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ERIN BURNETT OUTFRONT

The "Buffett Rule"; Women Voters; John Edwards on Trial

Aired April 16, 2012 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ERIN BURNETT, HOST: Breaking news tonight. The "Buffett Rule" dead on arrival, our guest says it means nothing and he has a much better way to make America more fair.

And the first poll of the presidential campaign released today, showing President Obama strong in almost every category. The big question, does Mitt Romney have a chance?

And new details from the Secret Service sex scandal. How big was it really? Former Secret Service agent OUTFRONT -- let's go.

And good evening, everyone. I'm Erin Burnett. OUTFRONT tonight breaking news, the Senate voting right now on the "Buffett Rule" and the bill failing tonight, mostly along party lines. Senate Democrats called for a vote on the so-called "Buffett Rule" today knowing it would never muster the 60 votes needed to pass.

The "Buffett Rule" is one of the president's election year priorities. It calls for people who earn a million dollars in adjusted gross income to pay a minimum tax rate of 30 percent. Now, the left-leaning group MoveOn.org was quick to jump into the debate. Target number one for them, Mitt Romney.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE, POLITICAL AD: When the wealthiest one percent pay a fair tax rate like the rest of us it keeps the American dream alive for everyone. So tell Mitt Romney kittens are cute. One percent fat cats who won't pay their fair share? Not so much.

(END VIDEO CLIP)

BURNETT: OK. We did the math, though, and the "Buffett Rule" doesn't add up to keeping the American dream alive at least when it comes to cutting the deficit. The "Buffett Rule" would raise about $4.7 billion a year in revenue. One-half of one percent of $901 billion. That's the president's forecasted budget deficit for 2013. And already those who earn over $1 million in this country pay a greater share of the income tax burden than everyone earning under $75,000 combined according to the Tax Foundation and in 2009, the most recent data available millionaires earn 10 percent of the income in this country but pay 20 percent of income taxes.

But, by the way, the Republican talking points don't add up either. One of the main arguments against the "Buffett Rule" is that it would hurt small businesses, but only one percent of small business openers actually have enough income to qualify for the "Buffett Rule". That's according to the Treasury Office of Tax Analysis. So overall here's the bottom line -- 237,000 individual taxpayers in this country even meet the "Buffett Rule" criteria. One of them is John Paul DeJoria. You probably recognize him as chairman and CEO of Paul Mitchell Systems, founder of Patron (ph). He's also a member of our OUTFRONT "Strike Team" made up of the country's top business leaders, entrepreneurs and innovators. John Paul DeJoria comes OUTFRONT tonight. Good to see you, sir.

JOHN PAUL DEJORIA, CEO, PAUL MITCHELL: My pleasure.

BURNETT: "Buffett Rule" --

DEJORIA: Yes.

BURNETT: Would it upset you? Would it make you angry or is it fair?

DEJORIA: I think if you look at this way, if we gave an extra five percent and it went to really helping the people and not into government waste, we would do it. We would do it in a second. But I think a lot of people are saying well wait a minute. Why should we add more to the deficit? Why should we add more to spending where it's not going to be spent correctly? The first thing that he's got to do is handle the deficit, not by taxing people more but being more efficient at what they do.

For example, I'm not a detail guy. I depend on accountants and administrators to do my detail stuff for me, but I do know the overall picture and I know that if you put business people together in a room, not just politicians, they could shrink the deficit tremendously by good business tactics. So those that have the money will gladly give it if spent properly. If not, make it mandatory. Make it a mandatory rule, if you're making that big money, you have to give an extra five percent away to helping the planet, something that does not benefit you but benefits those that are less fortunate. Now that's what we could all live with.

BURNETT: And do you think then that -- it sounds like what you're saying is that there is something to this point of fairness. That yes, people who make a lot of money make so much money that on an absolute basis of course they'd pay more taxes --

DEJORIA: Sure.

BURNETT: -- than everybody else but there's still a fairness issue. That it's not perceived relatively as paying enough. That it's not fair compared to other Americans.

DEJORIA: Well, if you give somebody a bunch of cash and you want to do something good with it and you don't know what you're doing, like the government does a lot, OK, you could lose a lot of money. In philanthropy, many of us give a little bit and each year we give more and more to see what actually works and not just throw money out there and see if it's going to work. If the government did the same thing, fabulous.

But if not, if the government were to say to people like us, no matter what you're giving to philanthropy now, no matter what you're paying taxes, pay five percent more, but you guys pay it directly to a cause that will help we, the people, all the people of the United States out and don't let the government control it. Now you're getting something accomplished.

BURNETT: So let's look at the poll, because this is very interesting. People who favor this.

DEJORIA: Sure.

BURNETT: This is a bipartisan thing Americans agree on.

DEJORIA: Yes.

BURNETT: Yes, it's -- 90 percent of Democrats favor the "Buffett Rule", but so do 53 percent of Republicans and 69 percent of Independents of whom you identify yourself --

DEJORIA: Sure.

BURNETT: -- as one. So what are they missing? What would you tell them to make them not feel this way?

