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More Levees in Danger; Bush and McCain Visit Flood-Ravaged Iowa; Oil Prices Retreat; Hybrid Cars in Demand; Evaluating Ethics on Obama's Opting Out on Public Financing; Massive Effort to Hold Back Floodwaters in Missouri; Latest on the Democratic Veepstakes; Mortgage Meltdown Busts
Aired June 20, 2008 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: You know, make the most of it though.
KIRAN CHETRY, CNN ANCHOR: Yes.
ROBERTS: This is going to be a great summer ahead.
CHETRY: Thanks for being with us this morning. We have some breaking news and we're talking once again about the might of the Mississippi River pushing past yet another levee. Now as many as 30 more in northern Missouri and western Illinois are in danger this morning.
The water stretches as far as the eye can see. Homes, businesses and another 60,000 acres of farmland underwater this morning. And the Mississippi is expected to crest sooner than first predicted. Experts say that a 50-mile stretch of the river could start dropping today between Quincy, Illinois and Winfield, Missouri. There's a look at the Google Earth map. It's because so many levees have given way that the water has now spread out across such a large area.
Also, the powerful strength of the floodwaters. These pictures showing vital levees in Missouri being ripped away. The widening gash is sending tons of water along a new path and that has saturated farmland.
Right now, people are filling sandbag after sandbag raising to build a defense against the rising river.
CNN's Ed Lavandera is live in Clarksville, Missouri with more. Good morning, Ed.
ED LAVANDERA, CNN CORRESPONDENT: Good morning, Kiran. While you guys are talking about how today is going to be the longest day of the year, there's no question that residents here in Clarksville are definitely feeling that pressure. This is a unique town along the Mississippi River as kind of an old historic town along the river, but there's also no levee here.
So really the residents of Clarksville have been fighting over the last few days, rapidly trying to bag full of sand. They've actually brought in the Missouri National Guard using pumps to get the water back into the river and away from the historic town here. You can see the sandbags that have built up. This is just one little portion where actually it's very difficult to get on to the main part of this street where the real heavy machinery has been brought in by the National Guard and other city emergency officials to fight this process. This has been going on for several days now. And we're talking to some people here this morning who say they're hoping the river is starting to go down.
But as you've mentioned, as this levee breaks it's made it very difficult to figure out exactly when rivers are going to crest because water is moving in so many different directions. But the anticipation here is that perhaps it will start going down although we have talked to some other people who say they expect it to go back up again at some point as well. So the fight continues here again today in Clarksville, Missouri -- Kiran.
CHETRY: Sure does. Ed Lavandera for us. Thanks.
ROBERTS: President Bush and his potential successor John McCain are promising help for Midwest flood victims. Both touring the flood zone in Iowa. And while their paths never actually crossed, their message was very much the same.
CNN's Dana Bash is covering the story.
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): A bird's eye view of the worst flooding Cedar Rapids, Iowa has every seen. A briefing under severe damage the flooding has caused and a promise from a president chastened by his sluggish response to Hurricane Katrina.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Congress passed, allowed to pass, you know, a big chunk of disaster money. Hopefully would help put people's minds at ease, and that we're going to help you recover.
BASH: Even as the president spoke. Some 60 miles south in Columbus Junction, the Republican candidate who wants his job was meeting with local officials, getting his own firsthand look at Iowa's flood damage.
SEN. JOHN MCCAIN (R), PRESUMPTIVE PRES. NOMINEE: I know that I speak for all of America. We'll do everything necessary to try to rebuild their lives and have a chance to continue living a normal life here.
BASH: Visiting a disaster area is a standard move for any would-be president, especially when it happens in a battleground state like Iowa. But this was a curious juxtaposition for John McCain.
Two months ago when his quest to separate himself from the unpopular president, McCain made his harshest comments ending in the city that symbolizes Mr. Bush's failures -- New Orleans.
MCCAIN: Never again. Never again will a disaster of this nature be handled in the terrible and disgraceful way that it was handled. Never again. Never again.
BASH: McCain aides tell CNN they knew the president would be in Iowa the same time he was but for scheduling reasons had little choice. If nothing else, the images are a reminder of their sometimes awkward coexistence. A president determined to show he's still hands on and learned Katrina's lessons, and a candidate whose own show of compassion is part of an effort to shield himself from Bush baggage.
BASH (on camera): And McCain's very different life experience from the president was on display. The Vietnam veteran sought several buildings that were partly underwater and said, "You lost the battle but you won the war.
Dana Bash, CNN, Washington.
ROBERTS: John McCain is accusing Barack Obama of breaking his word today after Obama said that he would not take public money for the general election. The campaigns exchanged heated e-mails after the Obama camp was denied access to McCain's conference call with reporters.
Obama's team wanted to get on the call to explain why Obama has changed his position. Communications director Bill Burton sent an e- mail to the McCain campaign saying, "Any particular reason you weren't willing to have an actual discussion about the disagreements here on your conference call?"
Not only did they send that e-mail to the McCain campaign. They sent it to all of the political reporters covering politics. McCain communications director Jill Hazelbaker shot back calling the last minute request a "stunt." She went also -- also went on to say, "That type of boys club bullying embodies an arrogance better suited for a frat house than a serious campaign about serious issues." Hazelbaker said that McCain would rather discuss the issue at 10 town hall meetings at a location of Senator Obama's choice.
Fur is flying -- Kiran.
