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ANDERSON COOPER 360 DEGREES

Congressional Insider Trading Bill Shelved; Jerry Sandusky Waives Right to Court Hearing

Aired December 13, 2011 - 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: It's 10:00 here on the East Coast. Good evening, everyone.

We begin tonight "Keeping Them Honest" with a sequel and update to report on things your elected representatives do that would land you in jail if you tried them yourself, what some are calling legal legislative graft.

Now, if you don't know about this, you have to listen because it is stunning, right now what the law allows members of Congress to do. Tonight, a bill to make Congress members obey the same rules that you and I do when it comes to making money on inside information, well, that bill has been put back on the shelf. Until tonight, it appeared as if the legislation was on a fast track to passage, a fast track that seemed to have been created just a few weeks ago after Steve Kroft on "60 Minutes" revealed that Congress members were legally allowed to use inside information, information they learn in briefings or through reports, to make money, something regular people like us would be arrested for.

(BEGIN VIDEO CLIP)

STEVE KROFT, CBS NEWS: Why does Congress get a pass on this?

PETER SCHWEIZER, HOOVER INSTITUTION: It's really the way the rules have been defined and the people who make the rules are the political class in Washington and they have conveniently written them in such a way that they don't apply to themselves.

KROFT: The buying and selling of stock by corporate insiders who have access to nonpublic information that could affect the stock price can be a criminal offense. Just ask hedge fund manager Raj Rajaratnam, who recently got 11 years in prison for doing it. But congressional lawmakers have no corporate responsibilities and have long been considered exempt from insider trading laws even though they have daily access to nonpublic information and plenty of opportunities to trade on it.

SCHWEIZER: We know that during the health care debate, people were trading health care stocks. We know that during the financial crisis of 2008, they were getting out of the market before the rest of America really knew what was going on.

(END VIDEO CLIP)

COOPER: So that was Steve Kroft on "60 Minutes."

But what was going on? Well, he reports that GOP congressmen like Spencer Bachus of Alabama and fellow members of the House Financial Services Committee were getting dire top secret briefings on the banking crisis back in 2008 from the Treasury secretary, Hank Paulson.

At the same time, according to "60 Minutes" and a researcher, Peter Schweizer, Congressman Bachus started making stock bets that the market would go down. Now his office says he never trades on nonpublic information, but the timing is certainly suspicious. Bachus reported taking -- his reported take on trades was around $50,000.

And it is a bipartisan story. They're doing it on both sides. Take Democrat Nancy Pelosi, the former House speaker. In 2008 she took part in Visa, the credit card company's invitation-only initial stock offering, buying 5,000 shares just as legislation that would have hurt credit card companies like Visa began to trip through the House. Legislation that incidentally failed that time ultimately was passed through the Senate.

Steve Kroft asked her about that.

(BEGIN VIDEO CLIP)

KROFT: I wanted to ask you why you and your husband back in March of 2008 accepted and participated in a very large IPO deal from Visa at a time there was major legislation affecting their credit card companies making its way through the -- through the House? And would you consider that to be a conflict of interest?

REP. NANCY PELOSI (D), MINORITY LEADER: I don't know what you're point is of your question. Is there some point that you want to make with that?

KROFT: Well, I guess what I'm asking is, do you think it's all right for a speaker to accept a very preferential favorable stock deal?

PELOSI: Well, we didn't.

KROFT: And you participated in the IPO. And at the time you were speaker of the House. You don't think it was a conflict of interest or have the appearance of a conflict of interest?

PELOSI: No, it -- it only has the appearance if you decide that you're going to have -- elaborate on a false premise. But it's not true, and that's that.

KROFT: I don't understand what part is not true.

PELOSI: Yes. That I would act upon an investment.

(END VIDEO CLIP)

COOPER: House Minority Leader Nancy Pelosi talking to "60 Minutes"' Steve Kroft. She denies any wrongdoing.

Now as we mentioned, his report got action. Suddenly a bill to curb insider trading called the Stock Act which had been going nowhere for years gained new traction and more than 200 sponsor.

We wanted to get every single lawmaker on record when it comes to the Stock Act so what do we do? We called every single lawmaker now in office in the House and the Senate.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm calling from CNN, ANDERSON COOPER 360. And I was hoping to speak with someone to help us about Representative Brooks' position on the Stock Act?

(END VIDEO CLIP)

COOPER: We called 100 senators, 434 House members. A majority in both chambers said they'd get back to us but haven't yet followed through on that. We haven't heard from them. We did get 201 House members to go on the record, with 16 maybes, 184 yeses, and just one single no. So the bill is clearly gaining supporters, so it seems.

But now Congressman Bachus who happens to be chair the House Financial Services Committee is postponing action on it reportedly on orders from Majority Leader Eric Cantor.

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R-VA), HOUSE MAJORITY LEADER: There were issues raised again by members on both sides of the aisle about this bill not being brought up in a vetted way. There are many other chairmen who have jurisdiction in this matter who need to be involved in this with the full vetting and we intend to do that.

(END VIDEO CLIP)

COOPER: Congressman Bachus issued a statement saying almost exactly the same thing. But "Keeping Them Honest," as recently as last Tuesday he actually seemed eager to move the Stock Act forward. In fact he'd scheduled what's called a markup on the bill for this week which is the last step before committee vote on it.