DEJORIA: Well, number one, U.S. government, if you want more money, start learning how to spend it properly now and not wait until you get more money to do it. And those that have money, why not work with the government to say, hey, let's take some extra money, but we, the private industry, help Americans where they really need it. We could do with less red tape. We could do it effectively, efficiently and for a lot less than the government could do it. Let us help. We are the government. We are we, the people. Let us get involved and make a difference, not just pay.

BURNETT: And we do have the final vote for those out there keeping track, 51 yes, 45 no, so that, as we said, that is a fail because of course 60 votes were needed to pass the "Buffett Rule". What should we do though, John Paul, because Mitt Romney was overhead speaking at a private event in Florida over the weekend about tax deductions he would eliminate and he did identify one that a lot of wealthy people benefit from. That is a deduction on mortgages for second homes. Would you say -- a lot of these deductions that go to the wealthy and most deductions do go to the wealthy seem ridiculous.

DEJORIA: Erin, that's a cartoon. No disrespect to Mr. Romney, he's a very, very smart man. OK, but if you're in the top wealth and you are able to have a second home, you shouldn't be allowed to have a mortgage on it. You should --

BURNETT: You should be forced to buy it in cash --

(CROSSTALK)

DEJORIA: Yes, buy it in cash. Are you kidding, why have a mortgage on it? That's silly. You should be able to buy it in cash and not have a mortgage on it. There's a lot of way we could help out the people that really need it by creating jobs, getting them to do something and deductions and things you don't need a deduction for isn't one of them.

BURNETT: And what about what Tim Geithner said? I'm curious about this because you're talking about creating jobs and I know you have some specific (INAUDIBLE) efforts --

DEJORIA: Sure.

BURNETT: -- about on this show. Tim Geithner said that the economy is getting stronger. In fact the strongest it's been in years when he did the weekend talk shows. Is he right?

DEJORIA: It's starting to get stronger, but only if you relate it to the last three years that it's getting stronger. We monitor this in beauty salons. When the economy went bad, people still went to salons but less often. Instead of every four or five weeks, they'd go every six or seven weeks. When they start coming back, you see a change, it's starting to turn. I would relate that statement only to the last three years. However, is it turning like astronomically, no.

BURNETT: Right.

DEJORIA: It's doing it slowly. We have to do more to get more people to work and there are jobs out there. People just have to start taking them.

BURNETT: All right, John Paul DeJoria, always good to see you. This is a man, by the way, who is taking his train, yes, he has one, his patron (ph) train, to both of the conventions this summer to put his view of the world and creating jobs to Democrats and Republicans --

DEJORIA: America still works and we want people to know that.

BURNETT: That's right. All right thanks very much, John Paul --

DEJORIA: My pleasure.

BURNETT: And next the first poll of the campaign released today. President Obama is leading literally in every group except the one that could decide the election.

And the latest from the Trayvon Martin case. George Zimmerman has officially asked for a new judge. And new developments in the murder mystery that's captivated the world. And we have the story about why it could derail China's quest to be number one versus America.

(COMMERCIAL BREAK)

BURNETT: OK. The long slog to November has formally begin today -- begun today, just in case you know you didn't -- you thought it started last fall or a year ago, actually today. The first poll of the general election came out, the president up 52 to 43 among registered voters. It's a nationwide poll. And after all the recent talk about which party is winning the -- as some like to call it -- war on women, it looks like the president is holding strong there with a 16-percentage point lead over Mitt Romney.

CNN contributor John Avlon joins us now. Michelle Goldberg also here, senior contributor writer for "Newsweek" and "The Daily Beast". We call them the double D. And Mary Kate Cary in Washington, former speechwriter for President George H.B. Bush and a U.S. "News and World Report" contributor, so Mary Kay, let me start with you. Poll numbers especially really show a problem for Mitt Romney with women, 16-point margin. I mean is there anything he can do to close that gap given that his secret weapon, Ann Romney, she's already liked. She's already been out there. He's already used that weapon.

MARY KATE CARY, FORMER SPEECHWRITER FOR PRES. GEORGE H.W. BUSH: I think the polls are showing that Mitt Romney is more vulnerable than he'd like to be. But it's not hopeless. He can pivot like he did this week very easily to get back to those pocketbook issues that the women want to hear about. One thing we learned last week with the Hilary Rosen incident was that the women's vote is not monolithic.

And the fact that the president, the vice president, the first lady, the head of the campaign, the DNC, all lowered the boom on her so quickly said to me that they see how volatile the women's vote is as well. We saw tremendous movement in the women's vote in 2010 during the midterms, so it's not a hopeless situation for Romney. I think he can turn this around.

BURNETT: You're sort of looking skeptical there, Michelle.

(LAUGHTER)

MICHELLE GOLDERG, AUTHOR, "THE MEANS OF REPRODUCTION": The only thing that the Hilary Rosen --

(CROSSTALK)

GOLDBERG: The only thing that the Hilary Rosen non-story showed us is that the Mitt Romney campaign is so incredibly desperate that it seized on a stray comment by a CNN contributor to convince us that there's some kind of mythical war on moms. And then they don't even know enough not to kind of express their glee at the opening when they're having a fund-raiser. You know they talked about this was an early Christmas present. The fact is, is that Mitt Romney's --

UNIDENTIFIED FEMALE: Right.

