on the broadcast tonight, star witness. for the first time, the assistant coach at penn state tells his story on the stand, tonight, what did he really witness? mad rush at the mall. if you thought stores were busy on black friday, perhaps brace yourself for this weekend. safe at home, once a role model for parents and kids alike, now an example of baseball's temptations. tonight, the question, does the punishment fit the crime? and making a difference, in this season of giving, some of the many people working hard to make sure every kid has a christmas. "nightly news" begins now. captions paid for by nbc-universal television

>> good evening. he is a star witness in a terrible story. so when he spoke today in court, his words carried great weight. mike mcqueary says he witnessed a terrible thing while he was assistant football coach at penn state, back before the name penn state became synonymous with this unfolding sex scandal and the former defensive coordinator jerry sandusky. the testimony is key to the case against two former penn state officials, senior v.p. gary schultz and athletic director tim curley who denied charges they lied to authorities. again tonight fair warning, this is tough material. the whole case has been that way from the start. we begin tonight with our national investigative correspondent michael isikoff from state college, pennsylvania. >> reporter: once the starting penn state quarterback, now a star witness for the government, mike mcqueary took the witness stand today and graphically described seeing a naked jerry sandusky engaged in what he

called extreme sexual activity with a young boy. "the boy was up against the wall" mcqueary testified. "jerry was directly behind him in a very, very close position. i believe jerry was sexually molesting him." mcqueary slammed his locker door shut, causing sandusky and the boy to separate and look him directly in the eye. mcqueary's testimony is key for the case against two former penn state officials, athletic director tim curley and senior vice president gary schultz, both charged with lying about what mcqueary told them about the incident and failing to report it to authorities. mcqueary acknowledged he never actually saw any sexual intercourse and never intervened. "i was shocked and horrified," he said, "and to be frank with you, i was probably not thinking straight." >> mcqueary was a great witness, very clear, articulate and very sincere and very respectful. >> reporter: prosecutors read from former coach joe paterno's grand jury testimony. paterno told the panel mcqueary only said he had seen sandusky with a youngster, doing something of a sexual nature.

paterno said he didn't push mcqueary for details. paterno said he later passed along the information to curley, who along with schultz met with mcqueary about a week and a half later, but never took any steps to investigate. defense lawyers hammered mcqueary over why he never told police. noting schultz's position overseeing the campus police, mcqueary shot back, "i thought i was talking to the police." late today judge william wenner ruled the testimony from mcqueary and others was enough to take the case to trial. michael isikoff, nbc news, harrisburg, pennsylvania. we're joined tonight here in the studio by savannah guthrie, our nbc news chief legal correspondent, and other than the gross alleged details in this case, what changed materially today? >> well i think we really saw what may turn out to be some of the most powerful evidence against not these two penn state officials. them, of course, but also, jerry sandusky. it is so rare in a sexual assault case to have an eyewitness to an alleged crime

and that's what mcqueary says he is. so we saw, here he is giving a very vivid, detailed narrative. i would make one caution which this is the early stage, just the preliminary hearing. prosecutors only had to put on the barest of evidence to establish probable cause for the charges to go forward and defense attorneys were somewhat limited in their cross-examination, so we haven't really seen the full throttle attack on the testimony mcqueary gave that we will see if this case indeed proceeds to trial. >> for folks who haven't been following the machinations of this, what was the decision sandusky's legal team reached earlier this week? >> they said we don't want to go forward with a preliminary hearing. if they had, we would have heard from mcqueary and several of the alleged victims in this case. ultimately it was a trade-off for these defense attorneys. on the one hand, they don't have to have days and days of bad publicity, as all these detailed narratives come out, but they missed an opportunity because they didn't get to lock these alleged victims into testimony which they could later cross-examine on trying to say

