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Details of House Fire Tragedy Released; Blackwater Guard Given Limited Immunity to Prosecution for Shooting; Navy Rescues North Korean Crew from Pirates; James Peake Nominated as Veteran Affairs Secretary; Astronauts Connecting New Segment to International Space Station

Aired October 30, 2007 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Could you ask anybody you see if they can give me an address?

UNIDENTIFIED MALE: They're trapped in the house, lady!

UNIDENTIFIED FEMALE: I know, sir, I mean you're telling me, but how can I send somebody if I don't know where to go?

UNIDENTIFIED MALE: I told you, the address is No. 1 Scotland Street, Ocean Isle Beach.

(END VIDEO CLIP)

KYRA PHILLIPS, CNN ANCHOR: Where's the fire? Right here. Two days after the deadly inferno on the North Carolina coast, we're learning more about the victims and the chaotic calls for help.

DON LEMON, CNN ANCHOR: Who's minding the toys? After so many recalls, scares and controversies, and with holiday shopping just around the corner, advocates say it's time to get serious about safety.

Hello, everyone. I'm Don Lemon, live at the CNN world headquarters in Atlanta.

PHILLIPS: And I'm Kyra Phillips. You're live in the CNN NEWSROOM.

LEMON: House No. 1 Scotland Street, home to a tragedy, an address witness -- will never forget. Now for the first time, we're hearing 911 calls from people who saw this North Carolina beach house go up in flames early Sunday morning and killing seven college students from South Carolina.

Calls like this one, filled with confusion and frustration.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Brunswick County 911, what's your emergency?

UNIDENTIFIED MALE: I'm looking for the address, Scotland Street.

UNIDENTIFIED FEMALE: Hello.

UNIDENTIFIED MALE: Let me see if I can help these people.

UNIDENTIFIED FEMALE: OK.

UNIDENTIFIED MALE: Can you get the fire department here?

UNIDENTIFIED FEMALE: Sure, what's the address, sir?

UNIDENTIFIED MALE: I'm not sure. It's Scotland Street. They'll see it.

UNIDENTIFIED FEMALE: Where is that?

UNIDENTIFIED MALE: Ocean Isle Beach.

UNIDENTIFIED FEMALE: OK.

UNIDENTIFIED MALE: Thank you.

UNIDENTIFIED FEMALE: Now wait a minute. Now I need something better than that. I'm not familiar with the area.

UNIDENTIFIED MALE: OK, I'm looking for an address.

UNIDENTIFIED FEMALE: OK. What's wrong?

UNIDENTIFIED MALE: A house fire.

UNIDENTIFIED FEMALE: Oh, I didn't know that, sir. You didn't tell me.

UNIDENTIFIED MALE: It would be unit one, Ocean Isle Beach, House No. 1, Scotland Street.

UNIDENTIFIED FEMALE: Scotland?

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: See if there -- is anybody there, sir?

UNIDENTIFIED MALE: There are people here.

UNIDENTIFIED FEMALE: Could you ask anybody you see if they can give me an address?

UNIDENTIFIED MALE: They're trapped in the house, lady!

UNIDENTIFIED FEMALE: I know, sir, I mean you're telling me, but how can I send somebody if I don't know where to go?

UNIDENTIFIED MALE: I told you, the address is No. 1 Scotland Street, Ocean Isle Beach.

(END VIDEOTAPE)

LEMON: The names of the victims haven't been officially released, but we've been able to confirm some of them through family and friends.

Sophomore Allison Walden was 19 years old, a premed major. Her dad, in Ohio, says she was often -- always cheerful and positive and had a good future in front of her.

As did 19-year-old freshman Cassidy Penley. She was in high school. She attended an academic program for the best and the brightest students. She was also junior homecoming queen.

Jump or die: the only choice for survivors of the inferno. Survivors such as Tripp Wylie, a 20-year-old who leapt from a third- story window into a canal.

(BEGIN VIDEO CLIP)

FREDERICK "TRIPP" WYLIE, FIRE SURVIVOR: I pulled the blinds off the window, just kicked in the window and, I mean, that was the only option, you know, you really had was to jump out.

(END VIDEO CLIP)

LEMON: Wylie says the flames were so intense, he couldn't get back into the house to help his friends.

PHILLIPS: Well, if you're a parent, you don't want to hear about any more dangers in your children's toy chest, but you need to hear this.

"Consumer Reports" magazine says that many toys still in stores test positive for lead. Among them, a red plastic blood pressure cuff made in China. That's part of some Fisher-Price medical kits. The company is owned by Mattel.

Consumers Union, the nonprofit publisher of "Consumer Reports", says the lead level is so worrisome that it's calling for a federal investigation. The group also says that it's found lead in dishware, jewelry, vinyl backpacks and other children's products.

In the coming weeks, Democrats in Congress plan to push new consumer and toy safety legislation. We'll have live coverage later this hour of a news conference by House Speaker Nancy Pelosi and other lawmakers.

LEMON: The face and voice of accountability for a wounded cabinet department. That's what President Bush wants James Peake to be. Any minute now, we're expecting the president to nominate Peake to be Veterans Affairs secretary.

