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Another Syrian Massacre; Penn State Report; JP Morgan Fallout; Feds Uncover Drug Tunnel at Border; Paterno Expressed Sadness about Sandusky in Last Interview; Ohio Links Teacher Pay to Test Scores; Different Side of Lenny Kravitz

Aired July 13, 2012 - 11:00   ET

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

KYRA PHILLIPS, ANCHOR, "CNN NEWSROOM": And hello, everyone. I'm Kyra Phillips. It's 11:00 on the East Coast, 8:00 on the West and it's Friday the 13th everywhere, just ask JPMorgan Chase.

The nation's biggest bank says those disastrous trades are actually worse than first believed. Almost three times worse.

240-yards long, 55-feet underground, another suspected drug tunnel is out of commission on the U.S.-Mexican border. We'll take you deep inside.

And guys, would you rather be bald or impotent? Propecia and what it may do to your sex life.

We begin, though, with the high cost of trying to outsmart the market. In the case of JPMorgan Chase, it's $5.8 billion and counting. That's how much the nation's biggest bank says it lost so far this year from a complex trading scheme that was supposed to hedge against risk.

The updated figures came in as the CEO Jamie Dimon personally briefed analysts on second quarter earnings which still managed to beat expectations.

We've got team coverage this morning, Alison Kosik live at the New York Stock Exchange to explain how this could impact all of our wallets.

But let's go ahead and start with Felicia Taylor. So, Felicia, you're at JPMorgan Chase headquarters there in New York. We have a healthy bank, or do we have a healthy bank, I guess, judging by the overall earnings?

FELICIA TAYLOR, CNN BUSINESS CORRESPONDENT: Actually, we do. The point is, you know, let's look at the numbers and what we know now as a result of that risky trade.

As you mentioned, a $5.8 billion loss, but nevertheless, the company was still able to absorb those losses and make $5 billion in the second quarter. So when you talk about the health of this bank, there's no question about it. They had earnings that outpaced expectations, $1.21 versus 72 cents a share.

Their commercial lending division is extremely healthy. That was up 24 percent. And the CEO, Jamie Dimon, did say that, you know, while this has shaken the company to its core, he expects the bank to be even stronger after this.

And they have basically said that they are going to end this kind of risky derivatives trade and go back to their primary focus, which is in the equities markets and other less complex kinds of trading.

You know, at least one shareholder, Ken Langone, is still very bullish about the company.

(BEGIN VIDEO CLIP)

KEN LANGONE, FORMER DIRECTOR, NEW YORK STOCK EXCHANGE: If I ever felt good about owning a stock, I feel great owning JPMorgan stock. That's the only reason I came. It is an incredible company, extremely well run, with the highest ethics and integrity. How much better can it be?

(END VIDEO CLIP)

TAYLOR: Jamie Dimon, as I'm told by a number of different analysts that I talked to here on the street as they exited the conference call, he was very apologetic. And you have to admit, I mean, he has come out in front of the problem. He's addressed it. He has taken responsibility for it.

He asked that three people that were in charge of this chief investment office to resign. They're now claiming that they're going to go after claw backs, which means that they can go up to two years of compensation for the individuals.

And evidently, Ina Drew, who was in charge of the office has offered to give ahead of his asking for it. They also are not due any severance kind of pay and no compensation for 2012.

So there is some fallback, in terms of these individuals. We don't know how many other people may be involved and that's still to come. However, there's still about 30 percent of this trading operative that is out there and still to be unwound.

We don't know if there are going to be more operating losses. Some analysts, at least one, says he's expecting to see some kind of a gain, but as Alison is about to tell you, there's no question analysts and investors like what they heard this morning from Jamie Dimon.

Kyra?

PHILLIPS: No more derivative trading, as well, when it comes to bank's business. Felicia, thanks.

Let's go to Wall Street now where investors have apparently decided to let bygones be bygones, as far as Chase stock is concerned. Right, Alison?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yeah, you said it.

PHILLIPS: And you're watching a lot more. I know that. It looks like stocks in general are on the rebound, though, today.

KOSIK: They are. A lot of that has to do with financial shares. Financial shares are boosting the Dow up. You see the Dow up 148 points.

You know, financials had been kind of treading water, waiting to hear what JPMorgan Chase had to say. JPMorgan had its say today and investors liked what they heard. Look at shares of JPMorgan now, up more than 4 percent. Happens to be the biggest gainer of the 30 stocks that are traded on the Dow Industrials.

So, after hearing that JPMorgan fessed up to losing $5.8 billion in risky trades, the big question is why would the stock be up? You know, you can call it a little parity, call it a little consequences. You know, there had been a lot of wide-ranging estimates going into today about just how big this loss will be.

