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CNN NEWSROOM

Dolly Eyes Gulf Coast; Philadelphia Newscaster in Hot Water

Aired July 22, 2008 - 15:00   ET

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


KYRA PHILLIPS, CNN ANCHOR: The next hour of CNN NEWSROOM starts right now.
Dolly eyes the Gulf Coast. The Gulf Coast watches Dolly. We could be calling this tropical storm a hurricane before long.

DON LEMON, CNN ANCHOR: And a high-profile Philly newscaster in a high-profile mess. It is a story that will have you looking twice at your co-workers.

PHILLIPS: And he found himself on a watch list. Now our own investigative correspondent, Drew Griffin, catches the government's eye. We will tell you what showed up in his mailbox.

Hello, everyone. I'm Kyra Phillips, live in New York.

LEMON: And I'm Don Lemon live here at the CNN world headquarters in Atlanta. You are in the CNN NEWSROOM.

All right, ever so close, but not a hurricane just yet. Tropical Storm Dolly is making waves already though along the south Texas coast. Expect landfall tomorrow morning. And emergency officials are bracing for high winds, a lot of rain and a storm surge of up to six feet above normal. Where it will all hit, well, that's still anyone's guess. As far north as Houston, folks are bracing, and they are being told to be ready just in case.

For the very latest on where Dolly is headed, let's go straight to our Chad Myers. He's in our hurricane headquarters right over my shoulder. And he's tracking the very latest on Dolly.

Chad, what do you have?

CHAD MYERS, CNN METEOROLOGIST: Well, it appears that Dolly as a hurricane will make landfall right along the Rio Grande Valley. Now, that's the center of the line. That's exactly what we tell you not to look at, the center of the line. We need you to look at the cone, because it could go left, it could go right as about a 90-mile-per- hour storm.

Now, why do we tell you it could go left or could go right? Because this is a very good model, one that we use all the time. But I will you this again in slower motion. Watch where this storm is right here and watch where it goes as we think it is going to Brownsville, this model says, oh, no, we're going to make a right-hand turn, make a run at Corpus Christi, and then go left. So that would affect many, many, many more people to the north of where our Reynolds Wolf is right there under that word "ville" in Brownsville. That's South Padre Island, a great place for spring breaking. I'm not sure how good it is for hurricane watching.

Reynolds, what do you see?

REYNOLDS WOLF, CNN METEOROLOGIST: Well, it was a little bit better earlier, Chad. We did have some sunshine.

We had some people back here that were enjoying the beauty of the ocean. And I will tell you we had one feeder band that came in. The wind really began to pop. The wind and the rain picked up. And people, they went out of here, just fled to the four corners.

Right now, there's still people back here that are enjoying the surf. It is vacation time. Many of them are trying to make the most of it before they leave the island. And many people who live here, as we go to this video, are doing what they can to prepare.

In fact, on this video you're going to see people with the plywood. Gosh, how many times have we seen this played out back in 2004 and 2005? They are going to take it. They are going to board up their windows. They're going to do what they can to protect their home before the real strength of this storm comes closer to land.

And it is just a scene that's going to be played out up and down parts of this coast, especially close here over the next couple of hours.

Want you to come back to me for a moment. I want you to know something, that when we're here on the beach we're trying to give you the story. We are expecting conditions here to deteriorate. And there is a good chance we could get sandblasted over the next couple of hours.

Also, another component we deal with is the heavy rain. So, to deal with the wind and the rain, we have got to find some kind of shelter. Now, if you look right over there, you can see the CNN Gulf Coast bureau truck, and right next to that a two-story tan building. We already have the hurricane shutters that are on. That's going to be our home base. For the next 24 to 48 hours, we're going to broadcast from that place to bring you the latest stories from right here in South Padre Island.

Let's send it back to you in the nice non-windy studio -- Chad.

MYERS: No, the air conditioner's not even on, so it is not windy at all, Reynolds. Thanks a lot for your help.

(CROSSTALK)

MYERS: And you know what? I do appreciate you having a nice, safe place. We spend a lot of time getting these places prepared. We just don't send our guys there and girls out there and say, OK, here you go. You're on your own. We always look for that safe structure, usually, the third or the second floor, because you want the water to go under.

Now, we're all going to look a little skinnier here, Don, for the next couple of hours, because we have this, the squeeze-back. And you will be able to see when this storms turns into a hurricane. That number will change to 75, maybe 80, because the threshold is 74. When it gets to 74 we have a hurricane.

LEMON: CNN is your weather headquarters, absolutely here. You will see it on your screen. And we will provide updates throughout the day.

