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Real-Time Transmission from Cockpits?; Unfinished Story of the CIA; What Happened to Flight 370?; Unconventional Wisdom on Flight 370; "House of Outrageous Fortune"

Aired March 15, 2014 - 09:00   ET


MICHAEL SMERCONISH, CNN ANCHOR: Hey, good morning. I'm Michael Smerconish.

I want to know why we can't have real-time video transmission from cockpits. You're about to meet a pilot who says that would be an invasion of privacy. And wait until you hear about the building where Denzel Washington, Sting, Lloyd Blankfein all reside.

Plus why I did not find that interview between two ferns funny but then again I wasn't the intended audience.

But first, the disappearance of Malaysia Flight 370 has become the mystery of the decade, if not the century. Primarily because of the intrigue surrounding the flight transponder. Now this morning, the prime minister of Malaysia confirmed that the aircraft communication system had been deliberately switched off midflight by someone on that plane. And then kept flying for another seven hours.

But could all of this uncertainty have been avoided? This week, I had a call to my radio program from a truck driver. He was making his way through Tennessee. He said to me that his employer knew of his whereabouts at all times and could monitor his rate of speed, his fuel mileage, his engine function. They had one camera monitoring traffic in front of him and another with an eye trained on the inside of his cab.

And yet here we are one week after the disappearance of Flight 370 still not knowing about the whereabouts of a passenger airplane with 239 people onboard. And investigators won't know what caused the disappearance until they recover the flight data recorder, the proverbial black box.

We were in this position five years ago when Air France Flight 447 crashed into the Atlantic. Then, it took nearly two years to retrieve the black box and figure out what happened. Why are we looking for a needle in the haystack? Why isn't black box data transmitted via satellite, in real-time? There would appear to be three reasons, the rarity of the crashes cause and pilot opposition.

Now, it is true - thank god, air disasters are rare and black boxes can store enormous amounts of data cheaply. But what of the emotional? What are the financial costs in a tragedy such as this playing itself out in Malaysia? You know, back when Air France crashed, I wrote a column that is only more compelling today.

I said then, drivers today don't make a move without receiving instruction from the GPS. Kids communicate face-to-face using i-chat on their laptops, nobody leaves home without a Blackberry or iPhone. We read books on the Kindle, we watch movies in the car, we buy music from our cell phones.

So why did hundreds of investigators spend so much time combing the Atlantic Ocean for Air France 447's black box, a 30-minute audio recording and data set detailing items such as the aircraft's altitude and air speed and for what? The equivalent of a cassette tape in the age of the iPod.

This week I spoke to Arthur Walk. He's a lawyer, a pilot, an aviation expert and we talked about the technological capability being there, but missing is the support of the union that represents many U.S. pilots. The National Transportation Safety Board has advocated for cockpit image recorders. But airline pilots association is opposed - opposed on the pilot union's website expands on the argument.

Digital flight data recorders and the cockpit voice recordings, the paper reads, already provide investigators with the tools they need to determine the causes of airline and accidents. Video imaging would add virtually nothing of real value to the investigative process and could due to its subjective nature, actually lead investigators down the wrong path.

I disagree. I'm not saying that we should rely only on satellite transmission of video, but that such data should be used in addition to everything else. Such video would have been of value when investigators looked at the crash of TWA Flight 800 in the summer of 1996 when 230 were killed off of Long Island. And when three years later, Egypt Air 990 crashed off Nantucket with 217 aboard, not to mention Air France 447 in 2009 and now Malaysian Flight 370.

Look, if a truck driver hauling a load down the interstate in Tennessee is being monitored, it is not too much to ask that we do likewise with those entrusted with our lives.

I want to talk about all of this with Dan Gorda. He has been a commercial pilot for 13 years. Dan, you are opposed to the idea of having cockpit video streamed in real-time. What is it that I'm missing?

DAN GORDA, COMMERCIAL PILOT: Good morning, Michael. Thanks for having me. I think the issue isn't only related to privacy. I think one of the bigger issue is that we are trying to correlate getting answers with aviation safety. And they don't always go together.

I agree with the Airline Pilots Association comments that the subjective nature of that data probably outweighs any value it can offer to an investigation because all the data that exists right now in a flight data recorder or a cockpit voice recorder is objective. It's relatively factual and -

(CROSSTALK) SMERCONISH: But how would video be subjective in nature? You know, it strikes me like the convenience store that has cameras monitoring their employees and all of their customers and if bad stuff doesn't happen, those tapes are erased. Nobody's privacy is invaded in any way and the tapes show what they show.

