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Oil Reaches Alabama Beaches; Israeli Prime Minister Defends Naval Attack; Close-Up View of Cleanup in Gulf; You May Be Investing in BP; Stockton Showdown: Police Department Fights Cuts in California; The Orchestrion Project

Aired June 02, 2010 - 13:00   ET

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

T.J. HARRIS, CNN ANCHOR: All right. That does it for me in the CNN NEWSROOM. Time for me to hand it off to my good friend, Ali V. And take it away.

ALI VELSHI, HOST: T.J., good to see you, my friend. Thank you very much. You have a great afternoon.

As T.J. said, I'm Ali Velshi. I'll be with you for the next two hours today and every weekday, taking every important topic that we cover and trying to get it a step further. I'm going to try and give you a level of detail that will help you put your world into context.

Let's get started right now. It's all about the oil again. Day 44 of the disaster in the gulf. That oil well is not capped. The latest attempt to cap it has hit a snag.

Plus, something really, really nasty washing up on the Gulf Coast beaches. We'll take you there.

Also, waiting to hear from Israeli Prime Minister Benjamin Netanyahu for the first time any minute now. His country's deadly ocean raid has set the world on edge. What will he say? We will bring you that live.

And you won't even think of a one-man band the same way again. It's a new evolution in music. You have never seen it played like this.

Let's take you to our top story. Let's take you to the Gulf of Mexico. There is oil washing up on Dauphin Beach in Alabama. Let me just bring you up to speed, if you haven't been following this in as great -- as much detail as we have, as to what is happening right now.

First of all, cut and cap is the word that we're using now for -- for the effort in place. It's the effort to put in what is called an LMRP, a lower marine riser cap. And that's what it is. This is the -- this is the thing at the bottom of the ocean. That's the bent pipe. And what we're doing is cutting that thing off, cutting that bent pipe off. More oil will come out. And then lowering a cap onto it to seal some or all of that oil.

At the top of that cap you see a pipe that goes to the surface. That takes the oil to a vessel that is on the surface. That is what they are trying to do right now.

In the meantime, they are trying to saw off the top of that riser. And that has hit a snag. As you can see here, it's very hard to see, but in sawing, the diamond-edged saw has -- has become stuck. And they're going to try and get that loosened up.

I won't give you too much detail on this, but listen to national incident commander Thad Allen of the Coast Guard explain what has happened and what they're going to do about it. Listen to this.

(BEGIN VIDEO CLIP)

ADMIRAL THAD ALLEN, COAST GUARD: Over the night we were successfully able to do a shear cut of the marine riser pipe. That is that 5,000 feet of pipe that's crumpled on the ocean floor that used to connect the well head to the mobile drilling unit.

We are in the process right now of trying to do the second fine cut with a diamond wire saw. That saw blade has become stuck inside the riser pipe. They're working to move the riser pipe to set it free. Anybody that's ever used a saw knows every once in a while it will bind up. That's kind of what's happening there.

(END VIDEO CLIP)

VELSHI: We'll give you -- for those of you interested, and I know many of you are, in the detail of that, we'll bring you a little bit more detail about what they're doing to get that -- that saw unstuck.

But that's -- that's only part of the story. That oil continues to get closer and closer to land. You know, in many cases it's already made landfall, but in one case we've been watching Dauphin Island, Alabama, very carefully. And it's started. It's a gooey, gucky mess.

John Zarrella is on Dauphin Island, and he's been showing to us, but it's come onshore, John.

JOHN ZARRELLA, CNN CORRESPONDENT: Yes, there's no question about it. It was first found here onshore yesterday afternoon. And in fact, our APJ, Patrick Ochman (ph), shot some video of what we saw here yesterday. And you can see really, it's -- in many cases, Ali, it's like brown, melted chocolate that some of it looks like patties, some of it looks a couple of inches long, a couple of inches wide. Some of it the size of silver dollars, half dollars.

It's interesting though, you know, earlier today, Ali, in the morning at first light I walked the beach again, and you could see some fairly significant size chunks, significant maybe several inches long and wide.

Later this morning, now, we had a big rainstorm here. A lot of thunderstorms, activity. Later this afternoon now, walking out there, you don't see quite as much. It's either broken up or it's a lot smaller pieces that are out there. And I'm going to bring in Commander Natalie Allen [SIC]. And Natalie -- Natalie Murphy. Natalie, let me ask you, what's the process now that you folks are going to do to clean up the beach?

