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Early Start with John Berman and Zoraida Sambolin

Arming Sunnis to Fight ISIS; Ex-House Speaker Indicted; Texas Faces New Flood Threat; FIFA Presidential Election. Aired 4:30-5a ET

Aired May 29, 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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[04:30:52] JOHN BERMAN, CNN ANCHOR: Is the U.S. shifting strategy to fight ISIS in Iraq? The new fine tune plans as Iraqis try to take back territory seized by the terrorists. We are live in Baghdad ahead.

Former House Speaker Dennis Hastert indicted, accused of lying to the FBI about hush money withdrawals. New details ahead.

New storms targeting Texas. The state already devastated by historic flooding and it's not over yet.

Welcome back to EARLY START, everyone. I'm John Berman. Thirty-one minutes past the hour. Christine Romans is off this morning.

Happening now, the Obama administration is fine tuning the ISIS strategy in Iraq. Pentagon officials are looking for a way to bring Sunni tribes into the fight against Islamic state militants. One possibility under consideration, the U.S. could begin arming Sunni fighters directly. That would replace or supplement the current system where all weapons go to the Shiite dominated government in Baghdad.

This as Iraqi forensic teams begin to identify nearly 500 bodies exhumed from the complex in Tikrit. Officials believe the bodies belong to Iraqi military cadets whom ISIS claimed to have killed last June in a massacre at a nearby base.

Overnight in Baghdad, at least nine people were killed, 14 injured in twin bomb blasts at luxury hotels popular with Iraqi officials, VIPs and foreigners. Standing by in Baghdad for us is senior international correspondent Arwa Damon.

Arwa, how significant is it, this idea of arming the Sunnis directly in this fight against ISIS?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, John, if it just stays as an idea, it's really not significant at all. If it materializes, this is an important development. But, of course, doing it directly and not through the Iraqi government may cause some tensions between Washington and Baghdad.

The Sunni tribes have been begging for weapons for well over a year now, and there have been many promises made by this predominately Shia government they would be armed. So far, that has not materialized.

One must also remember that the U.S. has fought alongside the Sunni tribes before. They did it back in the days when it was ISIS predecessor al Qaeda in Iraq. It was the key enemy in Anbar province and the Americans and their whole strategy back then did manage to convince the Sunni tribes to turn against al Qaeda and to fight alongside them, and that materializing.

There was a relationship that was developed there. The problem is that after the U.S. withdrew, the Sunnis largely felt as if America had abandoned them to what was Nouri al Maliki's Shia-dominated government, which in turn only acted to further aggravate the Sunni population and alienate them. The problem right now is that there is so much anger and frustration amongst the Sunnis geared towards the government and towards the United States because they feel they have been abandoned once again.

They feel as if the government and America should have armed them a year ago. They feel as if the U.S. could have and should have done more when it comes to those air strikes.

The other issue of concern, too, amongst the Sunni population that we have been speaking to, especially those that are from Anbar, is the fate of the civilians that remain trapped in these ISIS controlled areas. We were at the refugee camp where we met a number of people whose relatives are stuck in these neighborhoods that ISIS took over a year ago when they launched their initial surprise attack into Ramadi. These are civilians that were unable to flee quickly enough at the time either because they had little children or ill elderly among them or did not have a car to be able to get out. And ISIS quickly set up check points and since then has been shooting at anyone who does try to leave.

So, it's still a very complicated battlefield. And it's one that is fraught with so many potential problems, John.

BERMAN: All right. Arwa Damon for us -- a complicated situation in Iraq right now -- appreciate it, Arwa.

[04:35:02] New questions this morning about why a federal grand jury in Chicago has indicted former House Speaker Dennis Hastert, once one of the most powerful men in the United States, indicted on charges of financial misconduct and lying to the FBI.

The indictment alleges Hastert restructured bank withdrawals to avoid IRS reporting requirements. It says he paid $3.5 million in hush money to someone in order to keep secret unspecified misconduct dating as far back to his days as a high school wrestling coach. There was no response on Thursday when CNN knocked on the door of Hastert's home in Illinois.

