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ANDERSON COOPER 360 DEGREES

President Obama Talks to Muslim World; More than 70,000 Jobs Lost; Treasury Secretary Sworn In; Trials of Ted Haggard

Aired January 26, 2009 - 23:00   ET

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


(COMMERCIAL BREAK)

ANDERSON COOPER, CNN ANCHOR: Tonight, breaking news on several fronts to tell you about: President Barack Obama just gave his first formal interview, talking directly to the Muslim world. We'll play it for you in its entirety tonight.

But we begin with crucial developments on the economy and your future. Today, a brutal bloody Monday: More than 70,000 jobs cut today from big-name companies gone in a single day.

And one crucial job filled. Timothy Geithner sworn-in tonight as Secretary of Treasury after Senate confirmation on a 60-34 vote, three Democrats, one Independent voting no, 11 Republicans voting aye. Secretary Geithner's mission bluntly put, to stop the bleeding.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Congratulations, Tim. You've got your work cut out for you, as I think everybody knows. But you also have my full confidence, my deepest trust, my unyielding belief that we can rise to achieve what is required of us at this moment.

(END VIDEO CLIP)

COOPER: In a moment the political resistance to President Obama's recovery plan, a version facing its initial test in the House on Wednesday.

First though, details on perhaps the worst day in decades for working Americans and what the president can do about it. "Your Money, Your Future" and your job and Ali Velshi.

Ali, more than 70,000 jobs lost in a single day. What happened?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Anderson, I've never seen a day like this. And everybody I've talked to has never seen a day like this. The recession got very real for 70,000 families.

Major American corporations laying people off in numbers that we've never seen. Pfizer just announcing a deal now to buy the other pharmaceutical company Wyeth and laying off 26,000 people. Caterpillar, 20,000 people. Sprint, 8,000. Home Depot, 7,000. ING, 7,000. Texas Instruments, 3,400. It was massive -- 72,300 when you put them all together.

Those aren't people who just had to finish off today. These were announced job layoffs. They could take place over time. But remember, Anderson, every single month that we've lost jobs the announced layoffs are a fraction of the actual layoffs that go on.

So when you look at these numbers and you think that we've been running on average 500,000 jobs lost every month for the last couple months, this is staggering and it's disappointing -- Anderson.

COOPER: But the pressure is now even greater on President Obama to do something and to try to do it quick. What do we know about the stimulus plan as it stands now?

VELSHI: Well, over the weekend they started to trickle out some details about it. And now we know about the job creation part of this plan. In direct response to the jobs that are being lost, President Obama is suggesting that its stimulation plan, the job creation part of it, will include specifics in certain industries.

Here's what they told us about: 678,000 jobs in construction, 408,000 in manufacturing -- that's where we've seen most of the losses over the last few years. 604,000 jobs in retail; the thinking there is that if you give some people some money back they might actually spend it creating more demand. 240,000 in education and health care. Anderson, those are two of the only areas or two of the only areas where we've actually seen any growth or stability. 499,000 in tourism; theoretically people are feeling a little bit better, a little more flush, they'll take vacations. 244,000 jobs in government.

This is what the Obama administration says its stimulus program will do in terms of jobs. There's some criticism as to whether that will actually happen or not. But at least they started breaking it down for us -- Anderson.

COOPER: There were some positive signs coming out of the housing sector. What's that?

VELSHI: A little positive sign. It's a bit of a light at the end of the tunnel. Home prices are substantially lower than they were a year ago. About a 15 percent drop, and that's more than we've seen in a very long time.

But in December, home sales crept up just a little bit compared to November. It's the first time we've seen that all year. So there's some sense that with home prices as low as they are, the median price for a home in the United States is now $175,000. At those prices with low interest rates, some people are getting into the market, Anderson.

COOPER: All right, Ali Velshi with the news. Ali thanks.

As we mentioned at the top, the Geithner confirmation met strong GOP resistance after a weekend of Republican lawmakers sniping at Mr. Obama's plan. Now, they're going to be sitting back down with the president tomorrow. The question tonight, will it narrow political differences or simply sharpen the divide?

Ed Henry has the latest.

(BEGIN VIDEOTAPE)

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: With job cuts mounting, pressure is building on President Obama. Just two days before he faces a key House vote on the fate of his $825 billion stimulus plan.

OBAMA: We can't afford distractions and we cannot afford delays. These are extraordinary times and it calls for swift and extraordinary action.

HENRY: But key Republicans want more tax cuts and less spending. With even John McCain demanding a complete overhaul despite the president's recent outreach to his former rival.

SEN. JOHN MCCAIN (R), ARIZONA: It's just the old spending practices of liberal Democrats. So I hope we will be able to sit down and negotiate (AUDIO GAP) not vote for the stimulus package as it's been presented.

HENRY: The president is trying to win more votes ahead of critical meetings Tuesday on Capitol Hill with House and Senate Republicans.

