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U.S. to Stop Shipments to Oil Reserves; Obama Fires Back at "Appeaser" Remark; Rescue Operations Continue in China

Aired May 16, 2008 - 13:00   ET

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

DON LEMON, CNN ANCHOR: Appalled about appeasement. Barack Obama fires back at President Bush's claim that Democrats want to appease terrorists and tyrants.
BRIANNA KEILAR, CNN ANCHOR: The Democratic presidential frontrunner says when it comes to foreign policy, Mr. Bush and John McCain, as well, have a lot to answer for.

Hi, there. I'm Brianna Keilar at CNN World Headquarters in Atlanta.

LEMON: And I'm Don Lemon. You are in the CNN NEWSROOM.

We are just getting word the U.S. Energy Department is canceling shipments to the government reserves beginning in August. Our senior business correspondent, Ali Velshi, is on top of it for us.

Ali, tell us what this means.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Don, as you said, we are still trying to confirm this information. It has just come across on a day when oil has broken another record, passing $127. The United States Department of Energy has reportedly agreed to stop putting oil into the U.S. Strategic Petroleum Reserve.

Right now we put 76,000 barrels a day of oil into the petroleum reserve, which are four storage unit in Louisiana and Texas. Those storage units are 96 percent full right now. They hold 700 million barrels of oil. That's about 50- or 60-day supply of oil. That is for emergencies, if there's something like hurricanes or there's some attack. That is the U.S. store of oil that allows us to have emergency oil.

The president has opposed this move, but Congress passed a bill requiring the president to tell the Department of Energy to stop refilling the Strategic Oil Reserve. That is what the Department of Energy says they are going to do. These shipments to the reserve will stop in July or August because there's a six-month contract.

The Department of Energy has been buying 76,000 barrels of oil a day for a six-month period. They have said, according to the Associated Press, as soon as that contract is over they will stop adding oil to the Strategic Petroleum Reserve.

The idea behind this, Don, is that by not filling those reserves, 76,000 barrels a day will be available elsewhere for other use. That should bring the price of oil down.

Critics of this, including the president, have said that is a drop in the bucket and this decision will not affect the price of oil. So we are working on getting details of this. We are also tracking very closely how this is affecting oil trading, whether it is having the desired effect and bringing the price of oil lower. But today we did see other record, over $127 for a barrel of oil and $3.78 for a gallon of gasoline.

LEMON: And Ali, the big question is you said that some people are just saying that this is a drop in the bucket. And of course this information is just coming in. The president is saying this is not going to help.

But how do people on the other side feel that this is going to help? Is it going to lower prices? Is it going to allow more oil to be out there in order to lower those prices?

And by the way, just getting information. The Associated Press said they are correcting this. It is beginning in July, and not August, Ali.

VELSHI: OK. So that's when the contract for the oil that they've been buying will end. They're not renewing the contract.

Here's the thing, Don. There are about 85 million barrels a day of oil used in the world. We produce about half a million barrels extra every day. That's the cushion that we have. This is 76,000 barrels a day. It is less than -- it's about 12 or 13 percent of the excess that we have on a daily basis.

LEMON: OK.

VELSHI: It's not likely to have a dramatic effect in that case. But what people are saying is that any extra oil that is not going into these storage bins is oil that we can use.

I should remind everybody who's watching this, this isn't free oil. The United States buys it at market prices. So it's not like by not putting it in here somehow we've got 76,000 barrels of oil available for everyone else. The general thinking is that this is not going to have a substantial effect on the price of oil, but Congress passed the bill. And it sounds like the Department of Energy is listening.

LEMON: Yes, and it's very interesting, because -- political ramifications because the president was against this. Ali Velshi, thank you for explaining this. If we get any more information, any further explanation, we'll get back to you.

Thanks again. Senior business correspondent Ali Velshi.

KEILAR: And President Bush is in the Mideast, visiting various nations there. Let's talk now to our White House correspondent, Ed Henry. He's in Riyadh, Saudi Arabia, joining us now on the phone. And as we just heard, Ed, this obviously was not a move that President Bush wanted to make, stopping these oil shipments to the Strategic Petroleum Reserve.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: He certainly had reservations about it. The president has said recently that he had an open mind. He would take a look at this proposal from Congress and wouldn't veto it, you know, out of hand. But he has raised concern, as have other officials, about national security implications, as well.

As Ali was reporting, it's also the administration feeling that it will be a drop in the bucket, that putting this much supply on the market really won't drive prices down that much.

But politically on Capitol Hill, basically the president lost support from Republicans. In the Senate I think the vote was 97 to 1 in favor of ending, putting this oil into this strategic reserve. That vote just in the last week. Only one Republican voted against that bill.

