>> rose: welcome to the broadcast. there was the earnings report today by goldman sachs, and we have more on the s.e.c. complaint against the firm with michael lewis, david boies and andrew ross sorkin. >> the story we should all be talking about is this s.e.c. lawsuit. because it is really pointing to how goldman sachs is making its money. and it's not a pleasant story. and i think that if i had to guess what's going on inside goldman sachs today, it's less a celebration of their earnings than full crisis mode. because the world's ganging up on them. >> i think that there's a climate in washington that is... wants to show aggression in terms of regulation. i think that... that's not necessarily a bad thing. but i think you've got to be careful that when you bring an s.e.c. complaint as opposed to bring a bill to change

procedures or to add new regulations that you've got something that is improper under existing law. and looking at the complaint, i don't see where that is right now. >> rose: goldman sachs comes out today with great results. and their stock price goes down. why does their stock price go down? because there is a real worry that in a business based on confidence that people are no longer going to do business with them. states, countries, governments are no longer going to do business with them. at some point if you're a board of directors who used to do business with them, who used to consider them the good housekeeping seal of approval, you might say "i'm going to take my business elsewhere. >> rose: also this evening, ambassador william vanden huevel talks about the long journey of a memorial for franklin delano roosevelt designed by the architect lewis kahn. >> roosevelt's saving of western civilization with winston churchill, his leadership taking us out of the gate depression so

the that the nation found confidence with itself and as we see today everybody turns back to see what happened with roosevelt and then the struggle of the second world war. so there's no monument to franklin roosevelt in new york. >> rose: the great biologist from harvard e.o. wilson taped an interview today. we'll show it to you at a later time. tonight, more about goldman sachs and a memorial to franklin delano roosevelt when we continue. captioning sponsored by rose communications from our studios in new york city, this is charlie rose.

>> rose: goldman sachs announced huge earnings days after the government accused the legendary firm of fraud. goldman reported its first quarter profit rose by 91% to $3.5 billion. this is just the latest sign that the bank has emerged as one of the strongest survivors of the economic crisis. last week the securities and exchange commission accuseded the firm of selling a financial product that was bound to collapse. joining me now from berkeley, california, michael lewis. he's the financial journalist and author of "the big short" number one on the "new york times" best-seller list with me at the table, david boies, an attorney who has represented both major corporations and the government in high-profile cases including the microsoft antitrust case. and andrew ross sorkin of the "new york times." he is a columnist in and editor of deal book the "times" online financial report and his book "too big to fail." i am pleased to have all of them on this program. i begin with michael lewis. tell me the significance of what

the earnings report and what else goldman sachs said today. michael? >> well, the earnings report sr.... it's not that surprising. they've been doing very, very well ever since the crisis. and most of wall street has been doing very well. the story that we should all be talking about is this s.e.c. lawsuit because it is really pointing to how goldman sachs is making its money. and it's not a pleasant story. if i had to guess what's going on inside goldman sachs today, it's not a celebration of their earnings but full crisis mode because the world is ganging up on them. >> rose: tell me what it is that you think is at issue here. >> this lawsuit for first t first time in my lifetime the s.e.c. has filed a lawsuit that is at the core of what goes on on wall street. i have felt over the years it was an agency designed to do nothing but sue kind of trivial people for insider trading and

here they have for the first time sfwld a big way into the bond markets. and the story of the last... not just the last few years but the last few decades on wall street is the story of the bond markets. but the debacle of the last few years is a bond market debacle and the s.e.c. has said much of what you're doing... i mean, as a specific case, but the specific case is not an aberration. they have accused goldman sachs of essentially designing... collaborating with a short sell to design securities that would fail. and then deceiving investors about how these securitys were created. and it is a riveting case because although i had heard tell of such things happening inside the big wall street firms until now i didn't know for sure that it had. and so i feel like for the first time a light is being shrined be

into places where it needs to be shineeneded and we all all learn a lot about how these places conducted their business. >> rose: you think this is just the begin? >> oh, yes. i'd be really surprised if goldman sachs was the only firm designing securities with the help of short sellers that were made to fail and i'd be surprised if john paulson was the only hedge fund manager working with the firms to do it. and more generally it points to just the degree of corruption in fixed income markets. i mean, we have... the story gets complicated as you dig into it but goldman sachs was... essentially seems to have been using a seed owe manager as a front for selling things that should not have been buying them. on the other end of these transactions are punitively sophisticated institutions but not that bright institutions a

german state bank was the big buyer but around the world you have investors who now may feel they have a legitimate claim. and i wouldn't be surprised to see the lawsuits flying. people wanting their money back from having bought subprime mortgage-backed c.d.o.s that were constructed in this way. >> rose: what do you think of this complaint? >> the complaint itself doesn't give you a lot of meat. you read the complaint and you don't really understand what was illegal about what was going on. that's illegal is misrepresenting its deception and you read the complaint and you see a lot of conclusions but you don't see much hard evidence. i've seen some speculation today in the press-- we were talking about that before... about whether the s.e.c. has sort of held back the real good stuff.

