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Hope in the Gulf for the First Time in Months; New Fees on Banks Inch Closer to Becoming Law; Cashing In on SB-1070; Alleged List of Illegals In Utah Under Investigation; Big Sell-Off on Wall Street

Aired July 16, 2010 - 10:00   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: Meantime a look at our other top stories: there are some seismic shaking going on in the D.C. area. Before dawn today it was a 3.6 earthquake centered in Gaithersburg, Maryland. There were no reports of damages or injuries, but the USGS says the quake was felt by as many as 3 million people in the Mid- Atlantic region.

An explosion in Ciudad Juarez, Mexico killed at least three people. Investigators say either a grenade or a car bomb went off, about 20 people were hurt. This happened on the same day as the announced arrest of the leader of a Juarez drug cartel.

And a fire in a hotel in northern Iraq killed 29 people, including one American. About two dozens others were injured. A short circuit was blamed for starting the fire. This hotel is popular for tourists, because it sits in what is considered a safe province.

What a difference a day makes. That gushing oil leak that we saw this time yesterday is now shut off, and gulf residents are enjoying a reprieve on this 88th day of the crisis, but the fix is only temporary. Once BP finishes testing within the next day or so, crews will likely reopen the valve and resume funneling the oil to awaiting ships.

And any moment now, we're expecting President Obama to address the latest development on the oil disaster. You're looking at live pictures from the Rose Garden where he'll have his press conference momentarily. We'll take it to you live.

All right. Let's get the latest from the nerve center of this developing story. CNN's Ed Lavandera is in New Orleans, watching the new game plan unfold. What is the latest, Ed?

ED LAVANDERA, CNN CORRESPONDENT: Well, the latest is that things are going well, and the BP officials had given us a very quick technical briefing this morning about how things were moving along and essentially they're seeing things move in the directions they want to see them.

They said, in their words, no negative side effects for the beginning hours of this integrity test, and really they've got robotic cameras at the bottom of the Gulf of Mexico monitoring the seabed floor, making sure there isn't any structural damage that is done to that area around where this well bore is. So that's good news. Remember, we've been talking a lot over the last few days about this is essentially a pressure reading tests now that everything is sealed up. They need the pressure to build up to about 8,000 pounds per square inch. If they can do that, they say that would be the ideal situation.

Right now, according to them they're at 6,700 pounds per square inch. Not too bad. It's going up and steadily going up. So that is the good sign. Anything below 6,000 during the course of this 48-hour test, that wouldn't be a good sign, they probably would immediately kind of shut that down, but that hasn't happened yet.

And that's why they're sounding so confident about the way things are moving forward. But what happens after this integrity test is still very much up in the air and officials haven't exactly laid out a plan as to, well, at least publicly, about what they are going to do.

Remember, one of the options that Thad Allen had talked about, and the one that he talked about several times yesterday which leads us to believe that this is what he thinks probably will happen in the coming days is as you mentioned, Fredricka, they'll have to reopen those valves and begin the process of collecting the oil. That perhaps this cap alone won't necessarily work all by itself, but that they would re-open some of those valves and start collecting the oil. They say they have the capacity to collect all of them.

WHITFIELD: Ed Lavandera in New Orleans, thanks so much.

Meantime, Wall Street also cheered the news that the oil leak had been shut off temporarily. Shares of BP rose seven percent yesterday after the company made the announcement. Despite the rally, BP stock prices are still down about 35 percent overall from their pre-disaster values.

And Wall Street reform is now just one signature away from being law. The Senate passed the massive 2,300-page bill by a vote of 60- 39. And President Obama is expected to approve it next week. New financial regulations may seem removed from your everyday life, but this could mean some big changes in the way you actually spent money. Take a look.

First off, charging your $2 cup of coffee may be a thing of the past. Stores can have minimum purchases for the use of plastic, but you may want to use cash anyhow. Expect to see stores offering discounts for customers paying up front instead of using credit. The rules also clamp down so on so-called swipe fees. The fee banks charge stores when customers use debit card. Fewer fees means banks will make less money. And that means perks like free checking may disappear.

Next up, your loans, and banks will really be making sure you can afford it, especially when it comes to mortgages. You also have annual access to your credit score. And how about those taxpayer bailouts? President Obama says the overhaul will make them a thing of the past, cracking down on companies that put the economy in danger, but Republicans dispute that and say this is big government at work.

So some Republicans are even calling for the bill to be repealed before it's even signed into law. Patricia Wu joins us now from New York. So Patricia, a lot of criticism already, and you've been doing a little fact checking on that, right?