GOLDBERG: -- economic policies have always been really unpopular among women. He's lost the women's vote in every race he's ever won. You know he lost it crushingly in '94. He lost it even in 2002 when he won the gubernatorial race --

BURNETT: Well he won it in the primary, though.

GOLDBERG: Right, but he lost it -- UNIDENTIFIED MALE: Yes.

BURNETT: -- in every general election --

(CROSSTALK)

UNIDENTIFIED FEMALE: He's already won.

GOLDBERG: And in those elections the social issues weren't particularly selling (ph) it because he was still pro-choice. The reason he lost it is especially when he was running against Ted Kennedy, they hammered him on what his economic policies were going to mean for women. Right now those policies are pretty vague. He's kind of pro-business, but you know people don't understand that he wants to cut government even further. And remember, most of the job losses that we've seen among women since Obama has taken office have been government jobs. He wants to cut those payrolls further.

BURNETT: Yes, I mean it's interesting, John Avlon, I have to say the whole, you know if Democrats coin (ph) more on women, now war on moms, I mean I don't like to have a race to the bottom, but it's all kind of BS.

JOHN AVLON, CNN CONTRIBUTOR: But it's going on. We're racing to the bottom. Look, this is a completely manufactured controversy and that's the point. The open mike slip that the Romneys made over this past weekend acknowledged that fact. Despite the fact that they were fund-raising off that slogan, it's an attempt to play offense on an issue that they know they have been losing. They have been losing not because of you know slips on air, but because of policies that have been going on in state legislatures across the country, so --

BURNETT: Like contraception in Texas --

AVLON: Exactly right. So this is you know not out of nothing. So now they're trying to play offense and trying to take away the issue. It doesn't seem to be helping yet, but the big point is how incredibly cynical is it to be playing -- pumping up a completely manufactured controversy in an attempt to take away a negative that frankly you've earned and need to work your way out of not sloganize (ph) your way out.

BURNETT: Mary Kay, I'm curious about taking from women -- let's go to Independents now. Mitt Romney right now is losing to President Obama by a five-point margin among Independents, which as John Avlon points out often 40 percent of the total vote, obviously many of them sort of lean one way or lean the other.

UNIDENTIFIED FEMALE: Right. Right.

BURNETT: -- 40 percent. Is that five-point spread enough for the president or is that where Mitt Romney has to find his space?

CARY: Oh, I think there's a long way to go here. The election is seven months away. That's a lifetime in politics. There are so many wild cards that could still happen. When you think about right now the primaries are pretty much over. The -- there are no more debates left. We have got nothing between now and the conventions in late August, early September. There's a lot of stuff that can still happen. The fact that Mitt Romney is even that close this far out says to me there's a blank canvas and it's his to grab.

AVLON: Or an etch-a-sketch waiting in the wings. I mean that's --

(CROSSTALK)

UNIDENTIFIED FEMALE: Or an etch-a-sketch.

AVLON: I mean --

(CROSSTALK)

AVLON: You know Romney was actually --

(CROSSTALK)

AVLON: -- beating Obama --

BURNETT: Talking about manufactured controversies --

AVLON: Yes, but sometimes --

UNIDENTIFIED FEMALE: That wasn't even him. That was an aide.

(CROSSTALK)

AVLON: The point is, is that Romney of course he's going to pivot back to the center. This is Romney --

UNIDENTIFIED FEMALE: Right.

AVLON: You know this is Romney 1.0, Massachusetts version, where he wanted a state -- registered Independents outnumber Democrats and Republicans. In November Romney was beating Obama among Independents and then the primaries happened. And there was that rush to the right and it ended up damaging the entire Republican brand of Independents, so he's within striking distance. He's going to have to build it back.

BURNETT: All right, quick --

GOLDBERG: But he really can't pivot that much. He's the leader of a party that's an incredibly far right party and they're watching him. And they're not going to kind of let him disavow the positions that he's taken in the last few months as he's been fighting this primary.

BURNETT: All right. Thanks to all three.

And former presidential candidate John Edwards is on trial for using campaign funds to shield his pregnant mistress. But they're having a lot of trouble getting it started. Jury selection today, we have an insider.

And Pippa Middleton caught with a man who pulled a gun on photographers. Will the incident trigger gun charges for the royal family's latest wild child? (INAUDIBLE)

(COMMERCIAL BREAK)

BURNETT: So high-ranking power brokers and sex scandals always seem to happen, but lately there have been quite a few. Last week former Best Buy CEO Brian Dunn stepping down after an ongoing company investigation into whether or not he used corporate funds to finance an affair. And then there's University of Arkansas Coach Bobby Petrino, let go because school officials found out about his much younger mistress whom he hired as an employee. And then there's John Edwards. Jury selection resumed today for his trial in Greensboro, North Carolina, where he faces six counts of felony and misdemeanor charges and a possible 30 years in prison.

Now the 12 jurors will decide if Edwards used presidential campaign money as a slush fund to hide the affair and the child that he had with his mistress Rielle Hunter. She's expected to testify. Hampton Dellinger was in court today. He's a former North Carolina deputy attorney general. He's blogged about the Edwards case for "The Atlantic". Good to see you sir and let me start with Rielle Hunter expected to take the stand. Is that expected and how key will that testimony be do you think?

