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ERIN BURNETT OUTFRONT

Lots Of Talk, Little Action On Forced Cuts; Carnival Passengers File Class Action Suit; The Case Against Pistorius Revealed

Aired February 20, 2013 - 19:00   ET

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


ERIN BURNETT, CNN ANCHOR: OUTFRONT next, the president hits the road to stop forced spending cuts, but is this another game of chicken with the GOP, or do either have a real plan?

Plus, a missing woman found dead in a water tank on top of a hotel. A deadly mystery found out by hotel residents when the water tasted fun. It's right out of CSI.

And new developments in the Oscar Pistorius case tonight. What the prosecution claims it found in the Olympian's house. Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. OUTFRONT tonight, a little less confrontation, a little more action. A lot of people want that. It was a song made famous by Elvis Presley, but apparently not something that is so popular in Washington.

We're just nine days away now from the forced spending cuts that are going to take effect, and while we may be short on time, we are not short on blame. President Obama for one was busy today with no less than eight local television interviews.

The president, according to the White House, telling his side of the story directly to the American people, blaming Republicans in this interview with WCVB Boston.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: The way this arose actually was back in 2011, as you recall, the Republicans were threatening to default on the full faith and credit of the United States. And we had to avoid that.

The hope was that they would use this year and a half to come up with a sensible deficit reduction package. Now, we've reduced $2.5 trillion on our deficit. We've got about $1.5 trillion more to go.

There's a better way to do it than this, but the key is for them to go ahead and put forward the balanced, responsible approach that will avoid these cuts.

(END VIDEO CLIP)

BURNETT: He wants them to put forth the approach. John Boehner, meanwhile with, is the them, sort of. He made his case directly to the people too, today, blaming the president and he wrote in a "Wall Street Journal" op-ed, "Mr. President, we agree that your sequester is bad policy. What spending are you willing to cut to replace it?"

So he's saying, Mr. President, can you come up with something? Whoo, this doesn't look so good, right? We've got eight television interviews, an op-ed in the largest weekday newspaper, but where is the action?

Robert Reich is the former U.S. labor secretary to President Bill Clinton and author of "Beyond Outrage: What's Gone Wrong with Our Economy and How to Fix It" and Ari Fleischer, CNN contributor and former White House press secretary under Presdient George W. Bush.

All right, let's get some action here. Robert, let me start with you. The White House responded to John Boehner's challenge of saying, where are the cuts, with a blog post from senior adviser Dan Pfeiffer who wrote, "the fact is, the president has a detailed balanced plan with spending cuts, he's willing to make tough choices. Now it's time for the speaker to do the same."

Then he had a link to an 80-page proposal from September, which includes things like a trillion dollar in war savings, which we debunked before. It includes tax reform, which of course they want. It doesn't fully lay it out by any stretch of the imagination.

So our Jim Acosta then followed up and asked White House Press Secretary Jay Carney today what specifically will the president cut and here's what Jay Carney said.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: It is in the proposals he submitted to the speaker of the House that the speaker walked away from --

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Where does the president prevent sequestration from happening? Shouldn't the president take the lead and present that --

CARNEY: Well, first of all, Congress has to act.

(END VIDEO CLIP)

BURNETT: All right, it's frustrating, no matter what your point of view, politically is, isn't it, Robert? Congress says they need to do it, he says, they need to do it.

ROBERT REICH, PROFESSOR OF PUBLIC POLICY, UC BERKELEY: Of course, it's very frustrating, Erin. The fact of the matter is, though, that the president has put forward $1.5 trillion worth of cuts and there has been an agreement on $600 billion of new revenues with the Republicans.

So the question is, if you want a balanced approach, you want additional revenues to balance the spending cuts and the Republicans don't want to tax the rich anymore than they agreed to tax the rich. At the same time, the Republicans are not coming up with any spending cuts. They're saying the White House you have got to come up with additional spending cuts.

BURNETT: Well, Ari, I have to say, the problem is, nobody wants to cut spending cuts where they need to be done, because voters like those things, whatever it might be, Medicare.

ARI FLEISCHER, CNN CONTRIBUTOR: The House Republicans, who actually risked their careers to do so, if you recall Paul Ryan's budget, the chairman of the House Budget Committee, actually did make major changes to some of the most sacred --

BURNETT: Although when he ran for vice president, he tried --

FLEISCHER: The House of Representatives voted for them and actually passed them. We haven't even had a budget passed in the senate on the last four years. But Robert made the point about what's already been done, and those are accurate points he make. But they're absolutely insufficient.

We have so much debt piled up on our nation's visa bill, the things we've done before won't even begin to pay it off. That's the size of the hole we're in and that's why we've got to start making the decisions to get government spending under control.

BURNETT: The thing is, the House Republicans -- John Boehner writes about what you said, House Republicans have twice passed plans to replace the sequesters with common sense cuts and reforms. That's what he wrote in the "Wall Street Journal" today.