And, yes, that $5.8 billion is triple what was originally thought. And Jamie Dimon even says, you know what? These losses can get a little bigger, much bigger, as the bank continues to unwind these very complex trades.

But the point is, Wall Street at least heard it direct from the source and it' not just speculation now. Dimon is being very open about this. He said, quote, "This has shaken our company to the core." And he says traders involved in these trading losses are no longer with the company.

Now, JPMorgan -- you're wanting to know how this affects your bottom line -- JPMorgan is held at a lot of your everyday investments. In fact, the total dollar value of JPMorgan shares held by mutual funds is more than $50 million. The largest amounts are in three Vanguard funds.

So even with this 16-percent slide in those shares since the loss came out, since we learned about this loss on May 10th, shares are still up about 4.5 percent for the year. So, while you may not be where you were on May 9th before we got the news, you could still be making some money on JPMorgan shares

Kyra?

PHILLIPS: Which is not a bad thing and I think a lot of people don't even realize they've got Chase in their mutual funds because not a lot of people pay attention to what's exactly in there.

KOSIK: Right. I think they will now.

PHILLIPS: They will. They sure will. Alison, thanks so much.

And between early May and this morning, JPMorgan Chase had lost roughly $25 billion in market capitalization.

(COMMERCIAL BREAK)

PHILLIPS: And just a quick note for you if you're heading out the door. You can continue watching CNN from your mobile phone or, if you're heading to work, you can also watch CNN live from a desktop. Just go to CNN.com/TV.

All right, President Obama is spending most of the next few days in Virginia, a state that he carried in 2008, ending a 44-year losing streak for Democratic presidential candidates in the Old Dominion.

He speaks next hour in Virginia Beach, then it's off to Hampton and Roanoke.

CNN's Dan Lothian is at the White House. So, Dan, it's important. Well, Virginia's definitely important to both candidates.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: It is important to both, but you know, particularly for President Obama who, as you pointed out, did win there in 2008, the first time that a Democrat had done that in decades.

It was a narrow victory, so the president trying to hang onto that key, battleground state and you're seeing over the last few months, a real strong pinch from the Obama team to go after military veterans and that's especially important in a state like Virginia that has a big population of military personnel.

So, the president's message, not only today, but tomorrow will be focused on helping the middle class and helping people get into the middle class. You'll also hear the president continue to put pressure on Congress to extend Bush-era tax cuts for the middle class, Kyra.

PHILLIPS: Also, the president has been doing some reflecting on his time in office, actually -- and men don't do this very often, Dan Lothian -- admitting to a mistake?

LOTHIAN: That's right. You admit to a mistake and the opposition will jump on it, but you heard the president in that interview with CBS, talking about some of the challenges of the past three-and-a-half years.

It's not the first time that we've heard the president talk about this. Back in 2010 during one of his backyard events in Seattle, Washington, the president talked about how he was sort of moving very quickly in emergency mode and did not have a chance to properly advertise what his administration was doing.

So that message again now being amplified in this campaign environment. You hear the president talking about the challenges, saying that he needs to do a better job of not only explaining, but also inspiring.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: The mistake of my first couple of years was thinking that this job was just about getting the policy right.

And that's important, but the nature of this office is also to tell a story to the American people that gives them a sense of unity, and purpose, and optimism, especially during tough times.

(END VIDEO CLIP)

LOTHIAN: Now, the president in that interview also said that if elected for a second term, he plans to get out of town more, to meet with the American people, listen to them, have conversations.

But I'll tell you, as pointed out earlier, when you admit that you have any kind of failings, the opposition will jump all over it and that's exactly what Republicans did. Yesterday, shortly after some transcripts from that interview were released, the RNC sending out a statement saying that the decision for voters isn't about can the president tell a good story, but it's, can the president create jobs?

And this sort of plays into the narrative from Republicans that the president has not done a good enough job on turning the economy around, Kyra.

PHILLIPS: Dan Lothian at the White House. Dan, thanks so much.

And, of course, Mitt Romney had something to say about Obama's comments. He actually issued a statement that said, in part, "being president is not about telling stories."

Paul Steinhauser, here with that side of things. So, Paul, did Obama set himself up with that comment?

PAUL STEINHAUSER, CNN POLITICAL EDITOR: Kyra, you know everything Mitt Romney, everything Barack Obama says is going to be scrutinized and rebutted by the other side, no doubt about it.

So, yeah, I guess you could say this was an opportunity for the Romney campaign to quickly respond and they did. They put out a statement from the presumptive GOP nominee, Kyra, just minutes, basically, minutes after that sound aired yesterday.

