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Live Feed: Obama Talks Economy in Reno, Nevada; Was Mitt Romney a High School Bully?; Joe Arpaio Weighs in on Lawsuit, Interview with Former Labor Secretary Robert Reich

Aired May 11, 2012 - 15:00   ET

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

DON LEMON, CNN ANCHOR: Top of the hour, everyone. Thanks for joining us, Don Lemon here. Brooke is off today.

Right now, President Barack Obama speaking live in Reno, Nevada, laying out his plan to fix what many say is the heart of the terrible economy, the housing market.

Let's take a listen.

(BEGIN LIVE SPEECH)

(JOINED IN PROGRESS)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And that's where we need to go.

I have been pushing Congress to help us get there by passing a few commonsense policies that we're convinced will make a difference. We even made a handy to-do list for Congress, so they can just check them off. It's a list like Michelle gives me.

(LAUGHTER)

I know Paul's familiar with that list. He gets it from Val. Now, there are only five things on this list, because I don't want to overload Congress with too much at once.

But they are ideas that will help create jobs and build a stronger economy right now. So, first up on the list, it makes absolutely no sense that we actually give tax breaks to companies that ship jobs and factories overseas. That doesn't make any sense at all.

(CHEERING AND APPLAUSE)

So we've told Congress it's time to end tax breaks for companies that ship jobs overseas and use that money to cover moving expenses for companies that bring jobs back to America.

(CHEERING AND APPLAUSE)

Second, instead of just talking about job creators, Congress should help small businesses and help small-business owners who create most of the new jobs in America. So we want to give them a tax break for hiring more workers and paying them higher wages. The third thing on our to-do list, Congress should extend tax credits that are set to expire for our clean energy companies. These businesses are putting folks to work here in this state of Nevada -- last time I was here, in fact, I went to see a -- huge solar plant, solar energy plant. A lot of folks are working both in the construction of it and maintaining it. That's happening all across the country.

And so we've got to make sure that we are helping those folks because that helps us break our dependence on foreign oil. Over the long term that'll help drive down gas prices and it puts people to work right now. It's the right thing to do.

(CHEERING AND APPLAUSE)

Fourth, Congress should create a veterans jobs corps so that we can help communities higher returning heroes, our veterans, as cops and firefighters, and employees at national parks. Because nobody who fights for this country should even have to come home and fight for a job or fight for a roof over their heads.

(CHEERING AND APPLAUSE)

Alright, so that's four. Which brings me to the fifth.

The fifth thing on the list and that's why I'm here today. I'm calling on Congress to give every responsible homeowner the chance to save an average of $3,000 a year by refinancing their mortgage.

It's a simply idea, it makes great sense. And I know it'll have an impact. Last October, I was in Clark County where I announced new steps to help responsible homeowners refinance their homes.

And at the time, Congress wasn't willing to act, so we did. We went ahead and did what we could do administratively, without a new law being passed. And as a result, Americans who were previously stuck in high interest loans have been able to take advantage of these lower rates.

And they have been able to save thousands of dollars every year. And it turns out that two of those people are your neighbors, Paul and Valerie Keller.

(CHEERING AND APPLAUSE)

So, I just had a chance to -- to visit with Paul and Valerie and look at their beautiful home, and check out the grill out back. Valerie says Paul is a pretty good cook, so I'm going to take her word for it.

The Kellers have lived in this house for 14 years. Val works nearby, helping secure loans for farmers and ranchers. Paul is a retired electrical contractor who started a family business with their son. Last year, with mortgage rates at historic lows, the Kellers decided it would make sense for them to refinance. They thought it would be easy since they're current on their mortgage, they make their payments on time. So this is an example of responsible homeowners doing the right thing. But when they tried to refinance, they were told they couldn't do it because the Keller's house, like thousands of others in this state and probably some of the neighbors here, their house is underwater, which means that the price is currently lower than what they owe on it.

So they were -- they were hit -- you were hit -- with a historic drop in housing prices, which caused the value of homes in their neighborhood to plummet. And a lot of banks historically have said, "Well, we're not going to refinance you if you home's under water."

Now, luckily the Kellers saw my announcement that I had made down in Clark County. So I'm assuming it must have been Val because whenever something smart's done it's usually the wife in the house.

(LAUGHTER)

So they called their lender, and within a few months, within 90 days, they were able to refinance under this new program that we set up. Their monthly mortgage bill has now dropped $240 a month, and that means every year they're saving close to $3,000.

(CHEERING AND APPLAUSE)

Now, Val says that they have been talking to some of their neighbors, maybe some of you are here today, and you're saying, "Well, that sounds like a pretty good idea."

