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Three Ohioans Enslaved Mother, Child; Defending Surveillance Programs; IRS Targeting Whistleblowers?; Hunt For An Arsonist; Gripping Testimony In Whitey Bulger Trial; Chrysler Recalls 2.7 Million Jeeps; Journalist Michael Hastings Dead At 33

Aired June 18, 2013 - 20:00   ET


ERIN BURNETT, CNN ANCHOR: But this was above and beyond, and it brought home just how supreme money really is. And finally in honor of the many wonderful moments that we had, the Americans, the Australian, and the Iranians on our wonderful team in Tehran.

Thanks so much for watching. "AC 360" starts now.

JOHN KING, CNN ANCHOR: Erin, thanks.

Tonight, what top intelligence officials revealed for the first time today about the surveillance of U.S. citizens. Plus a former Air Marshall and whistleblower was slapped with an IRS audit after appearing in this documentary critical of the TSA. He says it was payback. The story may be part of a widening scandal. A 360 exclusive tonight.

And the Black Forest Fire has sparked a criminal investigation. Authorities now looking for evidence of arson. Colorado has been down this path before. Tonight we re-visit a stunning piece of detective work. How they caught the culprit behind the Hayman Fire.

We begin, though, with the breaking news of another disturbing case. Allegations of forced captivity and abuse in Ohio. This time in Ashland. It's about 60 miles southwest of Cleveland. According to the FBI, the victims, a recognitively disabled woman and her young daughter who were held captive for more than two years as house slaves. In a news conference, authorities described what they endured.


ERIC SMITH, FBI SPECIAL AGENT: Suffice it to say these victims were repeatedly exposed to subhuman living conditions such as frequently being denied meals, access to bathroom visits. They were physically punished for toiletry accidents and they were threatened not only with weapons but also with vicious animals to include pit bulls and pythons.


KING: Pit bulls, snakes, and our Pamela Brown has just learned more disturbing details that the victims were forced to eat dog food and were at times starved, all this while the alleged suspects were giving their pet iguana food.

Three people now have been arrested, Daniel Brown, Jordie Callahan and Jessica Hunt. Charged with forced labor. And again, according to our Pam Brown, authorities are looking to make a fourth arrest.

The U.S. attorney is calling it a case of modern-day slavery.

Scott Taylor covering this story for our affiliate WOIO, and he joins me now.

Scott, first, what's -- what are you learning about the case? What is the latest?

SCOTT TAYLOR, WOIO INVESTIGATIVE REPORTER: Well, right now they are looking for that fourth suspect as you mentioned your own Pam Brown reporting that. I do want to explain that investigators believe, John, this is just flat out slave labor. That's what they were doing with this mom back in 2011. Jordie Callahan and Jessica Hunt invited her into their home. And then according to this court document, they initially put her down in the basement along with her daughter and kept her down there.

Mom would come up and clean, do the laundry, actually go shopping for them, and they kept her down there and then eventually moved her up to an upstairs room where they actually locked the doors at night and eventually nailed the windows shut so mom and her daughter couldn't get out.

KING: Well then, Scott, how did she get away?

TAYLOR: Well, back in October she was at a Family Dollar Store, John, and she stole a candy bar. Police arrested her, then she started talking to them over a period of time and basically said that people back at my house where I live, well, they're mean to me. Now remember, she has a mental disability, so police took their time questioning her and eventually handed her over to FBI investigators. They started taking a look at it. They went back to the house, and that's when everything started to unravel.

KING: And had she ever been reported missing?

TAYLOR: No, as far as we know, she wasn't reported missing. I believe at least her mom lives in Ashland. Occasionally she would go back to that house, then according to witnesses in the FBI court document, Jessica and Jordie would send somebody back over to her mother's house and bring her back.

KING: That's bizarre. Scott, you also spoke to the lawyer for one of the defendants. What did he tell you?

TAYLOR: Yes, Jordie Callahan's lawyer, John, tells me that these acquisitions were ludicrous. He was ready to go to trial over these same type of charges and even more serious charges in county court. Well, those charges were dropped then the FBI indictment came down today. He tells me that this young mother who is only 30 years old could come and go as she wanted to, that everything, all these facts just simply aren't true but investigators believe her.

KING: Scott Taylor, of our affiliate WOIO. Scott, fabulous reporting, we'll stay on top of this case, a bizarre case that moves forward. Thank you, Scott.

Now to the Capitol Hill where the House Intelligence Committee held a rare public hearing on the secret surveillance programs, those programs recently revealed by the former NSA contractor Edward Snowden. For the first time, top intelligence officials shared details about the telephone and e-mail surveillance the government conducts.

General Keith Alexander, he's the chief of the NSA, said the programs had helped thwart more than 50 potential terrorist plots around the globe since 9/11 including would-be attacks here on the New York Stock Exchange and that city's subway system. He called the surveillance limited and focused and also described what it does not do.


UNIDENTIFIED MALE: Does the NSA have the ability to listen to Americans' phone calls or read their e-mails under these two programs?

GEN. KEITH ALEXANDER, NSA DIRECTOR: No, we do not have that authority.

