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ANDERSON COOPER 360 DEGREES

President Obama Overseas; G-20 Security Challenge

Aired March 31, 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: Tonight, President Obama in London.

The president and first lady arrived just hours ago. There is their arrival. Right now, they're bunking down at Winfield House, which is the American ambassador's home in London, tomorrow, a round of big-name visits, including an audience with the queen, then Thursday's summit, with nothing less than the global economy at stake, leaders of the top global economies gathering, all of them hurting.

But the problem is, each has a different prescription for stopping the pain. Mr. Obama's mission, to listen, says spokesman Robert Gibbs, but also, he adds, to lead.

Here's Ed Henry with the "Raw Politics."

(BEGIN VIDEOTAPE)

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): With tension building on the eve of the G-20 summit, a low-key arrival in Europe for President Obama, a sharp contrast from the rock star treatment he received last summer as a candidate, when he made bold promises about turning the page on the Bush years and building a new U.S.-European alliance.

(BEGIN VIDEO CLIP, JULY 24, 2008)

SEN. BARACK OBAMA, PRESIDENTIAL CANDIDATE: Partnership and cooperation among nations is not a choice. It is the only way, the one way, to protect our common security and advance our common humanity.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

HENRY: But now that he's president, Mr. Obama is having trouble winning over leaders like French President Nicolas Sarkozy, who is threatening to literally walk out of the summit if leaders fail to crack down on Wall Street and create a global financial regulatory system.

Mr. Obama will also have to bring along British Prime Minister Gordon Brown, who is taking aim at unchecked American capitalism as a key factor in the crisis.

GORDON BROWN, BRITISH PRIME MINISTER: Instead of banks being, as they should be, stewards of peoples' money, too many of them became speculators with people's futures. And I say to you plainly, this old world of the old Washington consensus is over, and what comes in its place is up to us.

HENRY: White House officials say Treasury Secretary Timothy Geithner already unveiled tough new regulations. So, the president is prepared to tell other world leaders the U.S. is leading by example.

Another sore point is the president's push for other nations to pony up more stimulus cash to prop up the world economy, which has met strong resistance from German Chancellor Angela Merkel.

She and other European leaders have already passed recovery plans and are blunt about not wanting to follow Mr. Obama's deficit spending.

MIREK TOPOLANEK, CZECH PRIME MINISTER (through translator): All of these steps, their combination and their permanency, is a way to hell.

HENRY: Aboard Air Force One on the way to London, White House spokesman Robert Gibbs tried to smooth the tension.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: If you total up what the G-20 nations have pledged to address the economic downturn, it represents 1.8 percent of GDP for the G-20 nations. That is a significant commitment to addressing the downturn in GDP around the world.

HENRY: In private, though, U.S. officials say, while these European leaders are flexing their muscles now, they may back off at the actual summit, given Mr. Obama's clout around the world.

As one U.S. official told CNN -- quote -- "He is more popular in some of their home countries than they are."

(END VIDEOTAPE)

COOPER: So, Ed, tomorrow, the president meets with leaders of countries that have tense relationships with the U.S., to say the least. What do -- what do we expect?

HENRY: That's right.

He's going to have separate meetings, his first face-to-face meetings with President Hu of China, but also President Medvedev of Russia. And that's significant, because there was a lot of saber- rattling under former President Putin, now the prime minister of Russia. President Medvedev wrote an op-ed in "The Washington Post" today that was very conciliatory.

It seemed like he was reaching out to the United States. And I can tell you, senior U.S. officials are teasing that tomorrow's meeting with the Russian president, there could be some breakthroughs. They're very hopeful that there may be something that they can take away from there that would suggest that maybe there's a new day in U.S.-Russian relations. I think that is the meeting to watch tomorrow, Anderson.

COOPER: Ed, stick around. We're going to talk to you in our panel.

The president leaves at the end of a crazy month for the economy and markets, bank plans, bonuses, bailouts, the Fed pumping a trillion dollars into the system, and, just yesterday, President Obama's drastic action on GM and Chrysler, not all of it ringing a bell with Wall Street and your 401(k), but enough to give investors a boost today, the Dow up 87, a major bump this month.

We're talking, of course, about your money, your future.

Ali Velshi joins us now.

Ali, the markets had a good day, but an even better month.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes, it's actually a good day for President Obama to be out there, because so many people see the U.S. as being the heart of this problem. But guess what? We are starting to see some improvement.

We probably hit the recent low in this market on March 9 -- March 9 -- and you can see that was the Dow. This is the Nasdaq. They all sort of indicate the same thing. Look at the ride up that we have had. This is a 10.9 percent gain on the Nasdaq. The Dow and the Nasdaq are both smaller indicators. The S&P 500 is 500 stocks. It most resembles the mutual funds that many people hold in their 401(k)s, their S&Ps or IRAs.

Take a look again. March 9, we probably hit a low there. And then this has been up 8.5 percent -- 8.5 percent in one month. That would make that the single best monthly percentage gain on the S&P 500 since March of 2000, the single best monthly gain in nine years.

On the Dow and the Nasdaq, it is the best monthly gain since October of 2002. So, these are real gains. Now, that doesn't mean that it doesn't go back down again, Anderson, but, you know, we always talk about the fact that there are three pillars on which you can build your wealth. One is the value of your house increasing, the value of your wage increasing, and we know those two are still having problems.

The third one is the value of your retirement savings increasing. And that's the stock market. So, there's something there that seems to be happening. Investor sentiment might be turning around.