Democratic officials confirm Congressional leaders are now dropping a provision lampooned by Republicans that would have provided $200 million in contraceptives to low-income families.

REP. JOHN BOEHNER, HOUSE MINORITY LEADER: How you can spend hundreds of millions of dollars on contraceptives, how does that stimulate the economy?

HENRY: But there's still deep Republican opposition to the broader plan. After the barbs traded at Friday's White House meeting over who should benefit from tax cuts.

After Republicans made their case, sources in the room say the president shot back about the election, "I won," though aides are trying to downplay any hard feelings.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The President said that he felt confident with the tax cuts that he'd run on. That the people had weighed in on what they thought might be a good way to stimulate the economy.

He said he won, and the next thing that happened is everybody laughed. So this wasn't -- this wasn't cowboy diplomacy. This was, I think, a rather light-hearted moment.

HENRY: Light-hearted, perhaps. But the president is playing hardball with the Republicans on other fronts; signing a Presidential Memorandum to get more fuel-efficient cars on the road. GIBBS: And I think what ultimately we'll come up with is something that moves along the twin goals of ensuring a strong manufacturing sector while at the same time ensuring that we take the necessary steps to reduce our dependence on foreign oil.

HENRY: But the question now is whether a move that will please environmentalists will deal a death blow to the already teetering auto industry.

(END VIDEOTAPE)

HENRY: Now, CNN has learned that newly sworn-in Treasury Secretary Tim Geithner is going to make a quick move tomorrow morning already to try to put his stamp on the Treasury Department.

He's going to announce tough new rules to crack down on lobbyists who are benefiting from government bail outs. There have been a whole series of stories saying companies like Wells Fargo, General Motors have received a lot of money from the government and then turned around and lobby the government for more money.

They're going to try to crack down on that, add more accountability and transparency to the whole so-called TARP process. What that also tells you is this administration realizes, though, there's a huge public relations problem with that TARP program.

And if they're going to get the rest of that $350 billion from Congress, they're going to have to make a lot of changes -- Anderson.

COOPER: And I was fascinated to learn that President Obama has given his first formal sit-down interview from the White House with an Arab language station clearly trying to reach out directly to the Muslim world.

HENRY: Absolutely. We saw that last week when he signed that Executive Order to keep his campaign promise to say he's going to close down the U.S. military prison at Guantanamo Bay as well. That was a very strong signal because obviously it's become a symbol in the Muslim world for allegations that the U.S. went too far in the war on terror.

In this interview it's also very interesting that the president basically takes a shot at former President Bush and says not just his approach to the war on terror but his language in calling it the war on terror sort of divided people and made it seem like the entire Muslim world was at fault.

And also in this interview, take a look, he clearly talks about how he wants to sort of reframe this whole situation, this whole approach.

(BEGIN VIDEO CLIP)

OBAMA: My job is to communicate to the American people that the Muslim world is filled with extraordinary people who simply want to live their lives and see their children live better lives. My job to the Muslim world is to communicate that the Americans are not your enemy.

(END VIDEO CLIP)

HENRY: Now, the big thing to watch for is that the president has promised that in this first 100 days of his new administration he's also going to travel to the Muslim world and give a speech somewhere. He hasn't said where yet. But there's been a lot of speculation it could be Indonesia since he spent some time growing up there -- Anderson.

COOPER: All right, Ed Henry reporting for the White House tonight.

We want to play you really the entire interview that President Obama has just given to Arab television, clearly sending a message as we said to the Muslim world. We'll also take a look at how it's being received. We're going to play that throughout this hour for you. You won't see it anywhere else.

Later, the hidden life of Ted Haggard, one time Evangelical super pastor. There's now a new sex allegation against him. And in a new film Haggard is speaking out about his life after scandal and how he continues to struggle with his sexuality.

Plus, new developments in the Travolta tragedy. The Bahamian senator implicated in the alleged extortion scheme now resigns. Details when "360" continues.

(COMMERCIAL BREAK)

COOPER: Now, we continue with our breaking news. President Obama tonight, sitting down for his first formal interview. Who he talked to speaking volumes tonight; the audience largely Arab, largely Muslim.

Now, here's an extended sample of the president just moments ago with Al-Arabiya television's Hisham Melhem.

(BEGIN VIDEOTAPE)

HISHAM MELHEM, WASHINGTON BUREAU CHIEF, AL-ARABIYA: Mr. President, thank you for this opportunity. We really appreciate it.

OBAMA: Thank you so much.

MELHEM: Sir, we just met with your personal envoy to the Middle East, Senator Mitchell. Obviously his first task is to consolidate the cease-fire. But beyond that you've been saying that you want to pursue actively and aggressively peacemaking between the Palestinians and the Israelis.

Tell us a little bit about how do you see your personal role? Because, you know, if the president of the United States is not involved, nothing happens as the history of peacemaking shows. Will you be proposing ideas, pitching proposals, parameters as one of your predecessors did or just urging the parties to come up with their own resolutions as your immediate predecessor did?

