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Defining Catastrophic Economic Consequences America Faces if Debt Ceiling is Not Raised; Police Investigate Mysterious California Deaths; United Nations Raises Horn of Africa Drought to Famine Level State of Emergency; Rick Perry Blasts President Obama Over Ending Shuttle Program; Fake Apple Stores in China; A Cat 4 Hurricane Dora; NFL Inches Toward Resolution In Lockout; Millennial Approach, Maximum Appeal; Mysterious Deaths at CEO's Mansion; Deadly Heat; FEC: Edwards Must Repay Government

Aired July 21, 2011 - 16:00   ET

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

DON LEMON, CNN ANCHOR: Now I want you to watch this.

(BEGIN VIDEOTAPE)

LEMON: The race to reach a debt deal. If it doesn't happen in 12 days, many say it could have catastrophic economic consequences. But try this one. Is the deadline actually sooner? How much longer will Wall Street wait?

Brooke's off. I'm Don Lemon. The news starts right now.

(voice-over): Children are dying. They're being left on the side of the road, because millions are hungry and can't find food.

UNIDENTIFIED MALE: This is the most fragile situation I have seen anywhere. It's a damned shame.

LEMON: It's a crisis unfolding before our eyes. We will take you there.

CNN investigates how tabloid reporters get their scoop, the secrets, the dirty tricks. You will see how journalism becomes a blood sport.

Plus two mysterious deaths at a CEO's mansion, a woman found hanging bound and naked. A little boy dies from a fall.

UNIDENTIFIED FEMALE: We think of ourselves as a sleepy little town.

LEMON: Now investigators are expanding their army to figure out what happened.

And find out why a massive iceberg the size of Manhattan is baffling scientists.

(END VIDEOTAPE)

LEMON: Hello, everyone. I'm Don Lemon. Brooke is off today. Twelve days now until potential default of the government. CNN is now reporting that President Obama and House Speaker John Boehner are zeroing in on a number, $3 trillion in debt reduction over 10 years, but there's a dispute over extending the Bush era tax cuts for folks who make more than $250,000 a year.

I can also report to you that we have a poll out today showing 62 percent of Americans now favor raising the debt ceiling one way or another, either with our without debt reduction.

Well, the effects of not raising the debt ceiling have been called catastrophic by some, but since it never happened before, this is unexplored territory for us.

Joining us right now from New York, Rick Newman. He's the chief business correspondent for "U.S. News & World Report."

Rick, thank you so much.

Where do you come down on this catastrophic, as some have called it, this claim? No real effect or somewhere in between? What's going on here?

RICK NEWMAN, CHIEF BUSINESS CORRESPONDENT, "U.S. NEWS & WORLD REPORT": I think you could argue that this is already having an effect. On Wall Street, they have long assumed that this is all political posturing and the politicians in Washington would never be crazy enough to actually default on America's debt.

But I think we're already seeing signs that markets are unnerved and that certainly the people who run companies are sitting on the sidelines not doing much until they figure out what's going to happen. The stock market has been going sideways for most of this month. We are seeing some turbulence in the bond markets.

We got a terrible employment report came out early this month. And when you talk to CEOs and people who make decisions about whether to hire or not, one of the big things they now say affects their decision-making is uncertainty in Washington and their concerns that there could be what they call a policy mistake, which is that the politicians do something stupid and might even cause another recession.

So if the odds of a recession seem to be getting higher, rather than lower, and you run a company, you're not going to hire anybody right now. You're going to sit on the sidelines and wait to see what happens. And that's exactly what companies are doing.

(CROSSTALK)

LEMON: I have got to ask you this. You talked about the markets. There's been volatility on Wall Street, but no real panic, no real panic, even though the deadline draws near. Why not a panic?

NEWMAN: Because the markets are continuing to believe that there will be some kind of favorable outcome here. And we do keep that they might be close to a deal. Just yesterday, we heard about the gang of six plan that now was resuscitated and might have a chance. That seemed to go away. Now we're hearing about another deal.

And if there -- I think one of the things that investors are thinking about is, if you still assume that let's say there's a 90 percent likelihood that this gets worked out, well, there will be a lot of relief in the economy, and there could actually be -- I'm pretty skeptical, but I think there's a chance there could actually be some serious effort toward fixing the debt, and not just saying we're going to continue to borrow money.

If that were to happen, I think that would be a big boost of confidence for the economy, and no one wants to get sort of caught out of the market, if you will, and then miss out on any gains that might come very quickly.

So that's -- I think that's how investors are trying to play this right now, but the closer we get to that deadline, obviously the more jittery everybody gets.

