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Tar Balls in Panhandle; Two NJ Terror Suspects Due in Court; Press Legend Should be Fired; Dow Near 4-Month Low; Chrysler Recalls 285,000 Minivans; Airlines Bound for Profits; Oil Spill Catastrophe; $100 Million on a Primary

Aired June 07, 2010 - 09:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: And right now we're working three different kinds of disaster.

Good morning, everyone. I'm Kyra Phillips.

Seven weeks of nonstop catastrophe. When will this ever end? It's the question everyone is asking. And no one can seem to answer.

Other parts of the country reeling from natural disasters. Twisted winds and heavy rains, leaving their destructive marks.

And a totally different kind of disaster. The PR kind. A legendary news woman makes news herself. A brief clip and a few words undermining her legacy.

It's day 49 of the oil crisis in the Gulf of Mexico, and we're expecting an update next hour. The government's point man on the disaster, Coast Guard Admiral Thad Allen, is due to hold a briefing next hour at the White House. We'll bring it to you live.

And scientists are reporting a disturbing new development. They say that they've discovered a second underwater plume of oil. The concern is that the plumes will poison the marine life that lives at greater depth.

BP hasn't commented on the latest claim but in the past has denied that underwater oil plumes even exist. Meanwhile, BP says it has spent about $1.25 billion on this catastrophe. That's doesn't even include the cost of building the protective berms.

Both the oil and the fear are spreading eastward now. Tar balls are already washing ashore in the Florida panhandle. And most Floridians are resigned to a grim likelihood. The worst is yet to come.

CNN's Jim Acosta is in Destin just east of Pensacola -- Jim.

JIM ACOSTA, CNN CORRESPONDENT: Morning, Kyra. Yesterday, we're on the Gulf Islands Seashore outside of Pensacola where we picked up this piece of tar glob washed on to this piece of bark here.

I don't want to give the impression that there were just a couple of these on this beach. There were hundreds of them scattered across what looked like a football field -- beach on that piece of national park.

You're not going to find that kind of tar ball activity here on this stretch of beach in Destin, Florida about 50 miles down the Florida panhandle. But environmental officials in the state fear that is just a matter of time.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: We're between Big Lagoon State Park right here to the right.

ACOSTA (voice-over): On the inter-coastal waterway and on patrol with the Florida Department of Environmental Protection, the soaring pelicans are a sign the wildlife is still thriving in this state. But for how long?

Looming just off this remote beach on the Gulf Islands National Seashore, brown foam and bands of oil sheen are closing in and dotting the pristine white sand, tar balls. Lots of them. This blue heron walks right through them.

(On camera): One thing we've noticed on this remote beach outside of Pensacola is that the tar balls here are actually darker in color than the ones found in Alabama and these tar balls, these globs, are scattered all over this beach.

ERIK SCHULZE, TOURIST: It breaks my heart. Sorry. Because it's so beautiful down here anyway. And I know it's going to devastate this area for a decade, two decades.

ACOSTA (voice-over): Erik Schultz came to Pensacola to visit friends who were lifelong residents here. They all worried BP will never be able to fully restore this majestic coastline.

ALLISON CRAMER, PENSACOLA RESIDENT: BP keeps saying that they're going to, you know, pay every legitimate claim. How do you when you take away all of this and you can't get it back overnight? I mean it could be years. You know --

ACOSTA: How do you pay that back?

CRAMER: Yes. How do you put a price tag on that?

ACOSTA: By air, right above these beaches and on the ground, state environmental officials are on the lookout for any traces of the spill. This mobile command post in Destin is set up like a mini war room tracking the oil's slow motion assault on a three-county stretch of the panhandle.

(On camera): It's a lot of ground to cover.

GRAY BEVIS, CHIEF INVESTIGATOR, FLA. DIVISION OF WILDLIFE: It truly is, but we've got a lot of heart chargers. And people are dedicated to this fight. ACOSTA (voice-over): But the experts say that fight will be hard to win. There's not enough containment equipment to protect white sand beaches and turquoise waters that are so awe-inspiring they lure wedding parties to these shores week end after week end.

