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ANDERSON COOPER 360 DEGREES

AIG Bonus Backlash Grows; Timothy Geithner Speaks Out

Aired March 19, 2009 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: We're here with students and faculty at Hofstra University in Hempstead, Long Island, just outside New York.

Tonight, more of what people here and across the country need to withstand the recession, a lot of concern here on this college campus among young people about their futures, about what kind of jobs they get when they graduate.

We want to give you the knowledge. We hope to empower you tonight. We're calling our coverage "The Road to Rescue." It takes us here tonight.

First, though, the growing bonus backlash, President Obama in California acknowledging mistakes, but trying to power past them with personal charm.

Congress, meantime, taking action to get most of the $165 million back from AIG executives, with 85 Republicans voting yes on the bill. A massive tax on those bonuses, that's their solution, making up for their mistakes. That's even though the GOP leadership is calling the whole vote a sham.

Some are also demanding Treasury Secretary Tim Geithner's head. We are going to have Ali Velshi's exclusive interview with Secretary Geithner. Hear what he has to say about that and the charges that his department pushed for language in the law making the bonus possible.

We begin, though, with what lawmakers did today and whether it's legal and for real.

Dana Bash is "Keeping Them Honest."

(BEGIN VIDEOTAPE)

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT (voice-over): Democrats are under intense pressure to get beyond the outrage, and actually do something about AIG bonuses.

REP. CHARLES RANGEL (D-NY), HOUSE WAYS AND MEANS COMMITTEE CHAIRMAN: Do these people deserve, at taxpayers' expense, to receive these type of bonuses?

REP. STEVE ISRAEL (D), NEW YORK: We just want to recover the taxpayers' money for them.

BASH: So, House Democrats rushed to pass a bill imposing a 90 percent tax on bonuses for employees with family incomes above $250,000. It applies not just to AIG, but all companies that got at least 5 billion taxpayer dollars.

Some Democrats admit that punishing employees by taxing bonuses after the fact may be legally questionable, but, because of public outcry, worth the risk.

REP. SHEILA JACKSON LEE (D), TEXAS: I realize that this may be subjected to constitutional challenge and/or the court. But you know what? I'm prepared to battle in the courts.

BASH: "Keeping Them Honest," the question is, why didn't Congress wage this all-out battle before to prevent the bonuses?

Let's start with Republicans. They now say:

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: The AIG situation underscores the fact that Washington isn't doing anything to help our economy.

BASH: But the reality is, many GOP lawmakers voted against multiple attempts to ban bonuses, calling it meddling in the marketplace.

As for Democrats, who run Congress, they did pass strict anti- bonus bills, but they also allowed the Bush White House and the Obama administration to prevent those from becoming law.

In fact, the Obama team's role came to light when CNN reporting forced Senator Chris Dodd to reverse himself and admit, under pressure from the Obama Treasury Department, he inserted a loophole, allowing AIG executives to keep their bonuses.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: The administration had expressed reservations about the amendment. They came to us and asked for modifications.

BASH: And now another Senate Democrat tells CNN the Obama administration blocked his attempt to stop the bonuses.

SEN. RON WYDEN (D), OREGON: What I can tell you, specifically, is I talked to virtually the entire administration's economic team. I wasn't able to convince them to go along, and I think that's unfortunate.

(END VIDEOTAPE)

COOPER: Dana, why wasn't he able to convince them to go along? What was the -- the president's economic advisers, what reason did they give?

BASH: Well, Senator Wyden told me that Obama officials made clear to him that they thought banning bonus -- bonuses was a bad idea because they thought it would risk driving talent away from Wall Street. Now, Anderson, it's important to keep in mind that these conversations happened just last month. And I'm told by other Democratic sources here on Capitol Hill that they're hearing similar things from the Obama administration. And that -- that, again, was just one month ago.

Now we're hearing from the White House that they are outraged over these AIG bonuses. I will tell you, Senator Wyden told me point- blank he thinks that President Obama was not well-served by his economic team.

COOPER: So, just to be clear, so folks understand exactly what happened today on Capitol Hill, basically, lawmakers passed this massive tax on these bonuses, not just for AIG, but for any company getting -- getting aid.

It's basically to make up for their own mistake. I mean, they -- they -- they allowed this to happen in the first place, and now they're trying to backtrack by making these massive taxes on private citizens, right?

BASH: They are trying to strip the bonuses that they, for the past couple of months, both here on Capitol Hill and the White House, failed to do. You're exactly right.

COOPER: Some would call that covering your tracks, but I guess there's another name for it in Washington.

Now to the -- Dana, thanks for the reporting.

(LAUGHTER)

BASH: Thank you.

COOPER: Now let's go to the president in California, trying to pull off a very tricky political maneuver, channeling the white-hot anger over AIG to advance his own agenda, without himself getting burned.

The "Raw Politics" from Ed Henry.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): In Los Angeles, with Republican Governor Arnold Schwarzenegger, President Obama back on offense.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I understand how mad everybody is about this AIG bonus business. I understand that. As I said before, I'm mad. As -- and even though I didn't -- I didn't draw up these AIG contracts, my White House didn't, it's my responsibility to fix the system.

HENRY: But Republicans in Washington are playing off the Obama team's own miscues to keep them on defense. SEN. LAMAR ALEXANDER (R), TENNESSEE: The AIG bonuses make the president subject to the charge that he's living above the store, but not minding it. He's even found time to fill out his NCAA basketball bracket. You might be spending less time on the brackets, Mr. President, and more time on the economy.

