[an error occurred while processing this directive]

 

Return to Transcripts main page

RICK'S LIST

Warren Buffett Testifies Before Congress on Financial Crisis; Oil Crisis Grows; Israel Under Fire For Raid on Aid Ship

Aired June 2, 2010 - 15:58   ET

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


DREW GRIFFIN, CNN ANCHOR: But time for the closing bell. Poppy Harlow joins me now for the "CNN Money List." Poppy interviewed Warren Buffett just last hour. He had some interesting things to say and also interesting things to say about what he thinks caused the financial meltdown, right?

POPPY HARLOW, CNNMONEY.COM: Yes. It's very interesting, Drew. I'll tell you, this was the financial crisis inquiry commission. It's a congressional panel that's been set up. They have to report back to the president on December 15th. But they had to subpoena Warren Buffett to sit in front of them to testify about the causes of the crisis. They asked him twice in letters and he turned them down, and then they subpoenaed him.

So I just sat through about two hours of testimony from Warren Buffett. The reason they want him to testify is because he's the single biggest shareholder in Moody's, one of the biggest rating agencies in the country and one of the companies that's blamed a lot for being at the crux of this financial crisis for not seeing the housing crisis.

And it was very interesting to watch Warren Buffett sort of rush to the defense of Moody's and talk about the fact that it was a flawed system in general, not just Moody's, that he didn't even see the housing crisis to the extent that it became apparent it was, that the American public, that the media didn't see it.

But I also talked to him, Drew, about financial regulatory reform, because as you know, that bill is likely to make it to the president's desk in a matter of weeks. He weighed in on that with some interesting insight. Take a listen.

(BEGIN VIDEO CLIP)

WARREN BUFFET, INVESTOR: It will do some good but I think it would be more useful, obviously, if they could give their findings before Congress acts. It's like coming down with an 11th Commandment sometime after Moses has proclaimed ten. It's hard to get much attention paid.

HARLOW: Are we rushing Wall Street reform?

BUFFET: The demand is there. People are understandably enormously upset with what happened in the financial crisis. I think it's sort of inevitable that Congress pounds ahead and doesn't wait for something like this.

(END VIDEO CLIP)

HARLOW: It's interesting, Drew. I asked him if they were rushing reform. He said that's basically a moot point. The question is you have the political momentum now. You just have to do it now, Drew.

GRIFFIN: Poppy, does he think that reform is not needed, that Wall Street is just going to behave now?

HARLOW: No, not at all. He's been one of the biggest advocates for it being needed. He's said it for years and years and he said it again today, Drew, in his testimony. He said CEO's need to be the chief risk officers in their companies.

And if their companies have to be bailed out by the government as most of the big banks here in New York were, then those CEOs should go hope penniless and they should really be held accountable. And he sticks to the point that these CEOs really have to be accountable.

He was asked about the CEO of Moody's, the rating agency that was sitting right next to him, how that rating agency did in handling all of this. And I want to play you some sound we just cut from the interview talking about the ratings agencies and whether they're at fault, whether they're at the crux of the crisis or not. Take a listen.

(BEGIN VIDEO CLIP)

BUFFET: I think they've generally done a fairly good job, but I think they're limited in what they can do. I do not follow agencies' ratings. I don't follow stock pickers' recommendations either, equity recommendations. I think they have some utility, but I don't think that anyone should say a rating of AA today means it's going to be AA ten years from now.

HARLOW: Where's the social utility in rating agencies? Charlie Monger and you talk about social utility a lot. And the CEO of Moody's said we give these ratings to the public for free. Be what they also did is not just Moody's, but Fitch and S&P and rating agencies across the country rated absolute junk with the highest possible ratings they could.

BUFFETT: If you look at the mortgage backed securities, it's a disaster. If you look at the record on corporates and municipals, it's hasn't been bad over the years. They're far from perfect, but they have been better than somebody that doesn't know anything about it.

And one advantage they have is if you take -- just take insurance companies. If they could invest in anything they pleased, you would have -- you would have some buccaneers get into that business, take other people's money, and who knows what they'd do with it?

So there's some utility in providing a check in regulated industries on what managers do with funds under their control that belong to other people.

(END VIDEO CLIP)

HARLOW: So, as you heard, Drew, he said there's some social utility in what rating agencies do. He said be careful about finger- pointing.

And that will do it for us. Closing bell on Wall Street, a nice day on the Street, up all session, the Dow closing up 228 points.

A lot more from Warren Buffett, you can check it out on CNN Money, Drew, but very interesting to hear him. And it took a subpoena, but I'm glad we were able to hear him.

GRIFFIN: Yes, I'm -- I was going to ask you about that, but we're out of time, but why -- why he needs a subpoena to talk.

