grammys. hawkins won in 1980. that was for his rendition of "the lord's prayer." >> couric: tonight, live and unprecedented, the white house apologizes on national television to a program official wrongly fired by the u.s.d.a. >> without a doubt, ms. sherrod is owed an apology. >> couric: i'm katie couric. also tonight, small towns, huge salaries. outrage in california where the city manager makes nearly twice as much as the president of the united states. it's a reenactment, but investigators say this is what happened when a north korean torpedo struck a south korean warship. and he's no houdini, but he did turn a cell phone into a porsche. captioning sponsored by cbs from cbs news world headquarters in new york, this is the "cbs evening news" with

katie couric. >> couric: good evening, everyone. it was an extraordinary scene on national television today. the president's top spokesman admitting the administration had fired an official of the agriculture department for alleged racism without knowing all the facts, and then he offered her an apology. but it didn't stop there. the man who fired shirley sherrod, agriculture secretary tom vilsack, soon popped up on tv himself and offered her another job. all this while the nation watched her watch them. we begin tonight with jan crawford in washington. jan, this is a very bizarre two- day drama. >> reporter: oh, yes, katie. and we heard today the kind of thing you seldom here from the this white house or any white house. >> without a doubt ms. sherrod is owed an apology. i would do so certainly on behalf of this administration. >> reporter: that was a 180- degree turn from what administration officials said less than 24 hours ago when agriculture secretary tom vilsack abruptly fired shirley

sherrod. >> i made this decision. it's my decision. >> reporter: after officials saw this edited clip of her speech. >> i was struggling with the fact that so many black people had lost their farm lands and here i was faced with having to have a white person. >> reporter: late this afternoon vilsack talked to sherrod >> again, i express my deep regret. >> reporter: the controversy consumed almost the entire briefing by press secretary robert gibbs, at one point a flustered gibbs was even told sherrod was watching it on television. >> apparently she's watching this briefing, shirley sherrod, on cnn right now. is there anything you want to say to her? (laughter) >> she's watching it? >> i understand. >> she's watching you. >> and let me... the secretary is trying to reach her? >> reporter: it all started three days ago when a clip lit up the internet and cable outlets. but that wasn't the whole speech or the whole story. >> it was just unbelievable, unbelievable to me.

>> reporter: it turns out, sherrod didn't say anything racist at all. her comments were edited and taken out of context which the administration would have known if someone had known if some one had watched the entire tape before they fired her. >> they definitely didn't do the right thing because they didn't look deeper to see what i was trying to say to them. please look at the whole tape so that you see what my message is. >> reporter: her message in the speech was one of unity. >> it's really about those who have versus those who don't. and they could be black, they could be white, they could be hispanic. >> reporter: sherrod said the administration forced her out because it was scrambling to head off criticism from the conservative media, something gibbs seemed to acknowledge today. >> the number of people called quite quickly after the comments aired and wanted to know what our response was. >> reporter: but the controversy seems to show on one of the nation's most complex social issues-- race-- the obama administration reacted impulsively to deflect criticism

from the right and in doing so shirley sherrod was thrown under the bus. >> there was no concern for me. >> reporter: secretary vilsack fell on his sword at his press conference and he offered ms. sherrod a job working on civil rights issues in the u.s.d.a. katie? >> couric: jan crawford in washington. jan, thanks so much. jeff greenfield, the obama administration has often complained about the 24-hour news cycle, and now it seems white house officials were caught in a vortex. >> reporter: yeah, katie. the old united press wire service had a slogan "get it first, but first get it right." in the wake of the shirley sherrod story it's worth asking whether the second half of that slogan has been dumped into the trash bin. it's now clear that no one, not conservative blogger andrew breitbart who posted the clip, not the n.a.a.c.p. who condemned sherrod, nor the agriculture department, none of them had and

seen the whole speech. but there's another part of this story, the deep-seeded desire of people who turn to news and opinion sites to reinforce their beliefs. for instance, the idea of an obama administration official harboring anti-white sentiments fits an idea espoused by one of fox news's most popular voices. >> this president, i think, has exposed himself as a guy over and over and over again who has a deep-seeded hatred for white people or the white culture. i don't know what it is. >> reporter: this doesn't mean fox would knowingly air a false or misleading tape. it may mean that the original incomplete and out-of-context video clip seemed to fit an idea that would resonate with many in the audience. this is not an impulse confined to any one ideological slice of the public. in march, 2006, a young black woman who worked as a stripper accused three members of the duke lacrosse team of raping her. the story was treated as a textbook case of racist privileged white athletes committing a viciously violent act.

