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Suspect in University Shooting Still at Large; Defense Secretary Visits Troops in Afghanistan; Pakistanis Flee to Escape Fighting; Conditions Improve for Fighting Santa Barbara Blaze; President Obama Holds Education Meeting; Texas Town Claims Seized Funds Used Lawfully; Warning about Testosterone Gel; Deal Possible for British Woman Jailed in Laos; Connecticut College Warns against At- Large Gunman

Aired May 07, 2009 - 13:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Tony, thanks so much. We begin with breaking news. A manhunt for this suspect. He's wanted for killing a college student. Now police believe he could be a threat to many more.

U.S. Marines pushing forward to Pakistan, or not. They ask the secretary of defense straight up: are you sending us or no? We'll tell you what he said.

Hi, everyone. I'm Kyra Phillips, live at CNN world headquarters in Atlanta. You're live in the CNN NEWSROOM.

First, a campus and now a community on high alert. The gunman who killed a Connecticut student still at large. Police say suspect Stephen Morgan may target others at Wesleyan university and people of the Jewish faith. Morgan's accused of shooting Wesleyan junior Johanna Justin-Jinich yesterday. And we now know that she filed a harassment complaint against him back in 2007.

Let's get straight to national correspondent Susie -- Susan Candiotti for the latest -- Susan.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hi, Kyra.

Yes, I spoke with a spokesman for New York University, NYU, who confirms that he was contacted by police in Connecticut just last night, asking about this alleged incident that happened in 2000, back in July of 2007 rather, just a couple of years ago.

He confirms to CNN, the spokesman for NYU, that both the victim, Johanna Justin-Jinich, as well as the alleged killer in this case, Stephen Morgan, both took a course back in July of 2007 on campus during the summertime there. And in July she made a plea to campus police that Morgan had allegedly made threatening phone calls and had sent her some e-mails, as well.

The New York Police Department was brought in. Both of them were interviewed, and later that very same month, I am told that she declined to press further charges.

At this time they are looking into what prompted this to happen, so back on campus everything is shut down for now. Taking an unusual step of telling students to stay inside. Asking the people who work on campus to also stay inside their offices. And the mayor has gone so far as to ask the entire town of 48,000 to be very careful when they go outside and to perhaps consider staying inside, as well.

The mayor also expressed his concern over what happened over this tragedy.

(BEGIN VIDEO CLIP)

MAYOR SEBASTIAN GIULIANO, MIDDLETOWN, CONNECTICUT: This has to be every parent's worst nightmare, that you send them away to school and all you think about every day is are they OK? You think about it every morning when you get up, and you think about that before you go to sleep every night. Are they OK? And the loss of this family is just unimaginable.

(END VIDEO CLIP)

CANDIOTTI: Police have also revealed, as well as other authorities, that police may be -- police may be focusing on -- the police may be focusing on the campus itself. And -- and they're concerned that Morgan might, in fact, be targeting members of the Wesleyan college community, as well as Jewish students on campus. There is a large segment of Jewish students who attend Wesleyan -- Kyra.

PHILLIPS: All right. We'll track the manhunt. Susan Candiotti, thanks so much.

Now, we want to take you back to Washington, where we're pushing forward on scaling back. Did you know that you're paying rent in Paris for the U.S. Education Department? Well, President Obama says it's time to cut that and 120 other dubious expenses from next year's budget.

Others include a radio-based navigation system that GPS has made obsolete, and the National Institute for Literacy, which spent almost half of last year's funding on overhead.

Now combined, the cuts would have -- would save $17 billion, give or take, which the White House budget director points out is not chump change. It's also not quite one half of 1 percent of proposed 2010 spending. The president says it's only a start. (BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: All told, by the end of my first term, we will have cut the deficit in half. Over the next decade, we'll bring non-defense discretionary spending to its lowest level as a share of gross domestic product since 1962.

We will also continue to look for ways we can save taxpayer money. I know there are many in both parties in Congress committed to cutting spending and eager to work with us.

(END VIDEO CLIP) PHILLIPS: Well, he's right about the cutting spending part, but finding Republicans who are eager to work with the White House may be a challenge. Consider one who took the job of commerce secretary and then backed out.

(BEGIN VIDEO CLIP)

SEN. JUDD GREGG (R), NEW HAMPSHIRE: Taking $17 billion out of that spending program is not going to solve our overall problems, which involve the fact that we are headed into a non-sustainable government because of the size of the spending that we're doing in the government and because of the size of the debt that we're running up.

(END VIDEO CLIP)

PHILLIPS: Who's not against government waste?

Next hour I'm going to ask Tom Schatz of the group Citizens Against Government Waste about a $17 billion drop in a $3.5 trillion bucket.