HENRY: The president is trying not to get bogged down in the back-and-forth, instead, taking the case for his economic plans directly to the American people.

OBAMA: We're going to get it done with your help. I need you.

(CHEERING AND APPLAUSE)

HENRY: He's looser out here, even becoming the first sitting president to appear on a late-night variety show, NBC's "Tonight Show With Jay Leno."

(BEGIN VIDEO CLIP, "THE TONIGHT SHOW WITH JAY LENO")

JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Now, how cool is it to fly on Air Force One? Just curious.

(LAUGHTER)

(APPLAUSE)

OBAMA: You know, now, let me tell you, I personally think it's pretty cool.

LENO: Yes.

(LAUGHTER)

OBAMA: Especially because they give you, you know, the jacket with the seal on it.

(LAUGHTER)

LENO: Oh, yeah.

(LAUGHTER)

(APPLAUSE)

(END VIDEO CLIP)

HENRY: Republicans slammed it as a sign the president is taking on too much and should focus on explaining the administration's role in the bonus flap.

SEN. JON KYL (R), ARIZONA: He flies off to Los Angeles tonight on the "Jay Leno" show. My suggestion is that he come back, since he's taken the full responsibility, to get his people together and say, all right, I want to know exactly what happened, who did what when. Let's get this resolved, or the American people are going to have no confidence in our administration.

HENRY: Mr. Obama was quick to fire back.

OBAMA: In fact, somebody was saying the other -- today, I think, that I shouldn't be on "Leno."

(LAUGHTER)

OBAMA: ... I can't -- I can't handle that and the economy at the same time.

(LAUGHTER)

(APPLAUSE)

OBAMA: They...

(CHEERING AND APPLAUSE)

OBAMA: Listen, here's what I say.

I say our challenges are too big to ignore.

(APPLAUSE)

OBAMA: The cost of our health care is too high to ignore.

(CHEERING AND APPLAUSE)

OBAMA: Our dependence on oil is too dangerous to ignore.

(END VIDEOTAPE)

COOPER: Ed, there are also some risks, I guess, to appearing on these late-night shows. I have just seen two reports that the president said tonight on "The Tonight Show" he may regret.

What happened?

HENRY: You will remember that, during the campaign, the president tried to connect with working-class voters by going bowling, and his score was under 100.

Jay Leno sort of joked and asked: How are been doing?

And the president said: I have been practicing at the White House in the bowling alley. I got my score up to 129, but I still can't really compete unless it's the Special Olympics.

That's obviously something that may backfire. People who are disabled might not think it's so funny. In fact, at this town hall meeting, someone in a wheelchair asked the president about what he will do for people who are disabled. And he said, he really wants to protect them and get them involved in the economy.

This shows the risks. You certainly can reach a lot of people on a show like this, but, when you get in there with a comedian, you might throw a joke out there that could backfire -- Anderson.

COOPER: All right, Ed Henry reporting tonight -- thanks, Ed.

Back in New York, more AIG developments -- the company sending State Attorney General Andrew Cuomo a list of employees getting bonuses. Mr. Cuomo's office is investigating possible wrongdoing at the company.

Let us know what you think of the AIG situation and how the government's handling it, President Obama's remarks about the Special Olympics, whatever you want to talk about, on the live chat happening now at AC360.com. Check out Randi Kaye's live Webcasts also during our breaks tonight.

Up next, a CNN exclusive: Treasury Secretary Tim Geithner defending his own role, explaining his own role, trying to answer charges he gave away the store to AIG.

Also, our panel weighs in.

Also tonight, Bernie Madoff's life in jail, his cell, the food, 23 hours a day without sunlight. It's not the South of France; that is for sure. We will take you inside and show you what his life is like now.

And, later, how Michelle Obama, in just two months, is remaking the White House and the role of the first lady.

And also tonight, answers in the tragic death of Natasha Richardson -- details about the fatal injury and how it might have been prevented -- when 360 continues.

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE)

COOPER: And welcome back.

We are here at Long Island's Hofstra University, traveling "The Road to Rescue."

First, though, that -- we're going to talk to a lot of these students throughout this hour, talk to them about their concerns entering the job market in this tough economy.

But, first, we're talking about President Obama's -- the outrage over the bonuses at AIG and the remaining questions about how those happened. How was that allowed to happen? Did Treasury Secretary Geithner, who sat down today for an exclusive talk with Ali Velshi, or his department push a loophole into the stimulus bill, essentially making the payouts possible? The answer is yes.

Take a look.

(BEGIN VIDEO CLIP) ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Senator Dodd said that he had a clause that was put into the stimulus bill that basically allowed these payments to be made to people at AIG in this particular unit. And he says that somebody at Treasury asked him to put it in. Have we figured out who told him to put this clause in?

TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: Oh, on this specific provision?

VELSHI: Yes.

GEITHNER: We expressed concern about this specific provision, because we wanted to make sure it was strong enough to survive legal challenge.

(END VIDEO CLIP)

COOPER: "Digging Deeper" now with correspondent Joe Johns and senior political analyst Gloria Borger.

Gloria, what do you make of all this? I mean, whose -- whose mistake was it, and how is Obama handling it?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, it was clearly the Treasury mis -- Treasury's mistake.

