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AMERICAN MORNING

Taliban Extending its Control over Pakistan; Congresswoman Denies Wrongdoing, Blasts NSA; Morgan Stanley Posts $117M Loss; Wells Fargo Reports $3 Billion Profit; Freddie Mac CFO Commits Suicide

Aired April 22, 2009 - 08:00   ET

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


KIRAN CHETRY, CNN ANCHOR: And good morning. Welcome. It's Wednesday, April 22nd. I'm Kiran Chetry.

JOHN ROBERTS, CNN ANCHOR: Good morning to you, I'm John Roberts. We got a lot to cover this morning and here are the big stories that we'll be breaking down for you in the next 15 minutes here in the most news in the morning and...

CHETRY: Sorry.

ROBERTS: Go ahead.

And breaking news. A dangerous development in Pakistan as the Taliban proclaims victory in its attempt to control a district just 60 miles from the capital. It is a key territory and a setback in the fight against the Taliban. In a moment we're going to take you live to Islamabad.

A major voice in congress on national security issues now fighting for her political life. California democrat Jane Harman says she's outraged by reports her conversations were secretly wiretapped by the feds. We're live in Washington with that story.

Speculation about a thaw in U.S.-Cuban relations may have been premature. Fidel Castro now saying that President Obama misinterpreted Raul Castro's comments last week about his willingness to discuss everything with the United States.

And we begin with the breaking news overnight this morning. The Taliban expanding its control over Pakistan. This morning the terror group just 60 miles from the capital, the latest show of force coming just days after an imposed Islamic law in the violence plagued Swat Valley. And right now growing concern in Washington over the Taliban's control and Islamabad's reluctance to recognize it.

CNN's Barbara Starr is live at the Pentagon. And what is the response there from military leaders to this latest development, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: John, they could not be more concerned about it. You put your finger on it. It's this expansion of the Taliban into central Pakistan. Admiral Michael Mullen, the chairman of the Joint Chiefs, in fact, at this hour is on his way to Islamabad for yet another meeting with Pakistani military officials about the situation there. There is also disturbing new intelligence, we are told, by U.S. officials that insurgent leaders are engaging in new collaborations.

You remember Mullah Omar, of course, from the days of the Taliban back in Afghanistan. He, U.S. officials say, is now collaborating with Baitullah Mahsud, the man said to be responsible for the assassination of Benazir Bhutto. They are collaborating to organize new attacks, the U.S. says. And Baitullah Mahsud according to one official now has thousands of fighters at his disposal. This official saying Mahsud turns out suicide bombers like Ford turns out cars -- John.

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

CHETRY: Well, in the near future, don't be surprised if a lot of tweets start pouring out of Iraq. Right now, there's a team of technology experts that are on the ground in Baghdad to help Iraq boost its use of social media. And joining me now from Baghdad is Twitter's co-founder, Jack Dorsey. Jack, thanks for being with us this morning.

JACK DORSEY, CO-FOUNDER, TWITTER: Thank you, Kiran.

CHETRY: So, it's interesting because there's probably a lot of the United States, a lot of people here that really have no idea what we're talking about when we say Twitter or when we talk about tweeting, and you guys are bringing it to Iraq. Why are you there?

DORSEY: We're here on a delegation led by the State Department to really listen to how Iraqis are using technology and if there's a way we can help in any way to bring more transparency to what's going on here and to also bring more transparency back to America.

You know, I -- you know, before I came to this country, I really didn't know what was going on in Iraq. I had a very set concept. But there's a lot of good things happening here and a lot of really important movements that need to be talked about. And who better do that than the Iraqis on the ground?

CHETRY: So, how will Twitter be able to help government officials and also everyday Iraqi citizens communicate better?

DORSEY: Well, the great thing about Twitter is that it's a very approachable and easy technology to get into. And we found while we're here that only 5 percent of Iraqis have Internet connections and Internet ability. But 85 percent of them have mobile phones and have been texting each other and using these phones on a day-to-day basis.

So, the nice thing about something like Twitter is that they can very easily, with just a text message, reach the world. Twitter works over SMS. They can update. They can receive. So, it's an easy way on get into, you know, kind of getting a sense of what's happening around you and around Iraq.

CHETRY: What are your impressions of Baghdad your first time there? DORSEY: I am amazed. This country, it's a really beautiful country. The people are extremely generous, very savvy, and there's such an openness. And there's an excitement here about building something new. One other thing that we found while staying here in talking to people is everyone wants to participate in this government- building and really see this go on the right path. So that's why we're here, and that's where we're speaking to, and that's where we'd like to help.

CHETRY: Did they talk to you at all about any type of security concerns in that, you know, in the past, people that would like to carry out acts of terror have been able to use cell phones to communicate with one another. Is there any way that that technology unfortunately could be used in the wrong way?

DORSEY: Well, I mean, you can use any technology in the wrong way. But I think the way you get around that with any technology is just to communicate more. When you have a greater sense of what's going on with the person next to you, when you have a sense of what's happening in your country, in your city, then you have a greater understanding of how life is like for other people. And that develops a sense of empathy, and that minimizes the conflict. So, the more information you put out there, the easier it is to minimize these, you know, these not necessarily good uses of technology.