And a lot of folks across the country recognize this is a smart thing to do not only for homeowners but for our economy because if Paul and Val have an extra $240, $250 a month then they might spend it on the local business. They might go to a restaurant a little more often. They might spoil their grandkids even more.

And that means more money in the economy. And businesses do better. And slowly home prices start rising again. So it makes sense for all of us.

And the good news is, since I have made this announcement, refinancing applications have gone up by 50 percent nationwide and 230 percent here in Nevada alone. That's the good news, people are taking advantage of this.

(CHEERING AND APPLAUSE)

That's what we want to see. But here is the only catch, and this is where you come in because you're going to have to pressure Congress. The pool of folks who can refinance right now when their homes are underwater is still too small.

The reason the Kellers were able to refinance is because the only thing that we could do without Congressional action was to give opportunities for refinancing for folks with a government-backed loan, an FHA-backed loan. But in order to expand that opportunity we want to include everybody, people whose mortgages aren't government-backed.

(CHEERING AND APPLAUSE)

And in order to do that we've got to have Congress move. There's absolutely no reason why they can't make this happen right now. If they started now in a couple weeks, in a month they could make every homeowner in America who's underwater right now eligible to be able to refinance their homes if they're making their payments, if they're responsible, if they're doing the right thing.

And think about all those families saving $3,000 on average a month. That's a huge boost to our economy. And for some of you who are under water you might say, "Instead of spending that money I can plow that back into equity in my home and build that back up," which would further strengthen housing prices here in Nevada and around the country. So it's the right thing to do. There's already a bill in the works. It's supported by independent non-partisan economists. It's supported by industry leaders. Congress should pass it right now.

And...

(CHEERING AND APPLAUSE)

Let -- let me just say this. Maybe there's some members of Congress watching.

(LAUGHTER)

If you need some motivation to make this happen then you should come to Reno and you should visit with folks like the Kellers.

I'm not saying -- I'm not saying the Kellers want all these members of Congress up in their house.

(LAUGHTER)

It's bad enough having me and the Secret Service in there. But at least they -- they probably wouldn't mind saying hello and talking to them here in front of their house.

But they -- they should talk to people whose lives are better because of the action that we took. All over the country, there are people just like Paul and Val, folks just like you, who are doing everything they can to do the right thing, to meet their responsibilities, to look after their families, to raise their kids right, give them good values.

You're not looking for a handout. You just want to make sure that somebody's looking out for you, and that when you do the right thing, that you're able to keep everything that you've worked for. That's what folks are looking for, and that's what they expect from Washington -- to put the politics aside and the electioneering aside and -- and just do what's right for people. (CHEERING AND APPLAUSE)

So -- so, I need all of you and everybody who's watching to push Congress on their to-do list.

Nag 'em until they actually get it done. We need to keep moving this country forward, send them an e-mail, tweet 'em. Write them a letter if you're old fashioned like me. But -- but communicate to them that this will make a difference. It's -- it's one small step that will help us create the kind of economy that all Americans deserve.

And that's an economy that's built to last. An economy where everybody gets a fair shot, everybody gets a fair share, everybody's playing by the same set of rules. That's what made us great in the past, that's what's going to make us great in the future.

All right? Thank you very -- thank you everybody. God bless you. God bless America. And give Paul and Val a big round of applause.

(CHEERING AND APPLAUSE)

(END LIVE SPEECH)

LEMON: Wow. Wouldn't that be great if it just could work? It sounds good. Everybody take advantage of a refinance program, you get $3,000, that really sounds great.

But getting Congress to do that, talking about being underwater, do not hold your breath. The president is in Reno, Nevada, right now. He's there talking about people who can take advantage of the refinance program that his administration is offering.

And it's not -- they're billing this as an official -- an official event, not a campaign stop. He's there to talk about this particular program, but he says in that speech he's going to give Congress a to-do list. He's not -- no more tax breaks for businesses that ship jobs overseas. He wants to give the money to companies here that bring them back home.

Congress should take small businesses and get tax breaks to them, because they create all of that -- they create the jobs in the country.

I want to bring in Robert Reich now. He is a former labor secretary. He's been listening to part of this.

And, as I said, Mr. Reich, originally, we had you on to talk about this J.P. Morgan Chase. But as the president was sitting there doing this, I thought it'd be interesting to get you to comment.

It sounds good if it could actually work. And when you're talking to Congress, about doing that tax credits and all of that, veterans' jobs, responsible homeowners, $3,000, if, if -- you know, and especially for people who are underwater, what do you make of that?

