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tv   U.S. Senate  CSPAN  August 12, 2011 12:00pm-5:00pm EDT

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session. the senators are back in their home states for the august recess. they'll resume legislative work on september 2006. and now to live coverage to the senators here on c-span2. the presiding officer: the senate will come to order. the clerk will read a communication to the senate. the clerk: washington, d.c., august 12, 2011. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable jack reed, a senator from the state of rhode island, to perform the duties of the chair. signed: daniel k. inouye, president pro tempore. the presiding officer: under the previous order the senate stands in recess until tuesday, august >> so the senate has recessed. the chamber will continue to gavel in and out for brief pro forma sessions throughout the august recess. when senators do return on tuesday september 6th, they'll take up consideration of the judicial nomination of bernice donalds a judge on the u.s. sixth circuit court of appeals. following a final vote on her confirmation, the senate will
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begin work on a house-passed bill that overhauls the system. watch gavel-to-gavel coverage of the u.s. senate here on c-span2. >> so the house has approved the deficit committee members that was included in part of the recent compromise to raise the debt ceiling by law. the panel is required to approve a panel to cut $1.5 trillion from the federal deficit over 10 years through spending cuts and tax members. representatives jeb henserling, deb kemp, and pat toomey and on the democratic side representatives javier ba-sera, james clyburn and chris van holland, patty murray and mark bachus and for more information about the committee including bios, videos and related stories, visit our website at
12:02 pm and where he return mow to that panel discussion on the new media impacts on the court system. >> there may be circumstances under which it would be appropriate to have a very limited closure. but i would want to take -- i would want to take that under advisement and really consider that moment and the nature of the questions. and the point of voir dire where those questions were being asked to see if they're still relevant to the process before i would want to close that. >> all right. we will assume that means the motion is denied without precedence for individual circumstances. our friend the defense lawyer decides to try and go for a gag order. >> yes, absolutely. >> why? >> well, frankly, this is a thin
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case. this is a circumstantial case after the crime to arrest my client under suspicious circumstances though, frankly, and, unfortunately, have ever interest in colluding the jury pool with extra-judicial statements. [inaudible] >> maybe he'll fire me. [laughter] >> this is my first case. [laughter] >> so i'm concerned about extra-judicial statements from law enforcement and from the prosecution to try to secure a conviction on the thin evidence here in this case and so i think it's entirely appropriate to have a gag order that gags the lawyers and anyone who's involved in the investigation who has access to evidence where information may not be admitted at trial so i move a gag order.
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>> as somebody who runs for office every few years, how do you feel about a gag order in a high profile case? >> i think it's completely unnecessary in the situation. i think the public is entitled to see me at my finest hour. [laughter] >> but also, of course, the case law sets the bar very high for granting gag orders. many courts looked at whether there's clear and present danger or serious and imminent threat and i don't think we have a situation like that simply because this is a high profile case and i think it took a while to find the criminal. >> let me ask for a print reporter. you still get to be in the courtroom and you still get to watch the proceedings. what do you think about a bunch of lawyers spinning the case. do you agree with a gag order.
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>> i really can't cover this entire trial. i've together run from courtroom to courtroom. and i really need to be tipped off when somebody interesting or newsworthy is going to be there. so i need the tips. and i get them from the lawyers. that's where you go. so i need that. >> judge, what's your thinking? having heard arguments? >> if i could rely on the court information officer to tell me. [laughter] >> no, i'm kidding. [laughter] >> your honor? >> motion denied. [laughter] >> should i have paused a little more before i did that? [laughter] >> no. i think again -- i think one of the judges -- it might have been in one of the sessions when this came up used a great phrase saying, now we're in my environment in terms of controlling what's set. again, i think it's within the
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authority of the court to remind the defense counsel and counsel that you're officers of the court. that the case will not be tried. a motion to limit to counsel and others involved would be entertained throughout the proceedings should the court determine things are out of hand. again, i think i'd be very concerned with two things. one, uninformed speculation and the difficulty of the press in tracking what's going on at trial but also, frankly, in my experience the ineffectiveness of the gag order. by and large, those most important element that one might try to keep under control by gag order seems to be the first thing that needs to get out with the order and the court knowing we have 40 other things we got on the docket before we could take a break would have to spend an awful lot of time in
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violation of the order. and with ethics laws and come out and seen to the public. >> well, with respect to, your honor, i would like my esteemed colleague to my right would not be under an ethical obligation but a pain of contempt for talking out of school about this case and so i just ask you to reconsider whether you think the ethical obligation is enough given the abuses we've seen in cases like the duke lacrosse case. and i think my client's case is on par with that sort of case in terms of publicity and interest in the police and some of my clients. >> given i'm sure some of the remarks are made on side-bar rather than in open court -- [laughter] >> i would have two observations. one you haven't been in my courtroom before given your relatively new status in the legal profession. [laughter] >> and don't worry, i'll be watching. and the prosecutor is well aware
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of my opinion on trying the case outside of my courtroom. >> now that the defense had it handed to him on a motion, let's take a look at some of the media specific issues to the media. we now have before the court 150 media outlets vying for 10 seats in the courtroom reserved for the media. does this type of thing happen in your day job as court public information? >> in my real life, yes, it can happen. >> it does happen. there's competition and limited resources. >> absolutely. absolutely. >> and those issues become your problem for a public information officer. so how do you start to even get your arms around. >> well, my initial feeling about 150 motions for 10 seats is i'm glad so many people are interested finally in covering
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the things that happen in my local courtroom. and i would feel -- i would feel like -- while it's a big national case and so there's an interest in giving those 10 seats to the people who are going to be most broadly disseminate that information and i feel those people in the seats need to be the people who cover the court all the time, know the players and can give the most informed information about the proceeding. >> well, one of the people who's in the court most often is your good friend the print journalist over here. >> uh-huh. >> and they said i don't care what you do with the other nine, all right, one of those seats to me. do you take that into account? >> well, putting my feelings aside and the way i think the way things should probably be decided, i think it would be a
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randomized selection process. >> okay. >> this is one of my famous moments. having one of those valuable seats. but anyway -- [laughter] >> what's your thought bubble? >> my thought bubble is -- i'm sorry. the media is a surrogate for the public. obviously, the public can't be there. i have an incredible following. i am from the network with the highest ratings i can reach the most people at any given time from the broadcast area. i would advocate that the court make a decision based on a combination of reach. someone, for example, on the print side and the broadcast side and with the associated press where virtually every
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mainstream person in the country belongs to and also representatives from several high reach networks and i also recognize that given -- that there's some very well -- much followed bloggers out there and i think that the court should be very, very careful. and as a fallback position, i would ask if that's not possible if there's some sort of location system put in. and my final fallback position is this, your honor, there's intense public interest here. this is a big old courthouse. you got, you know, some broom closets and some old closets. i don't understand why you can't have an room with closed circuit capabilities. and by the way, if you have that, i can go to the bathroom and nobody will ever know that i
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got up and left and go get coffee and whatnot. >> we're going to talk about the auxiliary room in a moment. step out of your role of juror and probably the most seasoned journalist, the cooperation and pooling among the press, do you all play nicely together in the sand box in those circumstances. >> traditionally, no. [laughter] >> but the field is changing dramatically. >> traditionally, it was every person for his or herself. and, you know, you got access to a juror or you didn't want other people to get access and that kind of thing. in recent years, though, as the field is changing, so i think there's still a lot of competition but you have something that would be unknown years ago or you have news organizations actually sharing material. in florida you have the "miami
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herald" and the st. pete times having a joint bureau in the state capital so i think there's less of that wild west feeling that we all new and loved for several years in the field. but i think with something big like this you're going to -- i think the attitude of the print reporter who didn't care about the other 9 was lucy's suggestion, you know, i'm a big star. i better be there, that's going to come to the floor. and what makes this a lot trickier you have so many different forms of media. what do you do with bloggers and there's different kinds of bloggers and is it fair to completely shut out that part of journalism at the same time, are you going to be shutting out really big organizations with reach? i think it's a more complicated question than it used to be. >> shouldn't the pio also be looking out for the locals? shouldn't the locals have some sort of say, too? i mean, are we locked out. shouldn't the pio look out for the people that care about covering the courts day-to-day,
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people like me? >> it gives it to three people who really care about the local area and you give it to 10 national folks and you give it to a wire service. but can i step back into my real life for a moment? i went to the national judicial college with judges and what i observed is a trend toward judges making this the media's problem. and forming committees -- this isn't going on as far as the cameras coverage in wisconsin. this is what you got and you guys go out in a room and you figure it out. you got 10 seats. you handle it. and it gets a little bloody sometimes, but it gets the job done. >> i would argue that's the only way to do it.
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where is it -- why is it legitimate for a court information office to decide he's a legitimate -- [inaudible] >> when did that get started? so i think -- >> but it happens all the time for real life pios and that's the real life situation we're in. and we have to determine who's a legitimate journalist. >> let me give my real life perspective to counsel for reporters who cover the courts generally when i hear about these fights about the seats, i just grit my teeth because i would prefer to keep our powder dry for the issues of access that i know we're going to face in a high profile case like this and it really generally ticks off the judge for us to be fighting amongst ourselves. so -- you know, while i admire we do our best by the readers as a lawyer i know there's going to be a whole array of issues i would rather fight on the more
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important ones. >> and deciding who is a journalist and who is not, we have a motion from the online media because we haven't addressed this issue yet to blog and tweet on the courtroom. >> i'm ready. i'm ready. i got my laptop. >> why should you be given equal credentials to the media or our esteemed colleague over here. >> i'm a journalist. there's no difference between the two of us or the three of us. you don't know how many people follow me. you don't know how much influence my blog has on this community and people really deserve to know from a local perspective because you people are coming out of nowhere. i've got contacts and cultural contacts that helps me. i know the courthouse. i know the personality of the people involved and, you know, i know who they are. i can add things that you guys can't possibly know or
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understand because i've been here all along covering this court. i've got great information for the public that you guys just don't have. .. so, let me ask you court public information officer. who gets the blogger's seat?
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>> i'm a columbia j-school grad by the way so i would get the blogger's seat [laughing] well, i recognize there are bloggers and there are bloggers and i think the scenario here is, there's a johnny-come-lately blogger, somebody who this is going to be their first crack at it. i think in a situation like this where you have obvious high public interest, there a value having someone who is established. which is not to say in a different case, where somebody, where there is not a competition for space, that this guy can't blog from the courtroom. >> so the person who's blogging on a very well-funded blog but it is their launch blog doesn't have the track record of somebody who has got a more streamlined shirt-tail blog been doing it a long time? is that a fair way to compare them? is it just the duration how long you've been doing it? is it the metric of your
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audience? how do you make that decision? >> that's obviously a different situation but, in this case, i mean if you add those facts, i do think there's weight that goes on the side of longevity. >> okay. can i ask chief judge, as chief judge, does it make you uncomfortable having to draw lines between legitimate media, long-time media, shirt tail media and the like? >> well, we've been fortunate in the district court in d.c. in the really high visibility cases we have got the funds and the equipment to set up the auxiliary courtroom with a media feed. we can accommodate most journalists. most of the journalists would like to be auxiliary place where we set up where they blog and don't worry about going in and out and disrupting the court proceeding. we have to more tightly control the courtroom and
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the jury is significant and the jury may be disturbed by people going in and out. actually most of the media prefer two auxiliary settings we have. we have not had to make really very many judgment about bloggers and who is legitimate. we did look at this national blogging organization and thought about whether we should use credentials from them in order to determine which bloggers we would let in if they were competing with journalists and we really haven't reached that point where we've had that kind of decision to make. >> until now. >> until now. and if we have that decision and we have to make it we might be unwoman for theable but i think a journalism degree would give a little, certainly over crazy harry or whoever your next example is. >> how do you feel about that. >> crazy harry? >> a well-known, eccentric courthouse watcher gadfly. brooking he has been in the
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courthouse for years. heness what is going on in the community. i wants to blog from the courtroom. he bought his first laptop and i'm a journalisted. >> not from the courtroom. >> not from the courtroom. >> okay. we have -- >> in my other role, all bets are off. >> we, not to prejudge the motion that is going to be brought, what does the court public information officer's view of his standing, crazy uncle harry? >> what is the, we're competing for the 10 seats or is it just a question do they get to be in the courtroom period? >> we're competing for the 10 seats. >> i mean he's got no followers, right? he has never done this before. i don't, if we're competing for the 10 seats i don't see him in that courtroom. >> so he's not a journalist? >> he might well be a journalist but i'm not sure that is the basis which we're making the decision. >> so you would put him in the pool of journalists, you
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wouldn't deny his motion because he is not a journalist? you would put him in consideration as a journalist? >> i'm not sure, i'm not sure i get to make the decision about his motion, but sure, i would put him in the pool with everybody else. >> media counsel has been retained by crazy uncle harry. can you make a good faith argument that he is deserving of equal attention? >> good faith and belief. [laughter] i worked with judge lamberth. remember the straight face. you make the argument with a straight face. i would argue it is not for the court to discriminate among people on the basis of their experience how they're going to communicate and otherwise. crazy harry should be part of the lottery. if he wins, he is in the door, if not he shouldn't. media council asserting the rights of my client under the first amendment i think it is to discriminate on the
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basis of forum, to discriminate the way the commission is communicated is impermissible. i don't say it is appropriate someone use as piece of paper and someone uses a computer there is distinction that can be drawn. i would certainly be just part of the lottery like anyone else and not for anybody else to decide what is journalist. >> speaking for the crazy uncle harrys that started as stuch in a world, you're part of organized online media. >> you have to start somewhere, right? every blogger starts with one follower, his or her mom and you grow hopefully. as a real pio, i would feel for crazy uncle harry, especially if he is somebody that is constant around the courthouse. i mean, i think it is difficult because uncle harry may have some followers. uncle harry might have some, real talent in his writing, i don't know. that's a tough one. that's a tough one. when you have limited amount
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of space, to be honest what i would probably do, and i'm sucking up here because one of my locals is here, i would take care of my locals first. but, i would, i think i would include uncle harry somehow in the pool. i would try to accommodate uncle harry at some point say look, i will do my best to get you in for an hour and rotate you out ore something. as former journalist in real life who has gone over to the dark side as my former colleagues say i do try to respect the fact that all of these individuals, you know, have a role to play in the public discourse. so, you know, he is important too. >> what did crazy uncle harry do to you. >> i'm not a pot the plant here in words of my -- i would like to raise an objection to the practice of live blogging and tweeting from the courtroom. this debate is academic to me. blog, live blogging and tweeting runs the risk of spreading misinformation from the trial.
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it is broadcasting the trial. my understanding of the rules is that live broadcasting of court proceedings is prohibited in this jurisdiction. so i don't know why we're having this debate at all. i don't think there should be tweeting or live blogging permitted from the courtroom during the trial. >> live broadcasting as television and radio from blogging? >> no. i think they're practically the same. there is rule against broadcasting in this jurisdiction and, i'm concerned about the unedited tweets and blogs spreading misinformation that might prejudice my client's trial. >> i would argue that is exactly what i said is wrong, a violation of the first amendment. it is an attempt to discrime among people by the nature and manner which they communicate that is impermissible and improper. >> lucy? >> i'm, you know, i find myself really sort of agreeing with defense counsel. i've been trying to get my cameras into this courtroom for, what, 30 years now? and quite honestly, if they
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allow these bloggers and tweeters in there, and they're not going to allow cameras that is travesty of justice. there, that is only way you wan describe it. what's next? they will have little life feed they will put on and only see on the internet but just because some, big media companies want to put it on the airwaves there is something bad about it? i think that's a completely unprincipled stance and we're just going to have to continue to fight this. >> let me level the playing field then for a second to address lucy's concern and maybe aggravate eric's. this is now a jurisdiction that allows the judge to let television cameras in at his or her discretion. there is now a motion by the tv news media to permit live coverage and live streaming over the internet. do you feel better, eric? >> do i feel better?