HAMPTON DELLINGER, ATTORNEY: Well, she is expected to appear, Erin. It will garner a lot of headlines and cameras. I don't know that it will determine the outcome of the case. Both sides believe that her testimony will be favorable to John Edwards. But this case at the end of the day doesn't turn on the sex scandal, the love child. It turns on you know somewhat complicated issues of federal election law. And so I also think it's a real issue of whether this jury is going to be able to relate to Rielle Hunter. If John Edwards expects her to save the day for him, I think he's got a lot to be worried about.

BURNETT: And you've been watching John Edwards in court as jury selection has been getting started. What's his demeanor? How involved is he? I mean, he's a lawyer himself.

DELLINGER: Well, he's not just any lawyer; he's one of the most successful lawyers in North Carolina history, arguably lawyer of national renown before he became such a famous politician. And it's extraordinary to see the defendant, the client in many ways serving as lead counsel. Many times during the pretrial hearings, certainly when the jury pool was in the courtroom last week John Edwards was the one bringing his team together, filled with high-powered lawyers from D.C. and North Carolina. So he's both client and attorney.

BURNETT: And we've seen this delayed because of his health, people have wondered how serious that is. Physically, how does he look?

DELLINGER: Well, he looked better today. I did see a bit more of the spring in his step. You know, he's looked at times kind of tired, for which sleep does little good. And you know it's a situation that was of his own making. But I think he looked better, seemed to feel better today.

BURNETT: And Hampton, how strong is the case? When you put it all together, how strong is the case? And given the difficulty of finding a jury of his, quote unquote, "peers", given the publicity and the national and certainly local renown of the situation, how likely do you think it is that he'll go to jail considering as we said, it could be 30 years?

DELLINGER: Well, I think it's quite likely this will be a working class jury. I saw with the pool in the courtroom more ball caps than neckties, more t-shirts than button-down shirts. It's the type of jury pool Edwards connected with as Edwards the lawyer, as Edwards the politician. It's going to be tough as Edwards the defendant. What he has in his favor, Erin, is the lack of precedent for this type of prosecution. This is not Edwards trying to sell an official act. This was not money that went directly for ads or for yard signs.

BURNETT: Yes.

DELLINGER: And he's got former federal election commissioners willing to testify that what he did in their eyes is not a crime.

BURNETT: All right. Thank you very much, sir. We appreciate it. From inside the courtroom, Howard Dellinger.

All right, so I was in the Middle East last week and I stumbled across a few very interesting articles and they were front page articles in fact, pertaining to something near and dear to me. Her, the beloved, in the Gulf (ph) news this headline "BlackBerry still a big seller in the UAE". In fact Research in Motion we learned is negotiating a lease for 1,500 square feet of retail space in Dubai where the BlackBerry rules thanks to its instant messaging. Now I also discovered that new stores are opening elsewhere. Research in Motion, the BlackBerry maker, plans on opening 4,000 retail stores in Kiosk (ph) in Indonesia alone where there were riots due to high demand when the BlackBerry Bold and 9790 was released in November.

So get this. OK, this is for you iPhone lovers. Prepare yourselves because according to IDC (ph), the BlackBerry out-shifts (ph) the iPhone by more than three to one last year in the Middle East and Africa. Newspapers in the Middle East reported the BlackBerry is even going to open stores in Lagos, Nigeria. So my beloved rules in the developing world and that's a huge thing that goes uncovered here at home. But it brings me to my number tonight, 770,000.

That's how many more iPhones than BlackBerrys were sold in Canada last year and that hurts because Research in Motion is a Canadian company. And in the U.S. the iPhone and Android have taken over according to Nielsen about a third of Smartphone users now have an iPhone, 48 percent of the Android, only 12 percent stick it out with the beloved. The big question will be can the rising world, the Middle East and Africa, outweigh the big giant markets or will BlackBerry go the way of the doe-doe (ph).

Still OUTFRONT new developments in the Secret Service sex scandal and George Zimmerman formally asking for a new judge. The question is will that decision help or hurt him right now.

(COMMERCIAL BREAK)

BURNETT: We start the second half of our show with stories we care about, where we focus on our own reporting, do the work and find the "OutFront 5".

First breaking news from Washington, Senate Republicans voting down a plan to move ahead on the "Buffett Rule", which would require millionaires to pay a minimum 30 percent tax. The president just responded to the vote, blaming Republicans for, quote, "choosing once again to protect tax breaks for the wealthiest few Americans at the expense of the middle class."

OUTFRONT "Strike Team" member John Paul DeJoria, the chairman and CEO of Paul Mitchell Systems is one of the millionaires who would have been affected by the "Buffett Rule". He tells me tonight he'd gladly pay higher taxes but he does not trust the government to not waste his money.

Number two, the two men charged with a deadly shooting spree in Oklahoma pleaded not guilty today. Jake England and Alvin Watts face multiple charges of murder and hate crimes. All five victims are African-American. Hours before the April 6th shooting England posted a racial slur on Facebook when referring to his father's killer. The 19-year-old denied being a racist in an interview taped and released by his lawyer.

Our legal analyst Sunny Hostin told us prosecutors have to prove motivation in a hate crime charge and England's statements will be used to argue a different motivation.

