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U.S. Banks Slammed; Record Floods Ravage Minnesota; Adopted Son Now Accuses Sandusky; Heat are NBA Champs. Obama Courts Latino Voters; Slow Growth, Bank Fears Roil Markets; Jury in Sandusky Case Deliberating Now; Tell-All Author Sues John Travolta; Air Safety in Question at CDC

Aired June 22, 2012 - 09:00   ET

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

CAROL COSTELLO, CNN ANCHOR: Good morning, Soledad. Good morning to all of you.

Happening right now in the NEWSROOM, here's a headline, $3 gas. Prices are plunging overnight. New outlook this morning that's great news for your wallet.

Plus this.

(BEGIN VIDEO CLIP)

MAVIS HARTMAN, MOOSEHEAD LAKE, MINNESOTA RESIDENT: Obviously, you don't buy flood insurance here. You don't do it. So I'm kind of emotional because I don't know what to do.

(END VIDEO CLIP)

COSTELLO: Police in Duluth, Minnesota, saying it's not safe here. Historic flooding wiping out bridges, roads and lives. One town being described as an island. We'll talk with the mayor of Duluth straight ahead.

Sandusky bombshell. An adopted son of the Penn State coach claims he, too, was molested by his father, and he's offering to testify. Will new charges be filed? We're live at the courthouse.

Plus --

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Oh, my god. You're so fat. Karen, you're fat.

ANDERSON COOPER, ANCHOR, "ANDERSON COOPER 360": Southwest Airlines reached out to us today. They'd like to send you and nine people to Disneyland in California.

KAREN KLEIN, BUS MONITOR: You've got to be kidding me.

(END VIDEO CLIP)

COOPER: The bullies apologized, taunted and teased bus monitor Karen Klein, grateful and humbled today after the jokers fess up and say, we're sorry. This morning Karen is stunned by all the support.

It is Friday. Happy Friday, June 22nd. NEWSROOM begins right now.

And good morning to you. I'm Carol Costello. We begin this morning with your money. Less than 30 minutes from now, Wall Street tries to rebound from a double whammy. One of its worst days in months. Major American banks that you problem have money and slammed by ratings agency Moody's. Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Citigroup.

The bad news sent international markets plunging overnight. But there is a silver lining to this report. Futures are up.

(LAUGHTER)

COSTELLO: Business correspondent Christine Romans joins us live from New York.

So is that a silver lining or am I exaggerating things?

(LAUGHTER)

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: You're always looking for the bright side, Carol.

COSTELLO: I know.

ROMANS: Futures are up, and that's something we sometimes see when you have a big down day. The Dow was down 250 points yesterday, and it felt pretty ugly all day long. And so they're up, futures are up a little bit here this morning. That often happens when you've had a big down day.

But it's not just the bank issue here. Right? I mean the bank downgrade shows us that there's still a concern about slowing global economy, about credit markets, about the debt problems in Europe. And that's something that banking analysts are concerned about. And there's a lot of talk about a summer slump.

A summer slump in the U.S. economy and the global economy. Slow jobs growth is what that will mean. Very low interest rates quite frankly and record-low mortgage rates. That's a result of that summer slump. A weak economy. And falling gas prices. All of these things are what -- kind of this whole macroeconomic grew is giving us right now.

There's a lot of things to worry about. Contagion from Europe. We're talking about a U.S. slowdown. We're talking about factories around the world slowing down. We're talking about the banks trying to put a ton of money aside so they can withstand all of this. And we're also talking about the debt ceiling and a fiscal cliff. And congressional inaction on that. Put it all together, and you've got people very concerned about where we are right now in the -- in the cycle, Carol.

And it's interesting, too, because Mike Mayo, who's a bank analyst we talked to late yesterday after that downgrade, he was saying on the bank downgrade, in particular, you know, it's not going to affect the way you're doing business with your bank right now but it's going to affect how banks are doing business with each other. And they are what pumps the oxygen into the global system.

That's why it's so important. He also said it's probably going to be the worst 10 years for bank lending since the Great Depression. So that affects you, too. You know, the banks are stockpiling their money, trying not to take big risks so they can withstand something terrible happening in the economy. That means you can't really take advantage of those low mortgage rates.

COSTELLO: Yes. We've heard that song before.

ROMANS: Yes.

COSTELLO: Christine Romans, reporting live from New York this morning.

Also this morning, a deadly ending to an 11-hour standoff at an Afghanistan hotel. Afghan and NATO troops engage in a fierce gun battle with Taliban militants. They stormed the hotel, taking several dozen civilians hostage. Police say the militants killed 15 civilians and four others before they were killed. Fifty other hostages were rescued by the time the standoff was over.

