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Pentagon Warns Of Drastic Civilian Cutbacks; Gruesome Find At The Cecil Hotel; Shanghai Hacking Network, Chinese Military Hack Into Scores Of American Web Sites; A Winter Storm Is Serving Up A Triple Threat

Aired February 20, 2013 - 15:30   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: All right, well, coming up next, for days people staying at a hotel in downtown Los Angeles complained of something strange going on with the water. Rooms were flooding, water pressure low.

Their complaints led to an investigation and you're not going to believe what they found.

(COMMERCIAL BREAK)

WHITFIELD: The Pentagon is warning today of drastic civilian cutbacks under the automatic budget cuts set for March 1st.

Our Pentagon correspondent Barbara Starr is standing by with more on that story. So, Barbara, what are they saying?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Fredricka, we've been hearing for weeks about this fancy word around Washington called sequester.

What are we really talking about? Layoffs at the Pentagon, cutbacks in military spending, but it is the layoffs that are going to start if this budget cut problem is not solved, if Congress cannot avert mandatory spending cuts.

What the Pentagon did today is notify Congress some 800,000 civilian workers are facing one day of furlough for the next 22 weeks. It is going to start hitting an awful lot of people right in the pocketbook.

I want you to have a quick listen to one of the Pentagon officials that explained some of the impact today.

(BEGIN VIDEO CLIP)

JESSICA WRIGHT, ACTING UNDERSECRETARY OF DEFENSE: The effects of sequestration and the continuing resolution on our military personnel will be devastating, but on our civilians, it will be catastrophic.

These critical members of our workforce, they work in our depots. They maintain and repair our tanks, our aircraft, our ships. They teach our kids. They care for our children.

They provide medical treatment to all of our beneficiaries. They take care of our wounded warriors. They provide ...

(END VIDEO CLIP)

STARR: So, there you have it. That's some of the impact, losing one day of pay every week for the next 22 weeks.

And just think of this. There are 84,000 military children enrolled in DOD schools around the world.

If their teachers are furloughed one day a week with no resolution, these kids may not be able to complete a full accredited school year, so the impact just keeps growing, Fred. It's a very tough situation.

But before I go, I want to say, welcome back. And we want to see baby pictures.

WHITFIELD: Thank you. I've got lots. I'll share.

Maybe not everyone wants to see them, but I'll send them to you.

STARR: OK. I'm looking forward to it.

WHITFIELD: Thank you so much. Great to be back. Appreciate it, Barbara.

STARR: Thank you.

WHITFIELD: All right, surveillance video of a Canadian woman adds to the mystery around her death.

This -- take a look -- is 21-year-old Elisa Lam riding an elevator at the Cecil Hotel in Los Angeles. So, she peers out the doors, runs back in and then presses several buttons.

Strange behavior, but what happened afterwards is even more bizarre. Several weeks after she was last seen, Los Angeles fire crews pulled Lam's body from the hotel's water tank on the roof.

So, let's turn now to CNN's Kyung Lah in front of the Cecil Hotel right now.

A very gruesome find, very perplexing mystery here, what more do we know about this case?

KYUNG LAH, CNN CORRESPONDENT: Well, let's start with the actual murder -- the actual case itself. I can't call it murder because what the LAPD is saying is they're treating this as a suspicious death. They are not calling it a homicide.

What they will tell us is that Lam, a resident of Vancouver, Canada, came down here as a tourist. She arrived in Los Angeles on January 26th. On January 31st, she went missing.

She was last seen here at the Cecil Hotel. You've seen that surveillance video. We've seen pictures that the LAPD has sent out of her.

Then, yesterday, the maintenance worker responding to some concerns about some water problems at the hotel went and checked the rooftop's water tanks.

There are four of them. When he looked in one of them, that's when he made the gruesome discovery.

The fire department investigators have been here. They did identify her through body markings.

At this point, the autopsy is still being conducted, Fredricka, still waiting for that.

WHITFIELD: And so what kind of role did the hotel guests play in all of this?

