PBS NewsHour; November 9, 2011 3:00pm-4:00pm PST

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Woodruff: THE DEBT CRISIS AND POLITICAL UNCERTAINTY IN ITALY RATTLED MARKETS AROUND THE GLOBE TODAY. GOOD EVENING, I'M JUDY WOODRUFF.

>> Brown: AND I'M JEFFREY BROWN. ON THE "NEWSHOUR" TONIGHT: WE GET THE LATEST ON THE TROUBLES IN EUROPE'S THIRD LARGEST ECONOMY.

>> Woodruff: THEN, WE WRAP UP THE RESULTS OF YESTERDAY'S ELECTIONS AND ZERO IN ON OHIO, WHERE VOTERS OVERTURNED A LAW CURBING UNION RIGHTS.

>> Brown: RAY SUAREZ UPDATES THE SCANDAL AT PENN STATE UNIVERSITY AS COACH JOE PATERNO ANNOUNCED HE'LL RETIRE AT SEASON'S END.

>> Woodruff: SPECIAL CORRESPONDENT JOHN TULENKO REPORTS FROM INDIANA WHERE A VOUCHER PROGRAM ALLOWS FAMILIES TO CHOOSE RELIGIOUS SCHOOLS, CHARTER SCHOOLS AND EVEN PUBLIC SCHOOLS IN NEIGHBORING DISTRICTS.

>> IF WE'RE GOING TO BREAK THIS CYCLE OF POVERTY, WE HAVE TO PROVIDE THOSE OPTIONS.

>> IT'S NOT OUR OBLIGATION AS A STATE TO SUPPORT EVERY CHOICE THAT EVERYBODY WANTS TO MAKE.

>> Brown: AND MARGARET WARNER LOOKS AT THE CHARGES OF GROSS MISMANAGEMENT IN HANDLING REMAINS OF AMERICA'S WAR DEAD AT DOVER AIR FORCE BASE.

>> Woodruff: THAT'S ALL AHEAD ON TONIGHT'S "NEWSHOUR." MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:

>> 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: FIRST GREECE AND NOW ITALY. FEARS THAT EUROPE'S DEBT CRISIS HAS TAKEN A NEW TURN FOR THE WORSE DROVE MARKETS DOWN TODAY. THE DOW JONES INDUSTRIAL AVERAGE LOST 389 POINTS 3% TO CLOSE BELOW 11,781. THE NASDAQ FELL MORE THAN 105 POINTS TO CLOSE AT 2,621. INVESTORS WERE SHAKEN BY THE COLLAPSE OF POWER-SHARING TALKS IN GREECE. AND THEY WERE NOT REASSURED BY NEWS THAT ITALY'S LONG-TIME AND OFTEN-CONTROVERSIAL PRIME MINISTER WILL STEP DOWN. WE BEGIN WITH JAMES MATES OF "INDEPENDENT TELEVISION NEWS" REPORTING FROM ROME.

>> Reporter: ANY HOPES THAT SILVIO BERLESCONI'S SLOW MOTION DEPARTURE LAST NIGHT WOULD CALM THE MONEY MARKETS WERE DASHED WITHIN MINUTES OF THE OPENING. AS THE INTEREST RATES THE ITALIAN GOVERNMENT WOULD PAY TO BORROW MONEY SHOT ABOVE 7%-- A LEVEL THE EXPERTS HAD LONG PREDICTED WOULD SEND ITALY BEGGING FOR BAILOUT. SHOULD SHOULD THE POLITICAL SYSTEM OF THIS COUNTRY, I THINK THEY MIGHT, BUT THEY BETTER RUN FAST BECAUSE THINGS ARE NOT GETTING ANY BETTER, THEY'RE ACTUALLY GETTING WORSE.

>> Reporter: BUT WITH A TEAM OF E.U. INSPECTORS NOW HERE IN ROME TO OVERSEE THE ECONOMIC POLICY OF ANOTHER SUPPOSEDLY SOVEREIGN GOVERNMENT, EVERYONE KNOWS THERE IS SIMPLY NOT ENOUGH MONEY TO BAILOUT THE WORLD'S EIGHTH BIGGEST ECONOMY. AS THEY CHANGE THE HONOR GUARD OUTSIDE THE QUIRINALE PALACE THIS MORNING ITALY'S PRESIDENT, NORMALLY A LARGELY CEREMONIAL FIGURE WAS URGING THE COUNTRY'S POLITICIANS TO GET A MOVE ON "WE MUST ACT NOW," HE SAID, "IF WE ARE TO ESCAPE FROM THIS VERY DANGEROUS SITUATION." AND A SENIOR OPPOSITION FIGURE TOLD ME THEY ARE TRYING TO HEED HIS WORDS.

>> WE ARE TRYING TO HAVE THE BUDGET LAW APPROVED BY SUNDAY OR MONDAY AT THE LATEST.

>> Reporter: SO THAT THEN MR. BERLESCONI WILL RESIGN AND DO YOU THINK THAT WILL BE THE END OF THE CRISIS?

>> THAT WILL BE THE END OF THE BERLESCONI PART OF THE CRISIS. THEN WE NEED TO EITHER TRY TO FORM ANOTHER GOVERNMENT WITH A LARGE MAJORITY IN PARLIAMENT OR VERY QUICKLY HAVE ELECTIONS

>> Reporter: IT IS TRADITIONAL IN ROME TO THROW A EURO INTO THE TREVI FOUNTAIN AND MAKE A WISH. IT'S NOT MUCH OF AN ECONOMIC POLICY BUT RIGHT NOW IT DOES SEEM AS GOOD AS ANY.

>> Brown: FOR MORE, WE TURN TO MARIO CALVO-PLATERO, U.S. CORRESPONDENT FOR THE ITALIAN NEWSPAPER, "IL SOLE" AND ROBEN FARZAD OF BLOOMBERG-BUSINESSWEEK. MARIO, HELP US UNDERSTAND WHY ITALY'S PROBLEM... DEBT PROBLEM IS SPIRALING OUT OF CONTROL SO QUICKLY. ITS ECONOMY REMAINS RELATIVELY STRONG, RIGHT?

>> YES, THE ECONOMY... WELL, YOU KNOW, THE GROWTH RATE IS NOT PARTICULARLY STRONG BUT THAT'S A COMMON PROBLEM THAT WE ALL HAVE IN THE WESTERN WORLD AND INDUSTRIALIZED COUNTRIES. THE PROBLEM IS THAT BERLUSCONI HAS RESIGNED AND THE MARKET WAS EXPECTING A QUICK TURNAROUND AND NOMINATION OF A NEW GOVERNMENT IMMEDIATELY WHICH DIDN'T HAPPEN BECAUSE BERLUSCONI TRIED TO GAIN TIME. SO THE MARKET GOT WORRIED AND WE HAVE SOME ISSUES GOING IN THE MARKET. $5 BILLION THAT ARE GOING TO BE RAISED AND THEN MONDAY A BIGGER ONE, $10 BILLION. SO THE MARKETS STARTED TO BECOME VERY NERVOUS BECAUSE THEY FELT THAT THERE WAS A POLITICAL VACUUM AND SO WE SAW THE SPREAD VIS-A-VIS THE GERMAN BOND GO BEYOND 500 POINTS TO 540, 550 POINT WHICH IS HAS TRIGGERED THE MARGIN CALLS AND THAT IS A TECHNICAL ASPECT BUT THAT MEANS THAT THE TRADERS TRADERS WILL HAVE TO PUT UP MORE MONEY IN ORDER TO HOLD WHATEVER LIQUIDITY THEY HAD AGAINST ITALIAN BONDS. SO THAT CREATED A BIT OF A SPIRAL. BUT TO FINISH, THE GOOD GOOD NEWS IN ALL OF THIS IS THAT THE PRESIDENT OF THE REPUBLIC HAS GIVEN A VERY CLEAR SIGNAL, HAS NOMINATED AS A SENATOR FOR LIFE MARIO MONTY THAT IS A SIGNAL AND HE WILL BE THE NEXT PRIME MINISTER AND THAT IS WHAT THE MARKETS WERE PECKING. AND HOPEFULLY TOMORROW EVERYBODY WILL BE A LITTLE BIT MORE CALM BECAUSE HOPEFULLY BY SUNDAY OR THE LATEST MONDAY THERE WILL BE INDEED A NEW GOVERNMENT IN ITALY.

>> Brown: ROBIN, LET ME BRING YOU IN HERE, GREECE IS ONE THING BUT ITALY IS QUITE ANOTHER IN TERMS OF SIZE AND POTENTIAL PROBLEM. WHY DO YOU THINK INVESTORS ARE DRIVING UP THE COST OF ITALY'S BORROWING AT THIS POINT?

>> IT'S A GAME OF CHICKEN. AND IN YOU THINK ABOUT ITALY'S SCALE IT'S ABOUT AN ECONOMY INDEBTED TO THE TUNE OF $2.6 TRILLION. THAT'S NO A.I.G. OR NO SMALL BANK TO BAIL OUT OR A HANDFUL OF PROFLIGATE HOMEOWNERS IN THE SOUTHEAST OR THE SUN BELT. THAT'S AN UNPRECEDENTED BAILOUT EVEN FOR THE I.M.F.. AND SO TRADERS HERE, INTERNATIONAL BOND TRADERS, ARE TRYING TO FORCE THE ISSUE. IF THERE'S A POWER VACUUM IN ITALY, THEY WANT TO SEE IF THE NEXT BAILOUTS WORK. SO IF IT ISN'T BIG ENOUGH TO BAIL OUT AN ECONOMY OF THIS SIZE, THE HOPE-- AND TABOO-- IS THAT THE EUROPEAN CENTRAL BANK COMES IN BEN BERNANKE STYLE AND PRINTS MONEY TO BUY ITALIAN BONDS AND DRIVE THEIR YIELDS LOWER. THAT'S A TABOO, THAT'S SOMETHING THAT'S CULTURALLY ANATHEMA TO THE CONTENT THERE WHICH IS MUCH MORE WORRIED ABOUT INFLATION THAN A RESAGS THEIR SPIRAL.