Then on Wednesday, according to Politico, Cantor smacked him down and Bachus postponed the mark-up indefinitely. A Cantor spokesman telling Politico a large group of bipartisan members believe the legislation is flawed and being recklessly moved solely in response to media pressure.

The co-sponsor and longtime reform advocate, Democrat Louise Slaughter, well, she isn't buying it, telling CNN affiliate WGRZ -- quote -- "Oh, for goodness sake, last week we passed a bill worth hundreds of billion of dollars with less than a two-day layover and no one knew what was in it." She goes on to say, "This bill has been around for six years." Some of Chairman Bachus' fellow Republicans, meantime, they're miffed as well. According to Politico, they say Bachus was putting them on the -- on the line to repair the damage to his reputation from that "60 Minutes" report. One of them telling Politico -- quote -- "We're not going to cover Spencer's ass by passing a half-baked bill."

Joining us now is retired congressman, Brian Baird, who tried to get -- tried to pass a similar ethics bill years ago without much luck. Also Melanie Sloan, executive director of CREW, Citizens for Responsibility and Ethics in Washington. She recently testified before Congress in support of the Stock Act.

So, Congressman, you helped introduce the stock back in 2006. It died over and over again in committee. Virtually no one even showed up for some of your hearings. Do you think it just died again?

BRIAN BAIRD (D), FORMER U.S. REPRESENTATIVE: Well, it seems like Eric Cantor would like to see it die. You know I just don't buy his explanation. Bills are often referred to multiple committees. You just waive that. The chairmen of the other committees say no, we'll let Financial Services handle it, it's in their bailiwick.

If he's serious about passing this, why doesn't he set a date? He should say that by the end of March, for example, we'll bring this bill or some form of it up for a vote and get it done. It's not that complicated. It asks people to do the same thing in Congress that we ask the rest of the country to do. He seems unwilling to make that happen.

COOPER: Melanie, to you, does it seem like this is dead at least for now?

MELANIE SLOAN, EXECUTIVE DIRECTOR, CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON: I don't think it just died, I think Eric Cantor killed it. And his calls for bipartisanship, that's a new one for Eric Cantor who hasn't cared about bipartisanship since his party took back control of Congress. It seems to me that Eric Cantor is doing the bidding of Boehner and Wall Street here and a bunch of chairmen of committees who don't want to see themselves tarred with the problem of being held responsible for insider trading laws like everyone else in America.

COOPER: Congressman -- when you were in Congress and used to raise this issue, I mean, what kind of a response did you get off camera from people? Because essentially I think a lot of Americans are stunned to learn that a member of Congress could receive some information in a -- in a briefing, an off-the-record briefing or behind-the-closed-doors briefing, and then use that information and buy stocks with that? I think it just defies explanation.

BAIRD: It does defy explanation. The most troubling response was people who either, A, did not understand the concept of why insider trading by members of Congress would be a problem. That showed an astonishing lack of self-awareness. But beyond that, a number of people just said, oh, that would be inconvenient. I don't want to have to report my stock trades the way other people do. This could possibly lead to investigations so it would be unwarranted. That's deeply troubling. If people in the congressional -- in Congress say that in some ways they are morally superior and they would never abuse something or that the laws should not apply to them, well, we've got a serious problem on our hand.

The fix was ready to go. We had a solution. It's been through three hearings, one in the Senate, two in the House, it may not be perfect. OK, amend it, bring it up for a vote, and let people stay where they stand and we'll see what the -- what the public thinks about that. I think they want to see a change.

COOPER: Yes, Melanie, to the congressman's point, I mean, they were serious about wanting to improve this bill, they could just say, well, we're setting a new date for the markup and the vote instead of putting it off indefinitely.

SLOAN: Well, that's exactly right. And that's what happened over in the Senate where Chairman Lieberman and ranking member Susan Collins have come up with a new bill, if not exactly the same as the House bill, but it's a new bill that's improved based on the hearing. And it's still not a perfect bill but it's better than it was.

And they could easily move forward with that bill in the House, or they could pass the bill they have and then work it out in conference. So there were lots of options other than just putting this off indefinitely. This was the way of postponing it without saying we're killing it, but really killing it.

COOPER: And Congressman, when people like Nancy Pelosi, or Bachus and Boehner deny acting on non-public information or their stock trading, I mean, do you think they're just not telling the truth? Do you think they're misinformed? What do you make of it?

BAIRD: Well, at the minimum, it sure has the appearance of a conflict of interest there. But when someone like Spencer Bachus gets a classified briefing and trades options the very, very next day, it defies common sense to believe that he somehow segregates the knowledge he gets in one committee hearing or a meeting with the secretary of the treasury. He completely segregates that from his stock trades and then has the audacity to say, well, I'm just a better stock trader than other people, that's why I make all this money.

That defies common sense. The average guy says, I don't get briefings from the secretary of treasury, I don't get classified information and if I did, by the way, I would probably go to jail. These folks don't.

COOPER: Melanie, I mean, just how is this legal? I don't understand. I mean, insider trading is illegal.

SLOAN: Insider trading is illegal, but it's not completely clear that the law applies to Congress as it's written. That's why this bill would have made it completely clear. The SEC sent over a letter saying no, no, we could prosecute this if we wanted to, if we thought there was a case but yet they never have. And the SEC isn't the most courageous agency in the first place, so it's clear that they need this legislation to make it crystal clear that Congress can't trade on insider information. But let me say, this isn't the only time where Congress has exempted itself from laws that apply to everyone else. The same goes for whistle-blower protections, the same goes for workplace safety laws. It's something that we often see with Congress. Why should they have to follow the same rules as everyone else, and it's part of the reasons Americans just don't trust them.