UNIDENTIFIED MALE: Does the technology exist at the NSA to flip a switch by some analyst to listen to Americans' phone calls or read their e-mails?



KING: Snowden's leaks about the scope of these surveillance programs set off an outcry over privacy concerns. Snowden himself said he leaked the information because he felt these tools could be abused. We should point out there is no way for CNN or any reporters to verify the testimony given at that hearing today.

Our chief congressional correspondent Dana Bash joins me now.

Dana, officials wouldn't or couldn't go into detail on the over 50 plots they say these programs which helped thwart but they did elaborate on four of them. What do we know?

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Well, that's right. Four of them -- two of them were new. We got new information about them today. The first is a plot to blow up the New York Stock Exchange. They said that that was helped -- they have stopped that by a program that allows them look at Internet -- Internet users, what they're doing abroad.

The second is phone record surveillance, and that they said, helped stop a plot to give money to a Somali terror organization. So those are the two new information -- piece of information we know about the terror -- terror plots.

The second and -- the third and fourth, you know, those are things that we knew before, John. The Zazi plot of 2009 to blow up the New York subway and then lastly preventing David Headley, somebody who was going to blow up a Danish newspaper that did the cartoon about -- anti-Muslim cartoon.

KING: So what was the administration's goal and the goal of other supporters of these programs going into the hearing and did they achieve it?

BASH: The goal was pretty transparent and actually kind of unprecedented. And that was to join forces, lawmakers on both sides of the aisle, to join forces with the Obama administration to try to lift the veil a little bit, demystify these programs and explain exactly what they do. In that sense, they were pretty successful. For the first time we heard publicly the idea of what goes into these programs, what they can't and can't do.

On the other hand, lawmakers are pretty clear going in, John, that they simply thought the best, most tangible way to calm concerns of constituents was to talk about the specific terror plots that were stopped and they weren't able to do that as much as they could because so much of it still had to remain classified because of protecting sources and methods. And even the ones that they did put forward, even those they couldn't put a lot of meat on the bone because they say that even that would have hurt intelligence methods.

KING: And of course, this never would have happened had it not been for the leaks from Edward Snowden. He is the reason this happened and he was a major topic today. Let's listen to this exchange.


REP. MICHELE BACHMANN (R), MINNESOTA: How damaging is this to the national security of the American people that this trust was violated?

ALEXANDER: I think it was irreversible and significant damage to this nation.

BACHMANN: Has this helped America's enemies?

ALEXANDER: I believe it has, and I believe it will hurt us and our allies.


KING: A lot of talk about Edward Snowden but anything more specific about just how he did this and where he might be?

BASH: Not really and especially to the where he might be. I mean, you heard a question -- the question was, what's next for Snowden? The answer was justice but they can't bring him to justice because they simply don't know where he is. Heard a lot of discussion about the fact that he's a liar, that he's a felon, that he talked about things that could be done with this program that you really can't do like reading people's e-mails, listening to their phone calls.

But the fact of the matter is he did unveil, unearth this program that the government has been running secretly for years for the first time, and that's why Mike Rogers, the Intelligence chairman, put it in a pretty descriptive way. He said this whole exercise is clean up in Aisle 9.

KING: Clean up in Aisle 9. That's a good way -- supermarket talk in the Congress.

Our chief congressional correspondent, Dana Bash. Dana, thanks.

President Obama has defended the surveillance programs, says necessary in an era of terror. They were made legal, you'll remember, under the Patriot Act which Congress enacted back when George W. Bush was president. Former Vice President Dick Cheney weighed in on the NSA controversy on FOX News recently, not exactly giving a shout-out to President Obama but listen here, he does defend the government surveillance.


RICHARD CHENEY, FORMER VICE PRESIDENT: I'm obviously not a fan of the incumbent president. I don't know what he did to the program. The program, obviously, from what's now been released is still in operation. I think it's good that it's in operation. I think it has, in fact, saved lives and it kept us free from other attacks.


KING: Critics now of the Obama administration continuing this policy, most of them to the president's left, they say these were implemented by the Bush White House and why is this Democratic president keeping them? Well, the president addressed those critics last night talking to Charlie Rose.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Some people say, well, you know, Obama was this raving liberal before, now he's, you know, Dick Cheney --


OBAMA: Dick Cheney sometimes says yes, you know, he took it all lock, stock and barrel. My concern has always been not that we shouldn't do intelligence gathering to prevent terrorism but rather, are we setting up a systems of checks and balances? So on this telephone program, you've got a federal court with independent federal judges overseeing the entire program, and you've got Congress overseeing the program, not just the intelligence committee, not just the Judiciary Committee but all of Congress had available to it before the last reauthorization exactly how this program worked.


KING: Let's break down this debate including the "Raw Politics" with CNN political contributors Paul Begala and Ari Fleischer.

Paul, to you first. This one is kind of delicious. It was not Charlie Rose who brought up the comparison to Dick Cheney. The president himself clearly has that going on, what he thinks about this himself. Why go there?

PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: You know, because that's what's in his mind, obviously. He's got -- probably nothing could be more unkind to Barack Obama than bring up a failed dishonest man like Dick Cheney and compare President Obama to Mr. Cheney. And there isn't an important difference. I've been a critic of this program. I still don't like it. but there's a huge difference as the president pointed out.

When Dick Cheney and President Bush started doing this, it was not authorized by the Congress or supervised by the courts. It was on its own. And in fact, the attorney general himself, Bush's attorney general, John Ashcroft, was in a hospital and he and his deputy attorney general had to stop the program because they thought it was illegal. One of the most dramatic moments that we've learned about from the Bush administration.

That's the difference. President Obama has the authorization of Congress, the support of Congress and he's got the courts overseeing this and then within the executive branch there are checks and balances. I still don't like it, OK? But it's not illegal and it looks like it was under Mr. Bush and Mr. Cheney.

KING: Now, Ari, jump in. I suspect you're going to get back at Paul's description of the former vice president. But you've also said in the past this current administration on these issues is basically a continuation, a third Bush term particularly on national security.

After hearing President Obama last night, you tweeted this. "President Obama denies he's Dick Cheney. I love it. He's fighting with one of his strawmen. Pretty funny, actually."

Tell us what -- exactly what you meant by that.

ARI FLEISCHER, FORMER BUSH WHITE HOUSE PRESS SECRETARY: Yes, this is -- this is one of those weird issues, John. I mean, Dick Cheney is right. Barack Obama is right and Paul Begala is wrong. And that doesn't happen too often.

Here's what's going on. Barack Obama, to his credit, is continuing the very architecture he inherited from President Bush when it comes to drone strikes. When it comes to indefinite detention. When it comes to the NSA program. When it comes to secret renditions, when it comes to military commissions.

He has continued the basic architecture he inherited from President Bush. To President Obama's credit, he's added some extra layers of due diligence to them, some extra audits to them, and the more time and space from 9/11, that's good and healthy. I'm glad he's doing that. But make no mistake. The basic bones of how to fight terror President Obama campaigned against and then he continued. The Bush, Cheney policies remain in place.

Now I understand why he doesn't politically want the comparison to Dick Cheney, but he's stuck with it. He is continuing the Bush-Cheney policies.

KING: It's an important point you make about the add-ons. Let's listen here to a former -- this is President Bush's former NSA director, Michael Hayden. He's also a former CIA director. He was involved in helping to set them up and here's his take on how the new administration, the current administration has changed them.


GEN. MICHAEL HAYDEN (RET.), FORMER NSA DIRECTOR: And frankly, the Obama administration was more transparent about this effort than we were in the Bush administration. I mean, they made this metadata collection activity available to all the members of Congress, not just all the members of the intelligence committee.


KING: Ari, all the members of Congress, not all -- not just all the members of the Intelligence Committee, but now that these leaks have happened, now that this debate has happened in the public, does the president have to communicate more with the American people? And the NSA declassified a little bit of information. Does it have to do more or is that too risky?

FLEISCHER: Well, I think the president does need to communicate more. This is very controversial. People are divided on it. When he has people at his own base of his party like Paul who are against it, the president needs to bring the Paul Begalas of the world over. What's most important is that this country have a bipartisan template for how to fight terror.

I want to see that bipartisanship as broad and as deep as possible. So it is the president's job to make the case for his policies, even if his political base doesn't like it. It's called leadership and it's required in this age of fighting terror. The president can do it, it just doesn't seem to be where he wants to put his political capital.

KING: And Paul, what more does the president have to do to answer? Maybe he won't make you a convert to the program, but to answer your questions about it. I mean, it is striking in this environment, this is a serious policy debate but in the political forum that we saw today, you know, Mike Rogers, the chairman of the House Intelligence Committee, a Republican, Michele Bachmann essentially going after Mr. Snowden and in doing so essentially taking the president's side.

BEGALA: Well, yes, if you look at that hearing today, I saw the coverage of it, and Dana's coverage, it -- the president is winning. If you look at the polls, the president is winning. He keeps pushing a couple of points that I think are very important. Nobody is listening to your phone calls and nobody is reading your e-mails, and I think that's important. And then the checks and balances. And that is critical. We are a nation of laws. Again, under Bush and Cheney, President Bush and Vice President Cheney, we're a nation of men, not a nation of laws. We were doing things that were not authorized by the Congress or supervised by the courts. And that's a big difference.

It's like this. You could say well, Justin Bieber is just like Dale Earnhardt Jr. because they both drive 100 miles an hour. But Justin Bieber is doing it through a neighborhood where it's illegal and Dale Earnhardt is doing it on a track at NASCAR which is legal and proper and entertaining. That's a huge difference.

KING: Let me jump in on the poll thing a little bit because our new poll, our new CNN poll does show the American people support this program, they support the idea that the government might have to do these things to fight terrorism but we also have a clear majority, around 60 percent, saying they think this president might be taking it too far. So how does he -- how does he balance that saying -- to explain and make -- improve his own numbers by talking to people and trying to dispute that notion?