So every Republican but one was saying you need to move forward on this. And I think politically the White House realizes that people on Capitol Hill, both parties, are struggling to show voters that they're doing something, anything at this point to try to lower gas prices, even if it's a little bit.

And add one other note, which is that the president today in Riyadh just found out -- he's here to try to talk to King Abdullah about increasing oil production on the worldwide market, again, hoping to drive down prices, deal with the massive demand out there right now.

But the president just found out today that King Abdullah, his oil officials, are telling him that they will not increase oil on the open market right now. They are feel they're at the right levels.

And what that means to U.S. consumers, bottom line, is no short- term relief. There's not going to be a big surge in production. And as a result, prices are going to stay where they are, as Ali noted, reaching $127 a barrel for the first time ever today.

You think back to the president was here in January in Riyadh, as well. He also pushed to get an increase in production. He failed that time. This is twice in four months the president has not been able to get Saudi Arabia to increase production. That's one of the reasons why prices are so high.

KEILAR: Ed Henry for us there in Saudi Arabia, traveling with the president.

Thanks, Ed.

LEMON: I want to go now to Wall Street and our Susan Lisovicz, standing by to tell us how this might affect the markets. And Susan, I'm reading here and have been reading people who have been writing this about said the high cost of crude oil is a primary ingredient in the sinking U.S. economy. There's a hammer creating pain in households throughout our country.

How might this affect the stock market?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, I mean, it's a major tax on the American consumer at a time when people are already worried about the housing market. They're seeing the value of their homes decline month after month. You're getting, really, a double whammy when -- every time you go to the gas station.

Having said that, I'm going to tell that you gas, the oil prices here in New York trading remain very high. We're up about $2. There's been no change in the oil pits here in New York upon this news. And perhaps the reason why is something Ed Henry was just talking about, that Saudi Arabia, this giant oil producer, says it's not going to boost production.

Meanwhile, there are concerns that China, in the wake of this devastating earthquake, had its natural gas resources hampered. And this very hungry consumer of energy is going to have even more demand in the coming weeks and months as it tries to reconstruct that devastated region of its country.

Perhaps, really, what might really bring down oil prices is just declining demand. Here in the U.S., we're seeing that the economy is slowing. And we are seeing changes. We're seeing changes in the way people behave.

And -- and, you know, as we approach Memorial Day weekend, it will be interesting to see how people travel, for instance. And that may ultimately affect oil prices. But right now, we're at about $126 a barrel, and overnight trading got close to $128 a barrel -- Don.

LEMON: All right -- Susan Lisovicz.

And as we're looking at the markets there, the Dow down 37 points. And it may -- we may yet see how it's going to affect the markets, because we're just getting word of this. But we'll check back with Susan Lisovicz, also Ed Henry and Ali Velshi, as well -- Brianna.

KEILAR: Barack Obama is taking on President Bush and presumptive Republican nominee John McCain.

Minutes ago in a speech you may have seen live right here on CNN, Obama blasted Mr. Bush for using the word "appeasers" in yesterday's speech to the Israeli parliament. He also ripped into McCain for, in Obama's words, "suggesting that I wasn't fit to protect this nation that I love."

The president used the word "appeasers" to describe leaders who'd be willing to meet with leaders of countries such as Iran. It was widely interpreted to be an attack on Obama. And today Obama said the president's comments, delivered in a foreign capital, were out of line. (BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: On a day when we were supposed to be celebrating the anniversary of Israel's independence, he accused me and other Democrats of wanting to negotiate with terrorists and said we were appeasers, no different from people who appeased Adolf Hitler. That's what George Bush said in front of the Israeli parliament.

Now, that's exactly the kind of appalling attack that's divided our country and that alienates us from the world.

(END VIDEO CLIP)

KEILAR: Let's bring in CNN's Dan Lothian now. He's in Frankfort, Kentucky, with the CNN Election Express.

What are the political ramifications here, Dan?

DAN LOTHIAN, CNN CORRESPONDENT: Well, there are a couple of things here. Certainly, the Obama campaign wanted to come out and make this strong statement, because they couldn't let those comments made by the president, also Senator John McCain, stand. That's the way that the campaign felt.

But you saw a couple of things in that speech. What Obama is trying to do is essentially tie Senator John McCain and the president. This is the kind of strategy that you would see in a general election, if indeed, he does get the nomination.

And the second thing is that Senator Obama really is trying to show that he's strong on national security. This is an area of vulnerability. This is where he has been attacked by his critics. Senator Clinton has talked about that, has said how she is the candidate with experience. She is the one who can best protect this country.

And so Senator Obama wants to show that he can protect this country. You heard it in his speech, where he talked about how he wanted to challenge President Bush and Senator John McCain to a debate on who would be best to protect America. And he said that is a debate that he would win.

