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Canada's Oil Sands Gaining Important for America; Teen Campers Lost in Mountains; Supreme Court Rules Death Penalty for Child Rape Unconstitutional; Punitive Damages Lessened for Exxon Oil Spill

Aired June 25, 2008 - 13:00   ET


KYRA PHILLIPS, CNN ANCHOR: I wish I had scripts or a teleprompter, guys. Sorry about that.
DON LEMON, CNN ANCHOR: Why don't I pick it up, Kyra?

Developing right now, FBI round-up. Hundreds of arrests happening all across the U.S. for their alleged part in child prostitution.

Also, we'll have this for you. A disgruntled employee goes home to get a gun. He returns and brings deadly results with it.

And $2 for gas in just 30 days. Is it possible? Well, just hear who's saying yes to this scenario here.

Hello, everyone. I'm Don Lemon, live in the CNN World Headquarters in Atlanta. As you can see, my partner Kyra Phillips is in New York today. It's a very busy day right here in the CNN NEWSROOM.

And as I said a very busy room in the CNN NEWSROOM. We start with this: an agonizing wait in Missouri where the Mississippi River is still rising, putting pressure on the only remaining earthen levee in the county. It's already so waterlogged only National Guard soldiers and firefighters wearing life vests are being allowed anywhere near it to stack sandbags.

Emergency workers say as little as two inch wake -- a two-inch wake from a passing boat could break the levee there. If it goes way before the river crests today, about 100 homes, businesses, a city park and a lot of farmland will be under water.

Also following this story for you: North Carolina. Investigators call the death of a pregnant U.S. soldier suspicious. That's what they say, quote.

Megan Lynn Touma was a dental specialist with the Army's 19 Replacement Company. She was 23 years old. Her body was found over the weekend at a motel in Fayetteville just days after she arrived at Ft. Bragg from Germany.

Now investigators say they don't know how or exactly when Touma died. She was seven months pregnant at the time.

PHILLIPS: And a whole community is in shock now. Folks in Henderson, Kentucky, woke up to learn five fellow townspeople were killed overnight while at work. Fredricka Whitfield has been working details on this developing story. She'll join us in just a few minutes.

Meanwhile, the gunman committed suicide. And police are trying to sort out exactly what happened at the Atlantis plastics plant just after midnight. Take a listen.


SGT. JOHN NEVILLES, HENDERSON, KENTUCKY, POLICE: He had words with the supervisor. According to a witness, a short time later he left on his regular break, was gone approximately 30 minutes. He came back. Witnesses saw the supervisor and the shooter walk outside together. They heard a gun shot, and then the shooter come back inside the plant and shot numerous people.


PHILLIPS: And police say at least one shooting victim survived and is in the hospital right now.

LEMON: We'll get back to Fredricka Whitfield with details on that in just a bit.

Now, we want to talk about the rape of a child. It is a horrible crime, but perpetrators can't -- can't -- be put to death. The Supreme Court has spoken in a 5-to-4 decision that rules capital punishment cruel and unusual and, thus, unconstitutional. For violent crimes other than murder, that is.

Now the case came from Louisiana, where Patrick Kennedy was sentenced to death in 2003 for the rape of his eight-year-old stepdaughter. It was a brutal crime, and prosecutors say the young victim suffered internal injuries. Kennedy denies he did it.

Five states in all allow death for child rapists, but only Louisiana has actively pursued executions. The high court barred the death penalty for adult rape in 1977. Louisiana made an exception for child rape in 1995.

The worst oil spill in U.S. history won't cost Exxon nearly as much as it feared. In another end-of-term decision, the Supreme Court cut the punitive damage award from the Exxon Valdez disaster from $2.5 billion to $500 million.

Now, you may remember 11 million gallons of crude oil flowed into Prince Williams Sound in the pristine Alaskan wilderness in March of 1989. The Valdez supertanker hit an offshore reef, soaking 1,200 miles of coastline. 33,000 Alaskans will divvy up the award: about $15,000 per person.

These are two of the most eagerly awaited rulings of the Supreme Court's term. And we'll talk more about them and look ahead to the big decisions yet to be announced with our senior legal analyst, Mr. Jeffrey Toobin, in just a few minutes -- Kyra. PHILLIPS: Now, despite the world condemnations, Zimbabwe's government is still planning to go ahead with tomorrow's presidential election. Opposition candidate Morgan Tsvangirai dropped out of the race earlier this week, citing violence and intimidation by supporters of Zimbabwe President Robert Mugabe. Tsvangirai has taken refuge in the Dutch embassy, but he emerged briefly today to call for international intervention.

