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THE LEAD WITH JAKE TAPPER
Is Billionaire Buying Off U.S. Government?; Billion Bitcoins; UPS Fined $40 Million for Illegal Pharmacy Shipments; Gadgets You Can Wear; The Marriage Wars; Last Minute Legislation: Bad for Our Health?; The Real Cost of Obamacare; Fifteen Minutes of Fame and Then Some
Aired March 29, 2013 - 16:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JAKE TAPPER, CNN ANCHOR: Welcome back to "THE LEAD." I'm Jake Tapper. The "Money Lead," because talking into a tiny ear piece that no one can see didn't make you look weird enough, get ready for a new wave of wearable gadgets as in watches you talk to that talk back.
The "Politics Lead," food safety sure sounds like a big deal. So how did controversial legislation that would potentially keep unsafe food on the market just slip by members of Congress and President Obama?
And the "Pop Lead," once upon a time, we could count on stars of the vanilla ice variety to go away. But a new study finds that like them or not some celebrities are here to stay.
Now it's time for the "Money Lead," it's a mystery unfolding in the shadows of Wall Street involving a camera shy hedge fund founder with a love for expensive art and massive mansions on the beach. A billionaire made rich from a firm that has been linked to insider trading.
Now Steven Cohen is ready to write a check for $614 million to the U.S. government. Some wonder could he be buying off the feds in order to remove the cloud of suspicion surrounding his firm? Some say that's absolutely what's going on. Still, today, another high level trader at his firm was arrested.
So let's bring in Zain Asher in New York. Zain, it's hard to believe Cohen did not know anything about these illegal trades, right?
ZAIN ASHER, CNN PERSONAL FINANCE/BUSINESS CORRESPONDENT: I mean, hi, Jake. You know, this is exactly what investigators are pretty much trying to figure out right now. So far, nine people have been implicated in all this.
The SEC started with more junior employees and they are slowly working their way up the food chain. That is what the SEC typically does in these kinds of cases. They rely on the more junior employees to spill the names of the more senior people who may be involved.
Today, Michael Steinberg, as you mentioned a portfolio manager pretty high up in the firm was arrested. The question now in everyone's mind, are the feds slowly zeroing in on Steven Cohen himself -- Jake. TAPPER: But, Zain, Cohen does not seem worried at all, right?
ASHER: I mean, you know, people sort of expect that somebody, you know, with a guilty conscience might go into hiding or sort of disappear from the public eye. Cohen, it seems as though he is doing just the opposite, right?
He's been in the spotlight recently after buying a Picasso painting reportedly worth $155 million and also buying a home in the Hamptons reportedly worth $60 million as well. But that doesn't tell us anything about his state of mind.
But I will say this though. If a senior person at a company you own is arrested for something as serious as insider trading, my guess, is you're probably going to be worried or at least probably concerned on some level -- Jake.
TAPPER: The settlement we referred to earlier, a judge has not yet signed off on it. Why not?
ASHER: OK, so this is interesting. There is a provision in the settlement, the settlement that's worth $600 million, that says that if Cohen's firm pays up they don't, right, they don't have to admit they've done anything wrong. The judge thinks it sounds pretty sketchy.
He's asking, well, you know, why would the firm pay so much if they truly did nothing wrong? A lot of people are asking that question. In fact, the firm is responding. They're saying that, you know, they're willing to pay because, number one, they have a business to run.
Number two, they don't want any litigation hanging over their heads, but also, you know, they probably want to stop the bleeding as well. Either way, $600 million is a huge amount to settle for, the largest by the way, ever for an insider trading case -- Jake.
TAPPER: All right, Zain Asher in New York, thank you.
It's digital money that has now surpassed the currencies of 20 countries in total value. About $1 billion worth of big coins now circulate on the web. The value surged this week as investors looked for shelter from the financial crisis in Cyprus.
If you don't know what a bit coin is it's a hugely popular way of buying and selling stuff on the web. Some sites accept only bit coins. One man even reportedly tried to sell his house for bit coins.
UPS is coughing up $40 million to basically get the government off its back. That's the amount of money the company says it made off of shipments for illegal online pharmacies.
By forfeiting the payments, UPS essentially puts an end to a federal investigation. The company could have faced criminal charges for doing business with pharmacies that sell drugs without valid prescriptions. Those annoying days of people talking too loudly into their cell phones could be coming to an end, but don't get too excited. Soon they'll be talking just as loudly into their watches.
Smart watches are taking over as the next big thing in technology and our own Dan Simon takes a look at the growing demand for gadgets that you can wear.