ROBERT REICH, FORMER U.S. LABOR SECRETARY: These are all steps in the right direction.

But the big question is, would Congress go along with it?

LEMON: Exactly.

REICH: Republicans have proven themselves absolutely recalcitrant. It's an election year. They're not going to vote for anything the president wants.

LEMON: Yes. So, it is possible. Be you say, hey, you know what? Without the cooperation -- I mean, is it pie in the sky? Or are these legitimate things that can happen if there is more cooperation?

REICH: They are legitimate. They should happen.

Cooperation is just simply not available. I would -- if I were the president, I would set out a mandate for my second term. I would say, look, if Congress doesn't go along with these, I'm going to fight for this and this and this. I'm going to make sure that the middle class in this country gets a fair deal.

But if we have the present Congress, I'm not going to be able to do it, because they say no, at least Republicans in this Congress.

LEMON: Yes.

Hey, listen, we're going to lose you. You have other business to attend to. So, thank you, Robert Reich. We were going to bring -- talk about J.P. Morgan Chase, but next time.

Thank you, sir. We appreciate it. Best of luck.

REICH: Thanks.

LEMON: We have got a lot more to cover this hour. Watch.

(BEGIN VIDEOTAPE)

LEMON: It's a place where Americans go to retire, but people are on edge after more than a dozen mutilated bodies were found. I will speak live to someone who knows who the victims are.

I'm Don Lemon. The news starts right now.

(voice-over): Some say Mitt Romney was a bully in high school nearly half a century ago. So, does this impact what you do in the voting booth?

Plus, he's the soldier burned in battle who won "Dancing with the Stars."

J.R. MARTINEZ, FORMER U.S. ARMY SOLDIER: It's great to see our wife and kids.

LEMON: J.R. Martinez joins me live to talk about the trouble troops face coming home from war.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

LEMON: Was it bullying? Or was it a harmless high school prank? Did it even happen at all?

Mitt Romney's saying he doesn't remember shearing off a fellow student's bleach blond hair at his prep school in the 1960s. A handful of Romney's former classmates, schoolmates say that the hair incensed young Romney, who reportedly worked the scissors as the pack of like-minded preppies held the kid down.

Let's listen to Mitt Romney on FOX News now.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I don't recall the incident myself, but I have seen the reports, and not going to argue with that. There is no question but that I did some stupid things when I was in high school. And, obviously, if I hurt anyone by virtue of that, I would be very sorry and apologize for it.

(END VIDEO CLIP)

LEMON: Jim Acosta is a familiar face at the Romney campaign. He spent a lot of time with them.

And, you know, Jim, you know when a campaign, when people are worried about things. Are they worried about this incident, alleged incident that occurred close to 50 years ago?

JIM ACOSTA, CNN CORRESPONDENT: Well, you know, I will tell you that this issue is still coming out on the campaign trail for Mitt Romney, Don.

Earlier today, he gave an interview to a local TV station down in Charlotte and he was asked about it. And he once again -- he basically gave the same line to that TV station that he gave to FOX yesterday, basically saying, you know, when I was in high school, I did some things I'm not very proud of, and if anybody was offended, I apologize.

He did not say whether or not he remembered the incident. Yesterday he did say that he did not remember the incident. And I had a chance, Don, to talk to one of those former classmates who was quoted in that "Washington Post" article about what he saw. He is still haunted by what he claims he saw nearly 50 years ago.

His name is Phillip Maxwell. He's an attorney up in Michigan right now. And let me tell you what he had to say. He described this not as a prank. He said this was an assault. He says: "I know what an assault is. This kid was scared. He was terrified. That's an assault" -- that according to Phillip Maxwell, who says he saw the incident.

And then, you know, I asked him, Don, what do you think of the response that we're hearing from Mitt Romney, that he did not recall this incident? And I have to tell you, Don, Phillip Maxwell was just perplexed by that response. And here's what he had to say.

He says: "It's unfortunate that Mitt" -- in his words -- "Mitt simply hasn't owned up to his behavior." And just to give you a sense as to how the Romney campaign is trying to quickly and quietly put this issue aside, they sent out some statements from other Romney former classmates who had good things to say about the GOP contender when he was at this school in Michigan.

Here's one from John French, a former Romney classmate. He says -- quote -- "Mitt never had a malicious bone in his body. Trying to imply or characterize him as a bully is absurd."

I will tell you, Don, that I did go back to the campaign and asked whether or not that particular classmate, John French, witnessed the incident, and the Romney campaign said, no, he did not, keeping in mind the fact that Mitt Romney has said he doesn't even recall the incident ever happening.

