Outrage at AIG; Seizing Madoff's Riches
WOLF BLITZER, CNN ANCHOR: Happening now, the president lashes out at big, fat bonuses and a company that's been bailed out by taxpayers. One of his top advisers says AIG is so greedy, it could win a Nobel Prize for evil. We'll speak with that adviser. Seizing Bernard Madoff's riches. The feds are going after the luxuries the convicted swindler bought with stolen billions. We're talking homes, cars, silverware, even his piano. And the threat from Russian bombers, within striking distance of the United States, some fear it could be a sequel to one of the most dangerous standoffs ever with Moscow, the Cuban Missile Crisis. I'm Wolf Blitzer in CNN's command center for politics, breaking news, and extraordinary reports from around the world. You're in THE SITUATION ROOM. First this hour, outrage at AIG. This is how much the insurance giant took in federal bailout money from all of us to date. Look at this number, a whopping $173 billion. And now take a look at this number, how much AIG wants to give out in additional executive bonuses, $165 million. Listen now to President Obama today venting his anger and promising to crack down.</s>BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: This is a corporation that finds itself in financial distress due to recklessness and greed. It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers, who are keeping the company afloat? AIG has received substantial sums from the U.S. Treasury. And I have asked Secretary Geithner to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers healthy.</s>BLITZER: Let's go right to our White House Correspondent Dan Lothian, who's standing by. Dan, take us behind the scenes, because the president is very, very angry right now.</s>DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: He is angry, Wolf. And, you know, privately and publicly, this administration has really been trying to build confidence in their economic turnaround plan. So you saw the outrage building among the American people, the taxpayers over the weekend. And then, on the Sunday morning talk shows, more outrage as well. And so this president decided to do some tough talk. The big criticism now, of course, is why didn't this administration do more early on when they were making these loans to AIG? Wolf.</s>BLITZER: The question is this, can the president, even at this late date, block that $165 million in extra bonuses for these guys?</s>LOTHIAN: Well, legally, it doesn't appear -- it's pretty doubtful that they can do anything legally. It's not impossible that they can do anything there, Wolf. Two things that the administration could do or see in terms of getting that money back. First of all, AIG could voluntarily say, hey, you know what? We're going to give up these bonuses. Or the government could tap into this $30 billion that they extended to AIG. They could go in there, get some of that money, and restore that money to taxpayers. That's one of the things that they're looking at -- Wolf.</s>BLITZER: All right. Dan Lothian, thanks very much. And this just coming in to THE SITUATION ROOM right now. Let's go to Zain Verjee. She's got the story. A very angry attorney general of New York State as well.</s>ZAIN VERJEE, CNN ANCHOR: Right. Exactly, Wolf. Attorney General Andrew Cuomo gave AIG chairman Ed Liddy a deadline, as you know, Wolf, of just minutes ago -- it expired at 4:00 -- to hand over a list of who exactly is supposed to receive those bonuses, $165 million in executive bonuses, and just who specifically is getting how much. The attorney general threatened to subpoena Liddy for the information. This is the second fight, as you know, as well, Wolf, by the attorney general over bonuses. He requested the same sort of information of Merrill Lynch before the Bank of America took over. What he's arguing is that taxpayers are supporting AIG and deserve to have that information -- Wolf.</s>BLITZER: Zain, stay on top of this story. Thank you. Right now there's payback for Wall Street's biggest swindler ever. Prosecutors planning to seize some of the most lavish examples of Bernard Madoff's stolen fortune. The thousands of people he cheated have been demanding that Madoff and his family know what it's like to lose everything, like so many of them did. Let's bring in our Senior Correspondent Allan Chernoff. He's got the story for us. All right, Allan, what's happening on this front?</s>ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Well, Wolf, the government really wants everything that the Madoffs have. Ruth Madoff, Bernard Madoff's wife, has the bulk of the family assets in her name. Even so, legal experts say, the government should have little problem seizing it all -- the homes, the boats, even the family jewels.</s>CHERNOFF (voice-over): Bernard Madoff swindled investors out of their life savings. Now he's about to lose his. In pleading guilty, Madoff gave up more than his freedom. He agreed to forfeit anything he made off the criminal enterprise. That includes his four homes in Manhattan, Montauk, Palm Beach and France, all the fine art and furniture in them, worth nearly $10 million; a $39,000 Steinway piano; a silverware set worth $65,000; and Ruth Madoff's jewelry, valued at $2.6 million. There are four cars, two Mercedes, a BMW and a Volkswagen. And $17 million at Wachovia Bank. In all, more than $120 million in assets, most of it in Ruth Madoff's name.