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ANDERSON COOPER 360 DEGREES

Bailout Showdown Looming; Concerns Raised over Treasury Pick; Bin Laden Issues New Tapes; Fugitive Pilot Had Downward Spiral

Aired January 14, 2009 - 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 with breaking news: Barack Obama's first showdown with Congress, a showdown with members of his own party is about to happen. We have just now gotten word that lawmakers will take up a vote tomorrow on the rest of that massive financial bailout fund or TARP as it's called.
President-elect Obama wants the money and is threatening to veto any bill that keeps him from getting it. It is high stakes for his presidency, for the economy, "Your Money, and Your Future."

Dana Bash is with us now with the latest on what they are voting on tomorrow and what could happen. Dana what do we know?

DANA BASH, CNN CORRESPONDENT: Well, this is going to be the first real test, Anderson, of Barack Obama's political clout and it is going to be an absolute nail biter.

You know, I spent two days on Capitol Hill talking to dozens of the Senators, Democrats and Republicans, and they all say this rescue plan has been mismanaged and it is so unpopular with their constituents that it was really hard to support it.

The president-elect himself came to Capitol Hill to plead for this. There was a meeting with Republicans earlier today. But there is still heavy skepticism and as of now they still do not know if the president-elect is going to get what he wants in this vote tomorrow.

COOPER: Would it be -- I mean, you said it's the first big test of his legislative effort. Would actually his own party torpedo this thing?

BASH: It is going to be so fascinating to watch that because Democratic leaders, Anderson, they are hoping that because the stakes are so high politically for Obama, he's going to get this.

But I can tell you I have talked to so many Democratic Senators who say, really candidly, that they are torn. They say they are hearing from their constituents who are outraged at the idea of giving hundreds of billions of dollars more to Wall Street but these Democratic Senators also understand how important this is for the new President.

So many of them I've talked to say, look, they understand that Barack Obama is saying trust me but, you know, even though they trust him more than they do the Bush administration, for this controversial bailout, trust just isn't enough. And that is why this is going to be so interesting to watch this vote at some point tomorrow.

COOPER: All right. Dana Bash, with the breaking news. Dana thanks very much. Literally just learned this a few moments ago.

We're going to talk to our panel, David Gergen and others in just a moment.

But there is also more breaking news out of D.C., late word that plans are in place to handle the very real possibility that treasury secretary designate, Tim Geithner will not be confirmed by Inauguration Day. Today, the Senate postponed hearings after news of Mr. Geithner's tax troubles broke.

Ed Henry is on the "360 Transition Team" and he has new details. Ed, what are you learning?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Hi Anderson, some new information tonight. A source close to the transition telling CNN that there is now a plan B in place in case Tim Geithner is not confirmed as Treasury Secretary in time for Inauguration Day.

This source close to the transition telling CNN that Stuart Levy, a top Bush Treasury official, has now agreed to stay on as acting Treasury Secretary starting on January 20th if Tim Geithner is not confirmed though, the Obama people had wanted him confirmed on that first day so he could immediately deal with this financial crisis.

Obama officials tonight insisting this does not mean that Tim Geithner is not going to eventually get the job. They think this is just going to be a short-term measure to have this temporary acting Treasury Secretary but any sort of contingency plan in place now suggests that this nomination certainly is in trouble, certainly more trouble than the Obama people ever wanted. And this is just one of many challenges right now for Mr. Obama suggesting that the honeymoon is already over.

(BEGIN VIDEOTAPE)

HENRY: On the run.

UNIDENTIFIED MALE: Mr. Geithner, how concerned are you that your nomination is in trouble?

HENRY: President-elect Barack Obama is playing both defense and offense defending Timothy Geithner's failure to pay $34,000 in taxes a few years ago.

BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: Look, is this an embarrassment for him? Yes. He said so himself. But it was an innocent mistake, so my expectation is that Tim Geithner will be confirmed and my expectation is that he is going to do an outstanding job.

HENRY: He's also facing questions about why transportation secretary designate Ray LaHood backed so many of those earmarks the president-elect says he opposes. Meantime, incoming White House Chief of Staff Rahm Emanuel is trying to put out another fire: Republican questions about why Mr. Obama needs $350 billion in bailout funds.

SEN. MITCH MCCONNELL (R), MINORITY LEADER: Larry Summers and Rahm Emanuel knew they had a skeptical audience.

HENRY: But along with the defense, a charm offensive: new details from the president-elect's efforts to win over skeptics in his own party.

Sources inside a private meeting tell CNN that when senators called him Mr. President-elect, he interrupted. I'm still just Barack until next week. An effort to show he's not taking fellow Democrats for granted.

GARY ANDRES, FORMER ASSISTANT TO PRESIDENT GEORGE H.W. BUSH: I think one of the biggest mistakes that new presidents make is to come into Office and think that the job of Congress is basically to transact the White House's agenda. And that is really one of the ways that you get yourself into trouble.

HENRY: Team Obama learned that lesson after failing to consult Democratic Senator Dianne Feinstein about the nomination of Leon Panetta for CIA director.

(on camera): Now Democratic officials say, Rahm Emanuel is trying to head off similar problems by giving out his cell phone number to senators so they have a direct pipeline.

(voice-over): Aides say Democratic Senator John Tester decided to test the offer and was surprised to reach Emanuel last Sunday afternoon. They dished about the stimulus plan and the following morning Emanuel dispatched a top economic adviser to the senator's office to hear him out some more.