Right now jurors are meeting behind closed doors to decide the fate of Jerry Sandusky. They deliberated late into the night, ending their discussions less than 12 hours ago. They are now reviewing testimony from two witnesses who appeared on the stand.

The former Penn State football coach could face even more charges, though, after a bombshell announcement from one of his six adopted children. Matt Sandusky. You're going to see him shortly. He is in a striped t-shirt. You see him on the right. He says he, too, was sexually abused by Jerry Sandusky.

National correspondent Susan Candiotti is outside the courthouse.

Susan, I want to talk a little bit about Matt Sandusky. He says through his attorney that he was ready to testify. Why didn't he?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Well, he didn't testify, Carol, because he -- because his father didn't take the stand. It was a pivotal moment back on Wednesday, you will remember, when we were all waiting to find out whether Jerry Sandusky would take the stand in his own defense.

We saw Matt Sandusky come through the witness door that day, and then it was revealed that prosecutors, through sources, had Matt Sandusky on standby in their back pocket to bring out as a surprise rebuttal witness if Matt's father, Jerry, had taken the stand in his own defense.

That didn't happen. So Matt didn't testify. But then it was revealed yesterday through that statement that you just mentioned, through Matt Sandusky's lawyers, saying that Matt is now revealing that he was abused by his father. Making that claim now. And what makes it particularly are interesting, Carol, is that before now, up until now, Matt Sandusky has always publicly spoke out in support of his father.

Now Matt's name did come up during the trial testimony when alleged victim number four took the stand. And we have an excerpt from that testimony. It goes like this.

Alleged victim number four speaking. He says, "Jerry started pumping his hand full of soap like he was going to throw it. He was in the shower. Then he says Matt got out. He went to another shower area." And the prosecutor asked, "And what was the look on Matt's face when he saw the defendant was about to start a soap fight?" And the accuser said, "Nervous."

Now there had been testimony throughout that oftentimes preceding alleged sexual assaults in the shower that Jerry Sandusky would soap up his alleged victims, and start rubbing them and that's when the alleged abuse would occur -- Carol?

COSTELLO: Of course, he didn't testify. The jury is not considering his testimony. But they have plenty of other -- they have plenty of testimony to consider. I know they are back at work. They just started. We'll get back to you, Susan, to see how they're progressing. Thanks so much.

This morning National Guard troops are fanning out across northeastern Minnesota where several cities are reeling from the worst flooding on record. As the governor declared a state of emergency, Coast Guard crews swept in and rescued at least 15 people from homes that were cut off by rushing water.

Neighborhoods in and around Duluth have been swamped by up to 10 inches of rain this week, and for many days of anxiety are taking their toll.

(BEGIN VIDEO CLIP)

HARTMAN: When it gets up to this line, we're moving everything out of the house. And we're done. We're moving out. And, you know, obviously, you don't buy flood insurance here. You don't do it. So I'm kind of emotional because I don't know what to do.

(END VIDEO CLIP)

COSTELLO: Hundreds of people have had to flee their homes and take refuge in Red Cross shelters. Remarkably, there are no known deaths so far. But the damage is staggering. Duluth's mayor says there's at least $50 million in damage just to the city's infrastructure.

Mayor Don Ness joins me now by phone.

Good morning, Mayor.

MAYOR DON NESS, DULUTH, MINNESOTA: Good morning.

COSTELLO: How unusual is this kind of flooding for the Duluth area?

NESS: Well, it's very unusual. You know, our previous record for a 72-hour period was 6.5 inches. And some of our neighborhoods received nine to 10 inches in less than a 24-hour period. When you couple the fact that, you know, that's just the rain falling on one neighborhood. And Duluth is a beautiful city built upon a hill, a rather steep hill. And so all that rain that was falling further up the hill then started rushing down and into our lower neighborhoods.

And the combination of the rain falling on our lower neighborhoods and the water rushing down the hill created a tremendous amount of pressure that overwhelmed our storm water system. And blew out manholes and damaged both our stream beds as well as our street infrastructure.

COSTELLO: Let's talk about the infrastructure damage. Because we've seen these incredible pictures of the water taking out an entire bridge. We see highways buckled. How many other scenes like we're seeing now, you know, on CNN's air are there in Duluth?

NESS: Well, Duluth has 25 named drought streams running through our city. It's one of the things that people love about our city. It's because we're built on a hill and we have these beautiful ravines. But when you have that much rain falling in such a short amount of time, it simply overwhelms the system. And you had a great -- a large amount of volume coming down at a very rapid pace. And it hit the smaller ravines and just kind of blew the system -- the system up.

