captioning sponsored by macneil/lehrer productions >> brown: bank of america will pay $335 million to settle allegations that its countrywide unit discriminated against african-american and hispanic borrowers. good evening, i'm jeffrey brown. >> ifill: and i'm gwen ifill. on the "newshour" tonight, we have a newsmaker interview about the justice department settlement with the illinois attorney general who helped bring the case, lisa madigan. >> brown: then, judy woodruff updates the political impasse in washington over extending the payroll tax cut. >> ifill: we assess new e.p.a. rules curtailing toxic mercury emissions from power plants. >> brown: from morocco, ray suarez reports on muslim clerics tackling a taboo subject.

>> ifill: margaret warner looks at egyptian women on the front lines of protest, some of them brutally attacked. >> brown: and we close with poet mark doty on a community coming together to sing a christmas tradition, handel's messiah. >> brown: that's all ahead on tonight's "newshour." major funding for the pbs newshour has been provided by: >> intelligent computing technology is making its way into everything from cars to retail signs to hospitals;

creating new enriching experiences. through intel's philosophy of investing for the future, we're helping to bring these new capabilities to market. we're investing billions of dollars in r&d around the globe to help create the technologies that we hope will be the heart of tomorrow's innovations. i believe that by investing today in technological advances here at intel, we can make a better tomorrow. >> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to live a healthy productive life. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> brown: the u.s. justice department announced a major

settlement today over alleged racial bias in home-mortgage lending. bank of america agreed to pay $335 million in a case involving countrywide mortgage, which the bank bought in 2008. attorney general eric holder said countrywide engaged in systematic discrimination against blacks and hispanics. >> these allegations represent alarming conduct by one of the largest lenders in this country during the height of the housing market boom. for example, in 2007, a qualified african american customer in los angeles, borrowing $200,000, paid an average of roughly $1,200 more in fees than a similarly qualified white borrower. >> brown: the settlement stems from an investigation that began in 2008. two years later, illinois attorney general lisa madigan filed her own lawsuit and she worked with the department of justice to gain today's settlement.

i spoke with her a short time ago. lisa madigan, welcome. fill in the picture. what exactly was countrywide accused of doing? give me an example. >> countrywide has been accused of discrimination in lending. so if you were an african american or a latino borrower you were likely put into a subprime loan when you qualified for a prime rate loan, for a lower-rate loan. in addition, even if you were an african american or latino american borrower who was put in a subprime loan, you were charged higher interest rates and fees. so it's both what we would call steering claims as well as pricing claims so discrimination not just in the state of illinois but across the country. >> brown: and when attorney general holder says " this happen? do the higher ups know what was going on? >> they don't have policies in place that prevent this from happening so we found not just a

statistical sis of the loans that they did in illinois but it also involved us looking at what were the policies in place when somebody came in? we learned by talking to brokers in various other countrywide employees that they were given the discretion to be able to decide what the interest rate was going to be what the the were going to be and there was a company policy that gave countrywide employees an incentive to put people into higher interest loans with these toxic features so therefore those loans are more likely to go bad and end up in foreclosure. >> so not written down as a rule clear you would make more money if you put people into pa poor quality

higher price loan. >> brown: now we know them as the bubble years. put this into the larger context of what was happening in the housing market and the role that countrywide played. >> well, countrywide at the time during the height of the housing bubble was the largest lender of every time of mortgage product in the country. and it really changed from in one year they might have been doing 19% adjustable rate mortgages, i believe in 2003. in 2004 the number was 49% and these adjustable rate mortgages were the real toxic ones. people got in at lower rates and then they just exploded and people were never qualified to even start with sometimes the loans when they got them at the lower rate to pay at a higher rate. but what we found from looking it over, 83,000 loans that were originated in illinois between 2005 and 2007 was that if you were african american or latino you were three times as likely to be put into a subprime loan than if you were a similarly

