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Strong Economic Growth in Third Quarter; Police To Take Extra Precautions; Airport Gun-Smuggling Ring Broken Up; NYPD Killings Raise Police-Mayor Tension; Songwriters Group Threatens YouTube Suit

Aired December 23, 2014 - 09:00   ET

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


RANDI KAYE, CNN ANCHOR: Good morning, everyone. I'm Randi Kaye, in for Carol Costello. Thanks so much for joining me.

We start this morning with breaking news. The U.S. economy grew 5% in the third quarter, the fastest rate since 2003. Chief business correspondent tracking this breaking story for us. Christine, if you would, put this in perspective for us.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: I will. It's two strong quarters for you in a row now. I mean, this is the second and the third quarter. The second quarter, I can show you a chart, was 4.6% growth. That is solid growth. The third quarter 5%, much higher than economists and the Commerce Department first expected. Consumers are spending more. You've got businesses investing in property and in technology, and that is really pushing things forward here in the third quarter.

So that shows you an economy that's shifting into higher gear. It shows you some confidence in the economy. It also corresponds nicely with the strength we've seen in job creation recently. When you look at the fact you've got gas prices so low here, you've got hiring continuing heading into the end of the year, and you've got a third quarter economic growth read like this, it's very good news. That economic growth, the strongest since 2003. Think about that. That's 11 years, the strongest case of economic growth.

One other number we just got -- November durable goods. So that would be a little after the timing of this report. November durable goods, those were not as robust as expected, so that could show maybe a little bit less robust growth in the fourth quarter; it's too soon to know. But futures in the stock market are up right now suggesting you could be on track for even more record highs in the stock market right now.

So just take a look at the things going for the American consumer and investor: low gas prices, falling heating oil prices, less to heat their home, you've had a stock market record after record after record, a very strong year for the stock market, job growth, and this GDP number showing the economy is strong in the third quarter. Randi.

KAYE: All of it coming together for a little early Christmas present. Christine Romans. thank you so much. Appreciate it. So this morning, police departments across the nation are warning

their officers to take extra precautions. Some are even making changes after Saturday's massacre of two New York City police officers. In Massachusetts. "The Boston Herald" reports state troopers are urged to do the following: wear body armor, not let anyone approach their cruiser from the outside while they're seated inside, and watch for suspects who appear to be conducting surveillance of officers.

Now in other cities like Dallas, the focus is on having officers ride in pairs. WFAA reports Dallas officers are being advised not to place themselves in situations where they could be outnumbered.

And, in New York, officers are also being directed to work in pairs. Union leaders say it's important to put their own safety first and to respond to every call with two cars and not to make arrests unless absolutely necessary. "The New York Times" reports the president of the detectives union told members to work in threes on the street and always to wear bulletproof vests.

CNN's Alexandra Field is in the Brooklyn neighborhood where the two officers were gunned down over the weekend. Alexandra, what other extra security measures are you learning about there?

ALEXANDRA FIELD, CNN CORRESPONDENT: What we're hearing right now, Randi, has to do with the new year's eve celebration in Times Square. We now know that there will be added security there. Not just involving the people who are there, this is a big security operation every year, but also you have so many officers who are there to secure it and their safety is now top of mind.

We have seen so many officers come here to this memorial, take a moment to stop, to reflect, to pay tribute, to leave flowers. You know that they are thinking about their fallen comrades, but they also have to be somewhere in the back of their minds -- or maybe in the front of their minds -- thinking about their own safety. They know that their fellow officers were targeted simply for the uniforms they wore. The city still very much grieving, and for the first time we're actually hearing from the widow of Officer Liu. Here's what she said.

(BEGIN VIDEO CLIP)

PEI XIA CHENG, WIDOW OF SLAIN NYC OFFICER WENJIAN LIU: The Liu family would like to express our gratitude and appreciation to the police department, our neighbors, the entire New York City community, friends and co-workers, for the help and support they provide. We would also like to express our condolences to the Officer Ramos' family. This is a difficult time for both of our families, but we will stand together and get through this together. Thank you.

(END VIDEO CLIP)

FIELD: Officer Liu's widow just showing incredible courage in her ability to come out and to put these words together at this time. We understand from the Liu family that they are waiting to make funeral arrangements until more of their relatives arrive from China. As for Officer Ramos, his family plans to hold a funeral on Saturday. Randi.

KAYE: And, Alexandra, certainly now we know that the mayor, Mayor Bill de Blasio, is now calling for calm, asking protesters not to protest. How is that being received on the streets?

FIELD: This is really interesting, because, Randi, w know that he has sort of shifted his tone here. Initially before the two officers were gunned down, the mayor had been criticized for supporting the protesters and demonstrators who have been out in the city the last few weeks. So yesterday was the first time that we've heard him come out and take a much stronger stance, asking people to lay off the demonstrations, to hold off, to allow the families some time to grieve, to pay respect and to pay tribute.

