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Gadhafi in Denial; U.S. Warships Closer to Libya; Cellphones and Virtual Wallets; The Help Desk; Firing Designer For Racist Rant

Aired March 01, 2011 - 12:00   ET

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

SUZANNE MALVEAUX, CNN ANCHOR: Well, top of the hour. I'm Suzanne Malveaux.

Want to get you up to speed.

Libyan protesters say they stood up to Moammar Gadhafi's fighters in Zawiya today. That's just 30 miles from the capital, Tripoli. Now, the regime tried to retake the town, but rebels say they failed. The opposition holds a number of towns across Libya's Mediterranean coast, but they haven't made headway in Tripoli, where Gadhafi and his loyalists are holed up.

Secretary of State Hillary Clinton told the House Foreign Affairs Committee today that Libya basically faces two choices. It can become a peaceful democracy or endure a protracted civil war.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: We have joined the Libyan people in demanding that Gadhafi must go now, without further violence or delay. And we are working to translate the world's outrage into action and results.

(END VIDEO CLIP)

MALVEAUX: Iranians hit the streets today to demand freedom for these two jailed opposition figures. An opposition Web site says that police immediately stepped in to break up the crowd with clubs and tear gas. Both imprisoned opposition leaders were candidates in Iran's disputed presidential election in 2009.

(CHANTING)

MALVEAUX: Government supporters and opponents staged separate and so far, peaceful rallies in Yemen today. President Ali Abdullah Saleh is offering his opponents a role in a unity government. They said no thanks. They want Saleh out of power.

And Florida reopened Interstate 95 along its central east coast today. They had shut down an 18-mile stretch because of a 10,000-acre wildfire.

(WEATHER REPORT)

MALVEAUX: Wisconsin Governor Scott Walker unveils a new budget today. It will reportedly cut $1 billion for local governments and school districts. Now, the governor says he can also save money if the legislature ends collective bargaining for most state workers. But Democrats left the state to stall a vote.

Activists at the Ohio State House in Columbus today. You're taking a look -- a live look here -- these are live pictures at the scene right now.

They are protesting Senate Bill 5. That would restrict collective bargaining rights for state workers. Now, a Senate votes is possible today. Republican Governor John Kasich says that the bill would help ease Ohio's budget deficit.

And this in Arizona, opening statements today at the manslaughter trail of self-help author James Arthur Ray. Three people died during a sweat lodge purification retreat in 2009. Prosecutors say Ray allowed the building to become dangerously hot. Defense attorneys say participants knew the risks.

Happening this hour, the Libyan Embassy in Washington is taking down its current national flag, the green one, and replacing it with the one that flew before Moammar Gadhafi took power in 1969. It is simply the latest sign of Gadhafi's own diplomats turning against him, but Gadhafi insists he's not going to leave.

(BEGIN VIDEO CLIP)

MOAMMAR GADHAFI, LIBYAN LEADER: They love me. All my people love me. They love me, all.

CHRISTIANE AMANPOUR, "THIS WEEK WITH CHRISTIANE AMANPOUR": But if they do love you --

GADHAFI: They will die to protect me, my people.

AMANPOUR: If you say they do love you, then why are they capturing Benghazi and they say they're against you? Why are they --

GADHAFI: It's al Qaeda. Not my people.

AMANPOUR: Al Qaeda?

GADHAFI: Al Qaeda, yes.

UNIDENTIFIED MALE: Al Qaeda. Al Qaeda.

GADHAFI: They came from outside.

(END VIDEO CLIP)

MALVEAUX: Libya's deputy U.N. ambassador, Ibrahim Dabbashi, he joins us live from the United Nations.

Mr. Dabbashi, thank you so much for joining us here.

You heard Gadhafi's remarks. You know this man. You've worked closely with him.

Do you think he is close to the breaking point?

IBRAHIM DABBASHI, LIBYAN DEPUTY U.N. AMBASSADOR: Excuse me, I didn't hear the question. Could you repeat that question, please?

MALVEAUX: Certainly. We just played a clip, and we heard from Moammar Gadhafi saying the people love him. They love him.

You've worked with this man. Do you think he's close to the breaking point?

DABBASHI: I think this man -- I don't believe that even his family loves him at this moment. I think no one loves him at all.

The whole Libyan people hates him now. I think with all the atrocities he's doing in our country, all the bloodshed, all the killing, I don't know how he thinks, this man. I think he's certainly out of his mind.