LEMON: Hey, Rick, you know how you hear something someone says, and then you don't react to it, and then you think about it later? I just -- something that you said, you said unless Washington, the people in Washington, unless they do something stupid. Explain more about what you meant by that comment?

NEWMAN: Again, there's this assumption that politicians, this is all posturing and they would not do something that's basically self- destructive.

I think there's less certainty about that these days, because this is already starting to impact decision-making. And we do not have a strong economy right now. This is the wrong time to be messing around with the economy and basically holding the economy hostage to either one ideological position or another in Washington, yet that is exactly what they're doing.

And we have also heard comments to the effect that, oh, it wouldn't be a big deal if the United States defaulted, it might actually be good in the long run. And anybody who has sort of analyzed the daisy chain of events that would be likely to happen it there were a default does not think that would be good at all. It would just almost certainly lead to more job losses and probably another recession.

And when you just hear this insouciance out of Washington about this, it's almost a sense of disbelief at this point.

LEMON: That brings me something that I saw, a quote today from Mark Zandi. He's the respected chief economist for Moody's. He likened nearing this deadline to a pile of sand is what he said. Here's what he said.

He said, "You keep putting one piece of sand on the pile. Nothing happens, and then all of the sudden, it just caves."

So could you see, Rick, something like that occurring even before the August 2 deadline?

NEWMAN: Yes, absolutely. And on Wall Street they're calling that a TARP moment, which is a reference to the end of September 2008. Many people don't remember this, but before that big bank bailout bill got passed, it got voted down by the House of Representatives.

And it looked there was just going to be a total financial flame- out. That day the stock markets had their second biggest one-day loss ever. And that loss in the stock markets was actually the thing that basically pointed out to lawmakers who were saying no to that, look, this is really important. And this is the kind of thing that's going to happen if you guys don't approve this bill. So that's one of the things that people think might happen this time. It might take like a major plunge in the stock markets or some other awful event before Washington actually gets serious.

LEMON: Hey, Rick, I do have to go, so if you can give me a yes or no, will we start hearing from Wall Street soon? Are they going to come out and say, listen, do something?

NEWMAN: Yes, absolutely. We have already got Standard & Poor's is might with Washington either today -- some of the House GOP guys today or tomorrow. We're going to get more of that for sure.

LEMON: Rick Newman, always appreciate it. Thank you very much.

NEWMAN: Thanks, Don.

LEMON: All right.

(NEWS BREAK)

LEMON: I want you to listen to this now. There are new fears that your tax dollars could be going to insurgents, the very ones trying to kill American troops. I will tell you how billions of dollars are apparently being wasted in Afghanistan.

Plus, should Syrian activists in America fear for their safety? The FBI says yes. And they're warning them to watch out. We will explain why coming up.

(COMMERCIAL BREAK)

LEMON: There are claims today that the Syrian government may be watching the activities of Syrians and Syrian-Americans in this country.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Long live Syria!

UNIDENTIFIED MALES: Long live Syria!

UNIDENTIFIED MALE: Long live Syria!

UNIDENTIFIED MALES: Long live Syria!

(END VIDEO CLIP)

LEMON: The allegations come from Syrian-Americans who have taken part in demonstrations here in the U.S. They claim they are not only being watched. They say their family members still living in Syria are being harassed. And now the U.S. State Department is looking into it, as a matter of fact.

Let's bring in our foreign affairs correspondent, Jill Dougherty.

Jill, any validity to these claims?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Don, I think you would have to say so far there's no concrete evidence that this is happening, but certainly the people who are involved in these demonstrations who are Syrians say that they believe this is happening, that they have had threats, but they can't necessarily connect the dots.

What they are alleging is that personnel from the embassy here, the Syrian Embassy in Washington, D.C., came out to their demonstrations in the United States and took photographs of them, and then as a result, they have had have some (AUDIO GAP) families and in fact some threats themselves because of these -- what happened at these demonstrations.

Now, the State Department is taking it seriously enough to say that they have had reports to this effect about the surveillance video and photographic, and that they are investigating the claims of harassment of the families.

And also the FBI, we are told by one law enforcement official, is meeting with some of these people from Syria, and saying we are concerned enough to give you some advice on trying to protect yourself.

(CROSSTALK)

DOUGHERTY: But they -- Don, I should say the FBI also says that it doesn't have any evidence that this exactly is happening.

LEMON: OK. Again, to -- the FBI is doing -- they don't have any evidence, but they're doing what again?