DAN SIMON, CNN CORRESPONDENT (voice-over): Technology for life's most thrilling moments. Google is betting big with its forthcoming glass, a wearable computer with a built-in camera. You'll be able to record pictures and video just by saying OK, glass, record the video.
It is all part of a new trend known as wearable technology perhaps the biggest emerging trend since the smart phone. A new category of devices called smart watches is already selling.
UNIDENTIFIED MALE: This enables hands free conversations anywhere at any time.
SIMON: Even after venture capitalists initially snubbed what is turning out to be one of the hottest new products in tech.
(on camera): Where did the idea for this smart watch come from?
ERIC MIGICONSKY, PEBBLE: The idea came actually from me while I was cycling. I had my phone in my pocket and I wanted to see what was happening on my phone.
SIMON (voice-over): This is Eric Migiconsky, the inventor of the Pebble. It may look like an old fashioned Casio, but the Pebble represents the watch of the future. Hard to believe that inside this small generic looking building he and his small company have stunned Silicon Valley.
(on camera): The Pebble works by connecting to your phone via Bluetooth so all of those phone calls, e-mails, and texts show up on your wrist. You can actually feel it vibrating. That can come in handy when it's tough to reach for your cell phone.
MIGICONSKY: Having your phone out is inconvenient and sometimes dangerous. It's much better to be able to just glance down and see the key portion of the message right on your wrist.
SIMON (voice-over): But the people who seem to know the valley the best, the venture capitalists, thought the Pebble sounded like a loser and didn't give them a penny. They missed out -- big time.
UNIDENTIFIED MALE: This is my smart phone and this is my Pebble.
SIMON: That became evident when Eric decided to raise money through the crowd funding web site "Kick Starter."
MIGICONSKY: The project was live on Kick Starter in 30 days and within the period of 30 days, we raised $10.2 million.
SIMON: Now they can't make these watches fast enough. You might say the Dick Tracy era has now finally arrived. Another watch called the "Martian" allows for real conversations.
UNIDENTIFIED MALE: Where are you?
UNIDENTIFIED MALE: How about meeting us for lunch at 10:00?
UNIDENTIFIED MALE: Cool.
SIMON: Nay-sayers might wonder have we officially jumped the shark as technology loving consumers? In our quest to stay connected, is society filled with way too much gadgetry? I guess that's up to each person, but if history is any indication, we'll soon be seeing lines not only for what you can hold but what you can wear. Dan Simon, CNN, San Francisco.
TAPPER: Among the other weird, wearable gadgets we could soon see, USB cuff links, Bluetooth gloves, and hoodies prewired with ear phones.
In politics, the definition of marriage is on the line. Here's the weird twist. The two super lawyers who just this week worked together to lay out the argument for same sex marriage actually used to be rivals.
And our own Gloria Borger joins me now. Theodore Olson and David Boyes, they were on opposite sides in the Supreme Court case Bush V. Gore. You got the only joint news interview with these guys. How did they end up joining forces on this case?
GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Lunch, serendipity. What occurred was Rob Reiner, of all people, remember him. Barack Obama just won the election in 2008. Proposition 8 passed in California. Rob Reiner is having lunch at the Polo Lounge.
He's very upset about it. Somebody walks by his table and says, you know what, you really ought to talk to Ted Olson about this. He said, are you kidding me? Ted Olson? This is never going to be, long story short.
TAPPER: The guy who delivered the Supreme Court case to George W. Bush.
BORGER: Exactly. Long story short, they decide to hire Ted Olson and then Ted Olson says, you know who else should join me in this case, David Boyes. Take a listen to Rob Reiner here.
(BEGIN VIDEO CLIP)
ROB REINER, ACTOR, DIRECTOR, PRODUCER: Then when he suggested that we get David Boyes to be his counsel, I thought, wow. To get the two guys who opposed each other on Bush V. Gore to team up saying that this is a nonpartisan issue.
(END VIDEO CLIP)
TAPPER: So, Gloria, this is sort of an unlikely marriage in itself. What is the significance of a conservative and a liberal fighting this case together?
BORGER: I think what they feel is that it will represent kind of the nonpartisan change that you're seeing in this country right now about the question of same sex marriage. That if they could team up because they believe it's the constitutional issue, a violation of the equal protection clause.
They believe that they can team up then anybody should listen to their arguments. I think Ted Olson had a tough time convincing conservatives about it. David Boyes not so much convincing liberals, but in the end it was, of course, Ted Olson who argued the case this week before the court, his 60th time before the court. Can you imagine that?
TAPPER: Not too shabby.
BORGER: Not too shabby.
TAPPER: You can see more of Gloria's documentary "The Marriage Wars, Showdown at the Supreme Court," this Saturday at 7:30 p.m. Eastern only on CNN.