JAMES ESTES, DESTIN RESIDENT: I will probably cry the moment I see it.

ACOSTA: James Estes has played on Destin beaches since he was in diapers.

ESTES: Still beautiful, isn't it?

ACOSTA: The oil moves in. He's considering moving away. As in to another state.

ESTES: I've gone places in my life. But I always come back here, because this is where my heart is. And these white sand beaches raised me.

(END VIDEOTAPE)

ACOSTA: And Florida environmental officials are stressing to people along this panhandle that the beaches are still safe to use here. They don't want tourists coming to this region to abandon their travel plans because there is so much at stake for the regional economy. These pristine white sand beaches.

Kyra, you've been down here. You know how they are. It's -- they're almost like powdered sugar up and down this panhandle. Hundreds of miles of it. And so they still want folks to come down here.

But you ask any local around here and they will tell you, these beaches are not as crowded as they should be this time of year -- Kyra.

PHILLIPS: Yes. And it's a shame. And you're right. I've been there a number of times. Beautiful place.

Jim Acosta, thanks so much.

And as we mentioned just a few minutes ago, the White House will update the crisis in the Gulf. Admiral Thad Allen will join press secretary Robert Gibbs for the news briefing. It's scheduled for the top of the hour and we will carry that live right here on CNN.

And in just a couple of hours, two men from New Jersey are due in court on terror charges. They were nabbed at New York's JFK airport alleged on their way to Somalia where the feds say they wanted to wage violent jihad and target American troops.

Senior correspondent Allan Chernoff live outside the courthouse.

So, Allan, what do we know about these men and the alleged plan? ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Kyra, they're both New Jersey residents. Mohammed Alessa, 20 years old, and 24-year-old Carlos Almonte are charged with attempting to engage in violent jihad against U.S. troops in Somalia.

Allegedly they intended to hook up with the Somali terror group Al Shabaab. Now both of them apparently also had an interest in attacking Americans here in the United States. Alessa was quoted as saying, "We'll start killing here if I can't do it over there." That a recording made by an undercover police officer from the NYPD.

The New York Police Department had an undercover officer befriend these people and shared information with law enforcement authorities leading to this criminal complaint and, as we said, they were picked up over the weekend as they were planning to board a flight to Egypt.

Now they were both allegedly followers of the U.S. born cleric Anwar al-Awlaki and he also allegedly inspired the Fort Hood shooter.

They'll appear in two hours before a federal magistrate judge here in Newark. And if convicted they could face life in prison -- Kyra.

PHILLIPS: All right, we'll track it. Allan, thanks.

Several tornadoes ripped across parts of the Midwest killing seven people. Take a look at this tornado in west central Illinois. You can actually see the roofs flying off buildings in the distance.

The severe weather damaged the outer wall of a nuclear power plant on Lake Erie in Michigan prompting an automatic shutdown.

Dozens of people had been injured across the region. And those seven deaths were right here in Wood County, Ohio, about 30 miles south of Toledo. Homes appear to have been blasted right off their foundations.

The "Toledo Blade" newspaper actually reports the tornado cut an eight-mile path through Wood and Ottawa Counties. Winds were estimated at 136 to 165 miles an hour.

Now the severe weather didn't just spawn a bunch of tornadoes. It also brought a whole lot of rain quickly flooding low-lying areas and streets catching some drivers by surprise. In Pittsburgh, one woman said the water rose so quickly she didn't have time to back her car out of the water.

(BEGIN VIDEO CLIP)

CARRIE WAUGH, STORM SURVIVOR: I was panicking.

(LAUGHTER)

WAUGH: I was panicking. It was climbing out of the window, like, what do I do? I was freaking out. I had to, like, swim to the side and up some cedar (INAUDIBLE) and walk down this way. And then all the rapids were coming at. I had a couple of men help me through the rapid. Like it was -- it was bad.

(END OF VIDEO CLIP)

PHILLIPS: That driver was lucky. After she got out of her car shall the rising waters submerged it to the roof.

Reynolds Wolf monitoring severe weather in the plains. Also all this weather. It's a messy weekend.