Mugabe is the only candidate still running in tomorrow's election. Zimbabwe's electoral commission says the election will be held as scheduled, with Tsvangirai's name on the ballot. The chairman says that Tsvangirai's withdrawal came too late and has no legal standing.

Meanwhile, strong new criticism of Zimbabwe's president from one of Africa's most respected voices. Anglican Archbishop Desmond Tutu is denouncing Robert Mugabe in no uncertain terms. He says that, after leading Zimbabwe from independence from Britain in 1980, Mugabe has, quote, "turned into a kind of Frankenstein."

Tutu called for more international pressure against Mugabe's regime, starting with a firm response to tomorrow's election.


ARCHBISHOP DESMOND TUTU, CATHOLIC CHURCH: Let Mr. Mugabe know that, if as seems are going to happen, he -- he claims victory on Friday, that -- that victory is going to be declared null and void. He's going to be declared an illegal -- he is going to be declared an illegal administration. And people must take it from there.


PHILLIPS: Well, raising the possibility of international intervention, Tutu called on Mugabe to resign while he still has the chance.

Our Isha Sesay is at CNN's Zimbabwe desk again today, staying on top of all of the developments. We'll begin hearing from her shortly.

LEMON: Skyrocketing gas prices are affecting everybody in this country. And Congress is again looking for some answers, holding a hearing on Capitol Hill today.

Lawmakers are examining global energy issues and ways to end or limit excessive speculation, believed to be partly fuelling the price spikes. Now, if they do act, they could see cheaper gas in a month or so.


FADEL GHEIT, OPPENHEIMER & COMPANY: I think within 30 to 60 days, I think we could see much lower gas prices. I think if the government applies a regulation.

I'm not saying that we do not need speculation. We need speculation that is sufficient to keep the liquidity in the market. But when speculation overtakes that physical market, then the government has to do something.


LEMON: But an energy analyst says finding a fix may not be so simple.


DR. DANIEL YERGIN, CHAIRMAN, CAMBRIDGE ENERGY RESEARCH ASSOCIATION: We really are in an oil shock, and you've all addressed how painful it is for consumers and businesses. The specter of stagflation is once again in front of us. Low growth, high inflation. We've discussed how oil prices have gone up.

In such circumstances, this tendency is to try and find a single explanation. For something this big, there is not a single explanation.


LEMON: All right. So I have a question for you. Could help for America's oil needs be just across the northern border? One of the world's largest oil reserves is in Alberta, Canada.

Here's senior business correspondent Ali Velshi in Ft. McMurray.


ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Ft. McMurray is in Northern Alberta, Canada, and it is home to what is known as the oil sands. Now, more than 200 years ago, an explorer came by this clear water river here and he saw film, an oily film on the water. And we came to shore. He picked up the sand, and this is what he found.

These are oil sands. It's sand that smells and feels maybe a bit like tar. And it's sand, but it's encased in something called bitumen. Bitumen is used to tar roads or to waterproof roofs.

Well, what they found out many, many decades later was that this could also be refined and turned into a sort of a molasses-like material which then can be upgraded into synthetic crude oil. Now, it takes about two tons of this bitumen just to make one barrel of oil through this process.

But there are more oil reserves underneath where I'm standing than anywhere else in the world. It is more expensive, obviously, to produce than regular crude oil, where you can drill into the ground and it gushes out. This is a more expensive, more labor-intensive process.

As a result of that, this area that I'm in, Ft. McMurray, Alberta, is as close to a boom town as one we'll ever see. It is just growing in leaps and bounds. And we're off to the mines now to take a look at how this process works. And we're told that the 20-mile drive to the mine could take two hours because of all of the people who are working here.

Alberta, this part of the oil sands is giving off almost a million barrels a day of oil. And much of that is going to the United States because of a sophisticated pipeline structure that goes into the states. There are experts who predict that within ten years that million barrels a day could become three or even four million barrels a day.

In Ft. McMurray, I'm Ali Velshi, CNN.


PHILLIPS: Well, the Commerce Department says that sales of new homes has tumbled again, dropping 2.5 percent in May. And the prices of those houses keep dropping. The median price on a new home fell to $231,000, down 5.7 percent from last year. Analysts expect that new home sales remain weak as long as the market is glutted with homes from the foreclosure crisis.

And new legal woes for troubled mortgage-lender Countrywide: twin lawsuits now from California and Illinois. Both states accuse the lender of shady dealings to entice people to apply for risky loans.