Stroking egos, however, only gets you so far. Eight years ago President Bush spent plenty of time socializing with lawmakers, giving them funny nicknames, but now he's leaving the stage with very few victories, a fate the incoming President wants to avoid.

(END VIDEOTAPE)

HENRY: And now on Friday, the president-elect is going to travel to the battleground state of Ohio, try to sort of inject some campaign style energy into his case for that economic bailout package; the rescue recovery plan.

But obviously right now it's unclear whether he's going to have his chief salesman, Tim Geithner, the man he wanted to be leading this whole economic effort as his treasury secretary. Obama aides still are very hopeful and they think this is a bump in the road but this is a fight they did not want to have right now, Anderson.

COOPER: Definitely that. Ed Henry, thanks.

Let's talk strategy now with David Gergen and John King, and also Pamela Gentry, a senior political analyst for BET.

David, what do you make of this breaking news that the Obama team may have to rely on this acting treasury secretary to stay onboard in case Tim Geithner isn't confirmed yet or the confirmation is delayed?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think that's not very surprising, Anderson. They do need a backup plan; they need a treasury secretary in place in case something happens in the financial markets such as an emergency.

COOPER: Is Geithner facing more trouble than we thought?

GERGEN: The longer this stays out there, Anderson, the more difficult it could become. When you have this kind of fight going on, you need to get it over quickly. I think it would have been far better to have his hearings this week and go ahead and get it done and get a vote. By letting it stretch on it could put it in a little more jeopardy. I think he'll still get there.

But Anderson, the bigger issue right now is this vote in the Senate on the TARP bill. There was an expectation that the House probably would not support this additional funding but it was believed that the Senate would support the president-elect as well as President Bush in voting for this.

If they vote this down, that will be a blow for -- against Barack Obama on the eve of his inauguration, something that would be, have been unbelievable only a few weeks ago. And it will also send a signal to the financial community that is extremely unhelpful.

You know, we're still in a fragile state and if the financial community gets the sense that the money is not going to be there, this extra $350 billion, you know, goodness gracious, I just don't think we want to go there.

But this is symbolically a very important vote for Barack Obama in the Senate.

COOPER: John, do we know how it's going to go?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: No. But the reason that you just heard Dana report that Harry Reid the Senate Leader wanted to schedule it sooner rather than later is they believe the longer it waits, as David just said, the more water the ship could take on when it comes to the TARP funding.

And David makes a key point, Anderson, because politically, every day we get closer to that inauguration and then on Tuesday this becomes Barack Obama's economy. It's Barack Obama's bailout money. And it's Barack Obama who is paying the price for the anxiety.

And he has a lot of good will. He has high public approval. Even many people who didn't vote for him want him to succeed but guess what? They're still mad about the economy; still don't think this bailout is a good idea. Don't know where the money is going and don't think it's getting to them on Main Street, USA or to the bank on the corner of their street. And that is now becoming increasingly and is about to become completely Barack Obama's political problem, not John McCain's, not George W. Bush's, not the Republican Party.

COOPER: And Pamela we've been seeing Barack Obama basically stroking the egos of people and Rahm Emanuel stroking the egos of folks on Capitol Hill. Is that enough though, to get this thing passed? I mean, they're facing a lot of opposition from their constituents and there's a lot of concern about -- that there was no oversight for the first $350 billion.

PAMELA GENTRY, SENIOR POLITICAL ANALYST, BET: Well, I don't think it's going to be as much about stroking egos as it as about 2010. A lot of these Senators and Members of Congress are worried about how this is going to look when they run in 2010.

They're worried that, you know, some of this has not been favorable in their districts and they don't have a lot of support there. But again, the popularity of Obama right now is pending on this because he doesn't want to get off with a start that gives him a loss.

COOPER: So, David, why then have it come to a vote tomorrow if they're not sure how it's going to turn out?

GERGEN: Well, you know, I've been puzzled by that question, Anderson. And I think it goes back to John King's point. And that is that they wait until late they'll have a worse vote. So they're taking it the best possible time.

But I must say this reflects fundamentally the failures of the Bush administration in the way they carried out the first half of it. But it also suggests that the Obama team hasn't done what it needed to do before they came to this vote if they get a very close vote or if they lose that.

And that is there was an expectation on the part of the Senate Democrats that before this went to a vote, the Obama team would come up with a clear, alternative way to deal with the next $350 billion with much more transparency, much more money for home foreclosures to prevent foreclosures and the like. Barney Frank has been working on legislation on that on the Hill side.

And somehow there's a sense that this hasn't come together for the Obama team the way it should have and I don't understand it. It's not good news. It shows the perils of trying to govern before you actually take the oath of office and before you have your team in place.

COOPER: Pamela, it's interesting to see Barack Obama reaching out to folks who basically have been very critical of him. He had a dinner with conservative commentator I guess at George Will's house. He also I guess today met with liberal commentators from friends and from cable. All these meetings were off the record so we don't know what was discussed inside. Everyone's kept pretty tight lipped about it. You think it's a smart thing for him to be doing?

GENTRY: I think it's smart. I think it's unpredictable and I think that he's played that to his advantage thus far. He's made a lot of moves that we haven't expected here inside the Beltway and he seems to be wanting to bring out a personal side to develop these relationships before all of these commentators start tearing him apart.

And I guess it will have been a good move to be face to face with him. The problem is he can't be face to face with everyone and he definitely won't be face to face with the blogging world. And that's been, you know, an element that all the elected officials have found to be a little bit unsettling at times.

COOPER: Well, if he keeps that Blackberry of his, he can just respond directly to them in their comments section.