The V.A. has come under fire recently, especially after shoddy conditions at the nation's premiere Army hospital came to light. But critics question whether Peake, a former Army surgeon general is the right man for the job. We'll take you back live to the White House as soon as the president speaks.

PHILLIPS: The circumstances surrounding the shootings that killed 17 Iraqis last month in Baghdad are still murky today. And so is the possible immunity that reportedly was offered to the Blackwater security guards that were involved.

It's a story that's raising eyebrows in Washington and in Baghdad. Our State Department correspondent, Zain Verjee, is live with the latest.

Who granted this immunity, Zain?

ZAIN VERJEE, CNN CORRESPONDENT: Well, Kyra, according to U.S. officials, the State Department's diplomatic security investigators granted the immunity. And diplomatic security is the law enforcement arm of the State Department.

The limited use immunity basically means, in legal terms, that they promised Blackwater guards that they would not be criminally charged for anything they said, as long as the statements were true. Now it's not really clear when it was done or how this was explained to the guards.

The senior State Department official, though, says diplomatic security has the authority under case law that says government employees' statements will not be used against them in a criminal proceeding. And they say that that was the authority that they were acting under.

The Justice Department, though, says that that kind of decision has got to be made in consultation with federal prosecutors.

Now a short while ago, the State Department spokesman, Sean McCormack, had this to say.

(BEGIN VIDEO CLIP)

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: First, we would not have asked the FBI and the Department of Justice to get involved in a case that we did not think that they could potentially prosecute.

And I think if you ask the Department of Justice, and the FBI, if they would have taken on a case that they could not potentially successfully prosecute, they would say, "No, of course not. We wouldn't take on such a case." That's one point.

The second point is that -- and I talked to our lawyers about this -- is that the Department of State cannot immunize an individual from federal prosecution, federal criminal prosecution.

(END VIDEO CLIP)

VERJEE: Publicly the State Department is not saying more than that, adding also only that this action was not sanctioned by or consulted with senior management in Washington.

Privately, we've learned from two senior State Department officials that weren't authorized to speak on the record who say that diplomatic security didn't offer blanket immunity to the Blackwater guards, but it's their understanding that it's just this, limited immunity.

State Department officials do acknowledge, though, Kyra, that that just makes it more complicated for prosecutors to build any kind of case against the Blackwater guards. Although officials say, too, that they can still prosecute. It will just be harder.

PHILLIPS: All right. Zain Verjee, thank you so much.

We're going talk to our legal analyst, Jeffrey Toobin, about this more, coming up at the half hour. How do you even charge members of Blackwater when the U.S. doesn't even have jurisdiction in the country of Iraq? We'll talk about that more, coming up at the half hour.

LEMON: Well, pirates taking over ships on the open water. Sounds like something from times gone by, but it's happening now. We have some breaking news when it concerns that. Our Barbara Starr is on top of it.

What do you have, Barbara?

BARBARA STARR, CNN CORRESPONDENT: Well, Don, really an extraordinary situation unfolding at this hour in the Horn of Africa, off the coast of Somalia.

A U.S. Navy warship rescued some North Korean crew members of a cargo vessel that was hijacked by pirates on the high seas yesterday. Here's basically what happened.

This North Korean cargo vessel, hijacked by pirates, taken over by them. The North Korean crew was trying to radio for help. There was a nearby Navy warship. They sent a helicopter to investigate. You see, I think, some file footage here.

And when they got there, the U.S. Navy helicopter ordered the North Korean -- the pirates on the North Korean ship to give up their weapons. A fight broke out between the North Korean crew and the pirates. When it was all over, three members of that North Korean crew, cargo crew, were badly injured.

And the U.S. Navy picked them up; they boarded the ship. And took these injured crew members back to the U.S. Navy ship, where they are being treated at this hour.

But what's so interesting, Don, this is the second incident this week. I think the file footage you're seeing here is of another ongoing pirate incident under way right now. A Panamanian flagged vessel has been hijacked. The U.S. Navy, another ship is tracking that vessel, because that cargo vessel is full of a very dangerous cargo, the chemical benzene. And they're quite worried about what's going to happen to it. But both incidents under way. One of them being resolved when the U.S. Navy took members of a North Korean cargo ship under their protection -- Don.

LEMON: All right, Barbara, keep abreast of that, and we'll check back. Thank you very much.

PHILLIPS: We want to take you live to the White House right now, where we're waiting for the president to step up to the microphone. You know the face and the voice of accountability is what he wants for a wounded cabinet department. We're talking about the Department of Veteran Affairs.

He wants to name -- nominate a name and appoint James Peake to be head of that department. The veterans affairs secretary is what the president is hoping James Peake will become.

He's stepping up to the mike. Let's listen in.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Caring for our military veterans is a solemn responsibility of the federal government. It is our enduring pledge to every man and woman who puts on our nation's uniform, and it is the daily work of the Department of Veterans Affairs.

I'm pleased to announce my nomination of an Army doctor and combat veteran who will be a strong new leader for this department, Lieutenant General James Peake.

Public service is a family commitment, and I'm especially grateful to Dr. Peake's wife, Janice, a fellow Texan, who is with us today. I appreciate you supporting Jim once again as he does the nation's work. I'm also proud to welcome Kimberly and Thomas. Thank you, all, for coming.