credit situated white borrower. >> brown: bank of america which bought countrywide after this is not agreeing to... accepting or denying guilt. >> correct, this is a settlement and they purchased countrywide in 2008 and at this point they've been in a position to clean up the mess that countrywide caused. >> brown: a mess in many ways for became. >> absolutely. but a worse mess for people who got into terribly toxic loans and paid more for those loans not just in terms of the economics of what was the price of your loan but the impact that has on their credit, the impact that has on their ability to then continue to support themselves and their families. it's an enormous problem. >> brown: the amount of the settlement, i understand, dwarfs anything in the past. it goes... some of it goes to... what happens to it? >> all of it is going to go to the borrowers who were the

victims of discrimination. so people who were priced in a discriminatory manner, people who were steered into subprime loans will get money. >> brown: they come and try to show their... how they were hurt? >> they don't even have to do that. became has the names of the people. they will be providing that information and then each borrow there will be a calculation done to determine the economic harm that they've faced because of that. >> brown: i'm curious. you started looking at this in 2008. i understand from the filings today that the forever referred this issue to the justice department in 2007. why did it take so long? what happened then and why does it take so long to get to this stage? >> well, in 2008 we issued subpoenas to countrywide we got information back late in 2008. it took about a year to do the analysis. it's a very intensive statistical analysis. we spent a year once we had our information and our evidence with the discrimination

negotiating with then bank of america over these countrywide claims and then once we realized that that was not going to work out we filed a lawsuit in june of 2010 and ultimately this all got settled. so the wheels of justice sometimes spin slowly but luckily they still spin. >> brown: and speaking of still spinning, i mean, here we are still in a foreclosure crisis. now this whole issue of predatory lending, i know you're still looking into it. fit that into the... the issue of predatory lending into what continues today. >> the way i look at it is the fraudulent subprime loans, they're at the heart of the chance of our economy. and so out of illinois we went after countrywide... this is our second lawsuit against countrywide but there was others there was ameriquest, household finance. and this piece of it really deals with just the discrimination. so the discriminatory aspect of those loans and the impact they

had on african american and latino families in illinois and now throughout the country so it's one piece of a much larger puzzle. there continue to be claims out there and they're being investigated and will ultimately be resolved. >> brown: and this piece of it, was it shocking to you to see in this day in age that this kind of discrimination would go on? >> absolutely. when i heard if you were african american making $100,000 you were still more likely to be put in the a subprime loan than if you were white making $35,000 a year. that was absolutely shocking and i said we're issuing subpoenas, we're going to get to the bottom of this and we did. >> brown: lisa madigan, the illinois state attorney general, thank you very much. >> my pleasure, thank you. >> ifill: still to come on the "newshour": the latest washington standoff; the e.p.a.'s new clean air rules; morocco's battle against h.i.v.- aids; egyptian women on the protest lines and a community comes together to sing the messiah. but first, with the other news of the day. here's hari sreenivasan.

>> sreenivasan: the european central bank threw a lifeline to hundreds of banks on the continent today. they borrowed $639 billion over three years under a program meant to ease a credit crunch. it was the central bank's largest intervention since the euro came into being 13 years ago. but the move failed to impress the markets. the dow jones industrial average gained just four points to close at 12,108. the nasdaq fell 25 points to close below 2,578. iraqi prime minister nouri al- maliki demanded that kurdish authorities hand over iraq's vice president today. tariq al hashemi is the highest ranking sunni figure in iraq. he fled to the kurdish north this week to escape an arrest warrant. the shi-ite-dominated government charges he ran terror squads that targeted government officials. at a news conference in baghdad today, maliki rejected hashemi's claim that the charges are politically motivated. >> ( translated ): i will not permit myself, others, or the relatives of martyrs to politicize this issue.

there is only one path that will lead to the objective, and that is the path of the judiciary, nothing else. he should appear before court, either to be exonerated or to be convicted. the cause of al-hashemi should not enter into political bargaining. >> sreenivasan: later, a spokesman for the president of the kurdish region rejected the demand. the political fight came as u.s. troops have finished their withdrawal from iraq. last night, vice president biden called maliki and urged him to resolve the crisis. in syria, dissidents reported government forces killed more than 100 people on tuesday in an organized massacre. the activists said a villagin idlib province was surrounded and then blasted by rockets, tank shells, bombs and gunfire. and more scenes of violence unfolded elsewhere. amateur video showed a man hit by random sniper fire while driving his car in homs. and pro-government gunmen patrolled neighborhoods around damascus. five nato troops-- all of them polish-- were killed in a roomro idengbibin af bantan n toda the soldiers were in a convoy