Here is what Mitt Romney said. "President Obama believes that millions of Americans that lost their homes, their jobs, their livelihood because he failed to tell a good story. Being president is not about telling good stories. Being president is about leading. And President Obama has failed to lead. No wonder Americans are losing faith in his presidency."

There you go, the response from Mitt Romney. And, Kyra, listen, both sides, again, going after every word, parsing every word the other man is saying.

PHILLIPS: Well, everybody is listening to every word, trying to figure out who the v.p. is going to be. Rumors are swirling around. We're still hearing Condoleezza Rice. What's the deal? What do your sources say?

STEINHAUSER: Yeah, well, here's what happened. Late yesterday, a headline, a screaming headline from the Drudge Report, which is a pretty popular and influential website on the conservative side, talked about a new name appearing high up on that list, Condoleezza Rice.

Let's be honest. Condoleezza Rice's name has been bandied about for a long time and there are a lot of good reasons why. She's African- American. She's a woman. She's had a lot of experience, national security adviser, and, of course, secretary of state for George W. Bush in his second term.

But, Kyra, let's do a little reality check here. There's also some things against her. A, when it comes to abortion, an issue that's extremely important to conservatives, especially social conservatives, she has called for abortion rights to an extent and that does not gel with Mitt Romney.

Also, on illegal immigration, she doesn't really match up well with Romney. And she herself on a number of times in a number of interviews, including interviews with Wolf Blitzer, with Candy Crowley and others, Piers Morgan, and said, I'm not interested. It is not going to happen.

She most recently said that in a CBS interview. Take a listen.

(BEGIN VIDEO CLIP)

CONDOLEEZA RICE, FORMER SECRETARY OF STATE: I am saying there's no way that I will do this because it's really not me. I know my strengths and Governor Romney needs to find someone who wants to run with him. There are many people who will do it very, very well and I'll support the ticket.

UNIDENTIFIED MALE: That's a no or it's not going to happen?

RICE: That's it's not going to happen. And no.

(END VIDEO CLIP)

STEINHAUSER: Kyra, the only people who really know who the names are, are Mitt Romney, his wife Ann, and maybe Beth Meyers, his trusted aide who's running the search and they're not talking.

Kyra, one other thing, this whole story from Drudge kind of moved the conversation away from that Bain Capital story over to this and, well, maybe that helped Mitt Romney to a degree.

PHILLIPS: Point well-made. Paul, thanks.

And add Bill Clinton to the chorus of Democrats who say that Mitt Romney should open his finances, specifically his tax returns. On the "Today" show, the 42nd president took issue with Romney's release of just one year of his 1040s.

(BEGIN VIDEO CLIP)

FORMER PRESIDENT BILL CLINTON: This is the first time in, I don't know, more than 30 years, that anybody running for president has only done that. You know, it is typical. I think we all release 10, 11 years. I think Senator McCain released over 20 years of tax returns. That, I think has been -- that struck me as a little odd.

(END VIDEO CLIP)

PHILLIPS: And Mitt Romney says, and I quote, "All the taxes are paid as appropriate, all of them have been reported to the government. There's nothing hidden."

(COMMERCIAL BREAK)

PHILLIPS: A prestigious university shamed. If you didn't get to read parts of the scathing report that was released yesterday, I will tell you no, it leaves the reputation of Penn State legendary football Coach Joe Paterno and top university officials tarnished.

The investigation led by former FBI Director Louis Freeh accuses them of not only covering up Jerry Sandusky's sexual abuse of young boys, but empowering Sandusky to continue the attacks. Also named, the school's board of trustees, accused of not performing their oversight duties.

And today, that board meets at its regularly scheduled meeting, but we still don't know whether or not they'll discuss the report. We can tell you that more criminal charges could be on the way for the failure of the leaders to report what they knew.

Well, what they knew, that is what outraged so many people when you talk about the Penn State scandal, including a number of op-ed writers like Sally Jenkins with "The Washington Post."

Quote, "Joe Paterno was a liar, a cover-up artist, a canny and unfeeling power-broker who put protecting his reputation ahead of protecting children."

And not only are we witnessing a public lashing by many scribes, we're also starting to witness a movement to wipe Paterno's legacy right off campus, starting with the removal of this iconic statue.

Sally Jenkins joining us via phone from Sag Harbor, New York. She's there, working on a book. We will definitely talk about that when you finish up, Sally, in a year, but let's start with your op-ed piece, if you don't mind.

And I remember when you did the interview with Paterno and you talk about this in your op-ed piece. I'm curious, at that time, did you have any gut feeling that he was lying to you?

SALLY JENKINS, SPORTS COLUMNIST, "THE WASHINGTON POST": I had a suspicion that he wasn't being truthful about some things. I also felt that he was truthful about some other things.

