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Will Primaries Shake up Washington?; Euro Hits 4-Year Low; Iran Makes Nuke Deal with Turkey

Aired May 17, 2010 - 13:00   ET

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

TONY HARRIS, CNN ANCHOR: CNN NEWSROOM continues right now with Richard Lui in for Ali Velshi.

RICHARD LUI, HOST: All right. Thanks a lot, Tony.

I'm Richard Lui, in for Ali Velshi, and I'm going to be taking you through the next two hours, taking every important topic that we cover a step further. We'll try to give you a level of detail that will help you put your world into context.

Let's get started with that. First off, here is what I've got on the rundown for you. Incumbents on one side. Anti-establishment candidates on the other. Voters in the middle. Which way will they swing? What happens on primary day tomorrow can shape the mood of the November general election and the mood of the nation.

Plus, we've seen the surface of the gulf oil spill. But the real danger is lurking underneath the sea surface. BP says it has some good news, though, about the cleanup. But we're going to put that into context for you.

Also, Iran strikes a nuclear deal. But does this mean President Ahmadinejad is blinking in the face of global pressure, or is he just buying some time?

All right. First off for you, primary elections even for U.S. Senate seats often don't generate much more than a ripple among voters. That is often the issue. But a Senate candidate in Kentucky promises a tidal wave is coming, and he may be right.

Kentucky's one of three states holding Senate primaries tomorrow. The others are Pennsylvania and Arkansas. And all three could have implications far beyond their borders.

Then there is Kentucky. The Republican contest pits Tray Grayson, the secretary of state there against Tea Party favorite Rand Paul. That's a familiar name to you. Paul is the son of Texas GOP congressman and former presidential candidate Ron Paul. And polls show him far ahead of establishment candidate Grayson.

Then there's Pennsylvania. Republican-turned-Democratic Senator Arlen Specter is in the fight of his life there against fellow Democrat and two-term congressman Joe Sestak. Polls there show a dead heat. That could be a close one. Then in Arkansas, Democratic Senator Blanche Lincoln is trying to fend off the state's Democrat lieutenant governor, Bill Halter. CNN's Dana Bash is watching that race and joins me now from Little Rock.

And Dana, what do you think about Arkansas Democrats when we take a look at this? Is this an issue of anti-incumbency?

DANA BASH, CNN CORRESPONDENT: It sure seems to be. And spending a little time here so far, and in everything that we have seen and heard down here in Little Rock.

And you know, it's very interesting. Sometimes what you hear is that they're angry at the two-term incumbent Blanche Lincoln for her vote for health care. Sometimes it's because she didn't support the president in terms of the Democratic primary voters in a so-called public option. Sometimes it's because she voted for that $700 billion bailout a couple of years ago.

But, you know, whatever the specifics, the overall theme that we are hearing from these constituents and these voters here in Little Rock is -- in Arkansas -- is the idea that it is time for new blood.

And I want you to hear really a good example. We talked to a voter, a Democratic voter named Patrick Block just a short while ago. And here's how he summed up how he's going to vote and why.

(BEGIN VIDEO CLIP)

PATRICK BLOCK, DEMOCRATIC VOTER: No knock against Ms. Blanche Lincoln at this point in time, but I think sometimes it's -- it's out with the old, in with the new.

BASH: You think it's time for new?

BLOCK: Yes, I believe so.

(END VIDEO CLIP)

BASH: Now, we spent some time with Senator Lincoln yesterday, and we watched as she tried to fend off this anti-incumbent feeling and sentiment that is very, very real here in Arkansas, as it is across the country.

And what she's trying to do specifically in her case is she's trying to turn the anger on her opponent. She's talking about the fact that there are being -- there are millions of dollars being spent from big labor. They are here in full force against their fellow Democrat, Blanche Lincoln. They want to make her kind of a poster child of somebody who goes against them, and other liberal forces are also trying to unseat her.

But when it comes to her opponent, it is very interesting, Richard. By the way, I should say he's going to be here in just a short while. He's the lieutenant governor. And he is not running from the left. It really wouldn't work in a conservative state like Arkansas. What he is running on is very much anti-incumbent, anti- Washington, "time-for-change" for message. And I asked Senator Lincoln about that.

(BEGIN VIDEO CLIP)

BASH: Your opponent is an Arkansan, and his main argument, at least lately, has been somewhat similar to what President Obama's back in 2008, that he wants to change Washington, and that you're part of the problem.

LINCOLN: Well, again, I just tell people to look at my record. I've actually been fighting the problem. Again, as a moderate Democrat and somebody who's coming up with pragmatic solutions. Why else do you think the Wall Street banks are after me?

(END VIDEO CLIP)

BASH: Now, there she's talking about legislation that she's pushing in Washington to try to reform Wall Street.