And by the way, President Obama is meeting right now with three men who probably don't get together very often: former House speaker Newt Gingrich, the Reverend Al Sharpton and New York Mayor Michael Bloomberg. They're all talking education reform this hour at the White House. We do expect the trio to come out and talk to reporters in a few minutes, and when they do, you'll see it right here live in the CNN NEWSROOM.

Pakistan and Afghanistan, two U.S. allies in the war on terror, two nations facing a resurging terror threat. Afghan President Karzai and Pakistani President Zardari are spending a second day in Washington, hashing out ways to take on the Taliban and Al Qaeda.

There are urgent reminders of the need to act. Pakistani forces are stepping up their offensive against Taliban militants who are getting bolder. And today in southern Afghanistan, a suicide bomber killed at least a dozen people at a market.

There's a lot more going on in Afghanistan right now. Just ask Defense Secretary Robert Gates. He's actually visiting U.S. troops there today. He's also questioning claims that U.S. air strikes killed Afghan civilians this week.

(BEGIN VIDEO CLIP)

ROBERT GATES, U.S. SECRETARY OF DEFENSE: We all know that the Taliban use civilian casualties and sometimes create them to create problems for the United States and our coalition partners. We will have to wait and see what happened in this -- in this particular case.

(END VIDEO CLIP)

PHILLIPS: Well, Pentagon correspondent Chris Lawrence is in Kabul right now. And Chris, I know that Secretary Gates also talked to U.S. troops. I'll get to that in just a second. But on that note, Secretary Gates saying, "Hey, let's see how exactly those civilians died." Well, it's interesting that Secretary of State Hillary Clinton already apologized for those deaths. So did she move too soon on that?

CHRIS LAWRENCE, CNN CORRESPONDENT: No, I don't think so. In fact, Secretary Gates in his press conference tonight said that is the policy of the United States, that even one civilian death among the Afghans is too much. That they will take those steps and that they will try to make amends, even if something happens and it's not the Americans' fault.

PHILLIPS: Meanwhile, troops came straight out with the question directly aimed at the secretary of defense. I'm wondering if it threw him off. They asked him straight up, "Are you sending us to Pakistan?"

LAWRENCE: Yes, that's right. Secretary Gates, you know, crisscrossed the country from Kabul to Kandahar and a few bases in between. At one point, he gathered a few hundred Marines together and said, "Let it fly. Tell me what you think. Tell me what you need."

One soldier got up and said, "Hey, are you going to send us into Pakistan?"

And the secretary said that is fully in the context of rumor. He said, "We can't be putting ground troops into Pakistan, so on that front don't worry."

PHILLIPS: We'll keep tracking it with you. Chris Lawrence, great job.

An all-out battle raging right now in northwest Pakistan. Thousands of troops taking on Taliban militants, while civilians lose their homes and run for their lives.

Here's CNN's Ivan Watson.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN CORRESPONDENT (voice-over): Expect to see more scenes like this in the days to come. A family of 18 -- tired, scared, confused -- trudging into one of the new refugee camps sprouting up across northwest Pakistan. A guard shows them an empty tent, and they move in.

"We left this morning. Our village was being mortared," says one of the men of this family. "A big piece of shrapnel almost pierced my child's leg."

Five days ago this was just an empty field. It is filling by the hour as tens of thousands of Pakistanis flee south to escape the fighting. Meanwhile, columns of Pakistani troops are headed north. This conflict is escalating. An already existing humanitarian crisis is getting worse.

These are the ruins of what up until a few years ago was a camp for refugees from neighboring Afghanistan. The Afghans are gone, but officials say now more than 49,000 Pakistanis live here. They're just a fraction of the more than half a million people uprooted by the war between Pakistani soldiers and Taliban militants over the last six months.

The natives at Jalazai (ph) camp are getting restless. They're angry, because the monthly distribution of food aid is a few days late.

"Our houses have been destroyed," this man explains. "All we have now are the clothes on our back."

It takes a few bags of flour to calm people down.

The United Nations predicts this camp's population will nearly double when the next wave of displaced Pakistanis arrive. Amid these staggering statistics, it's easy to lose sight of the terrible impact this is having on individuals. People like this woman, named Zuria (ph), shown here on the left in a photo taken during happier times.

Last September a helicopter air strike hit Zuria (ph) while she was fetching water in her village near the Afghan border. She lost both her legs at the knee. Zuria (ph) and her daughter now depend on charity to get by.

In this moment of crisis some homeless Pakistanis are turning to a higher power.

"There's nothing any of you can do to save us," says Muhammad Banir (ph), who fled to this camp with his family three days ago. He says, "We can only put our faith in God."