John, you know, looking at what Barack Obama has done to try to convince Congress people on the TARP, on the Geithner situation and other things, what are we already seeing about his leadership style?

KING: Well, we're seeing how they react in the fact that he's going to go out to Ohio and essentially campaign for his plan even though he's not the President yet and he is a candidate no more.

He's going to go out to Ohio and then in Philadelphia, (inaudible) Pennsylvania. On Friday night he's going to give public speeches and public rallies to campaign for his plan. Why? Geithner is a bit of a speed bump in the road.

These debates in Washington are a bit of a speed bump in the road and they think he's the best car to put on the track so they're going to put him out there not his people out there and that is smart politics and a very quick reaction.

Another key point, Anderson, imagine Barack Obama if he were still in the United States Senate and George W. Bush were still the President for another month or three and the question was should we attach all these strings to the second round of the bailout because we don't trust the government?

You can be sure Barack Obama would be saying like many Democrats, yes. But he's going to be the President now. This is executive power. He's a senator no more.

Many of his party are saying we need to put strings on the executive branch and he is saying no, no, no. I'm not a legislator anymore. I want that power. I will do what you want, I will meet your concerns that David just made about how the money is spent and where the money goes but he says trust me. But that's my power. I'm President now.

GENTRY: It'll be interesting to see if he uses his -- as he does his public appearances -- if he also uses his Internet outreach because he goes straight to the people and he turns them on their own members sometimes.

GERGEN: But who would have believed, Anderson, that on the eve of one of the most important and romantic and idealistic moments in American history, his inauguration, these storm clouds would be arising? I mean, it's such a -- it's so hard to fathom that.

COOPER: They have a way of popping up when you least expect them, I guess.

GERGEN: They sure do.

COOPER: Pamela Gentry, it's great to have you on the program for the first time.

GENTRY: Thank you.

COOPER: David Gergen as well. John King, John before we let you go we want to just let people in on quick program note. You've got a brand new gig "State of the Union" with John King starts 9:00 a.m. Eastern time on Sunday. A fresh new look at politics in Washington and how it hits home -- "State of the Union." Hope everyone joins us on CNN for that.

John congratulations for that. You're on from 9:00 until 1:00 p.m.? You're taking over for Blitzer here; he's like the hardest working guy on TV.

KING: Blitzer is going to lend me his batteries, Anderson. And we hope everybody gets up early. We're going get out in the country and do some fun and different things on Sunday morning. And we're also going to have some good newsmakers, tough interviews here and the "Keeping Them Honest" team that you have on this program "AC360." It's a great time to do it and we're going to have a lot of fun.

COOPER: Holding people accountable, good thing. John King thanks. So we'll see you Sunday.

There's a live chat happening now. Join Erica and me and other viewers around the world at AC360.com. We'd love to hear from you. Also check out Erica Hill's live Web cast during the break tonight.

Up next, have you seen or heard the tape, a new Bin Laden tape challenging the president-elect, fanning the flames in Gaza. We've got a live report from Israel and a talk with our analyst Peter Bergen. And the man who helped corner Bin Laden, only to have him slipped away when denied the forces to get him.

Also tonight how the fugitive pilot fell to earth, went into hiding and was captured on the brink of death. We've got the inside story and the new charges he now faces.

And later -- this story is unbelievable -- parents who named their son Adolph Hitler and their other kids they named them after Nazis. Now the government is taking the kids away. Were the parents committing child abuse? Is the state violating their first amendment rights? You get to decide for yourself tonight on 360.

(COMMERCIAL BREAK)

COOPER: Israeli air strikes on Gaza in the aftermath of a Hamas rocket attack in southern Israel. Both, sadly familiar pictures, images of death and devastation all around. Tonight there are signs of some kind of cease-fire emerging though nothing resembling either peace breaking or apparently definitive victory for either side.

Nic Robertson is on the ground on the Gaza border for the 360 dispatch. Nic, for the first time we're hearing talk of a cease-fire. I know in the last hour over your shoulder, air strikes are continuing to pan Gaza. What are you hearing today about what it's going to take to stop this fighting?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, what it's going to take to stop it is an agreement on who's going to move first. What Hamas is saying is that Israel has got to have a cease-fire first. The Israelis are saying no cease-fire from Hamas and Israel will just continue to push its offensive against Hamas.

And that's what we're seeing right now. Just over my shoulder, over here there's street fires on the horizon, there's huge pools of black smoke. Gaza City itself, the south side of it is under a lot of pressure from Israeli forces.

Tonight there was an explosion right outside a top Hamas leader's house. Killed three people and injured one other. Not clear if that Hamas leader was actually killed in the attack.

But that's what's happening. The diplomacy in Cairo, sequencing, Hamas first to call a cease-fire; they fired 18 rockets today or Israel saying, no, no cease-fire from Israel until Hamas stops firing its rockets, Anderson.

COOPER: So in terms of diplomatic efforts, I mean, what seems to be having the most traction, is the talks that have been going on basically spearheaded by Egypt?

ROBERTSON: Yes. Egypt's the moderator, the mediator in this right now and Hamas representatives have been in Cairo and have been talking to the Egyptian leadership. But Hamas maintains its one position that it's not going to stop firing rockets on Israel -- and it fired 18 today -- until, it said, Israel stops its military activities and opens up all the crossings on the border.

Now, Hamas has pushed that back today for the Egyptians and the Israeli representative is expected in Cairo Thursday to put Israel's position but Israel's position has been very clear. That Hamas has got to stop firing those rockets before Israel will talk about a cease-fire.