COOPER: It's a -- it's stunning. Melanie Sloan, appreciate it. Congressman Brian Baird, thanks very much.

Let us know what you think. We're on Facebook and Google+. Add us to your circles. Follow me on Twitter. Let me know what you think about this @Anderson. That's my Twitter handle. I will be tweeting tonight.

Up next, the two top Republican contenders promising to stay positive. Are they keeping their vows? We're "Keeping Them Honest" and looking at which one does better against President Obama in the polls right now.

Ari Fleischer, Cornell Belcher join us.

And later a courtroom surprise from Jerry Sandusky's attorney -- we'll tell you about the move that seemed to come out of nowhere and what his client is saying about the sex abuse charges against him. Our legal panel joins us, as well as attorneys for two of Sandusky's accusers.

(COMMERCIAL BREAK)

COOPER: "Keeping Them Honest" tonight on the campaign trail.

It seems like every four years presidential candidates promise not to go negative, not to attack their opponents. And a few weeks or months later they go negative and attack their opponents. Four years ago it was Senators Clinton and Obama launching rockets at each other. This time it's Republican front-runners on the attack despite promises not to in a commandment almost from on high.

(BEGIN VIDEO CLIP)

RONALD REAGAN, PRESIDENT OF THE UNITED STATES: When the chips are down and the decisions are made as to who the candidates will be, then the 11th commandment prevails and everybody goes to work. And that is thou shalt not speak ill of another Republican.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

COOPER: "Thou shalt not speak ill of another Republican." Not even Ronald Reagan always lived up to it all the time. Neither does Newt Gingrich He who considers Mr. Reagan a personal and political hero, as do many Republicans. He is promising to try.

Take a look at this message to supporters from Gingrich -- quote -- "Since I announced my candidacy for president of the United States I have made it clear that I intend to run a positive solutions-based campaign." It goes on to say, "The American people deserve a respectful and constructive campaign that focuses on a vision for rebuilding the country we love."

All right. Well, the question is, has he been living up to that pledge? Take a look and decide for yourself.

(BEGIN VIDEO CLIP)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Let's be candid. The only reason you didn't become a career politician is you lost to Teddy Kennedy in 1994.

(END VIDEO CLIP)

COOPER: Newt Gingrich this weekend. Mitt Romney says it's important not to weaken anyone who might defeat President Obama next November. So how does he explain this attack on Speaker Gingrich and how does Gingrich explain the counterattack?

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: If he was working as a spokesman for Fannie Mae -- excuse me for Freddie Mac, if he was there because of his political connections, and then if Freddie Mac fails, I think a fair question is asked, why did he profit as Freddie Mac failed?

GINGRICH: I would just say that if Governor Romney would like to give back all the money he's earned from bankrupting companies and laying off employees over his years at Bain, then I would be glad to then listen to him.

(END VIDEO CLIP)

COOPER: There you have it, Gingrich calling Romney a jobs killer, Romney calling Gingrich basically a political hack.

How did they explain it? Well, remember that message from Mr. Gingrich to his supporters. He left himself an out -- quote -- "I have refrained from launching attacks on my Republican opponents, though I have reserved the right to respond when my record has been distorted."

Joining me now Ari Fleischer, press secretary during the George W. Bush administration. You could follow him on Twitter @AriFleischer. Also with us Democratic strategist and Obama 2012 pollster, Cornell Belcher.

Cornell, I mean, you look at these polls. Do the voting public care about whether or not a candidate goes negative? CORNELL BELCHER, DEMOCRATIC POLLSTER: Well, this is one of the -- one of the conflicts among voters, the contradictions ,as you know all the voters talk about how they hate negative ads and they hate negative campaigning and how it turns them off. But truth of the matter is, we know very well that it moves voters.

If you have a valid and authentic attack line or strong contrast with your opponent and you put money behind that in television advertising, and you keep pushing that message, eventually it does burn in and it does make an impact. And what you have to do is you have to pause those voters from moving -- from moving to your opponent.

Look, Mitt Romney has to attack Newt Gingrich because he has to get in the way of those voters, that 77 percent of the Republican core electorate out there. He has to get in the way of them coalescing around Gingrich because if they coalesce around him, the race is over.

COOPER: Ari, it does seem like Gingrich has been able to stay above the fray or stay out of the fray really until this weekend. He previously in other debates he wasn't a top tier candidate. He is now. Can he continue to say, well, look, I'm not going to go negative? I'm not going to be negative?

ARI FLEISCHER, CNN POLITICAL CONTRIBUTOR: No, I think that's -- number one, not Newt's nature. And Newt under pressure of course is going to go negative. He always has. And frankly, Anderson, I think people can be a little overly sensitive about this. It's a campaign and they're running against each other. A campaign is based on what can you do for the country and what's the difference between you and the other guy who wants to do something for the country.

So, so long as it's kept civil, so long as it's kept focused essentially on the issues, which it largely has been on the Republican side, this is the very stuff of campaigns and it's what people should make up their mind about whether these differences they're arguing about, one person supported a mandate, whether somebody is for or against illegal immigration. These are substantive differences that need to be aired that should be aired.

