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THE SITUATION ROOM

Florida's Rising Flooding Crisis; Starting Over after the Storm; Tampa Bay Area Drenched by Debby; Wildfire Nears Popular Tourist Sites; Representative Vern Buchanan Under Investigation; Murder Rate in Chicago Increased

Aired June 26, 2012 - 17:00   ET

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


JOE JOHNS, HOST: You're in THE SITUATION ROOM.

Happening now, thousands of people in Florida are knee deep in water and misery. And Tropical Storm Debby isn't done with them yet. This hour, a new hurricane advisory on the storm, the flooding and the danger ahead.

Plus, a powerful U.S. lawmaker and Republican fundraiser the target of at least four high level investigations. Now a witness against Congressman Vern Buchanan is speaking exclusively to CNN about allegations of a money laundering scheme and cover-up.

And some people say Chicago has become more dangerous than the war zone in Afghanistan. We're taking a hard look at gang violence and the teenagers who are doing the shooting and the dying.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They might want to kill me and then they end up killing you, you and you and not killing me.

(END VIDEO CLIP)

JOHNS: Welcome to our viewers in the United States and around the world.

Wolf Blitzer is off today.

I'm Joe Johns.

You're in THE SITUATION ROOM.

People who live along Florida's Gulf Coast are used to rain, they're used to hurricanes, but they haven't seen a downpour quite like they've gotten from Tropical Storm Debby. This is what happens when you get hammered by as much as two feet of rain, some of it falling in just a matter of minutes.

Mandatory evacuations were ordered today for 2,000 homes along a flooded river in the Tampa Bay Area. Parts of the main interstate across Northern Florida were closed today, as Debby hovered offshore.

This very slow-moving storm has weakened, but that's not much consolation for folks who are bailing water out of their homes or those who may get hit when Debby crosses land.

John Zarrella and George Howell are standing by in the flood zone.

First, to our severe weather expert, Chad Myers.

Do you have that new advisory from the National Hurricane Center now -- Chad?

CHAD MYERS, ATS METEOROLOGIST: Brand new in my hands, Joe.

Now, still a 40 mile per hour storm, which means it's still a tropical storm. But the latest here, the big breaking news here, the just in, is that it is now on land. It did cross over land west of Gainesville. And so that's now going to allow the storm to begin to weaken even more.

I would say the center will be right about there and it's going to travel probably just to the south of Jacksonville.

But the problem has been north of that area, right along the I-10 corridor. That's where the flooding has been today and that's where it was yesterday, all of that flooding here south of Tallahassee. We'll show you pictures in a minute. You might not believe what you're going to see here with those pictures, how much water in the streets of some of those towns there just to the south of Tallahassee.

There it goes. There's the rain. There's the thundershower activity. Here's the rain we're talking about, Joe. We talked about this yesterday, where, at times, five inches of rain per hour were coming down right near the town of Sanborn. It's probably more like a crossroads, not even a city. But 25 to 26 inches of rain in 48 hours.

And it just continues to rain in some of these spots. And the flooding continues, as well.

We have an onshore flow where John Zarrella is. We could see a little bit of thunderstorm activity, maybe even a small waterspout coming onshore.

But the big threat with this is not that kind of weather. The threat is inland, rainfall. We call it fresh water flooding -- rain that comes down, gets into the creeks, valleys, streams, and all of a sudden, your car, house, whatever you're on, underwater.

We're also seeing, on the I-10 -- the I-10 Interstate there that goes out of Jacksonville and goes west, a sinkhole right on the interstate. The interstate is closed right along the I-75/I-10 Corridor. The I-10, nobody going east to west because of flooding. And now we have reports of that sinkhole -- Joe.

JOHNS: So ready to say the worst is over for some people at least?

MYERS: Yes, absolutely. The worst is over. Although it takes time for the water to go down. Even though the rain stops, that doesn't mean your flood is over. Sometimes it rains upstream, too. And all that upstream water has to come downstream. And so you think it's over because the rain stops, but there's still more water to come.

JOHNS: Chad Myers, thanks so much for that.

Some Florida officials have had to get used boats to get residents trapped by flooding. More than 50 people were rescued from their homes in the city of Sopchoppy in the Florida Panhandle.

CNN's George Howell is there.

What kind of damage are you seeing there -- George?

GEORGE HOWELL, CNN CORRESPONDENT: Joe, we are seeing homes underwater. We are seeing fast rising rivers here in Wakulla County, one of the hardest areas hit here in the state of Florida from this storm.

In fact, we were on the other side of this bridge just a few minutes ago, talking to a family, covering this story. And crews forced us to evacuate, to move here to this side, concerned that water would, as it did, overtake this bridge.

So even though the sun is out, we found many residents still dealing with the fallout from this tropical storm.

(BEGIN VIDEOTAPE)

LARRY PESEK, SOPCHOPPY RESIDENT: When it's your own place, you know, of course, that's -- that's a little different.

