tonight on "nightline," selling hollywood's dirty laundry. as john travolta's fight against an extortion plot began today, we go into the growing army of people willing to sell their secrets to the highest bidder. is capitalism evil? we hit wall street with filmmaker michael moore as he assaults the big wigs and the system he thinks are destroying america. plus, swept away. a toddler torn from his father's arms.

an amusement park under water. thousands evacuated and at least nine dead. we'll have the latest on the flooding in the southeast. captions paid for by abc, inc. good evening. i'm terry moran. we begin tonight with a look at a very dark and very contemporary business. the selling of celebrity secrets. these days for so many people, the temptation to turn a quick buck often overwhelms decency and morality. prosecutors in the bahamas today began making their case against the paramedic who treated john travolta's son the day he died, one of two men almost in on a $25 million extortion plot. their threat? expose inside information about the 16-year-old's death. as andrea canning reports, this is a booming black market.

>> it is the ultimate invasion of privacy. as john travolta faced his lowest moment, the death of his son jett, the actor became a victim of an extortion plot, allegedly masterminded by the paramedic who first responded to the collapse from a seizure. both denied it, but they said if the star didn't pay up confidential information surrounding the death would be sold to the highest bidding tabloid. just days after chris brown beat rihanna, her battered looking photo, official police evidence, was posted on tmz. even sarah jessica parker's surrogate became a target when two ohio mis -- police chiefs were charged with burglarizing her home. >> the most unsavory thing has been done.

i mean, she's, you know, had her phone hacked, her personal computer information hacked. >> what makes these leaks so outrageous is that they didn't come from the usual suspects, like limo drivers or celebrity assistants. these are leaks from official sources. >> it's coming from all areas and different organizations. >> terry ahern, founder of stoparazzi, a group that fights for the privacy rights of celebrities says the very people who are supposed to protect have now become a big source of celebrity gossip. >> airports, medical center, doctor's offices, courts, they have been penetrated and they have leads inside of there that dish the information off. >> what kind of person is leaking this information? >> usually people at low levels that don't have as much to lose as far as a career, and the tradeoff for the money they'll make on a story. >> it was lawanda jackson an administrative assistant at ucla

medical center who sold the details about farrah fawcett's cancer to t"the national enquire enquirer". her friend, alana stewart said she knew it had to come from the hospital. >> she'd go to get an eye exam and it would be in "the enquirer" that she was going blind and then she'd go to the gynecologist for pap smear and it would say she had a hysterectomy. it was always greatly exaggerated. she said once in an interview that "the national enquirer" caused her more stress than the cancer. it just infuriated her, you know? she felt so violated. >> stewart documents the invasion of privacy in her new book "my journey with farrah" and farah's story. >> it had been three months since i had been declared cancer free. >> she said fawcett was so frustrated and she personally

picked up the phone and called lawanda jackson. what did she say to her? >> she wanted to get the truth in her, that this woman had given information to "the enquirer," and i don't know what exactly whey said in the conversation, but i think jackson was really shocked when suddenly she had farrah fawcett on the phone calling her. farrah really didn't feel that she was the main culprit. she felt like "the enquirer" was even more the culprit than lawanda jackson. she wanted to bring "the national enquirer" down. >> fawcett was one of 30 high profile patients including britney spears and maria shriver who had their personal files breached by jackson. it was being in the right place at the right time. >> it was a couple of different ways to get the information. one is they overhear it and two is they see somebody famous in there and go to look for it. >> often the tabloids will seek

out workers on the inside but some officials will reach out to them hope fog ar big payoff. ohio prosecutor shean hervey said in the case of sarah jessica's surrogate, two police used their credentials to get access to the home and then sold it. >> when you live in a small town with a depressed economy money is always tight. when people can throw around money for a photograph or connected to celebrities i think that entices people a heck of a lot. >> but we discovered selling information doesn't have to be a covert operation. promises of big bucks for good gossip can be found on just about every tabloid website. just click and send an e-mail. tmz's harvey levin who was the first to report about michael jackson's death says that money is the biggest motivator.

