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New Terror Alerts Linked to Start of Olympic Games; No Relief from Winter Weather Woes; Four Arrested in Philip Seymour Hoffman's Death; Easy Access to Heroin

Aired February 5, 2014 - 20:00   ET


ANDERSON COOPER, CNN ANCHOR: Good evening. We begin tonight with breaking news about the latest potential threat to the Winter Olympic Games involving explosives in toothpaste tubes.

New information namely that the concerns are specifically linked to the start of competition now just a few hours away. The usual qualifiers apply, of course, about still evaluating the threat's credibility and operating out of an abundance of caution and so on. But it's clear official Washington is not taking this lightly.


REP. PETER KING (R), NEW YORK: I would just say this is the type of threat, though, that we're very concerned about. Americans should take it very seriously. The airlines should take it seriously. Obviously the people at the Olympics should take it seriously.


COOPER: That was Congressman Peter King talking to Wolf Blitzer just a short time ago.

Nick Paton Walsh is standing by in Sochi. But we want to start with Evan Perez who's working his sources in Washington.

So, Evan, sources revealing a potential threat. They believe it's credible. They're taking it seriously. What else do you know?

EVAN PEREZ, CNN JUSTICE REPORTER: Well, Anderson, this is a threat that they think is particularly focused on flights that are coming from European countries and other neighboring countries into Russia. We know that that is a specific worry that they have right now among U.S. officials in the intelligence community and homeland security officials.

It's very unusual to issue an alert like this like they did today to the airlines. And so it tells you that they're taking this very seriously. They don't want to take any chances that there's something they could have missed -- Anderson.

COOPER: Despite the threats, though, U.S. officials -- do they still believe it's safe to travel to the Olympics? PEREZ: Well, they do. They do -- just today I talked to people who had gotten some briefings. And they said that they have increased confidence that the Russians have done a good job securing the Olympic Village, Sochi itself. They think that the Russians have dedicated enough resources to make sure people who are inside the so-called ring of steel are going to be safe.

The question is about people getting to Sochi from outside of Russia, people who are going to be traveling from Turkey, for instance, and from neighboring countries. Whether those people can get there safely. That is the big concern -- Anderson.

COOPER: Yes. A lot of soft targets outside the Sochi area.

Evan, appreciate the update.

As if the Olympics didn't have enough problems already, as if security weren't already tight, there's this now.

Nick Paton Walsh is in Sochi. He joins us now.

So are Russians -- I mean, are they recalculating security plans in light of this latest threat? Do we know?

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: Well, Anderson, it's late at night here. And we've seen nothing on state media in reaction to this latest announcement from U.S. officials. But really I think the Russians would say they've done all they possibly could here, thrown the book at the venue behind me.

There are three surveillance balloons in the air when Putin was around yesterday. There were three helicopters circling constantly. And I think probably their reaction to this will be to say simply we're doing all we can. These games are safe.

Picking up on something that Evan said, (INAUDIBLE) there were only two flights coming from Europe, one from Germany, one from Turkey that actually land in Sochi. Everything else goes through Moscow where the Russians will have their own security measures. So a limited possibilities there -- Anderson.

COOPER: I also understand liquids of any kind in any quantity were already banned on flights to Sochi. So clearly Russians were taking precautions in terms of flights before this warning.

WALSH: Well, certainly when I flew from Moscow it was clear Aeroflot, the Russian state airline, told me no liquids at all in your hand luggage. That hasn't been repeated with all of our colleagues. A mixed experience. Lots of unpopularity for the original decree by the Russians banning all liquids, for example, baby milk, mothers need to take that on board.

But the key question, really, in the days ahead is the history that Russia has had with this issue on board. Back in 2004, two aircraft were blown out of the sky almost simultaneously by two female suicide bombers. That basically sparked fears they may have brought the explosives on board in face cream tubs. Russia then quickly introduced those full body scanners and has since tried to put the problem to one side.

Perhaps they knew about this, perhaps they told the Americans or perhaps the Americans warned them. But seemingly the Russians did have concerns about liquids onboard aircraft quite some time ago -- Anderson.

COOPER: All right, Nick, stick around. I want to bring in national security analysts Bob Baer and Peter Bergen. Bob is a former CIA officer. Both are experts in terrorism and all things al Qaeda.

Peter, what do you make of the latest threat?

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Well, you know, Anderson, this is -- I think the context of some of this is that these kinds of building a bomb on a plane has been an idea that people associated with al Qaeda or like-minded groups have had this idea for two decades.

I think back in the mid '90s a guy called Ramzi Yousef who was the mastermind of the first Trade Center attack in Manhattan assembled a bomb on a plane and actually killed somebody. He built the bomb in the bathroom.

So this is not something that is entirely new. This is a sort of wrinkle on a -- on a kind of tactic that we've seen before. And we've had other alerts. Nothing happened. Sometimes an alert can disrupt a plot because people say hey, we're not going to do this. Sometimes the information is simply inaccurate. And, you know, usually -- usually these alerts don't result in us then having some kind of event.