>> Brown: BUT ROBIN, THE GAME OF CHICKEN YOU'RE TALKING ABOUT IS I GUESS A GUAMBLE THAT ITALY CAN'T BORROW AT SUCH HIGH COSTS FOR TOO LONG.

>> THAT'S RIGHT. ITALY CAN SUSTAIN THIS TO A CERTAIN EXTENT. ITALY NEEDS TO BE ABLE TO REFINANCE ITS DEBTS AND ROLL OVER SMAERN WHICH YOU ARETYS. BUT OVER THE LONG RUN WHEN YOU TALK ABOUT HUNDREDS OF BILLIONS OF EUROS, MAYBE $700 BILLION, SOMETHING NORTH OF A TRILLION DOLLARS,ING THERE NOTHING IN PLACE THAT ALLOW IT IS CONTINENT TO KIND OF HAVE A FAIL SAFE TO COME IN AND BAIL OUT AN ECONOMY OF THAT SIZE. CERTAINLY THE GERMAN AND FRECHL ELECTORATES WOULDN'T COUNTENANCE THAT.

>> Brown: MARIO, WE HAD THE OPPOSITION FIGURE TALK ABOUT THE END OF THE BERLUSCONI PART OF THE PROBLEM. IS THIS, IN FACT, THE END OF IF THE BERLUSCONI ERA IN ITALY? A MAN WHO'S DOMINATED THINGS THERE FOR SO LONG?

>> I WOULD SAY SO. EVERYBODY'S TALKING ABOUT THE END OF BERLUSCONIISMO AS WE CALL IN THE ITALY. HE HAS BEEN DOMINATING THE SCENE FOR THE LAST 17 YEARS AND HE HAS DOMINATED, AS WE ALL KNOW, IN A QUITE COLORFUL WAY AND THE TROUBLE IS THAT HE HAS NOT BEEN EFFECTIVE ON MANY OF THE THINGS THAT HE HAD PROMISED THAT HE WOULD DO. HE REPRESENTS A MORE LIBERAL SPIRIT. HE COMES FROM THE RIGHT. HE WAS PROMISING THE REGULATION. ANY WAY HE WAS NOT BE ABLE... HE HAS NOT BEEN ABLE TO DELIVER THAT. SO THERE IS A BIT OF RELIEF BECAUSE FINALLY THE HOPE IS THAT ITALY CAN PRESENT A SPACE, A NEW GOVERNMENT, A LARGE WHITE COALITION THAT WILL BE ABLE TO TACKLE THESE PROBLEMS AND HOPEFULLY TO SOLVE THEM BY ATTACKING SOME OF THE ISSUES THAT HAVE NOT BEEN SOLVED YET SUCH AS PEPGS REFORMS, PUBLIC SALARIES THAT NEEDS TO BE CUT AND PROBABLY-- AND THIS IS THE TALK THAT IS GOING ON NOW, SOME KIND OF CAPITAL TAX TO PAY BACK THE HUGE DEBT WE HAVE.

>> Brown: ROBEN, THE IMPACT WE SAW ON MARKETS, INCLUDING U.S. MARKETS TODAY, IS THAT DUE TO DIRECT EXPOSURE OF U.S. BANKS AND OTHER INSTITUTIONS OR IT MORE A GENERAL FEAR ABOUT WHAT HAPPENS TO ITALY AND EUROPE?

>> IT'S ONE OF THOSE THINGS DIRECT OR INDLAEKT'S ALMOST LIKE SIX DEGREES OF KEVIN BACON AT THIS POINT. IF AN ITALIAN BANK IS GOING TO FAIL, CERTAINLY GERMAN BANKS AND FRENCH BANKS ARE ONLY ONE OR TWO DEGREES REMOVED FROM THAT. THEN YOU TALK ABOUT WALL STREET AND BANK OF AMERICA AND CITIGROUP AND J.P. MORGAN. SO IT'S UNTHINKABLE FOR US TO EVEN IMAGINE SOME SORT OF CONTROLLED TAKE APART LIKE THAT. THAT SPEAKS TO THE BIGGER ISSUE HERE. THERE'S NO MECHANISM PLACE FOR THE ULTIMATE TABOO, WHICH IS THE BREAKING UP OF THE EURO ZONE. IT'S NOT JUST A MATTER OF RETRO FITTING PARKING METERS AND A.T.M. MACHINES. IF YOU SUDDENLY BOOT A COUNTRY LIKE GREECE OUT OF THE EURO, YOU'RE GOING TO SEE GREEK CITIZENS POTENTIALLY IS A RUN ON THEIR BANK GO. OUT TO TAKE THE EUROS OUT BEFORE THE DEVALUED AND DEPRECIATED DRACHMA COMES IN AND THAT COULD CAUSE BANKS TO FAIL AND A WHOLE RIPPLE ACROSS OTHER ECONOMIES THERE AND IT HAPPENS ACROSS THE ATLANTIC. I MEAN, IF WE THOUGHT WE HAD A PROBLEM WITH A.I.G. AND LEHMAN BROTHERS AND THAT CHAIN EFFECT THREE YEARS AGO, IT'S ON ORDERS OF MAGNITUDE LARGER THAN THAT. SO WE ALMOST DON'T WANT TO CONSIDER THE POSSIBILITY.

>> Brown: WELL, MARIO OFFERED A SUMMARY OF HOPE FOR TOMORROW IN ITALIAN POLITICS. WE'LL WATCH FOR THAT. THANK YOU BOTH VERY MUCH.

>> THANK YOU.

>> THANK YOU.

>> Woodruff: STILL TO COME ON THE "NEWSHOUR": AFFIRMING UNION RIGHTS IN OHIO; ENDING AN ERA AT PENN STATE; CHOOSING SCHOOLS IN ANDERSON, INDIANA AND MISHANDLING THE WAR DEAD. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: THE PRESIDENT OF IRAN VOWED TODAY HIS COUNTRY WILL CONTINUE DOWN THE NUCLEAR PATH, BUT NOT WITH THE AIM OF BUILDING WEAPONS. THE U.N. NUCLEAR AGENCY REPORTED TUESDAY THAT IRAN IS CONDUCTING TESTS TO DEVELOP NUCLEAR ARMS. BUT PRESIDENT MAHMOUD AHMADINEJAD TOLD A CROWD IN TEHRAN THAT WESTERN POWERS ARE BEHIND THOSE CLAIMS.

>> ( translated ): THE ACCUSED US OF A NATION OF TERROR AND BUILDING ATOPIC BOMBS. WE DON'T NEED ATOMIC BOMB AND YOU TRULY KNOW THIS. THE IRANIAN NATION IS A WISE NATION AND WON'T MAKE TWO BOMBS AGAINST YOUR 20,000 BOMBS. WE WILL BUILD SOMETHING YOU CAN'T RESPOND TO AND IT IS MORALITY, ETHICS, BELIEVING IN GOD AND JUSTICE.

>> Sreenivasan: FRANCE CALLED TODAY FOR NEW SANCTIONS ON IRAN, BUT RUSSIA SAID IT OPPOSED THAT MOVE. IN WASHINGTON, A STATE DEPARTMENT SPOKESMAN SAID THE U.S. IS LOOKING AT A RANGE OF RESPONSES. AN EARTHQUAKE HIT TURKEY TONIGHT KILLING AT LEAST THREE PEOPLE AND TRAPPING MORE THAN 50 OTHERS WHEN A HOTEL COLLAPSED. THE QUAKE WAS A MAGNITUDE 5.7 AND HIT NEAR THE CITY OF VAN. AT LEAST A DOZEN BUILDINGS WERE DESTROYED, AND RESCUE WORKERS BEGAN SCOURING THE RUBBLE FOR SURVIVORS. IT'S THE SECOND LARGE QUAKE TO STRIKE THAT REGION IN THREE WEEKS. THE MAIN OPPOSITION CANDIDATE IN LIBERIA REFUSED TODAY TO ACCEPT THE RESULTS OF A PRESIDENTIAL RUN-OFF ELECTION. WINSTON TUBMAN BOYCOTTED TUESDAY'S VOTE CLAIMG FRAUD IN THE FIRST ROUND. THAT GUARANTEED A WIN BY PRESIDENT ELLEN JOHNSON SIRLEAF. BUT VOTER TURNOUT WAS AS LOW AS 25% AND TUBMAN SAID HE MIGHT LAUNCH A LEGAL CHALLENGE. PRESIDENT OBAMA HAS ORDERED U.S. GOVERNMENT AGENCIES TO STOP HANDING OUT "SWAG"-- THE COFFEE MUGS, PENS, T-SHIRTS AND OTHER PROMOTIONAL ITEMS BOUGHT WITH TAXPAYER MONEY. HE SAID TODAY IT'S PART OF A BROADER EFFORT TO CUT ABOUT $4 BILLION IN SPENDING.

>> IT DOESN'T REPLACE THE IMPORTANCE OF THE WORK THAT CONGRESS NEEDS TO DO IN COMING UP WITH A BALANCED, BOLD PLAN TO REDUCE OUR DEFICIT, BUT IT INDICATES ONCE AGAIN THAT THERE ARE THINGS WE CAN DO RIGHT NOW THAT WILL ACTUALLY DELIVER BETTER GOVERNMENT MORE EFFICIENTLY, MORE CONSUMER FRIENDLY, FOR LESS MONEY.