CHETRY: It sure is.
CHETRY: Well, Louisiana lawmakers are demanding some answers after a CNN investigation exposed how FEMA gave away $85 million worth of household items that were meant for Hurricane Katrina victims.
State lawmakers requested a hearing after watching our special investigation last week, and they want to know why a state government official rejected those FEMA supplies.
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EDWIN MURPHY, LOUISIANA STATE SENATE: He had to know the need was there, unless he just lives completely oblivious to everything that's in the newspaper. He just kind of had to know. I understand that you're here representing the agency in (INAUDIBLE), but I wish we could talk to this gentleman to find out how he couldn't know that there not just was a need but there still is a need.
KAREN ST. GERMAN, LOUISIANA STATE HOUSE: And so, what happened? Oh, I hope this is a glaring lesson for the future because if it's not, this is a slap in the face to think that anybody in this state doesn't know that the need is still there.
(END VIDEO CLIP)
CHETRY: The first truckload of lost relief supplies will be redistributed today to community groups helping Katrina victims -- John.
ROBERTS: The European Union will lift its diplomatic sanctions on Cuba hoping that the move will lead to democracy on the island and get Cuba's new president, Raul Castro, to make progress on civil rights. The U.S. has much more severe economic sanctions on Cuba and says it is not changing its stance.
State Department Deputy Spokesman Tom Casey said, "While we've seen some very minor cosmetic changes made by this regime, we certainly don't see any kind of fundamental break with the Castro dictatorship that would give us reason to believe that now would be the time to lift sanctions or otherwise fundamentally alter our policies."
Elian Gonzalez controversy could create problems for Barack Obama before his visit to Miami tomorrow. Elian's great uncle plans to hold a press conference this afternoon blaming two of Obama's advisers for helping send Elian back to Cuba eight years ago. He's taking aim at foreign policy adviser Greg Craig, who represented Elian's father, and Eric Holder, currently part of Obama's VP search team who is deputy attorney general when Elian was seized.
At the time, Elian lived in Miami's Little Havana neighborhood with relatives for several months. Obama was an Illinois lawmaker during the month-long custody battle, never took a public position on it.
The House agrees to give President Bush $165 billion for the wars in Iraq and Afghanistan. In exchange, Democrats get approval for two of their issues, extending unemployment benefits and money for college education for U.S. troops. The plan also includes over $2 billion to deal with Midwest flooding. The Senate, though, still needs to approve it.
CHETRY: Well, scientists reviewing pictures sent from NASA's Phoenix Lander say that signs point to ice on Mars. They say chunks of white material exposed in a trench earlier this week disappeared. That indicated the stuff was probably frozen water that melted instead of salt.
Our Miles O'Brien is going to be joining us, and he's going to have more on this discovery and what it could mean. Coming up at our next hour.
ROBERTS: Is there life on Mars? That's the big question.
As gasoline tops $4 a gallon, more and more people are trying to save money by turning to hybrids. But there's a big catch. Try to find one.
CHETRY: Also, attached at the hip. BlackBerry users say they work around the clock and they want to get paid for it.
ROBERTS: And Larry King like you have never seen him before. Hanging out backstage with Tommy Lee and Motley Crue. Oh, playing guitar? Larry, what's up?
You're watching the most news and the most music in the Morning."
ROBERTS: Twelve minutes after the hour. Welcome back to the "Most News in the Morning."
Someone in the I.T. Department at your job may be spying on you. Security company Cyber-Ark says it surveyed 300 senior I.T. professionals and a third of them admitted to abusing administrative passwords to find out other people's salaries or to read their personal e-mails. You know, good rule of thumb is, don't put anything in an e-mail you wouldn't want to see in the front page of the "New York Times."
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: John went for that.
ROBERTS: Hey, some good news today. We don't need to squeeze Ali's head to get oil out of it because --
VELSHI: Because they are giving it away. There's a huge sail on oil. You are never going to believe this.
Oil prices dropped almost $5 a barrel yesterday actually. The closing price was down about $4.75 to a paltry $131.93 a barrel. Now, how did this happen? Did the Saudis say there was lots of oil? Did we stop using oil?
No. It was very simple. The Chinese -- the Chinese raised the price of gasoline and diesel. They raised gasoline by 17 percent, diesel by 18 percent. And they forecast that inflation in China was going to be seven percent. Now, all of this means that people in China will buy less. When we have inflation of seven percent, we'd buy an awful lot less. In fact, some people think we do have inflation although our official inflation rate here is much lower.
So bottom line is China is so big and growing so fast when it comes to oil usage that by increasing the price of oil, China has caused the price of oil to go down. How long it lasts, we don't know.
There's going to be a big meeting in Saudi Arabia this weekend. The Saudis have invited all the oil consuming nations to visit. The Saudis are going to tell them there's enough oil for them to supply, but they're going to ask for a few things. Take a look at what is likely to come out of this weekend. There's going to be an announcement most likely that they will boost oil output. They're going to make some special deals with refiners to ensure that the refiners get all the oil they want. They're going to press for some oil trading controls, these curbs that we've been talking about. And there's probably a call to strengthen the U.S. dollar which often results in the price of oil going down a little bit.
So a busy weekend for oil. Maybe we'll see some good news if not enough comes out of that Saudi meeting though --
ROBERTS: Do you know what the price of gas in China is? They sell it by liter.