REYNOLDS WOLF, AMS METEOROLOGIST: It really has been. It's been a messy year. I mean when you think about -- started off this year with blizzards. We've got widespread flooding, tornadoes. We haven't really gotten to the full brunt of hurricane season yet.

And today is going to be busy also. Looks like we're going to see the focus shift from the Ohio Valley to parts of the Central Plains. We're going to talk about that coming up in a few moments. Maybe some flash flooding again and possibly some tornadoes also.

PHILLIPS: Sounds good. Thanks, Reynolds.

Well, Helen Thomas. You have seen her on the front row of the White House briefing. Your parents have seen her, your grandparents have seen her. Well, did you hear what she said? Something some people find so offensive they don't care how legendary she is. They want her fired.

(COMMERCIAL BREAK)

PHILLIPS: Helen Thomas, the legendary dean of the White House press corps. She's put a lot of presidents on the spot. Almost 90 years old, and she's still a spitfire. But some of that fire is blowing back in her face.

The White House Correspondents Association meeting this morning to talk about her future. All thanks to her recent comments about Israel. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: Any comments on Israel?

HELEN THOMAS, HEARST NEWSPAPERS COLUMNIST: Tell them to get the hell out of Palestine.

UNIDENTIFIED REPORTER: Oh. Any better comments on Israel?

THOMAS: Remember, these people are occupied. And it's their land. It's not German, it's not Poland.

UNIDENTIFIED REPORTER: So where should they go? Where should they go?

THOMAS: Go home.

UNIDENTIFIED REPORTER: Where is home? THOMAS: Poland. Germany.

UNIDENTIFIED REPORTER: You say Jews go back to Poland and Germany?

THOMAS: And America and everywhere else.

(END OF VIDEO CLIP)

PHILLIPS: Thomas says that she deeply regrets saying that. But some folks want her current boss, Hearst Newspapers, to fire her. Some folks, including Ari Fleischer, the U.S. press secretary for the second President Bush.

(BEGIN VIDEO CLIP)

ARI FLEISCHER, FMR. WHITE HOUSE PRESS SECRETARY: She's a columnist. She's entitled to her bias. That's what columnists do. And Helen is very pro-Palestinian. Pro Yasser Arafat. That was her point of view. And I never minded the ideological clashes that Helen and I would get into.

I wrote about her actually very fondly in my book. But this is a category unto itself. This is the type of discrimination. It's a call for religious cleansing that all Jews need to get out of Israel? To go home where they came from?

Nobody would accept this if it was said about other racial groups or religion just groups. I think that apology is too little, too late. How can somebody who expresses such hatred in their heart then right away call for tolerance and acceptance?

(END OF VIDEO CLIP)

PHILLIPS: All right. Let's talk more about this with CNN's Howard Kurtz, the host of CNN's "RELIABLE SOURCES." He's also been around the D.C. press corps for years.

Howard , one of Helen Thomas' agent dropped her. Now the White House Correspondents Association meeting about her. What do you think? Is this it for her?

HOWARD KURTZ, HOST, CNN'S RELIABLE SOURCES (via phone): Well, it's hard for me to see how she can survive this because the remarks were so outrageous. And you know, I talked to Helen Thomas on Friday night. I called her for comment when this hit the Internet.

And yes, she said she was sorry and she had made a mistake, but she didn't really sound that sorry. It wasn't -- it was a very narrow apology. I think she's sorry she said it in front of a camera as opposed to retracting the view that all Jews should just abandon Israel.

PHILLIPS: All right, well, you had a chance to talk with her. She's been around a long time as we all know, but it doesn't look like her age, her seniority will be an excuse to give her a free pass. I mean she's going to be 90 this summer. Do you think it's just time for her to retire?

KURTZ: I think she has gotten something of a pass in recent years. Look, Helen Thomas has had a spectacular career, was a White House correspondent going back to the JFK administration. In the last 10 years or so she's been a columnist. She hasn't been a significant force in journalism.

And she's become a kind of a frankly woman of advanced age and very sharp views. And I think people kind of roll their eyes when Helen goes off in one of their news conferences or press (INAUDIBLE) and say, well, that's just Helen Thomas.