And I think what you're seeing here is a real mixed message coming out of the White House. And that's never good for an administration. I mean, on the Sunday talk shows, you had them go out there and say, you know, you have to keep those bonuses for legal reasons.

And, then, clearly, the president and his advisers hit the roof on this politically, and they decided to show their anger and share their anger with the American public, because they understand they have a really big problem here.

And I think that it's that they came to Washington promising change. And, if they look like it's more of the same, then they're going to be in trouble down the road, no matter how popular this president is right now.

COOPER: But, Joe, Gloria says it's the -- it's the Treasury Department's mistake, but, you know, they're -- they're not the ones writing these bills.

BORGER: Right.

COOPER: They're not the ones passing these bills. Plenty of folks in Congress, Joe, voted on this. Chris Dodd could have said no. It's not like his -- his arm was being twisted, for all we know.

JOE JOHNS, CNN SENIOR CORRESPONDENT: That's for sure, and that's a problem Congress has to -- has to deal with.

But, look, I mean, these contracts, as you know, they were written a long time ago. And it's certainly a problem for Geithner, because, when you have a president who comes in talking about accountability and watching the way taxpayers' dollars are spent, then Geithner goes ahead and sort of slips this thing in there to make sure this whole business is legally sound, it's a problem.

On the other hand, there's a proportionality issue, too, Anderson. I mean, how much is the president going to do with Tim Geithner, when he's got a $165 million issue over at AIG with a bunch of executives getting some money, vs. the trillion-dollar problem of fixing the economy?

You get rid of those bonuses, or you tax them, or whatever, you still haven't fixed the economy, and that's what Geithner's there and he's supposed to do.

BORGER: But -- but -- but here's -- here's the real problem.

COOPER: But, Gloria, now -- now, today -- go ahead.

BORGER: Well, you know, one -- one of the real problems is that this creates a situation for them going down the line with the bank bailout plan that they're going to announce in the next couple of weeks.

They need to have congressional support for this. They need to have Wall Street's support for this. And this whole bonus issue just complicates matters for them.

COOPER: But, Joe, you now have Congress voting to put these massive taxes on -- on these bonuses. I mean, this is unprecedented, for Congress to single out private individuals. I mean, whether they're -- they should get this money or not, I have never heard of Congress doing this, singling out private individuals for a massive tax, to cover something, a mistake that they themselves made.

JOHNS: It sure is.

And it's one of the things people, I'm told, over at the administration were actually talking about, that you don't want to put in some law that goes counter to most of the laws you have ever heard, certainly goes counter to the laws of contracting. There's also issues in Connecticut with the law there.

So, they're really walking into a huge can of worms here. But what they have seen is, you know, all the reporting, and all the media, all the taxpayers yelling and screaming, saying, you have got to do something about this.

So, the Congress is simply trying to respond. On the other hand, they have a much bigger problem they need to deal with. And that is accountability and doing something with all that other money they have given out, and making sure that it's being spent properly. That's the larger problem we're not hearing about right now.

COOPER: Gloria, there are folks calling for Tim Geithner's head. Do you think he's -- he's safe? BORGER: Look, I think, at this point, he is safe. I think you have seen the president give him a real vote of confidence.

I think they have been very careful about putting him out there. Ali Velshi got an exclusive interview today, but you haven't seen them out -- out there very much, because, politically, he's new to this.

I think the real test is going to come on the substance. And I think it's going to be questions of this bank bailout plan that he's got to deal with coming down the road. And they're -- they have a real problem now, because what they're talking about is public-private partnerships. What kind of folks from Wall Street are going to go into business with the government these days, when they know contracts can be rescinded at any moment?

So, it -- it does make matters more difficult.

COOPER: All right, we have got to leave it there.

Joe Johns, Gloria Borger, thanks very much.

More to come tonight from Hofstra University, just outside New York.

Up next, CNN's "Road to Rescue" will be taking questions from the audience on the tools you need to meet the economic future.

Also tonight, we will take you inside Bernie Madoff's new world. Mobster John Gotti once called it home. This is no country club jail, a supermax. Madoff, life behind bars, no one can even talk to him inside the prison he's in right now.

Later, Michelle Obama talking real stories and real challenges to high school kids, Michelle Obama reaching out to young Americans with new words of hope -- that is coming up.

And, later, Broadway, honoring Natasha Richardson, as her husband attends a vigil to honor his wife -- the story, the details ahead.

(COMMERCIAL BREAK)

(CHEERING AND APPLAUSE)

COOPER: And we're at Hofstra University tonight, with an enthusiastic crowd of young people, where, in just a couple of months, college graduates here and roughly three million more across the country are going to start pounding the pavement for their first real jobs.

It is a tough job market, no doubt about that, a lot of these students nervous about what lies ahead. Some industries hold more promise than others.

Tom Foreman is back tonight with the winners and losers in this recession -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Hi, Anderson.

If you are graduating from college this spring, you start off as a winner, because, on average, you will make about as twice as much as you would with just a high school diploma.

But several other factors are separating young people into relative winners and losers. The first losers, if you prepared for a job outdoors, farming, forestry, fishing, mining, the government predicts a dwindling demand for your services over the next seven years. Sorry to say that.

