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Veterans Quality of Care; Rankled Republicans Blast Steele

Aired July 05, 2010 - 09:59   ET

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


KYRA PHILLIPS, CNN ANCHOR: Let's go ahead and check our top stories.

No apologies. That's the message from Israel to Turkey. Turkish officials demanding an apology after last month's Israeli raid on an aid ship headed to Gaza that killed nine Turkish citizens. Israel currently has a blockade for aid in that region. Israeli officials told CNN that Israel will never apologize for defending its citizens. Turkey has threatened to cut off relations.

Two run away horses pulling a wagon bolted out of a July 4th parade in Iowa. Those horses ran wild for six blocks, trampling people along that parade route; 24 people were hurt, five are in critical condition including two children.

Ecuadorian authorities working with the U.S., actually DEA agents that have seized what they say is a fully functional submarine built just for smuggling cocaine. They've also arrested one man. That sub is being held near the border of Ecuador and Colombia; investigators trying to find the group responsible for assembling it.

A developing story now about our veterans: our warriors and the quality of medical care that they've earned and deserve versus what they're actually getting. All last week we told you about the hundreds of veterans in St. Louis possibly exposed to HIV and hepatitis because of dirty dental equipment. That's just the most recent case.

Don't forget last year hundreds of vets may have been exposed to HIV and hepatitis thanks to dirty colonoscopy equipment at VA clinics in Tennessee and Florida. Also there were faulty prostate cancer screenings in Philly. Other vets got letters telling them that they had the fatal Lou Gehrig's disease. Those letters were actually wrong.

Lots of serious VA missteps.

And now we've got our hands on an internal memo from the VA. It's meant to crack down on some questionable medical practices at some facilities. In that memo, it talks about patient care compromise. Vets kept waiting for appointments, highlighting inappropriate scheduling practices referred to as gaming strategies, a tactic that was, according to this document, used to improve customer service scores.

And there's more, 8 pages worth, in fact. Congressman Bob Filner of California is chairman of the House Committee on Veterans Affairs and is their warrior in Washington. He's with me now to talk about this latest fight. It's frustrating, congressman, to see these stories over and over and over again. I know you're not going to let up on the VA and neither are we.

REP. BOB FILNER (D-CA), CHAIRMAN, VETERANS AFFAIRS COMMITTEE: We appreciate all your work here. You know, it's outrageous, one, that this happens, but even worse is this secretive, almost cover-up mode that they go into when something like this happens. Rather than be straight forward, talk about what happened, make the corrections, treat our veterans, who we owe so much to, with some respect and some care and empathy, they cover it up.

They knew about this problem with the cleaning of dental equipment in March. It took them almost two months to convene some board to look at the problem and then another six weeks before they notified anybody. Then they notify with a letter, you open a letter that says you may have HIV without necessarily a call or explanation.

We should be much more caring not only about the procedures but the way we deal with them after they're known.

PHILLIPS: And let me ask you, what is the incentive here? I wanted to dig a little deeper on this memo that we got our hands on. When they - it was referred to as gaming strategies, a tactic used to improve customer service scores. Are there bonuses involved in certain things that the VA does, members of the VA hat are working in these clinics? I mean, is there a financial incentive to basically hose vets?

FILNER: I think it's a bureaucratic incentive although there are bonuses, and we measure things, for example, waiting times. If you have a good waiting time you come up high in scores. That may get you a promotion. But if the waiting times are gamed, that is they don't count the times that you were sitting there before you got to the actual doctor, then we don't know the truth. I'm sorry, Kyra.

PHILLIPS: It's OK. By the way, do you have water? I know you're fighting a cold and you're a trooper for getting up early and coming and meeting with us. Grab a drink of water there and we'll just let our viewers - kind of update our viewers here on these stories that we've been covering with regard to our vets, in particular this memo that we got our hands on. You were talking about there are ways to get promotions and better your career through these certain scores but continue what you were saying.

FILNER: Well, mainly we have to have a bureaucracy that says we care about you, not we care more about the bureaucracy. When you don't - when you cover things up, and Congress was not informed about this St. Louis thing until they actually sent out the letters, which was about five months too late, and when a bureaucracy acts that way, you feel there's a cover-up and, yet, these are our veterans. These are the people who gave us our freedom. We have to be more loving and caring about them. PHILLIPS: Absolutely. And I know there is this public hearing that's coming up on July 13th, the VA medical safety lapse that we're talking about here from St. Louis. What can we expect to come out of that meeting?

FILNER: Well, we want to know exactly what happened and who knew what where as they said in Watergate, what did you know and when did you know it? I don't think the secretary of the VA knew what was going on until it became public last week. That's disgraceful.

