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CNN NEWSROOM

Report: Bloodstained Bat Found in Pistorius Home; Country Star Mindy McCready Found Dead; Federal Budget Cuts Set to Begin March 1; Facebook Avoids Taxes, Gets $429M; "LA Times": Pope May Be Blind In Left Eye; Superstorm Sandy Victims Fight for Cash

Aired February 18, 2013 - 10:00   ET

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


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CAROL COSTELLO, CNN ANCHOR (voice-over): Happening now in the NEWSROOM, new information about the shooting death of Blade Runner's girlfriend. Officials say Reeva Steenkamp was shot four times then carried downstairs.

Oscar Pistorius's family now coming to his defense.

ANTHONY PISTORIUS, OSCAR PISTORIUS'S UNCLE: -- our entire family is devastated. We are in a state of total shock.

COSTELLO: President Obama golfs and Congress takes a vacation, even though millions of government jobs hang in the balance. Some of the spending cuts that will impact you if sequestration happens.

And it's tax time for millions of Americans, but Facebook won't pay a dime. In fact, the government is giving Facebook a $400 million refund.

NEWSROOM starts now.

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COSTELLO (on camera): Good morning. Thank you so much for being with me. I'm Carol Costello. We begin with the new developments surrounding the death of Oscar Pistorius' girlfriend. Local media in South Africa report detectives are studying a bloodstained cricket bat found at Pistorius' home.

Officers are trying to establish whether the bat was used to attack Reeva Steenkamp or whether she used it to defend herself. Pistorius' family members are coming forward defending the track star against a murder charge.

CNN's Robyn Curnow picks up the story from Johannesburg.

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PISTORIUS: As you can imagine, our entire family is devastated. We are in a state of total shock. Oscar was happy in his private life. ROBYN CURNOW, CNN INTERNATIONAL CORRESPONDENT (voice-over): Investigators who have been combing through his house in this high security complex are starting to piece together what they think happened early on Valentine's Day.

CNN is being told and local media is reporting that police believe Pistorius' shot Steenkamp four times through a closed bathroom door and then carried her downstairs where she died. Neighbors have told police that they heard shouting before the shooting.

But there's still no solid explanation as to why he might have shot her. Pistorius appears in court again on Tuesday for his bail hearing. He hasn't entered a plea yet.

While Pistorius is in court, Reeva's family says there will be a funeral for her on Tuesday. But still South Africans will be able to watch her beach adventures on the reality show, which airs for another nine weeks.

Producers released this final message from her, meant to be the cast, but which now becomes her last words, her last goodbye.

REEVE STEENKAMP, MODEL: I take one with me so many amazing memories and things that are in here and in here that I will treasure forever. I'm going to miss you all so much. I love you very, very much.

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CURNOW: You know, Carol, there's been so much misinformation, rumors, speculation, guess work about what happened in Oscar Pistorius' house that Valentine's Day. We do know according to one official close to the investigation that Reeva Steenkamp was there to spend the night with her boyfriend.

Her overnight bag and iPad were found in his bedroom. We also know according to this official that she was shot four times through a closed bathroom door. Additionally, Oscar afterwards picked her up, carried her downstairs, while she was still alive.

Now more details will probably emerge in court. Oscar faces a magistrate and a bail hearing on Tuesday. While that is going on Reeva will be buried. Carol, back to you.

COSTELLO: Robyn Curnow reporting.

Country music stars and fans this morning are mourning Mindy McCready. She's dead at the age of 37. McCready put 14 songs including "Guys Do It All The Time" and six of her albums were on the billboard country charts. But she was known for her personal struggles as much as for her music.

McCready battled addiction and mental illness. Her body found on the front porch of her Arkansas home. Authorities say she shot herself to death. McCready leaves behind two boys, a 6-year-old and a 10-month- old. The baby's father was found dead last month of an apparent suicide. Chances are high automatic federal spending cuts will begin March 1st. Unless Congress acts soon some federal workers face an uncertain future, but nothing will be done about it today.

President Obama is in Florida after spending the weekend golfing with Tiger Woods while Congress is on vacation for President's Day. Most of the 2 million federal workers are facing furloughs and pay cuts though.

House Minority Leader Nancy Pelosi said she opposes a cut in pay because it undermines the dignity of the job.

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REP. NANCY PELOSI (D), MINORITY LEADER: It's a hard question to ask me because most of my colleagues are the breadwinners in their families. A pay cut to me doesn't mean as much. I don't think we should do it. I think we should respect the work we do.

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COSTELLO: The National Park Service is just one agency facing budget cuts. CNN's Emily Schmidt takes a look at what that means for your vacation.

