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ANDERSON COOPER 360 DEGREES

Obama's Iraq Flip-flop; Freed American Hostages Return Home; Solutions for Carbon Dioxide Pile up; Big Sur Burning; Hedge Fund Swindler Surrenders

Aired July 3, 2008 - 23:00   ET

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


ANDERSON COOPER, CNN ANCHOR: We begin though with Barack Obama scrambling to explain his position on Iraq. This morning, he seemed to open the door to changing his mind on a 16-month timetable for pulling troops out of Iraq.
He said he might, quote, "Refine his plans after meeting with military commanders in Iraq later this summer." The Republicans jumped on those comments saying essentially he's flip-flopping and Obama had to hold another news conference to refine his comments about refining his plan. So was it a flip-flop or a smart move or something else?

CNN's Jessica Yellin has the facts and the "Raw Politics."

(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN CORRESPONDENT: Barack Obama has made his name as a different kind of politician. A candidate who says what he means and doesn't change with the political winds, which is why he can't afford to be seen as shifting positions on big issues.

Today, he faced a firestorm about whether he's backing off the central pledge of his campaign, to withdraw combat troops from Iraq within 16 months of taking office. The concern became so intense he found himself in an odd spot this afternoon, holding a do-over press conference.

SEN. BARACK OBAMA, (D) PRESUMPTIVE PRESIDENTIAL CANDIDATE: We're going to try this again. Apparently I wasn't clear enough this morning on my position with respect to the war in Iraq.

YELLIN: The problem? Obama triggered a deluge of questions with this statement earlier in the morning.

OBAMA: When I go to Iraq and I have a chance to talk to some of the commanders on the ground, I'm sure I'll have more information and we'll continue to refine my policies.

YELLIN: Republicans accused him of flip-flopping. So he faced reporters a second time to insist he's been clear all along.

OBAMA: That I would bring our troops home at a pace of one to two brigades per month and at that pace we would have our combat troops out in 16 months. That position has not changed. I have not equivocated on that position.

YELLIN: When pressed, he refused to commit to that 16-month time frame, insisting any good commander-in-chief adjusts.

OBAMA: I would always reserve the right to do what's best in America's national interests. And if it turned out, for example, that we had to, in certain months, slow the pace because of the safety of American troops in terms of getting combat troops out, of course we would take that into account.

YELLIN: Though he insists he intends to end the war. Still the McCain campaign quickly fired off a statement insisting that Obama has reversed his position, proving once again that his words do not matter, that they are just empty words.

Obama fired back, saying they're playing politics.

OBAMA: I think what's happened is that the McCain campaign primed the pump with the press to suggest that somehow we were changing our policy when we hadn't.

YELLIN: And his Democratic allies agreed.

PAUL BEGALA, DEMOCRATIC STRATEGIST: I think Senator Obama today did a good job of tamping down this one-day rumor that somehow he was shifting on Iraq. If I were to give him a little coaching advice, it would be "Don't answer hypothetical questions." Presidents don't run a hypothetical country.

YELLIN: Clearly the McCain campaign thinks it's found a strategy, accusing Obama of changing positions now on a number of issues and will keep pressing its flip-flop claim.

Jessica Yellin, CNN, Washington.

(END VIDEOTAPE)

COOPER: Now the impact. Will Barack Obama be seen as the next John Kerry who famously said he voted for a piece of war legislation before he voted against it?

Or will he go down as someone who took a line from a famous British economist when someone accused him of inconsistencies. "When the facts change," he said, "I change my mind. What do you do, sir?"

"Digging Deeper", we're joined by Mark Halperin who edits the page at time.com; radio talk show host and Obama supporter Ed Schultz and Cliff May, president of the Conservative Foundation for Defense of Democracies.

Cliff, McCain's campaign said today and I quote, "Now that Barack Obama has changed course and proven his past positions to be just empty words, we would like to congratulate him for accepting John McCain's principled stand on this critical national security issue.

"If he visited Iraq sooner or actually had a one on one meeting with General Petreaus," they go on to say, "he would have changed his position long ago."

Has Obama really changed course?

CLIFF MAY, PRESIDENT, FOUNDATION FOR DEFENSE OF DEMOCRACIES: I hope he has and I hope he will continue to change course. And look, it's the middle of a political campaign. These kinds of things are going to be fodder.

But this also is a war and the war is very important. And I think the quote you gave earlier gives Obama a way to talk about this. He can say look, over the past year, the situation in Iraq has changed dramatically. I've taken notice of that. I'm going to go there and talk with General Petreaus, and the achievements that our troops have bought with blood and treasure.

I am not going to waste by having some inflexible timeline. I'm going to see to it that we sustain whatever progress our troops have brought us.

COOPER: And to you he sounds like he's saying that?

MAY: I think he's started to say that. Here's where he didn't say it. He said I'm going to tell my generals your mission is to end the war. The problem is the generals cannot end the war if they leave.

If you leave, you have no influence over the war at all and your adversaries will probably win it. If your generals want to win the war, that means they have to defeat Al Qaeda on the battlefield, frustrate the ambitions of the Iranians, and then little by little turn over defense responsibilities to the Iraqi themselves.