BEGALA: Here's the question I would ask. Well, what was the option that went too far? In other words, this seems to me, if you're listening in on every single phone call in America, my lord, that seems pretty broad. And I've been in the government, Ari has been, usually it's like "Goldilocks and the Three Bears," right? One policy is too big, one is too small, you settle on the one in the middle.

What was the proposal that was bigger than this? I mean, maybe we need to have it. Maybe the president is right and Dick Cheney is right. I still am not convinced at all that there wasn't a less intrusive way of doing this.

KING: Is part -- is part of the problem, Ari, that the director of National Intelligence, Mr. Clapper, did tell Congress, he answered no and then said well, not wittingly, when he was asked if they even had this information? Is there -- I heard Senator Rand Paul today say a credibility crap.

FLEISCHER: Yes, that was a problem. You cannot go before Congress and give an answer like that. And that's created part of problem and it's a shame that he took that step. But it doesn't change the bigger fact here, and the bigger fact here is these steps are necessary to keep us safe. And let me rebut what Paul said. Because we all know the drone strikes that President Bush had were legal and authorized. Military commissions. Legal and authorized. The so-called warrantless wiretaps is a misnomer. They weren't warrantless. They were provided by a order from the FISA court just as President Obama has said.

But President Obama has done because he's had the time and space since September 11th, he wasn't in a rush to defend America as we were. He's been able to get more consultation with Congress, which is good. He's been able to create some independent audits of these programs to make sure that they're working properly. That's all well and good and I salute the president for that. But, you know, Paul talked about Dale Earnhardt. Dale Earnhardt drives in circles, Paul is talking in circles. The Bush programs were fully lawful. People who didn't like them --

BEGALA: It's just not true.

FLEISCHER: -- alleged they were unlawful. But it is true, Paul, they were authorized under the FISA court.

BEGALA: The president's own attorney general --

FLEISCHER: All the programs of the NSA under President Bush were authorized by the court.

BEGALA: His own attorney general, John Ashcroft, said they were not legal.

FLEISCHER: Paul, that was for an extension of an existing program and had to be signed and extended. That was what that was about.

BEGALA: Right. And --


FLEISCHER: The very program itself like the NSA is --

BEGALA: General Ashcroft and his deputy, Jim Comey who I hope was --

KING: You used -- you used the racetrack analogy. I'm going to wave the caution -- I'm going to waive flag on this one for now. We'll continue the conversation another night.

Paul Begala, Ari Fleischer, thanks so much, gentlemen.

Just ahead here on 360 exclusive, this former U.S. Air Marshall who appeared in a documentary critical of the TSA says the IRS slapped him with an audit as retaliation. His claims may now be part of a widening scandal. We're "Keeping Them Honest."

Also ahead, a very close call at the Denver Airport where a tornado touched down. We'll have the latest on that.


KING: "Keeping Them Honest" tonight, with reporting you'll see only here on 360. We have confirmation tonight the scandal involving the IRS could be widening beyond the targeting of conservative political groups. Those groups, of course, seeking tax exempt status. CNN has learned at least one former Air Marshall who publicly criticized and then sued the U.S. government has been interviewed by the IRS Inspector General's Office. Why? Because he was suddenly audited by the IRS after speaking out against the management and the politics of a federal agency.

"Keeping Them Honest" it could mean the investigation into the IRS is extending to how the agency treated not just Tea Party groups but other individuals who've spoken out against the government. Here's investigative correspondent Grew Griffin with the 360 exclusive.


DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): Jeff Black is a former Federal Air Marshal who spoke out and eventually became a well-known government whistleblower against the Federal Air Marshal Service and the Department of Homeland Security. He even testified closed doors before Congress.

But it is what happened after he retired in June of 2010 that he came to believe someone in the Federal Air Marshal Service, the Department of Homeland Security or the Obama administration itself was using the IRS to retaliate against him.

P. JEFFREY BLACK, RETIRED FEDERAL AIR MARSHAL: We boarded the aircraft before the passengers. That was one of -- one of the flaws in the boarding procedures.

GRIFFIN: Jeff Black appeared in this documentary movie entitled, "Please Remove Your Shoes," a scathing spoof of the TSA's security procedures. It's debut in Washington, D.C. came on June 30th, 2010. That same day, Jeff Black found out he was under investigation by the IRS.

BLACK: Almost to the hour that the movie started, there was an IRS agent knocking at my door at home.

GRIFFIN (on camera): You don't think in any way that's a coincidence?

BLACK: I think the IRS is going to claim it's a coincidence.

GRIFFIN (voice-over): He was being audited, a $24,000 lien quietly was placed on his home and a yearlong intensive investigation into his taxes was underway, but in the end the IRS found out the federal government actually owed him $8,300 and that Black owed the IRS a mere $480.

Black had to pay that $480 but because the IRS decided the statute of limitations had run, the government didn't owe Black a dime and now the Treasury Department's Inspector General is launching its own investigation trying to find out if anyone in the federal government used the IRS to punish Jeff Black.

