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New York Governor Cuomo Gives State of the State Speech; Critic Says New York Ignored Warnings of Sandy Scale Event; Jeff Hall Murder Trial Examined; AIG Will Not Join Bailout Lawsuit; 1600 Penn at the White House

Aired January 9, 2013 - 15:30   ET

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


BROOKE BALDWIN, CNN ANCHOR: Got some breaking news just into here at CNN.

We were reporting on the possibility of a lawsuit, AIG to be part of this lawsuit, basically suing the hand that helped bail them out a couple of years ago that you and I and the American taxpayer, some $182 billion.

They were -- they're in the midst of a reimaging. You have seen the ads, right? Because of what has happened from a couple of years ago. But now we have learned they will not be taking part in this lawsuit. Hank Greenberg was sort of leading that charge. He was a former head of AIG. So, it's a no-go for them. Ali Velshi is going to be all over it in a matter of minutes.

But I want to talk now about New York and New York's governor, Andrew Cuomo, getting emotional today when he talked about Hurricane Sandy in his annual state of the state speech.

(BEGIN VIDEO CLIP)

GOVERNOR ANDREW CUOMO (D), NEW YORK: Despite all of these efforts, despite all of the efforts of the first responders, the police, the fire, the national guard, the heroism of citizens, we still lost lives during Hurricane Sandy. We lost 60 of our brothers and sisters who were New Yorkers at the damage of the storm.

(END VIDEO CLIP)

BALDWIN: Cuomo has met with experts, discussed specific steps to make New York safer before another storm like that hits.

But my next guest says New York has ignored the warnings for years about a superstorm hitting the city and state already has a pile of recommendations ready to roll to help improve the city's disaster plans. Really, he says, it is a question of who pays for it.

Joining me now is former New York state assemblyman Richard Brodsky. Mr. Brodsky, welcome.

RICHARD BRODSKY, FORMER NEW YORK STATE ASSEMBLYMAN: Nice to be with you. BALDWIN: The governor's broad -- this is some 175-page study. It says that the state should consider storm barriers with moveable gates. Price tag of that in the billions of dollars ballpark.

You say the governor's plan not detailed enough. What's missing?

BRODSKY: Well, the problem here is that we already have in New York, a very particular state law requiring to have a hurricane plan that has three elements. Response, which happened pretty well, the governor pointed it out to his credit.

But it also is supposed to have a prevention plan and a recovery plan and they simply ignored those parts of the law.

That wasn't an academic or technical breakdown.

BALDWIN: They ignored parts of the law?

BRODSKY: They did. They did. The law is specific. It says with storm surge, flooding, have a plan and ways and policies and make recommendations on how to prevent the damage.

Now, downtown on the Hudson River, there is a big building owned by Goldman Sachs. They put sandbags around that building to the tune of 16 feet. The lights stayed on, no damage.

One block away is the MTA's Brooklyn Battery Tunnel between Manhattan and Brooklyn. No sandbags, the visuals of that are appalling, hundreds of millions of dollars of damage and weeks of delay and inconvenience to commuters.

When -- if we're going to fix this, we've got to go back and figure out why we weren't prepared so that when the next storm hits, we get prepared.

BALDWIN: What about then beyond the lack of what these items that could have clearly helped a lot of folks up and down the New Jersey, New York areas, what about money?

I mean, this is not cheap here with these disaster preparations. Who pays? How do you get that money?

BRODSKY: Well, that -- it's a great question. And when you're going to spend public money, it's always easier to spend the money on saving people than it is on the dull business of preventing people on a calm August day years before.

The state has a responsibility, the city has a responsibility, the federal government has a responsibility and, frankly, I've been a little surprised by some of the reactions in the House of Representatives which they don't seem to want to invest in prevention.

They call it pork, which it ain't and they have dismissed that as a valid exercise of federal participation.

If we don't learn the lesson of Sandy, we're going to be facing expenses. Put aside the human tragedy, as the governor pointed out, we're going to be facing rebuilding costs triple, quadruple the cost of prevention.

It's good economics. It's good politics. It's time we got off our collective rear ends and did what's right about preventing storm damage.

BALDWIN: Straight talking Richard Brodsky, thank you. Thank you, sir.