(CROSSTALK)

GRIFFIN: The guy has never been quiet before.

(CROSSTALK)

HARLOW: Yes. He basically said he gets all of these demands and if he said yes to everyone, he wouldn't have the time to run his company. So, he can't yes to everyone. So, yes, but he did respond to the subpoena, and he came and testified.

GRIFFIN: All right, very good. Poppy Harlow, thanks a lot.

Well --

HARLOW: You bet.

GRIFFIN: Joran van der Sloot, the Dutchman once considered a suspect in the disappearance of Natalee Holloway, is the suspect in the killing of a woman in Peru. We're following new developments, and this:

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): Here's what's making the LIST.

As the oil sheen moves in to on the Gulf shores, plan A, B, C, D, E, F, G is under way. But is it working?

ADMIRAL THAD ALLEN, U.S. COAST GUARD COMMANDANT: That saw blade is becoming stuck inside the riser pipe.

And is this creeping oil a creeping crisis for the Obama administration? Robert Reich, remember him, joins the list with his list of five reasons why the White House should take over BP.

Anguish and outrage now against Israel's deadly raid on a ship carrying food and supplies to Gaza. We're asking the leader of the Free Gaza Movement why they're still challenging that blockade. (END VIDEOTAPE)

GRIFFIN: It's hour two. Time to pick up the pace, today's LIST for you.

We're going to check on number one: another potential confrontation off Gaza. Just a short time ago, Israeli Prime Minister Netanyahu called an aid flotilla a threat to his country's existence.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (through translator): This is a -- a very immediate existential threat to Israel. And I'm telling you and I'm telling you and I'm telling my friends in the countries that criticize us that a -- an Iranian port in the Mediterranean will cause an immediate danger to the countries -- to the European countries and to other countries.

Therefore, we will stop and check and examine every ship that is coming to Gaza, and this is what we did.

(END VIDEO CLIP)

GRIFFIN: Greta Berlin is co-founder of the Free Gaza Movement. That's one of the organizations behind the aid flotilla whose boat was involved with that clash with Israeli troops Monday morning.

You have more ships on the way, Greta. When will they arrive?

GRETA BERLIN, CO-FOUNDER, FREE GAZA MOVEMENT: Well, first of all, they didn't attack one boat. They attacked all six of our boats.

(CROSSTALK)

GRIFFIN: Greta, let me ask you a question. We're talking about the boat that's on the way. When -- is that literally on the way right now, and when will it arrive?

BERLIN: The boat is on its way, but, after Israel yesterday said that they had sabotaged two of our other boats, we're really not going to tell you, anybody, right now where it is, because we don't want any more sabotage to the boats, because this boat has 1,200 tons of vitally needed supplies for the people of Gaza, and we want to make sure we get it delivered.

GRIFFIN: Well, with the -- with the history now that we have in the last two days, and the violence and the deaths, I'm asking why you would put your boats and your people, specifically, on those boats directly into harm's way, knowing right now from Benjamin Netanyahu that they are going to be stopped and they are going to be searched?

BERLIN: Because Israel has no right do this.

We're challenging Israel's right to put a blockade up on 1.5 million Palestinians and -- and commit slow-motion genocide against them. This is what we're challenging. We are a civilian initiative. Israeli soldiers came on board all of our boats, not just one, and brutally murdered at least nine people, maybe a few more. We don't -- we're not sure yet.

And, so, you should really be asking yourself, what right does Israel have to do this in international waters?

GRIFFIN: Does Israel -- Israel have a right to defend itself from potential bombs, rockets, artillery, guns getting to Gaza through boats like yours?

BERLIN: Of course it does, but every single piece of cargo that we had on all of those boats were not only inspected at the ports where they left, but had individual and independent inspectors look at that cargo. Our cargo --

(CROSSTALK)

GRIFFIN: But they -- they were not inspected by any kind of Israeli official?

BERLIN: Why -- absolutely not. We wouldn't trust Israel.

(CROSSTALK)

GRIFFIN: And Israel wouldn't trust you, correct?

BERLIN: But there's no reason. Look, this is our ninth trip. We got in successfully five times. Five times, Israel did not stop us.

We have no obligation to tell Israel that we're coming. We're going straight from international waters into the waters of Gaza. We are delivering supplies that Israel refuses to have the people of Palestine, the people of Gaza to have, cement, olive trees, paper, crayons for the children. That was what was on our boats. And Israel had no right to stop us in international water and murder us.

(CROSSTALK)

GRIFFIN: Let me ask you a question, Ms. Berlin -- paper, crayons, olive trees. I just had an expert on a congressman, Mike Pence, from Indiana, who is an expert on this issue as well.