As battles rage in the Swat Valley, provincial officials warn up to half a million more Pakistanis may soon be homeless. The old man may be right.

Ivan Watson, CNN, Mardan (ph) Camp, Pakistan.

(END VIDEOTAPE)

PHILLIPS: Pakistan, Afghanistan, America, a complex evolving relationship. CNN brings you the major players. Tomorrow our Wolf Blitzer goes one-on-one with Afghan President Hamid Karzai. You can watch on "THE SITUATION ROOM" Friday, 6 p.m. Eastern, only on CNN.

(BEGIN VIDEO CLIP)

GARY TUCHMAN, CNN CORRESPONDENT: Officer, my name's Gary Tuchman with CNN. I want to know if you recognize this guy. We're doing a story. (END VIDEO CLIP)

PHILLIPS: Well, that police officer got a check for $10,000 from the district attorney. Why, you ask? I'm going get to the bottom of this with Gary Tuchman. He's all over this story from Texas. Some drivers have been pulled over and forced to give their money and their stuff to the cops. One person calling it a big piracy operation.

And the latest on the wildfires in California. Live pictures now of the air tankers dropping relief.

(COMMERCIAL BREAK)

PHILLIPS: Global headlines: an international outcry all because of this woman. She's British. She's pregnant. And she's locked in the southeast Asian prison, her fate unknown.

(COMMERCIAL BREAK)

PHILLIPS: A state of emergency right now in Southern California as a big wildfire continues to spread. That blaze in the foothills and canyons around Santa Barbara has scorched at least 500 acres right now. Eight firefighters have been hurt and at least 20 homes have been destroyed. Thirteen thousand people have been evacuated from their homes.

CNN's Thelma Gutierrez joining us now live from Santa Barbara.

Thelma, what's the situation like there right now?

THELMA GUTIERREZ, CNN CORRESPONDENT: Kyra, I can tell you that the winds have died down. And that has been a very good sign for firefighters, because what they're doing now is they're flying above this area. They've been making water drops all morning long. And that's one of the ways that they are attacking this fire, because we're in an area where there's a lot of dense foliage that hasn't burned in about half a century. And this is a very, very steep, rugged terrain.

Now, take a look right down below. This is what we're looking at. These are the kinds of -- this is rubble that we've been seeing as we drive up into the hillside.

You see this home that's still smoldering. The gas company was just out. They've been making rounds throughout some of these homes that are in the hillside, making sure that they are shutting off those gas valves.

And you take a look right beyond that home. This is what they're dealing with. Homes that are kind of tucked away in that brush. It's a very, very dangerous situation for firefighters. In fact, Arnold Schwarzenegger was here a short time ago, and he declared this area a state of emergency.

(BEGIN VIDEO CLIP) GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: But as I said, the fire has been a great challenge. There's no two ways about it. And I just heard this again from the briefing just now, that because of the winds, 50-mile-an-hour winds, the lack of access to the mountainous terrain and intense brush and all of this presents great challenges.

But this is why I wanted to come up here to show my support. That's why yesterday I declared a state of emergency for Santa Barbara area which means fire management assistant grant. We can draw down 75 percent of the response costs from the federal government.

(END VIDEO CLIP)

GUTIERREZ: Now, yesterday there were two fixed-wing aircraft in the air. Today we're talking about 16 aircraft that will be helping firefighters fight this blaze.

We talked to one of the firefighters on the way up to this area, and he told us that these are some of the worst fire conditions he has ever seen. He says absolutely devastating when the winds kick up. You've got these flames, a wall of flames just ripping through these canyons. And it makes it very, very dangerous for firefighters and residents.

And that is exactly why they've had to evacuate so many people from this area, because they say it's just very dangerous when those winds kick up. But so far they're laying down, and that's what we're hoping for -- Kyra.

PHILLIPS: And Thelma, you know, you see the smoldering home there, and you can't help but wonder did the family get out? Are they OK? Have -- do they know what happened to their home yet?

GUTIERREZ: Yes. Well, I can tell you, Kyra, that many people do not know what has happened to those homes, because the roads up here -- we're talking a two-lane road. Very narrow, winding roads. All of these roads up into these canyon areas are closed off.

And so the only people who are able to get in at this point are firefighters. We were able to get in. But residents are being kept out of this area, because all it takes, Kyra, is for those winds to pick up again, and this could be a really dangerous situation.

PHILLIPS: Thelma Gutierrez, live from Santa Barbara. Thanks.

Chad Myers keeping track of what's happening right now in the fire zone. Chad, what do you think?

CHAD MYERS, AMS METEOROLOGIST: Well, we've got high pressure on one side and low pressure on the other. And they're not that far away. That's the problem. It is the -- it's the gradient between.