HOWELL (voice-over): Dodging power lines and low-hanging branches, we took a boat ride with Larry and Crystal Pesek, as emergency crews took them through what used to be their neighborhood.

CRYSTAL PESEK, SOPCHOPPY RESIDENT: That's our road going to -- it leads to our -- it leads to Seminole Lane.

L. PESEK: I just can't believe the current through here. I mean the current is really, it's ripping.

HOWELL: After passing several homes...

C. PESEK: It should be down -- just down here on the left somewhere. I don't recognize anything now.

HOWELL: The reality of what's left became painfully apparent.

C. PESEK: So we're kind of (INAUDIBLE).

HOWELL (on camera): This is all you've got?

L. PESEK: Yes. We have a -- a utility trailer underneath that house.

Who knows where that is?

HOWELL (voice-over): The Peseks evacuated. But officials in Wakulla County say crews had to rescue dozens from their homes.

MAJOR MAURICE LANGSTON, WAKULLA COUNTY SHERIFF'S OFFICE: The amount of rain that we had, the water levels came up so fast, some of the folks didn't have time to actually pack their things and move out. So they're having to do it after the fact.

HOWELL: On the other side of the county, some residents were luckier than others.

PAULIA ROSE, SOPCHOPPY RESIDENT: I'm praying that it's OK. I'm praying God's taking care of it.

HOWELL: These are pictures of Paulia Rose's house when the floodwaters were rising. She returned to find her prayers had been answered.

ROSE: Yes, nothing got ruined. Even though the water -- I didn't think we was going to get out yesterday.

HOWELL: No one expected the water to rise as fast as it did. The water rose to the second floor in some homes.

But the Peseks are determined to start over, though, they can't help look back a little regretfully at all the hours they put into their house that they now have to rebuild.

L. PESEK: We're OK. But it's just -- it's a lot of investment in time and -- and, you know, where you could have been doing other things. So that's kind of disappointing.

C. PESEK: All those sunny days, we could have been fishing, honey.

(END VIDEO TAPE)

HOWELL: People are keeping an optimistic attitude, but a live picture here back in Wakulla County, where you see the -- the water over this bridge. And keep in mind, it is the convergence of all of the different rivers, also, the flow of floodwaters flowing out into the Gulf. And many of these rivers are still rising -- Joe.

JOHNS: You know, I look at that video and the first thing I think of, George, is gators and snakes. I would assume that could be a bit of a problem there, too.

HOWELL: I will tell you, when we were out on -- I would say river, what used to be a street, but what seemed to be a river -- that was definitely a concern when we were dodging power lines. You're also looking for those things out in the woods, the snakes that could be a problem.

JOHNS: And you bet.

All right. Thanks so much for that.

Stay safe.

I hate gators and snakes.

Now to Tampa, where the flooding and storm damage is raising concerns about what might happen in a couple of months when the Republicans come to town.

Our John Zarrella is there -- John, what's the flooding situation there right now?

JOHN ZARRELLA, CNN CORRESPONDENT: Well, you know, Joe, what a difference a few hours makes. This is Bay Shore Boulevard. And it's the main artery here in the Tampa area. And you can see it's dry.

Now, you were talking with -- with Chad, you know, and with George all about inland flooding. What we had here was tidal flooding. And for two days, all of Bay Shore was closed because of that flooding, up until just a few hours ago.

That's Tampa Bay behind me there. The water coming across, coming because of the onshore flow that they have had constantly, just building up and pounding over the shore -- over onto the roadway and closing it entirely down.

But now, even though high tide is just a couple of hours away, a good sign, a silver lining, the water has actually receded here along Bay Shore. And you can see, they're going to start to probably reopen this area pretty soon.

But again, earlier today, just like six hours ago, Joe, all of where I'm standing was under probably six inches to almost a foot of water -- Joe.

JOHNS: Now, John, you are not far from the site of the Republican National Convention, which is going to go on there in August. The city obviously is getting ready.

And the thing that comes to mind here in Washington is, what are they going to do if another big storm hits during the convention?

ZARRELLA: Yes, and, you know, that's a gen -- genuine concern.

Let me show you. We're about 400 yards, where we are now, from where the convention is going to be. That building in the distance, the convention center, right next to that is the forum, where they will also hold many of the activities for the convention.

And I had an opportunity to talk to the mayor earlier today, because the convention is right at the height of hurricane season, the end of August.

And he told me you know what, when we bid for the convention, we took that into consideration.

(BEGIN VIDEO CLIP)

MAYOR BOB BUCKHORN, MADEIRA BEACH, FLORIDA: We actually calculated the odds when we bid on the Republican National Convention. And it is probably less than a 1 percent chance that a hurricane will hit, based on history.