But look, what is going to happen next for Blanche Lincoln is a primary, a Democratic primary tomorrow. And if she does not break 50 percent, which even she admits is unclear if she will, and at this point it looks potentially unlikely, there is going to be a runoff in the Democratic primary. We'll see if she can win that, if that happens in early June.

And then if she does succeed, she is still going to have a very, very tough race against whomever her Republican challenger will be for November. She is somebody who is a moderate and is so classically caught in the middle of all of these forces that are -- that are really intense this election, Richard.

LUI: Yes. It could be difficult for either one of those two, depending on who they're going to be going up against when it comes to the GOP in that state.

Congressional correspondent Dana Bash, thank you so much for the latest on that.

Let's bring in Gloria Borger, our senior political analyst.

Gloria, you know, we mentioned earlier, Rand Paul's prediction of a Tea Party tidal wave. What's your take on that?

GLORIA BORGER, CNN POLITICAL ANALYST: Well, I think his -- his state is kind of ground zero right now for the Tea Party. Obviously, he's saying that, because he's a Tea Party candidate. If he were just another ophthalmologist, not Ron Paul's son, I'm not so sure he would be as out front as he is in the polls.

But Tea Party candidates will clearly, and have clearly already had an impact in the primaries.

I think, Richard, the big question is, does that translate into the general election? And we don't really know that yet. It will certainly have an impact in the state of Kentucky, where he is expected to win. It's certainly having an impact in the state of Florida, for example.

But again, these are primaries, which depend on turnout, which depend on getting your voters out there. The ones that tend to come out in prime -- in these kind of primary elections are the voters who are the angriest, and that's what you're seeing in a lot of these states.

LUI: Talking about one of those states, let's now move to Pennsylvania, where Senator -- excuse me, Senator Specter's having a tough time at this moment. The polls show them very close to each other. I mentioned anti-incumbency earlier. This seems like that might be the sentiment there.

BORGER: Yes. Well, you know, again, you know, this is kind of a -- each race, you know, is different. And Senator Specter is a five- term incumbent, except he was a Republican. And now he switched parties. Probably not a great time to be switching to the Democratic Party.

And he's somebody who's running kind of an old-time campaign. He said, "This is what I've done for the state of Pennsylvania. I can deliver for you." He has the establishment on his side. He has President Obama on his side. He has Governor Rendell on his side.

But as you see, it is neck and neck there with Congressman Joe Sestak, who says -- and by the way, he's an incumbent congressman -- but he says it's time for a change. And then Arlen Specter is really nothing more than an opportunist who changed parties because he thought it might be a good time to run as a Democrat.

LUI: So quickly, Gloria, as we take a step -- as you take a step back here, what is at stake for voters as they watch around the country about what's happening in these three races?

BORGER: Well -- well, you know, we tend to read so much into all of these elections.

LUI: Right.

BORGER: So let me again emphasize that each one is really, really different this time. But we're going to try and look at just how much impact we think the Tea Party movement has, and will have in future elections. We're going to try and see just how nervous those establishment politicians of both parties ought to be.

And one interesting thing we're going to look at is the impact of President Obama here. Because he has supported both Arlen Specter and Blanche Lincoln, and if both of those folks lose, people are going to start saying, "Well, remember those wonderful coattails he had a couple of years ago? He may be losing them."

LUI: That's right. Foretelling for November, as we look ahead. Gloria Borger, thank you so much for that. Appreciate it.

BORGER: Sure. LUI: BP claims some success in battling the massive gulf oil leak. But they might not have even scratched the surface. The real danger could be lurking way underneath the sea's surface. We'll tell you what is straight ahead.

And since Ali's off today, I'm taking over his "XYZ." I'm taking an attempt at it, a shot at it. I'm going to talk cars, Detroit, and your tax dollars, on putting you in the driver's seat later in my "XYZ."

(COMMERCIAL BREAK)

LUI: Well, after more than three weeks of failure, finally some success in the battle against the massive oil leak in the Gulf of Mexico, perhaps: BP saying it's now siphoning more than one-fifth of the oil that's been gushing into the gulf.

And as you can see in this animation, BP inserting a tube into one of the ruptured pipes yesterday. It goes in about five feet, and then funnels that to the surface about a mile high. The company saying the pipe is now funneling about 42,000 gallons of crude a day into a tanker ship.

But it is a limited solution. And BP is taking it slow to ensure the pipe does not get clogged by ice-like particles, a problem they had had before.

Now, a new threat just discovered for you. Giant plumes of oil, including one ten miles long, three miles wide and 300 feet thick in some spots, 300 feet, now, there's some concerns it could damage coral banks that stretch from Texas all the way to Florida. These plumes also are depleting the oxygen dissolved in the gulf, too. If the oxygen falls too low, it could kill off much of the sea life that are near the plumes or that are close to the bottom or midway.