OBAMA: Well, I think the most important thing is for the United States to get engaged right away. And George Mitchell is somebody of enormous stature. He is one of the few people who have international experience brokering peace deals.

And so what I've told him is start by listening. Because all too often the United States starts by dictating in the past on some of these issues and we don't always know all the factors that are involved.

So let's listen. He's going to be speaking to all the major parties involved. And he will then report back to me. From there, we will formulate a specific response.

Ultimately, we cannot tell either the Israelis or the Palestinians what's best for them. They're going to have to make some decisions. But I do believe that the moment is right for both sides to realize that the path that they are on is one that is not going to result in prosperity and security for their people. And that, instead, it's time to return to the negotiating table.

It's going to be difficult. It's going to take time. I don't want to prejudge many of these issues. And I want to make sure that expectations are not raised so that we think that this is going to be resolved in a few months.

But if we start steady progress on these issues, I'm absolutely confident that the United States, working in tandem with the European Union, with Russia, with all the Arab states in the region, I'm absolutely certain that we can make significant progress.

MELHEM: You've been saying essentially that we should not look at these issues like the Palestinian/Israeli track and the separation from the broader region. You've been talking about a kind of holistic approach to the region.

Are we expecting a different paradigm in the sense that in the past one of the critiques at least from the Arab side, and the Muslim side is that everything the Americans always tested with Israelis, if it works?

Now there is an Arab peace plan. There is a regional aspect to it and you've indicated that. Will there be a shift, a paradigmatic shift?

OBAMA: Well, here's what I think is important. You look at the proposal that was put forth by King Abdullah of Saudi Arabia.

MELHEM: Right.

OBAMA: I might not agree with every aspect of the proposal. But it took great courage.

MELHEM: Absolutely.

OBAMA: To put forward something that is as significant as that. I think that there are ideas across the region of how we might pursue peace.

I do think that it is impossible for us to think only in terms of the Palestinian/Israeli conflict and not think in terms of what's happening with Syria or Iran or Lebanon or Afghanistan and Pakistan. These things are interrelated.

And what I've said and I think Hillary Clinton has expressed this in her confirmation, is that if we are looking at the region as a whole, and communicating a message to the Arab world and the Muslim world, that we are ready to initiate a new partnership based on mutual respect and mutual interest, then I think that we can make significant progress.

Now, Israel is a strong ally of the United States. It will not stop being a strong ally to the United States and I will continue to believe that Israel's security is paramount.

But I also believe there are Israelis who recognize that it is important to achieve peace. They will be willing to make sacrifices if the time is appropriate and if there is serious partnership on the other side. And so what we want to do is to listen, set aside some of the preconceptions that have existed and have built up over the last several years. And I think if we do that, then there's a possibility, at least, of achieving some breakthroughs.

(END VIDEOTAPE)

COOPER: You're watching Barack Obama's first formal interview as president of the United States given to an Arab-language channel.

Our panel weighs in on what the president is trying to accomplish and how it's likely going to be received in the Muslim world. That and more of the interview when 360 continues.

Plus yet another twist in the strange saga of Ted Haggard.

That's Governor Rod Blagojevich. He showed up a lot in New York in the media today. We'll be having a little a bit about him.

But also we're taking a look at life after the fall for Ted Haggard. A new documentary is out. We'll have the director in to talk about it.

And the Sasha and Malia dolls, a toy company trying to cash in on their fame. The White House is angry, but can they really do anything about it? We'll bring you the details ahead.

(COMMERCIAL BREAK)

COOPER: President Obama tonight, just wrapping up his first formal interview, sitting down tonight on Al-Arabiya television talking in effect straight to the Arab world. And joining me now: the man who conducted the president's first formal interview, Hisham Melhem, Al-Arabiya's Washington bureau chief; also Reza Aslan, author of "No God but God;" on the phone, Nic Robertson; and senior political analyst David Gergen.

Mr. Melhem, what was the most surprising thing to you about what the president said tonight?

MELHEM: Well, this was a clear attempt on his part to speak to a broader Arab world and the Muslim world through Al-Arabiya. And I think he was trying to tell us that there is a new wind blowing out of the White House; that there is a different political discourse towards the Muslim world; that there is a different conceptualization of the war on terror.

He's no longer talking about the war on terror in generalities because terror is a tactic. He's talking specifically about a specific well-defined enemy called Al Qaeda.

And he's not going to use terms such as Islam or fascism that alienated many Arabs and many Muslims. He's going to focus on the real target which is Al Qaeda, and it's easier to define that target and wage war against it without alienating the rest of the Arab world.

And he's essentially going to tell us on the Arab/Israeli conflict that this President is going to be active, proactive. The way I framed my question was essentially I was telling him are you going to be like Bill Clinton, activist, or more passive like George Bush. And obviously by sending George Mitchell, a man of incredible stature, to the region, that's his way of saying that we have different approach.

And I think, Anderson, what he's trying to do, build up expectation to his speech that where he is going to address the larger Muslim world within the first 100 days of his tenure from the heart of a Muslim capital.