>> if there's a tip that leads us to something we have to still get the story. i would pay for a tip. >> in an extreme case the bahamian officials almost demanded $25 million from travolta to keep jett's information from being sold to the tabloids. prosecutors say lawanda jackson received $4,600 for leaking patient records. they say the checks were made out to her husband to hide the money trail. how do they hide the money trail? >> they always pay somebody else and mostly cash. but it can be check too. but they have it down so they're hiding behind the first amendment right if anything comes up. and you won't be able to find the frail. >> ahern says while leaking information is easy to get away with, officials are beginning to take come planltds more seriously. travolta's extortion allegations led to two arrests. and ironically, it was the paparazzi who turned in the ohio police chiefs.

they were suspended and are scheduled to go on trial next month. as for fawcett, she set up a sting. >> so when my cancer came back, that's when i set it up with the doctor. i said, okay, you know and i know. i'm not telling redmond. i'm not telling ryan. i'm not telling my father. i'm not telling my girlfriends. i'm not telling anyone. so i knew that if it came out it was someone from ucla. >> four days later something like that it was out in "the enquirer." >> lawanda jackson pled guilty and faced up to ten years in prison but she died of cancer before sentencing. stewart hopes a new law that fawcett was instrumental in getting passed will take away the need for such drastic measures. california hospitals are now required to report breaches and can face fines of up to $250,000. she says fawcett told her she was in the middle of a set atment will with -- of a settlement with "the enquirer," but died before it went through.

>> she was going to give it to the fawcett information for cancer research. and by the way, the best thing that the nation"the national en could do if they have any decency about them is to give a large donation to the farrah fawcett foundation and give her an apology. >> but "the enquirer" tonight had no comment. i'm andrea canning for "nightline" in los angeles. >> part of the darker side of hollywood there. thanks to andrea canning for that. when we come back, filmmaker michael moore launches a crusade against capitalism. we have a front row seat. you've wanted to quit smoking so many times,

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let's turn now to wall street and an american economy that economists say may be in the early phases of a recovery

after a deep recession. well, remember gordon gecko, the fictional fat cat who famously said greed is good? now, let's hear from a real life rabble-rouser who's got exactly the opposite message about capitalism. and as i found out he's delivering that message as only he knows how. there was only one place we wanted to meet up with michael moore right now. downtown manhattan, the financial district in many ways the capital of capitalism. >> we want our money back. >> michael moore hates capitalism. he hates wit savagely funny -- >> i just dropped it from the window. >> and surprisingly religious passion. that's what his new movie "capitalism: a love story" is all about. >> capitalism is an evil. and you cannot regulate evil. >> this is probably public enemy number one as far as i'm concerned. >> we were outside the offices of goldman sachs.

it's one of the most powerful firms in the world. its executives have served as treasury secretaries for republican and democratic presidents. a perfect example to michael moore of what's wrong with american capitalism. >> a deal was cut with henry paulson, the former ceo of goldman sachs. he left goldman to go and run the treasury department. >> it is criminal in your judgment? >> oh, yeah. i'm not -- i'm not doing this for a symbolic thing. i believe it is a crime scene. i believe that millions of americans have had their pensions robbed from them. their jobs stolen from them. the decisions that get made. i mean, look at the dow jones now doing so great when the unemployment rate goes up. they celebrate. >> and he's a populist in the grand tradition. he's a provocateur.

a bomb thrower. >> i mean, hitler put everybody back to work. i read stories of slave masters who were very generous to their slaves. child labor. i know it sounds weird now to say the things like that, but child labor a hundred years ago was an accepted system. >> you might have noticed the goldman sachs security guards eyeing us warily back there. you can hardly blame them. for 20 years, michael moore has been a security guard nightmare, walking up to corporate headquarters to accuse the big wigs of wrongdoing. >> yes, we're going to the 14th floor. >> do you have an appointment? >> no. >> i'm going up to the chairman. >> and never getting past the reception. but he's always polite. >> i hope we didn't cause too much trouble here. >> everywhere we go, on the sidewalk -- >> yes. >> take a picture? >> yes. >> in the subway. >> hey, how you doing, man? you're welcome. thank you very much. >> people come up to michael

moore. approachable. he is they seem to think one of them. >> i think that the people see me as their surrogate. that i'm there, you know, fighting the fight, i'm making films for them. they wish they could walk into the chairman's office and celebrate. >> so we're on a tour of sorts. michael moore's tour of wall street horrors. at the new york stock exchange he unloads. >> that's our flag, this is a great country. people died for that flag and in behind there, they have stolen people's pensions. they have moved people's money around, they have created the credit swaps and derivatives and they're literally hiding behind that flag. >> so your critics are right. you are radical. >> well, i'm radially in love with this country. i believe in democracy. and i believe in the core christian values that i was raised with. >> christian? michael moore? that's right. at the heart of moore's movie,

at the heart of all his movies really, but this time it's overt, is a fierce catholic faith, committed to justice for the poor and the disenfranchised, scorning a system that produces such inequality. >> capitalism for me and many of us at this present moment is an evil. it is contrary to all that's good. >> is the argument of the movie that capitalism is anti-christian? >> absolutely. it goes against the values of jesus and moses and mohammed and buddha, all the great religions they the pie at the table is to be divided fairly. and that you're not to leave a whole group of people behind, and that you will be judged by how you treat the poor and capitalism, our form of capitalism today is all about gimme, gimme, make as much as you can and to hell with the other guy.

