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Federal Mortgage Giants in Trouble; Firefighters Battle California Blazes; Remains of Kidnapped Soldiers Found in Iraq; Sudanese President May be Arrested for Genocide; Former Hostages to Return to Families
Aired July 11, 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: Fannie Mae and Freddie Mac, they have helped you buy your house. Now the mortgage crisis has landed on their doorsteps, and investors are running for the exits. We're watching all the markets for you.
KYRA PHILLIPS, CNN ANCHOR: A soldier goes to war knowing death can happen anywhere, but in the shower in a U.S. barracks from sloppy wiring? It's a tragedy in Iraq and now an outrage on Capitol Hill.
Hello, everyone, I'm live -- Kyra Phillips, live in New York.
LEMON: And I'm Don Lemon, live here at the CNN world headquarters in Atlanta.
You are in the CNN NEWSROOM.
Well, they hold or guarantee half the mortgage debt in America, $5 trillion we're talking about. And despite official reassurances, investors feel the mortgage giants known as Fannie Mae and Freddie Mac are in deep trouble. Their stocks plunged today, again taking the Dow down with them. On the same day crude oil prices hit a record high.
Mortgage problems and oil prices, two forces that have been battering the stock market and the whole U.S. economy. It's been doing it for months. Is this the perfect storm? We ask that question now to CNN's Susan Lisovicz.
She joins us now from the New York Stock Exchange with the very latest on that -- Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Don.
Well, it's one of the reasons why many economists say this downturn will not be short or shallow. And the anxiety is playing out dramatically on Wall Street.
The Dow briefly fell below 11,000 for the first time in two years. The "New York Times" says Bush administration officials are considering a takeover of Fannie Mae and Freddie Mac, triggering worries about the entire financial sector. Shares of the government- sponsored lenders are losing about one third of their value today alone.
Comments by Treasury Secretary Henry Paulson to calm fears of a government takeover had no impact to the broader market. Paulson says the government's primary focus is supporting Fannie and Freddie in their current form and that the administration is talking to the companies and to regulators.
Fannie and Freddie have lost nearly $13 billion over the past year, and that makes raising capital that much more difficult when their shares go into this kind of freefall.
Also today, oil briefly topped $147 a barrel for the first time. There are tensions involving Iran, the fourth biggest oil exporter in the world, as well as threats of violence in Nigeria and the planned oil strike in Brazil.
And yes, you can see it play out most dramatically in the numbers on the big board. Right now, the Dow Industrials are close to session lows, down 235 points, or 2 percent. The NASDAQ and the S&P 500 are each down 2 percent, as well.
Don, back to you.
LEMON: Susan Lisovicz, we'll be -- I'm sure you'll be joining us throughout the day. We'll be watching the markets all day with Susan Lisovicz. We appreciate it, Susan.
And we've been talking about Freddie Mac -- Fannie Mae and Freddie Mac. They are funny-sounding names for two very important financial players. Now, Fannie Mae is officially -- officially -- the Federal National Mortgage Association. Freddie Mac is the Federal Home Loan and Mortgage Corporation.
The two government-sponsored companies were created by Congress to help Americans buy houses. They're exempt from state and local income taxes and Security and Exchange Commission registrations and fees.
In 2004, then Federal Reserve chairman Alan Greenspan warned their rapid growth needed to be curve, because their expansion threatened the financial markets.
One analyst says if Fannie Mae and Freddie Mac had been created in the private sector, they wouldn't look like this. He says they had a public mission to expand housing and run what essentially is an insurance company -- Kyra.
PHILLIPS: Other top story: two western states are ground zero for firefighters. Several thousand are making a stand at a river outside Paradise, California. They're worried that the winds will shift, which could push the flames right past the fire line.
That's what happened overnight in a suburb of Spokane, Washington. At least seven homes and another structure burned before the winds died down.
And folks who live in that neighborhood are taking stock of what burned and what didn't. More than 200 people had to get out when the flames got too close. The fires raced across more than 1,200 acres and one homeowner could only watch as his neighbor's house went up in flames.
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UNIDENTIFIED FEMALE: They go up in flames. You'll start to see the smoke and then you'll see flames in the whole structure. I would say, in 45 seconds to a minute, the whole house is engulfed. So it's just -- it's devastating to see how quickly Mother Nature can move and can destroy things.
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PHILLIPS: The governor has declared emergencies in Spokane and Ferry County. Fires are burning in four other counties. Firefighters in California are watching the weather as they work to save Paradise.
Our Reynolds Wolf is also there, watching the weather and watching them work -- Reynolds.
REYNOLDS WOLF, CNN METEOROLOGIST: That's right. A lot of work out here. And you know, Kyra, this wildfire has already burned over 49,000 acres. And for a fire of that magnitude, to fight it correctly, you've got to have teamwork. And we have got some teamwork behind us.