COOPER: Well, is it that the Obama administration has been throwing basically kitchen sink at this thing? Are we starting to see the results of that, or...

VELSHI: You wouldn't see the technical results of much of it.

You mentioned the Fed pointing about a trillion dollars into the system. We saw that reduce mortgage rates to below 5 percent for a 30-year fixed. So, that was a very specific response. But the rest of it might just be the sense from some investors that there's something going on in this government. They really are trying to get it going.

The other side might just be that stocks had come to a point where people thought they were bargains to get into some, so a little early to tell.

COOPER: Right.

VELSHI: But the fact is, there's something positive happening.

COOPER: Hard to use the stock market as a barometer one way or the other.

VELSHI: It is, but it does tend to be -- it tends to lead the other ones. If we're looking at jobs and we're looking at housing and we're looking at the stock market, the stock market will be ahead of the restructure of them.

COOPER: All right, Ali Velshi, thanks.

Stay -- actually, stay right there. We're going to talk to you a .

"Digging Deeper" now on the president's trip.

A very popular president, compared to the last guy in the job, in Europe, certainly. CNN/Opinion Research polling suggests that 72 percent of Americans think foreign leaders respect President Obama, compared to a 49 percent figure for President Bush early in his presidency.

Back now, Ed Henry, Ali Velshi, along with senior political analyst David Gergen.

So, Ed, should the world expect actually anything concrete to come from this summit? I mean, nothing really came out of the last summit in November.

HENRY: That's right. It's a good point.

Five months ago, world leaders came together. They did a lot of talking about how they were going to try to stop this crisis. Five months later, the situation is much worse. It shows you that talk can only take you so far. You need action.

And maybe that poll suggests that President Obama has more clout on the international stage than former President Bush. That could help him. We will see over the next couple of days.

COOPER: But, David, there are a number of world leaders, leaders in Germany, in Spain, France, who are opposed to using government money to bail out the economies.

The Czech prime minister called President Obama's economic policies "the road to hell."

How badly does President Obama need global support to turn the economy around in this country?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, it's very striking, Anderson.

For most Americans, this summit is not a very meaningful exercise. People are focused here at home. But in much of Europe, this summit is taken quite seriously. Some of the newspapers in Europe have been calling it the most important economic summit since World War II.

But, unfortunately, even with his popularity, I don't think the president's going to get very much out of this. The difference is, the United States has been pushing hard to get Germany and France and others to put more money in to stimulate. He's struck out on that. You just saw Robert Gibbs, the press secretary of the White House, you know, downplaying it, papering over the differences.

And, at the same time, the French especially, but also other Europeans, would like the United States to embrace a system of not just national regulatory changes, but supranational. They would like international bodies to regulate our financial mechanisms. And the United States is saying no to that.

And there's even a hint from the French, as Ed Henry reported, that the French might walk away. So, they're -- the appearances right now is that there's not much coming out of this summit. And that could be very important in the long run.

COOPER: France's president seems to walk out of a lot of things. I have seen him walk out of interviews and...

(LAUGHTER)

COOPER: I don't know.

We're going to talk to Ali in a moment about what kind of impact the global economy has on the United States' economy.

We're going to be doing a 360 from London live tomorrow night, starting tomorrow night. And we will be there Wednesday night, Thursday night, and Friday night.

Join the live chat happening now at AC360.com.

Also, Erica Hill's live Webcast, check that out during our breaks tonight.

Coming up later: a look at perhaps the most extensive security ever seen in one place, concerns over terror, big demonstrations as well, all the manpower, the hardware needed to protect President Obama, the presidents of Russia, France, China's leader. The list goes on. Also tonight, the people who are supposed to be protecting us all from dangerous medical testing, are they failing the job? We're "Keeping Them Honest." And, as you will see, what we uncovered could put lives in jeopardy.

Plus, Oprah Winfrey's South African school is back in the headlines. I saw headlines today saying, sex scandal. This has got to be the most overhyped story of the day. We will tell you the facts, not the tabloid hype.

And we will take up the question of what President and Michelle Obama should bring the queen after the president's earlier gift to Britain's prime minister kind of fell flat. He gave them DVDs -- that and more tonight on 360.

(COMMERCIAL BREAK)

COOPER: We're talking about President Obama's first overseas trip, arriving at Stansted Airport, north of London, for the G-20 summit on Thursday, then meetings marking NATO's 60th birthday in Kehl, Germany, and Strasbourg, France, followed by the gathering of the European Union in Prague.

We are back with our panel, "Digging Deeper" with Ed Henry, Ali Velshi and David Gergen.

So, Ali, how important is the global economy to the U.S. economy?

VELSHI: You know, I was just showing you the increase in the S&P 500 in March, this big increase that we have seen in one month.

The S&P 500 are 500 of America's most influential big companies. In 2008, more than half the revenues of all of those companies came from overseas, came from non-U.S. companies, U.S. companies making money in other countries. So, we depend on the health of these other countries in order or for our own companies to be profitable.

And, by the way, those are companies that are held in the stocks and the mutual funds of our viewers, in their IRAs and mutual funds. The other thing is, let's look at the auto industry. Even without this crisis, we were downsizing in our auto industry, because we're a mature community.

But in Brazil, in China, in India, in places like that, people are still going for the first car. So, we went to be able to cater to the consuming needs of the rest of the word. We may be at the end of our hyperconsumption here in the United States. It's crucial to us that people in the other countries earn well and are able to buy the products that we can make and invest in the companies that we have here in the United States.