You know, my main job in that story was to get Paterno's account of himself on the record, and print it, see if it stood up to scrutiny. And it didn't. The Freeh report flatly contradicts his account of his knowledge or lack of knowledge in 1998 of a police investigation into Jerry Sandusky for molesting two boys in the Penn State football showers. PHILLIPS: What's your sense, Sally? You know, through all the years of writing and interviewing, why do you think he blatantly lied, went on record to so many people and said he didn't know anything?

JENKINS: Well, I think the stakes were very high. I mean, the question of what he knew in 1998 was the critical question and it was the question on which I pressed him the most in our interview, which wasn't lengthy.

But you know, I asked him four different ways in four different shapes and forms, you know, did you know anything about the '98 investigation? If not, why not? How could you not have heard a whisper or a rumor?

And he was adamant that he had no knowledge of it. Joe Paterno's entire account of his behavior around Jerry Sandusky rests on his claim to be ignorant of the 1998 police investigation.

It now turns out that he did know about that investigation and so it makes all of his subsequent actions look very much like a cover-up.

PHILLIPS: So, now there's a growing movement to take the statue of him down, to take it off campus. What are your feelings about that? Do you support that?

JENKINS: Well, you know, one of my feelings is that maybe they ought to leave it up to remind people of how a good man can make such a bad decision.

You know, the stakes were very high for Joe Paterno. In 1998, Penn State had built its reputation as the moral arbitrator of college football. They claimed to do everything that everybody else, to hold the moral high-ground.

And, so, the idea that a child molester occupied the office closest to his, I think Joe Paterno just went into denial. He had a great deal of difficulty admitting that.

That denial is forgivable. What's not forgivable is a sustained lie over a period of 10 years, from 2001 onward, when Joe Paterno knew that not once, but twice Jerry Sandusky had been accused of molesting boys in the Penn State showers and he took no action.

PHILLIPS: Matt Millen, now with ESPN played for Paterno and Sandusky. He came out with this quote, Sally. I want to get your reaction.

He said, quote, "To me, this shows he was fallible. He made a mistake. Is his legacy spoiled? Yes, absolutely, it's spoiled. But there is still a lot of good there."

Sally, is there still a lot of good there?

JENKINS: Well, I think he undeniably graduated players at a higher rate than most of his peers. He was undeniably for many years a wonderful educator of young men. What's baffling is that he failed to see that young boys needed protection to be able to grow into the kind of young men that he claimed to produce. That is what's so confusing.

Yes, he did a lot of wonderful work at Penn State. He was a witty man, a charming man, an intelligent man, and in many ways a moral man, but he failed the single, most important moral test of his life.

PHILLIPS: What outrages you more, the cover-up or the absolute disregard for victims?

JENKINS: Well, they're one and the same. Those two things are the very same thing.

The cover-up was a manifestation of lack of regard for the victims, a central lack of empathy, a central galloping self-absorption that prevented the people at the top echelons at Penn State of recognizing that boys were being harmed in the most profound way.

PHILLIPS: Sally Jenkins, sports columnist from "The Washington Post." Sally, thanks so much for calling in.

Joe Paterno's family did release a statement after yesterday's scathing report. They said, in part, quote, "One great risk in this situation is a replaying of events from the last 15 years or so in a way that makes it look obvious what everyone must have known and should have done.

"The idea that any sane, responsible adult would knowingly cover up for a child predator is impossible to accept. The far more realistic conclusion is that many people didn't fully understand what was happening and underestimated or misinterpreted events.

"Joe Paterno wasn't perfect, he made mistakes and he regretted them. He is still the only leader to step forward and say that, with the benefit of hindsight, he wished he had done more."

(COMMERCIAL BREAK)

PHILLIPS: Well, not a day goes by now that you don't hear about violence in Syria, but activists say what has unfolded in the last 24 hours is bloodshed on an unprecedented scale.

Opposition groups say up to 287 people were slaughtered by government forces, most in the village of Tremseh. If confirmed, this would be a bloody milestone, the most deadly day in Syria since the fighting began 16 months ago.

But President Bashar al-Assad's army says that armed terrorist groups are to blame. And now Syrian protesters are making it clear they're getting tired of diplomatic talks that have gone nowhere and they want Special Envoy Kofi Annan to just get out of their way.

Let's get straight to Mohammed Jamjoom who's following all of the developments for us. So, Mo, what more can you tell us about this massacre. Let's start there. MOHAMMED JAMJOOM: Well, Kyra, the opposition activists we have been speaking with said that yesterday was the deadliest day since the beginning of the uprising in Syria 16 months ago.