Here's what one marine scientist said about the plumes earlier on CNN.

(BEGIN VIDEO CLIP)

PROFESSOR SAMANTHA JOYE, UNIVERSITY OF GEORGIA: The plume itself is a very interesting feature. Nothing like it has really ever been seen in the deep water of the Gulf of Mexico before. And it's not only a large feature, but it's very -- it's a very complex feature. There's a lot of vertical structure to it.

So it's not something we can explain. It's certainly not something that we expected to find. We don't understand it at this point. But hopefully, in the coming weeks, when we really have a chance to analyze all the samples and the data, it will -- we'll have a better picture of the implications of what this feature really is.

(END VIDEO CLIP)

LUI: And here's the take of Democratic Congressman Edward Markey, the chairman of the House Subcommittee on Energy and the Environment.

Quote, "BP is burying its head in the sand on these underwater threats. These huge plumes of oil are like hidden mushroom clouds that indicate a larger spill than originally thought and portend more dangerous long-term fallout for the Gulf of Mexico's wildlife and economy," unquote.

BP officials say the plumes are not the immediate problem, though. Stopping the leak is. It's its main focus, and that it's doing everything possible to do that.

All right. Straight ahead, the euro hit a four-year low today. If you've got dollars in your pocket, that means some good news but mostly bad news. We'll explain that. Christine Romans tells us why after a quick break.

(COMMERCIAL BREAK)

LUI: OK. First off, we're looking at big numbers. In the big wall behind me, you can see the Dow taking a little built of a dip. We're down over 1 percent, over 112 points at the moment. Some concern about the markets, perhaps, because Europe and Asia were also tending lower earlier in the day. So that's an issue also, along with the euro hitting a four-year low today. Christine Romans, Ali's partner in crime, joins us right now for more on that.

What do you make of all this? Hey, Christine.

CHRISTINE ROMANS, CNN ANCHOR: Good morning. Good afternoon, really.

You're right. It's the third day in a row stocks have been down. And really, they just can't really shake this European flu that they have. They're very concerned about the fact that the euro's at a four-year low against the dollar. And they're worried that the reason why the euro is weak is because Europe is weak. It's having these sovereign debt issues. And that that could slow Europe's recovery.

And Richard, last year the No. 1 destination for American exports was Europe. So if Europe is weakening again, that's a concern for Americans and American business.

You can see this is what the euro looks like. That's really, since the worst of it in 2008, you can see the euro was recovering against the dollar. And then now from the peak there, to down today, $1.22, it's down about 14 percent.

So there's three different ways to look at it, really, when you're talking about a weak euro. One, if you're going to Europe this summer, you're going to get more for your money, 14 percent more for your money than you would have if you went over the new year's holiday. So you're going to get more for your money. But that -- that's a travel story.

The bigger economic story, really, is the fact that the euro is weak and what that means for American exporters. And American exports, manufacturing has been coming back recently. And there's some concern that, if the dollar is strong and the euro is weak...

LUI: Right.

ROMANS: ... that that makes our products more expensive. And that that is a difficulty for America.

So the key issue here is that Europe's problems matter, because Europe is a huge destination for our goods. And Europe is a huge economy. Taking the other huge economy, if it's weak, what does that say about the global recovery, and concerns there? So that's why we're watching it so closely and carefully.

LUI: Yes. The E.U. economy larger than the United States, for the folks who don't know that. That's why we need to keep an eye on that.

Another issue, we take a look at the euro and you're talking about more exports for U.S. manufacturers. A lot of them are banking on that at this moment to get a good revenue boost as they invest in sales and marketing, et cetera.

So the real question is, let's go back to last week. We had that $1 trillion boost in the arm. Is that going to work there, Christine? Because we're already seeing a dip today in the euro.

ROMANS: Well, it's interesting, because that $1 trillion boost in the arm that caused so much excitement, now it's got to be implemented. These countries, to get their big loans, their $1 trillion in loans and guarantees, they're going to have to take some very severe, austerity measures. That means cuts in public sector worker pay. It means people have to work longer. It means fewer benefits.

All of that could cause the European economies to slow down a little bit. If they slow down, what does that mean for the rest of the world. So it's a really damned-if-you-do, damned-if-you-don't scenario for Europe at the moment, and a lot of people are trying to figure what that's going to mean for the global recovery. Will it be enough to derail the global recovery or at least stall it here, and we just don't know yet.

LUI: And we know that all of Europe does not mean that they're all like Greece. Because of all the countries that entail and make up that complete block there.

ROMANS: Right.

LUI: Christine Romans.

