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Casey Anthony Murder Trial: Father's Alleged Mistress Testifies; Fire Crews Safeguard Los Alamos; Initial Jobless Claims Falls; Defense Secretary Gates' Last Day; Senate Cancels Holiday Recess; French President Grabbed; Royal Newlyweds Head to Canada; Pot Farms May Help City Budgets; Gates Gets Presidential Medal of Freedom
Aired June 30, 2011 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: It's 9:00 a.m. on the east coast, 6:00 a.m. out west. I'm Kyra Phillips. Thanks for joining us.
The defense may rest as early as today in the Casey Anthony murder trial. George Anthony's alleged mistress, Crystal Holloway on the stand right now. We're live in Orlando, Florida.
Firefighthers make some critical progress against the flames threatening the Los Alamos National Laboratory. They stockpiles of toxic and radioactive waste are safe and secure.
And this morning a fresh measure of the economy. The number of Americans filing their first unemployment claims dips slightly to 428,000 that's a decrease of about 1,000 from the week before.
Well, right now at the Pentagon, live pictures. It's a farewell tribute to Robert Gates. This is the last day on the job for the outgoing defense secretary who oversaw two wars and military operations around the world.
President Obama set to deliver the remarks. We will take it live as soon as he steps up to the mic.
Less than 24 hours after President Obama ripped Congress for taking too much time off of work, the senate leader responds. Just minutes ago, Democrat Harry Reid canceled next week's holiday recess so lawmakers can focus on the debt crisis and that approaching deadline.
Kate Bolduan actually broke the news to us there on Capitol Hill, Kate.
KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Kyra, well, Senate Majority Leader Harry Reid seemed to be trying to jump off of the July fourth theme when he made this announcement saying, that with liberty comes great responsibility and because of that the Senate will forgo -- read that as cancelling their July fourth scheduling break, which would be next week.
In order to stay in town because he says they simply just have too much work to do, having to do with continuing to negotiate and trying to strike a deal on the debt talks to cut the deficit. But the Senate majority leader turned very quickly, Kyra, to criticizing his Republican colleagues.
(BEGIN VIDEO CLIP)
SENATOR HARRY REID (D), MAJORITY LEADER: This crisis is about baying the bill for everything we already bought, for example, the decade of tax breaks for millionaires and billionaires, a war of choice in Iraq, war in Afghanistan, those tax cuts for billionaires and millionaires and the wars unpaid for. And what they aren't saying is what the consequences would be if such an irresponsible decision to not pay our accrued bills.
(END VIDEO CLIP)
BOLDUAN: Now, this of course as you say, Kyra, comes just after the president very publicly pretty much slammed Congress for taking breaks while this issue, these negotiations, the issue of raising the debt ceiling remains unresolved.
That criticism was really targeted towards House Republicans who are out right now, the entire House is out right now this week and will be back next.
But it seems the Senate is feeling the first consequence of all of this. A lot of this has to do with just simply how it looks to the public because the bottom line is, fact of the matter, Kyra, is that the people who are at the negotiating table.
It's a small group of people now. It is the top leaders in the House and the Senate in both parties. They don't really need both the House and full Senate in town to strike this deal. But a lot of this has to do with just how this looks as the negotiations drag on and we continue to approach that August 2nd deadline, Kyra.
PHILLIPS: Kate Bolduan on the Hill. Kate, thanks.
This morning in France, pretty terrifying moment for that country's president. Someone actually reaches out and grabs Nicolas Sarkozy, nearly pulling him to the ground.
Zain Verjee in London. She's actually got the video. Zain, do we know anything about this guy who grabbed the president?
ZAIN VERJEE, CNN ANCHOR AND CORRESPONDENT, CNNI: No. We're still waiting for more information, but let's just look at the video and see what happened.
The French president, Nicolas Sarkozy was in the south of France in a place called Brax and basically he was meeting with mayors and then looked what happens there.
He works the line to greet people. He shakes their hands. Three of his bodyguards just rush to this one guy who yanks him violently, just grabs his jacket. You can see the French president so visibly shaken.
His guards pummel the guy to the ground. They arrest him. But this is a worrying situation that the security let something happen like this. The French president is up for re-election, too, in about 10 months or so.
And you can see, here he is, just working the crowds there and again, look at what happens. Kyra --
PHILLIPS: Do we know, I mean, obviously, this man has been taken into custody, yes. Is he being investigated? Meanwhile, do we know where the president is now, if he's continuing on with his day or if he's behind closed doors, shall we say?
VERJEE: He's continuing his meetings there with the mayors in the southern part of the country. I mean, of course he's shaken. I mean, when do you see the president of a country being treated like this and not have his security detail around him?
So he hasn't been hurt. He's just shaken. In terms of the man who was arrested, we don't have any more information on him. We'll investigate. Look at this video and just figure out how this could have happened.