DOUGHERTY: They are meeting with some of the people who have been at these demonstrations, expressing concern, and saying, here are some suggestions on ways that you can, you know, make sure that you are secure and watch out for yourself.

LEMON: Interesting. All right. Let us know what happens. Jill Dougherty will follow that for us.

Thank you very much, Jill. DOUGHERTY: Thank you.

LEMON: By now you've heard about the billions of dollars the U.S. is spending in aid for Afghanistan, but you probably didn't know this, as much as $10 million a day -- $10 million a day -- may be getting smuggled out of that country. CNN's Chris Lawrence has been digging on this and he'll tell us about some of his shocking findings coming up next.

(COMMERCIAL BREAK)

LEMON: With all the corruption we hear in Afghanistan, it's there's no big shock that some of the billions isn't going where it is intended, but now we're hearing that funds are being divert to do extremists who are trying to kill Americans.

Our Chris Lawrence is at the Pentagon right now.

And, Chris, what are we talking about here?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Don, we're talking about a federal audit that finds that 10 years into this war in Afghanistan and the U.S. only has limited visibility over what happens to billions of dollars once we send it over to Afghanistan. The inspector general says that means that money is vulnerable to fraud, but even worse, being diverted to insurgents.

Look, the U.S. has spent more than $70 billion in security and redevelopment projects, but this audit finds as many as $10 million may be struggled out of the Afghanistan every single day.

Well, you wonder how does that happen? Well, part of the reason is when Afghan officials leave the country, no one checks how much money they're carrying with them. And this audit shows that officials have no plans to scan their cash through those electronic currency counters.

Now U.S. officials might be able to keep a better eye on it, but U.S. officials are denied access to that part of the access where VIPs come and go, and now President Karzai has banned U.S. Treasury officials from working with the Afghan central bank.

(BEGIN VIDEO CLIP)

SEN. CLAIRE MCCASKILL (D), MISSOURI: The troops are doing everything they're being asked to do, and in return, we owe them a duty to make sure that American dollars are not in any way flowing to the enemy.

If they're not willing to allow us to look over their shoulder as this money flows into the Afghanistan economy, then we ought to say to them, maybe it's time we don't let that money flow.

(END VIDEO CLIP)

LAWRENCE: And that money continues to flow. I mean, right now the Obama administration is asking Congress for another $17 billion -- that's billion with a "B" -- all for Afghanistan reconstruction for the next year, Don.

LEMON: Chris Lawrence, thank you very much.

You know, stories of human crisis are flooding out of the Horn of Africa. Right now, 11 million people there are in desperate need of food, water and a safe place to sleep.

Well, this woman is one of them. She's a herder, but lost all of her livestock months ago for the drought. Now she's barely surviving. She feeds her infant son wild berries and dirty water that make him sick. Well, his twin sister died of hunger in May.

This week, the United Nations declared hunger in the Horn of Africa has grown so severe that it constitutes a famine. And that means food and water are in such short supply, people can no longer take care of themselves.

CNN's David McKenzie reports on this humanitarian crisis from a refugee camp in Kenya.

(BEGIN VIDEOTAPE)

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: This is the edge of the Dadaab camp. It's where Somali refugees are streaming into in the thousands every week.

It's the children really who are the worst. Many of them are malnourished, most of them seem to have some kind of respiratory problem because of the dust and the wind that's blasting through here.

They're living in terrible conditions like this. They're in these huts which are basically constructed out of tarpaulins. They cook in this tiny little space with no shelter.

And when they come here, they come expecting help. They come expecting food, water, the basic dignity that refugees should get when they move to another country. But here they even have to go out into the outer areas to defecate, because there's no latrines for them, and they say they're worried there could be a disease outbreak in these areas.

While people talk politics and al Shabaab getting aid into Somalia, it's here in this Dadaab camp where the people are the worst off.

David McKenzie, CNN, Dadaab, Kenya.

(END VIDEOTAPE)

LEMON: All right, David, thank you.

Happening right now, Hurricane Dora is gaining strength in the Pacific and it's already a category 4 storm. Find out where's it's heading. Plus, Texas Governor Rick Perry has just released a statement, and he has some strong words for President Barack Obama.

The news is just ahead.

(COMMERCIAL BREAK)

LEMON: As promised, time for a "CNN Equals Politics" update. Our Jim Acosta join us now with the very latest news from the Political Ticker.

Jim, you've got some new poll numbers, I understand, on the GOP presidential candidates. Any surprises there?