>> Sreenivasan: TODAY'S EXECUTIVE ORDER ALSO IMPOSES CURBS ON FEDERAL WORKERS' TRAVEL, LAPTOP COMPUTERS AND CELLPHONES. TOYOTA HAS ISSUED A WORLDWIDE RECALL FOR 550,000 VEHICLES WITH POTENTIAL STEERING PROBLEMS. THE AFFECTED UNITS ARE MOSTLY IN NORTH AMERICA, FROM THE 2004 THROUGH 2006 MODEL YEARS. THEY INCLUDE THE CAMRY, HIGHLANDER, SIENNA, SOLARA, AVALON AND LEXUS. SO FAR, THERE HAVE BEEN NO REPORTS OF INJURIES. BUT IT'S ANOTHER BLOW TO TOYOTA, AFTER A STRING OF MAJOR RECALLS GOING BACK TO 2009. RUSSIAN SPACE SCIENTISTS STRUGGLED TODAY TO SALVAGE A $160 MILLION PROBE TO THE MARTIAN MOON "PHOBOS." IT'S DESIGNED TO DIG UP SOIL SAMPLES AND RETURN THEM TO EARTH. THE UNMANNED SPACECRAFT WAS LAUNCHED OVERNIGHT, BUT ITS ONBOARD ENGINES NEVER FIRED, AND IT FAILED TO BREAK OUT OF EARTH ORBIT. THAT LEFT ENGINEERS TRYING TO RESET THE COMPUTER PROGRAM. IF THEY FAIL, THE PROBE WILL CRASH TO EARTH, POSSIBLY WITHIN DAYS, RELEASING TONS OF TOXIC FUEL. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JUDY.

>> Woodruff: VOTERS AROUND THE COUNTRY WENT TO THE POLLS YESTERDAY AND DELIVERED SOME FIRM ANSWERS TO CRITICAL QUESTIONS ON THE BALLOT. THE MARQUEE RESULT FROM YESTERDAY'S VOTE CAME IN OHIO, WHERE VOTERS OVERWHELMINGLY REJECTED A LAW CURBING COLLECTIVE BARGAINING RIGHTS FOR STATE EMPLOYEES. THE 61% TO 39% RESULT WAS A MAJOR VICTORY FOR LABOR UNIONS AND THEIR DEMOCRATIC ALLIES. TEACHER COURTNEY JOHNSON WELCOMED THE NEWS AT A RALLY LAST NIGHT IN COLUMBUS.

>> WE THANK YOU, OHIO, FOR YOUR HISTORIC AND OVERWHELMING SUPPORT OF COLLECTIVE BARGAINING RIGHTS FOR OUR EVERYDAY HEROES. CLEARLY AND EMPHATICALLY OHIOANS HAVE SAID TO THE POLITICIANS WHO PASSED SENATE BILL 5 AND SUPPORTED ISSUE 2: WE DON'T TURN OUR BACKS ON THE PEOPLE WHO WATCH OURS!

>> Woodruff: THE VOTE WAS A MAJOR BLOW TO FIRST-TERM GOVERNOR JOHN KASICH, WHO CHAMPIONED THE LAW.

>> YOU KNOW, YOU A CAMPAIGN LIKE THIS, YOU GIVE IT YOUR BEST. IF YOU DON'T WIN AND THE PEOPLE SPEAK WITH A LOUD VOICE, YOU PAY ATTENTION TO WHAT THEY HAVE TO SAY AND YOU THINK ABOUT IT AND SO PEOPLE ASK WHAT WILL YOU DO? NOW I CAN TELL YOU, IT'S A CHANCE FOR ME TO CATCH MY BREATH AND TRY TO GATHER MY THOUGHTS TOGETHER AS TO WHAT WE DO NEXT.

>> Woodruff: A YEAR AFTER RIDING THE TEA PARTY AND REPUBLICAN WAVE INTO OFFICE, KASICH HAS FOUND HIS APPROVAL RATINGS UPSIDE DOWN AFTER HE PUT THE FIGHT AGAINST COLLECTIVE BARGAINING RIGHTS FRONT AND CENTER. IN MISSISSIPPI, MEANWHILE, VOTERS BLOCKED ANOTHER BALLOT MEASURE THAT WOULD HAVE RECOGNIZED A FERTILIZED EGG AS A PERSON UNDER THE STATE'S CONSTITUTION. OPPONENTS SAID THE SO-CALLED "PERSONHOOD AMENDMENT"-- KNOWN AS INITIATIVE 26-- WOULD HAVE HAD FAR-REACHING CONSEQUENCES, SUCH AS CRIMINALIZING BIRTH CONTROL AND RESTRICTING IN VITRO FERTILIZATION. THE REVEREND CAROL BURNETT OF GULFPORT:

>> 26 WOULD FORCE VICTIMS OF RAPE AND INCEST TO CARRY PREGNANCIES CAUSED BY THEIR CRIMINAL ATTACKERS, 26 WOULD MAKE SOME FORMS OF CONTRACEPTIONS, OUR BEST STRATEGY AGAINST ABORTION, ILLEGAL.

>> Woodruff: SUPPORTERS OF THE EFFORT INSISTED SUCH CLAIMS SIMPLY WERE NOT TRUE.

>> IT WILL STOP ABORTION AND IT WILL END CLONING. IT WILL NOT STOP CONTRACEPTION. IT WILL NOT BAN INVITRO FERTILIZATION. WOMEN WITH MISCARRIAGES WILL NOT BE INVESTIGATED. THOSE ARE ALL LIES.

>> Woodruff: THE VOTE AGAINST THE AMENDMENT WAS A RESOUNDING 58% TO 42%. AND A YEAR AFTER INCUMBENTS TOOK IT ON THE CHIN, YESTERDAY'S TWO GOVERNOR'S RACES TOLD A DIFFERENT STORY. MISSISSIPPI'S LIEUTENANT GOVERNOR PHIL BRYANT EASILY DEFEATED HIS DEMOCRATIC OPPONENT TO KEEP THE OFFICE IN REPUBLICAN HANDS.

>> WE'RE GOING TO DO SOMETHING VERY, VERY SPECIAL. WE'RE GOING TO CHANGE MISSISSIPPI, NOT BECAUSE HALEY BARBOUR HASN'T DONE SUCH A WONDERFUL JOB BUT WE'RE GOING TO BUILD ON WHAT HE'S ABLE TO DO BECAUSE YOU SEE THE CHANGE COMES WITH THAT FOUNDATION THAT HAS BEEN LAID.

>> Woodruff: IN KENTUCKY, MEANWHILE, DEMOCRATIC INCUMBENT STEVE BESHEAR COASTED TO A SECOND TERM.

>> FOLKS, THIS ELECTION WAS NEVER ABOUT PARTY. IT WAS ALWAYS ABOUT WHICH CANDIDATE COULD BEST BRING THIS COMMONWEALTH TOGETHER TO TACKLE THE CHALLENGES WE HAVE.

>> Woodruff: IN ARIZONA, STATE SENATE PRESIDENT RUSSEL PEARCE, ARCHITECT OF THE STATE'S TOUGH NEW IMMIGRATION LAW, WAS OUSTED FROM OFFICE IN A RECALL ELECTION BY A FELLOW REPUBLICAN IN WHAT MANY OBSERVERS DESCRIBE AS A REBUKE TO HIS POLARIZING POSITIONS. WHILE IN VIRGINIA, REPUBLICANS MADE GAINS IN BOTH THE STATE HOUSE AND SENATE IN A STATE THAT IS CERTAIN TO BE AT THE CENTER OF NEXT YEAR'S PRESIDENTIAL ELECTION. I'M JOINED NOW BY KAREN KASLER, STATEHOUSE BUREAU CHIEF FOR OHIO PUBLIC RADIO AND TELEVISION. SHE'S BEEN COVERING THE HIGH PROFILE BALLOT MEASURE CAMPAIGN FROM COLUMBUS, OHIO. KAREN, IT'S GOOD TO SEE YOU AGAIN. FIRST OF ALL, REMIND US HOW THIS MEASURE ENDED UP ON THE BALLOT.

>> WELL, THIS IS THE LATEST CHAPTER IN A STORY THAT STARTED BACK IN 2010 WHEN REPUBLICANS SWEPT EVERY OFFICE ON THE STATEWIDE BALLOT STARTING WITH JOHN KASICH AS GERN. AND WHEN GOVERNOR KASICH CAME INTO OFFICE HE MADE IT PRETTY CLEAR THAT HE WAS A LITTLE BIT CONCERNED ABOUT THE POWER THAT THE UNIONS THAT REPRESENT STATE AND LOCAL WORKERS HAD IN TERMS OF BARGAINING AND IN TERMS OF GETTING BENEFIT PACKAGES AND SALARIES. HE AND REPUBLICANS THEN HELPED CRAFT THIS BILL, SENATE BILL 5, WHICH STARTED TO LOOK A LITTLE BIT AT THOSE COLLECTIVE BAR GAPING SITUATIONS AND ALSO TRIED TO EXPAND A LITTLE BIT MORE ON THAT. THAT WAS 300-PAGE BILL THAT CAME INTO EFFECT AND SO THEY TRIED TO SEND THE MESSAGE THAT THIS WAS SOMETHING THAT WOULD HELP STATE AND LOCAL GOVERNMENTS CONTAIN COSTS AT A TIME WHEN THE STATE WAS SENDING LESS MONEY TO LOCAL GOVERNMENTS IN SCHOOLS. BUT THEN UNIONS AND THEIR ALLIES SAW THIS MEASURE, THE SENATE BILL 5, AND DECIDED IT WAS TOO FAR REACHING BECAUSE IT ALSO TOOK OUT SOME THINGS LIKE FAIR SHARE DUES PAYMENTS FOR PEOPLE WHO WANT TO OPT OUT OF THIS IS A UNION. AND SO THEY MOUNTED A HUGE PETITION DRIVE, GATHERED 11.3 MILLION SIGNATURES, THE LARGEST NUMBER OF SIGNATURES GATHERED FOR A REFERENDUM IN OHIO HISTORY. THEY KEPT THE MESSAGE GOING THROUGHOUT THE CAMPAIGN AND IN THE END THEY ENDED UP DEFEATING THIS LAW AND WINNING AND ENERGIZE AGO BASE THAT REALLY WAS LESS THAN ENTHUSIASTIC BACK IN 2010.