And now this, we're tracking an incredible emotional story out of Riverside, California. Back in May of 2011, white supremacist leader Jeff Hall was shot and killed inside his own home.

Now on trial is Jeff Hall's son, who was 10 years of age at the time of his killing. The defense rested yesterday.

Criminal defense attorney Holly Hughes joins us and, you know, there was a question as to whether or not this boy would testify and the lawyer now we've learned did not -- lawyer pulled the whole not guilty by reason of insanity plea.

So, what do you make of all that?

HOLLY HUGHES, CRIMINAL DEFENSE ATTORNEY: Right. They withdrew that and I think probably this young man -- and he was 10. I mean, this is a child. This is a little boy.

BALDWIN: I remember when it happened. We covered it. Yeah.

HUGHES: He repeatedly confessed, yes, I shot my father in the head while he was asleep.

So that confession has already come in through the state's witnesses, the detective who took that has put that in.

So, the defense did not want to expose this young man -- he's 12 now -- to cross examination by the state because, let's face it, it's just a matter of what degree are we talking about.

BALDWIN: What are we talking about? What would the penalty be?

HUGHES: Well, at this point, because he's being tried in juvenile court, it's only the judge deciding that and the maximum he's going to get, Brooke, is up until the time that he is 23 years old.

And the argument will become, will he be put in a lockdown facility and basically treated like an adult prisoner now with other people his age, right, a juvenile facility.

The defense is arguing to the judge, this young man is salvageable. Even the state's own psychologist said this young man could be saved.

So, you know, they're going to say the defense wants him put in a less restrictive environment, maybe a group home, where he will get a lot more therapy and not necessarily be exposed to more dangerous children who are in the juvenile facility lockdown.

BALDWIN: What about what the psych expert has said, the boy's actions had nothing to do with the father being a neo-Nazi. How is that ...

HUGHES: Which leads me to believe -- well, you know what it leads me to believe and this is why I think they probably withdrew the not guilty by reason of insanity.

Because this is a juvenile case, there's a lot we're not hearing, Brooke. There's a lot that's protected, OK?

I think that is sort of a telegraphic message saying, it wasn't because the father was a neo-Nazi, but it was something else the father did because the psychologist said, this young man had a traumatic upbringing, a rough upbringing.

So, if this child was being abuse -- exactly -- in some other manner that had nothing to do with him being a white supremacist, maybe just a rough, violent father.

BALDWIN: Got you.

HUGHES: And so that's why they withdrew the insanity plea because, if the judge found this young boy insane, his sentence could be indefinite. He will be locked up until he becomes no longer a danger to himself or society.

Look at John Hinckley. How long has he been locked up? That's why the judge said -- you know, the defense said we'll withdraw the insanity plea because the judge has heard all this other stuff and may go easier on sentencing him.

BALDWIN: Let me talk about this other case. This is Texas.

Judge in Texas says this high school can force high school students to wear a locater chip while on school property. Tracking our kids like this, no matter how parents feel about it, privacy groups on both sides, they are up in arms over this.

So, when you think, OK, if this is OK in one school, will this be OK in other schools?

HUGHES: And that's what Texas is actually trying to do. In this particular school district, which is one of the largest in the state of Texas, which is huge anyway to begin with, about 100,000 students in total, once you add up all their schools, they're starting this pilot program in two of their schools.

The judge has said, guess what, we're going to allow that. The locater chip is actually in an i.d. badge that the student has to have on and the caveat is there is a lesser expectation of privacy. Students have reduced privacy rights in a school and the Supreme Court has consistently held that.

Think about these cases. Locker searches, they can just go in and search your locker. They can't bust down your front door in the home and do it. That's exactly right. So, there is that lowered expectation and the badges do not work once you leave the school property.

So, the judge has said, hey, look, I understand, there is a public safety issue. There's also a funding issue. This is not to violate privacy rights. This is to make sure the children are properly checked into homeroom so the magnate schools can get their funding.

BALDWIN: Can't imagine kids being up to no good, Holly Hughes.

HUGHES: Teenagers, Brooke. Teenagers.

BALDWIN: Holly, thank you.

HUGHES: Absolutely.

BALDWIN: Thank you.

Another domino today in the president's cabinet shuffle, this time impacts your wallet.