Here's the Santa Barbara area. The winds are coming around this high and basically coming around this low together, and they're blowing offshore or at least from the north-northwest and then offshore. Actually, completely over the islands. I want to take to you something else. I'm going to get rid of this. And I'm going to fly you into the area that we're talking about. Because maybe kind of a hard idea to figure it out from on the ground. But I'm going to fly you all the way in. Notice there's L.A. And we're going to go to the west of L.A. Right up here where the -- it actually goes east and west of the coastline. And there's Santa Barbara.

And look at the mountains in the background. The mountains are the problem. The canyons are the problem. The canyons allow that wind to funnel down from up here from the higher elevations. As the air is dry it funnels on down through the canyons and back into the city.

And the city is the problem in the foothills. The problem, if you smell smoke, this is exactly what I said yesterday. If you don't smell smoke now but in the middle of the night you do, no matter where you live, you need to wake up and figure out what's going on. You could be in some of these areas here where the winds and the smoke are coming down the mountains.

Although this fire altogether is still less than one square mile. If you add up all the areas under in fire -- fire. So it's a small fire. But it's still not a small fire if it's by your house.

PHILLIPS: That's true. Chad, thanks.

Well, you've heard which banks are stressed, but you might be the one who's stressing if your life savings are sitting in one of them. Before you plan a big withdrawal, though, let's do a reality check.

(COMMERCIAL BREAK)

PHILLIPS: So is your bank healthy? Without crunching numbers, the answer is a qualified yes, but today is the day the government released the results of those so-called stress tests, aimed at making sure that banks can get by if the recession gets worse.

Well, just ahead of that official announcement, we learn that Bank of America, Wells Fargo, GMAC and Citigroup are all being told to raise billions of extra dollars, just in case. American Express, Bank of New York Mellon, JPMorgan Chase and Goldman Sachs all are said to have ample capital cushion. And the Fed says all 19 of the test -- tested banks are solvent.

So what? Well, the whole idea is to head off any more last- ditch, last-minute bailouts at taxpayer expense. So will it work, and can we all breathe easily about the banks?

Let's ask the curious capitalist, also known as "TIME" magazine's editor-at-large, Justin Fox.

Justin, good to see you.

JUSTIN FOX, EDITOR-AT-LARGE, "TIME": Good to see you, Kyra. PHILLIPS: All right. So, you know, put this in context for the consumer. You take a look at the list. You see banks that didn't do well on the list. Do I take my money out of that bank, or do I ride it out?

FOX: I don't think -- I'd say you ride it out. I think for the consumer, for somebody with an account at a bank, this entire discussion now is mostly irrelevant.

Basically, there was a decision made last fall that's been reaffirmed by this -- by the Obama administration, since it took office, that none of these big banks, none of the top 19 banks, are going to be allowed to fail. And so this whole stress test discussion is all a discussion about how much the shareholders at certain banks might have to give up to allow the banks to go on. But it really -- I just don't see where it has any big impact on customers.

PHILLIPS: But if my bank is in trouble, they could raise fees on me, right, make me pay extra for certain things that maybe I didn't have to pay for in the past?

FOX: It's true. But they may want to do that if they're not in trouble, too.

I think in general the banking system -- it's kind of interesting. If you look at sort of all the new business being done by banks right now, they're making a ton of money. And it's partly because a lot of their competition has disappeared. They're getting money at incredibly low interest rates from the federal government. And so -- and they're socking it to all of us, their customers, at higher rates with more fees and everything else.

So that seems to be the way we're planning to get out of this crisis: to basically let bank customers recapitalize the banks over the next few years by paying pretty healthy interest rates and high fees on their credit card.

PHILLIPS: Well, even looking at these stress tests and talking about these banks that are being told, "Hey, you better make more money here, because you could be in trouble," I mean, Warren Buffett saying, "Hey, it's a great time to be in banking." So is all this a bunch of hype, and nobody really should be stressed? Because as you said, the banks aren't going to be allowed to fail anyway.

FOX: I think if you're a shareholder in any of these banks, you should stress a lot.

PHILLIPS: It comes down to the shareholder?

FOX: Yes. I just don't think at this point if you're a depositor, it doesn't really matter if your deposits are in a bank that does need to raise capital or a bank that doesn't. It's just -- well, you go on.

PHILLIPS: No, no, no. I was just going to say, put it in perspective, then, the average shareholder. I mean, is this someone that, you know, could lose his or her, you know, entire nest egg? Or you know, as a shareholder...

FOX: If you're a shareholder in a bank, you've already lost 90 percent of your nest egg.

PHILLIPS: There you go.