LT. CMDR. NATALIE MURPHY, U.S. COAST GUARD: We have crews actively looking and walking the shoreline each day, looking for the tar ball or the sheen and oil. And when they discover it they're marking it by GPS in location. They're describing it and taking photos of it.

And our clean-up crews come immediately behind them. They clean it up. Right now with the tar bars, it will be with rakes and shovels, and put it in bags to properly dispose it. And we're getting that done rather quickly.

ZARRELLA: And so at this point, though, you have no idea how much really is out there until you collect it.

MURPHY: Right. We have increased our surveillance by air and by water. We have numerous boats offshore looking, purely seeking -- seeking the oil so we can take care of it in the offshore environment before it reaches the region.

ZARRELLA: And you have, in fact, found some offshore that you've taken care of, correct? And that would be in your area of responsibility: Florida, Mississippi, and Alabama?

MURPHY: Yes, yesterday alone we were able to recover 50 barrels of oil that was separated -- the water was separated out of it. So it was 50 barrels of oil, and then closer to shore it was 10,000 gallons of an oil/water mix that was taken out yesterday.

ZARRELLA: And -- but as far as today, those numbers obviously you don't have any numbers. You really don't have any indication of where the oil is at this point? Your surveillance is out there?

MURPHY: Our surveillance is out there. Our crews leave early in the morning to get out there and continue to report later in the day. So once we have those reports later in the day we'll be able to give you those updated numbers.

But again, our crews are out there. We're working well as a unified team. There are thousands of people across the Gulf Coast working to keep as much off the shores as we can.

ZARRELLA: And very quickly, I know I saw that a lot of boom in trucks. Is that boom going to be used on sections of this island?

MURPHY: The boom is coming back, and it's being deployed into the waters as we speak. And again, that's part of our area contingency plan, the preplanned effort to keep the water -- excuse me, the oil off the shore.

ZARRELLA: Commander Murphy, thank you so very much for joining us.

And Ali -- Ali, you can see that's where we are here today. The clean-up has begun on Dauphin Island.

VELSHI: All right, John. We'll get back to you a little later in the show. John Zarrella on Dauphin Island.

Let's go to Jerusalem right now, listening to Prime Minister Benjamin Netanyahu of Israel.

(JOINED IN PROGRESS)

BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL: ... need to make clear that rockets and missiles that Iran smuggles into Gaza are meant to attack the cities, the towns that are close to the Gaza Strip. Remember that I have warned on this, but they did not take my warnings seriously. But I am telling you today again that the rockets and missiles that Iran has smuggled into Gaza are now likely to hit areas surrounding Tel Aviv, Herzliya, Jerusalem. And some of those are already in Gaza.

Therefore, it is our duty and our responsibility, according to the international law and according to the logic, common sense, to prevent by air, sea, and land smuggling of weapons into Gaza. This commitment, this duty was understood by the former government, which imposed the blockade on the Gaza Strip that was meant to prevent smuggling weapons into Gaza.

The target of the latest flotilla was to break through this blockade into Gaza. The target was not to bring in assistance, because we do send assistance to the Gaza Strip. But the target was to break through this or penetrate this blockade. Had this blockade been penetrated or broken, there would have been dozens and even hundreds of ships. The amount of war material, weapons that can be smuggled on ships is a lot more than what could be smuggled through the tunnels. They could have -- they can bring hundreds of rockets and hundreds of missiles.

We have already stopped two ships. One of them was Franco (ph), which we stopped in the middle of the sea, where there were hundreds of tons of ammunition and weapons that Iran sent to Gaza.

And the other ship, Carrie Nay (ph), and I presume you all remember that was also sent by Iran to Gaza. Therefore, our duty is to check and to intercept every ship that is coming into Gaza, to take all weapons out, and then move the aid to Gaza.

I want to make clear to the citizens of Israel and to the citizens of the world what would be the meaning if we don't do it. The outcome would be a regime of Iran in Gaza, only a few kilometers away from Jerusalem. This is a destructive repercussion (ph) of a scenario like this, and this is a very immediate, existential threat to Israel.

And I'm telling you, and I'm telling my friends in the countries that criticize us that an Iranian port in the Mediterranean will cause an immediate danger to the country -- to the European countries and to other countries. Therefore, we will stop and check and examine every ship that is coming to Gaza. This is what we did. We wanted to take the ship to the Terstod (ph) port and, after the security check, to hand over the aid to Gaza. And, by the way, Egypt offered a similar proposal. But unluckily -- unluckily for all of us, the organizers of the flotilla refused or rejected our offer, and we were left with no other choice but to board those ships.