COOPER: Is there a danger, Cornell -- I mean, I agree with Ari on this one. Look, you know, we've all been to the rodeo before. You know there are differences between people. And that's why where a lot of this comes from. But is there a danger in saying you're not going to be negative and then being negative or just does it not really matter?

BELCHER: Well, look, if you're -- and like I'm a proud political hack, by the way. I do this for a living. If you're the front- runner, you with this classic front-runner card to pull out, I'm going to say negative, we shouldn't -- we shouldn't level any attacks --

(CROSSTALK)

COOPER: You mean I'm going to stay positive. BELCHER: Right. I mean, I'm going to stay positive. You can do that because other people have to catch up with you. And they can't catch up with you unless they take -- unless they take you down. Look, we hear this every campaign season. Every campaign season people make hard contrasts. And I'm sorry, but negative campaigning work. It does.

COOPER: There's this new NBC News/"Wall Street Journal" poll that I want to take a look at the numbers on. Newt Gingrich has a commanding lead nationally among Republican candidates, 40 percent compared to Romney's 23 percent. But look what happens when you put him up against President Obama. He trails by 11 points compares to Mitt Romney who only trails President Obama by just two points.

Ari, what do you make of the numbers?

FLEISCHER: Well, that's one of Newt's biggest obstacle. If Newt is going to become the nominee, he's got to show a steady stream of polls. And he's had a very mixed stream of polls that shows how he's going to do against Barack Obama.

If Republicans get convinced that a vote for Newt is a vote for Obama, it really could kill him as this campaign goes along. But Newt had some good polls, actually it was a Gallup poll that came out today and it shows in the battleground states both Newt and Romney are beating Barack Obama in the 12 battleground states that Barack Obama won last year or four years ago.

But Newt needs to get that across the board. The numbers like the NBC/"Wall Street Journal" poll that you just cited, Anderson, are very problematic for Newt. And he's got to change that story.

COOPER: Cornell, James Carville was on the program last night. He said he thinks the next week or two for Newt Gingrich, those numbers are going to come down because there's going to be -- a sort of steady drumbeat against him from the other candidates. Do you agree with that?

BELCHER: He -- well, two things. One is that those national polls at this point mean absolutely nothing to the general election because the contours of the general election haven't begun to be -- to unfold. You know, and there was a number of polls out, you know, the pundits said Hillary Clinton would be a better candidate in the general election than Barack Obama.

That's not how primary voters think, that's not how caucus goers think. They think that the candidate who's most in line with them, who they agree with, shares their values, that's the candidate that's going to be the best candidate in the general election because if not, what you're really saying is then there's something wrong with my values and the way I think if my candidate is in fact not the best candidate.

Other part about this is absolutely they will begin to pull back because you know what? Now that the sights are trained on Newt, and again, we don't like negative campaigning, but once you start attacking someone and bring -- bring up credible line of attack, voters pause. And if you're Mitt Romney, you have to get those voters to pause in their consideration of rallying around Newt Gingrich.

COOPER: Interesting. Ari Fleischer, thanks, Cornell Belcher as well.

Coming up next on the program, "Crime & Punishment": Former Penn State football coach Jerry Sandusky waived his right to a preliminary hearing this morning. That means we did not hear from his alleged victims of sexual molestation. But two of his accusers' attorneys are speaking out. We'll talk to them ahead.

Later, pressure piling up on Attorney General Eric Holder over the failed gunrunning operation Fast and Furious. Some Democrats say it's a manufactured scandal. We'll talk to one Democrat and see, what is he talking about? We're "Keeping Them Honest" ahead.

(COMMERCIAL BREAK)

COOPER: In "Crime & Punishment" tonight, a surprise move in the case against former Penn State assistant football coach Jerry Sandusky. Now prosecutors were ready to put witnesses on stand today. We talked about it a lot last night including some of the young men who say Sandusky sexually abused them when they were children, but they didn't get a chance to testify. Sandusky waived his right to a preliminary hearing. He also waived an arraignment scheduled for January, enter a not guilty plea and requested a trial.

We'll have more about what that means in just a moment. But first here's what Sandusky said today outside the courthouse.

(BEGIN VIDEO CLIP)

JERRY SANDUSKY, FORMER PENN STATE FOOTBALL COACH: To stay the course, to fight for four quarters. We await the opportunity to present our side.

JOE AMENDOLA, ATTORNEY FOR JERRY SANDUSKY: And we couldn't do that today.

(END VIDEO CLIP)

COOPER: Sandusky's attorney Joe Amendola went on to say that he and his client decided last night to waive the hearing because the defense wouldn't have enough time to question prosecution witnesses. And he said Sandusky maintains his innocence.

(BEGIN VIDEO CLIP)

AMENDOLA: We're ready to defend, we've always been ready to defend. Today's waiver has nothing to do with conceding anything. There have been no plea negotiations. There will be no plea negotiations. This is a fight to the death. This is the fight of Jerry Sandusky's life. This goes beyond the Penn State/Miami game in '86. This is -- this is the game of his life.

(END VIDEO CLIP)

COOPER: Joining me now live is Mike Boni, the attorney for the alleged victim number one and Howard Janet, attorney for alleged victim number six.

Appreciate both you being with us.

Michael, you were in court today when Sandusky decided to waive his preliminary hearing. How did your client, alleged victim number one, react?