FOX: That's already happened. So the issue now is -- I mean, there's a lot of people that have bought bank shares over the last few months, because they've gotten so cheap that they were sort of gambling on a recovery. And I guess there's all -- lots of us have some element of financial stocks left in our 401(k)s and everywhere else. But the big collapse there already happened.

PHILLIPS: Well, I like what you said about back, you know, in the '70s before the inflation and deregulation, that there was this philosophy that 363: bankers borrowed three, lent at 6 percent and hit the golf course by 3 p.m. You think that that should go back to being a permanent thing?

FOX: I mean, I said in my column in the magazine, somewhat jokingly. I do think a somewhat more boring, less adventurous banking system might be a good idea. And it's probably, clearly, what we're going to be getting for at least the next few years. I don't know if they're getting away with the golf at 3. But they are getting -- they're getting away with the other two parts of the 363.

PHILLIPS: That would be a perfect day, I've got to tell you.

FOX: Yes.

PHILLIPS: Because it doesn't get dark until 8.

Justin, thanks so much. I appreciate it.

FOX: Thanks for having me.

PHILLIPS: All right.

(BEGIN VIDEO CLIP)

TUCHMAN: Hey, officer, my name is Gary Tuchman with CNN. I want to know if you recognize this guy. We're doing a story about this guy, Robert Daniels. He was pulled over here by you a year and a half ago.

(END VIDEO CLIP)

PHILLIPS: That police officer got a check for $10,000 from the D.A. Why, you ask? Well, I'm going to get to the bottom of it with Gary Tuchman. He's all over this story from Texas, where drivers have been pulled over and forced to give up their money and their possessions to the police.

(COMMERCIAL BREAK)

PHILLIPS: License and registration, please. Oh, and how about your cash and your jewels, too? Thank you.

Well, if you're a minority and you're driving in this small Texas town, guess what CNN found out? The law just might pull you over and take your stuff. A new lawsuit claims that cops are policing ethnic drivers in Tenaha, Texas. Gary Tuchman confronted one of the accused officers.

(BEGIN VIDEOTAPE)

TUCHMAN: My name's Gary Tuchman with CNN. I want to know if you recognize this guy. We're doing a story about this guy, Roderick Daniels. He was pulled over here by you a year and a half ago, and you took his money and his jewelry. Do you recognize him?

(END VIDEOTAPE)

PHILLIPS: We'll take you back to Gary's investigation in just a second. But first to the White House. Al Sharpton, Michael Bloomberg and also Newt Gingrich meeting with the president about education.

(JOINED IN PROGRESS)

REV. AL SHARPTON, CIVIL RIGHTS ACTIVIST: ... Secretary Duncan, Vice President Biden and others came to New York that we began to talk about the need to deal with education as a civil right. We asked at that time that the president meet and we discuss this. And Mayor Bloomberg and former Speaker Gingrich and I and the secretary just had such a meeting. Mayor Antonio Villaraigosa was also invited and could not come because of meetings in Los Angeles on union negotiations.

The idea was to show two of the largest city's mayors and two that have not agreed on anything politically understand that we have a crisis of inequality in this country with education. Fifty-five years after Brown versus the Board of Education, there's still a difference in how students get up in the morning and go to school. Some are treated differently, some are funded differently, some face different principals, different teachers. There is a difference in the quality of education.

The spirit of Brown was to have equal education for all Americans. And we are committed across our political and ideological lines to that discussion. We may not agree on certain specific issues but there must be a commitment in this country for equal education for all American young people. So, we will rally around that on the 16th, and we met with the president on that today.

He knows the differences in opinions. He knows the difference in politics. But I think this president is uniquely positioned and significantly talented to bring divergent views together to say, how do we put our differences into a position where we can agree and have a consensus on how we move the envelope on equality and education. And that was the appeal today, and that's an appeal that we leave here with.

It does not mean on some specific issues we will agree, but it does mean there must be a commitment. We have agreed that we will work ongoing with Secretary Duncan to go forth in a long-term working meeting that will expand with others involved in how we get there. There will be some heated discussions. There will be some disagreements.

But there must be a commitment that in a crisis of education where in the African-American community in many cities, over 50 percent of black kids don't even get a high school diploma at a time that unskilled workers no longer exist. We must deal with this as a crisis, and we must have all hands on the deck. Accountability must be the way we get there. There can be no sacred cows when we come to the table.

I think the meeting was very candid. I think it was very upbeat in the sense that the president has hope that we can all as Americans rise to the level that he has challenged us to put aside the differences for the good of the future of the country. In the recent report that was quoted in the meeting, where America is 25th in terms of countries showing their ability academically, the nation's future's at stake. Our children are at stake. And we should be bigger than that.