So he is trying to get back on message talking about the economy. He was doing that down in Charlotte earlier today. He's expected to do that once again tomorrow down at Liberty University, when he delivers the commencement speech down there, Don.

LEMON: Jim, I have a quick question.

ACOSTA: Yes.

LEMON: I'm being told by the producers now we have to move on, if you can just -- if you can answer this for me quickly.

ACOSTA: Sure.

LEMON: Usually, the best way to put something behind you is to get another headline out there and instead of responding to something. And you remember Herman Cain when he said, I'm not going to take any questions, what don't you people understand?

ACOSTA: Right.

LEMON: And the media doesn't take kindly to not answering the questions, but, still, it could work out in his favor because he's -- he and Newt Gingrich, among others, have talked about the media and not focusing and what have you. So it's just the whole -- it's an interesting response here. And depending on how he navigates it, he can either win or lose.

ACOSTA: That's right.

I think the Romney campaign has decided at this point that this is what they want to say, Don. And the statement that he gave today is almost word-for-word the same statement that he gave yesterday and that he doesn't recall it, and if anybody was oven offended by his hijinks and pranks when he was in high school, he feels sorry about that.

LEMON: Yes.

ACOSTA: And they're ready to move on.

The question is whether or not -- do other revelations come up? Do reporters start looking at what Mitt Romney did when he was in college, when he went to Harvard?

LEMON: Right.

ACOSTA: All of this stuff is now fair game in a campaign.

(CROSSTALK)

LEMON: The more you don't want to talk about it, the more you -- people say, hey, I wonder what -- is there something to hide. What is going on? We will see.

ACOSTA: Well, that's true. That's right.

LEMON: All right. We will figure it out. Stay tuned.

ACOSTA: OK, Don.

LEMON: Thank you, Jim Acosta.

ACOSTA: Sure.

LEMON: A college student gets an infection of flesh-eating bacteria and loses her leg. But now she's at risk of losing more. You're about to hear her prognosis.

Plus, it feels like 2008 all over again. J.P. Morgan Chase loses $2 billion just like that, poof. The CEO calls it stupid, and egg in the face, egg on the face, but will these -- will there be some risks here? What are the other risks? Will it bring down the economy again?

(COMMERCIAL BREAK)

LEMON: J.P. Morgan's billion-dollar admission, and a woman loses her leg to flesh-eating bacteria.

It's time now for "Reporter Roulette."

We're going to begin with this. And it is startling, a startling admission from the man in charge of J.P. Morgan chase. Jamie Dimon is telling investors that the country's biggest bank lost $2 billion in the past six weeks and expects to lose more.

Two billion in six weeks, Alison, oh, my goodness. There she is, Alison Kosik, at the New York Stock Exchange.

Are the markets taking this in stride? I still see, it doesn't look like it's plunging or anything. It is taking it in stride.

ALISON KOSIK, CNN CORRESPONDENT: Exactly.

You know, even with that kind of startling news, yes, the markets are certainly holding their own. You know, you're looking at a mixed picture, the Dow only down 20 points. The Nasdaq is in positive territory. That's great. Financial stocks, they're getting hit pretty hard. Look at J.P. Morgan shares, down almost 10 percent.

Dimon, of course, warning that $2 billion loss could grow. That's not incentivizing investors to get into bank shares today. Other bank shares, including Morgan Stanley, Citigroup, Goldman Sachs, they're falling anywhere from 1 percent to 3.5 percent.

Look, the reality is, Wall Street's also worried about these other banks. What kind of bets are they making if J.P. Morgan is making their own crazy bets of their own, especially since those banks aren't considered as strong as J.P. Morgan?

LEMON: What about the reputation of J.P. Morgan, as I said, the largest bank? It had a good reputation and the man at the top. This is a confidence-shaker.

KOSIK: You know what? In the short-term, I think it is. It does tarnish J.P. Morgan's reputation and Dimon's reputation.

But I think it's really just -- just in the short-term. I mean, look, J.P. Morgan's regarded as one of the healthiest banks. Look, it weathered the recession better than most of its peers. And Dimon himself, he's a well-respected guy here on Wall Street. In fact, he's been called the king of Wall Street.

So, no surprise he took this -- he didn't take this well. On that call last night, on that conference call between him and stock -- and analysts, he was clearly upset. He was blunt and he certainly admitted that mistakes were made. He said these losses were caused by sloppiness and bad judgment.

We are going to see if he can move past this. I was reading on Twitter -- I don't know if this is true or not, but I did read on Twitter that he's going to be making an appearance on another network, so maybe trying to save face.