oh, there are inconsistencies that kind of thing, and they missed the opportunity to size up the demeanor and credibility of these alleged victims in court. >> savannah guthrie, thank you, as always, for being with us on this. now we shift our focus to washington, and some big news out of that city today. two former ceos of mortgage giants fannie mae and freddie mac were hit with accusations of fraud, by the s.e.c. fannie and freddie collapsed during the financial meltdown back in '08, leaving taxpayers with a staggering bill that grows larger by the day. nbc news senior investigative correspondent lisa myers has our report. >> reporter: three years ago the former ceos of fannie mae and freddie mac infuriated a congressional committee by denying any blame for the financial crisis. >> we thought we made the right decision at the time. >> you have exhibited no sense of accountability for your actions here, none. >> reporter: but today both former ceos, daniel mudd of fannie mae and richard syron of

freddie mac were accused of civil fraud. the securities and exchange commission, or e.s.c., alleged that they and four other executives made false and misleading statements to conceal the extent of risky sub prime mortgages. >> today's action is about holding individuals accountable for their role in misleading the public. >> reporter: who got hurt here? a lot of hard-working americans saving for retirement. >> fannie and freddie were two of the most common companies that the average guy on the street invested their retirement income in, and their retirement accounts took a real hit. >> reporter: when the companies imploded, taxpayers had to bail them out, to the tune of $150 billion. these are the highest profile individuals facing legal action in conjunction with the meltdown, but it's not likely to satisfy outrage that no big players on wall street have been criminally prosecuted. >> none of them is even under indictment.

indeed, there does not appear to be a serious investigation of any of them. >> reporter: the former ceos emphatically deny any wrongdoing and say the allegations are without merit. they insist they fully disclosed all risk to investors. mudd said he looks forward to his day in court, where the standard is "fairness and reason, not politics." lisa myers, nbc news, washington. and in a california courtroom today, a surprise when a federal judge handed down the sentence for the so-called home run king, barry bonds, convicted of lying to a grand jury in a case involving steroids and baseball. it's what didn't happen that has a lot of people asking tonight if the punishment fits the crime. our justice correspondent pete williams is in our washington newsroom with more on this. pete, good evening. >> and brian what didn't happen is any prison sentence, in this latest setback for the prosecutors who have spent millions of dollars investigating the use of performance-enhancing drugs in professional sports.

barry bonds remains a free man, his sentence is on hold while he appeals his conviction for giving rambling testimony to a grand jury looking into the use of steroids in baseball. prosecutors said 15 months, instead he got 30 days home detention. the judge called his conduct an aberration in an otherwise law-abiding life. this case began going south in april when a jury declined to convict him of lying about whether he used steroids. prosecutors had given up on trying him for that. over the summer a federal judge declared a mistrial in a similar case against pitching star roger clemens. the government will try again in april. prosecutors managed to get 11 convictions in steroids cases ending with probation or a few months in prison, and many applaud the government for sending the message about the dangers of steroids. but some in sports and the law wondered if this was the best use of federal resources. brian? >> pete williams at the intersection of justice and sports tonight, pete, thanks for

that. on capitol hill in washington, the house has passed the spending bill needed to keep the government up and running, but there is still a lot of work to do before the end of the year. we're joined tonight by nbc's kelly o'donnell from the hill. kelly, good evening. >> reporter: good evening, brian. first no government shutdown, that's done, because house republicans and democrats came together overwhelmingly to pass that nearly $1 trillion spending bill that covers more than a dozen government agencies and included in that is the fate of your household light bulb. republicans fought hard to get rid of the money to enforce the ban on the old incandescent bulbs in favor of more energy-efficient kinds. they said government was reaching too far into everyday life. democrats pointed out they're not really making those old bulbs much more, so not much practical effect, and brian i can tell you there are breaking developments on that other big priority, the payroll tax cut and unemployment benefits extensions. we're being told there's a tentative deal for just a two-month extension and would include something republicans

fought very hard for, and that's a provision dealing with the oil pipeline project they say will create jobs, the president wanted to push that off, so there are developments, they may all be out of here by the end of the weekend. brian? >> kelly o'donnell on the hill tonight, kelly, thanks. it is a crucial time, as you may know, in the gop primary race for the nomination. the final debate before the iowa caucuses was just last night. now it's a sprint to the finish, while trying to hold everyone's attention over the christmas holiday. nbc's chuck todd reports on what happened last night and what's ahead. >> governor? >> reporter: trying to look like a front-runner again, mitt romney picked up the support of tea party favorite, south carolina governor nikki haley. >> he's already a leader and knows what he wants to do the first day he gets in office, and he's already ready to do it. >> reporter: an endorsement romney hopes provides moment numb an important early primarily state, and after a week of attacking newt gingrich, last night romney held back. >> it's president obama we've got to be talking about. >> reporter: newt gingrich also