But those plans were rejected by Democrats, just like the president's plan, like he's citing are a year and a half ago, was rejected by Republicans. Aren't they both equally as ridiculous for putting forth an old plan that's not going to pass?

FLEISCHER: That's the essence of the problem in Washington. We're living in the era of goodwill. There is not enough goodwill in Washington for the people to come together there to make the big decisions that we need to do before we go bankrupt, which especially for young people are the ones who will bear all these burdens.

I don't know what the solution is to that. Erin, I have a feeling we'll have to wait and maybe the pressure of actually triggering these automatic cuts will force the president and the leaders of Congress to get together. That's the only thing left to think of.

BURNETT: Robert Reich, I mean, what I struggle with here is, I know you could debate how you want to get there, to reduce debt, right? You could raise tax revenue, you could cut spending. You could have a conversation about that. But these guys can't have -- they say cutting 2.5 percent of the budget overall is -- they can't find a way to do it. And the problem's bigger than that.

REICH: Erin, absolutely. The problem is, and I think Ari is absolutely right. The Republicans and Democrats have loggerheads. I mean, there is almost no agreement, no overlap between the Republican's position on the budget and the Democrats' position on the budget.

Republicans do want to take on Social Security and Medicare. The Democrats would rather raise taxes on the wealthy. The Democrats and the president have shown a little bit of willingness to open up Social Security and Medicare just a bit.

But Republicans though do not want to in any way increase taxes again on the wealthy. They say that they have increased taxes enough so that there's no dialogue, absolutely to dialogue going on at all.

BURNETT: One thing I don't understand, though, when you look at it -- you know, they extended the tax cuts for the middle class for perpetuity, right? And that's a great thing and people want that. And a lot of people would say, this isn't a great time to raise taxes on anybody, but they said, we're not going to raise taxes on the middle class.

But when you look at where the money is eventually going to have to come from, it has to come from the middle class. A small increase on the middle class would raise more money than a 100 percent tax on the wealthy. Eventually, taxes have to go up on everybody, by that logic.

Ari might say, they never have to go up. But from your point of view, Robert, isn't that true?

REICH: Well, remember that Social Security taxes have gone up, not just January 1st, but over the last 25 years, Social Security taxes trended upward. That is a huge tax on the middle class and that's arguably a regressive tax.

And also, you've got sales taxes all over the country going up. That is a huge tax on the poor and the middle class. So in terms of taxes, anybody who says that the middle class and the poor are not being taxed, they don't know what they're talking about.

BURNETT: I'm not saying that. I'm just saying that the money, when you're looking for where money will come from in the future, that's where it is. That was Bill Clinton's point. That was the point I was making.

REICH: Well, with all due respect to Bill Clinton, I think he has -- he has something of a point, but we are now at a point in this nation's history when the 400 wealthiest individuals have more wealth and the bottom 150 million Americans put together.

I mean, let's face it. This is -- most of the people in the middle class have seen their incomes and their wealth go absolutely nowhere. In fact, most people's wealth was tied up in their houses and their houses dropped in value.

FLEISCHER: But let me jump in on why there's such a Republican orthodoxy about these tax issues. It's because, even if we raise taxes on the wealthy, there's no sense that that money will go to reduce the deficit. It will all get spent.

That's the history of Washington, and certainly when you listen to the president's inaugural and when you listen to the president's "State of the Union," he's proposed spending it before he's even brought it in. So nothing is changing under President Obama.

Our nation still has debts we can't afford, the solution is not to find new ways to spend more money, the solution is to find ways to spend less money to save everybody from senior citizens to the middle class to the young people who are call counting on this government working for them.

BURNETT: All right, well, thanks very much to both of you. I'm sorry. We had to cut you off there. We are going to take a brief break.

Though, still to come, about 100 passengers from the cruise ship the "Triumph" filed a class action lawsuit against Carnival. I have it here and I've got some questions for the lawyer representing them. He's next.

Plus, never before seen photos of the model shot and killed by the blade runner, Oscar Pistorius. We have the photographer.

And breaking news, a dramatic and emotional 911 call has just been released. What the operator heard during a shooting spree in which four were killed.

(COMMERCIAL BREAK)

BURNETT: Our second story, OUTFRONT, a Carnival of trouble. About 100 passengers from the ill-fated cruise ship "Triumph" have filed a class action lawsuit against the cruise's operator.

The suit alleges the Carnival was negligent for allowing the "Triumph" to embark on the cruise and states, "Carnival knew or should have known that the vessel "Triumph" was likely to experience mechanical and/or engine issues because of prior similar issues." A spokesman for Carnival tells us, we are unable to comment on pending litigation at this time.

Michael Winkleman is a maritime lawyer who filed the class action lawsuit. Thank you for taking the time to come on, sir. I have read all of this and obviously I was down in Alabama last week.

In the lawsuit, I wanted to start off with this. Because you write something that a lot of passengers there on the ground were talking to me about. You said, instead of taking the more than 3,000 passengers back to Galveston, where the cruise began, Carnival decided to go to Mobile, Alabama, because that's where the repair facility is.

