mercia." i think it makes sense. it's a-mer-cia. he will he will with with "viewpoint" is next. ♪ >> eliot: good evening, i'm eliot spitzer and this is "viewpoint." mitt romney has clinched the republican nomination for president. romney crossed the winning line while attending a las vegas fundraiser hosted by donald trump. president obama called mr. romney with congratulations on his win not his choice of company. romney has refused to reject trump even though the reality tv start continues to raise the thoroughly discredited claim that the president was not born in this country. and trump doubled down again today, tweeting, and i quote, in

his own words barack obama was born in kenya and raised in indonesia and hawai'i. why does the press protect him? is this another watergate? actually that's a quote from mr. obama's literary agent used in a promotional material in 1991. one that they admit is a mistake. trump should know that. and pete hofstra should know better than to investigate presidential candidates place of birth. >> i want to make sure candidates who run for the office of the president meet the minimum requirement. this has nothing to do with barack obama. >> eliot: oh, yeah, of course not. perhaps to show that he, too were meeting those requirements, mitt romney released his own birth certificate. mr. obama is facing more serious political threats from republicans super pacs which plan to spend roughly $1 billion to defeat him and other

democrats in november. the bizarrely the latest web ad compares mr. obama to the basickers who tanked the economy. >> failed investment strategies, jobs eliminateed billions lost, president obama paying wall street games with our money. >> eliot: blaming him for wall street games paid for by wall street money is getting too complicated for me. fox played games with its own game with claims that they're a news. >> the guiding force behind the most improbable changes this country has ever gone through. ♪ >> eliot: with more on i'm joined with john who had a web page demanding an investigation over claims mitt romney was an unicorn. he might be.

also joining me, routers columnist david, rhode, who never thought he would be discussing unicorns in the middle of a presidential race. i don't know if i should apologize or say this is one big joke. this is kind of serious. first, explain the unicorn strategy, what are you doing? >> well, this started off with the secretary of state of arizona who said he might keep president obama off the ballot because he received e-mails questioning president obama's place of birth. well, if he could take the e-mails, we wanted him to investigate something equally absurd. there has never been the comparison of romney's dna with an unicorn's dna. >> eliot: there is documentary proof that he might be an unicorn. we're building the case here.

>> if he just shaved his head because there may an horn underneath the hair, he has got good hair, i give him credit but is there a horn? america wants to know. has it been photo shopped out. is that possible? if he would do that, take a dna test and get a real unicorn's-- >> eliot: no one ever accused me of being an unicorn, shaving the head is not the problem. let's get back to the real world. is there any plausible reason to believe that mitt romney gains anything by continuing this birther conversation? >> i don't get it. maybe he thinks he's rowing the base. i don't think this will serve him in the long term. this will be decided by six or seven swing states. the birther issue will not win him in ohio, pennsylvania these other states.

>> eliot: the etch-a-sketch that his own campaign gave to us and we've used it, of course, he has shaken the etch can sketch and has begun to cast new ideas on foreign affairs, does donald trump have a grip on him. >> this idiotscy on the part of romney makes no sense. ronald reagan would have had the character and intelligence to push back and not embrace this jack ass-re, but mitt romney has neither. >> eliot: this is going to be driven at the end of the day by economics, jobs. why is the white house not making the better argument, rather than bashing bain, which has a certain populous appeal why not add on top of that argument, we, meaning the white house, are better investors and use gm as an example. we brought back an entire sector

in the swing states, michigan, ohio, why are they not gravitating that? >> i don't get that either. i think they're trying to paint a caricature of romney. you have obama birther on one side and then he's the evil wall street capitalist. they spent this big push on the bain ads. they haven't done well and it's helped romney in the poles. i think people are turned off by this. most voters realize this is a silly thing, they're talking down to voters. people are smarter than this. they don't want silly cartoonish slogans, and that's all we're getting from both sides. >> eliot: there are deals problems in the deals that bain did, so why not say yes it's there but it depends on how you do it, and we did it better. >> that's a very good point. general motors, who would have thought they would be alive let alone expanding a couple of

