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Average Price of Gas $3.64; President Obama Gives Memorial Day Speech at Arlington; 50th Anniversary of Vietnam War; Corruption, Cover-up, Kidnapping Discussed in Scandalous Trove

Aired May 28, 2012 - 11:00   ET

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

ASHLEIGH BANFIELD, CNN ANCHOR: Hi, everyone. I'm Ashleigh Banfield. It's 11:00 o'clock on the East Coast, 8:00 o'clock on the West Coast. Let's get started. People like to say that American's have short memories, but today is the day that we go ahead and prove them wrong. Today, Americans remember and honor the men and women who fight and die so that others might live in freedom.

Arlington National Cemetery is the focal point of the national observance. President Obama is just about to place a wreath at the Tomb of the Unknowns.

As we take a look at live pictures right now of Arlington National Cemetery, you can see guard is set up and waiting for the president. It's a busy day for the president as well because not only will he be doing that, but later he will move over to the Vietnam Veterans' Memorial Wall to pay tribute there, as well.

Our Rene Marsh is standing by live. Rene?

RENE MARSH, CNN CORRESPONDENT: Good morning, Ashleigh. We are here at the U.S. Marine Corps War Memorial. We have been here all morning. It's a stunning memorial to see in person.

We have seen parents bringing their children here, and we have seen veterans themselves here, just taking a moment, a moment of silence to remember or remember those who have fallen and who have died for our country.

And this memorial is right outside of Arlington National Cemetery, and we spoke to a couple of people today who were headed from here and headed over to the cemetery for today's ceremony.

We do expect momentarily that the president will arrive there at Arlington National Cemetery along with the first lady. He will lay that wreath, we were told, around 11:00 this morning and that will be followed by remarks, as well.

But today is not the only day for the celebrations. We have seen them throughout the weekend. We had the Rolling Thunder that has been here in the nation's capital this weekend. Yesterday, we saw and heard the roars of hundreds of thousands of motorcyclists riding from Virginia to Washington, D.C., all in remembrance of those who were missing in action or prisoners of war. There is also the flags-in ceremony that we saw on Friday. That was amazing to see and quite touching. More than 260,000 headstones, each one had an American flag placed right there by the headstone just to make sure every service member who was laid to rest there at Arlington Cemetery is honored, Ashleigh.

Again, we are waiting for President Obama's arrival, but we have seen all throughout the morning busloads of people coming to this particular memorial, the U.S. Marine Corps Memorial just to pay their respects.

I spoke with one man. He is not native to the United State. He is an immigrant. He said it's a tradition for him to bring his son here every year. They live in Michigan. They made the trip here to Washington, D.C., and he said he did it just simply because it's the least he could do.

He thought about and thinks about those service members that travel from their homes right here in the U.S. to go abroad to fight those wars and some of them, unfortunately, never came back. So, again, that father and that son saying that's the least they could do on this Memorial Day, Ashleigh.

BANFIELD: And Renee, as we continue to watch, the president is said to have just arrived. We are going to watch for him to go towards the Tomb of the Unknowns. He will lay the wreath there.

This is a tradition that dates back so many years, but in fact, what is more incredible perhaps is that Memorial Day was first observed back in 1868 in this country. For those who might not know, it was called Decoration Day back then and it was a day that was set aside to honor those who were killed in the United States Civil War, 600,000 people killed in the civil war.

So back in 1868, that's when our first Memorial Day was and it's good to remember that as we all take a break and enjoy our barbecues and the sunshine. This is the day to remember our fallen heroes.

It's also a good day to commemorate those who have come home from Iraq and Afghanistan, and are gravely injured and are struggling to get back into the working economy as well.

So, as we continue to watch these scenes play out -- and that's the Iwo Jima Memorial, just outside of Arlington National Cemetery. It's and incredible sight and, obviously, a lot of tourists today, taking their opportunity to go and watch these commemorations as they get underway throughout the day, as well.

So, again, watching the itinerary for President Obama, it's going to be a phenomenal event there as well. The defense secretary will be there. Not only that, the chairman of the joint chiefs of staff will be there, the United States Marine Corps Band. So, this is worth sticking with us and staying tuned in because it will be a wonderful way to commemorate your Memorial Day.