MALVEAUX: You say he's out of his mind. A man who you believe is out of his mind, what do you think he's going to do now that there is turmoil in his country and he is hunkered down?

DABBASHI: I hope he will listen to reason, he will listen to the international community, and the world leaders who are asking him to quit as soon as possible. I think he has to put his old behavior -- it doesn't save his life, so it is very important for him and for his family to step down immediately.

MALVEAUX: Mr. Dabbashi, you talk about the international community. I want you to take a listen real quick here, because this is the U.S. ambassador to the United Nations, Susan Rice, who had this to say about her take on the Libyan leader and what is taking place right now --

(BEGIN VIDEO CLIP)

SUSAN RICE, U.S. AMBASSADOR TO UNITED NATIONS: It sounds just frankly delusional. And when he can laugh in talking to American and international journalists while he is slaughtering his on people, it only underscores how unfit he is to lead and how disconnected he is from reality.

(END VIDEO CLIP)

MALVEAUX: Mr. Dabbashi, do you agree with that? Do you think that he believes what he says? Does he believe what he is seeing? Or do you think he is out of touch with reality?

DABBASHI: I think what Her Excellency, Secretary Clinton, said is right. I think he's out of reality. That's right.

MALVEAUX: And real quick, if we can wrap here, what is the alternative now? What do you do? Can you support some kind of alternative caretaker government, somebody to try to get in there and take his place?

DABBASHI: Well, the Libyan people is doing its best to get rid of him. We know it is a matter of time. But certainly the Libyan people need the assistance of the international community to accomplish this goal.

Any action -- you know what are the demands of the Libyan people. Certainly, he has military supremacy over the people, and he is using airplanes to terrorize people, and killing them. And certainly, he's using heavy artillery and tanks against the people. So I think any action by the international community to deprive him of his supremacy will be appreciated by the Libyan people.

MALVEAUX: OK. Mr. Dabbashi, thank you so much for your time.

On another note, there will be dire consequences that could include layoffs. That is according to Wisconsin Governor Scott Walker. Walker plans to release his new state budget today as all of these protests around him continue.

Which brings us to our "Talk Back" question. Carol Costello, she joins us here in Atlanta.

I know you've been hearing from a lot of folks here about -- you know, everybody's paying attention to what's happening in Wisconsin because it could be anywhere.

CAROL COSTELLO, CNN CORRESPONDENT: Oh, it's fascinating. It is a fascinating situation, and it could quickly turn into a very sad situation for a lot of public employees.

Wisconsin Governor Scott Walker has issues an ultimatum. If Democrats who fled the state are not back by 5:00 p.m., he will release his budget with heavy-duty cuts.

(BEGIN VIDEO CLIP)

GOV. SCOTT WALKER (R), WISCONSIN: If they do not come home, there are dire consequences, dire consequences I don't think any of us, Republican or Democratic alike, would like to see happen here in the state of Wisconsin.

(END VIDEO CLIP)

COSTELLO: As in layoffs, and lots of them, including public employees and teachers. Walker says passing the bill is the only way to ease the budget crisis and allow time for a $165 million refinancing of the state debt, a step that would avoid layoffs. Besides, says Walker, Democrats have achieved their goal.

They slowed down the process. They grabbed the public attention. And some say their continued absence is making things increasingly intense in Madison.

A Fox News reporter says he's been harassed and attacked by members of the crowd shouting, "Fox lies!' According to Madison.com, the state house is now serving as a sort of protest village, complete with first-aid centers, scheduled events and childcare.

The fleeing Democrats who call the bill blatantly anti-union say taxpayers are not on the hook for their expenses. But Governor Walker has visited their districts. He's sent patrol officers to their homes in an effort to pressure them to return.

And what about the extra security around the capital? All of that costs money -- taxpayer money.

So, "Talk Back" today: Is it time for Wisconsin Democrats to come home and vote?

Facebook.com/CarolCNN. I will read your comments later this hour.

MALVEAUX: Carol, I talked to one of those state senators, and before. And it just sounds like they're pretty much set on staying out for a while until --

COSTELLO: The Democratic senators.

MALVEAUX: Absolutely.

COSTELLO: Oh, yes. They said they could stay out for as long as a month or two. Who knows?

But at some point, it's got to get pretty expensive for them, because Republicans in the Wisconsin state house are holding up their paychecks now, so they have to go home to get their paychecks.

MALVEAUX: Right.

COSTELLO: So that could throw a wrench into things, right?

MALVEAUX: They've got to be able to afford a month or two without pay.

COSTELLO: Yes.

