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Thousands Flee Syrian Crackdown; Rare Look Inside Syria; "Home Grown Terrorism" Arrests; Two Charged in Alleged Terror Plot; Debt Talks on Verge of Falling Apart; Obama to Troops: I Have "Your Back"; Obama: Time for "Nation Building" at Home; President Overruled Military Chiefs; Obama Talks Gay Rights; New Policy for Child Pat- Downs; Anthony's Mother Searched "Chloroform"; FBI Nabs A "Most Wanted" Fugitive; Oil Prices Plunge; Will Gas Prices Follow?

Aired June 23, 2011 - 19:00   ET


JOE JOHNS, CNN CORRESPONDENT: Thanks for joining us. I'm Joe Johns. John King is off.

There's a lot of important news both here in the U.S. as well as overseas.

Today, Syrian security forces moved into yet another village only a few hundred yards from the Turkish border. Not only could Syrian troops clearly be seen from the Turkish side of the border, the move sent people in a makeshift refugee camp fleeing across the border. Secretary of State Hillary Clinton says the United States is very concerned.


HILLARY CLINTON, SECRETARY OF STATE: If true, that aggressive action will only exacerbate the already unstable refugee situation in Syria. Recent reports are that there are more than 10,500 Syrians already sheltered by the Turkish Red Crescent in camps on the border.


JOHNS: Until now the Syrian government repeatedly refused CNN'S request to be allowed to cover the situation inside the country, but in a dramatic reversal today, the Syrians let CNN's Arwa Damon visit the capital city.

She joins us from Damascus. Arwa, it seems like from Damascus, you'd never know there's bloodshed and revolt in other parts of the country.

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Joe, the image we managed to get here in the short amount of time that we were able to get out onto the streets. We were accompanied by a government official, especially since we were intending on filming.

But this part of the capital we were concentrated in is really the heart of Damascus itself. One has to remember the demonstrations when they were taking place inside Damascus, really happening on the outskirts. But while we were there, we were hearing music blaring from a loud speaker, pro-government music. We also saw a number of individuals selling all sorts of paraphernalia that had the president's image imprinted on them from party cats to key chains to t-shirts.

A fair amount of anger though as well directed at us because we're viewed as representing the west. People coming to us and saying they don't want the U.S. to be involved anymore. They don't want foreign meddling. They're blaming all of the unrest on what is inside Syria on this foreign interference.

The government officials especially continuing to have this attitude where they maintain that the government is targeting these armed gangs. The violence is their fault.

And they appear to be quite confused because they keep asking why is the world making such a big deal about 10,000 Syrian refugees when a million Iraqis have been displaced since 2003? Joe --

JOHNS: Are you being accompanied by minors and do you have a feel for what's going on in the other parts of the country even though obviously you're in Damascus?

DAMON: You know, that's quite hard to gauge. As it has been, we were reporting from outside the country, as it is from inside the capital itself.

Again, when we are out there, we are accompanied by these individuals. There were people who spontaneously came up and spoke to us, whether they were expressing their aggression or support for the president.

We weren't really able quite yet to move out of that little isolated area of Damascus we were in. This is right near the tourist old town or the old city rather. The demonstrations by in large have been concentrated on the outskirts.

Now, Joe, we did put in a request to go to the other parts of the capital tomorrow, tomorrow being Friday, the Muslim holy day, a day where we have traditionally seen mass protests throughout the entire country.

So we asked to go to the Damascus suburbs where these demonstrations are expected to be taking place. We'll have to wait to see if the government approves that though.

JOHNS: Arwa Damon in Damascus tonight, thanks so much. We'll be following you closely.

Here in the United States tonight, there are more alleged instances of what authorities call home grown terrorism. Two men have been picked up in Seattle after buying machine guns they intended to use in an attack on a military processing center.

CNN's Homeland Security correspondent Jeanne Meserve is here with the latest. What do you know, Jeanne? JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: This is one of a series of stories we've heard about on attacks at military centers or plots to attack military centers.

This one involves two men, one from Seattle, his name Abu Khalid Abdul-Latif. He's a former prison inmate and another man named Walli Mujahidh of Los Angeles.

Apparently when they tried to recruit a third individual to this alleged plot, he went to the authorities. And at that point, law enforcement was able to monitor the plot as it developed. Here is a bit of sound from a press conference with authorities a short time ago.