And so there is a lot of damage, and yet it's localized to these areas where we have the culverts, we have the ravines, we have where the streams went under the road. You know, most of Duluth is in -- is in OK condition, and one of the messages that we want to send is that Duluth is open for business. That the -- as long as you don't go around the barricades, you're going to be safe in our city.

COSTELLO: So come on out and fish.

(LAUGHTER)

COSTELLO: Thank you so much, Mayor Don Ness, talking with us live this morning.

Let's find out why all that rain is falling in Minnesota. Alexandra Steele is here to explain.

You heard the mayor. This is really strange for this area.

ALEXANDER STEELE, AMS METEOROLOGIST: Well, it's probably some of the worst flash flooding they've had in 30 years. But it's so beautiful, isn't it? Duluth. Just look at this beautiful picturesque area.

What we've seen is such bad flash flooding. Because it's really kind of a two-day affair, the 19th and the 20th. So a few days ago. Between about seven and 10 inches of rain. And the problem was, Carol, it fell on already saturated ground. So the ground was already wet. And then in comes this seven to 10 inches of rain. So you can see what it looks like there.

In terms of the forecast, you know, today we're not going to see any rain for the most part. Really dry in for the next 10 days. It's looking at the forecast, you can see it's really Saturday there's the threat for some scattered showers. And then Sunday morning. But nothing as heavy certainly as they've seen. And you can see how dry the balance of this next five days is. And then even the 10-day outlook is pretty good as well, dry weather.

COSTELLO: You're watching another system, too.

ALEXANDER: That's right. Something that is heating up is what's happening in the tropics. So here's a look at what we're talking about. We're watching the Gulf of Mexico, really most notably the northern Yucatan Peninsula. And there's the area of interest there. So this is an area of low pressure. You can see it's getting better organized. No question about it. They're delineated in that square.

Now what we're going to see especially in the next two days, the National Hurricane Center says the depression probably will develop the next 48 hours or so. And the problem is the terrain of interest is so vast, all the way from the Texas Gulf Coast to the Florida Gulf Coast.

Now this is what we call, Carol, there are spaghetti models. And you can see there's a better consensus with this last run of these spaghetti models. You can see now moving it a little bit toward Florida more so. Before, they were more distributed in terms of where they could possibly go.

So all eyes for the next 48 hours or so. As this kind of air gets more organized. And take a look. It's all contingent upon the jet stream. That's kind of the driver so the jet stream will push this system maybe to the west, to Texas, or possibly to the east to Florida. So Florida looks like it could get about four inches of rain, but contingent upon this path which we'll know a little more in the next day or two.

COSTELLO: OK. We'll keep an eye on the spaghetti model.

(LAUGHTER)

COSTELLO: Alexandra, thank you.

The Miami Heat's NBA title summed up in one word by their hometown paper this morning. "Kings." The banner headline in the "Miami Herald", kind of a play on, King James. Though LeBron is the finals' MVP, the whole team is basketball royalty today.

John Zarrella was with fans last night.

I bet it was crazy.

JOHN ZARRELLA, CNN CORRESPONDENT: I've got to tell you, Carol, it was outrageous last night. When you look at it today, you know, you can see the street Biscayne Boulevard back to normal. A lot of morning work traffic.

The arena is quiet. I've got to say, though, I think a lot of those people going to work this morning are going to work with hangovers because nine hours ago, this place was insane.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Who's number one now? Who's MVP now? The Heat are number one. We're number one, baby.

(CHEERS)

UNIDENTIFIED MALE: I have been a Heat fan since I was born, man. I'm so proud of my dude LeBron. Finally got his ring.

UNIDENTIFIED MALE: Wade got a second ring.

UNIDENTIFIED MALE: Wade got a second ring. This is the great -- this is the happiest day of my life.

UNIDENTIFIED MALE: Heat, they rock. We won the finals.

UNIDENTIFIED MALE: You know, I have spent two years fighting across the country with every non-Miamian I know defending my team. They all hate us. And as Franklin Roosevelt said, I welcome their hatred. This is an emotional win for all of Miami, for me. You know, you never forget your first championship.

This is our second. It's our first one at home. This is special.

(END VIDEO CLIP)

ZARRELLA: I love that guy who said that that was the greatest day of his life. It may have been the greatest day of LeBron James' life.

You know, Carol, they were handing out these towels last night that have "XVI" on them, 16, which is the number of games they had to win to get the championship. And they did it. They did it.

