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Bin Laden's Fixation with the U.S.; Big Oil Execs Defend Tax Breaks; President Speaks at Prayer Breakfast; President Obama to Hold Budget Summit with GOP; Obama, GOP to Hold Budget Summit; Ohio Man Guilty of Nazi Crimes; Evangelist Billy Graham Hospitalized for Pneumonia; Mississippi River: Target Louisiana; The FBI's Steinbrenner Files

Aired May 12, 2011 - 09:00   ET

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

CAROL COSTELLO, CNN ANCHOR: Hey, have a good day. Thanks so much.

It is 9:00 a.m. on the East Coast, 6:00 a.m. out West. Good morning to you. I'm Carol Costello, sitting in for Kyra Phillips.

Busy day taking shape in the CNN NEWSROOM.

Right now on Capitol Hill, oil and gas executives are in the hot seat. They are facing questions over why they deserve billions of dollars in tax breaks while raking in near-record profits. We'll listen in in a bit.

At the bottom of the hour President Obama takes part in the National Hispanic Prayer Breakfast. The annual gathering stresses faith and activism for the fast-growing segment of the U.S. population. We'll take you live when President Obama begins speaking.

But first, the latest developments in the death of Osama bin Laden. Intelligence experts are poring over a prize discovery in the raid, a personal journal handwritten by bin Laden. In the journal and in documents saved on computer hard drives, there are reports that bin Laden urged his followers to recruit African-Americans and Latinos within the United States.

Also, are Americans safer nearly 10 years after the 9/11 attacks? That is the question the lawmakers face today. They're reviewing all of the intelligence reforms that have been put into place over the past decade.

And the first members of Congress have now seen the photos of bin Laden's bodies. Lawmakers are largely split along party lines on whether the images should be released to the public.

One Republican senator who saw the photos says some may actually be fit for public viewing.

(BEGIN VIDEO CLIP)

SEN. JAMES INHOFE (R), OKLAHOMA: There are 15 pictures. The first 12 were taken in the compound right -- it was obvious it was right after the incident took place. So they are pretty grueling. The other three were taken on the ship, and they included the burial at sea.

(END OF VIDEO CLIP)

COSTELLO: Now to the bin Laden diaries. And the latest information gleaned by intelligence experts. It turns out that bin Laden was obsessed with attacking the United States and according to the "Washington Post," that put him at odds with some followers. They wanted to move on to safer targets.

Reza Sayah is in Islamabad, Pakistan.

Reza, can you get more into this for us? I mean, why do you think that some of bin Laden's followers wanted to move beyond attacks on the United States?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Well, there are indications that they didn't want blowback. They didn't want America to move into their region. And that seemed to be a source of disagreement between Osama bin Laden and some of his affiliate groups.

But certainly U.S. officials say, when they looked at these documents, they do show that Osama bin Laden was fixated on carrying it out, another attack on the scale of 9/11 on U.S. soil.

These documents, according to U.S. officials, had Osama bin Laden marking off key dates on the U.S. calendar, Fourth of July, Christmas, 9/11. And apparently he wanted to launch an attack on these particular dates.

And this is not a shocker really. The U.S. to bin Laden of course was enemy number one and vice versa. He of course made his name-plotting attacks against the U.S. And it was his view that the U.S. was the leading cause of oppression, injustice and conflict in this particular region.

And he thought the best way to get the U.S. and U.S. forces out of this region was to kill as many civilians as possible on U.S. soil. And what's interesting again is that some of those affiliate groups in other parts of the world -- Yemen, Somalia, Algeria -- didn't necessarily agree with him.

They wanted to focus on smaller attacks, regional attacks, somewhat of a source of frustration for Osama bin Laden according to these documents -- Carol.

COSTELLO: Interesting. And I was also wondering, how active was bin Laden in plotting attacks? I mean, didn't his compound be called a command and control center? Would that be accurate?

SAYAH: It would be hard to call it a command and control center based on the information that's coming out of these documents. It looks like what he conveyed was his broad general instructions, his view of what he wanted to see.

There's no indications, according to this "Washington Post" report, that he was involved in devising and plotting the details of attacks. It looks like he was communicating with some of his senior officials. Most notably al Qaeda number two Ayman al-Zawahiri.

But the communication was difficult. The only way that he could communicate, according to these documents, was putting information on these thumb drives, these hard drives, and passing them along with a courier. Obviously, very inefficient.

So you get the sense that this was a very fragmented and inefficient al Qaeda. Even so, you could tell by these documents that he still wanted to launch another attack on U.S. soil.