CHETRY: Right. I bet you're thrilled that Oprah's tweeting now. Apparently, she joined Twitter, and the traffic went up 42 percent since he got her account.

DORSEY: Well, you know it's really interesting to see a public figure like Oprah share some small details of her life. You know, just the smallest details, like she's going out for a run on Sunday or you know, eating oatmeal or picking up a breakfast bar. It just makes her more human. It makes her more approachable.

And that's something that Twitter can do for governments as well, and that's why I'm here in Iraq, and that's why the delegation is here in Iraq to figure out if we can bring the government down to a more human level to something that's more approachable.

CHETRY: Right. Well, great talking to us and great mission that you're doing there. Jack Dorsey, the co-founder of Twitter, from the U.S. Embassy in Baghdad. Thanks for joining us this morning.

DORSEY: Thank you very much.

ROBERTS: An influential Democrat in Congress, California's Jane Harman is at the center of a national security scandal that threatens her political career. And Harman is fighting mad after reports that her phone conversation was intercepted on a national security wiretap.

Our Homeland Security correspondent Jeanne Meserve is following the story for us from Washington. She joins us.

Well, she is hopping mad about all of this. And a lot of people are wondering just how much trouble might she be in over it all. JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Yes, it is a big outstanding question. You know, Congresswoman Harman has been a big supporter of wiretaps for national security purposes. But now that she has learned that one of her conversations was monitored, she is livid.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): Congresswoman Jane Harman is outraged by reports that her conversations were secretly wiretapped. In 2005 and 2006.

REP. JANE HARMAN (D), CALIFORNIA: I am offended by it. I think it's an abuse of power, and I want to make sure it's not happening to other people.

MESERVE: Sources say Harman was overheard talking to an investigative target whose conversations were being legally intercepted. "Congressional Quarterly" and "The New York Times" report that Harman discussed using her influence to reduce espionage- related charges against two officials of the American-Israeli Public Affairs Committee.

In return, the person with whom she was speaking would lobby, then, House Minority Leader Nancy Pelosi, to appoint Harman chair of the House Intelligence Committee. Harman reportedly ended the conversation by saying "this conversation doesn't exist."

In an interview with CNN's Wolf Blitzer, Harman did not deny it.

HARMAN: I have no idea what I might have said in conversations with somebody or somebodies. Wolf, this is four years ago. I have many conversations every day with advocacy groups. There's nothing wrong with doing this.

MESERVE: In a letter to Attorney General Eric Holder, Harman asked that the Justice Department "release all transcripts and investigative material involving me in an unredacted form." And says she'll make it public.

The Justice Department is reviewing her request.

HARMAN: Let's see what I said and said to whom. And I did not make any effort -- this, I remember, clearly -- at all, ever, to influence our government at any level.

MESERVE: She did not, Harman says, contact anyone about the AIPAC case.

LARRY SABATO, UNIVERSITY OF VIRGINIA: This could be career- ending. She must be aggressive. She must fight it at every turn. She has to fight it on every front, legal and political, in the public forms and private forms.

(END VIDEOTAPE) MESERVE: "CQ" also reports that after the intercept, the FBI tried to open an investigation of Harman. But Attorney General Alberto Gonzales pulled the plug because he wanted Harman's help defending the controversial domestic warrantless wiretapping program.

The former attorney general had no comment when we tried to contact him. And as for the alleged deal, Harman did not get the intelligence committee chairmanship and the trial of the AIPAC officials is slated for June.

Back to you, John.

ROBERTS: All right, Jeanne Meserve for us this morning on this important story.

Jeanne, thanks so much.

Breaking news to tell you about this morning. CNN has confirmed the acting chief financial officer of mortgage giant Freddie Mac killed himself this morning. Fort-one-year-old David Kellermann's body was found inside his Virginia home just a short time ago. A spokesperson -- a spokeswoman for Freddie Mac says to CNN, confirms that it was in fact a suicide.

According to Freddie Mac's Web site, Kellermann was with the company for more than 16 years. He was named the acting chief financial officer back in September. We're following this story. We'll have much more on it as it comes in this morning -- Kiran.

CHETRY: Also new this morning, dramatic video of an emergency airplane's emergency landing on a road. It was a shot from the cockpit of a small plane. You could even see the propeller stall as the engine fails. The pilots tried to restart it. Eventually, though, the plane comes down smoothly right on the road. You see the guy on the right clapping there.

And some scary moments for Major League Baseball umpire Kerwin Danley. He was struck by the barrel of a broken bat during the Rangers-Blue Jays game -- ouch! -- in Toronto.

You can see the cracked bat hitting him in the head. He was taken off the field on a stretcher. Never lost consciousness. He was probably saved from a more serious injury because, of course, this hockey-style face mask that he was wearing.

And a dangerous development in Pakistan. The Taliban claiming control of an area just 60 miles from the capital. It's the closest they have come to the seat of power. We're going to be talking with our Christiane Amanpour about it. It's 10 minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning. Eleven and a half minutes after the hour.