He said, look it, there is no humanitarian crisis in Gaza. People are eating in Gaza. There is medical aid. You are talking about paper, crayons and olive trees, and -- and placing basically your volunteers in a potential situation where they could be hurt or even killed, as we now learned.

BERLIN: Well, I don't know what --

GRIFFIN: What is the real aim here? Is it to -- is it to actually help and try to solve the situation in this Gaza Strip, or is it just to raise awareness of your issues?

(CROSSTALK) BERLIN: I -- I understand the question. Let me finish this.

GRIFFIN: Mm-hmm.

BERLIN: First of all, Israel has a right to protect itself, but so does the Palestinians. There have been 30 Israelis killed since the year 2000 by rocket fire. No civilian should be killed.

In that same amount of time, Israel has killed 3,000 people in Gaza. That's a 100-to-1 ratio. So, why don't you ask whether the Palestinians have the right to exist, whether the Palestinians have a right to protect themselves?

Number two, I don't know where this congressman is getting his information, probably from some Zionist source. But if you want to look at U.N. reports, if you want to look at Amnesty International, every single one of them say that the people of Gaza are barely, barely getting subsistence-level food and clothing.

Ours was not about food and clothing. Ours was about taking in construction supplies, so they could help rebuild their homes that were destroyed in Operation Lead. Israel is terrified of us.

GRIFFIN: Let me -- let me --

BERLIN: They met us with violence because they want us to stop.

GRIFFIN: Yes.

Palestinian spokesman Ghaith Omari saying that the aid flotilla is not a good idea, that the people behind it are opportunists. You're that opportunist, he says.

BERLIN: And who is that? Is that a member of the Fatah?

It's little bit like saying that the Republicans think that the Democrats are opportunists. We are a civilian initiative. If governments had the courage to stand up and do what they were supposed to do, and make Israel open up this blockage, you -- there would be no need for us. We would all go home.

I teach (AUDIO GAP) for a living. I would love to go home and do what I do. But until this stops, we will continue to send boats, because somebody has to --

GRIFFIN: And you will continue to send volunteers who are willing, apparently, to die to do this?

BERLIN: There is no need for the volunteers to die. There was no need.

The -- Michael Oren, who is the ambassador to the United States, admitted today that there wasn't any way they were going to be able to non-violently get on the largest Turkish boat.

But I want to make something very clear. Every single boat was attacked, not just the Marmara, every boat. The Greek captain on the European Campaign to End the Siege boat was shot. Israel's doing this deliberately. Shoot the captains, shoot the volunteers, and --

(CROSSTALK)

GRIFFIN: OK. We have to go now. There obviously is going to be investigations, both by the Israelis and by, apparently, an international group looking into this, and will determine what exactly did happen.

But, Greta Berlin with Free Gaza, always appreciate your feisty comments and your -- certainly your passion for this cause. And thanks for joining us.

Well, you're looking at a live feed of the oil leak, as BP tries to cap it. How do they -- we know that they're really doing all they can to fix this? And should President Obama not only take over the cleanup, but take over the company?

Robert Reich thinks so, and he lists five reasons. The former labor secretary is ahead.

And more on the fallout over a flotilla of aid to Gaza. Warnings from Israel to Turkey are sparking outrage. A live report from Ivan Watson -- he's is Istanbul. That's next.

(COMMERCIAL BREAK)

(BEGIN AUDIO CLIP)

UNIDENTIFIED FEMALE: Hey, Rick. Irene (ph) from North Carolina.

What the Israelis did to that flotilla ship is no different from the Somali pirates.

(END AUDIO CLIP)

GRIFFIN: We want to show you live pictures right now. This is what we believe to be one of the survivors of, well, a confrontation off Gaza. This is just coming in.

Within the past hour or so, planes carrying more than 500 captured activists have started arriving in Turkey. What you're seeing is one of what we believe to be the injured being off-loaded off a plane in Turkey, obviously in need of medical attention there.

These pictures are happening live.

And standing by live, also, we have Ivan Watson, our CNN correspondent who is in Turkey.

And, Ivan, I can just imagine that these live pictures must be being shown there, where you are as well, and inflaming the already hot tensions among the Turkish people there.

IVAN WATSON, CNN CORRESPONDENT: Absolutely, Drew. The -- the pictures you're seeing are in the Turkish capital. And that's where the hospital planes that the Turkish government sent to Israel have been taking the wounded.

Now, I'm in Istanbul at another airport, where we're waiting for three other planes full of some of the more than 460 Turkish citizens that were basically taken prisoner after that commando raid turned so bloody Monday morning in the Eastern Mediterranean.

We are getting conflicting accounts of whether or not all three of those other planes have taken off yet. And the entire media, it seems like, representatives from every TV channel in Turkey, dozens of channels, are gathered here, waiting for that arrival, as well as government officials in this terminal right over my shoulder here, Drew.