Well, this time, I think what she said and the way she has handled this have been so disturbing, whether you -- regardless of what your views on the policies that the Israeli government should take. That I think it probably is time for her to pack it up at the age of 89.

PHILLIPS: We'll follow it. That's for sure. Howie Kurtz, appreciate you calling in.

All right. Severe weather, Reynolds Wolf, you are -- you have a lot to track. And you know the other concern, too, I mean, you were out there in the Gulf area as well with hurricane season. It's tremendous concern with regard to this oil spill.

WOLF: The timing is terrible. I mean especially this time of year especially in that place where they deal with so many things that nature throws at them. This, obviously, a manmade disaster. But with hurricane season, which may be a very busy one, we were getting a lot of bad components coming together.

(WEATHER REPORT)

WOLF: All right, Kyra, we've got more coming up. Let's send it back to you at the news desk.

PHILLIPS: Thanks, Reynolds.

WOLF: You bet.

PHILLIPS: Well, you know him as the former suspect in the disappearance of the Alabama teen, Natalee Holloway. Now he's the prime suspect in the murder of a 21-year-old woman in Peru. Investigators saying her killer used a tennis racket to beat her to death.

(COMMERCIAL BREAK)

PHILLIPS: It's day 49 of that Gulf oil spill. That leads our top stories. The U.S. House Subcommittee is looking into the impact of a disaster during a hearing this morning in suburban New Orleans.

Meanwhile the oil continues to spread east and Coast Guard Admiral Thad Allen says that cleanup will likely extend into the fall. And there's going to be another attempt to break Israel's blockade of Gaza. Iranian media says Iran's Red Crescent Society, similar to the Red Cross here in this country, will send food and medical supplies to Gaza by Friday.

And no pictures but we have their names. Mohamed Alessa and Carlos Almonte. Both New Jersey residents due in federal court this morning. The two are accused of conspiracy to commit acts of terrorism overseas. They were arrested Saturday night before boarding a plane for the Middle East. Prosecutors say they plan to join a terrorist group in Somalia.

You may remember Joran Van Der Sloot as the former suspect in the disappearance of Alabama teen Natalee Holloway. Today he's being held as a suspect in the murder of a Peruvian woman.

Van Der Sloot has not been formally charged in this case but a judge says he can be held for another week while investigators gather more evidence.

The body of a 21-year-old woman was found Wednesday in a hotel room registered to Van Der Sloot. A criminal attorney tells CNN that even if Van Der Sloot was convicted, he wouldn't get the death penalty.

(BEGIN VIDEO CLIP)

ROBERTO MIRANDA, CRIMINAL ATTORNEY: According to Peruvian law, a person who has committed that kind of crime must receive between 15 to 35 years in the jail.

UNIDENTIFIED REPORTER: Is there capital punishment in Peru?

MIRANDA: No, there is no capital punishment.

(END OF VIDEO CLIP)

PHILLIPS: Van Der Sloot was never charged in Natalee Holloway's disappearance. Her body was never found.

Charlie Sheen facing a jail in theater sentence. Could be under a possible plea deal. The star is due in a Colorado court today. And we've got the skinny on what's expected to go down.

(COMMERCIAL BREAK)

PHILLIPS: Charlie Sheen inmate and theater intern? Well, it's possible. The "Two and a Half Men" star is expected to strike a plea deal today on charges stemming from a domestic dispute with his wife. The judge in Aspen, Colorado accepts the bargain, Sheen could spend the next month as a theater worker by day and a jail inmate by night.

A bittersweet graduation ceremony for students at South Hadley in Massachusetts. There was a moment for silence for Phoebe Prince, the freshman who was bullied and then died by suicide in January. Also three members of the senior class did not graduate. They were kicked out of school and face charges in connection with Phoebe Prince's death.

And how would you like to have the president to deliver your commencement address? It will happen today at Kalamazoo Central High in Michigan. The school got President Obama by winning the "Race to the Top High School Commencement Challenge."

The Obama administration contest had students from around the country submitting a video and essay on how their school was preparing them to become college graduates.