Take a look at that crew. You see one way off there in the distance. Kyra, that crew is from Beverly Hills, California. They left the beauty and splendor of Rodeo Drive and headed northward. They've been here ever since.
And right next to them, you've got crews from places like Santa Monica on down the line. We go from crews from Santa Monica to places like Culver City. Here they are, beginning to pull their way out onto the road. They -- this crew is actually headed down towards -- many of these guys headed down to a place called Deadwood Road, where yesterday we had quite a bit of burning. There have been some flare- ups down there as we speak, so they're going to be making their way down to extinguish those flames.
Speaking of some major road, let's go back here. I've got a photojournalist, Jeff King, with me. We're going to walk our way past the San Ramon Valley command vehicle. You're going to see these traditional crews going to be coming up, Kyra.
What's interesting, these guys have been coming up from a blaze that is just a few miles around this bend. And the blaze we've been talking about is super heated. We're talking flames in excess of 1,400 degrees Fahrenheit. They've been battling it through much of the evening. They're trying to keep the flames from going over this road.
Earlier, a little bit of an interesting side note, there was a tanker truck that was actually going down this road, Kyra. Not a water tanker truck, a fuel tanker truck. High octane fuel going around this bend past that road block to a fire. Now, think about this. Fuel and a fire, the two aren't supposed to mix. You should have seen the firefighters here waving and telling that driver to stop, and that driver's face is about as red as this vehicle, I guarantee you. But he turned around. Everything's safe and life is good.
But still the fire continues to burn. Fifty percent contained. The elements are going to be a little better in terms of the sky conditions; however, if the wind builds, those planes won't be flying. Let's send it back to you.
PHILLIPS: Well, Reynolds, you bring up a great point. I mean, we need to get the word out. If there are people that are tuning in within that area or traveling across country like truckers, bringing in fuel, they need to know what's cut off, where they can travel and can't travel.
So are there certain areas that firefighters are saying, "Hey, do not come through these parts where we're battling the fire?"
WOLF: Oh, absolutely. There are a lot of signs. I mean, they seem to be aware. But I think most of the people, most of the people that travel this roadway are well aware that you're going into a fire area. If you're -- not trying to be mean to the truck driver. We don't know who he was, and he's anonymous.
But if you have a little bit of a brain and if you have one of these things on the end of your face, you can smell the smoke for miles away. I mean, the skies are thick with it. Not so much now because we're getting a bit of a clearing spell right here on top of the mountain. But I mean, you have to question your sanity if you're going to drive a fuel tank truck down this roadway. Water, gas, fuel...
PHILLIPS: You couldn't have put it more politically correct. You've got noses, eyes, and you're paying attention. All right, Reynolds Wolf, appreciate it.
All right, Bonnie, back in Atlanta, you are, of course, monitoring all of the Google map and conditions across that area and other parts where those fires are burning and the winds.
BONNIE SCHNEIDER, CNN METEOROLOGIST: That's right, Kyra. And first off, the temperature is still very hot. We still have red flag warnings in place a little bit further north in northern California.
Temperatures in the valleys are as hot already as 93 degrees. In Sacramento, it's 80 degrees. So some of the red flag warnings that were in place for this region expired. But these that you see here in red, they actually continue straight until 6:00 p.m. tonight Pacific time.
Now as we take a look at what else is happening, we're looking at hot temperatures in the valleys. Some will climb into the triple digits. But some good news finally this weekend. We're expecting that cool, damp marine layer moving onshore. So the onshore flow brings in a little bit more moisture. Some of the areas in this region are seeing relative humidity drop as low as a single digit. So any more moisture in the air will only help firefighters in their battle to contain the flames.
The other big story we're following is monsoonal moisture. We saw very heavy rain in and around the Phoenix area last night. We still have flood advisories for southern New Mexico.
And some of the rainfall totals are incredible. Phoenix saw over 2.5 inches of rain, Kyra, and we saw some very heavy rain also into Queen Creek, Arizona.
Coming up a little bit later on, I'll talk more about why we're seeing so much rain in this region. It has to do with monsoonal moisture. And I'll get more into that later on.
PHILLIPS: Sounds good. Bonnie, thanks.
LEMON: The uncertainty is over, but so is the hope. The bodies of U.S. Army Private Byron Fouty and Sergeant Alex Jimenez have been found in Iraq, 14 months after they were kidnapped.
Fouty and Jimenez were found -- were among seven U.S. soldiers and an Iraqi interpreter who were ambushed in an area south of Baghdad known the Triangle of Death. Four troops and the interpreter were killed. The body of a third kidnap victim, Private Joseph Anzack Jr., was found a few days after the ambush.
The Fouty and Jimenez families got the grim news yesterday.