The number of people actually growing food is expected to drop by almost 100,000 jobs. The winners, if you studied anything that had to do with health care, especially care for older people, welcome to the gravy train. The number of health jobs is growing right now and expected to keep growing 25 percent in the next seven years. Frankly, it has to. Seventy-eight million baby boomers are moving into retirement, and that's a lot of aching knees.

Losers, manufacturing jobs -- manufacturing has already shed millions of people. We know that. At least 10 percent more will go away in the coming decade. So, if you trained to make things, brace yourself, unless they are specialized products for a growth sector, like medical devices.

The winners, service jobs. If you're providing technical, scientific, or professional services, like accounting or legal work, you should see a 30 percent increase in job listings that might interest you.

But, just as I started by saying that young people with degrees are already winners, I have to add that your youth is also going to make you something of a loser. The percentage of jobs held by young people is expected to decline because of all those baby boomers. Many of them don't want to retire or can't afford to, and they will be winners, because many of them will out-compete you young folks for positions -- Anderson.

COOPER: All right, Tom, thanks.

Let's talk more about increasing your chances of coming out a winner.

With me now, innovation consultant Frans Johansson, author of "The Medici Effect," also Donna Rosato of "Money" magazine.

Frans, I want to get right to our audience, because we have got a bunch of students here.

Your name is Sean (ph). Are you -- when are you graduating?

UNIDENTIFIED MALE: I'm graduating next year. I'm a political science and economics major. And I'm going to -- I want to go into investment banking. It's my dream to go into investment banking. But...

(CROSSTALK)

UNIDENTIFIED MALE: ... the investment banking...

COOPER: Man, I'm sorry about that.

(LAUGHTER)

(CROSSTALK)

UNIDENTIFIED MALE: It's sort of not the best thing to do nowadays, but I feel like my only options that are left are foreign services or, you know, going into a law firm, and really don't know where to go from here.

FRANS JOHANSSON, AUTHOR, "THE MEDICI EFFECT": OK.

While investment banking, right now, yes, it's tough, but that doesn't mean you have to give up that dream, OK? I think that there's two things to think about. One might be, how can you actually get these jobs? And you don't necessarily have to go to the big firms, or small firms, however you want to call it at this point.

But you can actually look at -- many of these folks that work in this industry have been laid off. Some of them are going into starting their own boutique firms. So, maybe you can partner up with one of them. You will be inexpensive labor for them. They can actually use you to break into other areas.

Something else to think about, though, let me ask you, why are you even interested in investment banking?

UNIDENTIFIED MALE: It's just -- it's been a passion of mine since I was a little kid. It's something that I always...

COOPER: Come on, you want to make a lot of money.

(LAUGHTER)

UNIDENTIFIED MALE: Yes, I guess that is the reason.

(LAUGHTER)

JOHANSSON: All right, so, that's not a bad reason.

But let me tell you, OK, some of these -- some of these things that are in investment banking you can find in other places. Deal- making, moving fast, the excitement of getting some -- some contracts signed, done, and making money, you can do that in other areas as well. Go into those things that you're passionate about, do them with a vengeance.

When others see it, they will actually understand your passion. And, sooner or later, you will find your way into investment banking.

COOPER: All right.

Another question here. Your name is Sean?

UNIDENTIFIED FEMALE: Melissa.

COOPER: Melissa. Sorry about that.

(LAUGHTER)

COOPER: Hey, hey, it could be.

(LAUGHTER)

COOPER: You know, anyway, Melissa, what's your -- what's your question?

UNIDENTIFIED FEMALE: Well, I'm graduating in December, and I already have a ton of college loans already. Should I just jump into this market already, try to get a job right away, or should I try to get more loans, go to grad school right away? I don't know what to do.

DONNA ROSATO, SENIOR WRITER, "MONEY": All right.

What I say is, you don't want to go to grad school right away, for two reasons. For one, you're going to be more attracted to a grad school if you have a little bit of work experience. And you don't want really to add to that debt right now. So, get out there, get some experience, get...

(CROSSTALK)

COOPER: How much debt do you have?

UNIDENTIFIED FEMALE: A lot, tens of thousands of dollars.

COOPER: Wow. Wow.

(LAUGHTER)

ROSATO: Well, here's another thing to think about.

We talked a little bit before you came out here. And you're really interested in public policy.

UNIDENTIFIED FEMALE: Yes.

ROSATO: And I think there's a lot of programs out there, AmeriCorps, the VISTA program, that are really being expanded.

And if you pursue something in public policy, in the public sector, you're more likely to want -- one, you're going to enjoy what you're doing, and you can look at loan forgiveness programs, which may help you with some of the debt that you have. So, if you stick with it and stay with it long enough, you will -- you will not only pay down your debt. You're going to have some great experience, and then you will probably be more attractive when you get to grad school.

And maybe you can find someone to pay for grad school.

COOPER: How many folks in this crowd have debt, like thousands...

(CROSSTALK)

(CHEERING AND APPLAUSE)

(LAUGHTER)

UNIDENTIFIED FEMALE: Yes.

(LAUGHTER)

COOPER: All right. All right.

What's your name?

UNIDENTIFIED FEMALE: Samantha.

COOPER: Samantha.

And what's your question?

UNIDENTIFIED FEMALE: I know exactly what I want to pursue. And I don't want to...

COOPER: What -- what's that?