That doesn't mean we haven't stopped training, because we have. I don't want to be the mayor when that 1 percent odd occurs. But if it does occur, we're going to make sure that we get people out and we -- we deploy.

ZARRELLA: What would you do?

I mean what are the contingency plans?

Does the convention get canceled, delayed?

What do they do?

BUCKHORN: Well, I think that depends on the track of the storm and the track of the storm. Obviously, the decision to evacuate the community is mine. The decision to cancel the convention is the Republican Party. We will get together if that situation presented itself. We will make the decision that's in the best interests of everybody here, whether they're residents or guests.

But ultimately, that decision will be in terms of saving people's lives and making sure we get people out of harm's way, not the politics of the convention.

(END VIDEO CLIP)

ZARRELLA: Now, the mayor was telling me that if they had a storm like this hit in -- in August, and the power doesn't go out and it's a tropical storm, most likely, the -- the convention will go on. That's not going to interfere.

The question would be, if you had a severe storm, a more serious hurricane, for instance, a Category 2 or Category 3, what would they do then?

And you heard the mayor say they do have contingency plans. But life is of the utmost concern. And that would be the consideration that they would have to -- to take at -- at the highest level, as far as whether the convention would actually go on or not, if they were to have a storm that bad -- Joe.

JOHNS: Less than 1 percent odds that a storm will hit during the convention. Boy, we're going to hold onto that video and see what happens when we get to the convention.

ZARRELLA: Yes.

JOHNS: Thanks so much, John Zarrella, for that.

They could use some of Florida's rain in the Colorado fire zone right now. A raging wildfire is spreading closer to some of the state's popular tourist sites, including the U.S. Air Force Academy.

CNN's Jim Spellman is near the front lines of the blaze in Colorado Springs.

JIM SPELLMAN, CNN CORRESPONDENT: Take a look at this. They're working hard from the sky and on the ground to make sure that stays the case. This is the edge of the fire nearest the city. They're dropping retardant from planes and they're using helicopters to drop water on it to try to keep all of the homes safe.

They've only got 5 percent containment. And the really difficult operating conditions here -- high temperatures, high winds, low humidity -- are making the fire incredibly active here during the afternoon and incredibly difficult for firefighters to try to get the upper hand on.

They've called in more crews and more equipment, though they say it can take up to three weeks before they have this fire fully contained.

Jim Spellman, CNN, Colorado Springs.

JOHNS: Tensions between Syria and Turkey just keep ratcheting higher.

Could it lead to another conflict in a region already reeling from bloodshed?

Plus, a powerful U.S. Congressman and Republican fundraiser is being accused of a money laundering scheme and cover-up. Now, the key witness against him is speaking out, in an exclusive interview with CNN.

Plus, Jerry Sandusky's adopted son, Matt, on tape talking about being sexually abused by the convicted child rapist when he was a boy.

(COMMERCIAL BREAK)

JOHNS: Jack Cafferty's here with the "Cafferty File" -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: Thanks, Joe. Americans' confidence in our public schools is at a 40-year low. A new Gallup poll shows only 29 percent of those surveyed say they have a great deal or quite a lot of confidence in the public schools. That's down five points from last year.

But more importantly, it's down from 58 percent, twice as many who had confidence in the public schools when Gallup first started asking this question in 1973. It should come as no surprise that Americans have lost faith in our schools when you look at the dismal state of public education. One international assessment of 34 countries shows the United States ranks 25th in Math, 17th in Science, 14th in Reading.

That's disgraceful. Many of our students graduate high school without the skills they need to survive in a global marketplace, things like reading, writing, and math. Meanwhile, there seems to be little if any accountability when it comes to our schools and our teachers. Just last month in the "Cafferty File," we told you about how Florida lowered the passing grade on the writing portion of a standardized test after the students' scores plunged.

They just lowered the grade. Bingo, everybody passed. The latest example comes courtesy of New York. State lawmakers voted to shield a job performance reviews for hundreds of thousands of individual teachers from the general public. Instead, the new law allows parents to see the scores only for their child's current teacher.

Supporters say it's the right balance between the educational needs of the students and the parents and teachers' rights. Really? What about the public who pays the teacher salary? Aren't we entitled to know who's cutting it and who isn't? Yes, we are. Credit the political muscle of the teachers unions with another stifling yet another attempt to restore some accountability to the public school system.

Here's the question, how can we restore confidence in our public schools? Go to CNN.com/CaffertyFile, post a comment on my blog or go to our post on the SITUATION ROOM's Facebook page.

Makes a lot of sense, Joe. They rate these teachers, give them a performance grade or rating of some kind, but then, they keep it a secret. They don't want anybody to know what it is.

JOHNS: Yes. That doesn't seem to make very much sense, does it?

CAFFERTY: Not at all.

JOHNS: Well, government. Thanks so much. We'll back at you in a minute.

