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Early Start with John Berman and Zoraida Sambolin

Are the ISIS Hostages Still Alive?; Released Gitmo Prisoner: Returning to the Fight?; Hernandez Murder Trial Begins; Deadly Attack in Egypt by ISIS Affiliate

Aired January 30, 2015 - 04:30   ET

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

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JOHN BERMAN, CNN ANCHOR: The ISIS hostage deadline has passed. They had offered a prisoner swap for an imprisoned terrorist, but negotiations -- they fall apart when ISIS fails to prove the hostages are still alive. We're going to break down what we've learned overnight and also what comes next.

A Guantanamo Bay prisoner as part of the hostage swap for Sergeant Bowe Bergdahl -- has he made attempts to return to the Taliban? We will tell you who he is trying to contact, that's ahead.

The trial begins for a former football star accused of murder, drama in the courtroom. More to come today.

Welcome back to EARLY START, everyone. I'm John Berman. About 30 minutes past the hour right now.

And this morning, there is great mystery surrounding the fate of two hostages held by ISIS. ISIS threatened to kill these men if its demands were not met by sunset. That moment has passed. The series of audio messages reportedly by ISIS, Japanese journalist Kenji Goto passed along the terror group's demand for a prisoner swap. A convicted terrorist on death row in Jordan, in exchange for sparing the life of Jordanian fighter pilot Muath al-Kasasbeh. ISIS said if the terrorists Sajida al-Rishawi was not handed over, it would kill both hostages. That deadline, the sunset deadline, has now passed. But there is still no word on what has happened.

Now, CNN cannot independently authenticate the messages, but officials in Jordan and Japan are taking them very seriously. Jordan has said it is willing to make a deal, but it is holding out proof that its pilot is alive.

Japan's government is under intense public pressure to secure the journalist Kenji Goto's release. But right now, dependent on Jordan to make this deal.

So, where does the situation stand now?

Tracking developments for us in Tokyo, CNN's Will Ripley -- Will.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: John, the recurring theme throughout this hostage crisis has been waiting on what ISIS' next move will be. ISIS has set many deadlines throughout this ordeal, after the first deadline passed, they beheaded one of the Japanese hostage, Haruna Yukawa. After the second deadline passed and the third deadline, the two hostages as far as we know, have remained alive or at least were alive, Kenji Goto was alive at the time that his voice was reportedly recorded reading off the list of demands.

As you said, still no evidence, no evidence at all that the Jordanian pilot Muath al-Kasasbeh is still alive.

So, families right now are in limbo. The government is in limbo. The Japanese government saying today that they still have to the made any direct communication with ISIS. And even though Kenji Goto's wife Rinko has exchanged e-mails with the terror group, Japan says they have not attempted to reach out to ISIS through the e-mail address.

So, anxiety, waiting, you can imagine what the families are going through and the Japanese government staying very quiet about this whole process. Only saying it is a very fluid and difficult situation that continues with no answers, John.

BERMAN: All right. That's the situation from the Japanese perspective. Of course, great interest and at least in two countries. Thank you, Will.

Jordan is also facing huge public pressure for the release of its hostage as well. Demonstrations have been staged the outside royal palace this week. The family of pilot Muath al-Kasasbeh, they were given a private audience, but it was done very publicly so every one could see. They met with Jordan's King Abdullah.

CNN's Jomana Karadsheh in Amman with the latest -- Jomana.

JOMANA KARADSHEH, CNN CORRESPONDENT: John, no word yet on the fate of the pilot Muath al-Kasasbeh. We are hearing from the Jordanian military saying they are working. All government apparatus here are working around the clock to try to get an update, to try and find out what is going on. But as you mentioned earlier, the Jordanian government's position, they said that there is no deal on the table at this point unless they receive what they have been asking for, and that is proof of life. They say they have no evidence yet to show that their pilot al-Kasasbeh, who has been in ISIS captivity for more than a month now, there is no prove he is alive. They say that over the last few weeks, they have been engaged in indirect negotiations with ISIS to try and secure his release.

And throughout this process, they say they've asked for proof of life. Something that they have to the received. Now, for his family, that's not enough. They don't think the government is doing enough to try and secure his release. Whether the government has proof of life or not, that is irrelevant for his family who are putting a lot of pressure on the government to do more.