Number three: the United States will not use sanctions on Iran despite a plea from the country. Secretary of State Hillary Clinton said late this evening that Iran must prove it's serious about nuclear talks before any sanctions are eased. Iran held talks with six major nations, including the U.S. on Sunday. More talks are set for May in Baghdad.

U.S. sanctions have targeted Iran central bank, which is used to facilitate the country's crucial oil trade.

And number four, Jim Yong Kim will be the next president of the World Bank. It was the first time a U.S. nominee had faced a challenger. Kim beat out a Nigerian finance minister Ngozi Okonjo- Iweala, who has a much deeper resume. She criticized the selection process.

The World Bank has always selected an American as its president and Jim Yong Kim is one.

On the other side, the International Monetary Fund is traditionally selected a European. Kim is the current president of Dartmouth College. He is a friend of Timothy Geithner, and he takes over the World Bank on July 1st.

It has been 256 days meantime since the U.S. lost its top credit rating. What are we doing to get it back?

Well, one of the big reasons we lost the AAA rating is because of the gridlock in Congress. We're hearing more bickering and blame than we do solutions. You know, the Buffett Rule being the latest example tonight. And there's the Ryan economic plan.

But these are just facades that distract us from the real issues. There's a serious discipline problem in Washington at all levels of government. It's not just Congress, it's not just the White House. Everyone needs to start working together to get things done.

Organizations like the GSA which lavishly spent your tax dollars to fund over the top conferences and who made videos actually mocking the government.

More now on the latest scandal out of Colombia -- 11 Secret Service agents placed on leave and losing their security clearances tonight after allegations they were partying with prostitutes in Colombia a day before the president arrived for the Summit of the Americas. The scandal began on Thursday with accusations of heavy drinking and womanizing with prostitutes at a hotel in Cartagena.

Now, the incident came to life after an agent allegedly argued with the prostitutes over money. But prostitution is legal in Colombia. After local police became involved, they contacted the U.S. embassy.

The chairman of the Joint Chiefs of Staff, though, addressed the incident today.

(BEGIN VIDEO CLIP)

GENERAL MARTIN DEMPSEY, JOINT CHIEFS CHAIRMAN: We are embarrassed by what occurred in Colombia, though we're not sure exactly what it is. But what we do know is that we distracted -- several of our members distracted the issue from what was a very important regional engagement for our president. So, we let the boss down, because nobody is talking about what went on in Colombia other than this incident.

(END VIDEO CLIP)

BURNETT: At least 10 members of the military are also alleged to be involved in the incident. And the investigation is ongoing.

The question is: did the scandal compromise the president's safety?

Ralph Basham is a former director of the Secret Service and he is OUTFRONT tonight.

And good to see you, sir. Appreciate you taking the time.

RALPH BASHAM, FORMER DIRECTOR U.S. SECRET SERVICE: Thank you for having me on, although I wish it were under different circumstances.

BURNETT: I do too. And I think the thing that makes a lot of people deeply concerned about this is, you know, these are -- these are men that are -- people look at them as sort of the bastions of integrity and of strength and reliability. How could something like this have happened?

BASHAM: Well, first of all, I think they can still look at the Secret Service and attribute those attributes to the men and women that are out there every day. But we have agents who made a mistake here. We've had agents in the past make mistakes.

But what's key here, Erin, is the fact that the director, Director Sullivan, and his team recognizing the gravity of the situation took immediate action, brought those agents out of Colombia so that they did not -- were not distracted and others would not be distracted when they're in the mission of trying to protect the president of the United States. I thought they reacted very decisively and very quickly.

BURNETT: Ralph, one thing, though, that I think a lot of people are wondering is this wasn't just one guy, this was a lot of guys. This was Secret Service guys. This appears to have been military guys.

It sort of lends itself to -- does this happen all the time? And happen with a lot of people, as opposed to just a random incident here or there and they just don't usually get caught?

BASHAM: Well, that's what makes this such an unusual incident, Erin, the number of people involved is quite surprising. And it is -- it's disturbing.

But I can tell you in my 30-plus years in the Secret Service, I did not witness anything near this magnitude of gravity, and I believe that this is an isolated incident, it's an anomaly. And I think we need to wait and we need to, as the chairman said, we need to find out what the facts are -- who was involved and the degree that they were involved before we rush to judgment here and start to insinuate that this is a systemic problem for the Secret Service.

I don't believe it is. I think this is an isolated incident.

BURNETT: In espionage circles, some people have called it as the honey trap -- getting information from an agent using women, right? That's part of spy movies from times past, right?

BASHAM: Well --

BURNETT: Yes, go ahead.

BASHAM: I'm sorry. Well, we've all been trained -- we've all had these discussions about the possibility of being compromised in a foreign country, as a matter of fact, being compromised right here in the United States. It is not something that is new to the Secret Service in terms of understanding that that is a threat.

And that's why these men and women recognize that their conduct is a direct reflection on the Secret Service, the Department of Homeland Security and the White House, the president himself. And that's why the Secret Service demands professionalism, whether they're here, whether they're on duty or whether they're overseas, on duty or off duty. And that's something that is embedded in Secret Service from the first agents from the first day they walk on the job.