(CROSSTALK)

MYERS: I feel skinnier already.

LEMON: OK. Yes. That's a good way to go on a diet, right?

(CROSSTALK)

LEMON: ... squeeze. All right, thanks to you and Reynolds as well.

And again we will be following this story throughout the day. When the weather becomes the news, remember to send your I-Reports to us. Go to ireport.com or type ireport@CNN.com right into your cell phone. And remember, please stay safe.

PHILLIPS: For Democratic presidential candidate Barack Obama, more face-to-face talks today with leaders in the Middle East. He's heading to Israel after his stop today in Jordan. These scenes from Obama's meeting just a short time ago in Amman with King Abdullah.

And earlier Obama talked about his previous stop in Iraq, including his meeting with officials in the volatile Anbar Province.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: It is true that some of the tribal leaders, as well as the local governor in Anbar, expressed concerns about a potential precipitous drawdown of U.S. troops, which is why I haven't proposed a precipitous drawdown. What I have proposed is a steady, deliberate drawdown over the course of 16 months, and I emphasized that to them.

(END VIDEO CLIP)

PHILLIPS: Well, after his visits to Jordan and Israel, Obama travels on to Europe for stops in Germany, France, and England.

Republican candidate John McCain taking more jabs today at Obama over his stance on Iraq. The Arizona senator campaigned in New Hampshire, the state that helped bring his troubled primary campaign back to life, by the way.

(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: And, my friends, that would have been a catastrophe for the United States of America. He was wrong then. He's wrong now. And he still fails to acknowledge...

(APPLAUSE)

MCCAIN: He still fails to acknowledge that the surge succeeded, remarkable, remarkable. And, as you know, he just received his first briefing, ever, from General Petraeus. And he declared his policy towards Iraq before he left, before he left.

And so the fact is, we have made progress and we have succeeded, and we will be coming home, my friends. Our troops will be withdrawing, but they will come home in honor and victory. They will not come home in defeat. They will come home...

(END VIDEO CLIP)

PHILLIPS: Barack Obama has a slim lead over John McCain in a new presidential poll in New Hampshire -- 46 percent of the registered voters survived said -- or surveyed, rather, said they support Obama -- 43 percent back McCain. Eight percent are undecided. And 3 percent prefer some other candidate.

Now, back in April, McCain led Obama by 6 percentage points in the University of New Hampshire poll.

It is a "SITUATION ROOM" that you will want to watch. Senator John McCain joins our Wolf Blitzer Friday 4:00 p.m. Eastern. You can send your questions for the Republican candidate to ireport.com.

LEMON: Is it a new form of terrorism? For the second time this month, a Palestinian rammed a construction vehicle into a bus and several cars in downtown Jerusalem. Well, the driver was then shot dead by a civilian and an Israeli police officer. Four people were injured.

Israeli police said he was a 22-year-old from East Jerusalem with a criminal record. Three weeks ago, a Palestinian man drove a bulldozer over several vehicles in Jerusalem, killing three people, before he was shot dead. The Israeli government calls both terrorist attacks.

PHILLIPS: Well, disguises won't help accused war criminal Radovan Karadzic now. On the run for nearly 13 years, the former Bosnian Serb president is under arrest in Serbia and has been ordered to the Netherlands. There, he will stand trial at the International War Crimes Tribunal for alleged genocide.

Karadzic is accused of masterminding the executions of up to 8,000 Muslim men and boys during the Bosnian war in the early 1990s.

Now, earlier, I had a chance to speak with former U.S. diplomat Richard Holbrooke. As the special U.S. envoy to the Balkans, he actually was the chief architect of the 1995 Dayton peace agreement that ended the war in Bosnia. In that role, he had face-to-face talks with Karadzic.

And here's part of what he had to say.

(BEGIN VIDEO CLIP)

RICHARD HOLBROOKE, FORMER U.S. AMBASSADOR TO UNITED NATIONS: This is a historic day, Kyra. As he goes to The Hague in a few days, it will show the world that war crimes can be prosecuted.

I hope President Bashir in Sudan, who's just been indicted by the International Criminal Court, will get the message loud and clear. You can run -- and Karadzic ran for 12 years before he was caught -- but in the end you're going to get caught up with.

(END VIDEO CLIP)

PHILLIPS: And Holbrooke says that NATO made a terrible mistake by not making an all-out effort to capture Karadzic in 1996. He says they knew exactly where he was hiding, but they let him slip away.

So, what did bin Laden's former driver know and when did he know it? A prosecutor at Salim Hamdan's war trial says that Hamdan knew that the fourth hijacked plane on 9/11 was headed for the dome, an apparent reference to the U.S. Capitol Building.

