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Edging Closer to War; Israel Bombarding Gaza; Israeli Troops Massing Along Border; Going Over the Fiscal Cliff; Legal Fallout From Petraeus Scandal; High Court To Review Voting Rights Act; Long Island Residents Sue Utilities; Beyonce Faces $100M Video Game Suit; How To Pay For College

Aired November 17, 2012 - 12:00   ET


GARY TUCHMAN, CNN ANCHOR: The sense of urgency is growing by the hour along the Israel-Gaza border. Hamas militants and Israeli forces are hammering targets deep inside enemy territory as we speak, inflicting damage, casualties and sparking panic.

Air sirens wailed for a third straight day in the largest city in Israel, Tel Aviv after Hamas fired a rocket toward the sea side city. The rocket was intercepted. Israeli soldiers backed up by tanks and armored vehicles are going to the border raising the specter of a possible ground war.

All 30,000 troops mobilized and 70,000 more on standby. And this is in a nation of 8 million people. As the situation escalates, so does the death toll. The attacks have left three people dead in Israel, 40 dead in Gaza, nine of those killed just today.

Now our senior international correspondent Sara Sidner has been in the middle of all the action in Gaza city. She's been doing an exemplary job. Sara, thanks for joining us. What's happening there right now?

SARA SIDNER, CNN SENIOR INTERNATIONAL CORRESPONDENT: Thank you, Gary. Yes, we can hear right now drones over Gaza. And that sound, it sounds very much like a lawnmower. It's been going on for hours and hours and hours.

We know a lot about drones because Israel uses them quite often. We know that they can stay up in the air. They're unmanned, obviously, for more than 20 hours depending on the payload. So if they're just looking for targets, they can be in the air all night long and all day long.

Usually after the sound of drones, you start hearing the sound of planes flying and then the sounds of bombs dropping. And the result is usually a massive damage to buildings, a big plume of black smoke.

I want to talk a little bit about we were talking about the rockets coming from here. We have seen several very close to us actually. We're in the center of Gaza City. You know this is very densely populated place.

One of the things that Israel complains about is, look, we're trying to hit very specific targets. But they're blasting the rockets off from populated areas. So when they return fire, when they look and try to find those rocket launchers and they hit those areas, oftentimes civilians happen to be in that area as well.

Hamas has a very different story saying that they believe they're civilians are also along with the members of Hamas and other militant groups. It doesn't really matter who is right or wrong. For the civilians, it feels like war here. It's dangerous situation.

Nobody is really out on the streets. Only a few people trying to get a few things done like getting groceries. But most of the stores are shut. People are in their homes.

People are mourning the 40 people who died and trying to deal with what really does feel like a full scale war and very worried about the fact there are so many soldiers on the Israeli border waiting to possibly come in and start a ground war -- Gary.

TUCHMAN: Sara, it stands to reason that things will get worse at night. It's become night in the last hour there in the Middle East. Is that what you're anticipating right now?

SIDNER: Yes. I mean last night my partner and I went back to our hotel and after a few minutes, I mean, it was just raining down the sounds of bombs were rattling the windows. You know, we tend to take cover when this happens.

We -- there are big windows in that hotel. We try to get away from the windows and that's what most residents do when they hear the sounds. In Israel, they have the sound of sirens.

We've been seeing pictures and I've been talking to people there as well who have been hunkering down, grabbing their kids and trying to get under desks and those sorts of things.

Here, there are no sirens. The thing that makes everyone nervous is the sound of the drones and the sound of the planes. As soon as they hear the planes, a lot of people will look up and they know that next there will be the sound of a loud bang or a boom. They are just hoping it's not in their neighborhood -- Gary.

TUCHMAN: Sara, take care of yourself and your crew. We look forward talking with you later. That's Sara Sidner reporting from Gaza.

Now protesters are taking to the streets in Arab countries to show solidarity of the Palestinians in Gaza. Tens of thousands of demonstrators filled the streets of Egypt's capital city, Cairo, to show their support for the Palestinians.

Egypt's relations with Hamas have now strengthened with the new administration in that country. Protesters in Turkey set an Israeli flag and photo of Israeli Prime Minister Benjamin Netanyahu ablaze during a demonstration last night.