MIKE BONI, ATTORNEY FOR ALLEGED VICTIM NUMBER ONE: Anderson, he reacted with an interesting mixture of emotions. Obviously there was a great sense of relief. Victim one, my client, is young. He just turned 18 years old. And as you can imagine, he felt a tremendous sense of relief.

At the same time, he was angry. He was thoroughly prepared. Got himself mentally prepared. I had dinner with him last night. And he was ready. He is an extremely credible, earnest, sincere young man and was looking forward to this day when he would have the opportunity to assist the prosecution, so he was angry that he did not have that opportunity.

COOPER: Howard, what about your client, what the grand jury called victim number six?

HOWARD JANET, ATTORNEY FOR ALLEGED VICTIM #6: Well, let me tell you something about my client. This young man is a devout religious young man. He -- when he read the grand jury presentment, cried, not for himself but for the other boys. And at that point in time he made the decision that he was going to stand up and come forward again as he had done in 1998 as an 11-year-old, and stand up for his rights and especially for these other children.

So as a result of that what he did was he summoned the courage. He dug down deep and he summoned the courage to face his accuser, to face him in open court, to face him under oath, to face him while the world watched. He was ready, but Jerry Sandusky ran away.

Sandusky didn't have the courage to face his accusers. He didn't have the courage to listen to what this young man and the other young men were going to say. He didn't have the courage to let the world hear it.

COOPER: I want to play for you some sound from a CNN interview Jerry Sandusky's attorney Joe Amendola gave today. Take a look.

(BEGIN VIDEO CLIP)

AMENDOLA: Several of these young men know each other, have known each other prior to charges being filed. We're looking into the possibility that there may be a financial motivation involved, that there might have been some collusion, some interaction among these young people prior to charges being filed. We also know that in a number of the charges there really isn't an allegation of sexual contact as much as there is maybe inappropriate touching.

(END VIDEO CLIP)

COOPER: Michael, is there any truth to Amendola's claims that money is a motivating factor here for your client?

BONI: There is no truth whatsoever. That is an extremely offensive remark. He has no evidence. It is categorically false.

My client does not know any of the other victims, has never spoken with any of the other victims. And it is patently absurd for Mr. Amendola to level these charges without an iota of evidence.

He can say whatever he wants now and reach deep into his bag of tricks, but I can assure you that the furthest thing from my client's mind is money. What he wants to see is justice brought against Jerry Sandusky.

COOPER: Howard, briefly, does your client, alleged victim No. 6, know any of the other alleged victims or want money?

JANET: He does know, yes, some of the young victims. Some of them were Second Mile children, just as he was. That was his feeding ground, if you will.

But I don't believe for a scintilla of a second that any of these children are motivated -- now young adults -- are motivated by money. While I don't believe it as to them, I know it as to victim six.

This young man was abused by Jerry Sandusky. It's evident from the grand jury report back in 1998, 13 years ago. Neither he nor his mother did anything other than report this to the police to try and seek the kind of justice that was required. He didn't file a lawsuit. She didn't file a lawsuit. Never looked for a penny, never asked for a penny. And didn't come forward now.

He thought his matter was dead. The police came to him and reopened this investigation.

COOPER: OK.

JANET: That's what happened.

COOPER: I want to bring in criminal defense attorney Mark Geragos and CNN legal analyst Sunny Hostin, who's a former federal prosecutor.

Mark, some legal analysts have said that waiving the preliminary hearing today was bad for the defense, bad for Sandusky, because the prosecution's witnesses avoided taking the stand, didn't have to take the stand and potentially offering up contradictions in their testimony. Do you agree with that? MARK GERAGOS, CRIMINAL DEFENSE ATTORNEY: Well, that's one of the reasons that, if you're a defense lawyer, you want to have a preliminary hearing. Is it's your opportunity, prior to trial, to lock somebody in, to do a cross-examination, to kind of set the stage for trial.

I -- ever since I heard it this morning, one of the thing -- only things that I can speculate as to why they waived it is you do at a preliminary hearing give the judge the opportunity to raise or lower the bail, based on what he's heard.

And maybe there was some thought or some calculation on their part that, if we go through this preliminary hearing with all of the attention on this, if it looks or if a judge had a credible basis for saying, "Well, I think that there's more here than there was when I was faced with bail, I'm going to jump his bail or make it a tantamount to no bail," that could have factored into it. Because I've done that on -- myself on occasion, where I waived the preliminary hearing because I didn't want to expose the client to being remanded into custody.

COOPER: So Mark, you don't buy -- when the attorney for Sandusky, Amendola, says, "Well, we wouldn't have had enough time to interview the witnesses, the alleged victims"?

GERAGOS: The reason -- I don't know that I don't buy it, but I think the remedy for that, generally -- and I think it was a pretty good remedy that he had -- which was, OK, they've added all these other counts. They've got new victims coming forward. "Your honor we're not ready today. We want to continue the preliminary hearing so that we can get ready."

Now, the counterbalance to that is what he said. He went out there and he said -- and I'm taking him at his word -- that they're ready for trial. They want to speed it up. They don't want to waive time. They want to go right to trial.

You'll remember, Conrad Murray did the same thing. He didn't want to waive time. He set it straight for trial. Sometimes that's a good idea; most of the times it's not.

COOPER: Sunny, there's some people who thought maybe this is a sign that the defense might be looking for some sort of a plea deal.