PATRICIA WU, CNN CORRESPONDENT: Absolutely, Fred. You know, House minority leader John Boehner came out with both barrels saying about the bill, it's going to make credit harder for the American people to get. It institutionalizes too big to fail and gives far too much authority to federal bureaucrats to bail out virtually any company in America.

So let's take those one at a time. Will it make loans harder to get? Well, the answer is yes, and that's exactly the point. The bill requires banks to have more cash on hand, meaning less to lend. Why? Well, remember how we got into this mess in the first place? Loans were way too easy and too cheap. People were getting mortgages for expensive homes without proving that they can afford it.

The Consumer Federation of America is praising the bill, saying "unfettered credit helped to bring our economy down," but credit unions are not happy, they say it's going to hurt their ability to provide low-cost financial services to 92 million Americans, Fred.

WHITFIELD: All right. So what about that so-called phrase, you know, "too big to fail"? Is that here to stay?

WU: Well, you know, that one is a little tougher, Fred. The bill establishes a formal process that lets regulators unwind big banks that are failing, but critics say that essentially creates a permanent bailout authority. So who is right?

Well, we asked the Brookings Institution for its take and it tells us that realistically we can't completely solve too big to fail, but it says the legislation does as much as we can reasonably do. Fred?

WHITFIELD: All right. Thanks so much. How about regulators? Do they feel like they've been given too much power?

WU: Well, you know, that answer is unclear. The ability to unwind financial institutions is definitely a brand new power, but how it's used remains to be seen. What is true is there's definitely a lot in this bill, that's left up to bureaucrats decide and that makes some people nervous. But the Brookings analyst that we talked to says he's glad Congress didn't mandate every last detail, because regulators have more technical expertise.

So the bottom line, Fred, is it's going to take a while to see how all of these plays out. In the meantime, we'll probably hear lots of rhetoric from both sides.

WHITFIELD: All right. Patricia Wu, thanks so much. Appreciate that.

WU: Sure.

WHITFIELD: All right. A list of alleged illegal immigrants is under investigation in Utah. More than 1,300 people are on the list along with private information about them like social security numbers and pregnancy due dates. A letter signed by, "concerned citizens" came with it, and said people on the list should be deported ASAP. It was sent to media and government offices across the state. Leaders in Salt Lake City's Latino community says the list has stirred up fear.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: If I were governor right now, I would ask for an independent investigation of the list. I would go after whoever is putting out this kind of list through the law, and I would condemn the list, which wasn't done by our current governor.

TONY YAPIAS, "PROYECTO LATINO DE UTAH": Our community is very concerned, very worried about it. I would say they have been terrorized, many of them, and people are just afraid about what's happening.

DAVE LEWIS, UTAH DEPT. OF WORKFORCE SERVICES: Employers acknowledged that they don't have permission, not permitted to access case records unless they have a business reason to be there. You just can't peruse the database and look at people's records.

(END VIDEO CLIP)

WHITFIELD: The governor's office is trying to figure out how someone got hold of that information. Investigators are zeroing in on the Utah Department of Workforce Services.

The battle over Arizona's new immigration law is now in a federal judge's hands. A judge in Phoenix held a two-hour court session Thursday. Attorneys argued over the first lawsuit challenging the law. A Phoenix police officer was a key player. He wants the judge to block SB-1070 before it takes effect later on this month. He says it will require officers to use racial profiling as a law enforcement tool.

(BEGIN VIDEO CLIP)

OFC. DAVID SALGADO, PHOENIX POLICE: When they were signed, I knew I had to take a step of faith on blocking this law, because I had a duty to do that.

JOHN BOUMA, STATE ATTORNEY: In many respects, it encourages the assistance of state authorities in enforcing federal immigration laws.

(END VIDEO CLIP)

WHITFIELD: Attorneys for the state say SB 1070 is a tool that works in partnership with the federal law. The judge said she did not say when she would actually make the decision. It's the sane judge who will hear the federal government lawsuit. All right. Some people are cashing in on SB1070. T-shirts, hats even underwear. that say things like support Arizona and legalize Arizona. One T-shirt maker says he's made many shirts for people traveling to tea parties.

And any moment now we're expecting the president to emerge from the doors there and to address the nation about the ongoings in the Gulf of Mexico. He's in the Rose Garden momentarily. When that happens we'll take it live.

All right. The British government now admits it. Letting the Lockerbie bomb go was a mistake. We'll explain that.