We just met in the Oval Office, and there's no question in my mind that they're certainly proud of their dad.

Dr. Peake grew up in a home where service to country was a way of life. His father started out as an enlisted man in the Army and became an officer who spent most of his 30-year career in the medical service corps. Dr. Peake's mom was an Army nurse. His brother was a naval aviator.

And as a young man of 18, he set upon his own lifetime of service when he arrived at the United States Military Academy, to graduate from West Point in 1966. Second Lieutenant James Peake was sent to Vietnam with 101st Airborne. There, he served as the platoon leader. He led men into combat and earned several medals for his courage, including the Silver Star.

One of those who knows him best described his leadership this way. End of a chow line officer: everyone else first.

Vietnam he also earned two Purple Hearts. While in the hospital recovering from his second wound, he learned that he had been accepted to medical school.

After completing his medical studies at Cornell University, he devoted his career as an Army doctor to improving care for our wounded servicemen and women. Long before the global war on terror began, Dr. Peake was changing the way we deliver medical care to our troops.

As a result of this reforms, many who once may have died on the battlefield now, they come home to be productive and have a fulfilling life. As a medical officer and combat vet who was wounded in action, Dr. Peake understands the view from both sides of the hospital bed: the doctors and the patients.

Brought that understanding to many jobs. These include command surgeon in the Army hospitals; commanding general of the largest medical training facility in the world; an Army surgeon general, where he commanded more than 50,000 medical personnel, oversaw 16 hospitals across the world, and managed an operating budget of nearly $5 billion.

Since leaving the Army, he has served as executive vice president and chief operating officer of Project Hope. There, he helped one Navy hospital ship respond to the victims of the Asian tsunami, and another that was sent to care for those hit by Hurricane Katrina.

Most recently he's served as chief medical director and chief operating officer with QTC Management, which provides military veterans with timely medical examinations, as well as electronic medical record services.

When confirmed by the Senate, Dr. Peake will bring his unique set of skills and experiences to the Department of Veterans Affairs. He will be the first physician and the first general to serve as secretary. He will apply his decades of expertise in combat medicine and health care management to improve the veterans' health system.

He will insist on the highest level of care for every American veteran.

Dr. Peake's first task as secretary will be to continue to implement the recommendations of the Dole-Shalala Commission on Wounded Warriors. And Senator, thank you for joining us.

Some of the recommendations are the responsibility of the executive branch, and Dr. Peake will be a leader in carrying them out.

PHILLIPS: He's been nominated. Now will he be confirmed? That will be the next step. We're talking about James Peake, former Army surgeon general. The president wants him to head the Department of Veteran Affairs.

As you know, Jim Nicholson used to head that department; stepped down after all those allegations of shoddy conditions at Walter Reed, the nation's premiere Army hospital, and of course, conditions of other hospitals and benefits for those coming back, specifically from the Iraq war.

We'll follow this up, see if indeed he is confirmed. In the meantime, Elaine Quijano, White House correspondent, is standing by.

He's had a lot of challenges, no doubt. Specifically after what Jim Nicholson had dealt with, why he stepped down. There are still a lot of things that need to be fixed in that department.

ELAINE QUIJANO, CNN CORRESPONDENT: Certainly, a big department, a big job ahead, if in fact, Lieutenant General James Peake is successfully confirmed.

But this is coming now, this nomination coming more than three months, you'll recall, Kyra, after Jim Nicholson announced that he was stepping down from his position as V.A. secretary.

President Bush just a moment ago, as you heard, announcing his plans to nominate Dr. Peake to be his replacement. The president praising Dr. Peake, who retired from the Army in 2004 after decades of service. The president saying that he would bring strong leadership to the Department of Veterans Affairs.

Now today's announcement, though, comes amid some concerns by veterans groups that that top position at the V.A. Department remained unfilled for so long. The veterans groups, the person that I spoke to just this morning, in fact, saying they believed it was an indication that, for the White House, the issues that veterans face were very low priority.

Of course, the White House rejects that out of hand. Nevertheless, Democrats on Capitol Hill, who are currently locked in some heated battles with the Bush administration on budgets, on other issues as well, have jumped on this particular issue.

And already, Kyra, we have some reaction, even before this announcement today from Senator Patty Murray, a Democrat, a senior member of the veterans affairs committee, who said in a statement that she believes there are going to be some serious and significant questions for Dr. Peake, saying, quote, "For months we've been hearing horror stories from Walter Reed and other military care centers, and I will want to know what role, if any, Dr. Peake played in the failures of the system."

Now, asked about that just a short time ago, White House press secretary Dana Perino said, look, the White House is not looking for some sort of heated confirmation battle. She said it really will be up to Democrats running Congress to determine how smoothly this process goes -- Kyra.

PHILLIPS: All right. Elaine Quijano, live from the White House. Appreciate it.

Straight ahead, toys still testing positive for lead. Well, there ought to be a law. And that's exactly that lawmakers plan to pitch at a news conference this hour. We'll take you there live.