Apparently, they were very concerned about the water pressure and, you know, then, once they learned why, did the hotel guests know about this? How were they enlightened, so to speak?

LAH: Well, some of them learned by watching the local news.

You may notice that the front doors of this hotel are open. The hotel has not closed. It has stayed open.

It is on a flush order, meaning that all the people who are here, they can only use it to flush the toilets, no showering, no washing your hands, no -- definitely no drinking of the water.

So, we've spoken to some residents here who say that the hotel has not been honest with them, not been forthcoming, and here is what one couple from the U.K. told us.

(BEGIN VIDEO CLIP)

SABINA BAUGH, HOTEL GUEST: The water did have a funny taste.

MICHAEL BAUGH, HOTEL GUEST: It wasn't right.

S. BAUGH: There was something wrong. The pressure in the water was terrible. The shower was awful.

The water -- and when you turned the tap be on, the water was coming black first for two seconds and then it was going back to normal.

In the U.K., we drink water from tap and it has completely proper, nice taste.

M. BAUGH: Clean.

S. BAUGH: But the water here -- we never thought anything of it.

M. BAUGH: We thought it was pollution.

S. BAUGH: We thought it was just the way it is here.

(END VIDEO CLIP)

LAH: So, when they found out they said they felt absolutely sick to their stomachs. They feel psychologically twisted. They really feel quite disturbed about this.

The hotel is having them sign waivers saying, yeah, you can stay here at the hotel, but it's not our fault if anything happens to you.

We do want to add, Fred, that we did call the Department of Public Health. The Public Health Department is thoroughly testing the water now.

WHITFIELD: Oh, my goodness. All right. Kyung Lah, thanks so much. A mysterious story.

All right, a new report says the Chinese government is responsible for hacking into scores of U.S. Web sites and stealing information.

Our reporter in Shanghai went to the building pinpointed in this hacking scandal and was literally chased down, as you see right there, by Chinese authorities.

We'll tell you what happened next.

(COMMERCIAL BREAK)

WHITFIELD: All right. New developments in the story of last week's nightmare cruise on the Carnival Triumph," a class-action lawsuit now has been filed against Carnival Corporation.

The lawsuit alleges, quote, "Carnival knew or should have known that the vessel Triumph was likely to experience mechanical issues because of prior problems," end quote.

Also, the suit alleges conditions on the ship created a severe risk of injury, illness and/or disease.

The case was filed in Florida. CNN is reaching out to Carnival for a response.

And the White House will soon unveil an aggressive plan to help protect the U.S. from devastating cyber attacks. China will be a main focus.

An American cyber security firm says it tracked a hacking network to Shanghai and the Chinese military.

CNN reporters tried to investigate a Shanghai building named in the report as a home-base for hackers. Well, police chased them away, literally. Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Keep driving. Drive away. Drive away. Drive away. Drive away! Drive away.

(END VIDEO CLIP)

WHITFIELD: China is denying any involvement in the recent attacks -- hacks on American companies, that is, and institutions.

All right, John McCain called it. Yesterday at the start of this town hall meeting, he told these Arizonians that he would entertain questions, comments, even insults.

Well, down rained the insults, mostly on the topic of illegal immigration. As you'll see, the senator, well, he served up some thoughts of his own.

One of the first suggestions, however, coming from that room -- put the U.S. army on the Mexican border.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Why didn't the army go down there and stop them? Because the only thing that stops them, I'm afraid to say and it's too damned bad, but is a gun. That's all that will stop them.

And why didn't we do that? We wouldn't have the mess we are in today.

Thank you for listening to my question.

SEN. JOHN MCCAIN (R), ARIZONA: Because that, frankly, is not the kind of nation that we are.

UNIDENTIFIED MALE: After three-to-five years, you learn how to speak English. You pay into they system. They work hard. No felonies, no crimes, they take a test, a legal certified test, and become American citizens.

Now the system did ...