In so doing, Carnival forced the passengers to further harm and inconvenience by putting them on a seven-hour bus ride back to Galveston. Now a lot of passengers were told me they were given options, so we asked Carnival, and they said passengers were given a few options, you could go to Galveston, you could go to New Orleans, or you could stay in Mobile right there, at Carnival's expense, right there, obviously, and also pay for your flight home.

So passengers were given choices. Are you saying that that didn't happen for these people?

MICHAEL WINKLEMAN, MARITIME LAWYER: Well, first of all, good evening, Erin. Thanks so much for having me. I'm really happy to be here. In terms of the specifics as to whether they can stay in Mobile or New Orleans or Galveston, doesn't really make a difference as far as I'm concerned.

Because the real misconduct, as you just said, was dragging them across the Gulf of Mexico for five days instead of just turning around and go back to Mexico and flying them back home. And it's pretty clear that the reason for that was financially motivated.

BURNETT: So you're saying that there would have been a terminal, which could have taken the ship, handled the repair, and all of those things that needed to be done in Mexico?

WINKLEMAN: Handling the repair, I don't know about, but they certain -- they were about 150 miles north of Progresso, Mexico, which is a port that they actually call out, versus 500 miles from Mobile, Alabama. So they probably could have gotten off the ship the following day, but instead of that, they went through four, five days of a living nightmare.

BURNETT: And you think that was cheaper for Carnival?

WINKLEMAN: Certainly.

BURNETT: Why?

WINKLEMAN: I think it's certainly a lot cheaper to bus people from Mobile, Alabama, to Galveston, Texas, than it is to charter flights from Mexico back to Galveston.

BURNETT: Right, but they offered them to spend the night in Mobile and then fly them home. So they did offer flights. I see what you're saying, I'm just making the point they did offer flights for anyone who wanted them.

WINKLEMAN: Sure.

BURNETT: Let me ask you this, though. Some of the details in your suit are very graphic and they fit with what we heard from people. You say that this resulted in harm to the plaintiffs. And let me just read it to people, because I think this is worth everyone hearing. "Plaintiffs were forced to sleep on the deck and in other communal areas on the vessel, relieve themselves into buckets, bags, showers, sinks, were given spoiled or rotting food that was unfit for reasonably safe human consumption. Due to the lack of working plumbing and sanitation systems on the vessel, sewage and/or putrid water filled with urine and feces leaked onto floors, walls, and ceilings. Conditions became increasingly unbearable each day due to the lack of working ventilation system on the vessel leading to noxious odors and gases." This is what it was like, and that is awful, but did this cause lasting injury to them?

WINKLEMAN: Only time will tell. We're what, three, four days out from these people getting off the ship. It's really hard to know. But just commonsense tells you that living around sewer for five days can cause some serious consequences. And we've already seen that, from the roughly 100 or so people that have already contacted my offices, I'm hearing stories of lung infections, urinary tract infections, panic attacks. I mean, think it's going to run the entire gamut of what we've seen.

But Erin, I think the big thing is really just the emotional trauma in having to go through five days of these really awful conditions. You're going to seE a wide spectrum of what happened to all the people, but they all went through an awful situation at the negligence and/or intentional --

BURNETT: But how much money is that worth? carnival has reimbursed the cruise, given them $500 in discounted future cruises. How much money are you asking for? I know you don't know for everyone in the class, but at least for your particular clients, Matt and Melissa Kruzan?

WINKLEMAN: Sure. Erin, your opinion as to what you think the value of their case is worth is just as noble or just as valid as mine is. And that's the whole point. With the U.S. legal system, it should be a jury that decides, here's what they went through and makes a decision as to what their case was worth.

I would point out, though, that I think it's worth a heck of a lot more than $500, and I would also point out that after the Concordia -- now that was a terrifying few-hour experience of being in the Poseidon adventure. And my law firm represents numerous Costa Concordia passengers -- uninjured people, Erin, were offered $14,000. Uninjured people here were offered $500.

BURNETT: Right. But people died on that cruise.

WINKLEMAN: There's a disconnect. Erin, I'm not talking about the people that died. I'm talking about the people that were uninjured.

BURNETT: Right. But I mean, they could have died. I mean, the ship sank. I mean, it was different.

WINKLEMAN: Sure. Of course it was different. But as an example, I think when you compare and contrast the two, it's pretty surprising. But, of course, a number of people died on the Concordia and that was awful. But these people were moments away from that. When you put profits over safety and consumer experience, you're sort of teetering on that edge at any given time.

BURNETT: All right. Thank you very much. We appreciate your taking the time.

Still to come, a bizarre investigation in Los Angeles. Police tonight trying to figure out how a woman ended up dead inside a water tank on top of a hotel.

Plus, first lady Michelle Obama's new portrait is unveiled, and it highlights an oft-talked about new feature.