COSTELLO: Always fascinating. Reza Sayah, live in Islamabad, Pakistan. Thank you.

Back here in the United States, two men in custody in an alleged terror plot against New York City. The suspects were arrested in a police sting as they tried to buy several guns and a grenade.

The source telling CNN the men were planning an attack against a Manhattan synagogue. Their identities have not been revealed but the two men are said to be of North African descent.

A Massachusetts man says he's the furthest thing from a terrorist and he was not trying to hurt anybody on board his plane. But he was arrested Tuesday night when his Delta flight landed in Boston for messing with an emergency exit door. He has pleaded not guilty to interfering with the operation of the aircraft and he criticized authority's actions as over the top.

(BEGIN VIDEO CLIP)

ROBERT HERSEY, CHARGED WITH INTERFERING WITH AIRCRAFT: It was a plastic cover. The -- you know?

UNIDENTIFIED REPORTER: Were you surprised by the -- when you got to Logan?

HERSEY: Surprised -- well, when the second landed on my lap, there was nobody more surprised than I was.

UNIDENTIFIED REPORTER: You weren't making some lunge for the door?

HERSHEY: Not at all. Sitting on my seat, just -- you know, fatting (ph) around, flipping the tray.

UNIDENTIFIED REPORTER: Bored on the plane.

HERSHEY: Exactly.

(END OF VIDEO CLIP)

COSTELLO: We'll see what the president of Flight Attendants Union thinks about that and all the other flight incidents lately. She will join us live in the next hour.

As we speak, right now, the heads of five big oil companies are on Capitol Hill to explain why they need tax breaks while they rake in billions of dollars in profits. The heads of ConocoPhillips, ExxonMobil, Shell, Chevron and BP American all testifying.

Senate Democrats say with numbers like that in just one quarter, the companies do not need the government's help. And that the taxes they're not paying could go towards the national debt.

Dana Bash is on Capitol Hill.

So, Dana, do you think it will be spicy? I mean I can already hear lawmakers' questions to these CEOs.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Do I think it will be feisty? I will be shocked if it is not feisty. Absolutely shocked.

The hearing just began. You see the chairman of the Finance Committee giving his opening statement, Carol. He is making the point that we have heard from Democrats over and over for the last few weeks as they have pushed this political strategy to deal with high gas prices, the strategy to go after these oil companies.

He's saying that they simply don't need subsidies at a time of record profits for these companies. For example, let me just show you what we're talking about. There's a new Fortune 500 study that came out ranking the most profitable companies in the Fortune 500.

ExxonMobil was number one, $30.5 billion in profits last year. Chevron, number three, of all the Fortune 500 companies, $19 billion last year.

Now we do know from talking to some people and taking a look at what we expect to hear from the executives that they're going to say, Carol, that this is just not fair. That this is discrimination, singling out these -- just these five companies. Because that's really what this legislation Democrats are pushing does.

It simply gets rid of tax deductions, tax breaks for the big five oil companies that are represented at this hearing today.

COSTELLO: Yes, and you know, a good argument is, hey, we're a capitalist society. That's what companies do, they make money.

ConocoPhillips' CEO, they had a statement that came out. They said that killing the tax breaks are un-American. How exactly has that gone over?

BASH: Not too well. Not too well. Senator Robert Menendez who is on this committee, he saw that statement in a press conference yesterday really took issue with it, saying that they -- that the company is questioning the patriotism of public servants who are simply trying to do what they think is best in terms of public policy which is to get rid of subsidies for these oil companies.

And I should tell you that the other thing we're going to hear from these companies is that they say that they are -- even with these subsidies they are taxed much more heavily than other companies and other sectors in the business community around the country. COSTELLO: Yes. When those CEOs start testifying, we'll take it live. We've been showing live pictures of the hearing in progress and the chairman, Max Baucus, is talking now. But when we get to the CEOs, we'll get back live to that hearing.

In other news from Capitol Hill, President Obama is speaking at the National Hispanic Prayer Breakfast this hour. It's the second opportunity this week for the president to push Comprehensive Immigration Reform.

CNN's Ed Henry is at the White House. He has more on that.

Hi, Ed.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good morning, Carol. You're right.

White House aides say the president wants to obviously talk about the power of prayer at this breakfast and use it as an opportunity secondly to sort of get the country, urge the country to come together, both parties on Capitol Hill in particular.

You heard him do that after the killing of Osama bin Laden saying it was time to put petty differences aside and come together. He also did that after the tragedy in Tucson when he gave that eulogy at the memorial service in Arizona.