We want to get to the bottom of what happened but more important what do you do when a mistake occurs? And how do you do it in the most empathetic way possible? Why don't we have someone in charge of every 50 of these 1,800 who got letters and say, follow up with phone calls. Make sure they know we care. And how to get the tests to show them and give them some sense of knowledge and security about what they have.

PHILLIPS: And not to mention the 2009, the federal report that came out that cited numerous violations made at VA hospitals according to this report that we were looking over again this morning by the federal eye. The Veteran Affairs inspector general report actually followed up on these revelations that the VA hospitals in Florida, Georgia, and Tennessee, by the way we've covered stories out of all three of those states, possibly exposed 10,320 veterans to hepatitis B, hepatitis C, or HIV by not properly cleaning equipment.

What can you do as chairman of the House committee on Veterans Affairs, what can you do, specifically, to try and put a stop to this? There's got to be more accountability.

FILNER: Yes, and the VA, you know, is responding with new procedures and new follow-ups but Kyra, the only way you can get accountability is if there is someone who actually pays a price for this. Nobody has been fired, for example, in any of these incidents. There have been people who are put on leave and such but nobody gets the ultimate price to show that we're trying to be accountable. By spotlighting with our hearing, by spotlighting what is going on, we hope to bring more accountability to the VA.

PHILLIPS: Well, I hope so because I hope it doesn't take vets dying from these mistakes, congressman, until changes are finally made and people lose their jobs. Congressman Bob Filner -

FILNER: Kyra, I should say the probability of infection is very low because these instruments were sterilized. They just weren't given a pre-cleaning. So it's very low. But we have to be more accountable for everything. These are the people that we have to care about every single day.

PHILLIPS: Congressman, thanks. And I know you do.

All right. So Ron Paul supports Michael Steele's comments about the Afghan war. Well, there's one, because many Republicans are ripping him apart and wishing the party head would think before he jams his foot in the party's mouth. In case you missed it here's what Mr. Steele said. It was actually late Friday at a fundraiser in Connecticut.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, RNC CHAIRMAN: Keep in mind, again, for our federal candidates, this is a war of Obama's choosing. This is not something the United States actively prosecuted or wanted to engage in.

(END VIDEO CLIP)

PHILLIPS: Open Steele trap, insert foot. Steele has been getting lambasted left and right since these comments came out. Let's talk it over with CNN foreign affairs correspondent Jill Dougherty. Jill.

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Kyra, that video is kind of interesting, isn't? Caught with that little camera and what he said. He backtracked, as you mentioned, but you know, he has been catching a lot of flack.

Initially it was coming from commentators, you know, Bill Kristol, influential conservative commentator, Liz Cheney, people like that. But now it's moved into the political realm of congressmen, members of the Senate, and we'll give you an example of the different view points on the subject.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Dismayed, angry, upset. It was an uninformed, unnecessary, unwise, untimely comment. This is not President Obama's war. This is America's war.

REP. RON PAUL (R), TEXAS: I enjoyed the fact that we're willing to have a discussion about the popularity of this war. And, truly, it is Obama's war even though it was started during the last administration. Obama said, this is the good war and he's expanding the war and the American people aren't with him.

(END VIDEO CLIP)

DOUGHERTY: So two republicans, two different view points on what Mr. Steele said. And Kyra, we did ask the White House this morning if they had any opinion. They're not saying anything yet. And that's almost predictable because, after all, it's not a bad position to be in to look at Republicans in effect eating each other up on this subject. And it does raise serious questions for the Republicans where they go from here.

PHILLIPS: We'll follow it. That's for sure. Jill Dougherty from the White House. Appreciate it, Jill. I couldn't help but remember my interview with Mr. Steele last year. He was railing on the president's health care reform plan talking up his own party. Well, at the end of the interview I asked him what I thought was a very simple, non-gotcha question.

(BEGIN VIDEOTAPE) PHILLIPS: What kind of health care do you have?

STEELE: I have - I have private - I have health care through this - through the RNC.

PHILLIPS: What type of health insurance do you have? Do you get that through the RNC?

STEELE: Yes. Through my employer.

PHILLIPS: What company is it?

STEELE: Blue Cross Blue Shield, I believe.

PHILLIPS: All right. Chairman Michael Steele.

STEELE: Maybe not. I'm not -

PHILLIPS: Not sure?

STEELE: I think it's Blue Cross Blue Shield.

PHILLIPS: You must not have gone to the doctor lately. You're in good shape.