On five of the ships everything went on smoothly with relative calm. There were no special events or clashes. But on the sixth ship, we faced something totally different. Our soldiers were encountered with a group of extremists that supported terror organizations and today is supporting the Hamas terror group. That was not a ship. That was not a love boat. That was a boat of hatred. It was not a peaceful flotilla. It was a flotilla of terror supporters.

The soldiers who boarded the ships were attacked by clubs, batons and knives. They were thrown out of the ship. They had their weapons kidnapped from them and shot at them -- were used to shoot at them. They were -- I heard from some of the sources that the passengers were about to kill -- shoot and kill them. There was a lynch against our soldiers.

I want to ask, are these peace activists? Are these pacifist activists or peace lovers? These are extremist supporters of terror and violence.

I have to make clear that the idea of soldiers protected their lives bravely and also -- and I'm very proud of what they did. And I would ask myself what would soldiers of other countries do? Not in the third world but even in countries, in democracy countries, what would they have done? They, in the best-case scenario, they would have done the same thing that we did. And I would think that they would do something in special circumstances that would do a lot more than what we did.

Of course, we are sorry for the loss of lives, but our soldiers were also facing a life-threatening situation.

I forward my questions to the international community. And I asked all of the leaders throughout the world whom I spoke to what would you have done if you were in our place? And what would you have done in order to protect your civilians, who are attacked by hundreds of rockets and missiles?

We all know the facts. We all know the reality. And, therefore, we will continue to protect our civilians. We will continue to allow our soldiers to protect their lives. And the state of Israel will continue to practice for civil defense.

Our first obligation is the obligation of maintaining security for the people of Israel, for the children of Israel. Security is above all. And in this context, it is important that all of us should be united, because it touches our souls and our lives.

(END OF COVERAGE) VELSHI: All right. You were just listening to Israeli Prime Minister Benjamin Netanyahu through a translator, describing his very version of what happened yesterday to -- or on Monday with that flotilla in -- in the Mediterranean.

He said that the boat that was boarded had extremists on it who were supporting terror organizations. He didn't explain what those were, but the translators words. I'm not sure he was delivering the speech in Hebrew. I'm not sure this is a direct translation.

He said this was not the love boat. They were sorry for the loss of lives but that the soldiers were facing a life-threatening situation. He didn't explain that life-threatening situation, as to why they didn't use other means to stop that flotilla, to blockade that flotilla if they didn't want to it go further or felt it had terrorists or terrorist material on the boat. But he did say that their soldiers were facing a life-threatening situation, faced with no other choice than to -- than to do what they were doing. We'll bring you more on that through the course of this show.

Back to the oil spill for a moment. Dabbing at each blade at grass. That's what this clean-up has come down to in Louisiana's marsh land. We're tagging alone, as small crews try out -- try to get the oil out of the marsh land. I'll bring you that right after this.

(COMMERCIAL BREAK)

VELSHI: One thing about this oil spill is when it gets on the coast, it's not like a hurricane that sort of hits a place and then everything follows. In some places there's a sheen. In some places there are tar balls. In other places like John Zarrella was describing to us, there are these little gooey bits of, you know, something that looks like soft chocolate. In other places there are marshlands, particularly in Louisiana. There are wetlands and marshlands and the estuaries. And BP is paying crews to try and clean up what's on the coast.

Imagine if you were sent to a marsh to try and clean it up of the oil that's there. It looks like an impossible task. Yet Gary Tuchman got a look at the efforts of a very small crew, seemingly overwhelmed and over matched by the big job. Take a look.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): We travel via air boat through the swampy, grassy waters just off the coast of Louisiana to see some of the 20,000-plus people BP has hired to protect and clean up the oily coastlines. And we run into these three men doing what appears to be an incredibly thankless task.

This Coast Guard petty officer describes it well.

PETTY OFFICER NYXOLYNO CANGEMI, U.S. COAST GUARD: We have cleanup crews that are actually wiping down the grass with absorbent pads. TUCHMAN: That's right. People being hired by BP are wiping down blades of grass. They're also replacing oil soaked, and therefore ineffective, booms. But given the number of workers we see and a handful of boats versus the overwhelming amount of oil coming ashore, it all looks like an impossible task.

(on camera) Really making a difference with these guys. They're working hard, but it's such a small area and there's not that many of these guys doing this.

CANGEMI: Well, try and bring out as many people as we can. And we're working as hard as they can to do as much as they can.