KEILAR: Now...

(BEGIN VIDEO CLIP)

OBAMA: I want to be perfectly clear with George Bush and John McCain, and with the people of South Dakota. If George Bush and John McCain want to have a debate about protecting the people of the United States of America, that is a debate I am happy to have any time, any place. And that is a debate that I will win, because George Bush and John McCain have a lot to answer for.

(END VIDEO CLIP) LOTHIAN: And so, Brianna, this is -- this debate, actually, over what President Bush said might die down a bit. But the debate over the whole issue of national security won't go away. Again, because this is something that we know will come back again, time and time again in the general election.

KEILAR: Dan Lothian with the Election Express in Kentucky. Thanks.

LEMON: Well, John McCain is also taking some political heat for past comments that appeared to indicate he would be willing to hold talks with Hamas, which the U.S. has labeled a terror organization.

Now, one of those critics is former State Department official Jamie Rubin, who is now a Clinton supporter. And here's what McCain said to Rubin in a 2006 interview for Britain's Sky News.

(BEGIN VIDEO CLIP)

JAMIE RUBIN, SKY NEWS: You think American diplomats should be operating the way they have in the past, in working with the Palestinian government, if Hamas is now in charge?

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: They're the government, and sooner or later we're going to have to deal with them in one way or another. And I understand why this administration and previous administrations have such antipathy toward Hamas, is because of their dedication to violence and the things they not only espouse, but practice. So -- but it's a new reality in the Middle East.

(END VIDEO CLIP)

LEMON: Well, today on CNN's "AMERICAN MORNING," a top McCain policy adviser said there's no contradiction between what McCain said in that interview and his criticism of Barack Obama. She also said Jamie Rubin's criticism in today's "Washington Post" is inaccurate.

(BEGIN VIDEO CLIP)

NANCY PFOTENHAUER, MCCAIN SENIOR POLICY ADVISER: I think he is cherry-picking words in order to create a false impression that will be a distraction from the fact that Senator Barack Obama has pledged to unconditionally meet with leaders of rogue nations.

(END VIDEO CLIP)

LEMON: Well, John McCain is talking gun rights today in Kentucky. He is scheduled to speak at the annual meeting of the National Rifle Association at 4:30 Eastern.

KEILAR: So where do the candidates stand on gun rights? Well, let's break it down for you.

McCain voted against a ten-year extension of the assault weapons ban. He opposed a bill requiring trigger locks for hand guns. McCain did, however, sponsor legislation that requires background checks at gun shows. And his NRA rating is a "C-plus."

Hillary Clinton voted for the ten-year extension of the assault weapons ban. She supports hand-gun licensing and registration. She also backs mandatory trigger locks for hand guns. And she also would allow the Consumer Products Safety Commission to regulate guns.

Barack Obama also supported extending that assault weapons ban. He favors a national law against concealed weapons, with exceptions for police and military.

LEMON: A teenager suicide. Now the alleged connection to a grown-up neighbor and MySpace leads to criminal charges.

KEILAR: The earth shook. Thousands died. But China is still quaking. And the hunt for victims has entered the most desperate phase. We'll have a report from the disaster zone.

(COMMERCIAL BREAK)

KEILAR: Four and a half days into China's deadliest natural disaster in decades, and the images from the earthquake zone are just heartbreaking.

This is footage that we brought in from a Chinese television news program. Rescue crews there literally pulling apart piles of rubble, brick by brick. They are shouting. Then they're listening for any response from people who may possibly be trapped.

Amazingly, they have found some survivors, but as expected, they're finding more bodies. The government's death toll rose again today to 22,000. But that is expected to more than double.

LEMON: All right. So I want to warn you at the top of this, you're going to see, a little bit, some very disturbing pictures. So if you don't want to see them or you don't want your children to see them, then you should have them leave the room.

Saving lives is still the top priority. That is a quote from Chinese President Hu Jintao, who flew into Sichuan Province today to see the devastation before -- for himself, I should say. Sichuan saw the worst from Monday's earthquake, and Beichuan County saw the worst of the worst.

ITN's Bill Neely is there. And as we said, we want to warn you: his latest report is hard to watch.

(BEGIN VIDEOTAPE)

BILL NEELY, ITN CORRESPONDENT (voice-over): If there is a worst place in the world today, then this is it: a school where the children can still be seen in their classrooms. But they are all, hundreds of them, dead.

The workers lift what rubble they can. But the teenagers are almost fixed in the broken concrete. (on-camera) It's a terrible scene. This whole place is absolutely ghastly. And this is one of more than 50 classrooms in this school.

(voice-over) It was the newest building in the city, but its cheap materials broke the law on earthquake safety. With hundreds of children dead, the penalty for the builders may be execution.