And we're glad the president agreed to the meeting. We're glad we'll continue to work with Secretary Duncan, and we're glad that the participants this morning and Mayor Villaraigosa have made this commitment, and we hope others will join.

NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE OF REPRESENTATIVES: Well, let me just say that I think this is an issue that should bring all Americans together. I think that education should be the first civil right of the 21st century, and I think we have to move forward from No Child Left Behind towards helping every American get ahead, which means in a number of communities helping people who are already in their 20s and 30s. It's not just a K through 12 problem. But it's a problem of helping every American, and the reasons are practical.

In 1983, we issued "A Nation At Risk." I was a member of Congress. I went around holding town-hall meetings, and we said 26 years ago that if a foreign power did to our children what we were doing to them, we would consider it an act of war, and that our systems are so bad that literally the country was at risk.

In 2001, I helped author the Hart-Rudman Commission report which said the second greatest threat to national security is the failure of math and science education, and it is a greater threat than any conceivable conventional war. And I think this president has shown courage during the primaries when it was difficult. He stood out for charter schools. He has made clear his commitment to lifting the cap on charter schools. He has made clear his belief in accountability.

And I think as Americans, we can reach beyond Democrat and Republican, we can reach beyond liberal and conservative. And I'll just close with this thought, because I think it's very encouraging. You're about to hear from two people who have in two of our three largest cities fundamentally brought about improvement by insisting on doing practical things that work. And what I have said to Al Sharpton and others is, I'm prepared to work side by side with every American who is committed to putting children first, putting learning first and getting the job done in the next two or three years, not talking about it for 26 more years. And I think when you hear from the mayor and the secretary and realize what they have achieved, you'll realize that it's not just pie in the sky. We could literally have the finest learning in the world if we were prepared to systemically apply the things that work. Mr. Mayor?

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY, NEW YORK: Newt, thank you. Today happened to be particularly fortuitous. The State of New York released the test scores in English for how well different counties in New York are doing. And thanks to hard work by people like Merryl Tisch, the chancellor of the New York State Board of Regents; Joel Klein, who's with me today, our great schools chancellor; Ernie Logan, the head of the principals union; Randy Weingarten, the head of the teachers union; my deputy mayor, Dennis Walcott; and the 120,000 people that work for the New York City Department of Education.

What they've done, and the results came out again today, is nothing short of amazing and exactly what this country needs. We have improved the test scores in English, and we expect the same results in math in a couple weeks, every single year for seven years. We've improved the test scores for New York City students compared to New York State. We've improved the test scores for minorities, black and Latino kids, compared to white and Asian kids, who have always tested better. Seven years in a row of closing the outrageous ethnic gap in testing.

We've given out some charts to the press today. It is nothing but good news. We are going in the right direction. And the ways that you do it is, you have a accountability, which we do in our system. We hold our principals, our teachers, our students and parents all responsible. We make sure that we reward people who do better. In New York City, with the help of the teachers union, we've actually negotiated performance pay. You do a better job, you make more money. Everybody wants to help our kids, but we all want to live well, and monetary incentive seems to work very well.

We put out data. We always have the saying "In God we trust, everybody else bring data." We have a report card on every single school so the parents know how good that school is, how well it's performing, right down the line. We're doing what is right. If you want to graduate, you have to learn what you're supposed to learn to go to the next grade.

PHILLIPS: New York Mayor Michael Bloomberg side by side with former House Speaker Newt Gingrich, also Al Sharpton, civil rights leader, talking education with the president. We'll follow it. We're going to take a quick break. We'll be right back.

(COMMERCIAL BREAK)

PHILLIPS: License and registration, please, and how about your cash and jewels, too? Well, if you're a minority, and you're driving in this small Texas town, guess what CNN found out? The law may just pull you over and take your stuff. A new lawsuit claims that cops are policing ethnic drivers in Tenaha, Texas.

CNN's Gary Tuchman confronted one of the accused officers.

(BEGIN VIDEO CLIP)

TUCHMAN: My name's Gary Tuchman with CNN. I want to know if you recognize this guy. We're doing a story about this guy, Roderick Daniels. He was pulled over here by you a year and a half ago, and you took his money and his jewelry. Do you recognize him?

(END VIDEO CLIP)

PHILLIPS: All right, well, the cop won't talk. So, what about the local D.A. who's written some pretty questionable checks lately? Well, Gary didn't find her in court or in her office.

Yes, that's her, Shelby County District Attorney Linda Russell. She's singing, but she's not talking either. So, let's talk to Gary Tuchman instead. Gary, what's up with singing D.A.? Did you get anything out of her?