that's possible. >> rose: in other words, they're not disclosing to us everything they have. >> that's possible. but my instinct tells me that in this climate with this case and this defendant the s.e.c. has put its best stuff out there and if the best stuff is in the complaint i think s.e.c. is going to have some trouble. >> rose: in other words, you don't think it's a strong case? >> it doesn't look it from the complaint. i don't know the facts and maybe the s.e.c. has things that aren't there. so i can't tell you whether it's a good case or bad case. >> rose: goldman also says it's wrong in law and in fact. where's it wrong? law? >> well, i they they mean... i think what they mean is based on the facts that are in there, it's not an illegal conduct. the issue is whether there are more facts that would bring it under conventional law. as michael said, this is an unusual case, this is the first time you've seen a case like this. i happen to think it's no

coincidence it comes out just at the time that the administration is going after the financial regulatory reform in congress. >> rose: wait. you think the administration had some influence with the s.e.c. in terms of bringing this complaint now? >> i think that there's a climate in washington that is... wants to show aggression in terms of regulation. i think that... that's not necessarily a bad thing. i think you've got to be careful that when you bring an s.e.c. complaint as opposed to bring a bill to change procedures or add-to-add new regulations that you've got something that is improper under existing law. and looking at the complaint, i don't see why that is right now. >> rose: what do you think? you've been writing columns. >> i think there is a huge cloud now other goldman sachs and, frankly, all of wall street. i agree with david in that this is all now going to turn on the legislation. but, you know, interestingly goldman sachs comes out today

with ostensibly great results and their stock price goes down. why? because there is a real worry that in a business based on confidence that people are no longer going to diz do business with them. states, countries, governments are no longer going to do business with them. at some point if you're a board of directors who used to do business with them, who used consider them the good housekeeping seal of approval, you might say "i'm going to take my business elsewhere. the real question is where on wall street you can take it. because i think as michael said, it is very likely that we're going to see much more of this. this really goes straight at the conflicts of interest. the whole issue of people trading against their own clients, of doing things that are good for themselves but clearly not good for others. and you look at this case and it just smells bad. now, i agree with david, by the way. on the merits of the case it is very unclear whether there was a illegal. you have a situation where a hedge fund manager, john paulson comes in and says "put the worst

stuff together in a box." >> rose: he helps them select the worst stuff. >> he helps them select the worst stuff. >> rose: according to the complaint. >> according to the complaint. they go and then they market it. >> rose: and not disclose that he helped them? or not? >> and not disclose that he built the deck of cards. the distinction is that the buyers got to see all the cards in the deck. and, in fact, throughout some of the cards... threw out some of the cards initially and said "we don't like those cards." so they had input into the cards in the deck. the thing that you didn't know was that paulson was the guy on the other side who built the deck. >> rose: and he was a well-known short seller. >> and he was a short seller. interestingly in 2007 goldman sachs would tell you and i think others on wall street would tell you that he wasn't actually that well known. today he is the warren buffett of short sellers. at the time, he was a short seller that not many people knew. in fact, was not doing so well because he was betting against the market when the market was still going up. >> rose: and the reason everybody knows him now is because when he bet against the

housing bubble... >> he did very, very well. >> rose: better than anybody, as far as we sglochlt absolutely. >> rose: so therefore he had a big name. >> and that's why a lot of people look at this case and think that this is... hindsight is 20/20 and an easy case to make now. but i do think there are serious issues, as michael said. >> just to back away from the lawsuit for a minute and look at the deal. it's riveting. i don't know whether what they did was illegal or not but it should be illegal. >> rose: (laughs) >> it's indefensible what they did! that senate a room with someone... with the person they knew who knew the most about the underlying securities and he picked the absolute worst ones and then they presented it to this entity called a seed owe manager. a company called a.c.a..

and what's riveting about the case is that you read between the lines of the e-mails between the poor goldman sachs salesman who's being set up as the fall guy heres and the c.d.o. manager and the c.d.o. manager is trying to figure out why paulson is in the room. and goldman, according to the complaint, is told that paul son is in the room because he wants to own some of this stuff. in fact, what he wants to do is bet against it. but the c.d.o. manager, the person who's actually supposedly the expert in all of this is anxious to know why paulson is there tells you everything, that they themselves didn't feel they had the capacity to do the evaluation. and they were at the mercy of someone who knew more. and that you have this whole subprime lend magazine in which the only people who were doing any real analysis are the pete who are betting against the loans. i mean, it's just comically upside down. >> rose: if they did what they said, is it wrong? >> just the fact of packaging