COOPER: Yes.

MELHEM: And you can tell by listening to him that you are in the presence of a keen intellect, a man of supple intelligence who knows how to connect complex things together. Whether he's talking about the Arab/Israeli conflict, Iraq or Afghanistan, when he says you cannot discuss Afghanistan unless you get the Pakistanis...

COOPER: Yes.

MELHEM: ... and the Indian context, the conflict in that overall context.

COOPER: Let me bring in David Gergen. David, were you surprised that the first formal interview was given to an Arab language channel?

DAVID GERGEN, CNN SENIOR POLITICAL CORRESPONDENT: I was, Anderson, because I think what we're seeing now is a president of astonishing ambition. That he's setting out with this stimulus package to remake the economy, with a financial package to remake the banking industry, the emission standards that he called for earlier today. There's really a direct assault on the way Detroit's been doing business.

And now to take on the Middle East in this way with a speech promised in the first 100 days from a Muslim capital -- this is a man who has very, very large ambitions to change the world. To remake America, remake the world.

I think he sent an important signal to the Muslim world in his inaugural address; first President to ever talk about Muslims in his inaugural address. Now to give this interview, to plan this speech, and to send George Mitchell into the region.

COOPER: Reza, do you think he will continue to use the term "war on terror"?

REZA ASLAN, MIDDLE EAST ANALYST: I hope not.

Look, I think one thing that he says at the end of this interview is that language matters. Words matter. And that thus far the words that have been used to describe the conflict with Al Qaeda and the larger jihadist movement have been religiously polarizing language, they've offended a great many Muslims.

And it's almost as though what he's describing is a sea change, not just in the way that he's going to approach the conflict with radical militant forces in the Muslim world, but in the way that he's going to approach the Arab and Muslim world in general, talking about listening and respecting and being interested not just in America's interest in the region, but also in the interest of the poor and downtrodden.

These are words that are going to resonate throughout the region. This was an amazing speech. I'm actually giddy, I have to say.

COOPER: We're going to play more or all of it in its entirety. So don't get too giddy just yet.

Nic Robertson joins us on the phone. Nic, you just got back from Saudi Arabia. You're hearing that the special relationship between the U.S. and Saudi Arabia is under pressure due to recent action in the region. What are you hearing?

VOICE OF NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I talked with Prince Turki al-Faisal, a former ambassador to the U.S., former ambassador to the U.K., the head of Saudi Intelligence for several decades, a very respected diplomat speaking out very angrily about what he saw happen in Gaza and the Middle East.

He said that this was a very polarizing event, that the Saudi Arabia looked at this and saw George Bush's hand behind supporting Israel. He said this threatens the special relationship between the United States and Saudi Arabia.

Saudi Arabia has carried a lot of water in the Middle East in helping U.S. policy in the Middle East and that this is threatened right now. And this is sort of no surprise that President Obama should reach out to a station that is a Saudi Arabia television station that broadcasts throughout the Middle East.

I mean, just last week, a week ago today, we heard King Abdullah of Saudi Arabia saying that this peace plan -- this Arab peace initiative that he put forward was not something that was going to be on the table forever. And we hear President Obama dealing with this directly.

I heard from Prince Turki -- he told me that he was impressed and pleased that President Obama had appointed Senator Mitchell. He said he came with a good track record cementing a peace deal in Northern Ireland in 1998. That was a good track record. They respect Senator Mitchell.

And this seems to me very much President Obama speaking directly through this Saudi Arabia station to the Arab world but addressing very quickly, very head-on the issues that are pressing and that are dominating.

And right now Prince Turki said to me the reason I'm making this very, very strong statement about why we think this special relationship is in danger is because we want to send a very, very clear message to this new administration. We are in trouble as Arab leaders. We cannot continue with our relationship with the U.S. while situations like the recent Gaza fighting goes on. He said it's very difficult for us -- Anderson.

COOPER: We're going to have more from our panel throughout this hour. But we do want to bring you just about all this interview in its entirety. Hisham Melhem, who gave the interview, we appreciate you joining us. Reza Aslan, David Gergen and Nic Robertson, we'll talk to you ahead.

The interview again, from Al-Arabiya television, it is the first formal sit-down interview President Obama has given, speaking directly to the Muslim world. It is fascinating and important and we want you to see it. The President speaking in his own words. We'll have the rest of it just ahead.

And later: the hidden life of Ted Haggard, the one-time Evangelical super pastor. Now a new allegation against him. And a new film Haggard speaks out about his life after the scandal and how he continues to struggle with his sexual identity.

(COMMERCIAL BREAK)

COOPER: We're devoting much of the program tonight to something that has never happened before. Tonight, President Barack Obama gave his first televised interview since taking office.

It is an important get as they say in television and he gave it to Al-Arabiya. It was a chance to talk directly to the Muslim world. And just in doing that, President Obama is trying to send a message.

Here's more from the interview.