(END VIDEOTAPE)

PHILLIPS: It was a bit awkward as you can see. I was kind of shocked by the answer. He couldn't really answer the question. But that's hardly the first time that Steele's trap has stirred up controversy. You could almost put out a greatest hits CD.

Josh Levs is here with a look at some of those other gaffes.

JOSH LEVS, CNN CORRESPONDENT: Yes, there have been a lot of them in terms of what everyone, many Republicans, many Democrats reading a lot of his comments as gaffes. In fact, before we jump back in time let's take a look at another piece of what's gotten people riled up in recent days, something that Michael Steele said and I have the quote for you.

He was talking about President Obama being a student of history. He said has he not understood that, you know, that's the one thing you don't do is engage in a land war in Afghanistan? Everyone who has tried over 1,000 years of history has failed.

Now, the history of Afghanistan is very interesting and complicated and there have been military failures to study. That said, a lot of people very upset over this suggestion that maybe the activities going on there right now would not succeed.

Now time to jump back. We're going to take a look at a couple of things over the last couple of years that Michael Steele has said that got a lot of people upset beginning with this when he was talking about the idea of the government helping create jobs.

(BEGIN VIDEO CLIP)

STEELE: First off, the government doesn't create jobs. Let's get this notion out of our heads that the government create jobs, not in the history of mankind has the government ever created a job. Small business owners do. Small enterprises do, not the government.

(END VIDEO CLIP)

LEVS: All right. So that portion of his quote, "not in the history of mankind has the government created a job," got a lot of people upset including government workers and some people in his own party were speaking up and saying what are you talking about?

There is also something that came up last year. During the previous round of efforts to replace someone on the Supreme Court when President Obama said he believes that it's important that a judge have empathy. Here is something that Michael Steele said at the time.

(BEGIN VIDEO CLIP)

STEELE: I don't need someone feeling bad for my opponent because of their life circumstances or their condition and short changing me and my opportunity to get fair treatment under the law. Crazy nonsense, empathetic. I'll give you empathy. Empathize right on your behind. Crazy.

(END VIDEO CLIP)

LEVS: That's when he was spilling in on Bill Bennett's radio show. That is now in a lot of places online. You can hear that quote. A lot of people talking about not necessarily the best way for him to express those views.

Let me get to a couple more here that got a people talking. This was at the beginning of this year. This was a pretty big deal. It was after this quote that some people in his own party started saying, hey, time to go. He was asked in a Fox News interview if the Republicans could take back the House in 2010. It was just the beginning of 2010. And his initial response to that was not this year.

I will tell you that I followed what he said in days after that. And he did end up saying, hey, I think we can turn it around this year. I think Republicans can win this year. But that was his initial response. A lot of people saying the person who's in charge of fund raising for the Republican Party should never have that as a response at all.

And we can get in one more here which is sort of a different flavor but it offended some people because of insensitive terminology he used in that interview. He was talking about the Republican Party platform. "Our platform is one of the best political documents that's been written in the last 25 years." He went on to use this phrase. He said "honest injun on that" and he ended up saying, hey, that was the wrong phrase and he apologized for using what some people consider, what is a racial epithet and apologized for that.

I will also tell you when we're talking about this he says he's misunderstood. He says repeatedly that, you know, his quotes get taken out of context and that when he says something that he feels is a trip up he always comes back and says, hey, if I said something wrong I'll apologize for that.

So that's it, Kyra. He does continue to have controversial remarks. That hasn't gone away. And based on what we've seen in recent days including this new stage in the in fight in the Republican Party over Michael Steele, doesn't show any sign of going away any time soon either. Kyra.

PHILLIPS: I don't think it's going away any time soon either. We'll continue to follow it, Josh. Thanks.

And breaking news right now on this 77th day of the Gulf oil disaster. We have just learned that tests of the effectiveness of the "A Whale" oil skimmer in the Gulf of Mexico are inconclusive. A spokesperson for the company that owns the huge converted cargo ship actually announced this today. The cargo ship is the world's largest oil skimming vessel.

Now, if approved the "A Whale" would join an oil skimming flotilla of 550 ships that were working yesterday on the Gulf. This morning new cost figures from B{ who now say that they've spent more than $3.1 billion responding to the disaster.

Meanwhile, the feds have put another 1,100 square miles of the Gulf off limits for fishing. That closes roughly a third of the Gulf of Mexico's federal waters. A precaution taken to ensure the quality of seafood.

If the itinerary makes the monarch, well, Britain's Queen Elizabeth steers one tight ship. Tomorrow's destination? New York. Our look ahead for queen mum in 90 seconds.

