[Anderson Cooper, Cnn Anchor:] Tonight, breaking news involving President-elect Obama's chief of staff, Rahm Emanuel, and his connection, if any, to Illinois Governor Rod Blagojevich's alleged scheme to trade Obama's old Senate seat for campaign cash.Rahm Emanuel is not talking but CNN has learned new details about where he stands in the eyes of federal investigators. Joining us with the latest is Jessica Yellin. What have you learned?
[Jessica Yellin, Cnn Correspondent:] Hi, Anderson. I've learned from a source who's been briefed on the investigation that Rahm Emanuel is not a target of this probe. Now, that's significant for two reasons. First, because it's initial confirmation of something that Barack Obama said earlier this week, which is that he's confident none of his staff has participated in any deal-making. Clearly investigators believe Rahm Emanuel did nothing wrong. But it's also significant because presumably investigators would not notify him that he was not a target unless he had some contact with some of the people implicated in this case. So if you connect the dots, it does suggest that he may have been one of those aides who did make contact the Blagojevich's office. And let me underscore again that would not be surprising or unusual because, in fact, you would hope that the President-elect vacating a senate seat would have his top advisor reach out to the governor to ask about replacement for that seat. But we are not going to get more details about this until Barack Obama releases the entirety of his investigation. He is working at his own speed. And as we know, he takes his time. He doesn't move at our pace. We're going to have to get used to this. This is how he operates Anderson.
[Cooper:] All right Jessica, thanks for the breaking news. The Emanuel story comes on another bad hair day for the governor. His top law enforcer asking the state Supreme Court to declare him unfit for the office. Colleague calling him literally insane. And as if jealous of the light, his predecessor George Ryan from federal prison apologizing today for his crimes. As for Governor Blagojevich, he went to work today seemingly oblivious to it all when Drew Griffin caught up with him.
[Drew Griffin, Cnn Special Investigations Unit Correspondent:] Drew Griffin with CNN. Can you say anything to the people of the state of Illinois, sir? Do you have anything to say?
[Gov. Rodney Blagojevich,  Illinois:] I will at the appropriate time. Absolutely.
[Griffin:] Are you going to resign, sir?
[Blagojevich:] I'll have a lot to say at the appropriate time.
[Griffin:] Governor, are the authorities right in their petition that criminal complaint, did you do what they say you did? Governor? Just 30 seconds for anybody? For the state of Illinois?
[Cooper:] I guess not. Stay tuned for more on that. In the meantime, here's Drew with more on today's developments.
[Griffin:] In perhaps a sign he has nowhere else to turn for help, pastors of local churches showed up at the governor's door this morning, emerging to say they came to offer support.
[Leonard Barr, Fellowship Missionary Baptist Church:] We're here to have a prayer with my governor. He called me.
[Unidentified Female:] What was your prayer? What did you say?
[Barr:] That he continue to be a great governor. Stay the course.
[Griffin:] The governor waved to the press and waved off any questions on what he is going to do. At the downtown office building where the governor works, Illinois's attorney general announced she had filed a motion with the state Supreme Court to have the governor stripped of his power.
[Lisa Madigan, Illinois Attorney General:] We think it is very clear that he is incapable of serving. And we are certainly hopeful that the Illinois Supreme Court will hear this matter and appoint Lieutenant Governor Quinn as the acting governor.
[Griffin:] Behind the scenes, the legislature is gearing up to start their own removal procedures. Meeting on Monday, the House and Senate are expected to take up motions to strip the governor of his ability to name a U.S. senator to the vacant seat prosecutors say he was trying to sell. And Democratic House members are circulating this letter asking colleagues to join them in impeaching the Governor. But that will take time. Politicians agree the best thing for the state is for the Governor to resign. And while his accused chief of staff John Harris did submit his letter of resignation, the governor apparently is still on the job, working and not telling his press secretary much else.
[Unidentified Male:] People are trying to deal with today's issues as opposed to what's been going on this whole week.
[Griffin:] In the meantime, we still are waiting for the list of contacts between President-elect Obama's transition team and Governor Blagojevich's office. And also Rahm Emanuel, the chief of staff for President-elect Obama, continues to remain silent on his role in talking with Governor Blagojevich. Drew Griffin, CNN, Chicago.