Unfortunately, though, for a lot of people, mother nature was not playing along and put a damper on the Memorial Day concert at the National Mall in Washington. Actor Gary Sinise was the host of the show. He told that crowd there was a weather warning and people were advised to get out of there, actually, before some very nasty weather moved in.

So, the concert was cut a bit short, but not before country singer Trace Adkins and Daughtry were able to perform. The pictures looked good. Sadly, though, it did not last as long as it should have.

No relaxing for the astronauts aboard the International Space Station this Memorial Day. They get to unpack some new cargo and from a pretty cool vessel, as well. The first ever private spacecraft hooking up and visiting the orbiting lab.

SpaceX unmanned "Dragon" capsule, caught by the tail, berthing with the space station on Friday and, over the weekend, those hatches between the "Dragon" and the $100 billion orbiting lab were finally opened.

The payload was inside. The astronauts can now access more than 1,000 pounds of cargo that the "Dragon" spacecraft brought up. So how would you like that to be your holiday today, unloading 1,000 pounds of cargo. A pretty cool job, though, considering their workspace.

Take a look at the views, too. Not half bad.

Just a quick note for you if you are heading out the door. You can continue to watch us here on CNN from your mobile phone, which is a very cool option, your desktop as well if you are going to work on this holiday. Just go to CNN.com/TV. All of the options are there and you won't miss a beat.

So just make sure you stay tuned because we are keeping a eye on the live cameras down there at Arlington National Cemetery as the president gets ready to lay the traditional wreath at the Tomb of the Unknowns.

It's a very somber occasion, but one filled with pomp-and- ceremony, as well, because obviously all of the top military leaders are going to be on hand to say their comments.

And this is also somewhat a special time, as well. We also marked a very sad time on Friday where the 3,000th coalition soldier died in the war in Afghanistan, as well, so an opportunity to commemorate that moment as well.

You see Mrs. Obama who is walking in and Defense Secretary Leon Panetta also arriving. This is usually the circumstance where you have a platform party being brought in, very ceremoniously. The president now, I believe -- I can squint -- being brought in as well with an escort.

This will be the opportunity now for him to get organized for his comments and his wreath-laying as well. And don't forget this goes on throughout the day. As I said off the top of the program, there is a commemoration also, later on this afternoon, at the Vietnam war memorial, as well, and there is a lot that is going on with regard to that because this kicks off a 13-year effort to mark the 50th anniversary of the end of the Vietnam war.

Let's listen in.

And with the echo of "Taps" lingering, the party makes its way to prepare for the "National Anthem" and also for the address that will be in just a few moment.

We have a lot more coverage of Memorial Day 2012 just ahead. As we mentioned, the president will speak at the half hour and his next event is about three hours from now at the Vietnam Veterans Memorial which you will see live here on CNN.

Before that, at 1:00 Eastern and 10:00 Pacific, Mitt Romney also holding a Memorial Day observance in San Diego, accompanied by Arizona senator and former presidential candidate and former POW, John McCain.

(COMMERCIAL BREAK)

BANFIELD: A wet and windy start to this Memorial Day across the southern seaboard, thanks to Tropical Storm Beryl. It has just been downgraded to a tropical depression, but tell that to folks who have had to live through these winds and these waves. You're looking at nice live pictures from Jekyll Island in Georgia.

Usually it's sunny and pretty there, but this is not the kind of day you want to spend out on the beach. Beryl made landfall just after midnight, bringing dangerous surf and heavy rain to the coast of Northern Florida and Southern Georgia and, at one point, more than 20,000 people in Jacksonville lost their power.

While a lot of Memorial Day festivities are canceled in those areas, there's a silver lining to all of this and it is much-need rain for a place that was dry as a bone.

Jacqui Jeras is standing by live. I've been watching this storm system because I love watching your reports and I follow what you say and I wait to see if they turn into the storms or they peter out to depressions.

Peter or not, this thing really messed things up for a lot of people in that area.