New question today about whether the U.S. and its allies are tough enough on Syrian president, Bashar al-Assad. The alliance met to discuss the shoot down of a Turkish fighter jet by Syria and what it could mean for a region already reeling from the Syrian uprising. Here's our Pentagon correspondent, Barbara Starr.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Joe, NATO did exactly what the Obama administration wanted. It talked but made no military commitment.

(BEGIN VIDEOTAPE)

STARR (voice-over): At NATO tough talk after the meeting to discuss the Syrian shoot down of a Turkish jet.

UNIDENTIFIED MALE: We consider this act to be unacceptable and condemn it in the strongest terms.

STARR: But Turkey did not demand any sort of immediate military response from NATO members. Instead, the Turkish prime minister said his military is changing its rules of engagement. RECAP TAYYIP ERDOGAN, TURKISH PRIME MINISTER (through translator): Any military approach deemed to be a risk to the Turkish border from the Syrian side will be perceived as a threat and will be dealt with accordingly.

STARR: U.S. military officials say they accept Turkey at its word that it could decide to attack unilaterally.

VICTORIA NULAND, STATE DEPARTMENT SPOKESWOMAN: Turkey is our ally. As NATO said today and as the secretary general said today, we're prepared to look at any requests that Turkey wants to make.

STARR: But should Bashar al-Assad be worried?

ARAM NERGUIZIAN, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: So, you have a relationship that has gone from normal military cooperation a year and a half ago to all sort of military confrontation. This can escalate very quickly in ways that neither country wants.

STARR: But the lack of military response could encourage Syria's president.

SPIDER MARKS, CNN CONTRIBUTOR: He has no incentive to change his course of action.

STARR: Senior U.S. intelligence officials believe what is happening inside Syria is now essentially a seesaw battle. In the last several weeks, there's evidence the opposition is getting better, hitting government checkpoints, engaging in hit-and-run tactics, but regime forces are improving as well.

Even though the U.S. hopes and believes Assad will go, both sides essentially are stalemated for now.

(END VIDEOTAPE)

STARR (on-camera): The U.S. believes Bashar al-Assad has only hardened his resolve to remain in power. In the face of that, U.S. policy remains unchanged. It is focused on diplomacy -- Joe.

JOHNS: The CEOs of some of the biggest banks in the world raking in annual pay hikes of more than $12 million. Up next, details in the findings of a stunning new report.

Plus, one man gives new meaning to the term Good Samaritan returning almost $13,000 to its rightful owner, and you won't believe where he found it.

(COMMERCIAL BREAK)

JOHNS: There's a new report revealing an almost 12 percent annual pay hike for top bank CEOs in the U.S. and Europe. Our Mary Snow is monitoring that and some of the other top stories in the SITUATION ROOM right now. Mary, what do you have? MARY SNOW, CNN CORRESPONDENT: Hi there, Joe. Well, the research jump in the financial times shows an average pay increase last year of more than $12 million for the second year in a row. That's despite wide spreads false in profit.

Now topping the list, the heads of Bank of America and Citigroup, and at the very top, JPMorgan Chase's Jamie Dimon who's company was recently hit with a $2 billion trading loss. His pay package reportedly totaled more than $23 million.

The federal government is suing Wyndham Hotels after sensitive customer data, including credit card numbers and personal information were allegedly stolen on three separate occasions in less than two years.

FTC documents allege the hotel's lack security policies allowed Russian hackers to access more than 500,000 accounts between the year 2008 and 2010. An injunction could force the hotel giant to implement new security measures.

Facebook appears to have pulled a controversial feature from its website following an internet uproar. The friends nearby feature later dubbed the stalking app by one site allows users to get a digital list of other Facebookers nearby. Many consider it an invasion of privacy. The company says this was merely a test of the feature, not a formal release.

And a Tennessee man is giving new meaning to the term "Good Samaritan" after finding almost $13,000 in cash and getting it back to its rightful owner. Our affiliate, WKRN, reports the money was -- with a wallet inside a bag in a convenience store trash can. He couldn't track down the owner directly, so he called police.

It turned out the 51-year-old owner had suffered a medical condition and left the bag at the store. Great story, Joe.

JOHNS: Boy, you can't imagine how lucky he was for the one guy to find it that would actually turn it in. That's pretty incredible.

SNOW: It is incredible. And this guy said that many people have come and gone and nobody noticed it.

JOHNS: Wow! What a story. Thanks so much for that.

The key witness against a powerful U.S. congressman is talking to CNN about allegations of a money laundering scheme and cover-up. Standby for that exclusive interview.

And the young gang members who are turning the streets of Chicago into a war zone.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I will probably see 18. I'm a gang banger. (INAUDIBLE).

(BEGIN VIDEO CLIP)

(COMMERCIAL BREAK)

JOHNS: CNN has confirmed that a powerful Republican congressman and party fundraiser is facing at least four Congressional and federal investigations right now. CNN tried to catch up with third-term congressman, Vern Buchanan, but he didn't want to say much about the investigation that could possibly put him behind bars.