JIM ACOSTA, CNN CORRESPONDENT: There are some surprises, Don. This is a pretty interesting one from "The Washington Post"/ABC News poll that was out this morning. And some surprising news for those wondering whether Sarah Palin will get in the 2012 race.

Take a look at this, Don. Very interesting stuff. Mitt Romney, no surprise there, he's a front runner at 26 percent. But then there's the former Alaska governor right there at 18 percent. Michele Bachmann following Palin, and then Ron Paul.

And then some pretty good numbers for Rick Perry. We've been doing some reporting over the last week or so about the Texas governor, whether or not he's going to get into the race. A lot of people think he could go in and clear out some of these other contenders out there that are not doing as well.

And he is going after President Obama today, Don. As you know, this morning was the final landing of a space shuttle. The Space Shuttle Atlantis touched down this morning. Well, Rick Perry, he is the governor of Texas, and Houston, the space program down there in Houston is a very important jobs creator for the state of Texas. And he took aim at President Obama over the sending of the space shuttle program, essentially saying the Obama administration has no plans for space exploration.

And here's what the governor has to say. He says, "Unfortunately, with the final landing of Shuttle Atlantis and no indication of plans for future missions, this administration has set a significantly different milestone by shutting down our nation's legacy."

He goes on to say that basically the president is leaving astronauts no alternatives but to hitchhike into space, Don.

And you know, if you look at our own CNN polling, we had a CNN/ORC poll out this morning that shows Americans have some pretty mixed feeling about the end of the space shuttle program. Fifty percent say it's a bad thing for the country, but a solid majority of Americans would like to see private companies really in the forefront when it comes to developing the future of space exploration.

So we're sorry to see it go, but I think there are a lot of Americans who aren't so sure we can afford it anymore -- Done.

LEMON: You know what I'm happy for?

ACOSTA: What's that?

LEMON: That you said CNN/ORC, cause I've been -- I said what is a CNN/ORK.

ACOSTA: Exactly. And we got a lot of e-mails from our polling unit to not call it the "CNN/ORK poll." So let it be known that will not happen.

LEMON: You saved me a big mistake on the air, an embarrassing moment.

ACOSTA: I try.

LEMON: A "Daily Show" moment or something. CNN/ORC, thank you, Jim Acosta. Appreciate it.

ACOSTA: We'll put that down for you. OK, thanks.

LEMON: Still ahead here on CNN, a deal ending the NFL lockout could come at any minute. We're live outside the negotiations for you.

Plus, there's apparently a fake Apple store out there. Wait till you hear how far they go to pull it off, and what they're selling

Also, CNN investigates how tabloid reporters get their scoops. You'll see the dirty trick and the secrets.

"Reporter Roulette," times four, next.

(COMMERCIAL BREAK)

LEMON: Welcome back, everyone.

The NFL lockout may finally be coming to an end. David Mattingly has that. Alison Kosik reports how concert tickets sales are on the rise. Extreme heat, and now a hurricane, Chad Myers will update us. Time to play "Reporter Roulette".

We begin with NFL labor talks. David Mattingly is live in downtown Atlanta, where owners are meeting.

David, where do we stand? Is the NFL ready to play some football?

(AUDIO GAP)

Well, we can't hear David, so we will move on, when we can hear David.

Up next on "Reporter Roulette", concerts are making a comeback. Alison Kosik is in New York. Alison, are you there? We can hear you?

ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: I am here. I can hear and see you.

LEMON: All right. What's driving up thinks concert ticket sales? Thank goodness.

KOSIK: These promoters have to get creative, because the industry really just had a heart time last year. Yes, they're bringing in 16 percent more this year, because they are getting creative. You know, just like all of these performers, are paring up in songs, you know, like, J.Lo and Pitbull, now they're doing the same for their concerts. These artists are combining, so they have a stronger supporting act. So we're seeing like Rod Steward, Stevie Knicks, New Kids on the Block with Backstreet Boys.

Also, you know, what? They're not booking these huge venues. They're playing smaller places. And they are playing in fewer places. So they are kind of streamlining and making it-I guess more value, giving more value to concert goers.

LEMON: Alison, what is this we are hearing about a fake Apple store?

Yes, they are all over China apparently. So outside and inside, it looks like the real deal. It is very convincing. Everything from the winding staircase to the wooden tables and the floors, even the employees have these blue T-shirts and their little tags. But you know what? These stores are a big rip-off. A few of them have opened up in different cities in China. There you go, you can see what it looks like inside. It looks like a real apple store, doesn't it, Don?

LEMON: Yes, it does.