I guess I'm advocating a system where, you know, if nothing untoward happens on the flight, nobody ever sees the video that comes from it.

GORDA: Well, and I think that is a reasonable point of view. My issue is this. When I say subjective, I think what would happen is you're going to have experts and so-called experts parsing that video trying to read body language, movements of hands, gestures. Things that are not entirely factual. I think that the conclusions are going to be drawn based on that data in part rather than solely on the objective data from the flight data recorder and the cockpit voice recorder.

The issue that I have aside from the subjective nature of a video is that it will fundamentally alter if not destroy the dynamic the two pilots have with one another in the flight deck. One of the important things to note is that most people when they go to work on a Monday morning, they go to work with the same people that they are used to seeing.

When I show up at the gate and begin a flight sequence, it is entirely possible if not likely that I've never met the person that I am flying with. So we have a very limited time and ability to develop a rapport and build a team such that something happens on that flight, we're able to respond as a team rather than as two individuals.

SMERCONISH: OK. In other words, the folks who are putting together the CNN program with me on this Saturday morning are the same who were here last Saturday and we're building a rapport with one another. In your case, it is different. You walk into that cockpit frankly not knowing until that time with whom you will be flying the plane. And what exactly are you saying that there is chitchat that takes place and I don't mean to minimize it, that might be politically incorrect, it might be misunderstood because you are just getting to know one another?

GORDA: No, I'm not saying it's politically incorrect, all I'm saying is that when we walk into that airplane together, the only thing we may have in common is that we work for the same airline and we've been trained on the same policies and procedures. However, if you don't really get to know a little bit about somebody personally, it is difficult to understand who they are as a person and work better with them if a pressure situation were to arise.

Now, if we're unable to have that conversation without knowing that there is a camera and a red light recording every word we say, I think that people are going to have a more difficult time building that rapport and relationship because for better or worse, people to some extent care what other people think about them and cameras can be intimidating just by their very nature.

SMERCONISH: Dan, as you know this story continues to change by the hour and in the overnight. We are reporting on CNN all about the Malaysian prime minister and these new developments that would suggest that perhaps that flight had been airborne for much longer than we initially believed.

As you are reading the tea leaves with your expertise, does this sound to you like an airplane that was flying manned or unmanned? That it was at the control of a pilot or not at the control of a pilot for many hours?

GORDA: I think that is a complicated question. I know that when it departed Kuala Lumpur, it was definitely under control of the pilot. And I firmly believe that the first turn to the west was commanded by somebody in that flight deck. Now, there is a branch point after that. We don't know what happened as that airplane proceeded to the west. whether it was still manned, whether it was unmanned, whether it was a combination of issues. A confluence that came together. We don't know that. And rather than rush to judgment on that, I think we want to wait and try to get as much objective information and data as we can.


SMERCONISH: Final question for you, if I might. Of what significance do you place in the fact that the times among other outlets reporting today that the altitude may have climbed above 40,000 feet for a 777?

GORDA: If I'm looking at that, I start to think about a situation in which an airplane is flying straight and level, the auto pilot is somehow disengaged and the airplane is interim, so it's going to fly level for a period of time. But as it burns fuel off, whatever trim was in for the weight at the time the auto pilot disengaged, that airplane is now lighter so it is going to climb and eventually it is not going to be able to climb anymore. Because it will not produce enough lift and at that point, it would induce an oscillation.

So if that auto pilot was somehow disengaged while the airplane was in straight and level flight, it follows by physics that the airplane at some point would climb and then it would be unable to climb any longer and descend. While I can't substantiate that with any data, I can simply say that I believe that to be a reasonable scenario to explain the fluctuations in altitude.

SMERCONISH: Dan Gorda, thank you so much for your time today.

The unfinished story, CIA secrets about the interrogation and torture of suspected terrorists and a public feud that may keep Americans from learning the truth.