UNIDENTIFIED FEMALE: Health care reform. But I don't want to corner myself. I want to diversify myself. But I don't know if I should diversify myself too much...

(CROSSTALK)

COOPER: Are you afraid you're getting -- you pursue one industry, and then that industry changes, and then, all of a sudden, you're stuck?

UNIDENTIFIED FEMALE: Exactly, just like the car industry, just like the investment banking, everything.

JOHANSSON: Well, you're -- you're absolutely right. And it makes sense to diversify.

Many -- unfortunately, many of the jobs that you all have been training for might not even exist 10 or 15 years from now. But that's not a problem, OK? That's not a problem, trust me...

(LAUGHTER)

JOHANSSON: ... because -- because you will be preparing yourselves for actually learning new skills.

The best way to do that is to diversify. Not only that -- always, through your life, look for diverse inputs. Look for diverse perspectives. This -- there's a guy, an architect, OK, he obviously focuses on the -- on his industry, architecture. He decided to -- to pursue one of his hobbies, which is -- was termite ecology.

And he looked at how termites build this hill on the African savanna, and he said: Well, they can do very efficiently. Maybe I can use those principles in my architecture.

And he did that. He built the building. They used about 90 percent less energy than any other building around it. And he did that by combining his hobby with his -- with his profession.

These type of opportunities exist for all of us. And that's the way we can sort of break out and -- and -- and stand out.

ROSATO: That's right. You want...

(CROSSTALK)

ROSATO: ... want skills that are transferable for you, and they -- things that will transfer into any industry, being able to write well, communicate well, speak in front of a crowd. You know, you have got some of that experience already.

So, you want to focus on those transferable skills that will work in any industry.

COOPER: All right, well, great. Thanks very much. Appreciate it. Good -- good job, everybody, Donna Rosato and Frans Johansson.

Coming up next on 360: Bernie Madoff's high-security jail unit, confined to a cell 23 hours a day, not allowed to talk to anyone, no one can talk to him. We will take you inside the scammer's new home.

And, later, Michelle Obama off to school -- the first lady and several celebrities making the rounds in D.C. classrooms today. Why? We will tell you about that ahead.

And, later, having fun with Ellen. I stopped by her show today. I was actually there last week. We taped it. I found myself playing a celebrity pop quiz. See how well I fared and how well Chris Matthews did not fare.

(CHEERING AND APPLAUSE)

COOPER: We will be right back.

(COMMERCIAL BREAK)

COOPER: We have some breaking news on President Obama's remarks on "The Tonight Show." As we reported at the top of the program, as Ed Henry reported, the president referred to his low bowling score and appearance on the campaign trail as, quote, "like the Special Olympics or something."

Just moments ago, we got this statement from the White House, spokesman Bill Burton saying, the president made an offhand remark, making fun of his own bowling. That was in no way intended to disparage the Special Olympics. Mr. Burton added he thinks that the Special Olympics are a wonderful program that gives an opportunity to shine, to -- to shine for people with disabilities from around the world.

Clearly, the White House moving quickly to try to ward off any controversy or outrage that may be expressed about the president's offhanded remark.

Other news now. A new plea from Bernie Madoff today. He wants his freedom back, at least until his sentencing in June. The Wall Street fraud sat in his jail cell while his lawyers today asked an appeals court to release him on bail.

The judges are concerned Madoff may pose a flight risk.

While we await the judge's decisions, some more details are emerging about Madoff's life behind bars in the ultra-secure unit he's now calling home. After you see this, you're going to see why he wants to get out so bad.

Here's Randi Kaye.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): The man who scammed thousands out of billions is used to big numbers. Now he's got his own. Meet federal inmate 61727-054. Bernie Madoff, a white collar crook, confined like public enemy No. 1 here at the Metropolitan Correctional Center in Lower Manhattan, just blocks from his Ponzi scheme perch and light years away from his once lap-of-luxury lifestyle.

(on camera) The mansion, the $65,000 in silverware, that $7 million penthouse -- all gone. This is his new home, an 8-by-8 cell, but with a difference.

(voice-over) The "New York Daily News" reports Madoff is being housed in a special unit known as Ten South. Mafia godfather John Gotti was once a guest there. The department would not confirm or deny the "Daily News" story, but it tells CNN that Ten South is for inmates that require a higher security than the general population.

Prisoners in Ten South are usually confined to their cells 23 hours a day. Meals are served through a narrow slit in the door. Each cell has a window, but a coating on the glass prevents any view of the outside world.

The department says inmates have access to lawyers and reading material.

Some think the punishment fits the crime, but an attorney and CNN contributor Lisa Bloom calls it shameful.

LISA BLOOM, CNN CONTRIBUTOR: It doesn't matter what their crime is. We should treat them like human beings. If we confine animals in these kind of squalor conditions, most of us would find that to be inhumane. An 8-by-8 cell, no natural lights in his cell ever, the lights left on 24 hours a day, very little human interaction, I mean, this is cruel and unusual punishment in my view.

KAYE: Others say it's not cruel and inhumane, just part of the procedure.

EDWARD BALES, FEDERAL PRISON CONSULTANTS: This is the normal process for federal inmates, especially if they're in a higher level security. It does not surprise me at all. He's in a situation where he's in a segregated unit where they keep very watchful eyes on him.

KAYE: The worst may be yet to come for Madoff. When he's sentenced in June, Madoff could be sent anywhere from a low-security facility to a high-security prison. Madoff may adjust, but he's facing a very unhappy existence ahead.