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>> yeah. >> no, i don't feel better. >> bloggers differently or the same or anything? >> no. i have concerns about cameras in the courtroom. >> why? >> i, i'm concerned that the witnesses are going to play to the camera. i'm concerned that they are going to be afraid to be candid if they're being broadcast everywhere. and again, i appreciate and respect the job that the media has to do but i have a client whose liberty is at stake here and i can not risk a fair trial for him and i'm concerned about the way witnesses and the other participants in the trial are going to conduct themselves if there are cameras in the courtroom. so i object. and i sort of have the feeling my prosecutor here may agree with me on this score. >> well, even though i love the idea of myself on tv, i again, that is a thought, i'm not sure what will happen to my witnesses if they are on, in front of the cameras. so i'm going to not oppose
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the motion. as much as i regret it. >> the two of them are in cahoots to keep you and your cameras out. >> you know, i can't believe that it is 2011 and we're still having this conversation. you know, 30 years ago, cameras in really, really big and everybody complained, you couldn't have the cameras in your courtroom because they made noise and they were big and they were distracting. right now i can put a camera, your honor, in a lipstick case. no one is ever going to see that camera. it is completely unobtrusive. there are so many states out there. there are probably more than 30 right now allow cameras of some sort. there is no evidence whatsoever, other than the unfortunate situation we had in 1995. the or as bruce collins once said, the late unpleasantness. the, there's no evidence that having cameras in a
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courtroom distracts or diminishes the ultimate verdict. and furthermore, we would be very willing to accommodate reasonable rules. we would be willing to not show the jurors. we would be willing to adopt, go along with rules that perhaps, isolated victims who might be dealing with, those that were sexually assaulted or something like that. we would agree to limited restrictions on some of the witnesses. we're willing to be completely reasonable about this, your honor. >> your honor, are you willing to listen to their reason against the wishes of both parties in the case? >> i'm inclined to agree with the, with the idea that really over time this argument of disruption and playing to the cameras has
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lost credibility. i also think, if i can kind of cycle back through, because i think it probably would be essential to consolidate all these motions impact ruling on one will impact the other. i want to take the media motions with regard to the issues we've been discussing all at one time. again what's, the purpose here is to insure that the public receives the best possible view from a constitution standpoint, unfettered by the government. first amendment right to report to the public as surrogates what goes on at trial. that they understand what is best going on in their courts. >> i thought the principle job you had was justice was done and a fair trial was had? >> i think the court would err on the side of profession of the defendant, first of all to a fair trial. i don't see those necessarily in opposition. so i would think that, if i were to, you know, really sort of bundle this up in
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one large order, i would want to, permit live television and streaming from the courtroom, in a manner to be determined so it is not intrusive, in terms of the equipment, lighting, disruption. i would hold blogging from the courtroom in the same manner again with a concern that, you know, if you're blogging and you have a lot of flair as you type or, this can not be again intrusive again in the process. but again it is part of letting the public know what is going on in the court while respecting the right to a fair trial. the auxiliary courtroom, in stepping out, in 1908 i was on the first megatrial, wayne williams child murders and we found the aux room to be much better than the courtroom. i would want to instruct the pio set up on half day process a lottery allows members of the media to come into the courtroom as often as possible without
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disrupting a proceeding. they get a sense, you pick something up. you see body language you don't necessarily get over the television feed. so that, again the goal here i think is to, again, most sensitive to the first amendment argument keeping in mind the court's responsibility that, one. great dangers today is, i think the idea that the public doesn't understand what goes on in the courts and they don't understand the system. the terms are sometimes arcane. the more light shown in that process ultimately does protect the defendant. we also ought to keep in mind when the founders created the system that we have, their concern wasn't so much the prejudicial nature of the presence of the press but the press, the public in effect through their surrogates being there to guarantee a fair trial, to evaluate distinguished counsel for the state and to evaluate the judge to make sure the trials were being done in fair manner. >> does that require you to televise them? there will be at least -- >> i think there is
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assumption in the 21st century that simply part of the pros sets -- process we now see information. 50 years ago it may have been novel. i think today it is part of the process by which we observe what is going on in our world. >> what about counsel's concern that it will impact the way witnesses conduct themselves? >> again, with some understanding of the difficulty of the judges who really do sit on these cases i think that is the responsibility of the court to insure that witnesses through, whatever means the court has, and they have great deal of power, is simply to compel witnesses to, and you know, instruct and compel and require that witnesses answer fully and completely under oath. i don't think, as a journalist, 2 i can step back to my day time job, that is my responsibility. i have a role i think as the first amendment argument was made. first of all i don't want the judge determining i'm a journalist or not based on anything. very learned arguments in favor of the shield law make
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a point not doing anything other than definitional decisions. am i functioning as a journalist. >> for benefit of the audience give a 30 second capsule of what you mean by that, the shield law. >> issue of creating a shield law, lucy, you're the pro here but i will summarize quickly, just smack me in the back of the head if i get it wrong, the idea is there privilege for journalist and that requires what is a journalist? i think that there's, long ago the public information officers had to go on, are you there every day? do you sell 50,000 newspapers or whatever. and i think under the first amendment that is an inappropriate mechanism. i understand the practicalitity of it i think it ought to be what is your function? are you conveying information to somebody else about something that is occurring particularly regarding governmental or judicial actions? i think we finally arrived, this has been a circuitous route to get this legislation through to say the least. i think you now have a definitional description rather than requirement of
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circulation or some other employment or degree in journalism or -- >> functional status versus a, or a function test versus a status test. >> thank you. >> court public information officer has other places they can go like shield law issues to look for guidance or the court itself? >> yeah. well in some states, some states, yes. may i raise one, i mean -- >> please. >> i didn't even think of this. this is the argument i would also give you. you know, your honor, if you don't let the cameras in the courtroom, i still have a story to tell, and i still have to figure out how to explain all my viewers what happened today. and to do that, if i can't have pictures of actual witnesses saying something, i'm going to have to go out an liar some consultants to come on the air and talk about what they perceive happens that day, comment, give their opinions about
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what happens that day. because i still have, you know, air to fill. and i would much rather actually show the public what actually happened, but if i can't do that then i'm going to show the same footage of the same perp walk over and over again and i'm going to be trailing witnesses down the sidewalk as they go to their cars because i have to show a picture of them somehow because, you know, i got a job to do here. it actually, i think be more, be kinder to the public, to just sort of give this dispassionate feed to show to the public what any member of the public sitting in the courtroom would have seen if they had been there that day. >> may i point out that the commentators will be former federal prosecutors? [laughter] [inaudible] only people on earth, not on television. >> i aspire to that [laughing]
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>> hate to be -- widespread unemployment but, again, it is persuasive argument. i think that really falls more into the nature of the kind of nature of programing as a journalist you should decide you want to bring about in a trial. you may very well have the live feed and still decide to bring your pundits in to comment over the live feed. i think that gets beyond the ability of the court to in effect consider. although again the education process is part of the court's, i think based on our 10 years meeting with judges certainly in the mind of a lot of judges maybe more so, more more so today of this necessity of really letting the public know what really goes on in the courtrooms, to reassure them, to educate them and sometimes i think engage them. >> perhaps the court pio might suggest to the judge that another option would be to consider allowing the press at a certain designated time during the day to come in and videotape
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evidence or take photographs of some of the evidence, would perhaps that might be helpful to the press and if you're considering, you know, again not allowing cameras in the courtroom. that could be another option that could be suggested. >> i think we were offered that option something back in 1980 and '79, 80, '81. after first plush, not many people took advantage of it. the evidence there was circumstantial as it is in this case and there wasn't what was inanimate and television emotion, it just didn't even having a court officer hold somebody out didn't really attract much coverage after the first few on opportunities. >> well then there is probably little need for this next forum which is permission to have still photography in the courtroom but let's explore some of the boundaries of the court's authority. because the court sua sponte
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attached its own motions. want the address banning all photographing of jurors even entering and leaving the courthouse. banning the photographing the them in environs and parking lot. photographers outside to a designate zone outside across the street. counsel, what is your position, the court wants your advice. >> i have no objections to the motions. >> i'm sorry? >> i have no objection to the motions. >> thanks for your help. >> a bubble, i don't want to be seen as not protecting the jurors, otherwise they might side with my esteemed brother at the bar. so, i'm not going to object either. >> okay. >> even though i know the law is contrary to the -- [laughter] >> [inaudible]. do you need protecting?
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>> i think in this case that's a very good idea because this is very sensitive case and, there are a lot of dicey issues here and i'm kind of, you know, asking a lot of us to sit in here and decide the case like that. and i think the more the court can do to protect us from, from scrutiny i think it is a very good idea. and i understand that the press and the right to know and all that but in a case like this, as a juror, frankly i'm sitting here, i'm more worried about myself and my colleagues and keeping, protecting us. so i think it's very appropriate. >> well, sometimes, at least from what i've seen, some of your colleagues on juries actually hold press conferences and want to go out and talk about their role in the process in a historical moment like this trial. >> that's very true. there are all kinds of jurors and but i think this is, this case in particular, i think some of the sensitive aspects of it, are
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really why, as a juror, i'm concerned in this case. there are other cases where i don't think i would be but give the passion in the community about this and, the sensitivity to issues i feel, i feel a lot better if that were the way the judge would rule. >> print reporter, are you going to be missing much is your newspaper going to be missing many photo-ops? >> i'm getting a good story and people to read it i need a picture, especially if i'm going to make page one. so i like pictures and it is my job. so i'm going to try to get the photographer to take picture of anybody they can. roger clemens coming in and out. i want his picture. i want it to go with my story. anybody else i can get who will be a notorious witness i want their picture because it will enhance readers to look at my story if see the picture. >> because it sells newspapers and or in the public interest? >> it is in the public interest more people read my story
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[laughing] >> esteemed media counsel, what is your argument to the court? >> first of all paragraphs two and three 3 flat violations of first amendment. it is not even close. good lord, prevent tourists taking pictures too if they walk by? number one to put on my judge hat for a second, rule number one being a judge don't issue an order you can't enforce. how in the world will you enforce this. you made a fool of yourself. in banning photographers and jurors, there is not any danger to the people. not -- other notorious cases where we had justifiable concern anybody would come after them. they are performing a public duty. and they're entering and leaving the courthouse. my view, the restriction can not be justified by any interest that involves a first amendment right to take those pictures and use them by my client to illustrate a story. >> your honor, the judge is ascribe to counsel's view? >> i think view two and three in the same fashion. i can issue the order.
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it may be overturned. counsel for media will run as quickly they can and should to another courtroom and get my order, if i try to enforce those. i would just sort of note that the difficulty again here of technology is going to complicate, number one. because with new facial recognition software, we're talking about facebook, whether it is open to this person or that person, i can take a picture of anonymous juror, run that through facial recognition software and my understanding is have a very good chance of relatively short amount of time knowing who that person is. so it's, i don't know that it is insoluable. courthouses that might have, but you get, you get into really impositions on jurors and artificial restraints. i mean do you bring them in and out in a closed bus with a curtain over the entrance? will we be reduced to that? i honestly don't know the answer to this because technology is outpacing so many of the traditions we've had and the ability as you
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say of the court to even enforce an order if for his own client. i honestly don't know the solution to number one because i think it is a way around it today that is relatively inexpensive and very effective. >> [inaudible]. >> thank you. courtroom deputy, number two. well, let haste talk about other alternatives then. what about, i'm looking for one since we're on limited time here. what about a request from the jury foreperson to be able to sneak out of the courthouse, to leave the courthouse through the judge's entrance, to escape the wolfpack of the press outside? would that alleviate your fierce, charles? >> as i said before, i like the, i like that broader request. if that is not going to be the case i would feel a lot better about things if we could not be hassled as we left. we've got a lot on our mind here.
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we want to do the right thing. i just don't want to be subjected, you know what the press is like. i would feel a lot better if there were a way to kind of sneak us out without subject us to that. >> would you be amenable to helping them with that? would you go to the judge first? what would you do as public information officer if that request was made to you. >> i think so, as the public information officer, i interface with the public and hear complaints and complyments about jury service and certainly wouldn't want to do anything to discourage jurors from participating in the process. and so, in a high-protrayal case -- high-profile case if the foreperson came to me with a request i would certainly take it to the judge. >> is there an issue for you?. >> no. i would point out as a bit of knows tall ga, mr. moderator, i recall, i have covered a lot of trials in my life and one of my favorite judges of all time, the late edward devit, used
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to solve this problem by locking me in his courtroom. >> giving you a suggestion. >> [inaudible]. >> it was the area where near our courthouse where the all the journalists would sit and known as monica beach. their only job was get people coming out. grand jury. one guy get the coffee. one guy get the doughnuts and they sit there all day. it was called monica beach. >> since we have a couple minutes left i want to just open up to the audience for any questions of our panel, either in their real capacities or play capacities here today. anybody have any questions of the panel? looks like we covered the map then. panelists anything else you would like to say before we adjourn and you get back to your day jobs? >> if you would indulge me for a minute. linda deutsch, the most esteemed court reporter in the country is sitting here in the audience. she has covered every major
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california net case trial since -- [laughter] i would really be fascinated in, linda, you give us three thoughts on what happens, what we're talking about today. >> well, i am still very concerned about the issue of bloggers. and i don't know where we stand on it. i know that someone who is a layman, who has views on medicine can not describe, they can't go online and give out medicine. as somebody who is interested in the law like myself and in the courtroom and practice law, again people who think they have an expertise in journalism, can go out there and represent themselves as journalists and have have legal representation if they get in trouble doing it. i find that totally puzzling and i would love to know from you where we stand on it? >> well, as you know, unlike lawyers and everybody else,
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journalists are not licensed and, you become a journalist by becoming journalism and we, reporters committee have had to evolve and recognize that when someone calls and tells us that they were in a courtroom doing journalism, they were coughing a trial, they were doing something to editorially and disseminating it to an audience, i feel an ethical obligation to help them out. and do i, and quite honestly, lately i've been very grateful they were actually there because most trials don't get covered these days. >> [inaudible]. i might say technology is concern that i have about cameras in the courtroom with life feeds and we're -- entire trial. one of my admonitions as a
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journalist who covered trials for a living for a time would be, okay, but you don't get to say you watched the trial unless you only go to the bathroom when there's a recess. because i find people dipping in and out of coverage and yet they have a scenes they have seen the entire trial. they will watch the dramatic testimony. boy, when the seven hours of fiber testimony and verification comes up they bail and they come back and they don't -- as it was in the williams trial, could be a determinant factor. and they don't have the sense of that. why are they being, why is this strerd that verdict? so i have to even though i would have to say i favor the transparency of it the education of the public needs to be you didn't see the whole trial and pay attention to the people who did. >> right, absolutely. >> can i say one last thing? >> please. >> judge gene looked remarkably judicious, did excellent job. i don't agree with all of what he said but most i do.
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[laughter] >> [inaudible]. >> on that collegial note, thank you all for being good sports today. thank the panel. thank you for coming. [applause] >> we're going to have, i suggest you hold your seats for just a moment. we're going it have come up and repeat the foregoing. like in football, i call an audible. as professor abe programs give his -- abrams, gives his critique. we'll get out at 3:45. as floyd makes his comments and observations perhaps they could be interactive. i don't get a lot of time with floyd even though he is on my board. he has a brilliant mind. everybody knows his career, we'll hear more about that from roy eastburg.
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if there are no objections can we do it that way. >> sure. >> unfortunately i have a jury waiting. the guy is in sell block. >> let's go ahead and adjourn the panel and get floyd up here after the introduction from mr. roy eastburg, who is like me, a graduate and lawyer at the law firm of davis, wright, tremendous main. roy will come up and do a quick introduction, if members of the panel need to exit, that is absolutely fine. those who can stay, please do. and we will rather than taking a break, adjourn the entire conference closer to 3:40 rather than 4:00 if that is okay with everyone? okay. roy? >> thanks, ben. the well the good news i will be quick, everybody. i told ben when he invited me gave me the easiest job of anybody speaking today because i'm introducing somebody that everybody in this room and everybody who
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works in the intersection of media and the courts already knows and knows well, floyd abrams of cahill, gordon and rendell. if you don't believe me everybody already knows him, do what i did and google mr. first amendment. with the exception of couple honorable mentions like less than honorable mentions like rod blagojevich, pretty much every single hit going back decades leads you to floyd abrams. everybody is left to fight over the title first amendment guru which is marginally more democratic in only 3/46 the hits go to floyd abrams. he is mr. first amendment for good reason. over the last few decades he arguedly literally dozens of nation's most important first amendment cases. i won't list them for you but because of the reasons we're here today i will mention a couple that are near and dear who cover the courts. first is the nebraska press case which he argued with
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barry, jr., led to quotable boilerplate we put into briefs. prior restraints on speech are most serious and least tolerable infringement on first amendment rights. other one is smith versus "daily mail". which in nye mind clearest exposition of the idea that the government may never punish the publication of truthful newsworthy information lawfully acquired. these cases are quoted in more or list every brief dealing with gag order, another prior restraint on the press. depending whether you're reporter or lawyer making these motions or judge receiving them you can thank or yell at floyd after his speech. but because i don't really need to introduce floyd, i'll tell another story. i don't know how many people are familiar with something called the mindset list? boyd college does this thing every year. sort of explains what the world is like for its college freshmen. they did this thing, class of 2014, czechoslovakia has never been a country where people are coming from.
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the class of 2005, e-mail always existed, that kind of thing. i will tell you what it is like to be relatively young lawyer growing up in a world where there always been a mr. first amendment and always been floyd abrams. when the citizens united case was argued in 2009 i was relatively young lawyer along with a relatively couple young lawyers was writing amicus brief on fairly narrow issue in that case. arguing essentially that the government's construction of the press exception was a little too narrow in that case. we were pretty sure we were right. the government was overreaching. i think fair to say morale was low. politics of the case as everybody remembers were nasty. movie was terrible. and lawyers and judges who we liked and respected an awful lot were telling us the ftc was totally within its rights to regulate this documentary. so i can't tell you how it made us feel, how happy we were to get senator mcconnell's brief in the mail, written by floyd and susan buckley his fabulous partner at cahill.
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i still remember the last line the not the least because i rip it off every chance i get. the opening sentence of the conclusion, sometimes a case helps us see just how far off the constitutional course congress and prior rulings of this court have taken the nation. this is one of those cases. and it was moving for a couple of reasons. first, i think those two lines crystalized in a really sort of, in a really efficient and a really sort of hard-hitting way the intuitions of a lot of people about what the government had done but more than what it was said it was who was saying it. for three young lawyers who were writing this brief the fact that floyd aprograms, mr. first amendment, agreed with us, how wrong could we be? it reminded me of something that florida loss if i professor of mind used to say about aristotle. it is not that he is never wrong. it is a safe assumption that he is right unless you have good information to the contrary. sadly that is terrible advice as to aristotle i can
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report. but happily not bad advice as to floyd aprograms. -- abrams. with that i introduce him. thank you [applause] >> please, please don't leave the room [laughing] maybe we could working is out so we can hang out together and you could introduce me. [laughter] thank you very much. you have heard this great panel talking about all these issues and, i'm not going to use my time to sum up, let alone to resay what they have said. i'm reminded of a time when i was in college and robert frost came to get a speech -- give a speech. great poet. read some of his poetry, talked a little bit and asked for questions. the first question was from
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one very brave and very young student who said, what were you trying to say when you wrote such and such a poem? and frost glared at the student and said, you want me to say it again less well? [laughter] so, i'm not going to repeat what's been said here today. i did want to offer a few general views and where i kiss a -- disagree with the tone of the what's been said to comment on that. i'm struck by the fact that at least i sort of categorize the various motions that we've been talking about today and the various issues and in three categories. everything is in three categories.
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and i do it almost in terms of the time, the time in which different issues surfaced because of the change of technology. a significant amount of what we talked about today could not have been talked about 10 years ago because it is all based on new technology. the existence of the internet. the existence of bloggers as such. the need to make judicial decisions about what to do about, how to treat bloggers as opposed to, and many people would still phrase it, as posed to, quote, journalists, unquote. that argument persists. indeed if i have one noted disagreement with the tone of the panel as a whole it's
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that there was such agreement on the proposition that bloggers are per se, journalists and the law is to same as to them and should be that i think it overlooked a significant body of disagreement which exists, sometimes on a subliminal basis but nonetheless, exists in the press itself. that is to say, there are a lot of press lawyers out there and there are a lot of editors of the old press who really don't agree with the notion that bloggers are the same as they. i happen to disagree with them. i agree with the panel but i simply want to point out that, that issue remains alive for them. i remember doing an argument just a few years ago in this city singularly unsuccessful
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argument. notably unsuccessful argument. [laughter] seared in memory of arguing that a journalist ought to have first amendment protection for her confidential sources. . . could start a website.