So, who is Jack Lew and what would he do at the Treasury Department? That is next.

Plus, the breaking news of AIG's decision not to sue the government over its bailout.

Ali Velshi has a lot to say. He's back and he's next.

(COMMERCIAL BREAK)

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Things are looking up for the U.S. economy. Let's hope our politicians don't bring it down.

From the CNNMoney Newsroom in New York, I'm Ali Velshi. This is "Your Money."

Walmart reverses itself on gun violence meeting. Do you know who Jack Lew is? Well, you will soon. More nightmares on the Dreamliner and America is on track to prosper if we just let it.

But, first, that Walmart story, the change of heart. Vice President Joe Biden invited Walmart and other large gun retailers to meet with his gun violence task force at the White House tomorrow.

Incredibly, Walmart started off the day saying it didn't have a single person available to attend the meeting. But then it quickly changed its tune in response to scathing criticism, including from my good friend, Christine Romans, who spent the morning reporting on and talking to the world's largest retailer.

Christine, what happened?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, Ali, first thing this morning, Walmart was saying they were not going to be physically at those meetings with the vice president this week, that they had a phone call earlier this week, that the White House was well aware of their position on these matters and they would not be going to these meetings.

I asked specifically one of the corporate spokespeople, I said, so, of 2.2 million employees, not one can get out of the scheduling conflict to go meet at the White House? I mean, when the White House calls, you know, you kind of have to show up and show somebody -- send somebody. And they said, no, we weren't going to be there.

As the morning wore on, and we continued to talk about this, and whether it was appropriate for Walmart to have not one person at this meeting, then an about-face from Walmart.

This is what they said. "We underestimated the expectation to attend the meeting on Thursday in person, so we are sending an appropriate representative to participate."

Why is Walmart such a big stakeholder? Why did so many people expect Walmart to be physically at the table? Well, Walmart is the world's largest retailer. It sells Bushmaster AR-15-style weapons like the one used in Newtown.

As the world's largest retailer, it is also likely the world's largest firearms retailer and a lot of these folks have been gathering around the table to talk about how to cut down gun violence.

So, at the beginning of the day, Ali, no, Walmart was not going to be able to go because of a scheduling conflict. You know, by late morning, they changed their mind.

Ali?

VELSHI: Nice work, Christine.

On the money menu, Boeing may be in for more trouble over its 787 Dreamliner. In the latest mechanical glitch to hit the high-tech jumbo jet, an All Nippon Airways Dreamliner was grounded today in Tokyo because of a systems error message in the cockpit.

Now, yesterday, a Japan Airlines Dreamliner had to be towed back to the gate -- there it is -- in Boston because of a fuel leak. Yet another JAL Dreamliner filled with smoke on Monday after landing, though, luckily, passengers had disembarked. And last month, a United Dreamliner was diverted to New Orleans over mechanical problems.

Boeing executives say they still have, quote, "extreme confidence" in the 787.

(BEGIN AUDIO CLIP)

MIKE SINNETT, VICE PRESIDENT AND CHIEF PROJECT ENGINEER, BOEING 787: And like any brand-new airplane program, the first year or two years in service, there are issues that we have to work through.

And I can tell you that the 787 is in the same family as our other leading airplanes, the 777 as an example. (END AUDIO CLIP)

VELSHI: Now, I've taken a couple of flights on these new Dreamliner 787s. They are sweet, no question about it. But at $200 million a pop, Boeing has a lot at stake. It has 800 of the planes on order from airlines, but it's been dogged by production delays and now these mechanical glitches since it debuted in late 2011.

So, whether these problems are typical or not, they could prove to be a nightmare for Boeing's bottom line if airlines start putting their orders on hold.

All right, new term, new treasury secretary, a source confirms to CNN that President Obama is set to nominate his current chief of staff, Jack Lew, to replace Tim Geithner.

Lew is described as the consummate Washington insider and behind the scenes dealmaker. He also has ties to Wall Street. He was an executive at Citigroup. He served as budget director under Bill Clinton and then again more recently under President Obama.

He was a key player during the 2011 debt ceiling talks that almost shut down the government. He's going to have his work cut out for him, though, as Democrats and Republicans on Capitol Hill gear up for that battle over extending the debt ceiling.