only later, in reports of ed bradley's "60 minutes" piece did it become clear the charges were wholly false. >> were you at all concerned that your students and some members of your faculty were engaged in a rush to judgment? that their actions might actually throw fuel on the fire? >> we had public officials speaking as if it was almost a certainty this had happened. this charges engaged people's deepest fears and anxieties and dreads. >> reporter: if there's any encouraging aspect of this it's that many of the players quickly took a hard second look. last night, fox news took a cool clear-headed look at the story. >> i think this story has been thoroughly screwed up. >> reporter: today, white house press secretary robert gibbs publicly apologized to sherrod and no less than three commentators on the conservative national review web site cautioned outlets on the right to use care before rushing to judgment. >> it was wrong.

the story was entirely wrong and if there's an hour-long speech or a 30 minute long speech and you're putting up seven seconds of it, then you say "i'm putting up seven seconds." >> reporter: if you're an optimist, you might look at this as what the president calls a teachable moment, but maybe we should wait and see if we've learned anything the next time, katie. >> couric: certainly a cautionary tale. jeff greenfield, jeff, thanks so much. overshadowed by all this is the financial reform bill the president signed into law today. it's designed to prevent another economic meltdown and the white house believes it's too important to fail. here's sheryl attkisson. >> reporter: the new law is 880 pages, packed with regulations and restrictions that touched on every facet of the economy. >> it's done. (cheers and applause) >> reporter: so how exactly does congress's creation solve the complex problems behind the financial storm? remember big banks took big risks, straying from the primary role of lending money. they delved into risky trading, relying on mortgages that became

worthless, lending froze, taxpayers got stuck funding a $700 billion bailout. now bank investments will be more regulated, banks will be barred from so-called speculative trades. then there are the non-banks, financial firms that the government also deemed too big to fail. taxpayers had to bail out a.i.g. and others after they, too, got stuck with toxic assets. now new procedures could shut them down rather than bail them out. >> there will be no more tax- funded bailouts, period. >> reporter: but that's a major point of disagreement. republicans argue the new law doesn't stop bailouts, it makes them permanent. >> for ordinary americans who just wanted to see an end to the bailouts, this bill is no victory. >> reporter: that's because the government can still bail out firms of its choice, lending them money, buying their assets, paying off creditors. that, says republicans, exposes taxpayers to potential trillions of dollars. their attempt to set terms from the normal bankruptcy route was struck from the bill.

at the heart of the housing crisis were millions of people given loans they simply couldn't afford. now lenders have to verify that borrowers can make the payments, and lenders can be penalized for irresponsible lending. one big piece of the puzzle left out of this big reform, fannie mae and freddie mac, they're the private company that's made billions and whose executives made billions while buying risky mortgages. taxpayers kicked in $145 billion and counting. republicans wanted them to wind down like other big financial firms in trouble, but that was removed from the bill. experts are mixed on how well the new law will work. according to an a.p. poll, 64% of americans aren't confident the law will prevent a future meltdown. katie? >> katie: sheryl attkisson on capitol hill. sheryl, thanks very much. in other news tonight, b.p. could be just days away from completing that first relief well. but drilling was stopped today because of this: a big storm way off in the caribbean.

forecasters say there's a 50% chance it will become a tropical storm within 48 hours and it could reach the gulf by the weekend. kelly cobiella has more. >> reporter: with a storm brewing hundreds of miles away, the work to finally plug b.p.'s blown out well has come to a halt. b.p. stoped drilling its relief well until the threat passes. >> if we are forced to move off the site because of weather, the entire operation could be delayed ten to 14 days. >> reporter: that's a worst-case scenario since no oil has flowed into the gulf for nearly a week, b.p. is confident they can leave the well closed and unwatched if they have to. in louisiana, some people are fishing again, but those who make their living selling seafood to restaurants-- the commercial fishermen-- are still stuck at the docks. >> it does tend to make some people a little angry they we could open up recreational but not commercial. >> reporter: this man's shrimp boat has been tied up since the spill started. the waters around louisiana and

