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Rehab Racket; Massive Jewel Heist; Child Sex Trafficking Bust

Aired July 29, 2013 - 22:00   ET


ANDERSON COOPER, CNN ANCHOR: Good evening, everyone.

Tonight, a special "Keeping Them Honest" report on a ripoff that is simply stunning: shady rehab clinics filing bogus claims for phantom patients and guess what? You are paying for

Later, it's being called the largest ever child sex trafficking bust, 76 cities across the country, 150 alleged predators captured, 105 children recovered. We will take you inside and talk to child safety advocate and crime fighter John Walsh.

And right where Hitchcock filmed "To Catch a Thief," they're trying to catch a real one, a really big one, whoever walked in and walked out with about $136 million worth of jewelry in a brazen daytime robbery.

We begin though tonight "Keeping Them Honest" with part one of an investigative series that we're calling "Rehab Racket," because as you will see starting tonight that is exactly what it is. We're talking about the abuse of a state-sponsored taxpayer-funded program that on paper looks like a noble cause, privately run rehab clinics getting Medicaid money by billing for each addict who gets counseling.

But one billing for each addict that gets counseling. But over the past year, an investigation by CNN and the Center for Investigative Reporting has found a system riddled with fraud and poor oversight, from billing to government for phony patients to allowing convicted felons to run drug rehab centers.

Our investigation found it is all too easy to take advantage of the very people who need help the most. This is no nickel and dime fraud. Because it's happening in California, we're talking about big money. State and federal taxpayers are on the hook for tens of millions of dollars every year. I said federal tax dollars. To put it another way, that's your money.

Investigative correspondent Drew Griffin tonight "Keeping Them Honest."



(voice-over): George Ilouno has run a taxpayer-funded drug rehab business in Southern California for the past six years, which is surprising because for the last 11 years he's been on a list of people banned from billing Medicaid. Convicted of student loan fraud, George Ilouno should never have been allowed to even open this clinic called G.B. Medical.

GEORGE ILOUNO, G.B. MEDICAL: What is going on?

GRIFFIN (on camera): I'm asking you a few questions, sir, about the drug rehab case. I want to ask you about -- you seem to be at the center of fraud allegations here.

ILOUNO: No, no, no, no, no.

GRIFFIN: Yes. Have you been faking signatures onto sheets of paper and billing the state for the money?

ILOUNO: No, no, no.

GRIFFIN (voice-over): Guess what else. Ilouno is facing felony criminal charges for ripping off the state, allegedly getting paid by taxpayers to rehab drug abusers who weren't even there.

(on camera): Excuse me, sir. How can you bill the state for clients that don't exist? Mr. Ilouno, Mr. Ilouno, just one second, sir.

(voice-over): We never saw Ilouno again.

(on camera): Ilouno's drug rehab business here in Southern California has been part of the largest Medicaid program in the nation, paid for with federal and state dollars. A one-year investigation by CNN and the Center for Investigative Reporting, found the rehab portion of that program, called Drug Medi-Cal is rife with fraud, has operators who bill the government for made-up clients and often get away with it.

(voice-over): Joy Jarfors saw plenty of fraud in the nine years she spent working as a supervisor over Drug Medi-Cal.

JOY JARFORS, FORMER MANAGER, CALIFORNIA DEPARTMENT OF ALCOHOL AND DRUG PROGRAMS: I believe the word got out that there was easy money to be made in the outpatient drug-free system.

GRIFFIN (on camera): How bad is it?

JARFORS: It's bad. It was really bad. I left state service about three years ago, and we would have one provider that would bill for over a million dollars in one year that we believe was 100 percent questionable billing.

(voice-over): And that one provider was no isolated instance. Over and over, we found examples of fraud. Not hidden fraud. This was happening in plain sight. For example, George Ilouno.

Nineteen-year-old Darshaye Miles was just 14 when she went to his rehab center, along with her mother and three sisters. It is against the law to pay drug rehab clients, but that apparently didn't stop Ilouno. Miles said he paid her and other clients $5 each time they signed in for group counseling, all so he could then charge Medi-Cal between $28 and $61 per signature.

DARSHAYE MILES, ATTENDED REHAB CLINIC: At first, I didn't know it was illegal. I didn't know nothing about it. I thought it was just a thing. You were supposed to get paid to go in there, until people was like, oh, George was like you got to -- don't speak out loud about the money.