KOSIK: But they're not. This isn't like when you go walking out in New York and pick up those fake purses, and if they see cops, they put the tarp over, our throw the stuff in the truck. This is an actual storefront, or a few storefronts in China, that are ripping off the Apple name. What they say is they are selling actual Apple merchandise that is on the Web site. But these are not authorized Apple resellers. So that is the difference here. But, you know, what, analysts say there's little that Apple can do at this point. It is hard for companies with branded products to manage distribution across a big country like China.

Here's the irony in this. Apple this week, when it reported earnings, said China was key to its record earnings and revenue in the second quarter. How about that?

LEMON: All right. Thank you, Alison Kosik.

Next on "Reporter Roulette", Chad Myers in the CNN Severe Weather Center, so Chad, Hurricane Dora is a category 4 storm now.

CHAD MYERS, CNN METEOROLOGIST: Yes. LEMON: Are we getting closer to a Category 5?

MYERS: One mile from it. It's 155. 155 miles per hour; 156 is Category 5, so maybe at the next update, in the next half hour or so. Very large storm.

Here's Acapulco, Puerta Vallarta, right there. That would be Cabo San Lucas. Now the forecast is for it to get out here into colder water. Remember, hurricanes need warm water to survive and certainly warm water to get bigger. Here is the high-res forecast is, the high resolution image here.

Coming out where it was in Cabo San Lucas and about Acapulco, but right there should miss and stay in the ocean, eventually come out here and die a quick death out there in the colder water. Still warm water here. That's why the storm developed, 155-mile-per-hour storm, very big waves out there, crashing onshore in Western Mexico if you want to go surf's up.

LEMON: All right. Thank you, Chad. Guess what? David Mattingly is telling us he wants to be seen and heard. He's back now, live in downtown Atlanta, where NFL owners are meeting on labor talks.

Listen, you're not like kids should be seen and not heard? You're not a kid, we want to hear. Where are we on the standoff?

DAVID MATTINGLY, CNN CORRESPONDENT: Well, I wish I could tell you right now, Don, now that you can hear me, that this lock out is over. But we don't have word of that. The owners have been in closed-door meetings all day. Since 10:00 o'clock this morning, Eastern Time. There's been a great deal of anticipate this meeting might be over pretty soon.

They haven't been telling us what they have been talking about, or what they have been doing. Before this started, though, there was a great deal of optimism they might be able to have a vote today. We talked to Arthur Blank, who is the high-profile owner of the Atlanta Falcons. He said he was very optimistic and they might vote on accepting this agreement whether the players have voted on it or not. Now, we don't know if that's happened. We should find out soon where the owners stand on this agreement.

LEMON: So, listen, we thought the players would get this done yesterday. That's what we thought. What is the holdup?

MATTINGLY: Apparently there are more hoops to jump through for the players than had been discussed before, but right now one of the sticking points seems to be the recertification of their union. What we've heard, we heard just a short time ago, we hear from DeMaurice Smith in Washington, D.C., letting everyone know that this was going to be a very deliberate decision on the part of as lot of the players. Listen to what he had to say.

(BEGIN VIDEO CLIP)

DEMAURICE SMITH, EXEC. DIR., PLAYERS ASSOCIATION: The decision to dessert fill was important, because at the time we were a real union. The decision for our players, as men, to come back as a union will be an equally serious and sober one that they have to make.

(END VIDEO CLIP)

MATTINGLY: Reading between the lines there, he was essentially telling us that that wasn't a decision that could be made quickly or easily. So we are now waiting to find out at least a clearer word from the owners here, who have been meeting all day to discuss, and possibly vote on this agreement. Without both sides agreeing, we don't know if the lockout will end. Wait and see, Don.

LEMON: David, thank you very much.

Next on "Reporter Roulette" Deborah Feyerick is in New York with tabloid tricks of the trade. Watch this.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice over): For British tabloids like the recently deceased "News Of The World" it appears that everyone, everywhere, was fair game. Actors, business tycoons, royals, prime ministers, politicians, all potential front-page fodder, caught up in a type of scandal-driven journalism that bordered arguably on reporter blood sport. Allegedly involving hacking, tracking, and outright bribes.

BONNIE FULLER, EDITOR, HOLLYWOODLIFE.COM: They very much crossed the line. They didn't just do it once or twice. We're not talking about a single rogue reporter. Apparently it happened at least 4,000 times.

Media executive Bonnie Fuller has been the driving force behind magazines like "Star" "US Weekly" and now "Hollywood Life."

FULLER: You have a stronger takedown culture in the British tabloids. They're much nastier than anything you would find there. And they really do look to tear down people.

