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Dominique Strauss-Kahn Off the Hook?; Casey Anthony's Defense Rests; Gates Awarded Medal of Freedom; Nightmare Mother-in-Law Attacks; Minnesota Government Shutdown; Royal Newlyweds Visit Canada; "The War Next Door"

Aired July 01, 2011 - 06:00   ET

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


ALI VELSHI, CNN ANCHOR: We'll take it over right now in the United States, AMERICAN MORNING continues right now.

KIRAN CHETRY, CNN ANCHOR: And good morning. I'm Kiran Chetry.

A lot going on this morning. I want to get you caught up on the latest news.

Could ex-IMF chief Dominique Strauss-Kahn be off the hook? He's back in court this morning and there are reports that the sex assault case against him could soon implode.

VELSHI: I'm Ali Velshi.

The stakes are high in the Casey Anthony trial. The mother accused of murdering her 2-year-old child did not take the stand and the defense rests. The jury could get the case over the weekend.

We'll give you the latest -- on this AMERICAN MORNING.

(MUSIC)

CHETRY: And good morning to you. The summer is going fast.

It is the 1st of July today, as everybody gets set on this Friday for a holiday weekend. Glad you're with us.

VELSHI: And lots and lots of news today.

Up first, a man once the world's most powerful banker could be released from house arrest today.

CHETRY: This Dominique Strauss-Kahn case took an amazing turn yesterday. There is word that the sex assault case against him may actually be falling apart because of major holes in his accuser's story.

Susan Candiotti who has followed this case every step of the way is live outside of the courthouse.

This was made all the more stunning because when we first heard about this case, prosecutors said they really believed that they had a credible, credible accuser. SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: That's right. This is huge, Kiran. Good morning to you, and Ali.

In fact, it's important because of what you said and also because the police also made a point of saying how credible this woman was. However, now, two sources familiar with the case are telling CNN that the hotel maid who made the serious accusations against Dominique Strauss-Kahn has serious credibility issues.

But what's key about this stunning development, is that the disclosure is coming from prosecutors. In fact, CNN has learned that a meeting took place yesterday, called by prosecutors. They met with members of DSK's defense team and told them about some of the problems that they have discovered through an investigation, looking into the background of the hotel maid.

In fact, I am told there are four or five problems that have come up, including one that involved her application for asylum from her native Guinea before she came to the United States. Part of the issue had to do with a sexual assault that she said was part of that asylum claim. It was discovered according to a source that assault did not take place and that there were outright lies, I am told, that were involved.

As you know, very recently, attorneys for Dominique Strauss-Kahn put out a statement indicating that they had discovered serious credibility issues with the hotel maid that they had not yet disclosed. But it's also important to remember that the prosecutors and police have come up with at they said DNA evidence that indicated that there was a sexual assault at the hotel, that there was sexual activity at the hotel.

Now, because of these credibility issues, it doesn't necessarily mean some kind of sexual activity didn't occur, but it could mean that because her credibility has been so undermined, that it's possible the entire felony case might have to go away.

VELSHI: Susan, is there more to this than what she may or may not have been telling investigators? I've seen some reports that it's also got do with whether or not there have been some financial gain or some money exchanged.

CANDIOTTI: Well, "The New York Times" is reporting that one of the other issues that I mentioned were involved has something to do with someone who is doing time or is accused of drugs and money laundering and that there is a relationship with the hotel maid.

We do expect this -- I'm told by a source that prosecutors will outline the specifics of the credibility issues in court filing this morning that should be made public before this hearing begins at 11:30. What's going to happen at the hearing? Well, defense attorneys will ask that Dominique Strauss-Kahn, huge bond bail rather be modified. And I am told the prosecutors are unlikely to stand in the way of that.

However, will he walk out the door on his own recognizance? It's unclear whether that will happen and it's unclear as well that prosecutors, whether they will allow him to get his passport back. They might allow him to travel inside the United States.

CHETRY: All right. We'll certainly be watching that closely and following it with you later on today. Thanks, Susan.

VELSHI: You know, last night, our senior legal analyst Jeffrey Toobin talked about the twist that case has taken. He was incredulous. Listen to what he said.

(BEGIN VIDEO CLIP)

JEFFREY TOOBIN, CNN SENIOR LEAGL ANALYST (via telephone): The evidence apparently shows, DNA evidence, of a sexual encounter between Dominique Strauss-Kahn and the woman who is the maid. Yet even with DNA evidence, the prosecution is considering dropping the case. That shows how bad her credibility may be, that even with DNA evidence, they may not be able to bring this case. It's a shocking, shocking development.

(END VIDEO CLIP)

VELSHI: There's a couple things going on here. One of them is that there seems to be -- there seems to continue to be evidence of a sexual encounter but now the question is what is something else?

CHETRY: Was it an assault? And the other question is, was it a setup? I mean, because there were conspiracy theories abound when this first happened.

VELSHI: Right. They seemed to be discounted by the strength of the prosecution's case.