MIKE MCGINN, SEATTLE MAYOR: The men were captured on audio and videotape discussing the attack. Law enforcement monitored the suspect's actions, including a weapons transaction where they acquired automatic weapons.

Unknown to the suspects, the weapons they acquired had been rendered inoperable by law enforcement ahead of time and they posed no risk to the public.


MESERVE: Court documents say the men were unhappy about the U.S. military presence in the Middle East. They wanted to kill people, it is alleged, and they also wanted to inspire others to also stage attacks. They were going to do that they hoped through publicity in newspapers and right here on CNN.

JOHNS: There's also this extraordinary case of the Marine Reserve charged with the shootings at the Pentagon and the Marine museum. What do we know about this?

MESERVE: Well, this is the guy who was picked up last week, Friday, in Arlington National Cemetery. He dropped a suspicious backpack. He tied up traffic in all of Northern Virginia last Friday while this was unfolding.

There are allegations that when authorities searched his house, they found a video in his bedroom desk, and on that video he allegedly is seen in an automobile firing on what appears to be the Marine Corps museum.

Now, the Marine Corps museum was one of five -- well, four installations that were hit, five separate incidents last fall by fire. Nobody was hurt, but there were bullets fire.

They alleged this video connects him with that as well as forensic evidence. There were spent shell casings in his backpack he dropped at the Pentagon. They say those are the same make as the shells used at the shootings at those various military targets in Northern Virginia last fall. In addition, authorities say he was interested in IEDs. There were allegations that in that knapsack there were also 20 pounds of ammonium nitrate. That is what was used to blow up --

JOHNS: You really want to know, don't you, was he recruit bid somebody overseas, probably no way to tell?

MESERVE: They are certainly looking at that very carefully. There was a notebook in his possession in that there were references to the Taliban and to al Qaeda and so forth.

But officials still aren't willing to say whether he was a lone wolf or whether in fact he had real ties to any of those groups.

JOHNS: Jeanne Meserve, thanks so much for that.

Another important story tonight is developing right here in Washington, D.C. Less than an hour ago, Vice President Joe Biden put out a statement saying his bipartisan talks on raising the debt ceilings and cutting the deficit are on hold now, even though he says they've been making, quote, "real headway."

Tonight, the talks seem to be on the verge of falling apart because a top House Republican refused to take part in any more discussions. Let's go to senior congressional correspondent Dana Bash. Dana, what happened?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: What happened is that top Republican you're talking about is the House Majority Leader Eric Cantor. He abruptly pulled out of the talks this morning, Joe.

He said that he just can't deal with this anymore because in the talks he says Democrats simply will not agree to give up the idea, from his perspective, of raising taxes. Taxes have always been an issue in these talks.

We're talking about trying to chip away at the deficit by trillions and trillions of dollars. Democrats say, yes, we should talk about closing loopholes. Republicans say no, that's a nonstarter.

But there's a lot of intrigue into why this happened the way it did. Democrats are saying this is about internal republican politics, that Eric Cantor didn't want to take the blame for negotiating anything that his rank and file Republicans simply did not like.

So that is part of it. But the headline is these talks, which have been going on for nearly two months, to try to get to this very important deadline and to have a deal before that, that they are sidelined right now.

JOHNS: So what do we expect to happen now? The clock is still ticking towards the all-important August 2nd deadline when the U.S. will default on its loans if Congress doesn't raise the debt ceiling?

BASH: We're not exactly sure. In fact, I think that all of the players in this are scrambling to find the answer to that right now. What I'm told from some sources who have been involved in this is that maybe it's going to be a hybrid.

Because what Eric Cantor and other Republicans quickly rallied around, Joe, is the idea that, well, you know what? We've done our part. It's time for the president to get more involved in this.

So it's likely that the president will get more involved as will the House speaker and maybe the Senate Majority Leader Harry Reid. I'm also told that there's so much left undone. There's so much left that they have to negotiate and it can't just be at a presidential level.

So maybe it will be hybrid talks. But the whole idea that these negotiators have come to this stalemate when they really do need to find -- to agree to this condition, which Republicans have, to find trillions of dollars to cut in order to get Congress to raise the debt ceilings.

We're really running up against the clock. It's an important thing to remember. I'm sure people are out there scratching their heads saying, what are these guys doing?

JOHNS: People do that a lot with Capitol Hill quite frankly. Dana Bash there at the Capitol, thank you so much for that reporting.

Coming up, President Obama hits the road to talk about the troops and his Afghanistan drawdown plan.

