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Facebook Falls; Chinese Acquisitions; Horse Racing; Political Attacks

Aired May 21, 2012 - 19:00   ET


ERIN BURNETT, HOST: OUTFRONT next Facebook's IPO took a dive today. Was it a colossal mistake? Steve Case, the former cofounder of AOL, OUTFRONT tonight.

President Obama criticized by members of his own party for his attacks against Mitt Romney.

And Dharun Ravi sentenced for spying on his Rutgers roommate who later committed suicide. His sentence stunning, was it fair? Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett and OUTFRONT tonight, Facebook face down. Here are some of the headlines. The "Drudge Report" calls it "Fadebook". "The Wall Street Journal's" headline tonight "Bankers under fire as Facebook slips". Bloomberg, "Zuckerberg's fortune falls $2.2 billion as Facebook drops. To put it mildly, one of the most highly anticipated offerings in American market history hasn't lived up to the hype, at least not yet.

But look at this. Facebook's stock fell as low as $33 at one point today so that's down 11 percent in one day. The company has lost $40 billion in market capitalization since it opened. OK now that sounds like a lot of money. It is, so I looked it up. Here's the context.

That amount of money is the equivalent of losing the entire companies of Hewlett Packard and Clorox in a day -- poof, gone. The road doesn't end there. Nasdaq's CEO Robert Greifeld says he's embarrassed by the technical glitches that delayed the stock's debut on Friday. The glitches kept some traders in the dark for more than two hours. One man with a lot of advice for Mark Zuckerberg is Steve Case, former CEO of AOL, the first Internet company to go public.

He had some great times. He had some not-so-great times. He's OUTFRONT tonight with advice for Mark Zuckerberg and a plan to get more Facebooks in this country. Steve, great to see you and I guess the first question is I know you've got to look at this and say OK I know how some of this feels and people -- the (INAUDIBLE) people feel and wanting to pick on you. What do you think happened to Facebook?

STEVE CASE, MEMBER, PRES. OBAMA'S COUNCIL ON JOBS & COMPETITIVENESS: Well I think it is a great company. It started eight years ago and now has 900 million users and a market cap -- I think it closed today at something like 90 billion. By the way, I think your numbers are a little bit off. I think it was down about 10 percent from the offering, so it went out about 100 billion. Now it's about 90 million.

And it's awesome that a company that started eight years ago has had that kind of success not just financially but also in terms of what they've done for users. You mentioned AOL went public 20 years ago. We went public -- I think we -- our market value was 70 million and we raised $10 million. And nobody believed the Internet was real. So it is great to see it coming of age and I think Facebook is a terrific brand and Mark and Sheryl Sandberg I know I work with have done a terrific job.

BURNETT: Yes, we were using the number from the first opening tick. So I think -- I understand what you're saying as well. But let me ask you this. You've been in this position where you know you were the wonder kid and everything was great. And then when things weren't great everybody wants to pile on, and like I said there is this schadenfreude. I mean what should Mark Zuckerberg do right now?

CASE: Do what exactly he's doing, which is focus on the product. Ultimately the markets go up and down. We saw that with AOL. As I said we went public 70 million, a decade later it was $150 billion, so went from a couple of hundred thousand users to 20 million users. And as long as you keep focusing on the product and keep innovating, that's really what matters. You can't really pay too much attention to the stock price.

BURNETT: So one of the parts of the Facebook story really connects with what you are doing in Washington. Eduardo Saverin -- and those of you who don't know his name, this is one of the co- founders of Facebook, a billionaire, was born in Brazil, came to the United States, became a citizen and now wants to renounce it and move to Singapore. Obviously there are some in Congress, Steve, who say that this is to avoid taxes. He said it isn't but it's become a big topic of conversation. You want people like him to stay in this country and you're doing something specific about it. What is it?

CASE: Well it's really broader than that. I'm not doing it. There are four senators tomorrow morning they'll announce the START-UP Act 2.0. Senator Warner, Senator Coons, Senator Rubio and Senator Moran have worked together in a bipartisan way, two Republicans and two Democrats to build on the Jobs Act that passed with overwhelming bipartisan support and signed by the president about a month ago. That focus and acts as the capital for entrepreneurs, which is really important. The START-UP Act 2.0 that will be announced tomorrow, focus on some other things, particularly winning the global battle for talent. Ultimately we got to make sure we attract and keep the best and brightest.

Those are the folks that start companies like Facebook and Google and Yahoo! and so forth. We want to continue to be the lead. We want to continue to be the world's most (INAUDIBLE). We've got to win the battle for talent and that makes sure we get the best engineers and the best entrepreneurs coming here, working here, starting companies here or joining fast growing companies here.