(COMMERCIAL BREAK)

PHILLIPS: Well, the city that never sleeps gets a royal wakeup call tomorrow as England's Queen Elizabeth makes a long overdue visit to New York City.

CNN's Richard Roth has more on mum's travel plans this week.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN UNITED NATIONS CORRESPONDENT (voice-over): It will be queen for half day in New York City.

UNIDENTIFIED MALE: Her majesty, the Queen of England, will be here, going to visit.

ROTH: Her first visit since 1976.

(on camera): She's not been to New York in 30 years. UNIDENTIFIED MALE: Well, we're not giving it back.

ROTH: She hasn't been here since -

BILL MILLER, CHAIR., BRITISH GARDEN MEMORIAL TOUR: Hasn't been here for many years.

ROTH: Does she not like New York?

MILLER: Oh, she'll love it. She'll love it. Why not?

ROTH (voice-over): At "Tea and Sympathy" in Greenwich Village, the queen is already here but owner and dual citizen Nicky Perry is upset she won't be here for the queen.

NICKY PERRY, OWNER "TEA & SYMPATHY": I would love to offer her a proper cup of tea.

ROTH: I tried to prepare the former commoners.

(on camera): Can you bow for me? Not bad. What would you tell her?

UNIDENTIFIED MALE: What would I tell her? That you're beautiful.

ROTH: Do you tell that to all the women on the street in the summer here?

UNIDENTIFIED MALE: I do but there is a different beauty involved here.

ROTH: If she's around and wants to get high tea with me, just give me a call. She was very cordial last time we had it.

UNIDENTIFIED MALE: I'd try and sell her a diamond watch.

ROTH: You think she needs jewelry?

UNIDENTIFIED MALE: Everyone needs jewelry.

ROTH: What do Americans not know? We don't know what it's like to have a queen.

UNIDENTIFIED MALE: You've got plenty of queens in America.

ROTH (voice-over): The queen could have some royal fun in the big city.

UNIDENTIFIED MALE: She makes very highly scripted visits. She isn't going to be doing what Prince Harry did the other day in New York, getting on a polo pony and falling off which made news all around.

ROTH: Some New Yorkers would rather the grand kids stayed longer. (on camera): You would like to have tea with her?

UNIDENTIFIED FEMALE: Yes or her grandsons.

UNIDENTIFIED MALE: I now respectfully request her majesty.

ROTH (voice-over): The queen will first speak to the world at the United Nations as she did in 1957. The queen was 31 years old and when she noted the U.N.'s problems.

QUEEN ELIZABETH OF ENGLAND: Time has in fact made the task of the United Nations more difficult than it seemed when the terms of the charter were agreed at San Francisco 12 years ago.

ROTH: Then it's a motorcade trip downtown, perhaps passing this musician.

UNIDENTIFIED MALE: I think she would just go, you know, like this, like she does to everyone, instead of like that, which would be pretty cool.

ROTH: The queen visits where the Twin Towers stood and a garden where the 67 British citizens who died on 9/11 are remembered.

UNIDENTIFIED MALE: This is the place for the British and it's also about the unity of our two nations. You know, we've been, ever since we got over 1776, we've been shoulder to shoulder.

UNIDENTIFIED FEMALE: I'll say god bless the queen.

ROTH (on camera): What about god save the queen?

UNIDENTIFIED FEMALE: God save the queen, too.

ROTH (voice-over): Richard Roth, CNN, New York.

(END VIDEOTAPE)

PHILLIPS: And from the queen of England to the king of hot dogs. How's that for a segue? Hot dog eating champ put away 54 hot dogs and buns. How many calories is that? Well, how many Big Macs would you have to eat to equal that? We did a little math. The answer will probably turn your stomach.

(COMMERCIAL BREAK)

PHILLIPS: Checking top stories, RNC chair Michael Steele is feeling the fallout comments he made about the war in Afghanistan. He recently said the war is of President Obama's choosing and may be unwinnable. He's even catching flack from members of his own party for those comments.

Day 77 of the crazy Gulf oil crisis results from this weekend's "A Whale" test, apparently it's inconclusive. The rough seas are to blame. More test runs are slated for the massive skimmer capable of scooping up 21 million gallons. The feds also put another 1,100 square miles in the Gulf off limits for fishing. The cost of the whole mess for BP, three billion plus and counting.

And the northeast is dealing with extreme heat. JFK in New York tied a record high for July 4th by hitting 100 degrees yesterday. The National Weather Service says the heat wave could last until at least Thursday.