BALES: Personally, I guess, if I was Madoff, I'd rather be dead than have to go through the regimen that he's going to have to go through for the rest of his life.

(END VIDEOTAPE)

COOPER: Randi, John Gotti Jr. stayed in this same cell, right?

KAYE: Absolutely, Anderson. In fact, Gotti reportedly once said, "I was in Ten South, and it almost broke me." So that should give you an idea of just how ugly it is inside there.

The federal prison expert that we interviewed for our story tonight told us most inmates say it is a horrible facility, a facility filled with mice and roaches. He said it's very congested and, of course, very tight in terms of security.

One thing to note. We did talk to the people at the facility, at the jail, and they told us, Anderson, that Madoff is not in shackles, as some of his victims had been wondering and even hoping.

COOPER: All right. Well, we'll continue to follow that. We'll see what the judges -- judge rules. Whether he can get out on bail, pending his sentencing.

I know you've got other news in the "360 Bulletin." What have you got?

KAYE: That's right, Anderson.

In our "360 News and Business Bulletin" tonight, Eliot Spitzer returning to television today in his first interview since leaving office one year ago. Appearing on "Fareed Zakaria GPS," the former New York governor criticized insurance giant's AIG's efforts to, quote, "gin up profits" and the federal bailout keeping them afloat.

When asked about his own credibility, Spitzer had this to say.

(BEGIN VIDEO CLIP) ELIOT SPITZER, FORMER NEW YORK GOVERNOR: I have flaws, as we all do, arguably. I failed in a very important way in my personal life, and I have paid a price for that. I have spent a year with my family, with my wonderful and amazing and forgiving wife and three daughters, and have rebuilt those relationships and hope to do that as time goes on.

(END VIDEO CLIP)

KAYE: You can watch that full interview at 1 p.m. Sunday Eastern Time.

Two missing American journalists are reportedly being detained in North Korea. Reporters Laura Ling and Euna Lee of Current TV and their Chinese guide were seized Tuesday on the border between China and North Korea. U.S. officials have expressed concern to North Korea's government and are working with Chinese officials to determine their whereabouts.

And in the South Pacific, an undersea volcano spewing smoke, stem and ash up to 25,000 feet into the sky. The spectacular eruption began Monday, about six miles off the coast of Tonga, an area of more than 36 active undersea volcanoes. Authorities say the eruption poses no danger, Anderson, to the island residents.

COOPER: Wow. Those pictures are unbelievable.

All right. Still ahead tonight, Randi, President Obama dropping by Jay Leno, making history on that. We'll show you some of what he said and some of the controversy over it already. The White House moving quickly to put an end to that, if possible.

Not to be outdone, first lady Michelle Obama dropped by a local Washington high school for a candid Q&A of her own. You might be surprised about some of her answers.

And on a much sadder note, new developments in the death of Natasha Richardson. The specific brain injury that took her life and the warning signs of serious head trauma you need to know about. We'll have details ahead.

(COMMERCIAL BREAK)

COOPER: Tonight, public and personal tributes for Natasha Richardson. Oprah Winfrey spoke about her. So did the women on "The View." Watch what they had to say.

(BEGIN VIDEO CLIP)

OPRAH WINFREY, TALK SHOW HOST: I just want to say how deeply saddened I am, we all are, by the sudden passing of actress Natasha -- Natasha Richardson yesterday. Our thoughts and prayers are with her husband, Liam Neeson, their two sons, the rest of their family and friends. Yet another reminder of how fleeting life can be and how precious. We need to value every moment. WHOOPI GOLDBERG, CO-HOST, ABC'S "THE VIEW": We have to start our show by saying that, like everybody else, our hearts are broken and go to the family of Natasha Richardson...

JOY BEHAR, CO-HOST, ABC'S "THE VIEW": Oh, yes.

GOLDBERG: ... who passed away last night. A brilliant actress, a wonderful woman. And...

BEHAR: It just makes you cry.

GOLDBERG: Yes.

(END VIDEO CLIP)

COOPER: And then this evening, the lights on Broadway were dimmed in memory of Richardson. She won a Tony, of course, for her role in Cabaret.

Her husband, Liam Neeson, was in the theater district for an emotional vigil for his wife. Neeson was surrounded by Richardson's mother, Vanessa Redgrave, sister Joely Richardson, and other familiar faces, Matthew Broderick, Sarah Jessica Parker, Laura Linney. A very sad moment for so many people, public and private.

Tonight, two new developments in her very untimely death. We now know the exact cause of death. The medical examiner's office released the official finding today.

Also tonight, we are learning more about the initial medical response after the acclaimed actress fell while skiing in Canada. Were paramedics who could have helped her turned away? And if so, why?

The latest that we know from Gary Tuchman.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): Natasha Richardson, who fell and hit her head on a ski slope in Quebec, died from a blunt impact to the head. The New York City medical examiner declaring the impact caused an epidural hematoma. We asked a neurosurgeon what this means.

DR. ELAD LEVY, MILLARD FILLMORE GATES HOSPITAL: An epidural hematoma is basically a blood cot that forms between the covering of the brain, which is called the dura, and then the hard box of the skull.

TUCHMAN: Dr. Elad Levy practices neurosurgery at Buffalo's Gates Hospital.