TUCHMAN: I don't doubt they're industrious, but it seems like you need hundreds of people here and not 40 people in this area, whatever we're seeing.

CANGEMI: Right. It's a bit of a challenge to get as many people as you can. And you have to balance it out with the needs of other areas.

TUCHMAN: This work is backbreaking. It's also heartbreaking. Because most of the men and women hired by BP to do this work have spent their lives in this water. They rely on it for their recreation. They rely on it to make a living.

(voice-over) I wanted to ask them about their work, but we're told to get these jobs from BP, they have to agree not to talk to reporters. Terry Lapeyouse isn't working for BP. He talked to us at his general store in town.

TERRY LAPEYROUSE, COCODRIE, LOUISIANA, RESIDENT: I'll be 76 in September.

TUCHMAN (on camera): How many years have you lived here?

LAPEYROUSE: All my life.

TUCHMAN (voice-over): He knows many of the workers, and he knows the water.

(on camera) They lay down on their stomachs. They pick up the dirty boom. They put it in bags. Then they lay out the clean boom. They scrub the grasses with the booms to get the oil off. Do you think that's accomplishing anything?

LAPEYROUSE: A little bit but there's so much of it out there that it's just next morning it will be back, you know, on the grass like it is right now.

TUCHMAN (voice-over): The workers' intentions are noble, but as long as the leak continues, the teams we saw will be outmanned by the oil that relentlessly washes ashore.

(END VIDEOTAPE)

VELSHI: Gary joins us now by telephone.

Gary, I mean, you asked all the questions in your package. I don't know if there's more we can say about this, except to say it seems remarkable. I mean, this can't possibly be the solution to cleaning up the oil from those marshes, to have small groups of people putting, you know, absorbent material and wiping the grass. I mean, that just seems remarkable.

TUCHMAN (via phone): Well, I'll tell you what's interesting, Ali. These men and women are told under the conditions of their employment of BP they can't talk to the news media. Obviously, guys like you and me don't like it very much because we're trying to get the story.

However, a couple of them talked to me, you know, not for attribution, you know, casually. And they said, "Listen, we know that we're to not going to change the course of whether this oil comes on to land here in Louisiana; however, we can't just do any -- we can't just do nothing. This is our land."

But what it reminded me of, Ali, is like if you would take a small bucket and go out to your swimming pool and try to empty your swimming pool of water with a small bucket while it was pouring rain the whole time. I mean, it's a task that can't be done.

So these guys are doing good and meaning good. Whether they accomplish anything, the only way they could is if, for some miraculous -- for some miraculous reason, the oil leak stopped.

VELSHI: Yes.

TUCHMAN: And then they were able to stop it from coming. But as long as the oil leak is still coming, there's not much they can do.

VELSHI: Let me ask you this, Gary. You asked, you know, whether there should be more people involved. Is this a task for more people? In which case, that's a legitimate discussion as to whether BP should be having 10 or 20 times as many people.

Or is this -- is this just not a human task? Is there -- should there be some sort of technology? Is there some sort of technology, chemicals or machinery that can do this? I mean, are we really going to have to scrub plants and blades of grass?

TUCHMAN: Right. I mean, one thing to keep in mind: this is one particular area. And this is a huge area. And in some places there are more people. But in most other places there are far fewer people. So you have ten human beings stop this oil from marching onto the land? Not if the oil keeps coming at the pace it's coming at.

Is there technology that can do the job? Perhaps. But either way, if there was, we figure it would be out there by now, Ali.

VELSHI: Gary, great job out there. Thanks very much, as always. Gary Tuchman in the Gulf of Mexico for us, in Louisiana, in those marshes where there's so much devastation. CNN is your destination for complete coverage on the oil spill. We are covering every single angle. The people who are affected, their jobs, their businesses, the health concerns, the environmental concerns and that oil spill, and the business concerns. We've got correspondents spread throughout the region. Stay with CNN for all the latest on efforts to stop the spill and to clean up the oil.

And send me your questions on Facebook and Twitter. Let me know what you don't think we're giving you and what more information you need to hear, and we'll bring it to you.

Here's something you might not know. You might be investing in BP, believe it or not. We're going to check out your 401(k) to see if you are a BP investor, after the break.

(COMMERCIAL BREAK)

VELSHI: Frustration among Americans at BP and the speed at which this clean-up is going and the ability to cap that well is growing. Lots of people are mad about it. They don't want anything to do with BP. Some people are boycotting BP gas stations. Not sure that's the wisest thing, given that many of those gas stations are owned by people in your own communities and has very little affect on BP. But that's a choice people make.

