Hope in the Gulf for the First Time in Months; New Fees on

Banks Inch Closer to Becoming Law; Cashing In on SB-1070; Alleged List of Illegals In Utah Under Investigation; Big Sell-Off on Wall Street - Part 2

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<Date: July 16, 2010>

<Time: 09:00>

<Tran: 071602CN.V11>

<Type: SHOW>

<Head: Hope in the Gulf for the First Time in Months; New Fees on

Banks Inch Closer to Becoming Law; Cashing In on SB-1070; Alleged List

of Illegals In Utah Under Investigation; Big Sell-Off on Wall Street - Part 2>

<Sect: News; International>

<Time: 10:00>

<End: 11:00>

WHITFIELD: Paula, thanks so much. Appreciate that.Now to the reaction from family members who lost loved ones aboard that flight. Kathleen Flynn's son J.P. died as he was coming home to celebrate Christmas. She is joining us by phone from Monhville, New Jersey.

Kathleen Flynn, thanks so much for your time. So, what has your gut feeling upon hearing that Great Britain saying this was indeed a mistake?

KATHLEEN FLYNN, MOTHER OF LOCKERBIE BOMBING VICTIM (via phone): Well, it's actually shocking. I cannot believe that our most touted ally for all these years has, you know, succumbed to this kind of behavior. It's just incredulous that this is being done, and you know why it's being done. It's being done because it's all about oil.

WHITFIELD: Your gut feeling is the previous administration was thinking about oil. And that's why this release took place and this current administration in Great Britain is now saying, What my predecessor did is wrong ? That's how you interpret it?

FLYNN: Well, I would hope they would be saying that, you but I mean, -- you know, I just realized, I heard recently within the last 24 hours that Tony Blair had a wonderful visit with Gadhafi, and spent two days of discussions with him in the not so distant past.

So, I mean, what's going on here? I mean, I always liked Tony Blair. I thought he had done a heck of a job, as the BP -- as the British prime minister. So, I am just shocked that this kind of shenanigans is going on. Morally incomprehensible to us after so many people were killed. You know, in the Lockerbie explosion.

WHITFIELD: You know, at issue, part of the discussions it was believed that, you know, BP and its offshore oil and other minerals exploration of the Libyan coast might have been at the core of some of those conversations.

So when you hear that al-Megrahi may indeed have many more years to live, and that his release was because of some compassionate reasoning, because he had prostate cancer. What are your thoughts and feelings now that perhaps he's not on death's door, that perhaps he does have many more years to live?

FLYNN: Oh, I don't think there's any question about that. My husband had prostate cancer, and he had it probably ten years ago. And he's alive and kicking. So, it's just an absolute charade that's going on here that he's sick.

I mean, they have a picture -- there was a picture recently in

The New York Times of al-Megrahi holding hands with (INAUDIBLE) Gadhafi, the son of the Libyan leader. This kind of stuff is just absolutely unconscionable that this is going on, and, you know, to think that the UK has sold itself down the river is just amazing to me.

WHITFIELD: Kathleen Flynn, thank you so much for you time and joining us, as you reflect upon the Lockerbie Scotland Pan Am Flight 103. Your son J.P. was onboard. Thanks so much for your reflections on this latest twist.

FLYNN: You're quite welcome.

WHITFIELD: All right. Let's take a quick look at news cross-country.

First, a New Jersey billboard that is quite hard to ignore. Take a look. If says my life, my death, my choice. The group Final Exit Network says the message is about giving terminally sick people the right to end their lives. But some say there's not enough contact and that some people might think that suicide is okay.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's not a good billboard. I think they should take it down, to tell you the truth.

UNIDENTIFIED MALE: My life, my death, my choice. Yes, that's not a good message to be sending out to kids, I don't think so.

(END VIDEO CLIP)

WHITFIELD: The Newark archdiocese has spoken out against the billboard and the Final Exit Network's message.

All right. California is cracking down on farmers who knowingly mislabel their produce as organic. The state has already busted the owners of a Santa Rosa farm for claiming fruits and vegetables they've produced, selling as organic. The farmers were fined $1,500. Grocery stores charge more for organic produce to offset the higher costs that growers must pay to avoid certain pesticides and fertilizers.

And will Apple admit to a lemon? Not likely, but the tech giant has announced a news conference this afternoon. Apple is expected to address antenna problems with its iPhone 4. CNN's Josh Levs joins us with a preview of that.

(COMMERCIAL BREAK)

WHITFIELD: All right. Here's the headlines.