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LEMON: Apparently, we're having some problems with that. We wanted to listen from the father of Sergeant Jimenez who was speaking from his home in Lawrence, Massachusetts. We'll try to get that for you a little bit later on in the NEWSROOM.
But Waterford, Michigan, Private Fouty's stepfather there, Gordon Dibler, says he is still in shock. He says he always held out hope his stepson would be found.
CNN's Frederik Pleitgen is following this story from Baghdad. And Frederik, he joins us now.
We want to know what happened on that end, Frederick.
FREDERIK PLEITGEN, CNN CORRESPONDENT: Absolutely, Don, horrible news, of course, for the families of these two soldiers.
I do have some new information for you from the U.S. military here in Iraq. They say the remains of these two soldiers were recovered on the 8th of July near a town called Jurf as Sakhr. That's about 40 miles southeast of Baghdad. And when you look on the map, it's actually really not very far from the place that these soldiers got ambushed and were then taken.
And the U.S. military here in Iraq tells us that they got a tip from a man that they captured who then led them to the place where these two remains were still lying here near that village of Jurf as Sakhr. And shortly afterwards, the remains were flown to America for positive identification. And that, of course, has brought that grim confirmation for these families today, Don.
LEMON: Was there any hope, though, for the military that they would actually find these troops alive?
PLEITGEN: That's a very difficult question. Of course, the hope dwindled in these past couple of months. And as you said, these two soldiers were missing for 14 months. And of course, during the course of that time, the hope dwindled.
But I can tell you over the past summer of 2007, I was actually in that area a couple of times, and every time we went down there -- and we went down there to cover completely unrelated stories. But every time we went down there, I always heard from the military down there, "We have an operation going to find our missing soldiers" or "we have some operation coming up to try and find our missing soldiers."
So this was something that, even as hopes were dwindling to ever find these two soldiers alive, it was still very high on the priority list of the U.S. military down in that area, Don.
LEMON: Fred Pleitgen, thank you very much for your reporting -- Kyra.
PHILLIPS: Well, we're following another mystery involving a female soldier assigned to Ft. Bragg. Second lieutenant and nurse Holley Wimunc has been missing since yesterday, when fire damaged her apartment in Fayetteville, North Carolina. Arson investigators believe that fire was deliberately set.
Wimunc told a court in May that her husband held a loaded gun to her head, choked her, and threw her around the living room. That's what affiliate WRAL is reporting. Her disappearance comes three weeks after a pregnant soldier was found dead in her Fayetteville motel room. Today, Army investigators say a second autopsy confirms that Megan Touma was killed.
Now take a look at this. Firefighters in McKeesport, Pennsylvania, just outside Pittsburgh, pull off a daring early-morning rescue. They got trapped tenants, including children, out of that blazing apartment building just in time. Witnesses say that the firefighters went window to window to get the people out of there. And we've heard that no reports of injuries have come through.
LEMON: A family mourns the deaths of two newborns in a hospital ward where Heparin was mis-prescribed. Now the babies' grandparents are speaking out. We'll hear their emotional comments. PHILLIPS: And tensions in the Middle East skyrocket after a new Iranian missile test. But was the dramatic photo of missiles -- this one right here -- blasting off from the Iranian desert faked? We're going to get details from our senior Pentagon correspondent, Jamie McIntyre.
And this.
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KEITH STANSELL, FORMER HOSTAGE: It's about ten pounds of chain 15 feet long. It's wrapped around your neck. It looks like this. OK? And then about three feet behind you, you've got a guy holding your chain with a dog leash and then he's got a rifle pointed at your back.
(END VIDEO CLIP)
LEMON: Dramatic words from three freed American hostages about their long ordeal in captivity. We've got their exclusive interview with Headline News' Robin Meade.
You're watching CNN, the most trusted name in news.
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PHILLIPS: You're in the CNN NEWSROOM, and I'm Kyra Phillips.
Call her the latest version of G.I. Jane. After what she's done just to get into the Army, boot camp should be a breeze. Her story straight ahead.
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PHILLIPS: Well, the leader of Sudan soon could be the first sitting president to be indicted on charges of genocide. CNN has learned that the chief prosecutor of the International Criminal Court may seek an arrest warrant for President Omar Hassan al-Bashir.
Our senior U.N. correspondent, Richard Roth, standing by with more -- Richard.
RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Kyra, this is an explosive story. The sitting president of a nation, a member of the United Nations, possibly soon to be accused of war crimes and genocide. And what does the U.N. do?
There are aspects of this story that some viewers may find a little confusing. There aren't some countries ready, really, to support this, no matter how dramatic and astounding the accusations are, because there are thousands of U.N. peacekeepers in the nation of Sudan, and the president who might be accused shortly of genocide and crimes against humanity, he has the power to do great damage against those troops.
This week seven peacekeepers were shot and killed in an ambush that many believe is linked to the government. The government is fighting a campaign, years now, with rebels there for control and power in Darfur, a region the size of Texas.