California's money troubles are in the news all the time. Teachers and police laid off, people charged for emergency calls, and so on. So imagine how infuriating it must be to realize that precious taxpayer cash might have been spent on lap dances.

(COMMERCIAL BREAK)

PHILLIPS: One of the fallouts of the holiday weekend celebrations, more drunk teens. According to a report from the Substance Abuse and Mental Health Services Administration drinking- related visits increased 87 percent during the holiday weekend than a regular day in July.

Japan's most famous competitive eating star ends up eating his words. Police arrested Takeru Kobayashi at the annual Nathan's International Hotdog Eating Contest. The contest that he's won many times by the way. As you can see the security guards actually had to wrestle with him as he rushed the stage after he lost the competition.

Kobayashi got into a dispute with the sponsors and refused to compete this year. Kobayashi's biggest rival Joey Chestnut won the hot dog eating contest for a fourth time. He downed 54 hot dogs and buns in 10 minutes. The record? Chestnut holds it. An astounding 68 hot dogs.

Now, earlier we actually mistakenly credited Kobayashi with holding that record but of course yesterday's winner Joey Chestnut, well, we apologize for that error. But what the heck? It's a hot dog eating contest for goodness sake. Appetizing huh?

Well, here's food for thought. Joey Chestnut devoured 54 hot dogs and buns in 10 minutes so what does that really mean? Here's a calorie comparison. Hot dogs and buns equal about 15,000 calories. Put that in perspective? An average person should eat about 2,000 calories each day. All right.

So how does that compare with other popular foods? Next time you head to McDonald's, try wolfing down 31 Big Macs if you want 15,000 calories or if pizza is more your thing you'd have to down 48 slices of pepperoni. That's six whole medium pizzas, by the way. If you're a chocolate lover you may not be after eating 71 Hershey bars. Bottom line, whichever way you look at it, they probably all would make you really sick.

An airline passenger pulled over by TSA screeners detained and questioned. Was he carrying a bomb? No. Just cash.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He was pulled out of line because they saw a metal box in his bag. They wanted to look inside the metal box. They found money. Apparently you can't travel with money anymore.

(END VIDEO CLIP)

PHILLIPS: So what is going on at the TSA? We're going to dig a little deeper on that question with the documenting film maker. That's up next.

(COMMERCIAL BREAK)

PHILLIPS: Well, a lot of you are flying this holiday weekend and we all know the drill far too well. We line up at security and the stripping begins. Our shoes, belts, jewelry, hair clips, hats. With all that we do as law-abiding passengers are these TSA security measures really helping catch the bad guys? Did you know that agency gets $5 billion to $7 billion a year to do its job, a job that far too often ends up like this?

(BEGIN VIDEO CLIP)

STEVE ELSON: What TSA focuses on is the threat du jour. A TSA tester had a bag they put clothing in. They put a bomb assembled in. They put clothing. They put a bottle of water on top. The bag goes through. The screening x-ray stops the bag, lifts the battle of water off , close the bag, return the bag to the TSA tester who then took the bag with the fully assembled bomb and went aboard the plane. They focus on all kinds of minutia and crap rather than the items they need to.

(END VIDEO CLIP)

PHILLIPS: Fred Gevalt thinks the TSA can do better. He's had it with the minutia and crap. If you watch his new documentary please remove your shoes you're going to see why.

So Fred, why did you want to do this documentary?

FRED GEVALT, EXECUTIVE PRODUCER, "PLEASE REMOVE YOUR SHOES": I think there were many reasons that led me into doing this, some circumstantial. I was flying myself actually into New York the day of 9/11. And I sold my business and had the resources and time to do it.

But I think my motives actually go deeper. I'm a Vietnam vet. I value my country, I value the freedoms it has and I wanted to give something back. I think that TSA is a dangerous agency and it's kind of a poster child for bad government. It's abusive, abusive of passengers, its employees, and I think we need to fix things up.

PHILLIPS: You also say here, quote-unquote, "The stupidity never ends."

Let's look at another clip.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's a yes or no question. I just want to know why you have (INAUDIBLE) is an unusual thing. I carry 50 bucks. UNIDENTIFIED MALE: He's refusing to answer any questions. He don't want to answer - we're going to have to take him down to the station.

UNIDENTIFIED MALE: Yes. I mean, this is -

UNIDENTIFIED MALE: Let DEA, FBI and all (INAUDIBLE) talk to him.

UNIDENTIFIED MALE: Every one of them.

First it's the TSA, then the police officers, then the police officers are shouting at me and cursing at me. Then they're threatening to arrest me and take me to the FBI. At any point do I say, all right, fine, fine. But then I'd be giving up the rights that I 10 minutes ago said were so important to me.

