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Shooting at Cleveland Airport; ExxonMobil Reports Profitable First Quarter; Little Evidence of Price Gouging in Gas Industry, Experts Say; Bipartisan Report: FEMA is a Disaster; Task Force Arrests Thousands of Fugitives, Sex Offenders

Aired April 27, 2006 - 13:00   ET

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

FREDRICKA WHITFIELD, HOST: Good afternoon. From the CNN world headquarters in Atlanta, I'm Fredricka Whitfield. Kyra Phillips has the day off.
We are standing by live for news coming out of Washington. U.S. Attorney General Alberto Gonzales is about to reveal a major operation to catch sex offenders and other fugitives across the country. While we stand by for that, let's get on to other news.

Shots fired at the airport. A police officer and one other person wounded. It happened this morning in Cleveland. Some sort of confrontation at the ticket counter took place. And Paul Orlousky is there from CNN affiliate WOIO -- Paul.

PAUL ORLOUSKY, WOIO CORRESPONDENT: Well, Fredricka, we're probably -- we're about ten yards or so from where the shooting actually occurred. You can see police officer and coroners, investigators, taking measurements. That's because the suspect in this is deceased.

What happened is that's where the shooting occurred. But if you look over to left, down at the Delta counter this guy was trying to buy a ticket. He's described as a homeless guy, or at least homeless- looking. He's got a long criminal record, according to police.

They wouldn't sell him a ticket. And then went over to the United counter, tried to buy a ticket over there. And the United counter, a struggle began. He started arguing with people.

Two officers came up here to talk to him, to try to calm him down. They got into a fight with that guy. One officer was hurt in that fight. The other officer had his gun taken away from him. The man fired twice, hitting that officer. A third officer came to the scene behind me and fired, killing the suspect, we're told right now.

As we say, the guy's had a long criminal record here in the Cleveland area. He appeared to be disheveled, they thought homeless. It's kind of an ongoing problem here at Hopkins International Airport. As you know with many airports, people sleeping here in the overnight hours.

But that's what we can tell you for right now. The airport, really not any disruption to any travel or anything like that. But that's the story in Cleveland. WHITFIELD: Bizarre story, indeed. Paul, thank you so much for that update.

Well, this is not what most Americans want to hear while they're shelling out three bucks a gallon for gas. The world's largest oil company announced its first quarter profits today, almost eight and a half billion dollars, the fifth biggest quarterly profit for any public company ever. We're talking about ExxonMobil.

Our resident numbers cruncher, Ali Velshi, is standing by in New York. Ali, is this...

ALI VELSHI, CNN CORRESPONDENT: That's well beyond the numbers I can crunch, let me tell you.

WHITFIELD: This is just the beginning, isn't it?

VELSHI: yes. ExxonMobil -- this has been a week of earnings for oil companies. Those numbers you just talked about are for the first quarter, three months of the year. That's the kind of money they took in. They made this kind of profit on. This is -- this is what we are seeing. We're paying it at the pump and we're seeing the results in the profitability of these companies.

Now ironically, they didn't do as good as they did last year in the third quarter and fourth quarters, because their business divisions didn't perform as well. Most of the money that they made came in the increase of the price of oil.

People don't get that, because they pay -- you know, I think the national average is about $2.90, almost $3 and many people in the country are paying $3 a gallon for gas and they're trying to figure out what this is all about.

The one thing to point out is that a lot of the reason why we pay more for gas than you would think we should right now is because we have limited refining capacity. We've discussed this many times. We haven't built a new refinery in this country in 30 years. And right now, those refineries pump out as much gas as Americans will consume. When there's one that's down for repair or maintenance, that goes off line and we see all sorts of problems. We see price spikes.

So there are a lot of things we have to look at right now about our consumption of gas, because it's not getting any lower. There's no expectation that gas prices are going to get significantly lower over the next three months, Fred.

WHITFIELD: Ali, a look at the front page of "The New York Times" today, and it reports that many members of Congress are asking for the tax returns from many of these big oil and gas companies.

VELSHI: Yes.

WHITFIELD: To do what when and would it help in any way?