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that's the way it was phrased certainly in preparing to argue. and, of course, a judge in a very probing manner you could say his voice was raised asked me very early in my argument what about a blogger. are you saying that every blogger in the country can keep secrets? can refuse to reveal information and i gave an answer that was very similar to what our judge, the judge on my left, the mock judge on my left had to say today, which i thought it was a matter of the function played by the individual. a person gathering information for dissemination to the public, i argued, should get that
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protection regardless of whether the person was employed by a newspaper, magazine, television station or not. to which the response of the judge was, do you know how easy it is for someone to become a blogger? you can do it in 2 seconds. it's nothing. you're saying everybody gets the privilege. i really understand. i get the point, you know. [laughter] >> it's not a new thought. they didn't say that but it's nice that i get a chance today to say it. but my point is that issue is still an issue. when congress sits down to draft the federal shield law, one of the main stumbling blocks is the issue who are the journalists?
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who get the protection? and members of congress ask the same question that i was asked. are you really saying that everyone -- even if you add on as i put it, everyone who gathers information because the person wants to put it on the person's website can promise confidentiality? it's a hard question and it's an example, i think, of how -- call it modern technology makes some arguments more difficult than they were in the past. indeed, one might argue that the development of this new technology has made it less likely that the press as traditionally defined will receive certain, quote, privileges, unquote, that they argued for. that said, it still makes sense
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to me to treat the same people in and out of employed status as journalists -- people who -- one friend of mine once put it money in the high 2 figures are -- are no less entitled to first amendment protection than others. and i think that is in all likelihood the way the law is going. what does that mean is that no one gets the protection rather than giving it to everyone is a very, very live question. now, when one addresses some of the issues that were raised here today in terms of what i would call new technology, facebook --
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i agree with judge lamberth. i don't think the panel was sufficiently sensitive to the privacy interests of jurors. i think there's a very strong and indeed a compelling argument. it's one thing to draft a citizen off the street to come sit on a jury. it's something else to say that a juror has to open up his or her facebook to the world. to me it's not that different than 100 years ago if somebody demanded that a perspective juror brought his or her personal diary. it's true facebook has a public quality to it but we also know it has a private quality to it and it can certainly have a
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private quality to it. so i don't think it's so easy to say or so persuasive to say that simply because facebook might reveal bias, say, and indeed it might, that, therefore, there's a legal result ought to be that facebook be made -- that facebook access be made available to counsel let alone to the world. i don't think we would easily agree to the proposition that -- what wiretapped transcripts ought to be made available of perspective jurors just because who knows what might be on them? now, that said, i think that the
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areas which are not so new are ones which had also been affected by what is new in technology.
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ought to protect and allow
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people to have can be used or misused by the reader, by the person who watches by the person who becomes enthralled by what's on. i was struck by what was said about jurors here in terms of protecting them. i don't think it's a very close case. i don't think it's a hard issue. about letting jurors in very high publicity cases go out by the back door or trying to find some ways in certain cases and actually very few cases to protect them. i feel sorry for the jurors in the anthony case, who are, i assume, sitting in their homes awaiting for the time to run out by which their names will
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finally be released. but again, like the oj case, that one was so extraordinary, so atypical of television in the courtroom and of highly publicized cases, let alone of all cases, that i think we have to be careful not to draw large conclusions about what the law ought to be based upon those extraordinarily unique and atypical cases. the older sort of issues that we talked about -- older in the sense that some of them really go back almost the middle of the last century, issue of closing courtrooms, gag orders and the
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like are ones as to which the law has really developed highly degree of protection for the press and indeed for everyone. courtrooms are always open, courtrooms are rarely closed. closing a courtroom or the like, gag orders are the exception rather than the rule. and i think that should as well remain to be the rule as it is. so for my perspective then, i found the discussion especially
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interesting because it showed that in any kind of case, let alone the most highly visible and most interesting to the public case, there will be issues which arise and which a good defense lawyer, even if trained as a media lawyer, will raise issues such as indeed very often exactly the same as the ones that we heard talked about today. and on many of those issues where the claims of the defense are contrary to the interests, call them that, of the press or even of the values of free expression, the issues are close ones. we've opted, as a general proposition, for more legal protection here than any place
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in the world for the press. and for freedom of speech. and i'd just close by reminding how different we are from even a country as democratic and democratically rooted as england. it would be -- we used to say that in england they couldn't report the watergate because the watergate case, once in front of the courts, something that the american press could continue to report about, but which would violate a good part of english jurisprudence if the press continued to publish information suggestive of guilt of the defendants including information which might not be admissible in court, all of which is basically barred in the u.k. for being published, once there's a charge
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levied. not just the arrest which has occurred of some people in the recent scandal involving "news of the world" and the like. you know, so we -- the bet we have made as a society is one which says we will opt in favor of allowing the press to say more and to give criminal defendants more rights as we go along in cases to mitigate the potential harm. so to take the easiest example, we won't take the first 12 people out there and put them on a jury. we'll spend a lot of time going through question after question after question, all of which is
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unknown in england. they really get their jurors from federal courts also. i can speak freely. [laughter] >> there are some federal judges that can impanel a jury in any case in an hour or two. but that's not the case in most state courts. and it's not the case in my experience in a significant number at least of federal courts. but that's the -- that's the rule. that's the way it works in england. i mean, it is almost like literally saying, you know, you guys come up. you're our jury. very little questioning. and so we do things like that. we have exclusionary rules which are unknown elsewhere. we have all sorts of protections of defendants. but the one protection we don't
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give defendants is enforced silence by the press. and enforced silence within the public. and that is a vast difference in theory and in practice. i think it's one of the great american contributions, one of the great first amendment contributions that we can talk about stuff that has a high level of sensitivity including potential prosecutions, real prosecutions, ongoing cases. nancy grace is free to speak out especially when she's on television with my son. but even when she's not, and the
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commentary -- the ongoing commentary that accompanied, again, the anthony case would be unthinkable and again contempt of court in england and in other democratic countries. that's the bet we've made by having a sweepingly powerful and judicially enforced and often judicially created level of first amendment protection. so i thank you all very much for coming here. anybody on the panel has anything to say that they agree with me about -- [laughter] >> please feel free. any comments or questions? >> yes. [inaudible] >> the thing is you mentioned nancy grace at the end. and following the anthony trial there's been a lot of comments
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about the position of the tabloid tv commentators and how they literally campaign for casey anthony conviction and it really skewed of the impression of the public what was going to happen in this trial. i did not follow the casey anthony trial that much. i found the issues insignificant on a vast scale of what trials can symbolize. but as far as really a change in the tide of coverage, it appears that the world of the unbiased journalist is going away. and for me that's bad news 'cause that's what i am. but i just wondered from your perspective how this this changes everything from a personnel standpoint? >> i don't think it changes anything from a first amendment standpoint. that is to say journalists are
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allowed to be biased or unbiased. it changes things from a journalistic perspective. it changes things from the perspective of what the public sees. and what the public learns. but i don't think we would want legislators or courts getting involved in making distinctions as to who's protected by the first amendment based upon whether they have sound or unsound or sensationalized more nuanced presentations. but there's no doubt that one of the new -- newer things that has been happening is a level of ongoing commentary which is
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deliberately, knowingly intended to persuade the public of the guilt or innocence of a defendant. the coverage of the amanda knox in italy if you've been following that. no one will suggest that will influence an italian court, in any event. nor do i think that the judge who i think handled himself extremely well in the anthony case was influenced by what the commentators on television had to say. that's why i referred earlier to the proposition that, you know, if things were to get sufficiently out of hand, what some would call almost public incitement had occurred, that it
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could impact badly on the success of those of us and many of us who are in this room who have sought to persuade legislatures that there ought to be more rather than less right to televise trials or to televise hearings or to televise appeals or the like. so there has been a change. and as i say, i don't think it ought to affect -- it won't affect the law in terms of first amendment protection. whether it affects the law in terms of whether we have more or less coverage by television is yet to be seen. anyone else? yes. [inaudible] >> what the federal judges are going on. i realize that there are many methods of selecting state court judges as there are states but
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many, of course, have by general election and the attitude of judges who are appointed for life regarding allowing public -- publicity and media into the courtroom is, i think, greatly colored by that status as opposed to state court judges particularly when an election is imminent. it seemed to have a different view on allowing the media into the courtroom. and has that been your observation as well? >> i haven't seen that, but i wouldn't know it, really, as well as you. i live in a backward state which so rarely allows television it's called new york. [laughter] >> that i can't draw any conclusions about the behavior of judges.
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i've looked at it all where they were televised that the judges behave portrayed themselves really well. i had one judge tell me that the only difference he noticed was that he himself wore a blue shirt to court which he didn't use to do pretelevision. but in terms of whether it really impacts the decision of whether to allow cameras, i really don't know. i would say, though, that in some states like florida, where the presumption is in favor of cameras, i don't think it is so, that judges have sort of leaned over in the direction of allowing it out of a sense of
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personal gain of some sort. thank you all very much. [applause] >> i would if i may, i want to keep you for just a moment. we have about seven board members from the reynolds central courts of media. floyd abrams, lucy, david in the back, jeff in the back, walleter bush and linda deutsche. they all had the privilege of hearing what i'm about to say at a board meeting november the 10th and i'm going to ask floyd to just elaborate just a bit on the notion that in the near future, first amendment law may very well be made the plaintiff or impecunious individuals, what do you know about that? [laughter] >> it means that with new technology, the people who are going to get in trouble, the people who are going to get
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sued, the people whose cases are going to be great cases may not be the great newspapers anymore or the large television stations but individual bloggers. and that is all the more important to find a way to assure good representation of those people and to assure that the first amendment protection is genuinely available for all. one of the great things that occurred, i think, in the -- looking back on it, the last 30, 40 years of the last century is that the establishment press, as it was then, not directly viewed was willing to take very, very strong stances in court defending first amendment rights. that had not been the case before. there hadn't been that many
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cases before. but it had not been the case before. and it matters so much who the litigant is in terms of making law, making new law, affecting the development of the law. and i always thought the case would have been lost if the defendant had been "the village voice" rather than the "new york times" let alone if it had been dan ellsberg standing up giving a speech and reading from the pentagon papers. i think the police just would have come and taken him away and put in him jail. so it really matters who the litigants are. and i think the litigants in the future may be sympathetic because their individuals are impecunious or maybe unsympathetic because they're
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sort of unattractive whackos. >> [laughter] >> one way or the other we have to make sure that the first amendment protects them. [laughter] >> thank you very much. [applause] >> the unattractive whackos defense. we'll be out of here in 30 minutes. put a watch on it. the reynolds court and journal and they say don't have 10 ideas but have 1 and that's this and have others and things like this conference support it. i call on board members and i called floyd and he said to me, intake useful. he's just done this big old chevron case and make it useful and give the judge something they can use and i hope we've done that. if you're not a subscriber, this is a shameless commercial. [laughter] >> we charge $26 for this. that's pocket change.
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26 bucks. even in a bad economy we will take your business card, not even a check, write the number 26 on your business card. give it to eric robinson or to me or to denny marsh. last announcement and then we're out of here. if you're a lawyer looking for cle credit you got to fill out those silly forms or they won't allow us to give you credit. it's in your packet and you don't know where they are get another who is counting right back here and the final announcement before we adjourn is that danny marsh put this entire conference together with a help with other folks but mostly with her so give her a big hand. [applause] >> any other announcements? am i forgetting anything? we're adjourned. thank you for coming. [inaudible conversations]
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[inaudible conversations] >> as an aspiring journalist, i am already preparing myself for the very small salary that i'll be starting out with. >> to be a good journalist, you got to be disciplined enough to really put aside your bias and report the facts, the truth. >> the reason why people love fox news and like movies so much is because it's an experience. it's emotional. it's love. and it's hate. >> from the washington journalism and media conference at george mason university, aspiring high school journalists on ethics, the role of opinion and commentary and where they get their news and information in today's multimedia
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environment sunday on c-span's q & a. >> throughout the day today, c-span has live coverage of the iowa state fair, a key early stop for republican presidential candidates. earlier we heard from herman crane and speaking right now is tim pawlenty. a little bit later it will be newt gingrich and tonight at 5:00, michele bachmann will speak and on the drook side debbie wasserman schultz was invited to appear. she's serves as chair of the national democratic committee. you can watch these speeches tonight on 8:00 eastern on c-span or anytime online at and tomorrow we'll be live with more from iowa for the ames republican straw poll in ames and we begin with noon eastern for a preview program of the history and the impact of the 32-year-old event. it will be followed by the poll and speeches from the candidates and, again, that's live tomorrow on c-span.
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>> watch more video of the candidates. see what political candidates are saying and track the latest campaign contributions with c-span's website for campaign 2012. easy to use. it helps you navigate the political landscape with twitter feeds and facebook updates from the campaigns, candidate bios and the latest polling data plus links to c-span media partners in the early primary and caucus states. all at >> the senate is in the midst of their august break. watch book watch.
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>> every weekend american history tv on c-span3 highlights the 150th anniversary of the civil war. this week the new york city draft riots of 1863. >> this was fodder for lincoln's democratic opponents who fused the two things and said, look, you're going to go to war. we can't afford the $300. you're going to go to the battlefronts and die. and a emancipated black man is going to come and take your job for less money and you are family is going to starve while the rich stay home. >> the new york historical society hosts a panel discussion examining how the possible conscription of working class men led to three days of rioting and the lasting effects they had on the city. the civil war every weekend on american history tv on c-span3. >> and now former white house officials senior retired
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military officers and a former oil ceo take part in a simulated disruption of the global oil supply. they portray members of the cabinet giving recommendations of how to deal on an attack on a major saudi oil field. this 2.5 hour event is right pa of the national summit on energy security hosted by the group securing america's future energy and the electricification coalition. >> a member of the electricification coalition, cindy gasemi. [applause] >> good morning. i'm chairman and chief executive of a u.s. public company. i'm also one of the founding members of the electricification coalition. on behalf of all of us at securing america's future energy, s.a.f.e. and the
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electricification coalition, i welcome you to today's national summit on energy security. before i introduce mr. robbie diamond who will tell you about the oil shock wave, i just wanted to say a few words about energy security and the role of this summit. in today's summation we intend to examine how america's supply of energy is dangerously vulnerable and why urgent action is required is remedy this totally unacceptable state of affairs. let me explain. the entire u.s. transportation system is totally dependent on just one fuel source, that is
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oil. currently, there is no alternative. any disruption in the supply of oil will cripple our transportation system and create total chaos in our society. we, unfortunately, import 50% of the oil we need. most of this oil comes from the regions of the world which are unstable and usually hostile to the best interests of the united states. this morning, we will explore how vulnerable these sources of supply are. in addition to security concerns, we spend $300 billion a year to purchase this oil.
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again, people who are not friendly to the united states. this is a huge, huge transfer of wealth that has been going on for many, many years. the amounts of price of imported oil is not set by free markets. as you all know, it is set by foreign governments who actually own 90% of the oil reserves. therefore, it is not difficult to conclude that this total dependence on imported oil is a clear and present danger to the national security and economic civility of the united states. dependence on oil distorts american foreign policy forcing us to compromise on our values.
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oil dependence empowers foreign governments to impose unreasonable prices on american consumers. at $4 a gallon for gas, some american families are forced to spend more on fuel than they do on food. this current situation is not acceptable. for several years, the leaders in this room have attempted to bring attention with the importance of energy security. this summit is an excellent opportunity to draw attention to the threats caused by our dependence on oil and more importantly, to provide a forum to discuss solutions needed to solve our energy dependence once and for all. we've been talking about it for
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more than 40 years. we definitely do have alternatives, but we need to take the future into our own hands and act now. i hope this summit will spark action to truly reduce our dangerous dependence on imported oil. so without further delay, i would like to thank you again for attending the national summit on energy security, and i would like to thank s.a.f.e. and the electricification coalition for organizing this very important event. here's the president and the chief executive office of s.a.f.e. and the electricification coalition, mr. robbie diamond. [applause] >> thank you very much. thank you very much for coming. as you all know, this is a
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profound economic and national security challenge for the united states. when we first did oil shock wave in 2005, the price was pushing $60 a barrel. in fact, our first news clip for oil shock wave in 2005, asked if we were pushing the psychological threshold of $60 a barrel. unfortunately, in the intervening years, as we've worked on new scenarios and assimilations, we've seen $60 a barrel is the good old days. we've seen $147 oil in the summer of 2008. and when you look at the implications of what's going on in the world with rising instability, constrained production in many places as well as increasing demands on the situation appears bleecker. in fact, it's much easier than
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when we first did them in 2005. but there is good news. there's been great technological advances, whether it would be the profound find of natural gas in the united states, the resources we have in this country, fuel economy standards that were implemented by both the bush and the obama administration as well as the new electric vehicles on the road. i think there is some hope. the problem is time. and all these types of -- types of things that we must do as a country take decades, take billions of dollars and we don't really have that time. so we have an oil shock wave here which time is something to bring up. i just want to tell you four things about the simulation. number 1, of course, in any cabinet meeting, people will be under time constraints. so the president is going to want answers and he's going to want them now. information will certainly be difficult to come by in a crisis
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which isn't very different than many of these meetings. i would note that the -- that the scenarios, the members of the cabinets don't know the simulation before. they are walking into a situation as you know, no one knows what the breaking news of the day will be. and so they are unscripted. that these are all new scenarios that we have put together in the past several months based on world events. and as i said there are many scenarios and we're not predicting the future but just pointing out something that might happen. and then finally i would say that -- i just want to point out that the simulation is vetted by a group of experts. so essentially we work with people who come up with some ideas for how oil might come off the market. we vet those with national security experts. we then share that with people who actually trade oil in the markets and come up with prices if such a scenario happens and
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finally you'll speak with economists who run them through models to come up with the profound implications to our gdp, balance of trade and those kind of economic indicators. and really we are just -- i would say the circus masters in the middle trying to bring these together. with that, i just want to say thank you to the team at s.a.f.e. and at chris williams productions always does a wonderful job and particularly sam mory who has been running shock wave for several years now. and finally, i'll introduce you to the oil shock wave cabinet. thank you very much. ♪ ♪
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♪ ♪ >> welcome back to gnn the dour top reach of the attack against the world's largest crude oil processing activity in saudi arabia. although no one has yet taken responsibility, the assaults by a group of heavily armed attackers has apparently left the facility's water treatment and power generation utilities badly damaged and in flames. details of the attack itself are still emerging.