Let's go now to the Israeli side of the border as we've been reporting Israeli tanks and troops have been taking up position there's. CNN's Frederik Pleitgen joins us live from the border. Fred, thanks for joining us. What you are seeing in the terms of military activity where you are?

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Hi, Gary. Well, there is a lot of military activity on this side of the border as well. Of course, a lot of it has to do with the big military build up that's going on here.

If you look at the roads around the area of Gaza, a lot of them have been blocked off. They're not accessible anymore to normal people that want go to go through there because they have been declared into a military operation zone.

The other thing that you're seeing here is you're seeing a lot of military hardware on the road, usually on the back of trucks. We have seen a lot of tanks being delivered here, a lot of armored personnel carriers, a lot of armored bulldozers as well.

What's going on is that all this hardware is being brought to collection area as well as a lot of the soldiers being brought into this area. We've been saying in the past couple days that the Israelis have also mobilized a massive amount of reservists as well, tens of thousands who are now heading to this area as well.

So certainly you can see how this military build up is happening. At the same time, the Israeli government is telling us that a decision hasn't been made if there is going to be a ground invasion.

However, they do say that it is a very real possibility if the air strikes that they're conducting, that Sara was just talking about, does not achieve the objective they want to obtain.

Of course, the object is quite simple. What they want to do is they want to stop rockets coming out of Gaza and threatening civilians here in Israel -- Gary.

TUCHMAN: Fred, one quick question for you, compared to last night, for example, when you were standing there, does it feel to you, your sense that it's more likely a ground invasion will happen?

PLEITGEN: That's a very good question. One of the things that seems clear is the more troops build up here, it seems as though an offensive is something that could be more likely.

But it really is up to the fact whether or not the Israelis are going to be able to achieve what they want to achieve through the air campaign that's going on right now.

There are still several different steps of escalation that could come before a ground offense. There could be an expanded areal campaign, for instance. There could be more air attacks as well.

Perhaps there could be a political solution as well. Who knows? It does not look as though that's going to happen right now. It doesn't look as though either side is backing down or either side is willing to take its foot off the gas.

And one of the things that is definitely clear, as long as militants in Gaza are able to launch rockets at places like Tel Aviv, and we just said there was an air alarm in Tel Aviv today.

There was a rocket that was intercepted, as long as that's going on, the Israelis are not going to end their campaign -- Gary.

TUCHMAN: Frederik Pleitgen reporting live on the southern part of the nation of Israel.

Our international desk is keeping track of all the developments in Israel and Gaza as they happen. Nick Valencia is in the newsroom right. Nick, what is the latest information you're hearing?

NICK VALENCIA, CNN CORRESPONDENT: Good afternoon, Gary. Not only are we in Gaza and not only are we in Israel, but we're also monitoring the situation in Gaza and Israel from here in Atlanta.

I want to bring you here to our international desk. This is a specialized desk that we created today just for our viewers. This is where the latest editorial information comes through. This is the pipeline where it all happens.

I want to bring in Yousuf Basil. He's been looking and monitoring the latest video that we have. Tell me what you're looking at here. What you're watching.

YOUSUF BASIL, INTERNATIONAL DESK EDITOR: What we watch is different TV channels, Arab speaking TV channels. We're looking for news and we're looking for updates that -- and then we try to verify this with our teams on the ground.

So we have here, for example, the Hamas TV channel, which is located in Gaza. And now they are broadcasting live pictures of the meeting of the Arab league in Cairo.

VALENCIA: Those are Arab nation foreign ministers convening for an emergency meeting in Cairo, Egypt right now. They're closely monitoring what is happening in Gaza and Israel. You showed me video a little while ago that IDF put on their official YouTube account. Why don't you take us through and show us what happened?

BASIL: Yes, IDF has been very active in trying to put out on the internet updates on the operations that are in Gaza. They just posted this video about an hour ago. It's for one of the strikes on what they claim to be a house of the commander of Hamas brigade. And you can see the video here.

VALENCIA: You see that bomb going in and taking out the target. Now, IDF and Hamas have both been very active in updating us and both very media savvy.