That allegation was part of today's opening statements at Guantanamo Bay, Cuba. If convicted, Hamdan could be sentenced to life in prison. Hamdan's trial is the first U.S. war crimes trial since World War II.

LEMON: Well, the economy, of course, is issue number one. And more than 6,300 job cuts, fallout from Wachovia Bank's big earnings loss.

The fourth largest U.S. bank reports losing nearly $9 billion in the second quarter. And as a result it is slashing jobs and payments to shareholders. Wachovia's just the latest in a string of banks hit hard by the mortgage crisis.

Henry Paulson says it is time to do something to ease that crisis. The treasury secretary is pushing Congress to pass a government plan to back up Fannie Mae and Freddie Mac, legislation the House takes up tomorrow.

Well, Paulson says the mortgage lending giant might not need that help, but having a plan in place might help stabilize the battered housing market.

(BEGIN VIDEO CLIP)

HENRY PAULSON, U.S. TREASURY SECRETARY: House is not only important to our economy. It is also the largest factor currently impacting our financial markets.

The sooner we work through the housing correction, the sooner home prices will stabilize and uncertainty about the values of mortgage-related assets will be more easily determined. So, now, more than ever, we need Fannie and Freddie out there financing mortgages.

(END VIDEO CLIP)

LEMON: All right, just getting some new information coming in there.

Congressional analysts say Fannie Mae and Freddie Mac rescue could cost taxpayers up to $25 billion, but they caution there's probably a better than 50 percent chance the government won't have to step in.

Let's go live now to Wall Street, where we're keeping an eye on the Big Board. You can see the Dow up some 25 points, got close to 30 a little bit ago, was up 27 just a second ago. And there has been mixed news for investors. They are encouraged by falling oil prices.

I just got those oil prices again, Tom. Give me those. You said oil prices settling at, what, $127.95 today. It is the lowest price since June the 5th. Discouraged by poor earnings reports from big companies.

And why are oil prices dropping? We're hearing one big reason today, Tropical Storm Dolly likely won't hurt production in the Gulf of Mexico. Gas prices are seeing a fifth straight drop in five days. AAA says the national average for unleaded is around $4.06 a gallon.

PHILLIPS: The terror watch list, it is the list you don't want to be on. And our Drew Griffin has been there. We are going to find out the latest on his saga with the TSA.

LEMON: The Dalai Lama speaks out about Americans. So why does he think many of us are depressed and anxious? Man, I want to hear that. We will find out from our Carol Costello. She sat down with the spiritual leader.

(COMMERCIAL BREAK)

PHILLIPS: A controversial cleric promotes an underground campaign, ads about Islam on New York City subways.

LEMON: A longtime newscaster becomes the news. A scandal over e-mails has him facing charges and his story may have you looking twice at your co-workers.

(COMMERCIAL BREAK)

PHILLIPS: It is an ad campaign meant to promote Islam, but is the cleric behind it drawing attention away from the message?

Here's CNN's Mary Snow.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): Head scarf? Islam? These subway ads are designed to battle negative images of Islam. They aren't even put up yet, but they have sparked this "New York Post" headline, "Jihad Train." The "Post" story focuses not so much on the message as the messenger, an imam who is now promoting the project to spread awareness about Islam to millions of subway riders.

SIRAJ WAHHAJ, IMAM: Imagine them (INAUDIBLE) Imagine them seeing the word Islam. Imagine them seeing the word hijab.

SNOW: Imam Siraj Wahhaj draws attention because he's among 170 unindicted co-conspirators in the 1993 World Trade Center bombing case. And he served as a character witness to the man convicted of being the mastermind of that bombing, Sheik Omar Abdel Rahman.

WAHHAJ: The concept of me being of character witness for Sheik Abdel Rahman is what we knew about him before the incident.

SNOW: A former U.S. prosecutor in the case says, while Wahhaj was on a list of unindicted co-conspirators, he was never charged.

ANDREW MCCARTHY, FORMER FEDERAL PROSECUTOR: I think the list is probably an interesting footnote to people. I get asked about it every couple of years when some story or another about Wahhaj comes up. But, you know, I think the list is a tempest in a teapot.

SNOW: Wahhaj says, while he may be a controversial figure, he was also the first Muslim to lead a prayer before a session of the House of Representatives in 1991. But he admits there are things he said he regrets, such as calling the FBI and CIA terrorists.