Later, legendary Massachusetts mob boss Whitey Bulger caught in California after 16 years on the run.


JOHNS: President Obama hit the road today trying to sell his plan to drawdown U.S. troop levels in Afghanistan. At Fort Drum, New York, the president assured troops recently back from Afghanistan that a U.S. military withdrawal will not be done, in his words, precipitously.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Just know that your commander in chief has your back.


JOHNS: The president is catching flack from both ends of the political spectrum today. Many Democrats want a faster troop withdrawal. Some prominent Republicans are worried his endangering progress in Afghanistan by pulling out too soon.

With us now CNN chief political analyst Gloria Borger and "Time" magazine political columnist, Joe Klein.

Joe, it's generally reported that President Obama overruled General Petraeus who wanted more troops left in Afghanistan. Is that true from your reporting? What can you tell us about how the president made his decision? JOE KLEIN, POLITICAL COLUMNIST, "TIME" MAGAZINE: Well, it's interesting. This is the second time in I think three months that the president has overruled the military.

He's becoming a very confident commander in chief. He did it with Osama Bin Laden, Secretary Gates wanted to have him drop a bomb. Obama wanted to do it with Special Forces. He got his way there, very successfully.

In this case, once again, he wants to go with Special Forces. Petraeus is the advocate of counterinsurgency strategy, which means a long, slow process to win over the local population.

The president determined that what was really working in Afghanistan over the last 18 months have been these special operations that took out a lot of the mid level Taliban leadership and also a lot of the top level al Qaeda leadership.

This option was within the range of options that Petraeus presented to him, but it was not the one that Petraeus wanted to use going forward.

JOHNS: So it wasn't his number one option, it was one of, what, three or four?

KLEIN: Well, you know, the military always gives you three or four options. The one down at the bottom with the fewest troops is usually designed to seem ridiculous as is the one at the top where we need another 500,000 troops. This was not a middle option. This was an option down by the bottom.

JOHNS: So he took the "you got to be kidding me" option?

KLEIN: Yes, he did. You know, and I think that what we're talking about here is a very difficult piece of geography. You know, we're talking about regional command east in Pakistan, which is down in -- in Afghanistan, down near the Pakistani border, a lot of mountains.

It's really hard to do the kind of things that Petraeus wants to do there as easily as he was able to do it in Bhagdad and Kandahar and other places where you don't have mountains.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: But, you know, it's interesting, when you think of the irony of all this, General Petraus, OK, he is the architect of the counterinsurgency strategy which is big, which has had some success as Joe points out.

Now, he's leaving that job, he'll be the head of the CIA. What does the CIA do? The CIA does the targeted counterterrorist strategy with drones, for example.

So in a funny way, he's going to still be in charge of the president's Afghanistan policy, although he may be spending a lot more time thinking about dropping some drones in Pakistan.

KLEIN: The other thing is that the people were fighting in the eastern part of Pakistan, the Hakani Taliban network, are pretty much funded by the Pakistanis.

This has been very frustrating to Petraeus and to our military and now ironically, he's going to get to fight those guys on the other side of the border.

JOHNS: Let me get this in, guys. In an interview today, Fareed Zakaria, President Hamid Karzai said he was happy with Obama's announcement, optimistic about the Afghan's people's ability to improve their security situation themselves. Let's listen.


AFGHAN PRESIDENT HAMID KARZAI: Regardless of what the security situation in Afghanistan is, it is the responsibility and it's the job of the Afghan people to defend their country.

Having said that, I can confirm to you today, and I've had this confirmed by the local means, not by government means or the means of NATO that security in parts of the country has improved, that life is better now.


JOHNS: So, guys, what do we make of Karzai's take on this? Joe Klein first.

KLEIN: Well, I think that he's getting kind of what he wants. What we're going to continue to do is build the Afghan National Army. That is eventually the force that's going to stop the Taliban. It's a pretty plausible strategy because the Afghan National Army is essentially the old northern alliance on steroids.

It's a non-Pashtun force. It's been fighting the Taliban for hundreds of years and it is a plausible way to prevent the Taliban from walking into Kabul.

BORGER: You know, it's funny, though, because I think a vote of confidence from Hamid Karzai is not exactly what you'd be looking for if you were a politician. Nobody trusts him.

People think his government has been corrupt, in fact. Joe, you know this better than I do, he's been considered part of the problem more often than he's been considered part of the solution.