BURNETT: And so I looked at some of the numbers. They were pretty stunning. And this is just according to the Census that 16.5 percent of people in this country over 25 were not born in this country. But yet about one-third, a little bit more, of the engineering degrees in this country go to people who weren't born here and just about a third of other science, technology, math degrees also go to people who weren't born here. And now obviously a lot of those people are going to go home. I believe as part of the bill, can you explain how it works that there wouldn't be quotas anymore for the number of people for example from China or from India who get to stay here once they get those degrees?

CASE: Well these senators are introducing a number of things, but the issue specifically we are talking about around immigration is putting (ph) what's called a STEM visa and also it's going to be called an entrepreneur visa, so on the STEM side it stands for science, technology, engineering and math. It is really getting people who are coming to this country to get PhDs and masters degrees at some of our great universities and then once they get those often we kick them out of the country and force them to go home to start companies there that compete with our companies here.

What the STEM visa will do will enable those people to stay. I think we should encourage those people to stay. We've given them this great education. Why should we kick them out? It'd be the equivalent if we got people from China to go to our Naval Academy, educate them about our naval strategies and then kick them out to go back to China to join the Chinese navy. Nobody would think that would make sense.

But that's essentially what our immigration policy right now is around high skilled immigration. Obviously immigration is sensitive. There are a lot of facets to it. The focus here is not on illegal immigration, which is a big problem. But on legal immigration particularly making sure the best and brightest entrepreneurs and engineers are attracted to come here because they are job creators. About half of the fast growing company, particular technology companies are started by first or second generation immigrants.

I'm very grateful these four senators are coming together. It is tough in an election year. Obviously it's a tough climate, but they are coming together to focus on entrepreneurs and make sure we really remain the world's most entrepreneurial nation.

BURNETT: And I think we all want that. This is right in the center of the presidential election as well. I wanted to play very quickly for you a commercial that the president started running today about Mitt Romney. Get your reaction. Here it is.


SHARON BENNETT, POLITICAL AD: Bain Capital boss (INAUDIBLE) that was a whole different story. They put armed guards at the doors, did not look at anyone, did not speak to anybody and told us we were all fired.


BURNETT: Steve, you're an innovator and entrepreneur, you're also on the president's commission for jobs and competitiveness. What's your reaction to those sorts of ads? I mean on balance, from your view is private equity good?


CASE: It is what presidents call the silly season of politics. I think we're in that zone and obviously it is going to be a well you know tough contested presidential race as I guess it should be. But I think the focus for us right now should be not just be on politics but policy, making sure we get the policies right. And that's why I'm really focusing on celebrating the work of these senators who are coming together to try to put our entrepreneurs first. So there is a time for politics. There's a time for policy. My focus is really going to be on policy particularly the policy around entrepreneurship.

BURNETT: All right well Steve Case, thank you very much. Glad someone is fighting for that.

Well ahead OUTFRONT an investigation into the dark side of horse racing, tonight the alarming allegations against the trainer of the Triple Crown hopeful "I'll Have Another" and then Iran, new threats tonight from Prime Minister Benjamin Netanyahu of Israel about Iran's nuclear program.

And a major accomplishment in the recovery of the young woman battling a flesh eating bacteria, it's claimed one of her legs, it's claimed her hands but there was a break-through tonight.


BURNETT: Tonight a record, Missouri-based movie chain AMC is now a Chinese company. Private equity groups including -- oh, yes -- Bain -- selling the movie theater company in the biggest ever Chinese acquisition in America. The buyer is China's Wanda Entertainment Group. The price tag $2.6 million. Now AMC is big, 346 theaters, more than 5,000 movie screens. And thanks to that, Wanda is now not just China's biggest movie operator, but the world's.

Before you get sad and bemoan the Chinese takeover of the world, you know, think of it this way -- China wants movie theaters because the world loves to go see American-made movies, which brings me to our number tonight, $1.2 billion. That's how much the "Avengers" has made worldwide since its release on April 25th. Now I remember the old days when American movies got released in London weeks, maybe even a month after the United States.

"Evita" was the one I waited for months when I lived there and all my friends at home had seen it, but now movies go overseas where all the people are first. I'm betting now that AMC's Chinese Beijing might get "Avengers" too before London or New York.

And our second story OUTFRONT tonight, the man who's just one race away from winning the Triple Crown. This is something that happened -- it hasn't happened in 34 years. I have to say, by the way, every year it almost happens, I wait, I watch the Belmont and I'm sadly disappointed. I'd love a Triple Crown winner but this horse is facing well serious accusations. The owner (INAUDIBLE) performance enhancing substances on some of his other horses. Trainer Doug O'Neill and his champion horse "I'll Have Another" could be barred from participating in the upcoming Belmont due to charges of milkshaking. Now just explain what this is, this is the term for any illegal blend of baking soda, sugar and electrolytes. Now it is usually poured down a horse's throat or fed through its nostrils before a race and it is said to make the horses faster, at least from what I could see, faster you know when they're running sort of over a mile.