We're monitoring all the latest information as it comes in to us. When we get more information, Gary, as news breaks, we'll break it for you. That's the latest now from the international desk -- Gary. TUCHMAN: Nick and Yousuf, thank you both very much.

So will Israel take this conflict one step further and launch a ground invasion of Gaza? I'll talk to an Israeli government spokesman.

And what would do you if you were at the edge of the cliff? America is at a $7 trillion cliff.


TUCHMAN: Right now, President Obama is on his way to Thailand. It's the first stop of the three nation tour of Asia. Tomorrow, the president is scheduled to meet with Taiwan's king, prime minister and the U.S. Embassy staff in Bangkok.

Then he is on to Myanmar, a country no U.S. president has ever visited before. After holding talks to Myanmar, Mr. Obama will head to Cambodia for the East Asia Summit.

Come New Year's day, America could face a $7 trillion nightmare. A series of tax increases and major spending cuts will go into effect unless the White House and Capitol Hill reach a deal.

CNN's political editor Paul Steinhauser has been gauging what the public has been saying about the fiscal cliff -- Paul.

PAUL STEINHAUSER, CNN POLITICAL EDITOR: Hi, Gary. The clock is ticking on any deal to avoid falling off the fiscal cliff.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I think we are all that we have some urgent business to do.


STEINHAUSER: The president, as he sat down at the White House Friday with top congressional leaders from both parties. Americans agree more than eight in 10 questions at a "USA Today"/Gallup poll, says it is extremely or very important for the president and Congress to reach a deal.


PRESIDENT OBAMA: Our challenge is to make sure that, you know, we are able to cooperate together.

REPRESENTATIVE JOHN BOEHNER (R), HOUSE SPEAKER: And I believe we can do this and avert the fiscal cliff that's right in front of us today.


STEINHAUSER: And that's what most people want. Nearly seven in 10 say Democrats and Republicans should vote equally compromise to prevent massive spending cuts and tax hikes from beginning to kick in at the beginning of the year. So what do they want in any deal? Well, 45 percent say it should be about half spending cuts and half tax increases, with about four in 10 saying it should be mostly or only spending cuts.

And according to exit polls from election night, nearly half of voters said raising taxes on the wealthiest Americans was OK. Taxes may be the biggest sticking point in reaching a deal.


PRESIDENT OBAMA: What I'm not going to do is to extend Bush tax cuts for the wealthiest 2 percent that we can't afford and according to economists will have the least positive impact on our economy.

SENATOR MITCH MCCONNELL (R), MINORITY LEADER: We're in the dilemma we're in not because we tax too little, but because we spend too much.


STEINHAUSER: And that may be why about half of those questioned in a Pew poll say Congress will fail to hammer out an agreement and if there's no deal, who gets the blame? Well, according to that Pew poll, more than half say fingers will be pointed at congressional Republicans with about one in three saying it will be the president's fault -- Gary.

TUCHMAN: Thank you very much.

The ex-CIA director sex scandal, what kind of legal fallout, if any, could David Petraeus and the others involve face? Our legal guys are on the case. They'll be here and they'll weigh in.


TUCHMAN: Each week we're shining a spotlight on the top ten "CNN Heroes" of 2012 as you vote for the one that inspires you the most at

This week's honoree is from Nepal where innocent children can be forced to live in prison with their incarcerated parents. A woman has made it her life mission to make sure that no child grows up behind bars.


PUSHPA BASNET, CHAMPIONING CHILDREN: Nepal, girls are arrested by the police and the children don't have local guardian. Some children go to prison with the parents.

The first time I visited the jail, I was sorting my social work. I saw a small girl who grabbed me and she gave me a smile. It was really hard for me to forget that.

My name is Pushpa Basnet and my mission is to make sure no child grows up behind prison walls. In 2005, I started a daycare where the children can come out of the jail in morning and go back to the jail in the afternoon.

We have children who are from 2 to 4. They have coloring, reading, starting five days a week. We started in 2007. Currently, we have 40 children living here. Mostly 6 years old. I don't get a day off.

I never get tired. The children all come me nanny. It's a big family with lots and lots of love. When I started this organization, I was 21 years old. People thought I was crazy.

But this is what I wanted in my life. And I'm giving them what a normal child should have and I want to fulfill all their dreams.