GRIFFIN: And what did she do with the five dollars given to her by the drug rehab center? She bought drugs.

MILES: We was going just to get the money to buy weed. My whole thing was like, you all was paying us to get high.

GRIFFIN: The day after our interview, the state charged Ilouno and three of his employees at G.B. Medical with grand theft in connection with more than 2,000 phony bills for rehab dating back to 2009. He's pled not guilty. But records show your tax dollars still paid him, even after he was arrested and out on bail.

Ilouno's attorney blamed the billing practices on counselors and employees who were not well-supervised. The attorney says Ilouno was a certified counselor himself who was allowed to bill Medicaid. Despite that, the clinic voluntarily shut down July 1 without explanation.

CNN and the Center for Investigative Reporting reviewed thousands of records in California Drug Medi-Cal program, including program audits. We analyzed patient billings, even watched clinics undercover to see who was getting treatment and who wasn't. The result? We found that in the last two fiscal years, half of the nearly $186 million spent for Drug Medi-Cal, about $94 million, went to clinics that had shown questionable billing practices or signs of fraud.

Case in point, the man with the cigar, a convicted felon named Alexander Ferdman.

UNIDENTIFIED MALE: Ferdman was the organizer.

Marshall Voat (ph) was the lead investigator who helped prosecute Alexander Ferdman back in 2000 for running a Texas-based crime syndicate that staged car crashes, ripping off big insurance companies.

UNIDENTIFIED MALE: He lists his occupation as a...

GRIFFIN (on camera): Driver of an ice cream truck.

(voice-over): Ferdman pled guilty to organized crime and was sentenced to seven years in a Texas prison. He served just one year, was let out early for good behavior and ended up in California.

Even though felons are barred from running drug Medi-Cal centers, Ferdman soon opened a rehab clinic called Able Family Support. Taxpayer-funded drug rehab has been easy money for Alexander Ferdman. Despite his organized crime conviction in Texas, his California Drug Medi-Cal contract is now worth about $2 million a year, his salary, $180,000. Even after a 2011 review by Los Angeles County found evidence of what it considers to be fraudulent practices at his business, Ferdman was allowed to expand.

(on camera): Drew Griffin with CNN. How you doing?

I would like to ask you some questions about your business, if I could.

ALEXANDER FERDMAN, FORMER CONVICTED FELON: I really don't have time right now.

GRIFFIN: But you can explain, how can a guy with a record like you be operating a drug rehab clinic here in California? You have been convicted of a major insurance car crash scheme in Texas?

FERDMAN: I was convicted, but that's not what it seems. That's first of all. And, second, whatever happened, I don't know, 50 years ago, what relevance does it have to today?

GRIFFIN: Does the county know about your criminal record?

FERDMAN: They probably do. I don't know.

GRIFFIN (voice-over): What happened in Texas, Ferdman told us, should stay in Texas.

FERDMAN: Because I was facing 99 years, and I choose to take a much smaller sentence without any of it, because I could have it much worse. But there was no fraud, and there was no record of it in any way.


FERDMAN: It's a very long story

GRIFFIN: How could you say that? That was a huge case in Austin, Texas, statewide actually.

FERDMAN: Yes. That's what they tried to build it, but -- and that's why they pursued it, but it wasn't what it seems and what they said it was.

GRIFFIN: Could you tell me real quickly how you left Texas and decided to come here and get into this business? How easy or hard was that?

FERDMAN: I don't want to talk about it right now. So...

GRIFFIN (voice-over): With such apparent widespread fraud in the program, former supervisor Joy Jarfors says it's not just taxpayers who are being cheated.

JARFORS: I'm not a -- you know, the employee anymore that has to look at this every day, but I'm a taxpayer that knows that this is going on, and it angers me. And there's story after story after story about Medicaid dollars being cut from people who need the services.


COOPER: It's an incredible investigation, Drew.

And it's just so infuriating, because there's a lot of people who do need help, and there's probably a lot of good clinic out there. And this certainly gives a bad name to the industry. Is the state do anything about these clinics?

GRIFFIN: Well, finally they are, beginning to state down -- the state is cracking down.

I think once they realized the depth of our reporting, Anderson, and that it would be aired nationally on your show, the state announced a statewide crackdown. Alexander Ferdman's clinic, the felon from Texas, his clinic has been shut down, 16 others...

COOPER: Shut down?