You might even be an owner of BP, believe it or not. BP is one of the biggest companies in the world. All the big oil companies are.

Christine Romans joins me from New York to explain how much this -- this BP stock sort of permeates everything we do in the investment world -- Christine.

CHRISTINE ROMANS, CNN ANCHOR: Well, you look at Vanguard as one of the mutual fund companies. Vanguard is one of the biggest institutional holders of BP shares, Ali. So if you have Vanguard mutual funds either in a taxable account or in your 401(k) or in your retirement, you very likely have exposure to BP shares.

There's a T. Rowe Price and T. Rowe Price funds that also have exposure to BP shares. Look at this list: Windsor II from Vanguard; the specialized-energy fund from Vanguard; the Wellington fund; Fidelity's diversified international fund; the T. Rowe Price equity income fund.

Equity income, you see that little part right there? That's because this is a company that spits off an awful lot of what's called a dividend every year. You own this stock, and the company gives you cash at the end of the year for just simply being a shareholder. Almost $10 billion in cash is distributed to the shareholders. So that's why you see it in a lot of these funds that are meant to get something back, some kind of a return for investors.

And it's also why, I presume, one of the biggest other holders of BP shares is the Bill and Melinda Gates Foundation, believe it or not. And they're not commenting specifically on this stock holding, but if you look at their SEC filings, you can see that they are a big holder of it. They say it's in their trust.

VELSHI: Right.

ROMANS: And there are other charities who have it, as well, because it does pay a dividend every year.

VELSHI: A couple of issues here. You may -- you may own that stock. That may make you uncomfortable. But the other thing is that you may not be able to -- I mean, this stock has really taken a pummeling since this whole thing started.

ROMANS: Sure.

VELSHI: So if you are an owner, you'll have seen that effect, and it will have hurt you, as well.

It's not just BP the brand, by the way. We talked about the gas stations. This -- this company is associated with a lot of different brands.

ROMANS: It really is. And pretty much everything that has to do with gasoline, this company has a -- has a brand that goes with it. Castrol motor oil. The Wild Bean Cafe has a company that makes the sandwiches that are sold in the convenience stores like AM/PM and the like.

It has a lot of different brands, and it operates around the world, Ali. I mean, this is a very big company that is essentially, like all big oil companies, a cash machine.

VELSHI: Right.

ROMANS: It has $27 billion of free cash flow. What does that mean? It means it has cash coming in and going out in huge quantities every day. It has $7 billion in the bank. And it made $14 billion last year. It has -- it has deep pockets. There's no question about it.

VELSHI: By the way, I know you're going to get it on Facebook. I get it all the time, people saying, "I'm not buying anything from BP anymore." Why is that not as clear cut as it appears to be? I mean, these are not your -- your BP -- your local BP gas stations may have nothing to do with BP, other than they give them a franchise fee; they buy their oil from BP.

ROMANS: Well, that's the thing about franchises, too. You hear this sometimes in the anti-globalization riots and the like when people look at a McDonald's, for example, and they realize that that McDonald's is simply a franchise. You know?

It's the same thing with BP. In some cases, Ali, and I think you reported this, as well. Some cases, BP gas stations are selling gasoline that could be a whole bunch of different kinds of gasoline.

VELSHI: Right. ROMANS: Not necessarily something that came out of a BP facility. So it's all a little more complicated -- a little more complicated than that. Also...

VELSHI: But then other people -- other people, you know, boycott. They want to boycott the state of Arizona because of immigration laws. That also hurts people that have nothing to do with -- with the immigration laws in Arizona, but it has the affect of putting pressure on people.

So it's hard to know what you should do when it comes to boycotting. But I think people should at least know that it's not just -- you're not boycotting corporate BP, necessarily, by not buying your gas from the BP station.

ROMANS: No. And the one thing that I've been hearing a lot from people is they -- you know, some people who are rooting for BP to fail. They're so angry about what's happening. And then other people who are saying, "Wow, at $37 a share, it's down so much, should I be buying BP shares?"

VELSHI: Yes.

ROMANS: There's this funny -- there's this funny thing about how people want to play this all.

But the bottom line here is that this is a very big company. And everything about the way we live our lives is geared toward sucking -- putting straws in the ground and sucking the oil out. And it's not really geared to try to get -- keep the oil in there.

VELSHI: That's right. That's right.

ROMANS: And I think that the bigger discussion needs to be what does this -- is this some sort of a game changer about how Americans feel about their addiction to oil? And that's -- that's a discussion that I think that has only just begun.