We're following dangerous developments in Pakistan. The Taliban flexing its might overtaking a district just 60 miles from its capital, Islamabad. The new terrorist stronghold now raising concerns across the world and in Washington, as well.

CNN's chief international correspondent, Christiane Amanpour, is here to give us some perspective on just how dire a situation this is that we're talking about this morning.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, it's clearly very dangerous and it's clearly worrying the Bush -- sorry, the Obama administration, which has just unveiled its Afghan/Pakistan strategy. And seize the Pakistan government, basically in effect seething parts of Pakistan to the Taliban.

Taliban saying they want to usher in Sharia law, but it's more than just that. It's actually taking control. And so right now, the chairman of the Joint Chiefs of Staff Admiral Mullen is in the region. And he is due in Islamabad to talk to the government there later today. Just last week, I spoke to him about what looks like an increasing encroachment by these anti-American, anti-Pakistani government militants.

(BEGIN VIDEO CLIP)

ADM. MIKE MULLEN, CHAIRMAN, JOINT CHIEFS OF STAFF: I think that the safe haven in Pakistan and al Qaeda leadership, which is the main goal, is still the toughest part of the problem. And so we've got to stay engaged across the board on the civilian side of our government, the military side of our government. And we also have to, I think reassure Pakistan that we're -- that we're going to stay this time.

(END VIDEO CLIP)

AMANPOUR: So, right now, basically the Pakistan government is saying, hands off. This is our homemade strategy.

On the other hand, one of the ministers in this region has said that the Taliban seems to be violating the terms of their peace agreement. And if they continue, they'll be dealt with. The question is, how?

ROBERTS: So what about Osama bin Laden? At the same time that the Taliban is gaining strength there, he is still believed to be out there somewhere. What's up with him?

AMANPOUR: Well, in the northwest provinces, the best anybody can tell, he is up somewhere around the border. And the thing is that all of this plays into his hands one way or another, because this is militant control now of big, important parts of territory.

And it reminds me of watching in 1996 of how the Taliban systematically move towards taking over various big cities in Afghanistan, and that provided a safe haven for bin Laden to be able to operate, and then we all know what happened.

ROBERTS: Possibly, could do the same thing in Pakistan? Or would the Pakistani military step in? AMANPOUR: Well, you know, the Pakistani has a proper military to stand up. On the other hand, it's had only mixed success in fighting the militants in the northwest province when all of this started. It lost many, many soldiers trying to fight the militants, and it apparently seems that this deal to give the militants these -- what many are calling safe havens now, is to try to sort of fight the militants by co-opting them. It just doesn't seem to be working.

ROBERTS: All right, Christiane, thanks so much for that.

President Obama leaving open the possibility of charges against the officials who devise the Bush administration's interrogation policy. So what if anything can Republicans do to fend off possible prosecution?

And credit card companies jacking up interest rates to offset their growing debt. A look at what the president and Congress are doing to protect your money. It's coming up on 15 minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning. Seventeen minutes past hour. Here's what's new this morning.

Some good news about our nation's schools. A national study finds the high school dropout rate in some of the biggest cities is actually getting better. It's improving. In all 13 cities saw double-digit improvement between 1995 and 2005. But despite the improvement, researchers say that more than one in four U.S. kids will still drop out of high school.

Also this morning, new concerns for students in college. This is another report coming up. A number of students taking out private student loans is up sharply from five percent in 2004 to now 14 percent last year. Officials say that private loans are typically more expensive to pay back than federal student loans.

And check this out, it's a sign of the times. Hundreds of job seekers lining up in Mesa, Arizona, hoping to land a gig with In-N-Out Burger. Starting pay is $10 an hour. They do offer, though, medical and dental benefits.

ROBERTS: Wow. Who knew so many (INAUDIBLE).

Well, just in to CNN. Morgan Stanley and Wells Fargo released their quarterly earning just moments ago.

Christine Romans, "Minding Your Business," and she joins us now with more.

Good morning to you.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Good morning. And why do we care, because we have an awful lot of taxpayer money in some of these banks. So, we want to know how they're doing, what they're doing with our money, and whether they're able to get back on their feet, and what it says frankly about the financial crisis.

Let's start with Wells Fargo. We told you last week that this company expected to report a record quarter. $3 billion profit. And we said, wait a second, how can that be? Just last year, this bank was on the brink. Indeed, the company says it earned 56 cents a share -- $3 billion. Strong momentum across its businesses.

We're still concerned in a lot of these companies about the quality of some of the loans they hold. But the company says it did very well in its traditional banking and also in its mortgage-related business.

And this is what really will matter to you very immediately. It says it's going to be adding a staff where it can to its business that works on loan workouts. So if you need help working out your mortgage with them, they're adding staff. They want to add staff there so they can handle the big demands there.

Now, let me switch gears here and talk about Morgan Stanley. Also the first quarter results for Morgan Stanley. The company said in the first quarter, it cut about five percent of its jobs. You know, it's a challenging environment. The companies are pretty much telling what they are doing with jobs and dividends and the like. Overall, it looks like $177 million loss. The company lost money in the quarter.

Morgan Stanley also has taxpayer money there with that company. Looks like some strong, strong fixed income sales and trading, investment banking and the like. What I can tell you about the banks, and what everyone wants to know is why do they have our money if they are reporting profits in part of their businesses? Or what's happening with the banks?