GRIFFIN: And, Ivan, I want to bring our viewers up to date on what -- what kind of a political crisis this is where you are.

Turkey has been a friend of Israel, an ally, a link to the Muslim world. But this incident, where many of the volunteers were Turkish, has sparked new outrage, calls for diplomatic separation of the two countries, at best, and some of these protesters are -- are looking for even more type of revenge with Israel.

Bring us up to speed on just what this means to Middle East, Middle East relations, and Middle East peace.

WATSON: Well, this could be seismic for a region that we know full well is very, very turbulent. Turkey and Israel have been allies. They have been sharing intelligence. They have close economic ties. They have conducted joint military exercises.

But Turkey says no more military exercises now. It's canceled joint military exercises with Israel since this incident took place. In parliament today, all of the lawmakers from different rival political groups voted unanimously to condemn the Israeli commando raid on Monday morning, and they all issued a call for the government to reassess military and economic ties with Turkey.

And Turkish officials are also telling me that, in order to get these prisoners back, they issued an ultimatum to the Israelis. They said, unless is you hand these more than 460 prisoners over in the next 24 hours, we're going to reassess all our contacts with Israel.

Why is that a big deal for the Israelis? Well, they really don't have any real Muslim friends in the Middle East aside from Turkey. This is one of the countries that Israeli tourists feel comfortable coming to. On the -- at the -- in the tourist -- tourist resorts along the coasts, you will find waiters and bartenders who actually speak Hebrew.

And we are hearing that there are cancellations in the tens of thousands right now. This could have been huge implications on geopolitics in a region that we know is prone to crisis. GRIFFIN: All right, Ivan Watson on the scene in Istanbul, as we're watching live pictures from Ankara, Turkey, of survivors of that Israeli raid coming in there live in Turkey, as this crisis unfolds.

Ivan, thank you for that. We will keep in touch.

(BEGIN VIDEO CLIP)

TED HAGGARD, FORMER NEW LIFE CHURCH PASTOR: I called him to buy some meth, but I threw it away.

UNIDENTIFIED FEMALE: And who were you buying the meth for?

HAGGARD: No one. I was buying it for me, but I never used it.

(END VIDEO CLIP)

GRIFFIN: Do you remember that stunning admission, the fallen pastor? Well, he just announced his new plans for the future. You will hear it for yourself. That's ahead.

And a middle-aged taxi driver goes on a shooting spree in England, killing at least a dozen people and wounding many more. We're going to take you through that story next.

(COMMERCIAL BREAK)

GRIFFIN: Quickly, let's get to the roundup list, keeping an eye on the big stories of the day.

Hypnotic, isn't it, and heartbreaking at the same time, watching this crude oil just gushing by the thousands of barrels per day into the Gulf of Mexico? Here's the -- the new thing. An attempt to saw off that busted riser that you see, that riser pipe, had to be suspended when the cutting device got stuck. They have freed it now.

Also today, federal officials closed even more of the Gulf to fishing. That's the third straight day they have increased the no- fishing ban.

Number two: a neighborhood stunned, police stumped. This is Northern England, where a man went on a three-town shooting spree today, killing 12 people, wounding 25. Police say this guy was a taxi driver. He drove his cab from small town to small town near the Scottish border, firing shots in each one. The rampage is over. They believe they have found the shooter's body and have identified him -- now trying to figure out just why he did this.

Number three -- and talk about bizarre -- CNN now confirming -- confirming Joran van der Sloot is being sought in Peru for murder. If that name sounds familiar, it's because you will remember van der Sloot is the main suspect in the still unsolved disappearance of Natalee Holloway in Aruba five years ago.

Peruvian police say a young woman found dead in a hotel room today was last seen with the now 23-year-old Dutch citizen. The room was in his name. And there is evidence, we're told, that incriminates him. Van der Sloot is believed to have left Peru, reportedly for Chile.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: All of those people are being heavily exposed to a large quantity of very toxic chemicals.

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: By a show of hands, how many of you live --

(END VIDEO CLIP)

GRIFFIN: You know, as if the oil spill weren't bad enough, Louisiana residents who live near chemical plants are experiencing illnesses that are surprising to even our Dr. Sanjay Gupta. A CNN investigative report is ahead.

And is it fixed yet? You're looking again at the live picture of the oil leak. We will update BP's progress. Chad Myers joins me right after the break.

(COMMERCIAL BREAK)

(BEGIN AUDIO CLIP)

UNIDENTIFIED FEMALE: Hey, Rick. Irene (ph) from North Carolina.

What the Israelis did to that flotilla ship is no different from the Somali pirates.

