Im erin burnett. Outfront tonight, thank you, america. Insurance giant aig says its very grateful for the 182 billion in taxpayer money that saved it from i dont even know if bankruptcys the right word. How about complete and utter obliteration at the height of the financial crisis. Aig of course has become a symbol of the financial meltdown of 2008 so its nice that they are now running ads to thank taxpayers for all that money. We repaid every dollar america lent to us. Everything plus a profit of more than 22 billion. For the american people. Thank you, america. Good evening. Im erin burnett. Outfront tonight, thank you, america. Insurance giant aig says its very grateful for the 182 billion in taxpayer money that saved it from i dont even know if bankruptcys the right word. How about complete and utter obliteration at the height of the financial crisis. Aig of course has become a symbol of the financial meltdown of 2008 so its nice that they are now running ads to thank taxpayers for all that money. We repaid every dollar america lent to us. Everything plus a profit of more than 22 billion. For the american people. Thank you, america. Thank you, america. But now we may sue you. They left that part out. Aigs board tomorrow morning is going to be deciding whether or not to join a 25 billion lawsuit against the government for rescuing the company. Let me just explain. Heres why. Taxpayers profited from the deal. That may surprise you but it is true. Frankly it surprised a whole lot of people in the financial world who thought it would never happen. They did. Now, thats the 22. 7 billion that was just mentioned in that ad. But shareholders including aigs former boss, Hank Greenberg, say taxpayers profited because the deal terms werent fair. Michael waldman is from the nyu school of law. Michael, let me start with this. The treasury ended up owning almost all of aig. Nobody thought they were going to pay this money back. So they shocked everybody by doing so but the lawsuit says you cant take private property for public use without just compensation. Thats the fifth amendment. Theyre saying the compensation was not just. Youre a lawyer. Does aig have a case . Im a lawyer and a taxpayer and this is the legal technical latin term for this would be chutzpa if they did bring this suit. Bottom line is the board of aig in the middle of this financial calamity had a choice. They could take the bailout or the value of their shares as you said would vanish and shareholders would be left with nothing. So they chose the bailout. They dont actually have to bring the suit. I would be frankly quite surprised if they did. Hank greenberg was the former ceo, he was forced out, hes sort of disgruntled he has a personal connection to this. Hes making a presentation to their board saying you need to join this suit. They may feel they have a legal obligation to hear him out but they dont have a legal obligation to do it and they are even allowed to kind of snicker behind their hands at the time. Unfortunate timing of the ad. Steven, the lawsuit contends the governments a loan shark. The lawsuit Hank Greenberg they said that many times. 14. 5 . Lot of people watching might say all right, if i didnt know it was aig and it was me i would think that was a loan shark rate but just looking at the effective rate at that time to even borrow money for companies rated poorly but not horribly, companies in better shape than aig, they were borrowing at 18 . The way i see it is 14. 5 was a steal. What do you mean, you didnt get just compensation . Im a taxpayer, too, and i didnt like bailouts. I didnt like this one. It certainly smells bad. It certainly seems ungrateful to taxpayers that theres this lawsuit. But lets look at what theyre basically alleging. The shareholders are saying look, we werent actually we might have come out better in bankruptcy if we had gone through a formal bankruptcy hearing, our shares might have been worth more than they were in this case, and that they never really actually got to vote on this because the government took over 80 control of the organization. So thats the allegation, that shareholders interests werent really fully protected. I think thats crazy. I have to say. I think that aig, i mean, the whole Financial System could have crashed. Those guys are lucky to have gotten anything. Thats one persons opinion from covering that story. Right. But you never really know. I think theyre making the case if we had gone through a normal bankruptcy proceeding, that it wouldnt the value of the shares wouldnt have gone down to zero and who knows. But thats their allegation. Okay. I know you dont like bailouts so you have to say that. I think thats crazy. The gumption of arguing that. The fact is we all saw it in realtime. This wasnt a normal company in a normal situation, that might have been the case, but this was the world aig and the world Financial System hurtling toward oblivion and theres a really, really powerful lengthy opinion by judge engelmyer, very well respected federal judge, which dismissed this case very witheringly and said the allegations made by mr. Greenberg read like they were in an oliver stone movie. Its pretty clear that look, the board of directors had an obligation to act on behalf of the company and the shareholders but they were within their power, it would seem, to say that the shareholders would benefit from the bailout as opposed to the nuclear explosion. One final point. Is this going to open up the door to newly sworn in senator Elizabeth Warren . Not my favorite senator. Shes on the banking committee. She will have a field day with this. She said the government provides an ongoing stealth bailout to aig with special tax breaks. So aig, even if they dont join the suit, and theyre saying thank you and paid everything back with interest, theyre now suddenly in the spotlight again. Does this mean Elizabeth Warren is going to get a green light . I dont know what special interest tax break shes talking about. I dont like corporate loopholes any more than anybody, as we talked about last night. Well see if theyre there. This is going to be a very difficult case for aig to win, both