And yesterday night, his father here in Amman making an emotional, really a desperate plea trying to appeal directly to ISIS, asking them to release his son -- calling him a brother, a Muslim brother, a fellow Muslim, and that they should forgive him and release him.

Of course, John, we've heard pleas like this from families in the past to an organization that has only showed brutality. So, very tough situation here in Jordan. This country has been on edge for the past week trying to find out what the fate of their pilot is, a man who is considered a national hero. And a day again, this country is still on edge, and a very tense situation.

BERMAN: You have to feel for the families. Jomana Karadsheh, thanks so much. Keep us posted, if there are any developments.

The controversial prisoner swap for Sergeant Bowe Bergdahl even more controversial this morning. U.S. intelligence officials have evidence that one of the Taliban detainees released from Guantanamo Bay in exchange for Sergeant Bergdahl may be making attempts to return to militant activity.

Pentagon correspondent Barbara Starr following all these developments. She has more -- Barbara.

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BARBARA STARR, CNN PENTAGON CORRESPONDENT: John, it's happened before, but this time it is politically charged. The U.S. believes one of the five Guantanamo Bay detainees sent back to Persian Gulf nation of Qatar last year in return for getting Sergeant Bowe Bergdahl back, that one of them may be returning to a militant lifestyle.

The U.S. conducts classified surveillance of all five men's communications. Any communications they have. And a couple of months ago, apparently, something popped up that is causing concern that one of the men may have been reaching out to militants.

And that would be against the regulations that the U.S. set to monitor these men and to release them back to Qatar. So, there is a good deal of concern about this. Right now, the question is, of course, how much of a threat does this pose. Some officials, saying not a direct threat. But I will tell you, other U.S. officials telling me there is a difference of opinion inside the administration that there is some opinion that this is a very serious matter -- John.

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BERMAN: All right. Our thanks to Barbara for that. And it will only add to the controversy surrounding Bergdahl's release.

In Afghanistan, the Taliban this morning is claiming responsibility for an attack that killed three American contractors at a military base attached to the main airport in Kabul. A U.S. military official says it looks like it could be an insider attack, but the circumstances are still being investigated. The Taliban statement says the shooter did die in that attack.

The turmoil in Yemen having a big impact in the fight against al Qaeda in the Arabian Peninsula. "Reuters" reports that new gaps are merging in intelligence ever since the Iranian-backed rebels seized control of the government there, including defense installations which used to provide information to the United States. The big concern is that this new lack of intelligence could make it hard for the drones to target the right places. It could increase errant drone strikes -- meaning that innocent people could be killed, which would increase anti-American sentiment there.

The White House this morning responding some -- to some big demands made by Cuban President Raul Castro as a condition for restoring diplomatic relations between the two countries. Those demands from Castro now include returning the Guantanamo Bay Naval Base to Cuba and lifting the decades old trade embargo. The Obama administration is trying to throw cold water on the demands, and admits that the bold outreach made in December will take time to complete.

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JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Is the United States willing to do any of those things?

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: Well, I think, Jim, what his comments highlight is that there is a pretty clear difference between reestablishing diplomatic relations and carrying out the longer process of normalizing relations.

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BERMAN: When asked if the United States would actually give up the strategic Guantanamo Naval Base to Cuba, Earnest simply said no.

The president will present his budget proposal to Congress on Monday. We've learned that it blows through the mandatory spending caps imposed by Congress set four years ago. The administration plans to ask lawmakers to raise the cap by at least $74 billion. Anything less would impact military preparedness and hurt important domestic programs. The president's budget will also call for new capital gains taxes and bank taxes as well.

The Senate following the lead of the House has approved the bipartisan bill to build the Keystone pipeline, which would carry oil from Canada to the Gulf Coast. Nine Democrats joined with 53 Republicans to pass this bill, that is not though a veto-proof majority. The Senate and House measures must now be reconciled to a bill that will be sent to President Obama that he says he will veto.

So, what's your money situation today? Let's get a look at that. Alison Kosik is here.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning.

What a wild week it's been for stocks, I'll tell you what. We are watching stock futures this morning, pointing lower right now. That's after posting triple digit gains yesterday. The Dow climbed 225 points or a little over 1 percent. That's after seeing two days of big losses where the Dow lost a total of 500 points.

So, what changed? Some companies posted strong earnings. We are seeing more of that this morning.