So that would be the derby and most certainly the Belmont, which is obviously significantly longer. O'Neill is no stranger to milkshaking charges. His horses have tested positive for it on four separate occasions, the most recent violation two years ago at Del Mar (ph) in California. Ed Lavandera has been following the story for OUTFRONT and Ed, you know I've been reading about the milkshaking a little bit. It does seem that at least it's been shown to be effective in horses going faster on stretches like they race in the Triple Crown. Does it really work?

ED LAVANDERA, CNN CORRESPONDENT: That's a good question, Erin. You know I've been trying to figure that out throughout most of the day and looking back at some of the cases that were brought against -- violations that were brought against Doug O'Neill in California this is a trainer who has roughly about a dozen violations across the country over the last 10 years, 12 years or so. In looking back at the case history of these California violations, in the cases that were brought against him, there were a number of horses who, one of them finished last in a race so it is not exactly clear just how consistent milkshaking and effective it is over the long haul. I figure if a horse finishes last, the milkshaking in that particular case didn't have much of an effect, if any at all.

BURNETT: Ed, I know you spent time today speaking to the trainer's brother. What did he say about the allegations that we're hearing now about "I'll Have Another"?

LAVANDERA: Well this is kind of a fascinating story. Imagine you know this trainer who has been considered in the horse racing industry a good trainer or probably above average. But this is a kid whose father used to take him to the horse track. His father was a better. He graduated from high school, went working in the horse racing industry as a groom, as a horse walker and then worked his way up in this. So he's at the pinnacle of this incredible moment in his career and now kind of dogged by these questions. And his brother who has worked in tandem with him, and together found this horse "I'll Have Another" and bought him for $35,000, they're on this great pinnacle and yet they're kind of dogging -- you know dodging these questions or being dogged by these questions and they say, look, we've never milkshaked a horse in our lives. Listen to them here.


DENNIS O'NEILL, BROTHER OF ACCUSED, DOUG O'NEILL: Originally the thought was you had to milkshake a horse -- we had to actually Google that to find out what that meant. Nobody's ever been caught milkshaking a horse as far as I know. Doug sure hasn't. We've never milkshaked a horse. We wouldn't know how to do it. It's never been done by us or anybody in the barn.


LAVANDERA: And Erin, his brother says that Doug O'Neill's actually taking much of this very difficulty. It is weighing on him heavily as he gets closer to the Belmont.

BURNETT: All right, well thank you very much, Ed Lavandera. I have to say I hope it ends happily because it would be great to have a Triple Crown again.

All right next, Democrats slamming the president and his campaign for going after Mitt Romney's record at Bain Capital. You just heard Steve Case's view on that. Cory Booker seemed to agree. The president responds to the criticism tonight.

And her actions led Russia to temporarily block Americans from even adopting Russian children. But now there are new problems for the Tennessee woman who sent her adopted son back to Russia on a plane by himself.


BURNETT: Our third story OUTFRONT the president. He says attacks on Mitt Romney or his work at Bain Capital are fair game.


BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: Mr. Romney is responsible for the proposals he's putting forward for how he says he's going to fix the economy, and if the main basis for him suggesting he can do a better job is his track record as the head of a private equity firm, then both the upsides and the downsides are worth examining.


BURNETT: OK, but not all of the president's supporters seem to agree with how he has done that investigation so far in his advertising. Here's New York Mayor Cory Booker yesterday on "Meet the Press".


MAYOR CORY BOOKER (D), NEWARK: This kind of stuff is nauseating to me on both sides. It's nauseating to the American public. Enough is enough. Stop attacking private equity. Stop attacking Jeremiah Wright. This stuff has got to stop.


BURNETT: He continued to say you know why is he going to pick on private equity? Hours later though (INAUDIBLE) here he is.

(BEGIN VIDEO CLIP) BOOKER: Let me be clear. Mitt Romney has made his business record a centerpiece of his campaign. He's talked about himself as a job creator and therefore it is reasonable and in fact I encourage it for the Obama campaign to examine that record and to discuss it.


BURNETT: John Avlon and Reihan Salam and Jamaal Simmons are here. I have to say, you know, Cory spoke from his heart obviously on "Meet the Press" and I'm sure what he's trying -- he would say in the YouTube was in a thoughtful and considerate manner the record should be discussed, but not in this hateful simplistic way of ads. Maybe, I don't know. If you're watching, Cory, maybe I got it wrong but that's my bet, right John Avlon. The point is though it is rather nauseating.

JOHN AVLON, CNN CONTRIBUTOR: Yes and look, I mean the reason there was all this outcry is because he took the risk of breaking from partisan talking points and you're not supposed to do that but that's what people do when they have -- you know the courage to sort of say what they really think --


BURNETT: He went out to actually say why private equity contributes to --


AVLON: Yes, that's right and yes, guess what? There is a positive and a minus.