Former colleagues are now reacting to this indictment.

(BEGIN VIDEO CLIP)

MIKE ROGERS (R), FORMER HOUSE INTELLIGENCE CHARIMAN: I'm just shocked and disheartened that Dennis Hastert found himself in a position where he felt he had to do something this drastic. Obviously, clearly, he must have known that it was illegal to do it in the way they structured it because that's the way they structured it. So, on a personal level, shocked, dismayed, my heart goes out to his family. I hope they get it worked out.

From the FBI agent perspective --

WOLF BLITZER, CNN ANCHOR: And you used to be an FBI agent --

ROGERS: Lots of questions. I did use to be an FBI agent, lots of questions. Was he extorted likely the way they written the indictment where it says individual A means that individual A is likely to have cooperated with the FBI at some point in this investigation. So, I think there's gong to be a lot more story to be told here.

(END VIDEO CLIP)

BERMAN: Now, in the wake of this investigation, the 73-year-old Hastert has resigned his position as a lobbyist. That's a job he held since leaving Congress in 2007.

This morning, less than three days remain before a major U.S. intelligence program shutdown unless lawmakers find a compromise on legislation to reauthorize it. The White House says there is no plan B if legal authority expires and the NSA is forced to shutdown the data collection programs. That does put pressure on congressional leaders who are scrambling for a solution before a deadline on Sunday night. Critics say the surveillance programs have never made a critical difference in stopping a terror attack.

The death toll is rising from the monster storms and flooding in Texas and Oklahoma. As of this morning, at least 23 people have been killed by tornadoes and flooding. Seventeen in Texas and other six in Oklahoma. This morning, crews are scouring the wreckage of homes and cars in Hays County. Also in Houston, other location as well, searching for at least nine people still known to be missing.

With rain pouring down this morning and more rain in today's forecast, officials say the danger has not passed.

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REPORTER: Is the worst over?

NIM KIDD, TEXAS EMERGENCY MANAGEMENT CHIEF: I don't think so. I would like to say that it is, but I'm not sure the worst is over because of the way that the weather is running and we are so saturated in almost all parts of Texas.

(END VIDEO CLIP)

BERMAN: Now, eight of those still missing in Texas are from three families whose vacation cabin was swept away by the raging Blanco River. The body of one woman in that cabin, Michelle Charba, was identified on Wednesday.

CNN's Jennifer Gray is in Wimberley with the latest on the hunt for the rest of Charba's family and friends.

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JENNIFER GRAY, AMS METEOROLOGIST: Families in Wimberley are waking up on their sixth day waiting for answers. Eight people still missing that were swept away by the Blanco River. Over the weekend, three people have been identified. One person is pending identification.

Of course, Michelle Charba was found. She is the latest to be identified.

Unfortunately, the rest of her family, her husband, her son, as well as her parents, are still missing.

We have been hearing so much about Jonathan McComb. He actually was OK. He is in the hospital recovering. He does have serious injuries, but he is expected to make a full recovery. Unfortunately, the rest of his family, his wife and two kids, are still missing as well.

It has been a gut-wrenching couple of days for the people here in Wimberley as crews continue the clean up along the banks. We are anticipating more rain possible today, as well as through the weekend. But search crews are out and they say they're not going to give up until they find the rest of the missing eight people. They say they're going to search by foot, by boat and by air and they are not going to stop.

In fact, there are 40 to 50 crews out there at least with nine canine units. They are searching debris piles along the banks of the Blanco River, hoping for any sign of those missing eight people as their families wait to hear answers.

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BERMAN: The weather pattern is hitting Oklahoma hard. Look at the town of Lawton. More than 4 inches of rain fell in some places fast. You can see the water reached the top of the car tires there.

More severe weather in the forecast all the way through the weekend. We're talking about several more inches of rainfall on already saturated ground.

Meteorologist Derek Van Dam has the latest from the CNN weather center.

DEREK VAN DAM, AMS METEOROLOGIST: New to CNN overnight, Dallas/Ft. Worth breaks its wettest month of May on record with 14 inches of rain fallen so far. We still have some time to go.

