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Fighting in Basra; Arraignment Today for Detroit's Mayor; Democratic Presidential Campaign Continues; Mortgage Fraud Investigation

Aired March 25, 2008 - 08:00   ET


KIRAN CHETRY, CNN ANCHOR: His and hers. Arraignment today for Detroit's mayor and his former chief-of-staff. Text messages about sex, the felony charges, the prosecutor. Live this morning.



UNIDENTIFIED MALE: There is one common theme, unmitigated greed.


CHETRY: Stealing millions from desperate people. One of the biggest mortgage frauds ever investigated on this AMERICAN MORNING.

Yes, certainly a lot going on. We're glad you're with us. 8:00 here on the East Coast. I'm Kiran Chetry.

JOHN ROBERTS, CNN ANCHOR: And good morning. I'm John Roberts.

We begin this hour with breaking news out of Iraq. Fighting is raging in Basra this morning. Twelve people are dead so far, 32 others wounded. Iraqi security forces are fighting members of the Mahdi Army, that's the militia belonging to powerful Shiite cleric Muqtada al-Sadr.

The fighting could unravel a ceasefire that's been largely responsible for a decrease in violence in Iraq. The Mehdi Army has been growing angry at Iraqi troops targeting its militia members. The end of the Mehdi Army ceasefire could be a serious blow to the planned withdrawal of more U.S. troops. Some of the troops that were brought in for the so-called surge are in the process of being withdrawn.

But just yesterday, the top U.S. commander in Iraq, General David Petraeus, asked President Bush not to bring any more American forces home after July. At that point, troops will be back to their pre- build-up level of about 130,000 -- Kiran?

CHETRY: Well, there are more calls for a frosty reception to the Olympic torch relay, just a day after the flame-lighting ceremony in Greece was interrupted by pro-Tibetans demonstrators. There are new calls to disrupt the rally today. Pro-independence Tibetans in Australia say they will protest when the torch arrives next month. And on April 9th when the torch comes to San Francisco, Mayor Gavin Newsom says all groups will be allowed to show their displeasure.

Meanwhile, protests in Tibet are becoming increasingly deadly according to the Dalai Lama's exile government. Around 140 people have died in fighting stemming from these protests. The Chinese government puts that number much lower at 22.

ROBERTS: A loyalist of late Benazir Bhutto has been sworn in as Pakistan's new prime minister. During this morning's ceremony, Yousaf Raza Gilani took the oath of office from President Pervez Musharraf. A man Gilani says put him in jail five years ago. Yesterday, Gilani thanked his supporters.


YOUSAF RAZA GILANI, PRIME MINISTER OF PAKISTAN (through translator): I want to thank the sensible people of Pakistan for voting according to their conscience and giving me this mandate to run the country.


ROBERTS: And during this morning's ceremony, cheers erupted with Gilani's supporters shouting "long live Bhutto" and "go, Musharraf, go." Prime Minister Gilani's first order of business, releasing a number of top judges detained after President Musharraf imposed emergency rule back in November. The judges were arrested after they questioned the legality of Musharraf's re-election last year.

Prime Minister Gilani's swearing in comes just as U.S. Deputy Secretary of State John Negroponte arrived in Pakistan for talks with lawmakers. Negroponte is joined by the Assistant Secretary of State for South Asia. A spokesman for the U.S. did not say who they'll be meeting with.

CHETRY: Well, Pennsylvania, the next big primary, is exactly four weeks away. But instead of focusing on what she would do as president, Senator Clinton is being forced to address what really happened when she was First Lady.

And in particular, we're talking about a trip to Bosnia back in 1996. Now, Clinton has claimed that her entourage came under sniper fire while landing in Tuzla. The pictures, though, tell a different story. They show her, as well as her daughter Chelsea, seemingly in no danger.

Here's how she described this trip last Monday.


SENATOR HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I remember landing under sniper fire. There was supposed to be some kind of a greeting ceremony at the airport, but instead, we just ran with our heads down to get into the vehicles to get to our base.

(END VIDEO CLIP) CHETRY: Clinton now calls that a misstatement. Yesterday, she did try to clarify it for the "Philadelphia Daily News." She said, quote, "Now let me tell you what I can remember. What I was told was that we had to land a certain way and move quickly because of the threat of sniper fire. So I misspoke. I didn't say that in my book or other times, but if I said something that made it seem as though there was actual fire, that's not what I was told."

Now, Senator Barack Obama's campaign called it, quote, "a growing list of instances in which Senator Clinton has exaggerated her role in foreign and domestic policy making."

Meanwhile, Senator Clinton is trying to keep her campaign focused on the economy. In fact, she's holding a town hall meeting this afternoon in Pennsylvania.

Barack Obama, meanwhile, is enjoying a little bit of time away from the campaign throughout the day. His relaxation, though, could be cut short as soon as tonight. Right now, he's kicking back in the Virgin Islands. In fact, this is exclusive video that CNN obtained of Barack Obama relaxing there in the Island of St. Thomas. Tomorrow, though, it's back to work. He'll be campaigning in North Carolina.

Meantime, his former pastor, the Reverend Jeremiah Wright is expected to speak at a church revival. That's tonight in Tampa, Florida. It will be Reverend Wright's first appearance since tapes of his sermons emerged that caused the crisis in the Obama campaign. And as you pointed out earlier, no video cameras. Right? They are making sure that this one is not going to be taped.

ROBERTS: Not only video cameras but they're not allowing cell phones in that have cameras. No audio recording devices. No recording of any kind. Interesting rule that they play down there.