Of course, he wants us out of there. So it's in his own self-interest to applaud Barack Obama and say, you know what? I think this is a wonderful decision he's made and we're going to be able to defend ourselves. By the way, that works for him politically at home, doesn't it?

JOHNS: You know, yes, it's true. Gloria, one of the things that's sort of striking in all this is the wide range of positions from the Republican candidates who are trying to get the nomination off and running against President Obama. Let's listen to Minnesota Governor Tim Pawlenty who sounds pretty hawkish.


TIM PAWLENTY (R), PRESIDENTIAL CANDIDATE: When America goes to war, America needs to win. We need to close out the war successfully and what that means now is not nation building.

What it means is to follow General Petraeus's advice and to get those security forces built up to the point where they can pick up the slack as we drawdown.



KLEIN: It's unbelievable. I mean, this is truly a moment of shear ignorance. What Petraeus is proposing with counterinsurgency is nation building.

What the president is proposing is building up the Afghan National Army. Petraeus is in favor of that too. But one word you never hear David Petraeus or any other military officer involved in the actual fighting use in Afghanistan is the word "win."

BORGER: That's right, but here's the thing. Republicans are all over the lot on what you should do in Afghanistan. So each of them, when we got their statements, each of them has to find a way to differentiate themselves from the president of the United States because, of course, they can't agree with the president because they want to run against the president.

So Mitt Romney is saying I didn't like the timetable. Tim Pawlenty is saying you have to win, although he sounds hawkish. And Jon Huntsman basically said we need to get out.

So Republicans are everywhere on this, and so in terms of opposing Barack Obama, it's not clear where they are. The problem for Barack Obama is that his Democrats are not with him either.

JOHNS: Gloria Borger, Joe Klein, thanks so much for this. Hold those thoughts because I'm sure we'll be coming back to this issue real soon.

KLEIN: Thanks.

JOHNS: Coming up, the hour's top stories and could today's decision by the administration relieve some of the pain at the pump?


JOHNS: Welcome back. Here is the latest news you need to know right now.

President Obama is headlining three fundraisers tonight in New York City including one sponsored by the Lesbian, Gay, Bisexual and Transgender Leadership Council.

(BEGIN VIDEO CLIP) PRESIDENT OBAMA: I believe the gay couples deserve the same legal rights as every other couple in this country.


JOHNS: The head of the nation's airport screeners told Congress today the TSA is working to change its policy on how screeners can search children, aiming to decrease, but not necessarily eliminate pat-downs. There's been widespread outrage after a video of a screener's pat-down of a 6-year-old went viral on the internet.

At the Casey Anthony murder trial today, her mother testified that she, and not her daughter, conducted internet searches for key words including chloroform and alcohol in March, 2008. Casey Anthony's daughter disappeared later that year and was found dead.

Next up, the FBI catches up with one of its most wanted men. How did they find a Massachusetts mob boss after 16 years on the run?


JOHNS: Just a little while ago in California a federal magistrate ordered one of the most wanted men in the country to be taken to Boston for his long delayed day in court.

Alleged mob boss James "Whitey" Bulger was on the run for 16 years until last night. CNN's Deborah Feyerick has more on who he is, how they caught him and what he said in court today. Deb --

DEBORAH FEYERICK, CNN CORRESPONDENT: You know, Joe, this really wraps up a particularly painful chapter in FBI history, so much so that FBI Director Robert Muller traveled to Boston today where he'd served as a federal prosecutor during Whitey Bulger's reign of fear and crime.

Were it not for two FBI agents working in Boston, Bulger may have been in prison all this time. Instead they tipped him off to an impending arrest. He slipped away and disappeared for 16 years, Joe.

JOHNS: So as we all know at least, if we've been following the coverage through today, he's the head of the notorious "Winter Hill" gang, which arguably ran South Boston. Give us an idea of some of the things he did, anecdotes if you will.

FEYERICK: First of all, he paid police and federal agents to protect him, to look the other way as he allegedly murdered people, allegedly murdered his girlfriends. He got rid of competitors from both the Irish and the Italian mafias.

His criminal enterprise included extortion, gun-running for the IRA in Ireland and drugs -- actually charging traffickers as much as a million dollars to bring marijuana and cocaine in Boston Harbour. One former federal agent who I spoke to said, he was nasty, crazy, saying he would kill for a good reason, a bad reason or no reason at all. Estimates put his worth at about $50 million, some of which hidden in safety deposit boxes in London, Ireland, Florida and Montreal -- Joe.