[04:40:00] Here is our forecast rainfall today. Over the next 24 hours, we still have the possibility of quarter to a half an inch of rainfall across Dallas, some locations, critics experience even more than that over central and eastern Texas and parts of Oklahoma. That is why we still have flood watches and warnings ongoing through the rest of today and into early parts of the weekend.

We have a possibility of severe weather over the Texas panhandle, and we can't rule out the possibility of damaging winds and large hail as far north as Chicago and Grand Rapids, Michigan.

Let's talk about the cold front responsible for the change in seasons into next week. We're going to dry out across the area with the excessive rain. But take a look at this temperature drop for the nation's capital. Nearly 20 degrees from Sunday into Monday. Enjoy.

BERMAN: Wow. All right. Derek Van Dam, thanks so much.

Time for an early start on your money. Stock futures are slipping ahead of the open. A new look at U.S. GDP will be out at 8:30 a.m. Eastern Time. That could give the market direction. It is expected to show a decline in the economic growth in the first quarter.

So, Google wants your money. The company is launching Android Pay. That is an answer to Apple Pay. Tech insiders say it is a big improvement from Google Wallet, which is its earlier attempt at mobile payments. Google has been working with major credit cards and carriers on Android Pay. The platform will work at more than 700,000 stores across the United States.

There are times that were interesting on this subject yesterday. Apple Pay and Google Pay trying to fix a problem that doesn't really exist. It turns out, most people think that credit cards and cash are actually fairly easy to use.

Forty-one minutes after the hour right now. Dramatic testimony in the Colorado movie massacre trial. What one psychiatrist is saying about the mental health of shooter James Holmes. That's next.

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[04:45:24] BERMAN: Jurors in the murder trial of Aurora movie theater shooter James Holmes saw him on video Thursday describing his thoughts and feelings as the debate rages over whether he was insane at the time of the rampage. Psychiatrist who interviewed him testified that Holmes was sane, that he knew what he was doing and he also knew the consequences for that action.

Ana Cabrera has latest -- Ana.

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ANA CABRERA, CNN CORRESPONDENT: Now, we are getting to the crux of the trial. Was James Holmes insane when he opened fire inside a crowded movie theater on July 20th of 2012? The judge in this case ordered two mental evaluations of Holmes before the trial to help answer that question.

Now, the second evaluation just happened last year, performed by a Dr. William Reid at the Colorado Mental Health Institute. And he told jurors that he concluded Holmes was sane at the time of the shooting. He spent a total of nine sessions with Holmes, 22 hours. It was all videotaped. The prosecution just started to show some of that video to the jurors.

In it, we hear Dr. Reid asked Holmes about his childhood, about his upbringing, about his relationship with his parents and how he was a student. We haven't yet heard any questioning about the shooting itself.

But I want to play you a clip where you hear Dr. Reid ask Holmes about his time in jail and about a visit by his parents, listen.

DR. WILLIAM REID: Emotional for them?

JAMES HOLMES, AURORA MOVIE THEATER SHOOTER: Yes.

REID: How did they show the emotion, do you remember? Sometimes moms break down a bit.

HOLMES: My lawyer said she broke down when she was leaving. She held up pretty well.

REID: How about you? Did you get a tear in your eye?

HOLMES: Nope.

REID: Did you ever get tears in your eye?

HOLMES: Yes, sometimes.

REID: What brings tears to your eyes sometimes?

HOLMES: Just regrets.

REID: Regrets. Can you tell me a little more?

HOLMES: Usually it is before I go to sleep.

REID: Regrets about?

HOLMES: About the shooting.

CABRERA: That video was from July 30th, 2014. So, more than two years after the shooting. Also important to note that Dr. Reid told jurors Holmes was on medications at the time of their interview, that he was on anti-depressants, as well as anti-psychotic medication. We do expect to hear more of Holmes' mental evaluation when court resumes later this morning -- John.

(END VIDEOTAPE)

BERMAN: All right. Ana Cabrera, thanks so much.