(END VIDEO CLIP)

PHILLIPS: Fred, explain this to me. It wasn't even a gel or an aerosol. It was money in a box.

GEVALT: Well, that's right. As a reporter said, apparently you can't even carry money anymore. You have to explain to the government why you're doing that.

PHILLIPS: Now, we definitely want to point out that you offered the TSA a chance to speak in your documentary. The TSA declined. But they did give us a statement, Fred.

They said, quote, "TSA has significantly improved aviation security following the tragic events of 9/11. We have full confidence in our highly trained workforce to use the latest intelligence from all of our law enforcement and intelligence community partners, state- of--the-art technology, and other layers of security to keep the traveling public safe."

Do you agree, Fred?

GEVALT: I do not. I think if they have confidence, well let me rephrase that. I think that if the TSA is referring to its arrogance, its waste, its expense, then it's on the right track. It hasn't changed that a bit.

PHILLIPS: You even tackled the issue of air marshals.

Let's listen to this clip.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The managers believe that in case of a hijacking if we were not dressed in a full suit with Military grooming standards, the passengers on the plane would not believe we were federal air marshals.

We boarded the aircraft before the passengers. That was one of the flaws in the boarding procedures. When the passengers saw us board ahead of time they knew we were the air marshals. When they got on board the plane they would shake our hand, they would pat us on the back, and thank us for being on the plane.

Well, if the passengers know who the air marshals are, so do the terrorists. It wasn't too long where air marshals were calling this new policy the kill me first dress code policy. You kill the guys with the suits first.

(END VIDEO CLIP)

PHILLIPS: All right. That's pretty scary, Fred.

GEVALT: It is. It is. And it's demonstrative I think in many respects of the inconsistencies in TSA policies and lack of concern they be carried out by their employees.

PHILLIPS: So final thought. What's your suggestion? What should the billions of dollars - what did we say - we started out $5 billion to $7 billion a year that TSA gets to do its job.

What should be done with that money?

GEVALT: I think essentially if you go back historically, the events of Pan Am 103 in 1988, 9/11, itself, and the more recent events this past Christmas, all indicate -- and the experts I've talked to all agree - indicate that we ought to be spending more effort connecting the dots, using the intelligence that we have to predict these things rather than all the reactive show and tell that's going on at the airport.

PHILLIPS: Check out Fred's movie, pleaseremoveyourshoesmovie.com. The documentary is out.

Fred Gevalt, appreciate your time.

One soldier's trash can be one civilian's treasure. Why Iraqis are going second hand from Uncle Sam and finding some real bargains for dirt cheap, by the way.

(COMMERCIAL BREAK)

PHILLIPS: In Mexico the anti-incumbent fervor appears to be as strong as north of the border. It's been four years and 22,000 drug war deaths since the disputed presidential election. And today the president's party is taking it on the chin. 12 governors' races are up for grabs and the leading opposition party is ahead in nine of them. It's not just the drug war that's got voters ticked off. Mexico's economy has hit the skids because of the global recession.

Well, who needs the old Army/Navy surplus store when the Military will sell it to you directly, and for dirt cheap? Emphasis on dirt. As U.S. troops draw down the Military effort in Iraq, Uncle Sam is wheeling and dealing on tons of equipment or scraps -- all for pennies or more appropriately dinars on the dollar. It's called the world's largest yard sale. Here is the Fallujah stock yard. Old generators, computers, even latrines selling like hotcakes. Check that. Well he may be our Commander in Chief but Indonesia also has dibs on President Obama. And they've released a movie to prove it. We're on the set of "Obama Anak Mentang (ph)", Indonesia's tribute to their favorite adopted son. Remember the president spent time there as a youth? Well it's from a tell-all book by some of the friends that he made out there. Not everything's made it out of the edit room however. They cut out a scene of the president praying the Muslim way. It took away from their messenger of hope.

If you're getting a helping hand from the taxpayer, you're using that money for food and toothpaste, maybe power or water, right? So why is California, a state with so many money problems, made welfare money available at casinos and strip clubs? Places where there's a lot of temptation and not a lot of groceries.

(COMMERCIAL BREAK)

(WEATHER REPORT)

PHILLIPS: Even the president wants to kick back on the Fourth of July, so with the White House band playing in the background the First Family invited a few friends over to the White House for lunch yesterday. Did I say a few? How about 1,200 members of the Armed Forces and their families, comprising all five branches. On the menu? Barbecue, of course.