VELSHI: I don't think so. I really think there's a lot of politics flying around, because there are a lot of angry consumers. They should be angry. They're paying a lot for gas, and they would like someone to blame. And I think politics in an election year might be clouding this issue a little bit.

Because there's been no -- these companies show you how much they earn, and they show you where they put that money. Sometimes they pay their executives. Sometimes they -- they return it to investors in terms of dividends. Sometimes the stock price goes up. And -- but most of the money the oil companies make go into looking for new wells, because that's the business they're in. It's a very capital- intensive business. So most of the money goes into new drilling, new exploration.

At 70 bucks a barrel, they'll go anywhere in the world to find oil. At 30 bucks a barrel, 20 bucks a barrel, 10 bucks a barrel, which it was a few years ago, oil companies start shelving their operations. They don't go out and look for oil.

So while they make this money they put it back into looking for oil. A lot of people are saying if they're reinvesting it, why am I still paying as much for gas? Well, that's the question that needs to be answered. I'm not sure that the answer to that lies in the tax records, though.

WHITFIELD: All right. Ali Velshi, from New York, thanks so much.

VELSHI: OK, Fred.

WHITFIELD: Gouge and dodge. Allegations and suspicions, entirely unproven, being thrown out at big oil, as sky high gas prices grip the nation.

The Senate Finance Committee wants to see the companies' tax returns, as we just discussed, to make sure that they paid what they owed on last year's record profits. For its part, the industry is hotly denying it's overcharging consumers.

CNN's John Roberts investigated for "THE SITUATION ROOM".

(BEGIN VIDEOTAPE)

JOHN ROBERTS, CNN CORRESPONDENT (voice-over): With everyone from consumers to Congress to the president taking aim over the price at the pump, the oil industry came out publicly Wednesday, rejecting any notion that customers were being gouged.

UNIDENTIFIED MALE: The oil industry does not condone price gouging, and we feel that anybody who is found guilty of price gouging should be prosecuted under the law.

ROBERTS: But guess what? Even if individual oil companies were grossly inflating prices, there is no federal law against price gouging. And the head of the Federal Trade Commission has argued there should never be.

UNIDENTIFIED FEMALE: Regardless of how repugnant price gouging is, a law that prohibits it is a form of price control.

ROBERTS: Twenty-seven states and the District of Columbia have anti-gouging laws that many of them only apply in times of emergency or crisis. There have been some prosecutions, most recently, in the aftermath of Hurricane Katrina, but it's usually just little fish that get caught: individual stations or small chains jacking up prices.

UNIDENTIFIED MALE: There have been some successes, but generally speaking, the level of market manipulation is far less, our investigations have led us to believe, than what many people feel whenever they're paying these extraordinarily high prices at the pumps.

ROBERTS: The main federal worry for big oil is collusion: if they get together to manipulate prices. The new investigations announced by President Bush are looking into that, but the industry is confident they'll find nothing.

UNIDENTIFIED MALE: There have been over 30 of those done over time, and every one of them has exonerated the industry. We have every expectation that that's what's going to happen again.

ROBERTS: A bold prediction? Not according to this former member of the Federal Trade Commission.

UNIDENTIFIED MALE: I think they know where they're going to come out. I think they don't go anywhere. I hate to be cynical. I mean, this is what, you know -- I've been around this thing since '73 and, you know, we see it happen over and over again.

ROBERTS: Critics say there's no need for oil companies to work together. With each one controlling so many parts of the process, drilling, refineries, distribution and sales, it's easy, says industry watchdog Tyson Slocum, to effect prices without breaking the law.

TYSON SLOCUM, INDUSTRY WATCHDOG: But the problem is that there's lots of legal manipulation occurring. And that what we don't need is yet another investigation. But what we need to do is to strengthen the existing laws that we have. Those laws that we currently have, are inadequate to protect consumers.

ROBERTS (on camera): So why did President Bush launch yet another investigation into price gouging? Pure politics, many people say, that he had to be seen as doing something, even though he was reasonably certain of the outcome. And add to President Bush the chairman and ranking members of the Senate Finance Committee, who late on Wednesday asked the IRS for tax returns from the oil and gas industries.

John Roberts, CNN, Washington.