Three months in the making, BP has shut off the flow of oil from that broken well in the Gulf of Mexico. It is day 88 of the crisis, but the relief is only temporary. Once BP finishes testing within the next day or so, crews will likely reopen the valves and resume siphoning oil to awaiting ships on the ocean surface.

And it looks like the drug violence has flared yet again in the Mexican border city of Juarez. At least three people were killed in yesterday's explosion of either a car bomb or a grenade. The blast happened just hours after the release of a local cartel leader.

And a rare earthquake rumbled across the nation's capital, Washington D.C. area. Just after 5:00 this morning. It had a relatively modest magnitude of 3.6. No reports of damage. It was centered near Gaithersburg, Maryland, some 20 miles northwest of D.C. As many as 3 million people actually felt that shaking.

Much more of the NEWSROOM right after this.

(COMMERCIAL BREAK)

WHITFIELD: Big salaries in a little town have some people in Los Angles County quite upset. We're talking about Bell, California, one of the four cities in the Los Angeles County area. An L.A. Times report finds city manager Robert Rizzo makes close to $100,000 a year. His assistant brings home nearly $380,000 a year. Bell's police chief, Randy Adams, pulls in $457,000 a year. That's about 50 grand more than L.A.'s police chief.

Bell's residents are shocked.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's shocking. Did they go to school for this? How do they get it? Tey're making more than the president. It's totally not fair.

UNIDENTIFIED MALE: They promise a lot of things, and all it is is their wallets are getting fatter and fatter. Our taxes have continue to rise and rise. They have money for nothing but themselves.

(END VIDEO CLIP)

WHITFIELD: Whoa. Well, the mayor credits the city manager for putting Bell back on solid financial footing, and Rizzo says he deserves his paycheck. The steep salaries don't appear to break any laws, according to experts, but the district attorney is investigating why Bell City Council members make about $100,000 a year for part-time jobs.

On Wall Street, a trio of corporate heavyweights reported better-than-expected second-quarter earnings, but the market is lower, anyway. Alison Kosik is following the action from the New York Stock Exchange. Hello again.

ALISON KOSTIK, CNN BUSINESS CORRESPONDENT: Hi, Fred. Yes, we're in the middle of a big sell-off on Wall Street. The Dow Industrials down 156 points. That's despite earnings from three big companies that all beat Wall Street estimates. But if you go ahead and dig a little deeper, you can really see why investors are in more of a selling mood today.

I'm going to begin in the banking sector, especially because what's in the banking sector really gets the market moving. Bank the America's profit topped $3 billion. But the problem is, it said mortgage losses have widened. And it lost revenue when debt fears in Europe kept some big investors away. BofA shares are down more than seven percent right now.

CitiGroup also posted big profits. Some good news for taxpayers there. Citi says taxpayers could end up with a $2 billion profit from the 2008 bailout.

And economic barometer General Electric also beat expectations. First profit growth -- it is the first profit growth since the crisis began, and profit at GE's financial unit soared more than 90 percent. CEO Jeffrey Immelt said GE's capital losses, they appeared to have bottomed. That's good news. But overall, the company's sales have fallen, and the stock is down now more than 3 percent. Fred.

WHITFIELD: All right. Meantime, where do we stand one week into earnings season? Do investors like what they see?

KOSTIK: Yes, you know, there was really a lot of buying on the expectations that earnings would be strong. And even more buying happened after Alcoa kicked things off with a solid profit and good forecast earlier this week.

But investors are still looking for the job growth, Fred, and we're not seeing enough of that. A combination of better than expected earnings and plans to hire really may be the holy grail this earnings season. Not sure if we're really going to see that.

Next week will be really busy, as well. Eleven of the 30 companies on the Dow Jones Industrial Average are going to be reporting, and that includes Johnson Johnson. J J had a tumultuous quarter, marred by the massive recall of Children's Tylenol. Goldman Sachs will get a lot of attention on Tuesday. It reports after, of course -- it said it will be paying $ 550 million to settle the civil charges against it. Goldman Sachs shares right now are up about 3 percent.

Fred, back to you.

WHITFIELD: All right. Alison Kostik, thanks so much.

Okay. So, what will that announcement be? Apple is holding a news conference today, facing growing criticism of its latest star product, the iPhone 4. What's on the horizon?

Josh is back with a preview.

JOSH LEVS, CNN CORRESPONDENT: And you know, Fred, even though there are the analysts out there saying, look, there's no way they'll recall the iPhone 4 despite all the problems, the fact is there are people out there who really want to see that happen. Here's a couple right hire.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think they should replace the phones, every single one of them that they made and that is faulty, they should replace the phone. These are people paying a lot of money for a product and not getting what they paid for. It's that simple

UNIDENTIFIED MALE: I think I read it will cost them a billion and a half dollars, and I know that's a lot of money and they don't want that hit, but let's be real. Apple is a company that's worth hundreds of billions of dollars, and they can afford that.