sufficient together and even getting input from somebody who think it is stuff is going to go down is not in my... >> rose: and not disclosing it to anybody. >> it's a question of whether there is affirmative misrepresentation. >> rose: the doing of that is wrong or not? you're saying not necessarily... >> you're talking wrong, i'm talking legal. >> rose: i know. but i'm trying to get you to talk wrong. >> he doesn't want to talk about that! (laughter) that's not where he lives, charlie. he doesn't live with right and wrong. >> i'm a lawyer, not a priest. (laughter) >> rose: i've got to my producer. we said book a priest and he booked a lawyer! will you play the role of priest michael? >> stepping out of character... >> i mean... >> but you know what, it's sort of like creating pollution in the financial system. you're standing there trying to design securities that will fail and peddle them to unsuspecting people. what does that do to trust in the financial system? >> it's crazy that it should be allowed. >> michael, i have a thought

experiment for you. for everyone at the table. >> all right. >> rose: >> warren buffett call calls up goldman sachs three years ago and says "i'm a value investor, i found mortgages that i think are going to go to the moon and i think the rating agencies have them wrong, i would like you to package them and i want to buy this on the expectation it's going to go up, up, up." goldman sachs says "sure, i will do that" they call john paulson and say "would you like to take the other side of this late? " a year later the stock goes to the moon, warren buffett is absolutely correct, john paulson loses his shirt. the question is, does that bother you and could john paulson and the f.c.c. say if the if you'd only told me warren buffett put this stuff together..." >> it's an interesting question. i agree with you. it's an interesting question. it bothers me a little bit but... >> i think the larger issue that this case has exposed that this really is just about trading.

when you think of a synthetic c.d.o., so many of these instruments on wall street, it's just another a casino. there's no underlying assets. they don't own these mortgages. people aren't getting mortgages because of this. what's happening is... people are literally betting on the price and that's it. and what is the social utility of that in an environment where the taxpayers have had to take on a huge burden because of these trades, what should be the policy as a result? >> and there certainly ought to be tollsy issues like that addressed, in the beginning as you know there were some state gaming commissions that wanted to prohibit this or regulate it on the grounds it was gambling. and what you had is you had this huge casino buildup without any real regulations and without any real standards. so i think that issue, i think, most people would agree with. i think the harder question is i think the reason people are less bothered by your thought experience is that basically people don't like short sellers.

people who buy long are the good guys and people who sell short thought it was... >> rose: betting on hope rather than fear. >> exactly. but, in fact, when you package something, you can call it dumb money and maybe they are dumb money, but it's very big dumb money and these are sophisticated purchasers and the question is under both the current law and under what kind of regulatory reform you're going to have, how do you change that? what do you make people say in what kind of disclosures are you going to require people to make and how effective is that going to be? i think all those are important policy questions. but don't assume just because it's in the complaint it happened. >> rose: okay. let me take another step on this too. the recommendation-- this is the "washington post" today in a story about all this and basically said "endorsing the recommendations of investigators, the s.e.c.'s five-member commission voted 3-2 to proceed with the civil suit, taking the high-stakes gamble

that pits wall street's top regulator against its most storied bank." how much do we make over the fact that the s.e.c. has been accused of not being very aggressive and now we have this opportunity to flex its muscle and say... and they go after the most storied investment firm on wall street? give me some light on the politics of this and the fact that we're now considering financial regulation reform in the congress. michael? >> i was afraid you're going to ask me, charlie. dwrof faintest clue. i haven't interviewed anybody inside the s.e.c. i just take heart as a citizen of the republic to see the regulators actually trying to do something. the 3-2 vote is kind of interesting. just because i want to know what the two said. i suspect they sounded an awful lot like david bowie, that they were thinking... >> rose: (laughs) that thing isn't winnable. isn't winnable. and i think even if they don't

win they will have done some good. just by pointing... just by flashing the light in this direction and i bet the three who said "we're for it" said is it wrong? and it's very hard... you know, i have a hard time seeing how what they did was defensible. and it points to, look, it's a... in this environment what they did is clearly explosive and not just in the states. that around the world people have talked about this thing. it's become central to the british general election. but the... and it will be i think an impetus to the reform bill. fewer and fewer people want to stand up and defend goldman sachs and i think that's a good thing. but that's where my thought ends. i don't know the machinations inside the s.e.c. >> rose: so tell me what the people inside goldman sachs who talk to people like you are saying? >> they're in full crisis mode.