COOPER: And, Bob, given the fact that Russia as we were just talking about with Nick, they've already banned any kind of carry-on liquid on board flights arriving at the two main Moscow airports. Is the warning from the U.S. unnecessary? Is it just added precaution?

ROBERT BAER, CNN NATIONAL SECURITY ANALYST: No. I think Washington is expecting some sort of attack. They're considering all the possibilities. Al Qaeda uses liquid bombs. They've -- as Peter said. But you don't need liquids. I mean, you can take high explosive like PETN and put it in the liner of suitcases. Depends how Russian -- how good the Russians are.

But these things can get very sophisticated and the Chechens do have access to them. And that would be another worry. But again we're looking for specifics.

COOPER: And, Bob, I mean, without going into specifics, can somebody actually make a bomb out of -- with just enough material that would fit in a tube of toothpaste? A bomb that would actually do significant damage?

BAER: A tube of toothpaste is too small. You'd need a couple of them to pierce the skin of the airplane. But there are certain powders that could be used as explosives if you have a suicide bomber, for instance, in the bathroom.

Are the Chechens aware of this? I expect they are. But, you know, have they perfected it, that's another question.

COOPER: Nick, in terms of the other attacks we've seen in Russia, what kind of level of sophistication have there been with bomb making?

WALSH: Well, I remember seeing about eight years ago talking about paint tubs being filled with homemade explosives. Very crude. But more recently videos -- security services have been showing showed suicide belts, very small, very tightly made. A suggestion they've really gotten a lot more sophisticated here. And one person, in fact, an ethnic Russian with some significant expertise being pointed at by the Russian security service as being behind some of the more recent devices.

So I think they have learned a lot. This is a very active insurgency. So you can imagine in eight years since we saw some of the most crude devices in Dagestan, they could have learned significantly -- Anderson.

COOPER: And, Peter, we don't know where these latest threats have reportedly come from. If it Chechen militants, what sort of abilities have we seen from them, you know, going back to the takeover of that theater I think back in the early part of the 2000s?

What kind of capabilities do they have and are they known for making threats that they don't deliver on?

BERGEN: They've delivered on quite a number of their threats. I mean -- and I'll give you an example of something that they've done which is quite unusual for a terrorist group. They actually -- in a Moscow park, they demonstrated by leaving some radioactive materials that they could get the makings of a radioactive bomb. And they did that about 10 years ago. So I think there is a level of sophistication. So I think there's a great deal of anger.

Yes, Tolstoy was writing about fighting the Chechens back in the mid- 19th century. This has gone on for a long time. The Chechens have, you know, pretty good reason to not like the Russians and they have followed through on a number of these threats.

COOPER: Well, we'll see what happens.

Peter Bergen, appreciate it. Bob Baer, Nick Paton Walsh, as well.

Let us know what you think, follow me on Twitter @Andersoncooper, tweet us using #ac360.

Up next tonight, called the world's worst surfing movie, "The Endless Winter," another blast of snow, ice and rain hits the northeast and Midwest with power outages and thousands of flights canceled. We'll get a live update on the winter that just will not quit.

Also ahead, four arrests in connection with the drugs found in Philip Seymour Hoffman's apartment. The latest on the investigation into his death when we continue.


COOPER: Hey, welcome back. Whatever you're stuck in, slipping on or shivering through with the power out is not over yet. Not this winter, not today, not again.

Yes, again. Well, once again today the Midwest and northeast got hammered. Snow, ice, freezing rain, the kind of stuff that brings down power lines and covers highways and turns New York subways to a standstill.

More than half a million homes without power tonight. Several thousand flights canceled. A road salt shortage in New York. And the hits just keep on coming. Literally, there's another storm on the way. More on that in a second. But first the present misery.


COOPER (voice-over): It's all hands on deck in the northeast where no one, it seems, no matter your age, can escape grabbing a shovel to help out.

UNIDENTIFIED MALE: Shaw is shoveling. Keep shoveling.

COOPER: Another storm in an unforgiving winter, leaving people to dig out yet again. Commuters from Kansas to Massachusetts were again frustrated dealing with the worst winter in recent memory.

UNIDENTIFIED FEMALE: You can't even get out and enjoy this. It's just miserable.

UNIDENTIFIED MALE: It's been crazy. It's snow-pocalypse.

UNIDENTIFIED MALE: It is slippery. I've seen cars sliding behind me, and it's not -- it's not ideal conditions at all.

COOPER: It wasn't just the snow. Ice added to the misery. As far as struggling to get traction in Kansas where the storm is blamed for the state's third weather-related fatality, in Illinois near white-out conditions sent car after car skidding off the roadway. Even aircraft are struggling to deal with the conditions.

In Missouri, this Southwest Airlines flight hit a snow bank as it was taxiing to a gate. In Detroit, two Delta planes got stuck in snow on the runway in unrelated incidents.

Nationwide, airlines canceled more than 2800 flights with significant delays from Chicago to North Carolina.