(END AUDIO CLIP)

GRIFFIN: Topping the LIST right now: day 44 of this oil leak. BP did free a stuck saw that stalled, it's cut-and-cap operation in the Gulf. That's this latest plan.

Last night, BP's remote-controlled submarine successfully cut into the well's riser pipe with giant shears. However, BP hit a snag this morning. The blade of the diamond wire cutter got stuck. A little over two ago, BP was able to free the stuck saw.

Let me show you some video. This is the first time that we noticed that the cutter was no longer stuck. I'm having a hard time taking a look at that myself, believe me. But they're resuming work slowly on this -- the question now, though, whether they need to put in a new blade, so they can continue the second cut sometime today.

Before I break down what's going on underwater, I want to show you some other video. This morning, the Coast Guard, right, is preparing for Thad Allen, the administration's point man on the oil spill, to update us on the stuck cutter.

However, the BP logo is still on the podium. So, see, yesterday, the Obama administration announced it's no longer going to do joint briefings with BP on the oil spill. Senior administration officials say the change an effort to control the message. And having a BP logo on your podium confuses who's really in charge, so they pulled it off.

I'm not sure what I think about that, Chad. Is it petty? Who cares who is -- the message is the oil is still leaking and it ain't getting stopped.

CHAD MYERS, AMS METEOROLOGIST: It's not getting stopped.

And, in fact, today, it's worse, because they actually cut off that insertion tube. You know, that insertion tube that was pulling like between 2,000 and 6,000 barrels a day --

GRIFFIN: Right.

MYERS: -- that's no longer even attached to this unit, because they -- they thought they were doing well. They had about a mile worth of this riser pipe that they had to get rid of. They knew that they couldn't pick it up all at one of the time.

And when they cut it off at the top of the BOP, the blowout preventer, the part that we had all had seen for days of that's kinked over --

GRIFFIN: Right. Right.

MYERS: -- they knew that, if they just cut that off, they wouldn't be able to move that whole pipe, because it would weigh so much. So they kind of cut it in thirds.

And when they cut it in thirds, then the -- the insertion tube that was sucking the oil was no longer attached to where the oil was coming out, so it wasn't sucking anything anymore. But then they took this little thing, almost like a -- think of it as a dental floss saw --

GRIFFIN: OK. Right.

MYERS: -- a little bit more high-tech, dental --

GRIFFIN: I hope.

MYERS: You would hope.

(LAUGHTER)

GRIFFIN: I hope.

MYERS: They have them that you can throw over the limb of the tree on a wire, and you just keep pulling this wire back and forth, and it would cut the tree?

Well, this wire that's gone around and tried to cut this blowout preventer top off, where the riser is connected, got stuck. It's just like you and me trying to take a band saw or a hacksaw and trying to cut through a galvanized pipe when you're trying make a shorter piece of a fence. It's heavy metal. This is big stuff. This isn't teeny-tiny galvanized pipe. But when you try to cut a round pipe with a straight blade or even a wire blade, it's going to get jammed. It just happens when you start to get the -- the increase in friction as you get on the other side of the round part.

Plus, there's a drill inside the pipe. You know, we have only seen the (INAUDIBLE) pipe that looks like this. There's a drill bore pipe inside there as well that they were going to have to get through as well to get all the way through the whole thing.

There's a lot of metal to get cut. They knew that was going to get stuck. This was not unusual. This was not -- this was not unplanned. They took the whole thing. They took the saw. The saw looks like a -- it's like a horseshoe almost.

GRIFFIN: Right.

MYERS: And it was going on the pipe. Then it goes on the pipe like this, and it was just sawing it off. They got it stuck. They pulled it off.

It's going back up to the surface to get a new blade, coming back down. They will park it on the other side of the pipe in order to cut the other side of the pipe off, rather than try to get it in that same groove they have already made. They are not -- they're not trying to get it into that same kerf that they already had.

Kerf is the -- the gap now in the metal pipe that the saw already made. You know, you cut a piece of wood in half, you're going to lose some wood.

GRIFFIN: Sure. Sure. Sure.

(LAUGHTER)

GRIFFIN: So, they have got to get these two sides to match up.

MYERS: So, they're going to try to get them matched up as close as they can.

GRIFFIN: And when they do --

MYERS: At 5,000 feet with ROVs.

GRIFFIN: Right.

And when they do hopefully get it cut open, then we must wait for phase two, which is the cap. And, in the meantime, that much more oil is coming out.

MYERS: Correct, of course, of course. And it will come out. It will almost look like an explosion when they get the other side completely cut off.

And this pipe, this riser pipe will -- in my opinion, they won't even have to lift it. It will get blown off by itself because of the force, 2,300 PSI coming out of that -- that's like -- that's the tip of the -- of a very Home Depot power washer --

GRIFFIN: Right.