Countrywide is the nation's largest mortgage lender. It's been the center of the subprime mortgage mess since it began last fall. And so far Countrywide is declining to comment on the pending litigation. It does say, though, its shareholders have just approved the company's takeover by Bank of America.

Now the Federal Reserve is holding an important meeting today. It will decide whether to lower, raise, or keep interest rates the same. That decision can make a difference to your bottom line. And we're going to bring it to you live in our next hour.

LEMON: Well, dozens of volunteer mountaineers are helping in the search for 11 hikers -- nine of them are teenagers -- who set off on an outbound -- Outward Bound adventure in the Sierra -- central Sierra Nevada 11 days ago. They're due back on Friday, but the searchers set out after the group failed to meet up with a guide.


DEP. CHRIS CURTICE, FRESNO COUNTY SHERIFF'S DEPARTMENT: The area that we're searching is approximately 20 to 25 square miles. It's an area that we've searched before on other searches. So the -- our team is well aware of it and familiar with the area.


LEMON: The group should have enough supplies to last through the week.

Joining us now by telephone is a family member of one of those people missing. His name is Bill Reid. His daughter Shelly is missing.

Thank you very much for joining us, Mr. Reid.


LEMON: Yes. Tell us about what you're doing and what you're seeing, the last time you've heard from your daughter.

REID: Last time we heard from our daughter is when we dropped her off at the airport June 14, 2008, about two weeks ago. They were supposed to go out and do the hiking trail.

But they were supposed to have a satellite telephone with them at all times so they would be able to access the group. And apparently, that did not happen. Or there was a lead counselor who left the group, and he took the cell phone. And I understand there's two counselors and nine teenagers together right now that are unaccounted for.

LEMON: How old is your daughter?

REID: She's 14.

LEMON: Fourteen-years-old. They were supposed to have a satellite phone. They were supposed to meet up with someone with a satellite phone, but that meeting never took place. So...

REID: Well, as I understood it, they went with three counselors and the lead counselor had the satellite phone. For some reason the lead counselor became disengaged with the group, either to go check something out or search something. And he was supposed to reconnect with them. And the lead counselor -- and, I understand, had the most experience -- took the satellite phone. And when he was supposed to reconnect with the group, he could not find them.

Now, this has been going on -- they've known about this till Sunday, and we didn't get notice of this until yesterday.

LEMON: And you had no idea that your daughter had not been heard from since yesterday?

REID: No, we had no idea. We'd discussed that with Outward Bound. So I was in Houston, Texas, and my wife was in Dallas. And I was in Houston on business. And we've both flown to Fresno, and we're headed to the command post right now.

LEMON: You sound awfully put together, you know, for a parent whose child is missing. Has it set in for you yet exactly the circumstances with all of this?

REID: What we're trying to do is pray. We're asking our friends to pray. We're asking for the people to assist. And we're trying to keep this positive. But I will tell you, it's a very scary thing to know that your child has not been -- or has been missing for four or five days. Now, what's more frustrating is Outward Bound didn't tell us that immediately. And I think what's even more frustrating as a parent is we sent her to a camp with the understanding that they would have some type of satellite connection where they would never be left out in the wilderness without that type of connection.

LEMON: Well, Bill Reid...

REID: For whatever reason, that did not occur.

LEMON: Bill Reid, our thoughts and prayers, certainly, are with you, as well as the rest of the families and the people involved in all of this. We would love to get Outward Bound on to phone with us, as well, for them to answer some questions for us. Please update us if you hear anything, OK?

REID: I will.

LEMON: Thank you.

REID: Thank you.

LEMON: Kyra.

PHILLIPS: Straight ahead the Supreme Court handing down big rulings on crimes and punishment. Namely, how much punishment fits two very different crimes. Our legal eagle Jeffrey Toobin weighs in live.

LEMON: No room, no air, only errors. Twelve people died here in this Mexico City club after police busted in and blocked the door. We have new video from inside that stampede, plus an update on the investigation.


LEMON: Last hour in Washington, the FBI announced a nationwide round-up of suspected purveyors of child prostitution. The FBI says they picked up nearly 400 people, some of them juveniles, with 20 children falling into the description of rescues. The arrest happened coast to coast in cities including Washington, D.C., Los Angeles, even Toledo, Ohio.

The announcement comes on the fifth anniversary of the Innocence Lost initiative, which claims to have rescued some 400 children who have fallen into the illicit sex industry.

We'll bring you more on this developing story as we can right here in the CNN NEWSROOM.

PHILLIPS: So how much punishment is too much? That's the question at the heart of two very different cases just decided by the highest court in the land.