As you mentioned, many people saying at least 287 people killed across Syria yesterday and at least 220 in the village Tremseh alone. The activists we're speaking with say that yesterday in that village which is in Hama Province, that for hours, the town was surrounded by Syrian tanks, that it was shelled relentlessly and that after the shelling, the tanks, Syrian security forces and members of militias that are pro-regime in Syria entered that town and started slaughtering families that were trying to escape the violence there.

We have some very disturbing amateur video. We can't authenticate it. But we've seen it posted today. It purports to show scenes of the aftermath. It's very graphic. We must warn viewers.

One of the videos shows bodies in the streets, really gives you some sense of the scale of this atrocity yesterday. Another one of the videos purports to show a man crying over the body of his father who activists say was killed as a result of that massacre yesterday. It's really, really horrific stuff, very, very difficult to watch.

Now, Kyra, for its part, the Syrian government continues to blame the violence in Syria on armed terrorist groups. Not a surprise. They have been using that line since the beginning of the uprising.

The Syrian government says that yesterday they received distress calls from that town and that they went there. They responded because there were terrorist groups there. They started clashing with those terrorists and they that 50 people died as a result of those clashes.

Kyra?

PHILLIPS: Now, there's these protests wanting to get rid of Kofi Annan. What is the deal there? And why are they so fed up with him?

JAMJOOM: Well, it's interesting, Kyra, because today we've heard many opposition activists saying that what they're calling for across Syria are protests. And we are seeing evidence of those protests, a lot of videos purporting to show protests across the country where people are expressing outrage at Kofi Annan.

Now, the people in Syria are very upset about this massacre. Many marching in solidarity with the people of Tremseh, where they say the massacre happened. But this outrage is also being expressed at Kofi Annan. Why? Because the Syria opposition says, ever since the U.N. observers got in there and since Kofi Annan became the special envoy to Syria, sort of talking with the Syria government, they say not only has violence not ceased, but it has gotten worse. That's the problem. That's why they're upset. They call for the removal of Kofi Annan as the special envoy to Syria. They want to see the international community step in, make things better there -- Kyra?

PHILLIPS: Mohammed, thanks so much. Ambassadors at the U.N. Security Council will resume talks today on Syria and remain at odds over sanctions and military intervention. Meanwhile, Kofi Annan plans to meet with Russia's foreign minister in Moscow on Monday.

New satellite images of North Korea are ringing some alarm bells among intelligence analysts now. These photos actually show increased construction activity at a nuclear facility near the capital of Pyongyang. North Korea claims this light-water reactor is intended to help solve domestic energy shortages. But Western analysts say it is also part of an effort to build nukes. Pyongyang had agreed to suspend nuclear activity in return for shipment of food from the U.S. but carried out a failed long-range rocket launch in April despite that.

It's a favorite way Mexican drug cartels use to get stash into the U.S. -- tunnels. The feds discovered another. This one 240 yards long, running 55 feet underneath the Mexican/Arizona border.

Casey Wian has more.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT: This is the way agents first discovered this tunnel a few days ago, under this giant container of water. Over here, you can still see 55-gallon drums that contain the dirt that was dug out of this tunnel, stretching 240 yards across the U.S.-Mexico border.

UNIDENTIFIED FEDERAL AGENT: This is the most sophisticated one I've seen in Arizona.

WIAN: What makes it that?

UNIDENTIFIED FEDERAL AGENT: Because of the way that it is designed. It's not -- most of the tunnels we have in Arizona, those are digging through dirt to get to the sewer system, using that sewer system, punching out again. This one, when you look down the hole, you're going to see, it is completely 4 x 6 all the way, plywood all the way around it, rebar in there, reinforced.

WIAN (voice-over): The tunnel is so narrow and so deep, CNN photojournalist, John Torigoe, and his camera need to descend separately.

JOHN TORIGOE, CNN PHOTOJOURNALIST: Clear the shaft.

UNIDENTIFIED MALE: Clearing the shaft.

UNIDENTIFIED MALE: OK.

WIAN: Each with the help of a harness.

TORIGOE: It gets even smaller.

UNIDENTIFIED FEDERAL AGENT: It gets smaller towards Mexico, yes. We'll have to crawl, if you were to go a whole lot further.

TORIGOE (ph): There's no dirt in here, it is very clean. And there's light, electricity, and a fan even.

WIAN: U.S. authorities found 156 cross-border tunnels since the early 1990s. Lately, they have become more sophisticated as drug detection technology above ground improves.

(on camera): Agents had this area under surveillance since January. When the tunnel was actually discovered, Arizona public safety officers pulled over a pickup truck on the highway north of here, discovered 39 pounds of methamphetamine. After interviewing the occupants of the truck, they linked it to this facility. And they now have three suspects in custody.