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EMILY SCHMIDT, CNN CORRESPONDENT (voice-over): If Richard Wood has seen one national park, he's seen them all.

(on camera): How many have you been to?

UNIDENTIFIED MALE: Well, over 200, 250 approximately.

SCHMIDT (voice-over): With Great Falls Virginia checked off the list, there are about 150 to go.

RICHARD WOOD, NATURE ENTHUSIAST: The National Park Service, you know, there's nothing like it in the world.

SCHMIDT: The National Park Service covers more than 84 million acres in every state but Delaware and soon may do so with less because of mandatory budget cuts known as sequestration slated to begin on March 1st.

UNIDENTIFIED MALE: It looks like "The Sequester" is probably going to happen.

SCHMIDT: John Garder works for a non-profit group that supports the national parks, and he's worried about the looming changes.

UNIDENTIFIED MALE: Five percent is a lot for the park service.

SCHMIDT: The National Park Service is preparing to cut $110 million out of the $2.2 billion budget. That could mean shorter park hours, fewer employees and possible closed camping and hiking areas when there's not enough staff.

JOHN GARDER, NATIONAL PARKS CONSERVATION ASSOCIATION: A cut of this magnitude, which would be so damaging to parks. Over the course of a year federal spending would save 15 minutes.

SCHMIDT: Garder says Yellowstone National Park could lose $1.75 million, the National Mall, $1.6 million, the Statue of Liberty, $779,000. Still one budget expert says the cuts are not too extreme.

ISABEL SAWHILL, BROOKINGS INSTITUTION: I think almost any organization can sustain a 5 percent cut in their budget and not have it interfere with their basic mission.

SCHMIDT: Isabel Sawhill says taxpayers may not mind getting a bit less in service to help control government spending. Richard Wood agrees in theory, just not here.

WOOD: I'm a big National Park Service fan. So I want them to cut programs that don't matter to this me personally. No. I think unfortunately, all of us feel that way.

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COSTELLO: He's got a point. Emily Schmidt is live in Washington now. So, Emily, parks reduce funding, what will that mean for local communities?

SCHMIDT: You know, we get a little bit of an indication, Carol, from a letter that the Department of the Interior sent to the Senate Appropriations Committee. It says those cuts would make it a lot more difficult to get the seasonal employees it needs for the busy upcoming summer season.

It also adds the visits to the department managed lands in 2011 supported about 403,000 jobs nationwide. They estimated that contributed more than $48 billion to local economies. Clearly, the suggestion here is the ripple effects sequestration could really set in motion -- Carol.

COSTELLO: You're not kidding. Emily Schmidt is reporting live from Washington this morning. It is tax time for millions of us, but get this, Facebook made billions of dollars, but it will not be paying 1 dime in taxes to Uncle Sam. And Facebook is not the only company with that joy at tax time.

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COSTELLO: You can learn a lot, thanks to Facebook including how to legally avoid paying state or federal taxes. Facebook is not the only company to save money this way. Alison Kosik joins us now to tell us if it's possible for us not to pay federal taxes.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: I don't know about that. But if you're thinking about this as Facebook's gotcha moment, it isn't because, Carol, this is all legal. Now what Facebook is doing is they're taking a $1 billion tax deduction for last year for what's known as excess benefits from stock options. I know you're thinking, what the heck is that?

So let me give you -- give you the rundown on this, in the early days, what happened was Facebook wound up paying many of its employees with are known as stock options. Now what these are, are promises to buy shares of the company stock at a set price. Let's say $1 to make it easy.

What Facebook did when it went public last year, it went public, which meant employees could exercise these options, which means they could buy a share of Facebook for $1. Now even though the shares were worth as much as $38. So the difference between the price paid and the actual market value, that is tax deductible for Facebook.

Now as you said, Facebook is not the only company that does this. The Center for Tax Justice found that 185 companies in the Fortune 500 took similar deductions in 2010. Some of the biggest, look at this, Apple 742 million, Goldman Sachs, HP $294 million, Exxon Mobile $280 million.

Now the Center for Tax Justice says a total of $7.5 billion, Carol, could still be eligible for Facebook to deduct in taxes over the next several years. It just keeps on giving.

COSTELLO: It's just unbelievable. Alison Kosik, thanks so much. It's been almost four months since Superstorm Sandy hit. And guess what, some property owners are still fighting every day with their insurance companies.

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UNIDENTIFIED FEMALE: I have to run to the bank two Fridays ago and beg them to give me a loan so I can pay my contractor.

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COSTELLO: It's 15 minutes past the hour. Time to check our top stories, the Idaho man accused of slapping a toddler on a Delta flight is out of a job. The defense contractor where Joe Hundley works says he is no longer employed. He faces an assault charge that could land him behind bars for a year.