JACQUI JERAS, AMS METEOROLOGIST: Yeah, it really did. You know, the timing more than anything was just terrible with the holiday weekend and it became dangerous when folks were not following those safety rules and they were going out in the water and we had rip currents and more than 100 people had to be rescued.

The beach threat will stay out there and so you still don't want to go into the water or out to the coast. Not to mention the fact that it's just windy and lousy, that you are not as likely to do that, anyway.

The storm has weakened a lot. Yeah, so, we're talking a tropical storm depression now and it should continue to weaken here as it stays over land, but we do have some threats that we will still have to deal with.

Threat number one is really going to be flooding, OK. That will be a concern. You mentioned the drought and that we really need this rain, but if you get too much, you know, when the ground is hard and dry, it just all runs off, so be aware of that. This crosses I-10, crosses I-75, I-95 and a lot of holiday travelers still out there that need to use caution and be careful.

Rainfall amounts will be heavy at times today. We have had a couple of tornado warnings. Both of these cells weakened north of Jacksonville and up towards St. Mary's. So those storms are no longer rotating, but isolated tornadoes are still a possibility.

The track of the storm has it kind of doing this right-hand hook and moving up to the north and then eventually off to the east. This thing could re-intensify and turn back into a tropical storm as it heads off the coast of North Carolina sometime on Wednesday.

But it is a slow mover and that's part of the reason why the rain is going to be heavy. Here are some of the totals we had yesterday from yesterday. The highest we could find was Keystone Heights and that's three inches of rainfall. But if you had another one-to-three on top of that, that's when we will have the trouble.

And there you can see the computer model forecast showing you some of those widespread possibilities of three-to-six-inches-plus and that's why flood watches continue across the area.

So, still a way to go here yet with the tropical system, the second one of the year before hurricane season even officially starts. Ashleigh?

BANFIELD: First one, what was that, Bud, off the other coast?

JERAS: First one was Alberto.

BANFIELD: Oh, Alberto.

JERAS: Bud was in the Pacific.

BANFIELD: All right. I do watch you. Trust me, I do. Thank you, Jacqui. Enjoy your holiday day if you get some time off.

By the way, we should let you know that the National Weather Service is facing some fallout, too, over a report saying the organization mishandled millions of dollars. The director of the weather service stepped down on Friday amid this investigation.

The report began with an anonymous complaint, too, claiming that top officials misappropriated some $48 million.

Back in a minute.

(COMMERCIAL BREAK)

BANFIELD: The Latino vote is going to be pretty critical in this year's election from local races up to the white house. CNN is going in-depth this week on the issues and the possible outcomes for Latino voters.

In the presidential election, both campaigns have released ads in Spanish, but right now it seems like President Obama has the advantage. This NBC/Wall Street Journal/Telemundo poll shows that the president has a 34-point lead over Mitt Romney right now.

But we may get a different indication of how Latinos are leaning, at least the voters anyway, tomorrow because tomorrow is the Texas primary. Yes, we are still in primary season. Can you believe it?

And there may be no state where Latino voters are more crucial than Texas. Joining me is CNN Espanol's Juan Carlos Lopez standing by live in Houston. The numbers are pretty staggering, aren't they, in Texas when it comes to the number of Latino voters?

JUNA CARLOS LOPEZ, CNN ESPANOL: It has grown, according to the last census, Ashleigh, over 4 million new residents came to Texas and Texas gained four congressional districts and most of that growth came from Hispanic voters.

But this is still a solid Republican state. Latinos are a big part of the voting bloc, but this is still a decidedly Republican state. Although President Obama has an almost 40-point lead over Romney, that's well between the spread expected between Democrats and Republicans.

Now, these four new congressional districts have created a very interesting political battle. That's why they are having the primaries tomorrow, not on March 6th, as they were scheduled. A fight that doesn't end, but Latinos will make a very big impact and we will see what happens tomorrow.

BANFIELD: When it comes to Texas and how Latino voters respond to Republicans, I am reminded of Rick Perry during the primaries talking about funding education initiatives for children of immigrants, or illegal immigrants and that did not go over well with other Republican candidates like Mitt Romney.