BLACK: They wanted to know the history of my whistle blowing, me testifying before Congress. They wanted to get a whole history of my employment with the federal air Marshall service. They wanted to get a whole history of my employment with the Federal Air Marshall Service. They also wanted to find out the origin of the audits. They were very concerned with finding out who actually pushed the button to start the audit.

GRIFFIN: Meanwhile, in a sign that the scrutiny of the IRS is growing a spokesperson for the House Ways and Means Committee told CNN it is using the committee Web site to solicit reports from individuals who believe they were targeted for political beliefs.

"While it's too early in this investigation to determine what all of the facts are," the spokesperson told CNN. "Some reports received by the committee support claims the IRS was targeting taxpayers for their beliefs."

(On camera): Is there any doubt in your mind that what the IRS did to you is anything other than retaliation for speaking out against the administration?

BLACK: Extensive retaliation in the past for my whistleblower. I am not surprised about this. It is basically the only way they can still come after me and retaliate against me after I retire.

GRIFFIN (voice-over): Jeff black realizes many people will see this and think he is paranoid but last month at a congressional hearing focusing on the IRS targeting of Tea Party-type groups Congressman Kevin Brady wondered if in fact the IRS scandal is only beginning.

REP. KEVIN BRADY (R), TEXAS: Is this still America? Is this government so drunk on power that it would turn its full force, its full might to harass and intimidate and threaten an average American who only wants her voice and their voices heard?

GRIFFIN (on camera): Do you think there's others like you?

BLACK: I do.


KING: Drew Griffin joins us now.

Drew, first, any idea when the IG will be done with its review of this specific case and does that congressional committee looking into this believe there are more citizens like Jeff Black who may have been targeted because of their politics?

GRIFFIN: On point one, we don't know when the IG's office is going to will come through. Point two, the committee, they are searching for other people. They want to be cautious here, John. You know, lots of people complain about IRS audits and a lot of people are legitimately audited by the IRS despite their political beliefs or no matter what their political beliefs are. But we do know now that the committee is interested and the Treasury Department's Inspector General is investigating whether individual citizens, not just Tea Party groups but individual citizens may have been targeted because of their beliefs.

KING: And what about the IRS itself? Any response?

GRIFFIN: Not to Black's case, citing federal law which prohibits the agency from speaking out about individual taxpayer's cases. However, we did get a spokesperson from the IRS who told that audits in general, and I'm going to read here, "The IRS stresses that audits are based on the information contained on the tax return and the underlying tax law, nothing else." John, I believe that is somewhat of a defense from the IRS about this story but again, it is the inspector general from the Treasury Department that is conducting this investigation.

KING: We are sure that you will stay on top of it. We'll follow it as it goes forward.

Drew Griffin, thanks.

GRIFFIN: Thanks.

KING: Up next, at Denver's airport this afternoon. Planes weren't the only thing touching down. Take a look. Yes, that's a tornado. The latest ahead.

And investigators believe the Colorado wildfire could be arson. Tonight we'll look at how investigators sift through the ashes to hunt down a culprit. We'll take inside an investigation years ago that led to an arrest and conviction.


KING: Well, a tornado touched down at Denver's International Airport this afternoon. Take a look at this incredible video from east of the airport's concourses. The National Weather Service says the twister touched the ground briefly. Winds clocked in at 84 miles an hour. Now the airport was not damaged and no injuries reported, but at least nine flights had to be diverted to other airports nearby.

Tonight, firefighters are battling a wildfire on the western fringe of Yosemite National Park in California. It's burned 1,600 acres. Hundreds of homes now threatened. And in Colorado, the large Black Forest fire is now 85 percent contained. That wildfire is being treated as a crime scene to preserve evidence just in case arson is the cause.

Colorado fire officials know all too well how important protecting that crime scene is. The investigation into the Giant Hayman wildfire near Denver in 2002 initially thought to be caused by careless campers and became a hunt for an arsonist. How investigators came to that conclusion is a fascinating piece of detective work. Here's Thelma Gutierrez.


THELMA GUTIERREZ, CNN CORRESPONDENT (voice-over): The flames leading 30, 40 feet into the air. This was a fast-moving giant of a fire.

UNIDENTIFIED FEMALE: They have never seen a fire burn this hot, this fast.

GUTIERREZ: How to slow it, let alone stop it was a massive challenge.


GUTIERREZ: Before it was over, 5,000 pled for their lives and above them ominously dark and choked skies.

UNIDENTIFIED FEMALE: It was a mushroom cloud, what I would imagine for a bomb.

GUTIERREZ: the heat was so fierce, the walls of flames so massive, exhausted firefighters could not surround this monster.

UNIDENTIFIED FEMALE: There was just no way to fight it. There was just -- it wasn't doing anything, the water and fire retardant was evaporating before it even hit the ground.

GUTIERREZ: The catastrophic inferno raged untamed for three weeks, 133 homes burned in an area nearly 10 times the size of Manhattan. A staggering 137,000 acres transformed into a vast and charred dead zone. Eventually suspicions would tease their way out of the ashes as it turned out what really happened here at the Hayman Fire was a mystery and like any good mystery, it had clues, false leads, lies and tantalizing pieces of a puzzle and had an unlikely hero.