WAHHAJ: What I was saying is that, no, not that all of the FBI are terrorists or the CIA are terrorists. But there are some elements in there. So, if you want to accuse some Muslims, OK, these Muslims did that, but don't undermine the entire -- the faith. That's really the message.

SNOW (on camera): The group behind the ads, the Islamic Circle of North America, says it welcomes the imam's promotion of their campaign. They say the way the imam is often portrayed is the way Islam is often portrayed. The ads are slated to go up in 1,000 subway cars in September to coincide with Ramadan.

Mary Snow, CNN, New York.

(END VIDEOTAPE)

LEMON: A young black man dies in police custody. Where? Near Jena, Louisiana. Details of his death have been kept secret for months, until now.

PHILLIPS: Your e-mails, bank statements, personal message, just how safe are they? We have got a story that may have you looking twice at your co-workers. We are going to talk with an expert about your Internet safety.

(COMMERCIAL BREAK)

(BUSINESS REPORT) PHILLIPS: Well, a man of peace, faith and compassion. The Dalai Lama is visiting the U.S., but some of the things that he has to say may not sit well with some of you.

Our Carol Costello had an exclusive conversation with the Buddhist leader. She joins us now with a preview.

Carol also full of compassion and peace herself. I couldn't think of a better person to do the interview, Carol. I bet he moved you.

CAROL COSTELLO, CNN CORRESPONDENT: He did move me.

You know, I have always heard he can be charming. And he certainly is. He is very disarming. He jokes, and then he giggles. He will slap you on the arm. But, underneath it all, Kyra, there is a certain steeliness to the Dalai Lama. We talked about his love for President Bush and President Bush's lack of reality. Those are his words.

We talked about the China and the Olympics and how much he wants to see the Olympics held in China. And we talked about why the world thinks Americans are an unhappy bunch.

(BEGIN VIDEO CLIP)

COSTELLO: You were asked why so many Americans are depressed and anxious. And you said it was because we always want more. What did you mean by that?

DALAI LAMA, EXILED TIBETAN SPIRITUAL LEADER: Too much stress, too much competition, and too much desire, and not knowing the reality of limitation, and also requirement, and say we want more and more and more and more. And, then, all your desire, difficult to fulfill, then more stress, more worry.

COSTELLO: Isn't that the way we became the country we are, because we always do want more?

DALAI LAMA: Oh, competitive in positive sense, in certain -- up to certain limit, up to a certain level, good. But then goes extreme. I see some of my friend, I think is a millionaire or billionaire, but looks discontent. So, therefore, it is much worry, all this worry self-creation.

(END VIDEO CLIP)

COSTELLO: Kyra, I asked him what the secret to happiness was. And he looked at me, and he said you're going to have to figure that out for yourself. I was hoping for an answer, though.

(LAUGHTER)

COSTELLO: He's been exiled from Tibet and from China for 50 years. His followers want China to extend an invitation to the Dalai Lama for the Olympics. On August 8, they start. But I don't think the invitation's in the mail. We will talk more about that in "THE SITUATION ROOM WITH WOLF BLITZER."

PHILLIPS: Carol, as you and I both know, that's the biggest challenge is finding peace with ourselves without any other influence, constant challenge.

COSTELLO: I know. And the Dalai Lama sort of wants you to sort of figure it out yourself, darn it.

(LAUGHTER)

PHILLIPS: Yes, I know, right when we wanted some answers.

Carol, thanks. I can't wait to see the whole interview. You can her exclusive interview, the entire interview, with the Dalai Lama on "THE SITUATION ROOM WITH WOLF BLITZER." That's going to be at the top of the hour, just about a half-an-hour away.

LEMON: And, Kyra, you know any guru will tell you that's because the answer is right with yourself, right?

PHILLIPS: That's right.

LEMON: There's nothing wrong with you. You just need to work it out yourself.

PHILLIPS: You got to dig deep in that heart.

LEMON: Absolutely.

OK. Thank you very much. I look forward to that report. That's going to be really interesting.

We want to talk about this, too. U.S. drivers are worried about their bottom line, but few can afford this car. You're probably not one of them. Check out the latest ride GM has to offer. What is that? Never seen that before.

(COMMERCIAL BREAK)

LEMON: Hello, everyone. I'm Don Lemon live here at the CNN world headquarters in Atlanta.

PHILLIPS: And I'm Kyra Phillips live in New York. You're in the CNN NEWSROOM -- 3:29 Eastern time, here are some of the stories we're working on right now.

Tropical Storm Dolly getting stronger by the hour. It's packing almost 70-mile-an-hour winds in the Gulf of Mexico nearing hurricane strength. Live pictures right now, where our Reynolds Wolf is there on the beaches following all the hurricane warnings now in effect along a big chunk of the Texas and Mexico Gulf Coast.