ROB MARCIANO, AMS METEOROLOGIST: I'm Rob Marciano at the CNN Extreme Weather Center. Extreme heat across the country from the southwest including Southern California to the central plains, including parts of Oklahoma, even across the northeast, where in Washington, D.C. -

WHITFIELD: All right. Sorry, go to interrupt you there, Rob. President Obama at the White House.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: ...I want to give everyone a quick update on the situation in the gulf. As we all know, a new cap was fitted over the BP oil well earlier this week. This larger, more sophisticated cap, was designed to give us greater control over the oil flow as we complete the relief wells that are necessary to stop the leak.

Now, our scientists and outside experts have met through the night and continue this morning to analyze the data from the well integrity test. What they're working to determine is whether we can safely shut in the well using the new cap without creating new problems, including possibly countless new oil leaks in the seafloor.

Now, even if a shut-in is not possible, this new cap and the additional equipment being placed in the gulf will be able to contain up to 80,000 barrels a day, which should allow us to capture nearly all the oil until the well is killed.

It's important to remember that prior to the installation of this new cap we were collecting on average about 25,000 barrels a day. For almost 90 days this environmental disaster, all of us have taken hope in the image of clean water instead of oil spewing in the gulf, but it is our responsibility to make sure that we're taking a prudent course of action and not simply looking for a short-term solution that could lead to even greater problems down the road.

So, to summarize, the new cap is good news. Either we will be able to use it to stop the flow, or we will be able to use it to capture almost all of the oil until the relief well is done. But we're not going to know for certain which approach makes sense until additional data is in, and all the American people should rest assured that all of these decisions will be based on the science and what's best for the people of the gulf.

All right. I'll take just one or two questions. Go ahead.

UNIDENTIFIED FEMALE: Did you feel the earthquake, Mr. President?

OBAMA: I didn't.

UNIDENTIFIED MALE: Sir, do you think this means that basically we're turning the corner, at least, in the gulf? Tell the American people what you anticipate in the next few weeks ahead. They're still very anxious about this.

OBAMA: Well, I think it's important that we don't get ahead of ourselves here. You know, one of the problems with having this camera down there is that when the oil stops gushing everybody feels like we're done, and we're not. The new cap is containing the oil right now, but scientists are doing a number of tests.

What they want to make sure of is that, by putting this cap on, the oil isn't seeping out elsewhere in ways that could be even more catastrophic. That involves measuring pressures while this cap is on. The data is not all still in, and it has to be interpreted by the scientists, but here's the good news that I think everybody needs to understand.

Even if it turns out that we can't maintain this cap and completely shut off the flow of oil, what the new cap allows us to do is to essentially attach many more containment mechanisms so that we're able to take more oil up to the surface, put on ships, it won't be spilling into the gulf.

The final solution to this whole problem is going to be the relief wells and getting that completed. But there's no doubt that we have made progress as a consequence of this new cap fitting on, and that even if it turns out that we can't keep the containment cap on to completely stop the oil, it's going to allow us to capture much more oil and we'll see less oil flowing into the gulf.

Now, in the meantime, obviously we still got a big job to do, there's still a lot of oil out there. And that's why we've got more skimmers out there. There's better coordination on the ground along the shorelines. There's still going to be an enormous cleanup job to do, and there's still going to be the whole set of issue surrounding, making sure people are compensated properly that the $20 billion fund is set up and is acting expeditiously.

So we've got an enormous amount of work to do, and people down in the gulf, particularly businesses are still suffering as a consequence of this disaster, but we are making steady progress, and I think the American people should take some heart in the fact that we're making progress on this one.

UNIDENTIFIED MALE: Is the relief well still on target, sir?

OBAMA: So far it's actually slightly ahead of target, but the problem on the relief well is not simply drilling all the way down, it's also connecting it up. That's a delicate operation that could take some time. UNIDENTIFIED MALE: What does "ahead of target" mean, sir?

UNIDENTIFIED MALE: Mr. President, when does BP begin paying fines according to the amount of oil spilled?

OBAMA: Well, we are obviously going to be taking measures about how much oil is spilled. Those are calculations that are going to be continually refined. BP is going to be paying for the damage that it's caused. And that's going to involve not only paying for the environmental disaster and cleanup, but also compensating people who have been affected. That's going to be a component of the calculations that are made. Go ahead.

UNIDENTIFIED MALE: What do you want to say to the people there? When do you expect to go down next?

OBAMA: Well, I would expect sometime in the next several weeks I'll be back down. What we're trying to make sure the technical folks on the ground are making the best possible decisions to shut this well down as quickly as possible, that we're standing up the funds so that people are compensated quickly.