But finally, as you mentioned, he also wants to talk, according to White House aides, about Comprehensive Immigration Reforms. He did that earlier this week when he made his first visit to the U.S.-Mexico border down in El Paso, Texas, earlier this week.

But what's interesting is that, you know, you will remember in those remarks, the president sort of couched Comprehensive Immigration Reform in humane terms, spiritual terms almost, and saying, look, people who are living in the shadows are taking advantage of it.

So it's unfair, putting aside the economic issues and other things. It's just unfair. They work in unsafe conditions, et cetera, and something needs to be done. But undoubtedly, there'll be some Republicans wondering why the president is mentioning immigration reforms at a prayer breakfast. Does it have something to do with those Hispanic voters who will be up for grabs in 2012 and were so pivotal in the last few election cycles -- Carol.

COSTELLO: Ed Henry live at the White House. Thank you.

HENRY: Thank you.

COSTELLO: President Obama will also hold a budget summit with GOP lawmakers a little later today.

Coming up next, we'll talk with one Republican who is not happy about that summit. He thinks the summit is more like a stall tactic.

(COMMERCIAL BREAK) COSTELLO: The ranking member of the Senate Budget Committee meets with President Obama in just a few hours for a summit on the budget. And Republican Jeff Sessions of Alabama is not very happy about it. He still thinks -- he thinks it's a stall tactic.

The senator joins us live.

Welcome, Senator.

SEN. JEFF SESSIONS (R), RANKING MEMBER OF BUDGET COMMITTEE: Good morning, Carol. I am not sure I see it exactly that way but I'm afraid that we may not accomplish a lot out of this. And I do think the president would do well to inspire us and cite the reason we've got to make big changes in the way we're doing business and commit himself to help us achieve that.

COSTELLO: Did you also say, though, that the meetings are a stunning development? Are you surprised that the president wanted to hold this summit?

SESSIONS: Well, I was, actually. I think it came up almost on the spur of the moment. But we were ready at that point to begin budget hearings. We are way behind producing a budget in the Senate. It should have been produced April 15th.

We've not even started a markup. So we had markup set at that time. And of course, they've been canceled as a result of this meeting. So I thought it was a rather dramatic alteration of what was occurring at the time.

COSTELLO: Senator, are you going into the meeting with an open mind?

SESSIONS: Well, sure, I'm open-minded. And I just have to say what I'm troubled by is the things we have seen in concrete form from the president, his budget and even his speech, do not come close as Erskine Bowles said to doing what's necessary to avoid the fiscal challenges and nightmare we face.

So we have got to see something from him that's realistic. And we haven't seen it to date. Senator Conrad, our budget chairman, has indicated that his budget is unacceptable. And it is. So the Democrats need to come forward with some concrete proposals.

COSTELLO: Well, Senator, the president has floated this idea of automatic budget cuts and tax hikes if Congress doesn't hit, like, pre-set targets for reducing deficits? Are you --

SESSIONS: He floated that -- yes.

COSTELLO: Are you up for that?

SESSIONS: He floated that yesterday based on the best I have heard. It hasn't been communicating to me directly. If he'd like to pursue that and give us some real concrete figures about it, I think it could be something we could seriously work on.

COSTELLO: Oh, that's good to hear. So --

SESSIONS: Yes, sure.

COSTELLO: Maybe you will talk about that in the big summit.

You know what I'm going to ask you next because it keeps coming up. The majority of Americans, including the majority of Republicans, are for it. Are tax hikes on wealthy Americans on the table?

SESSIONS: Look, we have not shown any inclination to reduce spending. The American people have seen the tax proposals. And I have seen the tax proposals. They really cover everybody. It's going to impact the economy.

So, before we talk about raising taxes, we need to be sure that we have a commitment to end wasteful Washington spending and contain the 24 percent growth in nondefense, discretionary spending that has occurred in the last two years.

This is unsustainable. We are borrowing money --

COSTELLO: Senator, are you saying that if there are cuts in spending, to your satisfaction, that you would consider raising taxes on wealthy Americans?

SESSIONS: Well, let me just say it this way -- we have got to get this country on a sound financial footing. It is not happening now. We are not seeing leadership from the White House to get us there.

Once we see a commitment that fundamentally reduces the size and surging growth of our government, other things may be considered.

COSTELLO: Like a tax hike on the wealthy Americans?

SESSIONS: Well, let's see what they actually are proposing. And we'll see how it plays out.