Senator John McCain is going to talk about the economy to business leaders in Los Angeles today. In particular, he'll be speaking about the housing crisis. He was talking Iraq at a stop in Chula Vista, California, where he continued to hammer home his belief that Iraq has become the central battleground in the fight against al Qaeda.


SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We urge Palestinians, Syria, Jordan, Lebanon and Saudi Arabia to help and support of their Mujahedin brothers in Iraq, which is the greatest opportunity and the biggest task. So, General Petraeus and I and Osama Bin Laden are in agreement. It is hard to understand why Senator Clinton and Senator Obama do not understand that. I don't know if its naivety or what the problem is, but it's obvious that they are dead wrong.


ROBERTS: McCain says he thinks that it would be a mistake to pull U.S. troops out of Iraq and redeploy them to Afghanistan as the Democratic candidates have promised to do.

Meanwhile, Puerto Rico's 55 delegates are suddenly on the candidates' radar screen. The Democratic Party is letting Puerto Rico move its primary up to June 1st, instead of holding a caucus on June 7th. 55 delegates would make it the fourth richest contest still left in this primary campaign. Who knew?

CHETRY: Puerto Rico could be the game changer.

ROBERTS: Amazing.

CHETRY: You'll never know.

ROBERTS: I think that we should find a diner in San Juan and go down there and do the program.

CHETRY: Maybe the whole week just to, you know, cover our bases.

ROBERTS: That would be a good idea there. There's a lot of constituents to talk to there.

CHETRY: Exactly. Well, Veronica De La Cruz is here now with some other stories new this morning.

Good to see you, Veronica.

VERONICA DE LA CRUZ, CNN INTERNET CORRESPONDENT: Good to see both of you. And good morning to you.

We begin now with a CNN exclusive. A nationwide CNN investigation has found that Federal Air Marshals are on fewer than one percent of all U.S. flights. In real numbers, it means an air marshal is protecting passengers on only 280 of the nation's 28,000 flights every day. Several pilots told us they haven't seen an air marshal in months.

The Federal Aviation Administration wouldn't comment other than to say the number is, quote, "a myth." CNN's Drew Griffin will have a closer look at this investigation. That's tonight on "AC 360."

Well, families of the Virginia Tech Massacre are being offered $100,000 not to bring lawsuits against the university or the state. A family member who has seen the settlement offer says families and surviving victims would also receive medical help and counselling. It's been almost a year since Seung-Hui Cho opened fire killing 32 people and then himself.

The proposed merger of satellite radio rivals Sirius and XM is now in the hands of the Federal Communications Commission. The Justice Department approved the plan, saying it would not lessen competition or harm customers. Some broadcasters and consumer groups had opposed the merger, fearing it might lead to higher prices.

And Facebook says it had fixed its latest security lapse that made it possible to go through pages and photos even though they were set to private. A Facebook spokesman says they fixed the bug within an hour of being notified. Just last week, Facebook unveiled new security measures to help the 67 million members restrict access to their personal profiles.

All right, pay attention. Do you find yourself tense or angry when you can't get online or maybe are unable to text message a friend? Well, there might be a medical reason.

An article in the American Journal of Psychiatry argues an addiction to text messaging and e-mailing is another form of mental illness. According to the report, some of the symptoms of an Internet or text messaging addiction include excessive use, feelings of withdrawal and a need for better equipment.

Ali, Ali was going, check, check and check.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: I'm not checking it off. I'm definitely guilty of all of the above.

CHETRY: Do you really need another reason?

ROBERTS: Just wondering what did I do with my BlackBerry.

CHETRY: I know. I just want to remind with. Did we need another reason to all feel crazy though seriously and feel like something's wrong with us? Yes. If you put a computer around us, we will want to get on it. That's primal.

DE LA CRUZ: There you go. What was it again? Excessive use check?

VELSHI: Feeling of withdrawal. I have that one. And need for new equipment, always. Always need that.

DE LA CRUZ: Time for an upgrade.

ROBERTS: Intervention necessary over here.

VELSHI: Definitely.

ROBERTS: Hillary Clinton says Congress needs to act now to help fix the nation's home mortgage crisis. She put a plan out there yesterday in a major address on the economy. But what did her plan say and how is it potentially going to affect people? Ali Velshi, here to explain.

VELSHI: It was like eating a chocolate bar with nuts and raisins. And it was very, very chewy. But Hillary Clinton has really been out ahead of everybody else in terms of her discussions about mortgages and what could be done. And once again, yesterday she put forward a very detailed plan that is not about what she would do as president. It is about what she wants the president to do right now. And it's a four-point plan.

Let me tell you. The first one is she understands that this market for secondary mortgages where, you know, you lend people money, then you sell that mortgage over. That market has disappeared. She wants the government, the Federal Housing Authority to guarantee to buy unwanted mortgages which will continue to make money available to people who need to borrow money.

Number two, she wants an emergency working group of financial experts and the name she drop where Alan Greenspan, Paul Volcker, who was the Fed chairman before Alan Greenspan and Bob Ruben who was the Treasury secretary under Bill Clinton to work faster than Congress who work -- to figure out how we can fix this problem. Like three weeks and come back with a report.

Number three, she wants legal clarity for mortgage lenders. Now, the example here is let's say you took your loan with Countrywide. Countrywide sold it to someone else. You call up because you're in trouble. You want to get it refinanced. Countrywide doesn't own your loan. So maybe they don't want -- whoever actually owns your loan won't go for those deals and will sue them. So she wants legal clarity for what you call the mortgage services.