COOPER: Ed, Obama is in a difficult spot. I mean if the situation on the ground has changed, he needs to keep flexibility but a lot of his core support is from people who say get out of Iraq and get out now.

ED SCHULTZ, RADIO TALK SHOW HOST: Well, he's been very clearly, Anderson. He's going to get us out of Iraq. It's going to be a reasonable drawdown. He's going to reasonably get us changing policy in Iraq and move the fight to Afghanistan where we've got to have the resources because that's the hot spot --

COOPER: But this morning he said he would refine. He did use that word refine this morning.

SCHULTZ: Well, don't get caught up on word smithing by the conservatives, Anderson. The fact is Barack Obama made it very clear today in Fargo that Iran is a threat. He says we need to retool our military.

He also said that we got to keep our commitment to the veterans and he's going to get us out of Iraq and he's going to draw down responsibly.

Now the McCain camp wants you to think he's shifted. He has not shifted. He has been very consistent all along with what he's going to do with Iraq policy. I asked him directly in a one-on-one interview today, will you send more troops to Afghanistan? And he said yes. COOPER: Mark, what about this? Obama is saying, look this is a McCain made-up story, pure and simple. But again, Obama did use that word refine and held a second press conference.

MARK HALPERIN, THE PAGE, TIME.COM: It's not a made up story. We're on the eve of this holiday and a sort of the time when the press and a lot of political world is winding down.

I think this is one of the biggest things that's happened so far in this general election.

COOPER: This goes to the core of his support.

HALPERIN: Goes to the core of his support, goes to the core of what he said was a big contrast between John McCain and Barack Obama, if they got elected president.

I thought for a while that no matter what Obama said during the campaign, that in office on Iraq, they wouldn't be all that different. And that's a little bit of a controversial thing to say since they both say there is this big contrast. But the realities are the realities. This will help him if he wins.

I think he'll be able to govern better because he's starting to shift his position. It's going to hurt him potentially, I think the biggest thing about this goes exactly to what the frame that the Republicans have been trying to say. This guy's a politician; he's not a leader of a movement.

COOPER: Well, Cliff May, it's also not just the Republicans back in March. Samantha Power a former Obama adviser said that Obama's Iraq plan is I quote, "best-case scenario and will be revisited when he's president." I remember Hillary Clinton's folks jumping all over that saying essentially what McCain is now saying.

MAY: Yes, and I think also in some of the more left wing blogs, Obama is taking some hits. But this does move him to the center. And look, I want to -- I'm not a big fan of his, but I'm going to put the best spin on it which is that he understands the situation fairly well, certainly better than the Daily Costas and some of those on the left who would like to see America defeated in Iraq. As the demonstration exercise that the U.S. power never, never it can be used for good.

SCHULTZ: Whoa, whoa! That is absolutely outrageous! That is outrageous for you to say that people on the left want to lose in Iraq. I'm not going to sit here and listen to that.

This is the fourth of July. We are Americans. We don't believe in fighting in Iraq the way we are doing. We're depleting our resources. That's ridiculous.

MAY: Well, Ed, tell me how you're going to win in Iraq -- Ed just tell me how you're going to win in Iraq if you have no troops there?

SCHULTZ: You don't even know what the definition of win is. The fact is -- MAY: Tell me the definition of win if I don't know it you tell me.

SCHULTZ: We don't have enough money to do this. We are absolutely hurting ourselves staying in Iraq. The Iraqi people need to step up. The real enemy here is in Afghanistan.

MAY: Why don't you tell me --

SCHULTZ: And for you to sit here and say that liberals don't want to defend this country is unconscionable -- that is absolutely outrageous.

MAY: I didn't say that. There are those on the left who would think that a U.S. defeat in Iraq would be like a U.S. defeat in Vietnam; an object lesson for Americans without the use of force.

SCHULTZ: Listen, Mr. May, I don't know where you get your information, but I spoke to Barack Obama face to face today.

MAY: And congratulations to you.

SCHULTZ: He said that he was going to get us out of Iraq. I asked him, are we going to go into Afghanistan with more troops, because that's what President Bush wants to do right now.

He said he would support sending more troops into Afghanistan. Now that is fighting the war on terror.

MAY: I'm glad they agree. I'm glad that Obama and Bush agree on the need to also fight the battle in Afghanistan. These are both very important battles in one global conflict.

SCHULTZ: It's something that Bush hasn't done very well I might add.

COOPER: We're going to talk more --

MAY: I know you might.

SCHULTZ: It's something that Bush hasn't done very well at all.

MAY: I know.

COOPER: We're going to talk more about Obama's position and this switch -- this move to the center as some are calling it and also about John McCain's position on all of this.

We'll have more from our panel in just a moment.

You can also join the conversation. As always I'm blogging throughout the hour go to our new Website, ac360.com. I'm about to logon myself.

Up next, is Barack Obama morphing into Bill Clinton? At least as far as policy goes? He's taking heat from liberals for moving to the center. We got the facts so you can make up your own mind.