COOPER: Ed, David Gergen alluded to it, but, I mean, does -- does the popularity of President Obama overseas matter much in the coming days?

HENRY: It probably matters more, yes, how he's perceived overseas here, as opposed to that poll you cited in the United States, because that hits home for people like Chancellor Merkel, Prime Minister Brown, as well as President Sarkozy.

Each one of them have political problems back home. And that's why I can tell you, in private, senior U.S. officials believe that there's sort of almost a little bit of bluster from these European leaders, trying to, you know, throw out some fireworks here pre- summit.

But they think that, once they get down to business that face to face with President Obama, they may have a harder time opposing him, because in their home countries, President Obama seems to be a pretty popular figure. If you think back to last summer, he did have those rock star-style crowds.

It's been a few months, but, if anything, you could argue that, since he's been elected, his brand is even bigger here in Europe. So they're going to be thinking about that as they negotiate with him, Anderson.

COOPER: David, you think about the way President Obama is going to interact with these world leaders in these private meetings, what do you think we have learned about his leadership style in the last, you know, two, two-and-a-half months?

GERGEN: Extraordinarily cool, of course, extraordinarily self- confident, extremely ambitious.

And what we don't know yet is whether he's tough enough in private, whether he can stand up to, you know, when people push back, or whether he sort of goes along. And what we don't know on this European trip, Anderson, he's the most popular political figure in the world today.

And the question, the leadership question for him, I think, by which a lot of the press, at least, will be judging him, if that matters, is whether he can translate that popularity into action. Can he actually lead people to do things they may not want to do very much?

And we won't know that until we see the results of this trip. So, this is a very big, important trip for him. A lot of judgments will be made about his leadership based on this trip.

COOPER: Ali, what do you think is the most important thing he can do on the world stage to improve the economy here at home?

VELSHI: Save globalization. In this global recession, you have got people in every country around the world, including United States, who want to lock down. They want to impose protectionist tendencies. They want to block out trade with other countries. They want to protect the stimulus money for whatever happens in their own countries.

If the United States does enough of that, other countries will retaliate. I think he has got to get out there and put the message that we have got to get out of the soup together and that means maintaining good relationships with each other, propping each other up, as we get out of this over the course of the next year or so.

COOPER: Interesting stuff. We will be there tomorrow night.

Ali, David, Ed, thanks.

Up next: a rare look inside the amazing security surrounding the summit, especially this president. Nobody is underestimating the threat.

On the other hand, are people overemphasizing this story, expulsions at Oprah Winfrey's school in South Africa? We have got the facts. You can judge for yourself.

Then, the newest question dogging Madonna's desire to adopt another child from Africa -- with all the unwanted American kids waiting for homes, is she setting the wrong example going overseas? The ethicist Randy Cohen joins us.

And, later, meeting the queen. President and Mrs. Obama got lessons on what to do and say. And there's a question of a gift, always tricky when you're dealing with a queen. What do you get a woman who has got a kingdom?

All that and more -- tonight on 360.

(COMMERCIAL BREAK)

COOPER: Just hours ago, the Obamas touched down outside London, the first stop in their first international trip as first couple.

President Obama has his work cut out for him at the G-20 summit. He's not the only one with strong ideas about how to revive the global economy. And for the Secret Service and the London police, the next two days are a security Mount Everest, with the city bracing for major protests and 20 world leaders in tow -- in town.

Tom Foreman joins me now with a look at the security challenges -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: You know, Anderson, you are really right. What you have is the leadership of the industrialized world all in one place.

And President Obama's what we're going to start off with. He has about 200 security agents with him, according to the BBC. He's traveling around in that heavily armored presidential limo that we have heard so much about called "The Beast." It's capable of fending off chemical, biological, and rocket attacks.

Of course, he has his own helicopters with him in case he needs to go anywhere. Marine One is there. And, at any given moment, if he has to, he can get on board Air Force One, which of course turns into a flying White House at the drop of a hat, and he moves on from there. Most of the time that he is meeting here, he is going to be meeting over in this area right here. And I want to make this a little bigger and mark it, so you can't miss it. This is the area where he is going to be, this section.

And that is really going to be surrounded by hundreds and hundreds of other security forces. There will be road closures. Even boats will be out here with scuba forces on them to keep track of anything that might come up out of the river right in here, because, as you may remember, in Mumbai, India, the attackers came from the water. So, they want to make sure there's no threat to any of these world leaders who will be gathered over here in this area.

However, London authorities have much more turf to worry about. They're also increasing patrols over in this area in the financial district, where protests are expected against targets like, say, the banks that are in that area, the Bank of England, for example.

These are protests from other places around the world, but many protesters are converging on this area. Bankers are being cautioned to dress down, not to wear I.D. badges or anything that might make them a target.

And security will also be up over here around Buckingham Palace, Parliament, areas like that, Westminster Abbey. Overall, London police expect to spend about $10 million and use thousands of officers in part because all of them remember what happened back in 2005. You remember that attack on their transit system, when a meeting of leaders from some of these same countries was coming up in Scotland -- Anderson.

COOPER: Tom, and I guess the concern is twofold, both terrorism and these demonstrations.

FOREMAN: Yes. Absolutely, Anderson. They have to be worried about both of them.

And I want to show you one of the concerns they have about that. One of the worries they have in this whole process is that they could have -- I'm going to move this map aside -- they're a little bit worried that what they could have is that protesters in one area could get out of hand, and that could easily be a diversion that a terrorist group could use to slip in to position to strike.