played nice. >> i sometimes get accused of using language that's too strong, so i've been standing here editing. i'm very concerned about not appearing to be zany. >> reporter: the real damage to gingrich may be coming from tv attack ads blanketing iowa. >> -- gingrich was fined $300,000 for ethics violations. >> he's demonstrating himself to be the very essence of the washington insiders. >> it's about serial hypocrisy. >> perhaps the most aggressive last night, michele bachmann who took on the surging ron paul over the issue of iran's pursuit of nuclear weapons. >> we ought to really sit back and think and not jump the gun and believe that he with are going to be attacked. >> i think i have never heard a more dangerous answer for american security. >> reporter: bachmann also went after gingrich about his private sector ties to mortgage giant freddie mac. >> when the speaker had his hand out and taking $1.6 million to influence senior republicans to keep the scam going in washington, d.c. >> reporter: gingrich dismissed her charges which clearly upset the congresswoman.

>> i think sometimes people ought to have facts before they make wild allegations. >> i'm a serious candidate for president of the united states, and my facts are accurate. >> reporter: asked today whether she considered gingrich's rebuttal sexist? bachmann did not seem to rule that out. >> people looking at that would have to make that observation if that is so. >> reporter: all this with 18 days to go before the first votes are cast. chuck todd, nbc news, washington. and when our broadcast continues on a friday night, why this could be a make or break weekend for a lot of folks. and later, the soldiers on the front lines of christmas for a lot of kids who are counting on a visit from santa.

retailers have nine days left to eat up a lot of ground and conveniently shoppers have that same time remaining to cover a lot of ground before christmas. that's why this is going to be a busy and crowded weekend out there, starting with the mall parking lot. nbc's tom costello in reston, virginia, for us tonight. hey, tom, good evening. >> reporter: hi, brian. we're at a great spot here because it includes an outdoor skating rink in the shopping area. you know the current sales slogan, nobody pays full retail anymore? a lot of people are taking that to heart. they're demanding big discounts

both online and in the stores. retailers are desperate this weekend. they want to get shoppers in and merchandise out. if you thought the stores were packed over the thanksgiving weekend, and they were, then prepare yourself for tomorrow, on this last full weekend before christmas, some of the biggest retailers are slashing prices to lure in those shoppers who haven't yet finished, from the promenade in santa monica -- >> i haven't bought anything for anyone yet. >> i don't have a strategy yet. i think when i get to the stores i'll figure it out. >> reporter: -- to the magnificent mile in chicago. >> anything over 50% i feel is a good deal especially like being a student, i need those sales. >> reporter: while store sales soared at the weekend after thanks giving, they have since suffered the biggest drop in 11 years, with americans struggling through a rough economy while still carrying high levels of debt, retail annist dana telsey is on a ten-city tour, gauging holiday sales.

>> we found promotions drive traffic. on average the average promotion is around 40% off. >> reporter: still, since lower than expected sales since black friday, the national retail federation has actually raised its holiday shopping forecast, now expecting a 3.8% increase in sales over last year, but for that to happen, this weekend is critical. since the saturday before christmas falls on christmas eve this year, many retailers are calling tomorrow super saturday. in salt lake city, overstock.com was itself overstocked, and just auctioned off an entire warehouse for pennies on the dollar, and with consumer spending accounting for 70% of the economy, what happens in the next week is critical. >> the stakes are huge, not only for retailers but for all businesses, it sets the tone for activity as we make our way into 2012, whether businesses will broadly go out and invest and hire and that's vital to the economic recovery. >> reporter: vital to the economy he says. we talked to a lot of retailers,

to target. we talked to walmart, jcpenney, macy's, abercrombie, the gap, you name it. many are talking about extended hours in the run-up to christmas, deep discounts and the sales to start big time tomorrow. >> tom costello, who has pulled off the neat trick of being able to slip in some shopping, if not skating, while being able to say he's on assignment for us tonight, well done. tom, thanks. up next here tonight a man who often made the world think even if he didn't make a whole lot of friends in the process.