GRIFFIN: Shut down, 16 others temporarily suspended and California has announced a statewide review of the entire rehab clinic program, although the details are a bit sketchy right now.

COOPER: Why did it take so long, though?

GRIFFIN: That was my first question to the state of California. And as we continue our reporting, I think it's going to be your question and all your viewers' questions, because as we will reveal tomorrow night, report after report, investigation after investigation, year after year finds the county and state investigators were finding this fraud, finding these questionable billing practices, and yet the clinics remained open and we believe kept billing taxpayers for this.

COOPER: And that's the thing, it's taxpayer money. And the people who need help aren't getting it.


COOPER: It's incredible. Drew, OK, we're going to have that part two tomorrow night.

You also can make a difference. If you have got a tip for Drew, let him know. Just go to And let us know what you think about Drew's report. Follow me on Twitter at Anderson Cooper, as I said, more tomorrow night on this.

Coming up next, though, tonight, the FBI's biggest undercover operation yet against child prostitution, video of the raids coming up.

And, later, how one armed robber managed to get away with a fortune in jewels, a much bigger fortune than anyone first thought. It was originally reported to be worth about $50 million. Well, now authorities say some $136 million in jewels was taken from this hotel. We will take you to the South of France, where the chase is on right now.


COOPER: The FBI released video today of its biggest child sex trafficking ring sting to date, a sweeping undercover operation over the weekend targeting pimps who sell kids for sex.

There were raids in 76 cities nationwide. The FBI says 150 pimps were arrested and 105 children between the ages of 13 and 17 were rescued. The sting was part of an initiative created in 2003 to rescue sexually exploited kids across the country.

One young woman who turned to the FBI for help is now speaking out.


UNIDENTIFIED FEMALE: Happening here. Like I said, right now, there is a hotel right down the street. The same woman walked -- I think part of is a highway, this woman walking. So it's happened everywhere.

My name is Alexandria. I am 21. So, I got very lucky to be able to walk away with it with no arrest, no kidnapping. Never got hurt, so I'm lucky, like really, really lucky. I'm one of the few that can say that.


COOPER: Alexandria was 16 when she became a victim of sex trafficking. She helped the FBI put two pimps behind bars. The FBI is hoping that the children who were recovered over the weekend will also help send their pimps to prison.

Crime and justice correspondent Joe Johns joins me now.

Joe, what is the latest on this sting?

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Anderson, they're sorting through the charges, are they going to be state, are they going to be federal, and what about those young women, 105 teenagers between the ages of 13 and 17?

The question is, what happens to them? So it's a lot for the people in the system to do. And everybody's going to have a little different story, Anderson.

COOPER: How did they identify the people that they went after?

JOHNS: They went to venues where prostitution occurs typically, the local strip where everyone knows the prostitutes are, motels. They went to casinos, even watching big sporting events. And they're looking at Internet sites, and they actually think they're getting better at zeroing in on the right targets. Listen.

(BEGIN VIDEO CLIP) RONALD HOSKO, ASSISTANT FBI DIRECTOR: It appears as though we were 30 to 40 percent more successful in identifying both victims and pimps on this operation.

As we can further refine these efforts in the future, we will continue to look to Backpage and to those other fora where pimps and exploiters gather, and we will try to penetrate those fora, so that we -- that our success rate doubles again.


JOHNS: Police on the ground help on this. They know what's going on in the communities, they know when there's a child out there walking the streets and they also know which alleged pimps seem to be moving prostitutes from city to city and state to state.

COOPER: This really took place just all across the country, didn't it?

JOHNS: Yes, it's incredible, 76 different cities all across the country. San Francisco seemed to have one of the biggest problem with this, Milwaukee, Detroit, Oklahoma City.

Then there were some smaller cities like Jackson, Mississippi. Who knew there's such a problem there?

COOPER: All right, Joe, appreciate the reporting.

Want to bring in John Walsh, a child safety advocate and the former host of "America's Most Wanted."

John, as we just heard, the FBI specifically cited, and sites like it, as a place where they found some of these victims. Do you think shutting down these kinds of sites helps solve the problem? Or there are those who argue, some people who support these sites say it just pushes the commerce elsewhere.


Sex trafficking is a $32-billion-a-year business worldwide, and the number one offender and buyer of sex trafficking, particularly with children, is the United States. We're a First World country, but we're the biggest offender. It is about the commerce, but my hat goes off to the FBI and those 230 local and state agencies who partnered up to get these kids off the streets and punish these traffickers.