MYERS: -- 20 inches around. Think about how much you could clean if you had that kind of PSI cleaning your driveway.

(LAUGHTER)

MYERS: Your little PSI that you're trying to use your power washer at -- 2,300 PSI -- it's about the size of a pencil lead. Well, this thing is 20 inches around blowing that same pressure out. And it's going to blow it away. And it's going to be -- eventually get attached. And, when it get attached, then they start sucking it out.

GRIFFIN: Let's -- let's go to a question on -- on Twitter.

"Question I have yet to be answered by anyone, how much oil salvaged from the spill once it's capped?"

So, can they claim some of that oil? If this cap goes on and they start sucking it out, is that usable oil?

MYERS: Sure it is, absolutely.

Now, there will be methanol in there, and they may even be warm water in there. They're going to have to pump methanol into the cap, because, remember, the old dome that they built, the first thing that they did? It filled up with hydrates, basically ice crystals, although they're a little bit more technical than that.

They can't get this thing filled up with ice. If it does -- if you -- how do you -- how do you cool off a cup of coffee?

GRIFFIN: I blow on it.

MYERS: Sure. How do you do it? You kind of purse your lips. It's cold. You don't do this, because it doesn't get cold if it's still hot.

Well, you have this 20-inch pipe, and all of this air coming out. It's -- it's methane, but it's still air. It's a gas. And as it expands when it hits the water, it cools off. So, it's freezing saltwater down there in this dome. They can't have that again. They cannot get this dome, this new cap, filled up with ice, or it's not going to work again.

GRIFFIN: And if this doesn't work --

MYERS: Good luck. They have got two more months of drilling.

GRIFFIN: That's it, right?

MYERS: They have already done the junk shot. We didn't really hear about that. We all knew that the junk shot was a possibility. GRIFFIN: Yes.

MYERS: They did that over the weekend when they were trying to do the top kill.

They knew -- when they were doing the top kill and they were trying to push this mud down the wellbore, they knew that it wasn't going down. So, they did a junk shot in there, and to try to fill up these holes where the oil was already leaking out and where the mud was leaking out. They tried to fill those holes up so that the mud could go down. It didn't work at all.

GRIFFIN: Chad Myers staying on top of it. Something has got to work.

MYERS: Watching pictures. Go to CNN.com/live. It's there all day long.

GRIFFIN: In the meantime, former labor secretary Robert Reich thinks President Obama should take over the company. He's going to be here to tell you himself, and he brought his own list, his list of the top five reasons.

That's ahead.

And talk about gutsy. This is surveillance video of two guys who hopped a transit bus while the driver was taking a bathroom break. How does that turn out? Not so well.

That's next.

(COMMERCIAL BREAK)

Well, former labor secretary Robert Reich caught our attention today. He's been speaking out on the oil leak in the Gulf. He even posted a few suggestions for the president on his blog.

Here's the top five list of reasons why he thinks it is time for the federal government to take over British Petroleum.

No. 5: The president not legally in charge.

No. 4: The U.S. government can't force BP to adopt a different strategy right now.

No. 3: BP's new strategy to stop the leak is highly risky.

No. 2: He's not sure BP is devoting enough resources to stop the leak.

No. 1: BP, he says, has continuously and dramatically understated the size of the leak.

You're looking at a live picture of that leak and the efforts to try to stop it. Robert Reich thinks it's been a disaster. He wants the government to take over the company. He is fired up. He is next. We'll be right back.

(COMMERCIAL BREAK)

GRIFFIN: It is time for the government to seize control of BP and take over the company's oil spill recovery efforts in the Gulf. Seriously, that's what former Labor Secretary Robert Reich says.

We were talking about his reasons before the break. Now let's break it down with the man himself, Robert Reich, now professor of public policy at the University of California. He joins us live from Berkeley.

Professor, Secretary, I've got to tell you, I've always considered you a very serious person, but this doesn't sound serious to me at all. Are you serious about this, or was this some kind of a joke to get things going?

ROBERT REICH, FMR. LABOR SECRETARY: I don't think this is a joking matter at all. I mean, we have here one of the most serious environmental dangers, catastrophes faced by this country in history, and yet the effort to stop this spill is in the hands and under the control of a private, for-profit company, answerable to shareholders. That is an untenable proposition.

BP's expertise is certainly relevant. Its knowledge is certainly relevant. I'm not saying that that expertise and knowledge should not be applied. But the government does have to be in the position of weighing the risks and benefits, and also making sure the public is getting the right information, and also making sure that all resources that BP has are being put to stopping this leak.

GRIFFIN: But to take over a company like this sounds not only highly illegal and counterproductive, but seems to me to smack of something that we might see in Venezuela or in Russia under Putin.

