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Stocks Plunge Then Recover after Tweet; Tamerlan's Trip to Russia; New U.S. Intel on Canadian Terror Plot; Bomb Suspect's Bedside Hearing; Ricin Suspect Released from Custody

Aired April 23, 2013 - 14:00   ET

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

CHRIS CUOMO, CNN ANCHOR: Boston terror attack.

But first, we have some news developing out of Wall Street. Stocks plunging, for a moment, radically, but then quickly recovering. Why? Because of a tweet. I'll let this reporter explain it. Take a listen.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I have no announcements, so I will take your questions.

Julie.

JULIE PACE, AP WHITE HOUSE REPORTER: Thanks, Jay.

I just want to say at the top that it appears as though AP's Twitter account has been hacked, so anything that was just sent out about any incident at the White House is actually (ph) false and will be putting something out shortly (ph) to clarify that, if that hasn't happened already.

CARNEY: Good. I thank you for that. I appreciate that. And I can say that the president is fine. I was just with him.

(END VIDEO CLIP)

CUOMO: A rare episode of a reporter supplying the answers at a White House press conference. Let's go to Alison Kosik. She's at the New York Stock Exchange.

Alison, help us make sense of this.

ALISON KOSIK, CNN CORRESPONDENT: Well, you know how Wall Street often, Chris, moves on headlines. Well, Wall Street certainly moved on fake headlines as well. So when that tweet hit, it certainly - I heard people talking about it on the floor, you know, saying that there were these two explosions at the White House, that President Obama was hurt. Immediately -- this happened a little after 1:00. I don't know if you can see this. We printed out sort of this chart. You can see what happened here just around 1:15 when the tweet went out, the market fell, the market fell over 100 points, 133 points to be exact. It dipped into the negative. That happened within seconds. Within seconds that drop happened. And then AP sent out another tweet saying that they were hacked. And then you saw the market immediately shoot back up. It was a total 180. The market went from negative all the way to positive, over 100 points again within minutes. A very dramatic, whiplash kind of move. It shows you in this age of computerized trading how Wall Street can react to a tweet that's read around the web.

CUOMO: Boy, oh, boy, Alison, just such a look at how, you know, in the digital age everything moves so quickly, but you've still got to be right about your information.

KOSIK: Exactly.

CUOMO: Thank you very much for telling us that. Appreciate it.

All right, we're going to go back to - come back to Boston right now, where just a short time ago doctors upgraded the surviving suspect's condition from serious to fair. Now, it's not easy for the suspect to communicate. He has a wound in his neck and it's somewhat unclear why, but certainly speaking is very difficult. But communicating is, well, that's what you'll want to hear, that, you know, he's saying, the suspect, that he and his brother acted alone, OK. Now that's a key component to this investigation because the concern is that it was coordinated, who did they learn from, is there someone still out there?

The 19-year-old is quoted as telling investigators his brother was the mastermind. And the pair had no international ties to terror groups. They were self-radicalized jihadists. And the motivation for the bombing was simply to defend Islam. That is according to a government source who cautions that the bomb suspects' claims need to be checked out, obviously. We're also just learning that the older brother bought two reloadable mortar kits and shells back in February.

These revelations as Boston, a city paralyzed by the suspect's alleged actions, makes a symbolic step in its recovery just this hour. After a cleanup by hazmat crews today, a block of Boylston Street, that's where the bomb site was, it's reopening to merchants and the people who live here.

Here's a map. Take a look. This is the affected area, just a block from where we are right now, in the heart of Boston. The final one will be opening in about an hour.

Now, when it comes to the investigation, critics are noting that the bungles the bombing suspects apparently made, like staying Boston, not disguising themselves while at the marathon, those are mistakes that are very curious to investigators. Still, the brothers, if guilty, showed some technical skill in making the bombs that experts actually find impressive. In fact, some find it unbelievable that the brothers may have had no outside help.

And as their skill is being questioned, the head of Homeland Security is getting grilled over what she should have known, what the government should have known and followed up on. Today, senators were asking Secretary Janet Napolitano about the older brother's trip to Russia in 2012, because it appears intelligence agencies were aware he had left the country, but they didn't know that he had returned to the United States. Take a listen.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: You said, I think to Senator Grassley, that the older brother, the suspect who was killed, when he left to go back to Russia in 2012, the system picked up his departure, but did not pick up him coming back. Is that correct?

JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: That's my understanding. And I can give you the detail in a classified setting, but I think the salient fact there, senator, is that the FBI text alert on him at that point was more than a year old and had expired.

(END VIDEO CLIP)

CUOMO: Well, it's interesting that the secretary says the salient fact is that the investigation had already been closed into him by the time he came back.

Well, salient, also troubling. Let's bring in former CIA operative and CNN analyst Bob Baer.

Bob, thanks for being here. Appreciate it.

Help us make some sense of this. The concern is that there was a slip, right? That this was someone you should have had eyes on and you didn't. What does it mean to you?

BOB BAER, CNN ANALYST: Oh, I think, you know, when I first looked at this, I didn't think it was an intelligence failure. I now do think it is. There should have been, you know, an algorithm running through these databases. The first warning from the Russians in 2011, his departure going to Dagestan, which is like going to the tribal areas of Pakistan, it's a red flag, his coming back, and, of course, the purchase of weapons, a cell phone call. That should have all been integrated into what's called big data. And the FBI should have been back on him. And I think the FBI needs to explain why it wasn't.

CUOMO: Now, Bob, very important here. We've been very hot on this. And not because you want to blame. It's about safety, right? I mean the concern is that you don't avoid the hard questions and looking at yourselves as coordinated agencies just to cover yourself, because then you don't learn, then you don't fix, right? I mean isn't that a legitimate concern here?

BAER: Absolutely. But, Chris, this has gone on since, you know, 2001. We should have corrected this by now. This guy slipped through. It's a failure. We need explanation. We've spent billions upon billions of dollars trying to fix this and we haven't.

This guy was clearly -- should have been targeted, been looked at. He shouldn't have gotten a PRA status. We haven't been looking into people seeking asylum. Al Qaeda is using the process to get in, inside the system. And, you know, somebody should be held accountable. CUOMO: Well, also, Bob, let's just walk through it for a half a second, OK, because there's some reporting out there, well, they don't believe -- whoever they is -- that there are any international connections. And the suspect in custody is saying it was just us. But who cares what he says, right, because he's got absolutely no credibility on the issue. The father says, well, when my older son came, I know he didn't see anybody. I was with him the whole time and he was sleeping until 3:00 every afternoon. But, again, he is the father. And if you look at it from where there's smoke, there's fire analysis, the Russians say we're concerned about him, enough that we're coming to you, United States, check him out because he's living where you are.

He then goes for an extended period to Russia. In the same region where he is, there's terrorist activity going on. There is a known radicalizer, Abu Dujan, who is there. When he come back from Russia, he puts a video of Abu Dujan on YouTube. I mean, to connect the dots, even as an unsophisticated, untrained eye in this regard, doesn't that seem like something that is suspicious?

BAER: Chris, it is. You know, I spent a couple of years in prisons interviewing suicide bombers and their networks. And I've yet to see one of them -- one of these - and these are hundreds of them that actually came out and told the full truth about who they were and what they did. It just didn't happen.

And, number two, let's go back to the explosives. You know, I could take my neighbors and I say, listen, guys, get on the Internet, download this stuff about making detonators and bombs, go out and try it. And I can guarantee you that half of them would come back without their hands. It's just, you know, you go to explosive courses, make these things, and the instructors always tell you, don't do this at home. They either got extraordinary lucky - and I don't discount that -- or perhaps, and this is a likely hypothesis, the brother got some sort of field training in Dagestan. I think that's the most likely explanation. And I'm going to wait until I hear from the FBI, until they put all the leads together, and come with -- come forward with the evidence before I really, you know, can figure out what happened in Boston.

CUOMO: Well, absolutely, Bob, I mean that's the interest of all of us in looking at this, we just want to get better after it and make sure that the system is tighter so that we deal with fewer of these. And, also, we have contrary facts. When you look at the aftermath and the post actions of these brothers, it is confounding and kind of really contradicts the idea that there was any kind of coordinated effort because even though there's so many holes in what we know, it seems so odd at how they expose themselves, their failure, having a getaway plan, the randomness of violence, you know what I mean? There's enough to cut against their idea of sophistication that we're going to need to know more before we understand exactly who helped them do this, if anybody, you know?