(END VIDEO CLIP)

LEVS: You know, it's true that apple has a lot of money and technically could afford that, but a lot of people saying there's a much easier fix to the problem.

Let me first recap the problem is. The biggest problem the iPhone 4 has been facing, which is depending on where you're holding it, the sound can go out. And the reason is -- here's an image of the iPhone 4 -- the antenna is basically embedded. It winds its way around the outside, kinda snakes through this outside area. If you put your finger here, it can knock out your call.

And that is why Consumer Reports this week said it would not recommend the iPhone 4, why it made such a difference.

Well, a simpler fix is this. We have some video of cases. Now, it's actually not a fix, I should not call it a fix, I shouldn't call it a fix for the device itself. But if you have one of these cases that you put on your phone, that doesn't become a problem anymore. And as we know, there are people all over the place who will sell these little cases you can stick on top of (sic) an iPhone.

So, a lot of people are expecting today that the Apple folks will announce something about free cases, or something to allow people to avoid this kind of problem. That takes place at 1:00 p.m. Eastern this time today and Pacific (INAUDIBLE). We'll be all over it from today.

WHITFIELD: Yes, people will be riveted. They'll be watching closely. Josh Levs, thanks so much.

LEVS: You got it.

WHITFIELD: So the iPhone problems may be no laughing matter for exasperated owners, who are dealing with dropped calls, but apparently, late-night comic Jimmy Fallon is not among them. Listen to his take on the situation.

(BEGIN VIDEO CLIP)

JIMMY FALLON, LATE-NIGHT HOST: Did you hear this? Apple cause called a major press conference tomorrow to discuss the iPhone 4. Well, they actually tried to call like three days ago, but it finally went through just now.

(APPLAUSE)

FALLON: Very exciting.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

WHITFIELD: This is a special time of the show for us when we honor a U.S. service member who may the ultimate sacrifice in Iraq or Afghanistan. We call it Home and Away, and we'll let you know how you can be part of the project.

But first, we want to tell you about Staff Sergeant Clayton Patrick Bowen, from San Antonio, Texas. He was killed in a roadside bomb attack in Patika province, Afghanistan back in August of 2009. Clay's mom, Resa Bowen Debbler (ph) wrote us about him, and she says, quote, Clay is my only child, and I miss him very much. He was the most important thing in my life. Clay had a sense of humor second to none and lit up a room when he walked in. He was very talented and had achieved a lot in his 12 years in the U.S. military. Clay left me with many new friends and family that I will cherish forever. End quote. That from his mom.

Thanks for your story, Resa.

If you have a loved one you would like to honor and you want to tell everyone about that person, go to CNN.com/homeandaway. Type in your service member's name in the upper right search field, and pull up the profile. Send us your thoughts and your pictures, and we'll keep the memory of your hero alive.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

WHITFIELD: Okay. If you're a fan of these five ice cream flavors, you might want to make a beeline for Baskin Robbins. They're putting these flavors out to pasture. Take a look. Caramel praline cheesecake, campfire s'mores, apple pie a la mode, super-fudge truffle, and French vanilla are going away forever at the end of the month. French vanilla, by the way, has been around since 1945. What are they thinking?

Baskin Robbins plans to roll out some new flavors in their place, but they haven't said what the new once will be yet, of course.

All right. Speaking of saying good-bye, word of Levi Johnson's surprise engagement to ex Bristol Palin caught a lot of people by surprise. Well now, a few people are having a hard time accepting that Johnston is actually off the market. Let me wipe a tear.

Here's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): She is heartbroken over news of the engagement between Bristol and Levi. No, not Sarah Palin. We mean Kathy Griffin.

UNIDENTIFIED FEMALE: My lover, Levi. I woke up this morning in your arms, spooning.

MOOS: So, what if she made it all up? Her imaginary affair with Levi is part of her comedy stick with her playing off his Vanity Fair photo shoot on the ledge of a building.

UNIDENTIFIED MALE: I was all harnessed up, but yes, it was a little scary.

UNIDENTIFIED FEMALE: By the way, we're going to recreate that later tonight at my place.

MOOS: Or going ice fishing with Levi. Part of her Life On The D-List reality show.

UNIDENTIFIED FEMALE: Holding Levi close, I realize this is where I'm meant to be. For three days. And then get me the (EXPLETIVE WORD) out of here.

MOOS: And now, she's forced to hear Levi gushing about his