A legal loophole that allows big corporations to bend the rules when it comes to your food and the law passed without most of Congress even knowing about it. More political news is next.
TAPPER: The "Politics Lead," waiting until the last minute to tackle major issues like a potential government shutdown? Apparently, it has consequences. Who knew?
This week, President Obama signed a spending bill to keep the government running, but buried deep within the pages of that bill is a controversial piece of legislation that would keep the federal government from banning the sale of genetically modified food.
THE LEAD's Erin McPike is here to fill us in. Erin, what is going on here?
ERIN MCPIKE, CNN CORRESPONDENT: Well, so basically there are these food safety groups that are picketing outside the White House this week. Their concern is that these big biotech companies that produce genetically engineered food can bend rules.
And that if the Department of Agriculture, let's say, approves one of their products but then, one of their crops rather, but then someone challenges it in court. While it is going through the court process, they can still sell those crops and that has the food safety groups very upset. TAPPER: How did this end up in this legislation? It sounds like nobody or very few people in the Senate or the House or the White House knew this was tucked in there?
MCPIKE: One senator did and that was actually Jon Tester, a Democrat from Montana now. As you know, he is an organic farmer and when he was farming in Montana before he joined the Senate in 2007, he was making very little money.
It was between $20,000, $30,000 a year. So this is important to him personally. Let's take a look at what he said on the Senate floor prior to that vote.
(BEGIN VIDEO CLIP)
SENATOR JON TESTER (D), MONTANA: The provision says that when a judge finds that the USDA approved a crop illegally that the department must reapprove the crop and allow it to continue to be planted regardless of what the judge said.
Montana has elected me to go to the Senate to do away with the shady back room deals, to get rid of handouts to big corporations.
(END VIDEO CLIP)
MCPIKE: Now, Tester did go to the Democratic leadership and say that he wanted this taken out of the bill but they were basically saying we can't change this. This came from pieces of legislation that were worked through the House and the Senate in 2012. And they said if they wanted to keep the government from shutting down they needed to get this through. There was no taking it out.
TAPPER: All right, Erin McPike, thank you so much.
So, this week -- this past week marked the third anniversary of President Obama signing into law his landmark health care reform bill. He now calls it Obamacare. It's still a work in progress. Today, the administration finalized new health care regulations announcing they will pick up 100 percent of the state's tabs for the new Medicaid patients that will be eligible through Obamacare.
While that is one less cost for states other price tags are raising eyebrows. The Society of Actuaries this week released a report saying that medical claims will rise 32 percent for those covered by individual policies. Not employer provided coverage, individual coverage.
But asked about the rising costs, Health and Human Services Secretary Kathleen Sebelius this week said, the newly insured, quote "Will be moving into a fully insured product for the first time, so there may be a higher cost associated with getting into that market."
Now this, of course, caused some confusion for people who thought that the health care bill would bring lower premiums as we -- as the public had been told that it would keeping costs down for business, of course, and saving the government money. Joining us now is Nancy Deparle who led the health care reform effort for President Obama as director of the White House Office of Health Reform. Don't call her health care czar. You're not a czar.
NANCY ANN DEPARLE, FORMER OBAMA WHITE HOUSE DEPUTY CHIEF OF STAFF: That's right.
TAPPER: But you did head the office and are now a guest scholar at Brookings Institute. So the first question I have for you is, I don't understand what is going on here. Why are premiums going up? We were told that they would go down.
DEPARLE: Well, first, we don't know what is going to happen with premiums. Insurance companies set the premiums and I think the secretary said this week that it's really speculative to guess what they're going to do.
I'll tell you though they are going to be faced with potentially 30 million new people to insure and I think they would be crazy to raise premiums on a population like that. It's going to be a land grab I think. Insurers will be eager to get into this market and cover these new people.
Plus, Jake, we're already doing so many things and we're seeing some real progress on lowering costs. That's what the president saw as the promise of this legislation. The affordable care act is already lowering costs. We've had the lowest cost growth in history, in the 51 years of recorded history.
TAPPER: For overall health care costs.
DEPARLE: Premiums are being held down and Medicare, too.
TAPPER: But I hear from people all the time that premiums are going up.
DEPARLE: Well, you may hear from individuals, but on the whole, premium costs growth is lower than it's ever been.
TAPPER: We've heard a lot about businesses complaining about the costs. They are now going to -- I don't think it is this year, but in 2014, I believe they'll have to if they have 50 or more employees have to provide insurance for them or pay a fine. Is that --
DEPARLE: That's right.
TAPPER: So some of these businesses are saying it will be cheaper for them to pay the fine or they will reduce the number of employees or reduce their hours so that they don't have to pay that cost.