beyond are closed to him because the federal government wanted to keep gulf seafood from reaching restaurants until they knew it was safe. louisiana state officials have taken 600 samples and say it's fine to eat. governor bobby jindal is now pushing the federal government to let commercial fishermen get back to work. >> we've done hundreds of our own tests, now we're calling on the f.d.a. to do their tests so our people can go back out there make a living. >> reporter: commercial fishermen could get the o.k. soon. commercial fishermen told the f.d.a. they've found no problems with the areas they've tested and some could be reopen bid next week. katie? >> couric: kelly cobiella in grand isle, louisiana. thank you, kelly. meanwhile, in international news, the obama administration is turning up the heat on north korea over its nuclear program. today during a visit to the demilitarized zone, secretary of state hillary clinton and defense secretary robert gates announced plans to impose new sanctions. and in a show of force, the

aircraft carrier u.s.s. "george washington" arrived in south korea today. it's expected to take part in military exercises next week. relations with north korea have gone downhill since a south korean warship was sunk in march an attack blamed on the north. as david martin reports, the 46 sailors who died never had a chance. >> reporter: watch what happens when a heavyweight torpedo explodes beneath a ship. this is an out-of-service australian warship being used for target practice, but it's exactly what investigators from the u.s. and south korea concluded happened to the "cheonan" which was ripped in two last march off the west coast of the korean peninsula. now watch in slow motion as the 500 pound warhead detonates directly below mid-ships, lifting the ship out of the water and sending its superstructure overboard, bending the steel girders that make up its spine. a second later, the ship crashes back into the water, breaking

its spine, splitting it in two and sending it to the bottom. when the "cheonan" went down, 46 sailors died. the blame was put squarely on north korea. >> to date, we have seen nothing that gives us any reason to believe that north korea is ready to end its provocative, belligerent behaviors. >> reporter: the sinking of the "cheonan" took place under the cover of darkness, but when investigators raised the severed hull and brought it back to port, readings from seismic stations, testimony of surviving sailors and analysis of the bent and twisted metal led to the conclusion the "cheonan" has been sunk by a torpedo with a 500 pound warhead. but there was no proof who fired the shot. then south korea fishermen dredged up the remnants of this torpedo from the ocean bottom. the corrosion of the metal parts indicated it had been underwater from about the same time as the "cheonan" was sunk and its design exactly matched that of a north korean torpedo it was an

act of war, although north koreans deny they did it, the only mystery is why they did it. david martin, cbs news, california. >> couric: and still ahead here on the "cbs evening news," the art of the deal. a teenager turns a cell phone into a porsche one trade at a time. but up next, why taxpayers in a california city want to trade in their elected officials. stopping. it's not that hard. and only allstate pays you an extra bonus to do it. get one of these every six months you go without an accident. [ judy ] what are you waiting for? call or click today for a free quote or to find an allstate agent. [ susan ] i hate that the reason we're always stopping is because i have to go to the bathroom. and when we're sitting in traffic, i worry i'll have an accident.

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>> couric: do you know how much the average american worker earns in sally. according to the labor department, just over $43,000. but there's a small city in california where the police >> couric: do you know how much the average american worker earns in salary. according to the labor department, just over $43,000. but there's a small city in california where the police chief makes ten times as much. and the city manager? 18 times. and then ben tracy tells us the citizens found out. >> reporter: despite its name, bell, california, doesn't have much of a ring to it these days. unemployment is 16% and most people in this blue-collar town make about $30,000. unless, they work at city hall. irate taxpayers stormed the building after finding out that the city manager is paid nearly $800,000 to run a town of just $37,000 people. >> we're being ripped off, we're being looted by the city administration and we want to

put an end to it. >> reporter: robert rizzo has run bell for 17 years. his starting salary was a reported $72,000. thanks to pay hikes and an automatic 12% annual raise, his salary has skyrocketed nearly 100,000%. he makes three times as much oz the mayors of los angeles and chicago and nearly twice as much as president obama and rizzo doesn't even live in bell, he lives in a million-dollar home near the ocean in huntington beach. we went to city hall to talk to him. he wasn't on the job. >> he's just not available. >> reporter: can you tell me if he's in the building >> he's not in the building. >> reporter: taxpayers are also angry that the city's police chief makes $457,000, twice as much as new york's police commissioner who leads nearly 35,000 officers. bell's chief oversees 33. >> they asked me to come in and make an assessment and bring best practices to this police department and i have been

diligently trying to do that. >> reporter: christina garcia is leading a grass-roots effort to have both men fired. >> we have a police chief earning half a million dollars, you could create 17 new police officers with that. >> reporter: taxpayers also want the city council that approved these salaries recalled. >> we're here to have them removed and kicked out. >> reporter: those council members make nearly $100,000 and their jobs are part time. ben tracy, cbs news, bell, california. >> couric: and we'll be right back. we speak mpg. sure, but do we speak hybrid? yes, we do. and we can say over 700 miles on a single tank and 41 mpg city, and all the words stick because they're true. we speak the most fuel-efficient midsize sedan in america. yes, we speak hybrid, and apparently quite well.