TUCHMAN: Well, the thing was, Kyra, there are such serious allegations in this case, we really had to go and make the extra effort to talk to the parties involved. And we stopped by her office a couple of times and made a lot of phone calls. She never returned our calls.

When we would go to her office, we were told she wasn't there. And we said, when is she coming back? They said, tomorrow. We came back the next day. She's not there. I said why? She's not in. I said, is she on vacation or is she just not in? And they said, it's none of your business. And I said, well, it is our business because she's paid by taxpayers, to be honest with you. But they wouldn't tell us anything more.

But then we found out that she performs annually at this fire department charity fundraiser, and she's a country singer, and needless to say, she was surprised to see us when we got there. But we felt it important to ask her. But she wouldn't say a word to us, Kyra.

We asked her about these allegations of pulling people, mostly African-Americans and Latinos, over on the highway and then making them a deal, saying what they do is they pull people over for, like, speeding for example. One man we talked to was going 37 in a 35. And then they asked him, do you have money with you? And some of the people bring money because they're going to buy cars, for example, or there are casinos nearby in Shreveport, Louisiana, which is only 30 minutes away. So, people do carry large sums of money.

The allegation is, once the police find out you have a large sum of money, they arrest you for money laundering. And they bring you to jail. The D.A. often shows up, and a deal is made. They say, we will not press charges against you, but you must leave your money and perhaps your jewelry and sometimes your cars and leave it with us. And that's the deal that's made.

Well, that's against the law, according to this class action lawsuit that's been filed on behalf of some 150 drivers. And like I said, all of those 150 drivers are African-Americans or Latinos.

PHILLIPS: So, Gary -- well, exactly. You're saying that they're allegedly stopping minorities and taking them for money and cash. And if we could just look at that police officer that you confronted once again, Officer Washington, this kind of threw us for a loop and a twist because he's black.

So, that was one interesting side to this. But also, too, you also uncovered a $10,000 check that was written to him directly from the D.A. Have you been able to find out any -- you know, what the deal is with the cash?

TUCHMAN: Well, that's an important part of the story, Kyra, that forfeiture laws are legal. If you pull someone over and they're a criminal, you can take their money and drugs and valuables. The idea is, you don't want criminals to profit from their crime. But if you do obtain it legally, you have to spend it legally.

And the law in the state of Texas is that you can take that money that you get from convicted criminals, and you can use it for law- enforcement purposes or official purposes. But we found we got hundreds of checks the district attorney has written from her forfeiture account. It's the account just with forfeited money. And many of the checks are clearly for official purposes, but others are for charities that she likes, for churches that she likes, for candy and Halloween costumes for parties. Ad one check, like you said, a $10,000 check written to that officer for what is stated as investigative purposes.

The people we talked to, the class-action lawyers and others, say that is highly irregular to write a personal check of such a large amount to the officer. And that's why we wanted to talk to the officer, talk to the district attorney. They wouldn't talk to us. But the lawyer for the district attorney -- and this is very important -- says that she's followed all laws in the state of Texas and the United States and hasn't violated any laws.

PHILLIPS: Well, you bring up a good point, because coming up next hour, we're going to talk to the senator who's working to change that law. We're going to update our viewers on that, just pushing forward on your investigation. And I know, Gary, that our viewers can see more coming up at 10:00 p.m. on "AC360". Great job, Gary. Thanks so much.

TUCHMAN: Thanks, Kyra.

PHILLIPS: Well, breaking medical news this hour. You may be using a substance that could harm your children. We'll tell you about it.

(COMMERCIAL BREAK) PHILLIPS: We're finding out that you may be using a substance that could harm your children. Usually every Thursday is "Empowered Patient" day, but you've got breaking news this afternoon.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: That's right, I do. There's a substance called testosterone gel that more than a million men and women use. What's been happening is that in more than eight cases, parents are using this, and then they come in contact with their little children. We're talking kids less than 5 years old. The kids then get high testosterone in their blood. The kids get enlarged genitals, they become aggressive, they develop pubic hair.

This is obviously not something -- here are the products right here -- not something you want to have happen to your little child under the age of 5. So, it's a very simple solution. If you use these testosterone gels, what you need to do is wash your hands before you touch anyone else. And also, it's rubbed on the upper part of the body, like your shoulders. Before you pick up your child and hug them, make sure the product has dried.

PHILLIPS: All right, now tell us about this week's "Empowered Patient" column.

COHEN: This week's "Empowered Patient" is more questions on swine flu because people have questions. CNNhealth.com, it's all there.

PHILLIPS: Elizabeth, thanks.

COHEN: Thanks.

PHILLIPS: Well, we're just getting started in the CNN NEWSROOM. A fatal shooting, a worried campus and community, and police now hunting down a gunman who apparently has people of the Jewish faith in the crosshairs.