A few miles from so much death, life is pulled from the earth. Trapped for three days, a woman is lifted free. They clean her, and ask her, "Are there any more people inside?"

"Yes, two," she says.

"Are they alive?"

"Yes," she says, "they're still talking."

The ruins of Beichuan are still smoking. And people are still crying out for relatives. And the question here is: how do you find anybody alive in all this?

You call for quiet, and you shout into the rubble, "Knock if you can hear us." Deep down, someone knocks.

(on-camera) The only thing in this city that is as it was is its name. Every single building here has been toppled, and the whole place will simply have to be demolished. This city is history.

(voice-over) After such terror, few want to come back. They fled to a stadium in another city, 10,000 already. And in the grounds, the women weep. Grief and guilt over the dead children they've left behind. This is the worst thing that's happened to China in 30 years, a national tragedy in 100,000 personal traumas.

Bill Neely, ITV news, Beichuan.

(END VIDEOTAPE)

LEMON: A 9-year-old girl goes to the doctor with a bad stomach ache. Turns out it's something she ate. No, it wasn't. It was her twin, hidden away for years in her belly. How did that happen?

KEILAR: Barack Obama takes the stage and takes on President Bush over his use of the word "appeasers." We'll have more on the back and forth over campaign tactics and who can protect the country.

(COMMERCIAL BREAK)

KEILAR: Oil prices continue to surge to new highs while $4 a gallon gas become as reality in more places around the country. Susan Lisovicz is on the floor of the New York Stock Exchange with the latest on this.

Hi, Susan.

You know what? I think we're having some technical difficulties. We're going to see if we can get Susan. Could we get her?

All right. We can't get her. We're going to take a look at the big board as we try to bring Susan in. As you can see, The Dow down 47, standing at 12,944 at this moment.

And of course, the big news of today is oil and gas prices as we talked about. We're going to be checking in with Susan right at this very moment.

Susan, I think I jinx you, because it's always when I am trying to talk to you and then we have a technical difficulty.

LISOVICZ: They exist. That's the way our viewers know it's live television.

KEILAR: For real.

LISOVICZ: I have no idea what you said in your introduction to me, but what I will say that is we continue to watch oil prices. Oil prices are a story every single day. And they've been a story -- they're certainly a top story this hour.

And they continue to climb. They are staying where they are, up about $250 a barrel. The culprit today, fears that China may use more oil in the wake of that devastating earthquake and that natural gas supplies are disrupted.

Also, President Bush's failure to get Saudi Arabia to agree to pump more oil.

And of course, it all trickles down us to, the consumer. AAA says that gas is averaging more than $4 in two states now. Not only Alaska but Connecticut and several others are close, including California, New York and Illinois.

Brianna, can you hear me now?

KEILAR: I can hear you. And you know, Susan, I know so often it's so unfortunate, because you're telling us some bad economic news. But actually some good news, right, about the housing market today?

LISOVICZ: This is welcome news, because this is ground zero, what has really disrupted the economy so much. It all started with what had been a bubble, the housing bubble.

Well, we got something that was a surprise. Housing starts last month rose more than 8 percent. And that is the biggest monthly rise in two years.

Now, most of the jump came in multi -- multifamily type of buildings, such as condos, townhouses and apartments. That's a volatile part of the market, probably because it's expensive. Those are just bigger projects. And they tend to be more volatile.

The more closely-watched single-family homes dropped 2 percent and to the lowest level in 17 years. But let me just tell you about one other thing that was very welcome news. Housing permits rose across the board. And that's a good sign of future activity.

So we'll continue to watch housing starts, like we do every month. A lot of economists say we're not at the bottom yet. But that was something that was unexpected. What we're seeing on Wall Street right now is a modest sell-off. The Dow is down about a third of a percent. Oil stocks are higher -- no surprise -- given oil's rally, continuing rally. The NASDAQ, meanwhile, is down about half a percent.

Brianna, back to you.

KEILAR: All right. Susan Lisovicz at the New York Stock Exchange, thank you.

LISOVICZ: You're welcome.

LEMON: Barack Obama takes the stage and takes on President Bush over his use of the word "appeasers." We'll have more on the back and forth over campaign tactics and who can protect the country.

KEILAR: Stars, they are shining on the red carpet at Cannes. Why Angelina Jolie might be hanging around after this festival ends.

(COMMERCIAL BREAK)

LEMON: Hello everyone, I'm Don Lemon live here at the CNN World Headquarters in Atlanta.

KEILAR: And I'm Brianna Keilar. You're in the CNN NEWSROOM.

Barack Obama is taking on President Bush and presumptive Republican nominee John McCain. Minutes ago in a speech that you may have seen live here on CNN, Obama blasted Mr. Bush for using the word "appeasers" in yesterday's speech to the Israeli parliament.