SMERCONISH: Take a look at this. This is an artist's rendition of a water boarding table. One of the enhanced interrogation devices used in CIA black sites after 9/11. Years later we still don't know the full story. After the World Trade Center attacks, the CIA used any means necessary to get information from the bad guys. There's still much we don't know about all the techniques our operatives may have used with blessings from higher ups in the Bush administration. And now, a stubborn push for answers has sparked what some are calling a constitutional crisis. You got the CIA on the one side, on the other side, the Senate intelligence committee, each accusing the other of hacking their computers. The intelligence committee claims the CIA has tried to sand bag its years-long probe whose findings now run some 6,000 pages. The CIA wants to know how the Senate committee got its hands on a draft version of an internal review.

Phillip Mudd is the man that I want to talk to. He is the former deputy director of the CIA Counter Terrorist Center. Mr. Mudd, your name or at least your title presumably would be all over that report. Do you want it released?

PHILLIP MUDD, FMR. DEPUTY DIRECTOR OF THE CIA COUNTER TERRORIST CENTER: Yes, I think it should be released. I think there should be a couple of rules about how we release. The report should be bipartisan. It shouldn't either side of the aisle. and if the CIA has rebuttal, which I suspect they would, I think we ought to allow that to be released at the same time.

But look those of us who have our names or our titles in there, it's going to be a tough time. But his is important for the American people to understand this era in American politics, the era of the war on terror. If this helps that debate at some point, I think it is OK.

SMERCONISH: When you say that it will be hard for the American people to interpret, are you really saying that it is difficult through 2014 lenses to evaluate the conduct of you and your colleagues in an immediate post-9/11 world?

MUDD: I think there are a couple of things that the American people are going to have a hard time like in this report in terms of interpreting it through the lens that I look at it. The first is the report is only one picture of the story. People like me weren't interviewed. I gather those who prepared it looked at documents, which is their right. So I'm not sure how much of a sliver this represents.

But as you suggests, there is one other big piece that we have to remember. That is as time goes on, history can remember the facts, history cannot remember the feeling of sitting at that table every night in 2002 and 2003 and saying what's going to happen tomorrow and how do we find out what Al Qaeda is up to? You can't replicate the sense of tension that I remember.

SMERCONISH: Well, I'm glad that you are bringing up the human dynamic from your perspective. Because I was wondering what ran through your mind in that era as you were sending detainees to CIA prison, CIA black sites?

MUDD: Boy, I remember a couple of things. You know, this story even for me is hard to remember. I remember one thing that we spoke about in the office. That is what we call the end game. We had detainees. We held those detainees not because we were jailors, but we wanted to understand what they would tell us about Al Qaeda. We knew that one day though there would be a reckoning and that we would be vilified. And that reckoning has come so we knew this day would happen. The second thing we knew though is that sitting there every night, I drove down from the CIA headquarters in Langley to my house on the GW Parkway, George Washington Parkway. In those days, the "New York Times" was carrying the faces of the fallen. I remember those days driving home saying "What if we miss something and a child grows up without a parent because we didn't do everything we could." So I'm not sure what we did was right. I'm not sure it was wrong. I'm sure other people might have done things differently but before you throw a stone, you better try to remember, it was tough.

SMERCONISH: Mr. Mudd, you've also written a book on the subject called "Takedown, Inside the Hunt for Al Qaeda." Was the White House, was the Congress in the loop every step of the way?

MUDD: Sure. We went to the White House and said, "Are these steps appropriate? That has been well documented." I know there are disputes with the Congress about what they knew when. I was among those who went to talk to members of Congress and told them not only that we were holding prisoners, but describe the techniques we were using.

Also, remember, we referred this to the Department of Justice and said we respond and report to those who create the laws of the land including the Constitution. Does this accord with the laws of the land? The answer we got from both the Congress and the Department of Justice was this accords with the laws of the land. This is not torture. This is acceptable.

SMERCONISH: Did the technology, the techniques, pardon me - did it work? Did you get the information that you were looking for?

MUDD: Sure, I think this will be the subject of debate. Because those who say it didn't work - let me ask you a question. We didn't try other options. So we don't know if other options would have worked. But over time, what we did was to take a million bits of information that we did not acquire from detainees. Things like electronic information, intercepts of Al Qaeda. We took other information from foreign security services and we matched up with what detainees said.

And when the detainees said things that we knew were true, we knew that we were on a track with the detainee who is compliant. So we did not take their word for it, we only took their word after we had established that they were being truthful. And I got to tell you when I started receiving that information in the spring of 2002 with our first detainee, Abu Zubaydah, that information was gold. It helped us understand an adversary that we did not understand beforehand.