So how about that oil disaster? After 49 days, do you think it is time to get out the nukes?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The explosion is only seconds away.

(END OF VIDEO CLIP)

PHILLIPS: Yes. The Soviets went all atomic on some leaky wells allegedly. You can tell by the video that it's been a long, long time. So could this be plan D or whatever letter we're on now?

(COMMERCIAL BREAK)

PHILLIPS: Now Wall Street took a beating last week. The Dow closed Friday at the lowest level since February.

Alison Kosik at the New York Stock Exchange with a preview of today's session -- Alison.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Kyra, you know, don't expect a huge bounce-back today after what we went through on Friday. But if we wind up in the plus column at least a little bit, we'll take what we can get.

The jobs report that we got on Friday really rattled Wall Street. But this week, we really don't have any major economic reports that could wind up moving the market. So investors could wind up turning their focus overseas where Asian markets tumbled overnight.

And euro briefly hit a four-year low of $1.18. It's another sign that confidence in the European economy is weakening. And that's worrisome because with not much the focus on here on Wall Street and investors turning their eyes overseas, we could be in for trouble this week.

BP shares in the premarket are up 4 percent. That's after BP said it's making progress in capping the leak. The oil giant said it collected more than 10,000 barrels of oil on Saturday. At lease 19,000 barrels of oil are said to be leaking from the wells each day.

The latest containment device isn't a permanent fix. But it's calming some of Wall Street's fears.

Overall right now we're waiting for the opening bell to ring. We'll get back to you on those numbers. But don't want to leave you before this, Kyra. If you're looking to decorate your house, some artwork that once lined the halls of Lehman Brothers will hit the auction block in September.

Sotheby's is auctioning 400 pieces of art valued at $10 million. Proceeds will pay off creditors of Lehman Brothers. Its bankruptcy filing in September 2008 was the largest in U.S. But you know if you're going to go ahead and bid on some of these, Kyra, check your finances and make sure you're not going to go bankrupt.

I hear some of these pieces could get pretty pricey -- Kyra.

PHILLIPS: OK. I admit. I love art. I'm obsessed with art. But that's way out of my league. I like sticking to the local artists and negotiating a good deal.

KOSIK: I hear -- too many bad memories anyway to have a piece of Lehman on your walls. I don't know about that.

PHILLIPS: Bad karma, Alison. Bad karma.

KOSIK: Real fast markets right now are up, the Dow up slightly about 8 points -- Kyra.

PHILLIPS: Got it. Thanks so much, Alison Kosik.

Something important. If you drive your kids around in a minivan, Chrysler is recalling nearly 300,000 town and country minivans and dodge caravans. Apparently, there's a wiring flaw that might cause a fire. The company says that there aren't any reports of wrecks or injuries because of this, but the recall is for 2008 and 2009 models. If you got one Chrysler, well, we'll be in touch.

The skies may soon be turning friendlier for the world's airlines. Earlier today, an industry group predicted a strong rebound. The International Air Transport Association said that it expects a global profit of $2.5 billion this year. That would be the industry's first profit in three years, and even more startling, it would reverse last year's staggering loss of $10 billion. One big reason, local travel is back to its highest level since the recession begun.

It's day 49 of the oil crisis in the Gulf of Mexico, and we're expecting an update at the top of the hour. The government's point man on the disaster, Coast Guard Admiral Thad Allen, due to hold a briefing at the White House. We will bring that to you live.

And scientists reporting a disturbing new development. They say they've discovered a second underwater plume of oil. The concern is that the plumes will poison the marine life that lives at greater depth. BP hasn't commented on the latest claim, but in the past, has denied that underwater oil plumes exist. Meanwhile, BP says that it has spent about $1.25 billion on that catastrophe. That doesn't include the cost of building the protective berms.

So, have you heard about that other option for stopping the oil gush? Drop the bomb, nuke the well to hell. Radical idea, but it's not new.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The explosion is only seconds away. The camera feels the impact of detonation. The gasoline begins to subside. Let us now take a look at what has actually happened deep down below. The short wave of the explosion in past the surrounding geological material and pushed it aside blocking the flow of gas. The well was plugged by (INAUDIBLE). It took only 23 seconds to do the job.