COSTELLO: I know. I know.

ZARRELLA: LeBron got his first. And he silenced the critics.

COSTELLO: OK. Well --

ZARRELLA: And you're not happy, are you?

COSTELLO: No. Because I'm from the Cleveland area so I've been one of those critics.

(LAUGHTER)

ZARRELLA: I know.

COSTELLO: And I just want to run this by you, John. The Cavs' owner, the Cleveland Cavaliers owner Dan Gilbert --

ZARRELLA: Sure.

COSTELLO: He tweeted, congratulations to Miami and OKC for an exciting finals, but he did not mention LeBron, unlike his scathing attack two years ago when LeBron left Cleveland and Gilbert guaranteed his team would win a title before LeBron. I assume LeBron did not mention Dan Gilbert last night?

ZARRELLA: Not that I know of. I listened to quite a bit of his press conference, and in fact, at one point, LeBron was asked if he had any message or anything to say to the Cleveland fans. And I may be mistaken, but listening, I recall him saying, you know, that this was about Miami. This was about the victory last night.

COSTELLO: Blah, blah.

ZARRELLA: And I think he kind of sidestepped that question, yes. Exactly.

COSTELLO: Smart man. John, OK, congratulations. I know you're a Heat fan. Thank you, John.

There could be a silver lining to all those economic problems in Europe. Average gas prices could hit $3 a gallon or less in just a few months.

(COMMERCIAL BREAK)

COSTELLO: Eighteen minutes past the hour.

Checking our top stories:

In less than 15 minutes, we'll see how the stock market reacts to Moody's downgrading of several big banks in the United States. We're talking about Citigroup, Morgan Stanley, Goldman Sachs, Bank of America and JPMorgan Chase. The downgrade means these banks might have to pay more to borrow money.

Moody's is a credit rating agency. It says these banks are exposed to greater risk.

Also in money news, the average price of gas could be as low as 3 bucks a gallon by Halloween. Oil industry experts say the price will keep going down over the summer, but get this -- lower gas prices are actually a result of a slowdown in the global economy.

This morning, raging floodwaters from Duluth, Minnesota, are spreading to other cities. Duluth's mayor says this is the worst flooding in the city's history. Many roads are washed out. Some people have a foot of water and sewage in their hopes. The city estimates at least $50 million in damage so far.

In sports, this 6-year-old has really beat the odds. He is playing tee ball with only one arm. Riley Roden (ph) had a cancerous tumor on her left arm when he was 2 years old. The only way doctors could save him was by amputating his arm, but who cares?

Look at riley. He says the hardest part is catching the ball and then throwing it. But he has mastered a way to do that.

About four hours from now, President Obama will talk to Latino leaders in Florida to tout his new immigration policies and court Hispanic voters. Republican challenger Mitt Romney appeared at the same gathering yesterday. Romney is getting mixed reviews from a decidedly skeptical group that could decide several battle ground states.

Suzanne Malveaux is at the conference outside of Orlando.

Good morning, Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Good morning, Carol.

Well, obviously, a lot of people paying a lot of attention to what Mitt Romney has to say. Yesterday, he talked and tried to really focus on the economic conditions of the Latino communities, saying it was 11 percent unemployment, 2 million Hispanics who are actually living under the poverty level.

But he also did take on this issue of immigration and specifically about President Obama's immigration policy allowing at least some young adults who meet certain criteria to stay in the United States despite the fact that they are undocumented. He tried to address this concern, and he said he called this a stopgap measure. Something that was really short-term. And that he said he was going to be taking on this issue in a long-term, broader type of fashion.

But wasn't very clear on specifics. So I want you to listen to how Mitt Romney put this.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Some people have asked if I will let stand the president's executive order. The answer is that I will put in place my own long-term solution that will replace and supersede the president's temporary measure. As president, I won't settle for stopgap measures.

(END VIDEO CLIP)

MALVEAUX: So, Carol, some people were satisfied with that, but a lot of other people thought really there's not a lot of specifics and not a lot of meat to that. They want to know exactly what is going to happen in terms of immigration policy.

And what was interesting, Carol, is today there was a new web ad from the Obama campaign that picked up on an exchange that happened after that speech. A side bar, if you will. A young student by the name of Mayra Hildago, 28 years old, approached Romney to ask him -- to push him on that issue, whether or not he would repeal that. He didn't answer the question. He went off on his way. It was a rope line exchange.

We did have a chance to catch up to that student and ask specifically why it was that she pushed him on this. And here's how she responded.