years ago? it's mind blowing. it was a very good investment. saved a lot of jobs and is lead leading to more jobs. it's a great investment and they should tap that more. >> eliot: especially since you have mitt romney saying let them go bankrupt. i think it's going to be a millstone around his neck. does the white house now fear being that vocal in support of capitalist investment? >> i guess. the president's problem they continue to triangleate. they're so careful and cautious. people know they face incredibly difficult problems. they want proposals from got candidate and they're not getting it from the white house. the president is very careful 37 he does not go too far to the right or too far to the left that has frustrated his base as well. the new model, the chinese helped their industries come back, and it's a limited model but we need new models for a totally changed global economy.

we have to reinvent ourselves and our economy and they should embrace it and say that, but they don't. >> eliot: and then the gm investments could be emblematic of that-- >> limited. >> eliot: synergy is knot a word i wish to use but it worked, and it did exactly what you hoped it would do. switching gears, mitt romney syd something completely wrong in that the stimulus only helped the public sector. the fact of the meter, the government sector has shrunk. why hasn't the white house attacked that and say it has worked. >> the reality is, i'm ane an econ geek at heart. and this stimulus did work. if you look at private sector employment--it's hard to make the argument, but the reality the last month of the bush administration we lost jobs.

if that trend continued we would have had 27% unemployment. the stimulus worked. it should have been bigger. >> eliot: arguing in the alternative is hard. mitt romney himself in response to "time" magazine interview said if you were to slash the government by 1 trillion-dollar you would shrink the gdp. fox news ran a four-minute ad attack ad. how does the network get away with that? is this journalism or is this fox news, and it's nothing but voice from mitt romney. >> it's money, and its playing to fox's base. it's just bad for the country. i do think people are going to get sick of it after a while. they're losing--they're struggling as well as in terms of their ratings. it's pandering and very cynical and i hope it will backfire.

>> eliot: the $1 billion that we heard that will be spent by super pac, will it swamp everything out there or are these dollars, are there diminishing returns so it might not matter as much as we fear? >> i wonder if this is a low estimate. if you look at the invest to get control of a multi trillion economy, i think it could be hire. if the message does not resonate, it doesn't resonate but it gets a big loud speaker and it could make this race close, it really could. >> eliot: david, very quirkily s syria potentially an achilles' heel for the president because it this will continue to feather and some how it will explode at the wrong moment? >> it fits the narrative of a weak obama who isn't standing up and leading the world. we have to go very slowly. i think we should let other

countries arm the rebels. to me it reminds me of bosnia that i covered and the u.n. made these promises but nothing happened on the ground. i think that's the way to go. the president is being very cautious. they're sort of waiting. i think it's an issue that he needs to address. >> eliot: leading the war behind gadhafi, is this the same. >> we were bombing in libya so it's different. >> georgia you're right. here in syria, we're doing nothing. >> and romney will hammer him on this. >> eliot: i don't think how we covered so much turf. many thanks for your time this evening. the economy, america's favorite soap opera plus a current exclusive. we talk it the u.s. born jihaddist who is running from his old terrorist friends as well. both stories coming up on "viewpoint."

♪

>> eliot: in mark zuckerberg's new wife going to dump him? you can't blame her if she sees the number of the day. 1.5. that's how many billion dollars zuckerberg lost in less than a week. now that, my friends is a status change. since may 25 the co-founder of facebook saw his personal fortune collapse from $16.2 billion to a pal try $14.7 billion as the stock price of his company did a cliff dive. this poor guy isn't even among the top 40 billionaires in the world any more. he's done. he'll probably move back in with his parents. maybe live in on ramen noodles and kevinup and update his resumé on linked-in. come on, mark, post a picture or something. of course, zuckerberg's net worth fell out of enthusiasm the price two weeks ago $38 was so high investors got air-sick. so it shot back to $29.