But it was just one guy who violently got hold of the president and just shoved him toward him. But, you know, the French president has not been that popular lately either, Kyra. So there's a lot of hostility toward him and we're seeing some of that.
PHILLIPS: All right, Zain, thanks.
It's a joyful homecoming for two French journalists who are held in Afghanistan for a year and a half. Taliban militants had threatened to kill them and their translator. It's still unclear if demands were met to secure that release.
As we speak, the royal newlyweds crossing the pond on route to Canada. Prince William and Duchess Kate will spend over a week crisscrossing the country. First stop, the capital, Ottawa.
CNN's Max Foster is there, of course. So Max, what do they have planned, possibly a little hockey?
MAX FOSTER, CNN CORRESPONDENT: Yes, absolutely. The hockey (inaudible) a great hockey player at school and later on in Ottawa you'll see her playing some street hockey. We lost an opportunity to see the competitive side of this royal couple. (Inaudible), but the first stop is Ottawa.
This is going to be the big moment. There's going to be a huge concert there on the stage and the couple will be sitting in a royal box just to the side. It's going to be a big celebration in Canada. It is for Canada Day.
This whole area is it going to be full of crowds of people, possibly wearing some of the merchandise on sale here in Ottawa. Kate and William, we love you, all that sort of stuff. We'll see what the crowds are like when they arrive in about three hours' time. A huge media machine of course operating here, a camera points at us, us pointing at that camera. And studios up there on the other side of this huge sort of contraption. It's going to be a really exciting day I think here. An exciting eight days for Canada. We'll wait and see if they get all of that attention that people predicting certainly in the media here.
PHILLIPS: What are the Canadians telling you? I bet they want to definitely see that street hockey game.
FOSTER: Yes, exactly. They want to see what she's going to be wearing. The interesting thing is, we've got some images of them leaving London actually just a couple of hours ago. You'll see them getting into the military jet.
That is because they are the Canadian royal family as well as the British royal family. They are coming over the Atlantic under Canadian government control. So in Canada they feel they're part of the country in a constitutional way.
Later on, though, the weekend they'll be going to Quebec City where there's a lot of anti-monarchy feelings and demonstrations expected there. We'll see how the big anti-monarchy feeling is as well as the pro monarchy feeling. I get the sense that it's different depending on where you go in Canada.
PHILLIPS: All right, Max Foster. We'll track it. From Canada, the couple heads to California for a working visit to L.A. They're going to kick off the royal agenda Friday with an event supporting U.K. trade and a reception at the British consul general's house.
Saturday, Prince William plays in a charity polo match and later a black-tie red carpet dinner with British actors and Hollywood execs. Then Sunday, they'll visit a school on skid row and a job finger for military vets. From there, it's back to the airport.
Emotional testimony in the Casey Anthony murder trial. Casey listens as her dad's alleged mistress testifies saying George told Anthony that he knew how little Caylee died. We're live from Orlando.
And medical marijuana, some cash-strapped cities think it could be a cure for their sickly budgets. But now some of those plans up in smoke.
(COMMERCIAL BREAK)
PHILLIPS: Straight to the Pentagon now, the president of the United States with his farewell tribute to Secretary of Defense Robert Gates.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Whether he might stay on to serve an eighth president, he offered the answered, inconceivable! Why did he stay? I know there are days when Bob asks that himself. I'm sure Becky asked that also.
But I believe I know the answer because I've seen this man in those moments of debate and decision, when a person's character is revealed in the oval office, in the situation room, in the theaters of war.
You see, if you look past al of Bob's flashiness and bravado, his sharp attire, had his love for the Washington limelight, then what you see is a man that I've come to know and respect a humble American patriot, a man of common sense and decency, quite simply, one of our nation's finest public servants.
Bob, today you're not only one of the longest serving secretaries of defense in American history, but it's also clear that you've been one of the best.
Why did Bob Gates serve? Our nation is at war, and to know bob is to know his profound sense of duty, to country, to our security and most of all to our men and women who get up every day and put on America's uniform and put their lives on the line to keep us safe and to keep us free.
When the outcome of the war in Iraq was in doubt, Bob Gates presided over the extraordinary efforts it that helped restore order. Over the past two and a half years, we've removed more than 100,000 troops from Iraq, ended our combat mission, and are responsibly ending that war.
When the fight against al Qaeda and our efforts in Afghanistan need new focus, Bob Gates heed us twice the strategy that has finally put al Qaeda on a path to defeat and ensures that Afghanistan never again becomes a source for attacks against our nation.
When institutional inertia kept funding systems our troops didn't need, Bob Gates launched a war on waste challenging conventional wisdom with courage and conviction. Speaking hard truths and saving hundreds of billions of dollars that can be invested in the 21st Century military.
Bob Gates made it his mission to make sure this department is serving the troops in the field as well as they serve us. And today we see the lifesaving difference he made in the mine-resistant vehicles and the unmanned aircraft, the shorter Medevac times in Afghanistan and our determination to give our wounded warriors the world-class care they serve.