>> Woodruff: AND GOVERNOR KASICH HAS BEEN PERSONALLY IDENTIFIED WITH THIS.

>> RIGHT, IT WAS INTERESTING TO SEE GOVERNOR KASICH AT THE FOREFRONT OF THIS CONSIDERING HIS APPROVAL RATINGS ARE PRETTY LOW ACCORDING TO RECENT POLLS BUT HE'S CERTAINLY TAKEN ON THE MANTLE OF BEING THE HEAD OF THIS ISSUE 2 CAMPAIGN AND, INDEED, LAST NIGHT MADE SOME PUBLIC COMMENTS ABOUT HOW THAT WAS A REFERENDUM THAT HE HEARD VOTERS SPEAK ON, THAT HE WAS LISTENING, HE AND THE SENATE PRESIDENT AND THE HOUSE SPEAKER WHO ARE BOTH REPUBLICANS AS WELL WHO HELPED PUT THIS WHOLE THING TOGETHER. THERE'S BEEN QUESTION ABOUT WHETHER IT WAS OVERREACHING AND EVEN SOME REPUBLICANS IN THE STATE HAVE SAID IT DID OVERREACH BAUDS IT ALSO INCLUDED POLICE OFFICERS AND FIREFIGHTERS WHO WERE NOT INCLUDED IN, SAY, THE MEASURE IN WISCONSIN SO THAT HAVE BEEN THAT MAY HAVE BEEN SOMETHING THAT SOME PEOPLE HAD GOTTEN CONCERNED ABOUT WHEN THEY WENT OUT AND VOTED AGAINST IT.

>> Pelley: NOW, KAREN, ON THE OTHER SIDE OF THE COIN, THERE WAS A MEASURE TO BAN A KEY ELEMENT OF HEALTH CARE REFORM TO... THAT WOULD HAVE REQUIRED PEOPLE TO HAVE HEALTH INSURANCE THAT WAS PASSED. SO WHAT DOES THAT SAY? HOW DID THAT COME ABOUT AND WHAT WHAT DOES THAT SAY? BECAUSE IT WAS... IT SEEMED TO BE TO TWO COMPETING SET OF IDEAS HERE.

>> AND THERE WERE SOME PEOPLE WHO THOUGHT IT WAS ABSOLUTELY TWO SETS OF IDEAS THAT WERE IN COMPETITION. THERE WERE TEA PARTY ACTIVISTS THAT PUT THIS CONSTITUTIONAL AMENDMENT ON THE BALLOT AS ISSUE THREE. THIS WOULD, ACCORDING TO THE BACKERS AND CREATORS OF IT, KEEP OHIOENS OUT OF ANY STATE MANDATED HEALTH CARE SYSTEM BUT THEN THERE WAS A LOT OF T IN THE AMENDMENT THAT TALKED ABOUT HOW IT WOULD NOT AFFECT LAWS THAT TOOK AFFECT AFTER MARCH OF 2010 WHICH WAS WHEN THE FEDERAL HEALTH CARE LAW WAS SIGNED SO IT BECAME CLEAR THIS WAS A TARGETED ISSUE AND TARGETED AMENDMENT TOWARD THE FEDERAL HEALTH CARE LAW. NOW, BOTH SIDES AGREE THAT THIS CONSTITUTIONAL AMENDMENT WON'T HAVE ANYTHING TO DO WITH THE FEDERAL HEALTH CARE LAW, THAT'S GOING TO BE DECIDED BY THE U.S. SUPREME COURT. BUT THE OPPONENT... THE PROPONENTS OF IT, THE BACKERS OF IT, SAY THIS PUTS OHIOENS ON RECORD AS BEING AGAINST THE FEDERAL HEALTH CARE LAW, THEY SAY IT'S GOING TO MAKE IT HARDER FOR PRESIDENT OBAMA TO WIN IN 2012 IN OHIO. OF COURSE, OPPONENTS SAY IT WON'T DO ANYTHING AND THAT'S WHY THEIR SIDE VOTED AGAINST IT. BUT THE NUMBERS WERE VERY CLEAR ALMOST AS MANY PEOPLE VOTED FOR THIS AMENDMENT TO ALLOW OHIO TO OPT OUT OF HEALTH CARE THAN VOTED AGAINST THE COLLECTIVE BARGAINING REFORM LAW.

>> Woodruff: SO IF YOU PUT THE TWO TOGETHER DO THEY TELL US ANYTHING ABOUT THE DISPOSITION OF OHIO VOTERS GOING INTO THIS ELECTION YEAR AND THIS CRUCIAL BATTLEGROUND STATE?

>> I THINK IT TELLS EVERYONE THAT THIS STATE IS VERY MUCH UP FOR GRABS. I MEAN, I THINK A LOT OF PEOPLE LOOKED AT THE RESULTS IN 2010 WHEN, AS I MENTIONED, REPUBLICANS SWEPT THE STATEWIDE OFFICES AND THOUGHT THIS WAS A STATE THAT WAS BECOMING SOLIDLY RED. BUT THESE RESULTS SHOW THAT THERE WERE DEFINITELY SOME COMPETING INTERESTS HERE, THERE ARE DEFINITELY REPUBLICANS AND DEMOCRATS, DEMOCRATS ARE VERY ENERGIZED NOW AFTER THE DEFEAT OF SENATE BILL FIVE AND ISSUE TWO AND YOU'VE GOT TEA PARTY ACTIVISTS AND REPUBLICANS WHO ARE VERY ENERGIZED ABOUT THE APPROVAL OF THIS CONSTITUTIONAL AMENDMENT ON HEALTH CARE SO THIS REALLY MAKES OHIO VERY MUCH A BATTLEGROUND STATE FOR 2012 EVEN THOUGH WE'RE LOSING TWO CONGRESSIONAL SEATS IT'S A VERY COMPETITIVE PLACE FOR THE CANDIDATES FOR PRESIDENT TO COME TO OHIO AND RUN.

>> Woodruff: AND WE'LL ALL BE PAYING VERY CLOSE ATTENTION. KAREN KASLER IN COLUMBUS, THANK YOU.

>> Brown: NOW, MORE FALLOUT FROM THE PENN STATE SEXUAL ABUSE

>> Woodruff: LAST NIGHT, AS PART OF OUR AMERICAN GRADUATE SERIES, WE LOOKED AT THE HIGH SCHOOL DROPOUT CRISIS AND HEARD SUGGESTIONS FROM TEACHERS IN ST. LOUIS. TONIGHT, ANOTHER TAKE ON HOW TO IMPROVE PUBLIC EDUCATION. IT COMES FROM INDIANA, WHERE THE CURRENT REMEDY IS PROVIDE MORE CHOICES WHEN GRADUATION RATES ARE TOO LOW. SPECIAL CORRESPONDENT JOHN TULENKO REPORTS.

>> Reporter: ANDERSON, INDIANA- A CITY OF 50,000 JUST OUTSIDE INDIANAPOLIS. IN THE 1980s, IT WAS HOME TO SOME 15,000 AUTO WORKERS AND THEIR FAMILIES. A GENERAL MOTORS TOWN, UNTIL THE COMPANY FOLDED.

>> WHEN THE COMPANY LEFT TOWN, THE WHOLE ECONOMY WENT WITH IT.

>> Reporter: THE STUDENTS LEFT, TOO. FELIX CHOW IS SUPERINTENDENT OF SCHOOLS IN ANDERSON. BEFORE G.M. LEFT, ANDERSON HAD 21,000 STUDENTS IN 33 SCHOOLS.

>> TODAY, WE HAVE ABOUT 7,000 STUDENTS WITH NINE SCHOOL BUILDINGS.

>> Reporter: AS THE STUDENTS LEFT, STATE SUPPORT DECLINED SO ANDERSON WAS FORCED TO CLOSE SCHOOLS AND CUT PROGRAMS.

>> WE USED TO OFFER LOTS OF PROGRAMS IN FOREIGN LANGUAGES.

>> WE'VE LOST TWO FOREIGN LANGUAGES.

>> ABOUT TO LOOSE TWO MORE. WE HAD OTHER KINDS OF PROGRAMS THAT WOULD HELP THE STUDENTS WITH ENRICHMENT; WE WERE ABLE TO TAKE THEM ON FIELD TRIPS. CAN'T DO THAT NOW.

>> Reporter: ACADEMIC PERFORMANCE IS ANOTHER PROBLEM. ONLY ABOUT 55% OF STUDENTS HERE GRADUATE. AND IN THE LOWER GRADES, TEST SCORES LAG WELL BEHIND STATE AVERAGES.

>> LET ME DO A MEA CULPA THAT WE AS AN INSTITUTION HAVE A LOT TO IMPROVE. WE HAVE TO IMPROVE OUR ADMINISTRATION AND OUR TEACHERS.

>> Reporter: BUT SHOULD FAMILIES HAVE TO WAIT AROUND FOR THAT TO HAPPEN? AMBITIOUS ATTEMPT TO PROVIDE FAMILIES WITH WHAT'S CALLED SCHOOL CHOICE. THEY NOW HAVE THREE NEW ALTERNATIVES TO REGULAR PUBLIC SCHOOLS. OPTION ONE: PRIVATE SCHOOL.

>> THE LORD PROVIDED A GREAT FISH TO SWALLOW JONAH.

>> Reporter: A NEW STATEWIDE VOUCHER PROGRAM LETS LOW-INCOME FAMILIES TO SEND THEIR CHILDREN TO SCHOOLS LIKE LIBERTY CHRISTIAN IN ANDERSON. THE MONEY FOR THEIR TUITION-- UP TO $4,500 PER STUDENT-- COMES FROM INDIANA'S PUBLIC SCHOOL FUND.

>> FATHER, THANK YOU SO MUCH FOR THE STORY OF JONAH, LORD HELP US LEARN AND GROW. IN JESUS' NAME. AMEN.

>> Reporter: INDIANA COURTS HAVE SO FAR RULED THE PROGRAM CONSTITUTIONAL BECAUSE PARENTS, NOT THE STATE, CHOOSE WHERE TO SPEND THEIR VOUCHER.