BURNETT: What would you recommend that the current head of the Secret Service do? I mean, what would you have done? Would you just automatically -- if it turns out that indeed that there was prostitution, you know, these guys were involved in it, should they be fired or should they get a second chance? I mean after all, they're responsible for the president's safety.

BASHAM: I don't disagree. This is a serious accusation. It is under investigation.

If in fact some of the activities are in fact correct, I'm sure that the Secret Service is going to deal with it and there will be proper disciplinary actions taken, which may include the firing of some of the individuals involved. But I think we still need to wait to see and get more facts on what happened down there by interviewing the agents, interviewing the people on the ground, others that were involved in the incident, from the hotel to the local law enforcement before we make those kinds of judgments.

BURNETT: All right. Well, thank you very much. Appreciate you taking the time. He is former chief of the Secret Service -- as we continue to cover this unraveling investigation and frankly what appears to be a growing or at least a large number of men who were involved.

Well, Pippa Middleton's friend pulled a gun on photographers. Will she face gun charges too or were the paparazzi just plain old annoying?

And the latest developments in the Trayvon Martin case. The man who shot him has asked for a new judge today.

(COMMERCIAL BREAK)

BURNETT: We're back with our "Outer Circle," where we reach out to our sources around the world.

And we begin tonight in Italy where former Prime Minister Silvio Berlusconi is on trial for allegedly having sex with an underage prostitute.

Journalist Barbie Nadeau was in (INAUDIBLE), I asked her what today's witnesses had to say.

(BEGIN VIDEO CLIP) BARBIE NADEAU, JOURNALIST: Erin, today was really about setting the stage and painting a picture about the type of sex parties that Berlusconi hosted during the time he was prime minister. One of the witnesses described in great detail, how some of the girls started out in nun's habits and in football uniforms and stripped down that their g-strings, how the prime minister and his friends were invited to touch the girls and they were in turn invited to touch the prime minister and his friends.

This type of testimony really sets the stage for the most important testimony that will be coming this spring. That is whether or not Ruby the Heart Stealer, 17 at the time, performed sexual favors for money for Silvio Berlusconi when he was prime minister -- Erin.

(END VIDEO CLIP)

BURNETT: Wow. That's all I have to say about that.

All right. Now to Bahrain where an anti-government group has called for a week of demonstrations, ahead of the Formula One Grand Prix race on Sunday.

Frederik Pleitgen is in Bahrain and I asked if the demonstrations could actually derail the race.

(BEGIN VIDEO CLIP)

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Erin, both Formula One as well as Bahrain's government says they are determined to have this race go forward. However, if protests here should continue to escalate, and opposition groups are certainly saying they want to have more protests in the days leading up to the race, then it could indeed get cancelled at the last minute.

Now, the economic implications of that, Bahrain's economic development board says, would be catastrophic. Remember, the same race was cancelled last year because of protests and back then, they say, the losses just from that race were $600 million as well as thousands of jobs lost -- Erin.

(END VIDEO CLIP)

BURNETT: All right. Thanks, Fred.

And now to Paris, where Kate Middleton's younger sister, Pippa, could be prosecuted for driving in a car with a man who pointed a gun at a paparazzi photographer.

Matthew Chance is in London and I asked him how the royals are responding tonight.

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MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Erin, no reaction from the palace, but these are the images of Pippa Middleton sitting in a car driven by someone pointing this semi- automatic pistol or something like that like one at the paparazzi photographer in the French capital. You can see the headline, "Smirking Gun," a reference to the fact that Pippa is smiling as her friend brandishes the weapon.

They all seem to think it's jolly good fun, but of course this is taken very seriously indeed in France. The country just last month was rocked by a series of fatal shootings.

Whether or not the gun is real, and it's not clear from these photos, the gunman could face an extended stretch behind bars. And if Pippa is seen as an accomplice, she could be prosecuted too -- Erin.

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BURNETT: All right. And now to new developments tonight in the case of 17-year-old Florida shooting victim Trayvon Martin. The attorney representing volunteer neighborhood watchman George Zimmerman on second-degree murder charges has filed a formal request to have Judge Jessica Recksiedler recuse herself from the case.

Mark O'Mara says the judge has a conflict of interest because her husband is in the same law firm that George Zimmerman initially asked to defend him.

The decision is expected before Zimmerman's bond hearing this Friday.

Mark NeJame is partners with the Judge Recksiedler's husband and was asked to defend George Zimmerman. He's also a legal analyst for us. And he joins with Florida defense attorney Janet Johnson and prosecutor Paul Callan.

Wonderful to have all of you with us.

Mark, let me start with you. First of all, just ask you what happened when George Zimmerman -- I mean did he approach -- speak with you personally? I mean, who in your firm actually interacted with him?

MARK NEJAME, CNN LEGAL ANALYST: No. And first of all, let me state that this happened March 13th and I hadn't told anybody about this publicly because I just thought it was not right to do so, until in fact Mr. Zimmerman provided a waiver and a consent to me allowing me to now state that he in fact contacted our office. So we have not said anything until in fact that waiver came in.

When it came in, then we simply let it be known that which he allowed and presumably wanted to come out and that is that he contacted my firm, I was not available. Spoke to one of my partners. His case was well-known. Simply said he wished to hire me to defend him.