In New York, heavy snows are taxing salt reserves. The governor declared an emergency for the entire state with people struggling to get to work.

UNIDENTIFIED FEMALE: It's almost like being on a balance beam. It's a little dangerous out here. COOPER: Up and down the northeast, the snow and ice bringing down power lines. And it's not letting up. Icy conditions from eastern Missouri to New England are predicted with up to two inches of snow per hour around Boston and as much as a foot of snow in parts of Massachusetts. No choice but to deal with snow again tomorrow.

UNIDENTIFIED MALE: Put your boots on. Lace them up. And get out there.


COOPER: Well, lace up your boots, fire up the snowmobile. Whatever it takes we are right in the middle of it. So is Jennifer Gray from a safe distance, that is, in the weather center.

So what's the latest on today's storm? Who's hardest hit?

JENNIFER GRAY, AMS METEOROLOGIST: Well, it's that little swath right through New York, we're seeing New Hampshire and also Massachusetts. Those folks got hit the hardest. We had reports more than a foot of snow in those areas. Luckily that storm is pushing out and we are seeing improving conditions during the overnight hours.

Look at some of these numbers, right there, 11 inches, 12 inches in New York. Of course we are seeing that snow pushing out. Albany still getting some of that snow. Boston, it has pretty much ended for you. You could get a little bit more as we go through the overnight but not much expected at all.

Also a lot of those winter storm warnings have been canceled. Still a few left in the Boston area, also in northern Maine. So the snow accumulation as we go through the rest of the night really not much at all. Less than an inch. We are going to see a little bit in northern Maine. But that is all.

Temperatures are going to plummet, though. But temperatures have stayed above freezing for the past couple of hours in places like New York City, Philly where we had all the ice and power outages. Temperatures will fall well below freezing during the overnight hours. So anything that has melted, has become slushy during the overnight hours, it is going to freeze, Anderson. And so we are going to see a messy commute as we go through tomorrow morning. Dangerous travel in the northeast.

COOPER: And then another storm this weekend, I'm supposed to work in Boston this weekend. They're supposed to get snow. Where is it going to hit this weekend?

GRAY: Yes, it looks like we're going to see another system this weekend. The end of the weekend to the early part of the workweek. It doesn't look like it is going to be quite as bad. It's actually two separate systems. This one low that is tracking to the north is going to bring a little bit of snow to New York City, the Boston area, basically the same area that was hit today.

And then this low to the south is going to track basically to the east and be a rainmaker for much of the southeast Sunday night into Monday.

COOPER: All right, Jennifer Gray, appreciate the update. Thanks.

A lot more happening. Susan Hendricks has the "360 Bulletin" -- Susan.

SUSAN HENDRICKS, CNN CORRESPONDENT: Anderson, Virginia Police have charged three people with stealing the truck of a missing police captain. But there is still no sign of Captain Kevin Quick who was last seen on Friday night. Now Police say the three suspects under arrest are siblings.

We also have this. A 360 follow to tell you about. Kendrick Johnson's family is suing the funeral home that handled his remains. Johnson is the Georgia teen who died in his high school gym last year under mysterious circumstances. Well, the lawsuit alleges the funeral home desecrated his body.

The CVS pharmacy chain says it will stop selling cigarettes at its 7600 retail locations. The company estimates that it will lose about $2 billion in annual revenues because the move one that makes sense for CVS going forward and coincides with what they believe in.

And word tonight that Justin Bieber and his father allegedly were difficult passengers on board a chartered flight to New Jersey last Friday.

Here's what we know. A law enforcement source says they ignored the pilot's warning to stop smoking pot, and the pilot allegedly complained that the Biebers were verbally abusive to flight crew -- Anderson.

COOPER: So he's smoking pot on the plane?

HENDRICKS: Yes. That's what they're saying.

COOPER: Wow. With his dad?

HENDRICKS: The two of them, father and son. Yes. I know. The Biebers weren't listening. Are we shocked? I don't know.

COOPER: Goodness. All right. Good pop there.

Susan, thanks very much.

Just ahead, fast-moving developments in the investigation of Philip Seymour Hoffman's death. Four people arrested. The question is what is their possible connection to the case?

Plus opponents of the Affordable Care Act are raising the alarm over a report they claim says Obamacare will kill more than two million jobs. Is that what it actually says, though? We're "Keeping Them Honest."


COOPER: Welcome back. Tonight the public farewell to actor Philip Seymour Hoffman have begun. Just a short time ago lights were dimmer in Broadway Theater as a tribute to Hoffman.

The Oscar winner appeared on Broadway three times winning Tony nominations for every performance. His stage work was as big a part of his -- as his career in film. And the Labyrinth Theater off Broadway -- you're looking at live pictures here -- where Hoffman was a company member and former artistic director is holding a vigil and community prayer right now.

Although Hoffman was found with a syringe in his arm, the cause of his death is still officially undetermined. Today a medical examiner said an autopsy was inconclusive pending toxicology reports.