>> SOME PEOPLE CHOOSE LIBERTY BECAUSE OF THE CHRISTIAN EDUCATION AND OTHERS CHOOSE LIBERTY, I THINK, BECAUSE THEY WANT A SOLID EDUCATION.

>> Reporter: JEREMY COWIN DIRECTS LIBERTY CHRISTIAN. OF THE 570 STUDENTS HERE IN GRADES K-12, 120 QUALIFIED FOR THE STATE'S VOUCHER.

>> ANYTHING YOU'D GET IN A PUBLIC SCHOOL SYSTEM, WE'RE OFFERING THOSE COURSES AS WELL: SCIENCE, MATH, READING, ANATOMY, AND PHYSIOLOGY. WE HAVE PHOTOGRAPHY, ART CLASSES, A YEAR-BOOK CLASS. AND OUR STUDENTS DO VERY WELL. ALMOST 100% GRADUATE EVERY YEAR AND WE'RE LIVING IN A COMMUNITY WHERE THE GRADUATION RATE IS ABOUT 50%.

>> ATTENTION! PRESENT ARMS!

>> Reporter: THE SECOND OPTION FOR INDIANA FAMILIES: PUBLIC CHARTER SCHOOLS. THE LEGISLATURE INCREASED THEIR NUMBERS THIS FALL. ANDERSON FAMILIES HAVE THE OPTION OF ANDERSON PREPARATORY ACADEMY, A CHARTER SCHOOL WITH A MILITARY THEME. HERE THE STUDENTS ARE CALLED CADETS AND THE FACULTY HAVE RANK. ASSISTANT PRINCIPAL JOHN HAYDEN GOES BY CAPTAIN HAYDEN.

>> WE HAVE RITUALS HERE LIKE A FAMILY DOES. OURS HAPPEN TO BE MILITARY RITUALS.

>> ROOM AT ATTENTION!

>> STANDING UP WHEN AN ADULT COMES IN THE CLASSROOM. SALUTING IN THE HALLWAYS. AND PROBABLY THE MOST NOTABLE IS "YES SIR" AND "NO SIR" IS REQUIRED.

>> Reporter: HAYDEN SAYS ALL THIS DISCIPLINE PAYS OFF.

>> THEY FEEL SAFE AND SECURE SO THAT THEY CAN ACTUALLY THINK INSTEAD OF BEING IN THE FIGHT OR FLIGHT MODE, WHICH HAPPENS A LOT IN SCHOOLS. YOU'RE WORRIED IF YOU'RE ABOUT OUR KIDS CAN WORRY ABOUT WHAT'S THE NEXT THING I NEED TO KNOW IN ALGEBRA.

>> Reporter: 300 NEW STUDENTS CHOSE TO ENROLL HERE THIS FALL, MOST OF THEM TRANSFERS FROM ANDERSON PUBLIC SCHOOLS. BESIDES CHARTER SCHOOLS AND PRIVATE SCHOOLS, FAMILIES HERE HAVE ONE OTHER NEW OPTION. CITY QUICKLY GIVES WAY TO COUNTRY IN THE NEIGHBORING SCHOOL DISTRICT OF LAPEL. MANY ANDERSON FAMILIES SEND THEIR CHILDREN HERE. NEW LEGISLATION ALLOWS THEM TO CHOOSE PUBLIC SCHOOLS OUTSIDE THE DISTRICT WHERE THEY LIVE.

>> WE HAVE A VERY GOOD REPUTATION.

>> Reporter: BOBBY FIELDS IS THE DISTRICT SUPERINTENDENT.

>> IT'S RELATIVELY SMALL. THE TEACHERS KNOW EVERYBODY BY NAME. THERE ARE A LOT OF OLD-SCHOOL THINGS I WOULD CALL IT, THAT ARE APPEALING TO A LOT OF PEOPLE AND THEY WANT THEIR KIDS TO COME HERE.

>> Reporter: HIGH TEST SCORES AND GRADUATION RATES ARE TWO MORE REASONS SOME 400 ANDERSON FAMILIES CHOSE TO SEND THEIR CHILDREN HERE THIS FALL.

>> SOME OF OUR MOST DISADVANTAGED FAMILIES DO NOT HAVE THE CHOICES TO MOVE TO THE SUBURBS, TO MOVE TO A PRIVATE SCHOOL.

>> Reporter: STATE SCHOOL SUPERINTENDENT TONY BENNET HAS BEEN THE DRIVING FORCE BEHIND THE REPUBLICAN-LED CHOICE MOVEMENT IN INDIANA.

>> WHAT THIS HAS DONE IS ALLOWED-- THE STATISTICS ARE BEARING IT OUT-- IT IS ALLOWING FAMILIES THE OPPORTUNITY TO PURSUE PROSPERITY FOR THEIR CHILDREN. IF WE'RE GOING TO BREAK THIS CYCLE OF POVERTY, WE HAVE TO PROVIDE THOSE OPTIONS.

>> IT'S NOT OUR OBLIGATION AS A STATE TO SUPPORT EVERY CHOICE THAT EVERYBODY WANTS TO MAKE.

>> Reporter: DEMOCRATIC STATE SENATOR ED DELHANEY PREFERS HIGH QUALITY PUBLIC SCHOOLS OVER CHOICE.

>> THESE SCHOOLS ARE LIKE LITTLE CAR COMPANIES, AND THEY'RE ALL ANNOUNCING, I'VE MADE THE GREATEST NEW CAR. NO PROOF, NO EVIDENCE, NO HISTORY. THIS IS NOT A SCIENTIFIC EXPERIMENT. IT'S AN ATTEMPT IN MY VIEW TO JUST PUSH DOWN PUBLIC EDUCATION.

>> Reporter: FORNDERSON'S ALREADY STRUGGLING NINE SCHOOLS, CHOICE HAS MADE A BAD SITUATION WORSE. THIS YEAR, THE DISTRICT IS LOOSING 1,000 STUDENTS TO PRIVATE SCHOOLS, CHARTER SCHOOLS, AND NEIGHBORING DISTRICTS. ANDERSON'S SUPERINTENDENT FELIX CHOW:

>> IF YOU LOSE A THOUSAND STUDENTS, THAT'S $6 MILLION. SO WE HAVE TO CUT $6 MILLION EQUIVALENT IN EXPENDITURE IN ORDER TO BALANCE THE BOOKS.

>> Reporter: SOME 200 TEACHERS, A THIRD OF THE TOTAL, RECENTLY LOST THEIR JOBS AND CLASS SIZES HAVE GROWN. AN OBVIOUS SOLUTION IS FOR ANDERSON SCHOOLS TO IMPROVE, SO NOT AS MANY STUDENTS LEAVE AND TAKE THEIR STATE DOLLARS WITH THEM. BUT ANDERSON'S NEW COMPETITORS ARE MAKING THAT HARD.

>> SOME SCHOOLS CHERRY PICK. ONE SCHOOL IN THE AREA ACTUALLY SENT OUT A FLYER. THEY SOMEHOW GOT A LIST OF HIGH LEVEL KIDS AND SAID TO THEM COME HERE, THIS IS WHAT WE CAN OFFER YOU.

>> Reporter: MEANWHILE, ANDERSON'S NEEDIEST STUDENTS HAVE BEEN TURNED AWAY.

>> DO YOU ACCEPT STUDENTS WITH SPECIAL NEEDS?

>> THAT'S A DIFFICULT QUESTION. THERE MIGHT BE A STUDENT THAT COMES IN RIGHT NOW, MAYBE THEY APPLIED FOR A FIFTH GRADE CLASS AND THEY'RE READING ON A KINDERGARTEN READING LEVEL, AND THEIR MATH ACHIEVEMENT WAS ON A KINDERGARTEN LEVEL. ACADEMICALLY, I AM NOT EQUIPPED TO MEET THEIR NEED.

>> Reporter: PRIVATE SCHOOLS TO BE SELECTIVE, BUT ITS HAPPENING IN PUBLIC SCHOOLS TOO, WHICH HAVE ALWAYS BEEN OPEN TO ALL. ANDERSON'S NEIGHBOR, LAPEL, FOR INSTANCE, ONLY ACCEPTS TRANSFER STUDENTS WHO HAVE AT LEAST A 2.0 GRADE POINT AVERAGE AND HAVE NOT BEEN EXPELLED OR SUSPENDED.

>> BUT THAT'S THE WAY THE STATE HAS SET THE RULES AND WERE JUST TRYING TO PLAY THE GAME THE BEST WE CAN.

>> Reporter: OTHERS FEAR A BIGGER PROBLEM WITH CHOICE HAS MORE TO DO WITH SELF-SELECTION.

>> THE PARENTS WHO ARE ENERGETIC AND ACTIVE, AND POOR, WILL ANSWER THE ADVERTISEMENTS FOR THESE NEW OPPORTUNITIES AND TAKE THEIR KIDS THERE. THAT'S WHAT'S GOING TO HAPPEN. SO WHAT WERE GOING TO DO, ESPECIALLY IN THE URBAN AREAS, WERE GOING TO TURN THE PUBLIC SCHOOLS INTO PLACES OF LAST RESORT.

>> WE HAVE A LOT OF GREAT SCHOOL LEADERS OUT THERE WHO AREN'T SAYING, WOE IS ME, WE'RE GOING TO LOSE OUR SCHOOLS. WHAT THEY'RE SAYING IS WE'RE GOING TO LACE OUR SHOES UP AND WE'RE GOING TO COMPETE AND WE'RE GOING TO WIN.

>> Reporter: ANDERSON IS FIGHTING BACK, DESPITE RULES THAT MAY WORK AGAINST IT, WITH FOUR NEW INITIATIVES.

>> CHARACTER EDUCATION, HEALTH EDUCATION, TEAMWORK AND LEADERSHIP.

>> Reporter: ARE YOU PUTTING THOSE IN YOUR SCHOOLS?