COOPER:, we have looked at this a lot over the years. They fiercely defend themselves saying they're a great resource for law enforcement. I interviewed the lawyer that represents last year. I just want to play part of what she told me back then.


LIZ MCDOUGALL, ATTORNEY, BACKPAGE.COM: We have 80 percent of our staff dedicated to policing and to cooperating with law enforcement to prevent cases of exploitation from ever making it live on the Internet so we can facilitate rescues and so that we can cooperate with law enforcement to ensure convictions when there are those opportunities.


COOPER: I should point out we requested Liz McDougall to join us on the program tonight. She declined.

We did speak to the FBI though further about the sting and they told us that while a significant number of victims rescued from the operation were found on and sites like it, they were found solely through the FBI combing these sites, not by referring potential victims to the FBI. Do you buy Backpage's argument, John,?

WALSH: It's all about money. And it's not just the FBI. It's many other police agencies, state and federal, local and some international police agencies that point the finger to for helping these exploiters of children to function.

It's all about the money. And I really think that the public has to say, we all want First Amendment -- freedom of press and First Amendment. No one wants to sanction or censor the Internet, but I think these sites have to be held accountable because it's all about the money. They're not cooperating. They're not there as a nonprofit helping these law enforcement agencies. They're there because they facilitate these guys.

COOPER: It's also sickening to hear that according to law enforcement, a big sporting event like the Super Bowl actually kind of becomes a hub for child prostitution.

WALSH: That's part of America's problem that we seem to ignore. I mean, everybody thinks child prostitution and sex trafficking is in countries like India, where it is, or Indonesia or Cambodia.

I have been to those countries. Vietnam, yes, it's a problem there, but we're a First World country and these guys know they go to big events like the Super Bowl, different big sporting events and move the girls around. Another difficult problem is that we have over half a million runaways in this country every year. As soon as these kids hits the streets, one in three of them are solicited and forced into sex trafficking. They go state to state; 50 countries provide girls for sex trafficking and boys.

Nobody's looking for those kids. It's something that we have ignored and I think the public has to say, how could we -- a First World country -- be the biggest offender and the biggest buyer of sex trafficking in the world?

COOPER: John Walsh, I appreciate you being on. We will continue to follow this, as we have for quite a while now, but an amazing sting all across this country.

John, thanks very much. Coming up, a jewelry heist straight out of a movie script, $136 million in jewels stolen from the hotel where Hitchcock filmed the movie "To Catch a Thief." We will tell you whether police are close to catching the real-life thief next.

And, later, a rare interview with NSA leaker Edward Snowden's father on his fugitive son and his claim that Americans don't yet know the whole truth. We are about to find out. We will talk to him ahead.


COOPER: In "Crime & Punishment" tonight: a jewel heist in France that sounds like a big-screen thriller than a real-life story. Not only did it happen in Cannes, the site of the world-famous film festival. It happened at a hotel where an Alfred Hitchcock movie about a jewel thief was filmed. This is no movie, and the armed mask robber made off with more than $100 million worth of jewels.

Erin McLaughlin has the story.


ERIN MCLAUGHLIN, CNN CORRESPONDENT (voice-over): It's a story straight out of a Hitchcock film.

UNIDENTIFIED MALE: Filmed on the beautiful French Riviera.

MCLAUGHLIN: One man walks into a hotel in Cannes, France, and walks out with $136 million worth of diamond jewelry.

UNIDENTIFIED ACTRESS: Diamonds. The only thing in the world you can't resist.

MCLAUGHLIN: The Carlton Hotel, the setting for the iconic movie "To Catch a Thief" was the sight of one of Europe's biggest jewelry heists Sunday morning.

UNIDENTIFIED FEMALE: This was a gun and nobody stopped him. Nobody -- I don't know there was nobody around and they just gave him $40 million worth of jewelry. Just incredible.

MCLAUGHLIN: Police say a robber whose face was covered by a hat and scarf threatened to shoot exhibitors and guests during the hold up. Cannes, home of the International Film Festival, is known for glitz and glamour, but lately, it's become a magnet for jewelry theft. In May, a $2.6 million necklace belonging to jeweler De Grisogono was taken from a hotel party.