VELSHI: Is that kind of like an expression? What's that got to do with the price of gas in China?
ROBERTS: I'm interested.
VELSHI: I'll find out for you then.
ROBERTS: OK, great. Looking forward to it. Thanks, Ali.
CHETRY: He's looking for a --
ROBERTS: A reason to come back. A reason to come back.
VELSHI: I always want a reason to be invited back. So gas --
ROBERTS: Tell us how much it cost.
CHETRY: Well, this all ties into the demand for gasoline right now. Of course, as we know, it's $4 a gallon and climbing. And so, now, dealerships say they're overwhelmed with demands for hybrid vehicles. But there is a problem. Good luck finding one. And if you do, be prepared to pay more to fill up less. Here's CNN's Deborah Feyerick.
DEBORAH FEYERICK, CNN CORRESPONDENT: John, Kiran, the first generation of hybrid buyers were concerned with saving the environment. With gas prices rising, the new buyers are more concerned with saving a different kind of green and it's not as easy as you think.
FEYERICK (voice-over): Alan Machado handles Internet car sales for Loman Ford in Woodbridge, New Jersey. When a customer came in looking to trade his Toyota Prius hybrid, Machado immediately posted it on eBay.
ALAN MACHADO, LOMAN FORD: I started the bid at 15,000.
FEYERICK: The car with 30,000 miles and a small dent in the hood sold for nearly $24,000. MACHADO: On the lot less than a week.
FEYERICK (on camera): Really. Is that a quick turn around for a car?
MACHADO: Quick -- very quick turnaround, yes.
FEYERICK (voice-over): Joe Abutel who owns a Manhattan auto shop made the winning bid.
JOE ABUTEL, PRIUS OWNER: I got three other e-mails from guys that had lost asking if I was willing to sell it to them for a little bit over what I had won it for.
FEYERICK: Abutel who says he spent about $2,400 on gas last month to fuel his Hummer says he turned to eBay after he had no luck trying to buy a new Prius.
FEYERICK (on camera): A year ago you could get a deal on a Prius. Not anymore. The demand is so high, expect to pay full sticker price and wait three to four months for delivery.
FEYERICK (voice-over): Toyota dealer Frank Caputo (ph) has a wait list. More than 100 people with a deposit on a Prius hybrid.
FEYERICK (on camera): Have you ever seen a list like this?
UNIDENTIFIED MALE: Not on one particular line of car. No.
FEYERICK (voice-over): And that's just in the last months as gas prices have spiked. Problem is Toyota maxed out on the number of batteries it can make for its hybrids, some of which run 50 mills to the gallon. Honda makes a hybrid and is also developed a limited number of natural gas and hydrogen fuel cell cars. The problem there, you have to drive miles to find a fuel pump.
CHRIS NAUGHTON, AMERICAN HONDA MOTOR CO: Infrastructure has to be developed so that you have a place to fuel the car, and also the supply network.
FEYERICK: Which means driving green may require a bigger commitment than just saving green. Though admittedly, new Prius owner Joe Abutel says he's coming around.
ABUTEL: Leaving my kid a little bit of an ozone layer isn't such a bad thing either.
FEYERICK: Toyota sold 15,000 Prius just a month in the United States. It's expanding its battery production to make and sell even more cars but that won't be for at least another year. As for creating an infrastructure for natural gas cars and the like, that will take even longer and most likely be significantly more inconvenient -- John, Kiran.
ROBERTS: Deborah Feyerick for us this morning. Deborah, thank you. Two major airlines teaming up to fight high fuel costs. Find out if the airline alliance can address sky high ticket prices. Ali's got that ahead as well, as the price of a gallon of gas in China.
And one couple not letting the Midwest floods ruin their wedding plans. Instead of an aisle, they settled for a highway lined with sandbags. Take a look at that. What a scene.
You're watching the "Most News in the Morning." We'll be right back.
ROBERTS: Coming up on AMERICAN MORNING, addicted to work.
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UNIDENTIFIED MALE: We're expecting a message any minute.
(END VIDEO CLIP)
ROBERTS: The CrackBerry (ph) addict. They're afraid to put it down, but is it their fault or just part of the job?
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I actually can't imagine life without it.
(END VIDEO CLIP)
ROBERTS: How some people are getting paid for after hours e-mail. You're watching the "Most News in the Morning."
CHETRY: Kenny Chesny, "Summertime."
ROBERTS: That was "Summertime"?
CHETRY: Today's the summer solstice.
ROBERTS: 7:00 tonight, right?
CHETRY: Yes. The official start of summer, so get ready on a Friday.
ROBERTS: Sun crosses the tropic of cancer, I think, is it? It comes up here.
CHETRY: All I know is that it's the highest point in the northern hemisphere, and then it makes its way southward again.
ROBERTS: Most hours of daylight today?
CHETRY: That's right.
ROBERTS: Make the most of them.
National headlines for you on this Friday, the 20th of June. A bizarre accident on the ground at Dallas/Fort Worth Airport.
A van crashed into a parked airplane and became wedged under the plane. Wow. How'd you like to explain that?
The plane was loaded with passengers. No one was hurt. Police say the driver had a medical problem, lost consciousness behind the wheel.
A sudden spike in pregnancies at a high school in Gloucester, Massachusetts is being blamed on a reported pregnancy pact among students. The principal telling "Time" magazine nearly half of the pregnancies were planned and the girls agreed to intentionally get pregnant and raise their babies together.