With the global embarrassment that serves as economic policy debate in Washington these days, I have a hunch Tim Geithner won't miss taking part in another one of those showdowns.

And, finally, AIG made the right decision, the decision not to join a crabby shareholder lawsuit against the U.S. government. You've probably heard by now about the lawsuit. It was led by former AIG CEO Maurice Hank Greenberg.

It claims the terms of the $182 billion government bailout which saved the company -- possibly planet earth, as well -- from financial meltdown were too harsh. The lawsuit, which has already been thrown out of court once, was looking for $25 billion. Pretty outrageous.

But the board did have a responsibility to take a look at the lawsuit and decide whether or not to join it. The company's board met today and made the right decision.

The case will go forward, however. AIG won't be a party to it.

The government, by the way, has divested itself of the entire 92 percent of AIG that it or, more accurately, you owned. The profit on the deal was $22 billion.

That's it for me from the CNNMoney Newsroom in New York. I'm out. Same time tomorrow.

(COMMERCIAL BREAK)

BALDWIN: The TV stars of the comedy about the hectic family life in the White House will be rubbing elbows with President Obama today.

Shannon Travis here with me for the political pop and, Shannon, "1600 Penn," new TV show.

SHANNON TRAVIS, POLITICAL REPORTER: New TV show, exploring some things that you probably never would associate with the real 1600 Pennsylvania Avenue, Brooke, a pregnant first daughter, a divorced president, remarried to a new woman and a bit of a goofball son.

Obviously, these are the themes in this fictional "1600 Penn" on NBC.

Now, the new series premiere is airing tomorrow, but today, President Obama is hosting a screening at the White House.

Why would the president be hosting a screening of the show, you may ask?

BALDWIN: Why?

TRAVIS: Why? Why? Exactly.

It may be because one of the co-creators of the show, his name is John Lovett, he was a former speechwriter for President Obama for three years. Yeah, he actually got his start in comedy, veered into politics, is kind of now at the intersection of both. So an interesting screening there.

The show centers around, again, this fictional President Gilchrest, his four kids and one of them, this eldest son, is a bit of a screwball. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Let's fight fire with fire safety. I think we got it!

UNIDENTIFIED MALE: Oh, no.

UNIDENTIFIED MALE: Oh, no!

UNIDENTIFIED MALE: President De Soto, welcome to the United States.

UNIDENTIFIED MALE: I just hope to avoid bodily injury.

UNIDENTIFIED MALE: We'll keep you out of harm's way.

UNIDENTIFIED MALE: Maybe try a little bit harder?

UNIDENTIFIED MALE: I'm so sorry.

(END VIDEO CLIP)

TRAVIS: Looks pretty funny to me there, Brooke.

We're told that the president will have this screening in about an hour from now. Brooke?

BALDWIN: OK, so they're hanging out at the White House. What about presidential inauguration just a couple of weeks away and we've got some new details of who will be performing for the big weekend.

TRAVIS: Absolutely. Big details. Kelly Clarkson is going to be performing "My Country 'Tis of Thee" on the inauguration event on Monday. James Taylor is going to be singing.

But probably the biggest news is Beyonce.

BALDWIN: She's back.

TRAVIS: She's going to be doing the national -- she's back. She's going to be doing the national anthem.

It's a bit of a reward, Brooke, for all of her big electioneering and support for President Obama. Anyone's guess. But as you just mentioned, back in 2009, she also took part in the festivities for Barack Obama, so it's a pretty big year for her.

BALDWIN: Awesome. Well, I just found out I'll be covering the inauguration, so, Shannon Travis, I will see you in Washington. Thank you so much.

I want to you let you know we've been following. of course, this crane collapse. Take a look at this picture in Long Island City

New details here on the people injured. This was an active construction site, residential building, Long island City.

Back in a moment.

(COMMERCIAL BREAK)

BALDWIN: Before we talk to Chad here and talk about great white sharks, I want to let you know that we have new numbers from the New York fire department on this crane collapse in Long Island City that happened in the 2:00 Eastern hour here.

We now know seven people -- seven people are injured. We're told three, according to the fire department, three seriously injured, four with minor injuries.