JOHNS: Nasty and crazy. Tell us a little bit about how they caught him.

FEYERICK: Well, the FBI really started thinking outside the box and rather than go out and search for Bulger, they did a public service announcement for his girlfriend who's been traveling with him since they both disappeared 16 years ago. She's been out and about much more. She's more identifiable. Someone actually saw that public service announcement and called in.

FBI agents surrounded this apartment they were living in in Santa Monica, California, a third floor apartment. They were living there under the name Mr. And Mrs. Charlie Gasco. Agents lured him out, and they surrounded him without a fight.

A source telling us that inside the apartment, they uncovered about half million in cash, roughly two dozen guns, and fake IDs for both he and his girlfriend, Catherine Greig.

JOHNS: Deb Feyerick, thanks so much for that reporting.

With us right now is "Boston Herald" columnist Howie Carr, whose book "Hitman" is on bookstore shelves at the moment.

You know, I went sort of back in the files. This is just one of the many transcripts of congressional hearings about the Bulger case. And a lot of the questions are about whether the FBI was sort of complicit in allowing him to stay on the lam for so long.

Did the FBI really want to find this guy?

HOWIE CARR, COLUMNIST, BOSTON HERALD: I think the FBI, the current generation of the FBI, wanted to find him very badly. But in Boston, there were two generations of FBI agents that were totally corrupted by this guy. Whitey used to have a saying Christmas is for cops and kids -- meaning he paid off the FBI agents.

There's one FBI agent from Boston who died in prison while awaiting trial on murder charges in Oklahoma, and a second FBI agent is just about to begin a life sentence for murder in Florida in a different case. These are guys who worked with Whitey Bulger and were literally on his payroll.


JOHNS: Is it true that FBI informants actually would tell him that the FBI was closing in so he could get away?

CARR: Yes. He was told by the FBI that he was about to be indicted and he was given a heads up so that he could escape the arrest that was going to happen to him. Then, when he was -- when he was on the lamb, the FBI did not go to his associates to find out what alias he was using. So, for a year and a half, the FBI -- he was traveling the country under the alias Thomas Baxter. The FBI never even bothered to check to see what the alias was.

He was stopped twice for various traffic violations by cops. They could have caught him in 1995 or '96, but they didn't have -- the local cops didn't have his name because the FBI had just totally neglected to do the basic legwork that's necessary to find a fugitive.

JOHNS: Right. But in the interest of completeness, the current FBI director has actually looked into all of this and tried to sort of clean it up. Isn't that right?

CARR: That is correct, yes. Most of the -- all of the FBI agents who committed crimes with Whitey Bulger, none of them are no longer -- none of them are any longer on the bureau payroll.

JOHNS: Big picture now. Just how big a figure was Whitey in Boston?

CARR: He was just a -- he was just a towering figure, even though he was only about 5'7" -- because not only was he a gangster, he also had protection. You know, his brother was the president of the state Senate. So, whenever any state police moved against him, something -- for whatever reason, no one could ever put any fingerprints on it, they would always be demoted or transferred. They owned the FBI.

The Boston police almost had a commissioner from the -- one of the corrupt FBI agents was almost appointed Boston police commissioner. Billy Bulger tried to get his brother's employee as the new boss of the Boston police. It was -- it was an amazing thing.

There's an FBI document from one of the people that was in his gang who said Bulger and Flemmi, the other guy, have a machine, and the Boston police have a machine, and the FBI has a machine, and no one can fight the machines.

JOHNS: Now, tell me --

CARR: And that's literally the way it was.

JOHNS: Tell me about his brother William, because there's a completely different story there that just sort of adds to the movie quality of all this.

CARR: Right. Well, his brother Billy was a politician and he worked his way up through the ranks in the Massachusetts legislature and became the president of the Massachusetts state Senate. And, you know, he always -- he always made jokes about Whitey, you know?

He had a big St. Patrick's Day breakfast every year, he and the governor, whether it was a Democrat or Republican, they'd make jokes about Whitey. And Whitey won the lottery one year, and won a million bucks. They had a lot of laughs about that.

But I remember an interview that was done with a mayor of Boston, Kevin White. And he was talking about during the busing crisis in the mid-'70s, they -- he was at a club, an athletic club in south Boston. And he said when he walked out he was almost afraid to leave because he was afraid that Whitey Bulger would kill him. The mayor's famous quote is -- about Billy and Whitey together. He said, "If my brother threatened to kill you, you'd be nothing but nice to me."