headed to a meeting in eastern ghazni province when the bomb went off. it was the deadliest single attack ever involving poland's 2,600 troops in afghanistan. eight u.s. army soldiers have been charged in the apparent suicide of a fellow soldier in afghanistan. private danny chen was found dead in a guard tower in october. the army said it appeared he shot himself. the charges announced today ranged from dereliction of duty to negligent homicide and involuntary manslaughter. supporters of chen's family, in new york's chinatown, suggested he was bullied to the point he took his own life. by the many thousands, north koreans braved heavy snow today, to pay respects to the late dictator, kim jong il. crowds gathered in the central square in pyongyang. state media said more than five million people had gathered at monuments and memorials in the city, since kim's death was reported over the weekend. meanwhile, the official mourning went on amid a global guessing game about north kortua's fure. angus walker of "independent television news" has this report from south korea.

>> reporter: kim jong-un, north korea's dictator ins waiting greeting foreign envoys paying their respects as his father lies in state. in the dark suit just over his shoulder kim's uncle, a hardened veteran of north korea's exterior politics will share power. along the frosty frontier between north and south, relations are in a deep freeze. protests on the border, on one side of a leaflet, qaddafi, on the other, kim jong-un. thousands let fly balloons and aimed at the north. which direction the regime is heading in worries the world. on either side of this heavily fortified border, both armies are on high alert. the north koreans have missiles and nuclear capability and while power is shifting, the secretive

state is perhaps more unpredictable than it's ever been. >> sreenivasan: north korea is conducting an 11-day mourning period, ending with a state funeral and national memorial service on december 28 and 29. in the u.s. presidential race, top republicans traded new jabs over campaign advertising. newt gingrich demanded that mitt romney call off a political action committee that's running negative ads against gingrich. romney shot back that he can't tell the pac what to do. and he said, "this is politics." the nation's airlines will have to make sure pilots get more rest. the federal aviation administration today ordered at least ten hours of rest between being on-duty-- an increase of two hours. and total work periods are limited to 14 hours. transportation secretary ray lahood rejected criticism that cargo carriers will be exempt. >> safety is our number one priority, and everyone in the airline industry gets this. the c.e.o.s understand it and i want them to understand what the rule says and i want them to

adopt it voluntarily. >> sreenivasan: some of the existing rules dated back to the 1960s. but calls for change grew after a plane crash that killed 50 people near buffalo, new york, three years ago. investigators found the two pilots were exhausted. the european union's high court ruled today that u.s. airlines will have to comply with a new law designed to limit carbon emissions. the cap-and-trade program takes effect january first. it requires that airlines flying into europe pay compensation for the pollution they create. a trade group representing american carriers claimed the regulation was an exorbitant tax that violated national sovereignty. those are some of the day's major stories. now, back to jeff. >> brown: republicans and democrats in washington traded new jabs today in a stalemate over extending the payroll tax cut. both sides insisted the other blink first, but neither did so. judy woodruff has our report. >> reporter: wherever they could today, democrats tried to put pressure on house republicans to back down. at a brief, pro forma session, house minority whip steny hoyer

could be heard challenging the acting speaker republican michael fitzpatrick. >> mr. speaker, i would like to ask for unanimous consent that we bring up the bill to extend the tax cut for 160 million americans as you walk off the floor, mr. speaker. you're walking out, you're walking away just as so many republicans have walked away from middle class taxpayers, the unemployed and very frankly, as >> reporter: on tuesday, the republican majority in the house rejected a senate bill extending the payroll tax cut by two months, along with long-term jobless benefits. most republicans in the senate had supported the temporary measure. but on fox news this morning, house majority leader eric cantor blamed senate democrats and their leader for pushing a temporary fix. >> that was the only deal harry reid was willing to bring up in the senate, but in the end, it doesn't solve anything.