FEYERICK (On camera): That journalists who were able to do that, it's just not that complicated. It is not that hard?

JOHN ABELL, BUREAU CHIEF, WIRED.COM: No.

FEYERICK: John Abell of Wired.com walked us through the most common techniques. Like phone hacking, shockingly easy.

ABELL: Most people don't change their PIN or their passwords. Once they're able to correlate a specific phone number with a specific carrier, all they had to do was dial into that voice mailbox, enter the default pin.

FEYERICK: Another technique, something called pinging, using cell phones and cell towers like GPS to track someone's movements and locations. ABELL: The carriers know pretty much exactly where you are within a few square meters, based on the cell phone tower your phone is connected to.

FEYERICK: That information is usually hacked or accessed through bribes. After all, bribing anyone with any access to famous people is allegedly a long-used tabloid technique, as is something the British call blagging, impersonating someone to gain access to confidential data.

ABELL: Their best tool is still the phone, and guile. Maybe because people will say all kinds of things, and will give up all kinds of information. If your tone is correct, if your demeanor is proper, if you sound like you deserve the information you want.

FEYERICK: The reality, once information exists in digital form on the Internet or phones, experts say it's game over. Anyone who knows what they're doing can figure out how to get it.

(END VIDEOTAPE)

LEMON: All right. Deb Feyerick joins us now from New York, our bureau there.

Deb, I'm sure a lot of people want to know, what can we do to avoid being hacked?

FEYERICK: The most important thing you can do is change your password frequently, don't take it for granted. Clearly if you haven't created a password, you should do so immediately. Again these phones have a default mechanism. That's how some reporters, some journalists, were allegedly able to get into phones, but in other cases private eyes were able to hack into systems. So the more you change, the safer you are, Don.

LEMON: All right. Good advice. Deb Feyerick, thank you.

And that is today's "Reporter Roulette". Now watch this -

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Sometimes I get really fired up and need to relax a little bit.

(END VIDEO CLIP)

LEMON: There's a name for guys like that, they call him a millennial. Some employers are going all out to make these young folks happy. I'm talking about massages, video games. You saw the scooter there. Find out why some bosses think these folks are worth the trouble. It could affect everything-everything about your own workplace, that is next.

(COMMERCIAL BREAK)

LEMON: Can you imagine this? I'm not hating, either-yes I am. Skateboards at the office, unlimited paid vacations, no dress code, massage chairs, all the video games you can dream up. Some employers love millennial generation workers so much, they're going above and beyond to keep them happy. Keeping Gen Y employees motivated means giving them what they want. Our Poppy Harlow tours the company that swears by it.

(BEGIN VIDEOTAPE)

POPPY HARLOW, CNN FINANCIAL CORRESPONDENT: How do you get Millennials them moving on the job?

UNIDENTIFIED MALE: Sometimes I get really fired up and need to relax a bit.

HARLOW: It takes way more than a pat on the back. Try a full- body massage.

UNIDENTIFIED MALE: That's pretty good.

HARLOW: Throw in a gaming suite, unlimited gadgets.

UNIDENTIFIED MALE: Within arm's reach of me, I've got two monitors, two phones, an iPad and a laptop.

HARLOW: And all the paid vacation they can handle. Twenty-seven year old Grant Gadosi (ph) took an entire year off to live in Italy.

UNIDENTIFIED MALE: I love traveling. If you need to take a day off, an e-mail notification, and they say have a good time.

HARLOW: It may seem extreme, but CEO Ray Pawlikowski says Gen Y- ers are worth the trouble.

RAY PAWLIKOWSKI, CEO, HOTSCHEDULES: We tried that typical, old- style approach, started pants, starched shirt.

HARLOW (on camera): You did?

PAWLIKOWSKI: Absolutely, oh, yes. All about the schedule, all about the deadlines. And it didn't work. The minute we embraced change and we started seeing the results we wanted to see.

HARLOW: The change paid off. Hot Schedules, which puts restaurant worker schedules on mobile devices got even hotter. Users soared to 650,000, mostly Millennials.

(On camera): Why do you bring them onboard? Outside of their energy, are these outperformers, are these ambition people? Are these, frankly employees that will work for less?

PAWLIKOWSKI: You will see that, but from our experience, I think the biggest thing is they bring a new level of dedication that we haven't seen in the past.

HARLOW: Jason Dorsey coaches companies like Hot Schedules, how to maximize their Millennials. UNIDENTIFIED MALE: You are paying us good money. It is a bad economy right now, we should be getting there early, washing your car, right?