We asked the Sudanese ambassador what would be the reaction if his country's president was accused of war crimes or genocide?
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ABDALMAHMOOD ABDALHALEEM, SUDANESE AMBASSADOR TO U.N.: We strongly condemn any such attempt like this. We're broadly condemning, the strongest possible terms, any notion of that, because we know our leadership. We know the quality of our leadership. And it will only -- be condemned not only by here or by the revolutions (ph) of our country here, but by 40 million Sudanese.
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ROTH: There are 9,000 peacekeepers in Darfur. They are undermanned, underfunded, and they're already at great risk. And there's concern here at the United Nations about their fate.
But there's also great interest in the pursuing of justice. An investigation, should it turn out that way, that leads to a war crimes accusation, will be widely supported by human rights groups and others. This would be the first time a sitting president has been indicted by this court.
And Kyra, the United States is not really touching this story. The U.S. is not a member of this international tribunal court. They never agreed to the treaty. There was always fears that a U.S. politician or president or someone down the line could be arrested by the court, even though the advocates of this tribunal said that would never happen and there are a lot of restrictions to prevent that.
So the U.S. right now steering clear of it. But they'll be inside the Security Council if a country down the road wants to block this investigation and accusation of genocide, which it's possible, legally, they could do.
PHILLIPS: Well, we have covered the human rights speeches in Darfur for years, and it's about time that something is taking place. Richard Roth, live from the U.N. Thanks, Richard.
LEMON: It is all about the economy. As they've done all week, Barack Obama and John McCain are talking with voters about issues that affect their pocketbooks. Today both presidential candidates are on the trail in the Midwest.
McCain is courting voters in Wisconsin. And just a short time ago, he spoke at a town hall in Hudson. While the Republican talked a lot about jobs and taxes, he also focused on an issue affecting all of us: spiraling oil prices.
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SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I'll do everything in my power to get those offshore reserves exploited -- explored, discovered, and -- explored and exploited, and we will send the message. We will send the message, all over the world, that the United States is on the road to become independent of foreign oil, and America will stand on its two feet again.
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LEMON: Speaking to working women in the audience, McCain claimed Obama's tax policies would place a heavy burden on them and their families.
High gas prices were Barack Obama's focus at a town in Dayton, Ohio, among other things. Democrats said oil companies are not effectively using the land they already have rights to drill.
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SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: If we started drilling today, the first drop of oil wouldn't come for another seven years. And even then, it wouldn't have a lot of impact on prices because it would go to a world oil market. The Chinese and the Indians, they'd be buying the oil just like us. You would not see a significant savings. Everybody agrees with that.
Meanwhile, the oil companies currently have the rights already to drill 68 million acres of land in offshore areas that they haven't touched.
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LEMON: Obama says America's addiction to fossil fuels is one of the most serious threats to national security.
Some insurance companies will pay for Viagra, but not birth control pills. That fact caught John McCain off guard at a campaign stop.
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UNIDENTIFIED FEMALE: ... said it was unfair that health insurance would cover Viagra, but not birth control. Do you have an opinion on that?
MCCAIN: I don't know enough about it to give you an informed answer because I don't recall the vote.
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LEMON: Next hour, we'll have more on the Republican presidential candidate's awkward moment.
PHILLIPS: Their sons went off to war only to die in places that were supposed to be safe. Was it shoddy work by U.S. contractors? Could the military have done more to prevent their deaths? We'll tell you how Congress is getting involved.
And a brother, sister reunited after seven decades apart. We'll have their incredible story straight ahead.
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PHILLIPS: Keith and Kaylynn Garcia will be buried tomorrow. They are the twins who died in the neonatal intensive care unit in a Texas hospital after receiving overdoses of the blood thinner Heparin. Their mother is too distraught to talk about it, but grandparents Hector and Maggie Chapa say they want some answers.
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HECTOR CHAPA, GRANDFATHER OF GARCIA TWINS: It's not easy trying to deal with the turmoil that has happened. It is very difficult just trying to talk and visit with my daughter, because she's hurting so bad.
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PHILLIPS: Hospital officials said that 14 newborns got Heparin overdoses because of a mistake in the mixing process. It's not clear yet whether that's what exactly killed these twins. But we're going to talk with the family's attorney next hour in the CNN NEWSROOM.
LEMON: The three American hostages freed last week from the Colombian jungle aren't home yet, but they're closer than they've been in years. They're talking about their ordeal exclusively with Headline News' Robin Meade in San Antonio, Texas. Bits and pieces of an unbelievable story are unfolding. Here's Robin.
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ROBIN MEADE, HEADLINE NEWS CORRESPONDENT: The new bit of information that we have about the three former American hostages rescued from the jungles of Colombia is that they're going to be going home to their families tomorrow.