ROMANS: But they are all tied together by that same currency. And that's what starts to get people nervous. You know, they're very different countries, tied together by a currency that's quite weak right now.

LUI: This is not an easy discussion, no doubt, with a lot of details to it. Thank you so much. Christine Romans, thank you.

ROMANS: Sure.

LUI: And Christine, you know, is part of the best financial team on television. You can also catch her and her -- and Ali Velshi on "YOUR $$$$$," Saturdays at 1 p.m. Eastern and an encore presentation Sundays at 3 p.m. Eastern.

All right. Let's get a quick check of the top stories for you right now.

General Motors revved up sales in the first quarter of the year, bringing up its first quarterly profits since 2007. This could be a key step toward GM offering its stock to the public once again and paying back its taxpayer bailout.

Then in the Gulf of Mexico, almost after a month, there's finally been some success in stopping the flow of oil from that blown-out rig. BP says a tube a mile long is funneling about a fifth of the leaking oil to a tanker on the surface. Crews plan to increase that amount over the next few days. We'll drill into that a little bit more.

And three of Europe's busiest airports have reopened after a dense ash cloud from a volcano in Iceland. The first planes are now landing and taking off from London's Heathrow and Gatwick airports, as well as Amsterdam's airport. But the six-hour closures have stalled air traffic with as many as 1,000 flights affected.

OK. We're also going to be taking a look at weather. We've got rain. We've got thunderstorms in the east. Chad Myers has details right after the break.

(COMMERCIAL BREAK)

LUI: All right. Chad Myers joins us right now. If you're in the southeast or you're in the northeast, if you're in the west, there's something for everybody today. Correct?

CHAD MYERS, ANN METEOROLOGIST: Exactly. We have a couple things to focus on. I want to take you to an iReport that just amazes me. This is from Oklahoma City from yesterday.

LUI: It's a war zone?

MYERS: It looks like it's in Baghdad.

LUI: Yes.

MYERS: That was hail that went right through the car, literally right through the glass.

LUI: How big is that?

MYERS: I don't know. Three, four inches? Probably a tennis ball size, I mean, coming through here. It doesn't necessarily mean that that's how big the hailstone was, but it shattered the glass.

And today, Richard, the potential is here for -- from Florida and Orlando, all the way down to Miami, and even up here into parts of north Georgia and in the Carolinas we have the potential for severe weather. So let's just kind of get to the red zones, as you said. There are quite a few of them.

One west Texas already had watch boxes posted out here for hail and wind. And then another red zone here. Carolinas, back up through Kentucky, into northern Georgia. And so all of the Carolinas there, under the gun for wind damage, and then -- and mostly wind damage. Not so much tornadoes today. But we'll get to that in the next hour.

LUI: Can't imagine what's it causing for travelers, even on Monday.

MYERS: And the airports are doing OK right now.

LUI: Yes.

MYERS: Right now. But we'll see as they start to build.

LUI: Back in about an hour.

Iran says a new agreement should end the controversy over its new nuclear program. Is this a real step forward or just for show? We go globe trekking.

(COMMERCIAL BREAK)

LUI: For years now, the U.S. and other countries have been increasingly concerned about Iran's growing nuclear capabilities. They basically worry that Iran is close to developing a bomb that could change the balance of power in the Middle East.

Now, the U.S. has been pushing for more sanctions against Iran, but today there is a twist.

Let's start our globe trekking section going straight to Tehran for you, first off. And when we take a look at the deal that has been brokered, what we think has been brokered, we are hearing that Iran is offering an apparent concession in a bid to avoid new sanctions. Now, the head of Iran's nuclear agency argued the plan should end the controversy over his country's program, but observers are very skeptical.

OK. Now I'm going to take you over to Istanbul. That's where we're going to get more understanding of what is happening with this deal. Basically, Iran agreeing to spend thousands of pounds of low- enriched uranium to Turkey. CNN's Ivan Watson is standing by in Istanbul.

Ivan, when we take a look at this story, how is this deal supposed to work?

IVAN WATSON, CNN CORRESPONDENT: It works like this. The proposals for Iran to give about 2,600 pounds of low-enriched uranium, around 3 percent enriched uranium, and put it in Turkey, where Iranians would be able to keep an eye on it. It would stay here for a period of up to a year.

And western governments that have been pressuring Iran to limit its nuclear program, they would then give Iran about 260 pounds of higher enriched uranium, 20 percent enriched, which is still far less than you need for a bomb. And that would then be handed off to Iran from Turkish territory.

And if at any point the deal breaks down, the Turks would return that original 2,600 pounds of Iranian nuclear fuel back to the Iranians -- Richard.

LUI: Now, Ivan, there's been a bit of a monkey wrench that was added after this initial discussion. What happened there?