And the politicians were nothing but nice to Billy Bulger. JOHNS: If I remember correctly, Billy Bulger actually testified before Congress. Do you know if there was ever any evidence of corruption there?

CARR: No. They sent -- they sent congressional investigators up that summer to check on all these bills that punished Whitey's enemies. And they couldn't find any fingerprints on them.

JOHNS: Got it.

Do you have any idea how close the FBI was to finding him before this final tip sent them out to Santa Monica?

CARR: I thought they were just dealing with a lot of dead ends. I didn't think they were close at all. There hadn't been -- there had been various crazy rumors over the years. You know, t most recent one was that he died in Costa Rica and Catherine Greig, his girlfriend, had him cremated. But that didn't make any sense.

JOHNS: What do we know about her, by the way, Catherine Greig?

CARR: Well, her -- she was a dental hygienist and she was married to a Boston firefighter, and the Boston firefighter had two brothers, two twin brothers who were in the rackets. And over the course of -- in the 1960s and early 1970s, Whitey ended up killing both of her brothers-in-law. And, yet, that didn't stop her from developing a romantic attachment to him.

And one of Whitey's ways of disposing of victims in the later years was to dismember the bodies of his victims. And he was having a problem ripping out their teeth with rusty pliers, so he had Catherine Greig, the dental assistant, go into a catalog in her boss's office and order state-of-the-art tooth extractors that he could use in his dismemberment of bodies.

JOHNS: My gosh! How does it happen, though, that these two brothers could be killed and, you know, she'd still remain romantically involved with this fellow? I mean, how does that happen?

CARR: You're asking the wrong guy. I mean, I asked myself the same question. I mean, everybody asked themselves the same question.

She was, I think, a classic moll, you know? I mean, she was attracted to a gangster. And she had -- he liked his women flashy. She had breast implants. You know, she had facelifts, and they had a pair of poodles.

And I noticed that they had another dog that they were living with in Santa Monica. They loved pets. For some reason, Whitey had a deep attraction to canines.

JOHNS: Yes. You've written a couple books about this, and, obviously, you've answered tons of questions about the Bulger case. Are there some things, though, that you'd like to get some answers on over the next few days? CARR: Yes. The question I'd like answered is, where was he getting the money to live in this nice apartment in Santa Monica? We know that in the last years before he became a fugitive, he went on many trips around the world with a lot of cash from his drug operations and he set up safe-deposit boxes all over the world. But the FBI found a lot of them. But I don't know if they found them all.

But I'd like to know where did that money come from? Did it from -- that he was living on right now -- did it come from the safe-deposit boxes or did it come from somebody in Boston supplying him with dough, keeping him in the chips? That's the one question I'd like to know because whoever -- if somebody was supplying him with dough now, the statute of limitations hasn't run out on that crime. I'd like to see whoever it is prosecuted.

JOHNS: And where do you think it's going to be prosecuted? Where are we going to see a trial? And do you expect it to be a huge event? I'd think so.

CARR: I think it will be a huge event. Yes. Well, he's -- he'll be tried on federal charges, multiple murders in Massachusetts. But he's also facing murder charges in two death penalty states, Florida and Oklahoma. I'm not sure about Florida, but I know Oklahoma wants a chance to try him. And they -- Oklahoma would be glad to put him to death, even at his advanced age.

JOHNS: Howie Carr, radio host, columnist, author -- thank you so much for coming in and talking to us about the case.

CARR: Thank you, Joe. I appreciate it.

Next, a dramatic move to lower gasoline prices. We'll ask the former head of Shell Oil if it's going to work.


JOHNS: President Obama has decided to open up the Strategic Petroleum Reserve in order to drive down gas prices. Today's announcement helped send the price of crude oil tumbling to a four-month low. The question, though, is: will we see prices come down at the gas pump?

Let's check in with CNN Money's Poppy Harlow.



Well, this was a rare move indeed. We've only tapped the Strategic Petroleum Reserve twice before since it was established all the way back in 1975. One time was during Operation Desert Storm in '91 and again in 2005, in the wake of Hurricane Katrina. So, it's really held for emergencies.

That's why this news this morning came as a surprise to most people, the U.S. government teaming up with the International Energy Agency and agreeing to release 60 million barrels of oil onto the global crude market over the next 30 days. Now, the United States is going to provide half of that from our reserves which sit right now at a record high stockpile.