LEMON: And no blanket immunity for Blackwater. And some kind of deal has been made in the probe of the deadly shooting that killed Iraqi civilians. Our senior legal analyst, Jeffrey Toobin, takes a closer look for us.

PHILLIPS: Plus this: another high altitude fix-it mission for shuttle astronauts. We'll get the punch list from Miles O'Brien.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

LEMON: Twenty past the hour. Here are some of the stories we're working on for you right here in the CNN NEWSROOM.

Just minutes ago, President Bush nominated James Peake to be veterans affairs secretary. The V.A. has come under fire recently. Remember the allegedly shoddy conditions at the nation's premiere Army hospital?

Well, critics question whether Peake is the right man for the job. He's a former Army surgeon general.

An initial report on this deadly North Carolina beach house fire could come this week. Still no word on the cause of the blaze. It killed seven college students from neighboring South Carolina.

A tropical storm watch could be posted for parts of Florida later today as Noel gets closer. Tropical storm could pass close to the state in the next few days. It's now dumping heavy rain on parts of Cuba and also the Bahamas.

PHILLIPS: Federal Reserve kicks off a two-day meeting on interest rates today. And one issue sure to be discussed, the housing recession, in a new survey that offers little hope of a quick turn around.

Susan Lisovicz at the New York Stock Exchange with all the details.

Hi, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Kyra.

Well, the housing market, I'm afraid to say, has yet to hit bottom. Not if you look at this closely watched survey in 20 cities that shows home prices fell nearly 4.5 percent in August, compared to the year before.

The last time prices fell that much, it took more than eight years for prices to return to their peak levels. The survey's author says that the national and metro levels, the fall in home prices are showing no real signs of a slowdown or turnaround.

Tampa, Florida, surpassed Detroit as the worst performing city in August. Prices plunged more than 10 percent there.

Last week, the National Association of Realtors said the median home price is now down to $211,000 -- Kyra. PHILLIPS: So does that mean we accept help, rather, from the Federal Reserve in the form of maybe an interest rate cut?

LISOVICZ: Well, certainly, there are expectations on Wall Street that help will be coming and that it will come out tomorrow afternoon, Kyra. Investors certainly betting on that.

And most think that a quarter point cut will come. More modest than the half a percentage point cut we got last month.

But even that's not a sure thing. That's because we've been reporting week after week about record oil prices. So inflation is still a concern for the Fed. And with the dollar so weak, the dollar hitting a new low against the euro today, imports are more expensive. It's good for exports. Make them cheaper overseas. But imports are more expensive.

Another rate cut could help the housing market, certainly. But the chief executives of Countrywide Financial and KB Homes say the government must do more. They're calling on lawmakers to lift the limit on home loans that the government backs.

(STOCK REPORT)

LISOVICZ: Coming up, the next hour, the biggest pet peeves in the office.

I have no pet peeves about you. None at all, Kyra. You're a pleasure, as is Don. But I will tell you when other people say about other colleagues elsewhere.

PHILLIPS: OK. Really?

LISOVICZ: Really.

PHILLIPS: OK. We'll look forward to that.

LISOVICZ: It's a tease.

PHILLIPS: It is a tease.

All right. Talk to you in a little bit.

LISOVICZ: You got it.

LEMON: Well, locking a tower of power into place. Look at this. Live pictures now from space. Isn't that cool?

More on the orbiting building boom and why it's important to you. An orbiting building boom. Better real estate than here on earth.

Miles O'Brien -- there he is -- joins us in the CNN NEWSROOM.

Smile, Miles. Look like you're interested in...

MILES O'BRIEN, CNN CORRESPONDENT: Very interested. LEMON: Miles O'Brien, coming up in the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Well, it's hard work, but you can't beat the view. How'd you like a day at the office like this? Miles O'Brien gets it every day that he wants it.

Two shuttle astronauts reattached a massive girder to the International Space Station today. It's a crucial step for future missions.

Now Miles, I got called out yesterday because you were not available. You were traveling. And I said on the air, "I'm not quite sure what a rotary joint is."

So our favorite astronaut, Jeff Ashby, e-mailed me and called me out and said, "Yes, Kyra, never admit that you don't know anything."

I said, "I'm sorry. I didn't have Miles O'Brien."

O'BRIEN: That's the first and last rule of anchorage. Never admit you don't know anything.

PHILLIPS: Exactly.

O'BRIEN: For gosh sakes, Kyra. Jeez.

PHILLIPS: I do know something, though. Tell me about this mangled solar ring.

O'BRIEN: Yes. Well, talk about rotary joints in a minute.

PHILLIPS: OK.

O'BRIEN: We've got a little bit of news.

PHILLIPS: All right.

O'BRIEN: Take a look at this picture. And you don't have to be a rocket scientist to figure out that's not right. Look at that.

PHILLIPS: That's an expensive mistake or an expensive problem.

O'BRIEN: Yes. Everything up there is expensive. There's no question about that. Take a look at this. This is a mangled piece of solar array. And it -- here's the problem.

This solar array has been stowed, kind of locked in its suitcase for several months. And as they unfolded -- look at how -- take a look at how the sun is kind of beaming through there.