So, authorities are recalling -- are relying on what's called the so-called ring of steel, which is down here in London. And what this is really is a very elaborate system of cameras, which can record virtually all cars coming in or out, all traffic in or out.

And these are actual live pictures right now from some of those cameras. There are thousands of them keeping track and trying to provide security for what they are calling an unprecedented event -- Anderson.

COOPER: No doubt about that.

Tom, thanks very much.

Coming up in the program -- well, actually, in case you haven't heard, as unlikely as that is, Madonna wants to become an adoptive mom again. That's right. Her quest has ignited a backlash. We're going to have the latest on that just ahead.

But, first, Erica Hill joins us a 360 news and business bulletin -- Erica.

ERICA HILL, CNN CORRESPONDENT: And, Anderson, we will begin with a new threat to Washington.

Counterterrorism officials saying a Taliban chief in Pakistan has now threatened to attack Washington and the White House. But they're quick to add it is unlikely he could actually make good on that vow. Baitullah Mehsud made the threat after claiming responsibility for Monday's deadly shoot-out at a police academy in Pakistan.

The body of a 19-year-old North Carolina man found in Tijuana, Mexico. Shane Pennington had been living and working in California. He was last heard from more than a week ago. Authorities say he was stabbed to death.

A new report by Standard & Poor's shows housing prices in 20 major cities fell at record monthly and annual levels in January. That index is considered one of the most accurate gauges of the housing market.

And a lot of talk about another scandal at Oprah Winfrey's private school for girls in South Africa, including some very over- the-top headlines. Here's what actually happened.

The school has confirmed it recently expelled seven students for -- quote -- "inappropriate behavior." Now, according to some reports, the girls allegedly sexually harassed some of their schoolmates. No adults were involved.

In a statement today, Oprah Winfrey had this to say -- quote -- "Indiscretions resulting in disciplinary action are common in schools all over the world. Unfortunately, because of my name, these common infractions place the academy in the media spotlight. We will not tolerate a violation of school policy and dishonesty."

COOPER: It is ridiculous. I mean, I saw those headlines when I woke up this morning, like sex scandal, another sex scandal.

HILL: Yes.

COOPER: And, you know, when you read it, it's, OK, some kids who misbehaved or whatever...

HILL: They were a little overinflated.

COOPER: ... and got expelled. It happens all the time. I don't understand why -- I mean, obviously, I know why it's been like a big deal. (CROSSTALK)

HILL: I was going to say, well, I have an idea. I think...

COOPER: Yes.

HILL: It begins with an O.

(LAUGHTER)

COOPER: Yes. It's what happens, I guess.

All right, next on 360: Madonna's mission, new details about her adoption plans in Africa. She is still there waiting for a court -- a court case later this week. Also, how she reunited her adopted son with his biological father. And the debate: Is the child better off in Malawi or with Madonna?

Also ahead tonight, a disturbing report about the watchdogs paid to make sure that clinical drug trials are safe for the people who sign up for them. Are there holes in the safety net? That's what we're going to look at tonight. Congress says, yes, as big as a house. We're "Keeping Them Honest"

And Michelle Obama and Queen Elizabeth talking over tea and sharing gifts. See what the first lady has in store for the royal visit in a few hours.

(COMMERCIAL BREAK)

COOPER: Well, out of the thousands of international adoptions to the U.S. this year, just one is generating worldwide attention and controversy. You can guest who is at the center of it, of course, Madonna.

She's in the African country of Malawi right now, hoping to adopt a 3-year-old girl. Now, the toddler is from the same orphanage where the singer adopted her son, David. Yesterday, David was reunited with his father.

A Madonna spokesperson said that -- quote -- "Madonna and her son David met with Yohane Banda," which is David's biological father, "and reintroduced them for the first time since the adoption. Madonna is committed to maintaining an ongoing relationship with David's Malawian roots."

Now, as we told you last night, Madonna has come under fire for her plans to adopt this little girl from people in Malawi who believe that she is getting special treatment, to those who feel it is in the girl's best interests if she is not be raised by the superstar, if she stays in her own country.

Joining us now is Randy Cohen. He's the ethicist for "The New York Times Magazine." And from the Evan B. Donaldson Adoption Institute, executive director Adam Pertman. Adam, you deal with adoption issues, both domestically and internationally, day in and day out. What do you think about Madonna's second adoption?

ADAM PERTMAN, EXECUTIVE DIRECTOR, EVAN B. DONALDSON ADOPTION INSTITUTE: Well, I think that, unless we find out she is doing something unethical or illegal, she is doing what tens of thousands of people do. And she gets a lot of attention, sort of like the Oprah story before.

The cameras are on her, so we're scrutinizing her every move. And we really, really don't know yet whether what she's done is absolutely legitimate.

COOPER: And if they're stretching the rules a little bit for her because she's a celebrity, not -- that most people who adopt there have to live in the country for a certain amount of time. I think they have only had a handful of adoptions over the last number of years.

PERTMAN: Well, I'm not a big fan of stretching rules. I think that rules are in made this realm for a reason.

We're not talking about the interstate transfer of snow tires. We are talking about children's lives. And we ought to be very -- we ought to be scrupulous and ethical about how we proceed.

But, again, I just simply don't have -- none of us has enough information yet.

COOPER: Right.

PERTMAN: If this is a kid who genuinely needs a home, and it's legal and it's ethical, I think that we ought to move out of the way.