Wachovia Bank trying to recover from a big loss. The fourth- biggest U.S. bank reports losing almost $9 billion in the second quarter. Wachovia is cutting more than 6,300 jobs and slashing payments to shareholders. Friends and co-workers are mourning the loss of Estelle Getty. The "Golden Girls" actress has died at the age of 84. Former co-star Bea Arthur says that the onscreen mother-daughter pairing was one of the greatest comic duos ever.

LEMON: All right. You see that band right there, right to the side of me, to the left side of me, we're going to keep that up, because we're tracking Dolly inch by inch, minute by minute. And at last word, Dolly was still a hurricane in the making. Where does it stand now? CNN's Chad Myers joining us with that.

CHAD MYERS, CNN METEOROLOGIST: Well, we have a hurricane hunter plane in there from NOAA. They're in there flying around, trying to find out whether this storm has become a hurricane yet. Not yet right now. Seventy mile per hour winds. It needs to get to 74 to actually become a hurricane. The storm though is still very strong and is forecast to become a hurricane before it makes landfall somewhere north or south of the Rio Grande Valley.

About an hour ago I showed you this model. Well, now it changed its mind, it takes the storm right over Brownsville. That's why there is a cone. The cone is there because many models are saying it is going to go left, many models saying it's going to go right. Here's the latest radar out of Brownsville right now.

It is hard to see it, but for a while it was going to the west, now I believe this has turned a little bit to the north. That's one of these short-term turns. It could only and wobble but things are printing out all over the place. We'll get you that hurricane warning when it comes out, because I think it's going to be a warning probably before the show is over.

LEMON: OK. We'll check back. Chad Myers, appreciate it. Thank you -- Kyra.

PHILLIPS: Democratic presidential candidate Barack Obama is heading to Israel after a visit to Jordan. A meeting with King Abdullah was a highlight for Obama today during his stop in the Jordanian capital. CNN's Jessica Yellin joins us now from Washington with more on Obama's trip -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hey, Kyra, well, King Abdullah of Jordan actually drove Barack Obama to the airport. The two held a one-on-one meeting and dined together. And Abdullah in the meeting was expected to tell Obama the next president of the United States should make Israeli-Palestinian peace a top priority. Obama started his day in Jordan with a press conference.

He reported that after visiting Iraq and Afghanistan, he still believes his 16-month time frame for drawing troops down in Iraq will work. He acknowledged that not everyone he met with agreed with his timeline, including General Petraeus and some tribal leaders who expressed concern about a drawdown.

But he responded to the McCain campaign's assertion that he is ignoring the general's advice, saying that as commander-in-chief, he would be setting the mission.

Let's listen.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The notion is that either I do exactly what my military commanders tell me to do, or I'm ignoring their advice. No, I'm factoring in their advice, but placing it in this broader strategic framework that is required.

(END VIDEO CLIP)

YELLIN: Obama also acknowledged that there has been progress in Iraq, but he would not say that the surge has been a success. And from here Obama, as you said, heads to Israel and the Palestinian territories. There he will meet with Israeli leaders and also with Palestinian president Mahmoud Abbas on the West Bank. And after that he goes to Europe -- Kyra.

PHILLIPS: All right. Jessica, thanks.

And could John McCain be meeting with his future running mate tomorrow? The Republican candidate is scheduled to sit down with the Louisiana governor, 37-year-old Bobby Jindal who is often mentioned as a possible vice presidential pick. There have been reports the McCain campaign might name the running mate later this week in an effort to steal the spotlight from Barack Obama's trip overseas.

So what's the buzz right now?

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: What they are trying to do, and this is decided at some point today inside the McCain campaign, is to get the buzz out there to try to distract from Obama's campaign -- and his trip, I should say, abroad. Whether or not it is true, that's the goal here at this point.

Now the reality is, what we're hearing, is it is more likely to be later in the summer, maybe around more around the Democratic Convention. The other reality, as you well know, because you've been reporting, is that the McCain campaign is just getting up and running in some staff changes and trying to rejigger its campaign. And not a lot of people think even inside the campaign think that they're really ready for this kind of big roll-out of their V.P. pick.

CAMPBELL BROWN, HOST, "ELECTION CENTER": OK, Dana, so wait, Gloria, is this possible that somebody would leak a false story to the media to throw them off of the trail? Could that be possible?

GLORIA BORGER, CNN SR. POLITICAL ANALYST: I'm shocked. I'm shocked there's gambling going on.