MALVEAUX: OK. Thank you, Carol.

COSTELLO: Sure.

MALVEAUX: Well, here's a look at what's ahead "On the Rundown."

Tornadoes, flooding, firing sparked by lightening. An update in the clean-up after the storms.

And the U.S. moves Navy ships closer to Libya. A look at the balancing act that is facing the Obama administration.

And you are paying a lot more for gas. We all feel it. We're going to break down where that money goes.

And, also, no cash in your pocket, no problem. Technology can turn your cell phone into a virtual wallet. And finally, your turn to "Choose the News." We're going to recap the stories that you get to pick from.

(COMMERCIAL BREAK)

MALVEAUX: It's your turn to "Choose the News." We're going to tell you about three stories, and you vote by text messaging the one you want to see in detail at the end of the hour.

So, first up, celebrity fashion designer John Galliano goes on a racist rant, and it's caught on tape. Actress Natalie Portman is outraged, and Christian Dior is firing him.

Do you have a special talent to share with millions on YouTube? Well, YouTube will now pay you for it -- that's right -- and some folks are cashing in big.

Or from homeless to magical, how disadvantaged children are gaining self-confidence by learning the tricks of master magicians.

So, here's what you do. Vote by texting 22360: 1 for Galliano's Racist Rant; 2 for YouTube Millionaires; or 3 for From Homeless to Magical. The winning story is going to air at the end of the hour.

From Alabama to Indiana, people are cleaning up. They're taking stock after a terrifying 24 hours of storms.

(WEATHER REPORT)

MALVEAUX: Well, U.S. warships, moving now closer to Libya. A live report from the Pentagon.

(COMMERCIAL BREAK)

MALVEAUX: The unrest in Libya enters week three now. The violence is escalating, and now the U.S. is moving Navy ships closer to this divided nation.

I want to go live to our Pentagon correspondent, Chris Lawrence.

And Chris, the U.S. military now considering some options. What do we know?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Suzanne, we've now learned today that a second U.S. Navy destroyer has now entered the Mediterranean Sea. So now the U.S. Navy has two destroyers in the Mediterranean Sea, as well as a command and control ship at a port in Italy.

And if you look down near the Suez Canal and the Red Sea area, two more major ships have been moving closer to Libya. Now, one of them is the USS Enterprise. The other is the USS Kearsarge.

What this is doing is giving the military options, anything from using the military to disrupt Colonel Gadhafi's communications, prevent him from broadcasting in Libya, to humanitarian relief, and even imposing a no-fly zone. For example, the Kearsarge, in addition to being able to land Marines, also is sort of a floating hospital bay. It's got six operating rooms, the ability to care for up to 600 patients -- Suzanne.

MALVEAUX: And Chris, what about this no-fly zone? What are Pentagon officials saying about that? Is it possible? Can they do that?

LAWRENCE: Yes. Admiral Gary Roughead just told the House Armed Services Committee that, yes, the Navy is well-positioned for any sort of no-fly zone operation, to impose that. But other officials say it does not come without risks.

Now, take a look at what the head of U.S. Central Command said up on Capitol Hill just a couple of hours ago.

(BEGIN VIDEO CLIP)

GEN. JAMES MATTIS, COMMANDER, U.S. CENTRAL COMMAND: My military opinion is, sir, it would be challenging, you would have to remove the air defense capability in order to establish the no-fly zone. So it -- no illusions here, it wouldn't be a military operation. It wouldn't simply be telling people not to fly airplanes.

(END VIDEO CLIP)

LAWRENCE: Yes. So, again, you're talking about attacking Libya's air defense missiles on the ground.

And again, a no-fly zone is no cure-all. If you take a look at what the U.S. did in Iraq, the no-fly zones that were imposed over northern Iraq worked in part because the Kurdish militias controlled the situation on the ground.

The no-fly zone that was imposed in southern Iraq did not prevent Saddam Hussein from going in and attacking large numbers of Shiites because the U.S. did not have that control over the ground, the same as not having the control over the ground there in Libya. So, there's no illusion that a no-fly zone will cure all the problems there.

MALVEAUX: OK, Chris. Thank you very much.

I want to bring in our Michael Holmes. He's here taking a look at the Obama administration, the difficult position they're in now as this bloody uprising continues to unfold. It's our topic today with "Globe Trekking."

And Michael, critics say the Obama administration has not been strong enough in its response, but you take a look, you've got U.S. ships now in the Mediterranean. Is that enough to shake Gadhafi, do you think?

MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: You know, we've heard a lot of tough talk of course from the secretary of state for a starter, Hillary Clinton. But I think it is going to take more than words to oust a man like Moammar Gadhafi. But the point is, is that a good idea at the moment?

There's no point -- at this point, there's no telling whether the threat of action is going to be enough to change the situation on the ground. Taking action is a big step though.

Now, as we heard yesterday, this guy says there haven't even been any demonstrations in Tripoli, everybody loves him. That's his words. The facts, of course, are that this is day 15 of an uprising that has cost hundreds -- probably actually thousands of lives. A lot of people are saying it's about time something was done.

MALVEAUX: Well, we know that the president eventually, soon, we've learned, is going to make a major speech, a statement about the Middle East and what is taking place there. But we don't suspect this is going to be kind of a Berlin Wall moment for President Obama, do we?

HOLMES: No, I don't think so. In many ways, he's been forced, partly by the U.S.'s own foreign policy, to the sidelines in a way. But there's a complex set of social and political factors right across the region.

Now, first off, the U.S. doesn't want to be seen as some sort of imperial force wandering into Libya when the opposition forces want to be seen to be doing this themselves. Not everyone would greet American troops as liberators anyway, especially if the U.S. acted unilaterally. And I don't think they would, not without any sort of assistance from NATO.

You know, you look at Iraq, Afghanistan, and in terms of military action as well, look at Somalia in the early '90s. It didn't go so well. Those men were (INAUDIBLE).

Also, I think, as I said, it's far more likely the U.S. would let Europe, NATO take any lead on tangible action. Most of Libya's exports, including they all go to Europe.

And also, you know, we know that there's no guarantee that any democracy that could blossom in the Arab world or North Africa is going to be one that shares U.S. interests. In fact, quite unlikely it's going to be the same sort of Middle East that we've seen.

Again, Iraq, Afghanistan, examples of where democracy, per se, has not gone exactly how the U.S. would ideally have wanted. But beyond humanitarian concerns, the main interests of the United States and the region, counterterrorism efforts, watching over Israel, protecting the oil supply, and containing Iran.

MALVEAUX: And Michael, that doesn't seem to have changed. Having covered the Bush and the Clinton administrations, those were their priorities as well.

HOLMES: Yes, exactly. And as awful as the rule of Arab dictators and autocrats has been, one would think that we could generally count on their stability. And that was always the aim of the foreign policy, a precarious asset, stability in that part of the world.

Right now, nothing's certain to play out the way the West hopes it will. The question of whether the new Arab world would be as willing to oppose Iranian nuclear proliferation, for one, their feelings about Israel, their feeling about fighting those insurgents, the terrorists, if you like, all of that hangs in the balance.

There was an interesting poll, by the way, the Brookings Institute. Fifty-seven percent of the Arab public said that if there were nuclear weapons in Iran, it would be a positive thing. A positive thing. So no certainty of any rosy outcomes here, that's for sure, as far as the West is concerned.

MALVEAUX: All right, Michael. Thank you.

HOLMES: Good to see you.

MALVEAUX: Appreciate your perspective.

Well, gas prices, they're on the rise. The pain is going beyond the pump. We're going to examine the impact and tell you where your money is going.

(COMMERCIAL BREAK)

MALVEAUX: Here's a look at what's ahead "On the Rundown."

You're paying a lot more for gas, we don't have to tell you that. But we're going to break down where all that money is going.

Also, no cash in your pocket? No problem. Technology now can turn your cell phone into a virtual wallet.

And your turn to "Choose the News." We're going to recap the stories you get to pick from.

Well, we don't have to tell you, gas prices, going up and up and up. You might call this a sign of the times. More than $4 a gallon for premium unleaded at a gas station in L.A. And the pain of the pump goes far beyond at the gas station. Our Stephanie Elam from our Money Team is joining us to talk about impact of rising gas prices. Stephanie, 50 bucks to fill my tank now. Is it getting worse? Where does it end?

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: I'm right there in that pool with you. See, it would be better for you to stay in D.C., Suzanne.

(LAUGHTER)

ELAM: But when you look at the gas prices over the last seven days and they've been on the rise, so the national average for a regular gallon of gas is now at $3.37 a gallon. Obviously, a lot of people are thinking back to 2008, where we saw those $4 and more for the average. Not just, you know -- places like California and Hawaii, they're always more expensive there. We're used to seeing that in L.A., but not for the rest of the country.