Case in point, shares of one company moving higher, Visa. More than $1 trillion worth of transactions were made on Visa cards last quarter. And the company is making a fortune on fees. Visa also announced the stock split to bring the price from $250 a share to a more affordable $60.

We are also watching shares of Amazon. Amazon actually posting a profit thanks to strong holiday sales. Making money is actually relatively rare for Amazon, because you look at its overall business plan, it is losing money. Its retail space is making money because Amazon is really investing in lots of other big opportunities.

Other companies do this, though. Twitter has operated in the red. Even Amtrak, I don't think Amtrak has ever posted a profit in 40 years. And these companies just keep on chugging along.

BERMAN: Everyone is criticizing Amazon over the years. Oh, they don't make a profit. They are doing fine. And they're getting huge, but they have the profit, too.

KOSIK: Investors love that company. Shares over $300 a piece.

BERMAN: All right. Alison Kosik, great to have you with us. I appreciate it.

A deadly blast at a maternity hospital. Three dead and dozens injured, including babies. It happened during a sudden explosion. We have new developments right after the break.

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BERMAN: An awful scene in Mexico city this morning after a gas explosion nearly leveled a maternity hospital on Thursday injuring dozens and killing three. Frantic family members stood outside, waiting for word on their loved ones. The apparent cause of this blast is a broken hose on a gas supply truck.

CNN's Rosa Flores is in Mexico City at the scene of the disaster -- Rosa.

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ROSA FLORES, CNN CORRESPONDENT: John, at least three people are dead, one of those a child, and more than 60 others are injured. And hear this -- at least 20 of them are children.

I want to set the scene for you. You can see police here protecting the perimeter and in the background, the hospital which looks more like a pile of rubble. And you also see front loaders that have been working around the clock.

Now, here is what we know from authorities. A gas delivery truck came in through this driveway into the hospital to refill a butane tank. It turns out, a hose busted, triggering the explosion, collapsing 70 percent of this building. And, of course, now, we know about the injuries and casualties.

Now, three operators were operating the truck. We know that all three are injured. All three have been arrested. As for the company that they work for, the company has released a statement saying that they are cooperating with the authorities -- John.

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BERMAN: All right. Our thanks to Rosa Flores in Mexico City. An awful situation there.

Meanwhile, a big day ahead in the murder trial of former NFL star Aaron Hernandez. The 25-year-old is charged with a shooting death of Odin Lloyd. A semi-pro football player that he knew back in 2013.

In opening statements, defense lawyers said that Hernandez had everything in life. He had no reason to kill, his lawyers say. The prosecution told jurors that DNA from shell casings and security camera footage connects Hernandez to this crime.

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UNIDENTIFIED MALE: The evidence will show on June 15th, the defendant was unhappy with the victim. He had given Odin Lloyd information about himself. The defendant then called up his friends. He set up a meeting with Odin Lloyd. He concealed steps by using the phone of others. He drove for more than two hours to get the victim into a secluded area and orchestrated and participated in the killing.

UNIDENTIFIED MALE: Why would he kill his friend Odin Lloyd? Aaron Hernandez had the world at his feet. Aaron Hernandez was planning a future. Not a murder.

(END VIDEO CLIP)

BERMAN: Hernandez faces life in prison if convicted. Now, he is also charged in a separate case for killing allegedly two men he met in a Boston nightclub back in 2012. Evidence from that case will not be admissible here.

Breaking overnight, police in Los Angeles are investigating a fatal hit-and-run accident involving rap mogul Suge Knight. This morning, Knight appeared with his lawyer at the police station in West Hollywood. It is not clear if Knight was driving the car when it struck two men in Compton on Thursday, killing one of them. Knight founded Death Row records. He was behind the wheel in 1996 when Tupac Shakur was gunned down in his car in Las Vegas.

In Boston, there is so much snow that finding a parking space has become a major headache. People are digging out their spaces in front of their homes. But there is nowhere to put the snow and a new storm is heading through new England with up to a foot of snow in some places.

Meteorologist Derek Van Dam tracking that -- Derek.

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, John.

Just when we thought the winter weather was over across the Northeast, you can see another storm moving through with varying snowfall totals with a different computer models. We do expect the heaviest snow across Maine. Boston spared the brunt of it, 2 to 4 inches anticipated.

And you can see the bull's-eye north and east with dusting heading towards the Big Apple. Winter storm warnings in effect and advisories for Upstate New York. Look at the moisture wrapping around Arizona at the moment, very wet. Near Phoenix. Of course, a lot taking place in Phoenix. We have mountain snowfall for New Mexico.