Now, they've gone through what's called a reintegration process, where they try to wrap their minds around living in a free society after living in barbaric conditions in the jungles of Colombia for five years at the hands of a rebel group, FARC.
What is this?
STANSELL: Imagine having that. That's a lock that was put around my neck every night. This lock with five meters of chain, thick, one-inch links, went to his neck. So this was locked around my neck like this. The other one is locked around Marc's neck. We slept like that. Tom had the exact same thing. He slept with a Colombian captain the same way.
You're sleeping with ten pounds of chain and this lock around your neck.
MEADE: Those men said, too, that when they were in captivity they would fantasize and just kind of latch onto any detail they could to try to keep their mind sharp. And they would talk about how when they were free, they were going to take a big motorcycle ride across the country.
Well, now, my friends, they are going to do that. They're calling it the Freedom Ride. They already have an idea about what they want their T-shirts to look like. Just to live out that fantasy that they had during all those years in captivity in the jungle.
But they're also concerned about the people who are still being held, who are still kidnapping victims under the FARC rule, basically, in Colombia. So they're setting up a fund. They don't have information yet where people can give, but they're setting up a fund to help those families of the people who are still lost.
Back to you.
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LEMON: Robin, thank you.
This story has garnered the world's attention. And tomorrow night at 8:00, Robin Meade, in the first interview with three Americans held hostage for over five years. Their emotional story, in their words, tomorrow and Sunday nights, both nights, 8:00 p.m. Eastern right here on CNN. And you can watch Robin's entire interview on CNN.com. Just add backslash "video," and you're there.
PHILLIPS: Straight ahead, tensions in the Middle East skyrocket after new Iranian missile tests. But was this dramatic photo of missiles blasting off from the Iranian desert faked? We're going to get details from our senior Pentagon correspondent, Jamie McIntyre.
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LEMON: Hello, everyone, I'm Don Lemon live here in the CNN world headquarters in Atlanta.
PHILLIPS: And I'm Kyra Phillips live in New York.
You're in the CNN NEWSROOM.
We're going to start right now at the half hour, 1:32 Eastern time. Here are some of the stories we're working at this moment.
There are reports that Sudan's president will face charges of genocide and crimes against humanity, stemming from the conflict in Darfur. U.N. officials say that prosecutors at the International Criminal Court will seek a warrant for the arrest of Omar el-Bashir.
And a federal appeals court has ruled against the Bush administration in a fight over White House visitor logs. A government watchdog group wants to know how often religious conservatives visited the White House and the office of Vice President Cheney.
Martin Luther King's children are fighting each other in court. Bernice King and Martin Luther King III have filed suit against Dexter King. They say he's withholding information about their father's estate. LEMON: In the shadow of this week's missile tests, Iran is apparently preparing for new talks over nukes with a European envoy. Iran's official news services say, the country's top nuclear negotiator will sit down with the E.U. foreign policy chief, a week from tomorrow in Geneva. The E.U. confirms a meeting but not the time and the place. On the table, rewards if Iran stops enriching uranium. Punishments if it doesn't. The west, as you know, fears Iran is building nuclear weapons. Iran says, it isn't.
Back now to those missile tests. Now, you may have seen a dramatic photo of four missiles blasting off at once from the Iranian desert. And you may have been deceived. The testing did take place, it did take place to some extent, but this particular photo released to the world by Iran's Revolutionary Guard, was probably faked.
CNN's Jamie McIntyre says, it's not rocket science.
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JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: When I first saw the picture, it looked more like this. And then we saw the original picture where you could actually see the -- down here at the bottom, it looks like an SA-2 that U.S. intelligence believes was actually fired later.
But, if you -- just to show you if you're familiar with Photoshop at all, you just use the cloning tool to take a little bit of the smoke from a bottom of another missile, over here, which it looks like they did. Because this cloud matches over here. And then you just grab up here some of the missile there and sort of add that in. And in no time, you've got four missiles instead.
Now, they were a little more sophisticated in how they sort of added some more clouds at the bottom and stuff. But that's basically how you digitally alter the picture. And what it does is undermines their claim that they fired as many missiles as they said.
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LEMON: Well, Tehran hasn't responded to widespread of doctored reports.
PHILLIPS: At least a dozen U.S. trips have died horrible, painful deaths in Iraq. But, they didn't die in combat. They were electrocuted by faulty wiring on U.S. bases, in some cases simply by turning on water to take a shower. Senate Democrats today held a policy meeting to hear more. One soldier's mother said it's time for the military and it's civilian contractors to take responsibility.