Buchanan is a self-made Florida millionaire who sits on the powerful House Weighs and Means Committee and is in charge of fundraising for the Republican Congressional Campaign Committee. Investigators are looking into his business practices, his campaign finances, and his alleged attempt to try to stop a witness from talking.

Now, that witness is stepping forward in an exclusive interview with CNN investigative correspondent, Drew Griffin.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): Sam Kazran is a former business partner of Congressman Vern Buchanan. The partnership started here at a weed-filled lot, a former auto dealership in north Jacksonville, Florida. Eventually the two would own four dealerships together.

What kind of guy was he?

SAM KAZRAN, BUSINESS PARTNER OF REP. VERN BUCHANAN: You know, Mr. Buchanan -- I respected him, I believed him.

GRIFFIN: Kazran admits he says he was naive. He says the man was just interested in two things, money and power.

I mean, can you make a judgment call? Do you think this guy should be in congress?

KAZRAN: You know, let's put it this way, Mr. Buchanan is a very selfish person. And in my opinion folks who go to Congress got to do good for the people they represent.

GRIFFIN: Kazran presented to CNN the same information, documents and testimony he's now given to federal investigators. The two men had a falling out over finances. They've been suing each other for years.

For his part, Buchanan says Kazran is a disgruntled partner and lied about what's happened.

At the center of Kazran's allegations is a cash swap scheme used to finance some of Buchanan's campaign. Employees forced to write checks then reimburse with cash drawn from Buchanan's car dealership.

KAZRAN: It was to a point where I said, chief, we can't give you this kind of money. And that's when he went to the corporation. GRIFFIN: And what did that mean you? Run it through the corporation?

KAZRAN: That what he said to me is he said, get people to write a check to the campaign and pay them back through the corporation. And that's what I did.

GRIFFIN: That's what he said?

KAZRAN: Correct. Yes. He said run it through the corporation. Absolutely. Yes.

GRIFFIN: Kazran did and was soon calling in managers, salesman, even assistants, people who never even gave money to campaigns suddenly writing big checks to Buchanan for congress. And according to Kazran, getting reimbursed from the dealership.

KAZRAN: He would say I need more money.

GRIFFIN: It added up to almost $70,000 at Kazran's dealerships alone.

KAZRAN: In fact, I remember one of the partners, says, and a jokingly says boss, you have all the money in the world, why do you want us to pay you the money? And he said, well, it doesn't look good if it comes from me.

GRIFFIN: Kazran took his details allegations to the Federal Election Commission or FEC, which was already looking into Buchanan's campaign finances. Investigators there now wanted to know not only about how the cash swap scheme worked, but if the congressman knew about it.

This was absolutely his idea?

KAZRAN: Correct. Yes.

GRIFFIN: The FEC's initial report found reason to believe that Congressman Buchanan knowingly and willfully violated the election law. But then, in a later report they pulled back saying it found credibility problems with both Kazran and Buchanan and not enough corroborating evidence to back up Kazran's testimony.

The FEC eventually dropped the investigation into Buchanan but fined Kazran for $5,000. Why, because he admitted to reimbursing employees for campaign contribution. While the congressman has said that proves he's innocent, the findings at the FEC were more convoluted stating it came close to supporting a finding that it is more likely than not that Buchanan violated the law.

And that's where this gets much more serious for the Congressman. During the FEC probe, Congressman Buchanan pushed to settle a lawsuit Kazran had brought against him. And at the last minute with a $2.9 million settlement offer from Buchanan dangling in front of him, Kazran said he was given this.

KAZRAN: They wanted me to sign this affidavit.

GRIFFIN: According to Kazran, the congressman and his attorneys were asking him to sign a statement that was a lie. That Buchanan knew nothing about the cash swap.

And the affidavit said --

KAZRAN: In short this thing did happen but Mr. Buchanan had nothing to do with this.

GRIFFIN: Kazran refused to sign and took the affidavit to federal investigators. Now CNN has learned Congressman Vern Buchanan is being investigated for attempted to tamper with a witness in a federal investigation. After repeated requests for interviews from the congressman were ignored, we decided to find Vern Buchanan as he emerged from a hearing.

I wanted to ask you about this deal with Sam Kazran. Did you make him sign this after or try to get him to sign this affidavit?

REP. VERN BUCHANAN (R), FLORIDA: No.

GRIFFIN: You didn't do that?

BUCHANAN: I got to get to another meeting. You call my office.

GRIFFIN: You know, I tried calling your office but they wouldn't -- they said you were unavailable. You didn't hold this over his head for the $3 million settlement?

In a recent report released quietly several weeks ago, the office of congressional ethics wrote, "there is substantial reason to believe that Representative Buchanan attempted to influence the testimony of a witness in a proceeding before the FEC in violation of federal law and house ethics codes."