(BEGIN VIDEO CLIP)

MAYRA HILDAGO, STUDENT: This is important to me because I'm an undocumented student. I have been in this country since I was 6 months old. The administrative relief that Obama gave us Friday changed my life, and I'm going to be able to pursue my dreams of becoming a lawyer. And if Mitt Romney is elected, he's going to have the power to repeal this.

And if he repeals this, my life will be back to a life in the shadows without promise in the country that I know and love.

(END VIDEO CLIP)

MALVEAUX: Now, Carol, what's interesting about this, if you learn more information about this student, she clearly came here as part of an organization. It's actually a lobbying advocacy group based out of Washington. They are called the Dreamers and essentially they go and confront Mitt Romney. They are pushing this issue here.

It really underscores the importance of the pictures, of the images, and clearly the emotion, the passion, that people have around these kind of life stories and around these policies. If she can get the kind of attention that she did yesterday and actually get it into a campaign ad, they are clearly pushing this agenda trying to bring attention to it. This is one of the things that the Hispanic community is paying very close attention to -- Carol.

COSTELLO: Suzanne Malveaux, reporting live from Orlando this morning, of course, you'll be live for your own show at 12:00 noon Eastern and the 1:00 Eastern show as well. Thanks, Suzanne.

They have been out of work and underwater on their mortgage. This middle class mom asks a question directly to the Romney campaign about foreclosures and what Romney plans to do. We'll have his answer next.

(COMMERCIAL BREAK)

COSTELLO: It's time for middle class talk back. A segment we kicked off last month. We wanted to give middle class Americans a chance to ask direct questions to the presidential candidates.

Today, it's Moira Bindner's turn. She's from Alexandra, Virginia. And she and her husband have suffered long-term of time without jobs and their mortgage is underwater. This week, Moira had a question for Governor Romney.

(BEGIN VIDEO CLIP)

MOIRA BINDNER: It seems that one of the issues for the campaign this year that is being ignored is the millions of Americans whose homes are underwater. What are you going to do, especially when the federal government holds many of these loans, to help support the middle class Americans who are not bad people, but who are in situations where the principle really needs to be reduced?

(END VIDEO CLIP)

COSTELLO: Moira, we sent your question to the Romney campaign and they did not respond. Most likely because the Romney camp runs a tight ship. They like to keep on message. And the message right now deals with immigration.

That said, Governor Romney did talk about foreclosures during his nasty primary fight.

(BEGIN VIDEO CLIP)

ROMNEY: I'd make sure that we get the government out of housing and let the private sector do its job. We need to allow the market to reset as opposed to standing up and trying to stop the flow of the market, let the market do its work, reset, let home values start coming up. And then finally, get this economy going again. That's the -- you've got to have jobs.

(END VIDEO CLIP)

COSTELLO: So in other words, let the foreclosures go on. But will Romney revise his views now that he's trying harder to win over independent voters? That's what Romney's done on immigration. He now makes no mention of self deportation for illegal immigrants. But he talks about the need for a long-term solution on immigration, and the auto bailout.

First, Governor Romney said Detroit should go bankrupt. Now he takes credit for the auto industry's comeback.

So, Moira, who knows? Maybe Romney will change his tone on foreclosures too. Of course, we'll keep pestering his campaign for more answers.

(COMMERCIAL BREAK)

COSTELLO: Thirty-two minutes past the hour.

This morning, investors are hoping for a rebound after a flurry of bad news sent stocks plummeting to their second worst day of the year.

Alison Kosik is at the New York Stock Exchange.

So, I like the plus sign.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes. You're seeing those green arrows right now. The Dow is up 66 points. You're seeing a bit of a bounce back after yesterday's just flood of bad news that's pushed much, much lower, with the Dow selling off 250 points.

You know, Wall Street has got a lot to worry about. Europe's debt problems. They haven't gone away.

Plus, there were new signs yesterday of an economic slowdown, and not just here in the U.S., but around the world. Disappointing manufacturing data out of China and Germany came out yesterday. Here in the U.S., manufacturing showed signs of slowing. Jobless claims remain stubbornly high. And the recovery for the housing market is still uncertain.

But look, those bargain hunters -- they are out today. And that's despite a credit rating agency Moody's downgrading several major banks.

And there are a couple of reasons why Wall Street is shrugging this off. First of all, it didn't come as a big surprise. Moody's announced in February it was reviewing the banks, so basically made good on its threat.

And secondly, Carol, it's not as bad as everybody thought. Moody's could have downgraded some of the banks even more. And that's kind of how -- kind of sum of the vibe on Wall Street these days. It's skewed logic.