And number four, a $30 billion package for states and local communities to buy up repossessed properties if there's a concentration of foreclosures to higher security. If there's a lot of vacancies because a lot of these foreclosure vacancies have increased crime rates and things like that. She is asking President Bush to act on this right now. And I think that's what's makes it interesting.

Now, at 1:00 today, John McCain is going to give an economic speech. John McCain has spent a lot of time explaining to Americans about how he's not all that into the economy. It's probably time for that conversation to stop since the economy is number one.

We'll be listening very closely to that conversation at 1:00 Eastern. These are all worthy of consideration, because they are not about what happens when these people get elected in November and take off in January. It's about what can be done right now.

ROBERTS: Right. Although, what's the likelihood that President Bush is going to adopt the Clinton plan.

VELSHI: I think there is going to be likely pressure for President Bush administration to at least consider and say why he wouldn't do this because it is a real suggestion. It may not be right, but it is a real suggestion about what can be done now.

ROBERTS: All right. Well, we'll see what happens. Ali, thanks. And don't forget later on today, join Ali, Gerri Willis and the rest of the CNN money team. They talk about "ISSUE #1," the economy, noon Eastern, all this week here on CNN.

CHETRY: Just days after admitting to extramarital affairs, New York's new governor, David Paterson, is making headlines yet again.


UNIDENTIFIED REPORTER: You have used cocaine, governor?

GOV. DAVID PATERSON (R), NEW YORK: I would say I was about 22 or 23. I tried it a couple of times, yes.


CHETRY: Paterson coming clean about experimenting with drugs when he was younger. His explanation coming up.

Also, the mayor of Detroit facing a much more severe controversy this morning. He's accused of lying under oath about an alleged affair. The prosecutor says the case goes far beyond the mayor's private life. The lead prosecutor in the case is going to be joining us on AMERICAN MORNING.


ROBERTS: It's 15 minutes after the hour. More revelations this morning from New York's new governor David Paterson. Last week, just after swearing in as the -- being sworn in as governor, Paterson and his wife admitted to having extramarital affairs several years ago.

Now last night, Paterson was being interviewed by a local New York television station when he was asked about past drug use.






UNIDENTIFIED REPORTER: You have used cocaine, governor?

PATERSON: I would say I was about 22 or 23. I tried it a couple of times, yes.

UNIDENTIFIED REPORTER: When is the last time that -- is that the only time you've tried cocaine, governor?

PATERSON: Yes, around that time. A couple of times and marijuana probably when I was about 20. I don't think I touched marijuana since the latest late '70s.


ROBERTS: Paterson says that more Americans have tried a lot more and gone on to lead responsible lives -- Kiran?

CHETRY: Detroit Mayor Kwame Kilpatrick will be arraigned today on charges of misconduct in office, obstruction of justice and perjury. Either charges that could not only mean the end of his political career, but a long-term prison time as well.

He is accused of lying under oath about an affair. The prosecutor, though, says the case goes beyond his personal life. Joining me now from Detroit, the lead prosecutor who brought the charges, Kym Worthy.

Kym, thanks for being with us. You know, when you look at it, its stunning stuff. You've got 12 counts against the mayor and his former chief aide five to 15-year felony charges. How did this series of text messages that sort of have been at the heart of the case lead to these serious charges?

KYM WORTHY, WAYNE COUNTY PROSECUTOR: Well, actually, it's eight counts against the mayor and seven counts against Miss Beatty. And basically, we found out about this through a story that appeared in our local newspaper for "The Detroit Free Press." And then, we began an investigation.

And the text messages are a part -- impartial of our case, but it's not the entirety of our case. We have much more evidence than that. And again, it's not just about the sexual affair. It's about lying under oath. It's about misleading the public. It's about betraying the public trust. It's about using $8.4 million of the taxpayer's money to cover up that information from coming out. And it's also about firing three police officers that were doing their jobs for investigating.

CHETRY: So the allegation is that he is -- is that all of this stemmed from this investigation, these whistleblowers. These police officers that were perhaps going to expose some corruption within the mayor's office and the attempts to silence them?

WORTHY: That's right. And the links that he went through to cover this all up.

CHETRY: Let's hear what he says. He is still standing strong, claiming he's going to be vindicated and stay in office. Let's hear what the mayor said.


MAYOR KWAME KILPATRICK, DETROIT: I am deeply disappointed in the prosecutor's decision. I can't say that I am surprised, however. This has been a very flawed process from the very beginning.


CHETRY: Your response to that, Kym?

WORTHY: Well, I am not surprised that he would say that, but we are very firm in our charges. We have been very, very goal oriented and we know that we can prove these charges beyond a reasonable doubt. We've been very serious about this. We have not let outside influences in any way affect us. And so we know that we can go forth. We know we'll have to withstand a lot of legal challenges. We expect that. But I have very talented lawyers that I've assigned to prosecute this case and I have faith in them.

CHETRY: Have you been facing a lot of criticism and pressure about this case? I mean, this is somebody who is a rising star within the Democratic Party. Somebody who has, you know, deep roots in politics and somebody who was quite popular before all of this happened.

WORTHY: Quite frankly, we haven't. We haven't been facing a lot of criticism. In fact, just the opposite. So -- and even if we had been facing that criticism, we just simply can't let that affect us. The moment the elected prosecutor, and that would be me, lets that happen and lets the wind determine what we do, you become ineffective. So we have to go forward. We can't pay attention to any outside influences. And quite frankly, I don't worry about that.