>> YES. IF A CHILD HAS NO SENSE OF CHARACTER, YOU GET A LOT OF SMART CROOKS. YOU NEED HEALTH. WE TRY TO PROVIDE MUCH HEALTHIER LUNCH MENUS. WE EMPHASIZE PHYSICAL EXERCISE, STARTING AT THE LOWER GRADES. TEAMWORK AND LEADERSHIP WE TRY TO DO AS MUCH PROJECT LEARNING- GROUP WORK. WITH SCHOOL CHOICE, THE BEST SCHOOL GETS THE STUDENTS. WE CAN COMPETE.

>> Reporter: BUT TO OTHERS, CHOICE, EVEN AMONG GOOD SCHOOLS IS NOT ENOUGH.

>> WE DON'T NEED A COMMON EDUCATION IN AMERICA ANYMORE. THAT'S THE UNDERLINING THOUGHT. YOU CAN GO OFF TO YOUR OWN SELECTIVE RELIGIOUS GROUP AND THE STATE WILL SUPPORT YOU. I'M TROUBLED BY THIS. WE'RE GOING TO HAVE PEOPLE WHO DON'T KNOW EACH OTHER. IT'S JUST THAT SIMPLE. IF WE DON'T PROVIDE QUALITY EDUCATIONAL OPPORTUNITIES, REGARDLESS OF WHERE THEY COME FROM, TO ALL OF OUR CHILDREN, I BELIEVE WE'RE GOING TO SEE A GREATER SEPARATION IN THE LONG TERM. WE'RE GOING TO SEE THE EROSION OF THE MIDDLE-CLASS.

>> Reporter: WHO BENEFITS FROM CHOICE? CERTAINLY IT GIVES SOME STUDENTS OPTIONS AND OPPORTUNITIES. BUT FOR OTHERS WHO REQUIRE SPECIAL SERVICES, AND FOR THOSE WHO HAVEN'T BEEN SUCCESSFUL IN SCHOOL, THE OPTIONS, IT APPEARS, ARE LIMITED. AND UNTIL THAT PROBLEM IS ADDRESSED, CHOICE IN INDIANA IS LIKELY TO BE A PARTIAL SOLUTION.

>> Woodruff: NOW, MORE FALLOUT FROM THE PENN STATE SEXUAL ABUSE SCANDAL AND THE ANNOUNCEMENT THAT COACHING GREAT JOE PATERNO WILL RETIRE. RAY SUAREZ HAS OUR UPDATE.

>> Suarez: LATE THIS MORNING, THE LEGENDARY COACH, WHO WAS PENN STATE IN MANY WAYS, ANNOUNCED HE'D LEAVE AFTER THIS SEASON, AMID THE CHILD SEX ABUSE SCANDAL ENGULFING THE UNIVERSITY. IN A STATEMENT, JOE PATERNO SAID: AFTER 62 YEARS ON CAMPUS-- 46 AS HEAD COACH, 409 WINS, A MAJOR COLLEGE RECORD AND TWO NATIONAL TITLES. ALL OF JOE PATERNO'S CAREER STATS WERE OVERWHELMED BY A SINGLE NUMBER: EIGHT. THAT'S THE NUMBER OF YOUNG BOYS ALLEGEDLY MOLESTED BY JERRY SANDUSKY, OVER 15 YEARS, ACCORDING TO INITIAL CHARGES. THE FORMER LONGTIME DEFENSIVE COACH WHO RETIRED IN 1999 WAS ONCE PATERNO'S HEIR APPARENT. SANDUSKY IS NOW 67 WAS ARRESTED SATURDAY ON 40 COUNTS OF CHILD SEXUAL ABUSE. FROM THERE, THE FOCUS QUICKLY FELL ON WHAT PATERNO DID AND DID NOT DO, WHEN A GRADUATE ASSISTANT TOLD HIM IN 2002 THAT HE'D SEEN SANDUSKY RAPING A CHILD IN A LOCKER ROOM SHOWER. PATERNO DID NOT INFORM POLICE. INSTEAD, HE TOLD PENN STATE ATHLETIC DIRECTOR TIM CURLEY. NOW, CURLEY AND A PENN STATE VICE PRESIDENT ARE CHARGED WITH PERJURY AND FAILURE TO REPORT THE ALLEGED ABUSE TO AUTHORITIES. PATERNO HAS NOT BEEN CHARGED.

>> WE LOVE JOE.

>> Suarez: LAST NIGHT THERE WAS NO MISTAKING THE SHOW OF SUPPORT FOR THE EMBATTLED COACH OUTSIDE HIS HOME. HUNDREDS OF STUDENTS GATHERED FOR THE MAN DUBBED "JOE-PA." PATERNO SPOKE TO THE FOCUS OF THE CASE.

>> THERE'S BEEN SOME CRITICISM OF THE WAY WE'VE HANDLED SOME OF THE POOR VICTIMS. YOU KNOW MY WIFE AND I HAVE 17 GRANDKIDS, FROM 16 TO THREE AND WE PRAY FOR THEM EVERY NIGHT AND WE'RE GOING TO START PRAYING FOR THE KIDS THAT GOT INVOLVED IN SOME OF THE PROBLEMS THAT WERE TALKED ABOUT.

>> Suarez: THE EXUBERANCE DIDN'T END, AND THE COACH EMERGED ONCE MORE.

>> IT'S HARD FOR ME TO TELL YOU HOW MUCH THIS MEANS TO ME. YOU GUYS-- I'VE LIVED FOR THIS PLACE. I'VE LIVED FOR PEOPLE LIKE YOU GUYS.

>> Suarez: FOR NOW, PATERNO PLANS TO BE ON THE SIDELINES THIS SATURDAY, WHEN PENN STATE PLAYS NEBRASKA, IN THE NITTANY LIONS' FINAL HOME GAME THIS SEASON. BUT HE MAY NEVER GET THE CHANCE TO COACH THAT GAME. THE UNIVERSITY'S BOARD OF TRUSTEES MEETS FRIDAY AND COULD ORDER HIS IMMEDIATE OUSTER. MULTIPLE REPORTS THIS EVENING SUGGESTED THAT UNIVERSITY PRESIDENT GRAHAM SPANIER COULD RESIGN OR BE FORCED OUT BY SCHOOL TRUSTEES TONIGHT. WE LOOK AT THE QUESTIONS SURROUNDING THE SCHOOL, INCLUDING THE LEGAL AND ETHICAL ISSUES AT STAKE. ANNE DANAHY IS A REPORTER FOR JEFF ANDERSON IS A TRIAL LAWYER WHO RUNS HIS OWN PRACTICE, SPECIALIZING IN REPRESENTING VICTIMS OF CHILDHOOD SEXUAL ABUSE. JEFF, LET'S BEGIN WITH WHERE THIS STORY BEGINS-- WITH A MEMBER OF THE FOOTBALL TEAM STAFF SEEING WHAT HE THINKS IS THE COMMISSION OF A CRIME IN A UNIVERSITY FACILITY, JERRY SANDUSKY RAPING A YOUNG MAN, A BOY. WHAT LEGAL OBLIGATIONS-- NOT SUGGESTIONS, ETHICAL OBLIGATIONS-- BUT WHAT LEGAL OBLIGATIONS COME INTO PLAY AT THAT MOMENT?

>> WELL, EVERY ADULT IN THIS SCENARIO HAS A LEGAL OBLIGATION TO REPORT ANY SUSPICION OF SEXUAL ABUSE. ANY SUSPICION OF THOSE TRAINED TO INVESTIGATE. THAT IS TO TRIAL PROTECTION OR LAW ENFORCEMENT. AND THE FAILURE OF THE INDIVIDUALS TO DO THAT IS A FAILURE OF THEIR LEGAL OBLIGATION NOT TO MENTION THEIR MORAL.

>> Suarez: IN THIS CASE, THE YOUNG GRADUATE ASSISTANT REPORTED TO HIS SUPERIOR, JOE PATERNO AT THAT POINT IS BECOMES AS HERE STORY. WHAT'S MR. PATERNO'S RESPONSIBILITY AT THAT POINT LEGALLY.

>> WELL, FIRST, REPORTING IT UP THE LINE OR DOWN THE LINE DOESN'T MAKE IT. YOU REPORT IT TO POLICE. AND THEY INVESTIGATE IT BECAUSE THAT'S WHAT THEY'RE TRAINED. JOE PATERNO'S RESPONSIBILITY ONCE HE RECEIVED THE REPORT WAS TO DO THE SAME THING. TURN IT OVER TO LAW ENFORCEMENT, LET THEM INVESTIGATE IT. AND JOE PATERNO FAILED IN HIS OBLIGATIONS BOTH MORAL AND LEGAL. AND THAT REALLY LEADS TO THE LARGER QUESTION HERE. THIS IS INSTITUTIONAL FAILURE AS WELL AS INDIVIDUAL FAILURE OF TRUSTED ADULTS. AND IT IS THE INSTITUTIONS THAT FAILED THE KIDS ON MULTIPLE LEVELS FROM THE TOP TO THE BOTTOM AND SO THE RESIGNATION OF JOE MA TERN KNOW OR THE RESIGNATION OF THE PRESIDENT IN ITSELF DOESN'T ADDRESS THE CULTURE AND THE INSTITUTIONAL FAILURE. WHAT REALLY HAS TO BE DONE HERE NOW IS THE INSTITUTION HAS TO ACKNOWLEDGE THEIR FAILURES AND RIGOROUSLY COMMIT THEMSELVES TO TRAINING AND PREVENTING THIS FROM HAPPENING AGAIN AND RIGOROUSLY REACHING OUT AND ACKNOWLEDGING THE FAILURES OF THE PAST.

>> Suarez: IN THIS PARTICULAR CASE, JOE PATERNO SAID HE TURNED IT OVER TO HIS SUPERIORS. NOW, AT THAT POINT HE SAYS HE'S DISPENSED HIS OBLIGATIONS HIS SPOKESMAN-- HIS OWN SON-- SCOTT PATERNO, SAID HE'S DISPENSED HIS OBLIGATIONS AND, IN FACT, NO ONE IS SAYING THEY'RE CONTEMPLATING CHARGES AGAINST JOE PATERNO. WHAT HAPPENS NEXT?