COSTELLO: Yes.

KOSIK: Investors are still pessimistic that the downgrades are actually a relief because they weren't worse. You know, they have bars really, really set low these days.

COSTELLO: I like that skewed logic line. Let's talk about that with Christine Romans.

Because it doesn't make much sense, Christine. So Moody's downgrades these big banks, and then kind of nothing happens.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, something big happened yesterday. The Dow was down 250 points because the market was anticipating that Moody's was going to downgrade the big banks. So, there was a very big move. And what you're seeing now is a bounce back from that big move yesterday.

But there's a lot of sort of danger signs flashing here right now. And among them, you've got the world's banks who have exposure to the European crisis. A lot of concerns about what kind of contagion risks there could be out there. The U.S. economic growth is slowing here a little bit.

You know, it's 1.9 percent economic growth is really nothing to write home about. And quite frankly, the Fed this week lowered its growth forecast and raised its forecast for unemployment in this country. So you have another summer slump.

Just like last summer, Carol. It's the very same moment last year, we were talking about a summer slump where the recovery was just starting to ail. And the question is, will it continue to be an ailing recovery or will it gather some momentum in the fall.

And many are saying this time around we have an election. And there's political uncertainty around that. We have the fiscal cliff. We have another debt ceiling showdown by the end of the year.

So again, a lot of danger signals flashing here in the market. Even though it was up 60 points today, it still has 140, 170 points to go to get back what it lost yesterday.

COSTELLO: OK. We'll see what happens later today.

Christine Romans --

ROMANS: Sure.

COSTELLO: -- reporting live for us from New York.

Stories we're watching right now in THE NEWSROOM:

A deadly ending to an 11-hour standoff at an Afghanistan hotel. Afghan and NATO troops engaged in a fierce gun battle with Taliban militants. They had stormed the hotel and taken several dozen civilians hostage. Police say the militants killed 15 civilians and four others before they themselves were killed. 50 other hostages were rescued by the time the standoff ended.

In Washington state, a ranger is killed trying to rescue four people on Mt. Rainier. Nick Hall fell 3,700 feet to his death. The 34-year-old ranger was trying to evacuate the injured climbers to a helicopter when he slipped and fell down the mountainside. Crews plucked three climbers off the mountain last night and will try to reach a fourth climber this morning.

In North Dakota, they've got a budget problem many states wish they had. By next June, North Dakota expects to have a $2 billion surplus. An improving economy in the state is bringing in more revenue from sales and income taxes and oil and gas taxes.

The jury in the Jerry Sandusky trial is deliberating this morning. There's a shocker they'll never hear before reaching a verdict. Sandusky's own son now claiming he was abused too. How this might affect the case.

(COMMERCIAL BREAK)

COSTELLO: Right now, the jury in the Jerry Sandusky trial is deliberating the fate of the former Penn State assistant football coach. Jurors stayed until 9:30 last night, the first day of deliberations. They have to come up with verdicts for 48 counts of child sexual abuse.

And for the first time, we are hearing claims of abuse from Jerry Sandusky's adopted son. Attorneys for Matt Sandusky said he offered to testify against his father, but was never called to the stand.

Matt Sandusky is now 33. He met Jerry Sandusky through the Second Mile charity when he was about 7 years old. And then the Sanduskys adopted him as a teenager.

These new accusations could result in more charges. It also begs the question: did Dottie Sandusky, Jerry's wife, know anything about this? Just this week, she testified she never witnessed any abuse. But this is her adopted son.

CNN legal contributor Paul Callan is in Los Angeles.

Good morning, Paul.

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Good morning, Carol.

COSTELLO: Every new accusation that comes out of this is more dreadful than the last. We should have actually guessed there was something up with Matt Sandusky. His ex-wife went to court to keep Sandusky away from her kids and her request was granted.

Do you think that Dorothy Sandusky knew?

CALLAN: Well, if Sandusky is guilty, and, of course, he still is presumed innocent until that jury comes back with a verdict. But if he is proven to be guilty of these offenses, it is hard to believe she wouldn't know. I mean, we're talking about a staggering number of potential victims in this case, now including his own adopted son. So it's really hard to believe that she wouldn't know that something strange was going on.

And frankly, Carol, I'm very surprised she was not subjected to a more grilling cross-examination, a harsher cross-examination, by prosecutors this case. You know, they kind of let her off the stand pretty quickly and easily.

COSTELLO: Why do you suppose they did that?

CALLAN: I had a hard time figuring it out because frankly, most prosecutors I think would have said to her, did you know he was taking showers with little boys? Which that question was asked, but --

COSTELLO: Including your own adopted son?