i talked to someone today who said that the people who run our firm aren't running our firm anymore. they're deal entirely with this crisis. and i think they probably rightly suspect their jobs are at risk. and as andrew said, they report these incredible results and their stock price falls. they have become so politicized. and this is a natural, really, conclusion of what happened in 2008. i mean, essentially the risks that goldman sachs are running to make the money that they're making are socialized risks. if they go... they went right this quarter, but if they went wrong, we'd all be paying the bills. so it is... there's something right and proper about the public sticking its nose into goldman sachs's affairs just now. >> rose: what are people telling you inside goldman sachs? >> inside goldman sachs, michael is 100% right. >> rose: crisis mode. >> right. and they're not running the company in terms of the day to day operations.

there are people hopefully doing that but the senior people are literally trying to figure out what their p.r. strategy needs to be, what their washington strategy needs to be. and what their global strategy needs to be given that they're having problems in germany, britain. this can extend itself and we have to imagine you're going to see lawsuits every which way. >> rose: sheer from the "washington post" today. it says "for months, goldman sachs and the securities and exchange commission had both involved in secret talks over allegations that the wall street bank defrauded customers in selling them investment december signed to fall. then after a crucial meeting last month between lawyers for goldman and the s.e.c., the agency came to a fork in the road. even after s.e.c. lawyers told goldman in writing they were prepared to file a federal suit, the firm gave no ground, declining to ask for a settlement according to people familiar with the case. the agency could prolong negotiations in hope of reaching a deal goldman would accept-- as the s.e.c. had often done in previous cases... or take the bank to court." so they basically said we're not get anything feedback, goldman shows no interest in wanting to settle this so therefore we're

going to court which is a little different than you said. >> it is. and i don't know what the facts are. i read that story and i read contrary stories. only goldman sachs and the s.e.c. know who blindsided who. but i do think that this is a situation in which the s.e.c. wanted to send a signal for its own purposes, for the administration purposes. i think this was a desire to make a point not just resolve a particular case. >> rose: michael, do you think-- and this is one of those grand questions that i like-- this that this will look... this loon looked and and say that this was a momentous time? this was a signal that things were going to change on wall street? >> i do think that. i think it's the first shot in a culture war. and i think that... you know, i think this is the moment... the equivalent moment for goldman sachs that my old firm faced when it manipulated the treasury

bond market and then it responded to questions from the treasury by basically ignoring it. and i think... look, i think people in washington generally are finally figuring out that the politics of financial reform are simpler than the politics of health care reform. that aren't there aren't real l two sides goods to be on, for and against. and you're seeing this retreat. i mean, it's great to watch these republican senators who were doing whatever they could to stymie the legislation all of a sudden not want to be cast in that role. and this is a big force for reform, and reform is badly needed. i mean, we have... people... it's amazing how quickly people forget. we have just come through a period where people on wall street were paid more money than people on wall street have ever been paid to squander more money

than people in history have ever squandered. the system is screwed up and needs to be fixed. >> rose: and is there a consensus on wall street that reflects what michael just said? >> on wall street? >> i think it's hard... >> rose: i'm asking andrew ross sorkin. >> i think it's hard for people on wall street to fully appreciate and grasp the magnitude of what's happening here. and i think some of them get the joke, but i think it always happens more slowly for those on the other side. >> it's going to take a while. it's like driving down the road and you see an accident and you slow down for a couple miles and then you forget about it and until the next shoe drops and other people are brought in, people will say "well, that was goldman." in fact, if this is the beginning of a new era in terms of the way the existing laws are going to be enforced, you're going to see every major firm subject to something like that. >> i will tell you, i think, in

washington they feel that this is a sea change. you're already starting to see the republicans even shift their talking points. senator corker... he's now coming out... the reason he's now against the bill is that it doesn't go far enough! it really has... within 24 hours has changed. >> we can debate whether there was a good lawsuit or bad lawsuit but it was great politics. >> rose: you don't want to be running for office saying "i love banks." is that the idea, michael? >> not the big banks. you might want to be running for office saying "i like my little community bank. but you certainly don't want to be running for office defending the bond market as it's currently structured. i completely agree with andrew. the republicans have turned on a dime and they were the resistance. so now it's a question of what exactly is going to happen in this reform bill. i think all of a sudden the possibilities are endless. i'm very hopeful about it. it's nice to see someone do something good in washington. >> rose: so tell me what you want to see happen? >> can i tell you broadly in crude strokes?

