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tv   CBS Evening News With Scott Pelley  CBS  October 26, 2011 5:30pm-6:00pm PDT

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"cbs evening news with scott pelley" from seattle is next. >> caption colorado, llc comments@captioncolorado.com tonight, pr s say they have busted the inside man in an inside trading case. rajat gupta is accused of feeding secret information to a hedge fund tycoon, who made a fortune at the expense of ordinary investors. bob orr is covering. for the first time, the wife of bernie madoff speaks out. >> we decided to kill ourselves because it was... it was so horrendous what was happening. >> pelley: morley safer has the story for "60 minutes." rising tuition costs are driving students deeper into debt. dean reynolds tells us why some believe it will only get worse. and in a state with high unemployment, ben tracy on why there are thousands of jobs with no workers to fill them. captioning sponsored by cbs
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this is the "cbs evening news" with scott pelley reporting from seattle. >> pelley: good evening. from the emerald city. at a time when there is so much anger in the streets of america over wall street greed and corporate corruption, we begin tonight with one of the biggest wall street insider trading cases ever. at a time when many americans were losing their 401(k)s, prosecutors say rajat gupta was leaking secret corporate information to a hedge fund tycoon so that that tycoon's fund wouldn't suffer the same fate. gupta was in a perfect position to do that inside the board rooms of some of the country's biggest corporations. the result, prosecutors say, was that the hedge fund made millions while ordinary americans got soaked. justice correspondent bob orr has our story.
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>> reporter: as a board member for proctor & gamble, and goldman sachs, rajat gupta regularly heard sensitive corporate secrets, capable of moving stocks up or down, but federal prosecutors say gupta often shared that valuable inside information with convicted hedge fund trader raj rajaratnam. an indictment unsealed today charges gupta with conspiracy and five counts of security fraud. jacob frenkel is a former enforcement chief for the securities and exchange commission. >> the overall case by far is the biggest inside job. this reaches directly in to, two of the top corporate board rooms in the united states. >> reporter: prosecutors say at the height of the financial crisis in 2008, gupta provide a stream of tips that helped raj rajaratnam turn quick profits and avoid millions of dollars in losses. the indictment, built on wiretaps and phone records, claims gupta often passed inside information with stunning speed.
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for example, prosecutors say on september 28, 2008, gupta called raj rajaratnam just 16 seconds after completing a goldman sachs conference call. gupta allegedly told raj rajaratnam, warren buffet's berkshire hathaway was about to make a $5 billion investment in goldman. minutes later, before the markets closed and before the buffet news was public, the next bought 25 million in the stock, the next morning gold's prices rose $3.00 a share. the indian born businessman has extensive relationships with corporate c.e.o.s and charitable foundations. >> india needs that kind of growth. >> reporter: and he's used his voice around the world to encourage job creation, but prosecutor says gupta, who appeared in court today, openly flaunted securities laws. in his statement, his lawyer
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called the charges baseless, saying mr. gupta is innocent. he has always acted with honesty and integrity. tonight, gupta is free on it will $10 million bail after pleading not guilty. he's not accused of directly profiting from the inside information he allegedly passed on, but if convicted he faces a maximum of 105 years in prison and millions in fines. >> pelley: thanks, bob. hedge fund manager raj rajaratnam was sentenced earlier this month to 11 years in prison, the longest term ever for an insider trading case. the biggest name in wall street fraud is bernie madoff, whose ponzi scheme robbed investors of $20 billion. madoff is in prison, and his family has been in seclusion until tonight. in a story for "60 minutes," morley safer sat down with madoff's wife, ruth, and his son, andrew. in the interview, andrew madoff recalls a time he received an envelope with surprising contents. >> i tore open the envelope, and... and dumped it out, and it was absolutely heartbreaking.