CALLAN: Exactly. And either she says yes, she knew, and it was OK, or she said, no, I didn't know about it, in which case Sandusky was lying to her because we know that Penn State told him to stop using the showers at Penn State.

So, she was sort of in a corner and could have been cross- examined very, very carefully in that area. And they chose not to do it.

I guess they think the case went in very well and they just wanted to get her off the stand. You know, most of the time, jurors look at a wife and it's irrelevant what she thinks. Obviously, she's going to support the guy she's married to.

I mean, if he's guilty of this and he's found guilty of this, she made a deal with the devil when she decided to live with him for all these years. So, we can't expect her to be truthful on the witness stand.

But as I said, we have to see what the jury decides ultimately.

COSTELLO: OK. Let's talk about the jury because they deliberated until 9:30 Eastern Time last night. They are back early this morning to deliberate again. This trial has been moving at lightning speed. Do you think a decision will come down soon?

CALLAN: The case has moved -- I don't know. Maybe as fast as any case I can ever remember. I mean, literally. I don't know, 50, 60 witnesses. Some days there were 20 witnesses who testified in a day. It was staggering how fast it moved.

The jury, though, even if they think there is overwhelming evidence of guilt, they have to go through 48 counts in the indictment and decide -- and vote guilty or not guilty on each count. So I would be surprised if you had a verdict before the end of today. And it wouldn't surprise me if it went into next week in terms of deliberations, because there's an awful lot of testimony and victims -- alleged victims, for them to evaluate.

COSTELLO: Paul Callan, thanks so much.

CALLAN: Always nice being with you, Carol.

COSTELLO: Thanks, Paul.

The man who wrote a book claiming he saw John Travolta in a gay encounter is now suing the superstar and his attorney. We'll break down why.

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COSTELLO: The man who wrote a book saying he saw actor John Travolta in a gay encounter is now taking legal action against the superstar. "SHOWBIZ TONIGHT's" A.J. Hammer joins us from Los Angeles to sort this all out, the accusations against Travolta never ends.

A.J. HAMMER, HLN HOST, "SHOWBIZ TONIGHT": This is yet another lawsuit for Travolta, Carol involving allegations about his private life. And this time it's a libel suit against the actor and his attorney, Martin Singer. This traces back a couple of years to an article and a book that was written by Robert Randolph.

Now, he made some very racy allegations about Travolta's sex life. In this book that he wrote and try to sell the publishers the book called "You'll Never Spa in this Town Again". He revealed some of the stories from the book in an article on Gawker called "The Secret Sex Life of John Travolta".

And at the time, Travolta's attorney Marty Singer fired off a letter to Gawker defending his client, he denied what Randolph was saying and among other things alleged that Randolph had been in mental institutions and had suffered brain damage.

So Randolph is suing saying those statements are defamatory and they impacted his ability to sell this book. Now Singer and Travolta have both publicly responded to the allegations by calling the suit absurd and Singer is publicly threatening to sue the attorneys who filed the suit for malicious prosecution.

Now Carol those other recent lawsuits we've been talking about against Travolta by a massage therapist were withdrawn. Those stories fizzled out publicly at least. We're obviously going to have to wait and see what happens with this case.

COSTELLO: Wow, A.J., thank you.

A.J. will be back with us next hour with more "Showbiz Headlines" including Barbra Streisand, she's about to go behind the camera again as a director. And several A-List actors are close to signing onto the movie.

Also a congressional committee wants to know what was behind a potentially dangerous air leak at a high security Centers for Disease Control laboratory. It happened as visitors were taking a tour of the building.

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COSTELLO: Fifty-one minutes past the hour. Checking our "Top Stories" this morning, Jerry Sandusky back in courts as jurors resume their deliberations in his child sex abuse trial. They're reviewing testimony from two witnesses.

Right now Sandusky's own adopted son Matt is claiming he was also molested by his father. Sandusky is charged with 48 counts, he's accused of molesting ten boys over 15 years. He denies all charges.

In money news, more colleges and universities are offering a 25 percent tuition break. The catch, students have to squeeze four years of study into three. Hartley College in New York is among the first to offer the shorter degree program. There will also be an option at Wesleyan University in Connecticut and Minnesota State.

In weather news, a nasty storm is building in the Gulf of Mexico and it has a good chance of developing into a tropical depression or tropical storm within 48 hours. No consensus of where it might go but of course, our meteorologists are keeping an eye on it.