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eyewitnesss report seeing helicopters in the facility just before a series of explosions rocked the compound. the helicopters are reported to have initially been mistaken for saudi aramco equipment and may have had company logos. the whole attack apparently took as little as 10 or 15 minutes. meanwhile, oil markets reacted to the news with a surge in prices, exchanges in london saw their single greatest jump in history kicking off a chaotic day of trading in which officials apparently considered suspending in trading. markets in new york opened in normal conditions this morning. to help us make sense this morning we have standing in london our financial correspondent ali barrett. ali what can you tell us. >> there's been moments of real panics of financial markets, particularly of oil markets instability in the northeast and north africa have been nagging issues on oil prices throughout
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2011 but this attack really takes things up to fear and uncertainty. >> expand on that and help us give us is sense of context here. how does it fit into the world oil market and how significant is this one facility? >> well, simon, keep in mind that total world oil demand just recently hit 90 million barrels a day for the first time in history. and saudi arabia is, of course, one of the world's key oil producers. alone accounting for 10% or more of global supplies. uptake is the main processing plant for arabian light crude oil which is then exported along the east coast. at the time of its attack it was processing 6 million barrels a day. a majority of saudi output goes out. >> and does it absorb this kind of blow? >> under normal circumstances, simon, there is such a cushion.
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of course, it's within saudi arabia. they have been the world's buffer for so-called swing producer. this attack has raffled markets pretty badly for that reason. they fear with further violence or domestic instability within saudi arabia, the spigot could go closed. >> well, thank you, al irks, we'll be back with you shortly as we follow the financial implications of this unfolding story. we have with us a gnn correspondent in amman jordan who has more news on the situation in saudi arabia. what are you hearing? >> well, simon, among the more observers and analysts is more of shock and disbelief. it was considered to be one of the most oil securities in the middle east or perhaps the earth. and it has been damaged has shakened everyone here. it's a very sophisticated and well thoughtout attack against the heart of the world's oil
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production system. i'm being told that the attack badly damaged at least one of the town's three gas-powered generators. one compression train was ruptured and exploded causing severe damage throughout the ngl plant. one piece of good news is that critical infrastructure at the heart of the plant is believed to be undamaged. the multiple stairways was separated but restoring the plant to full capacity will take some time, perhaps a week or more. >> has anyone claimed responsibility for the attack? >> no, simon, no direct claims have been made as of yet. but speculation it was related to recent turmoil in the middle east is obviously rampant. and the governments of the gulf states have been highly aggressive in their crackdown of dissidents and extremist groups
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in some cases, resorting to violence. some observers here believe the attack could be designed to weaken the saudi monarchy. of course, the specter of sophisticated of terrorist groups like al-qaeda is of concern where leaders continue to openly call for the overthrow of the governments. there are certainly other possibilities. some observers have noted the potential for blowback against saudi arabia's ongoing incursion into shiite dominated area. and to prop up an increasingly unpopular monarchy there. for now it's all speculation. >> thank you very much. we'll be right back with more coverage on this attack on the world's largest oil processing plant as reports continue to come in. please stay with us. this is simon marks reporting
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for gnn. ♪ ♪ >> well, i want to thank you for assembling here on short notice. this is, obviously, a serious blow. we don't know what it's going to do to saudi production capacity. we don't know what it's going to do for how long. and, obviously, given the tight markets and the difficulties with our economy, the impact on our economic recovery could be dramatic. the president needs to be out there. he needs to be -- he wants to be out there. he needs to be saying some things that will calm the oil markets, give the american people a way ahead. his first opportunity to do that will be a press conference in about an hour. so he's going to want some concrete recommendations from us as to what he should say. he's got some specific questions we could -- we're going to get to and try to move through this
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fairly quickly. i want to first turn to the deputy national security advisor dave conover to give us an update. what do we know that we haven't just seen on the monitor? >> thank you, sir. i direct your attention to the powerpoint behind you. we really can't underestimate the importance of that take. as the generally accurate news stated they're responsible for 7 million barrels of day of crude processing to put that in context, the united states in 2010 produced 7.5 million bars day. so this is a very serious issue. we are gathering information as we can. and as spare capacity as you can tell by the cartel to manage prices rising oil demand has eroded that spare capacity along with the libyan unrest. the attack has significantly and
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in a negative fashion has altered the intake capacity for 2012. the plant will need to be shut down completely perhaps a week or more. our cia and doi estimates are up to two weeks but after that we assume even a loss of something like 2 million barrels a day of processing capacity would essentially eliminate the spare capacity. saudi is the swing producer. they are generally responsible for the spare capacity in the market. with global demand passing 90 million barrels a day in the fourth quarter there's been very little spare capacity outside of saudi arabia. as little as 1 million of notional spare capacity. so the outlook is grim. we're projecting shortages through march. production elsewhere in the
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kingdom is going to take weeks to come online and any further incidents could lead to very serious shortfalls. there are commercial stops available. and to some degree commercial inventoriless offset the shortages in asia. however, there is an ability working with iea for the u.s. and the ocd partners to call into stocks into use, public stocks. and the iea -- i want to be clear here. they cannot, of course, direct fuel anywhere but there would be an effort made possibly calling on the u.s. to release some of our stocks and then divert iraqi oil that currently flows to the u.s. east to deal with the u.s.-asian market. that's what we know today, sir. thank you very much. >> thanks, dave, very much. the president thinks he needs to
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address three particular issues at this press conference. he thinks they're going to come up. one is given the limitations and disruption of supply, what about the strategic petroleum reserve? is this something that we should do? how long do we do it for? that's one thing he wants to know. secondly, you know, we don't know whether this is the first of a coordinated series of attacks to go after the infrastructure, the oil infrastructure, and really put the global economy in the toilet, if you will. and so what are the other areas of vulnerability for options of enhancing security in those areas. he wants to be able to address that and thirdly, what are policy actions for impacting the price of crude oil and buying products in the short term? we can already see the price of oil is headed to the roof. what can we do to reassure the
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markets and reassure consumers and those are the things the president thinks we need to address. let's start with the strategic petroleum reserve and i think probably let me turn to the secretary of energy to kick off the discussions and give us a little bit of background on the petroleum reserve, the criteria and what are our options for at this point? >> well, in terms of overall with the strategic petroleum reserve this has been around for some 30-odd years. prompted after the oil embargo through the 1970s. it's a robust supply the world's largest supply of crude oil. it's in louisiana and texas. we've got about 700 million barrels stored. we have designed in such a way to have instant access to it within days. we can have all the way to 4 billion barrels a day and we can
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sustain that for a considerable period of time. the industry has gotten accustomed how to take that oil into their refinery system so they know how to mix the blend with their existing refinery designs. and if, in fact, there is a declared emergency, that's one of the conditions for the strategic petroleum reserve that is designed for emergency conditions in which there are feared shortages in which we're trying to make up for those shortages. another option is -- at the president's determination, another option is what you're talking about. in which the president can make that decision and we should not, however, think about the strategic petroleum reserve as a price offset. that's not what it's there for. because there are other sources of oil and if we start using this as a price offset we set a dangerous trend, i think, in the world markets. so while the temptation is always there, especially with
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today's spike, at this point i'd recommend we don't access the strategic petroleum reserve from a pricing standpoint. if on the other hand we think there is a near term or ongoing risk of shortage, then we have some flexibility in terms of opening it up. it takes about two weeks to kick it in. once we make that decision, what decisions can be made, and so it's not an instant relief but it's pretty close. what i'd say in the first instance is we don't have a shortage facing us tomorrow. we've got robust inventories in this country. we have a flow of oil into the country already on its way so we're not facing an immediate supply crisis tomorrow, this week or next week. we should keep this in mind. >> let me ask you this, is this something we would -- if there is a supply shortfall, something needs to be done to make it up, is this something we would have to do on our own? are there other global resources
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available and are there private resources. how big of a pool do we have to draw from if we have to do it? >> generally, if we're going to do something we should also include the iea the international energy association exists to try to couldn't on a global basis so there's some kind of override in terms of how people face and how they respond and react so we should definitely be in contact with the iea and i would make sure that happens instantly even before the president speaks so we've got the dialog opened up and go along. in addition, most of the major companies, both state-owned companies as well as the international majors, do have their own supplies on hand. and, you know, most of them would have anywhere from a 30-day upward supply, in excess of 30 days which could also be part of the overall stock that we have on hand. >> let me -- ari fleischer, let
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me turn to you. the secretary has made clear this is not something we used to store shock to price. it is something that we use if the supply is interrupted. will the american people understand that? when the public sees the price of oil going to the groove, how should the president framed this for the american people? their instinct is gone to be the price is going up, do something. >> i think we have a huge problem on our hands is that if we release oil from libya -- libby is a teeny. the press will instantly say, what are not be doing it when you did it previously? i am worried about the direction we're. here in that pressure is building and the press is going to be a huge part of the pressure.
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the president needs to be working the phones right now, calling the king of saudi arabia, the leaders of saudi arabia, as well as other nations. i am worried about the timing of this news conference in an hour. we did not have time to push this back. the secretary of energy needs to be working the phones. i would not do a news conference. my strong recommendation to the president would be a statement. the problem with having a news conference is the press will already haul in on questions that we do not have answers for, and his part is to reassure the country. taking questions from the press will create a signal of lack of answers. i would change what we recommend to the president to do and push back the timing as well. >> that occur on the press, it is already out there that the president will meet on the press. if we differ it, it increases the notion they do not know what
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they are doing it. let me -- before turning --sue schwab, let me push back on that. maybe no questions, otherwise looks defense said. it may look like we're not on top of this thread put those nets together, what would be your recommendation? >> the press understands if you were running late, you are running late. i do not worry about that. from his point of view he needs to calm markets, it is the press nastyary's job to take a questions, so send him out later. >> sounds like the voice of experience. [laughter] >> is now the time for --
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>> i do not think so, and there's something to be said for being up front with the american people when the president speaks. and when the press is being briefed by the white house staff, it is worth pointing out that in the case of the intervention to address the libby of problem, all that happened was there was a $5 drop in the price per barrel. was temporary. it came right back. all we succeeded in doing was getting a bath to a couple of speculators, in terms of long- term impact it has had, it has not had one on oil prices. there may be something to be said for keeping the opportunity in conjunction with the iea to surprise the market from time to time so you have less of a speculative push up, but it strikes me that the reassurance
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that is needed with come as much from the defense establishment, how to preclude or is there anything we can do to make sure that this does not get worse? if as we have been told you can have a process clear by march, then you are talking about a near-term problem, and there's virtually nothing that will happen or can happen in the near-term other than people reacting to price pressure and conserving. that will happen. the broader question, and i am looking at the secretary of the treasury as i say that, is the rest of this knocking us back into recession. aren't there things that we can and should be proposing year term, midterm, and then long term, because after this is resolved we will still have energy shortage issues going forward, just by the normal course of economic growth in
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asia, in the united states, and the world. >> let me ask you to respond to the comment and address the issue. what are the things -- how concerned are you that this impact on the economy and what are the things we can do outside to try to address that? >> we have a weak economy at this point, and the key is to avoid this will shock rippling through into wages and prices and going back into in 1970's type stagflation. a double dip recession here, and then rising prices and interest rates. that has to be avoided at all costs. the way to do that, steve takoma is that we want to do everything we can to recognize this is an international problem we need to get financed ministers together, to coordinate growth-oriented policies so we did not choke
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growth with these rising prices. the prices will take money out pockets of consumers. they will be spending less. we want to make sure no one reacts in an inappropriate way, and this learns the lessons of the 1970's. we did not want the central bank of england to start raising rates in anticipation that says gone to have an inflation impact. we want to coordinate this, and i would also have ready? i would not propose it yet -- since then by policies to ask congress to lower payroll taxes for employers and employees. i would be prepared to suspend the major budget cutting tax increasing initiatives we've been talking about in association with the debt limit, which we dealt with a couple of months ago.
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i would have them ready, because we did not aggravate an already bad problem. on the inflation side, there's no reason to think we're going to go into a 1970's problem. we now do not have that kind of inflation mentality we had then, with globalization. there is great downward pressure on raised -- on wages. we have a weak economy, a weakening economy in china and europe, so the pressures are pretty low, and i do not think this particular problem, even if it leads to a spike in energy prices, is necessarily going to spread throughout the economy worldwide. >> are you worried about the impact on this on the dollar? he said now is not the time to raise interest rates. >> the interesting is with all the talk about our growing debt, we have seen in times of crisis, even recently, that there is a
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flight to the dollar and a flight to u.s.-based assets when there is a world crisis. there is not a lot of other places to go. this is not on to cause a run on the dollar. we will probably seek yields stay low, and it is important to make sure that ben bernanke and the fed did not try to raise interest rates in anticipation that this will shock is on to lead to higher inflation. to keep interest rates near 0 and have that kind of coordinated interest-rate policy on the g-seven countries as well. >> if we just say now is not the time and the goal is to reassure the market, it seems to me it unleashes it. the question is, is there something we can do to show that a slow release is a -- >> thank you.
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you almost have to consider question one and two together, because we have to have some judgment as to whether or not this is the first in a series of attacks or not. it be interesting to hear from the director of national intelligence as to what his view is on that stage. that will be an devolving picture. in the meanwhile, we do not know at the moment. the president will probably say i do not know whether this is part of a coordinated series of kind of thing.t a one- i think we ought to do something soon and visibly to beef up that assistance effort to reassure him, both the saudis and the markets, that we're on to do everything in our power to help them protect those facilities against future attacks. those of the two things i would
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suggest in connection with this issue of whether this is a one- off thing, or the beginning of a series of attacks. >> let me ask john hannah, what do we know? this is the first of the series? should we be expecting more in the next weeks? >> the attacks just happened this morning. it is still very early in the crisis. the entire intelligence community is all hands on deck trying to get to the bottom of this. the initial read out we do have from our experts and from our people in the region is that the attacks does feature of the hallmarks of an al qaeda operation. there are several aspects that leave substantial uncertainty, and the secretary of state is right that if the president decides to go out, he will need to be very careful in assigning
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any responsibility for this attack. i do think however, based on our initial soundings in saudi arabia itself, in addition to sending a boost of confidence and sense that we are on top of this with the american people, and reassurance to the american people, i think our allies in the region are trying to beat that for much as well, and i think the president is on the haft have that in mind in any statement he makes. the attack was planned and financed. the helicopter pilots appeared as protocol and access codes. assistance from within aramco not be ruled out at this stage. how aramco record is its people, much less the entire saudi security establishment, is quite updated to our intelligence committee. although the saudis have made progress in stepping out outcry
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that, as you know, the disintegration of central government in yemen has allowed hawkeye that in the arabian peninsula to once again forced their in 2011. u.s.-led anti-terrorist efforts have stalled because of the lack of the strong partner inasanaa. some elements of the military have been in open defiance of the government. western intelligence agencies have detected increased chatter among extremists in to those 11. the focus of intercepts has believed to be attacks in u.s. and europe. we have also been monitoring would sides -- web sites, and last month we had a posting from
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the leader of al qaeda in the arabian peninsula, specifically threatening to target will and economic infrastructure in saudi arabia, specifically. it is not clear where the helicopters were sourced from, but access to such equipment opens the possibility of state support in the region. having discussed al qaeda as a possible perpetrator of the attack, i do not -- we do not have anything strong on this yet, but the issue of iran can never be: -- ruled out. the attention in the region surrounding the uprising in bahrain and the crackdown has raised the temperature between the iranians and the saudis, shiite-sunni tensions, and while
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thes hiites are a majority, only 10%, they're almost all concentrated in the saudi arabian eastern provinces, where all the oil is for sure is located, and we do not have to go too far back in history, the saudis were implicated in an attack on americans at cobar x in saudi arabia. we are continuing to work very hard. we will come back to you when we have anything more credible. >> secretary of defense, do we have an assessment of where the vulnerable points are in terms of the oil supply, whether it is saudi or elsewhere, and do we have -- and the chairman make comment on this -- the existing contingency plan of assistance we can provide to the saudis and
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other key countries as a hedge against this is the first of a wave of attacks, or someone decides to take advantage of this opportunity to hit the wall for in for chartres again? >> -- to hit the oil infrastructure again? >> this is only a onetime attack and we are taking measures in connection with the rest of the world to toughen up the defenses. if you look at that top-10 question -- countries from which the oil comes from, russia, united states, saudi arabia, canada, mexico, iraq, and kuwait. although we did not have a formal international system that says everybody goes oil defcon ii, we should be in touch with all those countries to ensure
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that all of us are taking individual measures we need to protect our critical if archer, and each country knows what it's critical infrastructure is. then if the united states is filling it with those countries who may be more limited in their ability to help themselves, and in that territory, i would say saudi arabia, where we have the potential arrangements with and uae, iraq, and kuwait, who together could use some assistance. the other aspect, once the oil gets in a tanker, a has to get to the country that consumes it, and that is the area in which the united states has the greater capacity. their other countries who can help us to ensure passage through straits, said there cannot be a successful attack at
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those points. my advice would be that the president tell us, and we have already started some of the actions, to ensure that the world oil supply is safer today than it was the day before yesterday, when this attack took place, and that will require a lot of work through embassies come out with military relationships, and then i would turn to the chairman the overall this position of our kurdish forces and how we might have to move them to fill some of the gaps, and especially to make sure that the oil tankers are safe for a while here until we sort this thing out. >> i agree with the secretary. from a this positional standpoint, there are battle groups in the regionone right outside the straits of hormuz. we have requested the secretary
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to put another battle group that could move into that region. we have forces there present, and we are in contact with them. we have been advised to prepare a disposition where we can go to the gcc states for a request of activity in there. we have contacted the omanis to ask for use of the bases there and contacted others that asked for permission for diego are syria -- garcia. i will go back to the secretary's point and say thetwo is our concern, and that is, is their right to be a fall of on this activity? i would like to interject that
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from a military perspective, it has economic issues. alternately, if we did get into some escalated situation, we would meet that fuel for assurance. i think a statement that the sp ro is ready. force weis we are in good shape. >> there seems to be an emerging consensus that while the president ought to talk about the spro, our only strategic petroleum reserve, but what is available internationally, and indicate that it is available for an interruption of supply. at this point, so there is a bit of a backstop in the market of our ability to help assure supply, but your recommendation at this point would not to be
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invoked a spro release at this time. is that the consensus? >> one of the problems with repeated use is the more you use it the less value it has in terms of the price impact. frankly, using it the libyan situation, where it was crisis oriented rather than emergency oriented, already devalued it, and using at it again, unless a true emergency would further devalue it when we needed it. i lived through the second oil shock when i was president carter's chief executive adviser, and one of the things i want to make sure the president does not do this time which we mistakenly did before was to policies which will aggravate the problem. for example, trying to artificially reimpose gasoline price controls or have odd-even
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days to try to restrict driving. those will only aggravate the problem, create more panic in the market, so let's learn lessons and not make the situation worse. >> i have been watching fox news. the stock market is down 700 points already this morning. west texas features are up 15% already, and as we were watching markets earlier in the summer, these are going to translate into the pot over night. we are looking at $6 a gallon gasoline when people go to their pop tomorrow. the president is going to get killed over this. i am understand that libya did not work when we released from the spro, there are other issues the get to the reassurance of the public that i worry about
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the most said the president is in the strongest position to address this. if he does not take any action, we're looking at economic conditions today, we are right to cut the legs out from under the president tomorrow in terms of him being able to reassure the people. there is one other elephant i need to raise. it is outside my lane, but i did hear the report didamaan isn't the issue whether iran was involved in the attack. we have to be careful here because if there is any evidence iran was involved, now deals with an act of war. another reason the president should not take questions because he will be asked by the press to rule out iran, and we did not want to raise that to this presidential level yet. i am worried about that issue with iran, but i think it has to
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be an action on the spro. >> if we cannot do spro, did not want to do spro, there is tension between shown there is action on top of this, and we did not know whether this the first of the series. we need to leave a little bit because we may need to go back to get a second time. is there something else we can do in the short run? the third question, the things we can put in place now to relieve this vulnerability over the longer term? point.ri's what can we do t? >> ari's point is it cannot buy something with nothing. even we did not have all the information, the president is going to have to lay a set of activities. it seems to me he can explain
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why not going into the strategic reserve now makes sense without taking it off the table. you do not want to take it off the table. a needs to be out there as an option. there are other things like that that he could allude to in addition to laying out what he is going to do to secure to the extent possible the market so you do not get further destruction. if this is a problem we believe by march we will have gone through, people, when gas at the pump goes up to $5.50, that is going to have a significant impact. if people know that here is what is happening between now and then so as to bring it down again without imposing artificial -- did not want to impose anything artificial --
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there's nothing you could do in the near impact. market prices will have an impact, so that will have an impact. the question is, can he talk about the near-term and use this the start leveraging mid term and longer term so we did not end up in this race again? i think it is worth started to talk about, what are the things we can and should be doing? i do not know about refining capacity and having a discussion with oil companies -- there is some things like that that he could talk about, but longer term, we need to be talking about things like suspending regulations related to canadian oil stands, the pipeline from canada -- why should canada be talking about shipping it to a
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show when they could be shipping it here? regulations having to do with nuclear, having to do with permitting natural gas, having to do with offshore drilling -- the president can talk about these things and hear our options, and he will speak to the country again in a week when we have had a chance to look at what kind of impact we can have. in the long term, reassured of the market and show we are thinking about it, we have a lot of options on the table, but near term, not a whole lot you can do. >> the news says the global spare capacity says with this incident be down to 2 million barrels a day. is that a real figure? is there something we should be doing to go to opec members, but not opec members? remember the majority of production comes
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from non opec members, to see if we can generate more spare capacity, because that is a good signal to the market if we we end up with people going up to top up their tanks and suddenly we are in a critical shortage, self-made, self made because of people's fears. here are some of the powerful messages. we look at it as susan said short-term, immediate term and long-term basis. the most powerful message we have is that the united states of america has more oil than any other country in the world that we know of. more than saudi arabia. we have simply been holding ourselves back from producing that oil.