♪ ♪ at last that of course is the great etta james who we learned today sadly is nearing the end of her life. her doctor is asking for prayers. she says james is terminally ill and the end stage of a long

fight with leukemia. she's a member of the rock 'n' roll hall of fame and a conis enchoice of course on the greatest vocalists of all-time. etta james is 73 years old. christopher hitchens has died. he was born in post-war britain but became an american citizen. he was the author of over 20 books and he read thousands more. he was a scorched earth polemicist, a trotskyite, an atheist, and a lot of people found him hard to like and impossible to pin down and that's exactly how he liked it. he was a big supporter of the war in iraq, he criticized mother teresa as a fraud, and he was a genuine intellectual who chronicled his own bikini waxing and once agreed to be waterboarded on camera. he got the power of a stunt and the power of words. he would debate with anyone and he usually won. he hung out with other smart writers, mostly brits. hitchens drank and smoked like an olympian, and he paid for it. he died of esophageal cancer, just as his father did. christopher hitchens gone at the age of 62.

while it took a british newspaper to show us what's happening in our own neighborhood, look at these photos from the giant rising above ground zero in lower manhattan. it's called one world trade. it's going up fast. it's up to 90 stories now, with 14 more to go, and already on a clear day you can see forever, and in a city of giants, this new giant is already visible from all five new york city burroughs. up next here tonight, the young man who popped the question to the first lady.

in this season of giving today, first lady michelle obama reminded us all to do our part for the needy and set an example by delivering a big red sack of toys from the white house staff to the u.s. marine corps toys for tots campaign. as she was sorting through the toys, the first lady got asked out, a young marine invited her to next year's marine corps ball. she said she'd love to go, but has to ask her husband. the toys for tots program founded by the marine corps has been making a lot of dreams come true for boys and girls in need for over six decades. tonight around the country, marines and hoards of volunteers are scrambling to fill a spike

in requests for toys, and to make a difference. our report tonight from nbc's ron mott in boston. >> reporter: last christmas, marine sergeant matt laroche was surrounded by taliban threats in afghanistan. this christmas he's bomb boarded by stuffed animal, board games, footballs and dolls. >> it's awesome to be able to do this. >> reporter: as coordinator for boston's toys for tots drive. >> this year's christmas and last year's christmas were very different. i was deployed to southern afghanistan, didn't really know it was christmas, to be honest, except for the care packages that i got from the, you know, the loving kids. >> reporter: with nine days to go before kids rip into all this fun, the mad rush is on to get toys to them. today in new york, anxious youngsters were thrilled to see a mountain of toys, reaching first, in one case at least, for the arms of a marine. back in boston volunteers hauled donations in, sorted, bagged, before sending them back out

with big smiles hoping even bigger ones are to come. >> i know it's the thought that counts but it's nice to have something to open on christmas. >> reporter: a year ago this chapter distributed nearly 140,000 toys. and while they just might reach that number this year, they're worried they won't be able to meet the surge in demand. across the country 1.5 million more kids are on the list for toys. officials say the increase is about 30%. >> the demand right now is very big, with the unemployment out there. >> reporter: though the economy is still clearly sour, this marine says there is clearly something sweet about returning the favor from all the care packages they receive during war. >> now i get a chance to give back to the kids. >> reporter: giving as good as they got. ron mott, nbc news, boston. >> there you go. we want to let you know every night next week we'll have a "making a difference" follow-up report. we'll show you how some of the folks who have seen the stories we've aired have stepped up to help others in need. that is our broadcast for

this friday night and for this week. thank you for being here with us. i'm brian williams. lester holt will be here with you this weekend. we, of course, hope to see you right back here on monday night. in the meantime, have a good weekend. good night. -- captions by vitac -- www.vitac.com