TUCHMAN: Pushpa is just one of our top ten honourees. One of whom will become "CNN Hero of the Year." We're very proud of the program and receive $250,000 to win it. Who will it be? It's you who decides. Go to online and on your mobile device. You can vote up to ten times a day every day for the most inspirational hero.


TUCHMAN: Sex, lies, e-mails from the ex-CIA director. Sounds like a movie. The fallout from the David Petraeus scandal is real and it's widespread. But what kinds of legal issues if any could some of the players involve face?

Let's bring in our legal guys to know the answer, Avery Friedman, a civil rights attorney and law professor is in Cleveland, Ohio. Richard Herman, a New York criminal attorney and law professor joins us from Las Vegas, Nevada.

Gentlemen, thank you very much for joining us. It's nice to see you.

Now, the David Petraeus scandal legal fallout. Let's talk about the national security breaches? Let me ask you first, Avery, do you see breaches and do you see laws broken?

AVERY FRIEDMAN, CIVIL RIGHTS ATTORNEY: Well, I don't see breaches. I think what we've seen up to this point is some level of clearance on the issue both in terms of Petraeus' appearance and explanations from the CIA.

But the legal issue is bound here both from the standpoint of marital issues in, terms of the fact that Petraeus, believe it or not, submitted an evidentiary statement in a child custody case involving Jill Kelley's sister.

And then you have the cyber cat fight. So there are a multitude of issues, but at the end of the day, David Petraeus, I think, walks free.

TUCHMAN: Richard, what about Paula Broadwell? I mean, she says she has classified information. How did she get that? Could there be a crime there? RICHARD HERMAN, CRIMINAL DEFENSE ATTORNEY: Well, she says she has classified information, but she did not get it from General Petraeus who, by the way, is one of the most decorated generals of our lifetime.

In any event, Gary, Avery, she is a socialite hanging out with generals. Who are these socialites? Isn't Paris Hilton a socialite and these others? What is going on here? Are we insane at this point? Who are -- who is Broadwell?

How does she get classified information? Who approved that? That's what we should be addressing whether or not Petraeus passed along classified information, that's the issue. He says no. She says she didn't get it from him. How are they going to prove he delivered it to her if there is any? I don't think so.

I agree with Avery. Petraeus, other than the humiliation he's feeling and the issue with his wife, he's going to walk away.

TUCHMAN: Richard, these are broad philosophical issues. Are we insane here? I don't consider myself insane. I'm getting there.

HERMAN: Right.

TUCHMAN: I do know that. Now, Avery, let me ask you is there an issue of cyber stalking between Paula Broadwell and Jill Kelley?

FRIEDMAN: Well, yes, it's a cyber stalking cat fight is what this case is about. I think to the extent that David Petraeus has had communications -- he's a potential witness. Let me tell you something.

He has Bob Bennett as his lawyer. There is nobody better in Washington. He didn't hire Bob for the fun of it. This is a real thing. When you start hanging out with Kardashian type women that's what this looks like, well educated ones, this is a problem.

There is a practical reality and that is the cyberspace battle is going to continue on. I think David unfortunately is smack in the middle of it.

TUCHMAN: Finally ask you, Richard, the general admitted the affair is a violation of the uniform code of military justice. So what could happen?

HERMAN: Well, look, he stepped down. When it was uncovered, he immediately resigned. It does not rise to the level of a court- martial. Don't even go there. Really, Gary, nothing is really going come of this with Petraeus.

Look at our history. Look at our leaders. Look at what is going on in the world. This is not a party like Berlusconi in Italy. So come on, nothing is going to happen to General Petraeus.

TUCHMAN: Now let's go to from bonga bonga parties to different issue, voting rights -- the Supreme Court, gentlemen, is going to review the constitutionality of the voting rights act of 1965. It is a complicated legacy from the Civil Rights Movement, but it still exists.

The case concerns so-called Section Five of the law requires many state and local governments mostly in the south to obtain permission from the Justice Department before making changes that affect voting. It applies to nine states, Alabama, Alaska, Georgia, Louisiana, Mississippi, South Carolina, Texas, and Virginia.

Do you think the voting rights act should stay? A lot of people say we have the black president of the United States. Therefore, it doesn't necessarily need to stay -- Avery.