So it's all about sequencing. There are other conditions as well. But this is the real issue. Who pauses the fighting first? And Israel says it has to be -- it has to be Hamas and they say they have Hamas under a lot of pressure right now. COOPER: All right, Nic Robertson on the on the border. Nic, thanks.

As Israel assault on Hamas continues, Osama bin Laden's breaking his eight-month silence, calling on Muslims to wage Jihad on Israel and challenging President-elect Obama though not by name.

Our analyst Peter Berge weighs in on whether Bin Laden is still a real threat or if the new audiotape shows just how weak he really has become?

And new details of the shooting caught on tape, the unarmed African-American man shot in the back by police at a train station. The cop is now in custody. What are the charges he's facing? We'll tell you.

And a bizarre and disturbing story raising all kind of questions including do parents have the right to name their children anything they want? Even naming a little boy Adolph Hitler? Would that amount to child abuse?

We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

LARRY KING, HOST, "LARRY KING LIVE": Are we ever going to find Bin Laden?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Yes. Of course, absolutely.

L. KING: Did we ever come close?

BUSH: I don't know. I can't answer that.

L. KING: You don't know or you --

BUSH: I really don't know, I'm not trying to hide anything.

(END VIDEO CLIP)

COOPER: President Bush last night, telling Larry King he has no idea if we came close to catching Osama bin Laden under his watch. The truth of his response is very debatable. And we will.

And today the Al Qaeda leader released a new audiotape, his first in eight months, it is 22 minutes long. And Bin Laden urges Muslims to wage Jihad against Israel because of its offensive in Gaza. And he also challenges President-elect Obama saying the U.S. won't be able to sustain its fight against what he calls the Mujahedeen much longer.

Tonight Obama talked about his strategy for dealing with Al Qaeda and Bin Laden. This is what he told CBS news.

(BEGIN VIDEO CLIP)

OBAMA: My preference obviously would be to capture or kill him but if we have so tightened the noose that he's in a cave somewhere and can't even communicate with his operatives then we will meet our goal of protecting America.

(END VIDEO CLIP)

COOPER: Let's "Dig Deeper" with CNN's national security analyst Peter Bergen and Gary Berntsen, a former CIA officer and author of "Human Intelligence, Counterterrorism and National Leadership."

Peter, do we know what power Bin laden still has? I mean, does he have operational control over Al Qaeda in Pakistan and Afghanistan or elsewhere?

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Well, I mean, just look at the coverage today. Every media organization in the world covered this audiotape. We hadn't heard from him in nine months and these audiotapes often have sort of specific instructions for people in the jihadi movement.

For instance Bin Laden and his number two have called repeatedly for attacks on the Pakistani government in the last year or so which is one of the reason we've seen a blizzard of suicide attacks against Pakistani government soldiers and policemen.

The tape we just heard today I don't think will have any real impact on Gaza but you could imagine Al Qaeda-like groups springing up in Gaza inspired by Bin Laden. We've seen that in the Palestinian refugee camps in Lebanon. Unfortunately, you know, Hamas may -- there may be even more radical movements springing up in Gaza over time.

COOPER: Gary, we heard President Bush tell Larry King last night that he didn't know if we'd ever gotten close to Bin Laden. Do you believe him?

GARY BERNTSEN, FORMER CIA OFFICER: Of course we were close in Tora Bora. I talked about that in my book "Jaw Breaker."

And of course, Dalton Fury just released a book called "Kill Bin Laden." He was the ground force commander for delta force. So it's quite clear what occurred there.

COOPER: President Bush just doesn't really want to --

BERNTSEN: Just recognize or acknowledge what occurred.

COOPER: What do you make of the importance of Bin Laden today? I mean, does he still matter?

BERNTSEN: Well, of course he matters. Anyone who conducted a catastrophic attack against the United States matters but the fact is he's limited now to conducting attacks in places like Pakistan or in the Middle East where he has a significant number of followers. Does he still have the ability to do catastrophic attacks on the United States? He hasn't done it in seven years and the Bush administration does, you know, warrant kudos for blocking that during the last couple of years.

COOPER: It's interesting, Peter, and I think bears repeating. Bin Laden portraying himself as a protector of Muslims around the world, in this case Palestinians. He has had no problem killing Muslims who he believes aren't Muslim enough.

Has he ever really done anything to help Palestinians or does he just use this cause from time to time?

BERGEN: He's done nothing specific to help the Palestinian cause. I mean, since 9/11 Al Qaeda has attacked a number of synagogues around the world. They killed the Jewish American journalist Danny Pearl in Pakistan but other than sort of these kinds of attacks they haven't really engaged in anything specific.

Hamas and Hezbollah obviously have conducted a lot of terrorism against Israel. Neither Hamas or Hezbollah likes Al Qaeda; they both made quite critical statements about Al Qaeda and vice versa. I mean, Al Qaeda has criticized Hamas for participating in Democratic elections which it regards as against Islam.

COOPER: Right.

BERNTSEN: Al Qaeda has kind of taken a back seat in the pack, Afghan-packed Theater. You know a lot of those other commanders like Gulbuddin Hekmatyar, who leads the HIG, Hezb-e-Islami Gulbuddin, he was previously the Prime Minister of Afghanistan, he doesn't need to follow Bin Laden.

COOPER: You spent a lot of last year in Afghanistan.

BERNTSEN: I spent much of the last year in Afghanistan.

COOPER: With the U.S. forces and trying to help out with IEDs.