Alina Cho is going to have more on this remarkable story coming up in our next hour.
And then there's this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Give me your money.
UNIDENTIFIED MALE: Hey!
UNIDENTIFIED MALE: Do it.
(END VIDEO CLIP)
CHETRY: We got a few laughs in the newsroom this morning as well. Police in Florida say it's the oddest robbery they've ever seen, and we concur.
A man used part of a palm tree to hold up a convenience store in Florida. And the camera was rolling when the man walked into the store waving the palm frawn like a spear demanding money as you heard. Another person then grabbed a bar stool, OK?
So, A, a strange weapon to try to rob it, but then it was a strange one to beat the guy off with. There is a lion tamer. What's going on?
Anyway, he was caught a short time later and charged with armed robbery.
ROBERTS: Is he trying to rob him or curse him?
CHETRY: He's asking for 50 bucks. They got that on tape.
Well, the floods in Iowa could not silence wedding bells for one National Guardsman who was called to duty. Yesterday on a bridge lined with sandbags, Curtis White married Danielle Ritter. The couple stood on a bridge that just the day before was covered with water. The new bride said hell or high water, she was getting married.
ROBERTS: Well, she got the high water.
CHETRY: Yes, how about it?
ROBERTS: Let's hope she doesn't get the other part.
ROBERTS: Our Bonnie Schneider is watching the weather for us this morning. How about that video, Bonnie, that the guy trying to rob the convenient store with the palm frawn.
BONNIE SCHNEIDER, AMS METEOROLOGIST: I know. That's odd. Hey, guys.
SCHNEIDER: Yes, exactly. Oh, we've got a lot going on now, John, in weather. I want to show you that we have rain coming in right over the flood zone in parts of Missouri. Take a look at the radar and you'll see what I'm talking about.
The rains really won't accumulate too much in terms of heavy rain, but it certainly doesn't help matters there in this region. This is what we're looking in. It's really interesting.
We've had a lot of levee breaks over the past day or so. So St. Louis to the south will actually see the worst flooding today because the water will slowly recede from this point forward. The levee breaks actually eased the water flow for St. Louis, so good news for them but bad news for folks in other parts of the U.S., especially in Lincoln County where there have been several breaks.
You can actually see the areas highlighted in purple. Those are the major flood breaks and then we have the4 modrate flood zones in red.
We're zooming in to Lincoln County now in Winfield, where we had the levee break. East of 79, people were evacuated. They've all moved further to the west to get out of that region. Another levee break occurred in Foley. This one was 40 feet wide. The water continues to flow to the southwest and fortunately a lot of people are going to be having to move to higher ground at that point as well.
In Elsberry, we're also looking at a levee that broke 10 feet wide. So unfortunately, this levee breaks are huge problems for these region. And as you can see, we'll be watching for that as well as the longest day of the year.
That's right. Today is the summer solstice. And look at the heat building in the southwest, John. Temperatures will be climbing to 107 in Las Vegas and 92 in Los Angeles. There is an excessive heat advisory for southern California. Back to you.
CHETRY: Now, Bonnie, were we correct when we said what does it take the sun's in the northern most position?
SCHNEIDER: Right. That's when the earth is tilted most towards the sun, so we get the longest day of the year. And it's actually coming a day early this year because it was a leap year.
ROBERTS: Everything explained. Bonnie's got the deal. Thanks, Bonnie. We'll see you again soon.
BlackBerry users say that they are working around the clock and they're not getting a dime for doing it. Now, some paychecks could actually reflect those after hours e-mails.
CHETRY: Also, Barack Obama breaks his promise about campaign fund raising. One ethics expert says he's actually doing the right thing by going back on his word. You're watching the "Most News in the Morning."
CHETRY: Well, balancing politics and ethics can be tough at times especially on the campaign trail. Barack Obama's decision not to take public campaign funding and his demands for everyone to lay off of his wife just a couple of ethics challenges in the campaign.
And joining us now to talk about it, Bruce Weinstein., He's known as the ethics guy. He writes the ethics column for Businessweek.com.
Bruce, good to see you this morning.
BRUCE WEINSTEIN, THE ETHICS GUY: You too, Kiran.
CHETRY: So earlier you promised that if John McCain or his Republican counterpart agreed to take public financing, a certain set of money that he'd go with it. And yesterday, the announcement came that they're actually going to not do that and that frees him up to raise way more money. But you say that he's actually doing the right thing.
WEINSTEIN: It's praiseworthy. It's important to keep a promise, but there are other things sometimes that are more important.
Let's say you promised your daughter you're going to take her whitewater rafting when you're on vacation in Wyoming, but it turns out that weekend the river is raging. Well, you know, you would say in this case it's more important to avoid the danger of the water than to keep my promise.
So, yes, it's important to keep your promise but it's also important to maybe look beyond. And you may recall last week when I was on this program, I presented a code of ethics for politicians. One of them is don't make promises you can't keep. That may be the take-home lesson here.
CHETRY: What about though the whole entire issue of raising money...
CHETRY: ... and being able to raise enormous amounts of money for your campaign?
WEINSTEIN: Well, you know, the spirit of the law that John McCain cosponsored in 2002 was an attempt to make sure that everyone's voice is heard. But the way it's played out, unfortunately, is that some special interests and Political Action Committees are able to bypass the spirit of the law and to raise funds and engage in some unfortunate activities. Now, I think that's what Obama is trying to avoid. To make sure that everyone's voice is heard. And really, let's face it. That's really what the spirit of the campaign finance reform is all about.