And what we're just learning about last night's massive fire in Kansas City. The fire department -- why was it sent away from the scene moments before the blast?

(COMMERCIAL BREAK)

BURNETT: And now to tonight's Outer Circle, where we reach out to our sources around the world. We go to China first, where the government is denying reports that a secretive Chinese military unit is behind hacking attacks on America. It comes after a cybersecurity firm says it hacked into a network that was linked to a building in Shanghai that's associated with the Chinese military.

Now, the firm says that lots of stuff has been stolen from the United States over the past few years. Our David Mackenzie is covering the story. He went there, and I asked him how police responded to him and his crew as they tried to shoot video of this secretive building.

(BEGIN VIDEOTAPE)

DAVID MACKENZIE, CNN INTERNATIONAL CORRESPONDENT: Erin, the security company based out of Virginia says it tracked the hackers to here in Shanghai, China. In fact, to a building north of here, which we tried to visit. In this building, they said there were highly trained hackers, working over years to infiltrate U.S. companies in particular, to steal data and corporate secrets.

Look at the reaction of the security officials as we got closer to the building.

Keep driving. Drive away. Drive away.

They demanded some tape, which we gave to them, and the Chinese response has also been strong. They've said that this is in no way to do with them, that they do not condone hacking, and in fact, that it is illegal. Here in China, they also say that millions of computers here in China are targeted from the U.S. The question is, could this be the next salvo in an information war. Erin?

(END VIDEOTAPE)

BURNETT: That is just incredible, incredible footage.

All right, next to Italy, where plans to pick a new pope could be speeding up. Pope Benedict, considering changing the Vatican constitution to allow a vote for his successor before March 15th. That's when the conclave had been set to begin. Ben Wedeman is in Rome and I asked him what else he knows.

(BEGIN VIDEO CLIP) BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Erin, officials in the Vatican are sending out messages that they would like to hold the conclave earlier than originally projected, just a few days ago, they were talking about the 15th of March. What they would like to do is hold it a bit earlier, bringing those 117 cardinals to Rome to vote for the next pope as quickly as possible.

They definitely want to avoid what happened with Pope Gregory X in the 13th century when the conclave went on for three years. The last time there was a conclave, it went on for two days, and that would be ideal for the Vatican. They would like to have the whole process of electing the next pope and putting that pope into power over and done with by the 24th of March, by Palm Sunday. Erin?

(END VIDEO CLIP)

BURNETT: All right, 24th of March.

Still to come, we talk to a photographer who spent time with both Oscar Pistorius and Reeva Steenkamp. We'll show you the pictures he took of her next, pictures that we have not seen before.

Plus, the first lady admits she's going through a mid-life crisis and says what she's doing to feel young again.

(COMMERCIAL BREAK)

BURNETT: Welcome back to the second half of OUTFRONT. we start with stories that we care about, where we focus on reporting from the front lines.

And we begin with an update on a story we first brought you last night, that massive gas explosion at a Kansas City, Missouri, restaurant. Today a body was found in the rubble. Authorities say it's too early to say if it belongs to a woman working at the restaurant. She hasn't been seen since the blast. But at least 15 others were injured. Now, we have obtained surveillance video of the explosion the moment it happened. You're going to notice it on the top corner of the frame. You can just see it there.

We're also learning tonight, though, that a utility crew was called into the area to investigate the odor. According to the mayor, the fire department also responded to the call about the odor 50 minutes before the blast, but then left the scene because the utility company said they had everything under control. We reached out to the utility company, Missouri Gas Energy, to ask about what appears to be a lack of urgency. A spokesperson says they couldn't verify that version of events, but they are still investigating.

Tonight, CNN has learned that the Army has revoked the promotion of Paula Broadwell. She, of course, is the woman, whose romantic involvement with former CIA director David Petraeus led to his resignation. A Defense Department official tells our Barbara Starr that Broadwell has been approved for a promotion to lieutenant colonel from major last summer. She has been under investigation for having classified information in her home without permission. Under Army regulations, it says that if new information comes to light within six months of a promotion date, you could be deemed ineligible for that promotion. Her security clearance also has not been reinstated.

Well, with a new term comes a new official portrait and there's a lot of talk about First Lady Michelle Obama's new -- it's still new -- new haircut. Much of the talk surrounding the first lady's bangs came from the first lady herself. In an interview with Rachael Ray, Obama jokes that her bangs are part of a, quote/unquote, "mid-life crisis" and she says getting a sports car and going bungee jumping are off- limits, at least while she's in the White House, I guess.

The portrait was taken in the White House green room about a week ago. Here's how it compares to her 2009 portrait.

You know, it's interesting that she's wearing pearls in both. I go with the new one. That's my vote. Anyway, let us know what you think, please?

And in Saudi Arabia, today, 30 women were sworn into the top advisory body by King Abdullah. It's known as the Shura Council, and it's the first time in history that women have been able to participate in it. It's said that women will have full membership rights, but they still have to observe Sharia law. That includes wearing a proper veil, and staying segregated from male members.