Meantime, the police investigation has gained ground with four arrests. Three men and a woman, all but one shown here, are facing drug-related charges tonight.

Jason Carroll has details -- Jason.


JASON CARROLL, CNN NATIONAL CORRESPONDENT (voice-over): A nighttime drug raid on a West Village apartment building not far from where Philip Seymour Hoffman lived. A tip that someone here sold drugs to Hoffman leads police to search three apartments in the building.

According to law enforcement, inside they find 350 bags of heroin and other drugs. The heroin called the "black list" and "red bull," not the same labels found on heroin found in Hoffman's apartment, which were called "Ace of Spades" and "Ace of Hearts."

Four now under arrest all facing various charges including criminal possession of a controlled substance. These pictures showing two men taken into custody late Tuesday night, Max Rosenblum and Robert Vineberg. Vineberg faces felony drug charges. A law enforcement source saying they found the largest amount of drugs in his apartment.

And CNN has learned Vineberg's cell phone had Hoffman's phone number stored in it.

CHRIS, VINEBERG'S NEIGHBOR: He's honestly the -- one of the nicest people I've ever met. Smart. Yes. He goes out of his way to be nice.

CARROLL: Vineberg is a jazz musician. Well known in the downtown club scene and the use the stage name Robert Aaron and has appeared with the rapper Wyclef Jean. Supporters posting comments on his Facebook page such as "Thinking of you".

Investigators still trying to determine if Vineberg or any of the suspects sold drugs to Hoffman. Still unclear what led Hoffman who had struggled with addiction to relapse. Some insight might come from his journal which police found on a table in his apartment. The cause of death still pending. The medical examiner saying at this point the exam was inconclusive.

Those who worked alongside him in theater still struggling with the loss.

ERIC BOGOSIAN, ACTOR: Phil was a leader in the greater sense of the word because he did just talk the talk, he walked the walk. We will more than miss Phil. We will live in a smaller world without him. We all know that for sure. We can only say tonight that we were lucky to know him.


COOPER: Jason, I understand there was some late developments in court as well.

CARROLL: Absolutely. Those four suspects arraigned in court tonight. The attorney for one of them, a 22-year-old woman. He basically says that his client was simply, Anderson, in the wrong place at the wrong time. He said she didn't even know Hoffman and that she plans on pleading not guilty.

And in terms of Vineberg who was mentioned there in the piece, basically I spoke to one of his friends on the phone a little earlier. And he says he feels as though Vineberg is being used as a scapegoat. And he says in no way, shape or form should Vineberg be accused in any way of having to do with any death of Philip Seymour Hoffman -- Anderson.

COOPER: All right, Jason, appreciate the update.

And now if it turns out that Hoffman got the heroin that likely killed him from any of these four suspects, the question is, can they be charged in his death? Or whoever he got it from, can they be charged?

That's a question for our senior legal analyst and former federal prosecutor Jeffrey Toobin who joins me now.

So, I mean, can they?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: It's remotely possible but very unlikely. First of all, it's simply not done that heroin or any sort of drug dealers are prosecuted unless you can prove that they knew or really had very good reason to suspect that they were going to -- that it was going to cause a death. If they added, for example, fentanyl or one of the, you know, really toxic ingredient.

And the second point --

COOPER: So there would have to be a prior knowledge that this drug was --

TOOBIN: More than usually dangerous.

COOPER: Right.

TOOBIN: Right. The second point is proof. How do you prove that that heroin caused the death?

COOPER: Right. TOOBIN: Here apparently you even have different labels. But even if you have the same label how could you prove that -- you know, that that drug --


COOPER: If an individual, small dealer doesn't necessarily stamp the label. It's usually from a bigger manufacturing place and then these dealers are just middlemen.

TOOBIN: And it's not like there are DNA tests where you can prove that heroin from this source caused this death. Heroin is a pretty generic product. And so it would be very difficult unless you had eyewitnesses or something.

COOPER: So somebody who is somehow linked to the sale, I'm not saying it's these people who were arrested but whoever it is and if police actually do track it down, would they be charged just for dealing heroin?

TOOBIN: Yes. And -- but that --

COOPER: But not related to the death of Philip Seymour Hoffman.

TOOBIN: There is almost -- I've never heard, frankly, of a drug dealer being charged directly in the death that's caused. I'm not saying it's never happened.

COOPER: Right.

TOOBIN: But it's certainly very rare. But don't kid yourself. You know, dealing heroin is a very serious crime. And that if you're convicted of it you're going to go away for a long time, anyway.

COOPER: Really?

TOOBIN: Oh, yes. Dealing -- we're not talking about pot here. Heroin is still in every state, including New York where obviously this took place, is something where you get -- yes, you can easily get 10 years in prison for dealing, you know, distribution-size quantities of heroin. We're not talking about pot here.

COOPER: Right. All right. Jeff Toobin, thanks very much.

Thanks very much, Jeff Toobin.