How do you suppose Mitt Romney is going to be able to assuage that hard-line position he took about what Rick Perry was talking about and not only that, the Dream Act and everything else that he's taken a right-wing approach to during those critical primaries?

LOPEZ: Governor Perry signed a similar bill to the Dream Act, the Texas Dream Act, and defended it in the campaign. He was criticized for it, but now it's Mitt Romney who it will be interesting to see how he will try to convince Hispanics that he can follow the issue. He gave a speech last week in front of a Latino business group and he spoke about education. Education is a key issue for Hispanics as is the economy and healthcare, like many other American voters, but immigration really gets people worked up.

Latinos get worked up over the tone over immigration and a lot of people remember the things he said. He said that Arizona could be a model for the country with laws like 1070. He said he would veto the Dream Act. He would withdraw lawsuits against Arizona and Alabama in his first day in office.

So those things were said in the primary. We will see if he has enough time from here to November to present a different issue, but so far he's not talking about immigration. So we will see what happens tomorrow and how he can comes up with a message that can get many Latinos.

Now, most Latinos vote Democrat, but they don't all. You were referring to the poll, 27 percent for Romney. He has to go up to like 38 or 40 percent in order to win. It's doable, but it's not easy and right now he does not have a rapport with the Hispanic community in the U.S.

BANFIELD: Buckle up because I think you will see a whole lot of ads in Spanish in your state. Juan Carlos Lopez, nice to see you. Thank you.

By the way, the Obama campaign has already spent $1 million on Spanish ads targeting voters in not only Texas, but Colorado, Nevada and Florida. Texas could cost even more so you make sure you stay tuned to CNN throughout the week for more of our in-depth coverage of the Latino vote and the expected effect on the 2012 election.

(COMMERCIAL BREAK)

BANFIELD: So a rare bit of good news for the millions of people who might be driving over this Memorial Day weekend, getting there and getting back may be cheaper than you were probably expecting because the average price for a gallon of gas across the country is $3.64.

I know it's still high, but we were worried more about $4.50 or $5.00 a gallon gas. Luckily, that evaporated. More people could hit the road this weekend and get to where they wanted to go. If you think about where they were in April, we were down 27 cents a gallon.

Alison Kosik is live in New York at the gas pump.

You know something, I was filling up the other day, my friend, thinking about you because I was closer to the $4 gas, and I thought, wait, I know it's not the same everywhere. But I could never figure out why some states are so much more expensive than others.

ALISON KOSIK, CNN CORRESPONDENT: Exactly. The $3.64 is the national average, and this price is relative, meaning it depends on where you live. Let me show you what I mean. In New York City, we are paying $4.13 a gallon. That's way above average. We're not the only place though. Look at this. California is paying $4.34 a gallon. Washington, Oregon and Nevada and Connecticut, they are paying above the average price.

But if you look at some of the places that are paying less than that. In South Carolina, they are paying $3.33, and below 3.64 in Alabama, Tennessee, Mississippi and Oklahoma, so yes, it's all relative.

BANFIELD: I always look at those lists that you put together and I am trying to do the math as to why it is those particular states, and why Alaska or Hawaii are not the most expensive because it's hardest to get the gas there.

KOSIK: Exactly. That's an important point to make. It takes more money to transport the gas there, the gas and oil. They are not close to refineries that refine the oil into gas. That's part of the reason why. And taxes play into it. And also there are environmental regulations. As you move further west, those regulations also make it more expensive to refine the oil into gas -- Ashleigh?

BANFIELD: The other trend I keep -- obviously, I have been in the business too long, because I know, come Memorial Day, gas prices always go up. But this time around, that trend was certainly bucked. Why did it go down and is it going to keep going down, or do you have a crystal ball at all on this one?

KOSIK: Anything can throw this sort of prediction out of whack, of course. But there are three big reasons why you are seeing the drop in gas prices. First of all, supplies are plentiful. Oil and gas supplies are at their highest levels since 1990. And the fear- premium built into oil is gone because Iran is not threatening to close the Strait of Hormuz, the main supply route for 20 percent of the world's oil. That fear is taken off the table. Also we are seeing the economic recovery going down a bit, and the momentum is losing its stride, not only here in the U.S., but in Europe as well, and we are seeing the jobs recovery slow down a bit and the GDP as well. So the demand for gas will slow and that's why you see gas prices going lower -- Ashleigh?