As they were unfurling it, they've had this ongoing problem with these arrays sticking together. We've talked about this several times, Kyra. And what happened this time, of course, they're very much watching for these kinds of problems, for these arrays to stick together and get hung up on their grommets.

And unfortunately, on this go round, it happened at the worst possible time. The sun was shining right through that spot. There was actually a little obstruction in the way of the TV picture. And they missed it. And so they kept deploying it when they probably shouldn't have, and it caused some damage to the solar array.

What's going to happen? This could change the whole face of the mission. The real problem, though, Kyra, is this solar array is at the far, far end of the space station, the very ramparts of the station. And it's, as best we can tell, almost inaccessible for a spacewalker.

Having said that, I am sure there are people on the ground in Houston right now, considering how close they could get to it. It just so happens the spacewalker who was out earlier today, Scott Perazynski, you know what his nickname is?

PHILLIPS: What's the nickname?

O'BRIEN: Too Tall. He's Too Tall Perazynski. He was going to fly to the Space Station Mir on the Soyuz capsule many years ago, and he couldn't fit in the Soyuz capsule. So he became known as Too Tall Perazynski. But that could actually help them in this case.

PHILLIPS: He can reach over all the solar panels.

O'BRIEN: He may be able to reach. Now, this is some pictures from the spacewalk, about seven hours earlier today.

And let's talk about your rotary joint, shall we?

PHILLIPS: Sounds good.

O'BRIEN: Have you ever been on one of those riverboat paddle wheel deals?

PHILLIPS: Sure. They wipe you out.

O'BRIEN: OK, there you go, there is your space version of that. As the space station goes across the planet, 90 minutes to an orbit, there is a device, a rotary joint, which allows those solar rays to constantly track the sun, right? That makes sense.

PHILLIPS: Sure.

O'BRIEN: You want to maximize the capability of those solar rays. Well, the one on the right-hand side, upon inspection a few days ago during a spacewalk, turns out has a ton of metal shavings in it. That's not good.

PHILLIPS: How do you get a ton of metal shavings?

O'BRIEN: Well, anytime you have something that rotates like that and has electricity, they have metal on metal contact.

PHILLIPS: OK?

O'BRIEN: You want it to be smooth but you need to have it conduct the electricity. You can see -- this is really hard to see -- but that's a piece of tape which has some of the debris in it. The point is, they have been having some voltage problems with that side. The spacewalker looks in, he sees all these shavings, that's not good. And now they're trying to figure out what to do.

Today when they were on left side, working on this solar ray, which now is a problem, they took a look at the rotary joint. It is fine. So they have got -- they're calling some audibles up there, on their spacewalks, as they lay ahead. They have a couple more spacewalks. And what they have planned to do and what they will be doing over the next couple of days, may be entirely different.

That is why you have the capability, the flexibility -- live pictures now -- I believe. Are those live pictures? There is the live picture of the rather mangled joint.

We have talked about this before, Kyra. We call them, like, blinds or something like that, pleated blinds. But they tend to stick when they're packed together. And it is only packed together for a short time but it obviously snapped.

PHILLIPS: Time for a new design?

O'BRIEN: Well, it is a little late for that, isn't it?

PHILLIPS: But it is never too late to talk to you on hammering it all out. All right. We'll keep following the live pictures. Miles, thanks a lot.

O'BRIEN: You not going to get any callouts this out this time.

(CROSS TALK)

Jeff we did good, right?

PHILLIPS: That's right. Ashby (ph), he set things straight.

LEMON: I feel like I'm watching car talk with Miles and Kyra. The rotary and has junk in there, and clean the oil --

PHILLIPS: As soon as he said paddleboat, then I got it.

(LAUGHTER)

LEMON: All right, let's move on now.

No longer a teen, no longer a prisoner. After almost three years behind bars, Genarlow Wilson now has to move on from the ordeal that put him in the headlines. What has been it like returning to his family? And what's next? Genarlow Wilson joins us live in our next hour, right here in the NEWSROOM, to talk about his freedom and his future. > PHILLIPS: The super bug killed her son, but mom is blaming the hospital. Now the City of New York is bracing for a major lawsuit. We'll have the details.

(COMMERCIAL BREAK)

LEMON: She says her son didn't have to die. Now this grief- stricken mom is putting New York City on notice. She's planning a big lawsuit over her child's death from the powerful staph infection known as MRSA. Let's go straight to Senior Correspondent Allan Chernoff, who joins us from New York with the very latest on this -- Allan.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Don, a very, very tragic story. Twelve-year-old Omar Rivera died about two weeks ago. And this morning his mother said she is going to be suing New York City and the city-owned hospital where he was treated, which is Kings County Hospital.

Aileen Rivera says that her son was treated at the emergency room and treated as if he was suffering from an allergic reaction. And he was just sent home with some Benadryl at a time when it appears he was indeed suffering from a fatal infection. The mother spoke of her pain this morning.

(BEGIN VIDEO CLIP)

AILEEN RIVERA, MOTHER OF MRSA VICTIM: I don't want nobody suffer like my son. I took my son to the hospital and they didn't do nothing. My son don't have no disease, my son don't have no infection. I want to respect my son memory, family, and me (ph).