And there's a lot of things that play into this. If you look at how much we're spending, it really does matter. One analyst tells us that when you see just a 25 cent increase for a gallon of gas, then Americans are spending $3 billion filling up, and that really does make a huge difference for a lot of Americans.

Think about it. If you have a mom-and-pop shop and you're selling fruits and vegetables in your little shop there, well, you know what? You're finally just getting your consumers coming back to your store. You don't want to maybe pass on that increase to them, because you want to keep them coming. But then that means maybe you're not hiring a stock person or somebody else, which then factors into the spending habits, right? So, consumers aren't spending because then they don't have a job and if that happens, that can slow down the economic recovery, and that's why we care so much about this.

Then on top of this, Suzanne, it's not just at the pump. You know, for all things like getting our food, for the fact that how clothes are made -- maybe you have a big plant and you need to heat it and you need oil to do that. You need all sorts of things to truck the fruit from where its grown and then get it to the restaurants. Restaurants are paying more for that. All of that factors in. Obviously, air fare, we all know that's an easy one. We see they have these little rises in prices, and they meet each other on them and the air fare goes up.

So, these are all reasons thatwe care about it. It's not just at the pump. It's in a lot of different ways at the rise in gasoline prices. Because of oil, will do this to us?

MALVEAUX: And where is all that money going?

ELAM: Where is all this money going? Well, let me put it to you this way. We're seeing this rise because -- and Americans get this. We know what's going on in northern Africa and the Middle East, right? You're seeing this unrest because of that, right? Even though these aren't major oil producing countries.

But because there's been a bit of a disruption on getting oil from that region of the world to other places, that's why we're seeing the rise go up because it's taking more to get the oil from there and to get it to where it needs to be. And just any jitteriness around this, we're getting very close to $100 a barrel for oil. If that happens, that could send another little trigger of fear and whether or not there will be any supply disruptions. It's about getting the oil from where it is to where it needs to be around the world.

MALVEAUX: All right. Stephanie Elam. Thanks, Stephanie. Appreciate it.

Want to bring in our CNN's Carl Azuz to break down each dollar out of your gasoline bill. Carl, tell us, what does it take? What are the gasoline stations, what are they making out of this?

CARL AZUZ, CNN MONEY TEAM: Gasoline station actually just pennies on each gallon. It's really not very much at all, although, of course, that's where we feel the pain when we have to pay for it.

But obviously, if you look at that chart here, you're going to see that OPEC, as Stephanie Elam mentioned, they determine the biggest factor in how much gas costs. Sixty-eight cents of every dollar you spend goes to crude oil. That's set by OPEC.

Second, taxes. We're not just talking about federal taxes. State and local taxes, 14 cents out of every dollar on average and because those taxes vary, states make some money off this. Local governments do. So, that's why gas prices vary state to state. Refining, 10 cents. Making that crude gasoline, (INAUDIBLEO gas, that sort of thing.

And getting it from the refineries to your local gas station. If you add all that up, you'll see 100 cents out of the dollar is spent underscoring the fact these filling stations really are not making huge amounts of money.

MALVEUAX: And Carl, besides OPEC, what are the factors here into the rising cost of gasoline?

AZUZ: Well, you know, there are seasonal factors. Summer, kids are out. People drive more. Take vacations. That has something to do with it.

Also, geography. In general, the further away you live from a refinery, the more you're going to pay for your gas.

Competition. You have three gas stations on a corner. If one lowers its prices, the others might try to compete with that. A couple of cents might play in there.

And then the market on the law. I mean, these filling stations, they still want to make profits. But obviously, they cannot legally price gouge. They have to also take into account what the market will allow. So, what it basically comes down to is you see OPEC getting lion's share of the money at the filling stations, even though a lot of times we might be tempted to kind of take out our frustrations there. They're only really making just a tiny bit on the dollar.

MALVEUAX: That's so true. That's a great point, because a lot of times, you think, these guys! But they're right there. They have nothing to do with it, really.

AZUZ: It's easy to get angry at them, but they're really -- just as you said, very little to do with it. Bottom line.

MALVEAUX: All right. Carl Azuz, thank you so much.

AZUZ: Thank you, Suzanne.

MALVEAUX: A reminder about your chance to Choose the News. You vote by texting 22360. Vote one for Galliano's racist rant. Why a celebrity designer for Christian Dior is being fired. Vote two for YouTube millionaires. How thousands are making a living posting videos on YouTube. Or three for, from homeless to magical. Children building self-esteem by learning magic tricks.