(BEGIN VIDEOTAPE)

MELHEM: Now there is an Arab peace plan. There is a regional aspect to it and you have indicated that. Will there be a shift, a paradigmatic shift?

OBAMA: Well, here's what I think is important. You look at the proposal that was put forth by King Abdullah of Saudi Arabia.

MELHEM: Right.

OBAMA: I might not agree with every aspect of the proposal. But it took great courage...

MELHEM: Absolutely.

OBAMA: ... to put forward something that is as significant as that. I think that there are ideas across the region of how we might pursue peace.

I do think that it is impossible for us to think only in terms of the Palestinian and Israeli conflict and not think in terms of what's happening with Syria or Iran or Lebanon or Afghanistan and Pakistan. These things are interrelated.

And what I've said and I think Hillary Clinton has expressed this in her confirmation, is that if we are looking at the region as a whole, and communicating a message to the Arab world and the Muslim world that we are ready to initiate a new partnership based on mutual respect and mutual interest, then I think that we can make significant progress.

Now, Israel is a strong ally of the United States. It will not stop being a strong ally to the United States. And I will continue to believe that Israel's security is paramount. But I also believe that there are Israelis who recognize that it is important to achieve peace. They will be willing to make sacrifices if the time is appropriate and if there is serious partnership on the other side.

And so what we want to do is to listen, set aside some of the preconceptions that have existed and have built up over the last several years, and I think if we do that, then there's a possibility, at least, of achieving some breakthrough.

MELHEM: I asked you about the broader Muslim world but let me -- one final thing about the Palestinian/Israeli theater. There are many Palestinians and Israelis who are very frustrated now with the current conditions. And they are losing hope and they are disillusioned and they believe that time is running out on the two state solution because -- mainly because of the settlement activities in Palestinian occupied territories.

Will it still be possible to see a Palestinian state -- and we know the contours of it -- within the first Obama administration? OBAMA: I think it is possible for us to see a Palestinian state -- I'm not going to put a time frame on it -- that is contiguous, that allows freedom of movement for its people, that allows for trade with other countries, that allows the creation of businesses and commerce so that people have a better life. And, look, I think anybody who has studied the region recognizes that the situation for the ordinary Palestinian in many cases has not improved.

And the bottom line in all these talks in all these conversations is, is a child in the Palestinian territories going to be better off? Do they have a future for themselves? And is the child in Israel going to feel confident about his or her safety and security?

And if we can keep our focus on making their lives better and look forward and not simply think about all the conflicts and tragedies of the past, then I think that we have an opportunity to make real progress. But it is not going to be easy.

And that's why we've got George Mitchell going there. This is somebody with extraordinary patience as well as extraordinary skill, and that's what's going to be necessary.

(END VIDEOTAPE)

COOPER: We'll have more from President Obama's extraordinary interview with Al-Arabiya; a first for a new U.S. President. We're playing extended portions so you can hear for yourself what he told the Arab world tonight.

And later, a battle unfolding over privacy versus profits; two new dolls named Sasha and Malia. The White House isn't happy but can they stop the company from cashing in on the first daughters?

And new developments in the Travolta tragedy: a politician in the Bahamas implicated in an alleged extortion scheme steps down.

Stay with us.

(COMMERCIAL BREAK)

COOPER: David Gergen said it a moment ago, calling President Obama a man of staggering ambition. With his Mideast envoy heading into the region and the mess, the president tonight chose Al-Arabiya for his first interview since taking office talking directly to the Muslim world in all its complexity. It is a daunting job to be sure.

Here's more of the interview.

(BEGIN VIDEOTAPE)

HISHAM MELHEM, AL-ARABIYA: Let's me just take a broader look at the whole region. You are planning to address the Muslim world within your first 100 days from a Muslim capital. And everybody's speculating about the capital. If you have anything to tell us that would be great. How concerned are you, because let me tell you honestly. When I see certain things about America, in some parts -- I don't want to exaggerate -- there is a demonization of America.

OBAMA: Absolutely.

MELHEM: It's become like a new religion and like a new religion it has new converts -- like a new religion has its own high priests.

OBAMA: Right.

MELHEM: Its own religious text.

OBAMA: Right.

MELHEM: And in the last -- since 9/11 and because of Iraq, that alienation is wider between the Americans and -- in generations past the United States was held high. It was the only western power with no colonial legacy.

OBAMA: Right.

MELHEM: How concerned are you and -- because people sense that you have a different political discourse. And I think judging by what Al Qaeda says and Zawahiri and Osama bin Laden and all these --

OBAMA: Yes, I notice they seem nervous.

MELHEM: They seem very nervous, exactly. Now, tell me why they should be more nervous.

OBAMA: You know what? I think that when you look at the rhetoric that they've been using against me, before I even took office --

MELHEM: I know, I know.

OBAMA: What that tells me is that their ideas are bankrupt. There's no actions that they've taken that, say, a child in the Muslim world is getting a better education because of them. Or has better health care because of them.