BERNTSEN: Right, but you've got other groups there like the Hakani network that doesn't need to follow Bin Laden. These are some of the regional players that are out there with the Taliban. And Al Qaeda has attached itself on to some of them for operations but is not operating independently in large elements that are presenting a significant threat to U.S. forces.

COOPER: Briefly, based on your experience on the ground, what can the Obama administration do that the Bush administration hasn't done in Afghanistan?

BERNTSEN: They need to focus on policing forces out there. Counterinsurgency means establishment of rule of law. We're going to work on the army. That's been ongoing. The Germans initially had the responsibility for the police, the U.S. assumed that responsibility two years ago. We've got to work on the police. Two thirds of them Afghan National Police cannot read or write their own language. We've got to do literacy and we've got to do development and there's a lot of work to be done in Afghanistan the next couple of years.

COOPER: Gary, I appreciate you being here. The book again is "Jawbreaker." Peter Bergen, it's good to have you on as always.

Thank you Peter.

Up next the fugitive flyer found barely alive after his desperate plea to die. Tonight the details of his arrest, the lies that brought him down and the new charges he now faces.

Plus inside a polygamist sect, a family torn apart, a young polygamist girl who chose to stay behind when her mother fled now speaks out. Exclusive interview and her mom's reaction.

And the Obama is moving to the White House. They've hired a new decorator but can they avoid the mistakes past first families have made when trying to spruce the place out. Stay tuned.

(COMMERCIAL BREAK)

COOPER: Tonight the fugitive pilot who allegedly staged his own death is alive and under arrest for two separate federal charges, trying to escape the law, lawsuits and his family. This businessman is accused of leading authorities on a high flying multi-state chase. His plane crashed Sunday night, if you'll remember.

Today a helicopter removed the wreckage from the impact site right there. That's where the search for the missing money manager took another strange turn and this is where the hunt ended in a tent at a remote camp site in Florida. As you'll see the authorities who caught up with the pilot probably saved his life.

The latest details, with "Crime & Punishment" here's Drew Griffin.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): Right up until the very end, the end of the chase at this camp ground, Marcus Schrenker was telling lies.

CAROLYN HASTINGS, CAMPGROUND MANAGER: He said he was riding across country with some buddies and they didn't want to stop.

GRIFFIN: Carolyn Hastings says she didn't suspect a thing when the lone motorcycle rider rolled into her camp ground Monday.

HASTINGS: He got some waters and some beer and actually chit chatted and very friendly; paid for one night.

GRIFFIN: Schrenker bought enough firewood for a roaring fire and something else. He got the campground's Internet code. Police showed up the next day, Hastings says, lured in by e-mails Schrenker was sending out.

HASTINGS: They knew that he had e-mailed someone in the area.

GRIFFIN: Inside the tent, the 38-year-old who had faked his death was now, according to police, trying to take his life. He had cut his right wrist and even taken Ultracet and aspirin, medications that dull pain and thin blood.

LT. JIM CORDER, GADSDEN COUNTY SHERIFF'S DEPARTMENT: It looks like he'd been bleeding for some time. There was a large amount of blood on his sleeping bag and inside the tent.

GRIFFIN: It is a bizarre end for the high-flying investment adviser. His plane crashing less than 75 yards from homes and miles from the speculated planned crash site, the Gulf of Mexico where searchers presumably would not discover the pilot was missing.

Somewhere over Alabama Schrenker had parachuted out, reclaimed a pre-stored motorcycle, and took off. The police say he had enough supplies to last for days but apparently no longer had the will to keep going.

For years this was the Marcus Schrenker known to his investors: a successful, high rolling, financial adviser with a beautiful wife and hobbies that included flying stunt planes. But former investors say behind the facade was a smooth talking, pathological liar.

Mike Kinney and nearly his entire family once trusted Schrenker with their life's savings.

MIKE KINNEY, FORMER INVESTOR: I've never in my life seen anybody that could tell dishonest untruths that he told over and over again and expect you to believe them. I guess it's one thing that caught me by surprise in my dealings with him. I've never dealt with anybody with that level of dishonesty.

GRIFFIN: Schrenker's own wife issued a statement today saying she, too, was a victim, filing for divorce on December 30th after discovering her husband was having an affair. Her attorney says Michelle first learned of the allegations against him when on December 31st police and investigators came to her door to search her home. Clearly, says the attorney, Michelle and her three young children are victims of this man's deceitfulness as well.

(END VIDEOTAPE)

COOPER: Apparently a lot of victims out there. Drew, so he had slit one wrist when police found him; they said there was a lot of blood in the sleeping bag. Has he recovered?

GRIFFIN: He is recovering in the hospital behind me, Tallahassee Memorial, here in Tallahassee, Florida. But, Anderson, he was very close to death. A federal agent said had they waited another hour he probably would have been dead when they found him in that tent. As it was, they had to life flight him to this hospital where he is expected to make a full recovery and a recovery to face all those charges here in Florida and back in Indiana.

COOPER: Bizarre story. Bizarre end to it. Drew griffin, appreciate it, Drew.

Just ahead a 360 exclusive: inside a secretive polygamist sect. Gary Tuchman visits its west Texas ranch and meets a young woman whose mom risked everything to free her child from the sect. So why did her daughter go back? What message does she now have for her mom today?

Also ahead, accused money manager, Bernard Madoff back in court today; prosecutors trying their best to get his bail revoked. He's wearing a bullet proof vest this time. Did they succeed? We'll tell you.