(COMMERCIAL BREAK)

MALVEUAX: She was often referred to as a full-figured actress. Jane Russell, the 1950s bombshell, has died. She was 89 years old. Russell's family says the actress caught a bad cold and died from a respiratory disease.

Russell's probably best known for star in starring with Marilyn Monroe in the 1953 hit "Gentlemen Prefer Blondes." She also starred in a cross-your-heart bra ads in the 1970s. Critics gave her high marks for her comedic timing and singing.

(BEGIN VIDEO CLIP)

JANE RUSSELL, ACTRESS: (singing)

(END VIDEO CLIP)

MALVEAUX: Wow! Russell first shot to fame as a World War II pin-up girl. Throughout her career, Russell was a staunch conservative who said she considered Democrats in Hollywood crazy.

Well, a major star is taken into custody. We're learning more about Moammar Gadhafi's Hollywood ties as well. All of this news tonight. "Showbiz Tonight" host Brooke Anderson giving us the lowdown on all the entertainment headlines.

Brooke, great to see you. Christina Aguilara. What do we know?

BROOKE ANDERSON, "SHOWBIZ TONIGHT" CO-HOST: Well, Suzanne, this just happened this morning. Christina Aguilera was arrested this morning for being too drunk to take care of herself. It's actually going to be public intoxication on her record. An L.A. Sheriff's Department press conference out here just wrapped up and they are saying despite the arrest, there are no plans to prosecute here.

Here's what happened. An officer pulled her over Aguilera and her boyfriend, Matthew Rutler at 2:45 this morning. Suspicion of DUI. Rutler was behind the wheel and he was arrested for driving under the influence. The deputies decided that Aguilera was too intoxicated to care for her safety, so she was taken into custody to sober up. We just learned she was released and picked up by a friend around 7:30 this morning. So, just a couple of hours ago.

Suzanne, the police say that while she was incapacitated, Aguilera was very cooperative and not belligerent.

MALVEAUX: And Brooke, we're also learning some new things here. Libya, everyone's watching what is happening there. It could slip into a civil war. But there seems to be a connection, a Hollywood connection, to the Gadhafis. Can you tell us about that?

ANDERSON: That's right, Suzanne. Mohammar Gadhafi and his family have been pretty extravagant over the years, and have paid a lot - a lot --of money to have high-profile celebrities perform for them, entertain them. Nelly Furtado is the only star so far who has publicly admitted that she performed for the Gadhafi clan. She tweeted that she received a million dollars for a 45-minute show in Italy. She now says she will donate the money.

But others stars including (INAUDIBLE), Beyonce and Lionel Richie have been tied to the Libyan family. And for now, they are not commenting on the reports.

But this is actually not a new story. Beyonce got a lot of attention for reportedly getting $2 million for a New Year's Eve concert in St. Barts put on by one of Gadhafi's sons back in 2009. She responded at the time by saying that basically, everybody does it. She said, quote, "Past performances have included Timbaland, Enrique Iglesias, and Mariah Carey." She added the guest list included Usher, Lindsay Lohan, Russell Simmons.

So, Suzanne, it's a lot of money, but at what cost to their public image?

MALVEAUX: And so far, it's just Nelly Furtado who's come out and said she's giving this money away.

ANDERSON: Publicly admitted it, yes. And donating the money.

MALVEAUX: OK. Great. Thank you, Brooke.

Well, you can always get your entertainment news update on "Showbiz Tonight" with Brooke Anderson and A.J. Hammer. That is 5:00 and 11:00 p.m. Eastern on HLN.

And you can put away your wallets because we're going to tell you about the virtual wallet in "Text Tuesday."

And tax season just around the corner means it's time to start talking about tax deductions, so here's the question. Which of these expenses was allowed on last year's return? Organic food, dancing lessons, dentures or artificial sweeteners. The answer when we come back.

(COMMERCIAL BREAK)

(MUSIC PLAYING)

MALVEAUX: So, which weird deduction was allowed on last year's return? The IRS permitted the difference between organic food and regular, chemically treated food to be written off as a medical deduction. The others were denied. Just one more reason to eat healthy.

Well, paying for lunch? Forget about the wallets. All you need is your cell phone. New technology turns your phone into a virtual wallet. Our CNN Silicon Valley correspondent Dan Simon gives us a look inside.