Also, new details about what three Americans went through as hostages in Colombia, chained to other hostages by the neck at times. And new details on the amazing rescue mission that freed them.

Later, we're live on the fire lines with the men and fighting to save California's scenic coastlines. Big Sur is burning. We'll tell you where the flames are heading next when "360" continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Apparently, I wasn't clear enough this morning on my position with respect to the war in Iraq. I have said throughout this campaign that this war was ill-conceived, that it was a strategic blunder, and that it needs to come to an end.

I have also said that I would be deliberate and careful in how we got out, that I would bring our troops home at a pace of one to two brigades per month. And at that pace we would have our combat troops out in 16 months.

(END VIDEO CLIP)

COOPER: Barack Obama this evening in Fargo, North Dakota, clarifying his position after Republicans jumped all over him saying he had flip- flopped.

A number of other issues, Obama has been seen as tacking right, moving to the center, whatever you want to call it used to be called triangulation when Bill Clinton did it.

Tonight, a new CNN Opinion Research poll shows that voters already believe that both candidates do it, changing their minds on issues for political reason. 59 percent think Obama does, 61 percent believe likewise about John McCain.

So how real is this so-called move to the center by Barack Obama? With that Up Close" here's "360's" Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN ACHOR: The senator from the middle of the country is moving fast to the political middle too, many analysts believe. Obama, they say, wants to prove he is not what the "National Journal" called him, the most liberal senator in the nation.

KEN VOGEL, THE POLITICO: Obama in many ways right now is for the first time in the campaign obviously putting pragmatism over idealism. And many people in his base are kind of questioning that.

FOREMAN: The last Democrat to win the White House grabbed the political center and Bill Clinton's playbook appears to be well read by Obama. For example, in the primary, Obama pleased liberals by opposing that broad intelligence surveillance Bill called FISA. Now he says he's read through compromises in the measure and he's for it.

OBAMA: That doesn't represent a huge shift in position. It represents an assessment of a compromise that was the best that could be done right now.

FOREMAN: Many liberal leaning voters have worried that President Bush's faith-based initiatives make church and state too cozy. But just this week in an apparent reach for moderate Republicans, Obama said he favors expanding such efforts.

And the list goes on. Since securing the nomination, Obama has issued nuanced words of support for private gun ownership, the death penalty and even welfare reform.

Obama has explanations for each of his decisions and many of his supporters are satisfied. But there is risk. After all, he won the support of millions by promising no more politics as usual.

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: That was kind of his mantra in the primaries. Now if he does lose a little of that in the general election, I think he could come under attack by Republicans for saying he's a flip-flopper or for saying it was just words.

FOREMAN: But in this election, all the numbers suggest the middle will be the battle ground and Obama is digging his trenches.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

COOPER: "Digging Deeper," we're joined once again by Mark Halperin, Ed Schultz and Cliff May.

Ed, is Obama moving to the center, on Iraq, on a number of issues?

SCHULTZ: Ok, he wrote in his book about the Supreme Court ruling that was just -- just came out about the rape of a child. Ok, he's been very clear on the death penalty. He's been very clear on the second amendment. He talked about that today with the local newspaper here.

Let me point out that John McCain did not support the GI Bill. John McCain did not support the Farm Bill and Barack Obama did. John McCain will not get us out of Iraq. John McCain will not get us out of Iraq. Barack Obama has a plan to get us out of Iraq.

COOPER: As you know, Ed, this isn't just Republican talking points. There are a lot of liberals who say Barack Obama is shifting to the center. You're saying he's not doing that, there's not any post- primary kind of shift?

SCHULTZ: I think that's being overplayed.

What liberals are concerned about is his most recent position on FISA. They want some clarity on that. They're kind of miffed that he's going to give some immunity to the TeleCos; instead of pushing forward for justice on that.

But I asked him about that today. And he said well, I'm willing to negotiate that as long as we get the right Bill and have oversight the FISA court. So we're vetting our candidate to make sure that we're on the right track to the White House. The point is that the McCain camp is grabbing this like a pit bull and trying to make it look like he's a big shifter and he is not.

COOPER: Cliff, let me ask you about that, Republicans are attacking Obama and McCain is attacking Obama saying, he'll reverse himself on any issue for political gain. We keep hearing it's just words that Obama uses but McCain has changed his position on tax cuts, offshore drilling, other things.

Should he be throwing stones at Obama on these issues?

MAY: If I would advise him I would say not. I would say that McCain should be congratulating Obama for moving to the center on an issue as important as the war in Iraq.

COOPER: Do you say he is moving on the center on issues?

MAY: Yes, yes, and also on the FISA, just so people understand, this is a vitally important bill. It restores to our intelligence agencies, the authority they used to have to monitor terrorist's overseas, foreign terrorists on foreign soil.

Now Obama was against this -- Obama was against this bill and Nancy Pelosi wouldn't let the house vote on it where it had a bipartisan majority. We were losing vital intelligence. It's now passed the house.

Only those on the very far left are opposed to the senate passing it. The senate will probably pass it next week and the president will sign it and Obama is now for it.