(END VIDEOTAPE)

WHITFIELD: And you can watch all the stories just like that one on "THE SITUATION ROOM" every night beginning at 4 p.m. Eastern and then on primetime beginning at 7 p.m. Eastern. The city of New Orleans is playing host, again, to President Bush. He has just arrived to thank all the volunteers who have been helping rebuild after Katrina. CNN White House correspondent Ed Henry is traveling with the president and joins us now from the waterfront.

Hi, Ed.

ED HENRY, CNN CORRESPONDENT: Good afternoon, Fredricka.

That's right, the president is here in New Orleans now. He will be meeting with volunteers who are working to rebuild housing for lower income people here in the gulf region.

But this is a White House that can't seem to catch a break, even when it has some good news to promote. You'll remember yesterday, the president rolled out a new press secretary, Tony Snow. But that was stepped on by the fact that Karl Rove, the top White House aide, made his fifth grand jury appearance in the CIA leak case.

And, once again, today, the president comes here to the gulf region to try to talk about some of the positive response to Hurricane Katrina but that gets stepped on by the fact that this bipartisan Senate report has now come out, basically charging that the federal government is still woefully underprepared for another natural disaster. This coming just a month before hurricane season starts once again.

The most scathing part of this Senate report, put out by Republican Susan Collins and Democrat Joe Lieberman, basically declares FEMA is in shambles and needs to be dismantled.

In response, White House officials this morning saying they share a common goal with these senators of improving the response to natural disasters, but have different ideas on how to reform the system. And Fran Townsend, the president's homeland security adviser, said today that she believes now, on the eve of the hurricane season, once again, is not the time to be changing the structure -- Fredricka.

WHITFIELD: In fact that was going to be my next question in terms of what about those who are criticizing timing? Why have this kind of dialogue when we're just over a month away from the start of hurricane season?

HENRY: That's exactly the point made by Fran Townsend, the president's adviser on homeland security issues. And she went on to say, also, that the White House basically disagrees with the Senate approach here in terms of the senators basically want to have the FEMA director report directly to the president.

Fran Townsend said if you look at it and compare it to the military, the White House believes it's better to not have the FEMA director report directly to the president like the joint chiefs chairman currently does, but instead have the FEMA director be more of a combatant commander, out in the field, somebody like General Abizaid, who can really be on the ground, and then filter that through other people like the, of course, Michael Chertoff, the homeland security secretary.

So you see a clear difference of opinion there between the White House and this bipartisan group of senators, Fred.

WHITFIELD: All right. Ed Henry, thank you so much.

Well, let's go now to Washington. Our Jeanne Meserve, our homeland security correspondent, talk more about this disaster agency of FEMA. And so Jeanne, you have to wonder about the timing. Is this only adding insult to injury?

JEANNE MESERVE, CNN CORRESPONDENT: Well, it may be a bit a red herring here to talk about the timing. Senators Collins and Lieberman made no bones about it in their press conference. This isn't something that's going to happen overnight. This is the sort of thing that would take congressional approval. This is going to take time.

They're talking about the long term. This isn't something that's going to impact preparations for this hurricane season. But they were very bold and forthright about saying, in their opinion, it is time for FEMA to go.

(BEGIN VIDEO CLIP)

SEN. SUSAN COLLINS (R), MAINE: FEMA is discredited, demoralized and dysfunctional. It is beyond repair. Just tweaking the organizational chart will not solve the problem. FEMA has become a symbol of a bumbling bureaucracy in which the American people have completely lost faith.

(END VIDEO CLIP)

MESERVE: The senators want to see a new agency, as Ed mentioned, within the Department of Homeland Security. In a crisis, the director could communicate with the president directly, much as the joint chiefs of staff does in times of military crisis.

The senators say it would be a dramatically different agency than FEMA with more clout, more responsibility, more funding, all making it more effective.

A spokesman for the Department of Homeland Security says it's already studied the problems in the Katrina response. The department is already making changes. And the department, saying what the White House is -- they don't see the point in moving the pieces on the organizational chart.

Back to you, Fredricka.

WHITFIELD: So Jeanne, is anyone talking about going back to what used to be, perhaps removing FEMA from under the umbrella of homeland security and allowing it to be a stand-alone agency like it was originally?