Some parts of these businesses are doing well and some parts of these businesses are not. And there's a big fear about the quality of the loans and those kinds of instruments that these banks still have on their books and that they might deteriorate further going forward.

So there's still concerns ahead about what a slow and painful recovery would mean for the bank's books. We're not out of the woods yet on the banks. We are watching very carefully to see where they're having some strength.

But, you know, the Treasury secretary he said when asked, you know, if the banks want to send the TARP Money back, can they send the TARP money back -- the bailout money back? Your money? My money? And he said, the most important thing is the financial system as a whole, not necessarily the single bank. He wants to make sure the financial system as a whole is healing before you make any big changes here.

ROBERTS: Christine, thanks so much for that.

ROMANS: Sure.

ROBERTS: Foreclosure rates bad all across the United States, but some states are far worse than others. Here's more for you today in an "AM Extra."

Between January and March of this year, nearly 804,000 homes received at least one foreclosure notice. The 26 American cities with the worst foreclosure rates are concentrated in just four states. Those are California, Florida, Arizona and Nevada. The cities with the -- in those states with the highest number of foreclosures are Las Vegas, Merced, California, and the area of Cape Coral and Fort Myers, Florida.

CHETRY: Still ahead, President Obama saying that harsh interrogation methods are not going to be used while he's in office. But his national intelligence director says that the methods approved by the Bush White House yielded, quote, "high value information." Legal analyst Jeffrey Toobin weighs in.

Also outrage over credit card companies jacking up interest rates on you while they take a bailout from the government. We're talking to one senator who is trying to put an end to it. It's 21 minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning.

President Obama meets tomorrow with credit card company executives. And he's expected to push for protections against industry practices seen as predatory. Congress is also on the case.

New Jersey Senator Robert Menendez is sending a letter to Treasury Secretary Timothy Geithner this week asking for help among other things. He wants to prohibit blanket rate increases. Also end what's called universal default, which can bump up your rate on one card if you are late on another. And also require that penalties and other fees be tied to their actual costs.

Senator Menendez joins us now from Capitol Hill.

Thanks for being with us this morning.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: Good to be with you, Kiran.

CHETRY: It affects almost everybody watching. The average home with credit cards carries a balance of nearly $11,000. Have you gotten any indication from the Treasury secretary that he will take action on your request?

MENENDEZ: I think we're headed in the right direction. The meeting tomorrow with President Obama and the credit card industry leadership is an important one. I think that what -- the bill that passed out of the Senate Banking Committee, which I'm a member, was a very strong message, that we are headed in the direction of greater consumer protections.

It's just fundamentally wrong that there are so many booby-traps and trapped doors in your credit card agreement that puts you as a consumer at risk. And with a trillion dollars that we have collectively in credit card debt in the country, this is an issue that -- at particularly at a time when families are continuously struggling that we just shouldn't see unilateral increases going through the roof for no good reason.

CHETRY: Yes, although, as we talked about, as you just mentioned these bills going through the House and the Senate, some of these have come up before and died. How do you know they have a real chance this time of getting through?

MENENDEZ: Well, actually, this is the first time that credit card legislation has gone through the Senate Banking Committee.

CHETRY: Right.

MENENDEZ: From the chairman, though, in over a decade. So I think that's a pretty strong statement. And I think you hear a human cry across the country from constituents. I certainly do. I have one constituent told me, look, I've been a perfect credit card payer. I have paid on time, and they just raise my interest rates from 8 percent to 29 percent. That's just simply is not acceptable.

CHETRY: Yes, you know, it's interesting that some of the companies are defending themselves. Bank of America saying in a statement that 90 percent of their customers did not see a rate increase last year. They took bailout funds and reported total earnings of about $4 billion in the first quarter. But then they say they lost nearly $2 billion in the credit card division.

Is there a danger that perhaps, if a plan like this passes, the recovery may take longer, some these banks may struggle a little bit more to try to get back into the black?

MENENDEZ: Well, even before the credit card companies and the banks were facing these challenges, these practices were going on. And there's a difference between a credit card holder who either defaults and/or is consistently late, there should be reasonable increases in that person. But for the wide universe of people who have not defaulted, are on time, and yet see their interest rates rise, it just simply not acceptable.

And finally, you know, in essence as taxpayers were paying twice. Were paying once in terms of trying to help these financial institutions be solved. And at the same time, we're paying in higher interest rates that have no rational reason to our particular performance.

CHETRY: Industries also trying to say that they need to do this -- in some cases to make money. They say they are at a 20-year high for uncollectible debt. And a 17-year high for late payments.

So isn't there also some responsibility -- I totally get what you're saying about jacking up these rates arbitrarily. But some responsibility on the part of people who are using, you know, credit and not paying and trying to stop relying so much on credit. MENENDEZ: Well, there's no question that, you know, there is individual responsibility here. And there's no question that we have to be stewards of our own person financial fate. But if I, for example, have an excellent credit card history, I pay on time, and in fact I have no reason for my interest rates to be jacked up arbitrarily, or if I might be a day late on my electric bill because I was traveling and you use that reason to raise my rates, something we call Universal Default.