He also ripped into McCain for in Obama's words, "suggesting that I wasn't fit to protect this nation that I love." The President used the word appeasers to describe leaders who'd be willing to meet with leaders of countries such as Iran, and it was widely interpreted to be an attack on Obama. Today Obama said the President's comments, delivered in a foreign capital, were out of line.

(BEGIN VIDEO CLIP)

OBAMA: On a day when we were supposed to be celebrating the anniversary of Israel's independence, he accused me and other Democrats of wanting to negotiate with terrorists and said, we were appeasers, no different from people who appeased Adolf Hitler. That's what George Bush said in front of the Israeli parliament. Now, that's exactly the kind of appalling attack that's divided our country and that alienates us from the world.

(END VIDEO CLIP) LEMON: All right well let's bring in now our senior political analyst, Gloria Borger.

Hi Gloria, thank you for joining us today.

I want to start with a quick question. Much has been made of Senator Obama's lack of experience on foreign policy in particular, but today he seemed to turn foreign policy failure back on the Republicans. Will his message work with voters? And will it work in the fall if he does in fact become the nominee?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well you know, obviously that remains to be seen. I think Barack Obama talks about change all the time and I think the question the American public has to answer is, is that the kind of change we want or is it too much of a risk?

You know, the Republican calculation is that they're going to say that Barack Obama is too much of a risk. That's something that in fact, Hillary Clinton said, when she said she is more qualified to answer that phone at 3:00 in the morning.

What Obama is saying is, sure, he respects Senator McCain's service, but in fact it's his judgment that really matters. And he also goes on to make the argument as he did today, that America is not any safer because of the decisions made by President Bush and echoed by John McCain. In fact, he said McCain wants to double down on George W. Bush's foreign policy.

LEMON: And it looks like he took this whole appeasers thing as a chance -- and kind of turned it around into a stump speech because he got a chance to criticize John McCain, as well.

I want you to listen to something and then we'll talk about it OK, Gloria?

(BEGIN VIDEO CLIP)

OBAMA: I want to be perfectly clear with George Bush and John McCain, and with the people of South Dakota. If George Bush and John McCain want to have a debate about protecting the United States of America, that is a debate that I'm happy to have any time, any place and that is a debate that I will win because George Bush and John McCain have a lot to answer for.

(END VIDEO CLIP)

LEMON: So Gloria, you get what I'm talking about? John McCain, he's now comparing him to George Bush and saying I guess -- you know, four more years of George Bush and everything. That's not an accident.

BORGER: Sure. He's not just comparing him to George W. Bush, he's attaching him surgically at the hip. And you will see that continue throughout this campaign. I mean, Barack Obama knows very well that George Bush has a 27 percent approval rating. And as far as the Democrats are concerned, the one thing that can unite all the Democrats is a fight against George W. Bush. And Obama is hoping that in fact, he can attract those Democrats who say they wouldn't vote for him if he were the Democratic nominee because they were Hillary Clinton supporters. He's hoping that in a fight against George W. Bush, they would line up on his side.

LEMON: OK and you know, I want to ask you this and if you don't want to touch it, let me know Gloria. Another word that has been making news on the blogs -- "sweetie.".

BORGER: Yes, you mean about Obama calling someone sweetie?

LEMON: Yes.

BORGER: I really -- honestly, I call everyone sweetie. I'll call you sweetie, OK? So I think it's a little bit of a side show to tell you the truth.

LEMON: OK. Yes, dear.

BORGER: OK, sweetie.

LEMON: Thank you, sweetie.

BORGER: Sure.

LEMON: Have a good one. Thank you, Gloria.

KEILAR: The cry from consumers grows louder as the price of gas goes higher.

Here's CNN's Josh Rubin with this week's Election Express Yourself.

(BEGIN VIDEOTAPE)

JOSH RUBIN, CNN ELECTION EXPRESS PRODUCER: We're at the Flying J truck stop outside of Indianapolis, Indiana, talking to truckers, talking to regular people about how fuel prices are affecting them.

UNIDENTIFIED MALE: I've been doing this a little over 23 years. I'm 71 years old. I would like to retire, but I don't have anything to retire on.

RUBIN: $630 to fill this up?

UNIDENTIFIED MALE: No, it's not a fill up. It's 150 gallons -- it's about a half a tank.

UNIDENTIFIED FEMALE: Twelve years ago, you know, it was $1 something a gallon. And now you know, we're up to $3.85 a gallon. Yes. that's craziness.

UNIDENTIFIED MALE: It's about the time to put a bar on the system. I can't make a living with this, spending almost as much as I make for fuel.

RUBIN: As an independent trucker, are you having trouble keeping up with it right now?