This is an issue I've been very involved in. And I say I am glad to see he's come around on this very vital piece of legislation that helps protect Americans.

I'm not going to criticize him for changing his mind, if he will study the issue and move to the center, I think that's something that should be praised.

SCHULTZ: He's been there all along.

MAY: Not on FISA he has not.

SCHULTZ: Yes, he has.

COOPER: Let me ask Mark Halperin here a question.

Mark, if you do look at these polls, our latest poll shows basically most Americans think both these guys flip-flop on issues, that there's not much light between them. I think we overuse that term flip-flop. It's a political attack term.

People evolve in their positions, or at least good leaders should. But is there much difference between these two guys in terms of changing? Is Obama moving to the center?

HALPERIN: Well, he is moving to the center on some things on most of these positions. FISA is an exception. Most of these things it's more a matter of emphasis. It's not new positions. It's what he's emphasizing; emphasizing being for welfare reform, emphasizing being for the death penalty. That is a shift and it's politically smart.

The poll shows I think what people think about politicians generally. These guys both have a well-deserved reputation for being a little bit more true to their principles than some other people who've run for president. But both of them have made some changes.

Ed, liberal blogger Arianna Huffington warned Obama that a move to the center could prove fatal she said, and I quote, "I can unequivocally say, the Obama campaign is making a very serious mistake, tacking to the center is a losing strategy. Fixating on and pandering to this fickle crowd is all about messaging tailored to avoid offending rather that to inspire and galvanize."

She said look, it didn't work for Kerry, didn't work for Dukakis, didn't work for Hillary Clinton.

SCHULTZ: Well, I think that right now you're seeing Barack Obama do very well with Independent voters in this country. And he's doing that with a very consistent message about tax policy, about energy policy, about what he wants to do with education and health care.

Just keep in mind, conservatives you're going to get George Bush III when you get John McCain if that comes to pass. When it comes to taxing and when it comes to the tax cuts and when it comes to the Supreme Court. And when push comes to shove, liberals are not going to run from Barack Obama. They don't want the court to lean to the far right.

COOPER: We're going to have to leave it there.

Cliff May, it's good to have you on. Ed Schultz as well. Thank you very much for being on this eve of this holiday weekend. Mark Halperin as well.

HALPERIN: Probably do my Chris Matthew's invitation or probably because I'm going to take away your internet privileges. You're in too many blogs.

COOPER: All right, thanks very much. Have a great Fourth of July, guys. Thank you.

MAY: You too.

HALPERIN: Thanks.

COOPER: Up next, new details about the daring hostage rescue in Colombia and what the captives including three Americans went through during more than five years in the jungle. Including how hostages were punished if they tried to escape. Also ahead, Big Sur burning fast-moving wildfire forcing people in California to flee their homes. We've got a live report from the front-lines coming up.

Plus, he stole millions from investors and faked his own suicide. Now he's turned himself in. Samuel Israel and he's talking to the judge. His wild tale when "360" continues.

(COMMERCIAL BREAK)

COOPER: That is a moment Keith Stansell, Marc Gonsalves and Thomas Howes will surely never forget. The world watching as three American military contractors set foot on American soil last night for the first time in more than five years. We brought it to you live.

Hours earlier, the Americans and 12 other hostages had been freed in a dramatic rescue mission by the Colombian military. Now these men spent today reuniting with their families in Brooke Army Medical Center in Texas where they're getting care. And we have the first reports on their condition. Take a listen.

(BEGIN VIDEOTAPE)

MAJ. GEN. KEITH HUBER, U.S. ARMY SOUTH: They greeted me with a strong hand shake and clear eyes and an incredible smile. At this point in time, it's only appropriate to say that the conditions that they lived under were very cruel.

COOPER: We'll have more on those conditions in a moment. Doctors treating the men said they appear to be in good health. They'll spend the next couple of days in what the military calls the reintegration process to help them transition back to their lives.

Since yesterday, we have learned a lot more about the elaborate rescue operation that freed them and what they went through during more than five years in the jungles.

Karl Penhaul joins us now from Bogota with new information.

Karl, you've interviewed another hostage who, while in custody actually tried to escape with Ingrid Betancourt and was then chained by the neck to one of the American contractors. How tough was it for these hostages?

KARL PENHAUL, CNN CORRESPONDENT: Sure. That hostage, his name was Luis Eladio Perez, he was freed earlier this year unilaterally by the FARC and he described some horrific conditions. He said that when he once tried to escape with Ingrid Betancourt after four days, they gave themselves up and as punishment they were chained by the neck 24 hours a day.

Now when I say they were chained by the neck for 24 hours a day, it wasn't for just a few days, it was for two and three years, Anderson. And in the case of Luis Eladio Perez, he was -- as he remembers in chain that he had been chained to the neck with one of the three Americans, I believe it was Thomas Howes. And essentially what it meant -- when one went to the bathroom, the other had to go to the bathroom. When one rolled over at night, the other had to roll over at night. It was such close quarters.