CHETRY: We're getting a little slice of what perhaps the defense may be. Kilpatrick's attorney questioning whether or not, the text messages were obtained legally. His quote is that the initial production of those text messages in effect -- in fact were illegal under the law. Is there any concern that perhaps this linchpin in the case may not be admitted in court?

WORTHY: There's no concern at all. I can't speak to how anybody else obtained those messages. I know how we obtained them. And we obtained them lawfully. So I'm not worried about that at all.

CHETRY: Do you think it's time for the mayor to step down?

WORTHY: I'm not going to comment on that. We're going to speak through our work in the trial. What he does or doesn't do is not going to affect our work in this case at all.

CHETRY: Kym Worth, Wayne County prosecutor. Thanks for being with us this morning.

WORTHY: Thank you.

ROBERTS: Twenty minutes now after the hour. Operation homewrecker. The Feds bust a ring that was preying on homeowners in dire straits. Our Gerri Willis shows us how it happened and who would affects and how you could avoid it. Coming up next.

And, what do you take in your coffee? If you like to stir in a little cream or even powdered creamer, you're adding more than you think to your daily diet. We're paging our Dr. Gupta, ahead on AMERICAN MORNING.


ROBERTS: Twenty-three minutes after the hour. A major mortgage scam has been busted by Federal Law Enforcement Agency. The Feds say they brought down the scheme which victimized 115 homeowners, many of whom lost their houses in a scam.

Joining us now with the details of what officials are calling "Operation Homewrecker" is CNN's Personal Finance Editor Gerri Willis.

Gerri, tell us how this scam worked.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey, good morning, John. Good to see you. Well, 19 people were indicted yesterday on charges of mortgage fraud by the U.S. Attorney in Sacramento, California. And here's what they were doing. They were approaching people at the brink of foreclosure, people who are absolutely at the last steps of losing their home because they couldn't pay their mortgage and offering to save them, to help them.

Now, what they offered is that if these folks agreed to have somebody else sign on to their title, then they would then be saved. But what happened was something far different. Someone else signed on to their title. They then lost control of their house.

They were promised that they would get to pay rent below their mortgage limit. And it just didn't happen that way. They typically lost control of the house. The scammers took over the home, extracted the equity. Sometimes they simply walked away. Sometimes they resold it.

So, this very sad situation for these folks. One of the interesting things in this, of course, is that the victims were widespread. They were all across the country. I think we have a full screen here, a map of where these crimes took place. It's really all over the country. California, Texas, the East Coast. You can see the picture here.

Now what's interesting about this is that the scam artists were able to really focus in on areas where foreclosures were ramping up. There were tons of them. In fact, if you take a look at RealtyTrac's list of top foreclosure cities, they include three of the cities that were involved in this scam. Stockton, San Bernardino and Sacramento, California, as you can see, John.

ROBERTS: Seems to be, Gerri, no shortage of nefarious characters are willing to take advantage of people who are in dire straits. We saw that this particular scam "Operation Homewrecker" was pretty widespread. But just how common is mortgage fraud?

WILLIS: I've got to tell you, very common. In fact, the FBI has described it as the fastest growing white collar crime. Let's take a look at some of the numbers in fact. In 2002, there were some 436 investigations into mortgage fraud. By last year, that number had more than doubled to over 1,000. It's a big problem.

FBI agent in Sacramento, Drew Parenii, saying that Mortgage fraud, they've elevated to the FBI's highest financial crime priority. And they are attempting to address the numerous reports of fraud in the real estate industry. It's a problem that's really getting beyond law enforcement right now because it's so common.

And I've got to tell you, John. One of the interesting things I found in reporting on this mortgage fraud issue is that one of the problems is, even after these folks go to jail, they still perpetrate the crime from jail. So you can't even stop them once they are prosecuted sometimes. Very frustrating for law enforcement.

ROBERTS: Yes, I mean, people can set up these scams pretty easily.

Hey, are you going to be doing "Issue #1" today from Chicago?

WILLIS: That's right. We'll do "Issue #1" at noon. Join us at noon Eastern. We'll be talking about all the things that matter to your wallet, from your mortgage to your debt, your job. We'll cover it all. Noon, Eastern, Join us. And we'll be taking some e-mail questions, too.

ROBERTS: All right. Looking forward to that. Gerri Willis for us this morning in Chicago. Gerri, thanks -- Kiran?

CHETRY: Well, we've been talking about this all morning. The guys' version of the pill. The birth control pill could soon be available in the United States. There's a new study showing that it is safe and it's a reversible. It's a hormone male contraceptive that's on the horizon.

Researchers describe it as a hormonal cocktail that includes testosterone and progestin. And it's about 98 percent effective in preventing pregnancy. Effective as the pill is for women.

So, we want to hear from you. Would you take it? This morning's "Quick Vote" question about whether or not you think men would take the pill. Last time we check, it was 50-50 split. Let's see what it says now. 47 percent saying yes, 53 percent saying no.

I don't know. We've got a bunch of guys in here who are all saying, sign me up, Doc. One of the side effects, by the way, is an increase in lean muscle, perhaps 4 to 10 pounds. So, I don't -- I'm just saying, I don't know if that's, you know, if that's one of the fringe benefits or a side effect for some.

Anyway, you can log on, to cast your vote. Clearly, I don't have a horse in this race since we're talking about male birth control. Anyway, we're going to tell you the numbers throughout the morning.