CHETRY: Also, will they have to give him this -- I mean, we made a lot about the $250,000 a month that he's paying for his own house arrest, the security, the armed guards, the monitoring, I mean, will he recoup that money if it turns out --

VELSHI: There are so many questions. It's going to happen around 11:00 or 11:30 Eastern. We'll, of course, stay on top of it.

CHETRY: Meantime, to another bombshell case, the defense wrapping up yesterday in the Casey Anthony trial. The death penalty is still on the table and there was a bombshell moment by the mother accused of murdering her 2-year-old in cold blood.

VELSHI: Now, Casey Anthony herself chose not to testify in her own defense.

David Mattingly joins us live from Orlando, Florida.

Just a lot of interesting things happening on that final day of the case. What's your sense of it, David?

DAVID MATTINGLY, CNN CORRESPONDENT: Well, Ali, the defense definitely gave the jury a lot of new things to think about yesterday. We heard from George Anthony's alleged mistress who claimed that he said this was all an accident. We also heard from every single member of the Anthony family talking about how they used to dispose of their dead pets using duct tape, plastic bags, and blankets.

But we did not hear from Casey Anthony. And the judge wanted to make it very clear to the court that it was her decision not to say a word in her own defense. Listen.

(BEGIN VIDEO CLIP)

JUDGE BELVIN PERRY, ORANGE COUNTY CIRCUIT COURT: You understand that your decision to testify or not testify is solely your decision and your decision alone?

CASEY ANTHONY, DEFENDANT: Yes, sir.

(END VIDEO CLIP)

MATTINGLY: Something that's also going to speak pretty loudly probably to the jury are words left in a suicide note by George Anthony. He was actually thinking about suicide, wrote a very long and rambling suicide note to everyone.

Here's some excerpts. He said, "This should be no surprise that I have decided to leave the earth because I need to be with Caylee Marie." He also said, "I cannot be strong anymore. Caylee Marie, our granddaughter, I miss her, I miss her so much."

Now, we're going to have closing arguments tomorrow, but there was one spectator in the court who's probably not going to be able to watch that, a very strange moment at the end of proceedings yesterday, a spectator in the court was called before the judge because he gave an obscene gesture to one of the prosecutors during this case.

The judge called him up. He gave him six days in jail, more than $600 in fines, and that is going to be one very costly finger that he displayed in that courtroom. But again, tomorrow, we're going to go into closing arguments as they trial really begins to wrap up here.

VELSHI: Who did he flip the bird at? Who was it intended for?

MATTINGLY: It was at one of the prosecutor's and -- in his defense, all he said was, that it was just something stupid. He never really gave any reason why. He's going to have a lot of time to think about that one, Ali.

VELSHI: I hear you. All right, David, we'll stay on top of it with you. This is going to be something we're watching closely for the next few days -- David Mattingly.

All right. Thousands of state employees in Minnesota are no longer being paid after the government shut down at midnight. This is the second shutdown in six years and it's all because state lawmakers cannot come to an agreement on how to close the state's $5 billion budget gap. There's a Democratic governor and Republican controlled legislature. What's closed this morning? The Minnesota zoo, state parks, state lottery, highway rest stops and no driving tests will be available until the government reopens. And all those people who have gone camping, it's a great time in Minnesota to go camping, state parks, they have to leave.

It's going to be a challenging day for thousands of San Francisco commuters as well. Golden Gate ferry service is canceled today. Good news, it's just temporary. It's a one-day strike by the ticket seller's union in effort to save jobs. Ferry service is expected to be back to normal tomorrow.

CHETRY: Well, lawmakers on both sides of the aisles digging in over the debt crisis and the fast-approaching deadline a month from tomorrow. The Senate has canceled its scheduled recess next week to continue working on a compromise, but it appears the only thing lawmakers are doing is taking swipes at each other.

(BEGIN VIDEO CLIPS)

SEN. JON KYL (R), ARIZONA: What I'd like to briefly address today is what seems to me to be an obsession on the part of the president to raise taxes. In fact, he is so fixed on this, it is so important to him to raise taxes that he's willing to risk an economic crisis knowing that Congress won't raise taxes as part of the debt ceiling increase.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I honestly think we can say that American people are tired of the posturing. They just want us to work. They want Washington to negotiate and reach an agreement. They want each side to move outside their comfort zone to accept tough choices that they wouldn't ordinarily want to accept but which the demands of the time -- or rather the times demand.

(END VIDEO CLIPS)

CHETRY: Also, Treasury Secretary Timothy Geithner could soon be leaving the administration. A source familiar with discussions tells our Jessica Yellin that Geithner is thinking about leaving his post after a deal is reached to raise the debt ceiling, that the source adds that Geithner has not announced any final decision.

VELSHI: OK. If you're keeping score at home, today is day 112 of the NFL lockout and it is day one of the NBA lockout.

CHETRY: So, there's still baseball.

VELSHI: There's still baseball.

CHETRY: And hockey.

VELSHI: And I've got tickets to the Yankees. So, this is -- my tickets got more valuable because that's everybody is going to be doing.

The league locked out it players after midnight when they failed to reach a new deal on collective bargaining. The two sides remain far apart on every major issue. The lockout puts the entire season in jeopardy. Commissioner David Stern says the league lost $300 million last season and needs cost-cutting help from the players' union.