DAN SIMON, CNN CORRESPONDENT: Suzanne, we're at Starbucks talking about something that is very important to people. You might be thinking we're talking about coffee. No, we're actually talking about money. Starbucks has done something pretty innovate where you can now pay for your products using your Blackberry or your iPhone. Essentially what they've done is they've created a digitized version of this, their gift card. So here it is right here on your phone. So when you get up to the counter and actually pay, you just take your phone, you see the bar code right here, swipe it and, boom, you've paid for your coffee.

Now, the mobile payments industry is on fire right now. One of the hottest Silicon Valley start-ups comes from a company called Square.

(BEGIN VIDEOTAPE)

SIMON (voice-over): This little white device may be the greatest thing ever for lemonade stands, school bake sales and push carts. All cash businesses. But now, with a smart phone or tablet, and this thing that goes into a headphone jack, they can now take plastic. Suddenly, anyone is capable of accepting a credit card. It comes from a start-up apply named Square. Jack Dorsey, also a co-founder of Twitter, is its CEO.

SIMON (on camera): So who is the primary user of the Square? Who would the core customer be?

JACK DORSEY, CEO, SQUARE, INC: It's really any small business in the United States. You can imagine you know, hairdressers, tax accountants, small business owners. You know, any sort of professional service, like a piano teacher or golf instructor.

SIMON (voice-over): The company says it is signing up 50,000 new customers a month. It makes money by getting a cut of the transaction.

DORSEY: We take a transaction fee of 2.75 percent and we pay the banks and the credit card companies out of that. So the user just pays that amount.

SIMON: Setting it up requires you to download the free Square app. You'll have to input some info, including your banking account number, so the money gets routed to you. Brandon Arnamick (ph) has a small cupcake store in San Francisco. He says Square solved what he deemed a major hassle of setting up pricey credit card swiping equipment. His tablet now does all the work.

BRANDON ARNAMICK, SMALL BUSINESS OWNER: The iPad is basically our register. So that's our point of sale system. We flip the screen over. They sign it with their fingernail.

DORSEY: It's really, really hard to get started to start accepting credit card payments. You have to go to the bank. You need to get a merchant account. We send you a reader in two to three days and you can start accepting payments. It posts directly to your checking account so you can use that money immediately.

(END VIDEOTAPE) SIMON: Here's another innovative way to give someone some money. PayPal has an application where you can literally bump money to somebody's phone. As long as both people have the same app, you take your phones, boom, you bump them together, that person's going to get some money. It's getting to the point now where you don't even need your wallet. Everything will be right on your smartphone.

Suzanne.

MALVEAUX: Cool. Thanks.

Well, you are sounding off on our "Talk Back" question today. Is it time for Wisconsin Democrats to come home and vote? Jim says, "they should not go home until Walker concedes." We're going to have more of your comments.

(BEGIN VIDEOTAPE)

ELAM: Time now for "The Help Desk," where we get answers to your financial questions. With me right now, Ryan Mack. He's the president of Optimum Capital Management. And Doug Flynn. He's a certified financial planner and founder of Flynn Zito.

Thank you, gentlemen, for being here.

First question is from Vince in West Virginia who writes, "Should I pay a fee to check my credit score online? Is this information that the bank will freely share with me when applying for a long?"

What's the answer, Ryan?

RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Well, obviously, yes. I mean, well, you don't have to pay the fee. You can get your FICO score for free. But, I mean, getting the FICO score at the time of getting the loan is almost like putting your seat belt on after the car has crashed, you know? So we want to do these things previously.

You can go to freecreditscore.com and they have a seven-day trial waiting period where if you can actually get your FICO score and cancel before that seven days is up, then you can get -- actually get it for free. And myfico.com has a 10-day trial waiting period where you can do it before they pay that $89.95 annual fee. So if you can do that -- or you can actually -- many lenders, as they're getting applications, are sending our free FICO scores with that. So there -- these are different ways you can get it, but definitely do it before the process starts.

ELAM: All right, the next question comes from Carrie in California who writes, "is my husband of eight months entitled to half of my 401(k)? He did not bring any assets into the marriage." Hopefully the marriage is doing better than it sounds like it's doing, Doug.

DOUG FLYNN, CERTIFIED FINANCIAL PLANNER: Yes. Well, she's in a community property state and there are 10 of those in the United States. You need to know if you're in one. But, generally, no matter what, assets that you brought in prior are treated separately than assets you acquired during the marriage. It would be unlikely, but ultimately it's up to the individual courts. So you need to get with an attorney and really find out for your situation how that works.

ELAM: How it works. All right, well, good information, guys. Thanks so much for helping us out.