Politics now: former New York Governor George Pataki has joined the crowded field vying for the 2016 Republican presidential field. The governor announced his bid in Exeter, New Hampshire. Also on the online video that tried to highlight his leadership in New York following September 11th. He declared himself a champion of small government. The governor says Washington has grown too big, too powerful, too expensive and too intrusive.

Hillary Clinton's campaign will bring out the big guns at the first major rally on June 13th. Her husband, the former President Bill Clinton, her daughter Chelsea Clinton will make their first appearance on the campaign trail then. Clinton aide say they expect to release details on the rally next week.

All right. FIFA, the governing body for soccer or football, facing its biggest scandal ever. One of the biggest scandals ever in sports, frankly. The president says don't blame me. Vote for me.

We are live with that part of the story, next.

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[04:53:06] BERMAN: FIFA is forging ahead with the presidential elections in Zurich despite the widening scandal. Sepp Blatter, the embattled head of soccer of football's world governing body, is expected to win a fifth term as president. That is stunning.

He is speaking out for the first time, vowing to protect FIFA's reputation while distancing himself from the scandal.

(BEGIN VIDEO CLIP)

SEPP BLATTER, FIFA PRESIDENT: I know many people hold me ultimately responsible for the actions and reputation of the global football community. We, or I, cannot monitor everyone all of the time.

(END VIDEO CLIP)

BERMAN: I cannot monitor everyone all of the time.

Let's go live to Zurich and bring in sports correspondent Alex Thomas.

Alex, Sepp Blatter headed for reelection, shockingly.

ALEX THOMAS, CNN SPORTS CORRESPONDENT: This is shocking, John, to many of those who are scratching their head off after this week's controversial headlines. You join me here in Zurich as music blasts from behind me from the Palestinian protest.

One the items on the agenda before Congress is a request to have Israel's football association thrown out. That's become a side issue ahead of the presidential election. Sepp Blatter standing up against Prince Ali bin al-Hussein of Jordan. He has been given no chance of the start of the week, but now has a slim one because of the amazing scandal unveiled before our eyes and what has been a watershed week for the most popular sport on the planet.

But, 209 votes are up for grabs. And even a small European nation like Andorra, with the population of 80,000, has the same one vote as the United States with its population of around 310 million. We know the USA, Australia and most European countries are going to vote for Prince Ali, but Blatter still has loads of support.

And when he tried to explain it, John, I like to put it like this. You know when you got a friend who is dating someone they don't like and they ask why, they get told because he treats me like I'm special. That is Blatter's appeal to even most smallest countries around the world, John.

BERMAN: A lot of people suggest a lot of money passing hands for a long, long time, perhaps they owe him something, Sepp Blatter.

[04:55:04] All right. Thanks so much.

Fifty-four minutes after the hour.

So, it is time to stop procrastinating and refinance your mortgage. If you wait, it will cost you.

We have an early start on your money, next.

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BERMAN: Time now for an early start on your money.

Stock futures are down this morning, but markets in Asia and Europe are mixed. It has been a wild week for U.S. stocks, as investors digest a long list of economic data. Today's focus is economic growth. The second reading on U.S. GDP is expected to turn negative, but analysts see a rebound in the current quarter.

It is May 29th, which means that it's, you know, 5/29 on the calendar, which means 529, College Savings Day. Two-thirds of Americans have no idea what that means, but 83 percent say they cannot afford the cost of college. A 529 is tax advantage savings plans sponsored by states. It can be used for education related expenses that almost any college. What most Americans know is higher education is wicked expensive and getting more so. It's like buying four new cars in a row. Most families cannot afford that.

So, celebrate 529 College Savings Day, and put away a chunk of cash for that looming tuition bill. So, if you have been procrastinating and haven't refinanced your mortgage, it is time to act. Mortgage rates at the highest level in year, or a level of the year, 30-year fixed rate loans average 3.87 percent nationwide.

Fifteen-year fixed is now at 3.11 percent. Those are still below rates we saw this time last year. A stronger housing market and looming Fed rate hike will likely keep pushing mortgage rates higher. So there.

EARLY START continues right now.