LEVY: It's tricky with epidural hematomas, because often patients can look wonderful or normal immediately after the injury. The clot will form to its largest size, usually around four to six hours after the initial trauma, and it really will continue to grow for several hours. And the patient may feel normal for one, two, three, even four hours after the initial injury.

TUCHMAN: That is what the resort said happened to Natasha Richardson, who hasn't been wearing a helmet while skiing. She returned to her hotel after the accident and said about an hour later she was starting not to feel good.

So if you hurt your head, when should you make the decision to go to the emergency room?

DR. DAVID LANGER, NEW YORK ROOSEVELT HOSPITAL: The last thing we want to do, especially in this sort of forum, is to tell everybody who hits their head to think they have an epidural hematoma.

TUCHMAN: Dr. David Langer, the director of the Center for Neurovascular Surgery at New York's Roosevelt Hospital, says symptoms to be alert for include lethargy, a severe headache, nausea, and vomiting.

But...

LANGER: The vast, vast majority of people who hit their heads are just fine. Even, you know, relatively significant blows to the head. And epidurals, really you have to have the blow, really, in a specific location, and only 1 to 3 percent or so of all head injuries result in an epidural clot.

TUCHMAN: And even when someone gets an epidural hematoma, it is usually not fatal.

NATASHA RICHARDSON, ACTRESS: I absolutely love you.

TUCHMAN: A Toronto newspaper is reporting paramedics were dispatched to help the award-winning actress after the accident, but were turned away and did not have a chance to check the injury. Who turned them away is not clear.

LEVY: If you get evaluated immediately after the trauma, you may seem just fine. So it's difficult to say if this -- if this would have made a difference.

TUCHMAN: And by all reports, Natasha Richardson did seem to be fine, which makes the outcome so stunningly sad.

Gary Tuchman, CNN, Atlanta.

(END VIDEOTAPE)

COOPER: Millions of Americans suffer brain injuries every year. We're going to have more on the warning signs you need to be aware of and the potentially life-saving steps you can take in an emergency in a moment.

Also coming up, first lady Michelle Obama recruiting a high-power team to celebrate National Women's History Month, plus, her surprising answers to some very candid questions, coming up.

(COMMERCIAL BREAK)

COOPER: Once again, a skiing accident on a beginner's slope has ended in unbelievable tragedy for the family of Natasha Richardson. She died, of course, of an epidural -- epidural hematoma, bleeding between the brain and the skull due to blunt impact to her head.

The Centers for Disease Control estimates 1.4 million Americans will suffer a traumatic brain injury, and each year 50,000 people will die. Experts say there are warning signs to look for. We thought this would be a good opportunity to talk about it.

Dr. Neil Martin in a professor and chair of neurosurgery at UCLA. Dr. Martin joins us now. Thanks for being with us.

Are epidural hematomas always fatal?

DR. NEIL MARTIN, PROFESSOR, UCLA: No, they're not always fatal. In fact, the majority of them are picked up by doing a CT scan of the brain in patients with the appropriate warning signs.

Those key warning signs are a headache that's getting worse and worse after an injury, severe nausea and repetitive vomiting. And one of the most critical things is disorientation. The person doesn't know where they are, or what time of day, or what day it is, and what the circumstance is. If someone has that level of confusion or disorientation, then a scan has to be done.

And a scan, a CT scan is very sensitive for picking up a CT -- for picking up a subdural hematoma. If we see that, and it's significant, then a patient's taken to the operating room. And it's something that can be repaired in a straightforward neurosurgical operation.

COOPER: So it is something, if detected soon enough, can be remedied?

MARTIN: Absolutely. The critical thing is to detect it before the incredible pressure inside the solid box of the skull has caused herniation. That is, the forcing of the brain down through the openings at the base of the skull.

If you get to someone early enough and remove the collection of blood and seal off the bleeding blood vessels, then it can be completely resolved and cured.

COOPER: And even a minor fall, a minor bump to the head can cause this?

MARTIN: Even a relatively minor fall, if it causes a fracture in the skull in the thin temporal bone, where it's weakest, can disrupt a blood vessel that runs on the inside of the bone, and that can gradually leak and over hours build up to cause a large pressure- forming blood clot.

So if you can detect that before it's caused irreversible brain damage, then it can be resolved. But once a person starts deteriorating, they can progress and worsen very quickly.

COOPER: So anyone skateboarding, anyone that goes skiing, should they wear a helmet?

MARTIN: You know, I think if everybody who was engaged in those sort of sports wore a helmet, we would dramatically reduce the rate of serious head injuries. There are about 50 -- 50 head injuries a year that result in a fatality skiing, and helmet wearing is going to reduce that number quite dramatically. I wear a helmet when I ski. My kids wear a helmet.

COOPER: All right. Good advice. Dr. Neil Martin, appreciate it, professor and chair of neurosurgery at UCLA. Thanks very much.

At the top of the hour, Treasury Secretary Tim Geithner under fire as the bonus backlash continues. Hear what he has to say in our exclusive interview.

And in Congress, outrage turns to action as the House votes to tax 90 percent of AIG's so-called retention pay, but will the move actually hold up in court? Is it even legal?

And Michelle Obama giving the local high school students a no- holds-barred interview. We have that, coming up in just a moment. The only thing more surprising than their questions are her answers. Stay with us.