FRIEDMAN: Well, you know what? The fact we have a black president, I think that is absolutely nothing. If you think that slavery was outlawed and voting rights were -- became part of the constitution in the 1870s, it took Congress 95 years to pass a law, the voting rights act of 1965.

The congressional record shows that Section Five, that free clearance by the Department of Justice is still necessary. We have elements on the Supreme Court that don't understand that. And it's up to the Department of Justice and the friends of the court to make this majority of the Supreme Court understand that Section 5, free clearance, has to stay.

TUCHMAN: Richard, the final question goes to you. By the way, the U.S. Supreme Court's ruling expected by June, do you agree with Avery?

HERMAN: I agree with Avery. Listen, this voting rights act came about in 1965 at the height of the civil rights movement in the United States. It's important. All it says is that in these southern states, which have exhibited issues of prejudice when it comes to voting, they cannot change their voting laws without federal approval.

I know they don't like big brother looking over them. But you know, it has to be done at this point. Look what happened in this election and some of the states. Look, it's not that much of a burden imposed upon the states. I think the Supreme Court is going to continue it.

TUCHMAN: Avery Friedman and Richard Herman --

FRIEDMAN: Three federal appeals case said that the department of justice was right. That gives you a pretty good idea how important it is.

TUCHMAN: It is an important topic. We should mention that both of you gentlemen will be back for part two of our bunga-bunga party in a few minutes to talk about pop superstar, Beyonce, who is facing a $100 million lawsuit by a video game developer.

Meanwhile, stories trending right now on, two people still missing following an explosion on an oil platform. Yesterday's blast off Louisiana coast did not cause a major spill. It's very important to point out. The cause is under investigation. Possible legal trouble for the Florida socialite embroiled in the David Petraeus scandal. A New York businessman says Jill Kelley asked him for an $80 million commission to win a South Korean business contract so far no comment from Kelley's spokesman about that.

It's an end of an era. It's a sad day for Twinkie lovers. We've been talking about this the last two days. Hostess brand is seeking to close up shop blaming a strike by the Twinkie bakers. But don't worry Hostess is sure to find a buyer for the iconic treat. See these and other stories trending on

The escalating conflict in the Middle East, I'm getting ready to talk to an Israeli government spokesman. I'm going to ask him what it would take to trigger an all out ground war in Gaza city.


TUCHMAN: The situation along the Israel-Gaza border continues to deteriorate as night falls in the Middle East. Israel aiming its rockets at the Hamas headquarters, Israeli soldiers backed by tanks and armored vehicles are massing near the Gaza City border.

In all, 30,000 troops have been mobilized, 75,000 more Israeli troops are on standby. Palestinian militants are firing the rockets deep into Israel, targeting Jerusalem and the largest city in the nation, Tel Aviv.

Mark Regev, is a spokesman for the Israeli government. Mr. Regev, thank you very much for joining us. Tell us at this point what will it be that justifies Israeli ground troops entering the Gaza strip?

MARK REGEV, ISRAELI GOVERNMENT SPOKESMAN: Listen, we've had to do this because the terrorists in Gaza have been shooting rockets at our people. And they haven't been doing this not for a day, not for a week, they've been doing it for months if not longer.

You have an entire population in Southern Israel that for them the reality is incoming rockets fired by the terrorists in Gaza, I was at a city a few days ago with the prime minister, Netanyahu, and we met a high schoolgirl, a 12th grader.

She said to us, you know, kids all around the world when they hear a bell, that means a lesson is starting or a lesson is ending. In Southern Israel, we have a whole generation of young people, schoolboys and schoolgirls when they hear a bell, that's a siren.

They have 20 seconds to get to a bunker, to get to an air raid shelter. Otherwise, that missile could land on them. That's a reality we won't tolerate. That's why we're acting. We want to stop the rockets raining down on our people.

TUCHMAN: My understanding before this all began last week, there were 750 rockets that hit Southern Israel so few may argue the need to defend their country.

Last time, which was four years ago when you went to war with Hamas, nobody came out ahead. The results were ambiguous at best. You may differ with that, but how do you think this time will be any different?