Philip Seymour Hoffman's death obviously has thrown some cold hard facts into sharp relief. Heroin use is on the rise. So are deaths from overdoses. Some simple economics are at work. Heroin is easy to get. Law enforcement officials and addicts agree on that point.

There's also the cost. Compared to prescription painkillers which is how many heroin addicts start off, heroin is cheaper these days and gives the same kind of high. It's also easier to get. A lot prescription pills now police and authorities have been cracking down on those. As Randi Kaye found out, you don't have to go very far in any decent sized city to find some heroin.


RANDI KAYE, CNN CORRESPONDENT (voice-over): It's broad daylight in Philadelphia. So it's plain to see this heroin deal in the making.

DAVID DONGILLI, DEA, PHILADELPHIA FIELD DIVISION: But if you look at some of the people that just left, they're all addicts. So they're in a neighborhood here. They're looking to cop. They'll get their fix for the day.

KAYE: And not just on this corner. As DEA special agent David Dongilli drove us around, we saw dealers and addicts at nearly every intersection. He showed me the tiny bags the heroin is sold in, under street names like Bud Ice, White House, even DEA. And the buyers? Anyone from high schoolers to housewives.

Dongilli says most of the heroin here is coming from Mexican cartels. It's a cheap fix. Just $10 a bag. And so easy to get.

Here's how it works. The dealers have guys on the street they call lookouts.

DONGILLI: Once a buyer walks down the street, you'll have those lookouts and direct them, hey, they're on the corner of 6th and Marshall.

KAYE: Lookouts aren't just for buyers but police, too. Some are in cars. Honking their horns to alert the dealers. Watch what happens when we show up.

DONGILLI: As you can see, people walking away. This right here are several drug dealers on the corner.

KAYE (on camera): They're on the move.

DONGILLI: They're moving. You see this guy moving? You see these guys moving down the road here? All right. We got a lookout. This individual here probably is looking to cup bags of heroin. But --

KAYE: Those guys just ran basically.

DONGILLI: Yes. They're running. They know we're here.

KAYE (voice-over): Agent Dongilli says Pennsylvania heroin is the purest east of the Mississippi. But that still hasn't stopped some dealers from mixing it with drugs like fentanyl, a powerful narcotic often used to treat cancer patients.

Just last month, 22 people died from heroin overdoses in western Pennsylvania. All of it had been laced with fentanyl.

DONGILLI: Fentanyl, it is extremely dangerous. Extremely potent. And two to three grains of salt just to put it in perspective, of fentanyl mixed in with heroin it could kill a seasoned heroin addict. So --

KAYE: And they don't tell you it's in there.

DONGILLI: They don't tell you it's in there.

KAYE (voice-over): Agent Dongilli's team recently seized over 12 kilo grams of heroin worth millions of dollars on the street. These are evidence photos of just some of the heroin and weapons they've picked up. But dealers are going to extremes. Like this woman, police say, was selling heroin in McDonald's Happy Meals. $2 for the toy, 80 bucks for the heroin. Those extremes and creativity are only making his job harder.

UNIDENTIFIED MALE: Sometimes they'll have small amounts on them and sometimes it will be hidden. It will be hidden in that mailbox. Could be hidden underneath the car, it will be hidden in a corner. Then they'll go and re ups the amount that they have on them. So they never take a chance to lose their product.


ANDERSON COOPER, CNN HOST: Randi joins us live. Randi, it's amazing to see how open it is. Why don't they pick these guys up that you saw selling on the streets? Why not pick them up?

KAYE: That's what I asked, too, because they are out there doing it right there in the open. So I said why aren't the police here? Why aren't these guys being arrested? And really, Anderson, those aren't the guys they want. They want the big guys, the guys who are running this organization. I'm told they can bring in as much as $100,000, Anderson, in a single shift of about eight hours. But the guys on the street who are risking arrest out there, they only get a couple hundred dollars, maybe $300 I'm told. It's the big guys who are raking in and cashing in on this whole deal.

COOPER: So the ones selling on the street are just low-level middle men?

KAYE: Exactly. Exactly. They're hardly making any money. A couple, $300 for an eight-hour shift, maybe that's good money to them. But the guys who are really bringing it in are the ones pulling in $100,000 every day, every eight hours.

COOPER: You weren't able to approach any of these actual dealers, were you?

KAYE: No. I mean, in fact our special agent that we were with he had his weapon out. It was a pretty dicey scene. But I did ask him, I want to see how easy it is. Can I go up to one of these guys or groups to try to buy some of this? No, mainly he wouldn't let me it's illegal. But also he said it's so risky.

He says if I had gone there on my own to try to buy some heroin like some of these high school wrestlers coming, housewives coming. If I was doing that he said not only would I risk being dragged into ally and being abused, but I would also risk having my car stolen, being robbed. He said this is one really bad deal you do not want to mess with these guys.

COOPER: Randi, appreciate the update. Thanks very much.

A programming note, playwright, David Katz, the friend of Philip Seymour Hoffman who found him dead inside his apartment will be on "NEW DAY" tomorrow to share his story.