Later that same month, over a million dollars worth of Chopard jewels were stolen from a safe in the Novotel hotel. This latest heist comes just two days after a member of the notorious Pink Panther jewel thief gang escaped from a Swiss prison. However, it is too soon to say if there's any link to this incident. Authorities this morning are looking through surveillance footage of the crime. DONALD PALMIERI, SECURITY EXPERT: Diamonds are like cash. They're the most concentrated form of wealth on the face of the Earth. So, they can, they can be very influential in acquiring weapons, in acquiring drugs, or anything else that we want to keep out of society.


COOPER: Erin, It's just unbelievable that someone managed to escape with $136 million worth of jewels in broad daylight. Why wasn't there more security?

MCLAUGHLIN: That is the question of the day, Anderson.

Prosecutors are saying that there was security present during the time of the heist, though that security was unarmed. They're also saying that this was meant to be a temporary exhibit here at the hotel set to expire in August, so the security in place one can assume then was temporary.

Neither the hotel nor the diamond house are saying much more than that. It's pretty interesting to take a walk through the lobby of the Carlton Hotel today. You would never know that this kind of heist happened yesterday. It was very much business as usual. There was even jewelry on display in the lobby, diamonds and sapphires as well as fine furs for sale, and I have to say pretty low-key looking security, although that exhibition in question, the Leviev diamond exhibition, that was closed today -- Anderson.

COOPER: It's incredible. Erin, thanks very much.

Well, and the hunts goes on.


ISHA SESAY, CNN INTERNATIONAL CORRESPONDENT: At Fort Meade, Maryland, Private 1st Class Bradley Manning will learn tomorrow if he's been found guilty of aiding the enemy. He's accused of the largest leak ever of U.S. classified information.

And, Anderson, authorities say a woman was arrested after tossing green paint in two locations inside Washington's National Cathedral. It's unclear if she's connected to the splashes of paint at the Lincoln Memorial and a Smithsonian statue. Just bizarre.

COOPER: Yes. Really strange. Isha, thanks very much.

Just ahead, by now pretty much everyone knows about Edward Snowden and knows who he is. Tonight we are going to talk to his dad. No one knows him like his father, obviously, who says there's more to the story than the public thinks and the public knows. We'll talk to him ahead.


COOPER: Welcome back. The fight over NSA leaker Edward Snowden is about many things: national security, serious alleged crimes, the right to privacy, loud echoes of the Cold War.

It's also about one man's son. The son who's being called a whistleblower by some, a traitor by others. A son who's now stuck in limbo at an airport in Moscow, while officials in Washington at the very highest levels are demanding him back.

Their latest enticement: a promise not to seek the death penalty against him. In a moment, you'll hear from Edward Snowden's father about what that's like. But first, how we got here.


EDWARD SNOWDEN, NSA LEAKER: My name's Ed Snowden. I'm 29 years old.

COOPER (voice-over): It's been nearly two months since Edward Snowden showed himself to the world as the source behind the NSA leaks. Snowden revealed the U.S. government had forced Verizon, the U.S. telecom company, to hand over the phone records of millions of Americans. He also revealed a secret program used by the NSA called Prism which gives the government direct access to data from Internet companies like Google and Facebook . He gave this interview to "The Guardian."

E. SNOWDEN: I think the public is owed an explanation of the motivations behind the people who make these disclosures for them outside of the democratic model.

COOPER: Snowden didn't hide his identity, but he did hide his exact location. Revealing only that he was somewhere in Hong Kong and hinted about a life on the run.

E. SNOWDEN: I could be, you know, rendered by the CIA. I could have people come after me, and that's a fear I'll live under for the rest of my life, however long that happens to be.

COOPER: Reaction to Snowden's public revelations was mixed. A hero to some, but to others...

REP. PETER KING (R), NEW YORK: This guy is a traitor. He's a defector. He's not a hero.

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: It's a giant violation of the law.


COOPER: Five days after Snowden's identity was revealed, he was charged with espionage. The U.S. sought Snowden's extradition from Hong Kong and revoked his passport. But days later, Snowden with the help of WikiLeaks managed to board a plane bound for Moscow.

After arriving at the Moscow Airport, he again went into hiding. Never passing through immigration. Staying within the airport's transit zone, with reporters from all over the world looking for him.

UNIDENTIFIED FEMALE: No sign of Edward Snowden. No one here seems to know where he is.