MESERVE: Well, a lot of people are talking about it, but there they're not the people who are making policy. A lot of people who have been in FEMA, some people who are still in FEMA, who think really the only way to re-establish the agency and give it the muscle it really needs is to put it outside of the Department of Homeland Security.

DHS, of course, wants to keep it exactly where it is. The senators appear to have brokered some sort of compromise, where they're saying it will be just a little bit -- within the Department of Homeland Security but with more autonomy, a little bit to the side with that work-around so the director could talk directly to the president in time of crisis.

But will that be enough? I mean, I talked to one former FEMA person a moment ago who said, does that make sense, to have them using one route for conversations when it isn't a crisis, another route when it is? And, they say, who ultimately would be responsible if there were another Katrina? Would it be the secretary of homeland security? Would it be the head of this new agency?

So still a lot of questions out there about this.

WHITFIELD: All right, Jeanne Meserve, thanks so much, from Washington.

MESERVE: You bet.

WHITFIELD: Well, here's a new heartbreaking revelation from the miner who survived the Sago mine disaster.

A letter from Randal McCloy says at least four of the air packs the miners were depending on to save their live did not work. He says he and the others, trapped miners, were forced to share the air packs that were working as they battled to avoid asphyxiation.

There's no immediate reaction from the mine's owner. McCloy was the only survivor among the 12 miners trapped in a West Virginia mine back in January.

His comments came in a letter written to the families of his co- workers and obtained by the Associated Press. McCloy described watching his friends die. Quoting now, "The last person I remember speaking to was Jackie Weaver, who reassured me that if it was our time to go, then God's will would be fulfilled. As my trapped co- workers lost consciousness, one by one, the room grew still, and I continued to sit and wait, unable to do much else."

Still quoting now, "I have no idea how much time went by before I also passed out from the gas and smoke, awaiting rescue."

The words of Randal McCloy, the sole survivor of the Sago mine disaster there.

And we're still waiting for that live news event to begin at the Justice Department. A major roundup of fugitives in the U.S. Attorney General Alberto Gonzales is about to speak. And we'll listen to that live when it happens.

The news keeps coming. We'll keep bringing it to you. More of LIVE FROM next.

(COMMERCIAL BREAK)

WHITFIELD: We want to show you live pictures right now out of Washington, out of the Department of Justice, where we're still awaiting a press conference to begin involving Attorney General Alberto Gonzales. He apparently will be accompanied by the director of the U.S. marshal's service, John Clark, and they will talk about their ongoing sting operation, looking for fugitives and child sex offenders.

This is a subject that the attorney general feels very passionately about. And this apparently, the sting that he'll be announcing, is a continuation of Operation FALCON that was introduced some time last year of a similar sweep of fugitives and sex offenders. It included a series of law enforcement actions across the nation.

Let's listen in right now to Attorney General Alberto Gonzales.

ALBERTO GONZALES, ATTORNEY GENERAL: ... this time last year the U.S. Marshals service completed Operation FALCON, an overwhelmingly successful, intensive operation to arrest fugitives across the nation.

And today I'm pleased to announce that the marshals service has just concluded Operation FALCON 2. For the week beginning April 17, more than 9,000 fugitives were arrested and more than 10,000 felony warrants closed.

The marshal service, joined by many federal, state and local partners, targeted the worst of the worst fugitive felons in the country. Among those arrests were more than 1,100 fugitives wanted for committing felony sex offenses or violent sexual assaults or for failing to register as sex offenders.

A few examples from the arrests make clear how we are safer. The very first arrest made under FALCON 2, for failure to register as a sex offender, put away Reginald Dozier, who had raped a child.

A parole violator, Antoine Sallay, was discovered to have been responsible for two unsolved sexual assaults on children. Investigators arresting Joseph Hodgson, another sex offender who failed to register, seized his weapons and ammunition, including a Colt M4 assault rifle.