Karen Elliott House, author of "On Saudi Arabia", has visited the Shura Council. She says that while King Abdullah is hardly a feminist advocate, he believes giving more opportunity to women is a safe way to relieve some pressures in Saudi Arabia.

For more on women's rights in Saudi Arabia, go to our blog at CNN.com/OutFront. You can see my story on how Saudi women are unable to get work, despite the fact they have advanced college degrees.

Well, it's been 566 days since this country lots its top credit rating. What are we doing to get it back?

Well, an account of the Federal Reserve's most recent meeting says that the Fed could scale back all of the stimulus it's been pumping into the economy and that sent U.S. stocks down more than 100 points.

Our fourth story OUTFRONT: the case against Oscar Pistorius.

Today, prosecutors in South Africa had their chance to dissect the track star's claims that he accidentally shot his girlfriend, Reeva Steenkamp, in the bathroom on Valentine's Day. First, prosecutors scoffed at the idea that Pistorius was not wearing his prosthetic legs at the time of the shooting. They say forensics will show that he was standing on his prosthetics and fired through the top part of the door, shooting down.

Prosecutors also claim they found two boxes of testosterone and needles in the bedroom, and they maintain they have witnesses who heard nonstop shouting that appeared to be coming from the Pistorius home, not long before the supermodel was killed.

Police also said they found blood on his cell phone and on a cricket bat.

(BEGIN VIDEOTAPE)

BURNETT: CNN's Robyn Curnow was in the courtroom today. She's OUTFRONT in Johannesburg tonight.

Robyn, let me ask you about the testosterone first, because there's been a lot of talk about that speculation, about whether he could have been on testosterone and steroids and this could have been some sort of a roid rage. How did the defense respond to the prosecution talking about those boxes of prosecution?

ROBYN CURNOW, CNN INTERNATIONAL CORRESPONDENT: Well, they kind of took down the investigating officer quite quickly, because they said to him in this quite amusing exchange for the court as they watched it, they said -- well, how do you know this is testosterone? And the investigating officer said, well, I just read the label. And he said, well, have you had it tested yet? And he said, no, no, not yet, we're still testing the substance.

So, you know, Oscar Pistorius' defense said, well, if you've gone to any pharmacist or chemist, you could have figured out that this, you know, is a herbal medication.

BURNETT: Robyn, let me ask you about this -- the other claim here which could potentially be damning. That they say -- the prosecutors say they have witnesses who heard shouting -- nonstop shouting that appeared to be coming from the Pistorius home. What did the defense say to that?

CURNOW: Of course, sort of the suggestion that there was a major fight, that there was some sort of domestic incident beforehand, of course, plays into the speculation that there was, you know, violence perpetrated by Pistorius, deliberately.

Now, when it was put to the investigator, you know, who is this witness and where were they? When did they hear all of this?

It turned out, and actually, the court gasped when they heard that this witness' house was about 300 to 600 yards away from the Pistorius house.

BURNETT: Oh, that's far away.

CURNOW: So there was a sense that perhaps they were -- it is far away. And so, you know, was it somebody else's house that you were hearing, you know, people yelling at each other? So I think in terms of setting up some kind of precedence of domestic abuse or some sort of domestic struggle, you know, I think they were on a bit of shaky ground, particularly after the defense pushed them on it. BURNETT: Yes, it would seem, you know, 300 yards, at least three football fields away. That's really hard to hear anybody, never mind figure out whether they were fighting or what they were saying.

What was the reaction of Oscar's family? The way you're describing it, it sounds like it was a good day for the defense. How did the family respond?

CURNOW: When I was in court yesterday, they really, all of them looked shell-shocked. Oscar, included, and he was crying a lot. He didn't cry adds much today.

I mean, the family are obviously feeling so confident that they release a press statement like this, saying, Oscar's family is satisfied with the bail hearing and they also say they find the contradictions in the investigating officers' testimony extremely concerning.

But what's also interesting about their statement, in which actually to be honest with you stuck me was that this investigating officer conceded after much talk with the defense that he couldn't find any inconsistencies in Oscar Pistorius' version of events. And that initially he had said to a family lawyer that he didn't think that it was necessary to oppose bail. He later changed his mind.

But there is this sort of sense that the case, that the prosecutor's case is unraveling and that it was slightly discredited or at least, you know, milked down, essentially, in court today.

So I'm sure, you know, even if he's in a jail cell tonight, Oscar Pistorius might just be sleeping a little bit better.

BURNETT: All right, Robyn Curnow, thank you very much. As we said, she's been in the courtroom in South Africa. Thanks.

(END VIDEOTAPE)

BURNETT: And the question that's central to this case, you know, we were talking a little bit about it, was Oscar Pistorius lying when he said he wasn't wearing his prosthetic legs when he fired the gun? It really -- it may be the entire, it may be the most crucial part of this case, because in order for the prosecution to prove that Pistorius committed a premeditated crime, experts say they need to prove that he took the time to strap on his prosthetics before Reeva was killed. Because he said, look, I didn't know she was not in the bed next to me, and, obviously, you would have to move very quickly no not notice that.