BAER: Well, Chris, we can't exclude the possibility they wanted a confrontation with the police, they wanted to go out in a blaze of fire and they didn't care whether they were seen. They were going to maybe go on to second or third attacks and that they just didn't care. I mean the fact that the early reports say that the elder brother had a suicide vest or explosives on him that he could have used. I mean, clearly, when they - when they were throwing these explosives out of the car, they wanted to slow down the pursuit so they could get ready to confront the police. We simply don't know what their plan was.

CUOMO: Right. Well, look, hopefully we learn -- certainly we know we have such an all-out effort here of investigators, 30 different agencies.

Bob, thank you very much for the perspective. We'll come back to you when we know more about the situation. Thank you.

BAER: Thank you.

CUOMO: Have some more news for you right here. Brand-new developments on the alleged plot to attack a Canadian passenger train heading from the United States. One of two men accused of planning to carry out the attack has been denied bail. Canadian police arrested the men yesterday and say they had support from al Qaeda in Iran.

Now that's very unusual. Why? Well, Iran denies allegations that al Qaeda is operating inside of its borders. It always does. You have Iran, which is largely a Shiite majority, al Qaeda usually Sunni led thing, and that division is usually the explanation for why al Qaeda wouldn't take any kind of route in Iran. But let's get some better perspective on this with these new facts. Gloria Borger joins me from Washington.

Gloria, you just received new details from a U.S. intelligence source. What are they?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: From a few officials, one with law enforcement, a couple with intelligence. And what we - what we do know is that, of course, this is good news, right? They actually thwarted this plot. We know that it targeted a train route between the United States and Canada. One law enforcement official pointed me towards a line that runs between New York City and Toronto. It runs actually through Buffalo, New York. I'm told that the plan was to detonate explosives in Canada and derail -- and derail the train.

And my law enforcement source said that there had been some reports that they wanted to wage a spectacular attack, blow up a bridge. He said, no. He said what they were doing was to target the train on the trestles. And actually what they wanted to do was derail the train and cause maximum injury to the people on it.

CUOMO: All right, so two quick follow-ups with you, Gloria. First, when we're look - when we're looking at U.S. response here about what happened in Boston, Canada, an example of it working well, right?

BORGER: Right. Exactly.

CUOMO: Coordinated investigation. They caught the plot early. And they've been watching it for over a year. They had eyes on the situation, right? BORGER: They had eyes on the situational. They had informants in a community that they believed would be lucrative for them. And that's certainly worked out. I think they - it's clear to me that they worked in concert with the United States law enforcement and intelligence. And so that this was one that they really -- that they managed to nip in the bud.

CUOMO: All right, Gloria, thank you very much.

BORGER: Sure.

CUOMO: Another point just to make going out of this story is for us to keep our cultural assumptions in tact. In the Canadian investigation, the Islamic community came forward, helped identify the suspects, helped investigators.

BORGER: Exactly. Exactly. Exactly.

CUOMO: Important to note. Important to note.

Gloria, thank you very much. Always a pleasure. Always a pleasure.

Back here in Boston, we have more on the suspects' communications with authorities, including what he revealed from his hospital bed. Those details will be very important. We're going to give you them after the break.

Plus, more on the breaking news involving the ricin-laced letters. This news startling to those following the story that the suspect has just been released. Why? The latest when we come back.

(COMMERCIAL BREAK)

CUOMO: All right, welcome back to Boston. We're actually monitoring three breaking stories for you at this time. Excuse me as I look at my notes.

On Wall Street, after the AP says that they had their Twitter feed hacked, there was a really violent drop. A great change in volatility in the stock market because, as we all know, the stock market moves instantaneously on information, whether it's right or wrong sometimes. So here, the markets got duped, but it did recover. And as you can see now, there's certainly no free fall. Well in positive territory, but we're watching that.

Then also another story. The suspect in those letters laced with ricin that were sent to the president and other officials, the suspect has been released from custody on bond. Not free. You know, there is a bond. There is a bail situation. But why? What does it mean about the case? We're monitoring both those things.

And then, of course, we're back here in Boston getting the latest in Boston on the investigation.

Here's what we're dealing with in terms of the suspect right now. In the hospital, his condition supposedly improving, now called fair. That's good in terms of his ability to communicate with authorities. Yesterday the suspected Boston bomber heard the words nearly every criminal from petty thief to murder hears. It's all documented in the transcript of his initial appearance inside his Boston hospital room. Here's a portion of what the federal judge said to the 19-year-old defendant.