it may make it worse and we're back having this fight again and again. >> reporter: instead, house republicans demanded a year-long extension. they want to pay for it with spending cuts that democrats oppose and to impose stricter limits on unemployment benefits. as of this morning, speaker john boehner was still saying senators need to return from their holiday recess and negotiate. >> all we're asking for is to get senate members over here to work with us to resolve our differences so we can do what everybody wants to. the time to do our work is now. the time is running short, but we have ample time to get this done. >> reporter: but the senate majority leader harry reid wrote to boehner, urging the speaker to call house members back, and approve the senate bill. and white house spokesman jay carney said president obama made a new overture to boehner in a phone call today. >> the president reiterated the

need and his commitment to work with congress to extend the payroll tax cut for the entire year and the fact that the short term bipartisan compromise passed by almost the entire senate is the only option to ensure that middle class families are not hit with a tax hike in tens days and gives both >> reporter: an aide to boehner said the speaker, in turn, asked the president to turn up the heat on his democratic allies. instead, the administration launched a new initiative on facebook and twitter overnight. it asked people what it would mean if the tax cut ends, and they lose an average of $40 pay each week. at the same time, house republicans were taking heat from some senate republicans, and from their usual supporters. a "wall street journal" editorial said:

meanwhile, as the political drama played out, some 160 million americans waited to see if their taxes will rise as the year-end deadline inches closer. >> ifill: the environmental protection agency unveiled new rules today to curb mercury emissions from power plants around the country. the standards apply to roughly 600 coal or oil-fueled power plants which would have to reduce their emissions of mercury and other toxic pollutants or shut down. the battle over the rules stretches back two decades but today epa administrator lisa jackson said the new regulations would address a broad range of air pollutants. >> this is a fleet of air toxic standard. it is mercury, it is arsenic, cadmium, chromium, cyanide,

hydrochloric acid, and because the pollution control technology that will go on these plants will also get some soot out of the air, it means by addressing some toxics we're actually addressing a suite of toxics and getting a lot of health benefits. >> ifill: there's a reason the rules have taken so long to take effect. for more on that, we get two views. scott segal is director of an energy industry trade group and john walke is clean air director for the natural resources defense council. john walke, how big is the problem that the e.p.a. says they're trying to solve. >> this is the most significant clean air and public health achievement in a generation and it is a huge problem with coal-burning power plants emitting more toxins into america's air than any other source of pollution. so cleaning them up is a huge success story to celebrate. >> ifill: scott segal, do you see it the same way? >> well, i don't. i will say it's a very big

significant achievement on the part of the e.p.a. in the sense that it represents the most expensive air rule potentially in e.p.a. history. it represents the greatest intervention into the power marketplace and for that matter job marketplace in a generation as well. i guess what i would say is over the last 20 years we've had about a 67% reduction in primary emissions coming from power plants, including mercury emissions and particulate matter emissions without this rule. what this rule adds is a substantial amount of cost at the... frankly, at the expense of american job creation and the competitiveness of our manufacturing sector. >> ifill: let's talk about cost. the administrator said today $11 billion. that sounds expensive. >> it's nearly $10 billion. the administrator also said that the health benefits to the american people would outweigh those costs by nearly 10-1, yielding benefits of up to $90 billion or more. what we have to recognize today is that the dirty power sector

in america is imposing health costs on the american people of nearly $1200 billion or more by not cleaning up their own pollution and what this does is it makes the actors responsible for that pollution clean up. that's fair; that's reasonable, it will create jobs in the process from cleaning up those plants and all of us will benefit. >> ifill: let's backtrack for a moment. when you say health costs, what do you mean? >> power plants are producing air pollutions that causing neurotoxic damage to children and the unborn, heart attacks, strokes, asthma attacks, people are going to the hospital, they're missing work, they are going to the e e.r. and when we clean up power plants we avoid those health costs to the american families, to the economy, we get people back to work and we have a healthier and more successful country. >> ifill: do those kind of costs outweigh the benefits dorr the benefits outweigh the costs? >> well, first things first, policies that maintain air

quality in the united states are important and they should be advanced, i agree that. the problem is this rule does not do that. t incremental health care benefits associated with this rule in our judgment are virtually zero and here's why. most of the benefits-- and by that i mean 99% of the benefits-- don't come from mercury but control of soot, sometimes called particulate matter. however, these well-controlled emissions and the e.p.a. is attempting to claim benefits when those same air is i can't say that it claims those benefits already attain standards that protect human health and the environment so what the e.p.a. is doing is double-counting the benefits that already arise under the clean air act. that's unacceptable. in fact there's recent material out from professor susan dudley over at george washington university, head of the regulatory studies program, that indicated incremental benefits, zero. in fact, costs so high that the increased cost of electricity