>> but moore has gotten plenty himself over the years. his movies have made him rich, leaving him open to charges that he's a hypocrite and a fraud. they look at the money you make, and they say, why isn't he more sympathetic to the system, he's benefiting from it. >> if anything i'm embarrassed by it, the fact that i'm able to make a really decent living and so many people aren't. and my own personal values, my own religious faith prohibits me from celebrating the fact that i somehow lucked out when so many people are tonight worrying about, you know, what they're going to do next week. >> i have 30 days to get my stuff out. >> as he does with every one of the movies, moore will donate some of the profits to the people whose stories he tells. but he argues it's collective action, not private charity, that is needed for the sweeping changes he supports.

>> yes, we can. >> the election of barack obama seemed to promise sweeping change, as one of the bright spots in moore's film. but so far, the obama administration has continued to bail out wall street and failed to deliver on healthcare reform and other issues dear to the left and to michael moore. a lot of people on the left are very disappointed in obama, given all the hope that you captured in the movie, are you disappointed or discouraged? >> no, i'm not discouraged or disappointed. this is the time you want the smart guy in the white house, not a dumb guy. so we have a smart guy. but what i do point out in thefilm his number one campaign private contributor were the people at goldman sachs. he really put that in there for an audience of one. i wanted to see that. i want him to know as much as we love him and support him, we also know who his backers are. and we'll be watching. >> so he shambles on. like some angry overweight prophet of our times, either

crazy or brilliant. can you explain derivatives to me. >> traitorous or patriotic, depending on your point of view, but always funny. are you like the guy that you'll occasionally see on the subway with the sign repent, the end is nine? >> no, because i -- actually, i'm kind of an eternal optimist. i believe that things are going -- i think people are going to turn things around. >> if you get angry enough and passionate enough -- >> just get involved. just be a citizen in the democracy. it's not a spectator sport. you can't sit on the bench and watch it happen. you have to get up and get involved. >> well, love him or loathe him, you have to give it to michael moore. he gets involved. he's a real citizen. when we come back, waiting for the water to recede in the southeast. we'll have the latest on those deadly floods. my name is herb. i live in northport, alabama.

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(cable guy) you can do that with cable! call the verizon center for customers with disabilities living room. at 800.974.6006 tty/v bedroom. at 800.974.6006 tty/v kitchen. (announcer) get the multi-room dvr from verizon fios and we turn now to the southeast, a region of the country what had until recently been left bone dry by an almost two-year drought. but in a cruel twist of nature, much of that area tonight remains under water and many residents have been left homeless by deadly storms and destructive floodwaters. report. >> the water was just too much, it came down too fast for days on end and most of it was over

north georgia. >> we have never seen the water rise this high and this quickly. >> a man driving this car and another driving this one were swept off by the waters and they drowned. and another family, a young child who was 2 years old, was ripped from his father's arms and drowned. >> two other people tried to help them and tried to everyone help the other person. >> it was a scene repeated across the region, families trying to escape the rushing waters and their neighbors firefighters who came to save this home needed rescuing themselves. their truck was overcome with water and the house burned. tonight, the rescues continued. homes and surrounded by water. the efforts are so treacherous, georgia's governor is asking residents to watch themselves, to be careful. >> please do not drive through even vehicles, heavy vehicles are not match for water flowing across the road and any situation like this that's where we get most of the fatalities.

>> the state is encouraging residents to wait until the water passes to go back to their homes. but the knox family couldn't wait. this house. more than five feet of water. the only way to get there was by boat. >> oh, man, wow. >> jackie fudge and her family came back to a home with sagging backyard. is this a creek? >> no. >> she says she never thought this would happen to her. she now has to start over. for "nightline," i'm steve osunsami in atlanta. >> there are thunderstorms forecast for much of that area tomorrow. steve osunsami reporting tonight from the flood zone. and when we come back, so is capitalism evil? that's the subject of tonight's "closing argument."

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