SMERCONISH: And final question. It would seem like this dispute centers on the fact that the CIA now realizes that an internal review of these policies somehow got into the hands of the Senate intelligence committee investigators. Briefly, how should this dispute be resolved?

MUDD: It should not be resolved through courts and through references to the Department of Justice suggesting that somebody in the Congress did something wrong. I know that some of the people involved in this from the CIA side. Let me be clear, they are going to be attacked. They are being attacked. These are great people. These officers I work with, "A" plus. They are terrific. Once you get inside that beltway, you enter a snake pit. And that snake pit leads you to make choices and make decisions that I think sometimes with the passage of time, seem like choices you would not make in an environment that is a little less intense. Step back, take a deep breath. Let these reports come out. If the Congress wants to come out with a report that attacks the CIA, as long as it is bipartisan, that is OK. And if the CIA wants to respond, that's OK too.

SMERCONISH: Philip Mudd, thank you for your time. We appreciate it.

Stick around for more on the Flight 370 mystery. The newest leads and theories and our headlines redefined.


SMERCONISH: Headlines redefined. The headlines that got the story half right. First up, this headline from New Jersey court ruling blocking newborns dad from delivery room is first in nation. Here is how I would have written it. Common law. Not Sharia law. This is a case we lawyers call a case of first impression. Very interesting facts.

Unmarried couple in New Jersey, conceived a child, and then become engaged and then break off the engagement. As the delivery date is approaching, the father said "I want to be there. I want to be in the delivery room when you give birth to our child," which was a healthy born daughter. Mom says "No. We're not engaged. This is stressful. This is a high risk pregnancy. I don't want you in the delivery room." So they go to court.

The judge in the case is Judge Sohail Muhammed. He rules for mom. This is the opinion which I've had the opportunity to read. I thought it was a very thoughtful, very analytical, very precise opinion on the matter where there wasn't much case law on the subject. And then it occurred to me, hey his name is familiar. Why do I know the name Judge Sohail Muhammed. Then it occurred to me, he is the individual who was appointed by Governor Chris Christie in 2011 amid cries that if Christie put this Muslim on the bench, he might be inclined to imposed Sharia law.

Look Chris Christie has really been getting beaten up recently. I think he deserves the pat on the back for having appointed this guy. Because at the time, Chris Christie said that's a bunch of crap. He would never do such a thing. And you know what? Chris Christie was right. Because Judge Sohail Muhammed wrote a terrific opinion in this case.

Nora, give me another one. Oh, yes, this one. From "USA Today." Drug company changes course. Gives drug to sick boy. Here is the way that I would have written it. Drug company, no match for social media. I know you heard about this one. It involves a seven-year-old Josh Hardy who needed life-saving medication. That life-saving medication was in the hands of a drug company and initially the drug company was reluctant to give it to Josh Hardy. They really got hammered. The drug company did online for the initial refusal to give it to the seven-year-old boy. In the end, good outcome. He got the medicine. We wish Josh Hard god speed. But the drug company didn't deserve the black eye that they got along the way. I chatted about this case Dr. Arthur Kaplan. He's the nation's foremost bioethicist at NYU Langone. He said what people missed in this case is the goal of the drug company was to protect the other Josh Hardys.

In other words, the drug company's objective was to complete clinical trials that would have allowed the medication to get to market and they were concerned that being evaluated in this case would slow the process and would hinder their ability to help other kids. As I say, good outcome and we hope that Josh Hardy is now doing much better.

My read this week is on the Flight 370 mystery. It is a very real possibility that it will never be solved. Stand by for this newest twist in a bizarre story.


SMERCONISH: Sometimes the crash site is never found. That's the first line of an article at that grabbed my attention this week as the Flight 370 mystery unfolded. It's written by Sylvia Adcock who covered aviation safety and security for "Newsday" for almost a decade.

Sylvia, you say the search for the Boeing 777 is like looking for a 200-foot long, 500,000 pound needle in a haystack. And in fact this morning, we are learning -- take a look at this -- that the flight path may have been extended as far north as Kazakhstan and as far south as the southern Indian Ocean.

Are the chances of finding this plane diminishing by the hour?