But the idea that we are going to solve our problem by tax increase after tax increase is dead. The American people do not want that. And we're not going to see it.

COSTELLO: Also, Senator, you are on the Armed Services Committee. Have you seen or do you plan to view the pictures of Osama bin Laden's body?

SESSIONS: I believe he is dead. I don't see any need for me to see that. Although, I do -- would like to talk to the CIA some about what they are finding, the kind of intelligence they are gathering and what kind of new insight this very effective operation will give us as to where al Qaeda is headed and what we can do to further diminish it.

COSTELLO: Why don't you want to see the pictures?

SESSIONS: I just have no interest in it. I trust the president. I trust the military. And I don't have any particular interest in seeing the pictures. COSTELLO: Senator Sessions, enjoyable as always. Thanks so much for joining us.

SESSIONS: Thank you.

COSTELLO: We are awaiting a speech from President Obama at the National Prayer Breakfast. That's meant to start in just about 10 minutes. And when it does, we'll dip in and let you listen to some of what he has to say. We'll be back.

(COMMERCIAL BREAK)

COSTELLO: Checking stories cross-country.

Former NFL star quarterback, Brett Favre, huddled with Alabama tornado victims in the storm-ravaged town of Hackleburg. It's where 18 people died in the April 27th twister.

(VIDEO CLIP PLAYS)

COSTELLO: Police in Baton Rouge, Louisiana, put a quick end to a planned burning of the U.S. flag, citing the safety of the event's organizer. You can see officers escort Benjamin Haas away as a large crowd hurled jeers. Actually, they hurled water balloons and they hurled with garbage and they shouted jeers. Haas wanted to protest last week's arrest of another LSU student suspected in a separate flag-burning.

And imagine living without Facebook at your name is Mark Zuckerberg. Well, a lawyer from Indiana knows after the social media giant pulled his account citing false identity.

(BEGIN VIDEO CLIP)

MARK ZUCKERBERG, DENIED FACEBOOK PAGE: I sent them my driver's license, my passport, my bar number, my pass code to (INAUDIBLE) court. And they still wouldn't let me in. I'm suffering tremendous emotional distress over this whole matter.

UNIDENTIFIED MALE: It sounds like you're trying to get little money.

ZUCKERBERG: What money? I just -- I want to get back on Facebook and have them leave me alone.

(END VIDEO CLIP)

COSTELLO: After finding (ph) he is indeed Mark Zuckerberg, Facebook said it would reactivate Attorney Zuckerberg's account.

A man found guilty of Nazi war crimes and taking part in the death of thousands of Jews during World War II. Find out what the future holds for the 91-year-old former Ohio auto worker.

And President Obama is getting ready to speak at the National Hispanic Prayer Breakfast. We'll take you there as soon as it happens.

(COMMERCIAL BREAK)

COSTELLO: On Wall Street, stocks are set for a lower open even though there are some positive economic news. New jobless claims dropped by 44,000 last week, coming in at 434,000. That is a sign layoffs are slowing.

In the meantime, retail sales edged higher in April. But there's still some lingering nervousness in the market after yesterday's selloff. And commodities like oil and copper and silver and gold are continuing to drop. Oil is trading near $96 a barrel today. Oil prices have plunged nearly $18 since the start of last week.

A 91-year-old Ohio man is found guilty of Nazi death camp killings during World War II.

CNN's Monita Rajpal is following the story live from London.

I think the most shocking thing about this is the sentence.

MONITA RAJPAL, CNN CORRESPONDENT: Yes, he was sentenced to five years in prison. The prosecutor, Carol, had asked for six years. A 91- year-old Ukrainian-born John Demjanjuk was found guilty of being an accessory of the murder of almost 28,000 Jews during World War II. Now, the defense say they will appeal, arguing that, basically, he was a prisoner of war, too, that they're saying that he was forced to be a guard at the Nazi death camp and what was then German-occupied Poland.

The 91-year-old's U.S. citizenship was revoked twice, first in 1981 when the accusation of him being a Nazi guard surfaced in the 1970s. And then, finally, in 2002.

So, the defense is saying they will appeal this case, although, again, as I was saying, he is 91 years old. And at this point, he remains stateless in Germany.

COSTELLO: I was just wondering, five-year -- he got a five-year sentence. Is it because he's 91 years old, because he's been convicted of some pretty serious crimes and a lot of them?

RAJPAL: That's the thing. The court in Munich wasn't clear as to why they handed down a five-year sentence. We understand that in Germany, a law for -- I believe that the law for being accessory to a murder, the maximum sentence is 15 years.