WATSON: Well, first of all, this isn't the first time Iran has agreed to this kind of nuclear swap. It agreed to one with western governments last October and then reneged on the deal. This time the Brazilian and the Turkish leaders, the presidents and prime ministers, they were on hand and calling this a real opportunity to bring an end to this dispute over Iran's nuclear program. But not before the ink was dry on that agreement, the Iranian government came out and said, well, you know what, we're going to do this, but we're also going to continue enriching our own uranium up to a level of 20 percent.

The Turkish officials I've talked to, they say that's a disappointment to hear that. And we've gotten a statement from the White House, from the press secretary, Robert Gibbs. He calls this a direct violation of U.N. Security Council resolutions, and says that the U.S., and Western European governments have also said this as well, that they will continue to press for sanctions to try to keep Iran obliging to its international agreements -- Richard.

LUI: Al right, Ivan Watson in Istanbul with the latest on this agreement, with some hiccups to it at least initially. We'll go back to you more as this story develops.

Now go from Istanbul and take you over back over to the United States to get more analysis and perspective on it. We go to Massachusetts, where what we find, Dr. Jim Walsh, he's a security analyst for Massachusetts Institute of Technology.

Jim, the first thing that comes to mind is we have been down this road before, we have had these discussions before. Is this for real or is this a sham?

JIM WALSH, INTERNATIONAL SECURITY EXPERT: Well, only time will tell. I think if it's -- if they do act on it and it's implemented, it is a modest positive step.

But it's really -- this whole thing was about the Tehran research reactor And the fact that -- the medical reactor, and that it was running out of fuel. This is sort of a side issue. It doesn't have anything to do with the core issue. The core issue is enrichment. And if it's true that Iran plans to continue to enrich 20 percent even though it has fuel for the reactor, that's certainly going to be controversial.

LUI: OK. So, Jim, if this deal does go through and we have this higher enriched uranium that will be traded there in Istanbul, is this grade uranium good enough to build a bomb?

WALSH: No. In neither case the uranium that Iran would send to Turkey is only 3 percent to 5 percent enriched. You can't make a bomb with that. Iran does not have highly-enriched uranium. And the uranium they would get back in the form of fuel rods for this medical research reactor is 20 percent enriched, let's say, you could not use that to make a weapon.

The problem with enriching it 20 percent, if Iran is doing it itself rather than sort of buying the services of others, which is what this deal provides, if Iran does it itself, it brings it that much closer, in fact half the distance to being able to enrich up to the highest levels, which is what you would need for a bomb. So people don't want Iran enriching at the 20 percent level. And if they do that, that will be seen as provocative.

LUI: OK, provocative. Let's move on then to the sanctions. Many countries are worried about this and that's why the threat of sanctions has been out there for quite some time. Let's talk about the progress and those sanctions.

What will happen after this deal?

WALSH: Well, I think the deal takes the wind out of the sanctions motions. I don't think there's any doubt about that in part because Turkey and Brazil are part of the U.N. Security Council right now and they are the two countries who brokered the deal and their foreign ministers explicitly said, look, we don't have to have sanctions now. So I think it's hard to avoid the fact that this throws a road block into that.

But, you know, I never thought sanctions are the be all and end all to begin with. They're just another step in a process and they're not a magic wand. I think what we should do is, as Ivan pointed out, is wait and give this a couple of days, see where this goes. Already, you know, Iran has this incredible capacity for following up a victory by stepping on it, and often they're their own worst enemy in this regard. So we'll see what happens in the next few days whether this ends up being a net positive or net negative.

LUI: Certainly a lot of chapters in this story, right, Jim, as we take a look at what's happening with Iran and the world.

Dr. Jim Walsh there in Massachusetts, thank you so much for being in our "Globe Trekking" segment. He's the international security analyst from MIT. We appreciate your time today.

You know, the Catholic Church rocked by sex abuse allegations and one Kentucky case is going straight for the top. How the Vatican plans to defend itself coming up in "Crime and Consequence." (COMMERCIAL BREAK)

LUI: OK, checking our top story this hour.

Just in, a U.S. immigration judge says President Obama's Kenyan aunt can stay in the United States, ending a six-year legal battle. Two government sources confirmed the ruling will give legal status to Zeituni Onyango. She applied for political asylum back in 2002 due to violence in her native Kenya, but was later turned down in that. President Obama had stayed out of this case as it went through the courts.

Turning to other headlines for you, the U.S. plans to keep a closer eye on how other countries treat the media. President Obama has signed legislation making freedom of the press a bigger concern. When the State Department prepares its annual report on human rights, it will be required to identify countries that violate press freedom or that fail to preserve the safety and independence of journalists.