to be $28 billion and only have $14.7 billion. it must be tough.rr >> eliot: you've heard it before. it's the economy, stupid. it was true then, and it's true today. that's what more than 50% of adults say in the latest "washington post" "abc news" poll. healthcare came in a distant second with a meager 7%. on top of all that the european debt crisis looms over us. helping me now to make sense of all the numbers, a former adviser to the mccain presidential campaign, and a go-to guy for just about everybody on the economy mark zandi chief economist at moody's analytics, the author of the up coming book "paying the the price: ending the recession and

beginning a new american century." it's great to have you join us. >> thank you. >> eliot: last month the unemployment number dropped but we only got 115,000 new jobs net. where do you think things are going, and what should we expect? >> i think the numbers will be okay. i think it's underlying job growth. if you subtracting from the vagaries of the date tax i think the economy is creating 175,000 to 200,000 jobs a month. that's not bad. it's pretty good. it's not going to push the unemployment rate lower but by election day it should be firmly although 8%. >> eliot: you have written in an article a couple of weeks ago saying that you thought the unemployment rate would drop below 8%. explain why? what is empowering the jobs because everyone out there is doom and glam that the dow is

jumping, europe is in cataclysm where are the jobs being created, and what should we do to create more job growth? >> the job growth is across most parts of the country. the easier to talk about what sectors are not laying off jobs. that's government, teacher fire, police outside that have industries are adding to varying degrees. it's increasing coast-to-coast even in some of the most distressed parts of the country like florida, nevada california, we're starting to see job growth. i think fundamentally businesses are in a much better place. they've worked really hard to get their profits up, get their balance sheets in order. now it's deploying the resources and they're becoming more aggressive. one of the things to point out that is going to be very important in the next few months, the expiration of insurance programs that will push the unemployment rate

lower. you have older workers whose benefits will expire who will step out of the workforce and not be counted as unemployed, and younger workers will take a job. i think we'll see unemployment move down quickly over the next several months. >> eliot: it's perhaps a statistical anomaly, in a sense people will drop out of the workforce. it's not that more jobs are being more created. something that we refer to as the workforce participation rate which was at an all-time low last month. what does that number reflect and when it drops lower that is a negative sign. explain what this means to us? >> yeah, it is negative because we want more people working. the more people who are working, the stronger the economy the more we're producing. as you point out the proportion of the working-age population that is working has fallen quite significantly. some of that is just demographic. we're all getting older. i'm getting a lot older.

i had my birthday, i'm now 53 and i have a few more years of work, but we have people in the baby boom generation who are retiring and leaving the workforce, and that's causing the participation to decline. there are those who are discouraged, they can't cover their bills their child care, their gas bills, they step out of the jobs. we want to see the participation rate begin to rise again. i suspect that it will. i'm hopeful that it will. once it does i think we'll feel much better about the way the job market is going. >> eliot: the unemployment rate has drifted down. it was up to 10% as we all remember not that long ago now you think it will be below 8%. but the total number of jobs is below where we were in the past. that is the tension and the schizophrenia psychologically that we feel and that is

reflected in the workforce participation rate, am i correct by that? >> just to give you the numbers. in the recession the peak--before the recession, the peak to the bottom during the recession we lost about 8.8 million jobs. we have gotten since job growth resumed a little over two years ago we got almost 4 million of those jobs back. we have not recovered half the jobs we lost in the recession. we dug ourselves in a deep hole in the down turn. we're digging ourselves out, but the unemployment rate is still higher than what we would see in a functioning economy where it would be 5.5% or 6%. closer to that. >> eliot: one of the points that you've written about is that the job growth is exclusively with the private sector. the public sector, government has been shrinking because of pressure because of diminished tax revenues. this has been a private sector driven economy

and not the public sector driven, am i right about that as well? >> i don't know the numbers precisely, but since the employees in the public sector peaked back, we lost a million jobs. that's incredibly atypical. generally we get job growth in the government sector. the private sector has been doing all the heavy lifting. the private sector businesses and non-financial corporations corporations are in an excellent financial shape, and they're becoming aggressive in going out and hiring more. and i think we will. as long as we get beyond the europe cliff next year we'll be in good shape. >> eliot: it's better than hearing the gloom and doom, mark

zandi, arrest sure of the book, "paying the price: ending the recession and beginning a new american century," great to have you on the abraham. >> thank you. >> omar ham mid ahead on "viewpoint."