In my inauguration speech, I spoke about, you will be judged on what you build, not what you destroy. What they've been doing is destroying things. And over time I think the Muslim world has recognized that that path is leading no place except more death and destruction.

Now, my job is to communicate the fact that the United States has a stake in the well-being of the Muslim world. That the language we use has to be language of respect. I have Muslim members of my family. I have lived in Muslim countries.

MELHEM: The largest one.

OBAMA: In the largest one, Indonesia. And so what I want to communicate is the fact that in all my travels throughout the Muslim world, what I've come to understand is that regardless of your faith -- and America is a country of Muslim, Jews, Christians, nonbelievers -- regardless of your faith, people all have certain common hopes and common dreams. And my job is to communicate to the American people that the Muslim world is filled with extraordinary people who simply want to live their lives and see their children live better lives. My job to the Muslim world is to communicate that the Americans are not your enemy.

We sometimes make mistakes. We have not been perfect. But if you look at the track record, as you say, America was not born as a colonial power, and that the same respect and partnership that America had with the Muslim world as recently as 20 or 30 years ago, there's no reason why we can't restore that. And that, I think, is going to be an important task.

But ultimately people are going to judge me not by my words but by my actions and my administration's actions. And I think that what you will see over the next several years is that I'm not going to agree with everything that some Muslim leader may say or what's on a television station in the Arab world. But I think that what you'll see is somebody who is listening, who is respectful, and who is trying to promote the interests not just of the United States, but also ordinary people who right now are suffering from poverty and a lack of opportunity, I want to make sure that I'm speaking to them as well.

(END VIDEOTAPE)

COOPER: President Obama talking about the bankruptcy of Al Qaeda's ideas. A lot to talk over.

Joining me again: David Gergen and Reza Aslan, author of "No God but God."

David, it's interesting to hear him address Al Qaeda in that way and saying essentially they are afraid, they seem nervous more so than they have been in the past.

GERGEN: Yes, it is. Anderson, the language he was using just in the last couple of moments actually echoes much of what George Bush tried to say after 9/11. But then we invaded Iraq. Barack Obama by winding down the war in Iraq can make an effective fresh start and be heard in a fresh way.

And I think what's clearly happening here is he's trying to appeal to the moderates in the Arab and Muslim world. He's trying to rally them and then isolate Hamas, Hezbollah, Al Qaeda as best he can so that he can overwhelm them politically. Whether it will work or not, we don't know.

This is a time when there's great weakness in political leadership both on the Palestinian side where the leadership is fractured between the West Bank and Gaza as you well know, and in Israel itself which is about to hold an election and may well elect Bibi Netanyahu to be prime minister who may not favor a lot of this at all. So he's got his work cut out for him. It's remarkable that he's taking these steps here in his first ten days in office.

COOPER: Reza, his message to Al Qaeda, which he had said also in his speech, you will be judged on what you build and not what you destroy, so far they have built absolutely nothing.

You said earlier you were giddy over this interview. Expand on that. What excites you?

ASLAN: Well, look, in a 20-minute interview he used the word "respect" about a dozen times. It seems like very small things to us but these are words that the Arab and Muslim world are not used to hearing from an American president. You have to understand 62 percent of the region believed Obama's election will make absolutely no difference whatsoever.

This is more than just sort of a tactical ploy on Obama's part. Let's not forget, the very first foreign leader he called within the first 24 hours of taking the office was Abu Mazen, the president of the Palestinian Authority. The first interview he does is with Al- Arabiya.

What he is doing here is something I think even bigger than what David suggested. He is essentially setting himself up as a bridge between the West and the Muslim world, between the United States and the Middle East. It's a grand gesture. And I think it's going to be taken very well.

And I will say this. He's right. I'm sure that wherever Zawahiri and Bin Laden are right now, they're scrambling to try to figure out a way to answer this comment. When the president of the United States says my family is Muslim, what are you supposed to respond to that? How do you criticize that?

COOPER: It is remarkable to have a president who can say I've lived in Muslim countries; I have Muslim members of my family. That's certainly yet another first for this president.

We're going to have to leave it there. Reza Aslan, David Gergen, appreciate it. Thanks for coming in on such quick notice. We decided to air this last minute and we think it's definitely worthwhile.

Coming up next tonight: a revealing look at struggles of one-time mega-pastor Ted Haggard.

(BEGIN VIDEO CLIP)

TED HAGGARD, FORMER EVANGELICAL LEADER: I'm 51 years old and I've never interviewed for a job in my life. I feel like a 19-year- old or a 16-year-old.

(END VIDEO CLIP)

COOPER: Looking for work, struggling to explain his sexual identity, Ted Haggard as you have never seen him before.

(COMMERCIAL BREAK) (BEGIN VIDEO CLIP)

HAGGARD: I'm talking about that secret part of your heart that other people don't know about. I'm talking about the thoughts that go through your mind. I'm talking about the schemes that are out there in the world that cause us to mess up our lives.