The food he said absolutely terrible. It was rice, it was a lot of carbohydrates, not much protein only from time to time. Sleeping conditions were in the open air most of the time and in these jungles, torrential rain much of the time, living in the mud.

That gives way to foot infections, foot rot. But also a lot of these tropical parasite deceases, lice manaises -- that's the tropical flesh eating decease, malaria was an ever-present threat.

But fortunately as we've seen, for 15 of these hostages, those days are gone. They're now in freedom. And today in fact we learned even more details about that daring rescue operation.

(BEGIN VIDEOTAPE)

PENHAUL: The long march to freedom began in early June. FARC rebels led the 15 hostages on a 100-mile slog through this dense jungle. What the rebels did not know was that they were being tricked.

Orders to move the hostages had come not from guerrilla commanders but from Colombian military intelligence who had spent months infiltrating the rebel's command and control structure.

This was called operation check mate and it will go down in history for its audacity and effectiveness. The defense minister said, making the journey with the FARC's most valuable hostages; former presidential candidate Ingrid Betancourt and three U.S. defense contractors Keith Stansell, Marc Gonsalves, and Thomas Howes.

The rebels wanted to use them as political leverage to win the release of hundreds of their comrades held in Colombian and U.S. prisons. With the hostages regrouped in the eastern jungles, the final phase of the rescue plan unfolded.

U.S. national security officials say they were briefed and did give specific support but they offered no further details.

INGRID BETANCOURT, RESCUED FARC HOSTAGE (through translator): This morning when I woke up, the last thing that I imagined was that I was going to be here with you tonight.

PENHAUL: At 7:00 a.m., guerrilla commanders told her and her fellow hostages they would get a visit from an international aid organization or be transferred to another rebel camp. That was a cover story military infiltrators had sold to the guerrillas.

BETANCOURT: I had the opportunity to talk to the third person in charge. And what he said to me is that they were all going to put us on a helicopter and they were going to take us to speak with some -- one of their commanders. And they didn't know what was going to happen afterward. PENHAUL: At 1:13 p.m., a white helicopter set down in a jungle clearing piloted by military intelligence officers disguised in Che Guevara t-shirts. At 1:30, 65 heavily armed rebels watched the hostages loaded onto the aircraft. The hostage pickup was planned to last 7 minutes; it dragged out to 22.

GEN. MARIO MONTOYA, COLOMBIAN ARMY (through translator): It is 22 minutes on land. The longest minute that I could have lived in my life.

PENHAUL: Not a single shot was fired. At 1:35, the helicopter lifts off. Six minutes later, six soldiers cast off their disguises and overpowered two guerrilla commanders who had boarded with their captives.

BETANCOURT: The chief of operations said, we are the national army and you are all free.

PENHAUL: Those hostages are home free after years in rebel prison camps. But Colombian army chiefs say some of their secret agents are still roaming the jungle.

GEN. FREDOY PADILLA, HEAD OF COLOMBIAN ARMED FORCES: The risk now is that our people that is inside the FARC will be discovered.

PENHAUL: But until they are discovered, their orders are to push ahead, infiltrating guerrilla ranks and defeating the rebels from within.

(END VIDEOTAPE)

COOPER: So there's still Colombian agents inside the FARC organization. Where does the Colombian government go from here in terms of trying to strike against FARC?

PENHAUL: Well, in fact, I just finished talking to the Colombian Defense Minister and asked the same thing to him. And he says what the role of both the military and also those undercover agents will be, will be to kind of exploit these loopholes that have been left by the fact that the FARC's communication networks is in absolute tatters.

He says that that gives the military ability to strike against the FARC before the FARC realizes what's going on, before one unit can talk to the other. But he says that the FARC are still dangerous.

He estimates the FARC may still have 8,000 men and women in arms. He says they're still dangerous; they still have a capacity to strike with terrorist actions, in his words. But he said they have now lost their capacity to respond in any meaningful way on the battlefield against the kind of strike we've seen over the last few days -- Anderson.

COOPER: Up next, our "Planet in Peril." Could giant panels that act like fly paper actually help solve the problem of climate change? Some scientists say maybe. We'll see if the facts add up. (COMMERCIAL BREAK)

COOPER: In our second season of "Planet in Peril," we're focusing on the clash between man and nature. A collision between growing populations and natural resources, climate change is a big example.

New research suggests that carbon dioxide is piling up faster than ever in the atmosphere and in its current issue "Time" magazine looks at some of the ideas being proposed to try to mop it up. Some of the ideas including giant panels that act kind of like fly papers sounded kind of farfetched to a lot of people. We want to find out more.

Bryan Walsh oversees "Time's" environmental coverage. He joins me now. So the study found carbon dioxide piling up faster than ever. Why does that matter?

BRYAN WALSH, "GOING GREEN" TIME: That's important because as carbon dioxide fills the atmosphere, the ocean, which usually will be able to absorb a lot of that, basically it fills up. It's kind of like a soda can going flat. The more CO you have in the atmosphere, eventually you get to the point where the ocean simply can't absorb as much in where we are now. And it's becoming a serious problem.

COOPER: There's still though a lot of skeptics who kind of doubt the modeling capabilities that we have to judge whether this really is a severe problem down the road.