This comes, of course, on the heels of the union saying that the mayor has blood on his hands for the death of these officers. So some people are saying this is the mayor sort of reversing course or trying to find a middle ground here. It's going to resonate differently for different people but certainly it doesn't erase any of the tensions that we are seeing between the union and the mayor's office.

But the mayor really hoping that people will stay off the streets. At the same time, Randi, that may not be the case. We are already seeing social media reports suggesting that some people could protest out here in New York City later today.

KAYE: Alexandra Field, thanks very much for the update from there.

Meanwhile, one of the daughters of Eric Garner is showing her support to the families of the slain officers. 22-year-old Emerald Garner placed a candle yesterday at the makeshift memorial for Officers Rafael Ramos and Wenjian Liu at the Brooklyn intersection where they lost their lives. She says, after losing her own father in July at the hand of police, she understands what the officers are going through right now.

(BEGIN VIDEO CLIP)

EMERALD GARNER, ERIC GARNER'S DAUGHTER: I just wanted to, you know, come out here and let the families know that, you know, I, too, understand what's going on. I lost my dad before the holiday season so I know how they feel. I know that this is a great loss. It's going to be hard this holiday season. But we're just asking everybody to stay strong, stay with us, be peaceful. This was an unfortunate tragedy that didn't have to happen.

(END VIDEO CLIP)

KAYE: Garner also said her dad was a peaceful man and would not approve of anyone using violence in his name.

Authorities have broken up an alleged gun smuggling ring between two of the world's busiest airports. Two men, including a baggage handler for Delta Airlines, have been charged with sneaking 131 weapons in carry-on bags on flights from Hartsfield Airport in Atlanta to JFK New York. Weapons included AK-47s and AR-15s. And what's more, some of them were actually loaded. The arrest warrant calls the operation, quote, "one of the biggest security breaches in recent years".

CNN aviation correspondent Rene Marsh joins me now live to talk more about this. So, Rene, the question I guess is on a lot of people's minds, how could a guy get guns onto flights in a carry-on backpack? How can this happen today?

RENE MARSH, CNN AVIATION CORRESPONDENT: That is the big question, and really, when you hear the details, it's an alarming breach in airport security.

Here's how it happened according to investigators. The gun supplier was an Atlanta-based Delta Airlines baggage handler. His name, Eugene Harvey. He used his airport security clearance to bypass security checkpoints and get the guns into the secure area. Once his accomplice, who was a former Delta employee, Mark Henry, cleared TSA, the two men would then communicate via text message, they'd meet in an airport bathroom, and that's where the transfer would happen. And that, Randi, is how more than 100 guns were smuggled onto passenger planes with others on board during a seven-month period.

Now, investigators eventually closed in on this ring, on this scheme, earlier this month. They arrested Henry once he landed at JFK, and here's a breakdown of what they found. He had 18 handguns in his bag, seven of them were loaded. As you mentioned off the top, a total of 129 handguns, two assault rivals, were smuggled in this operation.

Now, they were being sold on the street. The problem is they did not realize that the buyer was an undercover cop. It happened at least five times where they smuggled these guns onto Delta airplanes traveling from Atlanta to New York. I have reached out to Atlanta Hartsfield about the security procedures, and whether changes are coming, because this really does come down to an airport security issue. That employee had access to the secure area. It opens the question -- is there a loophole here that allows this sort of thing to happen?

KAYE: Yes, and to think that a handful of them, more than a handful of them, were loaded. It's really pretty incredible. What about -- is this happening at other times? I mean, it took them a while to discover this. Any idea how often this is happening, whether it's just guns or weapons or even drugs?

MARSH: Yes, you know, it does happen and it's happened before and CNN has covered it before in the past. And that's the other alarming thing. I mean, you look as far back as 2009, we've done stories on this, 2010. Most recently, we know that an Airtran employee was sentenced to ten years. In that case, investigators say that this individual agreed to smuggle a machine gun as well as cocaine on board a commercial airplane.

Here's what the situation is. Oftentimes airline and airport workers, they undergo security vetting process and then they receive badges that give them access to the secure or even the restricted parts of the airport and they're not required to be screened on a daily basis by TSA at many of these airports. So now many calling into question whether that is the proper procedure. Randi? KAYE: And what is Delta's response in all of this?

MARSH: Well, the airline says they are cooperating with the investigation and they're leaving it at that. But, again, they say they're supplying investigators with whatever info that they need.

KAYE: All right, certainly a frightening thought. Rene Marsh, thank you very much for bringing us up to date on that.

Still to come, a music publishing firm representing big threats, remove YouTube remove thousands of videos for face a $1 billion lawsuit.