Now, a full house ethics committee is looking into it. CNN is also learned the FBI and the IRS are conducting their own investigation.

Are you concerned at all about the IRS and FBI now investigating this FEC and OCE complaints?

BUCHANAN: Just call my office.

GRIFFIN: His office did respond to our interview requests with a statement saying that charges are politically motivated. The congressman did nothing wrong and, we are confident that the justice department and house ethics committee will reach the same conclusion.

(END VIDEOTAPE)

JOHNS: We reached out to Congressman Buchanan for an interview. His office never returned our calls.

Chicago's murder rate is exploding. And for some young gang members, it's just another day of shoot or be shot.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I see people get shot, killed, robbed. I've done all that. It's crazy.

(END VIDEO CLIP)

JOHNS: We'll take a hard look at gang violence and the casualties. And the disturbing reporting of Jerry Sandusky's adopted son, talking about being sexually abused by the former Penn State assistant coach, now a convicted child rapist.

(COMMERCIAL BREAK)

JOHNS: Four dead and at least 30 wounded in another weekend of gang violence in Chicago as the city's murder rate climbs.

CNN's Ted Rowlands talked to two 16-year-old gang members about their world where death is a way of life.

Ted, joining us now from Chicago.

TED ROWLANDS, CNN CORRESPONDENT: Hi, Joe.

Bottom line here is numbers are very concerning, of murder rate 30 percent higher this year compare today last year here in the city of Chicago. And the people that live in the effected neighborhoods, and they are select neighborhoods, say they are sick and tired of it and they want something done about it.

(BEGIN VIDEOTAPE)

ROWLANDS (voice-over): (INAUDIBLE) family wants you to take a good look at something you may need to brace yourself for. (INAUDIBLE) body in an open casket. This, they say, is what violence on the streets of Chicago really looks like. The 20-year-old had recently return today Chicago from college in Georgia. He was gunned down in what police are calling a gang shooting.

MELVIN NUTE, GRANDFATHER: He's a handsome young man, too. Very handsome young man and he got killed. You know, (INAUDIBLE).

ROWLANDS: The funeral was Friday, a few hours before the start of another violent weekend in Chicago.

MAURICE GILCHRIST, 16-YEAR-OLD GANG MEMBER: I won't probably see 18. I'm a gangbanger. I'm not going to lie. I'm going to keep it real with you.

ROWLANDS: Silas Ratliff and Maurice Gilchrist are both 16, both are associated with a gang and say they wouldn't be surprised if they were shot today.

SILAS RATLIFF, 16-YEAR-OLD GANG MEMBER: Just walking down the street, you never know. It could be your time to go. GILCHRIST: You always got to look behind turning your back. Anybody want to kill me, may end up killing you, you and you and not killing me.

ROWLANDS: The kids are matter of fact about the things they do and what they've seen.

GILCHRIST: I've seen people get shot, killed, robbed, I've done some of that -- all that. It's crazy.

ROWLANDS: According to Chicago police, the murder rate here is up 35 percent compared to last year. People living here say that gangs have taken over. Some say they'd like to see the National Guard come in.

FREDDIE WOODSON, DEACON SAINT ANDREW CHURCH: We need help. We need help. That's the only way I can put it.

ROWLANDS: Maurice and Silas say there are no jobs and people have no idea how hard it is to survive.

RATLIFF: Have they ever had to wear the same clothes week in and week out --

ROWLANDS: A week straight?

GILCHRIST: Wash your underwear out in the sink and hang it up so your school clothes will be ready. Not knowing when your next meal will come.

ROWLANDS: But, they would like to finish high school and get a good job. The dropout rate in Chicago's schools is a staggering 40 percent. And Maurice and Silas say they know it's very possible they'll end up in prison or in a casket like (INAUDIBLE).

(END VIDEOTAPE)

ROWLANDS: And Joe, of course the big question is, why has the murder rate gone up? Well, Chicago police say there are a number of different reasons or theories. One of them is after the housing projects in Chicago were mowed down a few years ago, gangs splintered out. So now, you literally have people that control two to three block areas, more gangs, more borders, more violence. They say guns were rampant in the street last weekend. They had a gun buyback program here; an astounding 5,500 guns were picked up just over the weekend in a buyback. They say that's not even putting a dent in it.

The other thing they do say may be a cause here is the weather. It was such a mild winter, people were out and about more so than in other years. That will play itself out as this year goes on. Bottom line, people very concerned here in Chicago.

JOHNS: Well that weather certainly got to play into it at least. Thanks so much for that report, Ted Rowlands.

It's a bill that's supposed to help veterans pay for school. But are schools actually the ones profiting with billions of dollars of your money? Ahead, details on some disturbing new allegations.