Our Tom Foreman is OUTFRONT with more on the prosecution's version of events that led up to the shooting.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: Hey, Erin. It's important to consider the layout of the apartment as you understand this two conflicting versions of what happened last night. Here's Oscar Pistorius' version. He and his girlfriend are in bed asleep. It's the early morning hours. It's dark, he gets up and goes out to the balcony to close a window and bring in a fan. While he's gone, he says, she goes to the restroom, unbeknownst to him, he comes back into the dark room and thinks she's still asleep, but hears a noise over here.

He retrieves his gun, goes down the hall, and walks in, sees an open window and says, an intruder has broken in, yells out, and fires, only when he goes back to the bed and realizes that his girlfriend is missing does he understand that she might be in there. He brings a cricket bat in, smashes the door down, brings her out and starts yelling for help.

That's his version of what happened.

But now, let's consider what the prosecutors are saying, because it's important. Their version of events is different. They're saying the two of them were having a fight, that had been going on for a long time, that was overheard by neighbors.

At some point, she retreated the into the bathroom, and locked the door, and then, he came around and, again, brought his pistol with him, and purposely fired through the door, attempting to kill her. At some point, using his cricket bat to smash down the door, whether that was to get at her or to get at her after he shot her. That's their version of events.

Here's the problem, though. The problem is the prosecutors have said they can't really account for all this physical evidence in a way that proves his version isn't the right version. That's a hurdle they're going to have to get over if they want to have a successful prosecution of this case -- Erin.

(END VIDEOTAPE)

BURNETT: All right. Thanks very much, to you, Tom. That really made it very clear, the different versions.

Earlier I spoke to criminologist Laurie Pieters. She's attended the bail hearings. And criminal defense attorney Ted Simon who also represented Amanda Knox and knows a lot about international law.

I started out by asking him about the shooting and the inconsistency raised in court today.

(BEGIN VIDEOTAPE)

THEODORE SIMON, INTERNATIONAL CRIMINAL DEFENSE ATTORNEY: There's a number of interesting facts that are developing, but I think we have to look at this from the lens of a South African criminal defense law and their system.

The difference here and why you're raising this question is, when it gets to bail proceedings, and when you're charged with a premeditated murder, in order to be released on bail, the defendant has the burden to show it's in the interest of justice and second, he can show exceptional circumstances.

So he was compelled in some way to rebut the murder case and he did so by affidavit. Whether or not the details of his affidavit may come back to haunt him is another question.

BURNETT: Now, Laurie, prosecutors also claim that they found two boxes of testosterone in the bedroom and obviously, this has been getting a lot of focus, because people have said, well, look, could this have been evidence that he was in some sort of a, quote/unquote, "roid rage", a steroid range. The defense disputes the claim of testosterone. They say it was just herbal supplements.

But in your expertise, if it is just an herbal supplement, could it still affect a person's behavior? Could it still cause some sort of loss of control or rage?

LAURIE PIETERS, CRIMINOLOGIST: You know, herbal supplements can have impact on metabolic rates and they can have impacts on mental processes. So, yes, it's quite possible.

BURNETT: You have been watching Oscar's demeanor, obviously, we have heard about how he has broken down into intense sobbing during parts of the hearing. What is your observation of him today, compared to prior days?

PIETERS: I thought he was a little bit more composed than he has been over the past two days. While I was in court today, I wasn't there all day, I was there until lunch. While I was there, they never had to adjourn at all to give him time to compose himself, which was a change from the previous two days.

BURNETT: All right. So, Ted, I want to get Laurie's view, since she's been in the room, of whether she believes him at this point. But first, let me ask you this, we're in a South African court, there's going to be a judge, there's going to be magistrate is if this goes to trial.

How quickly is it revolved and what is the standard of proof? Because I want to use that to get Laurie's point of view?

SIMON: Their standard is similar to ours. They have the presumption of innocence, and they have proof beyond a reasonable doubt. It's necessary for the prosecution to prove every essential element beyond a reasonable doubt. It doesn't shift to the defendant.

Now, the defendant can testify, but it's not required to testify, and he has the right to be protected under the right of self- incrimination. So, in some ways, it is similar. Where it's different is after this bail hearing, ultimately, the case will be tried in front of a judge and not a jury.

BURNETT: Laurie, let me ask you, because as Ted just said, the standard is similar to that in the United States in terms of, you've got to prove it beyond a reasonable doubt.

You have been in that courtroom. Do you have doubts? I mean, when it comes to, did he do this on purpose, was it premeditated? Do you still have doubts on that? Do you think he has a chance there?

PIETERS: I don't have too many doubts. I think that that he intended to shoot her. Just from what I've heard. The defense case doesn't make sense to me. There's so much missing.