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these were pieces of jewelry that i recognized, things that i had seen my mother wearing over the years. and i couldn't understand how she could do this. i mean, what were they thinking? and it wasn't until three years later that i had a chance to ask her, "what were you thinking when you sent me that jewelry? i don't understand." and she told me that she and my father planned to kill themselves, and they put together that package beforehand and sent it out. >> reporter: did they try to kill themselves? >> yes, they did. >> i don't know who-- whose idea it was. but we decided to kill ourselves because it was... it was so horrendous, what was happening. we had terrible phone calls,
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hate mail, just beyond anything. and i said, "i can't, i just can't go on anymore." that's when i packed up some things to send to sons and my grandchildren. i had some lovely antique things and things i thought they might want. i mailed them. it was christmas eve. that added to the whole depression. we took pills and woke up the next day. >> reporter: what did you take? >> i think ambien. >> reporter: how many? >> i don't even remember. i had-- i took what we had. he took more. >> reporter: did you leave notes? >> no. it was very impulsive and i'm glad we woke up. >> pelley: madoff's other son, mark, did commit suicide during the scandal. you can see the entire interview on "60 minutes" this sunday. occupy demonstrators in oakland,
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california are vowing tonight to reclaim their site in front of city hall. police kicked them out early yesterday, and there were clashes when they tried to return last night. police fired tear gas and bean bags. 97 people were arrested. for now, the park is closed for a thorough cleaning. wall street has also been watching europe today to see if the europeans can contain a debt crisis that threatens to trigger an unpredictable financial collapse like the one the united states suffered in 2008. at a summit meeting late today, european leaders announced they had agreed on a plan to shore up banks. it's a step in the right direction, but difficult problems are still to be worked out, including how to manage overwhelming debt owed to those banks by greece and italy. the stakes for the u.s. economy in all of this are high and we asked anthony mason to tell us why.
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>> reporter: the european crisis is the single biggest threat to the u.s. economy. if european leaders can't agree on a solution, economists say, the u.s. will be dragged back into a recession. europe is, first of all, our biggest trading partner. but a default in greece could also send shock-waves through the american banking system. the congressional research service estimates u.s. bank exposure to the european debt crisis at $640 billion. that's nearly 5% of total u.s. banking assets. u.s. banks also have more than a trillion dollars in loans with german and french banks which are in turn the biggest lenders to the troubled european economy. if a european bank goes down, the concern is, scott, it could provoke a crisis of confidence that freezes up the global financial system. >> pelley: thanks, anthony. a lot of folks are worried about their money, and we got an eye- opening report today about the widening gulf between the haves and the have-notes in our country. the congressional budget office
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tells us between 1979 and 2007, america's wealthiest 1% saw their incomes increase by 275% to, at least $352,000. the incomes for america's middle class grew about 39% to more than $49,000. and there's a split of opinion about where this country is headed. in a new cbs news pole out tonight, 49% of americans told us they believe the country is headed into another recession. the unemployed, of course, still haven't recovered from the last one, and chip reid found part of their story here in seattle. >> come here! >> reporter: rose brittain of seattle is all smiles when she is playing with her dog but ask her about being unemployed for three years and the mood change is dramatic. >> sorry.
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the potential to lose my home. >> reporter: rose belongs to the 54% of unemployed americans who say their household financial situation is bad compared to only 30% of americans overall. rose and her husband have also joined the 53% of unemployed americans who raided their savings to get by. >> we've used all of our 401(k)s. we're almost through all of that. i was one of those people that was prepared. we did have money put aside. >> reporter: in columbus, ohio, melody proper, unemployed for three years, skips meals it make sure her two children get fed. >> i don't have enough money to be able to afford groceries for three meals a day every day for all three of us. so i'm not going to starve my children. >> reporter: her mother, gloria kelber, laid off almost two years ago, belongs to the 53% of
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unemployed americans who have no health insurance. >> i can't go to the doctor, can't go to the dentist. can't have any of my health needs met. >> reporter: in northern virginia, rick jenkins lost his job as a government contractor seven months ago. he's part of the 30% of unemployed americans who expect to make less money if he finds a job. >> on every job it goes down a step, and down a step, and down a step. >> reporter: some of the jobs he's applying for now pay less than half what he used to make. >> it's just hard because of your self-worth, you know, is less. i mean, you used to be worth this, and now you're worth this. >> reporter: unemployment does take an emotional toll. according to the poll, 54% of unemployed americans say they've had emotional or mental health issues as a result of being unemployed. chip reid, cbs news, washington. >> pelley: college students are facing higher tuition and ser-deepening debt. coffee shop therapy-- it could
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be a lifesaver for soldiers in distress. and the color in colorado is snow white when the "cbs evening news" continues.