The prosecutors had asked for six, they had said that he'd already served time while in Israel when he was charged and then convicted of being a Nazi guard there known as Ivan the Terrible. But, then, that ruling was overturned. He spent eight years in detention there in Israel. That ruling was overturned when they found that was actually a case of mistaken identity.

So, they took that all into account when they had handed down the sentence, Carol.

COSTELLO: Monita Rajpal, many thanks, live from London. Things have not quieted down in Abbottabad since the Osama bin Laden. Furious protesters railing against the U.S. government and how it handled the mission. That's coming up.

(COMMERCIAL BREAK)

COSTELLO: Checking our top stories now. Evangelist Billy Graham is being treated for pneumonia at a North Carolina hospital. He checked himself in early yesterday. Doctors say the 92-year-old is clinically stable. We expect an update from the hospital sometime today.

Oil company executives are on Capitol Hill testifying before the Senate Committee on Finance. With profits and gas prices way up, expect a pretty good grilling. The fate of tax incentives, tax breaks for the industry also on the agenda. And things are already getting a little spicy and dramatic.

Listen to what Senator Orrin Hatch had to say moments ago.

(BEGIN VIDEO CLIP)

SEN. ORRIN HATCH (R), UTAH: I have a chart depicting what I expect this hearing to turn into, and there you go. That's a really nice picture. I think that's pretty good.

UNIDENTIFIED MALE: Who's the horse and who's the dog?

HATCH: I think we both know.

(LAUGHTER)

HATCH: I know who the horse's ass is, I'll put it that way.

(END VIDEO CLIP)

COSTELLO: So there you have it. It's off to a raucous start.

Also, intelligence officials are combing through one of the big finds of the bin Laden raid. Bin Laden's handwritten diary. It reportedly covers everything from al Qaeda terror doctrine, to calculations of potential U.S. casualties.

President Obama has been reaching out to Hispanic voters these last few weeks, meeting with Congressional Hispanic Caucus, speaking about immigration reform. And this morning he is addressing the National Hispanic Prayer Breakfast. In fact, he started his speech right now.

Let's dip in.

(JOINED IN PROGRESS)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When you lend your voice to the cause of educating all of our children, not just some, to succeed in the 21st century, I'm listening. And when you lend your voice to the cause of immigration reform, I am listening. As some of you probably heard, I flew down to El Paso a couple of days ago to give a speech on this topic. And what I said in that speech was that we define ourselves as a nation of immigrants, as a nation that's open to anyone who's willing to embrace America's precepts and America's ideals. That's why so many men and women have braved hardship and great risk to come here, picking up and leaving behind the world that they knew, carrying nothing but the hope that here in America, their children might live a better life.

Our heritage as a nation of immigrants is part of what has always made America strong. Out of many, one. That is our creed.

And we are also a nation of laws -- a nation of immigrants and a nation of laws. And what I went down to El Paso to say is that we are enforcing our laws and we're securing our borders. In fact, we have more manpower down at the southwest border than at any time in our history.

And so what we need to do going forward is to address some of the broader problems in our immigration system, and that means changing minds and changing votes one at a time.

I know there are some folks who wish I could just bypass Congress.

(LAUGHTER)

I can't. But what I can do is -- is sign a law. What you can do is champion alone. What we can do together is make comprehensive immigration reform the law of the land. That's what we can do.

(APPLAUSE)

Comprehensive reform is not only an economic imperative or a security imperative, it's also a moral imperative. It's a moral imperative when kids are being denied the chance to go to college or serve their military because of the actions of their parents. It's a moral imperative when millions of people live in the shadows and are made vulnerable to unscrupulous businesses, with nowhere to turn if they are wronged.

It's a moral imperative when simply enforcing the law, may mean inflicting pain on families who are just trying to do the right thing by their children. So, yes, immigration reform is a moral imperative. And so it's worth seeking greater understanding from our faith.

As it's written in the book of Deuteronomy, "Love ye therefore the stranger, for ye were strangers in the land of Egypt." To me that verse is a call to show empathy to our brothers and our sisters, to try and recognize ourselves in one another.

And it's especially important that we try to do that when it comes to immigration. Because this is a subject that can expose raw feelings and feed our fears of change. It can be tempting to think that those coming to America today are somehow different from us.

And we need to not get -- have amnesia about how we populated this country. What this verse reminds us to do is to look at that migrant farmer and see our own grandfather disembarking at Ellis Island or Angel Island in the San Francisco Bay.