New details on the pope's declining health. The "L.A. Times" reports Pope Benedict may be blind in his left eye. That's according to a German journalist who interviewed the pope several times most recently in December. That journalist tells the newspaper the pope's hearing has also faded. The pope cited his poor health in his decision to leave the papacy on February 28th.

Back home, Maker's Mark is saying I'm full. The Kentucky Bourbon maker will no longer water down its whiskey to stretch supplies. The reversal comes a week after the company announced it was diluting its famous spirit to deal with a spike in demand. Though officials said the extra water did not affect taste, customers waged an online revolt. So starting today, every Red Wax bottle is back to 90 proof. An Air Force One bomber jacket once worn by JFK was a top seller at an auction of Kennedy family memorabilia. The leather jacket with a presidential batch fetched $629,000. Other items included a birthday card from John-John to his dad and a marked up itinerary for the president's 1963 trip to Dallas. Relatives found the items at a home of one of JFK's special assistant.

In Florida, officials say 68 Burmese pythons were killed during a month long contest designed to thin the population of invasive snakes. Prizes went to the guy who brought home the longest python, which would 14 feet and 3 inches.

And also to the hunter who bagged the most snakes that would be 18. Wildlife officials held the contest to help them get rid of pythons, which are one of the area's most invasive species.

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COSTELLO: The National Hurricane Center says Superstorm Sandy is the second costliest storm in history after Katrina. The total estimated damage right at around $50 billion. Property owners across the northeast are learning it's not so easy to get the cash they need for repairs.

CNN national correspondent Deborah Feyerick has more.

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DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT (voice-over): Begging for money is not something Catherine Hall ever thought she would have to do.

CATHERINE HALL, SUPERSTORM SANDY VICTIM: I had to run to the bank two Fridays ago and beg them to give me a loan to pay my contractor. Once he's finished doing this segment of the work we have to stop because we don't have any more money.

FEYERICK: Nearly four months since Superstorm Sandy destroyed her home in Island Park, New York, Paula has been calling her mortgage banker almost every day. She's begging them to release insurance money so she and her family can rebuild and go home.

HALL: We have a 4-year-old boy who basically we spent his college fund. You know, the money we put back since his birth towards being able to send him to college later in life is what we have spent. It's gone.

FEYERICK: Hall, who was originally from Britain, and her husband, Bob and 4-year-old son, Nathan, have been living in a hotel since November. The Halls are among more than 6,000 families still waiting for insurance money.

New York's governor blamed a necessary red tape and accused banks of failing to release more than $200 million worth of insurance. The problem is some lenders require proof the repair has been made before they will reimbursed for the cost of that repair. BOB HALL, SUPERSTORM SANDY VICTIM: There are a lot of older people here that don't have any money. They're being told do 30 percent of the work and they'll get 30 percent of the work. Do 50 percent of the work. You'll get 50 percent of the money.

HALL: The reason that they do that I think is they're scared that you're going to get the check and leave, and leave them with a property that's not sellable. You know, but we've invested a lot of money in this house and it's our home.

FEYERICK: Banks contacted by CNN including Wells Fargo, JPMorgan, Citibank and Bank of America, tell CNN they've distributed more than 75 percent of all insurance money. The Hall's mortgage lender who they ask we not name did not respond.

HALL: You know, we came here to live the American dream and now we're living the American nightmare because they're holding our money, and we can't get it. It's not fair. You know, it's not fair on anyone and everybody is in the same position. Everybody, like I said to you, I don't know a single person who has a dime.

FEYERICK: And the waiting and uncertainty is taking a toll as devastating as the storm itself.

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COSTELLO: And I'm joined now from New York by CNN national correspondent Deb Feyerick. So, Deb, are banks worried homeowners will just take the money and run? I mean, what is it?

FEYERICK: Yes. Well, that's pretty much the bottom line. You know, one of the things is that when the insurance companies are actually paying out the money -- that's not really the problem. But they pay the check to the homeowner and the mortgage lender.

Both names are on that check. So the bank will hold onto the money and they have an interest in the asset, which is the home because they're the ones who have loaned the money. So they really want to make sure that the loans, the repairs are done.

But that puts people in a very, very difficult situation because it assumes they have money that they can spend to make the repairs in the first place. So Governor Cuomo is telling these banks to do what you have to do, get the money to the people, and they don't want to leave their home. That's the bottom line. They don't want to leave their homes -- Carol.

COSTELLO: Deb Feyerick reporting live from New York City.

Up next, 30 minutes of Talk Back: three hot topics, hot conversation and your comments. First question: Should we have the right to see the president play golf with Tiger Woods? Facebook.com/CarolCNN or tweet me @CarolCNN.

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