We think of the U.S. Military, especially in a war zone as a precise, fine tuned fighting force. So how do you explain this? Nothing more than a break from the serious side of war in Afghanistan. For a little while, anyway. Soldiers at Bagram Air Base staged July 4th parade turning government issue vehicles into personalized funny cars.

(COMMERCIAL BREAK)

PHILLIPS: Oh, yes. Raising hell at the Seventh Bale. That's a famous Sunset Strip club in L.A. It's on Sunset Strip. And it's a strip club. Motley Crue can spend all the cash they want there and apparently they did. After all, the Seventh Bale got a shout out from the Crue in that huge hit from the '80s. But, what about people who are getting state assistance? Talking about welfare. Should they be blowing taxpayer money on girls, girls, girls?

Cash-strapped California gives needy folks ATM cards so they can use it for food, clothing, and other basic needs. But an investigation found that ATMs in strip clubs, including the Seventh Bale and casinos across the state, would honor those cards and dispense the cash. In fact, more than $12,000 was withdrawn from strip clubs around L.A. over a two-year period. Now we're not sure that money was spent on lap dances, stripper tips, or martinis but seriously, you think someone just using a strip club for its handy ATM?

Thankfully California has gotten wind of this and changes are in the works to make sure that well intentioned money is available and handy in places where people can actually use it like the grocery store. I mean, why would you want that money available in a place where it's so tempting to blow it?

Jack Dolan is a "L.A. Times" reporter who for lack of a better expression uncovered this story. He's with me via Skype.

So, Jack, you know, it just sounds outrageous that this is even possible and from what I understand when you got a tip and you started investigating this story, that you actually tried to obtain the public records and you were denied.

JACK DOLAN, LOS ANGELES TIMES: Right. The state rejected a public records request. We were asking for all of the money that comes out of every ATM in the state's welfare network. And they said they couldn't provide that because it would be a violation of federal law to divulge the sales data of food retailers. That was, you know, a little bit frustrating for us because I had already found more than half of the casinos in the state on the list of places they were directing welfare recipients to go and drop cash.

PHILLIPS: Now, for a reporter this is just too good of a story. When you found out what was happening, I mean, did you laugh? Were you in shock? Could you not believe it?

DOLAN: Well, it was one of those moments, you know, that the state has a web site where, you know, if you have one of these cards you plug in your zip code and then it shows you where you can go use your ATM card. And it did. It was kind of just a joke at first. I thought, what's the most inappropriate place there could possibly be on this web site? And the things that came to my mind was the casinos. So we did that first. It was only after the fact that we started looking at strip clubs in L.A.

PHILLIPS: Now, I thought you could actually program these machines to not accept welfare cards.

Isn't that the case, and why wasn't this happening in strip clubs and casinos?

DOLAN: Yes, that's absolutely the case. And companies I have talked to who've place ATMs in casinos say it's actually pretty easy.

What happened, there haven't been a lot of explanations coming forth from the Schwarzenegger administration on how this happened. But my understanding is that when they switched from paper checks to these cards back in 2002, the notion was that they were trying to make the cards as accessible as possible. You know, the notion was let people get their benefits as conveniently as possible. It's just nobody was checking or thinking, I guess, about casinos and other places.

PHILLIPS: Well, it's kind of obvious. You know, you remember back in the day, you get your food stamps usually at the grocery store. You use them then and that was it. I mean, how did it even get to this point? I mean, we talk about the issue of convenience but come on.

Where was the accountability, Jack? DOLAN: Well, it clearly wasn't there. I mean, that's obvious. And on Friday the state released a report saying we're going to try to beef up our computer systems. That was sort of where they were placing the blame, that the state's varying computer systems didn't talk to each other and that they might now, and the ATM network will know where the casinos are. But, really, I mean, a big part of the issue for the state was, you know, do we want to be in the business of telling people where they can and can't use the cash portion of this benefit?

PHILLIPS: But it's taxpayer money, though. I mean, this is taxpayer money and it should be a no brainer that you shouldn't be able to retrieve cash in tempting places like a strip club or a casino.

DOLAN: Well, over the last week the thinking seems to have changed and they've decided that they are going to start placing value judgments on where people can and can't withdraw their cash.

PHILLIPS: And let's push forward and make the point that you broke the story and then all of a sudden there is an 18-page reform plan that's released by the California Department of Social Services director.

Tell us about that report and how far will it go? I mean, will it extend into massage parlors, bingo halls, other places of temptation?

PHILLIPS: Right. That was, you know, the report begins -- first they say they're getting rid of about 200 ATMs in casinos and strip clubs. And then it goes on to list other businesses that are under review, you know, deciding whether it's reasonable to take them out. And massage parlors, racetracks, bingo halls, those are all part of it.