In Kennedy versus Louisiana, the court was asked whether the death penalty for violent crimes other than murder amounts to cruel and unusual punishment. The crime at issue was child rape. And by 5- to-4 decision, the court said yes, the death penalty is out of bounds.

Now, in Exxon Shipping versus Baker, the issue is $2.5 billion in punitive damages for an accidental oil spill. In this case, the Exxon Valdez disaster.

Joining me with his insights and wisdom on all this, CNN senior legal analyst Jeffrey Toobin.

Jeffrey, great to see you. You were actually in the courtroom when the death penalty decision was handed down. Let's start there.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: What a dramatic day it was in the court, Kyra. Because this is really one of the unanswered questions in the death penalty area. Can you execute someone for something other than murder?

In 1977 the Supreme Court said, well, for the rape of an adult woman you can't execute someone, but several states in recent years have said, "We want to have the death penalty for child rape."

But today in another 5-to-4 decision, the Supreme Court said you can't do it. Justice Anthony Kennedy said it is cruel and unusual punishment to execute someone for child rape. So that sentence was overturned.

PHILLIPS: But Jeffrey, you think, God, child rape. I mean, the innocence -- how could they make this decision? I mean, was this a struggle for the court?

TOOBIN: It was -- it was obviously a very big struggle. First of all, it was 5 to 4, so it was as close as you can get.

But Anthony Kennedy said, look, only five states have execution for death penalty -- for child rape. And if you were to have child -- this death penalty, that would open the door to 5,200 new cases every year. Because unfortunately, that's how many child rapes are reported every year. Many more than homicide.

And they also made the point that it would create an incentive for child rapists to kill their victims to eliminate the witness, if you have the death penalty for child rape.

So all of those circumstances together: the small number of states that have it, combined with the potential large number of executions, convinced the court to say that this is outside the bounds of the Constitution.

PHILLIPS: Boy, when you bring up the high number of child rape, I mean, there's a whole other issue about cracking down on child pedophiles and the child molesters. And that's a whole other issue.

TOOBIN: Well, it's -- yes.

PHILLIPS: Now, you and I were talking about this, that not since 1964 has anyone on Death Row been executed for anything other than a murder. So why did Louisiana try to change that? TOOBIN: Well, as -- as you pointed out, and as we all know, this is an appalling, horrible crime. And politicians who are, of course, in charge of which crimes are covered by the death penalty, it's an easy call for many of them to say, "Look, we think this crime is so horrible that we're going to add it to the list of crimes for which you can be executed."

Louisiana did it. A couple other states did it. But as of today, they can't do it any more.

The only open question left is, is -- can you execute someone for treason, for espionage? Because it seems like the court is narrowing down what you can execute someone for, perhaps just to homicide.

PHILLIPS: All right. Now let's move into Exxon Valdez. This also -- decision was made here. And accidental oil spills, what happened?

TOOBIN: Well, you know, this is an example of the legal system moving at a glacial pace. The Exxon Valdez spill took place in 1989. Here 19 years later, the legal issues are not settled.

The specific issue here is was $2.5 billion in punitive -- punitive damages excessive? Supreme Court said yes.

Exxon wanted all those punitive damages thrown out. The court said, "We'll cut it down to about $500 billion."

So this was a very good day if you're an Exxon shareholder, but not as good as perhaps they wanted altogether. It certainly is a win for Exxon.

PHILLIPS: Jeffrey Toobin, thanks so much.

TOOBIN: See you, Kyra.

LEMON: Diabetes, America's seventh leading cause of death, is affecting a record number of Americans. We'll go behind the unsettling results of a new study.


LEMON: A lot of people are awaiting this decision, because in about an hour the Federal Reserve will release its decision on interest rates. Our Susan Lisovicz is on the floor of the New York Stock Exchange.

And Susan, the Fed has had a lot to consider over its two-day meeting that it's been having.

SUSAN LISOVICZ, CNN CORRESPONDENT: Yes, and just even today, Don, I mean, it has got some balancing act, whether to continue to juice the slowing economy or to choke off inflation. We have reports from both -- both sectors today.

Let's talk about inflation. We had a weekly inventory report on oil. And guess what? It increased by a million barrels. The street was expecting a decline of about the same. In fact, it was the first increase in about six weeks. So what we're seeing is that oil prices are down more than $3, but still, of course, at historically high levels.

And energy prices is the root of all evil when it comes to inflation. Trickling down into transportation, food, commodities, lots of stuff that we use every day. Inflation tends to feed upon itself, and that is what we have been seeing -- Don.