>> rose: yes. >> because i don't know exactly how you achieve it. i'll tell you how i would make the financial world a lot saner than it is. i think the sort of risk taking that goldman sachs, proprietary trading group does and the other wall street firms proprietary trading groups do is much better done inside of a partnership structure rather than a public... the structure of a public corporation. shareholders have no ability to evaluate this sort of black box trading and if people have got their own wealth on the line in a big way it will encourage them towards sanity. i think it makes not a lot of sense for wall street firms to be able to trade for their own books the same securitys they're advising customers to buy and sell. look, this is a story that goes back a long way. but as these firms have gotten more and more dependent on their trading revenues as opposed to the revenues they get from servicing clients, their clients have increasingly become tools

of 23 t trading books. so i think that reform should aid to... you can split the firms up along this line. you can say you can be a proprietary trader or you can be a customer service center but you can't be both. i think it makes total sense to require everything they trade to be traded through either exchanges or clearing houses. so that there's no more of this morgan stanley dialing up goldman sachs and making a $10 billion side bet that nobody knows about. because the minute they can do that, the minute they can engage in essentially side transactions that are opaque, it is the minute they become intertwained and none of them can fail. they're in this desperate because you don't know how exposed they are to each other. all you know is that they are exposed to each other. >> what about the products themselvess?

some of the characters in your book-- which i so enjoyed-- made an enormous amount of money by gambling. by betting against the system. they made a lot of money. people lost a lot of money on the other side. and i wonder what the social utility of those products were. >> let's take a single product. i think... look both collateralized debt obligations and credit default swaps if we could go back in time and not have them be invented we'd all be better for it. >> i'm with you. >> there's always an argument why these things make sense when they're created. but they quickly spin out of control. so credit default swaps are essentially an insurance product. you could ban them, that wouldn't be a bad thing. but you don't really is to.

if you just regulated them like insurance and required people to reserve capital against the bets a lot of team t market would dry up. the casino side of the market would certainly dry up. so, yes, i'm all for the regulators having more ability to constrain financial innovation. the thing that worries me a little bit about the spirit of the... of reform is that i think people think reform means just having more referees or more policemen on the beat. that you're going to beef up these regulatory agency and that will solve the problem. that will never solve the problem. if the rules of the game encourage bad behavior, encourage socially destructive activity there's nothing the regulators are able to do. and are very little. and so the reform has to

concentrate on the rules of the road in the financial system and layer on the regulators. but the regulators are always going to be sort of two steps behind the people on wall street. >> rose: what about derivatives, michael? >> well, credit default swaps are derivatives. they aren't inherently evil. they're like guns. they can be used for good or ill this is putting it very crudely but the more complicated finance becomes the more complexity becomes a form of opacity. and opacity... once it backs opaque, then bad things start to happen. so i'm all for essentially requiring pretty simple straightforward explanations of every invention to pass through the minds of fairly simple-minded straightforward regulators before they're allowed to exist. i watched personally and now i watch for some distance new

things dreamed up by wall street create mass destruction. >> rose: krejci has been hired as the lawyer. what does that say? >> he's a good lawyer. i think he'll do a good job. it signals they're going to prepare their case. i don't think it signals whether they'll fight or settle. i don't think you can read that into hiring any particular lawyer. >> what will make the determination as to whether they fight or settle. >> well, it's hard to settle now these are the kind of cases that there are two good times to resolve. one is right at the beginning and one is right at the end resolving hit in the center is very hard and you pay a high price for it. so i think that not having had this resolved in the beginning the parties may be locked into litigating this. maybe to a final resolution. >> rose: there was a time that goldman could have settled this.

this would have had to acknowledge some kind of guilt. >> rose: there was no question that there was an opportunity to settle this probably over six months ago. >> rose: with hindsight does this look like a stupid decision? or not if they believe they've done no wrong. >> i must tell you i would imagine given the it will problems this is going to have on their business, the reputational damage, the cloud that almost by default, whatever the cost of settlement is would probably be lower than whatever the cost is they're going to deal with today. >> this is a costly decision. whether it was a right decision or wrong decision i don't know how you can judge that. >> is the future of firm in place? >> i'm not sure the future of the firm is in place but for literally months and years litigation from the s.e.c., from all the other people that are going to jump in is going to occupy the central part of goldman sachs. >> rose: like i.b.m. when you

were not a lawyer. >> exactly. and that drains the company. >> you were defending i.b.m. for ten years? >> ten years. >> >> but the reason why a settlement was anathema to this organization and why i think so many people feel... have so many problems with goldman sachs is that this is at the center of their business. if you're not allowed to do this if you extend it just a little bit, that's what their business is. it's really about pearing people on both sides and, frankly, they don't typically tell each side who is who. so if you got to this point, it really could undermine the entire model and i would argue that today's stock price movement really reflects the fact that there are people in the market that think that this model, if you will, is in jeopardy. >> so volcker's rules, which he wants to separate from deposit banks, proprietary trading... >> rose: would have a huge impact on their model.