>> WELL, WHEN YOU HEAR OF THAT, IT IS REMINDFUL OF WHAT HAPPENS IN THE ROMAN CATHOLIC CHURCH HIERARCHY. IT'S REALLY JUST OBEDIENCE TO SILENCE AND A CULTURE OF PROTECTION. REPORTING UP THE LINE OR DOWN THE LINE AND TELLING OTHERS IN THAT CULTURE OF SILENCE AND SELF-PROTECTION DOESN'T PROTECT KIDS. THE ONLY THING THAT PROTECTS THE KIDS IS ACTION THAT IS REPORTING TO LAW ENFORCEMENT AND THEN TRAINING THOSE THAT ARE REQUIRED TO REPORT AN ACT, IN THIS CASE THEY DIDN'T AND SO AS A RESULT WE KNOW OF EIGHT, WE KNOW THERE ARE DOZENS MORE YET SUFFERING IN SILENCE READY TO COME FORWARD AND WE KNOW THIS INSTITUTION IS A REAL OPPORTUNITY FOR A TEACHING MOMENT FOR THEM TO LEARN THE LESSON OF THEIR FAILURES AND RIGOROUSLY EMPLOY PRACTICES THAT WILL PREVENT OTHER KIDS FROM BEING HARMED ACROSS ALL CULTURAL LINES AND INSTITUTIONAL BOUNDARIES.

>> THIS THIS CASE YOU'RE DEALING WITH AN INSTITUTION IN PEN STATE UNIVERSITY THAT IS... TAKES UP A HUGE SPACE IN THE CULTURE OF CENTRAL PENNSYLVANIA. YOU'RE DEALING WITH PEOPLE WHO ARE PROMINENT, WELL KNOWN IN EVERY CORNER OF THE STATE, BUT ESPECIALLY RIGHT THERE IN STATE COLLEGE, PENNSYLVANIA. DOES IT BECOME MORE DIFFICULT? IS IT MORE COMPLICATED WHEN YOU'RE DEALING WITH PROMINENT PEOPLE INSIDE A CULTURE THAT IS VERY MUCH DEVOTED TO THE MAINTENANCE AND THE SUCCESS OF THAT PLACE?

>> WELL, REALLY YOU HIT THE NAIL ON THE HEAD. THE PROBLEM IS THE MORE POWERFUL AND REVERED THE INSTITUTION, THE MORE DIFFICULT IT BECOMES FOR ANYBODY WITHIN IT "EXTRA INNINGS LIVE" POSE THE UNDERBELLY OR REPORT THE SEXUAL ABUSE AND TAKE ACTION AND BECAUSE IT IS SUCH A POWERFUL AND REVERED INSTITUTION EVERYBODY HERE DEFERRED TO THE INSTITUTION TO PRESERVE ITS REP DECONTAMINATION AND FORGOT ABOUT THE KIDS. AND THAT IS WHAT IS THE PROBLEM IN OUR MOST POWERFUL AND TRUSTED INSTITUTIONS. THE KIDS ARE AT GREATEST PERIL BECAUSE THE MOST POWERFUL AND TRUSTED PREDATORS IN THOSE INSTITUTIONS ARE GIVEN THE MOST PROTECTION.

>> Suarez: IS IT OFTEN IN CASE IN YOUR PRACTICE WHERE MOLESTERS ARE NOT SCARY STRANGERS BUT PEOPLE WHO GO OUT OF THEIR WAY OVER TIME TO GAIN THE CONFIDENCE AND CREATE INTIMACY WITH THEIR EVENTUAL VICTIMS?

>> WELL, IN OUR PRACTICE ACROSS THE COUNTRY FOR THREE DECADES AND IN PENNSYLVANIA HAS BEEN A DEMONSTRATION OF SERIAL PREDATORS WHO ARE VERY TRUSTWORTHY, THE MOST PROMINENT IN OUR COMMUNITY GIVEN GREAT DEFERENCE BECAUSE THEY ARE SO TRUSTED AND THEY CONTINUE TO OFFEND AND REOFFEND EVEN WITH THOSE AROUND THEM KNOWING, NOT WANTING TO BELIEVE OR REPORT AND THUS THEY'RE GIVEN PERMISSION THAT IF EFFECT THE FOX IS PUT BACK INTO THE HENHOUSE AND KEPT IN THAT POSITION OF TRUST. MOST NOTABLY DEMONSTRATED IN THE CATHOLIC CLERICAL CULTURE WHERE WE'VE SEEN THAT DEMONSTRATED TIME AND TIME AGAIN ACROSS THE COUNTRY AND AS WE'VE SEEN DEMONSTRATED IN OTHER PROTECTIVE INSTITUTIONS WHERE POWERFUL FIGURES ARE GIVEN DEFERENCE BECAUSE THEY... WE DON'T WANT TO BELIEVE, WE DON'T WANT TO SEE, WE DON'T WANT TO HEAR. AND WHEN THEY GET CAUGHT OFTEN TIMES AFRAID TO ACT OR BELIEVE THAT THEY COULD DO WHAT SANDUSKY DID.

>> Suarez: WHAT HE'S BEEN ACCUSED OF DOING. BUT JEFF ANDERSON, THANKS A LOT FOR JONG US TONIGHT.

>> YOU'RE WELCOME.

>> Brown: FINALLY TONIGHT, STORIES OF DISHONOR FOR SOME WHO DIED IN WAR. MARGARET WARNER HAS OUR REPORT.

>> Warner: DOVER AIR FORCE BASE IN DELAWARE RECEIVES AMERICA'S WAR DEAD IN SOLEMN CEREMONY WITH PRESIDENTS AND TOP BRASS PAYING THEIR RESPECTS. BUT NOW, AFTER A YEAR-LONG INVESTIGATION, THE AIR FORCE HAS ACKNOWLEDGED GROSS MISMANAGEMENT OF SOME REMAINS WITHIN THE BASE'S MILITARY MORTUARY. LOST BODY PARTS IN TWO INSTANCES IN 2009; FRAGMENTS OF ANKLE BONE AND HUMAN TISSUE OF SERVICEMEN KILLED IN AFGHANISTAN AND THE SEVERING OF A DEAD MARINE'S ARM BONE IN 2010 TO FIT HIM INTO A DRESS UNIFORM FOR VIEWING WITHOUT GETTING THE FAMILY'S CONSENT. STILL, THE AIR FORCE CONCLUDED THERE'D BEEN NO VIOLATIONS OF LAW, OR PROCEDURE. AND AIR FORCE CHIEF OF STAFF GENERAL NORTON SCHWARTZ YESTERDAY DEFENDED THE DECISION TO DISCIPLINE BUT NOT FIRE THE THREE SENIOR MORTUARY OFFICIALS IN CHARGE.

>> THIS WAS NOT A DELIBERATE ACT IN MY PERSONAL VIEW AND THAT OF THE COMMANDERS WHO EXERCISED AUTHORITY IN THIS CASE.

>> Warner: BUT SEPARATELY, THE INDEPENDENT OFFICE OF SPECIAL COUNSEL CRITICIZED THE AIR FORCE'S CONCLUSIONS AND DISCIPLINARY DECISIONS SAYING THEY DEMONSTRATED A PATTERN OF FAILURE TO ACKNOWLEDGE CULPABILITY FOR WRONGDOING RELATING TO THE TREATMENT OF REMAINS. DEFENSE SECRETARY LEON PANETTA HAS ORDERED A REVIEW, AND TODAY HIS SPOKESMAN SAID HE LEAVES OPEN THE POSSIBILITY FOR FURTHER ACCOUNTABILITY. FOR MORE WE'RE JOINED BY CRAIG WHITLOCK, NATIONAL SECURITY REPORTER AT THE "WASHINGTON POST." AND, CRAIG, THANK YOU FOR COMING BACK. LET'S START WITH HOW DID THESE CHARGES EVEN COME TO LIGHT, EVEN COME TO BE INVESTIGATED?

>> HI, MARGARET. THE CHARGES CAME FROM THREE WHISTLE-BLOWERS, EACH OF WHOM WORKS AT DOVER AIR FORCE BASE AT THE MORTUARY. THESE WERE EMBALMERS AND TECHNICIANS WHO WORKED THERE FOR A NUMBER OF YEARS AND THEY FILED COMPLAINTS WITH A NUMBER OF AGENCIES, INCLUDING THE INSPECTOR GENERAL OF THE AIR FORCE, WITH THE DEPARTMENT OF DEFENSE, AND WITH THE OFFICE OF SPECIAL COUNSEL AND THIS HAPPENED IN ABOUT APRIL AND MAY 2009 AND THAT'S WHAT... EXCUSE AMERICA 2010, AND THAT'S WHAT PROMPTED THE INVESTIGATIONS. THE.

>> Warner: AND WHAT IS THE MAJOR POINT OF DISAGREEMENT HERE BETWEEN THE AIR FORCE PROBE AND THE OFFICE OF SPECIAL COUNSEL WHICH SEEMS QUITE A BIT HARSHER.

>> IT IS QUITE A BIT HARSHER, MARGARET. THE AIR FORCE AS YOU NOTED EARLIER INVESTIGATED THESE ALLEGATIONS IN DETAIL AND WHILE THEY DID FIND A PATTERN OF QUOTE/UNQUOTE GROSS MISMANAGEMENT THEY FOUND THAT THESE INDIVIDUAL ALLEGATIONS OF MISSING BODY PARTS AND IMPROPERLY HANDLED REMAINS WERE NOT A VIOLATION OF SPECIFIC RULES OR PROCEDURES AND NO ONE HAD PERSONALLY BROKE ANY RULES. THE OFFICE OF SPECIAL COUNSEL TOOK STRONG EXCEPTION TO THAT. THEY SAID THIS WAS EVIDENCE THAT THE AIR FORCE DIDN'T TAKE THESE ALLEGATIONS SERIOUSLY ENOUGH, THAT THEY SHOULD HAVE DISCIPLINED SUPERVISORS MORE SEVERELY INCLUDING ONE WHO THEY SAID HAD BEEN QUOTE/UNQUOTE UNTRUTHFUL TO INVESTIGATORS AND THE OFFICE OF SPECIAL COUNSEL SAID ESSENTIALLY THE AIR FORCE TOOK A LIGHT HAND IN REACTING.