(END VIDEO CLIP)

PHILLIPS: Got to love the music too. Yes, that's the Soviet's reportedly nuked gas wells back in the 1960s. All the heat underground melted the rock and killed the gush. Now, depending on whom you talk to, this is either a nutty idea or the perfect solution.

CNN's John Roberts has been covering the nuclear options, shall we say. And John, what do you think? Could this ever be a good idea?

JOHN ROBERTS, CNN CORRESPONDENT: Let's see. "The New York Times" last week said that I had suggested doing this, which is just not true. I reported that it had been done, that people had been talking about it, but that it was an unlikely scenario. But what we saw there, that was a gas well, and we believe that was -- we haven't been able to independently verify that, but it did play on Russian television. We believe that was a gas well that had been out of control in Uzbekistan for three years.

They tried everything that they could. This is 1963 to 1966 to put it out and finally along came the Soviet nuclear agency and said, we have an idea. Let's drill a hole. We'll put a nuclear bomb in there and we'll set it off. Nobody is talking about that legitimately for this particular problem, at least, anybody who's in charge, but as this now drags on, Kyra, past day 49, there are some engineers, some energy industry analysts who are saying, hey, you know, maybe it's not beyond the realm of possibility if nothing else works. And of course, everything rides on those two kill wells that they're trying to drill. I talked to Don Van Euenhaus. He's a professor of petrochemical geoscience at the University of Houston and asked him, would something like this work?

(BEGIN VIDEO CLIP)

DON VAN NIEUWENHUISE, PROFESSOR OF PETROLEUM GEOSCIENCE: It actually could work, but you have to realize it would probably take at least six months to a year to actually figure out how to implement that because you're going to have to place a nuclear device actually under the ocean floor. You're going to create considerable amount of havoc on the surface. And if you don't get the nuclear device far enough into the ground, you're going to have radioactive material all over the Gulf of Mexico.

(END VIDEO CLIP)

PHILLIPS: OK. I have to admit, we've talked about this for months now, and it might be my fault that you were quoted in "The New York Times," and I should say for full disclosure, I sort of set you up on this, OK. In no way, shape, or form were we advocating this idea.

ROBERTS: No, we weren't.

PHILLIPS: But you did find this video today. So, of course, I couldn't let it go, and I couldn't stop looking at it. Let's take a look at another part of this video, and I have another question for you.

(END VIDEO CLIP)

UNIDENTIFIED MALE: A nuclear explosion was to be set off in plastic geological material below gas impermeable gas straight at. One being placement of the charge was over, the shaft was plugged with concrete. Preparation for the blast are near in completion.

(END VIDEO CLIP)

PHILLIPS: OK. Now, I have to admit, I don't think I'd want to be that guy lowering the nuke into the well, John, but I got to say, if nothing else works, is this something that the government could actually do?

ROBERTS: Let me quote Thad Allen who was asked about this on Thursday. He said, we would have to run out of a lot of options before we consider something like that. You know, there are treaties in place which we would be violating if we did that. The 1963 test band treaty, which banned all underwater explosions. Though, you could say that this actually isn't an underwater explosion because we'd be drilling into the strata at the bottom of the sea. But then, of course, President Obama has promised in his administration to ratify the comprehensive test band treaty, which would prohibit a nuclear explosion of any kind anywhere in the world for any reason.

You have to wonder, though, if the kill wells don't work, maybe they would have to resort to some sort of explosion to try to seal that well. Maybe drill down very close to the well bore with some conventional explosives or something like that in what that Soviet film called plastic strata and try to close off the well that way. But, I think, nuke beyond the realm of possibilities, but certainly an interesting thing is always, Kyra, to talk about as long as you don't get quoted as being in support of it as a journalist.

PHILLIPS: Very good point. And I'll admit, I had to ask Admiral Thad Allen.

ROBERTS: You always get me in trouble.

PHILLIPS: No, I'm not getting you in trouble. Look, it's out there. We had to talk about it. And I did ask the admiral about it as well too, and he very respectfully sort of laughed in my face. So, all right, we couldn't get enough of the video. Thanks for rolling it, John.