I'm staying in touch each and every day monitoring the progress and getting briefed by the scientists. The key here right now is for us to make decisions based on science, based on what's best for the people in the gulf, not based on PR, not based on politics. And that's part of the reason why I wanted to speak this morning. Because I know that there were a lot of reports coming out of the media that seemed to indicate that well, maybe this thing is done.

We went be done until we actually know that we've killed the well and that we have a permanent solution in place. We're moving in that direction, but I don't want us to get too far ahead of ourselves. All right. Thank you very much, everybody.

WHITFIELD: All right. A very cautious President Barack Obama there from the Rose Garden, talking about this being somewhat good news. He says they are making steady progress as it pertains to this new cap in the Gulf of Mexico to help either stop the flow or perhaps contain more oil.

However, he says there are a number of scientific tests that are continuing, and until those assessments are made, he says, is he willing to celebrate, so to speak.

Our Ed Henry, senior White House correspondent is there in the Rose Garden. You heard him asking one of the first questions there. So this president is being very, very cautious for good measure.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Absolutely. Because of many reasons here, Fred. Obviously, this White House has seen the pressure put on the president in recent weeks politically to try to deal with this crisis. They've had other moments where it appeared that things were turning around for the better and then it felt apart once again. So the last thing they want to do is start celebrating, first of all. Second of all, when you talked to the president's top aide, they say that they feel that you know, back in the early spring after health care reform victory, the president felt like he was getting some momentum and then very quickly what they call the Fs, the gulf crisis and the Greek debt crisis really stopped their movement.

The Greek crisis was spreading here to the U.S. in terms of market fears really slowing any attempted recovery right now, and then, of course, the gulf crisis has really put pressure on this president. So they are hopeful. I spoke to one of the president's top aides this morning, you know, they have faced a lot of fighting - infightings among Democrats this week, worried maybe they're going to lose their grip on power in Congress.

And I asked are you probably happy this week is over? He said, yes, it's been a long week, but yesterday it got a little better and stress "a little bit better." They think yesterday was a huge development, they got that but they do not want to be celebrating until they know for sure that this oil is going to stop flowing for good.

WHITFIELD: All right. Senior White House correspondent Ed Henry, thanks so much. Appreciate that. We'll check back with you.

(COMMERCIAL BREAK)

WHITFIELD: Sometimes people making their mark have to wait a long time for the recognition. Vernon Baker is one of only seven African-Americans to earn the Congressional Medal of Honor from World War II. The government called it a racial disparity that President Clinton erased in 1997, adding to the distinguished service cross that he was originally given. As a young lieutenant, Baker attacked several machine gun implacements, killing nine Germans. Then drew enemy fire to recover the evacuation of the wounded. He called it sad that "we thought but weren't appreciated. Vernon Baker died Tuesday. He was 90 years old.

(COMMERCIAL BREAK)

WHITFIELD: All right. This week we've seen the NAACP and the tea party volley charges of racism against one another. It's ugly. And it's a far cry from those days not so long ago when many Americans, though we turned over - thought we had turned over a new page on race relations with the election of America's first African- American president.

Well Carol Costello brings us a gut check this morning. Have we moved forward? Or have we taken a few steps back?

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN CORRESPONDENT (voice-over): On "Larry King Live," the discussion turned bad about the NAACP accusations that tea party movement tolerates racist elements.

UNIDENTIFIED MALE: Excuse me, I'm talking, so shut your mouth.

COSTELLO: It was a meltdown, just like an earlier discussion on Wolf Blitzer's show.

CNN contributor Roland Martin on one side, Tea Party Express spokesperson Mark Williams on the other.

ROLAND MARTIN, CNN CONTRIBUTOR: You should come out and say you're note welcome here.

MARK WILLIAMS: Racists have their own movement. It's called the NAACP.

(CROSSTALK)

COSTELLO: Observers say it's the same racial stalemate that America has been stuck in for years. Still not so long ago, Americans were kind of hopeful. On the day before President Obama's inauguration, a "Washington Post" poll showed nearly six in 10 Americans that his presidency would advance cross-racial ties, but by January 2010, only about four in 10 believed that.

WILLIAM JELANI COBB,: Anytime that we've seen racial progress in the United States, we're also seeing racial backlash.

COSTELLO: William Jelani Cobb who wrote the "Substance of Hope, Barack Obama, the Paradox of Progress," says even President Obama doesn't believe his election will bring about racial harmony. He said so himself.

OBAMA: I have never been so naive as to believe that we can get beyond our racial divisions in a single election cycle or particularly with a single candidate, particularly a candidacy as imperfect as my own.

COSTELLO: The president said that in a major speech about race in America in March of 2008. The only other time he broached the race issue in a substantive way was in July of 2009, during the now infamous and some say disastrous beer summit.