(END VIDEO CLIP)

COOPER: He certainly messed up his life. That was Ted Haggard in 2005, the evangelical pastor at the height of his power and on the brink of ruin. Caught in a sex scandal Haggard dropped out of sight until now.

This week he appears in a revealing new HBO documentary. In a moment, we're going to talk with the film's creator.

But tonight, a new accusation against Haggard has emerged. His former megachurch now says Haggard had a sexual relationship with a 20-year-old church volunteer and a senior pastor admits they paid the young man money to keep him quiet.

Haggard is yet to respond to this new allegation. But as you'll hear tonight he has plenty to say about what's happened to him so far.

(BEGIN VIDEOTAPE)

HAGGARD: I'm talking about that secret part of your heart that other people don't know about.

COOPER: Ted Haggard was a spiritual superstar.

HAGGARD: Oh, yes, God is good.

COOPER: Televangelist, founder of the New Life Church in Colorado, president of the 30-million strong National Association of Evangelicals. The married father of five had close ties to the White House. His approach was often affable.

HAGGARD: You know all the surveys say that evangelicals have the best sex life of any other group.

COOPER: But Haggard was a biblical hardliner. A champion of so- called traditional family values who never let on that he was sexually attracted to men. In 2006, a former prostitute named Mike Jones came forward with a stunning story.

MIKE JONES, FORMER PROSTITUTE: We continued seeing each other about once a month for that first year there.

COOPER: Jones says Haggard was a client, paying for sex over several years, and also buying crystal meth from him. At the time, this was Haggard's public explanation.

HAGGARD: I called him to buy some meth. But I threw it away.

UNIDENTIFIED FEMALE: And did you ever have sex with him?

HAGGARD: No, I did not.

COOPER: His church banished him, sending him away for so-called spiritual restoration. Haggard became an evangelical pariah and seemed to disappear.

What happened to him since is the subject of a documentary on HBO which, like CNN, is owned by Time Warner.

HAGGARD: Today we are driving to the University of Phoenix. I'm going to interview for a job there.

COOPER: Meet the new Ted Haggard, desperately searching for understanding, forgiveness and for a job.

HAGGARD: I'm 51 years old and I've never interviewed for a job in my life.

COOPER: The film directed by Alexandra Pelosi, the daughter of House Speaker Nancy Pelosi, chronicles Haggard's struggles to forge a new life.

The camera follows Haggard on painful job interviews. We see him unsuccessfully placing business fliers on doorknobs.

UNIDENTIFIED FEMALE: How many door hangers have you hung?

HAGGARD: Hundreds. Maybe thousands.

COOPER: When the documentary was shot, Haggard, his wife and kids were moving repeatedly throughout Arizona and Texas. Their belongings sometimes kept in a U-Haul.

HAGGARD: See. There's our stuff.

COOPER: Haggard never admits that he's gay. He claims he was abused when he was a child and says he engaged in same-sex play in his youth.

HAGGARD: I am who I am. I'm an evangelical. And I have struggled and continue from time to time to struggle with same-sex attraction.

COOPER: His wife, Gayle, continues to stand by his side. She says because of their marriage and their children.

GAYLE HAGGARD, TED HAGGARD'S WIFE: I stuck with him because I -- I love him. I believe he's worth it because he's a human being. And I just don't believe in writing people off because they have mistakes.

COOPER: Banned from the ministry he founded, Haggard is now back in Colorado working as an insurance agent. He believes he can once again be a role model for Christians; an example of someone who's sinned, but found redemption. HAGGARD: There's nobody else that had my experience in motivating people and encouraging people to do what would improve their life like me.

(END VIDEOTAPE)

COOPER: Up next, we'll talk to Alexandra Pelosi, the director of "The Trials of Ted Haggard."

Plus, new details on the Travolta tragedy: allegations of extortion and a politician resigns. The strange new twist ahead.

And the first family outraged over the new Sasha and Malia dolls. Is a toy company trying to cash in on their fame?

(COMMERCIAL BREAK)

COOPER: More now on Ted Haggard's fall from grace. The former televangelist is the focus of a new HBO documentary that's really fantastic. It debuts this week. Alexandra Pelosi is the director of "The Trials of Ted Haggard." It does debut this week, right?

ALEXANDRA PELOSI, DIRECTOR, "THE TRIALS OF TED HAGGARD": Thursday night.

COOPER: Thursday night. OK.

And I know you're going to be on "LARRY KING" and Ted Haggard is going to be on "LARRY KING" on Thursday as well.

PELOSI: This is my only television appearance.

COOPER: Is it? I'm thrilled. I appreciate it.

PELOSI: I saved it for you, Anderson.

COOPER: Ted Haggard allegedly went through something called spiritual restoration. That was part of his deal. What is spiritual restoration?

PELOSI: Honestly, I cannot speak to Ted Haggard. Like his therapy and his -- it's not really my place. I'm not here to defend Ted Haggard.

COOPER: Right.