MCCAIN: That's not the case, sir. You can say that. You can say that pigs fly, but it's not true.

I'm in charge, you're not, and I can tell you that it's not going to be the case.

UNIDENTIFIED MALE: You're taking away from the Social Security to give it to a dependent class of people.

MCCAIN: Taking away from their social security? I see.

UNIDENTIFIED MALE: As a police officer in the state of Arizona, if you pay in 15 percent for 20 years, you get 50 percent of that amount of money that you were making for the rest of your life.

Right now, when I retire ...

MCCAIN: This is an Orwellian experience. I've had enough, sir. You've had enough. You've had enough time. You've had enough time, pal. You've had enough time. You've had enough time.

Go ahead, sir.

UNIDENTIFIED MALE: You don't listen to us. That's the reason I'm like this.

MCCAIN: You know something, again, I've had town hall meetings for 30 years. People are happy that I have town hall meetings and I listen to them and get back to them and that's this is what it is all about.

But occasionally, I get a jerk like you here, so thank you.

Go ahead, ma'am.

UNIDENTIFIED FEMALE: This is pretty intense here.

MCCAIN: Yes, it is. That's what this is supposed to be.

(END VIDEO CLIP)

WHITFIELD: All right. John McCain there, reiterating that sometimes it's supposed to be intense, so he welcomes it.

All right, the verbal jabs continue to fly between legendary record exec Clive Davis and singer Kelly Clarkson.

So what started this feud in the first place? We'll find out.

(COMMERCIAL BREAK)

WHITFIELD: A Palestinian director whose film is nominated for an Oscar was detained on arrival at the Los Angeles airport.

Emad Burnat says he and his family were grilled by officials at LAX last night after their flight from Turkey.

He issued this statement saying, quote, "Immigration officials asked for proof that I was nominated for an Academy Award for the documentary 'Five Broken Cameras,' and they told me that if I couldn't prove the reason for my visit, my wife, my son and I would be sent back to Turkey on the same day," end quote.

Well, fellow documentary filmmaker Michael Moore, giving a play- by-play of the instance on Twitter, Moore tweeted this saying, quote, "Apparently, the immigration and customs officers couldn't understand how a Palestinian could be an Oscar nominee. Emad texted me for help," end quote.

Emad Burnat says he was released after an hour and a half.

And singer Kelly Clarkson is in a war of words with legendary record exec Clive Davis. He published some scathing comments about her in his new memoir.

And, now, the pop star is speaking out and says she won't be bullied.

Clarkson accuses Davis of lying about her. In a post on her Twitter page, she denies getting, quote, "hysterical" in a fight over that hit, "Since You've Been Gone," but says she did cry in his office after he called her a horrible songwriter.

Well, Davis responded today, saying in part, quote, "I think Kelly Clarkson is a tremendous vocal talent. I'm truly sorry that she has decided to take issue what I know to be an accurate depiction of our time together. I stand by the chapter as written in my book," end quote.

All right, the White House correspondents' dinner has had some of nation's top funny men as hosts over the past several years, and funny women, by the way, from Seth Meyers to Jimmy Kimmel.

Well, we'll tell you who will be hosting the biggest dinner inside the Beltway, next.

(COMMERCIAL BREAK)

WHITFIELD: Michelle Obama's new official portrait was unveiled today at the White House. The picture was taken earlier this month in the Green Room of the White House.

It features what the first lady has been calling her mid-life crisis bangs, but this time, she's covered up her arms there, at least in one of them, which were permanently on display in Mrs. Obama's previous official portrait from 2009.

There you go, the before and the after.

All right, during his failed presidential bid, it's fair to say Newt Gingrich had some help from people with plenty of money, but now Gingrich is saying, keep the billionaires out of politics.

The former speaker is lashing out in a column for the conservative site, Human Events, and he's naming names.

CNN political editor Paul Steinhauser with us now from Washington. So, who's he going after?