Energy Secretary Steven Chu coming out and saying, look, the move is in response to supply disruptions in Libya. We have seen a lost of about 1.5 million of barrels of oil per day because of the Libya situation. So, they're looking at it from that standpoint.

He went on to say that the Department of Energy will monitor the situation and take any additional steps if needed. Now, in response, oil fell almost 4.5 percent today on that news. But over the past month, take a look at the downward trend we've seen in crude, down almost 11 percent over the last month.

And here is why every American watching should care. You are going to feel this at the gas station. In the next few weeks, you're going to see gas prices fall. Right now, we have an average $3.61 a gallon for gasoline.

Some say this move could mean that gas will fall as much as 50 cents a gallon by the end of the summer. That is still to be seen. But the hope is, if consumers pay less for gas and energy, they're going to spend more and they're going to prop up this economy which we desperately need in this recovery.

We'll be watching closely, of course, to see how the market reacts on Friday after the sell-off we saw on Thursday. But what I think is also interesting here is that this intervention into the oil market came just one day after Fed Chairman Ben Bernanke made some very troubling comments about the pace of economic growth in this country, basically saying this recovery is going to be more prolonged and more painful than previously thought.

Of course, we'll keep an eye on it all come Friday when the market opens -- Joe.


JOHNS: Now, let's turn to the bigger picture and long-term prospects for lower gas prices. We're joined by John Hofmeister, the founder and CEO of Citizens for Affordable Energy. He used to be the president of Shell Oil.

John, thanks for joining us.

The U.S. is releasing 30 million barrels. The International Energy Agency is releasing another 30 million barrels.

How much of a difference do you think this is actually going to make?

JOHN HOFMEISTER, FOUNDER & CEO, CITIZENS FOR AFFORDABLE ENERGEY: Near zero, Joe, because that's about 16 hours' worth of daily consumption for the world as a whole. We consume 86 million barrels a day. Do the math. It's about 16, 17 hours.

The political sound bite is very powerful, and today's $3-plus drop in the price of oil sounds like it's related to that number. But, in fact, Ben Bernanke gave a stomach punch to the oil price yesterday when he talked about headwinds and slower economic growth. That's what sent the oil price lower, not 60 million barrels, which won't really enter the system for a month or more.

So, it's not going to do anything to the long-term oil price prospect.

JOHNS: So, this is just political theater or what?

HOFMEISTER: Yes. It's little political theater. We're coming to the driving season. We're coming into the July 4th weekend pretty soon. And it makes it look like elected officials are doing something for the consumer when, in fact, if they really wanted to do something for the consumer, this country would produce more of its own domestic resources because the number one reason for high gasoline prices is the refusal of the United States of America to produce more of its own energy. It's as simple as that.

Libya is not the issue for the United States. It's the refusal by the United States to grant more drilling permits to produce more domestic resources.

JOHNS: We should back up there. I mean, Steven Chu, the energy secretary, was a guy who said they were doing this to compensate for the loss of gas -- petroleum coming from Libya. But you don't think that's true.

HOFMEISTER: Libyan oil goes to Europe. We have an excess inventory in Cushing, Oklahoma, where the refineries along the Gulf Coast and the Midwest have more oil than they need for the foreseeable future, because of the inventory situation in the United States. The real reason for increased crude oil price is growing demand in Asia. U.S. demand has been flat to down.

So, China's increased demand, the Libyan situation in Europe. That's what's driven the price increase more recently.

But again, the underlying supply side issue is a very big issue for the world and for this country because China is going to need more this year, more next year, more the following year, and if we don't increase our supply through domestic production, we are going to be hurting as a consuming nation.

JOHNS: You know, normally when you hear politicians talking about releasing oil from the Strategic Petroleum Reserve, usually it's when gas prices have really just sort of peaked. But gas prices have been on the decline since they peaked near historic highs earlier this year. And that makes it even more confusing. It doesn't even seem logical to release oil from petroleum reserve at this time.

HOFMEISTER: It's completely illogical because the prices are dropping because of overall global domestic concerns about the lack of economic growth, the lack of jobs in America, for example. And so, we are in a decline period until such time as the recovery strengthens and then we'll see it go up again. And we will see much higher gas prices potentially by the end of this year, beginning of next year, if the economy recovers because we're not dealing with the underlying issue of supply versus demand from a global standpoint or from a U.S. standpoint. So, the political pandering in the summer season will just simply fade into history very quickly. This is not a solution to use your seed corn in order to influence the oil price as a way of somehow thinking you're going to change the dynamics of oil demand and supply.