>> eliot: still to come, christof putzel spoke exclusive exclusively with american jihad dis omar hammami, that's next. but first alan west, loses his cool. when it doesn't fit anywhere else, we put it in the viewfinder. >> oh, john, did i ever tell you i planned to under undermine the role from a martyr who is biased, while at the same time fearing the editorial vacuum that creates by propaganda in the news organization. >> one person who is the best friend of the first lady, and

the soulmate of the president, is de facto president of the united states. >> wow, that is big. let's talk about her resumé. does she have the resumé to have this job? >> no, she doesn't. >> let's go this show again? >> all these bills all the damn time, come out here the last--i got to come out and figure out how to vote for my people? you should be ashamed of yourself! >> real estate billionaire and basketball with tooth very veneer's donald trump. >> your ice cream it's vegetables. >> eliot: he was worn in born in alabama alabama, the american jihadist gives an interview to christof putzel. wojcicki give gavin a hands on look at google's glasses.

>>that's facinating.

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[ orbit glint ] fabulous! for a good clean feeling. ♪ eat, drink, chew orbit! ♪ >> eliot: peering into the mind of a terrorist who tried to understand why is like searching for an answer to a riddle wrapped in a mystery. it simply may not be possible. but in an exclusive interview with current tv vanguard course correspondent christof putzel who spoke with omar hammami the american jihadi. here is his report. >> omar hammami a 2023-year-old u.s. citizen born and bred in alabama left his family and friends to join al-qaida's most ruthless franchises. a group in somalia. he has been indicted by the u.s. accused of aiding a terrorist organization and placed on the fbi's most wanted list. in an interview that took place this memorial day weekend omar

spoke exclusively to current tv. >> right now there is a big transition happening and lots of dangerous to deal with. i can't even begin to think about possible scenarios because things are still quite uncertain. >> i first profiled omar hammami two years ago in a vanguard documentary entitled "american jihadi"." >> it was preposterous that you would know a person from alabama that would become an international terrorist. [singing] >> in somalia omar became known and began prestyling propaganda videos to recruit other young werners to the cause. but this past march omar appeared in a different type of video, claiming that they had turned against him.

>> i feel that my life is in danger. >> shortly after the video was released online he made contact with me. >> omar's former comrades are not the only ones he's hiding from. in the past few weeks africa union troops backed by the united states have escalateed their mission to eradicate them from somalia. on friday, troops began seizing control of their last major stronghold where they believe they are to be hiding. at the same time omar began recording an interview with me that we began before. >> i'm going to record our questions on the webcam. then he is going to record his answers on audio. omar has told me numerous times he has not believed that he has had much time left.

we have a very short window to conduct this interview. we're doing it right now. do you ever think about coming home and turning yourself in? >> never. maybe if i received a few head injuries out here i might start having some stupid ideas like that, but up until now i'm still sane. i've seen quite enough movies to know how the stories turns out and i cherish my religion far too much to sell out for some mediocre comfort in this world. i pray that god gives me the strength to finish strong. >> as omar recorded his answers troops gained land and 400,000 people displaced by the conflict. they had blocked local access to humanitarian aid. >> they are notorious for terrorizing the local population by conducting beheadings

nothings stonings, and cutting off limbs all under the guise of implementing islamic law. how can you possibly associate yourself with a group who does this? >> most werners say it's reminiscent of the stone age. our laws are more humane than anything that the west can concoct using their own brains. >> he described one man's execution. >> there was one instance where we caught this guy who was a self-professed trainer for ethiopians. he was an old guys who didn't think too much about dying. he was adamant about what he was doing and he was arrogant. i tried to explain the rulings the best i could. i tried to go over everything without being aggressive. i asked him if he was going to meet his maker. he said, yeah, yeah, thanks. before we caught him in in