And to look at that young mother, newly arrived in this country and see our own grandmothers leaving Italy or Ireland or Eastern Europe in search of something better.

That sense of connection, that sense of empathy, that moral compass, that conviction of what is right is what led the National Association of Evangelicals to shoot short films to help people grasp the challenges facing immigrants. It's what led to the United States Conference of Catholic Bishops to launch a Justice for Immigrants campaign, and the Interfaith Immigration Coalition to advocate across religious lines. It's what led all the Latino pastors at the Hispanic Prayer Breakfast to come together around reform. Ultimately that's how change will come. At critical junctures throughout our history, it's often been men and women of faith who've helped to move this country forward. It was our -- in our Episcopal churches of Boston that our earliest patriots planned our revolution.

It was in the Baptist churches of Montgomery and Selma that the civil rights movement was born.

And it's in the Catholic and evangelical and mainline churches of our Southwest and across our entire continent that a new movement for immigration reform is taking shape today.

So I'll keep doing my part. I'll keep pushing and working with Congress. But the only way we are going to get this done is by building a widespread movement for reform. That's why I'm asking you to keep preaching and persuading your congregations and communities. That's why I'm asking you to keep on activating, getting involved, mobilizing. That's why we all need to keep praying.

I'm asking you to help us recognize ourselves in one another. And if you can do that, I'm absolutely confident that we will not only make sure America remains true to its heritage as a nation of immigrants and a nation of laws, but we'll make sure we remain true to our founding ideals and that we build a beloved community here on this Earth.

God bless you. And God bless the United States of America. Thank you very much.

(APPLAUSE)

(END COVERAGE)

COSTELLO: President Obama finishing up his speech at the National Prayer Breakfast in front of the Hispanic community.

We're going to check in, too, with the oil company executives who are testifying on Capitol Hill. We'll tell you what they had to say. We're going to take a quick break. We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: Pakistani officials have summoned the U.S. ambassador for talks about the bin Laden raid. Relations have been -- well, as you know, a little rocky since last week's surprise attack in Abbottabad. Still, both sides are downplaying any tensions.

(BEGIN VIDEO CLIP)

HUSAIN HAQQANI, PAKISTANI AMBASSADOR TO THE U.S.: The United States and Pakistan at the government to government level, intelligence to intelligence level and military to military level are in close contact. We are not in the business of denial or contradiction right now. We are trying to get to the bottom of things, understand intelligence and work together. And at the same time, we continue to be concerned about unilateral relations and would prefer if the United States works with Pakistan instead of making Pakistan look like the bad guy here.

(END VIDEO CLIP)

COSTELLO: But people are not so diplomatic on the streets of Abbottabad. CNN's Nick Paton Walsh has more for you.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN CORRESPONDENT: Some of the anger we're seeing across Abbottabad at the moment, they're not here because they believe bin Laden was ever (INAUDIBLE), I think most people in this crowd have never really accepted that the world's most wanted man lived in Abbottabad for a while. They're really here because they are furious at the United States, at what they see as an invasion of their sovereignty by those Navy SEAL helicopters that attacked the bin Laden compound.

Here, really, we're seeing protesters holding signs. Some in English, clearly for an external audience. Also, organized flags from one of the main Pakistani opposition party, trying to harness this popular anger at the United States. I think this is where the arguments over the next few weeks is going to develop.

Does this kind of popular fury become any kind of larger, political momentum and change the already fractured relationship between Pakistan and the United States? Remember, Islamabad and Washington already at each other's throats before the bin Laden operation even happened and increasing recrimination and accusations between those two cities will play out in the forthcoming weeks.

And we're really going to have to see whether or not the bin Laden operation is still going to allow America to function in the way that it has done inside Pakistani territory or whether it will see some kind of final end to America's presence in Pakistani soil.

Nick Paton Walsh, CNN, Abbottabad.

(END VIDEOTAPE) COSTELLO: And this morning we have new developments to tell you about out of Libya. Just within the past hour rebels there announced they have captured Misrata, the nation's third largest city. The announcement comes after NATO launched a new attack on the Tripoli compound of the embattled leader Moammar Gadhafi. Now, earlier in the gay day, Gadhafi made his appearance on state TV in two weeks. People were wondering where he was, and then bam, he shows up on television.

Stories that will be making news later today.

At 2:00 p.m. Eastern, former Massachusetts Governor Mitt Romney is talking health care in Ann Arbor, Michigan as he mulls another potential run for the White House.

Later that hour at the Blair House in Washington, Vice President Joe Biden meets with a bipartisan group of lawmakers. They're trying to set the framework for a deficit reduction plan.