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i think this is the key stimulation to finally convince members of congress that it is time to get off the dime and really put the message out there of let's produce more domestic product to meet the needs of the nation, to grow our economy and create american jobs and all of the powerful signals. does that happen overnight? no, but let's equip the president to say look we used to produce $10 million -- girls in this country let's go back to producing 10 million barrels a day is a start. we can deal of alternatives and open fuel standards and other things down the road which is another set of solutions so that we are less dependent on oil per se. but i think we have to equip a 10 year time horizon and walk back from that and what about the immediate future? and unlike times past i think it is time to engage the oil companies to get them involved in getting some of the messages out there about how they see the
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future prospects, starting with a message there is no shortage. i think we have to keep coming back to that in the near-term. that is the strongest moore's powerful near-term message we have. there is no shortage. >> we move on from that. we don't know how much damage is really been done yet in the region there is such a brain trust and there is such a set of skills that knowing how the redundancy of these facilities and the original designer set up, once we do a damage assessment, then we can perhaps put some powerful messages out there about how long it is going to take to get back into normal production. maybe it is the month, maybe it is two or three months. but unless there is something new that we didn't learn this morning, they should not be a long-term shutdown of this facility because of the redundancy that is built into these refineries from the get-go. so if you combined those central messages, no shortage.ver
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we have over the longer-term more oil than we will ever need. it is a matter of releasing our domestic capacity to go i make t possible. of toppingemptation off your tanks, i think we can send messages of assurance that put people in a much better place than they are today. >> with all due respect, there is not a shortage to the extent that supply and demand will always balance out at some price, but longer term, there is a shortage to the extent that prices are going to get going up. this is a quick look at what we're in for in the next 10 years and no increase in u.s. production of oil in the next five years is going to stop that. china is growing at 9.5% a
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year, and developing crow countries will grow at 7% and change. even developed countries at 1% or 2%. seems to me that at minimum, yes, in the near term, maybe we can staunch this. president ought to be making a point that yes we are doing with this in the near term, talking to the companies, but we are going to not let ourselves be in this position five years, 10 years from now, as an inevitable and church rector of price increases. -- as an inevitable series of price increases. >> longer term we need alternatives to oil.
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we need to diversify our energy supply. >> we need to mention this cable from our ambassador who just met with the saudi oil minister and the president and ceo of saudi aramco, it is not too different from what we have heard before, but they now have a specific estimate it will take about 10 days to replace the damaged equipment and the plant will be reopened within 10 days. and then, they figure until they fully repair facility, processing capacity will be about 5 million barrels a day as opposed to the normal capacity of 7 million barrels a day. finally, interesting point here, they say they are not asking for any further assistance at this time and that they see this as a
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strictly internal matter, which says to me to the extent that we offer any kind of assistance, we got to be careful to do it discreetly. >> i agree with everything that has been said about short and medium term, including suspending regulations for domestic drilling. we are not addressing the international aspect. oil is a global commodity, and we have to coordinate what we do with our key partners. on the production side, to send a positive signal to the market, we should be closely coordinating with key energy producers, canada, russia, brazil, have them send signals they are prepared to use all their capacity, they are prepared to accelerate their near-term production, to coordinate the energy side but also the economic side so we
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have a coordinated message on keeping growth-oriented policies on the fiscal side, and solve this problem ourselves. in fact only about 10% of saudi oil actually comes to the united states. the vast majority goes to asia. we need to look the president needs to get on the phone with some of the key leaders to make sure we have a message to the oil markets from key producers who may be willing to say they will try to wrap up whatever capacity they may have. >> that will be a job for you, secretary. i agree that we need to get on the phone. we also need to get time on the plate. but the american people figure out that it is a global market,
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that is not going to work politically. he will have a real problem with that trip we have to find a way to get full -- we have to find a way to get china into play. i want to do this now. i am a little worried about starting to move the forces. if there is something really to be done in terms of enhancing security and saudi arabia, we will probably have to do it discreetly. we have to show we are on top of the problem but not produce panic which will make it worse. let me turn to the two of you. what will you do, and what would you recommend to the president? should he talking about it at all? and is there anything we want him to announce either to show we are being prepared to head off another attack were basically to show solidarity in the region and allies in the region that we are with them in this crisis point. what would you recommend to them? >> i think the actual actions
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should be as we discussed -- with countries we now have the facilities so we know what they are doing here we have offered any assistance that we can. i think we need to have enough forces available both of aden, that we can react quickly and there. as the chairman said, we have a considerable amount in the area. without making it a major deal, i think one thing that will not help the president with the press conference but i think it is very important -- an attack
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with helicopters and paramilitary tactics was not done by a couple of guys in a jeep or on the internet. there had to be a place for this team was gathered or practice where it took off from. we should put a little group together with representatives from state and the defense department and the intelligence agency to examine the two possibilities. even if this thing was planned and conducted out of yemen, or it was done out of i ran. i think we ought to put two groups together to look at what our security responses it should be in those two different cases. i am sure we will find out who these people are, where they came from. we need to be ready with a range of options not only military, but also diplomatic. certainly, economic to deal with
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stopping activity from continuing. that is in the staging area that was in the country that clout or updated it to happen. in the meantime, i will let the chairman check the details. i think it ought to be prudent movements that are not a rush to call in troops from liberty and put them on planes or get ships on the way that our three months early from their deployment dates. they are proven from where we know it reassurances are required accurate >> let me ask deputy national security adviser to stand up. really start a 24/7 operation. so that we can try to get a head of this.
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i think we are running out of time. i will try to summarize briefly what i think is the message of this group. anything else people want to put on the table before i do so? anything else he needs to hear? >> i do think we need a balanced international and domestic prices. i do nothing which it announced removing troops. i think some international reassurance that in a subtle way -- probably the secretary can do this. we are aware of the vulnerability is that this has caused. i do not know how we do this critic should be obvious. we need both the domestic musses that was articulated and a good strong international alert to this issue. >> right. i have something in from my station chief in the emergency cable.
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there was renewed turbulence in iran after the attack this morning. a group of men were arrested. all members are iran muslim majority. protestors have returned to the streets in very large numbers. attacks on suny shopkeepers. iran reporting that one officer was killed and several wounded. this is a developing situation. let me stress again, our continuing concern is about the situation in saudi arabia and in the eastern province. there is a possibility of instability. our state department has been on the ground. they have security under control. that is almost a sign they don't.
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i do think we need to be worried and keep a watchful eye. i think the heart of the president's messages and what you just read. i think the heart of the president -- >> this is the processing capacity at that refinery. >> so until it has been fully prepared, it will be 5 million barrels per day compared to the normal capacity of 7 million barrels. >> my point here is that the most calming message the president can get is an attack took place, and damage was done, but it did not affect the majority of saudi production. give the facts and give the numbers. what we have is if you're in the marketplace. if the president can speak, pass the information, call markets. yet to me is the most reassuring thing a president can say. >> if this is to believe that
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they can replace the damaged equipment and the pass will be opened in 12 days. >> i have already sent a message that we bought an extra half hour news conference, we will have an opportunity to get this to the president. let me just summarize what i think where we are. in terms of town, we want a realistic assessment of where we are in the nature of this crisis. he has to be candid in in terms of fact. i think john is to started the core of this message. it is at this point something that has a discrete limit to it, something 10 days or so. things are being done to restore capacity. hopefully, that is a calming message that will cut the
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possibility for panning. and then he has to talk about some concerns. we do not know who is responsible. we should avoid putting a blight on al qaeda but recognize it as possibly them. this might be a first of a series. therefore, the message of reassurance in terms of the security standpoint that we stand with countries in the region. we are taking steps within to enhance their ability and to protect other infrastructure. we stand ready to offer that help. i think the things we have talked about operational lead and making sure we have adequate forces, he does not talk about it. but he sends a strong message of reassurance internationally before our allies. i think he must also talk about
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a warning for others but to try to explore this information. but there it is al qaeda or the explorers or other actors of the market like chavez. this is not a time to try to gang up on the international economic system in think a little warning might be helpful. i think we decided that we do not suggest he make a release at this point. he should talk about the availability of our reserve and international reserves and correct it -- private sector reserves. we will be coordinating with them so that if there is a supply shortage, we can move and promptly. that should also help to reassure the markets i think internationally, we need them to be reaching out to companies with the same messages.
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we need to build in the message that the secretary of the treasury said. we need to keep an eye on global growth. this is not a time to respond by raising interest rates. we need a coordinated pro-growth policies, artillery if this is the first of a series. finally, i think as we talked about short, medium, and long, this powerful message the secretary talked about in the medium term, this is what we will do in the short run. in the medium term, we have to get oil out of the ground. a lot of this or that we control. we have to make the message of a comprehensive energy policy so to can get off of the course of dependence on oral. that is where we are. we will get the messages to him. it is your call, but i think this is particularly important enough that we ought to keep getting ready for an actual
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speech on this subject. i think the press conference will not be enough to establish the president's leadership. >> sound okay? >> one thing i would say, and i say it has to be done in a measured way, it does offer a way to fold this thing in to remind the american people about the war we happened in. we just passed the 11 anniversary of september 11 without heightening the alarm to munster to fold into the larger context of the challenge we face going forward that continues to exist. the death of an london -- the death of osama bin laden did not remember what happened to president -- it is too early. let us collect facts. >> we should also encourage
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whether it is api or some of the majors to send a message of insurance out there. >> we will look to you to take the lead on that. i will go to the president and passes for the press conference. he needs to hear directly from you on what your views are. we will get the deputy committees to get it. they will develop this on a real-time basis. thank you very much. >> our programmer resume.
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welcome back to gina gene in weather is breaking news coming out of today's opec ministerial meeting in vienna austria. moments ago in a press conference held after today's regularly scheduled meeting, iran and venezuela announced in a joint press conference that in the middle of one of the most severe sustained drives in energy prices in recent memory that they are jointly cutting their production of oil by 15% totaling 800,000 barrels per day. they had been expected to result in opec members bringing additional capacity on line to cover the temporary loss of production capacity in saudi arabia. following last month's attack on an oil processing facility there. today's unexpected move will most certainly cause further disruption and a world economy already reeling from sharply rising fuel prices ercolano prices, which started today at over $170 per barrel, expected to rise dramatically with many
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experts predicting prices over $200 per barrel in a matter of hours. standing by in vienna is our correspondent ann good one. what can you tell us about this? >> simon a section by iran and venezuela was announced at a press conference immediately following yet another rancorous meeting here today at opec world headquarters. you are a call at the june 8 meeting which is expected yielded a significant increase in production resulted in no official change in opec production otis after a group of nations led by iran and venezuela refused to pump additional oil. today's meeting actually broke up after an acrimonious and heated exchange between saudi arabia's oil ministry and representatives from iran and venezuela. >> can you tell us what the issues are here? i assume this has something to do with events in bahrain and elsewhere in the gulf? >> is more competition than that, simon.
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i'll amy has asked opec countries to recognize it is in everyone's long-term economic interest to discard production targets immediately and produce the maximum possible rate while the processing plant is operating at reduced capacity. iran's representative countered saying it was time for the world's oil producing country to recognize they have a moral responsibility to use their power to direct millions of people suffering at the hands of western oppression. libya, algeria and venezuela apparently agreed with the minister. they ran representative also lash out against the united thed states accusing the american government of aggressive actions toward iranian naval vessels in the persian gulf and of manipulating global oil markets through the release of strategic oil stocks earlier this summer. >> essentially these countries are using their oil supply as a weapon. >> that is what some analysts are saying, simon. as you know iran has been deeply critical of the ruling regime and membrane with a rating president recently likened to an attack on the shia people.
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visibility in bahrain which is has simmered throughout the past year over the past week as the violent confrontations between the government and the sunni protesters have moved to a new level of intensity was saudi amber rainey security forces taking fire from the demonstrators up to make the situation worse has reported several days ago a u.s. navy destroyer was involved in an extremely tense incident in the persian gulf with iranian ships expected of smuggling weapons into bahrain. >> what is that mean? me many experts agree that the power to hold the local economy in particular oil concerning countries hostage until they get what they want. the arena spokesman said they would not restore production to normal levels until all war and security forces have exited bahrain. the exact quote simon was less the americans and europeans want to return to recession and economic turmoil a should encourage the regime in saudi arabia to let the people of bahrain express their political opinions in a freeway any further violence against people
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of bahrain must be avoided in all foreign governments must leave bahrain immediately. >> can you stand by for a moment? i want to turn to adam our correspondent reporting from the new york stock exchange on wall street. at him, you just heard a report from vienna where we are being told that in effect, iran and venezuela intend to hold our economy hostage until we do what they want. how much power do they have and what kind of thing things can this economic weapon have on oil consuming economies? >> while some in the press conference ended about 10 minutes ago and already the price of oil has gone through the road. $180 a barrel to 197. no one here knows but i can tell you, be sure that the people here are more than very worried. if the market continues, concludes that the u.s. economy which everyone agrees is already on the verge of a recession is in fact going into a deep recession, no one really knows how bad the situation could get.
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>> what you are telling us adam is that this economic weapon is very powerful and these two countries have the power to inflict real pain on our economy and on the well-being of our nation. >> that is exactly what i'm telling you, simon. you have to keep in mind what we are seeing here is a confluence of different forces. without the attack on iran or venezuela who would not have this much power. given the lack of spare capacity in the oil market and given the already precarious nature of the economic recovery, major oil consuming countries like the united states, china and several european nations are basically a devastating outlook. the perspective of iran and venezuela by the way, this move is sure to be a moneymaker. >> how do you mean? >> simon the rise in oil prices will share eclipse the value of any production these countries take on. in other words with prices this high they will make our money while selling less. >> what certainly looks like we are in for a difficult situation in the coming weeks and months.