But the good news here, as this was a residential building and active construction scene, everyone is accounted for.

And now to sharks. A great white shark that weighs more than 3,000 pounds is just hanging out right now near Jacksonville Beach in Florida.

The shark dubbed "Mary Lee" was originally tagged near Cape Cod, Massachusetts, back in September and, yesterday, it entered the surf zone near Jacksonville Beach. No surfers were around, thank goodness, but Mary Lee got as close as 200 yards from the beach and that prompted the research group to track, of course, the shark, alert police.

Chad Myers. first of all, Mary Lee as a shark?

CHAD MYERS, AMS METEOROLOGIST: And that there, that's Jeannie (ph).

BALDWIN: Who names these sharks?

MYERS: Well, the Ocean Research Center here. It's like research ...

BALDWIN: It sounds so sweet.

MYERS: ... but it's OCEARCH.

Well, they really want to know what these things do in the summer, in the winter. Where do they go? Where do they eat?

BALDWIN: What's the zigzag?

MYERS: The zigzag's every place that Mary Lee -- we're going to focus on Mary Lee right now ...

BALDWIN: OK.

MYERS: ... every place that Mary Lee has been and around Jacksonville Beach. That's what you said. Right there, very, very close, kind of swam out earlier today. That was at 4:42.

Now, you can get on this app and kind of see where this thing has been.

BALDWIN: Look at that. 4:42 p.m., that's where Mary Lee was.

MYERS: But where was Mary Lee just a few days ago? Up here, a little farther up, here's St. Simons Island. Here's -- there's Savannah. Kind of flying around Tybee Island. Where did she come from?

BALDWIN: Quite the journey from Cape Cod.

MYERS: This, Cape Cod was tagged in September. Swimming all around. There's Jeannie. There's the yellow line where the other shark was. Not as many data points, so it looks like it flies through the land, but it actually doesn't.

Here you go. Now, there's the cape. Here's Cape Hatteras.

BALDWIN: OK.

MYERS: And flying up here, right here, right down swimming right along the continental shelf and if we keep on going and we will, we can zoom out a little bit, make this a little bit faster ...

BALDWIN: Mary Lee is making me dizzy. MYERS: Well, there are more. Mary Lee was found right there at Cape Cod, September 14th, 2012, tagged and is now swimming across parts of Florida.

And they're -- don't go to South Africa right now.

BALDWIN: Look at that. Come here. Come here. Rocky. This is why you don't go down here. There are lots and lots and lots of dots down there.

MYERS: Yes. There's lots of them.

BALDWIN: Hey, quickly, if people want to track the sharks, this is kind of cool. Where -- how do you do this?

MYERS: It's like the word "research," but it's Osearch and you'll find it right away and it says, "Track My Shark."

BALDWIN: OK, Mary Lee in Jacksonville Beach. Beware.

Chad, thank you very much.

MYERS: You're welcome.

BALDWIN: Today, we learned whether Barry Bonds, Roger Clemens made the Baseball Hall of Fame, but there was an even bigger surprise.

(COMMERCIAL BREAK)

BALDWIN: For just the eighth time in history, annual voting for the Baseball Hall of Fame has produced a shut out. The Baseball Writers of America say no today to Barry Bonds, they said no to Roger Clemens, no to Sammy Sosa.

In fact, they said no to all of the nominees. That includes catcher Mike Piazza of the Dodgers and the Mets. Craig Biggio, longtime second baseman for the Houston Astros. Also, no to slugger Mark McGwire who finished his career with the Cardinals.

McGwire, like Bonds and Clemens and Sosa, might have been considered a shoo-in except for allegations of steroid use. All can be considered an inclusion in the future elections to the Hall of Fame.

Let's take a quick look at the Big Board here. We have the Dow before the closing bell in a matter of seconds up 61 points. Right at 13,390 for the day.

Also a quick reminder, you can always follow me on Twitter @BrookeB. Brooke with an "E," "B," CNN. And we throw a bunch of our interviews up on the Brooke Blog. Go to CNN.com/Brooke.

Good to be with you here. We'll see you back here tomorrow.

Now to Wolf Blitzer in Washington. Wolf?

WOLF BLITZER, ANCHOR, "THE SITUATION ROOM": Brooke, thanks very much.