UNIDENTIFIED FEMALE: I'm so new and at the same point in time this was the biggest fire in Colorado's history.

GUTIERREZ: Special Agent Kim Jones.

KIM JONES, SPECIAL AGENT, U.S. FOREST SERVICE: I didn't think it was a crime. I mean, when I was going there that first day I was told it was a escaped campfire.

GUTIERREZ: Jones was a rookie Forest Service investigator, but a former police detective. So moments after she arrived, Jones was certain this was no ordinary fire but a crime scene. Forest Service worker Terry Barton was on fire lookout in Pike National Forest when she says she spotted a fire. These first moments of the fire proved so critical that investigators asked Barton to recreate them on tape.

Barton first tried to smoother the flames and then realized she needed backup fast. The fire erupted and raged out of control. When investigators arrived, they photographed the campfire ring and searched for clues. Their initial conclusion, a no brainer, careless campers started the fire. In fact, a witness did report seeing a van leaving the area.

JONES: I'm thinking why am I going to a campfire, you know?

GUTIERREZ: Jones remembers thinking it was a waste of time tracking six hours through the smoky haze to find and question a negligent camper?

(on camera): What is it like being back to the scene of the crime?

JONES: It's -- it's a little strange to be back because it doesn't look anything like it did then.

GUTIERREZ (voice-over): When Jones first arrived here, the very place where the fire began, her instincts immediately took over. Remember, there was a drought and high temperatures. JONES: It was a 90-degree day and nobody is going to build a fire.

GUTIERREZ: She talked to the first investigators.

JONES: As I'm looking at things, I don't see any evidence of camping. They were like maybe it was a hot dog they cooked. Where is the trash?

GUTIERREZ: It was common sense sharpened by years of police work. In the '80s, Jones was a cop in Missouri and then worked environmental crimes for the EPA, but Jones was new to the U.S. Forest Service and she'd only worked a few fires. In fact, Jones had only taken her first forensic fire investigation training a year earlier.

JONES: The fire moved directly underneath this rock and went straight out.

GUTIERREZ: Jones traced the fire to a poorly built campfire ring.

(on camera): What was it about the formation of the rocks that made you think something was very fishy here.

JONES: There's a large rock was -- had been propped up by another rock. It looks to me like this fire has been staged to look like a campfire but that it was an intentional fire.

GUTIERREZ (voice-over): Then Jones took a closer look at the ashes and made an important find.

JONES: It's a paper match and I can see clearly the head of it and clearly the stem. I wanted to get closer to it and then I noticed there is a second match directly underneath it.

GUTIERREZ: Then a third match.

JONES: And the three matches were stuck in the middle of this clump of grass.

GUTIERREZ (on camera): What if the person starts their fire and through the match off to the side.

JONES: They couldn't have been flung because I found three within an inch and a half of each other.

GUTIERREZ (voice-over): At that moment, Jones says she knew she wasn't looking for a careless camper instead she was looking for evidence to lead her to an arsonist.

(on camera): Did you start to think that maybe you were being a little bit too overzealous.

JONES: I was. I did start to think that.

GUTIERREZ: Given the magnitude of the devastation, Jones also felt she needed help and she brought in her fire instructor, Paul Steensland, a senior special agent with the Forest Service. JONES: We were going to need an expert witness and he's expert and with it being the biggest fire in Colorado, there is just -- my --

GUTIERREZ (on camera): Would you get picked apart?

JONES: Absolutely.

UNIDENTIFIED MALE: Kim is a very seasoned investigator, but she was very inexperienced with fire investigations.

GUTIERREZ (voice-over): Steensland has more than 35 years of experience and is known to be one of the best in the fire investigation business.

UNIDENTIFIED MALE: Questions for me you guys?

GUTIERREZ: So good, he trains many of the nation's wildfire investigators.

UNIDENTIFIED MALE: Watch how it comes out low and goes out high.

GUTIERREZ: Just hours after Jones called asking for help Steensland flew to Colorado. At the same time the driver of that suspicious van spotted leaving the scene was found, but had an alibi and was cleared. Investigators had no other leads so they returned to the scene and began a pain-staking forensic investigation. Steensland mapped the path of the flames with colored flags.

UNIDENTIFIED MALE: Then we're going to use some physical marks that the fire leaves and it's basically the fire's footprints.

GUTIERREZ: Then he meticulously sifted through the ashes at the campfire ring. Jones had already removed the crucial evidence, the three matches, but photos showing their exact position when the fire ignited was vital.

UNIDENTIFIED MALE: Being able to enhance that photograph and bring that original position of those matches out was fairly critical to our theory. There's one, you see the head and the steam and the second one, the head and the steam and there's third one, the head and the stem.

GUTIERREZ: They theorized an arsonist struck the matches purposely lighting the dry grass in the campfire but who? Remember the forest worker to spot the fire, Terry Barton? Steensland thought maybe she would remember key details and lead them to the arsonist.

PAUL STEENSLAND, FORMER U.S. FOREST SERVICE AGENT: We figured bring her up there as a witness and have her re-enact her actions on the day of the fire. Her story was that she had smelled smoke.