Bob, this may be your greatest legacy of all. The lives you saved and the confidence you gave our men and women in battle who knew that there was a secretary of defense who had their backs and who loved them and who fought for them and who did everything in his power to bring them home safely.
Let me also thank Becky for her extraordinary support of our extraordinary military families. She's been there day in and day out. And in many ways I know both Bob and Becky consider our troops to be like their own sons and daughters.
Bob, your sense of responsibility to them is profound. It's a responsibility we've shared as leaders who have served every day in a time of war. We're the ones who send them into harm's way. We visited them in the field knowing that we are the reason they're there. We've stood in solemn respect and dover when our fallen shoulders have made their final journey home.
We've held their families in our arms as they grieve their loved ones they gave to America so that our loved ones can be secure. We know the heavy wages of war and we know America shared obligations to all who served.
So today we not only pay tribute to a remarkable public servant. We celebrate the principles for which he served and for which our nation stands. I believe the life of Bob Gates is a lesson, especially to young Americans, a lesson that public service is an honorable calling.
That we can pass our country better and stronger to those who follow. Our next secretary of defense, Leon Panetta, has subscribed to this same life of service and I'm confident that he, too, will lead this department with clear vision and a steady hand.
In his willingness to come as the first secretary of defense to serve under presidents of both parties, the integrity of Bob Gates is also a reminder, especially the folks here in Washington, that civility and respectful discourse and citizenship over partisanship are not quaint relics of a bygone era.
They are the timeless virtues that we need now more than ever. For whatever differences of party or ideology we may have, we can only keep America strong if we remember what keeps America great, our ability to come together and work together as Americans for a common purpose.
Finally, as we face difficult challenges around the world and here at home, let today be a reminder that the United States will meet the tests of our time. We remain at war, but today fewer Americans are in harm's way and we will bring the wars we're in to a responsible end.
We will make hard fiscal choices, but we'll do so responsibly. And as commander in chief, I'm determined that our armed forces will always remain the best trained, the best led, the best equipped fighting for us in history.
And in an uncertain world, the demands are leadership. The United States of America and our armed forces will remain the greatest force for freedom and security that the world has ever known. This is the America, strong and confident, to which Bob Gates has devoted his life.
This is the America to which we rededicate ourselves. I can think of no better way to express my appreciation to someone who I have come to admire and whom I consider a friend. I can think of no better way to express the gratitude of the nation for Bob Gates than with a very special recognition.
Bob, this is not in the program, but I would ask you to please stand. As president, the highest honor that I can bestow on a civilian is the Presidential Medal of Freedom. It speaks to the values we cherish as a people and the ideals we strive for as a nation.
And today it is my great privilege to present the Presidential Medal of Freedom to America's 22nd Secretary of Defense, Robert M. Gates. Will the military aide please read the citation.
UNIDENTIFIED MALE: The Presidential Medal of Freedom to Robert M. Gates. Our nation's 22nd secretary of defense, Robert M. Gates, has selflessly dedicated his life to ensuring the security of the American people.
He has served eight presidents, of both parties, with unwavering patriotism. As a champion of our men and women in uniform and their families, he has led the department of defense with courage and confidence in our nation's wars with Afghanistan and Iraq and ensured our armed forces are better prepared for the conflicts of today and tomorrow.
The United States honors Robert M. Gates for his extraordinary leadership and for a lifetime of service and devotion to our nation.
ROBERT GATES, OUTGOING DEFENSE SECRETARY: Thank you, Mr. President, for those kind words and for honoring me in this department by your presence here today. I'm deeply honored and moved by your presentation of this award.
It is a big surprise, but we should have known couple of months ago, you've gotten pretty good at this covert ops stuff. Mr. Vice President, distinguished guests, colleagues, friends, thank you for being here this morning.
First I'd like to congratulate Leon Panetta on his recent confirmation. Right after the 2008 election, Leon wrote an op-ed suggesting President-elect Obama retain me as secretary of defense.
So when President Obama asked for my recommendation for successor, I returned the favor. Seriously, this department and this country is fortunate that a statesman of Leon Panetta's calibre and experience has agreed to serve once again and at such an important time.
My parting advice for Leon is to get his office just the way he likes it. He may be here longer than he thinks. I'd like to thank the members of Congress with us today. I appreciate the gracious and supportive treatment accorded to me by senators and representatives of both parties these past four and a half years.
Even when there were disagreements over policies and priorities, the Congress always came through for our men and women of uniform, especially programs that protect and take care of troops and their families.
As you may have noticed over the past few weeks, I've had my say on some weighty topics. So on this, the last stop on what is dubbed "the long good-bye," I'd like to spend a few minute talking about the men and women I've been fortunate enough to work with in this job.
I'd like to start with the two presidents whom I've been privileged to serve in this role. Serving as secretary of about defense has been the greatest honest and privilege of my life and for that I will always be grateful.