It's important to remember that the charges against these individuals are allegations. They are presumed innocent until proven guilty in a court of law. The seven-day operation featured the work of deputy U.S. marshals, in cooperation with hundreds of federal, state and local law enforcement partners in 27 states, primarily west of the Mississippi, and in the U.S. territories. We picked up fugitives wanted pursuant to a federal, state, or local arrest warrant. These included violent offenders, drug dealers, and gang members. This is an important step in ensuring a culture where the law is respected, where the judicial process is observed, sentences are meaningful, and hard time is served. In its very name, FALCON reflects cooperation that makes this kind of operation possible. FALCON stands for Federal And Local Cops Organized Nationally. The U.S. Marshals Service worked with the DEA and the ATF to have maximum effect on drug and weapons offenders and with the National Center for Missing and Exploited Children for help in identifying sexual predators. The Department of Agriculture, Department of Housing and Urban Development, and the Department of Veterans Affairs, as well as several other federal agencies aided in the intensive, week-long operation. Over 700 state and local law enforcement agencies and departments participated in FALCON II. Over 2100 officers were on the street each day. I want to thank all the law enforcement officers involved in this operation. Because of their work and dedication, thousands of fugitives will now receive the justice they tried to escape. Director Clark will now make a few remarks, and then we'll be happy to take any questions -- director. JOHN CLARK, DIRECTOR, U.S. MARSHALS SERVICE: Thank you, Mr. Attorney General.

I also want to extend my thanks to the deputies, special agents, troopers, police officers, county sheriffs and other partners who made this operation successful.

In this country, it's suspected that there are literally thousands of people wanted for some sort of sex crime. That's a startling number. But as part of the attorney general's priority to protect our nation's children and others from sexual predators, we used Operation FALCON as a way to curb that number.

Just before we hit the streets, I told our law enforcement teams that whether you catch one sex offender or 100, they were going to make our children, their communities and our country safer. In that end, we got more than 1,000 fugitives wanted on sexually-related offenses, and I couldn't be more proud of the results.

The Senate may look at this and think it's just a way to pat ourselves on the back for doing our jobs. But that would not do justice to what an amazing operation this was.

Last year, deputy marshals and their counterparts took down over 79,000 fugitives. We do this job without much fanfare, and while the public may not know what we do, the bad guys out there certainly do.

During FALCON 1 last year we learned that when we team up with our federal, state and local partners and use our combined resources it becomes a force multiplier. By using that strength, we did something that we could never do alone.

This year, we had even more cooperation and used last year's successes as a springboard to take down an extraordinary number of fugitives and unregistered sex offenders. In the process, we have helped people all over this country, from San Francisco to St. Louis, live in a safer community.

Let me give you an example of how FALCON 2 made a difference. On April 18, Mexican officials, using information provided by our field office in Mexico City, arrested Elias Boraz Martinez (ph). Martinez was wanted in California in connection with the kidnapping and rape of a 14-year-old girl. The victim was kidnapped last fall from her high school, taken to Mexico, and fortunately, she was found and returned to her family. However, the suspect remained at large until our deputies helped track him down last week.

We conduct...

WHITFIELD: Out of Washington, D.C., at the Department of Justice, you've been listening to the U.S. marshals director John Clark, along with the attorney general, Alberto Gonzales, talk about a huge nationwide roundup of wanted sex offenders and other fugitives of other various crimes, including drug activity and gang activity.

Well, with me now to talk more about this kind of sweep taking place, specifically on alleged sex offenders and fugitives of sex offenses, is Jake Goldenflame. He's an author and himself a convicted sex offender.

Good to see you, Jake.

JAKE GOLDENFLAME, AUTHOR: Thank you.

WHITFIELD: So when you hear about sweeps like this, and the attorney general says he's very proud that something like nearly 19,000 people, whether they be suspects or fugitives, have been swept in this kind of dragnet, do you think that this is making a significant dent, especially when, these days, we're talking more and more about sex offenses, particularly involving children?

GOLDENFLAME: I think it's dangerous. I think that what's going on here is an oversimplification, and we're calling everybody a child predator, when in fact, in some cases, the people involved are no more than a 19-year-old boy with a 17-year-old girlfriend.

I think there's a risk to be avoided here. And that's not driving people to become so desperate that in their desperation they do even worse crimes of greater violence. That's what I'm concerned about here.

WHITFIELD: So you're concerned about the connotations that come with such a dragnet or such a sweep?

GOLDENFLAME: Yes.

WHITFIELD: When you believe in some part, the term is being rather loosely used, sex offenses.