apostacy, i don't think it could have been any swifter or more humane. >> his voice reveals few traces of his southern roots. omar grew up in the bible belt where he was raised as a southern baptist and president of his high school class. a week before recording our interview, i went to the home where he grew up in in alabama. >> i know he's alive. [sobbing] >> is there anything that you want people to know about your son? >> i know he loved this country. he will not do anything that would harm this country in any way. >> your father told me that you love america, and would never

attack it. is that true? >> i'd say that's probably true of my mentality maybe back in the sixth grade. but not after i accepted islam and realized all the wrongs america is doing. how can i really think about refraining from attacking america? they're putting people just like me on the kill list of their cowardly drones. but give legitimate opportunity against legitimate targets i don't see why i should hold back from attacking. i think we're at war as far as i can tell. >> many americans feel that muslims from the west who will return home to launch attacks on their homeland. do you think this will happen? >> well, be the lone wolf attacks from the unknown elements in america that the americans fear the most. the more american muslims realize they do have anything to lose because they're going to be pressured regardless of what they do, the more attacks will continue to increase. americans can live in denial and

believe that muslims are at wars war with the u.s. because they're jealous of their lifestyle. that is not the case. i consciously left that lifestyle to fight side by side with my brothers: the sooner you realize that, the sooner we'll be able to find opportunities for piece. >> before omar finished recording the rest of the interview, he sent me a final message. houston, we have a problem. [gunfire] he told me he had three wives and five kids. and hopes that if he died his father would find and take care of them. he then broke contact. it was the last i heard from him. in this video released by the africa union during their assault, troops can be seen hold holding a souvenir. a flag similar to the one used by omar in his videos. his fate remains unknown.

>> eliot: joining us now with this current tv exclusive vanguard correspondent, christof putzel. do you know why he's at war with the united states, but also his former comrade in arms? what was the schism there? if you have the insight. >> omar has been known as a hot-headed guy as we can clearly see. basically they're weakening. they're fractioning off, and they had a disagreement of how shariya should be implemented and omar lost. basically the real details of what happened are still a little sketchy, but did he say there were a couple of key figures that he was not getting along with, and didn't want him to have anything to do with the organization any more. >> eliot: so whether he has survived, and where he might be is a complete mystery. >> exactly. 's in a pretty--they are in a

difficult spot. he's in a particularly difficult spot. not only does the africa union want him, the troops want him and the ethiopians, want them, and now they want him as well. this is a guy who doesn't have many places to go. >> eliot: he ended the interview so american. houston, we have a problem. american culture runs through his veins. did he miss it? >> that's what is so fascinating about our communication, you see a piece of it here. almost all that we talk about is the american culture. every message is a reference to a song or movie, however always basically around 1997 or earlier earlier-- >> eliot: discussdoes he miss it? >> he dreams of things like krispy kreme donuts. he wants to know what people are eating now? how is the chinese food, the

pizza, he definitely misses those aspects of it but then he corrects himself saying i'm doing something bigger and higher. >> eliot: did you try to engage him on the underlying immorality of what he's doing? >> absolutely. >> eliot: not just the terrorism but his wife way of life. >> he knows, look, i'm not muslim. i'm not somali. i'm an american like you. i have no idea what you're doing. this makes absolutely no sense to me. he knows something like me he can't quote the quran, because i don't get it. you have to explain this to me so it makes sense. while we have to acknowledge that what he's doing is quite--a lot of terrible stuff. he's involved with a group who has committed tremendous atrocities, but the way he tries to explain it to me is very interesting. i do have this culture ambassador who understands he can't go about and keep quoting

the quran to me because i won't understand it. >> eliot: in that video he shot someone because he disagreed with them, where is he intellectually coming from? he was a smart guy according to his teachers. >> yeah, an incredibly smart guy. i don't think anybody is saying that he isn't smart. he's incredibly intellectual. >> eliot: what does he think he's getting by talking to you? >> i asked myself that a lot because he came to me. i think that when it comes down to it through our communications this is a guy who basically is on his own now. he really just wants a lot of--he is desperate for contact. he has been living alone basically in the woods-- >> eliot: he seems desperate for attention. i'm not going to psychological--one of the things in high school he was able to