First to President Bush for giving me this historic opportunity and for the support he provided during those difficult early months and years on the job. And then to President Obama for his confidence in taking the historic step of asking me, someone he did not know at all, to stay on and for his continuing trust ever since.
The transition from the Bush to the Obama administration was the first of its kind from one political party to another during war in nearly 40 years. The collegiality, thoroughness and professionalism of the Bush/Obama transition were of great benefit to the country and were a tribute to the character and judgement of both presidents.
I've also been fortunate that both presidents provided me an excellent team of senior civilian appointees. When I took this post, the first and best decision I made was to retain every single senior official I inherited from Secretary Rumsfeld, including his personal front office staff. Most of whom have been with me to this day.
Likewise I've been fortunate to receive another first class roster of senior civilian officials from President Obama. They have provided me superb counsel and support on a range of difficult institutional issues and strategic initiatives.
These and other achievements, indeed, anything of consequence achieved in this department, required respectful collaboration between the civilian and military leadership, which has been a source of strength in our country.
I've received wise, forthright, but loyal counsel from the service chiefs and from the leadership of the Joint Staff. I'll always be grateful to them for their candour, cooperation and friendship.
Above all, though, I want to recognize and thank first General Pete Pace, who was chairman of the Joint Chiefs when I arrived and whose counsel and friendship got me off to a strong start. Then of course, my battle buddy of nearly four years, Admiral Mike Mullen.
Without Mike's advice to me, his effective leadership of the uniformed military and our close partnership, the record of the last several years I think would have been very different. Mike was never show about disagreeing with me, but unfailingly steadfast of loyal to me and to the presidents he served once a decision was made.
He is the epitome of a military leader and officer, a man of extreme integrity, a great partner and a good friend. A practice and spirit of cooperation is equally important in relationships with other elements of the government, especially with those dealing with intelligence, development and diplomacy. The blows struck against al Qaeda culminating in the Bin Laden raid exemplify the remarkable transformation of how we must fuse intelligence and military operations in the 21st Century. With respect to the State Department, my views have, as they say in this town, evolved over the years.
I started out my interagency experience in Washington, D.C., as a staffer on President Nixon's National Security Council. As you might expect, the Nixon White House was not exactly a hotbed for admiration for the Foreign Service.
Generally thought as a bunch of guys with last names for first names who occasionally took time out of their busy day to implement the president's foreign policy and for much of my professional life the secretaries of state and defense were barely speaking to one another.
In the case of Secretaries Rice and Clinton, I've not only been on speaking terms with these two formidable women, we've also become cherished colleagues and good friends. I suppose that giving a big speech calling for more money for the State Department didn't exactly hurt, but we should never forget the diplomats and development experts from state and AID are taking risks and making sacrifices in some of the planet's least hospitable places.
I speak for all of our military in appreciating the contributions they're making every day to the success of our missions in Afghanistan, Iraq and elsewhere around the globe. In doing my utmost to support the troops downrange on these missions, I spent a good deal of time venting frustrations with the Pentagon bureaucracy.
However, I did so knowing that the people most often frustrated by the pace of things in this building are the career civilian professional who strive every day to over the obstacles to getting things done.
As someone who worked his way up through the GS ladder, I understand and appreciate the challenges these public servants face and the sacrifices they make. What they accomplish does not receive the attention and the thanks it deserves. So know that I leave this post grateful for everything our defense civilians do for our military and our national security.
During a time of war, the top priority of everyone in this building ultimately must be to get those fighting at the front what they need to survive and succeed on the battlefield and to be properly taken care of when they come home.
I've spent much of the past two months visiting with these troops, first in military facilities around the U.S. and then over several days at a number of forward operating bases in Afghanistan. Though I was only able to meet a small sample of those who deployed down range, it was important to me to look them in the eye one last time and let them know how much I care about them and appreciate what they and their families do for our country. Looking forward to this moment, I knew it would be very difficult for me to adequately express my feelings for these young men and women. At least in a way that would allow me to get through this speech so yesterday a personal message from me to all of our service men and women around the world was published and distributed through military channels. I'll just say here that I will think of these young warriors, the ones to keep on fighting, the ones who never made it back till the end of my days.
Finally, as I was contemplating this moment, I thought about something Becky told me in January of 2005 when I was asked to be the first director of national intelligence. I was really wrestling with the decision and finally told her she could make it a lot easier if she just said she didn't want to go back to D.C. She thought a moment and replied, "We have to do what you have to do." That is something military spouses have said in one form or another a million times since 9/11, upon learning that their loved one received a deployment notice or is considering another tour of service.
Just under five years ago, when I was approached by the same president, again to serve, Becky's response was the same. "As much as she loved Texas A&M and Aggie sports and our home in Washington state and as much as she could do without another stint in this Washington, she made it easy for me to say yes to this job, to do what I had to do to answer the call to serve when so much was at stake for America and her sons and daughters in two wars.