GOLDENFLAME: Sure, sure. Here in California, for example our state Department of Justice has what's called the SAFE team, SAFE. And their job is to go and find people who failed to register.

And their way of doing it is very low key. They locate the apartment. They call on the person. They check with them. Our records show you're not registered. If it turns out that the record is true, and the person is not doing anything else to cause concern, they simply ask him to please go down to the police station and get their records updated, and it's taken care of.

If they find that they're doing something of, shall we say, objectionable sorts, like living with a child when it's obvious they're a convicted child molester, then they'll take them in. I think that's a more responsible approach.

WHITFIELD: Clearly something is really wrong -- clearly something is really wrong, and of huge proportions. And is it just me or is it that there are more incidents, at least more reported incident that are involving the abuses and neglect of young people. Is it in part, because we're hearing it more, because of so many media outlets...

GOLDENFLAME: No, no.

WHITFIELD: ... or has this problem been as pervasive in the past as it is right now?

GOLDENFLAME: I think it's growing. I think, quite honestly, that we're suffering from a moral breakdown in this nation. As I watched the sting operations that we've all seen on television...

WHITFIELD: So then how do we get to the bottom of it if not through sweeps like this, or other ways of tracking repeated sex offenders? How do you get to the bottom of it? How do you get the message out there? How do you find people who are abusing children?

GOLDENFLAME: Well, I think you have to start before that abuse even takes place. And I think we have to sell the message that needs to be sold, which is that children are human beings who have a right to be left alone.

WHITFIELD: Well, what do you mean by that?

GOLDENFLAME: Well, too often, people are seeing children as sexual objects. That's what's going on. That's what we're seeing in these sting operations. Instead of these are people who have a right to be left alone. Young people who are still being formed and should be left alone.

WHITFIELD: So I understand that you continue to have a dialogue with other violators and...

GOLDENFLAME: Yes.

WHITFIELD: ... there is some interesting information that comes from that dialogue, in that you're hearing from them that these types of dragnets or just arrests in general is really not making a dent in their transgressions, their behavior, right?

GOLDENFLAME: What I'm hearing -- what I'm hearing from some of the prisoners who are in prison for sex offenses is that the sentences have now become raised so high that they feel that they can't possibly do them. So they're saying that next time, with sentences as high as this, they think the smart thing to do is kill the child. WHITFIELD: Ooh, well, that's pretty outrageous. And so what do you do with that kind of information in what way -- since you are a conduit to getting this kind of graphic information and detail from people who, as you said, are already in jail or who are violators? How do you get that information to the right entities who can actually help prevent another offense from taking place?

GOLDENFLAME: Well, the first thing I do, is when those reports started coming in, I began sharing them with law enforcement and with the legislature in my state, as well as with federal authorities so they know this problem is coming out.

WHITFIELD: Where are you getting with that? Is there cooperation? Do they believe you?

GOLDENFLAME: They believe me. They're not having any problem with that. And they're, I think, dealing with it very responsibly.

The other thing I'm doing is, with the consent of the various states, I'm going back into the prisons and talking to the men myself. And the theme that I'm taking with them is you don't want to go out and do anything irresponsible, because if you do, you're going to make it rough on the rest of everybody here. And when they bring you back, you're going to have to face them. That has a tremendously calming effect on them.

WHITFIELD: All right. Jake Goldenflame, thanks so much for your perspective. And hopefully this kind of information that you're passing on to us will be passed on to the other right folks to try to prevent any other offenses from taking place involving people. Thanks so much.

GOLDENFLAME: Thank you, Fredricka.

WHITFIELD: Well, a teenage boy in southeast Texas is clinging to life today. What happened to him at a weekend house party is so appalling we can't even tell you every detail.

Reportedly, a fight broke out after the 16-year-old boy tried to kiss a 12-year-old girl. Police say the boy was beaten and kicked almost beyond recognition by two other teens, ages 17 and 18, who also insulted his race.

(BEGIN VIDEO CLIP)

LT. JOHN DENHOLM, HARRIS COUNTY SHERIFF'S DEPARTMENT: They stomped his head with their boots while cursing him as being a Mexican.

(END VIDEO CLIP)

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