Look, this is clearly -- somebody told John King that this could be a head fake, that they're leaking this to us because they want to distract from Obama. And, of course, the biggest story that we could get, Campbell, would be McCain having a vice-presidential pick.

Having said that, I talked to some people who said to me, look, there have been discussions about whether we ought to name a vice president sooner, rather than later. The candidate hasn't decided. And there are lots of people who think you ought to wait, as Dana was saying, and counter program. So I think it is more likely that they're going to wait. But clearly, that has been the buzz today and guess what? We're talking about it.

(END VIDEOTAPE)

PHILLIPS: Well, keep up with the day's top political stories every evening at 8:00 p.m. Eastern on CNN's "ELECTION CENTER" with Campbell Brown.

LEMON: OK. Imagine this, if your personal Internet accounts were broken into and leaked by someone you work with every single day, those are the allegations in a high-profile case involving TV news anchors. And when you hear about it, you'll wonder how safe and secure your e-mails are. And I want to let you know that I have worked with Larry Mendte, who is the focus of this piece, when I was in Philadelphia.

(BEGIN VIDEOTAPE)

LEMON (voice-over): Prosecutors in Philadelphia call it a tangled web of sabotage by a co-worker who used the Internet to do his dirty work.

LAURIE MAGID, U.S. ATTORNEY: The defendant here is charged with a systematic pattern of intrusion that included not a dozen incidents, not 100 incidents, but hundreds of incidents.

LEMON: More than 500 times, according to court documents, Larry Mendte, the 51-year-old high-profile local CBS main anchorman, somehow hacked into his co-anchor, Alycia Lane's personal e-mail accounts from home and even from work, sometimes during commercial breaks.

MAGID: Many of the intrusions took place just minutes apart. Sometimes as many as a dozen times a day.

LARRY MENDTE, KYW ANCHOR: CBS 3 announced today that Alycia Lane has been released from her contract.

LEMON: The FBI got involved after an employee at the station saw Lane's open e-mail account on a computer months after Lane had been fired from a station after a series of embarrassing incidents, including being arrested for assaulting a New York City police officer. The charges were later dropped, or downgraded, and Lane pleaded not guilty.

But prosecutors allege Mendte printed some of the e-mails and also fed private information about Lane to local newspapers. Lane's lawsuit alleges Mendte was jealous of her higher salary, reportedly $800,000 a year, and her growing popularity. The FBI says the case goes beyond jealousy. JANICE FEDARCYK, FBI: If we were talking about Mr. Mendte tapping into another person's telephone and listening to those protected and privileged conversations, the violation would be obvious.

LEMON: Mendte's lawyers say he's cooperating and plans to plead guilty, but prosecutors warn about keeping your passwords private.

MAGID: Those passwords are there for a reason. People need to take them seriously. Keep those password private because that's what's protecting your private information.

(END VIDEOTAPE)

LEMON: It is a fascinating story. And by now you're probably thinking just how much privacy can I expect at work? Certainly everyone here today was thinking the same thing. And how can I protect myself from snooping co-workers? Joining us now with the answer to that is Frederick Lane (ph), an Internet law expert.

And, Frederick, when I found out we booked you, Alycia Lane, Frederick Lane, you are not related.

FREDERICK LANE, INTERNET LAW EXPERT: No, I'm not related.

LEMON: OK. We just wanted to get that out there. All right. So, listen, how much privacy -- and I'm looking at the complaint here, and the charges here from Philadelphia. I mean, it's page after page of charge, and that he went into her e-mail account hundreds of times and possibly, it says, over the years maybe 7,000 or 8,000 times.

How serious -- first of all, I'm going to ask you, how much privacy can we expect at work, if any?

LANE: Well, I think you need to distinguish between privacy among co-workers and privacy between you and your employer. You should have a reasonable expectation of privacy with respect to your co-worker as long as you keep your password safe. People do need to realize that they have virtually no privacy when it comes to their employer.

LEMON: No privacy. OK. So if my e-mail account is open on my desk or just sitting on my desk and my co-worker comes up, sits down at my computer and starts to read my e-mails, is that a criminal offense?

LANE: I wouldn't be in a position to say whether that's a criminal offense per se. They're not obviously hacking into your account when they do that. It's something that their employer may take seriously. And that's a different issue. The problem with the newscaster in question is that he was clearly breaking into Alycia Lane's account, which clearly is a violation under Philadelphia law.