VELSHI: Yes. We've become very good at getting the oil out of the ground, and we have not developed the same science about keeping it in there.

Christine, great to see you, as always. You can watch Christine and me everyday here on this show, and you can watch us Saturdays at 1:00 p.m. Eastern and Sundays at 3:00 p.m. Eastern. We have a particularly big show for you this weekend because new employment numbers will be out.

All right. When we come back, we will talk to Chad. The Atlantic hurricane season has started. It's going to be a busy one. We're going to look at what the raging winds and churning waters could do if there's still oil in the Gulf of Mexico. Wow. You think the damage is bad now. There's a hurricane, it's going to be worse.

(COMMERCIAL BREAK) VELSHI: All right. It may just sound like a date to you. But June 1 is when the hurricane season began, and NOAA and the Coast Guard are taking this very seriously, in part because the forecast for this year is higher than normal in terms of the number of hurricanes. Boy, with that oil in the Gulf of Mexico and hurricanes, this could be a bad thing.

CHAD MYERS, AMS METEROLOGIST: El Nino that killed last year's season is gone.

VELSHI: Right. So, last year was supposed to be a bad year, and then it didn't happen.

MYERS: Correct. Correct. Because the forecasts made in June didn't see El Nino coming yet.

VELSHI: I see.

MYERS: By the time hurricane season was in full bloom we knew it was not going to happen. The numbers this year are indicated because the whole system now, El Nino being gone and all of the water in the Gulf of Mexico being warm, basically all the Atlantic being warm.

Dr. Gray (ph) from Colorado State, and I know you think why would Colorado State make a hurricane forecast? They're in Colorado.

VELSHI: Right.

MYERS: But they do it every year, great job. They have new numbers just out today. His forecast, Dr. Greg (ph) (INAUDIBLE) has 18 hurricanes, 10 -- or 18 named storms, 10 hurricanes. Most important thing, five major hurricanes and a 76 percent chance that one of those major hurricanes hits the U.S.

VELSHI: Okay.

MYERS: That's a big number.

VELSHI: So, this is the NOAA range. This is the Colorado range. They're the same. They fit.

MYERS: They fall right down the middle of the line. They use different parameters but they fall down the middle of the line. Above normal, that's all you need to know.

VELSHI: OK. You did say one of the issues is that June, the beginning of June is a little tough to forecast.

MYERS: It is. Because other things can develop, like La Nina. If that really gets in full bloom, these numbers could go up. Let's hope not, because that's high enough.

VELSHI: But this is the information we have right now. Two different sources telling us it could be a bad year.

MYERS: Confirming, basically. They are concurring. What is that movie, "I should have concurred"?

VELSHI: Yes.

(LAUGHTER)

VELSHI: (COUGHS) Thank you. All right. We'll check in with you a little later on.

Listen, one of the things we want to talk about as well is that we're headed back to the Gulf. Five thousand feet down. We're going to show you nuts and bolts. BP's attempt to cut and cap this well. Not much cutting happening now. But I'll tell you what this is all about.

(COMMERCIAL BREAK)

VELSHI: All right. The saw is stuck. It's Day 44 of the oil spill.

Let me show you that video of what it looks like under the water right now. That's a clamp, so you can't really see it. I don't think that's moving at the moment.

But let me explain to you what's happening. The effort right now is something called "cut and cap." Basically, what they're trying to do is cut off the top of the riser where that oil you've been seeing leaking has been leaking for so long and replace it with a cap, with a pipe that goes up to the surface to try and collect all that oil.

This is not an effort, by the way, to stop the oil from leaking from the well. That BP for now has given up on. They're going to deal with that with the relief well. This is an effort to try and cap this -- to cap this leak.

Now, let me show you what BP is using to do this underwater. This is 5,000 feet under water. A mile under water. People can't go that far down. We can't deal with the pressure. It's all being done by remote-operated vehicles. First of all, there's a diamond saw. You can just sort of see it. That's a sense of scale. That's obviously above ground. But it's a saw with industrial diamonds on it that are going to -- it's going to cut off the lid, the cap of this oil well that's leaking.

Then you've got shears. Now, these shears -- you just saw that in the last live picture that we had. These shears are going to make the initial clip in the pipe. The pipe when that Deepwater Horizon sank, the pipe bent. They've got to clear it off so they can put the new pipe in. And then they're going to install this cap.