Also on Capitol Hill, the Senate Homeland Security Committee needs to discuss post 9/11 intelligence reform and to assess progress made to protect Americans from terrorist attacks.

The swollen crest of the Mississippi River heads south, Louisiana in the crosshairs, a live report next on the devastation -- on the devastating effects of the floods along the Mississippi.

(COMMERCIAL BREAK)

COSTELLO: Happening right now on Capitol Hill, oil company executives are testifying before the Senate Committee on Finance; with profits and gas prices way up, expect a pretty good grilling. In fact the grilling is already underway. The fate of tax breaks for the industry also on the agenda. We are monitoring the feisty back and forth.

And we want you to listen to what John Watson, the CEO of Chevron, had to say.

(BEGIN VIDEO CLIP)

JOHN WATSON, CEO, CHEVRON: First, the oil and gas business pays its fair share of taxes. Despite the current debate on energy taxes, few businesses pay more in taxes than oil and gas companies. The worldwide effective tax rate for our industry in 2010 was 40 percent. That's higher than the U.S. statutory rate of 35 percent and the rate for manufacturers of 26.5 percent.

(END VIDEO CLIP)

COSTELLO: Dana Bash is monitoring the hearing. We're going to check in with her a little later and let you listen to more of what went on inside that hearing.

On the weather front, the swollen crest of the Mississippi River rolling south towards Louisiana. The high waters have closed more than a dozen Mississippi casinos. The river region remains on high alert. Rob Marciano is in Tunica, Mississippi. Rob what are you seeing?

ROB MARCIANO, AMS METEOROLOGIST: Well today, we're -- we're at a Red Cross shelter. So we're seeing the victims firsthand and talking to them and listening to their stories. We were here yesterday afternoon as well, spending some time with the people directly affected by these floods.

And Tunica as we've been reporting has been one of the hardest hit communities per capita really especially just west of here closer to the river over the levee and the Tunica -- the area called Tunica cut- off which is where the most dramatic pictures have been coming to you with over 200 homes completely inundated and 500, 600 people that have been well, evacuated from their homes.

A lot of them are here. And we met up with one -- one woman yesterday who had quite a story to tell.

Debra White had to leave her -- leave her home quickly as the waters rose faster than they thought. And that's what's interesting about this or -- or scary I suppose is that we've been reporting on this river with a slow rise but in this area that really is built around a short cut that the Army Corps of Engineers built for the shipping channels as the Mississippi kind of bends around, and it floods really, really easily.

She lost everything, like a lot of people here have lost, and -- and -- and she didn't have any insurance, which a lot of people here don't have insurance, as well.

So when the waters do recede, the scariest thing is going to be what they have to go back to. A lot of them told me point-blank they're just going to move out completely to probably another state and it's going to take several weeks for that to happen.

So there's a bit of mental fatigue here as far as folks who have already lived in this shelter for two weeks, they'll probably have to leave here at least for another two weeks, possibly more than a month.

So that's the latest from here as the crest continues to move downstream. But obviously the flooding continues, Carol. We won't see the river completely back below flood stage probably until the month of June.

COSTELLO: All right. Rob Marciano reporting live from Mississippi.

Checking on other stories cross-country now, business leaders in Chico, California, are upset over a police department advertising campaign that mentions gangs. The Police Officers' Association has posted these billboards emblazed into these messages like, quote, "Gangs are hiring, why aren't we?" And, quote, "Many criminals, too few cops."

Talk show host, Oprah Winfrey now has a street of her own in Chicago. Mayor Richard Dailey has renamed a street outside Winfrey's Harpo Studios, Oprah Winfrey Way.

And police in Clovis, California are looking for a burglar who stole several ATMs and buried them in the floor of a business. The machines were taken and smashed and grabbed (ph), hit a convenience store, a country club and a family entertainment center.

It's been a crazy week for pilots and passengers alike: cockpits rushed, flights diverted, people messing with exit doors. We'll get the scoop from a flight crew veteran on what's going on. That's coming up in the next hour.

(COMMERCIAL BREAK)

COSTELLO: I want to take you back to Capitol Hill and the Senate Finance Committee, because as you know, lawmakers are grilling the CEOs of the five big oil companies over tax breaks and their record profits.

Testifying now or actually answering questions, Exxon's chief, Rex Tillerson. Let's listen in.

(JOINED IN PROGRESS)

REX TILLERSON, CHAIRMAN & CEO, EXXON MOBIL CORPORATION: Removing them for a select few U.S. oil and gas companies is therefore nothing less than discriminatory and a punitive tax hike which jeopardizes the jobs of American workers.