UNIDENTIFIED MALE: Well, everybody has trouble keeping up with it.

UNIDENTIFIED FEMALE: Is there something out there that we can do -- you know, in the world in general, to bring our prices down? Can they walk in there and say, OK we're going to give them $2 a gallon again? Or we're going to walk in and take the taxes off of West Virginia, Ohio, the whole nation, who knows? But I would like to see it done but you know, that's not in my doing.

(END VIDEO CLIP)

LEMON: OK, this is really a strange story. A 9-year-old girl goes to the doctor, she's got a bad stomach ache. Turns out it wasn't something she ate. It was her twin. Hidden away for years in her belly. How did that happen?

(COMMERCIAL BREAK)

LEMON: Well, mastectomies had been on the decline for the past few years. But a Mayo clinic study suggests more breast cancer patients are going that route now. Cancer specialists aren't sure why women are choosing to have the whole breast removed instead of just undergoing a lumpectomy. One possible reason: More use of magnetic resonance imaging, MRI's, can red-flag more trouble spots than mammograms. Women might be deciding they'd rather not take any chances there by choosing the more aggressive treatment.

KEILAR: Well, doctors in Greece now know what caused a 9-year- old girl's stomach pains. It wasn't a tumor. It was actually her embryonic twin, two inches long with a head, hair and eyes. This kind of thing is pretty rare but it's certainly not unheard of.

So let's find out more from CNN medical correspondent, Elizabeth Cohen.

This is one of those medical cases that fascinates people.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Absolutely. Because you've got to think how in the world did this happen?

KEILAR: Sure.

COHEN: There's actually a name for this phenomenon. It is called fetus in fetu. In other words, basically, a fetus inside of a fetus. How in the world does this happen? Well, let's take a look back at another story last year that can help explain it.

There was a little girl in India named Vlacksmhe (ph), who had a parasitic twin. In other words, a twin attached to her. So she had extra limbs and extra arms. What happens here is the same thing in a way as what happened in Greece. Twins in the womb, one of them didn't get all of the genes they were supposed to get. And so wasn't able to survive. And in this case that twin, you can sort of see it there, latched on to Vlacksmhe.

In the case of what happened in Greece, that twin got absorbed. And then when that surviving twin became 9-years-old they noticed this lump in her stomach and they found that it was this two-inch fetus, her twin sister. No brain, many of these fetuses that are inside a fetus have no heart, they have no lung, they have no cardiovascular system. They were never going to survive to be a full-term baby. And sometimes they get absorbed by their brother or sister.

KEILAR: Is it pretty common or is it rare?

COHEN: It is uncommon, it is uncommon. Let's go over some of the basics of a fetus in fetu. There are fewer than 100 reported cases. They happen all over the world. There have been reported case in Chile, Pakistan, Kazakhstan, India. The fetuses -- the ones that are no longer alive -- are anywhere from half an ounce to four pounds, there's a real range. And they often lack a brain, a heart and an umbilical cord so you can see why they were never going to survive, and they just get absorbed.

KEILAR: In the case of the girl in Greece -- I mean we're talking about a 9-year-old though. Does it normally take that long before this is realized in a child?

COHEN: Many times it doesn't. Usually they discover these masses in infancy or in toddlerhood and they're removed pretty easily. But, sometimes that doesn't happen. There's a report of a man who was 47-years-old before they realized that he had his twin brother in his stomach. So sometimes it can go on for quite a while if they're really tiny.

KEILAR: But that's rare.

COHEN: Yes. That is unusual.

KEILAR: All right, Elizabeth Cohen. Thanks very much, Don.

LEMON: This -- it's fascinating. It's just a fascinating story.

This one is fascinating as well, but very tragic. Megan Meier, isn't the first teenager to kill herself when a relationship soured. But Megan's relationship -- it never really existed. It was a sham. And now, the middle-aged woman who is allegedly behind it, is under federal indictment.

CNN's Gary Tuchman, report

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): Megan Meier was allegedly a victim of a cruel hoax, one that her family says led to her suicide. One that federal prosecutors now consider a crime.

SAL HERNANDEZ, FBI: Whether the defendant in this case could have foreseen the tragic choice made by Megan, she is accountable for her fraudulent actions.

TUCHMAN: He is talking about Lori Drew, a mother and a former neighbor of the Meiers. Today in Los Angeles he was indicted on four federal charges connected to Megan's death. Megan's mother calls it justice for her daughter.

VOICE OF TINA MEIER, MEGAN'S MOTHER: It's a bittersweet feeling. You know, I have -- the bitter part is obviously Megan will, no matter what happened, will never come back. And that's something I can't change. The positive part is we have been waiting for a year and a half for this to happen.