CHETRY: Right.

MENENDEZ: Or if you're oversoliciting my son and daughter who don't have the wherewithal to have really a credit card and you're going after them, the industry has to be responsible as well. There is personal responsibility, but there's also industry responsibility here.

CHETRY: Hopefully you guys will get some action on this, this time. Senator Robert Menendez, thanks so much for joining us this morning.

MENENDEZ: Thank you.

ROBERTS: It's 28 1/2 minutes now after the hour. We're following breaking news this morning.

CNN has confirmed the acting chief financial officer of mortgage giant Freddie Mac killed himself this morning. Forty-one-year-old David Kellermann's body was found inside his Virginia home a short time ago. A spokeswoman for Freddie Mac tell CNN it was a suicide.

According to Freddie Mac's Web site, Kellermann was with the company for more than 16 years. And named acting chief financial officer in September. We're following this story and we'll have much more on that as it comes in.

Right now, Washington reportedly drafting plans to help Mexico combat brutal drug trade violence. According to "USA Today," the U.S. is planning to send up 300 former law enforcement agents to Mexico to create an academy where thousands of Mexican investigators will be trained in among other things -- narcotics, weapons trafficking and money laundering.

And pay attention, Mr. President. People who use nicotine chewing gum to help quit smoking may want to try another way. According to the "Times of London," research now suggests that nicotine chewing gum, lozenges and inhalers designed to help people stop smoking may actually have the potential to cause cancer.

Well, a couple of big stories surrounding Intelligence to tell you about this morning. President Obama now not ruling out potential prosecution for people who authorize the harsh interrogation tactics that were used against suspects caught up on the war on terror.

And as well now, Congresswoman Jane Harman answering questions about what she was talking about on a warrantless wiretap that the NSA picked her up on. She is saying the fact that she was caught on that wiretap was an abuse of power.

Joining me now to talk more about this on the phone is CNN senior legal analyst Jeffrey Toobin.

So, Jeffrey, you know what's being said. Congresswoman Jane Harman, a member of the Intelligence committee, saying it's an abuse of power that she was wiretapped, but then at the same time other people asking questions, well, what did she say in that wiretap related to two people from the America Israel Public Affairs Committee and potential charges against them on espionage.

Is she in trouble? Is this an abuse of power? How are you seeing it all, Jeffrey?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST (via telephone): I think we have to know a lot more about both parts of this story. First of all, it doesn't sound like Harman herself was targeted. It sounds like she was picked up speaking to someone who was targeted. And that's a very different story and there would really be nothing sinister about that. But on the same token, the idea that she might have called an administrative agency or been asked to call an administrative agency, like the Justice Department, to complain about a case, that itself is no big deal either. That's what congressmen do.

They call agencies and advocate on behalf of constituents. Now if there was some sort of direct quid pro quo, I will give you a campaign contribution, if you do that. Well there might be something wrong there. But that's a long way off from what the reporting is so far.

ROBERTS: All right. Now on these memos, these CIA memos that were released last week and as well the people who authorize the so- called harsh interrogation tactics that were used against suspects who were caught up on the war on terror, a bit of an about-face for the president who had said it serves no purpose to look back at what the Bush administration was doing on this front. Now not ruling out potential prosecution for people who authorize those interrogation tactics. Where is all of this headed?

TOOBIN: Well, I think here too there maybe be a little less than meets the eye. The usually smooth Obama administration, press operation, has offered a lot of mixed messages on this subject in the past couple of days. Just to go to the bottom line here, it's very unclear to me that there could be any criminal case made against the authors of these memos. There is not - I am unaware of any prosecution ever for giving bad legal advice. This may be a bad idea.

What - I mean, this - these may lead to bar association investigations. But an actual criminal case seems extremely unlikely. Now that doesn't mean that there wouldn't be some sore of truth commission, congressional investigation, non-criminal investigation. But an actual criminal case that looks like very much a long shot, notwithstanding what the president said yesterday.

ROBERTS: All right. Jeff Toobin, our senior legal analyst for us this morning. Jeff, thanks so much. Good to talk to you.

CHETRY: A man who wrote a letter to the president about why he shouldn't smoke could get a surprise of his life. The president writes back. Michael Power sent the president his father's photo and told him that his father had died of cancer from smoking 30 years ago. He advised the president to stop so that he could be around for his little girl and the president sent back the photo in the plastic bag with this letter. "Thanks so much for the wonderful letter and the good advice. I'm returning the picture since it must be important to you, but I will remember your dad's memory."

ROBERTS: Now of course we have that news this morning as well that chewing nicotine gum, according to some reports, may be a precursor to cancer as well. So, Mr. President, it's time to put it all down, I think.

CHETRY: Yes, exactly.

ROBERTS: This morning, new details of the so-called Craigslist murder. Police returning to the suspect's apartment as an alleged motive emerges.

And new backlash over the Miss California controversy. The beauty queen bashing heats up online but how much is too much? It's coming up on 34 minutes now after the hour.