Let me show you this last thing. This is the cap that they're going to install. You can also see a sense of scale here because on two sides you see the yellow things, those are people, those are men. This is the size of the cap. You can see on top of it that's where the oil will go up into and connect to a vessel on top of the sea that'll collect the oil. That is the process they are trying to undergo right now. Now, that's part of what's going on right now. The other issue is that oil -- I don't know how to describe them -- globs of oil are now coming onshore in different places.

We knew we had oil coming on shore in parts of the Gulf of Mexico. Now on the sort of more east of where we saw the oil there are globs of oil. In places like Dauphin Island, Alabama. It's also reached the Barrier Islands off of Pascagoula, Mississippi.

The sheen of oil, which you can see, is now nine miles off the coast of Pensacola, Florida. Florida Governor Charlie Crist warns it could hit the Panhandle in a day or two. We have a lot of people saying this, oh, this is not going toward Florida, it's not going to hit Florida. Well, it looks like it's going toward Florida.

There's a map to show you that the part that you're looking at on the map -- that's not the oil slick, that's the part of Gulf of Mexico that is now off limits to fishing. 31 percent of the Gulf of Mexico is off limits to fishing right now.

All right. We'll get back to the oil spill later in the show. We're going to stay on top of this very, very closely. I want to take you to what we're going to talk about in a minute in our Crime and Consequence segment that we do every day.

Billboards have gone up around a California city, slamming its public safety and priorities. Well, who put them up? The city's police department did. It's the focus of today's Crime and Consequence segment, next.

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VELSHI: A different kind of Crime and Consequence today. We're looking at police versus city hall. The scene is the city of Stockton, in northern California. It's the home of the second highest violent crime rate in the United States, in large cities. Over the past decade Stockton has been named both an all-America city and one of the America's most miserable cities by "Forbes."

Two of Stockton's biggest issues -- crime and cash flow, like in many cities around America, have finally collided. The central problem is a projected $23 million general fund shortfall causing the city to declare a fiscal emergency last week. Now, the city's proposal to address it, layoff 53 police officers, cut some police services. The deadline for a balanced budget is June 30th. That's tend of the fiscal year.

Now the aggressive police response has been a very in-your-face ad campaign. Blood spattered billboards with messages like "We can no longer guarantee your safety," or, "Welcome to the second most dangerous city in California." Or, "The murder rate is up, current body count, 24." And finally, "Stop laying off cops."

Let's have a conversation with some people who are right in the middle of this. Stockton Mayor Ann Johnson joins us via Skype from Stockton. Steve Leonesio is the president of the Stockton Police Officer Association.

Thank you for both being here.

I know we're not looking for a debate about this but we want to understand this because your situation in Stockton may be an exaggerated version of what so many people in so many communities across America are facing right now. So we need to understand how you're dealing with it.

Mayor, start with you. It's got to be a very tough decision in a place with crime, to have to cut police services.

How did you come to this decision and why?

MAYOR ANN JOHNSTON, STOCKTON, CALIFORNIA: Well, it's really very simple because we have a $23 million hole to fill in our budget. And the solution really is for the police union, the fire union, to come to the table and work on contract negotiations that will prevent those layoffs because that's really what we want to do is prevent the layoffs. We don't want them to happen. But we have contracts that are tying our hands right now. That's why we declared the fiscal emergency in an attempt to bring everyone to the table and work together to solve this really fiscal crisis in our city.

VELSHI: Mayor, in a way that's simple for us to understand, who aren't all that involved in Stockton or in labor negotiations, what are the basics of what you need from the police and the fire department?

JOHNSTON: Basically what we need from police, fire, and frankly all our employees is salary and wage concessions and benefit concessions. We need for them to give up some of their salary and pay for their benefits so that we can balance the budget. That's what we're asking and that's what we're hoping we can accomplish.

VELSHI: Steve Leonesio is the president of the Stockton Police Officers Association, joining us from Sacramento.

Steve, what can you contribute to this?

STEVE LEONESIO, PRESIDENT, STOCKTON POLICE OFFICERS ASSOCIATION: I do agree with the mayor on a portion of what she said. I think employee groups should come up and give concessions.

In fact, we have given concessions. We signed an agreement last year when the city came to us and gave up $11 million over the three- year period to help the city. But I think there's more on this that. I think there's a three-prong approach. I think the city needs to be fiscally responsible, which we haven't seen that from them yet. During this time of problems with the money, we just recently hired a city manager who got a $50,000 raise. Again, when we were asking our employees to give back more money. We hired another city staff person that also got a raise. We have an interim city manager that's making $25,000 a month. And I can go on.