When millennials show up to work, you have to provide specific examples of the performance that you expect. The reason is we often lack real-world experience. You have to give feedback to millennials at least once a month.

Other generations were taught. If your boss is talking to you, you're doing something wrong. Millennials were taught the exact opposite, which is if your boss isn't talking, you're doing something wrong.

HARLOW: No chance of that at Hot Schedules. The boss serves free barbecue and a mean game of ping-pong.

(END VIDEOTAPE)

HARLOW: Don, you might be in the millennial generation. I'm not going to say you're not. You're pretty young --

LEMON: No, I could have a millennial child. Come on.

HARLOW: I don't think it's like that. You know what's interesting, all the bosses we talked to, the millennial, Ray in that piece told us that it is true that these employees care so much less about money than they do about quality of life.

Having a good, fun work environment, being able to wear jeans to work and take as much time off as they want. It's truly their policy, if you get hired at that company, you have unlimited paid vacation, as you long as you get your work done. How about that?

LEMON: So maybe they don't want to get rich, but many of them, they want to become entrepreneurs, right?

HARLOW: Yes, they do. That's this interesting dichotomy in the millennial generation. That is they were brought up believing that you can indeed start your own company and be successful. This is the generation of Facebook, and before that the generation of Google.

They weren't brought up like the generation before, which thought, all right, you have to be a lawyer, a doctor one of these classic professions to be successful. They watched the dot-com boom, then the bust, and now they're watching what happens to technology and the social media space now.

So, Don, they don't necessarily want to be rich, but they believe they can start a company out of the back of their garage with a few hundred bucks and that they can indeed be a success, because they have seen their generation do it.

LEMON: All right, Poppy Harlow, thank you very much. Interesting story. And here's a bizarre story to tell you about. It's a mystery in California. It has 15 detectives are working to find answers, a millionaire's girlfriend and son dead within days of each other at his mansion.

Max Shacknai fell down the stairs last week. Two days later, was and then Rebecca Zahau, the girlfriend of Max's father, Jonah Shacknai, was found hanging from the balcony at the house. She was naked, her hands and feet were tied. Police say they haven't determined if someone killed her or if she committed suicide.

Then, over the weekend, little Max died in a San Diego hospital. Police are saying they are not ruling out a connection between the two deaths.

Rebecca Zahau, her sister is saying Rebecca wasn't depressed, had no reason to commit suicide. We're going to bring you more of this bizarre case as it unfolds.

In the meantime, he's already in big legal trouble. Now former presidential candidate John Edwards is set to take a big financial hit. We'll tell you why, coming up.

(COMMERCIAL BREAK)

LEMON: All right. Teaching your pooch to sit, beg and roll over seems pretty cool. That is, until you see what this ninja dog can do. You've got to see this.

Let's see that again. That is one smart little pooch. I know it's news and all that, but I could watch that all day. Look how cool that is. Pretty smart little fella.

All right. If big Hollywood blockbusters aren't enough of a reason to hit the theatres this summer then how about the air conditioning, right? That's what one theater is banking on. Can you read their marquee?

It says "We have AC. Who cares what's playing?" That's good enough reason for a lot of folks who'll do anything to keep as scorching heat wave affects much of the nation. "We have AC. Who cares what's playing?" It's cool in here.

You know, "THE SITUATION ROOM" with Wolf Blitzer is coming up at the top of the hour. Wolf joins me now for a preview. It's always cool in the "THE SITUATION ROOM" that's because Wolf is there. What do you have on the show today, sir?

WOLF BLITZER, HOST, CNN'S "THE SITUATION ROOM": Very cool in "THE SITUATION ROOM," right now because I like it cold. It's cold in here. Have you seen any good movies lately, Don?

LEMON: You know, I have seen, but you know what I rented lately, because of the whole thing that's going on overseas with the Murdochs. "Citizen Kane," I watched it the other day and it was amazing, but I haven't seen anything new, no. BLITZER: Let me make a recommendation. I saw "Midnight in Paris" the Woody Allen movie starring Owen Wilson, have you seen it?

LEMON: No, I have not.

BLITZER: It's a great, really good movie. Owen Wilson and I tweeted this after I saw the film. Owen Wilson, believe it or not becomes Woody Allen in that movie. I think you should go see.

If you like Woody Allen, I like the old Woody Allen movies, the new Woody Allen movies, if you like that kind of film, go see it. Just a recommendation.

LEMON: I love Woody Allen movies.

BLITZER: You like "THE SITUATION ROOM," too, right?