COOPER: Randy, in your column in "The New York Times Magazine," you answer ethical questions that readers write in. Your have received some on international adoption. What is your take?

RANDY COHEN, "THE NEW YORK TIMES": They come regularly.

And I'm impressed with the sincerity and the concern for children that these folks have. And often they wonder -- the amount of money involved can be very, very high. And sometimes just the adoption fees, let alone the cost of raising middle-class American children are astonishingly high.

And if that money, they ask, what if I -- instead, should I put that money to helping the child directly? Couldn't I do more good?

COOPER: To improving the situation the child is living in, the orphanage or the foster care system?

(CROSSTALK)

COHEN: Sure. You could help more children and many children, and perhaps there would be no need for adoption.

But I think it's a the wrong way to put it, that we all have an obligation to help this -- children living in poverty, but it's not a particular obligation of would-be parents, that we should all be helping children in need.

But you might just as well ask someone who spent $25,000 to buy a new car, an unnecessary car, well, shouldn't that money go for children?

COOPER: Adam, there are some who say, look, a child -- I mean, those who say this child should stay in Malawi say, you know, a child is better off with the, you know, extended relatives or in the culture that they were born into.

Do you buy that?

PERTMAN: I agree. I think in this country, kids are better off within their biological families within their cultures. In other countries, the same is true. When that's not possible, adoption becomes a good option, because children grow up better in families than in any other circumstance. There is no research that indicates that kids grow up better in institutions or temporary care.

So if we're focused on that kid, and we should be, then we have to decide what's better for her. If, in fact, there are relatives there who want to and can take care of her, that should be a first option. Again, I simply don't know.

COOPER: It's interesting, though, I mean, there are a lot of -- I think what is it? Over half a million kids in the U.S. foster care and a lot of celebrities tend to gravitate, you know, very publicly and get a lot of attention. They're adopting kids overseas.

There are people who are wrestling with the ethical implications of international adoption versus domestic adoption. What do you advise them?

PERTMAN: Domestic adoption is not so easy as you might think, and many families find that it takes an enormous amount of time, and they might end up without a child. People would prefer to do it the quickest, easiest way to start a family and help a child.

I don't think people go into international adoption lightly. They do it only when domestic adoption proves impossible for them.

COOPER: It's a fascinating topic. Randy, appreciate you being on, again. And Adam, as well. Adam Pertman with the Evan B. Donaldson Adoption Institute. Appreciate it, Adam. Thank you.

Coming up next on the program, on 360, busted. The government saying that it found key watchdogs not doing their jobs. They're supposed to be keeping people who volunteer for medical research safe. That seems like a good idea. But wait until you see them at work. We're "Keeping Them Honest." Also tonight, tea with the queen. The President and Michelle Obama's historic meeting, from the gifts to the proper greeting. An inside look at the royal introduction.

And the bar stool scooter. Try saying that one fast. I haven't seen this one, actually. A drunk, his strange driving machine, and a 911 call after his bizarre crash. And, yes, we have the tape and the story when 360 continues.

(COMMERCIAL BREAK)

COOPER: Companies that make drugs and medical devices stand to make billions from their products, but first they need approval from the FDA, and to get approval, they spend billions each year on clinical trials.

Now, we all stand to benefit from these trials. Obviously, they're incredibly important. It's how new treatments are developed. But there are growing concerns that the people who actually enroll in these studies may not be getting the protection they're required by law to get. And now there's proof there's reason to worry.

You won't believe what a sting operation commissioned by Congress has found. Joe Johns tonight is "Keeping Them Honest" -- Joe.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT: Anderson, a clinical trial with real people is a final test before a company can get a new drug or device approved by the FDA. Millions of people volunteer to participate.

To protect them from medical scams, we have a system of independent watchdogs called institutional review boards. Many get paid to monitor the trials so patients are protected.

(voice-over) These review boards, known as IRBs, must register with the government. But what if a review board itself was a scam, simply taking the fees but faking the reviews? The Government Accountability Office, the GAO, did two undercover stings to test for this. The result, shocking.

First, GAO registered two fake review boards with the Department of Health and Human Services.

UNIDENTIFIED MALE: There's no real patients. The whole thing was bogus, so there was no people signed up.

JOHNS: An online application for one review board company listed the CEO as Trooper Dog. Trooper, by the way, is the name of a three- legged mutt who belonged to a GAO employee. And the company is named after a truck stop, but nobody checked.

They also applied online to register a company called E-Z Reviews, at 1234 Phulovit Lane in Chetesville, Arizona. And yet, no one at HHS caught it. E-Z Reviews was registered to safeguard clinical trials with humans who truly could have been human guinea pigs, which got Congress asking questions.

UNIDENTIFIED MALE: Do we have nothing in place that would have caught a fake IRB?

JERRY MENIKOFF, DEPARTMENT OF HEALTH AND HUMAN SERVICES: Congressman, the system currently is designed in a way that you gave a registration with some cute names that, again, had spelling errors and other things that, unless somebody sat there and tried to pronounce the names and the addresses, they would not pick up the thing that seem incredibly obvious right now.

JOHNS: Seems obvious enough. In GAO's second undercover sting, investigators set up another bogus outfit and this time approached established review boards.

The fake company told IRBs it wanted to apply a bogus gel called Adhesiabloc to women's abdominal cavities to help healing following surgery. Investigators purposely failed to list 97 percent of the ingredients in the gel.

Two review boards rejected the proposal outright, calling it "awful" and "a piece of junk," "the riskiest thing I've ever seen." But one company, Coast IRB from Colorado, took the bait. Its board voted unanimously to approve the proposal noting, quote, "The gel is probably very safe."