Still to come tonight, more on the breaking news, the terror alert linked to the star of -- linked to the start of the Olympics Games. Also reporters of the Olympics say hotels are in shambles. The water is dangerous. You're not even supposed to flush the toilet. It's quite something. We'll have an update ahead.

Also is Obamacare really a job killer? A report that the affordable care act will lead to 2.5 million lost jobs made a great talking point for a lot of Republicans. The question is it actually accurate? We're "Keeping Them Honest" next.


COOPER: "Keeping Them Honest" tonight, politicians who have the nonpartisan facts in front of them, but choose partisan spin instead and continues to spin even after the facts are well-known and the spin is exposed for what it is. This time it involves a new report on the affordable care act from the nonpartisan Congressional Budget Office.

Now if you listen to Republicans when it came out yesterday and even well into today, you'd think this report calls it a massive job killer.


SENATOR MITCH MCCONNELL (R), KENTUCKY: They estimate up to $2 million, 2 million fewer jobs will be created as a result of Obamacare.

SENATOR JOHN BARRASSO (R), WYOMING: Two million fewer jobs as a result of the Obama health care law.

SENATOR RAND PAUL (R), KENTUCKY: The real point is that Obamacare is going to cost 2 million fewer people to have jobs.


COOPER: So "Keeping Them Honest," is there anything to the allegations that the affordable care act will result in nearly 2.5 million layoffs? In a word, no. In a few words, here's the relevant passage from the report that they are spinning. And I quote "The estimated reduction stems almost entirely from a net decline in the amount of labour that workers choose to supply rather than from a net drop in business's demand for labour."

In other words, the new law enables those who are staying in full-time jobs or putting off retirement so they can maintain their employer-provided health benefits to retire or cut back to part-time. Testifying today before the director of the House Budget Committee, the Congressional Budget Office restated that conclusion. Under questioning from Democrat Chris Van Hollen said the action could actually make it easier for people to find work.


REPRESENTATIVE CHRIS VAN HOLLEN (D), MARYLAND: So when you boost demand for labor, in this kind of economy, you actually reduce the unemployment rate because those people who were looking for work can find more work, right?

UNIDENTIFIED MALE: Yes. That's right!


COOPER: So now earlier in those hearings a big-name Republican Committee Chairman Paul Ryan questioned the CBO director. He's not a fan obviously of the affordable care act. As you'll see his questioning highlights some potential problems with the law in the CBO report. Notice what he did not do is buy into a spin on layoffs. In fact, listen to the beginning of the question. He actually debunks it.


REPRESENTATIVE PAUL RYAN, CHAIRMAN, HOUSE BUDGET COMMITTEE: So just to understand this, it's not that employers are laying people off, it's that people aren't working in the workforce, aren't supplying labour to the equivalent of 2.5 million jobs in 2024, and as a result that lower workforce participation rate, that less labour supplied lowers economic growth.

UNIDENTIFIED MALE: Yes. That's right, Mr. Chairman.


COOPER: So to be clear, at the end there he's highlighting a very different concern about the law. He also points out as economists on both sides of the aisle, by the way, that subsidizing health insurance is a kind of disincentive to working more. But again, that's a very different issue entirely from the debunked job-killing talking point.

No matter, though, this is Capitol Hill where folks never let a fact get in the way of a good press release. Hours after the hearing, House Speaker John Boehner put out a statement titled, quote, "Dems in full damage control on Obamacare." Containing links to a number of stories including one from the "Washington Examiner" on the report showing Obamacare would quote, "eliminate 2.5 million full-time jobs," which is just not true?

More now from Democratic strategist and CNN political commentator, Cornell Belcher, who is also a former Obama campaign pollster and Ralph Reed, the founder and chairman of the Faith and Freedom Coalition, founder of the Christian Coalition and president of Century Strategies.

Cornell, there's no doubt a lot of people have been spinning what the CBO report says. Today the CBO director said it will reduce unemployment, but the report also said it's going to reduce people's incentive to work to the equivalent of 2.5 million full time workers over 10 years. And the report says businesses might be encouraged to reduce employee hours to avoid the mandate. It's not quite as rosy as some Democrats hope it is.

CORNELL BELCHER, CNN POLITICAL COMMENTATOR: The truth of the matter is, Anderson, you know, if you look back when we first put ACA into action, we've had 45 of the strongest months of job creation in this country since the 90s, 8.1 million jobs have been created since Obamacare's been in effect. We're reducing the deficit. And guess what. Something that we've been struggling with for a long time, actual costs of health care in this country, is actually coming under control.

So that's the reality of Obama care. I'm mind boggled by the fact that Republicans again think they can take 2012 and run 2012 again in 2014, making up all these false accusations about Obamacare. That's somehow going to persuade the majority of voters who voted for Barack Obama to switch parties and vote for Republicans.