And this is the final day to campaign before three important primary elections. We've got two incumbent democratic senators, Arlen Specter of Pennsylvania and Blanche Lincoln of Arkansas, they face some tough challenges from other democrats. Then in Kentucky, a republican endorsed by Senate GOP leader Mitch McConnell faces another republican backed by the Tea Party.

Anti-government protesters in Thailand ignored a government deadline to disburse today. About 5,000 protesters remain camped in central Bangkok despite government warnings they now face up to two years in prison. Sporadic fighting continues between troops and anti- government protesters, at least 35 people have died since Thursday. The protesters known as Red Shirts are demanding new elections. Doctors today announced the death of a Red Shirt leader who was shot by a sniper last week.

All right, time for "Crime and Consequence" where we dig deeper into a case exploring all facets of an investigation, giving a face to some of the victims. Today, a sex abuse case in Louisville, Kentucky is rattling Rome as Vatican lawyers shape a new legal strategy. The plan is designed to protect top Vatican officials, including the pope from being pulled into U.S. trials. We'll get back to that in just a little bit, but first, let's backtrack to the origin of this particular case.

Back in 2004, three men filed a lawsuit alleging they were the victims of priest abuse as children. They are now seeking damages from the Vatican. Meanwhile, the Vatican is trying to get that case dismissed.

At the heart of the issue, a 1962 document from the Holy C that barred church officials from reporting sex abuse allegations to police. The Vatican says the document did not mandate that bishops keep their mouths shut, and the Vatican also says it's not liable for U.S. bishops who allowed molestation to happen. It says, bishops are not Vatican employees because they are not paid by Rome. They do not act on Rome's behalf, and they are not controlled day to day by the pope.

Those are some of the factors that courts have used to determine whether employers are liable for the action of their employees, but the attorney behind the Kentucky case sees it a little bit differently calling the 1962 document a smoking gun.

This is the first U.S. case to reach the stage of determining whether victims actually have a claim against the Vatican itself for negligence, for the failure of bishops to alert police and the Vatican wants the case thrown out before Pope Benedict XVI can be questioned or documents are subpoenaed.

Well, the victims in this case, not exactly clear-cut. Perhaps the real victim is faith in the church, faith that's been shaken quite a bit lately. The men who filed the lawsuit have claimed abuse, but there's been no ruling as of yet. Still, the Catholic Church has been dogged with a widening ring of sex abuse scandals. There are more than 41,000 priests serving in the U.S. today and a priest is supposed to be someone who is not just trusted and respected, but trustworthy and respectable.

So we'll leave it at this. Anyone who has had that faith fundamentally shaken is on some level a victim of these scandals.

There's a new cancer treatment that destroys cancer cells deep in the body without surgery. And you will never guess how young the developer of this brand-new treatment is. An amazing story for you straight ahead.

(COMMERCIAL BREAK)

LUI: In the Big Eye segment, every day we're bringing you new ideas and innovations in the areas of business, medicine, technology. Basically new ideas that can impact your world.

Well, today's Big Eye is a new cancer zapper involving photodynamic therapy. Let me lay that out for you. Here's how it works. Basically a cancer patient gets an injection of a drug called a photosensitizer (ph). This photosensitizer then concentrates in the tumor, light is then applied to the skin right above the tumor activating the drug and basically destroying the cancer cells.

There are some limitations, though. According to the National Cancer Institute, photodynamic therapy can only pass through about one-third of an inch of skin. So not very deep. But there's a new drug theory in the works, one that allows that therapy to go deeper into the body to fight tumors.

And the force behind that entire theory is 16-year-old Amy Chyao.

Well, good morning, good afternoon to you there in Dallas. Amy, let's talk about this.

What is your solution to take this photodynamic therapy to the next level? AMY CHYAO, 16-YEAR-OLD CANCER ZAPPER: Well, I worked on designing a new drug that would use near infrared wavelengths that are capable of penetrating deeper into the skin. Hopefully using this drug will allow the access to internal tumors.

LUI: How deep could this go once we have this drug?

CHYAO: I think it's on the scale of centimeters. I haven't been able to test it directly. But hopefully it should be much deeper than currently.

LUI: Are you talking about inches, four or five inches?

CHYAO: I'm not sure exactly actually. It would depend on the type of tissue. But that would be a big advance if it was that much.

LUI: OK. So, you're 16 years old. And a lot of folks are going, wow, Amy, how did you come up with this? Where did you get the idea to start this theory?

CHYAO: Well, I'm really interested in medicine. And that's why I kind of drifted towards cancer treatment. But I think I really owe it to my mentors at UT Dallas because we worked together to develop it.

LUI: What was the key point in your development of this? What was the "a-ha" moment?