REICH: Oh, please. You know, this is -- a temporary receivership is not a wild legal remedy. In fact, it's undertaken quite often, and even without statutory authority.

And, by the way, I'm not suggesting the president do this if there's no statutory authority, no congressional action. But even without statutory authority, you've had presidents like Harry Truman take over the entire steel industry in a national emergency.

No, this is very, very specific. And it is very important that the Obama administration have the power, the legal power, to order BP to do what is necessary, to also get to the bottom of all of the facts and make sure that BP uses all of its resources.

GRIFFIN: I think you would agree that, I mean, priority number one has to be to stop that leak, and the president has said that is where both the president, the administration, the government, and BP's concerns merge. There is no upside for BP to allow this to continue.

REICH: Well, with due respect, I don't think BP's interests are exactly the same interests as the United States.

GRIFFIN: You don't think they're doing everything they can to stop this leak?

REICH: Well, no. In fact, BP has shown time and again in its history in the United States with regard to explosions, worker safety, the spill on the North Slope of Alaska. It is willing to cut corners in terms of making a profit.

Now, other companies have not had nearly as bad a safety and environmental record as BP. But given BP's record, how can we entirely entrust this operation to BP? It simply doesn't make any logic. BP was responsible for this, and BP needs to be under federal control, at least until this is cleaned up.

Now, again, I'm not suggesting this is a permanent receivership. I'm suggesting a temporary receivership because this is such a national emergency.

GRIFFIN: The president, the administration has been criticized for not doing enough. Certainly, that's coming out of the governor of Louisiana.

Do you think that the response, whether or not BP or the government is in charge, the response of the federal government in cleaning up and trying to get containment on this has been enough?

REICH: Well, cleanup is a separate task. That's a very, very important task. And whether the federal government is doing enough or can do more right now, frankly, I don't know. But in terms of containing the spill, I don't see that the federal government is doing nearly what it could do, and that's precisely why I think it's so important to make sure that all of the assets that BP has, all of the information it has, all of the expertise it has are directed to this one objective of containing the spill.

Right now, BP is saying we're not going to be able to do this until August. Well, by August, we are going to have even a larger environmental hazard on our hands.

I don't recommend this lightly. I would not have recommended this if BP would have been able to contain the spill up until now. But again and again, BP shows that it is either unwilling or unable do it. And again, I worry that its loyalty, its primary responsibility, is to its shareholders, and not to the health, safety and environmental protection of the United States.

GRIFFIN: So, Mr. Secretary, just to wrap this up, a temporary receivership, put the power in the hands of the government, somehow appoint somebody who would be the government's CEO of this oil company, and then run the operation from there? That sounds incredibly time-consuming and a waste of precious time.

REICH: Well, look, I'm not suggesting -- I'm not suggesting in any way that we wait. In other words, we ought to -- BP ought to be doing just exactly what it's doing now. The government ought to be doing what it's doing now. But alongside, we need to have the government take BP's operations over, at least until this is solved.

I mean, again, the analogy of Three Mile Island comes to mind. The analogy of any major corporation that was threatening because of its malfeasance or its nonfeasance, threatening the safety, health and environment of the United States. No president can simply allow this kind of operation to be completely under the control of the people who created the problem to begin with.

GRIFFIN: It's controversial. Thanks for joining us.

Secretary Reich from California.

Thanks for joining us.

REICH: Thanks very much.

GRIFFIN: And Wolf Blitzer is going to be up next.

(COMMERCIAL BREAK)

GRIFFIN: Wolf Blitzer is getting ready in "THE SITUATION ROOM" for his show coming up. A lot of politics to talk about.

And Wolf, I can't think of any other story that melds crisis and politics like this oil spill. Now we're hearing Robert Reich telling President Obama to basically take over British Petroleum, at least temporarily. A wild suggestion as we're looking at live pictures here, but this is continuing to be a crisis for the Obama administration, as from both the left and the right.

I think people are viewing this as nothing's happening. There's no progress being made.

WOLF BLITZER, CNN ANCHOR: Yes. Well, we hope that in the next few days, at least they'll contain this oil explosion, at least somewhat significantly, although there's no guarantee that that will happen.

The expectation is this could go on at least until August, when, as you know, Drew, they're going to be drilling these relief wells. But even then, even then -- yesterday I spoke with Thad Allen, the overall U.S. incident commander on the scene from the Coast Guard -- there's not a 100 percent guarantee even those relief wells, the two of them that are being built, that are being dug right now, will work. And if it doesn't, who knows how long this spill could go on?

So it's a nightmare not only environmentally and economically, but certainly, as you point out, politically for this administration.