COOPER: Well, Ralph, what about that? I mean, a lot of Republicans have been saying this report says Obamacare will eliminate 2.5 million jobs. That's not really what the report says. There's a difference between reducing the labor force by 2.5 million and losing 2.5 million jobs from the economy?

RALPH REED, FOUNDER, THE CHRISTIAN COALITION: If you read the report, which I did today, it really sketches out a very depressing and bleak economic future between now and 2024. You're looking at 400,000 equivalent full-time workers lost per year over the next five years. You're looking at inexorable decline in labor participation, which they say is going to continue. It's already its lowest in 37 years.

And then the deficit begins to explode after about 2020 primarily because of health care costs of, which ACA is going to be a part. So there's no way to take this report and put lipstick on this pig. And when you combine it with the fact that people were told they could keep their health insurance if they liked it, 5 million to 6 million have lost it. When you combine that with surveys by Keiser and McKenzie and others showing that between 65 percent and 85 percent of the people getting insurance on the exchanges are people who lost their insurance, not the uninsured, Anderson, but people who got dropped and are now going to the exchanges to get reinsured, this is just a very ugly picture.

COOPER: Cornell, let me ask you in terms of this upcoming election, how damaging a message do you think this is? Clearly, we're going to be seeing a lot of commercials from Republicans saying Obamacare is costing 2.5 million jobs.

BELCHER: But that's a lie. This is the problem, Anderson. They are gearing up to make the centerpiece of their 2014 campaign strategy a lie and deceit. And look, partisan hat off just as a political strategist, how on earth as a party are you going to grow and expand your base by doubling down on a lie that we've already sort of had a campaign about and where Republicans in 2014 are going to say to all these millions of Americans signing up for health care, you know what we're going to do, we're going to take that freedom away from you. I kind of like Democrats' chances there.

REED: That's not really fair about what we're saying. In fact, if you look at the Burr-Coburn-Hatch Bill introduced I believe last week, it doesn't say we're going to take away your access to health care. It says the opposite. We've offered positive, optimistic, forward- looking reform that will replace Obamacare and is a lot more efficient.

BELCHER: So now we're ignoring the 40 plus votes on repealing Obamacare that actually have happened.

REED: No. We do want to repeal it. We just want to replace it. We want to replace it with something that's better.

COOPER: All right, Ralph Reed, Cornell Belcher, guys, thank you very much.

BELCHER: Thank you, Anderson.

COOPER: Up next, an update of breaking news, a new warning about toothpaste terror in the Olympics. Also new concerns that Sochi is not ready to host the games from unfinished venues to hotels with water too dangerous to even wash your face with. We'll take you there next.


COOPER: Once again the breaking news tonight, the U.S. is warning airlines with flights to Russia to be on the lookout for explosives concealed in toothpaste tubes or other types of cosmetic tubes.

Pentagon correspondent, Barbara Starr, joins us by phone to try to help fill out some of the details. What are you hearing, Barbara? Barbara, are you there? I think we just lost her. We'll obviously try to reconnect with Barbara coming up.

We also want to show you what's going on inside Sochi in Russia, even before tonight's breaking news, Americans are already fearful about the safety of the games, 57 percent of those surveyed in the CNN/ORC poll released today think the terror attack in Sochi is likely, 55 percent hold an unfavorable view of Russia.

Meanwhile, thousands of people converging on that Russian city, the concerns in Sochi is simply not really ready for the impact. Hotels are still under construction if you can believe it. Reporters who are already are tweeting that their rooms are unfinished and that accommodations are sort of a less an ideal.

One sent a photo of a sign posted in a bathroom advising that toilet paper is not to be flushed with a tweet, "People have asked me what surprise me the most here in Sochi. It's this, without question, it's this."

Another tweeted, "My hotel has no water. If restored, the front desk says, do not use on your face because it contains something very dangerous." An hour later the same reporter tweeted this photo of two glasses of yellow waters saying water restored sort of. On the bright side I now know what very dangerous face water looks like." That does not look good. A lot to talk about tonight with Ivan Watson who is in Sochi.

So Ivan, this latest news about the possibility of a toothpaste bomb, how tight is the security situation? What's it like in Sochi right now?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: They're calling ate ring of steel. I think it's pretty accurate. The Olympic venues are highly fortified. On top of that, even U.S. counterterrorism experts are saying they think the venues themselves are going to be very safe. Their concerns are soft targets beyond the Olympic venues, beyond these walls of fortifications.

And frankly, the wave the insurgents have worked in Russia before, they could hit any other city in this biggest country in the world, Russia. That would serve to really raise fears, could cost lives and would deeply embarrass the government of Russian President Vladimir Putin.

COOPER: One of the suspected masterminds behind the Volgograd attacks was reportedly killed today. Do you know anything more about it?

WATSON: This is all coming from Russia's state news agency, which is citing Russian security services saying that a shootout broke out in this republic of Dagestan in the turbulent Russian north caucuses and that in the process a man they suspect of being the mastermind of these terrible twin suicide bomb attacks that he was killed along with several others.