Interestingly, I had been looking at medical marijuana dispensaries, as well. The report didn't mention those. There are, you know, medical marijuana dispensaries on the list of places you can withdraw your cash.

PHILLIPS: Oh, geez.

DOLAN: So it will be interesting to see how this progresses.

PHILLIPS: It's just the gift that keeps on giving. As if California doesn't have to deal with enough right now.

Jack Dolan, I'm looking forward to part two of your investigation. My guess it'll be with these cards being used possibly for marijuana.

Great reporting, Jack. Thanks so much.

DOLAN: Thanks.

PHILLIPS: We want to hear from you. Do you think it's an outrage to have that money available in strip clubs or casinos, or is it none of anyone's business? Is that money that the recipients get to spend, should they be able to do it however he or she wants? Light up the blog. CNN.com/kyra.

(COMMERCIAL BREAK)

Checking top stories, RNC Chair Michael Steele is feeling the fallout from comments that he made about the war in Afghanistan. He recently said the war is of President Obama's choosing and may be unwinnable. He's even catching flack from members of his own party for those comments.

Day 77 of this crazy Gulf oil crisis. Results from this weekend's A-Whale test run are inconclusive. They're blaming rough seas. More test runs are slated for the massive skimmer capable of scooping up 21 million gallons. Feds also put another 1,100 square miles in the Gulf off limits for fishing. The cost of the whole mess for BP? $3 billion plus and counting.

And the northeast dealing with extreme heat. JFK airport in New York tied a record high for July 4th, by hitting 100 degrees yesterday. The National Weather Service says the heat wave could last until at least Thursday.

(COMMERCIAL BREAK)

PHILLIPS: We're honoring those who gave their lives for our country. We want to give you a picture now of Specialist Ryan J. Grady. The Vermont national guardsman died this weekend in a roadside bomb attack near Bagram Air Base in Afghanistan. He was 25 years old. Grady was a veteran combat engineer for Company A Special Troops Battalion, stationed out of Bradford, Vermont. He earned a Purple Heart for the injuries he suffered in Operation Iraqi Freedom. Grady leaves behind a wife and daughter Alexis.

That brings us to our daily Home and Away tribute. We'll tell you how you can be part of that in a moment. But right now we want to lift up Corporal Chad Groepper. He was killed in Iraq February, 2008. Chad's wife, Stephanie, joins us on the phone now from Washington.

Stephanie, how did you first hear about Chad's death?

STEPHANIE GROEPPER, WIFE OF CPL. CHAD GROEPPER (via telephone): I was notified, two soldiers came to the door. I was living with my parents at the time. He was deployed and I was pregnant and my dad came and told me that someone was at the door for me. And I opened the door and just collapsed.

PHILLIPS: And your baby Clarissa (ph), how old at that time?

GROEPPER: She was 4 months old when he was killed.

PHILLIPS: Oh, my gosh. Have you thought about as she grows up how you're going to tell her what happened, tell her about her dad?

GROEPPER: Well, she knows her dad's a hero and that he's an angel. And she always calls him daddy angel. She knows that he's watching out. We keep pictures everywhere and we visit memorials all the time.

PHILLIPS: Well, I tell you, her angel was quite an adrenalin junkie from what I understand. That was sort of the fun part. You said you had a hard time controlling your panic when you guys would get together.

GROEPPER: Yes, he was always seeking some sort of adrenalin rush whether it be his dirt bike or his quad and his random adventures that he would come up with.

PHILLIPS: What would he tell you, Stephanie, about the military?

Why did he want to be a part of the Forces?

GROEPPER: He wanted to make a difference in the world.

PHILLIPS: Do you think he did?

GROEPPER: Yes, I know he did.

PHILLIPS: And if you were -- I guess as your daughter grows up, as Clarissa grows up and she refers to her dad as her angel, tell me what's the one thing you're going to want her to know about her dad?

GROEPPER: Her dad die a hero, protecting her freedom.

PHILLIPS: Yes, he sure did. Stephanie Groepper, appreciate you sharing your story with us today. We appreciate it.

GROEPPER: Thank you.

PHILLIPS: All right. We'd also like to hear more stories like Chad and Stephanie's, but we obviously need your help. Go to our web site CNN.com/homeandaway. Put your service member's name in the upper right search field and pull up the profile. Unload your thoughts and don't forget the pictures. We're going to keep your hero's memory alive.

That does it for us. Happy 4th of July. We'll see you back here tomorrow. Tony Harris picks it up from here.