COOPER: Moscow was never intended as a final destination. According to WikiLeaks, Snowden applied for asylum in more than 20 countries. For now, Snowden remains in the transit zone, keeping largely out of sight, except for this one press conference he gave nearly two weeks ago.

E. SNOWDEN: A little over one month ago, I had a family, a home in paradise, and I lived in great comfort. I also had the capability, without any warrant, to search for and seize and read your communications. That is the power to change people's fates, and it is also a serious violation of the law.

COOPER: Snowden has applied for temporary asylum in Russia, saying he would be tortured and would face the death penalty if returned to the United States. U.S. Attorney General Eric Holder assured the Russians the U.S. will not seek the death penalty if Snowden were returned to stand trial.

So far, the Russians have refused to hand Snowden over. He remains in the airport and, according to his lawyer, he is studying Russian and may end up staying in the country long-term.


COOPER: Joining us now is Lon Snowden, Edward Snowden's father, also Mr. Snowden's attorney, constitutional lawyer and former ranking Justice Department official, Bruce Fein. I appreciate both of you being here.

First of all, your son obviously still in the airport. Have you been able to communicate with him? Do you know how he's been doing?

LON E. SNOWDEN: We've been able to communicate with him indirectly. And I believe he's in reasonably good spirits.

COOPER: How does he look to you in that press conference?

E. SNOWDEN: He looks as if he's lost a bit of weight. He needs a haircut. You know, I -- but overall, he looks reasonably well. Given his circumstances over the past 65 days.

COOPER: Last week on NBC, you said the American people don't know the whole truth; the truth is coming. What do you think people don't understand about what your son did?

L. SNOWDEN: Well, I think probably that the large majority of Americans, first of all, have not seen his 12-minute video. I've spoken to close friends who know this is my son, and we talk and -- I realize they haven't listened to the video. They don't really understand what the Fourth Amendment is.

So I think that there's much that's unknown. The American people, the media, to be quite honest, has not done a very good job of laying out the facts in digestible form. There has been a clear effort by those who have been threatened politically and/or embarrassed by these revelations to focus on the, so to speak, sinner, my son, who's revealed these, instead of the sins, the actual revelations. It's clear they don't want to discuss that.

And so when I say the truth is coming, what I mean is there are certain folks, myself included, who are going to push and push and push until, at a minimum, we have a well-informed public who, they have the facts and they can make their own determination.

BRUCE FEIN, ATTORNEY FOR SNOWDEN: One of the major truths here is that the conversation we're having tonight, these very strong debates that have occurred in the Congress most recently about that loss by 12 votes to shut down these NSA programs, the fact that there will be three hearings on Wednesday, they're all responsible because of what Ed Snowden did.

We had the director of national intelligence office say, their goal was to keep the program secret forever. They tried. The only reason that this was broken in the public was because of Ed Snowden's courage.

The members of Congress that knew about this were very cryptic in explaining exactly what was going on, despite the fact that they had a constitutional privilege to expose this to the American people.

And so what has happened is Ed Snowden has made the democratic process work. The things that we're talking about today, do we need these kinds of programs?

COOPER: One of the things that your son has said was that he sitting at his desk, a contractor, could gain access to basically anybody's e-mail, if he had the correct address, even the president's e-mail. At the time there were a lot of officials who said, "Oh, no, no, no, that's not true. He's overstating his own importance."

Brian Greenwald who is one of the people who received the information from your son, has now come forward and said he has new reporting which actually confirms what your son had been saying, that a contractor's low-level people even at their desk at the NSA or at some of these other contracting agencies could actually gain access to tons of phone calls which are on -- in data storage bases or people's e-mails.

There's going to be testimony Wednesday. How confident are you that the truth of that is going to come out?

L. SNOWDEN: Well, I'm not sure if it's going to come out in the Senate judiciary, because the same people who sat in front of the House judiciary, who were really grilled, I absolutely compliment those members on the House judiciary for, I believe it was last Wednesday or the week prior, when they grilled these same individuals who were going to sit in front of the Senate judiciary.

But you know, I'm disappointed that it's the deputy attorney general instead of Eric Holder sitting there, that is the general council for the director of national intelligence instead of James Clapper sitting there under oath again. And that it's the deputy FBI director sitting there answering these questions.