WALSH: There are two but I mean it's becoming clear. There was a paper last October in the proceedings of the National Academy of Sciences that showed that the ocean is losing that effect. And once that happens, you have potential real feedback where you get more CO2 coming in from the industry, the ocean can't absorb as much and the amount in the atmosphere just piles up.

COOPER: Another question that all the skeptics also raise is what can we really do about it? They said there's not much to do about it. You look at a couple of the different things that have been proposed. One of them is iron seeding. What is that?

WALSH: Right, exactly. Plankton actually absorb carbon dioxide. They'd actually eat it and the more plankton you get in the ocean, possibly the more you can absorb that carbon dioxide.

Now the way this would work is by actually putting iron into the ocean. Plankton also need iron and they find they tend to thrive in there where there's the most.

So there is a company called (inaudible) that basically says, well we put iron by a ship that it churns it up in the ocean.

That leads to a plankton bloom, plankton eats the carbon dioxide. We might have something that can actually get some of that out of the atmosphere.

COOPER: There's something called carbon scrubbing. What's that? WALSH: That's a pretty cool section, it's sort of like a fly paper actually. You have these proprietary plastic panels about nine feet tall that literally just catch carbon dioxide as it goes through. It's sort of like a filter no different than the one in principle that you would use in the air-conditioning.

And you put enough of those, in fact if you had one the size of the Great Wall and it was absorbing 100 percent of the CO2 out there; you could eliminate half of the world's emissions right there.

COOPER: And have these been used. I mean do we know this stuff works?

WALSH: They know it works in theory and that's where we get the real problem. It's all about scale. I mean climate change is possibly the biggest scientific challenge that we face and then simply because of that size.

So in order to -- I mean these to work, you have to scale them up vastly beyond what we can do now. Then you get the questions of price, and whether the technology will work -- will be worth while on that level.

COOPER: And the other kind of the impact you might have. It's interesting stuff. Bryan Walsh, appreciate it thanks.

WALSH: Thanks very much.

COOPER: A quick program note. Our second installment of "Planet in Peril Battle Lines" airs this fall. Our producers and camera crews are actually shooting stories for it right now half way around the world.

"360" will be right back in a moment.

(COMMERCIAL BREAK)

COOPER: In California tonight, Big Sur is in big trouble with the raging wildfire bearing down on it. The blaze has already burned 100 square miles of the Los Padres National Forest. It's destroyed at least 17 homes, or nearly 400 fires burning right now in California.

CNN's Dan Simon is there.

Dan, what's the latest?

DAN SIMON, CNN CORRESPONDENT: Anderson, we're pretty much in the heart of Big Sur. And this town is very much in danger and you can see why. I'll step out of frame here and you can see the fire in this canyon. Pretty much everywhere you look you can see flames.

There are 1,200 structures currently threatened, 200 homes said to be in immediate risk. All it takes is for those flames to come down this canyon here, hopscotch a highway just in front of me, in front of us. There are about 200 homes. We spoke to one guy who is still there. Keep in mind; this is a mandatory evacuation order, some folks still at their house. One person we've talked to, he hosts a syndicated TV show out of his house. He's staying put. Take a look.

(BEGIN VIDEO CLIP)

SIMON: Why are you staying?

DAVE EGBERT, BIG SUR RESIDENT: Because -- this house is all I got. I got -- I'm sorry. I got to protect it. That's what I got to do. So if I don't have a house, I don't have a livelihood. So I got to keep the house going as long as I can.

(END VIDEO CLIP)

SIMON: Dave Eggbert, a Big Sur resident, also a volunteer firefighter, staying put at his house, putting some boards up on his windows. Doing what he thinks will save his property from any sort of damage.

Anderson, this fire just 3 percent contained. It started on June 21st and they're saying that this fire won't be contained until the end of July.

So obviously they have their hands full. You can see behind us how steep this terrain is. And you get an idea of how difficult it is to get bulldozers up there. Those bulldozers obviously used to make containment lines but they can't put them up there because that terrain is so steep.

We should also remind you that, of course, tomorrow is the Fourth of July. Big Sur obviously a huge tourist area, especially this time of the year in the summer but this town obviously empty right now -- Anderson.

COOPER: Yes, it's good thing people got out.

Dan Simon, I appreciate it.

Still ahead, Samuel Israel, the hedge fund fugitive who faked his own suicide, tried to skip out on his 20-year jail sentence. Well, he's back in court today, facing an angry judge.

The latest twist, he looks nothing like that guy there. He's now got a beard; tried to disguise himself when he was on the run.

The latest twist in Samuel Israel's spectacular fall.

Plus, his pregnancy drew international attention; landed him on Oprah. That's right, his pregnancy. The transgender man has given birth to a baby girl.

We'll have the latest coming up on "360."

(COMMERCIAL BREAK) COOPER: Tonight, the hedge-fund fraud who staged his own death is behind bars. He'll probably stay that way. A day after surrendering at a police station, Samuel Israel today stood before a judge in New York, describing his days as a fugitive and how he really tried to kill himself with an overdose of morphine and other pain-killers.