LEMON: And yet, Susan, we are also seeing more signs that the economy is worsening, and how does the Fed weigh that with the inflation worries that they've been seeing?

LISOVICZ: Well, the Fed is in a quandary. These are twin evils that the Fed is trying to slay. And frankly, I think that's why Wall Street expects the Fed to do absolutely nothing.

Some of the reports we got today: from American Express, saying customers continue to fall further behind on credit card payments. Its CEO says, "Credit indicators deteriorating -- are deteriorating beyond our expectations." Obviously, that signals a worsening of the economy.

We also got a report from the government, showing new home sales declined in May. Sales have tumbled more than 40 percent from a year ago. A separate report shows that mortgage applications fell more than nine percent, despite a drop in mortgage rates.

So a lot for the Fed to consider. We will get that decision in less than an hour, 2:15 Eastern Time. Widely expected the Fed will hold the federal funds rate at 2 percent. That affects the prime rate, which is the benchmark for so many of our loans and what our borrowing costs are.

Very interested in the statement that accompanies it. We do expect to hear about inflation and maybe hint, perhaps, of an interest rate cut in the future.

But in the meantime, we've got a hike in stock prices. The Dow is up 52 points. The NASDAQ is up 34. And as I mentioned, oil prices are down nearly $3.50 right now -- Don.

LEMON: All right. Susan, thank you very much -- Kyra.

LISOVICZ: You're welcome.

PHILLIPS: Let's get straight to the newsroom. Fredricka Whitfield working details on a developing story out of Pasadena, Texas.

Hey, Fred.


Well, you hear "propane pipeline leak" and Chevron Phillips, and that combination certainly doesn't sound good. But that's the situation in Pasadena, Texas, where we understand this leak has occurred, not long ago. You see right now some of the latest pictures that we're just now receiving in.

The leak occurred in a utility easement at the Chevron Phillips facility just on the southeast corner of that property, the plastics complex there in Pasadena.

No injuries have been reported, even though those images look pretty frightening there. Good to hear that no injuries are being reported. But the company has relocated the employees there and the contractors in that affected area just as a precaution.

And we also understand that some roads nearby had been forced to close down temporarily as they try to contain this leak taking place right there now in Pasadena, Texas.

Of course, if we get any more information, Kyra, we'll be able to bring that to you.

PHILLIPS: Thanks, Fred.

Meanwhile, the tension is mounting in Zimbabwe, just hours away from a presidential election most observers call a sham. We're going to have the latest from our Zimbabwe desk in just about 15 minutes from now.

LEMON: We can only say what it is. It's inside the horror. New video from a Mexico club as a police raid sparks a deadly stampede. The scene and the story straight ahead.


LEMON: Hello, everyone, I'm Don Lemon live at the CNN World Headquarters in Atlanta.

PHILLIPS: And I'm Kyra Phillips live in New York. You're in the CNN NEWSROOM.

And it's 1:33 Eastern time right now. Here's some of the stories we're working on right now. Two major rulings today from the U.S. Supreme Court. In a 5-4 decision, the Court ruled that those who rape children cannot be executed. In another case, the Court reduced the damage award for the 1989 Exxon Valdez oil spill in Alaska.

And new flood worries in Missouri, standing water just feet from the St. Louis Arch, and 45 miles northwest of St. Louis, they're trying to save a levee protecting Winfield, Missouri.

And three men accused of plotting to bomb New York's JFK Airport are back on U.S. soil. They're scheduled to appear in court shortly right after being extradited from Trinidad and Tabago.

LEMON: And we're following the latest development in Zimbabwe today. A very busy story here. Hundreds of people are seeking refuge at South Africa's embassy in Zimbabwe. That's just the latest impact of this political situation there, what we can only call a growing political crisis.

Zimbabwe's Electoral Commission today declared it will go ahead, it will go ahead with tomorrow's scheduled presidential election. This, despite the withdrawal of the only opposition candidate, and international complaints from all around the world about this.

CNN's Isha Sesay of our international unit joins us now. And I understand you have some new developments. So, I'm going to get out of your way and let you get to them.

ISHA SESAY, CNN INTERNATIONAL CORRESPONDENT: Thanks, Don. Yes, let's get right to it.

As Don was just saying, about 300 people gathering in the South African compound, the South African Embassy compound in Harare. We have someone on the line now who can hopefully shed a little bit more light on exactly what is going on. Her name is Stella, she's a local Zimbabwean woman who works with refugees there in Harare.

Stella, if you can hear me, just describe the scene for us at the South African Embassy right now.