And what on earth would possess a mom and father to give their children Nazi-inspired names including Adolph Hitler for one of the sons and Aryan Nation for another? Tonight the kids are in state custody but are they victims of abuse? A strange and disturbing story -- details coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CAROLYN JESSOP, FORMER FLDS MEMBER: She didn't want to come. She was crying and you know, she said, "Mother, there's something you're doing that's wrong. Why doesn't father know what you're doing?"

(END VIDEO CLIP)

COOPER: Carolyn Jessop, former polygamist, describing the night she risked everything to escape from an FLDS compound so she and her eight kids could have a better life. That was nearly six years ago. She piled her kids into a family car and just fled.

Her plan worked. Jessop has built a new life. She has written a memoir about the secretive group whose leader, Warren Jeffs, is now behind bars. At least 11 other men in the sect have been indicted following a raid last spring at their west Texas compound. You all probably remember that story.

You may also remember that more than 400 children were taken from the ranch by authorities but now they are back. Gary Tuchman was allowed inside the compound this week to talk to the kids and little did he know who else he would meet there. Here is his exclusive interview.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice over): On the Texas ranch owned by the polygamist sect known as the FLDS, a ranch closed off to most of the outside world, is this young lady named Betty. And she hopes to be married soon.

(on camera): Would you like some day to have a sister-wife or two?

BETTY JESSOP, CAROLYN JESSOP'S DAUGHTER: Yes. That's a part of my religion.

TUCHMAN (voice-over): We'd been invited to the ranch to do a story on the hundreds of children who had been returned after this past spring's police raid. The day after we talked to 19-year-old Betty, we drive 45 miles from the ranch to attend a book signing.

Carolyn Jessop says she was forced to marry a 50-year-old man she despised when she was 18. She has written a book called "Escape" in which she writes about her harrowing escape with her eight children from the FLDS in 2003. But in 2007, one of those children, a daughter, decided to go back.

In the book, Carolyn Jessop writes, "When she left she promised to call but none of us have been able to reach her by phone since her departure." That child is Betty.

(on camera): What was it about the outside world that you disliked the most or that you were most scared of?

B. JESSOP: Mostly it's shallow. I couldn't find any satisfaction in anything there.

TUCHMAN (voice-over): We tell Carolyn at the book signing, which has security guarding her because of the proximity of the ranch, that we will show her our interview with Betty.

(on camera): Do you miss your mom?

B. JESSOP: Of course.

TUCHMAN: I mean, do you wish she would come back?

B. JESSOP: If she would do that, that would be amazing.

C. JESSOP: I could cry. I miss her. I mean, she's changed, you know. She looks like she's doing OK. But I miss her.

TUCHMAN, (voice-over): Carolyn's ex-husband and Betty's father is Merrell Jessop. He waved to us outside a Texas court this week. He's charged with presiding over an underage marriage. He's pleaded not guilty.

Carolyn says Betty is one of his 54 children.

B. JESSOP: I'm just beyond grateful to be back; wouldn't give it up for anything in the world.

C. JESSOP: You see, that's scripted, so grateful to be here and the expression.

TUCHMAN: Our interview with Betty was observed by one of the FLDS leaders but she nervously acknowledged she communicated with her mom two weeks ago. (on camera): When you miss your mom -- do you still love her?

B. JESSOP: Well, of course. On her birthday I sent her a text that said happy birthday and she sent back, "Thank you. We love and miss you. We hope you're well."

TUCHMAN: How did that make you feel when she said she loved you? Was it emotional?

B. JESSOP: It was good to see.

C. JESSOP: It's comforting that there's some communication that is -- that I still have with her and that, even in front of other people that she knows she's got to be incredibly careful what she says, that she would admit that that made her feel good.

TUCHMAN (voice-over): The FLDS says Betty is free to go if she wants. Carolyn says there's enormous pressure on her not to. But...

(on camera): Do you think you will be together again some day?

C. JESSOP: I do. I really do. I love her.

TUCHMAN (voice-over): But Betty says that will only happen if her mother comes back to her.

(on camera): If you could spend, like, a week in the outside world, would you do it?

B. JESSOP: I spent four years. That was enough.

TUCHMAN: Carolyn Jessop gave Betty life, but she no longer shares it.

Gary Tuchman, CNN, El Dorado, Texas.

(END VIDEOTAPE)

COOPER: A family divided by their faith.

Still to come, a strange story: why would parents name their son Adolf Hitler? The child is now in state custody, along with two of his siblings, also named after Nazis. But does naming your child after Nazis constitute child abuse? We have that story ahead.

But first Erica Hill joins us with a "360 Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, prosecutors have filed murder charges against the former transit cop caught on tape fatally shooting an unarmed man in the back in Oakland, California. That killing sparked rioting in the city.

In New York, a judge once again refusing to revoke Bernie Madoff's bail, keeping him under penthouse arrest. And under that jacket -- take a look at this video here -- Madoff spotted wearing a bullet-proof vest. We're told it is due to death threats. Trouble at Apple: CEO Steve Jobs now taking a medical leave of absence through the end of June. Jobs recently announced he is suffering from a hormone imbalance that's caused him to lose weight. But then today in a letter to his staff, he said the situation is actually more complex but did not elaborate. Apple shares, by the way, have fallen 8 percent in after-hours trading.

And if you're looking for a new car, President-elect Obama's old wheels are up for auction on eBay. Let's hope you have a big credit line. The current owner seeking a cool $1 million for Obama's one- time 2005 Chrysler 300-C. Mr. Obama, of course, will soon be riding around -- doesn't really get to drive anymore -- but he'll be riding around in this new armored limo nicknamed "The Beast."