LEMON: All right, we will see. Closing bell, by the way, 30 minutes, a little bit more than 30 minutes, we will have it here. Thank you, Alison Kosik.

Next on "Reporter Roulette": A Georgia college student has lost her leg to a flesh-eating bacteria after cutting her leg in the woods.

And our senior medical correspondent, Elizabeth Cohen, explains how the infection may have happened here -- Elizabeth.

(BEGIN VIDEOTAPE)

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: The disease Amy has is called necrotizing fasciitis, which is a fancy way of saying flesh-eating bacteria.

Many different kinds of bacteria can cause this disease. She, unfortunately, got infected with a particularly virulent kind of bacteria that lives in the water. Now, this is pretty rare. We don't have exact numbers. No one really knows. But it is really unusual.

But, unfortunately, the small number of people who do get this disease, about 25 percent of them die. Now, it took doctors a while to figure out Amy had this disease, and that's not unusual. The signs can be very subtle. So, Amy went to the hospital about four times before they figured out what this was. She was prescribed one antibiotic that wasn't strong enough to fight this kind of bacteria at one point.

She was also prescribed a painkiller at one point. What she really needed was a much stronger antibiotic, which she did eventually get. But let's talk a little bit, because people get cuts all the time. Any cut can become infected. And , theoretically, any cut could become infected with a bacteria that can cause necrotizing fasciitis.

So, how do you know the difference? Let's take a look at this. If you have a cut in your skin and the pain is disproportionate to the cut, in other words, if the cut isn't really all that big, but you're in terrible, horrible pain, or if the pain extends to not just to the area of the cut, but also that whole region of the body, that could be a much more serious thing than just a simple skin infection.

Also, if you have fever or weakness, that's a sign of something more serious. And swelling and especially dark marks in that area, both of those can be signs that this is something serious. And if this feels to you like something more than just a cut on the skin, you definitely want to make that point with the doctor that you see that this is unusual for you and feels like it might be quite serious.

So we're so glad to see that Amy's doing better. It's great news that she's more alert and is able to communicate with the people around her -- Don.

(END VIDEOTAPE)

LEMON: All right, Elizabeth, thank you very much.

High stakes in the John Edwards trial -- just hours after the prosecution rested its case, the defense makes a huge request today.

Plus, Sheriff Joe Arpaio tells me he's being sued by the Obama administration for political reasons. But he doesn't stop there.

(COMMERCIAL BREAK)

LEMON: Now to the John Edwards trial. And an effort to get it dismissed. The former presidential candidate is accused of wrongfully spending his campaign funds to cover up his mistress and their love child. CNN's Joe Johns is in Greensboro, North Carolina, for us. Joe?

JOE JOHNS, CNN CORRESPONDENT: Catherine Eagles, the judge in the John Edwards campaign finance trial today denied a move by the Edwards defense team to try to get the charges thrown out. Edwards is charged in a six-count indictment with accepting illegal campaign money, conspiracy and false statements.

His attorney, Abby Lowell, previewed some of the points he's likely to make at the end of the trial, arguing that he believes all six counts against Edwards will fail because the law requires proof that Edwards had specific intent, that he knowingly and willingly accepted illegal campaign donations to try to cover up an affair and keep his political aspirations alive during the 2008 presidential campaign.

Lowell says the government was not able to show that before it rested its case. The government spent a lot of time attacking Edwards' false denials about his relationship with mistress Rielle Hunter and his alleged conscious avoidance of details. Right before the prosecution rested, they played a video for the jury showing some of Edwards' denials in a 2008 interview on ABC.

Prosecutor David Harbuck (ph) said Edwards did not want to know certain facts about the money that was being spent by his wealthy benefactors, Fred Baron and Bunny Mellon, and Harbuck (ph) argued that Edwards' knowledge of the campaign financing laws as an experienced politician is an important part of the case.

The judge decided that the trial should continue. The jury returns to work on Monday morning when the defense is expected to call its first witness -- Joe Johns, CNN, Greensboro, North Carolina.

LEMON: All right, Joe Johns, thank you very much.

He has been called America's toughest sheriff and now he's being sued by the Feds, I ask Joe Arpaio some tough questions and he answers them.

(COMMERCIAL BREAK)

POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Time now for the "Help Desk," where we get answers to your financial questions. Joining me this hour, Greg Olsen is a certified financial planner and partner at Lenox Advisors; and Lynnette Khalfani-Cox is the founder of the financial advice blog askthemoneycoach.com. Thanks both for coming in.