Observers say don't expect the president to play peacemaker this time around.

DOUGLAS BRINKLY, PRESIDENTIAL HISTORIAN: The tea party is the number one enemy of the Obama administration, and the NAACP is a very strong behind President Obama, but you will not see our president trying to somehow use this moment that's going on right now in a healing way. He's going to ignore it and stay above the fray.

COSTELLO: It brings us back to our question - have we taken a few steps back when it comes to race relations? That says we have and as for whether the election of America's first black president will have a lasting positive influence on race relations?

COBB: We won't really know what the real significance of this is for many years to come. (END VIDEOTAPE)

WHITFIELD: All right. Carol Costello is joining us now from New York.

So Carol, Mark Williams, in the peace - he is now sparking new controversy, in what way?

All right, it looks like we're not able to hear one another. We'll try to hear from Carol a little bit later.

OK. Well,, the British government now admits that letting the Lockerbie bomber go home to die was a mistake. The man didn't die, and could actually live many more years. We'll explain, next.

(COMMERCIAL BREAK)

WHITFIELD: A dramatic admission from the British government this morning. Britain's ambassador to the U.S. said it was a mistake to let Abdelbaset al-Megrahi out of prison. He is the man convicted of the Lockerbie Scotland bombing. A total of 270 people dies on Pan Am flight 103 and on the ground on December 21, 1988.

But while in prison, al-Megrahi was diagnosed with terminal prostate cancer. Medical reports indicated he only had about three months to live, so he was released in August of last year on compassionate grounds. Now, word that he may live more than ten years.

At the time of his release, President Obama called the decision a mistake and the release angered many families of the victims. CNN's international security correspondent Paula Newton joins us now from London with more on today's developments.

Paula?

PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT: Fred, this may at first glance look like a reversal. It is not. The truth is we have a new government here in Britain. Prime minister David Cameron opposed the release, just like the U.S. government, back when it happened.

But what this government is keen to do is make sure when they meet with President Barack Obama next week in Washington, this won't overshadow the summit. They want to say a few things. One, they agree it was a mistake to release him. Two, it was not their decision to do so. That was up to the Scottish judiciary. And, three, quite controversially, Fred, adding their voice and saying look, there was no deal. They categorically deny there was any deal to release al- Megrahi or any other Libyan prisoner in order to make sure that BP got a favorable contract on deepwater drilling.

In all of these statements and the to-ing and fro-ing, Fred, you can kind of forget the victims at the heart of this. There were many young people on that airplane, and a lot of the families that we've spoken to here in Britain, especially in the United States that it is galling to them, and it opens their wounds all over again about the Lockerbie investigation. And the only man who was in prison was greeted somewhat as a hero when he arrived back in Libya and now will get to live out his days, however many days he has left, in Libya. And that is really what is difficult for these victims' families to accept.

Fred.

WHITFIELD: Yes. And momentarily, we'll actually talk to one of the mothers of one of those victims here in the States. In the meantime, has there been any reaction from Libya in any way, shape or form?

NEWTON: It's interesting you say this. We are going to speak to the Libyan oil minister momentarily, most likely within the next hour. If we get anything from the government, we will le you know. They have said that they don't have anything to add right now, but we will put those questions to them.

WHITFIELD: Paula, thanks so much. Appreciate that.

Now to the reaction from family members who lost loved ones aboard that flight. Kathleen Flynn's son J.P. died as he was coming home to celebrate Christmas. She is joining us by phone from Monhville, New Jersey.

Kathleen Flynn, thanks so much for your time. So, what has your gut feeling upon hearing that Great Britain saying this was indeed a mistake?

KATHLEEN FLYNN, MOTHER OF LOCKERBIE BOMBING VICTIM (via phone): Well, it's actually shocking. I cannot believe that our most touted ally for all these years has, you know, succumbed to this kind of behavior. It's just incredulous that this is being done, and you know why it's being done. It's being done because it's all about oil.

WHITFIELD: Your gut feeling is the previous administration was thinking about oil. And that's why this release took place and this current administration in Great Britain is now saying, "What my predecessor did is wrong"? That's how you interpret it?

FLYNN: Well, I would hope they would be saying that, you but I mean, -- you know, I just realized, I heard recently within the last 24 hours that Tony Blair had a wonderful visit with Gadhafi, and spent two days of discussions with him in the not so distant past.

So, I mean, what's going on here? I mean, I always liked Tony Blair. I thought he had done a heck of a job, as the BP -- as the British prime minister. So, I am just shocked that this kind of shenanigans is going on. Morally incomprehensible to us after so many people were killed. You know, in the Lockerbie explosion.