ROBERTS: At least, it was respectfully.

PHILLIPS: Yes, exactly. He always treats everybody with respect. Thanks, John.

ROBERTS: Thanks, Kyra.

PHILLIPS: A 126 people were on the deep water horizon rig when it erupted into a fireball. Eleven men died. Everyone else got off alive. And now, five survivors tell Anderson Cooper how they did it. It's an "AC 360" exclusive live from the Gulf tonight at 10:00 eastern.

A lost prototype and stolen thunder. All the hype over the new Apple iPhone really deliver anything new.

(COMMERCIAL BREAK)

PHILLIPS: Apple fanatics waiting to get a sneak peek at the new iPhone. Apple is expected to unveil today. At an annual conference going on in San Francisco, the tech site is MOTO.com. As you remember though, it came out with an unauthorized preview and that prompted a court challenge from Apple, but as for what you could be interested in, the new iPhone were told features things like a higher resolution screen, a front-facing camera that can be used for video conferencing, and a camera flash. The new iPhone may be available as early as this summer.

Checking top stories now. Day 49 of the Gulf of Mexico oil disaster. A top BP exec says the company is pleased with how oil from the broken wellhead is being funneled to a drilling ship, but the government point-man, Coast Guard Admiral Thad Allen says, no one should be pleased as long as there is oil in the water.

At least seven deaths are being blamed on a tornado that hit Ohio. Severe storms also smacked Illinois and Michigan over the weekend, including injuring dozens of people.

Two New Jersey men go to court today charged with conspiracy to commit acts of terrorism overseas. They were captured trying to catch a flight from New York to Somalia. They were allegedly headed to Eastern Africa to be trained to kill other Americans. Coming up, we are zeroing in on Somalia and it's role as a training ground for terrorists.

(COMMERCIAL BREAK)

PHILLIPS: All right. Before the break, we told you about two guys from Jersey arrested in route to Eastern Africa. They're accused of plotting to wedge (ph) Jihad and strike American troops. So, should we be worried about Somalia as a terror training ground? Pentagon correspondent Barbara Starr with a closer look at what's going on in Somalia?

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): CNN has learned that U.S. now estimates as many as 200 foreign fighters may be in Somalia, fighters posing a possible threat to the U.S. after joining the Somali-based al Qaeda group known as al Shabaab. President Obama's top counterterrorism adviser say Somalia is part of the overall U.S. threat calculation.

JOHN BRENNAN, WHITE HOUSE COUNTERTERRORISM ADVISER: We will take the fight to al Qaeda and the extremist affiliates wherever they plot and train, in Afghanistan, Pakistan, Yemen, Somalia and beyond.

STARR: Concern has risen steadily as Osama Bin Laden called for fighters to go to Somalia.

PETER BERGEN, CNN TERRORISM ANALYST: When anybody going to a Jihadii war zone, hooking up with an al Qaeda or affiliate getting training, that's a problem because these guys can going to get training and attack American or other western targets overseas.

STARR: Iraqis, Pakistanis, Afghans, and Saudis are among those at training camps across Southern Somalia, a core group training others in bomb-making and small arms. Any U.S. military action to stop this al Qaeda movement brings bitter memories of October 1993 when 18 U.S. troops were killed in Mogadishu after two black hawk helicopters were shot down. But the U.S. has approved plans to send commandos into Somalia, part of a stepped-up campaign already underway.

Last September in Southern Somalia, U.S. troops swept in by helicopter and killed senior al Qaeda operative, Saleh ali Saleh Nabhan, wanted for his role in attacks against U.S. embassy. In 2007, AC-130 gun ships fired against al Qaeda targets in Southern Somalia.

(END VIDEOTAPE)

PHILLIPS: All right. So, Barbara, we know the fighters in Somalia have the goal or aspiration to attack the U.S. It's such a remote country, though. What can the U.S. do about it?

STARR (on-camera): That is the challenge, Kyra. You know, those memories of black hawk down are very long and very bitter. Don't look for a large number of U.S. troops to go beyond the ground in Somalia. Look for more of the special operations commandos rates. Some of the most secretive and dangerous operations, the U.S. military undertakes very small teams going after al Qaeda targets deep in Somalia if they can find them -- Kyra.