(END VIDEOTAPE)

BURNETT: Well, OUTFRONT next, more from the murder trial. We're going to show you never-before-seen photographs of Pistorius' model girlfriend, taken just before her death.

And a bizarre murder investigation in Los Angeles. A missing woman's body, found in a water tower on the roof of a hotel, found out by people in the hotel who said the water tasted funny.

(COMMERCIAL BREAK)

BURNETT: Our fifth story OUTFRONT: exclusive new photos of Oscar Pistorius' model girlfriend, Reeva Steenkamp.

We're showing them public my for the first time tonight. Some appear to be candid, others were from an ad campaign, which was exactly what many of them were for -- although some of anesthesia ones behind the scenes are even better.

The photographer who took them, Jason Crouse, is OUTFRONT, and I asked him a few minutes ago about meeting Steenkamp's boyfriend, Oscar Pistorius, and what it was like working with Steenkamp.

(BEGIN VIDEOTAPE)

JASON CROUSE, PHOTOGRAPHER: The first time I met Reeva was on a jewelry shoot, when she arrived at my house, where I have my studio, and I walked her through to the studio and she sat there for an hour doing makeup with a friend of mine, Gena Myers (ph).

And I was very nervous, because this was a new area of photography for me, to be dealing with models, especially Reeva, who was previously on the front cover of "FHM" magazine.

And I must say, I think she kind of held my hand and led me through the shoot relatively easy.

BURNETT: What was she like? As you got to know her more as a person?

CROUSE: Very friendly, bubbly. She was a very huggable type of person, when she came in. She just wanted to give you a hug and say hello.

BURNETT: The last time you had a chance to speak with Reeva, I wanted to ask what happened during that exchange, because I know that you were sort of making a joke about Oscar and finding everything out about Oscar and she had a very pretty poignant response.

CROUSE: So when -- the last time I was doing, Reeva was not really involved in the shoot. It was her friend and another model. And as we were getting to the end of the shoot, they -- Gena turned around to me and said, well, Reeva's coming past. And I got excited, and she said, Oscar's coming with. I didn't know who Oscar was. I had no idea.

So they explained who he was, and the doorbell went and Reeva arrived with Oscar. They walked in the front door past the kitchen where my wife and my 11-year-old son was and introduced them.

The next day, my wife turned around to me and said, on the way to school this morning, my 11-year-old started telling her all about Oscar. I was like, how does he know about Oscar? She said, he did a school project on him.

So I watched Reeva, and said to her, Reeva, a bit of a joke, I said, if you need to know anything about your boyfriend or Oscar, you can just ask my 11-year-old, he's done his research. And her response was, you know, ha-ha, very funny, that's so cute, and, you know, Oscar's a wonderful human, exclamation mark. And that kind of reads on my last with Reeva about a month ago.

BURNETT: What did you think when you heard she was killed and killed by Oscar, given that interaction?

CROUSE: I was shocked. A friend called me. And it was early in the morning. And my initial reaction was, well, I hope it's -- I hope it's not Reeva. And I picked up my phone, and I phoned Reeva's cell phone and it rang through the answering machine and I left a message saying, I heard some news and I hope it's not true. And I kind of left it at that.

And as the day progressed and the name was released on the news, it was really shocking.

BURNETT: Jason, thank you very much.

CROUSE: OK. Thank you.

(END VIDEOTAPE)

BURNETT: Now to a gruesome discovery in California. Right now, investigators are trying to determine how the body of a missing woman from Vancouver ended up inside a water tank on top of a Los Angeles hotel.

Twenty-one-year-old Elisa Lam was last seen three weeks ago at the hotel which is located not far from the notorious neighborhood known as Skid Row.

Our Kyung Lah was OUTFRONT with new information on this investigation.

(BEGIN VIDEOTAPE)

SABINA BAUGH, U.K. TOURIST: It tasted horrible. It had a very funny, disgusting taste. It's very, very strange taste. I can barely describe it.

KYUNG LAH, CNN CORRESPONDENT (voice-over): Michael and Sabina Baugh, tourist from the U.K., never imaged the source of that indescribable taste and that it would trace back to 21-year-old Elisa Lam. The tourist from Vancouver, Canada, came to Los Angeles January 26th. She checked in at the Cecil Hotel.

Surveillance video from the hotel's elevators show her acting unusual, as if she's hiding from someone. Then Lam disappeared January 31st. The Baughs never saw Lam, but knew something at their hotel was off.

S. BAUGH: There was something wrong. The pressure in the water was terrible. The shower was awful.

LAH: The hotel's maintenance man responding to guests' complaints went to check the four roof top tanks that fed the building's main water supply. Thanks that are unlocked. But the roof top is locked to guests. The maintenance man found Lam's body inside one of the tanks at the bottom.

S. BAUGH: It made me feel really sick yesterday, and until now knowing that we've been drinking this water for eight days.