PELOSI: I thought it was interesting to talk about how the church treated him.

COOPER: Right.

PELOSI: And the way they deal with homosexuality in the church.

COOPER: But part of that was to send him to this thing.

PELOSI: Right. It's just like, I don't believe in this so it's hard for me to sit here with a straight face and say, "Yes, he was restored sexually."

COOPER: Right.

But what's interesting about him, he's not claiming -- he never says he's gay but he does say he continues to struggle with same-sex attraction. That's what he continues to say.

PELOSI: But in his world gay means like dancing in your Speedo on Fifth Avenue in the Gay Freedom Day Parade. There's a distinction between gay lifestyle, like having a timeshare on Fire Island, and maybe having some issues with your sexuality on the side.

COOPER: But he's clearly still attracted to men and yet still is fighting against that. By his own admission he says this. What do you make of him? What do you make of the way he's been treated, of his life now?

PELOSI: I felt really sorry for him because when I met him originally when I was filming my film "Friends of God" I knew him as the leader of the evangelical movement. He spoke at the National Association of Evangelicals. And when I met up with him again, he had no friends.

COOPER: That was your first question to him. Where have all your friends -- the last time I saw you, you were on top of the world. Where have all your friends gone?

PELOSI: Right. He built a church on the principles of the Bible, which is forgiveness, redemption, all the things that were not given to him. So I have a great sort of sympathy for Ted because I feel like the church didn't forgive him in his darkest moment, which is what churches are built to do, to deal with men in their moments of sin.

COOPER: He never seems to question his brand of Christianity, which completely, you know, says homosexuality is wrong and immoral and all this. Even now he doesn't seem to question that. He questions -- he's upset that the church exiled him. But he never questions the church's teachings which would lead to what happened to him.

PELOSI: Right. He is an evangelical. He is who he is.

COOPER: There are plenty of Christians who are gay, who are members of churches which accept them. He seems unwilling to take that step.

PELOSI: Right. He's never going to say I'm a gay American. He's not going to go Jim McGreevy. That's not who he is. He has five children and he has a loving wife who forgave him as the Bible told her to.

It's complicated. It's not simple. That's the problem.

COOPER: Well, that's what's great about the film. I mean it raises all these questions and makes you kind of, you know, it makes you think about all of this stuff.

PELOSI: Well, because real life is really complicated and dark and twisted and not as simple as it looks in a sound bite in the evening news. And this person's life, you know, Ted Haggard had to go through publicly what a lot of people go through privately. I was there to exploit that.

COOPER: Do you think he's going to become a minister again? I think he is.

PELOSI: You do?

COOPER: Yes, I do.

PELOSI: How much?

COOPER: At the end of the film. I was convinced he is.

PELOSI: How much do you want to put down on that?

COOPER: I don't know. We'll see.

PELOSI: OK.

COOPER: You don't think he will?

PELOSI: Would you go to his church?

COOPER: No. I mean -- I don't think -- I wouldn't --

PELOSI: Why not?

COOPER: As a story I might. It would be interesting to interview the guy.

PELOSI: That's what it's all about. You'd only go for the interview, huh?

COOPER: As you are, too.

PELOSI: OK.

COOPER: True. But you don't think he'll ever become a minister again?

PELOSI: I don't, no.

COOPER: Really?

PELOSI: I don't think -- I think he's selling life insurance and he's living happily ever after. He's kept his family together.

COOPER: He has a job.

The fascinating thing about this movie is watching him try to get a job. Anyway, it's on HBO later this week. You should watch. Alexandra Pelosi, good to have you on.

PELOSI: Thank you for having me, Anderson.

COOPER: Thanks very much.

PELOSI: Good to see you.

COOPER: Still ahead, new developments, and arrest and a resignation in the alleged plot to extort millions from actor, John Travolta, after the death of his son.

(COMMERCIAL BREAK)

COOPER: Let's get a quick update on today's headlines with Erica Hill and a "360 Bulletin" -- Erica.

ERICA HILL, CNN CORRESPONDENT: Anderson, despite today's staggering job cuts, stocks actually closed higher after a volatile session. The Dow gaining more than 35 points, a little bit of an uptick there. The Nasdaq and the S&P 500 also edging up on this session which helped to lift stocks obviously. Also, an uptick in existing home sales.

A paramedic in the Bahamas charged with trying to extort $25 million from John Travolta after his teenage son's tragic death there earlier this month. The details of the alleged scheme still not known but over the weekend a Bahamian senator resigned after being accused in that plot.

The first lady still angry over two new dolls sold by toy company, Ty Inc., dolls that bear passing resemblance to her daughters, Sasha and Malia Obama and also share their name. Michelle Obama told CNN through her spokesperson she believes it is inappropriate to use her young daughters for marketing purposes -- Anderson.

COOPER: Such a -- clearly there's nothing they can do about it, but it's got to be very irritating for them.

That does it for 360. Thanks for watching. "LARRY KING" starts right now. I'll see you tomorrow night.