(BEGIN VIDEO CLIPS)

DAVID STERN, NBA COMMISSIONER: The goal here has been to make the league profitable and to have a league where all 30 teams can compete. And since neither of those goals stated earlier have been achieved, the owners really don't have any choice.

DEREK FISHER, PRES., NBA PLAYERS UNION: A lot of our fans and people that follow our game, although we're not going to miss any games at this point, still just don't like the prospect of a lockout. We don't like it either.

(END VIDEO CLIPS)

VELSHI: This is just the second time that the two leagues have been shut down simultaneously by labor strikes. Major League Baseball and the NHL were both idle back in 1994. And both of those leagues will tell you how much it cost them in terms of money, in terms of fan support. It's dangerous when there are supposed to be games on.

Being on strike when there aren't supposed to be games doesn't matter. A lost season is a big deal.

CHETRY: Yes.

Well, for weeks, he's been tight lipped about any emergency surgery. Now, an admission coming from Venezuelan President Hugo Chavez. In a televised appearance yesterday, Chavez says that doctors in Cuba operated on him to remove a cancerous tumor in June.

There's no word yet on when he will return to Venezuela, but speculation surrounded his health after he canceled a high-profile summit of Latin American leaders which was slated for this month.

VELSHI: Update on the situation in Japan. The government there is recommending more evacuations from the area around the Fukushima Daiichi nuclear power plant. Officials say 113 additional households should evacuate from four districts now considered radiation hot spots. That's far beyond the mandatory exclusion zone that was set up for 20 kilometers around the Fukushima reactors.

CHETRY: Well, on the run since 2005, and on the 15 most wanted fugitive list since June, alleged drug kingpin Keith Hasson arrested in Los Angeles yesterday. He's suspected of masterminding a nationwide cocaine and marijuana ring which raked in more than $20 million. He's also wanted on an open indictment in New Mexico.

VELSHI: Prince William and his wife Catherine, duchess of Cambridge, are in Ottawa, Canada, this morning -- the couple's first official trip abroad since their wedding. They'll be there for eight days with strops across Canada. After that, it's on to California for three days. You know, it's Canada Day.

CHETRY: Happy Canada Day.

VELSHI: Thank you.

CHETRY: Nice. I'm glad you have flags on hand. Proud Canadians.

VELSHI: I have several. If you'd like one and Christine is not here. But I have one for her, too.

CHETRY: All right. Good. Thank goodness. I'll be using that later.

VELSHI: Good.

CHETRY: Meanwhile, ahead on AMERICAN MORNING, a scare for the French president on the campaign trail. It was all caught on tape. Someone grabbed him while shaking hands in the crowd. Security swoops in. We'll tell you more about what happened after this.

VELSHI: And fresh DNA analysis may help the appeal of Amanda Knox. Her mother says she's happy but isn't getting her hopes up. We'll explain.

CHETRY: Also, outgoing defense chief, Robert Gates, feeling the love from the commander-in-chief on his last day on the job.

Fourteen minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: Well, a security scare for French President Nicolas Sarkozy. Here's to look at what happened. He was shaking hands with people in the crowd when a man grabbed him and nearly yanked him to the ground. You see there was a -

VELSHI: Yes.

CHETRY: - there was a metal fencing in between them.

VELSHI: Yes.

CHETRY: But still some scary moments for him. The bodyguards came out of nowhere - well I would - we say nowhere -

VELSHI: Right. They were there.

CHETRY: -- they were there, wrestled the guy to the ground in a matter of seconds and police now say they're holding that individual for questioning.

VELSHI: Yes. Sarkozy pulled back pretty fast.

CHETRY: He did.

VELSHI: But he looks like he's already running up for, you know - CHETRY: Yes.

VELSHI: -- to block him.

CHETRY: And you also heard the crowd screaming at the guy, like, what are you doing, man?

VELSHI: A big surprise for outgoing Defense Secretary Robert Gates at his farewell ceremony yesterday. President Obama presenting Gates with the Presidential Medal of Freedom. It is the nation's highest civilian honor.

(BEGIN VIDEO CLIP)

ROBERT GATES, OUTGOING DEFENSE SECRETARY: I'm deeply honored and moved by your presentation of this award. It is a big surprise, but we should have known a couple of months you're getting pretty good at this covert op stuff.

(END VIDEO CLIP)

VELSHI: He's enjoyed a lot of support from - from both parties and from - from the American people. He goes out very highly regarded.

The reference, of course, to the president's decision to OK the bin laden mission, that was the covert ops (INAUDIBLE). He spent four and a half years as defense secretary under Residents Bush and Obama, first one to serve two presidents from two different parties.

CHETRY: He also has the support and the love of the troops.

VELSHI: Yes.

CHETRY: And when you see him there, when you see the speeches that he gives, I mean -

VELSHI: Yes.

CHETRY: -- he tears up. He say there's not a day that goes by that I don't think about all of you.

VELSHI: Yes. He doesn't sound critical. He doesn't seem to be the guy on top ordering people around.

CHETRY: Right.