[Cooper:] Now there's new developments as well concerning Jesse Jackson Jr., senate candidate # 5, in the government's criminal complaint but not a target of the investigation. Today the Chicago Tribune reporting that two businessmen with ties to Jackson and Blagojevich discussed with the governor raising at least a million dollars in campaign cash in exchange for Jackson getting the senate seat. According to the Trib, that meeting let to a fundraiser last weekend attended by Jackson's brother. Congressman Jackson denies any wrongdoing and met with Blagojevich on Monday, one day before the Feds arrested him. Today Jackson spoke out talking with CNN's Don Lemon.
[Rep. Jesse Jackson Jr.,  Illinois:] I've got a great name given to me by great parents. And I've got a great father who has a great legacy of public service.
[Don Lemon, Cnn Anchor:] But it's plain now what people say
[Jackson Jr:] It's so great, it's so great, that I named my daughter Jessica and I named my son Jesse. So I'm fighting now for my character and I'm also fighting for my life.
[Cooper:] More on that and all the angles shortly with our panel including former federal prosecutor CNN's Jeffrey Toobin and David Gergen as well. On now to the auto bailout next, for weeks, the President has resisted using money from the $700 billion financial rescue fund to help Detroit. Now perhaps as soon as this weekend, he's ready to sign off on precisely that. The reason, Senate Republicans last night snubbing him, voting against the $14 billion loan package he supported. And the reason for that, as you're about to see, is "Raw Politics." Here's David Mattingly.
[Unidentified Female:] On this vote, the yeas are 52, the nays are 35.
[David Mattingly, Cnn Correspondent:] It's kind of like a war between the north and the south. Senators in the south are saying no to bailout loans to carmakers up north in Detroit. Eight Senate votes from just these four southern states could have saved the bailout. Instead, all their Senators voted no.
[Ron Gettelfinger, President, United Auto Workers:] Regardless of their motivation, they thought perhaps they could have a twofer here or maybe, you know, pierce the heart of organized labor while representing the foreign brands.
[Mattingly:] Foreign brands in Kentucky, Tennessee, Alabama, and Georgia have spent billions on plants creating thousands of jobs. They are adding thousands more next year. Almost all southern states have right to work laws, no union membership required. By one industry estimate, non-union workers make about $3 per hour less than their union counterparts.
[Mike Randle, Southern Business And Development:] Labor is for an automaker their number one cost factor. But other factors, taxes, utility costs, real estate costs, they all factor in, in terms of the south being extremely competitive.
[Mattingly:] Talks to save the bailout deadlocked over Republican demands for United Auto Worker cuts in pay and benefits in 2009. But some say southern Republicans also practice backyard protectionism. This Hyundai plant was built in Alabama, taking advantage of more than a quarter of a billion in state and local incentives.
[Michael Robinet, Csm Worldwide:] By 2014, over 80 percent of total production in the south will be of companies other than the Detroit three. So that certainly tells you that they have a vested interest in protecting those companies.
[Mattingly:] A good way to illustrate how the battle lines are drawn is to follow the money. One nonpartisan calculation by maplike.org shows the UAW contributed an average of $7,400 to each yes vote it got in the senate. Compare that to the $147 it spent for each no vote and that's over a period of seven years. This fight started a long time before the big three bailout hit the senate floor. David Mattingly, CNN, Atlanta.
[Cooper:] Interesting. Well, do you think Senators were putting local politics ahead of the national interest? Let us know. Join the live chat happening now at AC360.com. You can also check out the live web cast for crew Friday during the break. Up next, our panel weighs in on the bailout and the senate for sale developments. David Gergen, and Joe Johns and Jeffrey Toobin. Also, the Obama's is asking for an earlier move-in date in Washington and getting rejected. Why can't the Obama's use a government house to live in so their kids can go to school? We'll explain. Later, one of the kings of Wall Street, the massive scam this guy is accused of running and the family drama that ended with his kids turning him in. And no sharks this time; just the fastest swimmer on earth. My "60 minutes" profile Olympic hero Michael Phelps and my race against the world's greatest swimmer tonight.