REGEV: Well, this time we want to come out of this with a situation where the people in Southern Israel don't have to live in fear of an incoming rocket. We think that's possible. We're putting a lot of pressure on Hamas. We targeted their command and control.

We've targeted their arsenals. We've targeted their stockpiles of rockets, they're launching centers. We think we've done a good job as hitting Hamas targets. Look, ultimately, the terrorists in Gaza have to understand that they cannot hit Israeli targets with impunity.

We'll respond and we'll respond and find those who are responsible and take them out. If the border can be quiet, that's fine. And it's important to understand our operation, strategically, is defensive.

We don't want to take over more territory. We don't want to do anything aggressive. We just want our border to be quiet. We want an end to the rockets coming across the border.

TUCHMAN: Still not sure though, Mr. Regev, how this will be different from four years ago because I know you wanted the same things and have the same goals four years ago. So if it's top secret, tell me. But what is being done differently in 2012 than back in 2008?

REGEV: I think we learned our lessons. I think we understand we have to put the pressure on Hamas. And we also at the same time have to tell the Palestinians in Gaza that you are not our enemy. We have no quarrel with our Gaza civilian population.

Our problem is with the terrorist who are shooting the rockets into Israel. And in many ways, you know, we see the people of Gaza also as a victim of this terrible, you know, Taliban type regime, a regime that puts, you know, the people of Gaza's interests -- you think of governing Gaza would be in better jobs and education.

But, no, Hamas government is a brutal dictatorship. They put the interests of the people in Gaza at bay. They say let's do jihad against Israel. That is not in anyone's interest.

TUCHMAN: Mr. Regev, a lot of us news people believe the key to a solution here could potentially, very potentially be the new government of Egypt. Can you tell us about any possible contacts between your government and Egypt and if you can't tell us specifically about that, can you at least tell us that is an important aspect to solving this problem?

REGEV: Obviously, Egyptians have historically had a very important role and obviously diplomatic communications continuing. As the military process moves forward, diplomacy has not stopped.

The end result has to be acquired border in the south. That can be achieved one way or another. We prefer if it's possible to do it immediately, we would like that. But I tell you what we won't agree to. We won't agree to some sort of quick fix and then a week from now, ten days from now you get more rockets on Israel cities. We want to know the border is going to be quiet. The people of Southern Israel get peace and quiet that they deserve. My problem is who we're up against. Hamas is a formidable --

TUCHMAN: Go ahead, finish your thought.

REGEV: Hamas is a formidable enemy because they're so stream. You said in your introduction they fired a rocket at Jerusalem. Jerusalem is a city that is so special for millions of people across this planet.

And, yet, they fired a rocket at Jerusalem. You know because you know the realities here. Jerusalem is a huge Arab population. They could have killed Arab people. In the end, the rocket overflew Jerusalem and landed in the West Bank.

They could have killed Palestinians. They don't care. They have no regard whatsoever for human life. Not even for their own people's lives. It's amazing.

TUCHMAN: It's a complicated history, complicated geography, Israel, the West Bank, Gaza strip, Golan Heights in the north. Mark Regev, thank you very much for joining us. We appreciate your time.

Coming up in our 2:00 Eastern Time hour, I'll speak with Hanan Ashwari. She is on the executive committee of the PLO. I'm going to ask her about the Israeli response in Gaza and the growing fears of an all out war.


TUCHMAN: It really stinks not having power for three weeks, no lights, no heat, no hot water, nothing. That has been the reality for thousands of people in New York dealing with the aftermath of Sandy.


LAURA BRENNAN, LIVING WITHOUT POWER: Why did they forget us? Why are we not part of the community that's getting the lights? We're still here and we're freezing now.


TUCHMAN: That's the problem this hurricane came and the cold weather, so unusual. Even though Long Island Power, the company, the authority that deals with the power restored power to 99 percent of customers, the company has come under fire for how long it has taken and poor communication, very poor communication with customers.

That's what they tell us. Two Long Island residents filed a class action lawsuit against the utility and the operating partner National Grid.

Our legal guys are back to talk about the legal ramifications. Avery Friedman in Cleveland, Richard Herman in Las Vegas. Gentlemen, LIPA is the name of the authority. They allege the lawsuit alleges that LIPA and National Grid were grossly negligent.