VELSHI: He leaves well regarded.

CHETRY: And also, yes, Petraeus as well, pretty well regarded. The man that Petraeus is replacing at the CIA, Leon Panetta, starts his new job today as Defense Secretary, so a little bit of a shuffling of shares.

VELSHI: Yes.

CHETRY: Panetta will be formally sworn at the Pentagon about two and a half hours from now. And also there's a little side note. Panetta plans to bring his golden retriever to work every day. And that got a lot of people talking in the newsroom how cool would it be if you could bring your dog. I'm not speaking for myself because (INAUDIBLE).

VELSHI: If I bring a dog, I'll get a dog. I don't have a dog (ph), because I work so much.

CHETRY: Right. You would get one.

VELSHI: I'll be able to bring a dog, sure. The little thing sitting there, little doggie, yes.

CHETRY: Little thing. You have two choices, you either need a quiet lap dog or you need a dog like a Golden Retriever or Lab -

VELSHI: Right, right.

CHETRY: -- that will just quietly sit there.

VELSHI: And just to blend in, yes.

CHETRY: Yes. A Boston terrier, not - not so good for work.

VELSHI: Yes. It could be part of the show.

CHETRY: Yes.

VELSHI: Rob Marciano in the Extreme Weather Center. Do you bring your dog to work, Rob?

ROB MARCIANO, AMS METEOROLOGIST: Absolutely not, no. And I wouldn't bring a Chihuahua either.

CHETRY: No.

VELSHI: You know what, this little yappy things.

CHETRY: Now, why do you have to say that? Do you have a Chihuahua?

MARCIANO: No, but actually we dog sat a Chihuahua over the last weekend for one night and that's -

VELSHI: That was scarring.

MARCIANO: Whoa, yes. I'm not going to get any one of those.

Good morning, guys. Although they're cute when they're - you know, with the ear plugs in.

Hazy, hot and humid across parts of the mid-south today and the central part of the country and some severe storms expected across parts of the Western Great Lakes. We had some rough weather last night across parts of Chicago and some heat building now across the Central Plains, 102 yesterday in Oklahoma City. And we've got heat advisories and some heat watches and warnings that have been posted from just east of Oklahoma City up towards Chicago and in through Minneapolis as well. So it's going to be kind of toasty as we go through the holiday weekend.

Ninety-nine degrees expected today for a high temperature in Kansas City; 83 degrees in New York City.

And your special request because it is Canada Day, 20 degrees right now in Winnipeg and about 13 degrees in Toronto. So a little bit chillier up there in Toronto. Of course, that would be in Celsius, so about 70 and about 60 respectively. Happy Canada Day.

VELSHI: Happy Canada Day.

CHETRY: Happy Canada Day.

VELSHI: Thank you, Rob. We appreciate that. And our Canadian viewers appreciate that. You sent a nice tweet. I'm going to - next time I go, I'm going to bring you people - Rob likes Tim Horton's, by the way, which is -

CHETRY: A coffee shop, right, really popular, kind of like Starbucks.

VELSHI: Yes. I mean, it's sort of more than that.

CHETRY: But you get bagels.

VELSHI: You got doughnuts and you get - it's more.

CHETRY: Right.

VELSHI: You can't describe it, right, Rob?

MARCIANO: The Dunkin' Donuts of Canada and then some.

VELSHI: And then some.

CHETRY: You don't have to go all the way to Canada when we were covering the New Hampshire Primary, they had really good (INAUDIBLE) in New Hampshire as well. So if you go up there, yes.

VELSHI: All right. Maybe I should get myself on the political track again.

CHETRY: Yes, you should.

We also got to make this big of a deal about the Fourth of July for us.

VELSHI: Totally will. I'll be here on Monday. Rob - Rob, you here on Monday as well?

MARCIANO: I'm not. But, you know, we do have the Fourth of July forecast.

VELSHI: I'll be all about the Fourth of July. Can you guys order some flags for Monday, please? UNIDENTIFIED MALE: Yes.

VELSHI: Thank you. All right.

She's been called a monster in law, the mother-in-law to be from hell. You may have already seen this, because it went viral. This mother- in-law to be sent a letter to her future daughter-in-law, tearing her to shreds.

CHETRY: That's right. And the back story with this is, she got - the girl got it and she forwarded it to some of her friends saying, "What should I do about this situation?" and it went everywhere. It got sent to me about five times. It was not meant to be public.

VELSHI: But she meant to send it or there was an accident or she really -

CHETRY: The monster in law that you're about to hear from actually sent it three times to be ensured -

VELSHI: OK, OK, OK.

CHETRY: -- that her future daughter-in-law got it. But it wasn't meant to be out there clearly.

VELSHI: Well, here's - here's how it starts.

CHETRY: Yes.

VELSHI: Here are a few examples of your lack of manners. When you're a guest in another's house, you do not declare what you will and will not eat unless you're positively allergic to something. You do not start before everyone else.

CHETRY: When a guest in another's house, you do not lie in bed until late morning. In households that rise early, you fall in line with house norms.

VELSHI: You regularly draw attention to yourself. Perhaps you should ask yourself why.