BANFIELD: All right, Allison, enjoy your day. At least you have your assignment outside and a little shade, too. Nice to see you.

KOSIK: Exactly, and a nice breeze.

BANFIELD: Cheers.

(LAUGHTER)

BANFIELD: By the way, we are keeping Alison hard at work. She doesn't get a day off at off because tomorrow she will look into hotels to check in. For folks that like to travel, especially families, hotel bills can be expensive. We will look at top tips to save money when you're booking hotel. We'll look into that one. (COMMERCIAL BREAK)

BANFIELD: We want to take you live to the Arlington National Cemetery where the defense secretary, Leon Panetta, is addressing those standing by the Tomb of the Unknowns.

(BEGIN LIVE FEED)

LEON PANETTA, SECRETARY OF DEFENSE: -- the memory of their sacrifice forever.

It's now my privilege and my honor to introduce someone who has taken this charge to his heart. I have been honored to work closely with President Obama as director of the CIA and now as secretary of defense, and to have the opportunity to see how seriously he takes his responsibilities as commander in chief. He has no higher priority than to protect this country and to protect those who protect all of us.

Ladies and Gentlemen, president of the United States.

(APPLAUSE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you.

(APPLAUSE)

OBAMA: Thank you very much. Please be seated.

Good morning, everybody.

Thank you, Secretary Panetta, for your introduction and your incredible service to our country, to General Dempsey, Major General Linnington (ph), Katherine Condon (ph), Chaplin Barry (ph), and all of you who are here today, active duty and veterans, family and friends of the fallen. Thank you for allowing me the privilege of joining you in this sacred place to commemorate Memorial Day.

These 600 acres are home to Americans from every part of the country who gave their lives in every corner of the globe. When a revolution needed to be waged and our union needed to be saved, they left their homes and took up arms for the sake of an idea. From the jungles of Vietnam to the mountains of Afghanistan, they stepped forward and answered the call. They fought for a home they might never return to. They fought for buddies they would never forget. And while their stories may be separated by hundreds of years and thousands of miles, they rest here, together, side by side, row by row, because each of them loved this country and everything it stands for, more than life itself.

Today, we come together as Americans to pray, to reflect and to remember these heroes. But tomorrow, this hallowed place will once again belong to a smaller group of visitors, who make their ways through the gates and across these fields, in the heat and the cold, in the rain and the snow, following a well-worn path to a certain spot and kneeling in front of a familiar headstone. You are the family and friends of the fallen, parents and children, husbands and wives, brothers and sisters, by birth and by sacrifice. You, too, leave a piece of your hearts beneath these trees. You, too, cause this sanctuary home. Together, your footsteps trace the path of our history. And on this Memorial Day, we mark another milestone. For the first time in nine years, Americans are not fighting and dying in Iraq.

(APPLAUSE)

OBAMA: We are winding down the war in Afghanistan and our troops will continue to come home.

(APPLAUSE)

OBAMA: After a decade under the dark cloud of war, we can see the light of a new day on the horizon. Especially for those who have lost a loved one, this chapter will remain open long after the guns have fallen silent. Today, with the war in Iraq finally over, it's fitting to pay tribute to the sacrifice that spanned that conflict.

In March of 2003, on the first day of the invasion, one of our helicopters crashed near the border of Kuwait. On it were four Marines -- Major Jay Allbin (ph), and Captain Ryan Borepray (ph), Corporal Ryan Kennedy (ph), and Staff Sergeant Kendall Watersbay. Together, they became the first American casualties of the Iraq war. Their families and friends barely had time to register the beginning of the conflict before being forced to confront its awesome costs.

Eight years, seven months and 25 days later, Army Specialist David Hickman was on patrol in Baghdad, and that's when his vehicle struck a roadside bomb. He became the last of nearly 4500 American patriots to give their lives in Iraq. A month after David's death, the days before the last American troops, including David, were scheduled to come home, I met with the Hickman family at Ft. Bragg. Right now, the Hickman's are beginning a very difficult journey that so many of your families have traveled before them, a journey that even more families will take in the months and years ahead.