Last week the Russians said that they captured two brothers who they believed to have been accomplices in those suicide attacks. Sochi is on the border of the caucuses and that's part of why the fears are so big, why the security concerns are so big is because Russia and the International Olympic Committee decided to have the Winter Olympics in the most difficult, most turbulent, most politically charged and conflict-prone part of Russia and certainly of caucuses arguably also in Europe.

COOPER: So Ivan, beyond the security, I mean, all those stories about the hotels in Sochi, the bad construction, I mean, this thing is starting in matter of days. Are they ready?

WATSON: Listen. The Russian authorities, the International Olympic Committee, they insist everything is going to be ready. The fact of the matter is the scale of this project, everything behind me basically here, all of this was built within the last seven years to a price tag of more than $50 billion. That's making it the most expensive Olympics in history. And what we're definitely seeing is that some of the kinks have clearly not been worked out. Now, the IOC, it claims that only 3 percent of the tens of thousands of rooms here in Sochi are not ready. We've definitely seen some glitches here and it's not just journalistic accommodations. It's a couple of five-star hotels, international chains and they are not finished yet. So the test will really come probably in the next 48 hours here.

COOPER: All right, Ivan Watson, good luck. Thank you, Ivan.

We've reconnected with Barbara Starr. Barbara, are you getting a sense of how credible U.S. authorities think this threat surrounding the Olympics is?

BARBARA STARR, CNN PENTAGON CORRESPONDENT (via telephone): Anderson, right now that's what they're trying to figure out. They are going to have to work very closely with the Russians on it. Both sides are going to be looking, we are told, at communications intercepts. Looking at just basic facts like do they know where the bomb makers are these days?

Who is out there that would know how to do this? Whether they are involved in it directly or may have trained Chechens or people in the region to carry out this kind of thing. There's a lot of information on the Internet that bomb makers may have looked for. But to stuff toothpaste tube full of explosives is just the beginning of what you have to do. This would have to be a device that would be fairly engineered.

There would have to be a workable detonator type of device, something that will make it go off and cause damage. And so they're going to look at where is the capability to do that. And in the coming days as they start to piece that together, that's going to give them a sense of the credibility of the threat. But right now, nerves are on such edge about all of this I don't think anybody's taking any chances.

COOPER: All right, Barbara, appreciate the update. Thanks, Barbara Starr. "The Ridiculist" is coming up next. Be right back.


COOPER: Time now for the "Ridiculist." Tonight we venture to one of my favorite states, Texas, where a pin up calendar is pushing boundaries and raising provocative questions. Let's check out some of the pictures, shall we? There's 70-year-old J.B. Smith rocking the sheriff's badge. He was elected Smith County sheriff in 1976 to 2012. Mr. February!

Mr. July is 78-year-old Ken Threlkeld, the founder of one of the East Texas premier insurance company and grandfather of eight. There is Conway Homes founder Steve Conway. He's been married to his high school sweetheart for 46 years and still knows how to rock a tool belt. You're probably starting to get the picture here.

This is a calendar filled with page after page of good sports. Dentists, business men, city leaders who strip down for a good cause! It's called the taking it off for the dog's calendar, raising money for the ASPCA of East Texas to build a shelter for the rescue and adoption of unwanted or abused animals. All the models say it was pretty much a no-brainer to be involved in the charity project.


UNIDENTIFIED MALE: What little we could do to sit in a bathing suit and take a photograph, ways proud to do that.

UNIDENTIFIED MALE: There's been nothing negative about it. It's a great cause. The ASPCA is doing a great job. I don't know how anybody could argue against it.


COOPER: Exactly. A fun calendar for a good cause, how could anybody argue against it? Nobody can except of course someone did. Someone has a problem with this particular photo. This is Dr. Aubrey Sharp, keeping it cool in January. He is 69 years old, the dean at Tyler Junior college and on the board of multiple charity organizations including meals on wheels. Now, a female board member of that organization has quit her position because of the charity calendar. Here's part of the written statement she gave a local news station, KLTV.


UNIDENTIFIED FEMALE: For the record, my resignation was prompted by the decision of our board president to pose in the nude for the fundraising calendar.


COOPER: Yes. Also for the record, Dr. Sharp says he didn't actually pose in the buff.


UNIDENTIFIED MALE: Well, I didn't pose nude. I was wearing short britches.


COOPER: See? Short britches! I'll not even sure what they are but I like them. Being a charitable man he doesn't hold any grudges against the board member who left because of his photo shoot.


UNIDENTIFIED MALE: She's a wonderful person. Smart, a great board member! We hate to lose her. It was just a difference of opinion.


COOPER: So the people who put together the calendar told us, quote, "We understand that a small minority may be offended and we respect that stance. The calendar that was done in good faith with much consideration and good taste, our only objective is to raise as much money as possible for an animal shelter in our city. Again go to The calendar is about $20. The priceless photography will last the whole year through on "The Ridiculist."

Nice job, guys. That does it for us. Thanks for watching, "PIERS MORGAN LIVE" starts now.