(COMMERCIAL BREAK)

COOPER: Well, the first family has another addition for the White House, a vegetable garden. Michelle Obama will begin planting tomorrow, apparently, with help from local school kissed kids.

And while her husband was laughing it up with Mr. Leno, Mrs. Obama was visiting D.C. area schools, and she brought along some serious star power.

Joe Johns has more.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): If you want a snapshot of how different the White House is these days, take a look at this picture: First lady Michelle Obama and a cast of amazing American women. Musicians Alicia Keys and Sheryl Crow, Phylicia Rashad of "The Cosby Show," and her sister, Debbie Allen from "Fame." Olympic gymnast, Dominique Dawes, preparing to fan out around the Washington area as part of National Women's History Month.

For her part, the first lady popped in almost unannounced at Anacostia High School, well known here as a pretty tough school in a tough part of town.

MICHELLE OBAMA, FIRST LADY: Y'all excited?

UNIDENTIFIED FEMALE: Yes. UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Yes.

OBAMA: So do I need to introduce myself?

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Yes.

OBAMA: OK. Well, my name is Michelle Obama, and I'm the first lady of the United States of America.

JOHNS: The formality of the self-introduction was, of course, a joke, which became clear as this decidedly informal conversation continued.

UNIDENTIFIED FEMALE: What do you guys do for fun?

OBAMA: What do we do for fun?

UNIDENTIFIED FEMALE: As a family, with kids.

OBAMA: Fun is different when you have kids. It's all kid stuff. It's like I haven't been to a grown-up movie in I don't know how long.

UNIDENTIFIED FEMALE: Do you do your own makeup every day?

OBAMA: I didn't today, because it was special. But most of the time I do. When I do something special, I have somebody do my makeup. But I do my makeup on my own.

This is just a little jacket, jacket and pants. Nothing special.

JOHNS: Some of the questions were what you'd expect.

UNIDENTIFIED FEMALE: Do you guys have a normal life?

OBAMA: We still -- you know, as normal as it can be living in the White House with the Secret Service.

JOHNS: She was surprisingly candid at times. She talked about her experiences going to school.

OBAMA: I wanted an "A," you know. I wanted to be smart. I wanted to be the person who had the right answer, and I didn't care whether it was cool, because I remember there were kids around my neighborhood who would say, "Ooh, you talk funny. You talk like a white girl." I heard that growing up my whole life. I was like, "I don't know what that means, but you know what? I'm still getting my 'A'."

JOHNS: On peer pressure. OBAMA: You don't worry about what anybody else thinks about you. You don't worry about the teacher that you think is not treating you fairly or what your friends are saying, you know. All that matters is where you are and where you want to be.

JOHNS: And even a nudge about postponing parenthood.

OBAMA: I don't understand why kids want to rush and have kids and get married.

JOHNS: Then, as if things had not gotten personal enough, the cameras were ushered out, leaving the kids to some more private time with Michelle Obama.

Joe Johns, CNN, Washington.

(END VIDEOTAPE)

COOPER: Well, coming up tonight, my visit with Ellen DeGeneres. She put my game show skills to the test today with a quiz that literally made me sweat. You'll see why, just ahead.

And President Obama continuing his West Coast tour with a town hall meeting in Los Angeles. How do you think he did? Judge for yourself at the top of the hour.

(COMMERCIAL BREAK)

KAYE: Anderson, I've got "The Shot" tonight. In case our friends weren't watching, you were a guest on "Ellen" today, and while you didn't dance...

COOPER: No, I did not.

KAYE: ... you did show off your game show skills with a fun little quiz that Ellen put together. Let's watch.

(BEGIN VIDEOTAPE)

ELLEN DEGENERES, TALK SHOW HOST: She's a judge on "American Idol" and she's...

COOPER: Paula Abdul.

DEGENERES: Yes. And he's on CNN also, and he has...

COOPER: Wolf Blitzer.

DEGENERES: No. And he has a talk show. He's been on forever, 6 p.m. and 9 p.m.

COOPER: That's Larry King?

DEGENERES: Yes.

COOPER: OK. DEGENERES: And she won for "The Reader."

COOPER: Kate Winslet.

DEGENERES: Yes. And oh, he's a singer, very talented, dating Jennifer Aniston.

COOPER: John Mayer.

DEGENERES: Yes.

COOPER: He sang with me.

DEGENERES: And yes, he sang with me. She's my BFF. And whatev. You know, she's my BFF.

COOPER: Paris Hilton.

DEGENERES: That's right.

COOPER: He groped you. He molested you.

DEGENERES: Yes!

COOPER: He's on the news. He's on MSNBC.

DEGENERES: Yes.

COOPER: He wanted to be a senator. He...

COOPER: I know! I know!

(END VIDEOTAPE)

KAYE: That was very impressive. You have way too much fun in your off hours.

COOPER: Yes. She totally had a brain freeze on Chris Matthews, though. That was so funny. He's not going to be happy about that, I think.

KAYE: No. Those were some pretty good clues you were giving her.

COOPER: ... on the program. Yes. She was nice that she didn't force me to dance. I appreciate that, as well.

You can see all the most recent "Shots" at AC360.com. Randi, thanks for being with us tonight.

Our thanks to everyone here at Hofstra.

Coming up at the top of the hour, payback time for AIG. Congress tries to get back the bonuses. All that and more ahead. We'll be right back.

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