Casey Wian, CNN, San Luis, Arizona.

(END VIDEOTAPE)

PHILLIPS: The DEA says no drugs were found in the ice plant on the building on the U.S. side, just bags and barrels of dirt. For more information on the war against drugs, go to FBI.gov.

(COMMERCIAL BREAK)

PHILLIPS: Well, if you take a look at your thinning hair, thinking about popping a pill, you're going to want to hear this next story. It is a popular drug that's taken by millions of men to fight baldness. It could be causing now some major sexual side effects, even after you stop taking the pill.

CNN senior medical correspondent, Elizabeth Cohen, here to give us more details on Propecia.

What exactly -- how did this come about, and what exactly is the research telling us now?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: This is a doctor at George Washington who wonders could this be causing side effects because there's lots of talk about it.

PHILLIPS: There's warnings already, right, when you take this, that it could cause sexual side effects.

COHEN: There's warnings some men experienced certain sexual side effects. We will get to those in a minute.

PHILLIPS: OK.

COHEN: Let's talk about the study, because it is interesting. It is a small study. It's 54 people, that small, and it's not a random sample of men. Millions have taken Propecia. What this doctor did is he got most of the study subjects from a web site where men go that are having problems. This is a web site you go to if having sexual problems, you think, because of a result of Propecia. They found 90 percent of the 54 men had sexual problems as a result of taking -- or felt they had sexual problems as a result of taking Propecia, and they lasted after they stopped taking the drug.

Merck, we talked to them. They make Propecia. They say there are some red flags here. This is not a random sample. These were men having problems already.

PHILLIPS: Already. OK.

COHEN: These are men who say they were taking Propecia and afterwards they had problems. It wasn't a random sample of millions of people that took it.

PHILLIPS: OK.

COHEN: Merck says, "A causal relationship between the use of Propecia and continued sexual dysfunction after discontinuation of treatment has not been established."

In other words, the researchers didn't look at a thousand men taking it to see what percentage had sexual side effects. They looked at men that say they were already having sexual side effects from Propecia.

PHILLIPS: Bottom line then, if there's a man thinking about taking it now, what's the recommendation and is it a risk and, you know, should they be worried about sexual side effects?

COHEN: You should be an empowered patient and think it through. First of all, you should know it works on testosterone. That's the way it works. The FDA has talked with Merck. Merck put a label on it that talks about certain sexual side effects.

Let's look at what they talk about on the label. It talks about how to recognize erectile dysfunction, libido disorders, ejaculation disorders, orgasm disorders. It doesn't say Propecia causes it, but it does say some men complained of those things. That's important to know.

Men should think about this. You have thinning hair. Do you want to take a drug that might possibly do that? Go to the doctor, maybe there's another drug. Maybe you want to put up with thinning hair. It is an unusual side effect, but it could happen to you.

PHILLIPS: Elizabeth, thanks.

COHEN: Thanks.

PHILLIPS: It's important to note to speak with your doctor, as Elizabeth mentioned, before stopping or starting any drug.

(COMMERCIAL BREAK)

PHILLIPS: Just a few minutes ago, I talked with Sally Jenkins from "The Washington Post." She's a sports columnist. She had the last interview with Joe Paterno before he died. We just received video from that interview. The legendary football coach talks about how he felt when he first heard about the allegations that Jerry Sandusky was sexually abusing young boys. Take a listen. (BEGIN VIDEO CLIP)

JOE PATERNO, FORMER FOOTBALL COACH, PENN STATE: I was shocked and saddened when I heard about Jerry Sandusky. I mean, shocked and saddened because nobody had any inkling.

SALLY JENKINS, REPORTER, THE WASHINGTON POST: How does something like that happen, do you think? How does someone hide in plain sight that way?

PATERNO: I wish I knew. I had never had to deal with something like that. I --

(END VIDEO CLIP)

PHILLIPS: Again, that was Joe Paterno speaking with "The Washington Post's" Sally Jenkins in the last interview before his death, and the last interview before the release of former FBI head, Louis Freeh, and his scathing report showing Paterno did know about Jerry Sandusky abusing young boys.

When I say "pageant," you think beautiful women strutting the stage, perfect from head to toe. Right now, contestants are gearing up to compete in the Miss Florida Pageant tomorrow. One contestant is breaking ground, not because she's perfect, but has imperfect vision.

John Zarrella introduces us to Miss Florida USA's first legally blind contestant.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Just to see where to sign her name, Connor Boss must hold her face inches from the sign-in sheet. You see, Connor is legally blind.

(on camera): We're four feet apart, you can't see me.