Lynnette, your question comes from Penti (ph) in Florida. Penti (ph) wrote in, "I owe over $14,000 on a credit card with a high interest rate but have never missed a minimum payment. I'm 83 years old with no job. How can I get out of debt?"

LYNNETTE KHALFANI-COX, FOUNDER, ASKTHEMONEYCOACH.COM: Oh, tough situation. And I'm so sorry to hear somebody who is obviously retired going through a financial situation like this. Couple things I think you should try.

One, call up your credit card company and negotiate. Ask them for a lower rate. Believe it or not, a lot of people who do this, 75 percent of consumers, according to one study actually get a lower interest rate right there on the spot.

HARLOW: Really?

KHALFANI-COX: Yes, so don't be afraid to ask, especially if you have a competitive offer from another bank or another credit card issuer, which is option number two. You might think about a balance transfer where you go with a new card that has a lower rate, you pay that off quicker because you're paying less finance charges.

Also think about tweaking the budget. I'm sure he's on a fixed income, maybe getting Social Security, but just see if there's other areas where you might be able to cut back and apply more cash toward the credit card to get out of debt quickly.

HARLOW: There -- I was looking at my bill and I was like, oh, those little things all add up.

KHALFANI-COX: They do, indeed.

HARLOW: So, you know, you got to look at the little stuff, too. Thank you.

And Greg, your question comes from Vikki (ph) in Arizona. Vikki (ph) writes in, "Is it a good idea to take a loan from my 401(k) to pay off my car loan?"

GREG OLSEN, CFP, LENOX ADVISERS: Hmm. I think one of the biggest financial planning mistakes is people look at their 401(k) loan interest rate, compare it to their consumer debt and say this is going to be less so it makes sense to pull money out of my 401(k), correct?

HARLOW: Right.

OLSEN: Well --

HARLOW: They don't think about taxes.

OLSEN: They don't -- well, it's a loan, so there's not going to be taxes, but they're not thinking about the appreciation in the market that they're going to miss. I mean, if someone did that last October, they would have missed out on a 25 percent appreciation of the market.

So think about that as your interest rate. So I would just make the payments on the car loan consistently and once it's paid off, drive that car into the ground.

(LAUGHTER)

HARLOW: And they last for a long time these days. Thank you both.

KHALFANI-COX: They do.

HARLOW: We appreciate it. And if you've got a question you want answered, just send us an e-mail any time to CNNhelpdesk at CNN.com.

(COMMERCIAL BREAK)

LEMON: There may be no sheriff in America more controversial than Joe Arpaio. He's nationally known for his tough stance against illegal immigration, too tough for the Department of Justice, which is now suing Arpaio and the sheriff's office of Maricopa County, Arizona.

(BEGIN VIDEO CLIP)

THOMAS PEREZ, ASSISTANT U.S. ATTORNEY GENERAL: There is reasonable cause to believe that MCSO and Sheriff Arpaio engage in a pattern of practice of discriminatory policing of Latinos.

(END VIDEO CLIP)

LEMON: All right. So Sheriff Arpaio tells me there's no way he's going to stand for it.

(BEGIN VIDEO CLIP)

SHERIFF JOE ARPAIO, MARICOPA COUNTY, ARIZONA: I'm not going to let the federal government run my office. I'm the elected constitutional sheriff. I report to the people, 4 million in this county. They want to take over my office and I have to tell them every time I want to do something. That's the problem with this lawsuit. That's the sticking point.

LEMON: Let's go on. Because you talk about -- you say that they say we're racist and you're not. And if you look at the evidence and look at what has been reported and what's on the record. For example, just giving one example and there are a number of them.

One example from the complaints is a pregnant Latina, a U.S. citizen, was pulled over in her driveway, the complaint says an officer slammed her against her car and shoved her in the back of a hot patrol car for 30 minutes, she was cited for failure to show ID, but everything was dropped. So how -- people will question that or look at that and say how is that not profiling, Sheriff?

ARPAIO: You mean one case out of 51,000 illegal aliens that we have arrested on the streets?

LEMON: That was just one --

(CROSSTALK)

LEMON: -- that was only, like I said, that was one example that we cited. But go ahead.

ARPAIO: OK. Well, I don't know. They won't give us the facts. They are talking about -- they refuse to give us witnesses and how they came about this. So I have no idea. But you know what? Going to court, now they're going to have to put up, explain everything, show their evidence, and we will be able to defend ourselves.

LEMON: OK. Another, in a 2009 interview, you said, I think we're doing something good if they're leaving -- if they're leaving, you're referring to Latinos. How can you say that? When your county is 30 percent Hispanic and that percentage is growing quickly?