AVLON: But the point is, is that the overwhelming tide of negative ads that are intentionally polarizing that people are already being subjected to does disgust people. It is nauseating. It is what people hate about politics. And so for calling that out all of a sudden he gets slammed by some folks for being disloyal. It is also just called telling the truth.

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Yes, but you know John -- John, you know people hate negative politics but they also really, really respond to it. Negative politics are as old as politics in this country. The first real campaign that we had with Tom Jefferson and John Adams, I mean they were questioning each other's manhood.

AVLON: Jamal --

SIMMONS: They were questioning each other's -- you know this goes back a long way.

AVLON: I hear you --

SIMMONS: People don't like it but they respond to it.

BURNETT: It goes back to Cicero, remember you was complaining about this --

AVLON: Look at the Roman analogies. Again look, I hear you Jamaal. I hear you, but here's the thing. This is what everybody says if they're a political consultant and they use it to sort of say, look, I hate being negative but it works and look the founding fathers did it. It is a rationalization. The reality is sure it does work but it also degrades the entire process and disgusts people.

REIHAN SALAM, CNN CONTRIBUTOR: Guys, I just want to get in the mix here just to say --

AVLON: Sure.

SALAM: The one thing that I consider very, very important so President Obama has said he is not attacking the private equity industry as a whole.

AVLON: That's right.

SALAM: He's saying that profit maximization is totally a-OK with him.


SALAM: But here is the thing. There's a policy issue here. We are trying to talk about these issues to get to the policy question and the policy upshot is this. President Obama wants to dramatically raise capital gains and dividend taxes. That will make it more likely rather than less likely that companies will load up with debt. That is there's a big debt bias built into the tax code, right? That's why it's not just PE companies --

BURNETT: That is true.

SALAM: -- that are using a lot of debt and President Obama is actually going to make that worse rather than better.


SALAM: But that's --

BURNETT: OK, that's interesting.


SALAM: Let's talk about that, guys --



BURNETT: That is relevant and important and complicated.


AVLON: It is. But this ad is not about that policy. This ad is about an attempt to characterize his --

BURNETT: Jamal --

SALAM: But that's why we shouldn't pivot so fast. That's the thing. President Obama is attacking this phenomenon in which a ton of companies did go bankrupt. That was a sad and terrible thing but here's the thing -- he's going to make it worse --

BURNETT: OK, but hold on, Jamal --

SALAM: And Romney's policy will make it --


BURNETT: Jamal -- Jamaal, let me ask you one thing here though about the president himself, right. The day that one of these first ads came out he was trying to get money from one of the biggest private equity guys in the business. Tony James (ph).


BURNETT: Bill Daley, former chief of staff, private equity guy, Rahm Emanuel, private equity guy, that's how he had the money to go spend time in Congress.





BURNETT: Chief of staff Jack Lew, these are all private equity guys.


BURNETT: So doesn't it seem a little insincere to put out ads saying that it's bad when you have so many guys that work around you that clearly you think are good?

SIMMONS: Well no, because here's the reason why. I think what the Democrats have been arguing it's not that private equity itself is bad. The president said it himself today that private equity is maximizing profits and that has a beneficial use for the economy. The question is about if Mitt Romney is casting his entire campaign around this notion of his business experience being the primary qualification, then it is a good idea to look at both the ups and downs. The problem with being a financier as a qualification of being president, you can't sell off Michigan if it is an underperforming asset. You can't outsource or offshore the FDA if you don't like the way -- you know if you want to save money. There are things that you cannot do as president that you can do when you are in business.

BURNETT: All right. SIMMONS: And that is why it is important to compare the two.

BURNETT: Finally, before we go, John Avlon, Bill Maher calls Mormonism a cult. I'm going to defend Bill Maher only in that I believe he thinks all religion is a cult.


BURNETT: Because I watched his movie, but who is the bigger loser here the president or Mitt Romney?

AVLON: Look it doesn't help the president. Bill Maher is a political comedian but when you give a million dollars to a Super PAC it can be said that you're acting as a surrogate. He's not a surrogate for the president or his campaign. And you're right. I think that is his general view, but that's a very loaded word especially with Mormonism.


AVLON: It's an ugly thing and you've got to be consistent.

BURNETT: All right, thanks to all three.

And still OUTFRONT in our second half, a showdown over nuclear Iran. This is a crucial week. It could be the tipping point for military action.

And a surprising sentence in the Tyler Clementi spy cam case. Was it fair?


ERIN BURNETT, HOST: Welcome to the second half of OUTFRONT.

We start the show with the stories we care about, when we focus on our own reporting from the front lines.