CHETRY: Because no one gets married in a castle unless they own. It's brash, celebrity-style behavior.

VELSHI: And it ends with -

CHETRY: I pity Freddie.

VELSHI: Freddie's her son.

CHETRY: It's actually her stepson. That's the craziest part.

Anyway, that brings us to our question of the day. If you were the bride-to-be, would you still go through with it?

VELSHI: Send us an e-mail, a tweet or tell us on Facebook. We'll read your thoughts throughout the morning.

I have to tell you, if it's the stepson, I think the bigger question is for him, how does he deal with the fact that his - his stepmother and his wife-to-be hate each other?

But, you know, here's a couple who's happy.

CHETRY: Yes.

VELSHI: At least look happy.

CHETRY: This is not a problem at all for these two. Thank goodness.

The royal newlyweds are going across the pond for their first big trip overseas. We're going to tell you how they were received in Canada and what they're up to today.

VELSHI: Yes.

Twenty-three minutes after the hour.

(COMMERCIAL BREAK)

VELSHI: Twenty-seven minutes after the hour. "Minding Your Business" this morning.

U.S. stocks rallying for a fourth day in a row. The Dow is up more than seven percent for the first half of the year. The NASDAQ and the S&P 500 both up about five percent so far.

Sources tell CNN that Treasury Secretary Timothy Geithner is considering leaving his post, but not until after Congress reaches an agreement to raise the debt ceiling. He's the last remaining member from President Obama's original economic team.

And the Senate is canceling its recess next week to buckle down on deficit legislation. That's after President Obama urged lawmakers to forget their vacations until they reach an agreement. Congress has until August to raise the nation's debt ceiling or the Treasury will not be able to pay all of its bills.

Lots of new economic figures coming out today, particularly a focus on manufacturing data releasing at 10:00 A.M. Eastern. Investors are looking to that number to signal whether the economy has been growing or shrinking.

Oil prices back up just one week after President Obama decided to tap the nation's strategic petroleum reserves. Prices fell about four percent last week on that news, but futures for light sweet crude oil are edging up about $5 now to $94 a barrel.

AMERICAN MORNING right back after the break.

(COMMERCIAL BREAK)

CHETRY: Crossing the half hour right now. Our top stories: Ex-IMF chief Dominique Strauss-Kahn could walk out of house arrest today. A court hearing is scheduled to talk about the credibility of the hotel maid who accused him of sexual assault.

Minnesota's government shut down after lawmakers were unable to reach an agreement on the state's budget. It means the state's zoos, the state parks, all closed and thousands of state employees will be sent home today without pay.

Testimony is expected to wrap up today in the Casey Anthony murder trial. And the case could be in the hands of the jury by the weekend. The defense rested yesterday without calling Casey to testify in her own defense. Her father George Anthony's alleged mistress testified saying he told her Caylee's death was, quote, "an accident." Closing arguments will likely be held tomorrow.

ALI VELSHI, CNN ANCHOR: The mother of Amanda Knox speaking out. Knox, you'll remember, is the American student convicted of a 2007 murder in Italy. Edda Mellas says she will not celebrate until her daughter walks out of jail, but new hope the conviction may be overturned. Forensic experts told the Italian court the DNA evidence police used to link Knox may have been tainted. And there's lots of jumping and hugging when those results were heard.

(BEGIN VIDEO CLIP)

EDDA MELLAS, AMANDA KNOX'S MOTHER: She had been so nervous and I kept telling her, you know, this is going to be good, we know it has to be good. And, you know, she's understandably not taking anything for granted. During the first trial, we took for granted that because she was innocent, you know, that would turn out and it didn't go that way. And so, you know, she's very careful about not getting her hopes up. I tell her, see, it's one more step in the right direction.

(END VIDEO C LIP)

VELSHI: For more on the startling new developments in this case against Amanda Knox, watch the "CNN Presents" special "Murder Abroad: The Amanda Knox Story." That's tonight at 10:00 Eastern on CNN.

CHETRY: Royal newlyweds William and Catherine are waking up in Canada this morning. It is their first official trip overseas as husband and wife.

VELSHI: And it's Canada Day, which I don't run the flag every time we say Canada.

CHETRY: You're tempted to but only allowed once a year.

VELSHI: I'm only allowed once a year.

The duke and duchess of Cambridge have a busy eight days planned before heading to the United States.

Our Max Foster live in Ottawa, having a blast of a time right behind him on Parliament Hill is where everybody gathers. What's on the royals' agenda today, Max?

MAX FOSTER, CNN CORRESPONDENT: I feel quite guilty, Ali. Shouldn't you be here?

Anyway, you know, it's great party. You know what the atmosphere is like and the crowds are already gathering. A big sort of party expected at lunch time when there's going to be a concert on the stage to my life.

But before that, you're going to have a bit of pomp and pageantry, you're going to see the couple in the state landau, an open top carriage, sort of thing you saw on the wedding day and you're going to have a bit of state ceremonial as well.

So, it's going to be a great day and a lot expected from the couple and a big reaction expected to the couple after yesterday's huge success.