JONES: She drove up on the fire and saw it and then had to park her vehicle.

STEENSLAND: And then found the campfire burning at 20 by 20 feet. GUTIERREZ: If you look there among the trees you can see Steensland and Jones timing Barton's every step. And in their reconstruction, they stumbled across something they couldn't explain.

STEENSLAND: The story just did not make sense within the fire behavior context.

GUTIERREZ: Remember, Barton said she was first drawn to the fire by its smell, but the experts on fire behavior said not possible.

JONES: We asked the fire behavior analyst for one, could a person have smelled smoke from a 20 x 20 fire and then first they were like, no, there is no way you could have.

GUTIERREZ: At that moment the mystery would shift once again.

STEENSLAND: The more we talked to her, the clearer it became to us that she moved from a witness to a person of interest.

GUTIERREZ: It changed from who done it to an ever more perplexing question, would a forest worker, a mother of two set off what became the worst fire in Colorado history?


KING: Up next, part two of Thelma's riveting story, those investigators close in on the suspected arsonist who has an alibi that doesn't add up to seasoned detectives. We'll see how they finally got to the truth.


KING: More now on how investigators looked for clues of arson after a wild fire. As we mentioned, the massive Black Forest Colorado fire is being treated as a crime scene although it's not yet known that a crime was committed. Once again, here's Thelma Gutierrez with a look at how investigators solved the 2002 Hayman wildfire.


GUTIERREZ (voice-over): Fire investigator, Kim Jones, was on the biggest case of her career, tracking the arsonist that started Colorado's largest fire. New revelations about the case forced her to re-examine the evidence, the matches and the ashes in the campfire ring.

Soon, Agent Jones was zeroing in on a fellow forest worker. One of their own, Terry Barton spent nearly two decades preventing fires in Colorado's national forests. The married mother of two raised her daughters here. This was Barton's backyard. She was praised for trying to put the fire out and Jones was closing in on her because her previous statements didn't make sense so Jones confronted her.

JONES: We don't know what happened, Terry, but there is no way anyone else started this fire. You started the fire. I'm not an arsonist. She's like I'm not an arsonist, I'm a firefighter. GUTIERREZ: Barton began to buckle under pressure, what she was about to reveal to Agent Jones during a taped re-enactment.

UNIDENTIFIED MALE: Terry, you've given previous statements --

GUTIERREZ: Would shock her small mountain community.

UNIDENTIFIED MALE: Were those statements correct statements as far as your count at what happened?

UNIDENTIFIED FEMALE: No, they weren't.

GUTIERREZ: Barton said it wasn't arson but an accident. She was in the middle of a divorce and she said heartache drove her to light the fire.

UNIDENTIFIED FEMALE: I was the one that started the fire, and it was a fear, and the fear kept getting bigger when the fire kept getting bigger.

STEENSLAND: She then admits that in fact she was responsible for the Hayman fire, by taking a love letter from her about to be ex-husband in a state of emotional trauma, carrying it out to the campfire ring and burning it.

UNIDENTIFIED FEMALE: The matches were in my hand with the letter. I put the letter down and I lit it one match -- let the match down, and I watched it, and I sat here until it burned up.

JONES: This moment is key because she's saying how she lit the letter with one match. I say are you sure it was with one match? She said no. I'm sure it was one match and I would have just flung it. I found three matches and that to me was a key piece of evidence that dispute what she says is happening here.

UNIDENTIFIED FEMALE: I just wanted to get rid of the letter. It was an emotional act, and it was a stupid act on my part and I tried to cover it up because of fear.

JONES: She was admitting to being responsible for the fire and that was the goal.

GUTIERREZ: But Jones said the evidence never pointed to any letter.

JONES: I never found any remnants of paper. Never.

GUTIERREZ (on camera): But to an untrained eye it would seem plausible that the matches and papers burned in the campfire and that's the end of that.

JONES: Well, I mean, I still had the matches and they didn't blow away.

STEENSLAND: You know, I was pretty confident that if there had been paper there, you know, we would have found it. GUTIERREZ: Jones and her mentor, Senior Special Agent Paul Steensland sent this ash from the campfire to a federal lab to screen for trace evidence of paper.

STEENSLAND: Of course, they found not a shred of paper material. We don't believe there was a love letter in this case, and her motivation was to start a small fire, certainly not the biggest fire in Colorado history, but start a small fire, suppress it and be recognized as a hero.

GUTIERREZ: And so whether heartbroken Terry Barton ever burned a letter remains a mystery. The case never went to court. Barton pled guilty to charges of arson and lying to federal authorities.

(on camera): And in the end, what does it say about the evidence you have against her?

JONES: That it was strong.

GUTIERREZ (voice-over): Agent Jones says in a strange way, she feels sorry for Terry Barton and her daughters.

JONES: People think they burn something and it's gone, but there is evidence there and it speaks very loudly and it was key in this case.

GUTIERREZ: Also key, this rookie fire investigator's instincts that resurrected clues and solved a mystery out of ashes. Thelma Gutierrez, CNN, Lake George, Colorado.