Eventually, Coast executives found themselves trying to convince Congress the bogus gel would be really safe.

DAN DUEBER, CEO, COAST: Well, this product wouldn't kill people and we know that. Our procedures are...

UNIDENTIFIED MALE: Tell me, what's in this bottle? How do you know this won't kill anybody?

DUEBER: I'm not a scientist. I can...

UNIDENTIFIED MALE: You keep saying this product won't kill anybody, our Adhesiabloc wouldn't kill anybody. You don't even know when's in it.

JOHNS: By the way, the gel never existed. That bottle is just a prop that the committee made up.

"Keeping Them Honest," we asked Coast CEO Daniel Dueber how his company could approve the experiment.

DUEBER: Unfortunately, you know, we got hoodwinked by a very, very sophisticated fraud.

We didn't do anything wrong. We didn't break any laws. We followed all the rules of the -- of the FDA that -- what they require of IRBs.

JOHNS: But the day after that interview, the company sent CNN a statement admitting its system was vulnerable and listing 12 reforms to its procedures.

(on camera) The government says there are other systems to catch cheaters in the human experimentation business, which begs the question, are existing rules good enough -- Anderson.

(END VIDEOTAPE)

COOPER: Thanks so much.

Still ahead tonight, the first lady meets Her Majesty. When Michelle Obama has tea with Queen Elizabeth tomorrow, what exactly does that involve? What would be the perfect gift to bring? Will the corgis be there? We'll dig deeper on all these important questions. Plus, we'll talk to a royal expert about the do's and don'ts of meeting the queen in the 21st century.

Plus, serious stuff. President Obama riding a wave of popularity in Europe. He'll need every drop of it. The challenges that await him at the G-20 summit, ahead.

(COMMERCIAL BREAK)

COOPER: In just a few hours, President and Michelle Obama will be escorted into one of the 775 rooms of Buckingham Palace and are going to have tea with Queen Elizabeth. Her majesty turns 83 next month. She's reigned over the British monarchy for more than 50 years.

For the president and Michelle Obama, the meeting will be formal, but the question is how formal? Do they bow? Does she curtsey? Exactly what are the rules of etiquette? We're going to find that out in just a moment.

But first the gifts. The Obamas landed in the U.K., armed with goodies for the people they'll see, including the queen. But how does the new administration figure out what to give the woman who has everything? Up close tonight, here's Erica Hill.

(BEGIN VIDEOTAPE)

ERICA HILL, CNN ANCHOR (voice-over): Just before 3 p.m. Eastern Time, the moment Europe has been waiting for. President and Mrs. Obama have arrived. While her yellow dress is likely already sparking a fashion debate, it's not the only choice people will be watching. One of the first tests of protocol for the Obamas: gifts.

LETITIA BALDRIGE, FORMER WHITE HOUSE SOCIAL SECRETARY: What the Kennedys always used to bring, which always scored beautifully, was something historic. They would buy a historic letter. They had one from Lafayette to George Washington, which they gave to General de Gaulle.

HILL: Letitia Baldrige was Jacqueline Kennedy's White House social secretary. The goal for gifts to a head of state: be thoughtful. And hopefully, avoid the now infamous outrage surrounding the 25 DVDs President Obama offered to British Prime Minister Gordon Brown when he visited Washington in early March. The classic American films were met with a pen holder, carved from the sister ship of the vessel whose wood was used to make the desk in the Oval Office.

The British press railed. Lesson learned.

But what about the other lessons, like whether or not to curtsey when meeting the queen?

DEBORAH STROBER, CO-AUTHOR, "THE MONARCHY": I hope they have been told not to grab her hands and shake them vigorously, not to touch the queen in any way, and to allow her to speak first and raise each topic of conversation.

HILL: That test comes Wednesday afternoon when the president and Mrs. Obama join Queen Elizabeth for tea.

As for the curtsey, royal watcher Strober says it is no longer required.

One of the most important things the Obamas can do: be themselves. And don't be afraid to make a mistake.

BALDRIGE: If you also make a terrible boo-boo, which I myself have done many times, you know how to apologize. You apologize effusively. Make everyone laugh, make everyone laugh because they're all feeling such pain for you.

HILL: Two Obamas who won't be feeling any pain, first daughters Malia and Sasha. Just because they didn't make the trip doesn't mean they're missing out. The beauty of this gifts protocol: the kids get them, too.

(END VIDEOTAPE)

HILL: In fact, according to Letitia Baldrige, she said she remembers Caroline and John used to get, in her words, truckloads of fascinating toys and things because people loved to buy things for the presidential and the royal children.

COOPER: So how -- who gives gifts to whom? I mean, it's endless.

HILL: Everybody, it seems. There are generations of people that you need to buy for in the family itself. And then she said pretty much everybody involved, at least the way it was when she was a part of these administrations, gets something. Even if it's a commemorative key chain for Secret Service members to remind them of this experience that they had.

But the curtseying, I just have to say, curtseying, it is a skill. And while Mrs. Obama may not need to worry about it, just in case, some of our intrepid crew members did put together a little -- I believe, a little premier as they say.

COOPER: A primer.

HILL: So here we have it. A fine showing. Bob, I knew he would bring it. Adrianna, representing the ladies.

COOPER: Sweet. Look at that.

HILL: Adrianna (ph) was a debutante...

COOPER: Wow.

HILL: ... which is why she has this nice curtsey there. I learned that tonight.