SYLVIA ADCOCK, FORMER AVIATION SAFETY WRITER, NEWSDAY: Well, it would -- it would seem so. You know, the experts I talked to said that you would hope in an investigation like this that the search area narrows as you get more information. In this case, we find the search area is simply ever expanding the more information comes in. And that is indeed troubling.

SMERCONISH: Let's bring in Michael Kay. He's a retired officer with Britain's Royal Air Force and has flown many tours of duty in Kosovo, Iraq and Northern Ireland.

And, Michael, you've investigated crashes. What are you discerning as you're reading these tea leaves?

LT. COL. MICHAEL "MIKEY" KAY, RETIRED SENIOR BRITISH MILITARY OFFICER: Yes, Michael, with 3,500 hours, 20 years of experience, two boards of inquiry, you've got 43 ships, you've got 58 aircrafts and 14 countries still haven't found this. This is a truly perplexing situation.

What I would say about the previous comments -- I think Sylvia is absolutely correct in terms of the way that the area seemed to be expanding and making it more difficult rather than just zoning in on the actual problem.

I think one of the counter of the theories of going north or south is the problem of an aircraft going into another sovereign territory. Now in order to do that you need a flight plan, you need to communicate with the sovereign's radar services. So I think that's -- most sovereign territories or many sovereign territories have what is called a QRA, quick reaction alert, and there are defense fighters on the ground that will be launched to inspect any aircraft that doesn't respond to an interrogation on the transponder.

And that's what the transponder does, is it responds when it's interrogated. So I think if it's going to go north to Kurdistan, there would have been some sort of alert to a sovereign territory, whether it'd be India, Kurdistan, wherever it is. The alerted QRA fighters that would have come up and sort of seen what the blip on the radar was.

SMERCONISH: But that doesn't appear to have taken place.

KAY: Absolutely not. So I'm thinking it hasn't gone north, it hasn't gone south. It's probably more gone into a vast expansive ocean area where you don't have those interrogations, you don't have those QRAs.

SMERCONISH: Sylvia, what of that point that many military installations would have had to been flown over if this flight had gone as far north as southern Kazakhstan?

ADCOCK: Yes. I mean, that certainly seems the case that when you're flying over a -- over any sovereign country, you know, they're going to know what's flying over them for security purposes. And I don't think we've had any indication that anybody has reported anything like that.

SMERCONISH: Michael, you, I'm sure, are familiar with what the Malaysian prime minister had to say in the overnight and now the reference made to deliberate activity within the cockpit. Does it sound to you, based on the information that's available, including the times report today that perhaps that 777 reached an altitude of 45,000 feet that this was manned or unmanned at the time? Was someone flying that plane do you think for the final hours?

KAY: It is impossible to tell. I don't think we can take anything off the table. I think we've got -- we've got to consider the mechanical aspects, we've got to consider sabotage, we've got to consider a hijack. And it is looking more like the latter two, given the evidence. You've got four communication methods on the jet. You've got the emergency locator transmitters in the nose and the tail which are run -- set off by seawater.

You've got two distress radio frequencies on victor and (INAUDIBLE). All civilian aircraft listen to victor on 121 decimal 5, all military aircraft listens to distress frequency on 243 decimal uniform. And then you've got the ACARS. So you've got four methods and the transponders of letting people know that there is a problem on board.

SMERCONISH: And still it's not enough. You know, I delivered a commentary at the outset. It's hard for me as a non-pilot to come to terms with this because I think of the way in which I rely on technology on a day-to-day basis. And so I think like many of us we say, well, why the hell can't they find this plane? Why aren't they using the sort of functions that we get by day-to-day with?

KAY: Well, I think it goes back to Sylvia's point at the -- at the beginning as you're looking at the search area. And I think those detection devices and location beacon work very, very well in almost 100 percent of cases because people know, have a general idea where the crash site is because of the flight plan and all the rest of it.

Now that the search area is just expanded, you know, quadruply, it makes those detection services incredibly hard to pick up. And if you're looking at a black box at the bottom of a very deep ocean 3,000 miles away from where you think the initial search point is, it's going to be impossible to pick up.

So I don't think there should be a knee-jerk reaction here. I don't think that we should ground every aircraft and reassess the way that the locator beacons are positioned on the airplane and all the rest of it because I think there are secondary and tertiary systems that are there and work very, very well. This is just a very, very unusual and perplexing case.