PAUL STEINHAUSER, CNN POLITICAL EDITOR: He seems to be going after Karl Rove. Remember, he was the political behind George W. Bush's two presidential election victories, and he was also the man who started up a major Republican Super PAC called American Crossroads a few years ago.

Earlier this year, Rove started up another Super PAC which is dedicated to helping Republicans who maybe would be more electable in a general election win in the primaries which could mean maybe less conservative Republican candidates.

Tea party groups and other grassroots conservatives have really been pushing back against Rove.

Now, Newt Gingrich is getting involved saying that Rove is dead wrong when it comes to the future of the Republican Party.

Specifically, he says this. "I'm unalterably opposed to a bunch of billionaires financing a boss to pick candidates in some 50 states. This is the opposite of the Republican tradition of freedom and grassroots, small town conservatism.

"No one person is smart enough nor do they have the moral right to buy nominations across the country," Newt Gingrich, earlier today, an op-ed in Human Events, which is a conservative publication, Fred.

WHITFIELD: OK. And you know what? Let's kind of, you know, turn a page a little bit.

STEINHAUSER: Yes.

WHITFIELD: A lot of Washington really looks forward to a couple of those correspondents' dinner, the Washington correspondents'' dinner, the White House correspondents' dinner, and they look forward to find out who's going to be hosting.

So, apparently, you're going to lift the veil on the White House correspondents' dinner. Who might be hosting?

STEINHAUSER: Yeah, and this is the biggest dinner in this town, no doubt about it, the hottest ticket inside the Beltway.

And who's going to headline it this year? Conan O'Brien. That's right, the host of "Conan" on TBS, the late night talk show.

This will be the second one for him, Fred, because he did this dinner -- he headlined it way back in 1995 when Bill Clinton was president. You've got to go way back.

He's doing it again. We're looking forward to it.

Jimmy Kimmel was the headliner last year, Seth Myers, two years ago.

WHITFIELD: Very fun stuff.

OK, and, you know, you've got to come armed with a sense of humor, so -- well, we know the president has a pretty good sense of humor. He doesn't mind being picked on every now and then.

STEINHAUSER: And it is tradition for the president to say some jokes before the headliner does.

WHITFIELD: I was going to say, if only he can serve up some first and then he's OK with the rest, right?

All right, thanks so much. Paul Steinhauser, good to see you.

All right, a winter storm is serving up a triple threat. Chad Myers is here to tell us all about it, next.

(COMMERCIAL BREAK) WHITFIELD: All right, brace yourselves. A massive winter storm is expanding fast.

Chad Myers with me now. Chad, what's going on?

CHAD MYERS, AMS METEOROLOGIST: It was digging into California yesterday, making rain and snow in the mountains of Southern California, now into Arizona, making snow in Tucson.

And, now eventually, tonight, it'll move into Kansas, Oklahoma, parts of Nebraska and even into Texas, and eventually to the Southeast with an awful lot of severe weather and even some thunderstorms, a little flooding.

Here you go. Kansas City, you're getting some light snow, but five inches on the ground in Wichita by morning.

The entire pink zone here? Winter storm warning. That is the Plains and I know they get it, but this, we've been calling it the triple threat because there's snow, heavy snow on the north side, severe storms to the south, and also flooding to the southeast and, in between not even drawn in here, is an ice storm for Springfield, Missouri and also into like Fayetteville, Arkansas.

Here's the snow. It does snow in Denver. Along the front range, we get snow. It eventually moves out by tomorrow night into Salina, into Kansas City. Heavy snow by morning in Kansas City and then continuing all day long, and even getting a little snow into Chicago before it's all said and done.

WHITFIELD: Wow. All right, well, Chicago, they're used to that.

MYERS: That's right.

WHITFIELD: You know. Folks still have to brace for the rest.

All right, thanks so much, Chad.

MYERS: You're welcome.

WHITFIELD: Appreciate that.

All right, that's going to do it for me. Thanks so much for joining us. I'm Fredricka Whitfield. See you tomorrow.

"THE SITUATION ROOM" with Wolf Blitzer starts right now.