CHYAO: I would say there were quite a few of them, actually. I started out with a base of my nanotubes and then added on another component because there wasn't quite the right chemical being produced. And then another component until I finally got what I was looking for.

LUI: The nanotube, that's exactly what I would have thought here, Amy. I'm joking here.

What do you do for fun?

CHYAO: I play the cello in the Greater Dallas Youth Orchestra. I also used to do the spelling bee, like the National Spelling Bee. So now I teach younger students in my own nonprofit organization.

LUI: In the 10 years that you've been competing in these fairs, I heard that you weren't worried so much about the competition, you're just kind of interested in the sort of mix of ideas that exist at these fairs, is that right?

Tell me about that.

CHYAO: That's true. Actually, the best part about the science fairs is how much you can learn from the judges, from the other students. Because especially the Intel Science Fair. I met kids from all over the world and that was really the greatest experience.

LUI: And last question for you, Amy. What are you going to do in college? What do you want to grow up and be when you're old like the rest of us?

CHYAO: When I'm old? First off, I want to major in chemistry and then get my Bachelor's of Science. And then probably either go the route of teaching as a professor, or something in medicine.

LUI: If you joined the business world, tell me which company it's going to be and I'm going to buy stock right now so that we can get an advance on a good profit.

Amy Chyao, thank you so much.

CHYAO: Thank you.

LUI: Really interesting, photodynamic therapy and what you alone as a 16-year-old high school student there in Dallas. Really something else, isn't it?

All right. Building up your own success in tough economic times. We're getting tips from two guys have done just that. They'll put you back on your feet literally.

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LUI: A landmark "AC360" series we want to tell you about what your children think about race could shock you. And what you are teaching your children about race. "AC360" conducted a pilot study on children's racial beliefs, attitudes, and preferences. It was designed, and the results analyzed, by renowned child psychologist and research professor Margaret Beale Spencer.

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UNIDENTIFIED FEMALE: Show me the ugly child.

Why is she the ugly child?

UNIDENTIFIED CHILD: Because she is, like, a lot darker.

UNIDENTIFIED FEMALE: Show me the good-looking child. And why is she the good-looking child?

UNIDENTIFIED CHILD: Because she is ice skating.

UNIDENTIFIED FEMALE: Show me the good child.

UNIDENTIFIED CHILD: This one.

UNIDENTIFIED FEMALE: Okay. Why is he the good child?

UNIDENTFIED CHILD: He looks good.

UNIDENTIFIED FEMALE: Show me the child who has the skin color most children don't like.

(END VIDEO CLIP)

LUI: All right. "BLACK OR WHITE: KIDS ON RACE." Don't miss this one-of-a-kind "AC 360" series, starting tonight, 10:00 Eastern.

You know, all this week, African-American business owners and aspiring entrepreneurs are gathering in Atlanta for the Black Enterprise Entrepreneurs Conference, and one of the main goals of the conference is to help black business owners survive during tough economic times.

And one business that's managed to survive the economic slump, as well as the decline in retail sales, is Shane and Shawn Wad. Joining us today is Shane and Shawn Ward, co-founders of their namesake company.

Welcome to both of you guys.

UNIDENTIFIED MALE: Thanks for having us.

LUI: Let's start talking about your company. Shane, what do you guys do you do?

SHANE WARD, CO-FOUNDER AND CREATIVE DIRECTOR, SHANE & SHAWN: We have a company called Shane and Sean. We do men's and women's fashion shoes, but with a very unique comfort twist. Our background is athletic shoes, and living in New York, we noticed a lot of women walking around the streets in a beautiful outfit, whether going to work or going out at night, and would have gym shoes on. And they would have their dress shoes in their purse or their bag. And we felt we felt because we came from the athletic industry that we could bridge that gap and do fashion shoes that feel like athletic shoes.

LUI: Comfort is king, is what you're saying.

SHANE WARD: Comfort is king.

LUI: OK. So Shane and Shawn, you're identical twins, as folks can tell by looking at them right now. Good thing you wore glasses. I appreciate that, Shawn.

What has been your key to your ability to survive this downturn?

SHAWN WARD, CO-FOUNDER, SHANE & SHAWN: I think it's been being nimble and being able to adjust to the times. Everything was blue skies back in 2008 and bam, right away, the recession hit in October. And we really came, you know, head-first with some realities that we really needed to become a lot more leaner.

And Shane and I, we actually closed our retail shop, because it was really high in overhead and said "where are opportunities that we can still grow our business, but it was low overhead?". And we really saw an opportunity online. and we probably should have been doing a lot more online business focus, but the recession actually was almost a blessing for us, because we came out of the recession smart, leaner and stronger, and our sales are up 600 percent online from last year because now - LUI: Six hundred percent? Six -

SHANE WARD: Year-over-year.