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stay with us for more coverage ort his developing story. >> thank you for meeting on short notice.eren i think the president's press conference was fairly successful and sort of getting us through the first hurdle of this, but as we talk at our last meeting, tho boulderup ability tight world supplies and lack of spare capacity is a problem. it plays into the hands of oil suppliers like venezuela and iran who use that leverage over the world economy to pursue other objectives. that looks like what we have got today. john, you can let us know
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whether this is iranian conspired or not. iran is now through their announcement of the cutbacks of production. the price of peace is to back out of their rain and let iran take it over. the saudi reaction -- the saudi reaction to that. we are creeping power depends on petroleum and the countries that do it are either unstable or hostile to our interests. that is the process we are seeing played out. the president has to give an address and the talk a little about that. his guidance to me is that he needs to clarify the significance of the event, he
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wants to add some policy things from us. he wants to show his way to the american people on how we will get to this challenge. let me start again by turning to the debt piddle -- deputy national security adviser. dave, where are we at this point? >> just to reemphasize, prior to the announcement, gears were really grinding. we had essentially no spare capacity. it will cause actual shortages. now we have supply and demand imbalance is moving through the rest of this winter into spring. cold weather is forecast in north america. we have the keating pressure. this is a serious problem which
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will essentially lead to significant demand destruction going forward. at this stage, the idea of government stopped and a drawdown is important. s why the show prices will peak at $200 per barrel. it will not come down below $150 until april. i should point out in previous discussion last month, we talked about china. this does not include chinese stocks. estimates are that the chinese have 100 million barrels in their stocks. this only represents drawdowns from i e a, member countries. any see has done some analysis that shows the 2012 economic
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outlook is grim and. we will be slipping into a sharp recession. baseline assumption of 3.5% growth in 2012 now down to 1.7%. the basic assumption of 8% unemployment up to nearly 10%. an inflation rate in 2012 as opposed to the 4.5. the economy recovers somewhat in 2013, partly due to the fact that world prices dropped. primarily command -- severe relocation. pretty bleak picture. that is all i have. >> the president asked us to look at 3 inches. he wants to know about the
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impact of the crisis, what do we say about what men as well and i run are doing. specifically, what are we doing about the rain? given to the blackmail, or let them critter the economy. second, economic impacts. what will it do to our economy? what can he say to the american people that he is doing about it? what can we do about it? finally, looking a little bit forward, and what did he say to the american people that we are doing to get our country out of this situation and get leverage back in our hands rather than being in everybody else. let us talk about foreign policy impacts. let me talk about you and ask or
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the saudis are on this and what is your thinking about what we should do and what the president should say about -- >> .. as saudi arabia is concerned, too thought occurred to me. first, we have to continue to bear in mind that they are the largest supplier to the international markets. we do not want to do anything that would alienate them. i think what ever we do in terms of our dialogue with them on the subject, i think it should not be public. it has to be quiet. we have to see if there is some way out of this under the impasse with respect to the situation. i would above all . >> avoiding some kind of public breach with saudi arabia both for policy and political reasons
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and the major supplier to the oil market, notwithstanding the withdrawal of this saudi production but a venezuelan and the iranians. they judge that mahmoud ahmadinejad faces a very bad domestic situation back at home. bad economic, bad political situation and that he may be trying to fabricate this crisis to enhance his own political standing in his country in which in turn, how sustainable is this defiant part on his part or can it be through some strategy and wait it out in some kind of way. >> what does the intelligence tell us about whether this crisis in bahrain is manufactured by the iranians? what is the evidence and is there any way that we can use
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that evidence to put the iranians on the defensive on this in some way? >> there's no question at least this latest iteration of the shiite unrest in bahrain was immediately triggered. is that a coincidence. we're not sure. it became happening on the same day. it's not to say there's legitimate shiite unrest and discontent in bahrain. they will have real grievances now, there's no doubt in the intelligence community that the iranians, the revolutionary guard, their quds force their special forces operation that they are now operational fomenting and fueling some of the unrest in bahrain including -- we had them on the smuggling of weapons in the bahrain -- to bahraini
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militants. it's important enough that it does come in the context in which iran is engaged in a much broader campaign against u.s. interests and u.s. assets in the region. on weapons smuggling in particular, for several years now we had them on weapons into iraq. specifically, the iran weapons as well as the explosives, the projectiles that are killing american forces and that has only been upticked in 2011 as begin the drawdown of u.s. forces by the end of 2011. we also earlier this year british forces intercepted a shipment of 4 dozen 422 millimeter rockets moving from iran to afghanistan. irgc officers are actively working with their syrian
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counterparts to crush unrest in syria and preserve the assad regime. and iran continues through iran air to deliver weapons and missiles capable of hitting israel to hezbollah in lebanon via the syrian transit route so we have -- the irgc operating on all cylinders. this economic component is of their declaration of war against the united states. and it's just the latest sign we have that the iranians are pursuing a comprehensive strategy to weaken the united states in the middle east and our economy and they for a long time with u.s. sanctions that have been significantly amplified since 2010 have said that they do have capabilities of striking back against the united states and the west and imposing economic pain on us. and i think our judgment is
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that's what we're seeing come to pass as part of the very strategy in which iran sees itself as engaged in very much of a -- almost a struggle with the united states. >> let me ask this question. in light -- and i want to throw it open. what's our leverage on iran? you know, right now leverage in iran that will make them reconsider the strategy they're playing in bahrain but done to make them rethink to put a gun at the head of the international community so i want to talk about leverage on iran. what do we have? let me start -- i want to start actually with you on the diplomatic side better than i want to go to on the economic side and then i want to get the secretary at the end what we have in terms of military. so let's run through, if we can -- what leverage do we have on iran to make sure they can reconsider the policy?
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and i put on the table both leverage from the outside but also what we might be able to do to encourage dissent within iran to try and preoccupy them. mr. secretary, let me start with you. >> first of all, on the side -- on the side of positive leverage, we have precious little because we've been in an embargo situation with iran economically for decades now. so there's not much on that side of the leverage at least of our own. there certainly are economic relationships between allies of ours and iran that we might be able to influence in some way and there's even economic relations with competitors of ours, if you will, such as china, which we might in some way be able to leverage. i think that the area where we have secured leverage and perhaps could consider ratcheting it up in some way is in the area of sanctions against
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their economy which we know, both financial and commercial, which we started to have some effect and maybe there's ways we can look at to increase those. and then, of course, we have the implicit stress of some kind of more coercive efforts with the potential use of force in certain types of situations which we've always been very careful about indicating but we've also been careful not to remove it entirely off the table. so that's something that is also there. >> let's see if we can add to that with secretary of treasury and then national economic advisor schawb please. >> well, the treasury department has through my undersecretary stewart levy has been very effective in supplementing the fourth round of u.n. sanctions which was aimed at the nuclear program of iran with both u.s. and european sanctions.
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and that in fact has been of import of gasoline. what i think we can do here on the economic side is ramp up both u.s. and european sanctions on imported oil. for example, as of may, 2011, iranian imports of gasoline had been cut almost 50%. we can now go to the chinese who have been, frankly, back-filling some of that and say, look, this iranian cut and venezuelan cut hurts you as much indeed as perhaps more than it hurts us because you're increasing the line on iran for oil and gas and, therefore, you should join us with a very stern message for us and a willingness to support a ban on all imported oil and
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refined product. even with all their huge reserves, their capacities are limited. they do have to import as i said a substantial amount of gasoline so this would be a logical next step. now, frankly, in the short term, steven, this could spike prices even more. >> yeah. >> but we have to take that risk if, in fact, we're certain that iran is behind this attack but in addition to sending the signal that they can't simply take hundreds of thousands of barrels off the market. this is for me reliving a bad reality show because in late 1970s when i was working in the carter white house, we had a 5 million barrel per day reduction in the production of iranian oil from the world market. it caused a 120% increase in oil prices. so we've got to be able to send the market a signal we're not
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going to allow this again and then i think china is key. china has a lot of leverage here and they're going to be hurt as much as we. >> i want to hear from the secretary of defense. >> we have a number of major producers including the u.s., including schaub including canada, mexico, russia and having countries pledge -- not to launch the policies in terms of export bans all they're
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saying we're going to step up in terms of production that we are going to allow market forces to at a minimum market forces to reduce consumption. the harm plus using the leverage. >> let me pick up something and ask secretary of state. you know, don't we want to internationalize this problem? this is not a standoff between iran and the united states. very wala and the united states. this is two oil suppliers threatening the entire world economy and the bad guy in this is clearly the ring leader who's iran. and is there a role, john, of taking this to the g20, something you mentioned last time as a way of both consuming countries can all get together. it's a way of putting pressure on china, which stu talked about needs to be done. going to to a security council, having a g20 meeting. let's try to internationalize this thing. this is a threat to the whole global economy.
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and iran is the villain and we are ought to be refocusing our pressure on iran. isn't that the thematic we should be doing. >> no sanction should be effected if it's only the u.s. >> right. >> as i mentioned in our first meeting, having first the g7 finance minister so we get the major industrial democracies to make sure, steve, that we take coordinated stimulus action and second, broadening it very quickly to the g20, both with respect to the economic impact but also with respect to iran so that we have a forum as sue mentioned where we can deal with the venezuela -- venezuela, even if we get china to help on the import of gasoline, venezuela could also back-fill the needs and we need to make sure they don't. >> right, right. >> so we have to internationalize this. >> let me just quickly hear from the secretary of defense before we move on, in the next piece of
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this. can we put some pressure on iran kind of the old-fashioned way? what kind of options do we have? >> the military hanging over iran for several years has to do with that nuclear program and we have never taken off the table the option of taking military action to prevent iran from attaining a nuclear weapons capability. now, the last time i looked at the evidence from the intelligence community, the situation was still ambiguous. iran has all the components of a nuclear capability but it's not still -- but it still kept the situation unambiguous but i certainly think the elements are there to -- to reroute all that
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stuff should we choose to. as far as military action that are more related to the prices at hand, there's two things we should consider. we're in the midst of a drawdown of our forces both from iraq, which lies to the west of iran and from afghanistan which lies to the east. i would recommend we would ask the chairman to look at those deployments and determine if we want to continue with the previous plan which was premised from a quite different iran we seem to be facing today. so i certainly think the adjustments of our course redeployments out of those two countries. we share a border with iran are something we should look at and those should be used for pressure. >> let's ask you and the chairman to look at that, slow down and whether there's some additional deployments we want to make signaling to iran that
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this may not be a free run and let me ask the dci to looks with cia and d.o.d. about whether there's some covert options. things we should look at to cause some disruptions that will raise some questions in the iranians' mind. let's take a look at that. let's move, if you will, to the broader challenge. we talked a little bit about what we want to try to do diplomatically to try to rally the world to save the global economy 'cause that's really what's at risk here. what else should the president say that we can be doing to help get through this economic crisis? mr. secretary? >> i think there's some, again, powerful messages to the president. in some respects iran and venezuela announcing that they're cutting back production is actually a fait accompli of what the sanctions have done to
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iran. iran is cutting back production because they don't have the capability of maintaining production. i think we should equip the president with the message that sanctions are working. we've known for a long time that iran's ability to keep their production going depends upon international help, international equipment, supplies, particularly, higher technology capability and they don't have it. they're running out so they are in decline. we've known hugo chavez have been in decline for some time. the incompetence that now overwhelms the area -- it's amazing they've been able to sustain production as much as they have which is largely thanks to some of the joint ventures that western companies still have in venezuela. the president could say these folks have been mismanaging their oil fields for a long time in venezuela and show that the incompetence of venezuela is
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part of the problem here. and just pull the rug out with mr. chavez. with respect to mahmoud ahmadinejad, the fact that the sanctions are working, pull the rug out from under him as well so put the point where we're actually taking smart actions and band-aid them with wire is not holding them together. >> john, could you see the end of opec. >> i think they have done serious damage to themselves with opec where the more rational producers, like saudi arabia, like nigeria and some others, who really see oil as value created for their nation rather than a political weapon. yeah, i think this could -- whether it's the end or whether it's a serious debt in their ability they can always change government in venezuela or change government in iran and come back and be part of the mainstream. but i also think going back to the earlier discussion, they equipped the president with the powerful domestic messages and i think we just keep reiterating
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those powerful domestic instances. for example, as everybody knows, i take an issue with the secretary of interior's decision with respect to the gulf of mexico. it's time to put the gulf of mexico back to work. i mean, we're not doing what we could be doing to help ourselves in regards to the gulf of mexico. in addition, an overall program was just announces announced yesterday to ease the regulatory by individual companies by operating federal efforts. let's accelerate that and because ever enabler is the creation of american jobs and in terms of the economic impact if we can portray a massive job creation scheme through domestic production of our own resources, that's a very positive message. i think also we have to come to grips with and is this the right time to sit with some of the
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major ngos who take issue with the hydrocarbon production that we have in this country and see if there wasn't some way to help the ngos understand that their resistance to the reality that we are in an oil age. it's not in the past, help us help ourselves. and if we want an alternative future, we can move to an alternative future faster by not going into economic recession by prohibiting the production of hydrocarbons. >> i want to get to ari on this messaging issue but i understand there's some breaking news just coming in. let's turn to the screen. they're going to put it up here in the situation room. ♪ >> welcome back to gnn where we are covering breaking u.s. financial news at this hour. at least one of the three credit
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ratings agencies is expressing concern about the sustainability of the u.s. debt position today. amid what is perhaps the most severe oil shock in modern history, fears of a deep recession and sharp worsening of the u.s. debt to gdp ratio are undermining confidence in america's ability to meet its obligations. this month's spike in oil prices has sent u.s. equity indices tumbling by more than 10% over the past -- [inaudible] >> and led expectations regarding u.s. economic growth in the fourth quarter of 2011 and the first quarter of 2012. the recent gnn poll earlier this week found broad sentiment among economists that the u.s. is headed for another recessionary period. the united states aaa credit rating was the focus of attention earlier this year while legislators debated raising the u.s. debt ceiling. rating agencies put a negative outlook on the u.s. long-term
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debt and some prominent investors paid moves to reduce their exclusion to u.s. treasury. we go now to our financial correspondent adam dell who joins us from new york. adam, what can you tell us? >> two of the three credit rating agencies have issued public statements today warning the current trajectory of the u.s. economy is cause for concern from the u.s. perspective. >> what prompted this move by the rating agencies today? >> this is really about the outlook for the u.s. economy as we head towards what looks like another deep recession. before we've gotten back on our feet before the last recession. consumer spending is projected to fall sharply this quarter and next as gasoline prices eat into household budgets. u.s. businesses and logistic companies, airlines -- are some of the industries are vulnerable to exploit like this.
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as the economy tanks back to recession federal tax rates will decline. spending on social safety neither like unemployment insurance, food will rise again. based on this the agency specifically cited a worsening debt to gdp ratio as their core concern. >> so adam, the natural question is, does this mean the u.s. is headed toward a downgrade? the united states is being aaa for along as there have been ratings, hasn't it? >> i think we can expect the rating agencies with the federal government and with some serious plan to go forward. the u.s. debt essentially doubled and that was directly related to the recession but the agencies will have assurances to enter another period of exploding federal debt. the key question facing the united states will be, given the known budgetary obligations, can the united states achieve the growth rates acquired to pay down the debt particularly if it
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means so vulnerable the energy shock we will have. that other industrialized nations will have -- [inaudible] >> of the united states, in france, aaa they have less energy than the u.s. produced a single unit of gdp. >> adam, before you go perhaps briefly give us the consequences of a downgrade, however, lightly or unlikely that may be? >> if the u.s. were down graded it could create a vicious cycle. many investors in the u.s. treasury, money market bonds endowments and insurance companies are required to hold a certain percentage of their assets in aaa-rated securities. a downgrade would automatically trigger a major selloff. liberty isn't quite sure how much u.s. debt would be affected by those types of requirements but analysts here on wall street are working overtime to try to to find out. >> thank you for reporting, adam. so to summarize where things stand at the moment, oil is now trading above $190 per barrel.
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rating agencies, voicing concern over u.s. debt on a sharply reduced outlook for economic growth, and there seems to be little that policymakers can do to unwind the problem in the short term. the president will address the nation from the oval office tonight. you'll see it here live on gnn. ♪ >> well, we've gone from a bad dream to a nightmare. we've got a debt and long-term spending problem that's confronting the country that we can get out of to get the economy growing and revenues up. and yet our economy getting our economy growing revenue is up depends on an oil market that is now being taken hostage by iran and venezuela. so we've got to get some
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guidance. i think the bar went up with what the president needs to do tonight. i'd like to us to address three things. one, we need a plan to absorb the short-term impact on this. secondly, we're going to need a plan to address the debt which will address the downgrade issues. and finally, we need a plan on energy to avoid the repetition. it seems to me that's what the president needs to talk about. i'll turn to you first. it seems to me the president's job got a lot harder. what's your initial reaction? what are your thoughts as to how he should try to frame this? >> well, with all respect to the conversation we were just having, we're whistling past the president's graveyard. this is unsustainable. the president is about to lose his re-election. we're heading into an election year. look at the trends since november since the attack on saudi arabia, oil has been above 140 a gallon, 185 now. it costs people $100 to fill up their midsize vehicle, more than
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$100 to fill up their suv and we're heading into a recession. and even with that recession, the perception of it is bad enough. michele bachmann is beating the president in all the polls. [laughter] >> that is a surprise. >> newt gingrich is even with the president in all the polls. [laughter] >> ej dionne wrote a column he said not only sounds like jimmy carter he's increasingly looking like jimmy carter. none of what we're talking about is going to solve the real life problems the president has. the way to do is to think much better, change the subject and present something brand-new to america so the president is leading our way out of this, not with traditional leverages that we may have. i think the solution is to go back to what happened for america in 1940, 1941 before we entered into the world war when we were seen as the armament of
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democracy and we're ready to solve a problem. we need to do that with energy and become the armament of energy and there's only two ways for the president. they're polar opposites and which one of these huge courses of action we need to take. if we're going to open up america and take the land that was previously totally closed, anwr, offshore oil, domestic oil and open them up to make america the armament of energy. we're going to 100% the opposite direction. and make america green once and for all and go in the direction of wind, solar and the other things that are now increasingly economically possible. anything else is just in the margins of history. we need to put the president on track for something so big the country gets excited behind the new mission he's established. and i meant that about the weapons in '40, '41.