CONNOR BOSS, PAGEANT CONTESTANT: No. It affects my retina, my central vision. My peripheral vision is intact.

ZARRELLA: At six months old, she developed over her left eye what's called amangiona (ph), a build up of blood vessels. Surgery took care of that. But within a few years, she was diagnosed with stargarts (ph), a rare disease, and one had nothing to do with the other, just plain bad luck.

BOSS: I fell going down the steps of the Lincoln Memorial, believe it or not, but you know, I managed.

ZARRELLA: Stargarts (ph), a gradual worsening of sight into blindness is incurable. But Connor also has a thirst to overcome the disability. She was in gymnastics until --

UNIDENTIFIED FEMALE: Then, when she had to do vaults, she ran into the vaults one time. ZARRELLA: While Connor can barely see, her vision of the future is clear. She's the first legally blind woman to sign up to compete in Miss Florida USA Pageant. The winner goes to nationals.

Her journey here began just a couple years ago when she was 16. On a whim, she entered a local teen pageant and won.

(on camera): Which is the first one you won.

BOSS: That bad boy.

ZARRELLA: What is that?

BOSS: Harvest queen.

ZARRELLA (voice-over): Conner says each new success, each crown helps build in here a confidence and self esteem that was lacking. Each new success led her here.

JESSICA SANTIAGO, PAGEANT CONTESTANT: What makes her special is her drive. She's admirable. She doesn't give up.

ZARRELLA: Pageant officials say, other than helping Connor get to marks on the stage, she's treated like all the other young women, and she never plays to her disability.

GRANT GRAVITT, EXECUTIVE PRODUCER, MISS FLORIDA USA PAGEANT: She's the last one who will tell you this, she'd prefer you not know. More importantly, it is not what I can't do, it is what I can do.

BOSS: I have come to learn it is not about winning the pageant, it is about I am so glad my story could be shared, and that -- at least I can inspire one person. And if I can inspire one person, I feel like I've won.

ZARRELLA: Perhaps what's most refreshing, Connor doesn't take herself too seriously.

(on camera): What's going through your mind right now? What are you thinking right now?

CONNOR: Dinner.

ZARRELLA (voice-over): Of course.

John Zarrella, CNN, Hollywood, Florida.

(END VIDEOTAPE)

PHILLIPS: Despite being legally blind, Connor ran track in high school and graduated with over a 4.0 GPA.

(COMMERCIAL BREAK)

PHILLIPS: What do you think? How should school teachers be evaluated, even paid? Graduation rates, writing skills, parent satisfaction? There's a new law just passed in Ohio where test scores will actually decide how much a teacher gets paid.

Carl Azuz is joining me now to talk about how this system will work.

We should point out, this is your beat. This is the show you do in schools across the country. Good to see you in the news cast.

First, what's the reaction to this, and how exactly would this work?

CARL AZUZ, CNN STUDENT NEWS ANCHOR: Ohio used to be like other states, in which an outside observer would come in, take a look at that the teacher was doing in the classroom and then rate that teacher depending on what the observer saw. In Ohio, this is what's changing. Teachers will be graded and half the grade will be determined by how well students perform on tests. Test scores will be a major factor. The grades will be used to determine who gets promoted, who gets paid what, who gets fired.

One of the things you see on the graph, seniority will take a back seat. What that means is all but the top-performing teachers in the state are going to be evaluated annually.

PHILLIPS: When schools do well with test scores, they get more money.

AZUZ: Yes.

PHILLIPS: So is this -- there has to be controversy surrounding this. Just because you have good test scores doesn't necessarily mean your student is learning and doing well and getting a good education.

AZUZ: That's where the criticism comes in. Ohio does receive Race to the Top funds from the federal government. The federal government does want Ohio, as all states that receive those funds, to show constant improvement for students shown by those test scores. A lot of controversy with test scores. Critics say it encourages teaching to the test, that it ignores other types of learning.

Take a listen to what teachers are saying about this. We have a couple comments, one from a teacher saying this is fine as long as athletes are ultimately paid based on the final scores of games. "As long as dentists or doctor salaries are determined by patient health."

(LAUGHTER)

Another teacher talking to us, saying this law -- and this is a teacher who taught at two different schools with different students but had different results. She said, "This would basically mean she would never go back to teach the students who didn't perform as well." That is where the heart of the concerns of critics lie, Kyra, because they're saying, in poor areas, whether urban or rural, you might have students concerned about where the next meal is coming from and they need good teachers, but if they're not focused on tests for any one of a number of reasons -- they might not have parental support either -- those students on focused on tests, those teachers are not going to get promoted. They're not going to get -- they might lose their jobs.

PHILLIPS: Could go into effect year? AZUZ: 2013 school year, yes.