LEMON: Come on, Wolf, do you have to ask that question?

BLITZER: We have a very strong show coming up in the top of the hour, Pervez Musharraf, the former president of Pakistan, Janet Napolitano. She's the Homeland Security secretary. We've got a lot of good stuff coming up at the top of the hour.

LEMON: Wolf Blitzer in the cool "THE SITUATION ROOM." Of course, we will be watching, less than 10 minutes away. Thank you, sir.

BLITZER: You know why it's cold in here?

LEMON: Why?

BLITZER: Because you never want to see the anchor sweat.

LEMON: I know. I like it freezing and the only other anchor who likes it colder than me and you I think is Kyra Phillips.

BLITZER: I like it really cold.

LEMON: Yes, thank you, sir. Cool guy. Coming up next, new trouble for John Edwards, the man who wanted to be president. He's just been ordered to pay the government more than $2 million. Joe Johns has the scoop, coming up next.

(COMMERCIAL BREAK)

LEMON: The sweltering heat that is gripping much of the country is nothing to brush off. I know you hear the world "dangerous" a lot, but I want you to know this. This heat wave has already killed as many as 22 people, 13 in Kansas City, Missouri, alone.

And as of today, excessive heat warnings stretch from Nebraska to Maine. In Boston, people are changing their routines.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I'm always running in this morning, but this week particularly, because it's so hot, I'm here at 4:30.

(END VIDEO CLIP)

LEMON: In Sioux Falls, South Dakota, the heat isn't just causing streets to buckle, they are bursting. It is so hot in New Haven, Connecticut, a bridge is swollen shut. Crews are out there trying to shave about an inch off the bridge to try to get it to open before the weekend.

The heat is putting pressure on the power grid to Chicago's heat index has been well above 100 for days. Thousands are without air conditioning. I want you to take a look at these pictures from Chicago's Zoological Society as well.

When the Brookville Zoo responded to the heat wave by giving animals giant ice blocks, animals' reactions prompted plenty of giggles.

I want you to look at this. This is Columbus, Ohio, where the city opened four fire hydrants in what they are calling "Operation Cool Down."

Things are always hot in politics, so this is no different. There's another setback for former presidential candidate John Edwards. Joe Johns is here. So Joe, John Edwards is in trouble again. What is it this time?

JOE JOHNS, CNN SENIOR CORRESPONDENT: You know, Don, every few weeks it seems like it's something else. He started out as senator, vice presidential candidate, not too long ago, people were thinking he actually had a shot of being president of the United States.

Now it's just one bad headline after the next. Edward's under indictment in a federal court in North Carolina for allegedly accepting $900,000 in campaign money to cover up his affair with his girlfriend while he was married. He says he's not guilty, but now today the Federal Election Commission just did an audit on Edwards' 2008 campaign for president and decided he owed the government something like $2.3 million, talking about federal matching funds.

They're basically saying they got a couple million and some change more than he should have. The "Wall Street Journal" is reporting that as of June 30th, the Edwards campaign committee had something like $2.6 million in the bank. So they got a lot that they've got to pay, and a little bit will be left over, apparently.

LEMON: I was going to say, you know, that seems like a lot of money, even for a top-shelf former trial lawyer. We know personal le he's a wealthy man. Is he going to fight it or what here?

JOHNS: Well, the important thing to say, really, is that the Federal Election Commission is actually - it's pretty typically for them to go back and review bookkeeping of the campaign. They say this is important to say, it doesn't have anything at all to do with the criminal case against John Edwards. We reached out to the Edwards legal team, haven't heard back from them, but the "Wall Street Journal" reported an attorney for Edwards as saying he doesn't owe the government anything. So this is not the last we might hear of it.

He has the right to appeal, not sure if he will. The FEC decision also is the kind of thing that go back and forth. Edwards does have a trial date on the criminal charges, completely separate in October though. That could be push back.

LEMON: I just have a short time left here. We're hearing from his attorney, not hearing him personally because remember he was on the interview tour a while back, going everywhere, but he's silent?

JOHNS: Yes, he talked a lot for a while then he got really quiet when it became pretty clear that he might be indicted. The last we heard from him publicly in my substance was outside the court in Winston-Salem, North Carolina on the day that indictment was handed up and he actually went to court to face it. He said he wasn't guilty, he didn't do anything wrong. We might hear more on this.

LEMON: Thank you, Joe Johns. We appreciate it.

You know it's hot around the country, politics are heating up as well, but it's always cool in "THE SITUATION ROOM" where we to now with Wolf Blitzer.

Wolf, take it away.