(BEGIN VIDEOTAPE)

FOSTER (voice-over): The future king and queen of Canada arrived in their overseas realm. William immediately showing his personal side with a young boy in the welcoming party. The bouquet was for Catherine, this trip is largely about her.

Minutes later, the Canadian public get their first glimpse.

(CHEERS AND APPLAUSE)

FOSTER: Then a change in tone.

William, a military man, keen to remember Canada's fallen servicemen and service women. William's predecessor, King George VI, unveiled this monument in 1939. Canada's royal history runs deep and recent polls suggest Canadians want to keep it that way.

Will this visit strengthen the monarchy further? That looks like a yes.

Relaxed, personable, informal -- this is the next generation of royalty and the crowd liked what they see.

Then, on to the official royal residence in Ottawa, and the official welcome to Canada. A guard of honor. A 21 gun salute.

Then a few words from the duke, even taking in a bit of French.

PRINCE WILLIAM, UNITED KINGDOM: (SPEAKING FOREIGN LANGUAGE)

(CHEERS AND APPLAUSE)

PRINCE WILLIAM: Catherine and I are so delighted to be here in Canada.

(CHEERS AND APPLAUSE) PRINCE WILLIAM: Instilled with us by our parents and grandparents who love this country, we've been looking forward to this moment for a very long time. And before we were married, we had a longing to come here together.

FOSTER: In the garden, a barbecue, young people being introduced to the next generation of royals -- a more approachable generation, perhaps, and one which knows how to make a good first impression.

(END VIDEOTAPE)

FOSTER: And the poignant moment today in their first event, they'll be going along to a citizenship ceremony where Canadians pledge allegiance to William's grandmother, the queen. He's going to be in that role one day, so he's trying to work out with Catherine how they're going to introduce their type of royalty. We're getting a sense of that now. But, of course, in the background, another poignant thought probably in William's mind, it would have been Diana's 50th birthday today.

CHETRY: Yes. You're right, she would have been 50 years old today. So, I'm sure she's certainly in the thoughts and prayers of her son.

Thanks so much for joining us, Max. We'll check in with you a little later.

VELSHI: Thanks, Max.

All right. The countdown to the chow down. Today, they're going to hold the weigh in for the annual Nathan's famous Fourth of July international hot dog eating contest. The super bowl of competitive eating. Four-time hot dog eating champion Joey Chestnut, the favorite this year.

I like hot dogs, but this is gross.

CHETRY: Yes. Joey Chestnut was on our show before this. They never go back -- remember last year. That's one of our writers, Rick Saliby (ph), who is a competitive eater in his own right, and he choked a little bit last year, right, didn't you, Rick? How many --

VELSHI: I don't understand. Tell me about the dipping it in water.

CHETRY: When you wet it it's easier to choke down the bread, because it's wet. It goes down easier. But they never --

VELSHI: Rick is still with us, by the way.

CHETRY: Yes, he is. And he's eaten many other things since then, including some crazy thing out of Chicago where it's kielbasa and a hot dog.

VELSHI: So, he's not just an amateur. He does this.

CHETRY: No, he does this. He goes around the country and eats.

VELSHI: Wow. That's excellent.

CHETRY: By the way, they never check in on July 5th to see what the sodium and cholesterol level has done to their body.

VELSHI: Comatose on July 5th.

CHETRY: All right. Well, still ahead, the war next door. It's a serious look at how drug violence has gripped Mexico but also why the tide may finally be turning. Not because of the police, the government or the military, but because regular people may have finally had enough.

VELSHI: Thirty-eight minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Forty-one minutes past the hour right now.

It is the war right on our doorstep. The violent struggle between Mexican gangs for control of the drug trade and it's left thousands dead. It's also paralyzed cities like Juarez with fear.

Who can forget this video of the Mexican kindergarten teacher instructing her students to duck and cover and singing to them as a shoot-out erupted just outside of the classroom?

Well, this week's "TIME" magazine is focusing on the war next door and how it may be reaching a tipping point, because innocent civilians have decided that's enough.

Joining us is Tim Padgett. He is the Latin American bureau chief for "TIME" magazine, wrote the cover story here.

And I know you've covered this more than two decades. Thanks for being with us this morning.

TIM PADGETT, LATIN AMERICA BUREAU CHIEF, TIME MAGAZINE: Thank you.

CHETRY: So, the numbers are staggering just to give people an idea of what we're talking about here. Nearly 40,000 people killed in gang- related violence over the last five years. We've seen the United States pledge money, $1.5 billion in aid, to fight the cartels. But we clearly haven't gotten a handle on it yet, can we?

PADGETT: Yes. If Mexico and the United States helps Mexico, pursue what is really the only long-term solution that country has to save itself from the situation, which is reforming police and the judicial system there, the military campaign that President Calderon has been using for the past five years to confront the drug cartels in Mexico has been a good short-term fight.

But, really, the only long-term solution is developing professional, modern, investigative police forces because that's what defeats organized crime. As we saw, for example, in the case of Colombia a couple decades ago, not soldiers. CHETRY: So, explain what the difference is between having a trained military to be able to battle them. Because in some cases -- I mean, you're talking about drug cartels armed with rocket-propelled grenades, assault rifles. I mean, clearly, they're able to outgun the police.