PHILLIPS: Barbara Starr from the Pentagon.

$70 million, that's a huge sum of money to spend on a primary campaign for governor. But it's an obscene sum of money when your state's budget is bleeding. We're going to talk about California's priorities here in just a second. (COMMERCIAL BREAK)

PHILLIPS: Well there's a number of primary races that are grabbing our attention right now.

Let's start in South Carolina where gubernatorial candidate Nikki Haley; a woman has denied two claims of an extramarital affair. That's right. And it's in South Carolina, well, you know what happened to Mark Sanford.

Travel on to Arkansas, where Democratic Senator, Blanche Lincoln is in the fight of her life. She is facing anti-Washington sentiment and a challenger with union support.

Then we can head west to Nevada where Republicans are licking their lips over the chance to unseat Senate Majority Leader Harry Reid. A new poll shows a Tea Party-backed candidate leading the GOP Primary.

Now how many times have we been through this? California and its budget that's gushing red ink, a deficit of more than $19 billion; 26,000 teachers laid off this year, a 32 percent tuition hike for students at U.C. University, cops getting laid off because there is no money to pay for them, people in some towns having to pony-up $300 for 911 calls, up to 40,000 state prisoners getting out early to save money.

These are just a few -- just a few chapters in the bigger story of California's money woes. So, given all that, does it seem right that one candidate for governor is spending $70 million on a primary campaign?

Watch this story from CNN's national political correspondent Jessica Yellin, and then I'll ask you to weigh in.

(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Meg Whitman is formidable. Former e-Bay CEO, self-made billionaire, she has invested $70 million of her own fortune in her campaign to be California's governor.

MEG WHITMAN, CALIFORNIA GUBERNATORIAL CANDIDATE: I just refuse to believe that California cannot be better than it is. We can make the Golden State golden again.

YELLIN: Add in spending by her chief rival, state insurance commissioner Steve Poizner and the avalanche of cash tops $100 million. That's a new record for spending in a state primary.

So what does that look like?

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: You like Arnold.

WHITMAN: You will love Meg Whitman.

UNIDENTIFIED MALE: Steve Poizner says that California is heading over a cliff. Guess who was driving when it happened?

UNIDENTIFIED FEMALE: Whitman's entire fortune is intertwined with Goldman Sachs. She helped manage Goldman and received sweetheart stock deals so unethical they were outlawed.

YELLIN: Voters just can't get away from the ads.

UNIDENTIFIED FEMALE: We have all heard it. We are tired of it. Let's get on with the election.

YELLIN: It is not all attack ads. They have debated what to do about the state's $19 billion budget deficit, 12.6 percent unemployment and approximately 2.6 million illegal immigrants. In these closing days, second-place Poizner has tried to put Whitman on the defensive over immigration.

STEVE POIZNER, GUBERNATORIAL CANDIDATE, CALIFORNIA: I am the one who supports the Arizona immigration law. I'm the one who's going to take tough stands on stopping the flow of illegal immigrants into California. She is not.

YELLIN: She stepped up her get-tough language but refused to embrace the controversial Arizona law.

WHITMAN: My plan in California I think is better suited for California.

YELLIN: -- no doubt with an eye on the state's Latino general election voters. One issue that won't die for Whitman: why is she spending all that money? She has been dogged by union-backed protesters calling her Queen Meg trying to buy democracy.

That kind of money could have hired more than 700 police officers, more than 750 teachers. Does that bother you?

WHITMAN: Well, you know, what I am doing is running for governor of California so I can turn this state around. And so what I need to do is every voter I want to understand where I stand, what I want to do to turn this state around. That's what it costs.

YELLIN: She said she'll spend up to $150 million to win the seat.

(END VIDEOTAPE)

PHILLIPS: All right. What do you think? Given all the state's money woes do you think it is obscene that these candidates are spending this kind of money just to win a primary? Is that money well spent? Tell me on my blog cnn.com/kyra. Put your two cents on this $100 million next hour.