Sanjay is here once again, though, to talk about something else. If you're making coffee right now, you may want to listen to this.

Coffee creamer could have a lot more calories and fat than you think. It's not just your coffee that may be loaded with fat. Well, coffee is not loaded with fat. Coffee with cream. But a lot of these creamers are out there right now. These Coffeemates, not to pick on one brand in particular. But they have all these new ones out now. You know, the liquid form and there are hidden calories.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, it's an interesting exercise when it comes to reading labels, because you take a look at something like this and it says very clearly on the front, zero grams of Trans fat. Now, you may not be able to see that, but that's what it says here on the label.

CHETRY: Right. GUPTA: What's interesting is if you look at sort of a history, that the FDA says, look if something has below .5 grams of Trans fat per serving, you can call it zero grams. It's essentially a negligible amount. That's in one teaspoon.

Now, if you put a couple of teaspoons in each cup of coffee, pretty soon, if you drink three cups of coffee, for example, throughout the day, pretty soon you've gotten to three grams of Trans fat, which is more than the recommended amount that you should get in a given day.

And that's just from your coffee drinking. It's sort of an interesting exercise. You're allowed, you know, two grams of Trans fats, 20 grams of saturated fat. Lots of different foods out there. Even if they say they have limited or no Trans fats, you can quickly get over the limit, just even with coffee creamer.

CHETRY: Yes, you're right and it can add up. And those are the hidden ones. There's a lot of sugar in those as well, the new flavored ones that are out there as well.

GUPTA: Sometimes they compensate. You know, so they say, you have less of one ingredient. They put more in the others. So, you really got to keep tabs on those labels.

CHETRY: What about other breakfast foods or other foods in general that may have hidden amounts?

GUPTA: So, breakfast obviously the most important meal of the day. But you can get to your fat content pretty quickly. For example, a cinnamon muffin, for example, (INAUDIBLE) 30 gram of fat which is about half of what you eat. Pancakes, 29 grams of fat. Again, you know, about 65 or so grams of fat total in a day is all you should eat. Sausage links, 32 grams of fat.

Here's something interesting. Four sausage links has about three times as the amount of fat as four strips of bacon. So, if you are trying to pick between sausage and bacon, go for the bacon, as far as fat goes. Cheese omelette, 33 grams of fat there as well. That's a lot of fat. Again, you're getting almost all you need, almost you should have in just breakfast alone.

CHETRY: You know, granola is not so innocent either. It's more fattening than you think. It has a lot more sugar than you think. And you think of that as a health food.

GUPTA: You pitch those as health foods, certainly, but they do have a lot of fat in them. And you know, if you had just extra 100 calories or so a day, you know, that's easy to do. Things that you might not expect. You'll gain about ten pounds a year. If you do nothing differently this year but just add a few more coffee creamers or a few more things at breakfast, you're going to gain ten pounds. That's why reading these labels are so important.

CHETRY: Switch to black coffee, I guess. I always wondered about the sprays, oils as well. They also say, you know, zero grams of fat or a small amount of fat. That's if you are doing one tiny spray.

GUPTA: One little something, one spray. Go to the Web sites often. They'll tell you exactly. So, if it says 0.5 grams then you know six sprays and you've got more transfats than you actually should have.

CHETRY: Sanjay, good to see you. As always, thanks.

ROBERTS: Apologies there for the audio problems. The bumping noise you hear, I think it was the arteries in Sanjay's microphone clogging up and rolling over and dying there. Apologies.

Fragile cease-fire is in trouble in Iraq today, threatening a new wave of violence. We'll have a live report for you coming up from the Pentagon.

And Hillary Clinton's First Lady past coming back to haunt her on the campaign trail. Why this trip to Bosnia that took place 12 years ago is forcing her to back pedal this morning.


CHETRY: Welcome back to AMERICAN MORNING. We have some breaking news right now. This morning, the U.S. Navy says an American cargo ship working for the navy fired on Egyptian boats in the Suez Canal. The ship fired warning shots at several small boats after instructions to turn away were ignored. Egyptian authorities say one person was killed and two injured. The boat operators say they just wanted to sell cigarettes and other products to the American ship.

ROBERTS: And more breaking news out of Iraq this morning. Fierce battles breaking out today between Iraqi troops and members of the Mehdi militia. The militia belonging to the powerful Shiite cleric Muqtada Al Sadr.

CNN's Barbara Starr is monitoring developments from the Pentagon for us this morning. Barbara, could this offensive threaten the security gains that have been made in Iraq over the past year?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, John, that is the question this morning. Because it was just yesterday that General David Petraeus, the top commander, gave his recommendations to President Bush and by all accounts, General Petraeus is asking for a pause in further troop reductions so he can really assess the security situation.

This comes as the fighting has broken out again in Basra, Iraqi security forces going after fighters of Muqtada Al Sadr's Mehdi militia in that southern city. The fighting is said to be very heavy and being overseen personally by Prime Minister Nuri Al Maliki.

At the same time as this fighting is going on in Basra, fighting also has broken out in Sadr City up in Baghdad. Again, another stronghold of the Mehdi militia. And Mehdi fighters are said now to be on the streets of Yusufiyah and Mahmudiya, cities, crucial cities south of Baghdad. So why is all of this happening? Well, there has been a cease-fire with Muqtada Al Sadr but his fighters have become very upset in recent weeks because of these Iraqi and coalition operations against them.

The question now, of course, is whether this cease-fire is going to be so strained it may break and that may force U.S. troops to stay longer in Iraq to deal with the problem -- John.