And tonight, a congressional source has confirmed to CNN that three Drug Enforcement Administration agents are under investigation for hiring prostitutes and -- wow -- strange, coincidence, in Cartagena, Colombia. Information came from the Secret Service which is of course investigating itself as to why several of its agents hired prostitutes during a presidential trip.

Incident with the DEA agents occurred at the same time as the ones involving the Secret Service but it was a totally separate incident. They weren't together. Agents have been removed from the country.

And we want to give you the latest on Aimee Copeland, she's he 24-year-old grad student who's been fighting flesh-eating bacteria and fighting her life. I told you there was a break-through late today and it's good news. After having both of her hands and her remaining foot amputated, but she's now breathing on her own and this is a big break-through. Her father put on his post Aimee's back to cracking jokes and speaking frankly.

In a separate but unrelated case, a man named Bobby Vaughn who was in the same hospital as Aimee has undergone five surgeries to remove tissue infected by the bacteria.

And a new mother in Greenville, South Carolina, remains in critical condition after having seven surgeries since being diagnosed just hours after going home after the birth of her twins. The twins though are healthy.

French investigators are widened their investigation into the former IMF chief Dominique Strauss-Khan's alleged participation in a prostitution terms today rather significantly. They have upped the terms today rather significantly. They say there is suspicion that he participated in a gang rape at a hotel in Washington.

In a statement to CNN, Strauss-Khan's attorneys say the investigation will establish that Dominique Strauss-Khan has never committed acts of violence or had any relationship whatsoever without the consent of his partners, plural.

Strauss-khan has also been warned by French authorities that he is under investigation for aggravated pimping, though there have been several allegations made against him, he has not been convicted of any crime.

Well, Chrysler is recalling about 68,000 Jeep Wranglers due to a potential fire risk. This crossed just a moment ago. The recall affects 2010 Wranglers with automatic transmissions built before July 2010. The recall involves about 86,000 vehicles. We looked at the National Highway Safety Administration documents and they said debris can get stuck between a plate which protects the transmission and catalytic converter that can cause a fire.

Well, it's been 291 days since the U.S. lost its top credit rating. What are doing to get it back?

Well, it's very nice after a very rough week to have a good day for stocks. All three indices were up more than 1 percent.

And now our fourth story: Benjamin Netanyahu of Israel today told Iran, that time is running out for the country to stop its alleged nuclear weapons program.


BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL (through translator): Giving these evil attentions, the leading powers in the world must show force and clarity and not weakness. They shouldn't make concessions to Iran. They should present a sharp and unequivocal demands.


BURNETT: He picked today because inspectors from the International Atomic Energy Agency met with Iranian officials in Tehran this afternoon. U.S. and other Western governments are meeting with Iranian negotiators in Baghdad this week, and this is a crucial week. If there's no deal it could be the tipping point for military action.

OUTFRONT tonight, Joe Cirincione, member of Secretary of State Clinton's international security advisory board, and the Council on Foreign Relations, and Hooman Majd, the author of the "Ayatollah's Democracy".

Good to have both of you with us.

And, Joe, why is this week so important?

JOE CIRINCIONE, COUNCIL ON FOREIGN RELATIONS: We haven't had sustained negotiations with Iran for over two years, so the key here is whether this week's discussion can lead to a process where we move from high-level occasional meetings to an actual operationalization of a compromise plan. Will Iran give the West what it wants? Which is a slowdown in its program. Will the West give Iran what it wants? Which is a slowdown in the sanctions. This week will tell.

BURNETT: And I want to ask about the sanctions in a moment from Hooman. But, first, one of the biggest problems, Joe, has been access to one of Iran's most secretive military site. And this I'm referring to is called Parchin. In the recent weeks, governments hostile to Iran have leaked pictures of devices where they say nuclear explosions have been tested in the past in Parchin.

And this is a crucial question: Will Iran do you think give full, unfettered access to the site?

CIRINCIONE: Not nuclear explosions tested, but it's possible they were constructing a site to test components of a nuclear device. It's a military site. IAEA inspectors are there today. They want to have access to the site. Just Director General Amano (ph) was optimistic about the possibility of getting a deal. We'll know in about 24 hours.

This is part of what Iran has to do to begin to restore some confidence their program is indeed for peaceful uses as they claim, and to extend the warning time should they break out of the IAEA inspection process.

BURNETT: And, Hooman, what I'm referring to is an "A.P." report which they said was leaked to a government hostile to Iran, that had this device was there. But the question is, if there's nothing to hide, which Iran says there is nothing to hide, why not just give full access and shut everybody up about the satellite pictures or the site, what's there and what isn't there?

HOOMAN MAJD, AUTHIOR, "THE AYATOLLAH DEMOCRACY: Well, I think Iran wants to be treated like every other country in the world with certain amount of respect. That's what they say anyway. If they give -- immediately give access to whatever inspectors want, even though it's not on the list of things they have to give access to -- because it's not a declared nuclear site, so therefore they don't have to give access to it.