To the families here today, I repeat what I said to the Hickmans, I cannot begin to fully understand your loss. As a father, I cannot begin to imagine what it's like to hear that knock on the door and learn that your worst fears have come true. But as commander-in- chief, I can tell you that sending troops away is the most wrenching decision I have to make. And when we do, we must give our troops a clear mission and the full support of a grateful nation and as a country. And as a country --

(APPLAUSE)

OBAMA: And as a country, all of us can and should ask ourselves how we can help you shoulder a burden that nobody should have to bear alone. And as we honor your mothers and fathers and sons and daughters, we have given -- who have given their last full measure of devotion to the country, we have to ask we can support you and your families and give you some strength. One thing we can do is remember these heroes as you remember them, not just as rank or a number or a number on a headstone, but as Americans, often far too young, who are guided by a deep and abiding love for their families, for each other, and for this country. We can remember Jay Allbin (ph), the pilot, who met his wife on an aircraft carrier and told his mother before shipping out, if anything happens to me, just know I am doing what I love. We can remember the former track star, running the lead-off leg, always the first one into action, who quit his job as an accountant and joined the Marines because he wanted to do something more meaningful with his life. We can remember Ryan Kennedy (ph), the rock climber and lacrosse fanatic that told his dad two days before his helicopter went down that some of the Marines he served alongside were some of the best men he dealt with, and they would be his friends forever. We can remember Kendall Watersbay (ph), a proud father, a proud son of Baltimore, who was described as a light in a very dark world. And we can remember David Hickman, a freshman in high school when the war began, a fitness fanatic who halved jokingly called himself Zeus, a loyal friend with an infectious laugh. We can remember them. And we can meet our obligations to those who did come home, and their families who are in the midst of a different but real battle of their own.

To all our men and women in uniform, know this, the patriots that rest beneath these hills were fighting for many things, for their families and for their flag but, above all, they were fighting for you. As long as I am president, we will make sure you and your loved ones receive the benefits you earned and the respect you deserve. America will be there for you.

(APPLAUSE)

OBAMA: Finally, for all of you that carry a special weight on your heart, we can strive to be a nation worthy of your sacrifice, a nation that is fair and equal, peaceful and free, a nation that weighs the cost of every human life, a nation where all of us meet our obligations to one another and to this country that we love. That's what we can do.

As president, I have no higher honor and no greater responsibility than serving as commander-in-chief of the greatest military the world has ever known.

(APPLAUSE)

OBAMA: On days like this, I take pride in the fact that this country has always been home to men and women that give of themselves until they had nothing more to give. I take heart in the strength and resolve of those who still serve, both here at home and around the world. And I know that we must always strive to be worthy of your sacrifice.

God bless you. God bless the fallen. God bless our men and women in uniform, and may God bless the United States of America.

(APPLAUSE)

(END LIVE FEED)

BANFIELD: The president shaking hands with the defense secretary, Leon Panetta, just having wrapped up his comments at Arlington Cemetery this Memorial Day. And he is there to lay a wreath at the Tomb of the Unknowns. He will be headed to the Vietnam War Memorial later this afternoon.

I want to bring in Dan Lothian, who is live at the White House, who follows the president's every move.

What is happening later this afternoon actually is kicking off something not normal for a Memorial Day commemorations. This is a significant 13-year endeavor that is about to be kicked off with regard to the Vietnam Memorial.

DAN LOTHIAN, CNN CORRESPONDENT: That's right. We've been talking about how the president was remembering Memorial Day, but also the 50th anniversary of the involvement in the Vietnam War. But it's not just for one day. It is, as you pointed out, a 13-year program, a combination of a federal and local and private organizations involved in honoring those who fought and died in that war. More than 58,000 U.S. troops died in that war in Vietnam. More than 1600 are still listed as missing. So the president, through a proclamation, trying to honor those in a special way.

Listening to the president a while ago, what you heard was not only a moment to honor those who have fought and died for this country and some who have returned and are struggling to rebuild their lives. But it's also about honoring the family members who have had to deal with their loved ones gone for so long and some gone forever. The president reassuring those in the military and all Americans that he and his administration will do whatever it takes to make sure that they have the benefits that they need.