convert a number of kids to islam in high school. >> omar is an incredibly charismatic guy. in our communications, he's funny. you read his biography, and there are parts that are funny. he does a lot of lol with me. he's a very charismatic life. in high school, in daphne, alabama, he was able to convert seven kids to islam. that doesn't happen in daphne, alabama. that's a charismatic guy. he has been able to recruit more and more people to wage jihad. he has been able to get dozens of american citizens from minneapolis, kids from toronto, europe, and that's something no one in al-qaida has really been able to accomplish. >> 's an enigma inside of a mystery, but he's terrorist. that, unfortunately, is the bottom line. christof putzel, thank you for

you're mazing reporting on this story. >> eliot: the president wages warswar, drones seem to be the perfect answer. but are they? more coming up.

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♪ >> eliot: the securities and exchange commission is not just a joke. it's a punch line without any punch. why big banks continue to have nothing to fear. but first, let's go west and visit jennifer granholm in "the war room." what do you have for us tonight govern? >> don't, we make a return trip to president obama's war room in chicago. i sat down with david axelrod and he's going to give us the latest on the obama campaign playbook. we're also going to talk with douglas brinkley, presidential historian. he'll be discussing the romney nomination and his new book. we'll go the north carolina to

talk about the controversyies surrounding the politics there. >> eliot: david axelrod is the wizard who took barack obama who is a brilliant speaker and turned him into the president. he has all the answers. >> totally charming, just a great guy. >> eliot: i can't wait to watch the show. >> all right. >> more "viewpoint" coming up next. >> david: the president claims two central successes in the fan affairs. the first is the elimination of osama bin laden, the act of courage by both the navy seals who actually captured and killed him, and by the president who had the fort attitude to go forward with a plan fraught with all sorts of risk.

second, has been the use of drones to eliminate senior most members of al-qaida, not only in pakistan, afghanistan but yemen and anywhere elsewhere they have plant roots. the expansive use of drones now came from the president alone. the use of force has been a presidential prerogative unchecked by our legislature or anybody else despite the constitutional obligation that congress and only congress can declare war we are now seeing a presidential use of force with drones attacks against individuals the president has personally decided are threats to our security. argentinas have included u.s. citizens. there was no judicial review nor any sharing of information that would have permitted congressional oversight. no one was offered the opportunity to challenge the unilateral position of the president to kill one of our own citizens. this should give us pause. as the new york sometimes detail

in a penetrating story about how the so-called dill list is generated, the vetting of names and targets by intelligence agencies produced almost a baseball card selection process for the president. we know that noncombatants can be deemed so-called collateral damage, but it has been minimized by the claim that any male of military service age who is that close physically close to an intended target must be a militant himself. this clever sleight of hand doesn't with with stand scrutiny. drones attack is minimal risk to us, but as appealing as these drone attacks may be, this president is not without cause for concern. we must ask ourselves whether we've created a decision process that too readily grants one branch of government unchecked authority over military force. what proof has been required to

place anyone and the people around him on the kill list and what limits the president's authority to kill. if he can do it in yemen can he do it in england? what about home. this will come back to haunt us, and we need to know where it stops. that's my view. i have the most common type of atrial fibrillation, or afib. it's not caused by a heart valve problem. i was taking warfarin, but my doctor put me on pradaxa instead to reduce my risk of stroke. in a clinical trial, pradaxa® (dabigatran etexilate mesylate) reduced stroke risk 35% better than warfarin. and unlike warfarin, with pradaxa, there's no need for regular blood tests. that's really important to me. pradaxa can cause serious, sometimes fatal, bleeding. don't take pradaxa if you have abnormal bleeding and seek immediate medical care for unexpected signs of bleeding, like unusual bruising. pradaxa may increase your bleeding risk