That is the quote, in restoring power to the 945,000 customers, a suit filed Tuesday in the state supreme court on Long Island. Charge that's LIPA National Grid, quote, "grossly neglected vital maintenance, failed to fortified substations, delayed replacing the outage management system."

This is long, "provided false information to rate payers and ignored a 2006 study that identified problems and could have minimized outages." So the customers in the suit, gentlemen, are seeking unspecified money damages in review of LIPA operations, can they be legally liable? Richard let's start with you about that.

HERMAN: Absolutely, Gary, shades of New Orleans. They're going to be accountable here. All their policies and procedures are going to be uncovered and this lawsuit is the real deal. LIPA is in big trouble here not only civilly, but there may be criminal charges filed by the attorney general when it all gets said and done.

TUCHMAN: Now we should tell you that the chief operating officer of Long Island Power announced his resignation because of this. And CNN has contacted LIPA about the suit and the LIPA spokesman tells us.

This is a quote, "at this time we're focusing on completing restoration for our customers." We also reached out to National Grid, a multinational company based in the United Kingdom.

They responded with a statement saying, "Its workers are focusing on completing restoration and they continue to work with relief agencies to provide ongoing support to those communities and to be there for our customers."

I heard some laughter. Avery, what do you think of the statements?

FRIEDMAN: Their statements are silly. I mean, it would almost to have been better, Gary, if they just disregarded your call. Look, I wish I could agree that this is a big case that is going to be substantial liability.

There will not be. Was Hurricane Sandy foreseeable? Were the circumstances foreseeable? No. According to this -- the highest court in New York, you have to show gross negligence. Let me tell you something, LIPA has $7 billion in debt.

Their debt-income ratio is 19-1. You know what? Unless there is a rate hike, it's an empty judgment. I don't believe the litigation will be successful. I understand. I mean, I appreciate the suffering.

But I don't think at the end of the day there will be liability. I think they're going to slide out from under this thing. I don't think they can show gross negligence nor can they show fraud. It's obsolete. It needs a lot of work. It needs a lot of money. It's going nowhere. TUCHMAN: Gentlemen, I'm going to go from lighting to a woman who lights up the stage. Beyonce, according to the Hollywood reporter, pop star Beyonce, she is facing a lawsuit in New York from a company called Gate 5 that alleges she agreed to help to make a video game called "Star Power."

Beyonce, late last year backed out of the deal. Gate Five is asking for huge damages, hundreds of millions of dollars that it could have made if she honored the agreement according to the lawsuit. Validity to this lawsuit, Avery?

FRIEDMAN: I actually like -- I love Beyonce and I like the lawsuit. The reason the court of appeals rule very shortly ago is that the judge took it away from a jury. That was a victory for Beyonce.

Now the jury will decide whether or not, number one, the gate five got sufficient financing. If they didn't, she could bolt or secondly, whether or not Beyonce engaged in activity that blew up the financing.

So at the end of the day, we don't know the answer. The jury in New York is going to have to make that decision.

TUCHMAN: Richard, what do you think?

HERMAN: It will fall on the term committed financing. The definition of committed financing will determine this case. What happened was Beyonce's attorney moved for summary judgment immediately. They tried to end the litigation. The judge says wrong. There are material questions.

It's got to go to a jury. Wrongfully -- not wrongfully, but, you know, not thinking clearly. Her attorneys took an appeal, which they had to lose the appeal anyway. They did lose it. It's going to go to a jury.

It's going to fall down on the terms committed financing. Whether or not that was defined sufficiently in the agreement signed by them and if they can show that Beyonce breached this agreement, there's going to be a settlement here. She won't get hit with a judgment.

TUCHMAN: You guys are well versed on every topic under the sun. We should point out that we reached out to Beyonce to a comment and we have not received a response.

Our legal guys are here every Saturday at this time and also at 4:00 Eastern Time to give us their take on the most intriguing legal cases of the day. Thank you, gentlemen.

The cost of college does not come cheap these days. It comes with a very hefty price tag more than ever. We'll take a look at smart ways to advance your education while fitting your finances.

If you're planning a trip to the ski slopes, it's not too late to find bargains. I'm looking for them right now. We have some tips in this "On The Go" report.