MICHAEL BAUGH, U.K. TOURIST: It makes you feel physically sick, literally physically sick. But more than that, you feel psychologically, you know -- you think about it, and it's not good.

LAH: The L.A. County Department of Public Health says the hotel was immediately placed on a flush only order, but not ordered to shut down. A reasonable solution, says the health department, if the hotel provides bottled water.

The hotel would not speak to CNN on or off camera, but it did notify guests about a, quote, "health and safety condition." Guests tell us if they leave, they don't get a refund. If they stay, they must sign this legal agreement releasing the hotel of legal liability. It says if guests stay, quote, "You do so at your own risk and peril."

This gruesome discovery is the latest chapter in a dark history for the Cecil Hotel. At least two serial killers have lived here, including night stalker, Richard Ramirez, found guilty of killing 13 people in the 1980s. He lived on the 14th floor of the hotel.

KIM COOPER: He was living here during his killing spree going out at night and killing people.

LAH (on camera): So this is just the latest unusual chapter in a storied history?

COOPER: It is, and I think it's the sort of thing that's going to be hard to forget because it's just such a graphic and disturbing story, and I hope we find out what happened.

(END VIDEOTAPE) BURNETT: And we have breaking news now. The 911 tapes of a southern California shooting spree are now just public. The shooting spree was yesterday. We just have these tapes this moment.

Four people are dead, including the gunman. Police say he went on a rampage of shooting and carjacking.

Miguel Marquez is OUTFRONT on this story in Los Angeles.

And, Miguel, these are pretty disturbing tapes that you have.

MIGUEL MARQUEZ, CNN CORRESPONDENT: Yes. We should warn folks that these are fairly disturbing. This is where it all began. This is the mother of the shooter as she calls the 911 operator, and she is in a panic.

(BEGIN AUDIO CLIP)

CALLER: Somebody's shot.

911 OPERATOR: Do you think somebody was shot?

CALLER: Yes.

911 OPERATOR: OK. In your house?

CALLER: I heard a gunshot.

911 OPERATOR: OK. What is that alarm going off in the background?

CALLER: It's in my house.

911 OPERATOR: OK. So do you think somebody was shot in your house?

CALLER: Yes.

(END AUDIO CLIP)

MARQUEZ: Now, police say that 20-year-old Ali Syed went off after that 5:30 a.m. 911 call to kill two other people. One of them Melvin Edwards. He carjacked his BMW, took him out of the car and literally shot him execution-style on the side of an L.A. freeway and then a short time later shot a construction worker, Jeremy Lewis, shot and killed him.

He shot two or three other people along the way. They only sustained minor injuries. He even went so far as to stop at one point on the freeway, two big freeway exchanges, and just began randomly firing at vehicles as they passed by. Amazingly, nobody was killed in that particular part of the incident.

He eventually killed himself before police could get their hands on him -- Erin.

BURNETT: Awful. Miguel, thank you.

And still to come, tonight's essay on the Post Office.

(COMMERCIAL BREAK)

BURNETT: The Post Office is in a lot of trouble. Last year, it lost $16 billion. Last month, it was forced to say Saturday delivery this summer. But it thinks it may have found a solution to its money problems -- a clothing line.

The Post Office has announced it's going to team up with the Wahconah Group to release a line of apparel and accessories called Rain, Heat, & Snow. The line will be based on the Post Office uniforms and displayed in a showroom in New York City with the goal of eventually selling in high-end department and specialty stores. They say that will put them on the cutting edge of functional fashion.

Now, look, I'm a fan of the Post Office. I love catalogs. The physical ones that clog my mailbox, I love them. But it might not be a good sign when the people most associated with your clothing brand, such at it is, is that guy.

But the Post Office thinks they have a new take on fashion. The Postal Service spokesperson telling Yahoo News the entire aim is to reach well-beyond t-shirts and baseball caps, to include wearable electronics, like jackets with iPod controls built into the sleeve.

Now, that's pretty cool because where are you going to find technology like that? Well, except for almost every other jacket currently available. Now, the Post Office doesn't have a reputation for being too speedy, so it might be a good idea to jump on a trend that was launched more than 30 years ago.

But what makes the Post Office so confident? Maybe this. Today, we spoke with Andrew Burns, a retail analyst for D.A. Davidson. He told us that overall, integrating technology into clothing is a growing trend. Performance apparel is up double digits. Both good signs for companies that begin with a P, like Patagonia, but maybe not a P like Post Office because I'm a skeptic here, I'm sorry. I can't believe if you're in the market for a new coat, you're going to go with the Post Office over Columbia or North Face or Moose Knuckle.

Basically, what I'm saying is this, Post Office, don't do it. You're not a musician or an athlete. You don't need your own clothing line, and selling coats with Apple gadgets won't necessarily help your money problems. It was actually Apple's Steve Jobs who said, don't try to do everything. Do one thing well.

You can stick to delivering the mail. Doing things related to connecting people together. That's what you stand for.

"ANDERSON COOPER 360" starts now.