CHETRY: You know, it's interesting. Barack Obama's campaign staffers and much was made of this -- apparently asked two women who were wearing Muslim head scarves to step out of a shot that was going to be televised. They were standing behind him at a rally. Obama actually called them yesterday and apologized for the incident.
But it does raise a bigger issue when it comes to exactly how images are being used in the campaign and whether that's ethical.
WEINSTEIN: And speaking of images, when we see a Muslim in popular culture on television and movies, they're almost always portrayed as terrorists. And that's just not fair. Most Muslim Americans are peace-loving and law-abiding as are Jewish Americans and Christian Americans. And so it's in Obama's own interest to acknowledge that and it's also true to his own platform of inclusiveness.
However, he did apologize. He took responsibility for that serious mistake. He called the women himself and that is a sign of good character. And that's something we should all follow.
CHETRY: The larger question, though, is why were they so leery of it and the possibility that these outside groups that you talked said -- are able to raise money outside of the campaigns could use those images against him or any of the candidates as we head into the general election?
WEINSTEIN: It's a mistake to play the bigot. And you may recall that John Paul Sartre said "If the Jew did not exist, the Anti-Semite would invent him." So bigot are going to use anything they can whether it's based in reality or not. So the right thing to do there would be to do the right thing, namely to include Muslim Americans in one's images. And just not even address the bigotry that's out there.
CHETRY: All right. Bruce Weinstein, the ethics columnist for businessweek.com. Great to see you, thanks.
WEINSTEIN: You, too, Kiran.
JOHN ROBERTS, CNN ANCHOR: It's coming up on 32 minutes after the hour. And here's what's making news this Friday. The first day of summer. There's a massive effort to hold back the floodwaters in Missouri towns along the Mississippi River this morning.
St. Louis is the next major city in the path of the surging river. Near record crests are predicted from Quincy, Illinois, to Winfield, Missouri.
The latest on the Democratic veepstakes for you this morning. Former vice presidential candidate John Edwards and Former Georgia Senator Sam Nunn said to be on Barack Obama's short list for a running mate. Lawmakers who had been brief by Obama's VP vetting team say there are about 20 names on the list which also includes retired military generals.
ROBERTS: Mortgage meltdown busts. Federal agents arresting two ex- Bear Stearns fund managers. The Fed says they both knew about problems and tried to cover them up, costing investors more than a billion dollars.
CNN's Mary Snow has got the details this morning.
MARY SNOW, CNN CORRESPONDENT: John and Kiran, the Justice Department announced hundreds of arrests in two separate investigations looking into mortgage fraud. Here in New York, two arrests were linked to managers of investments at the heart of the subprime mortgage crisis.
SNOW (voice-over): Matthew Tannin and Ralph Cioffi are the first Wall Street executives to face criminal charges following the subprime mortgage crisis. The two managed hedge funds at Bear Stearns that collapsed a year ago, losing over $1 billion.
BEN CAMPBELL, U.S. ATTORNEY: They lied in a futile hope that the funds would turn around and that their incomes and reputations would remain intact.
SNOW: Prosecutors say e-mails prove their claims. In the indictment, one of the dependents is alleged to have written an e-mail to his colleague on April 22nd, 2007 saying the subprime market looks pretty damn ugly. Adding that if the latest guidance was true the entire subprime market is toast.
But according to prosecutors, three days later, the defendant told investors there's no basis for thinking this is one big disaster. Both defendants pleaded not guilty. One defense attorney said her client is being made a scapegoat for a widespread market crisis. Another defense attorney called the charges a government PR stunt.
ED LITTLE, ATTORNEY FOR RALPH CIOFFI: Apparently, the FBI is calling this operation malicious mortgage. Someone else told me perhaps this sort of equals operation malicious prosecution.
SNOW: But one former prosecutor compares the cases to corporate fraud cases like Enron and World Com.
STEPHEN MEAGHER, FORMER FEDERAL PROSECUTOR: I think these arrests potentially are very significant. They are perhaps the tip of the iceberg. They put a face on the government's investigation. And they obviously could lead to more people in the chain being indicted.
SNOW: Part of the government investigation took a separate turn in Washington. The Justice Department and the FBI announced more than 400 people were charged -- real estate and mortgage brokers and others. Officials say it's all part of a widespread effort to crack down on mortgage fraud.
MARK FLIP, DEPUTY ATTORNEY GENERAL: Bear Stearns case is just one example of how this is a complex area that all can fairly be included under the idea of mortgage fraud.
SNOW: Attorney Steven Caruso is now fighting in court to get some of that money back for investors suing Bear Stearns.
STEVEN CARUSO, MADDOX HARGETT AND CARUSO: It's very hard to tell at this point. I really can't give you an estimate. But certainly whatever we're able to recover is better than nothing.
SNOW: Former prosecutors say it's very difficult to get money back in fraud cases like these. As for the defendants, if convicted they face up to 20 years in prison.
John and Kiran?
ROBERTS: Mary Snow for us this morning on that important story. Mary, thanks.
CHETRY: Meanwhile, Alina Cho is here now with some other stories new this morning.
ALINA CHO, CNN CORRESPONDENT: Hey there, guys, good morning. Good morning, everybody.