in court and in the court of public opinion. If this gets before congress you will finally see a return of bipartisanship. You may be right about that one. If this is what it takes, then ill take it. But you know, the big winner here actually was the federal government. The federal government actually made a lot of money on this transaction. I think thats actually one of hank paulson and tim geithner in the darkest moments when people thought they couldnt get money out of the atm, put terms on it. President obamas pick for defense secretary got a ringing endorsement today. The problem was, it came from the Islamic Republic of iran. Plus, the president cleans out his cabinet and all of his new picks are white men. No offense to white men who are sitting on this set but some people are upset about that. On st for your stuffy nose. Thanks. Thats the cold truth ive got two tickets to thanparadise l set . Pack your bags, well leave tonight. Uhh, its next month, actually. Eddie continues singing to tickets to. Paradiiiiiise no four. Remember . Whoooa whooaa whooo you know ronny, folks who save hundreds of dollars by switching to geico sure are happy. And how happy are they jimmy . Happier than eddie money running a travel agency. Get happy. Get geico. Fifteen minutes could save you fifteen percent or more. Officemax can help you drive supply costs. Down. And down. Just use your maxperks card and get a case of x9 paper for only 1cent after maxperks rewards. Find thousands of big deals now. At officemax. Your doctor will say get smart about your weight. Thats why theres glucerna hunger smart shakes. They have carb steady, with carbs that digest slowly to help minimize blood sugar spikes. [ male announcer ] glucerna hunger smart. A smart way to help manage hunger and diabetes. First it was fire, the next day it was leaking fuel. What is going on with boeings dream liner . Our second story outfront iran in chuck hagels corner. The defense minister applauding president obamas pick for the defense chief, saying we hope there will be practical changes in americas Foreign Policy and washington becomes respectful of the rights of nations. Hagels comments about iran have become lightning rods. Critics point back to his push in 2005 for direct negotiations with iran and to his past statements like in 2006, when he said i would say that a military strike against iran, a military option, is not a viable feasible responsible option. I believe a political settlement will be the answer. 2005 and 2006 was a long time ago. His views have tempered perhaps, who knows. Outfront tonight, peter brooks, former assistant secretary of defense and john avlon. Let me start with you, peter. Obviously the iranian government loves to get involved in these things at times and stir the pot. They seem to love to do that. But how much does this seeming endorsement affect this potential nomination . Well, i guess you have to ask the senate. I doubt very much that theyll take the ayatollahs advice take it under advisement, i suppose. I dont think it will have much at all. Senator hagel had some views about iran in the next couple weeks, i suppose were going to have another airing of those views and im sure its a very important question that senators are lining up to ask him. So john, let me ask you. Chuck hagel has a long record of talking about this and he said that in 2005 and 2006, but heres what he said just last year in an oped about iran written with four other political leaders in the washington post. Our position is fully consistent with the policy of president s for more than a decade of keeping all options on the table, including the use of military force, thereby increasing the pressure on iran while working toward a political solution. So still saying he wants a political solution but military option on the table. So what is that, when you pull all that together, is this a guy who changed his point of view . That is a mainstream position, one the president has articulated. Clearly in the mainstream of american Foreign Policy. Whats important to note about the comments hagel made in 2006 and 2007 and his memoir, 2008, its in the context of someone who has been a consistent conservative, a vietnam vet who felt burned by americas venture into iraq when we started getting all the information, and he started saying look, we blundered into this war because of flawed intelligence, because of ideology and in that context he was saying war with iran should not be our first option. That is not in americas interests. Whats extraordinary to me is how that perspective, that consistent small government conservatism is being called out of the mainstream by some in the conservative movement today. It raises question about whos in the mainstream. Colin powell, bob gates, frank carlucci, reagans secretary of defense support hagel. Who is outside the mainstream here . Interesting point. Peter, most people would say the United States is warweary. If we are looking at a deadline, israel would like there to be a deadline of late spring, early summer in terms of a decision on iran. Leon panetta, the defense secretary, current defense secretary, told me he thinks we have more time than that. The u. S. Isnt on the same page as israel. Isnt it just the reality that america doesnt want a war at all . There wouldnt be the political will for it anyway. I dont think anybody does. Do we ever really want war . I dont think thats the case, erin. I think the issue here is that most people dont realize that we have been negotiating with iran for nearly a decade on their Nuclear Program. 