TUCHMAN: The story is shocking and it's tragic. In 2006, Megan joined the social networking site MySpace. And her first affectionate message came from a boy named, Josh Evans.

T. MEIER: He thought she was really pretty. Posted on her comments and her pictures. You know, this is beautiful, your eyes are beautiful.

TUCHMAN: The online courtship did not last long. As Megan's father remembers, the messages suddenly turned ugly, with Josh rejecting Megan.

RON MEIER, MEGAN'S FATHER: The world would be a better off place without you and have a (EXPLETIVE DELETED) rest of your life.

TUCHMAN: Devastated, Megan never got over the hurt. In October 2006, she went to her room and hanged herself.

T. MEIER: This is the part I'll never forgive myself for because she was looking for me to help calm her down like I normally always did, and be there for her.

TUCHMAN: What Megan did not know is that Josh, the MySpace page, all of it -- was allegedly created by Drew into inflict emotional distress on Megan. Megan was a friend of Drew's daughter. And authorities believe the mother used the MySpace page to try to find out why the two were fighting. Drew insists she did not create the page, a grand jury disagreed.

HERNANDEZ: This case is yet, another lesson teaching us, that malicious acts may have unforeseen but very serious consequences.

TUCHMAN: Drew is charged with conspiracy and unlawfulfully accessing protected computers. Each charge carries a maximum penalty five years in prison. Drew has said she's innocent. But Megan's parents told me they believe Lori Drew set up this MySpace hoax with the help of others.

R. MEIER: As if my daughter would have killed herself with a gun, they loaded the gun for her.

TUCHMAN: Gary Tuchman, CNN.

(END VIDEOTAPE) KEILAR: The earth shook and thousands died, but China is still quaking in the hunt for the victims there has entered the most desperate phase. We're going to have the report from the disaster zone.

LEMON: And Barack Obama takes the stage and takes on President Bush over his use of the word appeasers. We'll have more on the back and forth over campaign tactics, and who can protect the country.

KEILAR: Stars are shining on the red carpet at Cannes. Why Angelina Jolie might actually hang around after the festival ends.

(COMMERCIAL BREAK)

LEMON: All right, it's Caught on Camera time. We've got the jet-skiing squirrel or whatever that thing is. All right, who needs low-budget horror flicks, right Brianna? Who needs them? Look at what is caught on camera today. Check it out.

First, the invasion of the frogs. Man, those are little frogs.

KEILAR: They're cute.

LEMON: Frogs? Those are mini frogs. They've invaded Bakersfield, California, these tiny little green frogs, one neighborhood there. Sometimes they travel in groups. And all the hopping around has many neighbors and people there feeling a little jumpy themselves.

They are kind of cute. They'll probably get...

KEILAR: I like them.

LEMON: Frogs are good luck.

KEILAR: Well, if you think frogs are scary, I know you're scared of frogs...

LEMON: No, I'm not.

KEILAR: Especially those little ones. Well, how about ants?

OK, this is a little creepy. Not just any ants, these are thousands of tiny, harry reddish-brown ants. They're spreading across five Houston area counties. They'll swarm on your arm if you give them half a chance. And the good news though, is that they eat fire ants. The bad news is they bite humans. So why is that guy doing that? That is my question.

LEMON: Because is there a camera there, probably.

OK and the third part of our triple feature here could rival one of those mad scientist flicks. This experiment performed by high school students in Louisville, Kentucky, involves the effect of 1,300 Mentos dropped in 1,300 diet colas. The result: 1,300 Mentos diet cola geysers. Enough to beat the world's record set in Belgium, earlier this year. Science marches on. The question is why?

KEILAR: I never knew that Mentos did that. But that's pretty amazing.

LEMON: Do you want me to get you some from the cafeteria with a Coca-Cola?

KEILAR: Yes, we'll try it later on the air maybe. I got a kick out of that though.

Well everything from art films to Hollywood blockbusters are on display as the Cannes Film Festival continues in France. And among the premieres is of course, the animated comedy "Kung-fu Panda," you may have heard about it.

And CNN's Brooke Anderson caught up with its stars.

(BEGIN VIDEOTAPE)

BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT (on camera): It was a night of "Kung-fu Panda."

(voice-over): And co-stars Angelina Jolie, Jack Black and Dustin Hoffman, here at the Cannes Film Festival. First the animated comedy held its lavish premiere in grand screening. And following that we all hit panda's after party on the pier.

(on-camera): Describe Cannes, because a lot of people don't realize just how crazy it can be. You've been here numerous times now.

JACK BLACK, ACTOR/COMEDIAN: It's you know, it's got all the artists of Sundance Film Festival but instead of the snow you've got the beach. It's kind of like Miami Beach, but a little more Vegas. And it's kind of like the Oscars at the same time.