VOICE OF STELLA, REFUGEE WORKER IN ZIMBABWE: At the moment, there's 300 people waiting outside the gate, trying to get in there, but nowhere to go there. They're all coming out of all the parks, out of the hospitals, and then, the riot police came in and stopped the (INAUDIBLE) from trying to get in there. So, the South African Embassy opens the booms to let them in.

Our hospitals are now overflowing with people. I was at a hospital yesterday. People coming straight out of anesthetic and having nowhere to go. They are sitting on the grasses, on the benches and they're ...

SESAY: So Stella, let me be clear ...


SESAY: ...we're hearing that about 300 people have converged on the South African Embassy there in Harare. Who are these people? Give us some background on why they've decided to go to the South African Embassy.

STELLA: They've gone there for safety to try and feel safe and to get help for people at the moment.

SESAY: And are these people MDC supporters? What do we know about their story?

STELLA: Yes, no, no, they're all MDC supporters, their houses have been burned, they've got nowhere to go, they are absolutely destitute. I have one mother which I met there (ph), gone to see a grade a bit (ph), called the past buildings (ph) yesterday and they took off all the children and half the mothers that are now in the South African Embassy don't know where their children are, they are missing. They apparently have got 60 kilometers out of Harare in the middle of nowhere.

SESAY: So, now they've got to the South African Embassy. How have they been received, what are South African officials saying?

STELLA: They're not saying a lot at the moment. They're just like -- they're not -- it's hard to cope with them at the moment, the whole situation where I live.

SESAY: So, you left there, these people arrived early afternoon as I understand it. What kind of provisions are there -- we're talking about mothers with children, we're talking about people, as you describe it in a bad condition. What kind of provisions have been made for them? And how long do they intend on staying there?

STELLA: No provisions are being made yet. They're trying to get hold of the Red Cross. They're saying they can't react and they can't help. So, they just -- in the land of limbo at the moment.

SESAY: And just one final question because our viewers will be keen to know this. How long do they plan on staying there? Is this a case of once the election has passed, they will leave? What are they saying to you?

STELLA: The South African Embassy are trying to do as much as they can for them. Now, they're all stored (ph) in the car park and the sick children, sick mothers, many just have absolutely nothing, no clothing, no blankets.


STELLA: They're desperate.

SESAY: OK, Stella, there we must leave it. Many thanks for joining us on the line.

And Don, Stella trying to give us some sense of the conditions there that 300 people have basically, you know, swarmed the South African Embassy in Harare. She's describing a scene of no blankets, no provisions being made for these people. These people going there because they fear for their safety. As Stella describes it, these people are MDC supporters and basically, they're in fear of their lives and that is why they have gone there.

LEMON: And the only way to describe this, Isha, is a crisis.

SESAY: It's the only way.


SESAY: I don't see how else we can describe it given the numbers of people we're talking about that have been affected.

LEMON: Isha Sesay, thank you very much -- Kyra?

PHILLIPS: Well, Israeli troops have closed all supply crossings into Gaza after militants there fired rockets on a southern Israeli town. Islamic Jihad says the attack was a reprisal for the killing of one of their commanders. Israeli officials call it a gross violation of a truce that went into effect last week. Hamas, which controls Gaza, says it remains committed to the truce, but won't act as Israel's police force against other factions that violate it.

Now, people who were there call it a death trap, a packed Mexico City nightclub swarmed by cops on a raid becomes a scene of a deadly stampede. As protesters take their fury out on the police, prosecutors are lashing out as well.

CNN's Harris Whitbeck reports.


HARRIS WHITBECK, CNN INTERNATIONAL CORRESPONDENT (voice-over): This video released by Mexico City officials Tuesday shows police blocking the only exit of the News Devine Disco. Twelve people suffocated or were crushed during the police raid there Friday, including three police officers.

Some 500 teenagers were packed into the club in a working class district of Mexico City celebrating the end of the school year. Police arrived to look into underage drinking at the club. Prosecutors charged they botched the operation, blocking the exit and causing a panic inside the club that prompted the young patrons to stampede.

RODOLFO FELIX CARDENAS, MEXICO CITY PROSECUTOR (through translator): The witness called attention to the attitude of the police who were trying to push the youths back into the club while the youths were trying to get out. Those police not only tried to keep the youth from getting out, but it is clear that they were pushing the kids back inside.

WHITBECK: Seventeen police commanders and other top officers have already been asked to resign from their posts. Mexico City Mayor Marcelo Ebrard promised a full investigation and ordered the release of the video taken by police at the scene to prove the officers involved would not be protected.