And new this morning, the Taliban is claiming responsibility for a suicide bomb attack. It happened in southern Afghanistan. A man with explosives strapped to his body blew himself up in front of a U.S. military convoy. Five civilians and two soldiers, including one coalition soldier, were killed in the explosion.
After months of violence and political infighting, the main opposition party in Zimbabwe is now threatening to pull out of next week's presidential run off. The party's leadership tells CNN, the escalating violence against its supporters is one of the reasons.
According to the official results, the opposition party's candidate beat President Robert Mugabe back in March but failed to win a majority. The runoff is scheduled for June 27th.
The mortgage crisis having an effect on the nation's largest savings and loan. We're talking about Washington Mutual. That company is cutting 1,200 jobs nationwide. It amounts to about 2.5 percent of its work force. The latest round of layoffs is driven by the companies continued efforts to right itself after bad mortgage loans.
And as we've been saying this morning, today marks the official start of summer. The summer solstice arrives exactly at 7:59 tonight. We're going to have to wait a while, but it is today. And that means the longest day of the year. If it's sunny, you can surf or go to the beach. And if there are no clouds, 15 full hours of sunlight. More time to enjoy the outdoors, weather permitting. Or take the shuttle back to Washington, D.C. which is (INAUDIBLE) at 11:30 a.m. today.
ROBERTS: Or take a plane to St. Petersburg, Russia, for the white nights. Just incredible. The sun doesn't go down until midnight.
CHO: Oh, wow.
CHETRY: And the kids are wondering -- wait a minute, it's summer. Why am I still in school?
CHO: Yes, that's right. You can take the 11:30 shuttle, though. You'll be able to squeezing the bike ride, weather permitting.
ROBERTS: It's all good. It's all good.
CHO: You bet.
ROBERTS: 37 minutes after the hour. Ali Velshi is here and it is all about the gas this morning. Good morning, Ali.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Thank you, John. Same to you. In fact, if you're taking shuttles to anywhere, one of the things you might want to consider if you're an airline passenger, there are some changes to Continental and United that are going to affect the way you fly.
Your membership and frequent flyers and maybe the price you pay. I'll have that when we back. You're watching AMERICAN MORNING. Stay right with us.
ROBERTS: And Ali Velshi joins us now. We're not talking gas, for ones. It's not about the gas. It's about the airlines.
VELSHI: Which I suppose all comes down to gas in the end, doesn't it? The problem the airlines have right now is lots. But one of them is that fuel costs are now the highest costs for airlines. So they're thinking about all sorts of ways of getting around them.
They constantly cite the fuel costs, but I'm not entirely sure how these alliances help them save fuel. But Continental and United have announced some sort of alliance. There was some talk that Continental and United would merge. And they all announced to each other a few months ago or about a month ago that that is not going to happen. So, yesterday they announced an alliance.
Here is how it's going to affect you largely. There's going to be code sharing on flights in the United States. You know, that means that you book a flight on Continental or three or four flights on Continental, one of them might be on United or vice versa.
There's going to be reciprocal frequent flyer miles. So, you can easily get your status on either airline if you fly on the other.
And, Continental will leave the SkyTeam Alliance -- this is how it may affect you the most -- and is going to join the Star Alliance, which is where United is.
So, for American travelers, you will actually notice some differences in what you can book, what you can co-chair, what you can easily get when you're using one of their sites. There are going to be some bigger deals in terms of what they're sharing in Latin America and Europe -- travel to those places.
But for now, for American passengers, it's going to mean an alliance, there'll be more co-chairing, you can get status of your flights. So, often what happens if you have status on one of these airlines, you might get an upgrade. You'll fly on an airline that is aligned with that airline so that they'll give you the nice treatment. Now, you'll get that on United and Continental.
Continental is one of the stronger airlines out there right now. It's been the longest out of bankruptcy. United has got a lot of issues right now. So, we have to see how this one works. But I still don't see how it saves anybody any fuel.
ROBERTS: Any luck, by the way, on the price of a gallon of gas in China?
VELSHI: Yes, I found a lot of information about the price of a gallon of gas in China, but we're just trying to narrow it down so we don't give the wrong stuff. But I'll have that for you in exactly half an hour.
ROBERTS: All right. Looking forward to that. Thank you, sir.
Larry King has interviewed some of the most important and powerful people in the world. Tonight, he takes a break from all of that and jams with Motley Crue.
LARRY KING, HOST, "LARRY KING LIVE": Good morning, Kiran and John. We got a great "LARRY KING LIVE" for you tonight -- Motley Crue. I spent some time with Mick and Vince and Tommy and Nikki and they showed me the ropes. Here's a look at some of what you will see.
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UNIDENTIFIED MALE: Who likes Larry King? Who likes Motley Crue? We're going to be on.
Motley Crue, "LARRY KING LIVE."
UNIDENTIFIED MALE: Check it out.
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KING: All the guys are going to be here and you know I'll be asking Tommy about his new girlfriend, his ex, Pam Anderson. And that's not all, Lewis Black rounds out the hour. It's going to be fun. It's "LARRY KING LIVE" tonight.
CHETRY: We love you, Larry.
ROBERTS: He has got so much soul, that guy.
CHETRY: He really does.
ROBERTS: Tommy, Vince and the boys on tonight.
CHETRY: And they're like one of the few -- right? Are those '80s bands that actually stayed together with the original members?
CHETRY: To see if their music still sounds good.