My partner communicated it to me and I simply declined representing him and my firm simply did not. I have never spoken to him. And then apparently after what I call the debacle of his other two attorneys afterwards on the courthouse steps, a friend of his contacted us again, contacted me directly, not Mr. Zimmerman but a friend, wanting me to come on. At that point, I had been hired by CNN as a legal analyst.

So I simply said on top of all the personal reasons, I've got younger children and just have been involved in many big national cases and they take a lot out of you and I didn't want time affray from my children. So with that, I simply said that I have the initial issue with CNN and that was it.

So I gave five names. One of the names was Mark O'Mara, who they ended up hiring.

And then, lo and behold, when the case got assigned, and it got assigned to Jason Recksiedler's -- my law partner who manages our personal injury division -- his wife Jessica Recksiedler.

And so, we simply had full transparency, let everybody know and let the professionals file the appropriate paperwork as they chose to do it.

BURNETT: Well, it sounds like you didn't have any inside information or any conversations with the Judge Recksiedler's husband so I would be safe in assuming you don't think the judge is a conflict of interest?

NEJAME: Well, that's not the issue. The issue under Florida is whether there's an appearance of impropriety. And I think that's presumably where Mark O'Mara -- I have not seen the motion, but it's pretty obvious that because of my relationship with him and my commenting on a critical person in a case could in fact potentially be considered by some to influence or affect it, it's better, at least what Mr. O'Mara apparently argues, it would give an appearance of impropriety to the public and we want to avoid that in a courtroom and to the public at all costs.

Being ethical lawyers, which she is and I am and my partner is, Mr. O'Mara, as well as the other side. I know lawyers particularly well on the other side of Mr. O'Mara. So everybody needs to do the right thing, file it and let the process take care of properly.

BURNETT: And, Janet, let me ask you, you've tried a lot of cases in Florida with the special prosecutor Angela Corey who obviously is on this case. What's her history? What would you describe going against her is like? How will she do?

JANET JOHNSON, CRIMINAL DEFENSE ATTORNEY: She's very charismatic. What she does particularly well is she embraces her victims, which I think in this case was kind of the reason she was picked. She's going to sort of embrace them as her family. I think she already said she prayed with them when she first met with them. And I think that's kind of what this case called out for because the whole community was looking for somebody to take in the Martins.

So, she's formidable in court because of that emotional tie that she has with her victims.

BURNETT: And let me just play a sound bite to that point of what she said when she talked about praying with Trayvon's family. Here's special prosecutor Angela Corey.

(BEGIN VIDEO CLIP)

ANGELA COREY, FLORIDA STATE ATTORNEY: I think that after meeting with Trayvon's parents that first Monday night after we got appointed in this case, Bernie was there, John was there, our prosecution team was there. The first thing we did was pray with them. We opened our meeting in prayer. Mr. Crump and Mr. Parks were there. We did not promise them anything.

(END VIDEO CLIP)

BURNETT: So, Paul, is this a conflict of interest? Is that charismatic and appropriate for a prosecutor to have that link with their --

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: It's strange at one point in the case and appropriate in another. Most of the time when prosecutors come in, somebody is already under arrest, there's a prosecution going on and they bond with the victim. They are the advocate of the victim because that's the person who was hurt by the crime.

BURNETT: Yes.

CALLAN: What's unusual in this case is the Florida governor appointed her to do an impartial investigation to determine whether Trayvon Martin was a legitimate victim or whether he assaulted Zimmerman.

BURNETT: And that is not impartial, what I just heard was not impartial.

CALLAN: No. She sat down and prayed with the family of Martin while she was investigating Zimmerman. That's not impartial. She's already chosen sides in this investigation before the charges are even handed down.

And that's the criticism I think that will be lodged against her overall, that she is a victim advocate but it's affecting her fairness in this particular case.

BURNETT: Janet, it will affect her ability to stay on this case?

JOHNSON: No, I don't think it will. And I think, you know, anyone who knows her knows that's her personality. It's -- I think she would do that for either side. She doesn't meet with the Zimmermans because that's not appropriate.

But I think that's the sort of the culture of that office and it's a genuine moment for her that makes her difficult to go up against. But that's who Angela Corey is. BURNETT: Mark, I'm curious because you gave a very thoughtful answer to why you chose not to sign on to this case.

I understand -- I mean, there's been death threats against the lawyer who is did at least temporarily. I know that was a debacle. But I understand your point.

But do you think there's any way that George Zimmerman can win?

NEJAME: I think from what I've heard so far that there's a lot of unanswered questions. And when there's unanswered questions, there's reasonable doubt.

I think the fact of the matter is that I've heard and I found out some things in my role with CNN that much of what first got reported isn't necessarily accurate. And that there's a lot more to this story that needs to come out.

BURNETT: Like what? Could you give an example?

NEJAME: Well, as far as, you know, what really happened on that particular day and what Mr. Zimmerman's background is and matters such as that. I'm really impressed by Trayvon's mother, by coming out and saying she's just seeking truth. She comes across as extremely spiritual, good woman, who's not vengeful, but just really wanting to get to the bottom of what happened.