(COMMERCIAL BREAK)

(MUSIC PLAYING)

CHETRY: All right. Well, this morning we're learning more about the clean-cut med student accused of being the Craigslist killer. Right now, Philip Markoff is in a Boston jail after a judge said there is sufficient evidence to hold him without bail for the murder of a young masseuse and for assaulting at least one other woman. This morning, as an alleged motive emerges, people who knew the 22-year-old are responding to the allegations. CNN's Alina Cho is following all of this for us. Good morning, Alina.

ALINA CHO, CNN CORRESPONDENT: Hey, good morning, guys. Good morning, everybody. I want to get to this first. New information just into us from our own Randi Kaye. That the D.A.'s office confirming that Philip Markoff's fiance was with him inside the car at the time of the arrest. There is also evidence that they were headed to a casino.

Now that is consistent with reports from ABC News that Markoff may have been trying to pay off gambling debts and that may have been the motive for the crimes. Now remember that one of the victims was robbed. According to published reports, people who know him say the 22-year-old med student was a nerdy bowler in high school, a bit of a bully, and that his yearbook mentions his poker-playing skills. Randi Kaye tracked down one of his neighbors.

(BEGIN VIDEO CLIP) PATRICK SULLIVAN, LIVES UPSTAIRS FROM SUSPECT: My girlfriend actually rode the elevator a lot with him alone which is kind of freaking her out now. As she thought he is kind of the all-American good looking guys. When she saw him on TV yesterday, she even remarked I can't believe it was him. I always thought he had such a great smile. He was so nice to me.

(END VIDEO CLIP)

CHO: Markoff is charged with murdering 26-year-old Julissa Brisman and attacking another woman. Both have Boston hotels. Both of the women have placed ads for erotic services on Craigslist and police say that is how Markoff found them. Authorities say it was Markoff's own e-mail account that helped track him down.

(BEGIN VIDEO CLIP)

DANIEL CONLEY, SUFFOLK DISTRICT ATTORNEY: What led police to Philip Markoff initially was by tracing back his contact with Julissa Brisman via e-mail. By doing that, they identified his Internet provider's address at that Quincy location where he lives.

(END VIDEO CLIP)

CHO: Markoff's lawyer maintains his client is not guilty. His fiancee sent an e-mail to ABC News saying that Markoff is, "the wrong man, was set up and couldn't hurt a fly. On the couple's wedding Web site, it talks about how they met, how they planned to marry in August and their top honeymoon choice, guys, a casino in Connecticut.

And certainly we were talking about this a bit earlier, it's important to point out that there is no evidence that the fiancee knew anything about these crimes. In fact she did send in that e-mail that he was a beautiful person inside and out. And that they still plan to marry in August.

CHETRY: Yes, she's sticking by him through all of this.

CHO: She is.

CHETRY: All right. Alina, thanks.

CHO: You bet.

ROBERTS: Miss California's gay marriage comments cause a huge controversy. Now new questions about the online rage against her and what the venting could also be doing. It's 40 minutes now after the hour.

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ROBERTS: Forty-two and a half minutes after the hour. New backlash this morning over the Miss USA contestant who told pageant judge Perez Hilton that she believes marriage is between a man and a woman. Here is the question and answer that started it all, just in case you missed it.

(BEGIN VIDEO CLIP)

PEREZ HILTON, MISS USA JUDGE, CELEBRITY BLOGGER: Vermont recently became the fourth state to legalize same-sex marriage. Do you think every state should follow suit? Why or why not?

CARRIE PREJEAN, MISS CALIFORNIA: Why, I think it's great that Americans are able to choose one or the other. We live in a land that you can choose same-sex marriage or opposite marriage. And you know what, in my country and in my family, I think that I believe that a marriage should be between a man and a woman. No offense to anybody out there. But that's how I was raised and that's how I think it should be, between a man and woman. Thank you.

(END VIDEO CLIP)

ROBERTS: All right. So, a personal opinion, but after the show, Perez Hilton stat off on his celebrity blog calling Miss California dumb and using the "b" word and worse. And listen to what he told HLN's Mike Galanos about his online beauty bashing.

(BEGIN VIDEO CLIP)

MIKE GALANOS, PRIME NEWS: On your blog or basically what I saw on YouTube and we have it as well you called her a dumb "b." Are you still that fired up or do you take that back? Where do you stand on that?

HILTON: I still think she's a dumb "b," and she just keeps putting her foot further into her mouth. She herself has said in interviews today and yesterday that she prepared for the final question, and the gay issue question was one that she prepared for. Obviously, she did not prepare well enough for it.

(END VIDEO CLIP)

ROBERTS: So the rant is raising new questions this morning about online anger. And our Carol Costello in Washington has been looking into all of this for us. You know, you see a lot of this stuff, a lot of it is anonymous but then some people are willing, as Perez Hilton is, to put his name to it.

CAROL COSTELLO, CNN CORRESPONDENT: Yes. And he keeps saying that "b" word over and over, doesn't he? And of course he says worse as you will see. It'll be easy to dismiss this war of words between Miss California and Perez Hilton as pop culture fluff, but some experts say the fact that Hilton so casually used an obscenity when referring to Miss California online is not only disturbing but potentially dangerous.