DEPARLE: Some individual businesses may say that, but when you look at the studies that have been done of this by the human resource managers out there, they're not showing that employers are planning to drop.
For the vast majority of employers, this is going to help them. It is going to help them bring down their costs. As I said, we're starting to see really for the first time in 50 years things that are taking hold to help reduce costs.
TAPPER: And the last question. We only have a minute. We've now seen many, many Democrats vote against a tax that is in the bill, the medical device tax . We've also heard some Democrats talk about the FDA regulations when it comes to forcing restaurants to put up nutritional value. Are we seeing Democrats have some buyer's remorse about what is in the bill?
DEPARLE: I don't think so at all. Remember, this bill, it is very important to remember, was paid for 100 percent. It reduces the deficit. So if something like the medical device tax, the fee that was put on there because medical device companies are going to benefit from everyone having coverage, if that goes away, then all that happens is you raise the deficit. I don't think Democrats are going to want to do that.
TAPPER: All right, Nancy Ann Deparle, the former director of the White House Office of Health Care Policy. I think I got that right. Have a great weekend and thanks for joining us.
Are you sitting at home just waiting for Kim Kardashian's 15 minutes of fame to be over? You might be waiting longer than you thought like maybe the rest of your life. Our "Pop Lead" is next.
TAPPER: The pop culture lead, if just hearing the name Kardashian sends a cold chill down your spine, brace yourself for some horrifying news. It turns out the Kardashian clan and other over exposed celebrities like them may be here to stay.
That's according to a new study published in the Journal of American Sociological Review. Researchers discovered that despite what you've heard, once a celebrity makes it to the top, fame is no longer fleeting.
TAPPER (voice-over): Pop artist, Andy Warhol, once said in the future everyone will be world famous for 15 minutes.
UNIDENTIFIED MALE: Andy Warhol's 15 minutes.
TAPPER: It turns out he was almost right. In an age of viral videos -- and reality TV, celebrity status seems easy to come by. Some might say a little too easy.
In the past we could console ourselves that the Morton Downey Jr.s of the world would soon leave the air space, but something has changed and now according to a new study the ease of fame is masked with the difficulty of making the famous unfamous.
University researchers found nowadays those 15 minutes of fame are going into triple overtime. UNIDENTIFIED FEMALE: My mom making these loud, crazy grunt noises.
TAPPER: Someone like Kim Kardashian who is famous mainly for being famous does not have to do much to remain famous.
UNIDENTIFIED FEMALE: You are crazy.
TAPPER: After year after mind numbingly painful year.
UNIDENTIFIED FEMALE: Thank you.
TAPPER: So how do the Kardashians of the world pull it off? Researchers say in the current media environment fame is self- reinforcing. Once you're in the spotlight, attention begats attention and all the different forms of media from TV to magazines to gossip blogs end up competing with each other to fulfill the desires of a celebrity obsessed culture.
Of course, there are exceptions to the rule. After all when is the last time you thought about this guy? But researchers say more often than not people who make it to the top of the fame food chain stay there. And that means actress, Lindsay Lohan, will continue to dominate tabloid headlines despite the fact that she has not had a hit movie since John Kerry was a candidate for president.
UNIDENTIFIED FEMALE: It's not my fault you're like in love with me or something.
TAPPER: You're right, Lindsay. It's not your fault. It turns out the blame lies with all of us.
TAPPER: Researchers also found the hardest part of fame is getting to the top because there is very little turnover among those considered A-Listers.
Next week on "THE LEAD," an exclusive behind-the-scenes look at the upcoming season of "Mad Men" inside Don Draper's office. I'll talk to the co-creator and some of the cast of the hit AMC drama.
I'm still the new guy at CNN so all week I've been asking you, how is my driving? Here is some advice you've given me. First, lighten up. Laugh at your jokes or at least give a chuckle. Rich told me smile more often. That might have been Rich or it might have been my mother or Jeff Zucker pretending to be a guy named Rich.
Not sure yet. OK, second. None of you can decide if you want more politics or less. David writes you should spend more time at the beginning of the show focusing on more serious political stories. And yet Sherry Lynn disagrees. I love that instead of only politics, politics, politics, it's a little bit of everything.
Got more pointers for me? Send them to the firstname.lastname@example.org. Hash tag you're it. We asked you what teams you would want to buy and why? The best tweets, 2004 Red Sox played hard and dirty. No one saw them coming. Best bunch of idiots ever. And 96 Yanks. I wouldn't change a damned thing.
That's it for me. Thanks for watching. We'll see you right here Monday at 4:00 -- now Mr. Wolf Blitzer.