LEMON: Yes. That is the accusation at least, because it is expected that he is going to plead guilty. But he has not done that yet. OK. So let me ask you this, so you're at work, right? And your company can look at your e-mails. Just about every company. How much, I don't know, leeway, do they have, I guess is a good way of putting it, in looking at the company e-mail and your work e-mail? How much leeway? Can they go into my personal account here, Yahoo! AOL, or what have you?

LANE: Well, they can't necessarily go into your personal account, Don. That is to say they couldn't go to Yahoo! and ask Yahoo! unless there was some allegation of criminal wrongdoing to turn over your e-mails. But you need to understand that if you're sitting at your desk at CNN, and you're using your Yahoo! account, the e-mail obviously is traveling across company computers. And the courts have given companies a great deal of leeway to look at communications that go across company lines.

LEMON: And even if you're looking at your bank account, you're looking at medical records, or what have you, your company can look at that as well, even your personal information.

LANE: Absolutely.

LEMON: OK.

LANE: Well...

LEMON: I've got five seconds. We have five seconds here. Final words of advice.

LANE: We've had tremendous surveillance increase since 9/11. People should really try to limit what they do that is personal at work.

LEMON: Thank you very much. Frederick Lane, an Internet law expert providing some context for this story and some advice as well. We appreciate your time.

And we've also asked if you felt safe accessing e-mails and the Internet at work. And here's what some of your responses are. These are from our viewers, they wrote in. Lawrence writes: "Work e-mails, the title says it all. You are at work, there is no excuse for accessing personal information during work hours." We hope Lawrence wasn't at work when he wrote us that.

And here's what Lisa says: "E-mails at my company are only available to a handful of people, most of whom abuse them one way or another. Though I am certain my employer tracks each keystroke back to each employee, double standards like this need to change."

Here's what Eddie writes: "I was a systems programmer in a number of companies," listen to this, everyone, "any time I wanted, I could read any e-mails sent or received by anybody in the company. And what's worse, if I had wanted to, I could have made copies of the e- mail backup disks, taken them home and leisurely pursued years of e- mail conversations that took place on company computers." Do you hear that?

And John sent us some words to live by. He writes: "I don't trust anyone anymore so I certainly would not give anyone the chance to steal my passwords and look at my personal information." We want to thank everybody for e-mailing us those responses -- Kyra.

PHILLIPS: A CNN correspondent finds himself on the terror watch list not long after he does a story about the TSA. Interesting. Is Uncle Sam doing anything about it? We'll tell you.

(CROSSTALK)

PHILLIPS: Drew Griffin, CNN's "SPECIAL INVESTIGATIONS UNIT" correspondent, and a member of the terror watch list. Yes, that's right. Drew found himself there about two months ago after he investigated the Transportation Security Administration. Drew joins us now by phone from outside Detroit.

And I understand you have an update for us, Drew?

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: Yes, last week, Kyra, unbeknownst to me, my name came up in a hearing where Congresswoman Sheila Jackson Lee peppered Michael Chertoff, the homeland security director, with questions about my and other people being placed on this watch list, which basically makes traveling by air a hassle.

Well, yesterday when I got home, there in my mailbox, dated the same exact day as that congressional hearing, was a letter from Homeland Security telling me that they reviewed my records and "where it was determined that a correction to records was warranted, these records were modified to address any delay or denial of boarding that you may have experienced."

Basically, after two months of -- since filing my paperwork on the very same day that the congressional hearing took place, Homeland Security acted on my request to be removed from the watch list. What's interesting is I'm not actually removed from the watch list. I flew from Atlanta to Detroit this morning, and was told by Delta that indeed I am still on the list even after producing this letter and showing them that I should be off. So maybe that takes a little while to process.

But that's the news on the Homeland Security watch list.

PHILLIPS: So basically you have to travel around with this letter now.

GRIFFIN: Well, that's what TSA -- actually Homeland Security is advising me to do. The hassle is I have to go up to the counter every time I fly and prove to whatever airline agent I'm dealing with that I'm not the so-called terrorist named Drew Griffin that apparent is on the watch list.

Now I've also asked the FBI for who this character is named Drew Griffin who is the terrorist. They even suggested that perhaps the power of CNN we could track this person down worldwide and put him behind bars. But the FBI has not produced anybody named Drew Griffin or using the alias of Drew Griffin who is a terrorist. I've been checking with my sources and haven't been able to find a Drew Griffin terrorist, so that mystery remains. But for the time being we can say Homeland Security has a redress process. They've addressed my redress, and now supposedly I'll be off this watch list, but as of today, I'm still there.

PHILLIPS: Yes, mystery or excuse. Well, what do you have coming up later tonight on "AC 360"?