</s>BRADLEY SIMON, FMR. FEDERAL PROSECUTOR: It would be a little hard to separate her money from the criminal enterprise. At the end of the day, in my view, the government's going to take every penny.</s>CHERNOFF: Liquidating Madoff's company could raise millions more for victims of the fraud. But the total still amounts to a tiny fraction of the $65 billion that Madoff investors thought they owned. Victim Miriam Siegman believes Madoff must have more hidden away.</s>MIRIAM SIEGMAN, MADOFF VICTIM: I think there's a huge possibility that there are all kinds of accounts and there's money that has been sloughed off into other entities.</s>CHERNOFF: And the government says it's continuing to search for more assets to help victims recover some of the money they lost.</s>CHERNOFF: For good measure, the government told Madoff before his plea that it intends to seize more than $170 billion. Good luck finding that amount -- Wolf.</s>BLITZER: We're showing our viewers, Allan, a picture of Bert Ross (ph). I spoke with him. He lost $5 million in investments he made with Madoff. What can he and other investors like him expect to get back?</s>CHERNOFF: His best hope, Wolf, is the $500,000 that the Securities Investor Protection Corporation does offer. So far, they have sent out checks to only 12 victims. But I spoke minutes ago with the chief executive, Stephen Harbeck, and he says that they are going to be sending more checks out this week, and he hopes that it will all be finished within the year. It won't take more than a year, he's saying. But at least $500,000 to those victims.</s>BLITZER: Half a million, I guess that's something, but it's not $5 million, at least in Bert Ross (ph) case. Allan, thank you. Let's bring in our Internet reporter, Abbi Tatton. She's taking a look at the multimillion-dollar properties of Bernard Madoff and his family. What are you seeing?</s>ABBI TATTON, CNN INTERNET REPORTER: Wolf, $22 million worth of properties on both sides of the Atlantic. And we've been looking at it in Google Earth. Take a look at the penthouse apartment, first of all, in this building in New York City's upper east side. The value of that, $7 million. Then there's the weekend getaway in the Hamptons, just a few miles up the coast. This one valued, an oceanfront property, at $3 million. Plus there's a $1.5 million in contents and furniture. Another holiday home, down to Palm Beach, in Florida. This is the most expensive. It's got its own dock, five bedrooms, $11 million. And if two properties for your holidays is not enough, there's the more modest property in the French Riviera. Just $1 million for a condo there. But look what we found close by that the feds are also targeting, a $7 million yacht which is anchored just less than a mile away, one of fourth boats and yachts, Wolf, that Madoff is said to own. All of them named by Madoff "Bull," would you believe?</s>BLITZER: And that's what we know. Who knows what else is out there that we don't know?</s>TATTON: The list goes on and on.</s>BLITZER: Yes. That's a good point. All right, Abbi. Thanks very much. Let's check in with Jack Cafferty. He has "The Cafferty File" -- Jack.</s>JACK CAFFERTY, CNN ANCHOR: Happy Monday. The White House needs to make up its mind. Sounding a lot like John McCain did during the campaign, they said that the economy is fundamentally sound over the weekend. The president's economic adviser, Christina Romer, says the fundamentals are sound "In the sense that the American workers are sound, we have good capital stock and we have good technology." And she added that this is despite the mess that we're temporarily in, including huge job losses and a plunging GDP. After weeks of seeing the economic glass as quite a bit more than half empty, administration officials, including President Obama himself, are suddenly out painting a more positive picture these days. The president says he's confident in the economy that if we focus on the "fundamentally sound aspects of our economy, like the many outstanding companies, workers, innovations et cetera, we will make it through this rough time." Nonetheless, just a week ago, the OMB director, Peter Orszag said that, "Fundamentally, the economy is weak." And despite the optimism coming from the White House and Wall Street, which almost made it five up days in a row today, but wound up closing with a seven-point loss, there don't seem to be any signs that an end is near for the current recession. Fed Chairman Ben Bernanke suggests the recovery won't start until next year. So here's our question. Is it a good idea for the Obama administration to say the economy is sound despite the worst recession since the Great Depression? Go to CNN.com/caffertyfile and you can post a comment on my blog -- or not -- Wolf.</s>BLITZER: Welcome back, Jack. It's going to be another excellent week for all of us. An important U.S. ally is pulled back from the brink after rioting and chaos in the streets. Did the Obama administration prevent disaster? And in a nation that's armed with nuclear weapons, plus a shocking, shocking outbreak of HIV and AIDS to rival the deadly outbreak in Africa. And stand by to find out where the virus is spreading out of control right here in the United States. And even with all we know about the mortgage crisis and the damage it's done to our economy, believe it or not, mortgage fraud is rampant. You're going to be finding out if you have a strong chance of being a victim. That's coming up in our special coverage of "The Road to Rescue."