ARPAIO: No, I said by enforcing the state laws and the federal laws until Obama took away my authority under the federal laws, no, I was saying as a deterrence instead of being arrested by my office or law enforcement, if they're leaving and going back to the country that they came from, I think that's a good thing. They're here illegally. So if criminals want to leave and go back, I think that's very beneficial.

LEMON: OK.

(END VIDEO CLIP)

LEMON: That was Sheriff Joe Arpaio.

This guy right here, see him? He won "Dancing with the Stars." But he's also a soldier who was burned during war and he's speaking out about what it's like for vets returning home from war to no jobs. J.R. Martinez, standing by with a message.

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LEMON: I'm so excited to do this next interview, for American servicemen and women returning from war, a new battle awaits them when they get back into the job market. So, so many of our veterans are struggling to find work.

This weekend a new documentary follows Georgia National Guard soldiers as they strive to readjust to home, soldiers like this specialist. Look.

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UNIDENTIFIED MALE: Everybody's happy to see you, but you've got to get back to reality sooner than later. If you have a job, you have to get back to work. If you don't have a job, you have to look for work.

(END VIDEO CLIP)

LEMON: The documentary's called "Voters In America: Vets Wanted?" You can catch it at 8:00 p.m. Eastern Sunday night here on CNN, 8:00 pm Eastern right here on CNN. And there's the man right there who narrates it. That's why I'm so excited about this interview.

Thank you, before I go, thank you for your service. I think you're an amazing person. I watched your journey, not only your journey before "Dancing with the Stars," and you're a fantastic person. Veteran actor, dancer, and brand new dad, by the way, congratulations, J.R. Martinez, he tells us why he wanted to get involved in this project right now. Why did you?

J.R. MARTINEZ, ACTOR AND VETERAN: Well, the biggest reason for me to get involved in this project now is simply because of the fact that, you know, I faced a lot of difficulties coming home when I got out of the military.

Luckily for me, I had an amazing opportunity to become a motivational speaker to kind of create my own business and my own brand, so to speak. But a lot of troops don't have that opportunity. A lot of troops don't know that the possibilities are out there.

And, quite honestly, there aren't sometimes a lot of possibilities out there, opportunities so to speak. And so it is important for me to say, you know what? This is my way of continuing to serve. If I can sit here and read a script and narrate this documentary, then that's my part.

LEMON: So, listen, why should -- this is your appeal now. Why should people hire veterans when they come back?

MARTINEZ: Well, because of the simple fact that a lot of times -- you look at it on paper. These vets don't necessarily on paper -- you think that what exactly can they do for this company? But they're leaders, they're trained to perform under unbelievable circumstances. At the same time, they're very resilient, they're very positive, they just want opportunities and they excel in every single opportunity.

And they're hard workers and the want to learn. And you know, if we give these -- if we ask these men and women to go overseas and sacrifice for six months, a year, two years, multiple times, let's give them an opportunity be able to provide for their families and to be able to live a normal life that we all want to live in the United States of America.

LEMON: OK. So I'm not sure about this, but I'm told that some employers worry about PTSD or employees having to leave suddenly for the National Guard. What would you tell those employers?

MARTINEZ: I'm sorry, Don. I didn't catch you on that one.

LEMON: They're worried about PTSD or they're worried about vets suddenly having to leave for the National Guard. What do you tell those employers who may worry about such things?

MARTINEZ: Well, you know, those four letters are an amazing four letters that is brought to a lot of people's attention, which is PTSD, post-traumatic stress disorder. It's real, it exists.

However, a lot of people have a tendency to look at every single vet and think that they're walking ticking time bombs, that they're unproductive, that they don't want to work, that they're lazy, that they have all of these issues, and that they don't want to actually continue to live life -- that's actually not the case. A lot of times what all these guys want is an opportunity and multiple chances of trying to get a job when they come home ultimately will break down any man and any woman.

And that's exactly what you see is when these men and women are having to interview for a convenience store job and doing something that they did that's way below what they're qualified to do in the military, you know, and they're being rejected from even doing that, that will tear down a man.

So it's -- yes, let's pay attention to PTSD, but also I think one way of fixing that is giving these individuals an opportunity to learn something brand new and feel that they can do it and provide for themselves.

LEMON: And if they're worried about deployment or having to go, if they're a National Guard member, there's certainly in the country, so that should not be a worry. J.R. Martinez, thank you very much, continued success along your journey and congratulations. Baby's doing great, right? Yes.

MARTINEZ: Yes, thank you, Don. And everyone, please tune into the documentary. It's an amazing one and I'm proud to having been involved in it.