Well, Becky, we're really going home this time. Your love and support has sustained me and kept me grounded since the day we first met on a blind date in Bloomington, Indiana, 45 years ago.
Shortly, I'll walk out of my office in E Ring at the last time as defense secretary. It's empty of all of my personal items and mementos, but we'll still have looming over my desk the portraits of two of my heroes and role models, Generals Dwight D. Eisenhower and George C. Marshall.
It is from Marshall that I take a closing thought, first delivered more than six decades ago in the opening years of the Cold War. Addressing new university graduates, Marshall extolled what he considered the great musts of that generation. They were, he said, the development of a sense of responsibility for world order and security, the development of a sense of the overwhelming importance of the country's acts and failures to act.
Now, as when Marshall first uttered those words, a sense of America's exceptional global responsibilities and the importance of what we do and do not do remain the great musts of this dangerous new century. It is the sacred duty entrusted to all of us privileged to serve in positions of leadership and responsibility, a duty we should never forget or take lightly, a duty I have every confidence you will continue to fulfill.
Thank you. God bless our military and the country they so nobly serve.
(APPLAUSE)
KYRA PHILLIPS, CNN ANCHOR: Last day on the job for outgoing Defense Secretary Robert Gates, who oversaw two wars and military operations around the world. Of course, we expected him to talk about the troops, how much he admires our men and women in uniform -- also talking about the cure crass bureaucracy in the midst of the Pentagon there and he's had to deal with that for so many years. And, of course, a shout-out to his wife.
But the surprise that came today was the president of the United States giving Bob Gates the Presidential Medal of Freedom.
Coming up, President Obama ripped Congress over the lack of a budget deal. He said, "My kids get their homework done, why can't you?" As you can imagine, we will tackle that in our political buzz.
(COMMERCIAL BREAK)
PHILLIPS: Checking top stories.
Someone grabbed French President Nicolas Sarkozy and tried to pull him to the ground. His bodyguards actually wrestled the would-be attacker to the ground.
The defense may rest as early as today in the Casey Anthony murder trial. George Anthony's alleged mistress, Krystal Holloway, has been on the stand all this morning. The trial is in a short recess right now.
And firefighters making progress against a wildfire burning near Los Alamos, New Mexico. But nearly 10,000 people haven't been allowed to return to their homes yet.
And a law enforcement official says there's no sign of terrorism in a stowaway case. A Nigerian man allegedly flew from New York to L.A. without a valid boarding passes or ID.
"Political Buzz," your rapid fire look at the hottest political topics of the day. Three questions, 20 seconds on the clock.
And playing today, Democratic strategist Maria Cardona; CNN contributor Errol Louis, political anchor in New York; and Republican strategist Cheri Jacobus.
First question, guys. We've got the big headline yesterday from President Obama when our new White House chief correspondent Jessica Yellin asked about the debt ceiling. Take a listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Malia and Sasha generally finish their homework a day ahead of time. They don't wait until the night before. They're not pulling all-nighters. They're 13 and 10.
You know, Congress can do the same thing. If you know you've got to do something, just do it.
(END VIDEO CLIP)
PHILLIPS: Well, he ripped Congress there. So, do we say good- bye to any hope of a deal by August 2nd, Cheri?
CHERI JACOBUS, REPUBLICAN STRATEGIST: You know, I'm glad the president is finally on board and wants to get to work, because it's been his on congressional Democrats who have complained that he's been AWOL on the debt talks, on the debt ceiling talks. So, the fact he wants to dig in and get to work, if that means Congress has to stay in town -- fine.
We have to do some special things to work around this president. And if the president finally wants to get serious -- I'm all for keeping Congress in town.
PHILLIPS: Maria?
MARIA CARDONA, DEMOCRATIC STRATEGIST: I think it's completely up to the Republicans. And that's exactly the point that President Obama was making yesterday. Look, two weeks ago, it was Majority Leader Eric Cantor who left in a huff of the negotiations because he wasn't getting what he wanted. Who does that? My children, who are 4 and 6, don't even do that.
And Senator Reid today announced that he was keeping everybody in to make this happen. So, Democrats have been showing leadership and the president, not the Republicans.
PHILLIPS: Errol?
ERROL LOUIS, CNN CONTRIBUTOR: As the veteran of about a quarter century of all-nighters, right up until my last night in law school, I'm not sure what he was getting at. I mean, look, the point of political brinksmanship is that it doesn't work unless you're ready to go up to the brink. I would advise Congress, as well as the media, not to -- well, to keep their schedule clear the weekend of July 29th. I think it's going to go right down to the wire.
PHILLIPS: OK. Stephen Colbert testifying before the Federal Election Commission today, fund my super PAC ac is what he's saying. Here's how he explains it.
(BEGIN VIDEO CLIP)
STEPHEN COLBERT, "THE COLBERT REPORT": Tonight, I await the FEC's decision on my super PAC. Change is coming and I hope a lot of large bills, too.