But what's the difference between having a highly-trained police force and an effective military?

PADGETT: Well, a police force -- a military, for example, can do -- it can bust drug cartel capos, bust massive kilos of cocaine, but what it can't do and what police have to do is get inside organized crime cartels and weaken them, RICO-style, for example. Get at their finances, at their political and business protection, get at their more deeply into their structures, the kind of things that military really aren't trained or adept at doing, but which, you know, as I said, professional investigative police forces are.

And as I said, I go back to the example of Colombia. When they decided to start professionalizing their police and judiciary back in the late '80s and early '90s, that's when they started turning the tide against organized crime. And we've also seen it in places other drug gang-plagued places like Sicily and Hong Kong, et cetera. So, that's really where Mexico has to go.

CHETRY: Right. In your cover story, the first couple paragraphs talk about this perhaps tipping point and the reason behind it. One of Mexico's best poets and author's son was killed this earlier year and you say that sort of spawned a grassroots movement, this outrage, that perhaps is going to put more pressure on politicians. Explain that.

PADGETT: Right. The violence in Mexico obviously is the worst we've ever seen it at this point. It's become a human rights crisis, really. I mean, you've got officials, human rights officials in Mexico, that they're talking about this crisis in terms of like the Balkans back in the 1990s.

The good news that's coming out of this is that because the drug cartels are increasingly focused or targeting innocent people, you're starting to see the emergence of large victims groups that are like the one led by the poet Javier Sicilia whose 24-year-old son was killed by narcos back in March. These groups are starting to put more pressure on Mexican politicians to pursue the kind of, you know, rule of law reforms that the country so desperately needs. That's why we feel that there's some hope amidst all the horror in Mexico.

CHETRY: Meantime, obviously, we know it's a two-prong problem. I mean, the drug cartels are profiting, I mean, because of the huge demand here. The White House Office of National Drug Control Policy say that annually, Americans consume $65 billion worth of illegal drugs, a lot of that either produced or transited through Mexico.

And when it comes to guns, 70 percent of guns, according to the ATF, seized in Mexico in the past two years, were smuggled from the U.S. What do we have to do on this side of the border? TIM PADGETT, LATIN AMERICA BUREAU CHIEF, TIME MAGAZINE: Well, first, we have to divert more of our drug war resources toward policies that reduce demand. More drug rehab-oriented policies instead of just traditional law enforcement interdiction. And we also have to work to reduce that flow of arms. We have to reinstate the ban on assault weapon sales in this country because so many heavy weapons are getting smuggled from the United States into Mexico.

CHETRY: What about marijuana? Where does that factor in and would legalization here in the U.S. change anything?

PADGETT: There is a growing feeling that marijuana, which many consider a less dangerous drug, many consider it, you know, on the level of alcohol, and if it's regulated, legalized and regulated, there is a belief that the Mexican drug cartels make the lion's share of their revenues from marijuana trafficking, and legalization could put a serious crimp in their finances which they use to buy the heavy weapons that they use to create all the Mayhem south of the border.

CHETRY: Certainly, a lot to digest. It's a great article. I encourage people to read it. Tim Padgett, Latin American bureau chief for "Time" magazine. Thanks for joining us this morning.

PADGETT: Thank you.

CHETRY: Take a quick break. We'll be right back.

(COMMERCIAL BREAK)

ALI VELSHI, CNN ANCHOR: Forty-nine minutes past the hour. Here's a look at your headlines.

(BEGIN VIDEOTAPE)

VELSHI (voice-over): A bail modification hearing today for ex-IMF chief, Dominique Strauss-Kahn. A court hearing scheduled to talk about the credibility of the hotel maid accusing him of sexual assault.

The defense rests in the Casey Anthony trial, and Casey Anthony did not testify. George Anthony, her father's alleged mistress testified saying he told her Caylee's death was an accident. Closing arguments are expected to begin tomorrow.

The Minnesota government was forced to shut down after lawmakers were unable to agree on how to close the state's $5 billion budget gap. The state's parks, zoos, and highway rest stops are closed.

A source familiar with the discussions tells CNN that Treasury Secretary Timothy Geithner is thinking about leaving his post after a deal is truck to raise the debt ceiling. However, that source adds Geithner has not made a final decision yet.

First pro-football, now pro-basketball. The NBA has locked out its players after the owner and players' union failed to get together on a new collective bargaining agreement. The work stoppage puts the 2011- 2012 NBA season at risk.

(END VIDEOTAPE)

VELSHI (on-camera): You're caught up on the day's headlines. AMERICAN MORNING back right after this.

(COMMERCIAL BREAK)

CHETRY: It's a chance of a lifetime and only comes around once in a lifetime. Or, I guess, if you're a shark follower, perhaps --

VELSHI: For (ph) shark. Yes.

CHETRY: It is an encounter with the whale shark. CNN affiliate, WPEC sent us this video. It's off of Florida's coast. Check that out. He's actually the largest fish in the world, one of the rarest, and they're worth three dozen divers who were able to swim right next to this whale shark for about an hour.