ROBERTS: (INAUDIBLE). Tonight at 9:00 Eastern. The show that you definitely don't want to miss.
You're watching the "Most Mews in the Morning." Sunny Hostin's legal hotline answering your questions. This week's topic -- how to deal with people with disabilities or how people with disabilities deal with police. Your e-mails, just ahead.
CHETRY: Also, you always got your BlackBerry on, right? You know, checking it in and after you leave work. Well, people who are doing that say, you know what, we should get paid for all that scrolling. And some of them are because they demanded it. Can you? You're watching the "Most News in the Morning."
CHETRY: A lot of people are working around the clock, thanks to their BlackBerries. And many say, you know what? If I'm at home and constantly on this thing, I should get paid for it. Well, one group of workers fought back and won.
Richard Roth tells us how.
RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT (voice-over): The BlackBerry is a constant companion.
UNIDENTIFIED FEMALE: I actually can't imagine life without it.
UNIDENTIFIED MALE: I use it from the second I wake up until the second I go to bed.
ROTH: But the device can be a drag.
UNIDENTIFIED MALE: This thing is like a -- I think a ball and chain.
ROTH: Wired-up workers say they can't even escape from the job after hours. Now, they want to get paid for it.
UNIDENTIFIED FEMALE: I definitely think that we should be compensated.
UNIDENTIFIED FEMALE: I think people should be compensated for what they're being asked to do outside of work.
ROTH: Writers and producers at ABC News demanded payment for after- work usage and reached a settlement with management. Elsewhere, people keep multi-tasking while the office is closed.
VALORIE BURTON, LIFE COACH: For some people, they feel like they're missing out on something. I think for others, there really is a genuine fear that they'll appear not to be a team player.
ROTH: And attorneys are sending a message to businesses -- prepare for legal action.
JEFFREY SCHLOSSBERG, ATTORNEY: Employers don't really perceive that there's a problem or an issue with employees using their BlackBerries outside of work. They don't see it.
UNIDENTIFIED MALE: We're expecting a message any minute.
ROTH: Financier Andrew Tsunis is separated from his BlackBerry only when taking midday naps.
UNIDENTIFIED FEMALE: Here's an extra chair. Turn off your cell phone or your BlackBerry.
ROTH: He doesn't expect his employees to be messaging at night.
ANDREW TSUNIS, BLACKBERRY USER: Compensated for using the BlackBerry while out of work?
ROTH: 12 hours.
TSUNIS: No, I don't think that's a good idea.
ROTH: Maybe brute force can eliminate the problem.
UNIDENTIFIED MALE: It is very tough to get rid of those.
UNIDENTIFIED MALE: Holy crap.
UNIDENTIFIED MALE: Be careful.
UNIDENTIFIED MALE: Oh, it's really good.
ROTH (on camera): The world's strongest man in the United States cannot destroy this BlackBerry.
ROTH (voice-over): But will companies be as tough when it comes to exhausted workers armed with a device?
ROTH: Hello. This is a very undefined area by law. But we know that attorneys are calling, cold calling into various businesses looking for employees that may want to pursue litigation about BlackBerry use off hours.
CHETRY: You know, it's true, though, you're on it constantly, right? 24 hours a day from the second you wake up.
ROTH: I'm sure there are people on it right now who are watching hours before they go into work right now and thinking, maybe, hmmm.
CHETRY: Did the weightlifter break it?
ROTH: No, the weightlifter was unable to break those BlackBerries.
CHETRY: He did crack a screen, though.
ROBERTS: Oh, yes. Look at that.
CHETRY: How about it?
ROBERTS: This is an old one?
ROTH: I can't reveal that. It's against company policy --
ROBERTS: It is slightly broken now.
ROTH: No, you can slam it. I'm sure you get frustrated here occasionally. You're busy e-mailing right now while I'm even talking that report. You didn't even hear my report.
ROBERTS: You serious? You want me to break this?
ROTH: Yes, I don't care.
CHETRY: Don't break it, John.
ROTH: The IT people are always happy to try and --
ROBERTS: He's like a fly fisherman. He just sort of sets the fly out there and waits for a chad to jump out of it.
ROTH: I really don't like eating fish but I'll go with that analogy.
CHETRY: Good seeing you, Richard. Thank you.
ROTH: Thank you.
CHETRY: Well, China can't get enough oil and now it's tapping rival Venezuela. Could be bad news for our leverage and our gas prices.
ROBERTS: The Mars Lander strikes ice. Our space expert on the hope that it gives for finding life there and sending life there in the future.
ROBERTS: It's Friday which means it's time to answer some of your legal questions with AMERICAN MORNING's legal analyst Sunny Hostin in our "Sunny's Law" segment.
Good morning to you.
SUNNY HOSTIN, CNN LEGAL ANALYST: Good morning, John.
ROBERTS: Our e-mail this morning comes from Amy in Florida who writes my Asperger son, this is a son with Asperger Syndrome, had a run in with our local police. He was charged with a second-degree felony. We told the police immediately that he had A.S. and showed our diagnosis from a doctor, but they would not drop the felony.
What are law enforcement and state attorney organizations doing to educate themselves on how different children, teens, and adults with autism or Aspergers communicate?
So how our police and attorneys train to deal with people who have disabilities like this?