MAJD: Then they feel like they're being treated differently, as second class citizens in the world. I mean, U.S. doesn't give access to its military sites. Other countries don't give access to military sites to international inspectors.


MAJD: Iran says we have already given them access to Parchin. They did in 2005, but that's a long time ago.


MAJD: I do think actually they will be allowed to have access to that site but I think Iran wants to also see some development in this process that Joe was talking about which is like this process of negotiations that's going to lead to something, and that's why they -- I think they're holding off on giving that access right away.

BURNETT: So they have it as a chip.

MAJD: I think so, yes.

BURNETT: What I refer to this week as a tipping point, and Prime Minister Netanyahu said to me in an interview a few weeks ago he will accept zero enrichment from Iran. Now, the United States' position seems to be that Senator Feinstein was talking the other day, somewhere around 5 percent, which you could use for medicine and things like that.

MAJD: Right.

BURNETT: That doesn't mean U.S. and Israel aren't in the same page. It means that there is nothing Israel will accept and Iran has said categorically they'll never go to zero.

MAJD: Right.

BURNETT: At one point does one side cave here? By that I am talking about Israel and Iran.

MAJD: I think if we believe all leaked stories about what the U.S. would be willing to accept, then it is true that they would be willing to accept some form of enrichment. Even Hillary Clinton has said that and I believe that to be the case.

I mean, it is a little odd that a country that isn't a member of the NPT, or isn't a signatory to NPT and has nuclear weapons is dictating terms to a country that is a signatory to the NPT and doesn't have nuclear weapons as far their own intelligence service tells them, and our intelligence service tells us. So, I think that's a little strange. I think they're trying to put pressure on the U.S. more than on Iran to try to get the U.S. --

BURNETT: To back them.

MAJD: Well, to back them, and also not make a deal that the Israelis would be uncomfortable with at this point because it does appear there is some space between Israel and Iran on what they feel is acceptable for Iran to have.

BURNETT: And, Joe, a crucial question and a final question. Iran has said they really wan these sanctions rolled back. The toughest sanctions have not yet taken effect. It seems from people I've talked to in Washington there is no appetite in the U.S. to roll those back.

I mean, is that your interpretation or would the U.S. consider softening those sanctions this summer which obviously could result in Israel making a choice but that the U.S. doesn't want them to make?

CIRINCIONE: Well, you're right, Erin. In fact, the U.S. Senate just passed another sanction bill today, increasing the proposed sanctions.

So, what, if you're Iran and you want relief from what is becoming a crushing sanction regime that's really killing the Iranian economy and the price of oil has dropped so they're not getting as many revenues, you want something from the West, from the partners there, what can they give? They can give a delay in future sanctions.

You might be able to see the European Union to lay the old embargo which has not yet gone into effect. You could see the president relax some sections for humanitarian reasons on some banks. That's what Iran will be looking for, that's the most politically sensitive part of these negotiations.

BURNETT: And that will -- I don't even know what that would do in Tel Aviv.

OK, thanks to both of you.

OK. Now something almost no one expected. Today, Dharun Ravi was sentenced by the judge for bullying his gay roommate. He could have gotten 10 years. He got 30 days.

His roommate Tyler Clementi committed suicide by jumping off the George Washington Bridge in 2010. Clementi killed himself after discovering that Ravi had secretly spied on him with a webcam while he was with another man.

In court today, both the Clementi's and Ravi's mother made emotional pleas to the judge there.


JANE CLEMENTI, TYLER CLEMENI'S MOTHER: Tyler and I had been very connected. So much so that I feel like a piece of me died in September of 2010. That connection became very real to me again during the trial as most of the time I was listening and watching as if through Tyler's ears, eyes and mind. SABITHA RAVI, DHARUN RAVI'S MOTHER: But my son is sitting here physically alive in front of everyone's eyes. While I am sharing his pain, I make sure that he knows that I love him.


BURNETT: Paul Callan is OUTFRONT tonight.

That was hair raising from both of the mothers. Obviously, very influential on the judge as well.

I mean, were you -- were you shock? He could have gotten ten years. I know that a lot of people felt that was too much for someone who made a horrific mistake. But 30 days?

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: It was an unbelievably emotional scene in that courtroom and yes, I was shocked by the sentence. I'll tell you why. First, the judge started out talking tough. He said I never saw an apology from Ravi to one of the victims in the case, M.B., who was the boyfriend, acknowledged boyfriend of Tyler Clementi. He said Ravi didn't even bother to stand up at his sentencing. He said that this was a crime that had inflicted this horrible penalty on the Clementi family.