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this is a chance to do something big where america leads the world out of it and i think those are the only two courses to take. >> well, you put it as alternative. are they alternatives or can they be complementary. >> absolutely both ends. it's both ends. we have a short and a medium term which can only be met with more hydrocarbons we have, nobody is going to go out to buy batteries because cars aren't available. we have to make pace over the next 10 to 15 years healthy supplies of domestic hydrocarbon energy and the whole pathway for the green economy. those can happen simultaneously. we've only been frittering with the green economy because the efforts have been so paltry, so small. we could paint a much bigger picture of what that looks like but we shouldn't do it at the expense not a decade and a half or even a few decades of hydrocarbon reality that we face. you can't fly airplanes on wind
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power. it doesn't happen. you can't, you know, move trucks across the highway with all the goods that they carry with biofuels. it's just not there yet. so we have to rely on the historical and as i said a few minutes ago about creating this whole jobs agenda to go after domestic production. we could list outlet year by year by year exactly how much capital the oil industry or the other gas producers are going to spend. it's not billions. it's in the trillions that we could open up for this country and those are big jobs, high-paying jobs. i'm doing a commercial for big oil here. i think it's a reality that we have been just been hiding and not talking about literally for decades and let's re-open that up. >> let me ask the group, you know, in our area it's a
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problem, but how do we let this happen? how does the president ask the question, you know, we know we've been dependent on oil for 20 years and everybody has been talking about energy independence. how can we're at this point. why haven't we done this before? >> i think the situation here is that the reality is really, but the way the thing is wired together, something like a less than 1% withholding of oil by two countries that are the united states have a far more than 1% influence on the economy and the stock market and all of those things. .. allowed ourselves to be worked slowly into a very delicate position with this international oil market largely controlled by countries who are at best neutral towards the united states, at worst end
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antagonistic and it's delicate that one quiver here can shake the whole thing. so we've got two real choices here. we can become less dependent on that system by decreasing the oil intensity of the country. and i think the reason we got here was we allowed the oil intensity to increase while sort of holding the geopolitical structure together well enough so it didn't really hurt. but i think $200 a barrel really hurts. and we've got to make some structural changes to not allow that geopolitically fragile system hurt us and to look at the basics, which i think we can control in terms of supply and demand. >> secretary of the treasury. >> i want to focus on the economic impacts because i've just been given a report the dollar is continuing to fall and hedge funds are selling a dollar short and that we've been asked to meet with moody's immediately. now, the fact is it this persists for any length of
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time, we are in the potential of my being the first secretary of the treasury since alexander hamilton to have to announce a downgrade of the dollar a and if the president is the first president, more importantly, to preside exactly over the political impacts that are mentioned. but economically, a downgrade or even the threat of a downgrade will inevitably lead to higher long-term interest rates. and you can do all the efforts you want with ben bernanke and the fed to go back to purchasing more bonds. it's very difficult to effect long-term interest rates which are market-driven. so we have the real risk, steve, of going into a double-digit recession now. we need to do, therefore, the following and it's a very careful balance. first we need a short-term stimulus by a payroll tax, holiday or a substantial reduction in employer and employee payroll taxes. second, we've had these
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continuing impasses on the debt limit. we just went through this over the summer and only put a band-aid on it. you know, winston churchill said the american people always do the right thing after they've exhausted all alternatives. we've now exhausted all alternatives. this could be the shock that gets us to a deficit reduction package. now, mind you, it needs to be a long-term one in impact. if we were to do that immediately now, it would send a terrifically positive signal to the market that finally this crisis brought us to a genuine deficit reduction, long-term package dealing with our structural deficits, putting entitlements and tax revenues on the table. and third,and the third is the s part. china, which has always been hoping that their own currency
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could be an international reserve currency, and that oil is trading dollars that the dollar tanks, they, and the rest of the world economy will suffer. we need to get the g20 to put out strong statements of support for the dollar backed up by administration action dealing with the deficit so that we do not let this iranian situation, which is only a blip in the amount of oil but has major psychological impact, we need to send a message from our international partners that they have confidence in the dollar and our capacity to handle the structural deficit. we need to demonstrate quickly. i would have the president in his speech tonight say he is going to ask congressional leaders to come to the oval office tomorrow morning and
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reach a deal on the deficit. maybe this spread it will shock us into the action we should have been taking over the summer. >> to balance this a little bit, i agree that these are long-term solutions that need to be started today. no doubt about it. " concerns me is the -- what concerns me is the -- if that is disrupted in some way, all of the gains would go for naught. the concern for me is the fifth fleet headquarters is in bahrain. we need to see where that is going to be operating from. the idea that iran could make us leave would be important but not operational lee. -- operationally.
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i feel like the sanctions have the been ineffective. the next step would be an embargo or blockade. those are acts of war. i am not suggesting we do that " we need to prepare ourselves for alternatives. the threat from iranian small boats has been there before. it is still there. i am worried about a maneuver that would escalate this in an unforeseen ways. we need to start thinking behind the scenes with our allies in the middle east for alternatives. to the speech tonight, we are short on a time. i want to focus on the energy possible. stuart has outlined things
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well. if the president is going to outline an energy plan, to get us out of the vulnerability we are in, i want to have some comment on what that is starting with sue and then john. >> i think would be worth the president pointing out the two things -- we have met the enemy and he is us. we are the largest consumer of oil in the world, one-quarter of the global -- comes to the united states. that is twice what the chinese consumers. most of that, 70%, is for transportation. let's start with those data points. we can start backing into solutions. one of the things worth pointing out is that one of the reasons saudi arabia has calibrated its capacity so that you did not see this kind of price hike. they did not want to see the
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world going to recession but also did not want market forces and a market prices to stimulate the kind of innovation away from hydrocarbon, away from oil that we now have the chance of generating. i agree with the secretary of energy on the expanding domestic production side it but i think one, expand. second, to the extent that the prices at the pump, i am not sure what that is. i do know that between gasoline prices and heating oil prices, the average household income has gone down by a $137 billion. we need to be in a situation where there is a motivation. the price at the pump will contribute to this.
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motivation to buy fuel efficient vehicles that are sustained. producers and consumers will need to know this is not just a temporary aberration. the prices will stay high. we need to develop alternative sources of energy, whether that his nuclear, natural gas. we have a lot of natural gas in this country. we have seen that in terms of prices. how can we translate that into more energy self-sufficiency? >> in 1974, the oil shock gave impetus to the creation of the iea and the whole idea of stockpiling. against future shocks of this kind. i am wondering whether opec has
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run out its string. what we would not want to take them on in a diplomatic confrontation, maybe there is a way of getting the saudis and other friendly oil producers to sit down with us in a different context like a meeting of the key consumer and producing nations where we could include russia and north america, canada as well as the oecd countries. it seems to me that architecture of our energy diplomacy, find some new formulation where we would be able to create a somewhat
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friendlier atmosphere to the major economic interests we are trying to pursue. >> a part of that effort has to recognize that oil is traded in dollars. i think we need to have the ben bernanke organized a central bank support for the dollar so that it is not plunge and hurt everyone. this has been done before. it can be done. we showed the hedge funds that they cannot sell our dollars short. that has to be an economic and energy policy. >> in terms of how we consider going about this, there is a consensus in the intelligence community that we are in for a protracted situation in the middle east. 2011 is not going to go away
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anytime soon. and yet, all of our mainstream energy forecasts all depend on substantial production growth from the middle east, from saudi arabia, iraq and other states to make -- meet future oil demand. whatever strategy we put together, we have to take into account the restraints that are going to exist on any short-term increase in the production capacity globally. >> and what i think we have heard tonight and the guys " run by the president. i want to start where we already started. we have to do something bold. the president has a real challenge and an opportunity to become a great president.
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something brand new for america but also the president leading the world out of the economic crisis, providing leadership out of the energy crisis. 3, we need energy. as part of that leadership we need to sketch out a comprehensive plan. on the economic peaciece, the dollar. we have to get the central bank to lead an effort to defend the dollar. the president has to avoid a double-dip recession. some of stimulus measures, you want to put people to work. you have to reduce the cost of labor to give them an incentive. of course, this is an opportunity to say we need to
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get a deficit-reduction. call for a meeting to try to get our hands around the deficit-reduction. third, we talked about internationalizing this problem. calling for international groups to come together, the g7, g20 kind of approach. that showed of the crisis we face is mobilized in the international community including countries like china and putting pressure on iran and venezuela and those people in the international system. -- putting the international system at risk. the president needs to put out a comprehensive energy plan that is molded beyond what we have seen in the past. opening up the domestic markets.
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getting hydrocarbons out of the ground and into the market, decreasing the intensity of our dependence and other matters. on the transportation sector and in which is where the oil consumption is, moving toward electricity which allows us to power cars from a variety of sources. petroleum is only 1% of what we use in terms of the generating electricity. it diversifies to other sources and non petroleum -- we have to do all of those in a big way. part of the international is moving beyond opec. opec is no longer for stabilizing the economy. it is a vehicle for assaulting the economy. we need to move beyond opec. the president needs to call for
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a different set of approaches to dealing with the economy. it is a challenge for the president but it is an opportunity for the president to lead the country and world to a better place. that is the message we take to the president. comments? suggestions? >> i would add one other thing to your excellent summary. when the suit was -- when sue was in her other position, she negotiated three free-trade agreements. it would send a signal that our political system is not dysfunctional. that is what it has been showing during this debt limit problem. if we could use this crisis to get that done and put in the payroll tax cut and the long- term deficit reduction package, it would send an axle and message. when there is a crisis america
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rises to it. this is a time when congress needs to do that. that would be another element that adds to the package. >> amen. >> the president has to be clear with the american people that while he is going to provide this leadership on a national and global basis, this is a problem that has festered too long. we are behind the mall. it is going to take a long time to keep these things moving. it will be a rough times for america and the world until it gets down. not a great message but that is where we are. i will take that to the president. thank you very much. >> on time and on message. [laughter] >> thank you very much everybody. well done. [applause]
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damhe voi >> i am the voice of doom that g occurs everybody on television will have a british accent. [laughter] this is the point at which we allow this terrific team to come out of character and abandoned the roles that they are played over the last couple of hours and talk about the experience of securing out this sand -- stimulation -- simulation. we're doing this at such an extraordinary time in washington with the debt crisis been discussed hour by hour at the white house and on capitol hill. stuart, do you leave this thinking differently about those conversations and about how, the extent to which the united states is flirting with grave danger? >> yes, it is something that i
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have realized. but the simulation emphasizes that this may have some impact on the the talks that are going on now. this is a short-term palliative. successive presidents have talked about energy independence and energy security. here we are back at it again in 2011. it gives me a sense of urgency. the key is whether it is urgency for the congress, the administration to come together now to avert a problem before we get a downgrade which will send the economy into a tremendous spiral. we talked about a seconds double dip. it could be a second great recession. >> we will be opening this up for questions and a few minutes. feel free to think about what questions you would like to ask. i was struck by the fact that when you ended part one of the
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stimulation -- simulation and you listed the ideas you're going to take to the president, the last thing on the list was developing a comprehensive energy policy. isn't the lesson is that this has to rise up the list and that it cannot wait for the fictional events to occur before policymakers actually grant but? >> i think that is the takeaway. this is a time to be bold. it is true that the country faces enormous challenges. but enormous challenges tend to make great presidents. what i would say to president obama and all of those poor trying to run for president is, this is a time for boldness. we are locked in too small things.
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we're not talking about major leadership. the american people are looking for it. that is what they want to see. i agree with you. we are late on this. we have known this was a problem for 20 years on the energy side. we talk about energy and the -- energy independence. each year if it's worse and worse. >> you were playing the role of the counselor to the president. you were raising the political issues that the president had to face. to what extent do those concerns and constraints mitigate against the possibility of a comprehensive strategy? >> especially with a divided government, it mitigates it tremendously. there are severe handicaps. if the president decides to open
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up america and have a rebellion in his political base because of the democrats will say let's go cream. how quickly is it is achievable? republicans [unintelligible] the same thing with the debt limit. these are the handicaps' we have. in the end, after exhausting everything, we do the right thing. churchill was right. that is an open question. it handicaps' both parties. governing from the center is the hardest thing to do in washington, d.c. >> sometimes there are two ways to get a consensus. it is to boil it down to the lowest common nominators. -- common denominator. but sometimes it is good to go big. this time it is go both. that way you may be able to
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generate a consensus and enthusiasm. >> i wanted to ask you about the issue of [unintelligible] ari and others were making the point out, how could you not be prepared for the fictional crisis that was rolling out in the saudi arabia. in a sense, if it were better designed for dealing with lower level global relations rather than seismic issues, what is the take away from that? >> having been at this for a while, i think this approach should be a life insurance policy only. it is only in case of death. anytime you start manipulating it for other purposes, you dilute it. then it becomes like a faucet.
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turn it on, turn it off. that is not what it is therefore. i think that takes discipline. bold is important. courageous is also important in terms of the decisions that need to be made. from where i sit in the country, the most courageous decision would be a those made without regard to reelection but rather what is right for the country in terms of resolving these big issues. last political tactics and more the substance of what is courageous. the country has to do with these issues. >> can that happen in this town? >> probably if the crisis is big enough. i think we are on the right track. [laughter]
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the crisis came and the talk came. it creates an opportunity. so the question for us is can we anticipate this and make those kinds of decisions before a crisis arises. i am not brimming with optimism on that score. >> what strikes me in this simulation is the inability of our national security instruments to solve this problem in a satisfactory way. our armed forces, a powerful as they are, cannot get this particular problem. our diplomacy, skillful as it may be, it drives me back to doing the things we can control in our own country in terms of our own energy resources and
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conserving every barrel that we do news and then looking at becoming less dependent. we have been using some tools to do this. we have spent huge amounts of money. we have a served. the problem lies with them. it is something we need to do at home. we can do that. we do not control opec or iran. we do not control saudi arabia. we control the things we can do in this country. i think we need to look inward to solve this. >> i presume you would agree with that. we have met the enemy and he is us. >> you have to wonder if we cannot get beyond no-brainers
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like the debt limit or the free trade agreement, how can we come to grips with this in the absence of a crisis? there is nothing that -- once the crisis has started, we are in deep, deep trouble. how do you generate -- we talked about courage. we need to talk about leadership, leadership, leadership. there are some things that are important enough to risk losing your job. whether you are elected or appointed, i think being honest with the american people about these issues, the american people can take the real story. it is going to require a longer- term solutions.
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we were scared so much of what had been going on -- spared so much of what had been going on. the congress had passed a stopgap measures. we did not talk about subsidies. some of the mistakes that were made in the 1970's were mentioned. but we were largely spirit. -- spared. so a lot of us need to step up. >> the crisis -- you need a crisis to motivate you. you have options before you get in the crisis and you have options after. but in the crisis, your options
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are few wis. one of the tricks about a crisis is to be able to articulate a sustained agenda that people can buy into and they can be executed over the long term. but when you're in the crisis, you are precooked. key iss point, the education of the public. everybody is but when you put the component parts on the table, we're going to have to have limits on social security, discretionary spending, on the taxes, the fact is we cannot afford the structure we have built in the today's tax limits. we have to come to terms with that. it takes a bold politician and it takes the public to believe that in which they do not believe. they have this theoretical sense
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if we just make a few cuts here and there we can solve it. the same with energy. a sustained honest dialogue to explain where we are is difficult to do before the crisis. when there is a crisis, perhaps it is easier. can we take these actions to avert a crisis? in a democracy like ours, so open, it is very difficult. it takes a high level of education of the public. >> a quick footnote, which did not talk about the private sector. we talked a little bit about ngo's. we should be talking about what can the private sector be doing? i happen to set on the fed -- serve on the fedex board. fred is fred is walking the walk. walking the talk. he's doing and he's not just
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talking about. and to the extent we can see a consensus start to build about a long-term plan in the private sector, in conjunction with ngos and have that as a force multiplier for political leaders, that would also be a tremendous benefit. >> let's send it up to questions. we've got a couple of microphones. back there and there. anyone on the floor over what you witnessed for the last two or three hours. i think we got someone over there, a gentleman over there. >> hi, john buehler. and i guess i would like to follow up on your conversation about a dual strategy, increasing our own dramatic sources and being more bold and aggressive about a green future. it seems politically and economically essential that we just don't say we're going to
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have a economy and we'll link the two. so i guess i would like to hear about the grand bargain if you will where we open up the gulf of mexico but we tie somehow those resources to investments in accelerated green strategy and i don't know the practical details of what that would look like and what that would be accessible to the different sides of the equation. >> you talk about reaching out on the ngos and reaching out of the future economy. >> i do believe there's a grand bargain being negotiated with proper leadership negotiateing it and that bargain is, what all companies do is explore and produce oil. let's open it up and at the same time, part of the deal is, let's change the royalty rates. let's change the royalty scheme. now the oil industry doesn't
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want to hear that but the best deal in the world is to produce oil in the united states of america because royalty regimes elsewhere around the world are far less lucrative to the oil companies so let's change the royalty rate in return for more production and let's use those royalties for the next generation of energy. the new technology, the innovation, the so-called green energy. that deal could be struck. and with respect to the ngos, i think getting the ngos on board that, yes, we're going to open up oil for the next 10, 20, 25 years and we're going to find royalty methods that are going to pay for what you're advocating in the green energy sector and all of a sudden you've got democratic forces coming together in coalition rather than in opposition. that's maybe a drain too far but i think it's a real possibility. >> we're in a situation -- let's
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take about the oil situation and talking about the green energy and being bold. china is number 1 in production of wind turbines. china is number 1 in production of solar panels. we haven't built a new nuclear plant since 1974. no one wants it in their backyard. a leading family in new england is opposed to the aesthetics. putting a wind farm in the bay. there's always a checkmate in our system. and perhaps it takes a crisis to allow people to say we got to put aside these kind of narrow parochial views and let it hang out, alternative energy, nuclear all of this have to be done but it requires the american people also to sacrifice and be willing to allow some of these things to happen when there's some risks to take. >> i'm john hannah and i want to get your take on this and the
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take-away lessons on this. >> the notion that we've known about this problem forever. we haven't discussed the huge economic impact on the united states to the degree in which we're holding hostage in which we discussed the national security impact. all of us have sat around this table especially after 911 and what came out to the region of the world and answer on about what we could do. there's real constraints on american security and flexibility and the policies we can bring to bear on the middle east precisely because of this back to oil and opec and the kind of strangle holds it has on the global market of the commodities that's absolutely essential to our way of life. and knowing that as long as we've known that again -- i mean, one is just struck by how
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incredibly urgent a problem this is. how little we've done about it. it hits home. >> we got time for one more question from the floor. the gentleman back there. >> hi, i'm lewis naberg. i feel a little bit like in a fast food contest where employees are family members and can't participate. what's most striking about this event today is that when we did our first oil shock wave, i think it was 2005 or 2006, the conclusions were strikingly similar. big ideas, big plans, do this -- we got to this this if we're sitting on our hands. basically we had no options and long term in a crisis wasn't an option, just as it is here. that's not dealing with the immediate needs of the present. oil prices were probably 25 or $30 a barrel. and it was pre-katrina and we
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worked and came up or robbie and his team worked and came up with speculation of oil at $100 a barrel and to talk about what it would do to our economy and bring us to our knees and this recession wasn't really about oil prices. it was part of it. it was something much bigger and since then the oil prices are high we've had unprecedented economic growth but our deficit has grown two, three times perhaps. so i think what we ought to be reflecting upon where we come from, where we are and are we really going to do something when it really becomes a problem? because you can't probably have $200 a barrel oil. anyway, i throw that out as a provocative plot and putting this into context. >> i guess having worked on a presidential campaign i'm, but the thing that will stir action is the price of gas at the pump. nothing accounts more than having to fill up your car. all the other macrostatistics
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are macro, but that's what creates pressure on a politician. i can't conceive -- where i live it cost $4.50 a gallon to fill up at premium and that's reflected how it's gone down 10 cents, 20 cents recently. i suspect that we're at the rebellion stage. and everything that comes from the individual and politicians respond. they're close. >> one more question down here. >> i'm with the hulet foundation. this has been a fascinating morning. one issue that didn't come up that i kept thinking about when i watched the price of oil going up and up during the course of the morning is somebody is making a tremendous amount of money off of this shock wave that's happening.