HOSTIN: You know, when we first got this e-mail, John, I just wasn't sure. And so I called a few of my friends that are on the police department in different jurisdictions. And by a margin, the response I got was that there really is no specific training for dealing with children and adults that have autism or Aspergers.
And so it was really pretty fascinating to me. What I was told was, you know, we do get some training in dealing with people with -- we call them EDPs in law enforcement, sort of emotionally-disturbed persons. But those are -- that's sort of a tactical training. How not to approach, how to approach. But nothing like this. So it's really, really fascinating. I don't think there really is any training out there.
ROBERTS: So what tips do you have for parents who might find themselves in a situation like this?
HOSTIN: Well, there are couple of tips. And take a look at this. I think there should be tips for parents of kids with autism before there is trouble with the police. Talk to your kids. Wear an alert bracelet. Carry the information card. Make sure that your kids do that.
Carry a number of an advocate organization or a relative. As the officer to contact that relative or that advocate. And then, finally, please talk with your kids about interaction with law enforcement and how to deal with these types of situations before they happen.
ROBERTS: So still a long way to go, really, in dealing with these people with disability?
HOSTIN: A long way to go. But there are tips that I want to give some parents for what to do when this type of thing does happen. Tips after contact with the police.
One thing that they really can do is alert the officers as this viewer did. But if that doesn't work, go to the prosecutor. Having been a prosecutor, I did have parents that came to me, John. Go to the prosecutor or judge and plead your case there prior to charging. If that doesn't work and your child has been charged, request a diversion program as opposed to jail time. And so there are things that can be done. But I think we have a long way to go with law enforcement in this particular area.
ROBERTS: Some good information for us this morning. Sunny, thanks.
ROBERTS: Team baby boom. One school, 17 pregnant girls.
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UNIDENTIFIED FEMALE: These numbers are outrageous.
(END VIDEO CLIP)
ROBERTS: And a pact.
Plus, Houston, we have ice. The Mars Lander makes an earth shattering discovery. You're watching the "Most News in the Morning."
ROBERTS: It's four minutes to the top of the hour. Welcome back to the "Most News in the Morning." And time for a check of our own CNN gas gauge.
The national average for a price of a gallon of gas according to AAA is $4.08 a gallon. 28 cents higher than a month ago and more than a dollar higher than this time last year. And a penny higher than it was earlier this week.
Higher gas prices are the center of politically charged debate over whether or not to drill for oil in Alaska's National Wildlife Refuge. This morning we cut through all the spin.
CNN special correspondent Frank Sesno looks at what would happen if drilling began there and how long it would really take to see a single drop of oil.
FRANK SESNO, CNN SPECIAL CORRESPONDENT: John, Kiran, President Bush and a number of congressional members say it's high time to end the ban on oil drilling not just in coastal waters but in Alaska's Arctic National Wildlife Refuge.
Now, Barack Obama is against that, so is John McCain. On this they agree, but there's a lot of oil there and public attitudes may be changing.
SESNO (voice-over): With prices this high, what if John McCain and Barack Obama flip and the U.S. Congress decides it's time to drill for oil in the Arctic National Wildlife Refuge, ANWR, after all. Maybe as much as 16 billion barrels of it. There'd be a firestorm of environmental protest, for sure.
UNIDENTIFIED MALE AND FEMALE: Keep our country great! Separate oil and state!
SESNO: But Alaska's governor says people want it and the time is right.
GOV. SARAH PALIN (R) ALASKA: If we want to become more energy independent it makes sense, obviously, to be looking domestically.
SESNO: If they drill, results will be a long way off. It would take two to three years to get the leases, another two to three years to drill a single exploratory well. Years more to build pipelines, plants, drilling pads and the wells themselves. Maybe ten years, the Energy Department says before the oil would flow.
And if it flowed, it wouldn't be insignificant. Maybe a million barrels a day at its peak. But that's less than 5 percent of what we use today. Impact on price? Not much. Maybe a buck a barrel or so. It would reduce dependence on imports somewhat. The U.S. buys about 60 percent of its oil abroad now. That would drop to 49 percent or so at ANWR'S peak.
What about the environmental costs? Negligible say proponents. If all of ANWR were the front page of "The New York Times" they calculate, the affected area would be the letter T. 2,000 acres out of more than 19 million. Opponents say if they drill, it would disrupt the wilderness and be a costly distraction from efforts to find alternatives.
Without ANWR, Alaska's oil production will decline by about 25 percent in the next six years. If hybrids, biofuels and conservation don't change things a lot that will mean even more dependence on imported oil.
SESNO: For a long time, public opinion has lined up formally opposed to exploration in the Arctic National Wildlife Refuge. But according to a Gallup Poll last month, a majority now, 57 percent think drilling should be permitted in America's protected areas including Alaska. $4 a gallon gasoline is changing the politics of oil.
CHETRY: And we're coming up just to the top of the hour. Here's a look at what's making news this Friday.
The mighty Mississippi River overtaking one levee after another in Missouri and Illinois. Because of this, forecasters say that many towns down river may actually be spared from flooding which had been predicted for today.
Also, a war funding bill with $2.7 billion in flood relief is now headed to the Senate. The House approved it yesterday. It also provides $162 billion to fund the wars in Iraq and Afghanistan. President Bush said he will support the legislation if approved.
And elsewhere on Capitol Hill this morning, former White House Press Secretary Scott McClellan will discuss his bomb shell book about the Bush White House under oath. He's going to be appearing before House Judiciary Committee.