GRIFFIN: All this week we're focusing on "Black in America" and issues related to such. And, Kyra, this is interesting to you, because in a little town called Winfield, Louisiana, which is just about 45 minutes from the town of Jena, the site of so much racial protest last year, and where did you a big special last year, there was a -- basically a killing, a police officer who used his TASER nine times on a handcuffed suspect.

The suspect was black. The cop was white. And it has the stirrings of racial tension in another small Louisiana town. Here's a preview.

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): Coroner Ralph Williams has just released his findings. A white officer, armed with a TASER, he says, violated every Winfield police procedure on TASER use, ultimately, killing a black man in handcuffs.

(on camera): What is a man down on the ground, handcuffed behind his back, getting repeatedly shot?

DR. RALPH WILLIAMS, CORONER: Well, it's a homicide.

(END VIDEOTAPE)

GRIFFIN: It's a chilling story based on a coroner's report that CNN obtained just last week. I hope you'll take a look at it tonight.

PHILLIPS: Drew, we look forward to it. Great job. Thanks so much. And you can catch Drew's story on "AC 360," that's tonight, 10:00 Eastern, right here on CNN.

LEMON: We have been telling about the FEMA supplies that didn't make it to Hurricane Katrina victims until our "SPECIAL INVESTIGATIONS UNIT" series of reports on that story. Now it turns out, federal officials made a whopping math error estimating the value of those supplies. The General Services Administration originally said they were worth about $85 million. Now the GSA says, get this, 121 truckloads of household items are worth about $18.5 million. CNN's "SPECIAL INVESTIGATIONS UNIT" revealed the supplies ended up being given to federal agencies and 16 states. As a result of our reporting, several truckloads of supplies were returned to Louisiana.

So how were the goods overvalued? In one case the GSA says individual plastic spoons and forks were valued as an entire case. Senator Mary Landrieu says the math error does not change the fact that "to hurricane survivors in need, $18.5 million is a huge amount of money." A congressional hearing into why FEMA warehoused the items for two years and how it's handling future disasters is scheduled for July 31st.

PHILLIPS: U.S. drivers are worried about their bottom line, but if you can afford this car, you're probably not one of them. Checking out the latest ride GM has to offer.

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LEMON: Ah, look at that, there is just something about a Corvette. While the U.S. auto industry struggles in the tight economy, General Motors unveiled this cobalt blue beauty in Bowling Green, Kentucky, yesterday. The new ZR-1 is called a dream Corvette and that dream comes with a very hefty price tag, more than $103,000. As my mom would say, American dollars?

The ZR-1 reportedly beat some other high-performance sports cars in fuel efficiency, getting 20 miles per gallon on the highway. And believe it or not, GM says there's a high demand for them.

PHILLIPS: Holiday bell ringers, red kettles, Christmas trees, not something you are used to seeing in July, but donations for the Salvation Army haven't been so great lately. So the charity decided that Christmas needs to come early this year. Salvation Army launched a "Christmas in July" campaign this week and officials hope the familiar trimmings of the holidays make people feel a little more generous.

LEMON: Time now to check in with a very generous man, CNN's Wolf Blitzer.

PHILLIPS: He's standing by in "THE SITUATION ROOM" to tell us what's coming up at the top of the hour.

Hey, Wolf, I know we're going to hear we're from the Dalai Lama.

WOLF BLITZER, CNN ANCHOR: We certainly are. We're going to also hear from the oilman T. Boone Pickens. He says Americans must act quickly to stop dependence on foreign oil. My interview with him, that's coming up, you're going to want to hear about his plan, what it means for all of us.

And, as you say, the Dalai Lama, he sat down for an exclusive interview with our own Carol Costello. You're going to hear what he has to say about President Bush. You might be surprised.

And we'll also go live to Texas where Tropical Storm Dolly now gaining strength off the coast, anxious residents preparing for a potentially dangerous amount of flooding.

I'll also speak with pastor Rick Warren, the author of "The Purpose-Driven Life," on his plan to bring both presidential candidates together at his megachurch. A lot coming up at the top of the hour right here in "THE SITUATION ROOM." Back to you guys.

PHILLIPS: Sounds great, Wolf.

LEMON: The closing bell a wrap of all the action on Wall Street straight ahead.

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(STOCK MARKET REPORT)

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Congratulations to Kyra on her big reporter of the year win over the weekend, Kyra. See you guys tomorrow.

PHILLIPS: Susan, you're a gracious friend. Thank you.

LEMON: Congratulations. Now we'll turn it over to "THE SITUATION ROOM" and Mr. Wolf Blitzer.

BLITZER: Thanks very much, guys.