(END VIDEO CLIP)
(LAUGHTER)
PHILLIPS: Maria, what's the real message here? CARDONA: The real not-so-subtle message here, Kyra, is the obscene amount of money, undisclosed money, that has been allowed in our politics today because of the Citizens United decision. And that's exactly what has prompted all of the riff that Colbert has done on his late night show now that has become so popular. But it is an obscene amount of money that is corrosive, it's debilitating our democracy. And I think it's bad for elections and bad for the American people.
PHILLIPS: Cheri?
JACOBUS: You know, I think it's fine if he's drawing attention to this, so this is our opportunity to sort of push the limits and see where the problems are, where the loopholes are, where they need to tighten up.
Now, I'm all for sunlight in that regard. But first and foremost, he's doing this for ratings. He's a comedian. He's a pretend newsman.
And so, yes, let's get real. We know what this is for. And more power to him.
PHILLIPS: Errol?
LOUIS: I think the situation is so bad it almost defies parody. I think that's what he has proved.
There's actually an interesting hook in it, too, which is that a number of media commentators also run PACs, arguably, super PACs. And they've got contracts on other stations. I won't call any names. But, you know, they are doing stuff that potentially would look a lot like what he's talking about. It's really not that far from reality.
PHILLIPS: OK, guys, buzzer beater, 10 seconds each.
Today, we said farewell to Defense Secretary Robert Gates. We just ran it live here right on CNN.
What should his retirement gift be, Cheri?
JACOBUS: Well, he got a nice big thank you from President Obama, which is well deserved because he made the president look good and helped him pivot from irresponsible policy during his campaign, a disengagement to one of continuation of the Bush/Cheney policy.
So, good for Gates for making Obama look good.
PHILLIPS: Maria?
CARDONA: I think in addition to the great present that he received from this president, I think we should give him a very large cash award that he can slowly withdraw between now and 2014 without any debilitating effect on his bank account.
PHILLIPS: Errol? LOUIS: I would give him a bottle of that indelible purple ink they use for the elections in Iraq. I mean, his major accomplishment was the surge that made it possible to have democracy in Iraq now.
PHILLIPS: I was waiting to hear what kind of whiskey you were going to name there, Errol.
Errol, Maria, Cheri, thanks so much.
JACOBUS: Thank you, Kyra.
PHILLIPS: Also ahead, the cash p crop of marijuana. Not just for stoners and criminals anymore, some cash-strapped cities actually flirting with the idea to make a little money for their city.
(COMMERCIAL BREAK)
PHILLIPS: All right. Checking stories cross country.
This out of Fall River, Mass. Just hard to believe. A woman's body goes unnoticed at the bottom of a public pool for two days. So, now, dozens of pools are closed, lifeguards are on administrative leave and an investigation has begun.
A hostage call turned hoax in Collier County, Florida. A teen living at the address says he was playing an Xbox game with a gamer from Canada. The next thing he knew, a SWAT Team was on his doorstep. His gaming buddy now suspected of making the false report.
Glen Ellyn, Illinois, robbers with a conscience? A church group was robbed at knifepoint in Columbia, but the following day, the thieves apologized, even returned some of the stolen loot. Apparently, the alleged gang members felt a little guilty when they found out the students were there doing mission work.
Better late than never in Louisville, Kentucky, where flooding along the Ohio River meant a two-day delay for the annual Great Steamboat Race. How fast do steamboats really go, by the way? Congrats to the Hometown Ship for winning last night's race.
All right. Thank shady mortgages, shoddy foreclosures. We all know it did a number on our economy. Now some lenders are making big payouts that will actually help settle investors' claims but won't come close to settling the score.
The latest? Bank of America which is going to be shelling out billions of bucks. Who better to break it all down than the former sheriff of Wall Street himself, Eliot Spitzer.
Eliot, homeowners here saying, where the hell is our justice?
ELIOT SPITZER, CNN HOST, "IN THE ARENA": That's exactly right. Because what we have going on here really is Bank of America admitting that it mislead a lot of investors when it marketed these shady loans. But what I want to see is the documents that led Bank of America to pay $8.5 billion up to $20 billion at the end of the day because they clearly are now admitting that what they were doing was fundamentally fraudulent and that the loans they were marketing were bad loans.
But the people who were sold these loans who were the subject of these misrepresentations, the homeowners, are still paying on mortgages that haven't been reformed, that haven't been written down. That's why our economy is in bad shape, that's why the housing market is in bad shape. So, investors are taking care of investors, but the banks are not take being care of the homeowners. And that's who we've got to think about if we're going to get our economy going again.
PHILLIPS: All right. You say you want to see the documents. What is it you would be looking for in those documents? What could the documents reveal?