VELSHI: Wow. The shark, apparently, liked the visit, by the way. Some of the swimmers say he was wagging his tail.

CHETRY: Others would describe that as swimming in the ocean, but sure wagging his tail.

VELSHI: All right. Earlier, we told you about this e-mail that is going viral. It's from a really mean, I'll let you decide, mother-in- law-to-be to her stepson's bride-to-be, her stepson's fiancee. She attacked everything from her manners at the table to her cheap and out-of-work parents. So, we decide we put (ph) to you.

CHETRY: Yes. It's our question of the day. Would you, if you received this scathing e-mail like this, or if you even had these types of problems with your in-laws, go through with it?

VELSHI: So, Kristen says on Facebook, "I married my husband even though my mother-in-law didn't like me. She hasn't talked to us in years. We are happily married with three children. It's her loss. We're open and willing to talk with her if she ever wants to."

CHETRY: Matthew on Facebook writes, "I would. It would be important to patch up the relationship though ASAP for the spouse's sake." And that's really, I mean, who suffers in these cases when in-laws don't get along with, you know, the people that they're going to marry, it's the kids that suffer.

VELSHI: Right. That's exactly right. Keep your comments coming. Send us an e-mail, a tweet, tell us on Facebook. We'll read more of your thoughts a little later in the show.

CHETRY: Some people should know better. A well-known political pundit suspended without delay after putting his foot in his mouth on live TV.

VELSHI: He used a four-letter word to describe the president, as your grandmother might say (INAUDIBLE). Here's Jeanne Moos. (BEGIN VIDEOTAPE)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): There hasn't been a guy you could call "dick" in the oval office since President Richard Nixon, but suddenly, on morning TV, the "D" word raised its ugly head. Begins with "D" and rhymes with hick.

MARK HALPERIN, AUTHOR/POLITICAL ANALYST: Run the seven-second delay today?

UNIDENTIFIED FEMALE: All the way.

HALPERIN: I wanted to characterize how I thought the president behaved.

UNIDENTIFIED FEMALE: Go for it.

UNIDENTIFIED FEMALE: Yes. Let's see what happens.

(CROSSTALK)

HALPERIN: I thought he was kind of a (EXPLETIVE DELETED) yesterday.

UNIDENTIFIED MALE: Oh, my God. Delay that. Delay that. What are you doing?

HALPERIN: I think the president --

UNIDENTIFIED MALE: I can't believe you. I was joking. Don't do that. Did we delay that?

MOOS: No. No delay. And there wasn't much of a delay in the apology either. After all, Mark Halperin is a big-time political writer and analyst.

HALPERIN: It's an absolute apology.

UNIDENTIFIED MALE: Yes.

HALPERIN: Heartfelt to the president and to the viewers, I made a mistake, and I'm sorry and I shouldn't have said it.

MOOS: MSNBC suspended Halperin indefinitely as an analyst, saying we apologize to the president, the White House and all of our viewers. The White House spokesman said he had called the network.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: It would be inappropriate to say that about any president of either party.

MOOS (on-camera): Actually, the "D" word episode seemed to be part of a larger inside joke about the show's delay button.

MOOS (voice-over): The delay was set up almost three years ago after the host himself, Joe Scarborough, swore without realizing it.

JOE SCARBOROUGH, HOST: For screaming (EXPLETIVE DELETED) you at the top of their lungs. My wife is going to kill me.

MOOS: After that, two delay buttons were established, one for live remotes and one for the studio. For the show, the hosts were joking about testing the buttons, and there was a new executive producer manning the controls.

UNIDENTIFIED MALE: So, there's this one button here, right? You think this was it.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED MALE: Well, apparently, there's this other button over here.

UNIDENTIFIED FEMALE: OK. Alex, you're supposed to actually know how to do the job before you get the job.

UNIDENTIFIED MALE: A lot of buttons here.

MOOS: If you really want to see a guy having trouble with buttons, check out this Tucson, Arizona, cable access host trying to cut off an obscene prank caller.

UNIDENTIFIED MALE: (EXPLETIVE DELETED)

UNIDENTIFIED MALE: OK. Tell you what --

UNIDENTIFIED MALE: (EXPLETIVE DELETED) you.

MOOS: Rember the good old days when Jon Stewart was celebrated for using the "D" word to attack the then host of a CNN show called crossfire.

UNIDENTIFIED MALE: You're as big a (EXPLETIVE DELETED) on your show as you are on any show.

MOOS: It turns out Mark Halperin apologized a couple of years ago for saying that John Edwards thinks Obama is kind of a "P" word that means timid. Now, they've used the "D" word as well. The website, Gawker, reports that Halperin has called Obama both types of genitalia. Hey, gentle (ph), look for the "D" spot, disconnect.

UNIDENTIFIED MALE: One button, two button, three button, four.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

VELSHI: All right. Coming up next hour, he could have been France's next president. Now, word that the sex assault case against Dominique Strauss-Kahn may crumble. We're going to talk about his future and whether the U.S. legal system really dropped the ball. Fifty-five minutes after the hour.

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