>> Warner: AND THAT GUY YOU'RE TALKING ABOUT, MR. KEOGH, WAS THE DIRECTOR OF THE MORTUARY.

>> THAT'S CORRECT.

>> Warner: NOW, THIS SEEMS TO BE A FAST-MOVING STORY. WHAT ARE THE LATEEST?

>> WE'RE REPORTING ON OUR WEB SITE VERY SHORTLY-- IF WE HAVEN'T ALREADY ON MY WAY TO THE STUDIO-- THAT THERE WERE SOME HIGHLY SUSPECT METHODS FOR THE AIR FORCE MORTUARY TO DISPOSE OF SOME REMAINS AT DOVER FOR MANY YEARS. WE'RE GOING TO REPORT-- AND AIR FORCE OFFICIALS HAVE ADMITTED-- THAT BETWEEN 2003 AND 2008 THAT WITH SOME BODY FRAGMENTS AND TISSUES AND PARTS RECOVERED FROM THE BATTLEFIELD THAT THEY CREATED THEM... CREMATED THEM AND DISPOSED OF THEM IN A LANDFILL IN VIRGINIA. THEY DID THIS FOR THE MOST PART WITHOUT THE FAMILIES BEING AWARE. LET ME BE CLEAR: IN EACH OF THESE CASES THEY WERE... WAR IS AN UGLY BUSINESS AND IT'S PRETTY GRAPHIC AND IN SOME CASES BODIES WEREN'T LEFT INTACT AND IT TAKES A WHILE TO IDENTIFY ALL THE REMAINS OF THE BODY AND IN MANY CASES THE FAMILIES GAVE THE AIR FORCE PERMISSION TO DISPOSE OF ANY LATER FOUND BODY PARTS IN A DIGNIFIED AND APPROPRIATE MANNER WHAPLT THEY DIDN'T KNOW IS THAT THE AIR FORCE WOULD HAVE THEM CREATED AND INCINERATED AND THEN TAKEN TO A LANDFILL.

>> Warner: SO THE FAULT HERE IS FAILURE TO ESSENTIALLY SHOW THE PROPER RESPECT AND NOT MEET THE FAMILY'S EXPECTATIONS ON WHAT THEY HAD TOLD THE FAMILY WOULD BE DONE WITH THEM.

>> I THINK THAT'S RIGHT. THE FAMILIES WERE NOT AWARE THAT WAS GOING ON. SOME FAMILIES TRIED FOR YEARS TO GET ANSWERS OF WHAT HAD HAPPENED AND THE AIR FORCE WAS RELUCTANT TO BE OPEN ABOUT IT. BUT, AGAIN, LET ME EMPHASIZE THAT FOR THE MILITARY GIVING CARE AND RESPECT AND DIGNITY AND HONOR TO FALLEN TROOPS IN THEIR FAMILIES, THOSE WHO ARE WHO WERE KILLED IN BATTLE, IS OF THE UTMOST IMPORTANCE IN MILITARY CULTURE AS WELL AS REGULATIONS. SO THE IDEA THAT THESE REMAINS CAN BE HANDLED, WHETHER ULTIMATELY ENDING UP IN A LANDFILL OR THESE LOST BODY PARTS IS SHOCKING TO PEOPLE IN OUR ARMED FORCES AND THEIR FAMILIES.

>> Warner: THE SPECIAL COUNSEL IS CRITICAL OF THE AIR FORCE FOR ITS OWN TIMETABLE FOR NOTIFYING THE FAMILIES. WHAT HAPPENED THERE?

>> THAT'S CORRECT. THIS INVESTIGATION TOOK 18 MONTHS OR SO. THE AIR FORCE WAITED THE AIR FORCE WAITED TO NOTIFY FOUR FAMILIES WHOSE SERVICE MEMBERS HAD BODY PARTS THAT WERE MISSING OR COULDN'T BE ACCOUNTED FOR. THE AIR FORCE HAS GIVEN SOME SHIFTING EXPLANATIONS FOR WHY THEY WAITED SO LONG. FIRST GENERAL SCHWARTZ, THE CHIEF OF STAFF WHO YOU HEARD EARLIER, SAID THAT THERE WERE SOME CONSTRAINTS PLACED ON THE AIR FORCE BY THE OFFICE OF SPECIAL COUNSEL THAT MADE THEM WAIT. LATER HE SAID THAT IT WAS THE AIR FORCE'S JUDGMENT THAT THEY WANTED TO GIVE ALL THE INFORMATION OF THE FAMILIES IN ONE FELL SWOOP INSTEAD OF PARTIAL REPORTS AND THAT'S WHY THEY WAITED. THE OFFICE OF SPECIAL COUNSEL WAS HIGHLY CRITICAL OF THIS. THEY SAID THAT THEY HAD URGED THE AIR FORCE FOR MONTHS TO NOTIFY THE FAMILIES, THAT THEY SHOULD HAVE BEEN NOTIFIED RIGHT AWAY THAT THERE WAS THESE DISCREPANCIES AND WHAT HAPPENED TO THEIR FALLEN RELATIVES.

>> Warner: SECRETARY PANETTA HAS HIS REVIEW, YOU HAVE YOUR FINDINGS. WHERE DOES THIS GO FROM HERE?

>> WE'RE NOT SURE AND I I THINK THERE ARE QUESTIONS AS TO HOW THINGS WERE HANDLED AT THIS MORTUARY AND FOR HOW MANY YEARS. YESTERDAY GENERAL SCHWARTZ COULDN'T RULE OUT THAT THERE HAVE BEEN OTHER INCIDENTS WHERE BODY PARTS WERE MISSING OR OTHER IMPROPRIETIES. HE SAID HE HOPED EVERYTHING HAD BEEN FIXED AND EVERYTHING WAS UP TO YOU HAVE? NOW BUT WE DON'T KNOW WHAT HAPPENED IN PRIOR YEARS OR IN OTHER CASES AND WE'LL HAVE TO WAIT AND SEE WHAT COMES OUT.

>> Warner: CRAIG WHITLOCK OF THE "WASHINGTON POST." THANKS SO MUCH.

>> Woodruff: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY: THE ECONOMIC AND POLITICAL CRISIS IN ITALY RATTLED MARKETS WORLDWIDE. THE DOW INDUSTRIALS LOST NEARLY 390 POINTS AND LEGENDARY PENN STATE FOOTBALL COACH JOE PATERNO ANNOUNCED HE'LL RETIRE AFTER THE SEASON. HE SAID HE'S DEVASTATED BY CHARGES THAT A FORMER TOP ASSISTANT MOLESTED YOUNG BOYS. ONLINE, WE HAVE MORE ABOUT LAST NIGHT'S ELECTION RESULTS. HARI SREENIVASAN EXPLAINS. HARI?

>> Sreenivasan: OUR ANALYSIS OF WINNERS AND LOSERS IS ON THE "MORNING LINE"-- OUR DAILY EMAIL ON ALL THINGS POLITICS. SIGN UP ON OUR POLITICS PAGE. SPECIAL CORRESPONDENT FRED DE SAM LAZARO EXAMINES THE PLIGHT OF SOMALI REFUGEES. FIND A PREVIEW OF HIS REPORTING ON OUR WORLD PAGE. PLUS, JEFF TALKS TO WRITER JULIAN BARNES, THIS YEAR'S WINNER OF THE MAN BOOKER PRIZE FOR HIS NOVEL "THE SENSE OF AN ENDING." THAT'S ON ART BEAT. ALL THAT AND MORE IS ON OUR WEB SITE: newshour.pbs.org. JUDY?

>> Woodruff: AND THAT'S THE "NEWSHOUR" FOR TONIGHT. ON THURSDAY, WE'LL REPORT ON THE SEARCH FOR RADIATION HOT SPOTS IN JAPAN AFTER THE NUCLEAR MELTDOWN. I'M JUDY WOODRUFF.

>> Brown: AND I'M JEFFREY BROWN. WE'LL SEE YOU ONLINE AND AGAIN HERE TOMORROW EVENING. THANK YOU AND GOOD NIGHT. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:

>> OIL COMPANIES MAKE HUGE PROFITS.

>> LAST YEAR, CHEVRON MADE A LOT OF MONEY.

>> WHERE DOES IT GO?

>> EVERY PENNY AND MORE WENT INTO BRINGING ENERGY TO THE WORLD.

>> THE ECONOMY IS TOUGH RIGHT NOW, EVERYWHERE.

>> WE PUMPED $21 BILLION INTO LOCAL ECONOMIES, INTO SMALL BUSINESSES, COMMUNITIES, EQUIPMENT, MATERIALS.

>> THAT MONEY COULD MAKE A BIG DIFFERENCE TO A LOT OF PEOPLE. AND BY THE ALFRED P. SLOAN FOUNDATION. SUPPORTING SCIENCE, TECHNOLOGY, AND IMPROVED ECONOMIC PERFORMANCE AND FINANCIAL LITERACY IN THE 21ST CENTURY. 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. Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS Captioned by Media Access Group at WGBH access.wgbh.org

>> THIS IS "BBC WORLD NEWS AMERICA." FUNDING FOR THIS PRESENTATION IS MADE POSSIBLE BY THE FREEMAN FOUNDATION OF NEW YORK, STOWE, VERMONT, AND HONOLULU. NEWMAN'S OWN FOUNDATION. SHELL. AND UNION BANK.

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