LUI: That is not bad. So your shoes, comfort is king for women. There's a lot of women. We say thank you so much, Shane and Shawn, we appreciate that.

You said cutting costs was, I guess, your key move earlier on. What is your key going now forward? Do you see the recession as still a bill lit more long-term, or do you think you see the end of it from your perspective?

SHANE WARD: Well, we're starting to get a lot more positive feedback now, like Shawn mentioned, online sales. But to stay lean, we have decided to change our business model so that we focus on what we're strong at, which is design and marketing. And the things we weren't strong at, which was operations, shipping and logistics, we're going to outsource that. So, that has kept our overhead down, and we're going to give a percentage of our business to those companies that partner with us to do those type of things.

LUI: Okay. We were talking before you went on air. You definitely here for the Black Enterprise Entrepreneurs Conference. Had a couple speeches, on a couple panels, and you were saying your job here is to motivate people and give them some key sort of ideas to move forward. Give us one or two of those, if you could.

SHAWN WARD: Yes. I'll give a couple. The first thing I think people should do is, what we did is focus online, because it's a very low-cost way of doing business, and you're going directly to the customer, who cannot not only buy your product but give you feedback on how to become better.

Secondly, I think we need to approach our suppliers and get better terms. A lot of small businesses have trouble with financing. Instead of just looking for investors, go back to your suppliers who need the business now, because of the recession --

LUI: Renegotiate is what you're saying.

SHAWN WARD: Renegotiate your terms instead of, you know, for example, paying in 30 days, you can pay in 90 days. The suppliers need the business, and it helps your cash flow situation. So, I would definitely tell the small businesses to reach out to suppliers and get better terms.

LUI: Shane?

SHANE WARD: I would say the biggest thing they can do right now is listen to the mentors.

LUI: Reach out to the network you've got.

SHANE WARD: Absolutely. Because being a entrepreneur right now, especially going through the recession, you can get into tunnel vision and your day-to-day grind of, like, fighting all the fires. But if you shall reach out to your network, your mentors, and open the book and let them know what's going on with the company, they can give that you feedback that you need to make it through.

LUI: You're saying overly defending. Instead, think forward and be a pioneer about the thoughts and ideas you've got for your business.

SHAWN WARD: And just -- one thing Shane and I aren't going to do is go back to the old ways, just because things are getting better, ok, let's hire more people, let's get a big office space. We're saying lean going forward, and I think a lot of business owners need to think the same way.

LUI: Shane and Shawn, thank you both very much. I know you're a Michigan grad, so hopefully you can apply some your concepts to our college football team going forward. \

SHANE WARD: Yes, we hope they'll do better this year, don't we?

SHAWN WARD: Thank you.

LUI: Thank you both.

Winnie Mandel, the movie about her life, has not even started filming yet, and already, she's the talk of Cannes. We'll take you to the movies, straight ahead.

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(MUSIC PLAYING)

LUI: All right. Three projects making a splash at the Cannes Film Festival, from Winnie Mandela to The Rolling Stones to a call to disarm. CNN's Brooke Anderson has more.

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BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT (on camera): One of the films buzzed about here at Cannes is already swimming in controversy and not a single scene has been shot yet.

I'm talking about the upcoming film "Winnie," about Nelson and Winnie Mandela focused on Winnie's controversial life. It stars Jennifer Hudson and Terrence Howard, who are here at the festival for the movie's official announcement. Winnie Mandela herself, sent a letter to producers, threatening legal action if she is not allowed to approve the script. Well, producers say it won't happen.

I spoke with Jennifer, who said she understands why Winnie is worried.

JENNIFER HUDSON, ACTRESS, "WINNIE": For good reason, you know, she would feel that way. But I don't think she would be disappointed, and I, for myself, I definitely hope that she will be pleased with basically -- kind of -- I don't know if I could call it a tribute. But, you know, the reflection. It's just telling the story. It's nothing that shied away from. It is what it is and it's being told. But I do feel like -- I mean, I have respect and a newfound respect.

ANDERSON: Filming is set to get under way later this month in South Africa.

Now, Hudson is reveling not only in her career success, but in her new role as a mom. She opened up about how having a child has changed her.

HUDSON: It makes me appreciate life and everything that it has to offer that much more seeing it through my child's eyes. It's such a blessing. I love it. Oh, he's the best baby. He's so sweet. He's such a sweetheart.

ANDERSON: A couple of other notable movies making waves here. The documentary, "Countdown to Zero," about nuclear proliferation makes its international debut. And Mick Jagger is here for "Stones in Exile." It's about the making of the Rolling Stones 1972 epic album, "Exile on Main Street." It's a fitting place to premier the film as much of the album was reported here in France, back in the '70s.

Brooke Anderson, CNN, Cannes, France.

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