ROBERTS: Barbara, U.S. forces have been encouraging the Iraqis to take control of security there in ever-increasing measure. But is there concern there at the Pentagon that this whole thing could come unglued because of Iraqi military operations?

STARR: Well, that's the question again. You are quite right because how far the calculation is, how far do you push the Mehdi army? The cease-fire with them is one of the crucial things U.S. forces say that has contributed to the success of the surge. Having them under the wing of this cease-fire for the last several months has been absolutely vital.

If now these military operations lead to renewed fighting and so much pressure against Muqtada Al Sadr and his fighters and the rogue elements of the Mehdi army, will it break this very fragile success that is a crucial concern at this hour. John.

ROBERTS: Barbara Starr for us at the Pentagon this morning. Barbara, thanks.

To politics now and with just four weeks into the big Pennsylvania primary, Senator Hillary Clinton is backtracking on comments about a visit to Bosnia that she made as First Lady. Clinton claimed that she came under sniper fire while landing in Tusla in 1996. But the pictures show Clinton and daughter Chelsea seemingly in no danger and not in a rush to leave the tarmac.

Here's how Senator Clinton described the trip last Monday.


CLINTON: I remember landing under sniper fire. There was supposed to be some kind of a greeting ceremony at the airport but instead we just ran with our heads down to get into the vehicles to get to our base.


ROBERTS: Clinton now calls that a "misstatement." Senator Barack Obama says it's another example of her exaggerating her role in foreign policy. Clinton is looking to move ahead and is going to host a town hall meeting this afternoon in Pennsylvania this afternoon. Topic, the economy. Kiran.

CHETRY: Well, Facebook in the hot seat yet again. The popular social networking site experiences another security lapse exposing some members to prying eyes.

Ali Velshi joins us now to explain. You know, I understand the Facebook phenomenon, but the notion that any pictures you upload onto the Internet are private seems like a stretch to me.

VELSHI: That's right. That's totally right. This one is for the kids out there. I like doing Facebook stories because I get lots of Facebook friends every time I do them. But here's the story.

For those of you who don't know, for those of you who know, you know, Facebook, my producer described it to me, it think this is a good description, it's like an ongoing yearbook. It sort of tells you what you are doing, but you can update it every day. It tells you where you are and you can put pictures on it.

Guess what, it's got 67 million subscribers. And last week, they upgraded some privacy controls but some guy in British Columbia figured out even if you set your privacy controls so that nobody can see the pictures you just uploaded from that crazy party you were at on the weekend, this guy in B.C. actually could.

Facebook said that it fixed the problem within the hour. I don't know what the expectation is. Apparently when you load a picture up to Facebook you give Facebook the license to show that picture. You know, sort of give up all rights to the pictures but you got to figure if are putting a www anywhere near pictures of you that you don't want people seeing, you know, there's some chance they might see it.

This is particularly important for young people looking for jobs because it is -- a lot of employers now go to Facebook to sort of see what they are all about. So you know, as much as these things shouldn't be exposed to all sorts of people, the expectation of privacy on places like Facebook should be managed. You should figure that are putting pictures up or something you don't want people to see, don't put them up on the Internet.

ROBERTS: Don't put them up on the Internet. Stay away from the Internet.

VELSHI: That's exactly right.

CHETRY: Thanks, Ali.

VELSHI: All right.

ROBERTS: People just don't get that.

VELSHI: No. It's a generational thing. A lot of people just think that that's where you put, it's like a photo album, where you put stuff.

CHETRY: Exactly.

ROBERTS: It's like putting them on the sidewalk.

VELSHI: It kind of is. Hey, by the way, if you guys are around at noon Eastern, join Gerri Willis and me and the CNN money team for "ISSUE #1," we're talking about your money.

ROBERTS: Looking forward to it. CHETRY: Good show. We'll be watching. Thanks, Ali.

ROBERTS: Thanks, Ali.

VELSHI: All right.

ROBERTS: Key endorsements for both Democratic presidential candidates from different African-American leaders. Why the vote breakdown may not be along racial lines in Pennsylvania. That's coming up.


ROBERTS: It's coming up to 43 minutes after the hour. Race is pushing other issues to the back burner in the intense battle for the Democratic nomination. But in Pennsylvania, some African-American voters are giving Senator Hillary Clinton a second look.

CNN's Jason Carroll talked with voters in the next key battleground, the keystone state, a month from today. He's here this morning. What did you find out?

JASON CARROLL, CNN CORRESPONDENT: Yes. Well, Clinton is still doing extremely well in Pennsylvania and she has picked up the key endorsement of one of the state's leading African-Americans.


CARROLL (voice-over): Senator Barack Obama has a tough road ahead in Pennsylvania. Senator Hillary Clinton leads among working and middle class white, as well as women. Obama still leads among African-Americans, but Clinton has the backing of the state's popular governor and Philadelphia's mayor.

MAYOR MICHAEL NUTTER (D), PHILADELPHIA: I think she is the kind of leader that we need at this point in time.

CARROLL: Mayor Michael Nutter could help Clinton among black voters as well as higher income whites. Both groups supported him during last year's mayoral race.

NUTTER: I'm not claiming to have some, you know, magic wand to drive people to a particular candidate. But those who understand where I'm coming from, respect my opinion.

CARROLL: Clinton may not need the African-American vote to win the state, but even a strong showing could be viewed as a victory of sorts, given the overwhelming black support that Obama has received in past primaries.