could result in greater threats to public health than this rule would purportedly address. >> ifill: i want to give you an opportunity to respond to that question that they're double counting these health benefits. >> gwen, if that sounds overly complicated it's because the truth is far simpler. when you clean up toxic air pollution from power plants using a handful of control equipment you are simultaneously reducing the deadly pollution that causes heart attacks, strokes, asthma attacks and other illnesses. we should celebrate that outcome and what lisa jackson said today is this rule is delivering more health benefits to the american people outweighing costs by about 10-1 and it's causing the polluteers responsible to clean up their own pollution. >> ifill: are they paying more in other ways? are they paying more for their electricity? will electricity become less reliable because there are to be fewer plants. >> those are good questions. e.p.a. estimates that any electric rate impacts would be

on average about 3% to consumers and in return we're getting $100 billion in benefits to to the economy and the health of the american people. e.p.a. and the department of energy has said that there is not going to be an impact on electricity and keeping the lights on. in fact, these plants could lead to the retirement of less than half of 1% of all electricity producers in the united states. so that is not going to cause problems in meeting electric needs. >> ifill: that's one of the things i'm curious about, scott segal. how many of these plants were going to close anyway? they're out of date and were tired and need to be retired so this would not have the the kind of effect that perhaps some coal or energy producers would worry about. >> there's no doubt some of these plants would retire over the natural course of things and under market conditions. the question we have to ask ourselves, it doesn't make sense to try and retire all of them simultaneously and in so doing endanger 8% of u.s. electricity. that's like taking three states offline.

if a foreign power were to try to do that we would regard it as a threat. so the bottom line is this. we do expect there will be significant increases in electric power costs. in some areas of the country that are more heavily dependent on coal-fired power we're looking at costs as high as a 20% increase. >> ifill: but would it all happen simultaneously? >> no, of course not. the agency is provideing many years to clean up these plants or decide whether the businesses... >> ifill: four years. >> four years with the opportunity for more time if plants decide that they... find that they can't meet the standards. president obama issued a very sensible and reasonable memorandum today laying out the steps available under the law. the agency is committed to doing that. the energy department knows we can meet our electric needs. so, you know, you're seeing a lot of fear-mongering from some quarters of the utility industry-- not my friend scott-- and what you... you know, what

you see are plants that have cleaned up already and know that we can't and should and some plants that haven't cleaned run fighting this tooth and nail in washington. >> ifill: but your friend scott said this is going to cost jobs. >> it will cost jobs. one of the best economic analysis performed by a reputable economic consulting firm indicated that we will lose about 1.44 million net jobs. meaning taking into account the job creation john referred to earlier with respect to air pollution compliance jobs. >> ifill: retro fitting the plants will create jobs but not for long. >> for every one of those job that exists on a temporary basis-- because as soon as the retro fit is done, that job is over-- four of those jobs in manufacturing secondors, mining or the power secter are likely to be lost. that's a tradeoff we can ill afford. we've had so much debate, gwen, about the payroll taxes and giving a thousand dollars to middle... to middle-class

families it would be a shame to achieve that benefit of the tax and then in the same notion give back the thousand dollars in increased utility bills to the middle-class. >> ifill: your friend john is shaking his head. >> that notorious study proved the adage that lobbyists can pay consultants to say anything in washington. the truth is that when e.p.a. and the energy department conducted the most exhaustive analysis of the competing studies and information out there they found that these rules are expected to produce construction jobs of two to three years for over 40,000 american workers and permanent long-term jobs operating the cleanup equipment of over 10 jobs. so, you know, those numbers that scott's putting forward were paid for by industry and stand in stark contradiction with what e.p.a. is saying. >> ifill: finally, it wasn't that long ago we were sitting at this table discussing the administration's rolling back of its plan to put tighter restrictions in place for smog regulations and you weren't very happy about that at