(MUSIC)

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(BEGIN VIDEO CLIP)

MAYOR BILL DE BLASIO (D), NEW YORK: I have, throughout my public life, expressed tremendous respect for the NYPD. It's very well documented. I will continue to. I also think in a democracy that people express their desire for a more fair society and that's right and proper as well, but they must do it peacefully. There can be no violence and certainly there can be no violence against those who protect us and who represent our society. The police are our protectors and they must be respected as such.

(END VIDEO CLIP)

KAYE: The New York mayor Bill de Blasio is facing harsh criticism in the wake of the two slain police officers. Members of the NYPD turning their backs on him, accusing him of having blood on his hands.

This morning, an op-ed in "The New York Times" is calling those remarks slander and encouraging more protests. The editorial board writing, quote, "The protesters and their defenders, including Mayor de Blasio, need offer no apologies for denouncing misguided and brutal police tactics and deploring the evident injustice of the deaths of unarmed black men like Eric Garner."

The op-ed went on to say all of this mayoral mistrust is clouding the real tragedy at hand, and as CNN's Miguel Marquez reports, it is a distrust that has been building now for years.

(BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): A shocking moment, as New York Mayor Bill de Blasio entered the hospital Saturday where the mortally injured officers were taken, fellow police turned their backs on him, a powerful and divisive message to the mayor of this major city who has lost their trust.

Noel Leader (ph) was a New York City cop for 20 years.

UNIDENTIFIED MALE: I've never seen hostilities this heightened before in my career.

MARQUEZ: One NYPD union, the Patrolmen's Benevolent Association, has been withering in its attacks on de Blasio.

PATRICK LYNCH, NYC PBA: There's blood on many hands tonight, that blood on the hands starts on the steps of city hall in the office of the mayor.

MARQUEZ: He and his organization representing beat cops blame the mayor for the way he's handled recent protests. The lack of indictment of police in the killing of Michael Brown in Ferguson, Missouri, first set off angry protests here.

PROTESTERS: What do we want? Dead cops! When do we want it? Now!

MARQUEZ: They grew angrier. A handful of protesters actually calling for the killing of police after a jury in New York failed to indict police over the killing of Eric Garner after he was stopped for selling loose cigarettes.

In the midst of the protest firestorm, de Blasio shared his feelings about talking to his own mixed race son about how he should deal with police.

MAYOR BILL DE BLASIO (D), NEW YORK CITY: We've had to literally train him as families have all over this city for decades, in how to take special care in any encounter he has with the police officers who are there to protect him.

MARQUEZ: But perhaps what angered police most, protesters given free reign of the city for several nights and one incident, several protesters on the Brooklyn Bridge physically assaulted an NYPD officer.

So upset over the mayor's handling of the protests, on December 12th, well before these current killings, the Police Benevolent Association asked officers to sign a letter to the mayor, asking him not to attend funerals of officers in the event they were killed on duty.

UNIDENTIFIED MALE: When an individual who is the executive of the city does not have the cooperation of his own police force, it puts the citizens at a dangerous place, and when you hear some of the rhetoric by the union president that, only raises the level of frustration.

MARQUEZ: Tension between police and de Blasio started before he took office in January, over New York's stop and frisk policy.

At its height in 2011, nearly 700,000 New Yorkers stopped for so- called suspicious behavior, 87 percent of them black or Latino.

De Blasio made ending the policy a cornerstone of his campaign.

DE BLASIO: I believe that the long-term security needs of the city require moving away from the overuse of stop and frisk. MARQUEZ: The practice ended by a federal judge in 2013, and supported

by the new De Blasio administration, has been a sore point for police and its unions, who view the practice as successful in curbing crime here and preventing everything from petty crime to terrorism in the future.

Miguel Marquez, CNN, New York.

(END VIDEOTAPE)

KAYE: And we will talk to a former New York City police commissioner about how he would resolve these tensions, coming your way next.

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(MUSIC)

KAYE: Hope you have your dancing shoes on this morning, because a battle is looming over the freedom of the Internet and the rights of musicians. And caught in the middle the songs that you love.

A new music publishing group, Global Music Rights, run by industry titan Irving Azoff is demanding YouTube remove almost 20,000 videos or face a billion-dollar lawsuit. Global Music Rights represents about 40 writers such as Pharrell Williams, the Eagle, Chris Cornell, and John Lennon.

The threat of a lawsuit comes as YouTube begins to roll out a new subscription plan called Music Key, the service to compete against Spotify and Pandora would charge users $10 a month for upgraded audio and no ads.

Mel Robbins is a CNN commentator and legal analyst. She's here to talk about it along with CNN's Samuel Burke, who is also joining us.

All right. Lots to talk about here.

So, Samuel, let me start with you. I mean, YouTube is defending its posting of the videos. What is YouTube saying?