So everybody was holding their breath waiting for a serious sentence, and 30 days came down along with probation and a fine. Now, you have to understand under New Jersey crime, this crime, a second degree crime, five to 10 years normally. It's robbery, kidnapping, sexual assault -- those are the kinds of crimes that this attaches to.

This was a shoplifting sentence. A disorderly conduct sentence in -- for a crime that is punishable by a much greater sentence.

BURNETT: We just heard from the mothers. Do you think that their statements had an impact or the judge already made the decision?

BURNETT: I don't know. I think it had to have had an impact. This courtroom was awash in tears of these mothers. I mean both of them. It was Tyler Clementi's mother and the father an brother. They all spoke. Then Ravi's mother spoke and they were all in tears.

I mean there was so much emotion, the judge had to be moved by it. I think ultimately he looked at the case and said, this is the first time this law has been applied to a college student. I can throw the book at him or will I give him a break? And as a warning to other students not to do this.

BURNETT: Think about cruelty and bullying. It seemed like he had.

His father did also speak at court today. Here is a little piece of that so it can hear it everyone.


JOE CLEMENTI, TYLER CLEMENTI'S FATHER: My family and I understand that there are many people worldwide watching this case. We also understand there are important broader issues of protection of privacy and protection of people against criminal acts that are associated with bias, that while not in this case will be affected by this case.


BURNETT: Obviously privacy's something you've talked about. This could be a huge precedent in that case. Given that do you think there will be an appeal? Prosecutors will appeal?

CALLAN: Well, you know, it's interesting, usually prosecutors don't appeal cases. Usually they can't. New Jersey has this weird law that says if the sentence is idiosyncratic, the prosecution can appeal -- meaning, bizarre, odd or freakish, and strange word for lawyers to apply.

So if the appellate division in New Jersey says this was a bizarre, freakish sentence, then they can order a new sentence and order a more harsh sentence. A lot of lawyers say they have almost never seen a case where a second degree felony got such a light sentence. So idiosyncratic is the word of the evening.

BURNETT: So they'd have to decide -- they'd have to see if that actually applied.

CALLAN: That's right. And if it does, then the prosecution can appeal and they have a shot at a harsher sentence.

BURNETT: Any case in America that comes near the definition of privacy ends up being confusing.

CALLAN: Very. But this is the --

BURNETT: A penumbra of confusion.

CALLAN: It is -- but this is the precedent setting case. It's a watershed case. It sends a message to everybody: be careful if you're using one of those webcams to humiliate and cyber bully because you are going to prison.

BURNETT: Right. Certainly incredibly moving from both of those mothers.

Well, OUTFRONT next, she made international headlines when she sent the son, she adopted on a one-way flight back to Russia. But now, the Tennessee woman could be forced to hand over hundreds of thousands of dollars to him.


BURNETT: We're back with tonight's outer circle where we reach out to our sources around the world.

And we start in Yemen. A suicide bomber dressed in a uniform struck a military parade rehearsal today killing at least 100 soldiers.

Mohammed Jamjoom is following this story and I asked him who's taken responsibility.


MOHAMMED JAMJOOM, CNN CORRESPONDENT: Erin, Yemeni officials are telling us this attack, there's a hallmark of al Qaeda, which really isn't a surprise when you consider the fact that al Qaeda in the Iranian Peninsula, the group that most analysts consider the most dangerous wing of the al Qaeda terrorist network, uses Yemen as its hub.

Now, what's really, really concerning about today's attack isn't just the fact that the military was targeted but it is the fact that it took place in one of the most heavily fortified seconds not just of the capital of Yemen but of also all of Yemen. This is one of the most secured sites in the country. It's very close to the presidential palace in the capital and it's very close to the headquarters of the central security forces.

A lot of people that I'm speaking with in Yemen today say, hey, if this can happen there, it can happen anywhere in Yemen -- Erin.


BURNETT: Thanks to Mohammed.

And now to Mexico, where authorities captured one of the main suspects in the kill of 49 people whose bodies were discovered dismembered gruesomely last week. Ramirez Daniel Elizondo known as "The Madman" will be detained for 40 days as prosecutors build their case against them.

I asked Rafael Romo what Mexican authorities know about the suspect and the reason for the murders.


RAFAEL ROMO, CNN CORRESPONDENT: Erin, Elizondo was the leader of the drug cartel known as Los Zetas, in that part of northern Mexico, near the border where the bodies were found. And loco or "The Madman" was described as one of the suspect responsible for last week's killings -- the massacre of 49 people whose bodied were beheaded and mutilated.

Officials say this was part after strategy to blame the actions on opposing criminal organizations to cause confusion among authorities and public opinion. Elizondo is an extremely dangerous individual, Erin. Officials say as Mexican soldiers were closing in on him, the Madman hurled the grenade and fired the troops with a rifle.