SMERCONISH: Sylvia, there is precedent in the piece that you wrote for You spoke of a 1972 flight. Briefly remind us of what occurred.

ADCOCK: Yes. This was a flight from Anchorage, Alaska, to Juneau. It was carrying two U.S. congressmen. It took off. The plane was planning to operate under visual flight rules. And the weather was not really conducive for that. The pilot took off anyway and made some brief contact with air traffic control. And it continued on its way.

Now it's a Cessna, which is of course a lot smaller than a 777. The plane never arrived in Anchorage and -- I mean, in Juneau.


SMERCONISH: And was never found.

ADCOCK: And so the point -- and it was never found. Basically they -- the search area was 325,000 square miles. They searched for 39 days and like I said, there were two U.S. congressmen aboard which of course gave a lot of --


SMERCONISH: Michael Kay, very quick comment to that.

ADCOCK: And it was never found.

KAY: Yes. I mean, we've got to be careful not to compare apples with pears. This is a very small aircraft. It doesn't have the located transmission equipment 777 had. It would have been flying a lot lower, it would have been flying in mountainous areas. It may not have been picked up on radar in the first place. So there were a lot of differences between a very small -- the training of the crew, simulator training, all the rest of it so --

SMERCONISH: Michael Kay, thank you. Sylvia Adcock, thank you. Wish we had more time.

Conspiracy theorists, they're having a field day with the Flight 370 mystery. It's hard to take them seriously, or is it?


SMERCONISH: What do we really know of the fate of Malaysia Airline Flight 370? Conventional wisdom says the jumbo jet crashed perhaps after a hijacking but no surprise there's a growing body of speculation that's somewhat less conventional. Some are confusing this with an episode of "Lost" or think the ending is akin to the movie "Capricorn 1" which suggests that we never landed on the moon. They're pointing fingers at everyone from aliens to Edward Snowden.

Chris Cesar writes for the "Boston Globe" and He's been cataloging some of the craziness.

OK. What are some of the conspiracy theories that are in circulation?

CHRIS CAESAR, STAFF WRITER, BOSTON.COM: Well, I've heard everything from the Chinese kidnapped employees of this company that was involved with the NSA to a miniature black hole that came and swallowed the plane. So it's really a pretty wide and vast range of ideas out there.

SMERCONISH: You know what occurred to me after I read your piece, Chris, is that I can't think of an example where there was an enormous conspiracy theory that was proven correct. And despite the inability to look at anything historically, and say, well, see, that was one that panned out, people still gravitate toward these things.

CAESAR: Yes, that's true. I mean I think that there is a tendency for people to want answers. And when they see or are confronted with a big mystery like this are just trying to figure something out and some people just get really wrapped up in some really hare-brained ideas.

SMERCONISH: I tried to find out why that's the case. And yesterday, I did an interview on radio with Dr. Nicholas DiFonzo. He wrote a book called "Watercooler Effect." And he studies rumors. This is his area of expertise. And I said to him, Dr. DiFonzo, you know, why do we gravitate toward these things? And he said it's a twofold reason. We are social beings and we have this innate desire to make sense of the world. You put that together and, you know, at the watercooler, at church, wherever you might be, we're jibber-jabbering in trying to make sense of a cataclysmic event like this.

CAESAR: Absolutely. And I think it's only reinforced by the fact that we have the Internet and people can go out and basically find any news source to tell them what they want to believe and reinforce whatever ideas they have. So I think that makes a lot of sense to me.

SMERCONISH: But my hunch is because of the observation of mine that they don't seem to pan out, but my hunch is that movies and books play a significant role. I made reference to "Lost" at the outset of this discussion, or "Capricorn 1" which was a hell of a movie back in the '70s.

I think people start over time to confuse fact and fiction. Maybe they're remembering "Capricorn 1" or they're thinking about "Lost" and somehow they're confusing reality with fiction.

CAESAR: Yes. A couple of these conspiracy theories outright reference movies like "Oceans 11." I saw one theory where they believed that the plane was taking a sea landing and a few scientists on board were kidnapped by either Chinese authorities or Iranian authorities, or even North Korean authorities. So I think imagination does play a pretty large role in this.

SMERCONISH: Just a final thought, I -- my hunch is -- I hope we get to the bottom of this. I hope we figure out exactly what went on here.


SMERCONISH: If and when we do, I don't think it's going to satisfy the folks that you wrote in the "Globe" about with all of those different theories. It will never be enough for many of them.