SUNNY HOSTIN, CNN LEGAL ANALYST: That's what I thought. I mean, it's extraordinary that a defense attorney would give up the opportunity to see the prosecutor's hand.

I've tried so many cases, Anderson, and I've never had a defense attorney waive the preliminary hearing, because they want to be able to cross-examine these witnesses. They want to be able to have the opportunity to see what they are facing.

So the fact that they did this sort of at the very last minute tells me that they were afraid of what they were going to hear. They were not prepared to cross-examine these witnesses. And the fact that he said that he wouldn't be able to cross- examine their credibility is just complete nonsense. The minute those boys got on that witness stand, their credibility was immediately at issue, and he would have had the opportunity to cross-examine them.

COOPER: Howard, would your clients prefer to see Sandusky take a plea deal, I mean, if it means not having to testify?

JANET: This young man's not concerned about testifying. He welcomes the opportunity to testify and face his accuser. What he is looking for is justice, and what should happen here is Jerry Sandusky should be behind bars. The prosecution is going to make a determination as to how that should come about.

COOPER: Michael, do have a position? Does your client have a position on the plea deal?

BONI: He does. And he's 18 years old. This is all swirling around him like something none of us can understand.

I think what my client wants is to see justice served. If he can assist in that process and give testimony, he will be ready, prepared, and he will be very credible in doing so.

If a plea deal is struck that puts Mr. Sandusky behind bars for a good, long time, I believe he'll be satisfied with that, as well.

COOPER: I want to play another sound bite, Sunny, from Joe Amendola, the attorney.

(BEGIN VIDEO CLIP)

AMENDOLA: If anyone is naive enough to think for a minute that Tim Curley, Joe Paterno and Gary Schultz and, for that matter, Graham Spanier, the university president, were told by Mike McQueary that he observed Jerry Sandusky having anal sex with a 10-year-old-looking kid at a shower room in Penn State, on Penn State property, and their response was simply to tell Jerry Sandusky that, don't go in the shower any more with kids, I suggest you dial 1-800-REALITY, because that makes absolutely -- that makes absolutely no sense.

(END VIDEO CLIP)

COOPER: It turns out the phone number he gave out was actually a phone sex line of some sort, probably not the greatest line for him to be using at this point. But are you surprised of the degree to which Sandusky and his attorney are speaking out?

HOSTIN: I really am. I mean, this attorney has had a sort of unorthodox way of defending Jerry Sandusky from the very beginning. The approach has been very nontraditional.

He's allowed Jerry Sandusky to be interviewed, and he's making all these football analogies when he's speaking. So I'm not surprised, but it's really shocking, in many respects, that this is the tack that they're taking. I'm also very offended that he's put forth this defense of these boys getting together and colluding for money. I have never, in my experience prosecuting child sex crimes, had a victim come forward and make something up because they want money.

COOPER: Mark, at this point, do you agree with what she said about -- about the amount to which they're both speaking publicly?

GERAGOS: Well, you know, the problem is this is what I call a supersize case. And I think a lot of the normal rules that you engage in as a defense lawyer may not apply. It's unorthodox.

You don't see -- I mean, what were there, 200 credentialed media that were sitting there? The thing is being covered, you know, wall- to-wall. And so sometimes this presumption of guilt in this case, which has come so quickly, you want to try to do something to stop the bleeding.

At the same time, you know, until you've gone through one of these things, you don't understand what it's like to be in the middle of it if you're defending somebody who's the object of all of this hatred and opprobrium that's coming his way. So this may be something new to him. And I feel his pain.

COOPER: Mark Geragos, Sunny Hostin, appreciate it. All the attorneys in this, thank you so much for being with us.

We're going to look later at another case of alleged abuse by a coach at Syracuse. Two alleged victims are now suing the university and the head basketball coach, Jim Boeheim, for defamation for calling them liars in defense of Bernie Fine.

Plus, more fallout from Operation Fast and Furious with Attorney General Eric Holder at the center of the storm. Two very different narratives, though, coming out of Congress. We're "Keeping Them Honest" next.

(COMMERCIAL BREAK)

COOPER: Another "Keeping Them Honest" report now.

Attorney General Eric Holder, as you know, is under growing pressure tonight from congressional Republicans over the botched gun- running operation known as Fast and Furious, which was overseen by the Justice Department.

Today 22 House Republicans introduced a no-confidence motion against Holder. Dozens more are calling for his resignation.

So let's start with the facts. For more than a year agents from the Bureau of Alcohol, Tobacco and Firearms, the ATF -- and Explosives -- allows thousands of illegal gun sales. The idea was the guns would end up in the hands of Mexican cartel leaders who could then be traced and targeted.

The problem is the ATF didn't keep track of most of the guns, two of which were later found near the body of a slain Border Patrol agent Brian Terry last December. His cousin testified at a congressional hearing in June.

(BEGIN VIDEO CLIP)

ROBERT MEYER, COUSIN OF BRIAN TERRY: He had already made his travel plans to fly back to Michigan and spend the Christmas holiday with his family. Brian's attention to detail had ensured that all the Christmas gifts he had meticulously selected for his family had already been bought and sent in the mail prior to his arrival.

Brian did ultimately come home that Christmas. We buried him not far from the house that he was raised in just prior to Christmas day.

(END VIDEO CLIP)

COOPER: Testimony from Brian Terry's cousin. Now during these hearings, the attorney general, Holder, has maintained he was not aware of the program until early this year. The Justice Department has launched its own investigation.