Plus, whatever the Supreme Court decides on the health care law, it is clear one GOP Senate candidate is ready with the response.

Up next, the you tube blunder that has Democrats pouncing.

(COMMERCIAL BREAK)

JOHNS: Turning to the child sex abuse conviction of Jerry Sandusky.

A new audiotape obtained by NBC News of an interview his adopted son, Matt Sandusky, gave to police. He now admits being abused by his father. And on that tape he's apparently agonizing about the grand jury testimony where he denied the molestation.

He thought testifying in the trial could help set the record straight and that potential testimony eventually led to Jerry Sandusky's decision not to testify in his own defense.

(BEGIN VIDEO CLIP)

MATT SANDUSKY, JERRY'S SANDUSKY'S ADOPTED SON: With like the showering, with the hugging, with the rubbing, with the just the talking to me, the way he spoke.

UNIDENTIFIED MALE DETECTIVE: And you said at the beginning of our interview last night that things happened to you, but there was no, that you can recall there was no penetration or oral sex, is that correct?

SANDUSKY: Yes. At this time I don't recall it.

(END VIDEO CLIP)

JOHNS: Matt Sandusky said he was coming forward now so his family would really know what happened.

(BEGIN VIDEO CLIP)

SANDUSKY: So that they can really have closure and see what the truth actually is. And just to right the wrong, honestly, of going to the grand jury and lying.

(END VIDEO CLIP)

JOHNS: Matt Sandusky's attorneys released a statement saying the tape demonstrates Matt's tremendous courage and strength.

CNN national correspondent, Susan Candiotti, joins us now with more.

And Susan, you are learning that the audiotape sparked quite a meeting today?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (via phone): It did. It was a subject of a hastily called meeting, Joe, called out by the trial judge and it was attended by several people including prosecutors and defense attorneys, even the judge overseeing the grand jury that's been investigating the Sandusky case.

According to a source, the knowledge of the meeting, but no one owned up to who was responsible for sharing that audiotape. It's expected that the tape would be used by the grand jury that's still considering the Sandusky case. And if any more victims wind up being charged, it's unlikely that would happen before Sandusky's sentencing expected in September.

JOHNS: Do we know anything more about what it's like for Jerry Sandusky now that he's been locked up?

CANDIOTTI: Well, we do, Joe. For one thing, we have a quote from Jerry Sandusky. I asked his attorney to ask Sandusky a question for me when he visited him. And what he wanted to tell the jury. And Sandusky said, "I'm innocent. I didn't do it," according to his lawyer. As the lawyer also said that Sandusky says he doesn't regret not taking the stand. He said I didn't do this. He does say that after consulting with his attorneys, he didn't take the stand. But we know now, Joe, that if he did, his son Matt, could have been called to testify against his father as a rebuttal witness for the prosecution.

Now, Sandusky is still under a suicide watch in jail. He was put there protectively by the trial judge until Sandusky can get a psychological examination. But the cell itself is only about eight by ten feet. There's a glass window in the door. And I'm told that a guard sits there 24/7 to keep an eye on Sandusky. And he's wearing a yellow tunic that's designed to prevent him from hurting himself, although he's not threatened to take his own life, Joe.

JOHNS: Susan Candiotti, with new details on this very, very sad story that simply doesn't seem to go away.

Thanks, Susan, sadly for that.

At least 18 people dead and devastating landslides. Our Mary Snow is monitoring that and some of the other top stories in the SITUATION ROOM right now.

Mary, what do you have?

MARY SNOW, CNN CORRESPONDENT: Well, Joe, rescue officials in Uganda fear that number will only get higher as countless more could be missing. Heavy rains and mud pummeled the village leaving at least 15 homes from being destroyed. Heavy debris is keeping the buried bodies from being recovered. The Red Cross is working to relocate more than a thousand people.

A Senate committee is slamming for profit schools alleging they're cashing in on the GI bill that covers some tuition for veterans. The committee says the VA paid out more than $4 billion for tuition and fees from 2009 to 2011. Four profit private schools raked in 37 percent of those funds, but educated just 25 percent of veterans. The White House has also accused some of these institutions are engaging in misleading recruiting practices.

A spokesperson for private sector colleges and university says poor profit schools are working with Congress and veteran organizations on solutions in many areas of concern.

And Indiana's Republican Senate candidate is getting heat for a string of videos prematurely uploaded to you tube ahead of the Supreme Court's anticipated health care reform ruling Thursday. The four videos feature Richard Murdoch's official reaction to different potential outcomes. Murdoch's campaign told our affiliate, all campaigns prepare comments ahead of time for decisions like this. There is no guessing his reaction, Joe.

JOHNS: That's unbelievable. You know, technology can be really tough to candidates running for office.

SNOW: Yes, can't erase that. Yes.

(LAUGHTER)

JOHNS: Thanks so much, Mary.

Time now to check back with Jack Cafferty -- Jack?