JOHNS: Besides the way it looks, does this have a tangible downside? The U.S. Chamber of Commerce released a statement today attacking the administration, saying the strategic reserve is meant to address true emergencies. So, the question there is, is it possible that releasing this amount of oil from the reserve could actually affect the U.S. ability to respond to a future emergency?

HOFMEISTER: There are two downsides. One is the only way refiners will buy this oil is if it's at a discounted price which means that taxpayers will pick up the price difference between selling off these 30 million barrels and replacing it with higher cost crude oil down the road.

The second is -- you're right exactly -- it drains 30 million barrels out of a 700 million barrel emergency supply that is intended for when supply is actually cut off. But there is no cut-off from supply right now. As I said, inventories are high in the United States and nobody needs the oil.

JOHNS: Well, there's also just that question of jump-starting the economy, even if it's only for optics' sake, if it sort of improves optimism. Is that an upside at the end of the day?

HOFMEISTER: It's an upside only if it's sustained. But because we're not increasing the underlying supply and we're just throwing, you know, a rock in the pond, basically, to make the pond look like it's bigger, when we get back to some level of economic growth, we're going to see gasoline prices skyrocket back to where they were in April and early May, because that's the underlying problem. Not enough domestic supply to offset demand.

JOHNS: Some straight talk there from John Hofmeister. Thanks so much for coming in.

HOFMEISTER: You're welcome.

JOHNS: Stay there and find out why millions of dollars in farm subsidies are going to -- are you ready for this? City dwellers.


JOHNS: Year in and year out, the U.S. government pays farmers billions to help them get by. And that's your tax money. A new study shows that last year, $394 million of those crop subsidies went to about 90,000 people who live in -- cities.

How is that possible? Let's ask the head of the group that did the study. Ken Cook is president and cofounder of the Environmental Working Group.

Ken, tell me what you found.

KEN COOK, PRESIDENT, ENVIRONMENTAL WORKING GROUP: Well, Joe, what we found is, as we expected to find, that there really is a broken system here. You don't really have to live on a farm or work on a farm to get farm subsidies. You just have to have an interest -- an investment interest, an inherited interest, in a farm that gets subsidies somewhere else.

So, right in the zip code, I'm sitting in now in San Francisco and probably the one you're sitting in, in New York and Washington, D.C., all around the country, people are getting these absentee farm subsidy checks.

And it would be one thing if this were money to tide farmers over who maybe were living in the city temporarily, but these are folks who live in the city permanently. And, right now, farmers are making record amounts of money from the marketplace. We're setting records for crop prices. We are setting records for farm income. We are still sending money to some of the biggest, prosperous farmers in the country and absentee land owners here in San Francisco, in the middle of Washington, D.C., right in the middle of New York City.

JOHNS: Now, what's wrong with legitimate efforts to help domestic farms? We talked to the National Farmers Union, they told said some of the payments could be done to support risk-sharing agreements, or rent paid to sort of conserve land where they can't get income.

What's wrong with helping farms regardless of where the people actually live?

COOK: Well, there's nothing wrong with owning a piece of land in the country. I would like one myself.

But why does the government have to be involved? What's happened here is there are some legitimate circumstances where people are living in the city -- maybe in Minneapolis or Des Moines and they are operating a farm outside of there. But, oftentimes, under USDA rules, you just have to make a phone call every few months and qualify by that standard as participating in the management of the operation or have ownership interest.

But the bigger question really is we just saw Congress last week slash budgets for low income people, hungry people, poor people, right across the board. It was as if the battle cry was women and children first, except instead of rescuing them, they were cutting the budgets for programs that support them. And they threw in infants, too, by the way.

JOHNS: Got you.

COOK: Against that, we are spending huge amounts of money, spending it by sending it to the middle of the biggest cities in the country and calling it farm subsidies. We really ought to have some reforms where this money goes to working family farms on the land.

JOHNS: Very quickly, the Agriculture Department says, hey, they put in reforms in 2008. Then they were able to save about $200 million. Isn't that a good start? There were some reforms.

COOK: Well, there were some reforms. But if farmers who are dead are still getting subsidies -- which we have also shown -- I don't think the reforms have gone far enough.

JOHNS: All right. Great. Thanks so much, Ken Cook, from San Francisco. Appreciate it.

That's all from us tonight. "IN THE ARENA" starts right now.