(END VIDEO CLIP)

CHERNOFF: Her attorneys say this say clear case of malpractice and they are suing for $25 million. Kings County Hospital released this statement, "We will conduct a full review of the patience's treatment and examine if anything more could have been done to detect the latest infection."

And of course, there have been a growing number of reports of MRSA actually being spread in schools. It is not known for sure whether indeed little Omar actually did receive this in his school. But ironically his mother actually works for the Education Department here in New York at a high school in the Bronx. She says she is healthy.

Of course, this has been a bit controversial in Brooklyn, now, because the parents were not told of this actual infection until three days after it was determined that Omar did die of the MRSA super bug.

LEMON: CNN's Allan Chernoff. Allan, thank you so much for that report.

There is a lot of fear and questions surrounding MRSA. It is prompting a major Chicago area hospital, Loyola University Medical Center, to start testing all incoming patients for the staph infection. A recent government study says the super bug likely kills more Americans each year than AIDS. But most MRSA cases are relatively mild skin infections. The bug can be deadly if it infects the blood or vital organs.

You can avoid MRSA by taking simple precautions, washing your hands, wiping down your work spaces, and by not sharing personal items such as razors, towels or sports equipment.

PHILLIPS: The case was complicated and controversial enough, now comes the revelation that Blackwater security guards involved in deadly shootings in Baghdad may have been promised some sort of immunity by the State Department investigators.

The issue has raised red flags. But is it really just a red herring? Here to help us with it all, CNN's Senior Legal Analyst Jeffrey Toobin, in New York.

Jeffrey, you and I were talking about this. I basically wanted to lay out the reality check here, that the U.S. has no jurisdiction for crimes in Iraq. So when it comes down to it, could members of Blackwater even be charged with anything?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: At this point, based often what is publicly known, I would say the odds that there is a prosecution coming out of this case -- a successful prosecution -- is something like a million to one.

Either in the United States, or in Iraq, because just the basic fact is if this was a homicide, that's a crime that took place in Iraq. American courts, in almost all circumstances, don't have jurisdiction over that. And then --

PHILLIPS: So --

TOOBIN: Go ahead.

PHILLIPS: No, no, I'm sorry. Go ahead.

TOOBIN: But then Iraq has jurisdiction over it. But as you know better than I, since you were there and I wasn't, there is barely a functioning government in Iraq. So the idea that the Iraqi government could bring about prosecution seems unlikely at best.

PHILLIPS: And point well made. The parliament is having enough problems with just dealing with smaller- to medium-sized issues. You take on something like this, you wonder if they could handle something at that level.

Let me ask you, so why the headline today about talking about immunity? Does the government just want the public to think that they're doing something, or could possibly be do something, because we're talking about murder here? Because the reality is -- really, there is nothing they can do, if the law is as it stands where the U.S. has no jurisdiction for crimes in Iraq?

TOOBIN: Right. There is clearly an investigation going under way. And it does appear that some of the Blackwater employees have taken the Fifth. Have said, look, I don't want to talk because there is some risk and the Fifth Amendment is very broad. You can take the Fifth almost anytime. And they're saying, look, I'm not talking unless you give me immunity.

It does appear that the State Department has given some immunity. That's where things get a little murky. And if they did give immunity, the prosecution, which I think is unlikely in the best of circumstances, becomes practically impossible because then the information that was provided can't be used in a court case. So that is yet another barrier to a successful prosecution, but there are already plenty of them.

PHILLIPS: So, Jeffrey, could Congress step in and change the law so that the U.S. would have jurisdiction for crimes in Iraq? Is that even possible?

TOOBIN: There is some possibility. They could extend the jurisdiction of American criminal courts to events like this, when you're dealing with government contractors, allegedly under government supervision. That's what Congress is weighing doing now.

But what they couldn't do is apply the law retroactively to this case, because that's unconstitutional. So, yes, Congress could put contractors like Blackwater under the umbrella of American criminal law, more than they are now. But that certainly wouldn't affect this possible homicide of 17 people, that has caused so much controversy right now. It wouldn't apply to that case.

PHILLIPS: So final thought, final question, the government knowing what it knows, it is the U.S. government that brought Blackwater in. Obviously, Blackwater serves a purpose for them with regard to protecting dignitaries and VIPs, noting the ethical controversy of how they do. But the fact that they brought Blackwater in, holding them accountable is just more egg on the face for the U.S. government.

TOOBIN: See, that's what the real heart of the problem is here. Is that this is at least a possible murder of 17 Iraqis by American citizens. And it does appear right now that they are outside the law. That no one can prosecute them. That's disturbing to a lot of people. Now, we don't know whether in fact, it was a homicide. But it certainly is a possible homicide.

And if it was a homicide, someone should be accountable. But the way the system is set up now, they appear to be completely beyond the reach of the law. And that's what everybody is trying to struggle with right now.

PHILLIPS: Legal Analyst Jeffrey Toobin. Always a pleasure. Thank you.

TOOBIN: OK, Kyra. See you.

LEMON: There is a pirate drama on the high seas. U.S. military has given medical help to the crew of a North Korean cargo ship that had been attacked by pirates. The attack happened in the waters of Somalia, off Somalia, near Mogadishu.

