families tend to get those jobs and perform well.

MARTIN: Look, it happens. Bottom line is when you're in these political roles, guess what? People are absolutely consumed by these jobs, whether it's men or women, whether they are white, whether they are black. So be it. That's the nature of these jobs.

BURNETT: All right. Thanks very much to all. We appreciate it. Let us know what you think about this.

I hope many people have passionate views on it and share them with us.

OUTFRONT next, more than 100 fires in Australia are raging, threatening hundreds of homes, thousands of people and sparking a revolution.

(BEGIN VIDEO CLIP)

PADMA LAKSHMI: I'm from India. While it didn't surprise me, it disgusted me.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

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

And tonight, we go to Australia. More than 130 fires are raging in New South Wales. Many are fearing a repeat of 2009's Black Saturday, which was a series of bush fires in which 173 people were killed and destroyed thousands of homes. As temperatures soar to 109 degrees, officials are warning residents that the risk is real and potentially deadly.

Gemma Veness at fire service headquarters in Sydney for us tonight.

And, Jim, how widespread are these fires?

GEMMA VENESS, SKY NEWS: These fires basically are almost Australia-wide. At the weekend, they hit Tasmania and this heat wave really moved up through Victoria, up to New South Wales, and this heat threat is now moving into southeastern Queensland.

So, yet to see if any of those fires eventuate in Queensland. So, you would certainly expect so. So, in Tasmania, the threat was very true there because 100 homes were lost. In Victoria, there were reports of up to 20 homes and in New South Wales, no confirmed home losses at the moment, thankfully and most importantly, no lives have been lost.

BURNETT: And I know there's obviously a concern that there could be a loss of life if these fires continue. What is the Australian government doing about this?

VENESS: There certainly is concern and obviously we learned a lot of lessons since the 2009 Black Saturday fires.

Now, in terms of fires that are actually going on at the moment, obviously, they are being fought on the ground and in the air by firefighters, many of them volunteers here in Australia and, obviously, the fire bombing from aircraft to try to get the fires under control.

We also have back burning operations in areas that are yet to be hit where it is safe to do so where fires are burning because the Australian bush obviously just burns so easily in these conditions. Very dry and the trees have that oil that just seems to burn and combust that way.

We have undercover police at several locations looking out for any arsonist activity which unfortunately, is a real threat, and luckily, we've had no lightning which can of course also cause the bush fires.

So, people in their own home as well, their fire preparations which hopefully in most cases have been prepared long before this, everybody should have a fire plan if they live in any bush fire prone areas which a lot of people do across Australia, of course, so that they can defend their homes.

BURNETT: All right. Gemma, thank you very much. Gemma Veness reporting for us from a fire house in Australia.

And now, our fifth story OUTFRONT: international outrage.

Protesters have taken to the streets of Nepal today demanding better protection for women. The demonstrations are in response to the brutal gang rape and murder of a 23-year-old Indian woman by five men and a teenager in New Delhi last month. The story has grabbed the world's attention and it has prompted condemnation.

Among those speaking out tonight is Padma Lakshmi, best known as the host of "Top Chef" here in the U.S.

Padma, though, was born in India. A lot of her family still lives there. And she came OUTFRONT to talk about the story for the first time. I asked her how she felt when she first heard the news.

(BEGIN VIDEOTAPE)

PADMA LAKSHMI, TOP CHEF: I was saddened and I was sickened. I literally felt nauseous. I'm from India and while it didn't surprise me, it disgusted me, and it reminded me, brought back to me all of those feelings of when I was walking in Delhi.

And the minute I read about this, my mind immediately went back to I remember going to the market to get vegetables for my aunt, who had run out of cilantro or something. I said, OK, we'll go get it. And me and my cousin went to get it and, you know, it was literally before 6:00 p.m. and we were leered at and, you know, we really felt intimidated. This was not, you know, routine guys kind of whistling. This was much more aggressive and intimidating than that. And that happens every day.

I used to ride the bus in India to school and I hated it, I hated going on a crowded bus, because they would always pinch you or grab you. And, you know, when you're a teenager, I went to school some years in India and it was terrible.

BURNETT: So, I mean, that literally would happen on the bus, that men would grab you and touch you?

LAKSHMI: Sometimes, yes. I mean, look, they have reserved seating for women on buses. You know, that gives you an idea of the problem.

BURNETT: Right.

LAKSHMI: And, you know, you never feel safe. Like you never feel like oh, I should just, you know, walk where I want, because it's my right. It doesn't matter what your technical legal rights are. What matters is your safety and you just don't -- you just don't feel like testing that.

BURNETT: Well, you were born in India, as you say you still have family there and spend a lot of time there. One of the things I thought was so amazing just getting ready to talk to you was you said there isn't even a word for rape in Hindi -- obviously, the predominant language spoken in India.

I mean, what does that say?

LAKSHMI: I mean, the closest word is I guess "lutna (ph)", which kind of means, you know, to take someone's honor away. But to say that because a woman has been violated, she no longer has her chastity or her honor is missing the point.