Plus, I'm paying for that? Well, you might yell that at your TV screen when you hear where your tax dollars are going. For example, does the Education Department really need a man in Paris?

Also, straight ahead, pregnant, in prison, and the subject of an uproar that's getting louder. We're going to take you behind the bars of a prison in Laos.

(COMMERCIAL BREAK)

PHILLIPS: Southeast Asian prison not an ideal place for anybody, especially not a 20-year-old British woman who's five months' pregnant. In a case that's causing a global uproar, Samantha Orobator has been in jail in Laos since early August for alleged heroin possession. Today, there's word of a possible deal between British and Laotian officials. It would transfer her to a British jail to serve her sentence if she's convicted. The drug charge can carry the death penalty in Laos, but authorities say their criminal code forbids them from executing pregnant women. Most of us don't know what it's like to be locked up in a foreign prison, but some Westerners do, and it's not pretty. Our Phil Black found out firsthand with this exclusive interview with a former prisoner.

(BEGIN VIDEOTAPE)

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT (voice-over): Kay Danes knows what it means to be an inmate at Ponthong Prison in Laos.

KAY DANES, FORMER PRISONER IN LAOS: I was beaten. I was threatened with mock executions. I had a pistol hit in the back of my head.

BLACK: She and her husband, Kerry (ph), were working in the country as private security consultants, when in late 2000 they were accused of embezzlement, fraud and tax evasion, charges they strongly denied. Both were held in Ponthong for ten months while the Australian government negotiated their release. Kay says they were both treated brutally, but her husband especially so.

DANES: They handcuffed him from behind, and then I had to watch, along with everyone else, as they beat him for about four hours with a steel tire brace. They poured dirty fish water down his throat.

BLACK: Kay has written a book about their experiences there. She says she still have contacts in the country who smuggled out these photos of Ponthong in 2007. And she says those contacts have been updating her on the condition of Samantha Orobator, the 20-year-old British woman now being held there, accused of trafficking heroin.

DANES: This is the cellblock that I was detained in, and then there's one, two, three, four, five cells at the front and five at the back. And she's in the third cell right here.

BLACK: Kay says this is just one example of how some prisoners are mistreated. This man's feet are locked up in wooden stocks. She says everyone sleeps at least six to a cell on timber floors with no bedding. The food is scarce and poor, and there are no medical facilities. Samantha Orobator must cope with all this while also being pregnant.

DANES: It was terrifying for me to be in there as a woman who was not pregnant. But to be in there with a pregnancy involved, I mean, I couldn't imagine how terrified she must be.

BLACK (on camera): The Lao government said it will not seek the death penalty for Samantha Orobator because she's pregnant, but Kay Danes said that may cause interest in her case to fade. And she believes that pressure is essential to ensuring the 20-year-old one day escapes the terrible conditions she is enduring.

(voice-over): Kay and Kerry (ph) Danes are still dealing with their experiences in Ponthong Prison. They hope Samantha Orobator will soon be able to begin the process of putting her prison experiences behind her. Phil Black, CNN, Brisbane, Australia.

(END VIDEOTAPE)

PHILLIPS; Well, she knew him, and she complained about him. New details emerging in the fatal shooting of a Wesleyan University student. Connecticut police say the victim and the suspected gunman had a history. They're also warning, he may have more targets.

Let's get the latest now from our Susan Candiotti. She's in Middleton, Connecticut -- Susan.

CANDIOTTI (via telephone): Hi, Kyra.

It's really an unusual situation on campus because there are no classes today as they prepare for exams. And the university has asked all students and campus employees to stay inside. Even the mayor of Middletown, Connecticut, has put the town of 48,000 people on notice that they should be on alert and be very careful because they don't know where this suspect is.

The suspect's name is Steven Morgan (ph), age 29. Police say they have found journals containing -- that belong to him in which he allegedly made threats, either against Wesleyan students or specifically against its Jewish students, of which they have a fairly large student population. Now, Steven Morgan (ph), his motel room and his car have already been searched by authorities. It turns out that he and the victim here, her name is Johanna Justin Yinnick (ph), attended a class together in the summer of 2007 at NYU, New York University.

And that July, according to police, she contacted campus authorities, who in turn contacted New York City police. She was complaining that Morgan (ph) had sent her threatening e-mails and had made scary phone calls to her. She filed a report but then declined to prosecute after she filed that report with the police department. So, for now, authorities have a full-scale alert and manhunt on for this Steven Morgan (ph), trying to find out where he is.

PHILLIPS: We'll stay on top of the story as well. Susan Candiotti, appreciate it.