"You have the right under the Constitution of the United States to remain silent. Any statement made by you may be used against you in court. And you have the right not to have your own words used against you." The judge goes on to say, "finally, if I ask you any questions here in this hearing or at any future hearing, which you think might incriminate you, you have the right not to answer. Do you understand everything I've said about your rights to remain silent?" The transcript then says "defendant nods affirmatively."

OK. So what does this mean? How is this suspect being treated? Is this the best for his rights as an American citizen? Are they the best for this investigation? Let's bring in the redoubtable Harvard Law Professor Alan Dershowitz and CNN legal analyst, one of my favorites, Sunny Hostin.

Sunny -- thank you, to both of you, first of all. It's great to have you here. I needed you both and I needed you, Sunny, because I know, if I go head to head with the professor, it's going to be a long day for me. So I'm happy I have you here.

You're a former federal prosecutor. When you look at this initial appearance, is there anything about it that struck you after reading the transcript?

SUNNY HOSTIN, CNN LEGAL ANALYST: You know, it strikes me as being sort of the type of hearing that we generally see in federal court for a first appearance where the defendant is read his or her rights, the right to remain silent, the right to counsel.

A couple of things were a bit interesting in that he had provisionally been appointed by this magistrate judge a federal public defender. So he sort of went in there already, although being advised of his right to counsel, with a lawyer. I thought that was interesting.

I thought what was also interesting, Chris, was that he agreed to voluntary detention. So sometimes there, after a first appearance is discussion of bail. There's a bail hearing. Well, that didn't take place here. His attorney agreed to voluntarily detain him.

I think also what was fascinating to me is that we heard so much about his condition, that he couldn't speak, that he had been heavily sedated. Well this judge, Chris, found him alert, mentally competent and lucid. And so those are the things that sort of struck me when I read the hearing transcript.

CUOMO: All right, and that's good because it gives a sense of normalcy to how this is proceeding, removes doubt as to whether or not this is fair.

So, professor, let me come over to you. A lot has been made about Miranda. Oh, it wasn't given right away. He's a citizen. He needed to be Mirandized. But give me a sense of what the leeway is, especially in situations like this, after acts like what happened here at the marathon.

PROF. ALAN DERSHOWITZ, HARVARD LAW SCHOOL: Well, it's yesterday's news. He's now been given his Miranda warnings -

CUOMO: Right.

DERSHOWITZ: And probably anything he said without his Miranda warnings is not going to be need by the government or the prosecution. Remember, they did not indict him as a terrorist. That is very important. They indicted him as an ordinary murderer. Anybody who wants to kill their mother-in-law, their business partner and makes an improvised explosive device and kills them is just as guilty under the statute he's been indicted as Osama bin Laden might be. So this is not a terrorist prosecution. They don't have to prove intent to terrorize, intent to intimidate. They can prove their case just through the videotapes.

Now, I predict there are going to be only two types of possible defenses in this case. Number one, the jihad defense. I did it, I'm proud, I'm happy, please kill me, I want to join my brother in paradise. I'm a martyr. The other, my brother made me do it, I am innocent, look at my face, look at my high school record, I really didn't mean it, don't give me the death penalty.

I think from what we've heard now, the jihad defense seems like it's off the table. He is prepared to cooperate. He apparently is beginning to blame his brother. He probably wants to live, not die. And so we're going to see a kind of not a defense on the merits, but please don't execute me.

And then, of course, the defense lawyers have to make a hard decision. Should the trial be in Boston, where everybody's a victim, or should it be moved to Springfield, which might have a fairer jury, but the jury pool might be more inclined to give the death penalty. A very hard judgment call that any defense lawyer has to make in a case like this.

CUOMO: All right. Now here's the big topic of conversation that I want you two to take up on potentially from opposite sides. The idea of how you treat a suspect in this situation, that, yes, he's a citizen, but after what was done and the risk of exposure, the risk of coordinated efforts, that you would do whatever you could with a combatant, and treat him that way, even if it involves the most harsh things, what the professor brought up that is getting a lot of heat is, the idea of torture in a situation like this, whatever you have to do to get to the truth.

Start with you, professor. What do you believe is an acceptable set of parameters for how you treat a suspect in these situations?