>> so this might be an impetus for >> the volcker rule could be called the goldman rule. of all of the firms on wall street, that's the firm that would be enacted the most. they are the ones that have this proprietary trading which does more than any other firm on the street. >> rose: so this is likely to give some momentum to the volcker rules being involved in some final legislation. >> actually yes. up until last week when this happened i think people thought the volcker rule while a name might somewhere be in the bill was going to be watered down in a meaningful way. is >> it may be a good or bad lawsuit but it's great politics. it's moved the administration's financial reform agenda way ahead and i think that sometimes that ends up being a good thing for the society as a whole but it raises troublesome issues if you think it ought to be brought for what the law says. >> rose: you think that's a

possibility here? i don't know enough about it but i know two commissioners thought it shouldn't go forward. i know the complaint itself raises questions. i know this is a departure from the way the s.e.c. has done it before and it comes at a time when it's going to have an inevitable and very positive for t administration political feedback. take all that stuff together and it's the kind of thing that makes you want to know more. about what's really behind this. >> michael, suppose this is just the beginning. what's the end? >> if volcker rule in strong form is passed i would think goldman sachs might split itself up of its own volition and half of it would go one way and become a partnership again. it would be a... it would have a glass-steagall like effect on the place. i think the middle is going to be more interesting than the end because i think what's going to happen now is we're going to get

a lot of disclosures about things that were going on like this that will shock people. so the... the end game is a different structure to the financial firms. >> michael, you sound like you're so excited to know more because you think this is such an extraordinary moment. >> it is an extraordinary moment: i've been waiting 30 years for this. >> rose: and you want to answer his question. >> i think goldman, by the way, would end up having to be broken up. they would have to define what proprietary trading is and goldman sachs has made a long argument that they are not only in the pry pry tear trading business but that they are trying to match trades and take pieces of it and facilitate their clients. if the volcker rule were to be enacted with teeth you could

imagine that not only goldman but many firms would look different. if they could split themselves up by stay companies it might be that the shareholders end up just as well off or better off. a lot of times the advantages of integration aren't nearly as profitable as people think they are. >> rose: thank you, michael. >> thank you, charlie. >> rose: thank you, david thank you andrew ross sorkin. >> thank you. >> rose: 40 years ago a vigsz for memorial took shape. the architect louis kahn was commissioned to design it. roosevelt island was commissioned for location. but kahn's unexpected death, fiscal crisis and changing administrations in new york kept the mame y'all from being built. it has now changed. the franklin d. roosevelt four freedoms park broke ground at the south southern tip of roosevelt island. here is a part of the speech given by franklin roosevelt on four freedoms on january 6,

1941. >> the first is freedom of speech and expression. everywhere in the world. the second is the freedom for every person to worship god in his own way everywhere in the world. the third is freedom from wont which translated into world terms means economic understandings which will cur through every nation a healthy peacetime life for its inhabitants everywhere in the world. the fourth is freedom from fear which translated into world terms means a worldwide reduction of arms be such a

point and in such a thorough fashion that no nation will be in a position to commit an act of physical aggression against any neighbor anywhere in the world. (applause) >> rose: joining me now, ambassador william vanden huevel chairman of the franklin roosevelt four freedoms park. i'm pleased to have him here at this table. he's a friend of many decades and i am pleased to have him sit at this table. tell me about this memorial and why it's important and the history of it. >> first of all, it's important because franklin roosevelt was the greatest president of the united states in the 20th century gee thing a najaf. of all the historians and he had a special role in the building of new york. in 1936, for example, the w.p.a. established an office here in new york city 246,000 new yorkers were employed by the w.p.a. and a great part of new york was

built. the holland tunnel, the triboro bridge, 400 parks, you name it, the f.d.r. drive, laguardia airport, one of the greatest of the w.p.a. monuments. anyway, roosevelt's contribution to the nation, his saving of western civilization with winston churchill, his leadership taking us out of the great depression so that the nation found confidence in itself and as we're seeing today everybody turns back to see what happened with roosevelt and then the enormous struggle of the second world war. so there's no monument to franklin roosevelt in new york. he is the... >> rose: a son of new york, governor of new york. >> he was governor of new york, he was president, elected four times. only president in the history of... the second point is that louis kahn was one of the great architects the 20th century. to have chairman of our architects committee, this becomes a world class monument.

that i believe's true. >> rose: because it bears the imprint of louis kahn? >> it's his last work. it's the only work that could be built... someone bought one for $110 million. think of what you could do in building this, the great louis kahn monument. we've raised $35 million and there's only $15 million ngor go. so i think that's a... and the other thing is open space. the mayor has done a fantastic things in new york in terms of waterways and water parks all around the city. this is part of that except it's much more of a private sector enterprise than the other parks that are joining it. so you're going to have four and a half acres that is the four freedoms park and you're going to have ten acres of open space above that. so you're going thief wonderful view. and i think it's appropriate to say in this day in age you're going to have 200 men and women working jobs that are going to

be... >> rose: creating jobs. >> rose: the land itself belongs to new york city. >> the land belongs to the city and thes say the has a leasehold on it until 2068. >> rose: and the reason other than louis kahn that this was not done? >> i think it was always the financial. nelson rockefeller shortly after... >> rose: nelson rock feller? >> in hyde park at the presidential library there's a fragment of his autobiography, nelson rockefeller's, where he says the most important person in his life outside his family was franklin roosevelt. so he took great pride in 1973 with john lindsay in announcing this. arthur schlesinger gave the keynote address. i was there at that occasion. and so i think nelson then became vice president of the united states. so he left new york. louis kahn died, as you pointed out. >> rose: in '74 in penn station.