COOPER: Wow.

HILL: The Cadillac makes its debut during the inaugural parade. Of course, there's...

COOPER: That's a cool-looking limo right there.

HILL: There's more than one, too, because you have to have...

COOPER: Is there?

HILL: Well, typically, yes.

COOPER: I guess so.

HILL: Because you have to throw some people off. Security.

COOPER: Sure. Why not?

Up next, this story is so disturbing. A little boy named Adolf Hitler. He and his Nazi-named sisters were taken from their parents today. The question is, is the state overstepping its bounds? We'll let you decide after you hear the facts.

And later, decorating the White House. How will the Obama style compare to presidents of the past? We'll take you inside.

(COMMERCIAL BREAK)

COOPER: In New Jersey tonight, three children, all given Nazi- related names by their parents are in custody of the state. Now, we don't know exactly why they were taken from the home, but some wonder if calling them "Hitler" and "Aryan" had something to do with it. And if so, was that right? The story from Randi Kaye.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): This three-year-old has a lot in common with other toddlers his age, except one thing. Heath and Deborah Campbell decided to name their son "Adolf Hitler."

The New Jersey parents have two other young children, JoyceLynn Aryan Nation and Honszlynn Hinler Jeannie.

In this picture, you see a black Nazi banner on the wall. In the center, a large swastika. But in an interview with a local newspaper, Heath Campbell said he is not a racist, stating, "A name doesn't make a person. The person makes the person. My son is going to learn to love. None of my kids are going to have a bone of hate in their body."

That may be true, but what is also accurate is that right now, according to police, all three of his children have been taken from the home by New Jersey child welfare workers. But why?

(on camera): We contacted the New Jersey Department of Children and Families, and while the agency will not comment on a specific case, it told us that children are removed from their homes only if there is an imminent danger to the child and only after an allegation of abuse or neglect is made.

The department stressed that a child is never removed from the home simply because of his or her name.

(voice-over): This is not the first time the name has created controversy for the Campbells. Last month, a supermarket refused to write "Happy Birthday, Adolf Hitler" on a cake for the boy.

Despite the firestorm that continues to grow, the Campbells are refusing to change their son's name.

HEATH CAMPBELL, FATHER: This is America. They say it's free. You have a right to name your child what you want to name your child.

KAYE: Randi Kaye, CNN, New York.

(END VIDEOTAPE)

COOPER: Heath Campbell told a local newspaper that his kids were not removed from the home. However, published reports say they were. We've been unable to reach the family for comment.

It is a strange case, unsettling, to be sure. Joining me now to talk about it is attorney and "In Session" anchor Lisa Bloom.

Can social services legally remove kids because they were named after Nazis?

LISA BLOOM, ANCHOR, "IN SESSION": I don't think so, Anderson. And I think there's something more to this story. They can investigate for that reason. That would be a cause for suspicion or alarm, go into the home.

Because look, if parents name their kids "Adolf Hitler" or "Aryan Nation," we're talking about some cruel parents. We're talking about parents who would subject their kids to derision and ridicule in the schoolyard. That should be enough for a red flag.

COOPER: Some might argue that is abuse, in and of itself. BLOOM: I would argue it is, but it's not enough, I think, under Pennsylvania law, which I've looked at. There has to be a danger to the physical, sexual, or emotional well-being of the child. We're talking about some kind of abuse or neglect where their basic needs aren't being met.

So I think this is enough of a red flag to go in and investigate. Maybe they found something more that they're not disclosing. They can't disclose under the law. That's what I would suspect if they did take the kids.

COOPER: Are there any precedents for something like this?

BLOOM: Not for taking kids away just because of a name. Look, that would be a slippery slope. Think of all of the people with unusual names in this country. And this is a really bad one. As I said, I think it's cruel and abusive. But we can't start taking kids away because we don't like their name. That alone, I don't think, would be enough.

Also, look at the very young age of these children. I mean, one of them is a baby, and she clearly doesn't know what her name means, any historical significance to it. So I don't think this alone would be reason enough.

COOPER: And there are plenty of neo-Nazis and racists in the United States who, you know, have swastikas in their home. And they have kids, and they grow up around this.

BLOOM: Tattoos. Swastika tattoos, "Mein Kampf." I mean, sure. You can teach intolerance to the -- to your children if you want to, unfortunately, but you can't abuse them. You can't cause them danger. You can't harm them in a physical or emotional way. You can't fail to provide for their basic needs. And I suspect that may be what's at the root of all of this.

COOPER: So these folks live in New Jersey. What -- do we know what happens to the kids next? I mean, social services will just investigate this?

BLOOM: Well, if they've taken the kids and, apparently that's in some dispute, then the kids are going to be examined emotionally, physically, to be sure that they're being taken care of, that they're not being abused. They would do an entire investigation of this family: talk to neighbors, talk to friends and find out what's really going on in that home.

COOPER: So bizarre. Ms. Bloom, thanks.

BLOOM: Thank you.

COOPER: Just ahead, a completely different subject: interior decorating with the Obamas. Their plans for a new look in the White House and how other first families have tried to leave their mark on the White House. A presidential design guide, if you will, coming up next. And later the movie star who sold cars and fantasies. We remember Ricardo Montalban. Our "Shot," coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): It's not so much what first ladies do on Inauguration Day as what they wear that matters.

Since the earliest days, the attire of the first lady has spoken to her sense of style and the times. In the 1970s, Roslyn Carter was criticized because she wore the same gown that she had worn to her husband's gubernatorial balls.