(BEGIN VIDEOTAPE)

HILTON: Miss California lost because she's a dumb (EXPLETIVE DELETED), OK? COSTELLO (voice-over): Maybe that shocks you. If it doesn't, some cybercrime experts say it ought to because even though Perez Hilton routinely uses the "b" word on his gossip Web site, he uses it in an entirely different way to describe Miss California.

HILTON: I called her the "b" word, and hey, I was thinking the "c" word, and I didn't say it.

COSTELLO: Using such language is more than rude, they say. It's feeding a growing problem online. Sexist, racist, hateful rants.

ROBERT SICILIANO, CEO, IDTHEFTSECURITY.COM: When someone like Perez Hilton, who was hired by Donald Trump, then goes out and spews vile content about Miss America you know that the problem is a lot bigger than it seems.

COSTELLO: Online hate has become pervasive. People viciously criticizing everything from online newspaper columns to friends on Facebook and YouTube. It's the kind of online behavior Robert Siciliano says well-known people like Perez Hilton should condemn, not join in.

SICILIANO: What we're seeing here is people who are being held to a higher esteem are ranting in this way. And it gives millions and millions of other people the blessing to go ahead and do the exact same thing.

ANTHONY POWELL (ph), POSTED ONLINE VIDEOS: So (INAUDIBLE) here, it's all over.

COSTELLO: And there are plenty of examples. This man Anthony Powell posted dozens of videos online calling black women the "b" word. His primary target, Asia McGowan, who tried to fight back with an online video of her own.

ASIA MCGOWAN, POSTED ONLINE VIDEO: And when you hate, this what you do. Bringing the other person up. And you are bringing yourself down.

COSTELLO: YouTube did manage to remove some of Powell's videos, but he eventually turned his online rage outward, stalking and killing McGowan and then killing himself. It's an extreme example but Siciliano says it's a warning people like Hilton should heed before they use hateful words online.

SICILIANO: At some point in time, this stalker believed -- or was made to believe, that it was perfectly OK to talk like that and to distribute this via mass media. And we, as a society, have made it acceptable for those rants to go on air.

(END VIDEOTAPE)

COSTELLO: Yes, because you know, John, not many people are criticizing Perez Hilton for calling Miss California the "b" word. As for what she says about it, listen.

(BEGIN VIDEO CLIP)

PREJEAN: I can only say to him that I will be praying for him. And I feel sorry for him. I really do. I think that he's angry. I think that he's hurt, and you know, everybody's entitled to their own opinion. He asked me specifically what my opinion was on that subject, and I gave him an honest answer, and that's all I can do.

(END VIDEO CLIP)

COSTELLO: You know, as for how you can control this stuff online, John, that's a difficult thing. I mean you could ask the FCC to step in, but that would take an act of Congress. It's really up to the Internet community to control itself. To police itself, if you will. And that means complaining very loudly when it sees objectionable content that could hurt online.

ROBERTS: All right. You know, you see so many -- so much of this online usually posted under anonymous handles, you know, for somebody like Perez Hilton to say it, you know, come out there and put his name to it, certainly does take it to a different level. Carol, thank you.

COSTELLO: Yes, I mean, did he really have to use that term to criticize? I mean, that's what some people are asking. Can't he just do it in a more intelligent way?

ROBERTS: All right. Carol Costello for us this morning. Carol, thanks so much -- Kiran.

CHETRY: If you have seen his blog, the answer is no.

Well, President Obama is heading to the Midwest today. Why the president is visiting a shutdown factory in honor of Earth Day. It's 48 minutes after the hour.

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CHETRY: Fifty-one minutes past the hour now. Fast forward to the stories that will be making news later today. A snapshot of the economy on the way. A few major U.S. companies will be revealing their quarterly earnings. We're expecting first quarter reports from McDonald's as well as Morgan Stanley, Wells Fargo, AT&T, Apple and eBay.

The Tribeca Film Festival opens today in New York, just a few blocks from Wall Street. And the festival is expected to be toned down a little more than usual given the economic crisis. The festival kicks off with a Woody Allen film called "Whatever Works."

And President Obama is going to be celebrating Earth Day today in Newton, Iowa. He will tour a former Maytag plant that now builds towers for wind turbines.

And our Rob Marciano is also celebrating and commemorating Earth Day. You love earth.

ROB MARCIANO, AMS METEOROLOGIST: Who doesn't love Earth?

CHETRY: No one I know.

MARCIANO: Look at...

CHETRY: A couple of Martians maybe, I'm not sure.

(LAUGHTER)

MARCIANO: I drove extra slow to work today to conserve gas in honor and we built this graphic Earth Day. Hey, what's happening on Earth Day. Check this out. Video out of Wisconsin.

I told you about the snow that was forecasted to come down. In some cases they've got seven, eight, nine inches of wet snow, and then in other places they were without power. That doesn't look like spring, let alone Earth Day.

Check out some these snow totals across parts of Minnesota -- Michigan, excuse me. Rockland, 23 inches to Marquette, Michigan, eight inches of snow there. So definitely winter weather but we're kind of winding down the snow right now across the Great Lakes, just a couple of showers there. In the Northeast, we will see more on the way of showers, maybe even a couple of thunderstorms across parts of New England later on today. Down across the Delmarva, we're looking at some showers.