But that wasn't enough for survivors of the stampede. Many of them gathered outside the now closed nightclub to stage a protest against the police. One man splashed red liquid on a police officer. Others chanted murderers, murderers. One protest sign read "Wanted: the chief of the child-killing gang known as the police."

Harris Whitbeck, CNN, Mexico City.


LEMON: Diabetes, America's seventh leading cause of death is affecting a record number of Americans. We'll go beyond the unsettling results of a new study.

(COMMERCIAL BREAK) LEMON: All right, some really, really important health news to tell you about. It's unsettling figures out from the CDC, Centers for Disease and Prevention. The numbers of Americans with diabetes increasing at an alarming rate.

And our medical correspondent Elizabeth Cohen joins us now to break it all down. And really, these are some startling numbers. And sort of sitting here ruminating about it, and having diabetes in the family, it is very unsettling to hear this.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: It is unsettling because when you have diabetes, it's not just bad because of the diabetes ...


COHEN: ...but it puts you at more of a risk for circulatory problems, for heart disease, for all sorts of things. And these numbers are really -- the increase is really quite startling.

In two years, from 2005 to 2007, there was a 15 percent increase in the number of diabetics in the United States. That means that at the end of the study, 2007, that eight percent of all Americans had diabetes. That is indeed a lot of people. And the news is even worse for minorities. Take a look at these numbers. And among Native Americans, 16 percent are diabetic, African-Americans, almost 12 percent, Hispanics, 10 percent, Caucasians, six percent.

So, you can see that this is a disease that affects different groups differently. Most of these are type -- most of the increases because of Type 2 diabetes, that's the kind that people often get later in life, but do sometimes get in childhood.

LEMON: Yes, and you have to wonder why. I mean, what are the factors that contribute to that. But I have to ask you why, why this increase?

COHEN: A lot of it has to do with obesity.

LEMON: Right.

COHEN: Obesity has been on the rise in this country and you're much more likely to get Type 2 diabetes if you are obese. But another one is sort of statistical: the population is aging, you're more likely to get diabetes as you get older. In fact, right now, one out of four Americans over age 60 have diabetes. So, some of it has to do with the aging of the population.

LEMON: OK, so then, what can you do? Obviously, watch your diet, right. What do you do to prevent any of this?

COHEN: Right, the good news here is ...

LEMON: Or to reverse it, if you can reverse it.

COHEN: ...that all of this is -- right, sure, you can reverse it. I mean, there are definitely stories of people who were on insulin and they changed their diet, they changed their exercise, and they really could make a difference. So, when it comes to Type 2 diabetes, there really are specific things that people can do. You can also -- there are some drugs you can take to help control diabetes, as well.

LEMON: OK, but again, you should just watch your diet, talk to your doctor, and then help to help reverse that trend.

COHEN: That's right, absolutely because diabetes is bad for so many ...


COHEN: ...different things, not just the diabetes in and of itself.

LEMON: Very important information. Thank you, Elizabeth.

COHEN: Thanks.

PHILLIPS: Well, so far, so good for Tiger Woods, following reconstructive surgery on his left knee yesterday. Doctors say the operation went well. And it's highly unlikely that he'll suffer any long-term effects. It comes a week after Woods' stunning playoff win at the U.S. Open despite hobbling on a torn knee ligament and a double stress fracture in that same leg. It's the fourth surgery on the same knee, the second in 10 weeks.

LEMON: Some economists are talking about possible inflation. Well, the Feds today, a decision in just a bit on whether or not they're going to increase interest rates. Details to come right here in the CNN NEWSROOM.


PHILLIPS: Presumptive Republican Presidential Nominee John McCain there giving an energy speech in Las Vegas, talking about a number of things from gas prices to the high price of oil. Actually, hitting on an item that is a part of the Congressional hearings that are being held today.

He was talking about the oils futures market and holding off on reckless speculation, as he said, in his speech talking about reforming oil futures market. You know, critics have come forward and said if you regulate oil futures trading and speculative trading, then gas prices will go down, the price of oil will go down.

Let's take a listen to him.


SEN. JOHN MCCAIN (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: ... energy reform, but never without the familiar corporate handouts and fighting over scraps of pork. Even now, some in Washington still seem to think the best plan is a direct, heart-felt appeal for Saudi sympathy. As if that conveyed anything other than weakness.

In the way of new ideas, get this, in the way of new ideas, a majority of the House of Representatives actually voted in favor of suing OPEC as if we can litigate our way to energy security.