Nancy Reagan looked glamorous. Some felt her gown was over the top for the recessionary '80s.

But whether a gown is praised or panned, they all wind up in the same place, the Smithsonian, where tourists can check them out years after the dance is done.

(END VIDEOTAPE)

COOPER: That's Tom Foreman. Michelle Obama's inaugural gown will also be in the Smithsonian. First, though, of course, her husband has to take office. Then the Obamas move into the White House, a home the president-elect speculated in his book, "The Audacity of Hope" was worn and probably drafty.

They're going to be redecorating, of course. It is a tradition for every new first family, and one with its share of personal and sometimes unusual styles.

Up close tonight, Erica Hill.

(BEGIN VIDEOTAPE)

HILL (voice-over): Making a 55,000-square-foot mansion feel like a cozy home is no small feat, which is why the incoming first family usually has a little help.

The Obamas' choice: California designer Michael Smith. He's worked with Steven Spielberg and Michelle Pfeiffer and, according to Michelle Obama, quote, "shares my vision for creating a family- friendly feel to our new home and incorporating some new perspectives." His other strength: harmonizing old and new.

DEBORAH NEEDLEMAN, EDITOR-IN-CHIEF, "DOMINO": His real skill is in combining antiques and grand houses in big proportions with a sense of modern comfort and livability.

HILL: With two young girls in the White House, comfort will be key. Their rooms are first on the list, something ten-year-old Malia told "Access Hollywood" back in July she was looking forward to, if her dad won the election, of course.

MALIA OBAMA, DAUGHTER OF BARACK OBAMA: I think my most excitement about it is that I get to redecorate my room.

HILL: The first family has a budget of $100,000 to redecorate the private quarters, which may sound like a lot, but they've got 24 rooms to cover.

NEEDLEMAN: I think that both Michael Smith and Mrs. Obama are looking for very clever ways to bring in affordable American design and perhaps repurpose things that are already in the White House archives and perhaps mix in things from places like Target and Crate & Barrel, especially for the children's rooms.

HILL: And during a recession, that could go a long way with the American people. It's also something Smith is known for: mixing periods and even sometimes price points.

No one wants to be remembered for a pricey misstep. Mary Todd Lincoln can't seem to live hers down, even after nearly 150 years.

NEEDLEMAN: That Lincoln bed was -- I can't remember what it cost, but it was an exorbitant amount. And President Lincoln was aghast and never slept in it.

HILL: Nancy Reagan created a stir when she bought more than $200,000 worth of china for the White House. Never mind that the dishes were paid for with private funds. It just didn't look good.

So what does look good to the country? A presidential home everyone can be a part of.

JACKIE KENNEDY ONASSIS, FORMER FIRST LADY: I don't think the White House ever can completely belong to one person. It belongs to the people of America.

HILL: Jackie Kennedy ushered in a new era, opening the White House up to the nation on television following an extensive renovation, a tradition that endures and one that will hopefully allow the country to see the final product in the Obama White House.

(END VIDEOTAPE)

HILL: And so many questions about what that Obama White House will end up looking like. What was interesting, when I was over at "Domino" magazine today, we were talking about the eclecticism that this Michael Smith has of really putting different periods together. And as she was explaining to me, I said, "You know, it sounds a lot like what President Obama said, that he's just a mutt."

And she said, "You know what? You're right. These will sort of be mutt rooms, but beautiful mutt rooms."

COOPER: We shall see. Erica, thanks.

All right. Time now for our "Beat 360" winners; our daily challenge to viewers to come up with a caption better than the one we can come up with for a picture that we put on our blog every day.

Tonight's picture: Paul McCartney strolling on 56th Street here in Manhattan.

Our staff winner tonight is Candy Crowley. It's actually her first "Beat 360" win. Her caption: "OK, guys. I'm ready. You can let Heather out."

That's funny. Looks like he's ready for a fight there.

HILL: Very clever, Candy.

COOPER: Our viewer winner is Kevin from Toronto, Canada. His caption: "Due to a tough economy, McCartney is back street performing, and unfortunately, his one back-up singer appears to have a headache."

COOPER: Kevin, congratulations. Your "Beat 360" T-shirt is on the way.

Up next, he was the mysterious Mr. Roarke on "Fantasy Island." Tonight we remember an original Hollywood star, Ricardo Montalban.

(COMMERCIAL BREAK)

COOPER: For tonight's "Shot," a tribute to a Hollywood original, the actor Ricardo Montalban. Suave or sinister, serious or playing it for laughs, he was one-of-a-kind.

He began his career in 1942 appearing in dozens of film and TV roles, including "Star Trek" during the '70s and '80s. He was a pitchman for Chrysler, showcasing the cars in commercials, especially the Chrysler Cordoba.

Of course, he was also Mr. Roarke, the white-suited host of "Fantasy Island," where after saying, smiles everyone smiles. B- and C-list celebrities would find love, trouble, or perhaps even both.

HILL: Often both.

COOPER: Often, yes.

Ricardo Montalban died in Los Angeles. He was 88 years old.

HILL: That's sad.

COOPER: It is sad.

HILL: You know I heard about it. I was on hold waiting for a script approval, and all of a sudden you hear CNN radio when you're on hold. And I was shattered.

COOPER: But it is amazing the career he had going back to the mid-'40s all the way through and to live such a long life is a great accomplishment.

HILL: Absolutely. COOPER: That does it for this edition of 360. Thanks for watching.

"LARRY KING" starts right now.