WHITFIELD: You know, at issue, part of the discussions it was believed that, you know, BP and its offshore oil and other minerals exploration of the Libyan coast might have been at the core of some of those conversations. So when you hear that al-Megrahi may indeed have many more years to live, and that his release was because of some compassionate reasoning, because he had prostate cancer. What are your thoughts and feelings now that perhaps he's not on death's door, that perhaps he does have many more years to live?

FLYNN: Oh, I don't think there's any question about that. My husband had prostate cancer, and he had it probably ten years ago. And he's alive and kicking. So, it's just an absolute charade that's going on here that he's sick.

I mean, they have a picture -- there was a picture recently in "The New York Times" of al-Megrahi holding hands with (INAUDIBLE) Gadhafi, the son of the Libyan leader. This kind of stuff is just absolutely unconscionable that this is going on, and, you know, to think that the UK has sold itself down the river is just amazing to me.

WHITFIELD: Kathleen Flynn, thank you so much for you time and joining us, as you reflect upon the Lockerbie Scotland Pan Am Flight 103. Your son J.P. was onboard. Thanks so much for your reflections on this latest twist.

FLYNN: You're quite welcome.

WHITFIELD: All right. Let's take a quick look at news cross- country.

First, a New Jersey billboard that is quite hard to ignore. Take a look. If says "my life, my death, my choice." The group Final Exit Network says the message is about giving terminally sick people the right to end their lives. But some say there's not enough contact and that some people might think that suicide is okay.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's not a good billboard. I think they should take it down, to tell you the truth.

UNIDENTIFIED MALE: "My life, my death, my choice." Yes, that's not a good message to be sending out to kids, I don't think so.

(END VIDEO CLIP)

WHITFIELD: The Newark archdiocese has spoken out against the billboard and the Final Exit Network's message.

All right. California is cracking down on farmers who knowingly mislabel their produce as organic. The state has already busted the owners of a Santa Rosa farm for claiming fruits and vegetables they've produced, selling as organic. The farmers were fined $1,500. Grocery stores charge more for organic produce to offset the higher costs that growers must pay to avoid certain pesticides and fertilizers.

And will Apple admit to a lemon? Not likely, but the tech giant has announced a news conference this afternoon. Apple is expected to address antenna problems with its iPhone 4. CNN's Josh Levs joins us with a preview of that.

(COMMERCIAL BREAK)

WHITFIELD: All right. Here's the headlines.

Three months in the making, BP has shut off the flow of oil from that broken well in the Gulf of Mexico. It is day 88 of the crisis, but the relief is only temporary. Once BP finishes testing within the next day or so, crews will likely reopen the valves and resume siphoning oil to awaiting ships on the ocean surface.

And it looks like the drug violence has flared yet again in the Mexican border city of Juarez. At least three people were killed in yesterday's explosion of either a car bomb or a grenade. The blast happened just hours after the release of a local cartel leader.

And a rare earthquake rumbled across the nation's capital, Washington D.C. area. Just after 5:00 this morning. It had a relatively modest magnitude of 3.6. No reports of damage. It was centered near Gaithersburg, Maryland, some 20 miles northwest of D.C. As many as 3 million people actually felt that shaking.

Much more of the NEWSROOM right after this.

(COMMERCIAL BREAK)

WHITFIELD: Big salaries in a little town have some people in Los Angles County quite upset. We're talking about Bell, California, one of the four cities in the Los Angeles County area. An L.A. Times report finds city manager Robert Rizzo makes close to $100,000 a year. His assistant brings home nearly $380,000 a year. Bell's police chief, Randy Adams, pulls in $457,000 a year. That's about 50 grand more than L.A.'s police chief.

Bell's residents are shocked.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's shocking. Did they go to school for this? How do they get it? Tey're making more than the president. It's totally not fair.

UNIDENTIFIED MALE: They promise a lot of things, and all it is is their wallets are getting fatter and fatter. Our taxes have continue to rise and rise. They have money for nothing but themselves.

(END VIDEO CLIP)

WHITFIELD: Whoa. Well, the mayor credits the city manager for putting Bell back on solid financial footing, and Rizzo says he deserves his paycheck. The steep salaries don't appear to break any laws, according to experts, but the district attorney is investigating why Bell City Council members make about $100,000 a year for part-time jobs. On Wall Street, a trio of corporate heavyweights reported better- than-expected second-quarter earnings, but the market is lower, anyway. Alison Kosik is following the action from the New York Stock Exchange. Hello again.