CAESAR: No, I agree. I actually got a phone call from someone yesterday that took objection to the article. And he was telling me that he thought it was obvious that the American government took the plane down and kidnapped these people and, you know, try as you might to argue with them, they just have their own conclusions and they really don't want to hear any counter factual arguments.

SMERCONISH: Right. And there's such a certainty to their belief system.

Chris Caesar, thank you for being here.

It's a dirty little secret here in New York. OK. It's not much of a secret. The fat cats still think that greed is good. And now a new book is exposing a house of outrageous fortune.


SMERCONISH: If Sherman McCoy lived in Manhattan today, he would most assuredly reside at 15 Central Park West. You remember the McCoy? The protagonist in Tom Wolf's extraordinary novel "The Bonfire of the Vanities"? A real master of the universe?

Wolf's gift was in summing up an era through his description of McCoy and his environs. And now Michael Gross has done likewise by taking us inside the most powerful expensive, most powerful address in the world. The book is called "The House of Outrageous Fortune." And it concerns one Manhattan address that has housed the likes of Lloyd Blankfein, Denzel Washington, A-Rod and Sting and Jeff Gordon.

There are only 201 units. And one of them sold for an astonishing $88 million. 15 CPW writes, "Gross is the most outrageously successful, insanely expensive, titanically tycoon stuffed real estate development of the 21st century."

Michael Gross, joins me here now.

The book opens -- the book is terrific, by the way. Congratulations.


SMERCONISH: But the book open with a bidding war between two titans. Who were they? Who won?

GROSS: Well, Carl Icahn was the friend of one of the financial backers of the building and Dan Loeb was a friend of another. Icahn of course is the aging lion of finance and Dan Loeb is a younger breed of cat. Icahn wanted two apartments on the 39th floor, most floor space in the building, penthouses, but wanted to haggle. He didn't want to pay the price. $45 million. Loeb came in, paid the price, got the apartment. Icahn went ballistic.

SMERCONISH: Was this a new money versus old money or are they both new money relatively speaking?

GROSS: I like to see it as old money versus new money. I think that it represents two different points of view, two kinds of wealth.

SMERCONISH: What was the tipping point that made this the "it" building where people who were at that level, this is where they wanted to live?

GROSS: It was like a dog whistle. A whistle went off that nobody could hear but the richest people in the world, and they came like dogs in a pack (INAUDIBLE), wanting these apartments. And then of course, there was a masterful marketing campaign to make sure that the world knew that this was happening.

SMERCONISH: If you and I lived in steerage over there, if we paid only $1.7 million for our units do we get to hang with Sting? Do we get to hang with Denzel? Do they want to have anything to do with us?

GROSS: You have to take a separate elevator in the back of the building but you share the health club, the lap pool. The restaurant, the lobby, so, yes, you get to hang with them.

SMERCONISH: You know, in reading the book, I was thinking of Rodney King, oddly enough. Can't we all just get along? Because what's interesting is that there is such an ethnic mix in this building and there are so many different clusters in this building and everybody seemingly does get along.

GROSS: I call them the tribes of 15 CPW. The largest tribe of the alternative investment managers. But there are foreign tribes and religious tribes and economic tribes, and professional tribes, there are tech guys, bankers. And my favorite is the fact that we have Arabs and Israelis living in peace somewhere in the world.

SMERCONISH: Given the concentration of wealth and power in this building, security must be a concern.

GROSS: It is. Especially during the great recession when Lloyd Blankfein and Sandy Weill needed their own security details and there were elaborate procedures. People in the lobby, for instance, were not allowed to address Lloyd Blankfein by name. People were whisked through the basement garage to get out. And there was an Occupy Wall Street vigil right across the straight, only they called that one Occupy Goldman Saks because Lloyd Blankfein lives in a duplex in that building.

SMERCONISH: You made me wait until the final chapter to find out about A-Rod and the hookers. Let's hear it.

GROSS: You know, sex life on steroids. The boy had a very good time. Favorite story, two hookers coming down in the elevator while Cameron Diaz was going up. Go, A-Rod.


SMERCONISH: If I live in this building at a time of the holidays, how much am I ponying up for?

GROSS: It depends. You know, the average staff worker walks away with about $22,000. Some of them make up --


GROSS: In tips, cash, by the way. Some of them make up to $100,000. The super god knows they say he gets paid $600,000 a year.