KING: Fascinating story. Up next, crime and punishment, we'll go inside the intense courtroom showdown between ex-mob boss, Whitey Bulger, and the hitman who confessed to killing at least 20 people.


KING: Crime and punishment tonight, more riveting testimony in the trial of James "Whitey" Bulger. The 83-year-old former mob boss accused of 19 murders and other charges. Former hitman, John "The Executioner" Martorano back on the stand today describes in chilling detail some of the alleged killings and he said Bulger was directly involved in some of them. Martorano also told the jury that in Bulger's gang, death was a way of life.

Shelley Murphy, a "Boston Globe" reporter and co-author the book, "Whitey Bulger," joins us with more. Shelley, help us understand this very significant day in court. This was the first time, right, that a trial witness in this case a confessed killer, John Martorano, testified Whitey Bulger himself committed murder, right?

SHELLEY MURPHY, CO-AUTHOR, "WHITEY BULGER": That's right. He claimed that Whitey actually was the triggerman in the shooting of a bar owner back in the '70s. He claimed he drove to the scene. Whitey got out, they walked down the hill. You heard a burst of the fire and they came back to the car and said he is gone. KING: Eddy Conners, I believe. Was that right the bar owner. That's the old hood.

MURPHY: That's right.

KING: I want you to help me with this one, so John Martorano has admitted to 20 murders, but he says he doesn't like the word hitman, doesn't like to call himself or consider himself to be a mass murderer, not a serial killer. What does he call himself?

MURPHY: Well, I think John has a very different definition that most of us might have. He said by his definition a hitman is someone who is paid to kill someone. Now after one of the slayings, after the murder of Tulsa businessman, Roger Wheeler, Martorano says his buddy who actually authorized the hit gave him $50,000.

But John said it really wasn't for the murder, he just gave it to him because he was so grateful and John said he would have done it for nothing so he didn't consider himself a hitman. Now there were other slayings, as you said 20 total, but Martorano said no. No, I'm not a serial killer because by his definition a serial killer takes joy in killing and John said not only did he never take joy that he didn't actually really like it.

He really just did what he had been brought up to do, and that is take care of his friends and family and that most of the hits, except for a couple mistaken identities or accidental, you know, innocent bystanders who got in the way, John says that, you know, really, it was him doing a favor for friends.

KING: So one of the big questions here is can the Whitey Bulger defense team chip away at Martorano's credibility in part because he did kill 20 people and part because he cut a pretty good deal with the federal government back in the '90s serving only 12 years for 20 murders? Cross-examination just began today, but what's your sense of the defense strategy and its effectiveness so far?

MURPHY: Well, I think the defense was very effective today. I mean, Hank Brannon, you know, Whitey's lawyer, he was very aggressive in going after John Martorano and he got Martorano to admit that, yes, Whitey, you know, by Martorano's own account actually was the triggerman in one slaying that Martorano was the guy that was shooting between the eyes and in the back of the head.

The other thing is that I thought he sort of mixed him up a little bit when Martorano insisted that one of his victims that he stabbed him four times and when the defense lawyer noted that, you know, gee, the forensic evidence shows he was actually stabbed 20 times. John said I really didn't remember that, didn't seem like that many to me.

So he did trip him up on some of the details and he also showed the fact that, you know, John Martorano who has been out there claiming to be a vigilante, and he tried to make him look a little foolish. But the one thing that they didn't do is shake his story, the fact that he and Whitey were part of the same gang. That they were very close friends and one of the things I thought was interesting, they actually showed the jury a photo of Whitey Bulger smiling in a nice suit holding John Martorano's son at his christening. Whitey was the godfather to the child. So the government is showing, look, he might be a killer, but they were close buddies look how close they were. They were all in this together.

KING: Shelley Murphy at the "Boston Globe." It's a fascinating trial. Thanks so much.

MURPHY: Thanks, John.

KING: Let's get caught up on some other stories we're following tonight. Isha Sesay joins us with the 360 News and Business Bulletin -- Isha.

ISHA SESAY, CNN CORRESPONDENT: John, Italy's high court revealed today why it wants Amanda Knox retried for murder. Prosecutors argued the jury ignored significant evidence supporting a claim that Knox's roommate, Meredith Kurcher, was killed during a sex game at their home in 2007.

A 2.7 million Jeeps are being recalled after Chrysler group gave into a government's request. The car manufacturer said today that it in some cases it will provide an upgrade to the restructure of vehicles for better protection and low-speed impact. The models in question include the 1993 to 2004 Jeep Grand Cherokees and 2002 to 2007 Jeep Liberties.

Buzzfeed confirms that journalist, Michael Hastings, was killed in a car accident in L.A. today. Hastings won the 2010 Polk Award for his "Rolling Stone" expose on General Stanley Chrystal who resigned shortly after its publication. He was 33 years old. It's so sad -- John.

KING: Very sad, indeed. Isha thanks so much. We'll be right back.


KING: That does it for this edition of 360. "PIERS MORGAN LIVE" starts now.