ALISON KOSTIK, CNN BUSINESS CORRESPONDENT: Hi, Fred. Yes, we're in the middle of a big sell-off on Wall Street. The Dow Industrials down 156 points. That's despite earnings from three big companies that all beat Wall Street estimates. But if you go ahead and dig a little deeper, you can really see why investors are in more of a selling mood today.

I'm going to begin in the banking sector, especially because what's in the banking sector really gets the market moving. Bank the America's profit topped $3 billion. But the problem is, it said mortgage losses have widened. And it lost revenue when debt fears in Europe kept some big investors away. BofA shares are down more than seven percent right now.

CitiGroup also posted big profits. Some good news for taxpayers there. Citi says taxpayers could end up with a $2 billion profit from the 2008 bailout.

And economic barometer General Electric also beat expectations. First profit growth -- it is the first profit growth since the crisis began, and profit at GE's financial unit soared more than 90 percent. CEO Jeffrey Immelt said GE's capital losses, they appeared to have bottomed. That's good news. But overall, the company's sales have fallen, and the stock is down now more than 3 percent. Fred.

WHITFIELD: All right. Meantime, where do we stand one week into earnings season? Do investors like what they see?

KOSTIK: Yes, you know, there was really a lot of buying on the expectations that earnings would be strong. And even more buying happened after Alcoa kicked things off with a solid profit and good forecast earlier this week.

But investors are still looking for the job growth, Fred, and we're not seeing enough of that. A combination of better than expected earnings and plans to hire really may be the holy grail this earnings season. Not sure if we're really going to see that.

Next week will be really busy, as well. Eleven of the 30 companies on the Dow Jones Industrial Average are going to be reporting, and that includes Johnson & Johnson. J&J had a tumultuous quarter, marred by the massive recall of Children's Tylenol. Goldman Sachs will get a lot of attention on Tuesday. It reports after, of course -- it said it will be paying $ 550 million to settle the civil charges against it. Goldman Sachs shares right now are up about 3 percent.

Fred, back to you.

WHITFIELD: All right. Alison Kostik, thanks so much. Okay. So, what will that announcement be? Apple is holding a news conference today, facing growing criticism of its latest star product, the iPhone 4. What's on the horizon?

Josh is back with a preview.

JOSH LEVS, CNN CORRESPONDENT: And you know, Fred, even though there are the analysts out there saying, look, there's no way they'll recall the iPhone 4 despite all the problems, the fact is there are people out there who really want to see that happen. Here's a couple right hire.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think they should replace the phones, every single one of them that they made and that is faulty, they should replace the phone. These are people paying a lot of money for a product and not getting what they paid for. It's that simple

UNIDENTIFIED MALE: I think I read it will cost them a billion and a half dollars, and I know that's a lot of money and they don't want that hit, but let's be real. Apple is a company that's worth hundreds of billions of dollars, and they can afford that.

(END VIDEO CLIP)

LEVS: You know, it's true that apple has a lot of money and technically could afford that, but a lot of people saying there's a much easier fix to the problem.

Let me first recap the problem is. The biggest problem the iPhone 4 has been facing, which is depending on where you're holding it, the sound can go out. And the reason is -- here's an image of the iPhone 4 -- the antenna is basically embedded. It winds its way around the outside, kinda snakes through this outside area. If you put your finger here, it can knock out your call.

And that is why "Consumer Reports" this week said it would not recommend the iPhone 4, why it made such a difference.

Well, a simpler fix is this. We have some video of cases. Now, it's actually not a fix, I should not call it a fix, I shouldn't call it a fix for the device itself. But if you have one of these cases that you put on your phone, that doesn't become a problem anymore. And as we know, there are people all over the place who will sell these little cases you can stick on top of (sic) an iPhone.

So, a lot of people are expecting today that the Apple folks will announce something about free cases, or something to allow people to avoid this kind of problem. That takes place at 1:00 p.m. Eastern this time today and Pacific (INAUDIBLE). We'll be all over it from today.

WHITFIELD: Yes, people will be riveted. They'll be watching closely. Josh Levs, thanks so much.

LEVS: You got it.

WHITFIELD: So the iPhone problems may be no laughing matter for exasperated owners, who are dealing with dropped calls, but apparently, late-night comic Jimmy Fallon is not among them. Listen to his take on the situation.

(BEGIN VIDEO CLIP)

JIMMY FALLON, LATE-NIGHT HOST: Did you hear this? Apple cause called a major press conference tomorrow to discuss the iPhone 4. Well, they actually tried to call like three days ago, but it finally went through just now.

(APPLAUSE)

FALLON: Very exciting.