And I think that with both sides, with O'Mara on one side and Natalie Jackson helping represent Trayvon's family, I know them both to be excellent, ethical lawyers. And if the system is allowed to play out that way, I think we'll get close to the truth -- closer to the truth than we could hope otherwise. And I think once all that comes out, we'll be able to sit back and evaluate.

BURNETT: Paul, final question to you. Why then would both sides at least at this point appear to want the record sealed from the public? The media, CNN included, have asked for those records to be released given the high national interest in this case. Why are they holding back?

CALLAN: Well, in most states, lawyers fight hard to keep these things out of the public eye because they don't want jurors being tainted in one specific thing. We don't know what George Zimmerman said when they took him to the precinct. Remember, he's taken in handcuffs and released.

So, obviously some kind of a detailed statement was taken in the precinct. Now, does that help Zimmerman or hurt him and will it poison a jury panel in the future? Remember there are going to be hearings on admissibility down the road. So, I think for that reason they're trying to tamp down the disclosure, get the passion level down so we can make a reasoned decision about what's admissible and what's not.

BURNETT: Thank you, all of you, for being with us.

And now, let's check in with Anderson.

Anderson, what's coming up on "A.C. 360"?

ANDERSON COOPER, HOST, "A.C. 360": Erin, as you mentioned, the lawyer for George Zimmerman has filed paperwork, asking for a new trial judge, claiming a conflict of interest. We're going to talk with Zimmerman's attorney, Mark O'Mara on what's next in this case and how his client is holding up in jail and when he expects to have him out bond hearing on Friday.

Also tonight, my interview with one of the top diplomats. America's Ambassador Susan Rice on the lies being spun to the world by the regime in Syria.

And despite also her royal connections, Pippa Middleton could be headed to jail. She's in hot water tonight. The sister of Britain's future queen in a gun incident, a friend she was with driving in a car in Paris pointed a gun at a paparazzi. Not her first brush with paparazzi, a controversy.

Those stories and tonight's "Ridiculist" all at the top of the hour, Erin.

All right. Thanks, Anderson. Looking forward to that.

All right. On the way back from Dubai this weekend, I picked up a magazine called "Viva" -- full of articles around relationships, fashion and health. And while I was flipping through it, I happened upon something I seriously want.

In an article entitled "Bikini Bum" -- the style editor raves about a style of short shorts which quote -- Paul, I thought you'd appreciate this.

CALLAN: Thanks for keeping me here.

BURNETT: "Using muscle stimulation to gently exercise your wobbly bits." That's a quote.

According to amazon.com, the slender tone, bottom toner is a fully rechargeable women's undergarment which includes six electro toning pads that will help get a firmer bottom and more toned thighs via electric shock. The intensity meter goes from one to 99. According to its site, it requires a controller to operate it.

Paul, I thought I seriously would want this product. I mean, what woman wouldn't, right? Over the years, women and men have been lucky enough to lose weight and stay fit without diet or exercise, using products just like this one, right? I mean, the thigh master, the body blade, and of course, the shake weight. I'm so happy that the women of today have a miracle product of their own.

And, yes, I realized some people might scoff at the fact you could lose inches by shocking yourself five days a week for eight weeks. Possibly slender tone bottom will be as helpful as the products of the past. By the way, Paul, do you want to know how much the slender toner bottom apparently costs?

CALLAN: I'd really like to know who's going to be the operator if you buy it. That's another issue.

BURNETT: That is another issue. Yes, $375.

CALLAN: Wow. A bargain, a bargain. Absolutely.

BURNETT: Yes. That's when I realized it was seriously out of my reach for now.

CALLAN: Maybe you should get one for the next guest on the show, that might be more practical.

BURNETT: If I don't like what you say, I have a little (INAUDIBLE), I'm going to shock your booty.

All right. New revelations in the murder mystery that's captivated the world. We're going to tell you how it can cost China the title of next world boss.

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BURNETT: So there are bizarre new developments in a story we've been following for weeks here. You may remember that British businessman Neil Heywood was found dead in a Chinese hotel room last fall.

Now, his death was reported accidental. His body immediately cremated. It's attributed to excessive alcohol consumption. Now, some were suspicious.

And since then a very different and more compelling narrative has emerged. It turns out Heywood was an associate of a top ranked communist leader named Bo Xilai, the leader that could have been the next president of China, and that Heywood's accidental death could actually have been anything but. It could have been a poisoning cooked up by Bo Xilai's wife who was working with Heywood to move money out of China.

Swiss investor Marc Faber, author of the "Boom, Doom, and Gloom Report," recently said the U.S. was being pushed out of China and that only one country matters for the global economy, China, not America. Now, some say those words are too strong.

But if China wants to be a superpower, it needs to start acting a little bit more like one. It doesn't mean pleasing other countries. And we're not saying it means a certain system of government, but it does mean a government that's more transparent, doesn't brush investigations under the rug, and pull a man who was once considered a possible future president from the public eye so that there rumors of a coup in the country, not to mention there's a possible that a communist official's wife poisoned a British businessman with cyanide. It makes for great spy novels, but it doesn't make for a country that's on track to be the world's richest and most powerful.

"ANDERSON COOPER 360" starts now.

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