PHILLIPS: Could be a little tweaking to the law.

AZUZ: Absolutely.

PHILLIPS: You will follow up and let us know what happens.

AZUZ: Will do.

PHILLIPS: Carl, thanks.

Read more about this story at CNN.com/education.

Well, this next man grew up dreaming of a better future for his hometown slum in South Africa. When that dream never became a reality, he decided to change things himself. Meet this week's "CNN Hero."

(BEGIN VIDEOTAPE)

THULANI MADONDO, COMMUNITY CRUSADER & CNN HERO: Since apartheid time, Kliptown has not changed. There is no electricity. People are living in shacks.

Growing up in Kliptown makes you feel like you don't have control over your life. Many children drop out of school because they don't have school uniforms and text books. I realized the only way that Kliptown could change was through education.

I'm Thulani Madondo. I'm helping educate the children so that we can change the town together.

UNIDENTIFIED TEACHER: (INAUDIBLE).

UNIDENTIFIED STUDENT: (INAUDIBLE).

MADONDO: We help the children by paying for their school books, school uniforms. Our main focus is our tutoring program that we run four days a week.

As young people here who are born and raised here, we know the challenges of this community.

We also do a number of activities.

(SHOUTING)

MADONDO: We've got to come together for fun and also come together for academics.

UNIDENTIFIED MALE: This program gave me a chance to go to university and paid for my fees. That's why I came back to help out here. A little can go a long way.

MADONDO: What subjects you need? Math and science and English. (SHOUTING)

MADONDO: I did not go to university but whenever I help them, I feel excited.

UNIDENTIFIED STUDENT: I am going to be an accountant.

UNIDENTIFIED STUDENT: I am going to be a lawyer.

UNIDENTIFIED STUDENT: I am going to be a nurse.

MADONDO: The work we're doing here is bringing change.

(END VIDEOTAPE)

PHILLIPS: Don't forget we're always looking for people making a difference. If you have someone in mind, nominate them today. Tell us their story. Go to CNNheroes.com.

(COMMERCIAL BREAK)

PHILLIPS: You know him for songs, and Grammys. There is a side of Lenny Kravitz you wouldn't have seen coming. Alina Cho takes us through the rock star's house in Paris and see another one of his passions -- interior design.

(BEGIN VIDEOTAPE)

(SINGING)

ALINA CHO, CNN CORRESPONDENT (voice-over): Lenny Kravitz -- rock star --

(SINGING)

CHO: -- actor --

LENNY KRAVITZ, SINGER & ACTOR: I'm here to help you in any way that I can.

CHO: -- interior designer? Why not?

KRAVITZ: I was always into my environment. You know, even when I was a little kid.

CHO: I sat down with Kravitz at his palatial Paris home, a place he has called home for seven years.

KRAVITZ: There you go.

CHO: The four story mansion is filled with all of his favorite things -- art by Warhol, a Lucite piano, his four Grammys, photos of his late mother, actress, Roxie Roper, and the couch and chandelier he designed.

KRAVITZ: It always made me feel good. It made the music sound better. You know, the lighting was right. Everything was good. It just goes hand in hand with everything that I do creatively.

CHO: In 2003, he founded Kravitz Design, a residential, commercial, and product design company with a real office in New York with real workers and real projects.

KRAVITZ: The same way I make my music, the same philosophy. I'm very detail oriented. If you put me in a room that's perfect, except for one flaw, my eye goes right to the flaw. Kind of a sickness, my attention to detail. But that's the way I am.

CHO: He's designed condos and hotel suites in Miami, wall paper and these chairs.

(on camera): Does one help the other?

KRAVITZ: Yes. When I'm doing music, I need a break from music. Doesn't mean I want to stop being creative.

CHO: How do you keep it all straight? Talking about tile designs in between gigs?

KRAVITZ: Absolutely. Absolutely. If we have to.

CHO (voice-over): And this is just the beginning.

KRAVITZ: The plan is to make it a lifestyle brand. That's been my dream for this company in the same way you would see Ralph Lauren. When people say they enjoy something or something gives them pleasure, the music, a couch, whatever it may be, it's just a great thing to be able to share something with other people.

(SINGING)

CHO: Alina Cho, CNN, Paris.

(END VIDEOTAPE)

PHILLIPS: The top names in the fashion industry are in Paris for fashion week, showcasing their latest designs. You'll hear more from top designers and get an exclusive "Back Stage Pass" from Paris with Alina Cho Saturday, 2:30 p.m. eastern.

Thanks for watching. You can continue the conversation with me on Twitter, @KyraCNN, or on Facebook.

NEWSROOM INTERNATIONAL starts right now.