SAMUEL BURKE, CNN CORRESPONDENT: Well, first, let's lay this out. Who would have thought iTunes and downloading music is now old school. New school is streaming music on Spotify, Pandora and YouTube, and their new music service. But what people are realizing, whether it's Taylor Swift or Beyonce, that they need more money from these services and unlike Taylor Swift, they're not just going to shake it off. They want a cut of the pie.

KAYE: Very clever.

BURKE: Let me just tell you what YouTube has been telling us about this potential lawsuit. YouTube said in a statement just a little while back, Randi. They said, quote, "We've done dealing with labels, publishers, collection societies and more to bring artists music into YouTube's Music Key, to achieve our goal of enabling the service features on all the music on YouTube will keep working with both the music community and with music fans invited to our beta phase.

They want the music on, they don't want to be in the same position as Taylor Swift and have blank spaces on their service the way Spotify does.

KAYE: All right. If it goes to court, we don't know if it will, but if it goes to court, I mean, does YouTube have a chance here? What will be their argument?

MEL ROBBINS, CNN COMMENTATOR: Well, it will be huge, because there's something called the Digital Millennium Copyright Act which Congress put in place that basically provides YouTube with a couple arguments for what they call a safe harbor, meaning if they host certain music under four different requirements, Randi, they're not going to be infringing.

However, as Samuel was saying, this is a pretty interesting case, because YouTube is launching a streaming service to compete with Spotify and Pandora, and basically, the nuts and bolts of the lawsuit are this -- YouTube has negotiated for the rights to stream certain music as part of the library, and all that this lawsuit is saying, you may have talked to the record label but you didn't talk to the songwriter. So, we want a piece of it, too.

I think what you might see is an injunction delaying the release of Music Key until this is resolved.

KAYE: So, but also, I mean, you talk about Music Key. I mean, we have Spotify, we have Pandora, we have all of these music services that are streaming. Is there even room for another one like Music Key?

BURKE: Well, that's a big question. YouTube is a big brand. They've been aggressive in all aspects of video. So, just with the brand recognition alone, they should get some market share. But you're right, Pandora is incredibly popular. It's a number one service in the United States and Spotify is number one worldwide.

But maybe if they give the artists and the songwriters more money then maybe they can get more leverage and have more music, because I just want to point out one fact -- "Happy" is the most streamed song of the year by Pharrell Williams played 43 million times on Pandora. He got just $2,700 for all of those.

So, this could be something if the competing services could get more money to the artist, they might have more selection.

KAYE: Maybe there's a happy medium.

ROBBINS: You asked about market share. Keep in mind you were saying that Spotify is the largest globally. They only have 10 million subscribers. Pandora has close to 3 million. YouTube gets 1 billion unique visitors a month.

So, the ability for YouTube to market its own streaming service to 1 billion unique people coming to their site a month is extraordinary. There is a major amount of money here.

BURKE: When Google does something, they go all in.

KAYE: But in this digital age, what are the rights of these songwriters?

ROBBINS: Well, you know, it's changing. It's as rapidly as people are adopting new technology, the entire body of jurisprudence around digital rights is changing and we were talking before we were on air about how the heck are artists going to possibly protect themselves when you can easily copy a video. You can easily copy an mp3 file.

And one of the things that I'm wondering in my head as an entrepreneur is maybe somebody's going to create a digital watermark the way they've done with photos. So --

BURKE: They started to do that on YouTube. One thing we should be clear about, even though Taylor Swift has pulled her music from Spotify for now, nobody -- none of these artists, none of these big music titans think that streaming is not going to work. They know it's going to work and that's why they're pulling the music now because they want their leverage. They want to get their muse you can on there but they want their piece of the pie along with it. It's all about the Benjamins.

ROBBINS: It clearly doesn't work if it's 43 million times your song is getting played and you're getting almost $3,000.

(CROSSTALK)

BURKE: People said the same about iTunes. Remember when the artists hated iTunes and now begging for it. Taylor says puts her music on there over Spotify.

KAYE: You never know.

BURKE: It will work eventually.

KAYE: Keep us up-to-date on that, all right, Samuel? I'm counting on you.

OK, Mel, Samuel, nice to see you. Thank you.

The Woodstock Music and Arts Festival was marked by legendary performances but no one made a bigger vocal splash than Joe Cocker.

(MUSIC)

KAYE: Sounds like a black middle aged soul singer from the American south. Not like the white young lad from Sheffield, England, that he was. The sandpaper and tarred voice accompanied by fast guitar movement set him apart and also set up for some ribbing at the time. Joe Cocker passed the test of time musically. The mad dogs of Englishmen tour in 1970 brought him huge success in the U.S.

As the decade went on, Cocker was brought down by substance abuse. He turned his life around in the '80s winning a Grammy for the duet "Up Where We Belong." Cocker's career spanned six decades and 40 albums. He died yesterday in his Colorado ranch of lung cancer. Joe Cocker was 70 years old.

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