Doing so would also do nothing to reduce the prices Americans pay at the pump. Gasoline prices are primarily a function of crude oil prices, which are set in the marketplace by global supply and demand, not by companies such as ours.

Furthermore, arbitrarily punishing five U.S. oil and gas companies by raising their taxes will generate far less government revenue than if we were allowed to compete and produce our nation's own resources.

(END COVERAGE)

COSTELLO: Ok. This hearing will go on a long time, so we're going to dip in and out. And we'll have a full report at the top of the hour.

But we have to tell you about this story. Newly released FBI files suggest the late owner of the New York Yankees was nothing like the character so famously lampooned in Jerry Seinfeld. As CNN's Mary Snow reports George Steinbrenner, he's secretly helped FBI agents.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): The late George Steinbrenner had become a larger-than-life character far beyond New York as owner of the Yankees for more than 30 years. What wasn't known and what FBI files now reveal is that Steinbrenner assisted the FBI on national security cases.

What he did exactly is unclear since specifics on the cases were redacted in the documents. But it's a chapter in Steinbrenner's life that was unknown to veteran sports writer Bill Madden, author of "Steinbrenner Unabridged: The Last Line of Baseball."

BILL MADDEN, AUTHOR: I think the one thing that was a surprise was George the spy. George was a lot of things and, as my book points out rather graphically, he was a very complex human being.

SNOW: Part of Steinbrenner story revolves around Richard Nixon. Steinbrenner was convicted in 1974 for conspiring to make illegal contributions to Nixon's campaign, which got him suspended from baseball for a period of time. The Yankees' owner sought a pardon and in making the case for clemency his lawyers noted his cooperation with the FBI.

In one case he was said to allow an undercover agent to receive calls at his office over a three-year period. In another, his lawyers wrote, "Mr. Steinbrenner knows that he placed the lives of his family and himself in jeopardy through being involved in a terrorist matter. He knows he made the right decision because the agent stated this information was very valuable to the United States."

It's unknown what terrorist matter his lawyers were talking about in the 1970s, and Steinbrenner's roles aren't made clear.

MADDEN: I would say that there's probably a very good chance that they were exaggerated. Remember, it's very hazy as to exactly what George was doing and how or when this was all going on.

SNOW: In the documents, Steinbrenner's lawyers also revealed that Yankees Stadium was offered to the FBI and the New York City police department in the mid-1980s. A gambling raid was in the works and law enforcement need a place to process hundreds of arrests. In the end, the plan to use the stadium was scrapped because of the weather.

(on camera): Steinbrenner's first petition for a pardon was denied in 1979, but President Reagan ultimately did pardon him in 1989. We did reach out to Steinbrenners' sons, Hal and Hank, who now run the Yankees, but a representative for them say they have no comment.

Mary Snow, CNN, New York.

(END VIDEOTAPE)

COSTELLO: The Miami Heat are moving on in the NBA playoffs after finishing off Boston in five games. LeBron James scored (INAUDIBLE) -- you're looking at him there. James had the Heat's last ten points as Miami closed the game on a 16-0 run. The Heat will play the winner of the Chicago/Atlanta series.

The Oklahoma City Thunder's Russel Westbrook steals the ball against Memphis, and boy, does he go in for the slam. The Thunder beat the Grizzlies by 27 points to take a 3-2 series lead in the western conference playoffs.

Kansas City Royals rookie, Eric Hosmer -- (CROSSTALK)

COSTELLO: -- on his first road trip, and why not? 15 family members and friends were at Yankees Stadium to see him hit a home run last night. Hosmer also got the winning RBI as the Royals beat the Yankees.

And watch this -- the Chicago White Sox, its first baseman Paul Konerko runs in, grabs the ball, and he tosses it behind his back to pitcher Matt Thornton who grabs the ball barehanded and beats the runner to first. And it was how the game ended; Sox beat the Angels.

Top of the ninth, Tigers/Twins, Detroit's Brandon Inge hits the ball to deep right center. Denard Span cannot -- he can't get it. Ramon Santiago scores all the way from first base. Tigers win; it is their eighth win in the last nine games.

And Ryan Ketchner is aiming to become the Major League's first deaf pitcher. He's in AAA this year. His catcher says Ketchner is a terrific lip-reader and Ketchner says his deafness helps him focus on the game. Ketchner's role model, former Major Leaguer Curtis Pride, who was also deaf. Good for him.