LEMON: I'm going to tell them more about it now, J.R. See you soon.

Sunday, CNN takes you on a journey with citizen soldiers as they struggle to serve country and family. J.R. Martinez narrates this. "Voters In America: Vets Wanted?", the first in a series of documentaries. Watch it Sunday, 8:00 pm Eastern, 8:00 pm Eastern on Sunday right here on CNN.

And this just in to CNN, a major development in the trial involving the murders of Jennifer Hudson's family. This is a strange twist.

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LEMON: This is just in to CNN in Chicago. The jury reports it is split in the trial of Jennifer Hudson's former brother-in-law, William Balfour, who is accused of killing Hudson's mother, brother and 7-year-old nephew. The jury sent a note to the judge just a little while ago saying it was split, but adding, that "we are trying." We'll continue to update you here.

Meantime, "THE SITUATION ROOM" with Mr. Wolf Blitzer coming up at the top of the hour.

Hello, Wolf. What do you have on tap?

WOLF BLITZER, CNN HOST: Don, we're standing by. There is going to be a news conference down in Mississippi in connection with Adam Mayes. As you know, he kidnapped his wife, three girls and we're watching -- we're getting all the latest developments on what's going on on this front.

Adam Mayes, the accused kidnapper of Jo Ann Bain, authorities are standing by to brief us. What has happened, there have been more arrests today, as you know. So we're going to be taking that news conference, at least part of it, showing it to our viewers right at the top of the hour.

Also, a lot going in Syria right now. Professor Fuad Adjami (ph) a Middle East scholar, he's going to be joining us as well, so lots of news, as usual.

LEMON: All right. Wolf is coming up shortly. Wolf, thank you very much. We appreciate it.

It is a place where many Americans retire, safe, serene, but the town is on edge now after a stunning discovery: 18, 18 mutilated bodies found, most beyond recognition and I'm about to speak live with someone who knew some of these victims.

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LEMON: This is a disturbing story that is too close to paradise, 18 bodies in two vehicles abandoned along a Mexico highway just a few miles from paradise where tens of thousands of retirees from the United States and Canada.

The bodies were so badly mutilated that investigators had a hard time telling if the victims were men or women. The crime is disturbing to those who have loved ones who have retired to the serenity of nearby Lake Chapala.

Howard Feldstein moved there from Denver, Colorado. He is now the president of the Lake Chapala Society, an organization for foreigners living at Lake Chapala.

So, Howard, describe Lake Chapala for me. Tell me why so many Americans live there first and then we'll talk about these bodies.

HOWARD FELDSTEIN, PRESIDENT, LAKE CHAPALA SOCIETY: If you can see where I'm sitting, which happens to be my backyard, this is a similar kind of setting almost 365 days a year. It's a wonderful place. Very convenient to a large city, Guadalajara, the airport about 30 miles away.

We're sitting a few blocks away from Mexico's largest natural lake. It's surrounded by mountains. This is a lovely place. Lots of wonderful people, both foreigners and Mexicans living here.

LEMON: It sounds like paradise. So how close -- how close was this discovery to the retirement area? I'm mean, and what's the reaction from the people who are living there?

FELDSTEIN: Well, the discovery area was several miles away on the highway toward Guadalajara, but my understanding is several of the victims were actually abducted from the Malecon, the beach area, just a few blocks from here and two of those people that were abducted were friends of my neighbor's son, and this neighbor's son were helping to financially through university.

And these were friends of his that were just on an evening's outing at the Malecon, listening to some music when they were abducted.

LEMON: Can you tell me more about -- you knew the families of some of the victims. Tell me more about them. You said it was some of their sons or do you know more victims?

FELDSTEIN: I really -- I know one of the young men is the son of a restaurant nearby -- in a nearby town that my friends and I have frequented. It's a lovely little Mexican restaurant. I didn't know this young man directly, but actually his cousin I've known. His cousin is a chef at another restaurant here.

The other -- the other friend of my neighbor lives nearby, a block away, in fact, just went by that neighborhood, that block today and they're setting up --

LEMON: Mr. Feldstein? I've got 10 seconds, literally here. Do you feel safe? Are you going stay?

FELDSTEIN: Absolutely feel safe. It's safer here than back north. Up north you can run into random shootings, Congressmen getting shot. We're much safer.

LEMON: Mr. Feldstein, thank you very much. Sorry to rush you along. We had the next show coming on. I appreciate it. Stay safe, OK? Good luck.

I'm Don Lemon. Thanks for watching. Time now for Wolf Blitzer and "THE SITUATION ROOM."

BLITZER: Don, thanks very much.