BURNETT: All right. Thanks very much to Rafael. And now, let's check in with Anderson.

Anderson, what's coming up on "A.C. 360"?

ANDERSON COOPER, HOST, "A.C. 360": We've got breaking news tonight on the program.

New and controversial testing guidelines for prostate cancer. One of the deadliest forms of cancer among men. We're going to speak with an oncologist and author who needs screening and how often.

Also, a stunning hate-fill speech by a preacher who took the pulpit and advocated for gays and lesbians to be rounded up and put in electrified pens. Speaking out against this tonight, my guest tonight, the Reverend Welton Gaddy, who says this sermon violates every principle of religion and what it means to be a good American.

Those stories, a lot of about politics tonight and the "Ridiculist" -- all at the top of the hour, Erin.

BURNETT: All right. Thanks very much, Anderson.

And now, our fifth story OUTFRONT. A hefty fine for a Tennessee woman who adopted a boy from Russia and then sent him back on a one- way flight. Artyom Saveliev was just seven years old when he was adopted in 2010 by Torry Hansen. She renamed him Justin. But after six months, she put him on a plane alone to go back to Russia with a letter that said she didn't want him anymore. She said she was unable to handle caring for him.

This caused a shutdown in American adoptions of Russian children for a while and Hanson has now been ordered to pay $150,000 in back support and fees, plus $1,000 a month until the boy turns 18. That's going to quarter almost a quarter million dollars.

Artyom has just turned ten. He's living with a foster family in Russia.

Larry Crain is an attorney for the adoption agency that sued Hanson.

And, good to see you, sir. Explain exactly how this happened. How did you choose the amount?

LARRY CAIN, ATTORNEY: This was a difficult case. There was no legal precedent for it. Simply what remedies could be invoked on behalf of the minor child who was a U.S. citizen, bear in mind, Justin, when he stepped on the soil in 2009 became a U.S. citizen with all the rights and privileges that apply.

And so this case, we had to find a legal theory that had validity for which we can find someone with standing to invoke this child's legal remedies. This was a two-year-long battle on which Ms. Hanson hired no fewer than three law firms who threw every technical legal defense in our path that could be thrown. But the case went to trial last Thursday. And the issue had to do with whether or not this mother had breached a placement contract that she signed wherein she agreed that if this child were ever taken from her home for any reason she'd remain responsible for his support. So the case --


BURNETT: Yes, let me just ask a question about that. Her side of the story at the time was I know that this looks awful what I did, but I met the child once. I brought him here and it turned out that he was severely disturbed and had all sorts of issues and I was unable to care for him. So how should she have handled this differently so it wouldn't have ended this way?

CRAIN: There's a proper legal process for her to follow as every parent. You know, a biological parent can't just decide they're going to one day no longer parent their child. And the same applies in an adopted parent setting.

She could have surrendered this child and found another home, which easily been found for Justin. And the records simply did not bear out the fact this child had any violent tendencies or propensities. The medical evidence is to the contrary.

While he had been institutionalized, she was briefed and given information about his medical background. So we just do not see where that was a justification for a parent to surrender the child -- rather to return the child to his home of origin in the manner that she did.

BURNETT: Well, he's with a large family. We showed a picture of him with his foster family where he's in Russia now. By all the accounts at least that we've heard or seen, he seems to be doing well. It's a happy family.

So why do this public push for child support?

CRAIN: The public push for child support had to do with the fact but for this case, Torry Hanson would have escaped without any legal consequence for her actions. And by anyone's standards, it's simply is outrageous in a civilized studio, for a mother to pin a note to a child and send him back.

She hired a driver over the Internet about whom she knew nothing about. This gentleman picked him up at the airport, dropped him off at the ministry of education. And there was no action being taken by the local authorities here in Tennessee or the criminal authorities to do anything about this.

BURNETT: All right. Well, thank you very much. We appreciate it. A story that I know captivated a lot of people when we first heard about the child being put in that flown to go back to Russia.

I was in Boston this morning. It's been a rather long day, but I got a sneak preview of something totally, totally amazing -- a band. And we'll explain next. (COMMERCIAL BREAK)

BURNETT: So today I was in Boston and there was a big cable show going on there. In fact, it's the cable industry's biggest annual convention. It was jammed. I was amazed.

It was standing room only. By the way, because those of you who watch the show know I love to talk about beautiful infrastructure, it was the most convention center I've seen, the Boston Convention Center.

But it's what the show kicked off with that I was so excited and I have to tell you about. It was mesmerizing. It was one of those moments when technology takes your breath away. It was iBand, a rock group from the Atlanta area performing the U2 song "Where the Streets Have No Name".


BURNETT: I mean, just amazing, right? The future. Is it beautiful or frightening?

We'll be back tomorrow at 7:00. See you then. Anderson starts now.