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CHERYL HARRIS, MOTHER OF FALLEN SOLDIER IN IRAQ: I stand before you today to demand accountability. To implore that preventive measures be adopted. And to ask for your commitment that no military family will have to endure the paralyzing pain of this type of senseless tragedy. (END VIDEO CLIP)
PHILLIPS: Well, CNN's special investigation correspondent Abbie Boudreau, has been reporting on the electrocutions of U.S. soldiers in Iraq. Cheryl Harris, the woman you just heard from, is among the people that she interviewed. Abbie also uncovered some troubling questions about the military's knowledge of the electrical work being done on U.S. bases.
Here it is.
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ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT (voice-over): A memorial for a fallen soldier.
HARRIS: The doorbell rang and I looked at my husband and I said, oh, it must be a neighbor.
BOUDREAU: Ryan Maseth was 24 years old, from Pittsburgh.
HARRIS: And he went to answer the door and I could hear the boots coming in the door. I could hear the footsteps.
BOUDREAU: No ordinary soldier, Ryan Maseth was highly decorated. An Army ranger in the Special Forces, a Green Beret. He was trained to survive. One of three brothers serving in Iraq.
Cheryl Harris is Ryan's mother.
HARRIS: I remember saying to them, which one? And they would just stood there and look at me quietly. And I just said, one of them are dead, one of them has died. And they finally said, Ryan.
BOUDREAU: But Ryan Maseth did not die on the battlefield. He died on a U.S. base in his bathroom.
HARRIS: I can't make sense around Ryan's death. That he died like that. That he was so trained.
BOUDREAU: She was told her son was electrocuted while he was taking a shower. She says, Army officials told her he may have been holding a small appliance when it happened.
HARRIS: It just created so much doubt. And I know Ryan. I know that he would not have been in the shower with a small appliance and electrocuted himself.
BOUDREAU: Ryan's mother felt the Army wasn't telling her the whole truth. She kept pushing. Soon, she uncovered what really happened to her son.
The Army finally told her that her son's shower water pump was improperly grounded. It short circuited, sending a lethal jolt of electricity through him. Leaving burn marks across his body and even singeing his hair. Reports showed he likely suffered a long, painful death.
Electrocutions in Iraq, have been a problem the Army has known about for years. In 2004, the Army even issued this warning bulletin, calling electrocution a killer growing at an alarming rate. Ryan Maseth is just one of at least 12 U.S. military personnel who have been electrocuted in Iraq since 2003, according to military and government officials.
(on camera): So why weren't the problems in Ryan Maseth's building fixed? These Army documents show a U.S.-paid contractor inspected his building and found serious electrical problems. That was 11 months before Sergeant Maseth was electrocuted.
(voice-over): The contractor is Houston-based Kellogg Brown & Root, or KBR. KBR noted several safety issues concerning the improper grounding of electrical devices. But KBR's contract did not cover, quote, "fixing potential hazards." Only repairing items as they broke. So the electrical problems were never fixed. Only after Sergeant Maseth died, did the Army issue an emergency order for KBR to finally fix the problems.
In this internal government e-mail obtained by CNN, a Navy captain admits the Army should have known the extent of the severity of the electrical problems. The e-mail then states the reason the Army didn't know was because KBR's inspections were never even reviewed by a qualified government employee. Congressman Henry Waxman, chairman of the House Oversight Committee, is now calling for an investigation.
REP. HENRY WAXMAN (D), OVERSIGHT COMMITTEE, CHMN.: It's inexcusable to contemplate the idea that we send our soldiers to Iraq. And then because of neglect or incompetence, they die because of electrocution.
BOUDREAU: In a statement to CNN, the Department of Defense wrote, this is a serious issue. Adding that they have no information that their contract management officials failed to take appropriate action in response to unsafe conditions brought to our attention. They are reviewing the issue.
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PHILLIPS: And KBR declined to speak on camera to CNN. But the company sent us a statement saying it found no evidence of a link between the work it's been asked to perform and the reported electrocutions. The defense contract management agency responsible for handling the contract with KBR also declined to answer CNN's questions.
Now, we have more to talk about on this troubling story. Coming up next, Lorraine McGee (ph) will joining us. She testified earlier today, as well, in that hearing that we told you about. And her son, Army Sergeant Christopher Everett (ph), was electrocuted almost three years ago in Iraq. Next hour, we will hear from her.
LEMON: After years of decline, the number of teens getting pregnant has gone up. Dr. Sanjay Gupta will tell us if we're looking at a blip or a trend.
PHILLIPS: And ahead we'll introduce you to the latest version of G.I. Jane. After what she's done just to get into the Army, well, boot camp should be a breeze.
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LEMON: We have good news to tell you about teens and cigarettes. Not so good news about teens having babies, though. A new study suggests teen pregnancies are up for the first time in about 17 years, while the number of eighth graders smoking has gone down.
CNN's Sanjay Gupta -- Dr. Sanjay Gupta, talks about the study with or Kiran Chetry.