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>> pelley: we're back now from seattle. the eastern part of this state had its first frost last night, so farmers are rushing to
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harvest washington's biggest cash crop, apples. 70% of america's apples come from this state. 10 billion are picked by hand every year, but this year, ben tracy tells us, hands are hard to come by. >> reporter: it's the height of harvest in washington's apple orchards. and grower al robison is racing against time. >> we're just running out of days. >> reporter: he needs to clear his 240 acres of apples before the first freeze. he usually has 80 pickers. this year, he could barely find 60. >> once they're frozen, that... that quality goes downhill fast and after a couple of days, you're done. >> reporter: help wanted signs are planted up and down streets of the wenatchee valley, nicknamed the apple capital of the world. right now this state desperately needs more than 10,000 apple
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pickers. where are a lot of workers? a lot of growers are convinced a lot of talk about illegal immigration in washington, d.c. has scared away the apple pickers here in washington state. most of the pickers here are migrant workers. an estimated 66,000 are here illegally. that's about 72% of all farmhands statewide. >> whether they're legal or illegal, they're not traveling. >> reporter: alfonso garcia has a green card. he's worked these orchards for 24 years.*+*+*+*+*+*+*+*+*+*+**+ 8;;;; qui >> reporter: and these migrant workers carry the load of this backbreaking work. they pick about 8,000 pounds of apples in a nine-hour day. so one guy picks eight or nine of these things in one day? >> yes. it's a lot of work. >> reporter: are these jobs most americans would do? >> no. you can say, "oh, well, you don't pay enough." but i'm paying $150 bucks a day. unemployed people who are on unemployment aren't willing to get off of that and come work. >> reporter: the labor shortage has put the $1.4 billion
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washington apple crop at risk. >> without a labor force to do that, the industry is simply not going to survive long term. >> reporter: bruce grim wants congress to create a new guest worker program that allows mexican migrants to come here for harvest and then return home. >> yeah, we see a need for securing borders and taking care of your immigration. there's no question about that. but we have workers who want these jobs, and we have workers in america who clearly do not want these jobs. >> reporter: without more workers, al robison worries that after three generations of growers, he could be his family's last. >> it will fold. people are-- people will go out of business. >> reporter: ben tracy, cbs news, wenatchee valley, washington. >> pelley: as the frost came to washington state, so did the snow to colorado. a foot or more across much of the state. the snow snapped trees and knocked out power to more than 100,000 homes and businesses.
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a hard lesson for students about the cost of college when we come back. ,,,,
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>> pelley: an executive order from president obama could help millions pay off their student loans. he announced it today at the university of colorado denver. his plan will let borrowers consolidate their debt into a single government loan at a lower rate.
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but student debt in this country is approaching $1 trillion, and today the college board reported tuition and fees at public colleges rose by more than $600 this year. we asked dean reynolds to look into that. >> reporter: it would be nice if katrina manalac, a senior at the university of illinois at chicago, could just concentrate on her studies. >> what is this? >> reporter: but there's something else on her mind. after she gets her diploma, she will have $50,000 in unpaid student loans. tell me what that's like? >> it's a really overwhelming feeling. i-- as much as i tonight want to think about it i have to think about it. >> reporter: she needed the loans to cover the ever- escalating cost of going to school, costs that have risen 8.32% at public universities in just the last year to an average of $17,000, even for in-state students. terry hartle of the american council of education.