(END VIDEO CLIP)

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WHITFIELD: This is a special time of the show for us when we honor a U.S. service member who may the ultimate sacrifice in Iraq or Afghanistan. We call it "Home and Away," and we'll let you know how you can be part of the project.

But first, we want to tell you about Staff Sergeant Clayton Patrick Bowen, from San Antonio, Texas. He was killed in a roadside bomb attack in Patika province, Afghanistan back in August of 2009. Clay's mom, Resa Bowen Debbler (ph) wrote us about him, and she says, quote, "Clay is my only child, and I miss him very much. He was the most important thing in my life. Clay had a sense of humor second to none and lit up a room when he walked in. He was very talented and had achieved a lot in his 12 years in the U.S. military. Clay left me with many new friends and family that I will cherish forever." End quote. That from his mom.

Thanks for your story, Resa.

If you have a loved one you would like to honor and you want to tell everyone about that person, go to CNN.com/homeandaway. Type in your service member's name in the upper right search field, and pull up the profile. Send us your thoughts and your pictures, and we'll keep the memory of your hero alive.

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WHITFIELD: Okay. If you're a fan of these five ice cream flavors, you might want to make a beeline for Baskin Robbins. They're putting these flavors out to pasture. Take a look. Caramel praline cheesecake, campfire s'mores, apple pie a la mode, super-fudge truffle, and French vanilla are going away forever at the end of the month. French vanilla, by the way, has been around since 1945. What are they thinking?

Baskin Robbins plans to roll out some new flavors in their place, but they haven't said what the new once will be yet, of course.

All right. Speaking of saying good-bye, word of Levi Johnson's surprise engagement to ex Bristol Palin caught a lot of people by surprise. Well now, a few people are having a hard time accepting that Johnston is actually off the market. Let me wipe a tear.

Here's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): She is heartbroken over news of the engagement between Bristol and Levi. No, not Sarah Palin. We mean Kathy Griffin.

UNIDENTIFIED FEMALE: My lover, Levi. I woke up this morning in your arms, spooning.

MOOS: So, what if she made it all up? Her imaginary affair with Levi is part of her comedy stick with her playing off his "Vanity Fair" photo shoot on the ledge of a building.

UNIDENTIFIED MALE: I was all harnessed up, but yes, it was a little scary.

UNIDENTIFIED FEMALE: By the way, we're going to recreate that later tonight at my place.

MOOS: Or going ice fishing with Levi. Part of her "Life On The D-List" reality show.

UNIDENTIFIED FEMALE: Holding Levi close, I realize this is where I'm meant to be. For three days. And then get me the (EXPLETIVE WORD) out of here.

MOOS: And now, she's forced to hear Levi gushing about his fiancee, Bristol and their baby.

UNIDENTIFIED MALE: I love them both very much.

MOOS: No wonder Kathy Griffin has posted her suffering on her website.

Poring over Levi's Playgirl spread while listening to a tear jerker by Celine Dion.

Ripping out Levi's pictures, but Kathy Griffin wasn't the only one thrown for a loop.

MOOS (on-camera): This cover is how Levi's own sister and mother discovered that he's engaged to Bristol Palin.

MOOS (voice-over): In a post entitled "who needs coffee when you wake up to news this shocking," Levi's sister, Mercede (ph) blogs about how her crying mother woke her up with the cover of "Us Weekly" on her laptop. Not exactly the image I wanted to come face-to-face with when I first opened my eyes. There seems to be bad blood between the Johnstons and the Palins. Johnston still want to be invited to the wedding. Levi's mom told "Inside Edition" don't leave us out of it. That would kill me.

MOOS (on-camera): But it's not just women mourning the news that Levi is getting married.

UNIDENTIFIED MALE: I think Levi is really hot. I'm pretty jealous. Major crush.

MOOS (voice-over): Levi may be hot, but Kathy Griffin is already moving on to another hottie -- Taylor Lautner from the "Twilight" films. Levi, you dumb (ph), how could you just dump Kathy?

UNIDENTIFIED FEMALE: I'm just going to be looking in his beautiful chocolate eyes, all night, and waiting for magic to happen.

UNIDENTIFIED FEMALE: What about you?

UNIDENTIFIED MALE: The same thing, yes.

MOOS: A man of few words, but "I do" will apparently be among them.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

WHITFIELD: How does one follow that? That's where Tony Harris comes in with the next couple hours of the NEWSROOM.

TONY HARRIS, CNN ANCHOR: Oh, that's a great song from Celine Dion absolutely destroyed.

OK, Fred. Have a great weekend.

(LAUGHTER)

WHITFIELD: All right. On that note.