>> and the city of new york essentially went bankrupt. the lincoln memorial was dedicateed in 1922 and the jefferson memorial was only dedicateed in 1943. >> rose: so it takes a while. >> rose: take a look. this is our first rendering we will show you. this is a computer rendering of what it will look like. not what it looks like now. >> right. but the u.n. is right there which roosevelt was the founder of. looks out to the ocean. it will be to the east river what the statue of liberty is to the west harbor. >> next one is a close up aerial view of the park. wow. >> rose: 150 little leaf linden trees have formed the double lei coming together in that magnificent room. in july you'll see the granite arriving for the room. six foot by six foot by 12-foot blocks of granite. >> rose: coming from... >> north carolina. >> rose: all right!

>> wouldn't think of getting it anywhere else. >> the next thing is a rendering of the completed memorial and park. here it is. this is the alley. there you go. look at this. >> it's going to be a great venue for public events. the people of roosevelt island will have extraordinary pleasure out it but the people of the world will. you mentioned out in la jolla the... >> louis kahn built the saulk institute. >> people travel the world to see it and see kahn buildings. you remember the museum in texas. >> exactly. let's take... there there's a rendering of the line with the trees. a rendering of the inside of the memorial. here it is. >> and the four freedoms will be inscribed on the walls of the room. it has the commanding staircase that leads up to it and the four freedoms-- freedom of speech and expression, freedom of worship, freedom from wont, freedom from

fear-- this, roosevelt said, before we got into the war in january, 1941 we have to understand the that that the terrible sacrifice of this war that we're going to be involved inble k only be justified if we create a different world. and the world that we create has to have as its essential values the four freedoms. that's the point of it. and i think it will be looked at that way. >> rose: the next slide is a view of the united nations from... there you go. >> well, the united nations, of course, was his great hope that the world was going to be a place that will understand freedom and understand its responsibility. >> while we're looking at things let's look at... this is louis kahn's original drawing. >> that's his view of it. yes. he had a very real feeling for roosevelt because he'd been in the w.p.a. artist program so he had been helped in his own life and career. so this had special meaning for him doing it for roosevelt.

>> rose: the monument at the tip has aspects of a greek temple, doesn't it? >> it does. without the ceiling. but it will certainly be a magnificent place for thoughtfulness and reflection, medication and public events. >> rose: let's move to the notes from the sketch book. there you go. look at this. >> you had nathaniel kahn on. and his documentary about his father, that really brought this back into focus. >> rose: roll tape. we have that here. nathaniel kahn talking about his father louis kahn. >> he bid build some buildings that changed the course of architecture. he restored a... modernist architecture was obsessed with steel and glass and very light wonderful, beautiful structures but something about that wasn't right for him. it didn't fit with him. he brought back a sense of class schism, weight, of buildings being built with stones, brick, con creek.

and i think in some ways he returned the spirituality to architecture and people say when they go into his buildings they're spiritual experiences. they really are. the same way ancient buildings are spiritual. you go to the parthenon, the pyramids, these are buildings from ancient times that when you walk among those stones you feel something. you feel something powerful, something ancient. something in the air. >> rose: why was he as good as he was? what core qualities did she? >> when you think of the disability, the physical disability he had of polio where he never could stand again, where he was truly a paraplegic. where he couldn't walk on his own, i think mrs. roosevelt often said that this is what really changed his life in terms of his values and his commitments and his purposes he is an icon in the sdabled world. when people understand what he did. and governor paterson, interestingly, is very interested and been very helpful

regarding this memorial. >> rose: because he has... is sight impaired. >> in part when he was at columbia university and his disability was causing him to drop out a professor gave him a biography of franklin roosevelt and said "don't change until you understand this." and i think... plus, also roosevelt was a master politician in leading our country. he saved the free enterprise system. he put into place a regulatory system that we're now looking back on with envy. >> rose: do you think what nelson rockefeller admired was that he was a patrician who was able to devote himself to public service? >> yes. i think nelson rockefeller and the rockefeller family looked at roosevelt as someone who they could relate to. as someone who brought to a person who could have a life of ease and leisure and lived totally differently but who instead devoted himself to his country, was a great patriot and a public servant. he was a moster politician, elected four times as president.