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and then we have to stand up and compete. california needs to lead the nation again, and i think we can do it. >> couric: you've got to be one heck of an athlete to be a college cheerleader. try this if you don't believe me. but today, a federal judge ruled competitive cheerleading is not an official sport. so colleges can't include cheerleading squads to show they're complying with title ix, the law that mandates equal opportunities for men and women in athletics. european scientists are cheering tonight. they've discovered a star bigger than any they've ever seen. you can't see it with the naked eye, it's 165,000 light years away and 265 times bigger than our own sun, that yellow object that you see on the screen. it's also ten million times brighter. from star gazing to whale watching, here's a view of one you don't want. a boater snapped this picture of a 40-ton whale leaping over a

yacht off south africa. it slammed on to the deck, two people were on board, and it snapped the mast. >> i just saw this huge shape come over the water and i thought, oh. literally. i was absolutely stunned-- and then chaos around us. >> couric: yikes. the couple wasn't hurt but their yacht needs some serious work. and while no one's sure why it happened, this type of whale-- a southern right whale-- has notoriously bad eyesight. still ahead, a whale of a deal, a porsche for free. how he traded up and up and up next. ÷c÷c÷c÷c÷cñ÷c [ male announcer ] there's scientific news about centrum.

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shaky! shaky! and if you named your own price on car insurance, you could be picking up this tab yourself. so get allstate. [ dennis ] dollar for dollar, nobody protects you from mayhem like allstate. nightmare commute. so, when will it end? next >> finally tonight, how would you like a fancy sports car, no money down-- in fact, no money at all? the teenager you're about to meet got himself a porsche without spending a dime. rebecca jarvis tells us all it took was a cell phone and a system. >> reporter: steven ortiz is enjoying the ride of his life. >> i feel power and luxury, you know-- not too many 17-year-olds can sit behind the wheel of a porsche and say it's theirs-- that's the best part.

>> reporter: the even better part is that he got the car for free. to understand how, go back two years. it started with an old cell phone given to steven by a friend. the glendora, california student went to online marketplace craigslist, and began his treasure hunt. >> he has the ipod i want. why don't we do a trade. >> reporter: he made that swap then traded the ipod for a small motorcycle. that motorcycle for a bigger motorcycle. >> once i had the full-size motorcycle, i traded that for a macbook pro. >> reporter: steven almost stopped there. >> i got offered a 1987 toyota four-runner. i was like why not? >> reporter: for one thing, he was still too young to drive but that didn't hold him back. a golf cart, two dirt bikes and three cars later, steven had a 1975 ford bronco. that's the car he swapped for a porsche. it only took him 14 trades to

get from a free phone to a $9,000 sports car. >> never in a million years would i ever think i would have a porsche from a cell phone. >> reporter: this type of deal- making has taken off since the recession began-- craigslist has seen online posts for barter jump 180% in three years. steven says the people on the other side of his transaction got something they wanted too. >> the guy that i traded the porsche, he wanted the bronco to drive down to mexico. >> reporter: and the guy who gave steven the phone in the first place, he's proud of what he started. >> you can take something little and turn it into something huge. >> reporter: as for steven, he's still hunting for his big deal >> reporter: as for steven, he's still hunting for his next big deal. >> a nice truck that runs good. >> reporter: whatever you say, steven. rebecca jarvis, cbs news, new york. >> that is "the cbs evening news." i'm katie couric. thanks for watching. i'll see you tomorrow. goodnight. captioning sponsored by cbs captioned by

one. can industrial- sized marijuana light a fire under the the city that lost much of its industry over the years tries to jump-start a new one. can industrial sized marijuana light a fire under the oakland economy? our first look at suspects in the murder of a man who came to the bay area just hoping it land a job. another hellish day for a.c. transit users. so if the soon right when it says there is no sickout, if the union is right, why did hundreds of workers call in sick? good evening, i'm dana king. >> i'm allen martin. the news starts now. your realtime captioner is linda marie macdonald. caption colorado, l.l.c. comments@captioncolorado.com oakland has made a move for additional revenue by giving an official blessing to industrial sized marijuana. phil matier on whether a city that's lost