FEIN: If I could add, Anderson, remember that the people who are going are testifying are working under the aegis of the director who, when confronted with a question, by Senator Ron Wyden, are you collecting date on millions of Americans, hundreds of millions. director Clapper said no. A flat-out lie, which he tried to defend as only a small untruth. And where to...

COOPER: He said, not wittingly.

FEIN: Not wittingly. He has a trillion dollars of mega bits, you know, unwittingly. But we're to rely upon their self-assessment as to whether or not these technologies exist?

We need outside auditing of what the NSA has been doing all these years. The NSA at present doesn't have someone who's not part of their overall program examine whether they are complying with the requirement that they not look at the contents of information, unless we have some reasonable suspicion or otherwise. And why would we expect an agency to call its own people to account?

COOPER: In a letter to the Justice Department, to the Obama administration, you describe what your son did as civil disobedience. There are those who say, look, civil disobedience is accepting the ramifications of your actions of your decision, of taking the punishment. Why do you see this as civil disobedience?

L. SNOWDEN: Well, first of all, I think he is accepting the consequences. Again, if you look at his 12-minute video, and what he said, he's not living a very comfortable life at this point. He said he's an American; he loves his country. I know my son. I know he loves his country. What he believed is that this information, the American people needed to be aware of what their government was doing to them, spying upon them.

FEIN: I would interject on this issue of civil disobedience.

Anderson, if it were true that there was a comfort level that a fair trial would be offered to Mr. Snowden, I think your question would be far more poignant.

COOPER: You don't think that's possible?

FEIN: Because what we have -- you've shown part of it in the introduction here -- we have had four, five, six members of administration, members of Congress convicting Edward of treason. We haven't even had a single trial. We haven't even had an official grand jury indictment. They're already saying he's guilty of treason. We don't even have the attorney general saying he enjoys the presumption of innocence. We have the president of the United States denigrating Mr. Snowden as a hacker. Not somebody who was trying to generate the national conversation over these drag net surveillance that the president himself said it's urgent. COOPER: The president has said he wants this conversation. This is a conversation the American public needs to have. Do you believe that?

L. SNOWDEN: No, actually, I don't. It is one thing. You know, words mean one thing. Actions mean another. And that's much in the same way of our national character. I'm really disappointed by what I've seen.

You know, our national character, much as with individuals, is determined by what we do when we think that no one is watching, when we think that we won't be held accountable. And it's not just a matter of what's legal, of what's constitutional; it's a matter of what's ethical.

FEIN: Think of this oddity, as well, Anderson: The attorney general writes a letter to the ministry of justice of Russia, and he has to go out of his way to say, "We won't torture Edward if he comes back." We are in that position of a country where we need to give assurances to others we won't torture him like Bradley Manning?

COOPER: Do you believe him when he says that? When he says we have no death penalty and the United States doesn't torture?

L. SNOWDEN: Well, at this point I believe it would be in the best interests of the Justice Department. And we've attempted to work with the Justice Department and both the people investigating this, and I just do not believe that that collaboration, the good faith exists anymore.

So I'm very, very disappointed. And we've attempted to get assurances that Ed would receive a fair trial. I have absolutely no faith in Eric Holder, the attorney general of the United States. None.

FEIN: A couple of things that he omitted...

COOPER: You don't believe your son would receive a fair trial?

L. SNOWDEN: Absolutely not. Not at this point. No, absolutely not.

FEIN: A couple of the things that the attorney general omitted from his letter in trying to describe the fair trial Edward would receive would be the right to confront the witnesses or the evidence against him. No secret evidence. He didn't mention that. The right that Edward would have to summon witnesses in his favor. No mention of that. The presumption of innocence, no mention of that.

Why? These seem very, very glaring. Because we know that the government would try to claim classification, national security secrets, we can't disclose this to the defendant.

COOPER: When you see the way Bradley Manning was treated early on, do you believe your son would be basically helping those -- held no in those same conditions? L. SNOWDEN: No, I think because that was so embarrassing to our government and the people who were responsible for it, but it doesn't change -- it makes clear what the mind-set is.

President Obama, when he was first running for president, he talked about how he -- how important whistle blowers were. June 7th, after the story broke. He told the American people, we're not reading your e-mails and we're not listening to your phone calls. On June 8, a link on the white House website, I believe, that was linked to his language regarding whistle blowers, that disappeared.

FEIN: We already know that's false anyway. The "New York Times" reported long ago that the NSA was reading or listening into conversations between wives and servicemen serving abroad.