Ladies and gentlemen, America is going to meet this great challenge, but we're not going to do it as a supplicant or as a claimant. We're not going to meet it with words at all, we're going to meet it with action and we're going to meet this challenge in a way that's consistent with the character of our nation.

Three decades of partisan paralysis on energy security is enough. Since I'm not president, I cannot say the buck stops here. But what I will say that it must stop now. Should I be entrusted --


MCCAIN: Should I be entrusted with the honor of that office, I will break the stalemate in Washington. And I will put this country on a course to energy security. I will authorize and support new exploration and production of America's own oil and gas reserves.


MCCAIN: Because we can't outsource the solution to America's energy problem.

Opponents of domestic production cling to their position even as the price of foreign oil has doubled and doubled again. They were against it when a gallon of gas cost $2, they're still against it when a gallon cost well over $4. And we're left to wonder what it'll take to shake their faith in this dogma of dependence on foreign oil.

As for me, my convictions place a priority on the well-being of people who cannot afford these ever rising prices. Every year, we are sending hundreds of billions of dollars out of the country for oil imports, much of it from OPEC. While trillions of dollars of worth of oil reserves in America go unused.

As a matter of fairness, we must deal with the here and now and assure affordable fuel for America by producing more of it ourselves.


PHILLIPS: John McCain speaking in Las Vegas, Nevada, giving an energy speech. Barack Obama was also there yesterday giving a speech on the economy to women voters.

We'll continue to follow that. If you want to watch it, you can go to and you can watch it in its entirety. Meanwhile, we'll follow it, we'll take notes and bring you the highlights throughout the afternoon.

Also, other stories in our Political Ticker today. A wider gap in the Polls of Polls. Barack Obama leads John McCain by eight percentage points in the latest average of five separate surveys. Last week's gap was six points, also in Obama's favor, 12 percent say that they haven't made up their minds.

Now, for Hillary Clinton, the numbers that matter most aren't polls, but dollars. Her failed campaign is more than $20 million in debt and now Obama's trying to help. He's asking his top donors to chip in or raise cash on Clinton's behalf. Tomorrow, he and Clinton will ask her money people to do the same for him. A lot of quid pro quo going on. And Friday as you've heard, the two will campaign together for the very first time.

Well, here's what every American wants to know about. That with soaring oil and gas prices straining your budget, could relief from Congress and a few new laws help? One argument you'll want to hear.


LEMON: Barack Obama is ahead in the polls and he appears to be leading, and get this, baby smooching as well. None other than Jeanne Moos has that story.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): Hey, kids, don't you know, that's the head of a potential president you're touching? Don't pull his nose, not that Barack Obama minds.

SEN. BARACK OBAMA (D), PRESUMPTIVE PRESIDENTIAL NOMINEE: After kissing hundreds of babies --

MOOS: It's routine by now. Babies adorned with Obama stickers try to nap ...


MOOS: ...parents hand over the baby. The senator gives him or her a kiss and a smile, occasionally the parents brag about it on YouTube. But imagine what this madness feels like to the baby.


MOOS: It's a wonder they don't all sob. Though it's true, some of them do. This father of two is pretty adept at making faces. But for supporters who can't make it to an Obama event, we've got a Web site for you. Send Barack your baby, package and ship your baby in a well-padded box, fill out the packing slip. What would you like Senator Obama to do with your baby? Kiss, hug, give hope?

Here's hoping you're not taking this "send Barack your baby" stuff seriously. Frequently asked questions include, "How will you return my baby?" "Most babies are back home within 14 business days."

Not quite as quick as an in-person kiss.

OBAMA: I'm going to kiss that one right there. That's a cute one there.

MOOS: A 22-year-old Web designer named Kareem Shia (ph) dreamed up this one-note joke Web site. He's a lukewarm Obama supporter.

(on camera): We've had no reports of anyone actually sending a real infant, but if you do, don't forget to bubblewrap your baby.

MOOS (voice-over): OK, so shipping a baby is out of the question. But people really do let their baby's body surf to Obama.

OBAMA: There you go, start passing the baby up.

MOOS: Kids go from hand to hand on the way up, then hand to hand on the way back.

By the way, we're not giving John McCain equal time in the baby- kissing department because we can't find examples. We did once interview a guy who had his baby pose with every candidate he could. And he said McCain was a natural, even when baby Dolly (ph) had cried.

UNIDENTIFIED MALE: He made a joke that there goes another vote.

MOOS: And though the babies won't remember any of this, for the parents, it's a four exclamation point moment.


MOOS: Jeanne Moos, CNN, New York.