Israel was sentenced to 20 years in prison but that was before he went on the run. Now he's looking at much harder time.

"360's" Randi Kaye has the latest in tonight's "Crime and Punishment" report.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT: A federal fugitive for weeks, Samuel Israel looks more like he was on summer vacation, dressed in shorts, a t-shirt and sporting a new beard. He told reporters he turned himself in because police went after his girlfriend.

UNIDENTIFIED MALE: Was it because they arrested your girlfriend that you turned yourself in?

SAMUEL ISRAEL, FUGITIVE: I just said that.

KAYE: Israel, the co-founder of Bayou hedge-fund, pleaded guilty in 2005 to stealing more than $450 million from investors. His 20-year prison sentence was to start June 9th.

Israel was supposed to report to prison in Massachusetts by 2:00 p.m. That morning, around 9:00 a.m., police say he left his home here in Armonk, New York, about an hour outside Manhattan, telling his live-in girlfriend, "I'm driving to prison."

Police say his girlfriend, Deborah Ryan, provided them with a fake suicide note, supposedly left by Israel. Israel's car was discovered on this bridge spanning New York's Hudson River.

On the hood written in dust "Suicide is Painless;" the name of the theme song from the "M.A.S.H." television show. And the same song that played during a fake suicide in the original "M.A.S.H." movie.

Search teams trolled the river for Israel's body. A skeptical U.S. attorney released this wanted poster and a warrant for Israel's arrest. Then police charged his girlfriend as an accomplice.

Investigators say she helped him load a scooter into this RV just days before he disappeared. It came in handy.

CHIEF MARK KIRYNICKI, SOUTHWICK, MASSACHUSSETTS, POLICE DEPARTMENT: He arrived here on a scooter, a small scooter that gets 100 miles to a gallon.

KAYE: Police say Israel who was hundreds of millions in debt, had been sleeping at this Massachusetts campground the last few weeks.

JEAN GILBERT, MET ISRAEL AT CAMPGROUND: Quiet, didn't say much about anything. He just was concerned about the dogs eating his power cord.

KAYE: Officers say Israel was on his cell phone with his mother when he turned himself in.

Why fake a suicide and then turn yourself in?

ROSS INTELISANO, CLIENTS LOST MILLIONS IN FRAUD SCHEME: It seems like his mother convinced him to.

KAYE: Attorney Ross Intelisano says his clients lost $25 million in Israel's fraud scheme.

Why do you think he didn't leave the country?

INTELISANO: I think it's not that easy in this post-September 11th world without a passport to just get out the country so I think it's a little bit hard for him.

KAYE: After a brief court appearance in Massachusetts, Israel was driven to Manhattan where he appeared in court this morning. Addicted to painkillers for years, Israel told the judge he tried to take his life this week by swallowing nearly 200 morphine tablets.

He said, "I thought it would be better to do myself in than turn myself in. I woke up and realized God didn't want me to do that and I turned myself in."

The judge ordered him to prison. Israel wears a pacemaker and court records show he's had at least nine back surgeries. Prison, he says, is a death sentence.

UNIDENTIFIED MALE: Anything else you want to say before you go?

ISRAEL: I'm sorry for everybody.

KAYE: Having swindled investors out of millions and triggered a nationwide manhunt, all paid for with your tax dollars, sorry may not be good enough.

Randi Kaye, CNN, New York.

(END VIDEOTAPE)

COOPER: Well, coming up, is Barack Obama flip-flopping on Iraq? That's what the Republicans are saying. Well, we got the "Raw Politics" and the facts at the top of the hour.

Up next, the queen of mean, Leona Helmsley, do you remember her? Well, in her will, she ignored her kids, ignored the grand kids and gave $12 million to that dog named "Trouble."

But now we've learned that is chump change compared to the billions she's left for other dogs. Could maybe your dog get a cut? Details ahead.

And later, the pregnant man delivers. The latest on the birth and the baby and the controversy when "360" continues.

(COMMERCIAL BREAK)

COOPER: Here in New York, Leona Helmsley, a billionaire real estate tycoon who made headlines for browbeating employees and stiffing the IRS is making news again, from the grave.

Leona Helmsley died a very rich woman. She had kids and grand kids but she basically blew them off in her will. She left $12 million for her Lapp dog a Maltese named "Trouble." But now we've learned she wanted dogs everywhere to share in the wealth.

Once again here is "360's" Erica Hill.

(BEGIN VIDEOTAPE)

ERICA HILL, CNN CORRESPONDENT: She controlled the Empire State Building, hated paying taxes and had major problems with people. But boy, did Leona Helmsley love dogs.

So much so that the woman dubbed the "Queen of Mean" reportedly wanted her entire charitable trust to be used for their, quote, "Care and Welfare," a trust "New York Times" estimates is worth between $5 and $8 billion, seriously, all that money for mutts?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: You can't leave a dog money because dogs can't spend money. But a judge will interpret Leona's will to be consistent with the general idea of helping dogs.