But the issue here is the employee unions and groups will give concessions like we have and we are open to do more. However, we need the city to be fiscally responsible, as well as the citizens which I think they have, come up and admit that, yes, we can do with a little less services during these hard times and then we'll come back and accept what we have later.

But it's a three-prong approach. And without that portion from the city, I think it's not going to work.

VELSHI: All right. You guys have taken this to the streets now with very, very vivid campaign to bring sort of the citizens of Stockton into this and say, these are what the consequences could be.

I want to know whether that's a fair way to characterize it when I come back.

Stay with us. Mayor Ann Johnson from Steve Leonesio, the president of the Stockton Police Officers Association. We'll continue this discussion about safety in Stockton, and in major American cities in the face of this financial crisis when we come back.

Stay with us, please.

VELSHI: Stockton, California, is facing a situation that many people, many cities in America are where money is down, tax revenues are down. They've got a lot of foreclosures in that -- in that city, and as a result their budgets are down. They're trying to deal with -- pardon me -- how to deal with that, and that has meant cuts in some of the city services.

I'm joined now by Mayor Ann Johnston from Stockton, California by Skype and by Steve Leonesio the president of the Stockton Police Officers Association. There's a dispute in this town about how to cut those services.

Mayor, Steve was talking about other places that can be cut. The reality is they put these billboards up that says they can't keep people in Stockton safe because of these cuts. Do you agree with that, and can the city cut in other places and try and do a little more with the police budget?

JOHNSTON: The city has cut in virtually every department that there is, and we would have nothing but police and fire employed if we were to cut out everything to balance the budget, and even that wouldn't do it.

I think that it's important for citizens to recognize that the intent is not to lay off police officers. The intent is to get a balanced budget with concessions from our employees so that we can all maintain the level of service that we have today. It's critical that we maintain that level of service.

However, a recent study showed the deployment of our police forces could certainly be done better. We've had people come in and suggest other ways of doing it with a more limited staff in the police department. So we're trying to be very creative. We're trying to do the best we can with very little, and we have been very efficient at reducing -- we've cut over $40 million from our budget in the last two years. So that is huge, you know, in a $200 million budget.

VELSHI: Steve, the billboard that says, "We can no longer guarantee your safety," is that true?

LEONESIO: That is true. We want the public to know that if these cuts continue, it will be one-third of our entire police force that we will lose. And with one-third of our police force being gone, we are mainly going to be doing reactive policing, but we are only going to be able to go to the calls that the people call in. And with that we have to prioritize them and not necessarily get to everyone in a timely manner.

I think it's very important for the citizens to realize and that's why we're doing the ad campaign so they know the consequences of such drastic cuts.

VELSHI: All right, thanks to both of you for joining us. It's a complicated issue that we won't solve on TV today, but it's important for the rest of the country to see because I think the types of discussions are going on across the country. I know both sides feel they have a strong position. I hope you're able to work it and out things get better for Stockton.

Mayor Ann Johnston from Stockton via Skype and Steve Leonesio the president of the Stockton Police Officers Association. Thank you.

LEONESIO: Thank you very much.

VELSHI: Let's talk about the oil spill again. Have you ever asked yourself with the oil in the Gulf of Mexico, why can't they suck the oil right out of the Gulf? Believe it or not, that could be a viable option. More on that in our "Big 'I'" Segment.

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VELSHI: You might not believe your eyes or your ears when you see and hear this. In our "Edge of Discovery," we met a jazz musician who controls a robotic backup band with his guitar. Listen to this.

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PAT METHENY, MUSICIAN: Hi, my name is Pat Metheny and welcome to the Orchestrion Project.

This whole thing happened from my brain as a 9-year-old, because my grandfather had a player piano and I always kind of wondered why hasn't anybody really looked at that potential, and that's what this idea is.

The guitar is the control device for everything. The process works that I play a note, and then that tells something what to do.

I can add in drums. I can add in a bass. What I play, it plays.

It's all acoustic instruments, so that gives an infinitely more complex musical sound.

You know, it's kind of alive. I mean, it's not, like, just something that's sitting there. I mean, it's smacking around and beating and hitting things.

The audience reaction to this, I have to say, has been unlike anything I've ever experienced, because this is so off the beaten path.

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VELSHI: All right, if you asked yourself why can't they just suck that oil right out of the Gulf of Mexico? Believe it or not, that could be a viable option. I'm going to bring you more on that in our "Big 'I'" coming up next.

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