UNIDENTIFIED MALE: I am talking about Senator Barack Obama. That's what I'm talking about.

CARROLL: An organized group of black ministers are backing Obama. Reverend Ellis Washington say he has heard arguments for both candidates in and out of church. REV. ELLIS WASHINGTON, ST. MATTHEW'S A.M.E.: We understand the mayor. We understand the governor. But, you know, we think that we have to be the prophets of this time and go a different way.

CARROLL: But these church volunteers have made up their own minds.

SHIRLEY THOMAS, VOTER: There's a chance for a female to be in the office and she has more experience. I mean, I'm not opposed to Obama but there, that's my choice.

CARROLL: Strong for Obama?

TAYLOR RICHARDSON, VOTER: Strong for Obama but Hillary brings a lot of experience and intelligence with her program as well.

CARROLL: That seems to reflect a common theme found among many black Pennsylvania voters.

DR. G. TERRY MADONNA, FRANKLIN AND MARSHALL COLLEGE: I don't think there's a distress or a dislike for Senator Clinton. And in the polls that we've done, we do find a surprising number of people, African-Americans say, well, if it's not Senator Obama, you know, they're comfortable with Senator Clinton.


CARROLL: And recent polling shows that Clinton leads in virtually every Democratic group -- demographic group except for two. And that's voters in Philadelphia and non-whites statewide.

ROBERTS: So, how do the candidates stack up on the issues and their relationship to voters?

CARROLL: Well, that's interesting. Clinton seems to do better with voters who, in terms of the economy, that is their number one issue or health care. Obama seems to do slightly better with voters in Pennsylvania, where when asked, Iraq is the number one issue that they care about.

ROBERTS: Increasingly, though it looks like the economy is going to be the issue upon which people vote.

CARROLL: Absolutely.

ROBERTS: So, we'll see how that works out. Jason, thanks very much. Kiran.

CHETRY: All right. Right now, we're going to head over to Heidi Collins for a look at what NEWSROOM is working on for the top of the hour.

Hi, Heidi.

HEIDI COLLINS, CNN ANCHOR: Hi, there, Kiran. Issue number one on the NEWSROOM rundown. Again, the economy is today's focus for John McCain and Hillary Clinton on the campaign trail. But where is Barack Obama? We'll tell you about that.

Detroit's embattled mayor in court today. Eight felony counts relating to a text and sex scandal. We talked to the reporter who broke the story.

And we're watching serious floods in east central Arkansas. The water could hit historic highs today. We'll watch that with Rob Marciano.

And why is it such an unusual day for the U.S. Supreme Court? Find out in the NEWSROOM, top of the hour, right here on CNN -- Kiran.

CHETRY: Heidi, thanks. Still ahead, she's barely two months old but already one baby girl is proving to be quite a fighter.


UNIDENTIFIED FEMALE: I'm probably most afraid of losing her. But you try not to think about that.


CHETRY: CNN got exclusive access as a newborn baby girl had open heart surgery, just two days old. Dr. Sanjay Gupta joins us with more on her fight next on AMERICAN MORNING.


ROBERTS: Speed bumps? More like road blocks? Residents of some Tampa area apartment complexes are complaining about monster speed bumps. Drivers say they are having trouble getting over the square speed bumps which are scrapping the bottom of some cars.

Now, these aren't speed tables. These are just like a square speed bump, high up over the top and down. The apartment manager said the speed bumps were put in to protect children from drivers who went too fast over the previous smaller round bumps. He says they were speeding right over them. So, now they have to slow down but complaining the cost of their cars is just a little too bad there.

Rob Marciano at the CNN Weather Center tracking extreme weather. That's a speed bump if ever I saw one, Rob.

ROB MARCIANO, AMS METEOROLOGIST: Yes, it's awful. The kids can't enjoy it by taking their bikes over it. You can catch and bend the rims out.

ROBERTS: And unless they have those mountain bikes with duel suspension. Then, they'd be all right.

MARCIANO: Exactly. Mountain bikes in the Great Lakes today, John, would cut you through some snow. Some (ph), they're looking good, three to six inches across parts of Michigan especially, cooking through Wisconsin right now. And this will head to upstate New York. So, pretty much north of the line from Grand Rapids to Detroit is where the rain-snow line is. Southwest toward Chicago, not looking all that bad as far as the snow goes.

But we still have water to deal with. St. Louis down through Paducah, rivers have crested here. But the massive water is making its way downstream. We're still looking at places just east of Little Rock. They are in record flood stages right now. And mainly the White River is just about to crest this afternoon. And that will filter down into the Mississippi and that will try to get down to the Gulf of Mexico.

So we have flood warnings that extend all the way to Baton Rouge. Those things begin to fan out once you get south of Baton Rouge and the swamps kind of absorbed it a little bit better. But Baton Rouge is not going to crest until Monday. So we still have almost a week for this flood situation. It started last week for that water to eventually get down into the Gulf of Mexico. So, people are kind of pulling their hair out right now when all of this will be over with -- John.

ROBERTS: Rob, thanks very much. Kiran.

CHETRY: Well, she's less than two months old but already she has pulled through her first heart surgery. What doctors are learning about baby Annabelle will also go a long way to help other kids as well. CNN's chief medical correspondent Dr. Sanjay Gupta has been following her story.

Amazing when you think about a baby that small undergoing open- heart surgery. What is Annabelle's story?

GUPTA: Well, it's -- this is first of all how hospitals and doctors learn, by stories like Annabelle. She has something known as hypoplastic left heart syndrome. And basically, it just means the left side the heart didn't form as well as the right side of the heart. It's a relatively rare thing and up until recently it meant a certain death sentence.