seven congressional elections in a row he won. the british did not have an election from 1935 to 1945. in wartime we had two congressional elections and a presidential election and roosevelt won them all. >> rose: and lincoln did away with habeas corpus, didn't he? >> right. and i think when people think of the great depression and those who lived through the great depression and remember it-- and i do-- think of what... roosevelt identified the government in a different way. it had an affirmative obligation to do something about the quality of life about social justice and equality in america. and i think the country we live in today as arthur less jer used to say, this is the structure of roosevelt. modern america. and who loved roosevelt more than ronald reagan? >> rose: indeed. >> i remember seeing ronald reagan at the white house with

congressman pepper once. >> rose: claude pepper from florida. >> claude peper from florida. president reagan said "franklin roosevelt, i voted for him four times. he was certainly greatest president of this century." >> rose: you were investment banker who was once involved in politics and had a lot of public service. a lawyer then investment banker and you spent a lot of time in a commitment to franklin roosevelt in terms... not just this. >> i've had the great opportunity of my life. i started with wild bill donovan >> rose: he was the head of what became the c.i.a.. >> he was the counter of o.s.s. he was ambassador to southeast asia under eisenhower and i was his executive assistance in those days. then i was associated with robert kennedy having been his assistance when he was attorney general. great friend and edward kennedy was a great friend of ours all those years. then i was appointed ambassador the united nations by president carter so i've had a wonderful

opportunity of public service but always in my own life. i went to his funeral, franklin roosevelt when i was a boy. i hitchhiked from rochester, new york, to get there. and my family, my parents were immigrants, working people didn't speak very good english but to them franklin roosevelt was a very good thing. the mortgage, unemployment, social security and then in the warhol land and belgium being innovated it was roosevelt's bringing the allied forces together that meant so much to us. so it was a very personal experience. i got to know mrs. roosevelt quite well in new york politics. she was a formidable force. >> rose: all history writes about the fact that winston churchill's primary aim in terms of prosecuting the war was to get f.d.r. on board. >> yes. yes. and f.d.r., though, was a very great constitutionalist. the last time the united states

declared war was on december 8, 1941. the united states has been in all of these wars since then without a constitutional declaration of war. and roosevelt kept reminding churchill at the atlantic charter meeting that he led a constitutional republic and that the processes had to be done. so the japanese attack on pearl harbor short circuited all of that but it was the happiest days of churchill's life when the united states became his ally. >> rose: he knew he could win. >> he knew we would then win the war. >> rose: what's the biggest misconception or unfair characterization of f.d.r. for you? >> well, i've been very interested in the supreme court issue. there's a wonderful new book out by jeff she is. >> rose: former speech writer. roosevelt's confrontation with the supreme court. in my judgment, we're going to face it again. president obama is going to face it again. it's when a majority of the court are dominated by political

ideologues who think differently about what the nation should do and reject what the congress and the president-- who have been elected by the people of 2 united states--. >> rose: but roosevelt tried to pack the court. >> they call it packing. i call it reorganization. >> rose: she he have run for a fourth term knowing how ill he was? >> well, it was a question of whether he knew how ill he was. it was interesting how the doctors didn't convey that information to him. there's no record that i'm aware of of any dialogue within the family or within his major political advisors about whether or not he should run. the leaders of the democratic party certainly... >> but the question, bill, as you well know, is whether he would have known. did his doctors level with him? >> i don't think so. >> and did he have an understanding of the severity and... his illness and that he would die in office. how long after he was elected did he sky in >> three months. >> rose: three months! he had to know. >> well, if you looked at it, you saw how ill he was.

but even with that illness, he had arteriosclerosis and blood pressure that was 280 and there were no medicines that could deal with these things and maybe it was post-polio, too. >> rose: but he ran for reelection because he thought it was necessary because of the war i assume. and he ran... of course the vice presidency changed at that time and harry truman became the vice president. >> and didn't even know about the fact that an atomic bomb... >> that's not a surprise. the vice president,sy was a legislative office more than an executive office. but that's another thing about roosevelt who led us into the age of a nuclear weapon. nuclear development. if hitler had done the same-- and hitler had the scientists who had the same information we did. when einstein wrote the letter to roosevelt in 1939 if roosevelt hadn't created the manhattan project, if hitler had gotten nuclear weapons before we did, the outcome of the war

would certainly have been different. so that was another major contribution to our history. >> rose: you've had this great life. you came from more humble background? or not. >> i was saying to someone today 80 years ago today my mother took a bus from our boarding house to go to the local hospital and i was born six hours later. (laughs) so it was a wonderful background. wonderful parents who gave me a great sense of america but we were by today's definition poor. but never in despair. always hopeful and in a great sense wealthy in the context of our opportunities. >> thank you for coming. >> thank you, charlie. >> my friend bill vanden huevel, the f.d.r. memorial designed by louis kahn. thank you for joining us. see you next time.