HILL: One dog who's been helped is her Maltese, "Trouble." When Helmsley died last year, she left "Trouble" $12 million but that was recently reduced to just $2 million.

LEONA HELMSLEY, REAL ESTATE TYCOON: I am not going to jail.

HILL: Helmsley was a real estate tycoon New Yorkers loved to hate. She served time in prison for tax evasion.

In her will, she also left some of her grandkids nothing. Dog, though, that's another story. Question is, will her wishes come true.

TOOBIN: You don't have unlimited power in a will. You can't leave money to commit a crime. You can't leave money that's only for the benefit of white people and you can't leave money to a dog.

HILL: Since Helmsley's desire for the dogs was in a separate document not part of her will or trust, experts say judges can make some changes.

TOOBIN: The judge is probably going to establish broad guidelines that don't specifically help dogs but generally support the same idea.

HILL: As for response from the possible beneficiaries, we tried asking questions but all we got in return were barks and a few sniffs.

(END VIDEOTAPE) COOPER: Unbelievable. And my dog wants some of that money.

HILL: Jake is all about getting a chunk of that money. Do you know how many treats that could buy?

COOPER: Yes, I think there's going to be a lot of dogs lining up for $8 billion.

HILL: But you think about Katrina and wow it could be amazing so.

COOPER: Yes I know it would be great, yes and there's still a lot of stuff to share but you know.

HILL: It's still a lot of money for a dog.

COOPER: I feel for her kids and her grandkids. I mean how would you like to have your mom have billions of dollars and then get --

HILL: $12 million to "Trouble," you really ticked me off when you were 5, you're out.

COOPER: How could the dog "Trouble" need $12 million? What possible -- how much care can a dog get?

HILL: I don't know, you know that's a lot of grooming. Apparently, though it got death threats after that and had to hire security details like a 100 grand a year.

COOPER: Trouble's got a security detail now.

HILL: He's Trouble.

COOPER: All right, there you go.

I know you have some other surprising stories in the "360 News and Business Bulletin" tonight.

HILL: Indeed we do, Anderson. We start off with one that you'll probably rather not hear but I'm your bearer of bad news.

Gas almost $4.10 a gallon as we head into the July Fourth Holiday weekend; that is 39 percent higher than last Independence Day. And it's almost certainly going to keep on going higher; oil today crossing the $145 a barrel mark for the first time.

Airlines are also feeling the squeeze; American airlines today announcing massive job cuts -- 7,000 full-time employees. It will also cut its flight schedules by 11 percent. And over at AirTrans Airways -- plans to slash salaries by 10 percent.

And the pregnant transgender man has given birth to a baby girl. Thomas Beatie was born a woman. He legally switched genders but kept his female reproductive organ intact. The 34-year-old gave birth naturally and everyone, Anderson, is said to be doing fine.

COOPER: All right time now for our "Beat 360" winners. You know how it works, Erica. We post a photo on our blog. Erica does that. And then we ask viewers to come up with a caption that's better than one from our staff.

Tonight's picture, there you go Senator John McCain with a funky facial on a news conference in Bogota, Colombia, yesterday. Our staff winner tonight is Daniel who's caption "Strike a pose, there's nothing to it;" a little salute to Madonna there.

Our viewer winner is Michelle from Spring Valley, California. And her caption, "Stop right there, this is perfect lighting to make shadow puppets on my face."

All right. We'll be here all week.

You can check out all the entries that we received in our blog and play along by going to our new Website. And you get this fancy t- shirt if you win. Congratulations.

HILL: I mean is there anything you don't get on this show?

COOPER: I don't think there is. I think you got it all.

HILL: Like you're "Trouble" and you just won $12 million.

COOPER: Exactly.

The shot is next, overweight, overfed monkeys, just too darned fat, the solution, coming up.

(COMMERCIAL BREAK)

COOPER: All right, time now for the shot, what better way to start out the holiday weekend festivities with chunky monkeys.

HILL: Not the ice cream?

COOPER: No certainly not. It certainly looked overweight that's what it happens when people give them food around the spot.

HILL: Look at that belly on that guy. Wow!

COOPER: The Japanese zoo is open 24 hours a day. For the fat primates it is non-stop eating. The zoo officials are concerned about their out-of-shape monkeys, so they are putting them on a diet.

HILL: Nothing but celery for you.

COOPER: That's right. They need some exercise. They need to do more than just sitting there and grooming each other. That's a good shot, cutting their caloric intake by more than half.

You know what they need. They need Dr. Phil.

HILL: Dr. Phil? I thought the pear-shaped diet didn't really work so well for him. Isn't there an issue with it?

COOPER: You can see all the most recent shot -- what is that shot is? I'm not sure I really want to know.

HILL: Good thing this is cable.

COOPER: All the more disturbing shots of monkeys.

HILL: Monkeys, just monkey, leave it at that.

COOPER: Logon to ac360.com. There you can also see segments of the program, read the blogs, check out the "Beat 360" picture; whatever you want to do there. The new address again, is ac360.com.

That does it for this edition of the program. Thanks for watching.

Larry King starts now.

See you tomorrow night.