GRIFFIN: And politically speaking, the administration continues to try to say, look, it's BP, it's BP's fault, it's a reason we need to change our energy policy. The president today, again, speaking. I believe he was in Pittsburgh, talking about energy, almost trying to deflect the blame and the crisis cleanup.

But, Wolf, you've seen a lot of crises come and go. You've seen a lot of presidents dealing with this tragedy. President Obama has been criticized vehemently about not getting as hands-on, and he still seems to not be getting his hands on or hands around this oil spill.

BLITZER: Yes. It may be unfair, but you know you have a huge political problem, Drew, not necessarily when the Republicans, the conservatives, members of the Tea Party are going after the president, who is, after all, a Democrat, but when you have sharp criticism coming against the president from our own James Carville, or from Maureen Dowd, writing in "The New York Times" today, if you saw her column, or Tom Friedman writing in "The New York Times," Frank Rich, you have sharp criticism, pretty sharp criticism, of the way the president is handling the oil spill coming from those columnists and commentators. You know you have a problem.

GRIFFIN: Let me ask you about one more serious problem that's developing, and it's going to be placed on the president's doorstep. Actually, it already is, and this is the whole idea about the flotilla members being attacked over in Israel, off the Gaza Strip.

The situation could literally spin out of control almost immediately in the Mideast. This is on top of all the other economic, Korean crisis and the oil spill crisis that this president has to deal with.

Is this just too much for this administration?

BLITZER: You know, it's a huge number of issues that the president has to deal with. I pointed out yesterday, if you take a look at that picture, the video of him speaking yesterday, you can see the gray hair. I've got a lot of gray hair, but that gray hair really emerging.

And if you compare it to what he looked like before he became president, just before he was elected, he's aged quite a bit in the year and a half. And it sort of underscores the enormity of these issues -- the economic issues, the jobs. You point out North Korea, South Korea, Israel and the Middle East, Iran potentially getting some sort of nuclear device. And now you have this oil spill in the Gulf. That will age a president, there's no doubt about that.

GRIFFIN: All right.

Wolf Blitzer live in Washington, getting ready for "THE SITUATION ROOM."

We'll look forward to that, Wolf. See you soon.

BLITZER: Thanks, Drew.

GRIFFIN: Well, imagine living in a town surrounded by chemical plants that make you sick. You're going to hear what it's like. A CNN investigative report is next.

(COMMERCIAL BREAK)

GRIFFIN: Mossville, Louisiana, a small town that's surrounded by chemical plants. Chief Medical Correspondent Sanjay Gupta has been looking at how pollution there has affected the health of the people who live there.

(BEGIN VIDEOTAPE)

SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: By a show of hands, how many of you live within a mile of some sort of chemical plant?

Just about all of you.

How many people here have had either themselves or a family member affected in some way either through illness or something else because of what they believe to be chemical plants?

UNIDENTIFIED MALE: I had one kidney removed.

UNIDENTIFIED FEMALE: Encephalitis.

UNIDENTIFIED MALE: I had to be given steroids because I had bad asthma.

GUPTA (voice-over): All these health problems.

UNIDENTIFIED FEMALE: I have a white blood count that is dropping. Every two years it's going down.

UNIDENTIFIED MALE: Both my kidneys are gone.

GUPTA: As a doctor, I couldn't believe what I was hearing.

UNIDENTIFIED MALE: I go to dialysis three days a week.

UNIDENTIFIED FEMALE: My daughter suffered with endometriosis to the point where she had to have a total hysterectomy, like most young women do in this area. And they really don't like to discuss it.

GUPTA: Most young women have hysterectomies?

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: I did.

GUPTA: You did?

Ma'am, you did, too? And you believe it's because, again, of this pollution?

(voice-over): Chemical detective Wilma Subra has been studying Mossville's pollution for years. She lives 100 miles down the road in New Iberia, Louisiana.

WILMA SUBRA, PRESIDENT, SUBRA COMPANY: All of those people are being heavily exposed to a large quantity of very toxic chemicals.

(END VIDEOTAPE) GRIFFIN: You can watch the CNN special investigation, "Toxic America." That's tonight and continuing tomorrow night, both at 8:00 Eastern, only here on CNN.

A couple of tweets from our show today.

"Can you blame the fishermen for not speaking? They are against one of the richest companies in the world." That's Elizabeth Cohen's piece about fishermen getting sick in the Gulf.

"Hey, we should take over BP and put Tony Hayward in prison," says Mike.

"Who was sworn into office, Obama or BP?" from Taylor Nelson.

"When a ship refuses inspection and rejects all reasonable alternatives, it has nothing to do with humanitarian aid."

Thanks for joining us.

We want to show you the in-studio crowd here.

Give a wave, you guys, if you can find a camera.

Wolf Blitzer is next. He's in "THE SITUATION ROOM."

[an error occurred while processing this directive]