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DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: It could just be a red flag, just a blip hopefully, on the monitor, as opposed to a trend. But, it definitely is going up. We're seeing more teen pregnancies over the last year than really in the last 15 or 16 years before that.
And you know, if you look over all the numbers, 21 births per thousand in 2005, went up to 22. That may not sound like a huge gain. But the point is, that it's going in the wrong direction. I think that's what everyone is so focused on.
Teen pregnancies have a whole host of problems, as you might imagine. Overall, they have poor outcomes in terms of the babies. The mothers are less likely to get prenatal care, they're less likely to gain the appropriate weight. So, it could be you know, a serious problem overall, for these young mothers. But why it's happening? That's sort of the $64,000 question here.
KIRAN CHETRY, CNN ANCHOR: Very interesting. All right. And there's also some new stats on about teen smoking. So a bit of a bright spot in the report?
GUPTA: Yes, you know. I get to give good news every now and then. But, you know, it's funny because you think about eighth graders. When I was in the eighth grade, maybe it was just me, but I wasn't really exposed to a lot of this stuff.
But it turns out like several years ago, about 10 percent of eighth graders were smoking daily, back in 2006. And now if you look at -- I'm sorry, 1996. In 2007, it's gone down to 3 percent. So, that's good overall with regard to smoking. There may be other problems, though. There may be other drugs that are being used more frequently. And that is a concern, as well, that this report is sort of looking at. It's harder to gauge because these things are done on surveys and not everyone is always forthright on surveys in terms of what they are and are not doing.
(END VIDEO CLIP) PHILLIPS: Well, U.S. troops make a lot of sacrifices, but one had to clear a major hurdle just to sign up. She had to lose more than 100 pounds.
Reporter Janet St. James, with CNN affiliate FAA, in Dallas, has her story.
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ASHLEY BARRETT-CARTER, LOST 110 POUNDS: Well, these weren't even the fat pants. Well, they are now.
JANET ST. JAMES, FAA REPORTER: That was Ashley Barrett-Carter before, this is Ashley now. More than 100 pounds lighter. She dropped from a size 22 to a 7. Her motivation, a chance to join the Army.
BARRETT-CARTER: They told me that I needed to lose a little bit of weight to get started,to put it nicely.
ST. JAMES: Recruiters told Ashley she didn't meet the physical requirements. They advised her to lose some weight and come back.
STAFF SGT. RYAN MEMOLO, U.S. ARMY: Normally when that happens, we don't ever see them again. But Ashley came back.
BARRETT-CARTER: I would come back at first, after every 20 pounds and then as it got closer to my goal, it was every couple of weeks. And then it was every -- then it was every week.
ST. JAMES: Ashley says the key to her success wasn't a diet, it was a lifestyle change. A change that includes eating smaller portions. And hitting the gym. For Ashley, a lifelong dream of joining the Army, is now a reality. Her first mission accomplished.
BARRETT-CARTER: I'm very proud to reach that goal. It also -- it showed me that I can work towards anything and get it done.
MEMOLO: So to set a goal saying I want to serve my country and this is what I've got to do to get there and come back, is actually pretty amazing.
ST. JAMES: Janet St. James, channel 8 news.
(END VIDEOTAPE)
Some insurance companies will pay for Viagra, but not birth control pills. That issue catches John McCain off guard at a campaign stop.
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QUESTION: ... said it was unfair that health insurance companies cover Viagra, but not birth control. Do you have an opinion on that?
MCCAIN: I don't know enough about it to give you an informed answer because I don't recall the vote.
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LEMON: In our next hour, we've got more on the Republican presidential candidate's awkward moment.
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LEMON: President Bush is addressing issue No. 1, namely the ripple effect of record high oil prices. The president consulting with his team of economic advisers late this afternoon -- or late this morning, I should say, as they tried to devise a strategy to relieve the pain at the pump and in the pocketbook of so many Americans.
The president's answer? Explore and drill at home.
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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The vast potential of crude oil reserves on offshore lands, as well as in Alaska, as well as in the oil shale in the Western part of our country. And yet the Democratic leaders of Congress have consistently blocked opening up these lands for exploration.
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LEMON: The president has long blamed congressional Democrats for stalling on more offshore oil exploration.
We're exploring new territory when it comes to the rising price for oil. We hit not one, but two new record highs this morning -- topping $147.27 a barrel. The hike was stoked by fuel supply fears, Nigerian militants, Iran's sabre rattling and a planned labor strike in Brazil.
PHILLIPS: CNN's senior business correspondent, Ali Velshi, joining us now for a breakdown on today's record oil run and all the supply and demand. Is that it, or is it something else?
You and I were talking about Iran, Brazil and Nigeria. How do they all rank?
ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Well, let me tell you -- first of all, we had -- last Thursday we saw this big record in oil. It was 146 bucks almost. It got there. And then, the beginning of this week, we saw oil come down quite a bit. Then we saw it gain $5.60 yesterday, going up to about 141 bucks. That's the second biggest gain on record. Then, overnight, over another $5. So 10 bucks in two days, to $147.26 -- what Don was just talking about. It has pulled back a little bit.
But here's what's been going on. Earlier in the week, we saw Iran talking about a test of these conventional missiles that could reach Israel. Iran had said if anybody attacks Iran, they'll close off the Strait of Hormuz, through which 40 percent of all the oil in the world that is shipped travels. So that would be a bad thing. Now, Nigeria -- Iran is the fourth largest producer of oil in the world. Nigeria is the sixth largest producer of oil in the world. And the interesting thing about Nigeria is it is the fourth largest supplier of oil to the United States. So it's very important to us because it gets shipped right across the ocean to the United States.
Now look at that map. Where you see that line down from the capital, of Abuja, you go right down to the bottom and that's the Niger River. The Niger delta is on the coast there, and that's where a lot of the oil installations are, the oil factories and pipelines. There has been a lot of rebel activity there in the last two years.
Normally they pump out 2.5 million barrels worth of oil per day. There has been a cease fire in the last few weeks. And the rebels have said that when that cease fire expires at what would be around 7:00 Eastern tonight, they will resume attacks. So that's what initially pushed the price of oil up.
Then we have Brazil. Not as major an oil producer, but a significant one, and they've got oil workers who said they'll go on a five-day strike starting on Monday.
So you see, in the entire world, we produce 87 million barrels of oil a day, and we use somewhere between 85 and 86.5 million barrels a day. So we have half a million barrels of excess supply in the world. So when you've got all these countries that are oil producers and there is a chance that some of that oil won't flow, we could actually get a day where we're consuming more oil in the world than we're producing.
PHILLIPS: I noticed that you were talking about Nigeria, Iran and other Brazil, but not Iraq. You've got Basra, which has all those oil platforms and the insurgents go in there and they tap in, they steal the oil, everybody wants a piece of that oil --
VELSHI: But we're still considering Iraq a net gain over the last few years because there was a period where Iraq was putting out no oil. They are up above 2 million barrels a day. That could get up, according to some people, to 6 million barrels a day, which is why a lot of people say we should be putting our attention into making sure that infrastructure exists and that the world can get that oil. So we want to --
PHILLIPS: We're definitely -- the U.S. is definitely focused on Iraq. That is for sure.
VELSHI: Right. But we need --
PHILLIPS: And the oil.
VELSHI: At this point, we need to be very specific about the fact that there is a lot of oil in Iraq. And that's -- we need to sort of make sure that that is fully developed and people aren't stealing it on the way to the pipelines. Because we are really -- we don't have enough oil in the world right now. So Iraq is very important to this equation. That could be one of the biggest oil producers in the world, once they get it all back up and running.
PHILLIPS: And once again, not just our demand but international.
VELSHI: International demand.
PHILLIPS: Thanks, Ali.
VELSHI: OK.
PHILLIPS: All right.
LEMON: Siblings separate by heart break and history reunited after decades apart. Their story straight ahead in the CNN NEWSROOM.
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LEMON: From prices at the pump, to prices at the supermarket, the economy is the hot topic on the campaign trail. You can better believe that.
CNN producer, Josh Rubin is talking to voters from the Election Express.
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UNIDENTIFIED MALE: People are just constantly complaining about the price of gas.
UNIDENTIFIED MALE: I spend $15 a day to drive to work and back.
UNIDENTIFIED MALE: Right now gas prices are really killing me.
UNIDENTIFIED FEMALE: It's pretty frightening. I definitely have not been encouraged that there is going to be any decrease.
UNIDENTIFIED MALE: As a family man, we now have to do things that we should have been doing ten years ago.
UNIDENTIFIED MALE: I've decided to stop smoking. I can get a gallon of gas for what it costs me to buy a pack of cigarettes.
UNIDENTIFIED FEMALE: I know we've gone to some more used clothing stores for our kids.
UNIDENTIFIED MALE: I got health insurance for my family, but we're going to have to let it go because -- you've got to eat and you need gas to get to work.
JOSH RUBIN, CNN ELECTION EXPRESS PRODUCER (on camera): Quitting smoking to save money is admirable. Buying used clothing is frugal. But having to give up your health insurance because gas prices are too high -- well that is downright scary.
And I'm hearing more and more stories like this every day.
UNIDENTIFIED MALE: We've got to promote some type of change and doing things differently. One thing is using our mass transit systems, smaller vehicles, looking at alternative fuels. But in my case, we make out a list of where we're going and what we're going to do to make one big trip in lue of six or seven small trips.
UNIDENTIFIED MALE: It's us the people, also, who have to get involved. There's things that we have to do.
(END VIDEOTAPE)