Some Democrats are accusing now, though, Republicans of a witch hunt. Georgia Representative Hank Johnson told "The Daily Caller," quote, "I think this is another manufactured controversy by the Second Amendment, NRA, Republican, Tea Party movement."

Earlier I challenged Congressman Johnson on that statement.

(BEGIN VIDEOTAPE)

COOPER: Congressman Johnson, in an interview, you describe Fast and Furious as a, quote, "another manufactured controversy by the Second Amendment, NRA, Republican, Tea Party movement."

I'd like to ask you about that. It's a fact this operation took place. It's a fact some 1,4000 guns can't be accounted for and a fact that the guns from this operation ended up at the crime scene where Border Patrol agent Brian Terry was killed. So what's manufactured about this?

REP. HANK JOHNSON (D), GEORGIA: Well, it's manufactured into a scandal or into an alleged scandal when, in fact, the scandal, Anderson, has to do with the lack of federal laws, which contribute to the numbers of assault weapons that enter into the hands of Mexican drug cartels and others and are used to kill people.

COOPER: But sir, aren't you then -- I mean, it sounds like you're just making a political position. Yes, you oppose, you know, the NRA, I assume. You oppose loopholes that allow guns to be sold through gun shows.

But why not investigate who made the decision in this Fast and Furious program? We still don't know who actually signed off on this.

JOHNSON: Well, I am interested. And there is an ongoing investigation at the Justice Department, through its solicitor general is undertaking, and changes have already been made and the investigation is not complete.

COOPER: But I guess people...

JOHNSON: I would allow it -- I would allow that investigation to run its course.

COOPER: But sir, it seems like you're saying, well, the Justice Department should be able to investigate itself when, in fact, if this was some -- something else, I'm not sure you would leave it up to the people who have been accused of or questioned about the -- you know, who approved it, whether someone in the Justice Department approved it. I mean, are they really able to investigate themselves on this?

JOHNSON: Well, Congress certainly has oversight authority to investigate this.

COOPER: Right, that's what Congress is doing, but you're saying the investigation is manufactured. You're saying this is much ado about nothing, essentially.

JOHNSON: I'm saying that the means, that the manner in which this investigation is being conducted by the House of representatives through the Government Oversight Investigations Committee is scandalous.

COOPER: Well, I guess maybe I still don't quite see your point. I mean, this is a scandal in Mexico. There are many people in Mexico very upset about this, because these guns have been used at we don't even know how many crime scenes. We do know a U.S. border agent is dead, and guns were found nearby.

The attorney general himself has said that guns from this operation, this Fast and Furious Operation, will likely end up being used to kill people for years. That's not a serious matter to you?

JOHNSON: Yes, it is. But so will the massive numbers of illegal weapons that fall into the hands of wrongdoers based on the gun show loophole.

COOPER: So to the families of -- to the family of Border Agent Brian Terry, to the family of Mexicans who have been killed at countless crime scenes with weapons that the federal government allowed to go across, you say what?

JOHNSON: I say I'm very sorry that this nation, which should be limiting the numbers of assault weapons possessed by wrongdoers, does not do its job, and as a result 40,000-plus people are dead.

COOPER: Congressman Hank Johnson, I appreciate your perspective, sir. Thank you.

JOHNSON: Thank you.

(END VIDEOTAPE)

COOPER: Still ahead tonight, disturbing new details about a new alleged hazing at Florida A&M University. Three band members now charged in the brutal beating of a female band member just weeks before drum major Robert Champion died.

Also tonight, holiday thieves caught on camera make our "RidicuList."

(COMMERCIAL BREAK)

COOPER: Ignoring problems rarely makes them go away. But critics say that is precisely what a major school district's policy on student sexual reorientation does. They claim it ignores the problem that silence causes. The problem is kids bullying other kids about their sexuality, and their perceived sexuality.

In Anoka-Hennepin, Minnesota's largest school district, seven kids have taken their own lives in the past two school years. Parents and friends say four were either gay, perceived as gay, or questioning their sexuality. And that heartbreaking statistic, a lawsuit, and a national report, including by this program, has triggered the district to reassess its so-called neutrality policy.

Neutrality bars teachers from discussing such things, and critics say it answers the bullying of gay students with silence, which bullies see as acceptance. Earlier this year, we did a special report on the problem, "Bullying: It Stops Here."

I spoke with the Anoka-Hennepin school superintendent, with parents and with four amazing students who are fighting back, including a brave kid named Kyle who's had a lot to overcome.

(BEGIN VIDEOTAPE)

COOPER: How do you get through the day, Kyle?

KYLE, STUDENT IN ANOKA-HENNEPIN SCHOOL DISTRICT: I prayed every day that I didn't have to go back to school. And I go...

COOPER: You pray every day you don't have to go back to school?

KYLE: Yes, I hide under the seats of the bus. And I would...

COOPER: You'd hide under the seats?

KYLE: I would. And then I'd go to the nurse three times a day at least.

COOPER: Just to get someplace safe?

KYLE: To go home.

COOPER: To go home.

I understand at one point how many kids did you know who were bullying you?

KYLE: Forty. COOPER: Forty kids?

KYLE: Yes.

COOPER: You could identify 40 kids?

KYLE: Yes.