ANDERSON: All rolled into one.

BLACK: It's an entertainment burrito.

ANDERSON (voice-over): Before the party, at a press conference promoting "Kung-fu Panda," Angelina revealed that she is considering giving birth to her twins right here in France.

ANGELINA JOLIE, ACTRESS: I actually haven't completely decided. But we are certainly thinking of France. And I just -- it's the second language in our house. I don't know, I'm still learning so I'm not going to attempt it here today -- my rusty French. But our children are starting to speak French and so being here is very good for them for their language at this time.

ANDERSON: Angelina will also be promoting the film "Changeling" from Clint Eastwood, in which she stars as a mother whose son is kidnapped.

(on-camera): We're also anticipating the long-awaited premiere of the fourth installment of Indiana Jones. I'll be speaking with Harrison Ford and film makers and we will bring that to you as well.

Reporting from the 61st Cannes Film Festival, Brooke Anderson, CNN.

(END VIDEOTAPE)

LEMON: What a gig that Brooke Anderson has.

OK. Well you know it's an interesting campaign season when a Hillary Clinton supporter gets a tattoo of her on his leg.

Jeanne Moos will be along with that and some other personal moments from the campaign trail.

(COMMERCIAL BREAK)

LEMON: OK, so Barack Obama takes some heat. The Obama girl, well, she tries to beat the heat. It's not even that hot yet. And a guy with a Hillary Clinton tattoo.

It has to be our Jeanne Moos. She has everything, all the major stories from the campaign trail.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): So ladies, would you mind if Senator Barack Obama said this to you?

UNIDENTIFIED FEMALE: Senator, how are you going to help the American auto workers?

OBAMA: Hold on one second, sweetie.

UNIDENTIFIED FEMALE: I wouldn't really mind if anybody called me sweetie.

MOSS: From Senator Obama's "sweetie" apology, to the Hillary tattoo.

So I hear you have Hillary Clinton on your thigh?

LUIS SALGADO, TATTOO ARTIST, CLINTON SUPPORTER: Yes.

MOOS: To the Obama Girl deodorant commercial?

UNIDENTIFIED FEMALE: I try to be a little sexy. But this is not the way.

MOOS: Some of these campaign stories are the pits. But somebody has to cover them. Barack Obama blew off a reporter for CNN Detroit affiliate WXYZ. Then ended up leaving an apology on the reporter's voice mail.

OBAMA: It's a bad habit of mine, I do it sometimes with all kinds of people. I mean no disrespect and so I'm duly chastened on that front. MOOS: Would you mind if Barack Obama called you sweetie?

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED FEMALE: He could call me sweetie.

UNIDENTIFIED FEMALE: I would have preferred darling.

MOOS: How sweet does this retired doctor get with nurses?

UNIDENTIFIED MALE: When I worked with them I didn't call them sweetie. Now that I'm retired, I call them sweetie and they think it's just fine.

UNIDENTIFIED FEMALE: I call everybody honey because I don't remember their names.

MOOS (on-camera): I'll-call my cameraman darling.

UNIDENTIFIED FEMALE: Oh, will you? I don't.

MOOS (voice-over): Baby, is what Obama Girl calls her favorite senator. Well now she is pedalling the best deodorant.

UNIDENTIFIED FEMALE: I had a problem of excess perspiration before I started using certain dry.

MOOS: We never noticed her excess perspiration before.

UNIDENTIFIED FEMALE: No more stains. Pretty sexy, huh?

MOOS: Actually, not so much. Now this is sexy.

SALGADO: I'm pretty much sure that I'm the only guy in the world with a Hillary tattoo.

MOOS: Luis Salgado is a tattoo artist in Philadelphia. Another artist by the name of Buffalo Bill gave him this Hillary tattoo as a tribute to the wanna-be first female president.

SALGADO: It's awesome. I'm in love with the tattoo.

MOOS: It took about three hours to do.

(on-camera): You're not worried she may be -- end up being kind of a loser? And then you're stuck with a loser on your thigh?

SALGADO: No. In my eyes, Hillary is never going to be a loser.

MOOS (voice-over): She's certainly gotten under his skin.

UNIDENTIFIED MALE: Does that make Hillary a "dermacrat?"

MOOS: By the way, if you want to see Luis' view of Hillary, it's upside down, but with a leg up on the race.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

LEMON: Got some ink somewhere? Do you have any ink?

KEILAR: No ink.

LEMON: No tats?

KEILAR: No, I promise. No tats. But what if I did, Don? You would have just fully embarrassed me on national television.

LEMON: Oh, come on. I would never do -- I would never do that, sweetie.

(LAUGHTER)

KEILAR: OK, hun.

LEMON: The next hour of the CNN NEWSROOM starts right now.