SMERCONISH: And I guess the risk that you run if you're not -- and somebody gave 90 grand, right?


SMERCONISH: Sanford Weil?

GROSS: One year but then cut it in half the next year and they all got really grumpy.

SMERCONISH: Right. Because now they figured like, hey, we're entitled to the 90 grand.

GROSS: Exactly. Yes. Where's mine?

SMERCONISH: But if you don't pony up, then you run the risk -- I mean, look at A-Rod, even though you write that he left -- he was a tenant. He left that apartment in better condition than he found it but they didn't like him on the day --

GROSS: That's true. The realtor liked him but the staff actually called him a douche.

SMERCONISH: And that's what did him in. That's why you -- that's why you know the story.

GROSS: They don't mind telling tales if you don't treat them right.

SMERCONISH: You know what else is stunning about your book, Michael Gross, is that despite the amount of money paid for those units, those who have since sold, they're making a fortune.

GROSS: They've tripled in value in just a few years. Astonishing.

SMERCONISH: And one of the -- you know, I -- now that I spend time in New York City I can't help because of you walking by and looking up. And I see that a lot of the lights are off. How do you spend $88 million for a condo and not sleep there?

GROSS: When you have five houses and a private jet and a separate wardrobe in every house, you don't need to be anywhere very long. They come here for the season, when it's too hot where they live. There's an Arab prince who only comes during summertime in his native country.

SMERCONISH: And the $88 million unit, fair to say, that was a Russian oligarch presumably who bought it for his 22-year-old college student daughter?

GROSS: Apparently taking either a telephone or a computer extension course.


And I look up -- I look up every night those lights are never on.

SMERCONISH: Amazing. The book is called "House of Outrageous Fortune." You've really got a niche here in terms of writing about pieces of real estate and the stories that are lying behind the walls. So congratulations.

GROSS: Thank you. It's a great window into lives.


One last thing, it's about that interview "Between Two Ferns."


ZACH GALIFIANAKIS, BETWEEN TWO FERNS: I have to know, what is it like to be the last black president?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Seriously? What's it like for this to be the last time you ever talk to a president?




GALIFIANAKIS: I have to know, what is it like to be the last black president?

OBAMA: Seriously? What's it like for this to be the last time you ever talk to a president?

GALIFIANAKIS: It must kind of stink, though, that you can't run, you know, three times.

OBAMA: Actually, I think it's a good idea. You know, if I ran a third time it would be sort of like doing a third "Hangover" movie. It didn't really work out very well, did it?


SMERCONISH: One last thing. This was a real busy news week. The missing Malaysian flight, unrest in an upcoming referendum in Crimea, and intelligent smack between the Senate and the CIA. But among all the headlines there was only one that cause our 26-year-old daughter to e-mail me with a subject line marked, have you seen this?

What she wanted to make certain I had seen was the president's interview with Zach Galifianakis on "Between Two Ferns" at the Web site Funny or Die.


OBAMA: Have you heard of the Affordable Care Act?

GALIFIANAKIS: Yes, I heard about that. That's the thing that doesn't work. Why would you get the guy that created the Zoon to make your Web site?

OBAMA: works great now.


SMERCONISH: The president's appearance was part of the final push for as we approach the March 31st deadline for 2014 enrollees. This, too, quickly became a matter of controversy with some questioning whether the appearance was beneath the dignity of the office. Such concerns are nothing new. Richard Nixon faced them after appearing on "Laugh In." Bill Clinton, too, after playing sacks on Arsenio Hall.

This time Bill O'Reilly opined that Abe Lincoln would never have gone on "Funny or Die." That's true, but that's also because news in the late 19th century was disseminated by individually printed newspapers that were delivered on horseback.

A more nuanced approach is now the hallmark of any advertising campaign. Me? I thought the jokes on "Between Two Ferns" were lame. And I say, it doesn't matter if four million sign up, it's who those four million are.

The economic viability of the Affordable Care Act is dependent upon having a sufficient number of young invincibles enrolled to offset those who have pre-existing conditions. That was the target audience on "Between Two Ferns," not me, and not Bill O'Reilly.

No, the intended audience was 26-year-old Kaitlyn. And judging from her e-mail, the president hit the target.

Thanks for watching. Please come back next Saturday.