SPITZER: I want to see what representations were made by Countrywide. Remember, Bank of America bought Countrywide. Countrywide itself had actually issued these mortgages. That's where a lot of the ugly, nasty stuff occurred. I want to see what Countrywide was saying about the mortgages, the quality of the mortgages, who the borrowers were, what fraud was going on when they were selling the mortgages that led Bank of America to kind of throw up and say, we're guilty. We've got to pay the investors who were bought - who were sold -- these collateralized debt obligations and all the other high-tech stuff. We sold that to them with misrepresentations about the quality of the debt.
I want to see what the misrepresentations were, who knew about it. Because that should also lead to prosecutions. Remember, there have been virtually no prosecutions of people involved in the sale of this stuff. I want to see what documents there are that indicate who knew what, when, and why about how ugly this stuff was and how much fraud was committed.
PHILLIPS: What else can we see "IN THE ARENA" tonight, 8:00 p.m. Eastern?
SPITZER: It is going to be an exciting evening. We've got David Stockman. You may remember, he was President Reagan's budget director. Incredibly smart. He called the Republicans to the carpet way back when saying, you know what? This supply-side economics isn't working. It will lead to deficits. He's been right about virtually everything he's ever said.
But interestingly tonight he's talking about China. He says the Chinese economy may be heading for a crash. We'll have that conversation with him because, remember, right now in the world economy, China is driving the engine. It it's the Chinese growth at about eight percent, nine percent, 10 percent a year that's permitting us to export, that is driving growth around the world. If they collapse, it is going to be an ugly.
He thinks they're overheating too much. It's going to be an important piece of economic conversation.
PHILLIPS: All right. Your specialty. Eliot Spitzer, 8:00 tonight, "IN THE ARENA." Thanks, Eliot.
Here are some other stories developing -
SPITZER: (INAUDIBLE)
PHILLIPS: You bet -- later today. In Boston, accused mob boss James "Whitey" Bulger has a scheduled court appearance at the bottom of the hour.
Then 2:00 p.m. in Washington, lawmakers take up the topic of proposed U.S. troop withdrawals from Afghanistan. In that same hour, the crew of the space shuttle Discovery holds a news conference about their historic final mission.
And by the way, CNN is your place to watch the final shuttle launch. It's set for a week from Friday. Coverage begins 10:00 a.m. Eastern.
So, how about a pot farm to cure your city's budget crisis? That's exactly what's going on in one small town in California. Just north of Sacramento, it is considered a deal with the medical marijuana collective. Delta Allied Growers promised the city up to $600,000 if it could create a pot farm on the edge of town. Well, it created quite a debate, so much so that prosecutors stepped in. Now the city officials squashed the idea.
Bruce Pope is the city manager. Still isn't giving up. So, Bruce, a pot farm to save the city. I know Oakland gave this a shot as well. Is this a sign of just how desperate cities like yours are becoming?
BRUCE POPE, ISLETON, CA CITY MANAGER: This is more a sign of the results of proposition 215 passed by the voters that made medical marijuana legal in the state. And the city was approached by numerous applicants, and Delta Allied Growers was one applicant that the city felt we could approve.
PHILLIPS: So, you had an attorney on your staff, though, and surely that attorney warned you of the gray areas here legally. Because you went full force, then all of a sudden had to squash the deal because you realized about the legal implications.
POPE: Well, we understood the legal implications going forward because, as I said, Proposition 215 made it legal. In my opinion, state of California has totally dropped the ball. They should have regulated medical marijuana the same way they regulate alcohol.
Then cities and counties would make land use decisions. That is what we do. We zone property, we approve developments.
Because the state has done nothing other than adopt what is referred to as the attorney general guidelines, which in my opinion are very are weak, we have no guidance here. And there is conflict between state and federal law. So, we used our legal tools, our standard planning tools to control this and make the necessary approvals while maintaining public safety and maintaining a secure operation that would deal only with the growing, distribution of medical marijuana. PHILLIPS: So are you -- do you still have hope for this? Do you still want to push forward with this idea? And if so, you know, how many jobs are we talking? How much money? Could this really help save your city?
POPE: Well, yes it would. Most cities in California today are economically strapped due to the economy and the activities of the governor and state legislature trying to seize local funds. So any kind of development that produces income is a benefit to a city.
Now, our city, Isleton is a very are small city. Therefore, $350,000 or $650,000 of new revenue would be extremely significant. But you have to remember also, with a development such as this, there are added responsibilities. We'd have to increase the police force. We'd have to modernize the police force. And all of those issues were addressed in the development agreement and were to be paid for by the developer.
So, we felt we addressed this logically and we put the proper controls in place. The district attorney disagrees with us.
PHILLIPS: We'll see what happens. We'll definitely follow it. Isleton city manager, Bruce Pope, appreciate your time today.
POPE: Thank you.
PHILLIPS: And an international airline boots kids from first class. We'll tell you more about the baby ban coming up.
(COMMERCIAL BREAK)
PHILLIPS: And the drama in the Casey Anthony murder trial continues this morning. Jurors heard testimony from a woman who claims she had an affair with Casey's dad. And right now a private investigator is on the stand.