JACK CAFFERTY, CNN CORRESPONDENT: How are you going to follow that? What kind of a Looney Tune does that? I have four different responses. I'll upload them all ahead of time.

JOHNS: My God. Yes, that's totally late night comedy material.

CAFFERTY: Unbelievable.

Question this hour is how can we restore confidence in our public schools? May that guy would think about re-enrolling.

And Alex from California writes. "We used to have very good schools in this country. We used to know how to do this stuff. No longer. As a former high school teacher, I know what happened and who's responsible. Our schools were ruined by the same catastrophic liberal experiments that ruined our families and larger culture. America and our schools fell as liberalism roll. And we won't fix the schools until the liberal mindset is swept aside."

Tom in Texas writes. "Stop selling war and buying every piece of military hardware on the planet. Cut the defense budget in half and reallocate those funds to education forever. We will still have a bloated military, but then those in the military will be able to read operating instructions of the equipment they buy."

Mark in Houston writes. "My wife was a teacher with three advanced degrees for 45 years. When she had the right to run the classroom, there was seldom a problem. Students who didn't behave were disciplined. Students were taught to think, not just take tests. No child left behind changed all that. Now if a student does poorly, no matter the behavior or family support, it is the teacher's fault. Education if that's what is still called is nothing more than a concept that places the blame everywhere than where it belongs, the students."

Steve writes. "We can start by teaching all the basic reading and writing skills that so many of our high school students apparently haven't learn yet from elementary school."

And Susan in California writes this. "Stop using the school for baby-sitting, leave the technology at home. If you need your parent, the school will call them, just like they did back in the dark ages when I was in school. If the parents make excuses for their children's poor behavior, they will become poor excuses for adults."

You want to read more about this, go to the blog, CNN.com/caffertyfile, or through our post on "the SITUATION ROOM" facebook page. As always, it has been fun, Mr. Joe.

JOHNS: It certainly has, Jack. And hope to do it again soon. Thanks. See you soon.

A Muppet on a rampage, frightening children and disturbing adults in New York. Jeanne Moos shows us Elmo gone wild.

(COMMERCIAL BREAK)

JOHNS: Here is a look at this hour's hot shots.

In India, a farmer plows his field before heavy monsoon rains.

In Italy, residents await the arrival of Pope Benedict as he visits areas affected by earthquakes.

In California, a photographer captures a Los Angeles skyline from a movie premier in the Hollywood hills.

And in England, workers sew par chute material in the oldest hot air balloon factory in Europe.

Hot shots, pictures coming in from around the world.

A New York City impersonator is trying to give the furry monster we have come to love as Elmo a bad name.

CNN's Jeanne Moos looks at his most recent Central Park rant which had children and adults alike scrambling to get away.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): When you think of Elmo, you think of warm, fuzzy hugs, getting kids to eat vegetables, singing happy songs.

Well, this is Elmo's curse. A guy dressed up as Elmo has been ranting in Central Park, yelling anti-Semitic slurs.

UNIDENTIFIED MALE: Jews will harass you.

MOOS: He rallied against Hindus. UNIDENTIFIED MALE: Say (bleep) you Hindu.

MOOS: Elmo needs his mouth washed out with soap.

UNIDENTIFIED MALE: Filthy stinking (bleep).

UNIDENTIFIED FEMALE: That is the scariest Elmo I've ever seen in my life.

MOOS: It was such a weird sight that everyone was stopping to shoot video and take pictures, among them Kathleen Loftus.

KATHLEEN LOFTUS, WITNESS: You know people didn't want their kids to see that coming from Elmo.

MOOS: And it has been going on for months, documented by videos posted to you tube. Watch mom grab her kid.

It was too much for another performer wearing a drum. He started pushing Elmo around.

UNIDENTIFIED MALE: Do I look like I'm playing with you? Go home and stop cursing around kids, man.

MOOS: In Times Square, a guy dressed at Shrek shooed him away and was applauded.

But minutes after his rants, Elmo cozies up to some unsuspecting kid, characters pose mostly with tourists for money, and there are good Elmos out there.

So how do you tell good Elmo from bad Elmo? Look for the bag and knee pads.

Knee pads are for the kneeling he does with children. This past weekend, things came to a head. Tickle me Elmo. Make that handcuff me Elmo. The ruckus he caused prompted police to put on the cuffs, as police led him away, the crowd cheered.

Aspiring journalist Kathleen Loftus whipped out her camera in time to capture this.

LOFTUS: His big red feet are popping out.

MOOS: Elmo was not arrested. He was taken to the hospital, probably didn't press on his belly.

Jeanne moos, CNN, New York.

(END VIDEOTAPE)

JOHNS: I guess there was no mug shot.

That's it for me. Thanks very much for joining us. I am Joe Johns in the SITUATION ROOM.

The news continues next on CNN.