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and is there any thought around what -- you know, whether that's the global oil industry or if it's financial companies? is there some role that we need to be thinking about that the hedge funds or people who are speculating what is a smile crisis but not as urgent in the supply and demand versus what was happening when you look at the impact on wall street and the financial markets? i'm just curious does anybody perhaps the secretary of the treasury or have some thoughts on this? >> well, one of the things that we did in the '70s and forgive me for repeating this, john, is that when we deregulated the price of oil with the iranian oil shock, we recycled that money. now, here you could do something simil similar. take all of that money and put it in the production or in the
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deficit reduction or into alternative energy. not on a permanent basis but just with this extraordinary situation where you will have a lot of companies not that they want it but because the realities of the market will put that in. another thing that sue and i were discussing is to have on the gasoline price so that you don't get these wild fluctuations. this crisis will go 2.5 a barrel and we don't need to have a car. if you had a base under oil prices and god knows i've been through this in two administrations where we had our head handed to us trying to do it. and you take a uniform and 100% % of the but you still put it under gasoline prices it sounds like a signal to the market to auto manufacturers and purchasers that they can go out and buy energy efficient. so those are some thoughts on
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how to deal with the situation. [applause] >> i would say most sadly in this scenario they are going to russia, venezuela, iran -- i mean, they're going to the producers. yes, there is some spinoff but by and large, it is not the speculators so much as the producers. and they get that premium and they get that rent. and part of the point that stu is making is there some other way of dealing with the economic rant issue in the short term to deliver market signals so that we don't forget after two years that, you know, maybe we have a hybrid vehicle. >> two quick points. remember if you are going to open up america and do all this drilling, it's very expensive. and it requires an enormous
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investment so if you think of those windfall profits, a lot of those windfall profits need to go into investment. secondly, someone was mentioning last night, 90% -- i think this is right. 90% of the world's oil reserves are controlled by state-owned oil companies that are controlled wholly or largely by countries. and those companies are not investing which is why production is going down in so many places in the world. so one of the challenges is, we've got to invest but we got to get those investors to invest in oil out globally, not just out of the united states. i mean, it is one of the amazing facts in terms of opec production since opec was created in the early 1970s. if you look at opec production
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capacity, it's essentially flatlined. a little 30 million barrels a day and a little over 30 million barrels a day and that's when you see historically this tremendous price fluctuatibility. >> oil companies have too little not too much power. >> right. >> and we need to encourage the saudis and other major oil producers to open up to private american european multinational investment to help them. it's in their best interests to do that. to bring the new investments to bring the shells and the companions and the bps to work with them to increase their production. >> i almost hate to stop the conversation because it's such an important one and having started it would be good to continue but we're out of time. i want to thank stewart, john, ari and deni, john negroponte
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and the recently deported chuck. thank you for being here for the last few showers. he's been called to the white house clearly. thank you very much indeed and enjoy the rest of the day and thanks for the stimulation. [applause] >> throughout the day c-span has had live coverage of the iowa state fair. a key early stump for republican presidential candidates. earlier they heard from herman cain, rick santorum, ron paul, tim pawlenty and newt gingrich and also remarks from chairman of the dnc debbie wasserman schultz who is invited to speak at the fair. still to come at the top of the hour at the iowa state fair minnesota representative michele bachmann coming up in about 45 minutes at 5:00 pm eastern and a reminder, if you miss any of today's coverage you can watch these speeches again at 8:00 eastern or online or anytime at
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c-span/politics and saturday we're back to iowa one last time for the republican straw poll in ames we begin noon eastern with a preview program on the history and the impact of the 32-year-old event followed with the poll and the speeches from the candidates. all of that tomorrow on c-span. and with the senate out for the august break, watch booktv all this month in prime time here on c-span2. tonight the worldwide web.
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>> six months after the uprisings in egypt, hosni mubarak and the sons appeared before a three-judge panel on charges of corruption and the premeditated murder of the peaceful protesters. the leader who served for 30 years pleaded not guilty to all charges on a hospital bed in a cage inside the courtroom. the first day of the trial was shown on egypt's television. this is an hour-long portion of that event. [speaking in native tongue] >> translator: in the name of god, hosni mubarak representing one of the plaintiffs of the 25th of january revolution. your honor, i call upon you and
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the people dubbed me the lawyer of the people and we we have full trust in your justice. we ask you to implement article 301 of the criminal procedures to press charges according to article 102 paragraph 2 regarding the use of explosives against peaceful protesters that died in our arms in alexandria in cairo, were assassinated and killed with explosives with forbidden weapons according to the article 305 that are relating to terrorizing the
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peaceful population. what happens during those days was. it was terrorizing to people. they brought their own thugs to kill and terrorize the civilian people. we call upon your honor to apply the punishment in article number 11 former minister of interior who was implementing the orders of president hosni mubarak who was encouraging him to kill the protesters. counselor, please give us your motion. counselor, counselor please present your motion in writing.
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please, your honor, we would like to second the public prosecution in pressing charges against the accused. where your motion, counselor. please give us your demands, your motions in writing. can someone hand me that motion. go ahead, counselor. god almighty says that you raise
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whoever you wish and you put down whoever you wish. i would like to congratulate everybody for the start of the month of ramadan. god says justice is the basis of all life and justice is prayer. i represent 32 of the victims of the revolution of january 25th. this is a civil case. they request reparation for each victim and injured. counselor, you already gave us
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this motion in the previous hearing. did you pay the fees [speaking foreign language] >> translator: yes, we paid the fees, the original ones. [speaking in native tongue] >> translator: did you pay the fees for the amended motion [speaking foreign language] >> translator: not yet, your honor. okay. and go ahead and pay the fees for the amended motion. you pay the fees and then come -- bring your motion. the civil case against the prime minister former prime minister former prime minister and five ministers of information and it's just the administrator of
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the treasury because we would have to implement the ruling of the court. your honor, thank you for your patience. we would move that all the crimes that took place all over the territory of egypt under your court that because that is a clear link between the crimes of which the former president is accused the crimes were committed by individual police officers or thugs and these crimes need to look at one. the second thing we would like to include all those who committed crimes and killed
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protesters. what else? what else? okay. pass the microphone, please, to one of your colleagues. in the name of god, mohammed, i represent one of the martyrs and also i have a civil case. i know, mr. president this hearing will be adjourned a number of times. and we prevent this crowding i would like those who have civil charges to be present in the court to allow individuals to be present. the court can also mandate that mohammed hosni mubarak, the accused, put in the hospital in
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the jail and this is something the egyptian people are expecting and waiting for so that there's no playing with justice. these are the two motions i have, your honor. case number 2. prosecution, press the charges. please sit down counselors. please sit down. everybody be seated. your honor, we have motions. we have motions to present to you. please, we have in the name of god the public prosecution brings charges against the accused whose names are hamid
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fasni mubarak and mubarak. for their actions between the year 2000 until the year 2010 and in the period between january 25th, 2011, in the provinces of cairo and giza. and others. the accused number 1. participated and conspired, on the former minnesota of interior at that time and who has been
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brought in front of the court and the protesters with premeditation that has had next to it other crimes. they inspired and plans for it to the peace process that took place that i mentioned earlier that were demonstrating against the tire economic, social and security situation in the country. and also calling for reforming and stepping down of the accused from the presidency of the republic and bringing down his regime that is responsible for this situation. he allowed him -- he allowed the second accused to use the weapons and the armored vehicles to help the security forces to
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commit the crime. and he also followed up with the police officers and security forces shooting the protesters with live ammunition in places of their bodies that would be fatal to them and running them over with armored vehicles. he watched all that happened and did not intervene with the authority that he had to prevent that from happening or stop the aggressing and his intentioned was to dill a number of protesters to terrorize the others. and force them to give up their demands. one of the police officers shot the victim and he inflicted the
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demise. and the crime was committed according to this previous agreement and the plan by the former government. a number of other crimes have also been committed that accused in many of these places that we mentioned earlier participated by conspiring with the accused, the former minister of interior at that time and others whose name are in the list in the premeditation in the method that we described earlier. second he also comspider with accused others and the minister
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of interior with intent to kill others with clear premeditation and planning in the way that was described earlier. number 2, the president of the republic, he accepted and took for himself and for his two sons the accused number 2 -- number 3 and number 4 the donations that are described in the conversation. five villas and nexus that reached 39 million 759 and 500 egyptian towns with phony contracts that were recorded in the real estate registry by in
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exchange of using his own authority to build on a protective lens that surfaced of about 2 million square meters in the regional areas for a profit for the investment company named in the investigation. number 3 he helped in support with the public officer to gain benefits for himself. he conspired with the ministry of oil and who has been brought to criminal justice for this
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crime to allow exports and selling of the egyptian gas company of the mediterranean that is represented by the number 2 number 2. who had been brought to the crime and he also assisted him binaming the company in a petitioned to associate himself without any due process selling the under the normal market prices so that they could gain benefits personally in
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conditions that were profitable for them between the price in the contract and the benefits that reached 2 million and 600 dollars which raised the benefits for his company, therefore, the crime was committed. number 4 also participated to create the crime and help and assist him in implementing it which led to a advice advantage in hurting the oil and gas
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sector in egypt. the difference to the price of the natural gas that was actually sold and the market prices at that time, therefore, the crime has been committed according to this assistance and conspiracy. accused number 2, gave a gift to a public servant to use their authority -- his authority to change the property the villas that we mentioned earlier which which had the price of 39 million and 39 egyptian pounds which were registered in the
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real estate properties and the exchange for the accused number 1 for using his authority to have access to land and give it to the company that he owns in the best places. and accused number 3 and number 4, they accepted and they took gifts for a public servant to use. his authority -- each one of them accepted from accused number 2. the property of two of the four villas and their nexus that are described and delineated and their value value reaches 13
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million 39,500 egyptian pounds in exchange of their father the accused number 1, using his authority to get real estate that was given to the company called nama, which is the property of the accused. and all of this was knowingly and by design. accused number 1, mohammed hosni mubarak. yes, your honor, i'm here. >> you heard the accusations and the charges that the public prosecution has pressed against
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you. what do you say [speaking foreign language] >> translator: i deny firmly all these accusations. the accused denies all the accusations. accused three hosni mubarak? foreign >> translator: yes or no. >> you heard the charges by the public prosecution. what do you say? >> i also deny them all. >> i deny them all.
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>> who's representing the accused number 1. just a minute. just a minute, please. who is the counselor for accused number 1 representing accused number 2. defense lawyers, who is here with accuse 1? who's here with accused number 4? okay. you are representing all of them. the civil plaintiffs, your honor, we would like to be able to say them is representing himself and on behalf of my
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client, the plaintiff requesting reparation and also requesting the inclusion of the current minister of interior and also to change and alter the name of mohammed samir. i also move the courts. >> speak slowly so that the clerk can speak up with you. go ahead. >> and also move and ask and request from the court to continue to look these charges.
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and not send the case back to the previous court and for the obvious link between the two cases. former president of accused in the case of 12-27 in criminal court. of all the security apparatus. also at bringing the police
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officers that were in charge those days. your honor, i would like to say something before the motion. i am representing all the professors of egypt. and i want to say if this nation was embellished by the blood of the -- blood of the martyrs then now this nation is embellishing again with this trial which is a symbol of the sovereignty of justice to this nation that has lost its dignity for decades. our motion is to allow us to take a photocopy of all the files of court 3600 of the
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criminal case and since the two cases are integrated now, i have another motion. i was not able to talk the first time. i would like to hear the testimony of dr. mohammed, an engineer -- the executive director of the national body for telecommunication and we would like to hear the testimony of mr. mohammed, president of the news in the period between
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january 1st until he was -- he was relieved from his office and also hear the testimony of the president of channel 1 on egyptian tv in his capacity for his role between january 1st until he left the office. and also the president of the nile newschannel for the same period. and also request to have a copy of all the additional files in
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the case. after it was transferred to the cour court. i know you're patient and stand for the truth and justice. your honor, when a member of egyptian youth proposed for their dignity and rights, the men and thugs of the minimum city of interior of live ammunition and their weapons killed them, killed the peaceful protesters in those moments and
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on january 28th, orders were given to general pantowi and the other general to crush the protest and to crush the tahrir square, my request is to listen to general -- to er has the testimony of general hamid as chairman of the chief of staff and the general to listen to their testimonials whom they get those orders from.
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president mubarak was then the commander in chief. your honor, i represent the union of lawyers in the case number 3627 in 2011, we request from the court to subpoena the minister of interior to give us the files of the security director and the security
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administration. to give us the officers who were on duty on the 25th until the 28th of january, 2011. we also request that the court send one of the judges -- to send one of the judges to the minister of interior to investigate those people. and also have a copy of the footage that the national channels and the alja-ve -- al-jazeera channels. >> your honor, your honor --
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please, your honor. please, your honor, we need to reach the actual accused. your honor, how are we going to get the evidence if the footage is not brought to this court? >> i represent the victims. we represent them in the civil case and we also require the 100,001 and your honor our motions is to obligate the current prime minister -- minister of interior to give us
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the names of the officers who who were on duty in those dates where the where the felonies and the crimes took part -- took plac place. >> i'm lawyer and i represent one of the victims. your honor, i'm not going to say more than three words. i only request from your justice to take the fingerprinting of accused hosni mubarak, right now during the hearing and i have here -- because all the papers, they have no record in the civil registry.
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please, your honor, you can send someone to take their fingerprints. what? what else? we would like, your honor, a i say will of all the phone calls that -- the calls that took place all the nine defendants here january 1st until january 30th. keep it. you keep it. keep the ink. >> attorney anna. >> i represent 22 martyrs from northern sina. i present my motion, 40,000
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pounds for each one. on martyr mohammed attif, the martyr and others and the victim hamid and the victim and others. i represent civil cases from the 8 martyrs. we bring the civil cases for reparation, 40,000 pounds to each one of the 8 martyrs.
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someone give me the motion. the lawyer who represent the civil case and i request from the court to exert its powers, too. include dr. atta in number 4 that is pressed against the accused number 1, president mubarak. in view of the transfer ruling and based on the investigation and also witness. hamid fared, i represent the
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martyrs and injured in the revolution. we request from the court to include our demands first, to anull the ruling of the first tribunal that transferred the case to hear for infringing the article 102 which says that when the first -- the first case has to stop. your honor, you need to stand something else. something else. what else? what else? >> we request from the court to include the final report of the fact-finding mission that the prime ministry has formed and
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included in this case. third motion, regarding the destruction of evidence of voice recording that has the recording of general madreni and request from the court i request this misdemeanor to the felony and apply article 90. please let me finish. please let me finish, your honor. the most important motion is to -- according to article 11 of the criminal procedure for the president -- former president
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hose sunny mubarak from the weapons arms deals and we would like for the court to include that as a charge. your honor, our main motion is in this case, we are judging associates. we would like the court to subpoena the minister of interior to present the names of the snipers that were active and used during the revolution so that we know who gave the order and who pulled the trigger so that this ring of assassins and killers all brought to justice and also request the presence listening to him because he was
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present in all those meetings. the civil plaintiff from the martyrs of cairo and alexandria, 25 of them. all i ask is number 1 is to listen to general mohammed and general aninn to determine whether they were ordered or asked to do. the second is the testimony to give us the names and the duty role of the officers. >> are you a lawyer? >> i would like permission to have a copy of the minutes of
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the proceedings. >> i represent one of the victims. we would like to subpoena the representatives of the phone and other communications companies to hear from them who gave them the order to shut down the telecommunication of the network. we request from the honorable panel to include more accused to these circle. there are media circles that really incited the people to violence by saying that the protesters were mercenaries. that they were terrorists. that they were.
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we would like to include several because on january 27th, that's it. that's it. pass the microphone. enough. counselor representing the civil case, victim of aggression. and we request reparation for my client and we also would like to to subpoena the head of the intelligence. we also request reparation. i represent the mother of a
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martyr. please, counselors, who represent -- okay. you are the last one. you're the last one. we would like all these motions in writing. give me the motion. give me the paper. i would like to request from the court to give permission to all the people who are the plaintiffs of the civilian. there's only 30 of us here present. there are 130 outside that were not allowed to come into this courtroom.


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