if you're 75 or older, have a bleeding condition like stomach ulcers, or take aspirin, nsaids, or blood thinners, or if you have kidney problems especially if you take certain medicines. tell your doctor about all medicines you take any planned medical or dental procedures and don't stop taking pradaxa without your doctor's approval as stopping may increase your stroke risk. other side effects include indigestion, stomach pain, upset, or burning. pradaxa is progress. having afib not caused by a heart valve problem increases your risk of stroke. ask your doctor if you can reduce your risk with pradaxa. from silver screens... to flat screens... twizzlerize your entertainment everyday with twizzlers

the twist you can't resist. >> eliot: are they the worst cops on the beat? four years later and still no prosecutions of high-ranking wall street executives. four years later and they're still letting companies off the hook with small fines and no admission of wrongdoing. four years later and their own commissioner say the sec does better job prosecuting the little guys than after going after the big guys. why the sec is so bad. matt, from rolling stone

magazine, thank you for your time. i did not even mention goldman and the squid. the best-ever metaphor. i'm in cold turkey. you said that the sec is failing in so many levels. give us examples, reasons and cases they should have made. >> number one, they literally have not made any high profile cases of any high ranking executives since 2008. but there are a number of companies that didn't get any serious treatment. the most glaring are the lehman brothers. and the sec decided they were not going to recommend or refer that case for prosecution. there that is a case with all kinds of strands aggressions, and they just overlooked all these companies. it's not like they don't have cases to make. they're just not making them. >> eliot: when you talk to them, what do they say the reason is? >> well, they haven't been forth coming to me about this whole issue. did i a long story about this last year, and they defended

their record. they say they have gone after plenty of cases. >> cenk: they're jokers. >> right. >> eliot: let's not waste time. it's not worth it. you come up with seven, number one whistle blowers. explain this to us. >> there is a lengthy history of people coming to the sec with pertinent information about companies that are in serious trouble, the lehman brothers is a great example. there was a lawyer who came to them six months before with information about the overstatement of income. they blew him off. and they blew off the whistle blower in the madeoff case. there was a whistler blower for chase, debt, sales credit card. >> eliot: they had people come to them with information that could have led to cases, some of the biggest cases. me sent them away and said we don't want to hear. >> but there was a guy from

chase who went to the sec and not only did they not do anything with this information but they actually told chase that he had come forward to the sec, and the guy subsequently got fired. >> eliot: very quickly when we had whistle blowers come to us, we would ask them why did they come to us and not the sec, they said because the sec does not handle them. people know that. they missed the obvious. they missed the larger structural problems that are there. don't they look at what is changing in the dynamic of the marketmarketplace and who is communicating fraud. >> there was an epidemic of liars in the mortgage markets people who submitted information without proving their income levels. they said this could cause problems. some how the sec didn't know about this, which was incredible. >> eliot: and the sec did not bother going to the banks and say let's see the due dill diligence

that you're doing on these loans. we saw this, and we went to these agencies. the agencies didn't want to investigate it. >> yes, right, it was very strange. the related problem of all the securitization issues that went along with that, the mass fraud and securitization. pitching loans to pension commerce and misleading what was in those packages, and nothing. >> eliot: despite all this, when the sec finally gets a case, they neither admit nor deny any wrongdoinger. a little slap on the wrist. >> more importantly, the evidence in the case is never made public. there is an additional thing that doesn't happen, is that the public isn't warned about the full extent of the problem because the evidence is buried. >> eliot: right, and you came upon, and i think that's one of the many things that i love about your articles, i love all of your articles, as you know, in the end of talk about the speech given by the

commissioner. tell us what he said that boggles the mind. >> he said we have to be careful, and we have a high hit rate when we go after prosecutions. he said fraud proliferates in these smaller cap companies. so therefore that's why we go after these smaller companies. you know what i found? they really do go after these small companies with incredible fervor, and at the end of every year they go after these registration violations. they go after and close dead companies. that's where they spend all of their efforts, blowing up these dead companies. >> eliot: when 20 years ago they said let's go after organized crime. they said let's go after the mopes around the outside rather than working up through the organization to get the bosses. a complete failure. >> in the last year, 121