(END VIDEOTAPE)

COOPER: Kyle was trying to survive in a climate where teachers could not even talk to Kyle in whispers about what bullies were shouting in his ears.

Last night the school board met to consider replacing neutrality with what they're calling a controversial topics curriculum policy. It would presumably allow teachers to talk about sexuality, as long as they don't, quote, "advocate personal beliefs or opinions." We'll continue to follow it.

Let's get the latest on the other stories we're following. Susan Hendricks is here with a "360 News & Business Bulletin" -- Susan.

SUSAN HENDRICKS, CNN CORRESPONDENT: Anderson, thank you.

Three Florida A&M University marching band members faced a judge today on charges of hazing a fellow band member. They are accused of beating freshman Bria Hunter, who police say suffered a broken thigh, blood clots and severe bruising that sent her to the emergency room last month.

Less than two weeks later, Robert Champion died in a suspected hazing incident on the band bus. No charges have been filed yet in his death.

Two men who accuse former Syracuse University assistant basketball coach Bernie Fine of sexual abuse are suing the university now and its head basketball coach, Jim Boeheim, for defamation. Boeheim accused Bobby Davis and Mike Lang of lying after they went public with their allegations. Fine has not been charged with any crimes and denies that he abused anyone.

We're also following this. The National Transportation Safety Board is calling for a nationwide ban on using cell phones and texting while driving. Now, the ban would apply to hands-free as well as handheld electronic devices.

Remember Elizabeth Taylor wore that wig in 1963 in that film "Cleopatra"? Well, according to Reuters, it has sold to an anonymous bidder for just over $20,000. The iconic bob is made of human hair, by the way.

Anderson, back to you.

COOPER: Coming up, if you're going to steal your neighbor's Christmas decorations, you might want to smile for the security camera. A Christmas crime -- a crime wave worthy of "The RidicuList." That's next.

(COMMERCIAL BREAK)

COOPER: Time now for "The RidicuList." And tonight we're adding a little pre-Christmas crime wave that caught our attention. Starting with the alleged Grinches who were actually caught trying to steal Christmas.

So this house in Sweetwater, Florida, was all decked out with Christmas cheer, including lots of inflatable lawn ornaments. I'm talking $500 worth of lawn ornaments. When suddenly, they were gone. Vanished.

Miami news station WSVN got to the bottom of what exactly was stolen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Mickey Mouse on a horse, some hugging penguins, Snoopy on a doghouse, and Santa on a sled.

(END VIDEO CLIP)

COOPER: Mickey on a horse, hugging penguins?

But wait, all was not lost for the hugging penguins, because it turns out there was security camera video of the actual crime taking place. Look. Not only that, the woman who owns the house called police after she saw her decorations on another lawn in her own neighborhood.

Stealing your neighbor's holiday lawn ornaments, pretty bad. Stealing your neighbor's holiday lawn ornaments, and then putting those ornaments on your lawn half a block away, well, that takes Christmas balls. That's all I've got to say. Thank you.

Two women were arrested on grand theft charges. Two women.

So most people know it is wrong to steal Christmas decorations, but what about hunting for them? And I mean that literally, because a man in Georgia was arrested after he fired a gun in a wooded area near a shopping mall.

(BEGIN VIDEO CLIP)

MEKKA PARISH, DEKALB POLICE SPOKESWOMAN: William Robinson was firing into the trees in an attempt to get mistletoe out to decorate his home for Christmas.

(END VIDEO CLIP)

COOPER: That was from a news station, WXIA.

And before you start feeling all superior because you've never had to shoot your own Christmas decorations, listen to what one of the news station's own cameramen had to say about mistletoe. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Well, I've gathered it before.

UNIDENTIFIED MALE: How did you gather it?

UNIDENTIFIED MALE: The traditional southern way.

UNIDENTIFIED MALE: Which is?

UNIDENTIFIED MALE: With a gun.

(END VIDEO CLIP)

COOPER: So yes, it's apparently a thing in some parts of the south: people shoot mistletoe out of the trees. Who knew? At least not us New Yorkers.

So after Mr. Robinson fired his double-barrel .12-gauge shotgun into a tree, he got arrested and spent the night in jail.

He actually seems like a really nice person, quite considerate. Here's what he told news station WGCL about his quest for mistletoe.

(BEGIN VIDEO CLIP)

WILLIAM ROBINSON, ARRESTED FOR SHOOTING INTO TREES: There's some in my neighbor's tree. And I know him. I could have gotten it, but he wasn't home. I didn't want to go shooting in his yard if he wasn't home.

(END VIDEO CLIP)

COOPER: That's good. See, that's very neighborly. Not shooting in someone's yard when they're not home. If they were home, it's much easier.

He says after spending a night in jail, he has learned his lesson.

(BEGIN VIDEO CLIP)

ROBINSON: I guess I assumed that everybody knew what I was doing. I mean, if anybody had been over there -- there was nobody around except this one car that was driving through. Yes, I'll get mistletoe next year, but it will be somewhere else. It will be way out in the country.

(END VIDEO CLIP)

COOPER: So I guess next year if you're way out in the country in Georgia, just be on the lookout for shoulder-fired mistletoe. Also, do not shoot in a neighbor's yard if he's not home, and do not steal your neighbor's inflatable Mickey Mouse on a horse, because 'tis the season to be jail-y on "The RidicuList."

Hey, that's it for us. Thanks for watching. "ERIN BURNETT OUTFRONT" starts now.