We followed her along from in utero to her first heart operation. For her and her family, it's been quite a journey.


GUPTA (voice-over): At barely two months and just over eight pounds, Annabelle Butcher is a fighter like her mom Rebecca and her dad Scott. They had to get special permission just to let Annabelle wear a hair bow in the pediatric ICU. A victory to honor Annabelle surviving the first round of open-heart surgery.

REBECCA BUTCHER, DAUGHTER BORN HEART DEFECT: What I'm probably most afraid of is losing her. But you try not to think about that.

GUPTA: Their fight began months earlier. Learning when she was 16 weeks pregnant the baby had a heart defect. Later Scott, Rebecca and three-year-old son Wyatt invited our cameras along to another ultrasound. The defect, hypoplastic left heart syndrome, left untreated, could kill her baby girl.

DR. SCOTT BRADLEY, MEDICAL UNIV. OF SOUTH CAROLINE: The left side of the heart, either forms incompletely or does not form at all.

GUPTA: The Butchers faced painful choices, end the pregnancy or commit to surgery on their soon-to-be newborn baby.


R. BUTCHER: We decided that we would let her fight.

S. BUTCHER: Lord, we just thank you for this day.

GUPTA: January 28th, Annabelle's birthday. CNN had special access to the day the Butchers say is one of the happiest of their lives. And we witnessed the next dramatic step when just two-day-old Annabelle is wheeled in for risky open-heart surgery.

The defect means the left side of Annabelle's heart is so underdeveloped it simply can't pump enough blood. During eight hours of surgery, doctors insert a tube or a shunt to reroute her circulation around the defect. It's complicated work. The wait is agonizing for the family.

R. BUTCHER: The waiting game is not fun.


R. BUTCHER: But I think we're all right.

GUPTA: It's an emotional milestone. But Annabelle faces her next surgery, then another when she's about two. She'll need medication and constant care. And every bit of hope from her family.

R. BUTCHER: To graduate from high school, to graduate from college, to see her get married. That's my hope for her, to have a completely normal life.


GUPTA: She should have a pretty normal life. Annabelle likely won't be a competitive athlete, for example, but she'll be able to do most thing that people are required to do on a daily basis. Now, people learn from these things.

So, Kiran, for example, the Medical University of South Carolina, which you just saw there, the success rate has gone up to about 90 percent for this particular operation and this condition. And just a few years ago, not that long ago, it was considered that most of these children would not survive through childhood.

CHETRY: Wow. Now, how crucial is it that they are able to diagnose this stuff in utero?

GUPTA: It is pretty crucial. I mean, the olden days, what would happened a baby would be born and while they are still in the delivery room they'd notice the chest turn blue or the lips have turned blue or something would turn blue and then that would be the first clue that doctors knew that something was wrong.

CHETRY: Right.

GUPTA: Oftentimes, it was too late. Not only can they diagnose it in utero now, but they can actually even operate in utero. I actually witnessed one of those as well, where they actually take a little catheter, and this is a tiny, tiny baby and you are basically threading that catheter into the heart and opening up part of the heart that allows that left side of the heart to grown and start pumping again. So it could be diagnosed and treated.

CHETRY: And why did they not decide to do that in this case?

GUPTA: Well, it's not for every child. The anatomy, if you will, has to be absolutely perfect for this. So, you have to be able to thread this catheter, and technically, as you might imagine, a very challenging procedure. So, if a child's anatomy is correct, if they are at the right size and is diagnosed at the right time, they could possibly have it done.

And I think as time goes, they get better at it, more and more children will have this treated in utero. But, you know, in her case, she had to wait until she was born and it looks like it's pretty successful.

CHETRY: Wow. Truly medical miracles.

GUPTA: We'll keep on top of that. Yes.

CHETRY: Amazing. Very fascinating story. Thanks, Sanjay.

GUPTA: Thanks, Kiran.


ROBERTS: Fifty-six minutes after the hour. A quick look now at what CNN NEWSROOM is working on for the top of the hour.

TONY HARRIS, CNN ANCHOR: See these stories in the CNN NEWSROOM. Clinton and McCain focusing on issue number one today, the economy. Will stocks keep up their winning streak?

Detroit's mayor in court today accused of lying about a text and sex scandal.

Iraqi troops hit militias in the southern oil port, Basra.

Assisted suicide advocate Jack Kevorkian talks with CNN about his run for Congress.

Historic flooding forecast along Arkansas's White River.

NEWSROOM just minutes away, at the top of the hour on CNN.


ROBERTS: A male version of the pill could soon be available in the United States. We have been asking this morning, would men take the birth control pill once it goes on the market? Final check now, look at that 49 percent of you say yes you would. 51 percent say no. The response has been pretty much split all morning. Thanks to everybody who voted.

What they are missing in all of this is just as a side effect of taking it, at least four pounds of lean muscle mass that goes along with it, too.

CHETRY: How about that?


CHETRY: We'll see. Side effect or fringe benefit?

ROBERTS: Could be. Thanks so much for joining us on this AMERICAN MORNING. We'll see you again tomorrow.

CHETRY: Glad you were with us today. Meanwhile, CNN NEWSROOM with Tony Harris and Heidi Collins starts right now.

HARRIS: And good morning, everyone. You are in the CNN NEWSROOM. I'm Tony Harris.

COLLINS: Hi, there, everybody. I'm Heidi Collins.