The overall pattern is such that we still have this cool air mass out to the eastern third and a lot of heat back to the west but that will be shifting as we go through time. So that's good news, if you want some more warm weather.

And finally, on this Earth Day, our friends at WFAA, just outside of Dallas, Texas, these three little baby hawks were rescued from a high school light pole that was being torn down because it was deemed dangerous. And they took the little baby hawks and they put them in the wildlife refuge where they will be bottle-fed until they can learn how to fly, and they will be released into the wild. Mother Earth alive and well.

CHETRY: Love it. So adorable.

MARCIANO: Back to you.

CHETRY: All right. Thanks, Rob.

MARCIANO: All right. Talk to you later.

ROBERTS: This just in. Will you marry me? There's nothing like a proposal live on television, especially when it's between the anchor and the reporter. The ring, the tears, the story coming up. It's 53 1/2 minutes after the hour.

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ROBERTS: Most popular videos right now on cnn.com. Look at this, amazing video out of Florida. You saw it here first right here on AMERICAN MORNING. From the cockpit of a small plane, you can see the propeller stall as the engine fails. The pilots try to restart it but eventually have to make an emergency landing. Here they come, on a local roadway. Cheers all around there for a safe landing.

Also, tensions escalating between an officer and a reporter at the scene of an accident. The officer asks the news crew to leave and becomes visibly upset when they say no, we're not leaving right away here. And it was all caught on tape. Not surprisingly, the officer has been reassigned to desk duty.

And meet Brian, an Oklahoma man who is the new world record holder for the most powerful lungs. He used his hot air to inflate three hot water bottles until they burst and in just a minute and eight seconds he did it all too. And those are the top videos right now on cnn.com.

Well, television news people tend to propose stories to each other, not marriage. But that's what happened live during a local newscast the other night. The sweet on-set proposal that left viewers crying through the forecast. Here's CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Normally, they whisper sweet nothings like...

UNIDENTIFIED FEMALE: It's our top story this evening.

UNIDENTIFIED MALE: And...

MOOS: And this just in to KARK, a marriage proposal.

UNIDENTIFIED MALE: Twisters, planes on the road.

UNIDENTIFIED MALE: Breaking news.

UNIDENTIFIED MALE: Uh-oh.

UNIDENTIFIED MALE: Oh my gosh.

MOOS (on camera): It happened at the end of the newscast. The anchor had just been told through her earpiece that the show was light. That she had to fill, that she had to stretch for 2 1/2 minutes. But the one who did the stretching was Courtney Collins's fellow reporter and boyfriend.

UNIDENTIFIED MALE: Courtney...

COURTNEY COLLINS, KARK-TV CORRESPONDENT: Oh, my goodness.

PETE THOMPSON, KARK-TV CORRESPONDENT: I just want to tell you how much I love you. Three months in, I lost my dad, and we know that we both know that you've been such a rock for me to lean on.

MOOS: Courtney arrived at the station a little over two years ago, and it was pretty much love at first sight.

UNIDENTIFIED MALE: Greg.

MOOS: Now, Pete Thompson was getting the ring from the weatherman and was on the air on his knees.

THOMPSON: Courtney, will you marry me?

COLLINS: Of course. Oh my gosh.

MOOS: And what would a TV news proposal be without the ultraobvious spelled out on the screen. Pete said later he couldn't think of any way to get her to lose the unsightly Band Aid in advance without arousing her suspicion. The last time something like this happened was at KAMC in Lubbock, Texas.

UNIDENTIFIED MALE: If you might want to marry me, how about that?

UNIDENTIFIED FEMALE: Yes.

MOOS: Emily Leonard said she did two things she thought she'd never do on TV, cry and...

EMILY LEONARD, KAMC-TV: Squeal like a wild banshee. Oh.

MOOS: Ditto on the heartfelt hugging at KARK in Little Rock, Arkansas.

THOMPSON: I love you.

COLLINS: I love you, too.

Well, I'm out.

MOOS: Not laughing were the grouchy news purists at the Web site, News Blues, who suggested there's a special place in hell for lovesick morons who interrupt news programming.

THOMPSON: So do a final wrap of weather?

UNIDENTIFIED MALE: Yes.

MOOS: Courtney continued to sniffle through the forecast.

UNIDENTIFIED MALE: Up there towards Jonesboro, Batesville.

MOOS: Doppler radar must be picking up the happy tears.

UNIDENTIFIED MALE: A slight chance of rain for the north. For tomorrow, temperatures in the 60s.

MOOS: And what could be more romantic than the pulsating strains of news music. Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

CHETRY: It was cute. It was. They were so earnest.

ROBERTS: Love strikes in Arkansas.

CHETRY: It was very cute. Well, congrats.

ROBERTS: A movie about it, love struck in Little Rock.

CHETRY: That's right.

ROBERTS: Well, thanks so much for joining us on this AMERICAN MORNING.

We'll see you back here bright and early again tomorrow.

CHETRY: Right now, here is CNN NEWSROOM with Heidi Collins.