COOPER: So I mean, there are those who say, who see your son applying for even temporary asylum in Russia and look at Russia and say, well, look, that's a government that clearly has its own intelligence apparatus, that clearly does not value dissent from the top down. Should the place where your son is looking for -- should that impact the way people view what your son did?

I think they have to look at this in context, what choice does he have? He was attempting to go elsewhere and clearly our government forced down the aircraft of Evo Morales, who was returning to Bolivia. And you know, again, I know that -- of Bolivia -- we have operatives in both Peru and Colombia, I don't believe that would be a safe place for him. I'm not sure what would happen if he went to Ecuador or Venezuela.

COOPER: You think Russia is the best place for him?

L. SNOWDEN: I absolutely think it is the best place for him at this point. It is our government, specifically the Obama administration, that has caused that.

Again, he was looking at going elsewhere. At this point I would hope that he -- I make no apologies, I would hope that he remains in Russia, until we have assurances he would receive a fair trial here, and much of that at this point depends on another presidential administration.

FEIN: There's another element here, Anderson. And I want to just flag here -- this has not been discussed at length -- and that is the possibility that we have agreements with foreign intelligence agencies for them to circumvent the limits that the NSA has on spying on Americans. And then we spy on their people and share the information and intelligence.

We know that all the uproar in Europe about our spying on their citizens. The intelligence agency said nothing, that's a real worry that even the limits we would place on the NSA would be circumvented by the NSA going to the British and saying, why don't you spy on American citizens, hand over the information to us and we'll see what happens. COOPER: We'll see what comes out of testimony on Wednesday. I know you'll be watching very carefully. Lon Snowden, good to have you on. Mr. Fein, as well. Thank you very much.

L. SNOWDEN: Thank you very much.

COOPER: Coming up next, Pastor Rick Warren returns to the pulpit after the death of his son. More on his return ahead.


COOPER: Get you caught up on some of the other stories we're following. Isha Sesay is here with the "360 News & Business Bulletin" -- Isha.

SESAY: Anderson, a University of Pittsburgh research scientist accused of killing his wife, has waived extradition in West Virginia, where he was arrested. Robert Ferrante is expected to be transferred to Pennsylvania tomorrow. He is accused of poisoning Autumn Klein, a Pittsburgh neurologist, with a lethal dose of cyanide.

Over the weekend Pastor Rick Warren delivered his first sermon since his son committed suicide nearly four months ago. The leader of a California mega church spoke about the mental illness that his son Matthew struggled with and spoke about erasing the stigma surrounding it.

And fast-food workers in St. Louis and six other cities across the country are staging one-day strikes and rallies this week, calling for higher wages and the right to unionize. In New York, hundreds of workers at Wendy's, McDonald's, and Burger King restaurants walked off the job, demanding at least $15 an hour.

And Anderson will be right back with "The RidicuList."


COOPER: Time now for "The RidicuList," and finally tonight the wait is over. Ladies and gentlemen, it is Christmastime in July, because there is a new Prancercise video.

That's right. You remember Prancercise, don't you? It's the fitness craze created by Florida's Joanna Rohrback. She describes it as a rhythmic, springy way of moving forward, similar to a horse's gait and ideally induced by elation. So you can only imagine my own elation upon hearing that there's a brand-new Prancercise video. Please take a look.




COOPER: It's a little more mellow. Pretty much like the first one, though, different outfit. Same kind of mesmerizing moves, however. That clip was pretty low impact, so let's try to pick up the pace, shall we?


JOANNA ROHRBACK, PRANCERCISE CREATOR: We're going to pick up the pace with the Prancercise trot. It sure beats sitting at home beginning to rot. We're having such fun, why the heck not?



COOPER: Oh, Joanna Rohrback, you complete me.

I'm not the only one who's positively enchanted by Prancercise. Singer John Mayer even asked Rohrback to be in the music video for his song, "Paper Doll."




COOPER: Any Prancercise video is good Prancercise as far as I'm concerned. But I don't know. Maybe I'm a purist. Because I've got to say: my favorite, still the original. You never forget your first love.




COOPER: Ms. Rohrback, please, please keeps videos coming. Just keep Prancercising, and thank you for putting a spring in our step. Because our motto is "Prancercise forever" on "The RidicuList."

That's it for us. Thanks for watching. "ERIN BURNETT OUTFRONT" starts now.