And if you have a question you want to get answered, hey, let us know. Send us an e-mail any time to cnnhelpdesk@cnn.com.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

MALVEAUX: Wisconsin Governor Scott Walker plans to release his new state budget today, even as protests enter a third week. Here's your chance to "Talk Back." Our Carol Costello, she's joining us here in Atlanta.

Carol, what are folks saying?

CAROL COSTELLO, CNN CORRESPONDENT: Oh, they're very heated about this question. As you know, the governor's going to release his budget and the cuts in the budget might mean layoffs for public employees. So the question today, is it time for Democrats to come home and vote?

This from Tarik. He says, "why aren't taxes on those who can afford it on the table for the governor? Cutting taxes for corporate interests and cutting education cannot be an American ideal and can't be considered a good thing."

This from Maureen. "Yes, that is democracy. Those Democrats who are not showing up for work are the folks who should receive pick slips."

This from Rob. "When everyday people are willing to, one, run into the burning building to fight fires, two, get shot while protesting the innocent, three, take their own trash to the dump two times a week with the bags leaking on their back seats and then pay the dump, four, not work and self educate their own kids at home, five, fix pot holes on their own, then, sure, get rid of unions."

MALVEAUX: Yes, no lack of opinions there.

COSTELLO: No, very strong opinions and a great conversation. So keep the comments coming, facebook.com/carolcnn. I'm going to go check it out right after this.

MALVEAUX: All right. Great. Thanks, Carol.

COSTELLO: Sure.

MALVEAUX: And our producers are tallying the last minute results of your "Choose The News" winner up next.

(COMMERCIAL BREAK)

MALVEAUX: Well, you choose it. We're airing it now. Christian Dior's celebrity designer John Galliano is being fired after spewing hateful remarks at a Paris bar. Our CNN's Hala Gorani brings us the story.

(BEGIN VIDEOTAPE)

HALA GORANI, CNN INTERNATIONAL CORRESPONDENT (voice-over): He is one of high fashions golden boys, British designer John Galliano. He's been called a genius. He's been called an inspiration. But now, some are calling him a vile racist.

The head of French label Christian Dior, Galliano was arrested last week for allegedly hurling racist and anti-Semitic insults at a couple dining in La Parel Brusary (ph) in Paris. And if it seemed things couldn't get worse for Galliano, Monday they did. Britain's "Sun" newspaper obtained a video of what it says is another incident at the same cafe in October.

JOHN GALLIANO, DESIGNER: I love Hitler. People like you would be dead today.

UNIDENTIFIED FEMALE: (INAUDIBLE).

GALLIANO: Your mothers, your forefathers would be (EXPLETIVE DELETED) gassed and (EXPLETIVE DELETED) dead.

UNIDENTIFIED FEMALE: Oh, my God. Do you have a problem?

GALLIANO: With you? You're ugly.

GORANI: In the tiny world of high fashion, allegations of Galliano's slurring racist insult spread like wildfire. And at Sunday's Oscar ceremony, best actress winner Natalie Portman, the celebrity face of Miss Dior perfume, was asked about the controversy.

UNIDENTIFIED FEMALE: As the face of Dior, what didn't you wear Dior and what are your thoughts on John Galliano's suspension and those allegations that he made anti-Semitic remarks?

NATALIE PORTMAN, ACTRESS: I don't -- OK.

GORANI: But her people didn't let her touch the, quote, "couture hot potato."

UNIDENTIFIED MALE: We're just going to move on.

UNIDENTIFIED FEMALE: OK.

UNIDENTIFIED MALE: Sorry.

GORANI: John Galliano's lawyers say they will fight charges of insult and defamation, but for the Dior brand, this scandal is damaging and the label's parent company acted quickly. JAMES FALLON, EDITOR, "WOMEN'S WEAR DAILY": I don't think LVMH could afford to wait until six months down the road to see the facts that came out, especially with the bloggers and the tweeters and the Internet and all of that, as it already has gone crazy with the various accusations.

GORANI: If convicted of those charges in the latest incident, Galliano faces fines and even jail time. But perhaps for one of the most famous and successful designers in fashion history, it is not the loss of his freedom, but of his reputation that will be hardest to recover from.

Hala Gorani, CNN.

(END VIDEOTAPE)

MALVEAUX: After we filed this report, actress Natalie Portman, who is Jewish and just won the Oscar for best actress, said she is, quote, "deeply shocked and disgusted by the video." She says she will not be in association with Galliano in any way.

CNN NEWSROOM continues right now with Christine Romans, who's in for Ali Velshi.

Hey, Christine.