The North Koreans apparently overpowered the pirates today and at least three crew members were seriously hurt. The U.S. destroyer in the area is assisting the Korean crew. At least two of the pirates are dead. Five others are being held a aboard the Korean cargo ship.

PHILLIPS: Your kids love to play with them and you hope they're OK, but new safety warnings could have you cleaning out your child's toy box once again.

(COMMERCIAL BREAK)

LEMON: Well, they're supposed to be playthings, but new worries about toxic lead in your kids' toys is causing real concern for consumer watchdog groups. Experts say it is more widespread than you think. We're awaiting House Speaker Nancy Pelosi's news conference on toy safety. You see it there, to the right of your screen.

As we wait on that, meantime, Medical Correspondent Elizabeth Cohen is here with the facts on the health risks.

How do we know if your child has been exposed to lead poisoning?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: I got to say the honest answer is you probably would not know.

LEMON: OK?

COHEN: The reason is, it is symptom-less. Your child may have been exposed to lead you wouldn't know. When things get really bad, if your child has been exposed to lots of lead, then you might see something. You might see kidney problems. Your child might have seizures. Your child might not grow properly.

But, basically, you don't know if your child has been exposed to lead. That's why it is important for parents to remember, if you're worried -- if you're worried that that, you know, little toy that your child has been sucking on every day for the past six months has lead in it, take your child to the pediatrician.

LEMON: OK, great.

COHEN: It is so simple. There are blood tests they can do. Pediatricians do them all the time. If you're worried, go to your pediatrician. And get a test done.

LEMON: OK, then how about this, then. And how about testing the toy? Because there's been some controversy about these testing kits. Do they work? Do we know if they work?

COHEN: Well, according to the Centers for Disease Control, the jury is still out on those.

LEMON: The home testing kits.

COHEN: The home testing kits, right. The one you can buy and go to your home and test the toys. It seems like it would be such a great idea. You just test the toy and you can decide whether to keep it, or toss it. But the CDC is very clear. It is not clear if they work very well. You can't trust them. Go to a certified professional.

The conclusion of this Consumer Reports article, they're testing, that they did -- they tested the testing kits, similar conclusions, some of them worked OK. Some of them didn't. You really need to rely on a certified lab.

LEMON: All right, so all this stuff coming out. You don't know if the CPSC is doing their thing.

And we see Nancy Pelosi walking up now. As soon as that gets started, we'll bring it to you. But all of this stuff. How do you know? What do you do to keep your kids safe? What precautions do you take?

COHEN: Well, one thing you can do is keep up on that list of toys that have been recalled. For example, you can go to the Consumer Products Safety Commission Web site. Make a list, check it twice, and get rid of the ones that aren't very good.

Also, make sure that your child washes their hands frequently. So, if there is any lead residue, you get rid of them. So, those are two things you can do.

And a third is, take a step back and remember, lead is really -- I mean, we hear a lot about the toys. It is really more of an issue for soil and for water. So, if you're worried about the lead in your toys, you really ought to be thinking about the lead in your soil or your water, and getting that checked out.

LEMON: All right. Thank you very much for that Elizabeth Cohen.

House Speaker Nancy Pelosi among the lawmakers pushing for tougher, new consumer legislation. She's holding a press conference now. Let's listen in.

(BEGIN LIVE FEED, IN PROGRESS)

REP. NANCY PELOSI (D), SPEAKER OF THE HOUSE: Some of these toys contain 200 times the legal limit of -- for lead, 200 times. At the Consumer Safety Protection Commission, there is only one (AUDIO GAP) charged with testing toys to make sure that they are safe for our children.

There are toys being sold in our stores now that are untested and are unsafe. Some of them are here. This top contains -- is very dangerous in terms of the amount of lead that it contains. This toy, look at it, with these little steel balls and the rest? This is suitable for a four-year-old child, according to the label. Not suitable for a child three years and under.

And then this -- this really breaks my heart with this because with five grandsons, I have Thomas the Train practically set up across the country. But some of the Thomas the Train toys, not all, but some, are dangerous to the health of our children. And I say some, not all, but some.

Why should it be up to the moms and dads to be able to figure that out? Is it too much to expect government to live up to its responsibility, to protect our children? We have a consumer protection agency to do that, Protection Commission to do that.

In a letter just last week, the chairwoman of the Consumer Products Safety Commission, Nancy Nord, said she was opposed to increasing the agency's funding for authority. One person assigned to testing toys to ensure that they are safe. And the chairman of the commission saying she's opposed to expanding the authority, or the funding.

That is not what American parents want to hear. They want to know that we are doing all we can to ensure that safe toys, safe food, and safe medicine, are available for our children. We stand here today because we do not believe that it is too much for America's parents to ask. America's children deserve all of that, and more.

My colleagues who are standing here, they have taken the lead on this. They and Mr. Dingell, the chairman of the Energy and Commerce Committee, have been in the lead. Congresswoman DeLauro, on the Appropriations Committee, already this year, we passed sweeping new drug safety legislation, conducted vigorous oversight with toys and food safety hearings, increased funding for the Consumer Safety Product Commission while toughening the fines that they can levy.