And check out this man in this surveillance video. There he is. New York police say he stole a Salvador Dali painting worth $150,000 from an art gallery. They say the man asked the security guard for a picture and as the guard stepped away the man took the paintings and stuffed it in his bag and simply walked away. New York police are now asking for your help to find this man.

A congressional panel wants answers from the Centers for Disease Control over a reported air leak at one of its bio labs earlier this year, a lab where scientists work on dangerous pathogens like anthrax and monkey pox.

Here's Brian Todd.

(BEGIN VIDEO CLIP) BRIAN TODD, CNN CORRESPONDENT (voice-over): It's a highly secured bio-germ lab at the Centers for Disease Control conducting experiments with pathogens like monkey pox, bird flu, tuberculosis, rabies, other organisms that could be used as biological weapons. CNN has learned a potentially dangerous air flow leak at the so-called bio-safety level pre-lab will be investigated by a congressional committee.

Congressional sources and CDC officials tell us the leak occurred on February 16th of this year.

(on camera): What are your biggest concern of what could have happened here?

REP. MICHAEL BURGESS (R), ENERGY & COMMERCE COMMITTEE: Well the biggest concern obviously is that from my understanding there was a contingent of visitors who are walking through the building and had one those people been stricken or made ill or worse, obviously that would have been devastating.

TODD (voice-over): Congressman Michael Burgess will be part of the investigation by the House Energy and Commerce Committee. Experts say if experiments had been under way at the time of that air leak unprotected visitors could have gotten exposure to germs but an epidemic would have been unlikely.

The airflow system in that lab is supposed to protect against the release of contaminated air.

(on camera): Air from a clean air corridor is pushed through vents into that lab where experiments involving those pathogens and including small mammals take place. The air circulates and then is pushed to the outdoors through powerful hepa filters; that air is supposed to be cleaner than the air that comes in.

But on February 16th of this year, visitors who are in a clean air corridor noticed a puff of air being pushed out to that corridor through a window in the slit of the door. That is not supposed to happen.

(voice-over): CDC officials say animals were in that lab at that time but they were secured in filtered cages. They say the lab was clean, was not active at the time and no one got infected.

CDC officials told us they couldn't put anyone on camera. In a statement a spokesman said, "At no time during recent incidents featured in the media were CDC workers or the public in harm's way. This unique facility features multiple security layers specifically designed to protect workers in the public in the event of an incident."

There's been at least one other safety-related incident in that same building at CDC. In 2008 it was discovered that a high containment lab door was sealed with duct tape.

Bob Hawley, former safety chief at a government infectious disease lab talked about the safety layers at CDC, like bio-safety cabinets researchers work in within that lab.

BOB HAWLEY, ALLIANCE BIOSCIENCES: Nothing is handled outside that cabinet. So they are working with minute amounts of material and the chances of aerosol negligible.

TODD: But there are also questions about cover-up. In an internal e-mail reported by "USA Today", a CDC biologist said "The CDC will do anything to hide the fact that we have serious problems with the air flow and containment in this whole building." We have not been able to independently verify that e-mail.

In response, a CDC spokesman said "The agency will continue to be transparent in addressing safety challenges and will cooperate with that congressional investigation."

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

COSTELLO: A relief pitcher for the Tampa Bay Rays appeals his pine tar suspension. He can still play though while an appeal is being heard. But maybe that wasn't the best decision. We'll tell you why.

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COSTELLO: After coming up short in last year's NBA finals, Lebron James and the Miami Heat have proven their critics wrong, winning a title this time around. James had 26 points, 11 rebounds and 13 assists, his first triple-double of the season as Miami beat Oklahoma City 121-106. Chris Bosh and Dwyane Wade combined for 44 points, Mike Miller drilled (ph) seven three-pointers but Lebron is the series MVP. The Heat beat the Thunder in five games. It is the team's second championship and of course, this is Lebron's first championship.

Major League Baseball is suspending Rays' reliever Joel Peralta eight games for having pine tar on his glove. He was thrown out of Tuesday's game after the Nationals, his former team, asked the umpire to check his glove. Peralta is appealing the suspension and he can play until a final ruling. But that's setting up (inaudible) for a two-run double last night and guess what; Peralta takes the loss (inaudible). Washington leads the NL East by three and a half games.

Let's go the links, shall we? Shot of the day at the Traveler's Championship. Watch this. Bubba Watson approach shot from the rough. Yeah, that went exactly, exactly how he planned it. The ball rolled up and into the cup for an eagle. Watson finished round 4 under par, he's two strokes back of the leader, David (inaudible). That's a look at sports this morning.

The next hour of CNN NEWSROOM starts right now.