BANFIELD: Dan Lothian live for us at the White House. Thanks very much.

Much more coverage of Memorial Day 2012 straight ahead. President Obama's next event is about two hours from now, as Dan was just talking about. It's at the Vietnam Veterans Memorial. You will see it live right here on CNN.

Before that, at 1:00 eastern, 10:00 pacific, Mitt Romney will hold a Memorial Day observance in San Diego. He's going to be alone. He will be with Arizona Senator and former presidential candidate as well as former POW, John McCain.

(COMMERCIAL BREAK)

BANFIELD: Some pretty serious intrigue coming out of the Vatican. The pope's own butler is today sitting in a jail cell and accused of funneling top secret documents to the author of a blockbuster tell-all book. Corruption, cover-up, even kidnapping are discussed in a scandalous trove many are calling Vati-leaks.

Barbie Nadeau joins me with more. How serious are these allegations and what exactly is in all of these letters and documents that are so indicting?

BARBIE NADEAU, CNN CORRESPONDENT: Well, it really runs the gamut. There is some gossip about you who a white trifle worth 100,000 Euro ended up in a soup kitchen and there's some serious allegations of cronyism, corruption, tax evasion, about how the Vatican's intra-office dialogue with regard to many of its financial matters.

BANFIELD: Barbie, what about the idea that they're prosecuting this guy, the pope's butler, what about the actual fallout from what the documents suggest, that there's a real mess in there?

NADEAU: Well, it is a mess. It really is, but the Vatican doesn't have to be transparent. They don't really have to deal with the fallout. They are their own sovereign nation. They can handle this in any way they choose to. Very little of this spills out into the Italian everyday life. There is one document that talks about a secret meeting between the pope and the president of Italy. There's another document that talks about how the dialogue went on about how the Vatican should get out of paying for property taxes on some of its Italian properties. These are top prelates having arguments, power struggles, all on the eye on who will be the next pope.

BANFIELD: With such salacious material, it's got to have some kind of ripple effect or domino effect. Is that likely to just gather steam or are they trying to tamp this down?

NADEAU: Well, I mean, the Vatican has not specifically denied the authenticity of the documents. They have instead said that publishing them, printing them, talking about them is a criminal act. It's a breach of privacy. it's betrayal against the pope. I think they're trying to maybe garner a little sympathy for this pope, that he trusted this butler. This was a man that saw him first thing in the morning, last thing at night, and who really in his inner circle,, in his pontifical family, it's a very small group of people, four nuns, the butler, and two clerical secretaries have this much access to the pope. And he betrayed that trust if these allegations are true.

BANFIELD: Barbie Nadeau, thank you, live in Rome for us.

For more on this unfolding scandal, you can visit CNN.com's Belief Blog.

(COMMERCIAL BREAK)

BANFIELD: Washington is working some leads today about an intricate plot to assassinate American diplomats, a plot that's being traced back in Iran. It's apparently part of a plan to retaliate for a secret war that is being waged. You might remember four scientists tied to Iran's nuclear program have been killed, some say assassinated, in the past three years. "The Washington Post" says this scheme took shape over more than a year ago and, among the targets, U.S. embassy staff and family members in Azerbaijan, Iran's next door neighbor. But Iran apparently abandoned the plot when it suddenly agreed to nuclear talks.

British Prime Minister Tony Blair took the stand this morning in the on-going British telephone hacking investigation. The former prime minister said he was pressured politically by media mogul, Rupert Murdoch. He also said, despite that, it did not shade his position on media-related laws.

Mr. Blair has been criticized for being too cozy with Rupert Murdoch and his media empire. But he denied that charge.

His testimony, by the way, was interrupted briefly by an anti- war protester who called him a war criminal for his stance on Iraq. The judge immediately ordered an investigation of how that protester was able to get in the room.

That is it for me. Thanks so much for watching on this holiday, this Memorial Day.

CNN's NEWSROOM continues now with my colleague, Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN ANCHOR: Good to see you, Ashleigh.