HOLLY FIRFER, CNN CORRESPONDENT (voice-over): Ski season is here.

GABE SAGLIE, TRAVELZOO: All right, if you're looking to get a bargain on that ski vacation, really look at very early in the season or toward the tail end of ski season. The more expensive months will definitely be sort of mid-December into late-February, very early March.

FIRFER: When choosing a place to stay, it's all about the location.

SAGLIE: If you travel early enough in the season, you can even stay at the more high end four or five star hotels right at the base of the mountain. After that, if you travel during peak travel seasons, the further you stay from the base of the mountain, the less expensive your hotel stay will be.

FIRFER: And skip the rental car.

SAGLIE: If you're really there just to enjoy the ski conditions, can you actually take advantage of free shuttle service that gets you to the slope and back.

FIRFER: Also consider leaving your ski equipment at home.

SAGLIE: Because of the potential having to pay more on the check baggage fees, it is worth considering renting the equipment on the other side of your trip.


TUCHMAN: It's time to hit the slopes. College degree is essential in today's competitive job market. We all know the high cost of that education can affect a student's and family's finances for decades. But there are ways of shrinking the college costs. Christine Romans explain in this week's "Smart Is The New Rich."


CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT (voice-over): At this college fair, high school junior Veronica Woodley is exploring her options.

VERONICA WOODLEY, HIGH SCHOOL JUNIOR: Finding schools that had premed and I major in biology to become a dermatologist. It is also a minor in Spanish.

ROMANS: Picking the right college is a high stakes decision with a high price tag. Average tuition per year at a public college is more than $22,000 for in-state students, a private college more than $43,000. Community colleges cost $15,000 a year.

Not all kids borrow for college. But those who do graduate with $27,000 in debt on average with a price tag like that, college choice is a careful investment, but depends on a student's talents and finances.

(on camera): Most important, you have to graduate from school in four years. No more five years and you have to pick the right school. If you haven't saved any money, you can't pick the super expensive school and graduate five years later. And you say there is a certain rule of thumb for paying for school.

CARMEN WONG ULRICH, PRESIDENT, ALTA WEALTH MANAGEMENT: Here's the thing. If you're a parent saving, I don't know how and why you think you have to pay for the whole thing. Don't try to save the full price tag.

You can basically try to save a third and then go for scholarships and grants for the other third. And borrow a third. It's much more manageable and can you do it.

ROMANS: That means part of the burden is on the kid. Part of the burden is on the parents. Carmen, a lot of people aren't saving.

ULRICH: Exactly. Now, listen, if you can't save, if things are too tight to save, I say take care of yourself first. Your child has a lot more time to pay off loans than you do.

And stick with federal. More flexibility when it comes to repayment. If they can't pay, they have ways to go ahead and defer it, income based repayment. So look at those loans first.

ROMANS (voice-over): For students like Veronica and her mom, Kathy, it's an exciting time and a lesson in high finance. They're crunching the numbers and considering all the options.

WOODLEY: I mean I'm scholarships financial aid and then I work. But my mom -- I feel like my mom will do most of the paying. But, I mean, I will help her out, of course.

ROMANS: Christine Romans, CNN, New York.



TUCHMAN: Victims of the Aurora movie theatre massacre will soon get monetary compensation. Donors sent in over $5 million to the Aurora Victim Relief Fund in Colorado for families of those killed or injured in the shooting. The fund special master is deciding who gets how much? The fund was established by Colorado's governor and by a local charity.

A Missouri man is behind bars accused of planning a mass shooting like the one in Aurora. Police say 20-year-old Blake Lambers was initially plotting to shoot up a movie theatre, but then changed his mind and decided he would target a Wal-Mart store instead. Investigators say his mother called them concerned that her son was planning a copycat massacre. Police say he confessed to the plot.

Coming up later this afternoon, we'll bring you all the late breaking developments out of Israel and the Palestinian territories as tensions are very high. And if you're not sure why this conflict came to be, we'll break it down for you.

Washington still reeling over General David Petraeus, his affair and his fall from grace, we have the details from inside the beltway.

And find out why this traditional New Year's Eve possum drop is now against the law and a thing of the past. "YOUR MONEY" starts right now.