Some of the policemen even told some of these rape victims that maybe victims that maybe they should consider marrying one of their rapists, so that, you know, they'll be able to find a husband and their honor won't be taken from them, which is ridiculous.

I mean, the problem is much bigger than this gang rape. It's much bigger than these men or even the rapes of the last five years and the lack of prosecution. It is something that is so intrinsic to Indian culture. You know, we like to say that India is the largest democracy and in many ways, it is.

But we can only consider India a true democracy when, you know, half its citizens feel safe in the streets, when they don't feel like they are vulnerable, just because of their gender, and when they can walk their streets and go about their business and their family in peace, and in tranquility.

BURNETT: I mean, your story, Padma, is so interesting to people. I mean, your parents divorced when you were very, very young, right? Your mother moved to the United States, and you were raised here, but in an Indian home.

So when you think about it now, you were talking about how when you go to New Delhi and walk down the street and talking about how you know the fear they feel, how was your upbringing different than what your family in India was taught?

LAKSHMI: I come from a liberal, middle class family, but still, it's very conservative. When I was a young girl, you know, one of the reasons my mother, for example, moved to America is because there was a lot of discrimination against single women, single mothers, divorcees, and she would have had a very difficult life had she stayed in south India.

And in north India, it's much the same. I mean, I was even concerned when I went into modeling after college, because, you know, while my family accepted me, I was worried about what other people would think. Fifteen or 16 years ago when I started modeling, you know, modeling was just not that far from prostitution. So you can imagine how self-conscious I felt.

But, you know, I got to pay off my college loans through modeling. I just think, you know, there's such a deep problem, even the notion of sexual harassment is called eve teasing in India. And that, I think, is a very of euphemistic way to refer to a very serious problem. And the I think the reason that you're seeing all of this incredible demonstration is because women feel empowered because they make their own money and their own decisions to speak out.

BURNETT: And do you think, Padma, I mean, there's been so much attention on this case. And in a sense, it seems like a blessing that this is -- you know, it's terrible it's taken this long, but once this happens, this becomes a moment. Will there be real change?

LAKSHMI: I think there may just be real change. I am optimistic about that. I have to be optimistic, as a woman, as an Indian, and I think that the Internet and news programs like you guys really help, because now I think Sonia Gandhi and Manmohan Singh and all the rest of parliament understand that the world is watching.

And to truly be respected as a world power, as a dominant force, on this globe, which is what every Indian wants, whether they're in office or not, they are going to have to tackle this subject head-on. They're going to have to explain to the world why they're a democracy, and yet, over half of their citizens are abused, verbally and otherwise, assaulted, sexually and otherwise, and also discriminated against.

You know, it's in there, it's engrained so deeply into our psyche, into our religious text, that to break through of those bounds and ties of our ancestry, we are going to have to really look at our demons in the eye in order to extinguish them.

BURNETT: All right. Well, Padma, thank you so much for taking the time.

LAKSHMI: My pleasure. Hopefully, the next time will be on a better subject matter.

(END VIDEOTAPE)

BURNETT: A 70-year-old man, a bride who says she's 15. That story is OUTFRONT next.

(COMMERCIAL BREAK)

BURNETT: A man in Saudi Arabia is seeking legal action against his new bride after he claims she refused to spend time with him. This despite the fact that he paid a dowry of nearly $20,000. Now, this would normally, in Saudi Arabia, just be a dispute between families, except for this -- the man is reportedly 70 years old and his bride says she's just 15 years old.

The young girls being forced to marry old men is an ugly reality in much of the world, but in Saudi Arabia, the issue for women is not just behind closed doors. In addition to the concealing dress which they must wear by law, women must be accompanied by a male guardian. They can be stopped forced to show papers proving their relationship with the man they are with. And women I know, they tell me, this practice is a little less common that it used to be.

But the truth is, you can't leave the country as a woman unless your male guardian has signed off on it. I've seen the forms they have to provide at the airport. And when I saw it, it sent a chill down my spine.

Certainly, it's time for change, and how about starting with driving? Saudi Arabia is the only country in the world that still prohibits women from driving a car. It has been that way since 1979, far from being an edict thousands of years old, it's very recent.

When I'm there, I never get used to the fact that there are only men behind the wheel. Women aren't allowed to be with men they are related to in Saudi Arabia, except in the car, where they're driven around by expats from Pakistan and Southeast Asia, who they are not related to at all.

Many women in America when they hear hypocrisy like that assume that the situation in Saudi Arabia is hopeless. But the truth is, is that Saudi Arabia is primed for a great awakening.

According to Oxford Strategic Consulting, about 57 percent of Saudi women have university degrees, most of them post-graduate. They are being given amazing education. They just haven't had the opportunity. Women make up only about 15 percent of the Saudi labor force, the lowest in the world, and roughly 60 percent of women with PhD degrees are not working outside the home.

It's an amazing statistic. You want everyone to have the choice whether to stay at home or whether to work. I've spent time in Saudi Arabia with some incredibly driven woman who love their country, want to stay there, and want to change it for the better. They want jobs and they want families, and they want freedom. Here's hoping they succeed. "ANDERSON COOPER 360" starts right now.