2003, when it was finally, the world finally became aware of Irans Nuclear program which didnt come from the iranian government, by the way. It came from another group. So i mean, weve made no progress. The centrifuges keep spinning. Sanctions havent really worked. Weve had theyve had little effect, although they have some effect but no effect on changing the policy of iran. So you know, the question is can you live with a nuclear iran or are you going to have to take some sort of action, perhaps a military action, to deal with it. Thats the tough question and thats a very difficult question that policy makers are going to have to face in the coming years. The other thing is that iran is very close on having an Intercontinental Ballistic Missile capability. The u. S. Air force said publicly, and i think this is the governments position, that by 2015, were already in 2013, that iran may have an icbm so if you put a Nuclear Program that everybody believes is Nuclear Weapons and an icbm program, thats not good news for american security. I want to ask a question. Do you think what chuck hagel is doing is putting out the president s point of view on iran which is that hes trying to say we might need to back off a little bit . Im asking that because of something that leon panetta said. I just want to play exactly what he said about how the u. S. Disagrees with israel. I think this is new information. Lets play it. When you look at the intelligence, you know, it can be a lot more complicated. So i would just caution everybody that the intelligence on this issue raises a lot more questions about timing and when this will happen. Erin, what secretary panetta is saying there is that lets be wary of false choices and timetables which is essentially the message chuck hagel has been sending for years on this. The Obama Administration has been pretty tough on iran behind the scenes. Hagel has been consistent himself, saying look, we cannot allow a nuclear iran, war should not be our first choice, and that also is consistent with the president. The president began by thinking perhaps he could negotiate more with ahmadinejad than has proven to be the case. Hes evolved on this issue. My guess is chuck hagel as secretary of defense will reflect that evolution. Theres one other thing i want to ask you each about. This is relevant well, well ask you whether you think its relevant in terms of timing. In terms of topic i think this is relevant. The number of sexual assaults in the military each year is about 19,000. It is a serious issue. There are women in the military now and in 1996, when running for senate, the literature from chuck hagel reportedly said quote, i am prolife with one exception, the life of the mother. Now, who knows, people agree and disagree with that. Im simply curious about democrats are not noticing that, talking about that. First, i think because its irrelevant to the job of a secretary of defense. But it does remind us and highlight that president obama has nominated a republican, a consistent small Government Conservative to be secretary of defense. His position on social issues are really irrelevant to the office of secretary of defense but its a reminder the president is trying to bridge divides and reassert the old idea that partisanship ought to end at the waters edge. Interesting, if he says only in the life of the mother and sexual assaults are 19,000, you could have rapes and children and the secretary of defense will execute the administrations policy. Whatever that might be. 100 . Peter brooks, whats the bottom line . You think hes actually going to get this confirmation . It appears that even though there is some resistance, that it is going to be surmountable. Am i wrong . Well, i cant predict the future, but my sense is that the legislative staff and the white house probably went around and counted noses in the senate before they put his name up there. Something could come up between now and then, but my sense is they feel they have a very good chance and a Democratic Majority Senate of getting senator hagel confirmed as the next secretary of defense. Maybe they will sneak brennan by with all of this brouhaha going on. Thanks to both of you. Still to come, new developments in the aurora theater massacre. Prosecutors today described a deadly trap that the shooter set to kill police officers. A crowded courtroom also heard the 911 calls from the night of the shooting. Ed lavendera has the latest. They are saying somebody is shooting in the auditorium. The first 911 call came from theater nine, 18 minutes after the start of the dark knight rises. The call lasted 27 seconds. The constant sound of boom, boom, boom. 30 gunshots in the call alone. Six minutes later, the shots had stopped. A teenaged relative of Veronica Mosier sullivan in tears. The girl struggles to explain veronica cant breathe. The kiss patcher says tells her to start cpr. The teenager says i cant hear you. Its an exkrugsiating phone call. Some wish that james holmes would simply plead guilty. I would like to see them throw him in a room with a toilet and nothing else, a window that he can at least see the day is passing and thats it. No bed, nothing. And let him just sit with his thoughts. Reporter even more stunning was the most descriptive explanation yet of the boobytrap holmes left in his apartment. According to an fbi bomb technician, he mixed and created the explosive chemicals himself, including explosive powders and live ammunition, and homemade napalm. He saturated his carpet in gasoline and oil and rigged an elaborate system of containers to explode. Youre talking about that he rigged that elaborate system to explode. The way he did that was really bizarre and when i saw kind of what he did and what he thought might happen, i dont know, it gave a sense of how deviant his mind is. Can you tell everyone about that . Reporter absolutely. Remember, all of this, he had hoped, would have gone off before he started shooting in the theater to distract first responders, take them to his apartment and then several miles away, he would be entering the Movie Theater. There were a couple ways to trigger these explosive devices, the ieds. One would have been by opening the door which would hit a trip wire and cause chemicals to mix, exploding on to the floor and causing the entire apartment to explode. Another one which was i thought stunning, we had not heard this, was that there was a pyrotechnic Remote Control device on top of the refrigerator connected to canisters and jars on the ground in the living room which was then connected to a boom box he had put in a white trash bag outside of the Apartment Building with a Remote Control car and he had hoped, he had told the fbi technician that he was