Now under the leadership of Chairman John Dingell and Bobby Rush, the chairman of the subcommittee, we (AUDIO GAP) legislation that will ban lead from children's toys, will require testing of children's products by independent third-party laboratories. That we will provide the Consumer Product Safety Commission with significantly greater resources to protect America's consumers.

I want to commend Congresswoman (AUDIO GAP) for her leadership on these issues that relate to toys, medicine, and food safety for our children. I want to commend Congressman, Chairman Bart Stupak for his chairmanship of the important committee and the oversight hearings he has had. I commend Congresswoman Rosa DeLauro for her leadership on the Appropriations Committee, where she has made food safety a mission and a crusade.

(AUDIO GAP) O'Neill (ph), the distinguished chairman of the subcommittee that has dealt with this issue of toy safety and commend him for his leadership. Want to yield now to Congressman Bobby Rush.

REP. BOBBY RUSH (D-IL), CHRM., CONSUMER PROTECTION SUBCMTE.: Thank you, Madame speaker. Let me just commend you ...

(END LIVE FEED, IN PROGRESS)

LEMON: All right, Congressman Bobby Rush speaking. House Speaker Nancy Pelosi just now speaking, saying that the Consumer Product Safety Commission, CPSC, needs way more resources and it should not be left up to parents to fend for themselves when it comes to what is safe and what is not for their children. A spokesperson for the Consumer Product Safety Commission is listening in to this press conference and she'll join us right here on CNN to tell us if what Nancy Pelosi, and what this committee is doing, will it actually work? Is there enough money? Julie Vallese joins us on the other side of the break. Back in a moment.

(COMMERCIAL BREAK)

LEMON: So you just heard Democrats in Congress announcing a crackdown on toy and consumer safety. The very day we learn of independent tests revealing lead in a number of toys that are still on store shelves. Julie Vallese joins us now from Bethesda, Maryland. She's with the Consumer Product Safety Commission.

And, Julie, I saw you during that press conference. You were shaking your head. You're not upset. You said that the speaker gave misinformation.

JULIE VALLESE, CHAIRWOMAN, CONSUMER PRODUCT SAFETY COMMISSION: Don, thank you very much for having me on today.

And, yes, there is a lot of misinformation, inaccurate information that is being talked about, and put out to the public and that's really --

LEMON: What is the misinformation that the Speaker put out there?

VALLESE: Well, the CPSC does have more than one toy tester. We have a team of people who test for toys. This is an agency that is very committed to the consumer. We're hearing the parents are being left to fend for themselves. I'm a parent. And there are a lot of parents here at the CPSC who come here every day and the work we do is to benefit consumers.

We're not leaving you high and dry. In fact, we're working extremely hard to make sure that the products that come into your home are safe.

LEMON: OK, Julie. Then, how do you explain -- or just over the past couple of months the number of toys and other products that have lead and other contaminants in them that are that are showing up, that are being taken off the shelves, being recalled, tested by the CPSC and got through?

VALLESE: What you are finding is that there is no pre-market testing. So nothing got through before it went to market. The number of recalls that are occurring because of lead paint is our commitment. We're sticking to the commitment that we made to consumers, earlier this year, that we are doing a top to bottom inventory of products that are in violation of safety standards.

LEMON: OK?

VALLESE: And you're seeing that. We are clearing the shelves and ridding the marketplace of products that are in violation of a federal law.

LEMON: You said something that is very important. You said there is no pre-market testing. If so, if that's true, then why not? And that part of the government, legislation, that should be carried out?

VALLESE: Well, frankly, Congress, when they built this CPSC, didn't give the agency authority for pre-market testing. But the agency is very active in discussions with industry to put in place an independent third party pre-market testing and certification program.

Congress isn't looking to give us that pre-market authority. And we're not seeking it. What we are doing is encouraging the industry to put in place that independent testing, to make sure that the products that are coming into consumers' homes are living up to the numerous safety standards that are currently on the books.

LEMON: OK, let's talk. Because I don't want to sit here and beat up on you, but according to a report, Campaign For America's Future, it is called Toxic Trade, here. I have the report here. It says your employees have been cut to -- from 420 in 2007 to a proposed 401 for next year.

It has been cut from about 700 when it started in the '70s. To 400 now, and that your budget has been cut from, what $174 million to now $34 million? Is that correct?

VALLESE: No, we have a budget right now of $63 million.

LEMON: OK, $63 million. But is it true that you're budget has been cut? That employees have been cut. Do you have enough resources in order to do the work to keep folks safe?

VALLESE: Well, the CPSC, there's no arguing that the resources have been cut over the years. And it's been cut over the past few decades under different administrations, both Democratic and Republican. But as it stands the CPSC is a good value for the American consumer. We are here enforcing the safety standards that are on the books.

LEMON: All right.

VALLESE: The CPSC would welcome more resources, but we want the right resources. We want to put the money and the extra people to good use in places that will benefit consumers.

LEMON: All right, Julie. Thank you very much. Unfortunately, we're out of time. Julie Vallese from the Consumer Product Safety Commission, we thank you so much for joining us.

Next hour of the CNN NEWSROOM starts right now.

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