Big football game on Sunday in Phoenix. It calls for drier weather. Temperatures around 71 degrees to end the weekend. This moisture soars across the Plain States, creates a path of heavier snowfall from Des Moines, Iowa, right through the Ohio River Valley. Path is still uncertain with this storm, along the New England coast. One thing for sure, chilly temperatures will stick around.

John, I hope you'll be watching the Patriots this weekend, and seeing a victory. Back to you.

BERMAN: All right. Indeed. Yes, I will.

All right. About 48 minutes after the hour.

Dozens dead and a new terror attack by ISIS, trying to expand its reach into another country. We are live in Cairo, next.

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BERMAN: Deadly violence in Egypt's Northern Sinai where an ISIS- affiliated jihadist group hit several police and military positions in the city of Al-Arish. The series of near simultaneous assault with car bombs and mortar rounds killed at least 26 and wounded dozens more, including civilians.

CNN's Ian Lee following these events for us from Cairo.

Ian, what's the latest?

IAN LEE, CNN REPORTER: John, this was a very brazen attack, a well- sophisticated, coordinated attack. We haven't seen an attack like this in quite some time, with the use of simultaneous car bombs and rocket fire. The group claiming responsibility is Ansar Bait al- Maqdis. Just late last year, they pledged allegiance to ISIS. But unlike ISIS in Iraq and Syria, this group has almost exclusively targeted areas and trying to avoid civilian casualties.

Now, the army says they are making progress against the organization with a lot of successful operations. But again, this group's attacks have grown more daring and more deadly since they began a few years back. Hundreds of police officers and soldiers have been killed -- John. BERMAN: Of course, there are a lot of western tourists, including

American tourists that go to Egypt. Ian, you said the terror group does not target westerners there?

LEE: Well, we haven't seen that yet so far. It would be a major escalation for the group to go after tourists and target civilians. Egypt is an economy that relies heavily on tourism. And a lot of the people here would lose a lot of support that some of the support they do have that people who are disenfranchised with the government if they did start going after this source of income for Egypt.

Also, if you look at the Sinai Peninsula, you can basically break it in two sections, the north and south. The north is where we're seeing a lot of this violence and the south is where the tourist destinations are. And the Bedouins in the south have an interest in keeping the peace down there. They don't want this violence to spread, because they make a bit of money off the tourist trade down there, John.

BERMAN: All right. Ian Lee in Cairo for us, following developments there.

We'll be right back.

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BERMAN: How is your money doing this morning? Alison Kosik here to tell you -- Alison.

KOSIK: It's not doing very well at the moment. You know, this is after -- it's been a wild week for stocks. In fact, we just are seeing stock futures in the U.S. taking a pretty big turn to the down side. So, it looks like we're going to see a dip at the open. But yesterday, the Dow snapped a two-day losing streak. It gained 225 points or a little over 1 percent.

One stock that is climbing before the bell, Amazon. Amazon actually posting a profit last quarter. Thanks to strong holiday sales.

Making money is actually relatively rare for Amazon, because a lot of its money goes toward investing in other opportunities. Airbnb trying to make nice with the government. According to "The Washington Post", the controversial home rental service will begin collecting hotel or occupancy taxes in Washington, D.C.

Now, the taxes are going to range anywhere from 5 percent to 15 percent. And this could actually mean millions of dollars in additional revenue for the city.

Here's my two cents: eventually, Airbnb has to start playing by the rules and become legit. They can't squirt the laws forever. So, this could be a way for the company to do that. Airbnb already charges these taxes in Portland and San Francisco.

Want a burger to go with the stock? Shares of Shake Shack begin trading on the New York Stock Exchange today. Last night, its IPO priced at $21 a share. And that means the company is going to raise $105 million, giving it a valuation of close to $800 million. Oh, but that's small potatoes compared to fast food giants like McDonald's, which is valued at $86 billion.

Shake Shack, it's got something crucial McDonald's doesn't have. Millennials love it even though its burgers are double the price. But today, if you're outside the New York Stock Exchange, they're rolling out a food truck. You can get the food for free.

BERMAN: They're lucky because those burgers are good.

KOSIK: They are good.

BERMAN: All right, Alison, thanks so much. EARLY START continues right now.

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