COOPER: Very nicely done. Erica, thanks.

Next on the program -- well, let's do the "Beat 360" right now. Shall we?

HILL: Why not?

COOPER: Our daily challenge to viewers to come up with a caption better than the one that we can come up with for a photo we put on the blog every day.

Tonight's picture, President Obama and the first lady, stepping off Air Force One outside London today, arriving for the G-20 summit.

Our staff winner tonight, Joey.

HILL: A shock. It's Joey.

COOPER: He seems to be on a streak. His caption: "And remember, please don't fist bump the queen."

(SOUND EFFECT: LAUGHTER)

HILL: Looks like Joey wins.

COOPER: That's true. Our viewer winner is Jon from an undisclosed location. His caption: "I'm going to break the ice by saying 'you're way better looking than Helen Mirren,' then you give her the Yes -- then you give her the Yes We Can T-shirt, and if she looks like she's going to ask to borrow money, we'll tell her we've got jet lag."

(SOUND EFFECT: "Ooooh!")

HILL: I get that, Jon.

COOPER: I messed up the reading. I apologize, Jon. Your "Beat 360" T-shirt, though, is on the way.

So when the president and first lady do meet the queen, how do they treat her like a queen? From curtseys to conversation, we'll talk to an etiquette expert to give all the rules of royal treatment, coming up.

Also, take a look at this contraption. It's a motorized bar stool. Now imagine driving it drunk. One guy did, crashed. No surprise there. His friend called for help. The story coming up. Listen to this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Nine-one-one.

UNIDENTIFIED MALE: I've got a friend here that wrecked a bar stool, hit the pavement with his head.

UNIDENTIFIED MALE: OK, but he fell just from the bar stool?

UNIDENTIFIED MALE: No. He was riding a bar stool.

(END VIDEO CLIP)

COOPER: Well, even before they meet, President Obama and Queen Elizabeth are standing side by side, in wax, that is. Leave it to the folks at Madame Tussaud's in London to get the P.R. machine working with this timely new attraction. The figures are impressive. The president smiling. We can't tell if the queen is amused or annoyed.

You can find them near the Albert Einstein and Amy Winehouse collection, apparently. Maybe that's what she's annoyed about.

When the president and Michelle Obama are introduced to the queen, what exactly is the proper greeting: from the correct formal address to a curtsey or bow? Is there a traditional code of behavior to follow? We heard a little bit about in it Erica's piece.

Let's talk now with a royal expert. Jacqueline Whitmore is an image and etiquette consultant who joins us from Palm Beach.

Jacqueline, thanks for being with us.

So Michelle Obama, does she have to curtsey? And what is the president expected to do?

JACQUELINE WHITMORE, IMAGE AND ETIQUETTE CONSULTANT: Hello, Anderson.

Absolutely not. Michelle Obama is not required to curtsey. Or bow. In fact, bowing is not required of U.S. citizens. And please don't kiss her hand.

COOPER: No kissing of the hand. You're not -- are you -- unless, what, she reaches her hand out first, and then you shake her hand? Is that how it works?

WHITMORE: That is exactly right. She should extend her hand first. And then, if she extends her hand, the Obamas should extend their hand.

COOPER: Now, a lot has been made of Michelle Obama's sleeveless dresses. Would it be a mistake for her to wear a sleeveless dress while having tea with the queen?

WHITMORE: I would advise her not to wear a sleeveless dress. No. 1, it's going to be chilly over there, No. 2, I think it's going to be a more conservative environment. I picture her wearing something with sleeves, to be quite honest with you.

COOPER: And I mean, what happens during a tea reception with the queen? Are they -- what do they serve? Obviously tea. Do they eat?

WHITMORE: Well, it depends on the time of the day, and I'm assuming it will be sometime in the afternoon and, yes, food will be served. However, you stop eating when the queen does. I would personally take a few sips of tea. I would take a cookie and not touch it. She's going to ask a question.

COOPER: Yes, I'm guess she's not serving, like sloppy Joe's. It's got to be like little finger sandwiches or little, you know, not- so-tasty cookies.

WHITMORE: Right. Some petit fours. Maybe scones with clotted cream.

COOPER: Clotted cream?

WHITMORE: Yes.

COOPER: What's clotted cream?

WHITMORE: Devonshire cream. Something really, really decadent and...

COOPER: Is that like Cool Whip?

WHITMORE: You would love it. It is like Cool Whip. Yes, it is. Like frosting on a cake.

COOPER: I like the Cool Whip.

WHITMORE: And you would also address her as your majesty, not Liz, not Elizabeth. Her mother probably is the only person who calls her that.

COOPER: And why is it you're not allowed to talk to her until she talks to you? Which is actually the rule for anchors around here, as well, just in case you were wondering.

WHITMORE: Well, I was wondering that, actually. But no. That's not the case. She's -- they're there for social purposes, to build the relationship. So I do recommend that the Obamas talk about subjects that are near and dear to the queen's heart, like her dogs, like her horses. In fact, since the Obamas looking for a dog...

COOPER: Yes, that's the perfect conversation starter.

WHITMORE: Wouldn't that be great?

COOPER: Totally. I hadn't thought of that. You're brilliant. Yes. They can talk about the dog, and she can talk about how great corgis are. WHITMORE: That's it.

COOPER: Yes.

WHITMORE: That would be my suggestion. Sure.

COOPER: I've never seen the Corgis myself. But you know, I like all dogs.