Live pictures out of Orlando, Florida. Let's go ahead and talk some more with Holly Hughes, a criminal defense attorney and former prosecutor. Okay, first of all, the questioning with the alleged mistress, the purpose behind that.
HOLLY HUGHES, CRIMINAL DEFENSE ATTORNEY: To prove George Anthony is a liar. And quite frankly, I got to tell you, Kyra, it fizzled and it was a big dud. I don't think it was as sensational as the defense wanted it to be. They downplayed it, and we know Jeff Ashton. He got up on cross-examination and did his thing .
You know, he's not a dog with a bone. He's a dog with the whole cow, Kyra, OK? He took her apart like he does everybody else. He says, hey, you know what? You got paid to sell your story, right? Mm-hmm. And who did you tell your story to? Well, it wasn't about selling the story, but "The National Enquirer" gave you $4,000? Well, yes. But - but -- Well, didn't other reputable news organizations get ahold of you? Yes, but I thought they were the best to get the truth out.
PHILLIPS: Oooh.
HUGHES: I mean, seriously? I mean, come on. That's a lack of judgment, ok? We all know what the reputation -- she had CBS calling her, all the big guys, you know. And she says, I went with "The National Inquirer." No, because they were going to pay you, right?
So, again, Jeff Ashton puts her on the defensive, shows the jury that she has a monetary reason to involve herself in this case. And she inserted herself. She went down to that tent and befriended them after they were in the news, after they were big public figures, and he pointed it out.
PHILLIPS: All right. Casey Anthony, this is what a lot of people are wondering: will she take the stand?
HUGHES: Wow, I've got to tell you, based on what I'm seeing from the defense team, they are trying everything in the world not to put her on the stand. That's why they want to prove George is a liar. Because let's face it, when the judge charges the jury and says, you get to decide credibility, if they believe anything that River Cruz said, then George must be lying about certain things. And they can say, so, he's lying about anything, he's lying when he denies sexual abuse, he's lying when he denies he had anything to do with the drowning and hiding the body.
That's where they're going. They don't want to put her up. Because if they do, remember what I say about Jeff Sshton? We'll watch a live autopsy because he's going to eviscerate her one piece at a time.
PHILLIPS: Holly, we'll be talking more.
HUGHES: Oh, yeah.
PHILLIPS: All right.
Let's talk politics now, shall we? Mitt Romney, going after President Obama on the economy and he's using a pretty symbolic backdrop. That's what Jim Acosta is talking about with us today from Washington. Jim?
JIM ACOSTA, CNN POLITICAL CORRESPONDENT: Ah, yes, Kyra, this goes to show you there are perils in hosting political events at factories. The president went to a factory back in December of 2009 to talk about the economy and to talk about his stimulus plan and what it might do for the economy.
Well, earlier this year, that factory is closed and, lo and behold, Mitt Romney, the GOP front-runner right now, is holding an event later today in Allentown, Pennsylvania, to highlight the fact that this factory has closed down. Here is just a brief clip from a web video Romney put out ahead of this announcement.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDNET OF THE UNITED STATES: It's good to be back in Pennsylvania.
I just came from Allentown Metal Works where I had a chance to visit with workers there.
UNIDENTIFIED FEMALE: The Allentown Metal Works is set to close its doors on Friday. This was hailed as a symbol of hope by President Barack Obama last year when he promoted his jobs plan.
(END VIDEO CLIP)
ACOSTA: So, an interesting tactic there for Mitt Romney. He's not going after the other GOP candidates right now that are also running for the nomination. He's going directly at the president.
And on the lighter side of politics, a kicker for our ticker, Kyra, you could call it. Over at the FEC this morning, the Federal Election Commission, there was a special guest. A man by the name of Stephen Colbert --
PHILLIPS: Did he make a scene too? What happened?
ACOSTA: He did make a scene. He's been trying to form his own super-PAC. And guess what? The FEC said, you can have one.
And this is not really a surprise. The Supreme Court has opened up the floodgates for various groups. Karl Rove has a group. Bill Burton who used to work in the White House, he has a Democratic leaning group, that raise all these sort of money and then inject it into the political process before elections.
Stephen Colbert wants to do this because he wants to call attention to the fact there's so much money in politics. So instead of following the money, Kyra, I guess we have to follow the funny with Stephen Colbert.
PHILLIPS: I would love to see you on his show. You would grill him, that's for sure.
You'd get to the bottom of this.
ACOSTA: I would. I would have to.
PHILLIPS: Jim Acosta, you would. Thanks, Jim.
All right. Next hour, we will continue to have your political updates. And a reminder -- you can also go online to our Web site, CNNPolitics.com. And of course that's 24/7.
That does it for us. We'll be back here tomorrow morning, 9:00 a.m. Eastern.
Suzanne Malveaux takes it from here -- Suzanne.