DERSHOWITZ: Let's remember, we have precedent here. We had much, much worse terrorists in this country called "the weathermen." They were bred at home. They were all-American kids. They were wealthy. They were well educated. They made anti-personnel bombs. They planned to kill many, many American soldiers at Ft. Dix, Columbia University students. We treated them with kid gloves. Nobody talked about enemy combat. One of them is now teaching at Columbia. Another is now at Chicago. Robert Redford's making a movie about them.

We have a real, real double standard here. There's no way that these people are going to be treated as enemy combatants. This is going to be an ordinary criminal trial. We're going to try to get as much information from them. But the best way to get the information is to bargain, to exchange his life, possibly, for the information. And by the way, if we don't kill him, we are not creating a martyr. If we kill him, we create a martyr. His picture will be on recruiting posters. I think everybody wins if this guy exchanges information for a life sentence and then is put in an obscure prison where nobody will remember him and he doesn't become a hero to other jihadists.

CUOMO: So, Sunny, just respond to the idea of, a lot of people when they watch these situations, they say, don't treat him like a regular criminal. He isn't. This was a terrorist action. Do the harshest things. That's how you get the truth out of these. That's how we figure out how to stop the next one. Where's the sense? Where's the sense in that? Do you understand that?

HOSTIN: I do understand that, and I think that's sort of the gut reaction post 9/11, because I think we're all looking at terror in a very different way post 9/11.

But the law doesn't provide, in my view, when I look at the facts of this case, to treat this particular person as an enemy combatant. The Supreme Court has spoken, that, yes, a U.S. citizen can be considered an enemy combatant and perhaps be held indefinitely, perhaps because the Supreme Court hasn't really addressed that particular issue.

But we're talking about domestic terror. Someone that was sort of home grown. And I just don't think that indefinite, you know, detention would be appropriate here, especially because the parameters, the criteria, Chris, are supposed to be that the person would have provided substantial support to al Qaeda or to the Taliban or some sort of associated group. There's no indication that that happened here. And so, quite frankly, it's sort of a nonstarter because he just doesn't meet the definition of an enemy combatant under our laws right now.

DERSHOWITZ: We have no disputing (ph) on that one.

CUOMO: All right. Professor Dershowitz, thank you very much.

DERSHOWITZ: Thank you.

CUOMO: No, I got - but to be fair to both of you --

HOSTIN: Oh, I get - I guess Professor Dershowitz admits (ph) to agree with me. I love that.

DERSHOWITZ: I agree with you when you're right. CUOMO: You know what, though - that I'm not surprised by. Sunny, you are very intelligent and great at this. It's me who -- I am the one with the problem every time I interview the professor. He's too smart for me. That's why - that's why I needed you.

DERSHOWITZ: No, no, you're fine.

CUOMO: But just to be fair to the investigation, there's a lot we don't know about whether or not there was any coordinated effort or connection. That's what's being debated down in D.C. Thanks to both of you, though. Appreciate it. Be back to you, I'm sure, in the future on this.

DERSHOWITZ: Thank you.

HOSTIN: Thanks.

CUOMO: We're going to go take a break. When we come back, we have breaking news from Memphis. A really stunning twist in another legal case. The man charged with sending ricin-laced letters to President Obama and other officials has just been released from custody. The question is, why? We'll take a look when we come back.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

CUOMO: Hey, I'm Chris Cuomo, live in Boston for continuing coverage of the Boston terror attack. But there's a lot of breaking news today out of Memphis.

Paul Kevin Curtis, the man charged with sending ricin-laced letters to President Obama and other officials, has been released from custody. The question is, why? There's going to be a news conference at 6:00 p.m. Eastern. You can see it live in "The Situation Room" with Wolf Blitzer.

But first, let's go to crime and justice correspondent Joe Johns. He's tracking this case.

So, Joe, we've been talking about this today. It's unusual in a case like this when you see momentum shift this way. Any further information into why he was released or what the conditions are of that release?

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Chris, we've actually gotten just a lot of radio silence from the authorities. The Justice Department in Washington so far has no comment. All they're saying, stating the obvious, that the investigation into this curious case is continuing. Paul Kevin Curtis, charged with sending ricin-laced letters to President Obama and other officials, was released suddenly from custody on Tuesday.