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>> the biggest reason for tuition increases quite simply are state budget cuts. in the unrelenting mathematics of public higher education, state budget cuts equal tuition increases. >> reporter: now that the federal stimulus money to the states is running out, the squeeze will get worse. here in cash-strapped illinois, the state owes nine public universities half a billion dollars in delayed payments. the consequences of that delay are larger classes, a faculty hiring freeze, and higher tuition. to save money, katrina manalac had to move from the campus to her parents' home in the suburbs. did you want to be living with your parents in your senior year? >> no, i did not. >> reporter: she wants to go to graduate school to become an occupational therapist-- meaning more loans and more debt. dean reynolds, cbs news, chicago. >> pelley: here's what our research department found out about the value of a college degree. the unemployment rate for high school graduates 25 and older who didn't go to college is 9.1%. but for those who have a
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bachelor's degree, it's just 4.8%. a coffee shop with a mission to help soldiers haunted by war. that story is next
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>> pelley: seattle has been called america's capital of coffee.
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it seems as if there's a coffee shop on every corner. but we end the broadcast at a coffee shop outside tacoma, washington, where barry petersen reports each cup comes with compassion. >> my life just wasn't the same, and i couldn't find a reason to really live any more. >> reporter: deborah flagboam is still traumatized by a sexual assault during boot camp and needs a therapy dog to help her cope with thoughts of suicide. >> it wasn't just merely a cry for help. it was real roller the former marine was told by military officials there was a two-month waiting list for long-term psychiatric therapy. so she came to this coffee shop just outside joint lewis mcchord. >> any issue we can help, we will help. >> reporter: iraq veteran jorge gonzales is executive director of coffee strong, the veteran- owned shop opened three years ago to serve free coffee to soldiers and marines. over time it became a place for
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troops to share their problems and treat the mental scars of war. what's the difference here? >> that it's normal. it happens to everybody. >> reporter: you're not reporting to anybody? >> no, we don't report to their chain of command unless there needs to be. >> i don't think i would be alive today, to be honest. >> reporter: veterans at coffee strong found help for flagboam within 24 hours. >> i could have ended up like sergeant jared hagemann. >> reporter: army ranger jared hagemann killed himself this past june. facing his eighth combat deployment as a member of the special forces. >> at that moment, i knew that this was going to be the death of him. >> reporter: his wife, ashley, says she warned base officials soon after her husband threatened suicide. >> he had that look in his eyes like he just wanted to die. >> reporter: in 2004, there were 67 confirmed suicides in the army. this year, 130 army deaths are apparent suicides.
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there have been six at lewis mcchord. colonel dallas homas is in charge of the suicide prevention program at lewis mcchord. >> we have thrown immense resources, time, energy, money to try to get soldiers to the help they need, and we've come a long way, but we are still losing soldiers to suicide. >> reporter: some officers warn their troops to avoid coffee strong, which does not hide its antiwar message, but colonel homas takes a different view. >> i think that wherever a soldier gets help is a good thing. >> you're not going to be weak. you're not going to be less of a soldier or anything. it's a normal thing. >> reporter: at coffee strong, there is no weakness, just the comfort of comrades. barry petersen, cbs news, tacoma. >> pelley: and that's the cbs evening news. i'm scott pelley in seattle. for all of us at cbs news and around the world, good night.
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flash grenades. police clash with protestors in the your realtime captioner is linda marie macdonald. tear gas, flash grenades police clash with protestors in the streets of oakland. what the "occupy" movement plans for tonight. why one expert says they need to hit the suburbs to really succeed. good evening, i'm allen martin. >> i'm dana king. oakland occupiers say police crossed the line and tonight those protestors are ready to fight back saying they will retake their camp near city hall after violent clashes with police last night. christin ayers with what's happening out there right now. christin. >> reporter: frank ogawa plaza was reopened. protestors have started if you take a look back here to reconvene on

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