WHITMORE: You never -- you never turn your back to the queen and...

COOPER: Really? So when they leave they have to, like, walk out backwards?

WHITMORE: Well, what will happen is the queen will exit the room first, and then the Obamas will exit the room, or they'll either exit together.

COOPER: You know that as soon as they exit the room, they're going to, like, look at each other and be, like, you know, that was -- that was that. That was interesting. You know?

WHITMORE: Well, you know what? Personally, I would be quite nervous meeting the queen. And I think the Obamas would probably be a little bit nervous, too, because obviously, the queen is -- I would think she would be a very intimidating woman. Don't you?

COOPER: I think she would drink anyone under the table, and I'm sure she knows how to have a good time better than anyone. So I don't know.

No, I'm sure she's very intimidating. But I'm sure the corgis will loosen it all up.

WHITMORE: Well, the good news is the Obamas are very sophisticated, and I think they'll do a fine job.

COOPER: They're more than able to handle it, yes. Unlike me.

Jacqueline Whitmore, appreciate it. Thank you very much. Thank you for your expertise.

WHITMORE: Thank you.

COOPER: You can bet you won't catch the queen riding on this, although you never know in Buckingham Palace. A motorized bar stool. That's right, bar stool. This contraption led to a guy's arrest. We've got the 911 calls. Our "Shot" next.

Also ahead, how will President Obama be greeted, not by the queen, but the world leaders in London? We're going to the latest on that from Ed Henry. We'll be right back.

(COMMERCIAL BREAK) COOPER: All right, we've saved the best for last, Erica. A story hard to believe, but of course, it's happened. We'll make it "The Shot."

For one Ohio guy, the bar is always open and running. This is the motorized bar stool fashioned out of a lawn mower, or the guts of a lawn mower.

A couple of weeks ago, the 28-year-old owner and driver was puttering down the street, perched on his street, plastered out of his mind, so much so that he crashed the crazy contraption, and a friend called 911. Here's the conversation you don't hear that often.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Nine-one-one.

UNIDENTIFIED MALE: I've got a friend here that wrecked a bar stool, hit the pavement with his head.

UNIDENTIFIED MALE: OK, but he fell just from the bar stool?

UNIDENTIFIED MALE: No. He was riding a bar stool.

UNIDENTIFIED MALE: OK.

UNIDENTIFIED MALE: Motorized bar stool.

(END VIDEO CLIP)

COOPER: Motorized.

HILL: Of course it was motorized.

COOPER: One of them motorized bar stools.

HILL: Is that -- is that the turtle man?

COOPER: No, I think that's Charlie our producer.

HILL: It might be Charlie. (UNINTELLIGIBLE) boy that he is. You know what I noticed...

COOPER: By the way, he had consumed 15 beers.

HILL: And he could still -- I mean, clearly, he wasn't upright for very long, but it's impressive that he's still upright. I would think that would kill you.

COOPER: And apparently, the bar machine, boozing machine can go about 30 miles an hour, and he was charged with drunk driving.

HILL: Great.

COOPER: Should have been. He was drunk and driving. I've got to say, it's a good 911 call. It doesn't even come close to our favorite 911 call of all times, which is the police officer...

HILL: With the pot?

COOPER: ... calling 911 because he was so stoned on pot brownies he thought he was dead.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think we're dying.

UNIDENTIFIED FEMALE: How much did you guys have?

UNIDENTIFIED MALE: I don't know. We made brownies, and I think we're dead. I really do.

UNIDENTIFIED FEMALE: OK. How much did you put in your brownies?

UNIDENTIFIED MALE: I don't know.

UNIDENTIFIED FEMALE: Was it a bag? Who made the brownies?

UNIDENTIFIED MALE: My wife and I did. Come here.

UNIDENTIFIED FEMALE: OK.

UNIDENTIFIED MALE: She's on the living room ground right now.

UNIDENTIFIED FEMALE: Is she breathing?

UNIDENTIFIED MALE: Barely breathing.

UNIDENTIFIED FEMALE: Is she awake?

UNIDENTIFIED MALE: I think so.

(END VIDEO CLIP)

COOPER: She's stoned! Just say it.

HILL: Out of her mind.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Can you look?

UNIDENTIFIED MALE: Yes. I can feel her laying right down in front of me. Time is going by really, really, really, really slow.

(END VIDEO CLIP)

HILL: I hear that's how it happens.

COOPER: I've read that's how it happens.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Pardon?

UNIDENTIFIED FEMALE: How much did you buy?

UNIDENTIFIED MALE: I don't -- just please send rescue.

UNIDENTIFIED FEMALE: They're on the way.

UNIDENTIFIED FEMALE: They're on their way, but how much did you buy?

(END VIDEO CLIP)

COOPER: OK. It's good, yes. We always have it on stand by, ready to go, just in case.

HILL: It really doesn't get old. Hey, by the way, I just want to say that I think it's clear that, after your comments in the last segment about etiquette, you know, Cool Whip, corgis and whether or not the queen drinking everybody under the table, maybe even the bar stool guy, you have a tea appointment when you go to London tomorrow, don't you?

COOPER: Tea appointment.

HILL: Yes.

COOPER: Not going to happen.

HILL: Yes.

COOPER: All right. Let's see a couple curtseys as we go to break.

HILL: Harry, I just found out, he was kind of a debutante, too. He did a "Beau-tillion."

COOPER: Never heard of that.

HILL: Top hat, tails, cane.

COOPER: All right. A lot more coming on the president's trip after the break. We'll be right back.