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Early Start with John Berman and Zoraida Sambolin

New York Prison Break: Plot to Kill?; New Fallout for Donald Trump; 4th of July Terror Threats: Security Boosted. Aired 4-4:30a ET

Aired July 02, 2015 - 04:00   ET

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

[04:00:00] CHRISTINE ROMANS, CNN ANCHOR: Big changes coming to the New York prison where two killers broke free. The captured convict sharing new details of his escape, including how involved an arrested prison seamstress was in that plan. Did she want her husband killed?

JOHN BERMAN, CNN ANCHOR: New fallout for Donald Trump. Those comments that so many people are calling racist costing him more business. But you know what? He did an interview overnight with CNN. Man oh man, you have to hear this.

ROMANS: Cities across the country boosting security concerns grow over Fourth of July terror threats.

Good morning. Welcome to EARLY START. I'm Christine Romans.

BERMAN: Good to see you today. I'm John Berman. Thursday, July 2nd, 4:00 a.m. in the East.

ROMANS: First now, we have some breaking news this morning to tell you, a dramatic rescue operation underway in the Philippines right now where a ferry has just capsized. Coast guard officials tell CNN that the boat was carrying 173 people when it sank off the port of Ormoc City off the island of Leyte.

Red Cross officials say at least 34 people have drown so far, with dozens more rescued. Again, those rescues are happening right now. There have been about 50 rescues, some 30 fatalities. This rescue operation is continuing right now. We'll continue to keep you posted as we get new developments on that Philippine ferry capsized.

BERMAN: We have new revelations flowing in from David Sweat that could be key to understanding how he escaped from a maximum security prison, and how he and his partner stayed free for so long. A law enforcement source reports the captured convict now not only says he was the mastermind behind the brazen breakout of Clinton correctional, but that his partner Richard Matt weighed him down from the start. Sweat says the older inmate was out of shape and that Matt started to get drunk after they broke into a cabin. Sweat said he was frustrated that they split up. Officers shot Matt to death five days later, nothing they could smell alcohol on his body from several feet away.

Let's get the very latest on the investigation. CNN's Kyung Lah is in Albany. (BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT: Good morning, John and Christine.

Investigators say they have completed their interview of David Sweat, at least for now. But he has been talking to them from his hospital bed and he has been saying a lot. First and foremost, certainly, leading investigators to understand that it was a lot easier to break out of this correctional facility than anyone could have imagined. Sweat detailing to investigators that he and his accomplice used hacksaws, manual hacksaws to get out of their jail cells, to cut into some of the piping, that they were able to slip in and out of their cells at whim.

They made it to an underground passage way and they found a sledgehammer, that was apparently left behind by a construction worker. They used that hammer to get further out. They were able to do a dry run, first getting into one manhole. Rejecting that manhole thinking it was too close to some houses. The next day, making their real run into a manhole -- popping out of a manhole that was less populated.

Also, Sweat detailed that he was the mastermind, it was Joyce Mitchell who had the idea of killing her husband. Mitchell's attorney saying that that simply is not true.

Mitchell did not pick up the men so they tried to flee on foot to Canada, as we know. Sweat telling authorities that while he was on the run, he had a number of close calls, one where he was hiding in a tree as an officer walked right by him. He remains in the hospital this morning. He is under heavy guard from what the hospital tells us and he remains in fair condition -- John, Christine.

(END VIDEOTAPE)

BERMAN: All right. Kyung Lah in Albany.

New big changes underway at the prison. Clinton correctional has a new superintendent this morning, Michael Kirkpatrick, after the superintendent and two deputies in charge during the escape were put on paid leave, along with nine security officers. Other changes include much more frequent checks of cells and catwalks, and the elimination of the prison's honor block.

ROMANS: A new business setback for Donald Trump, the combative presidential candidate has already been fired by NBC for painting Mexican immigrants as killers and rapists in his campaign announcement.

Now, a major outlet for Trump's clothing and fragrances is following suit, although Trump says he dumped them. They didn't dump him.

CNN's Athena Jones has the latest.

(BEGIN VIDEOTAPE)

ATHENA JONES, CNN REPORTER: Good morning, John and Christine.

There is more bad news on the business front for Donald Trump. Macy's has announced it's ending its partnership with the billionaire businessman, after mounting pressure, including an online petition by MoveOn.org that urged the company to dump Trump. That petition got more than 700,000 signatures.

The company is taking his merchandise off the shelves, saying his disparaging remarks about Michigan immigrants are inconsistent with Macy's values. Trump says he's the one who ended the relationship because he has, quote, "never been happy about the fact that the ties and shirts are made in China."

This is just the latest company that cut ties with Trump after Univision and NBC Universal ended their business relationship with the real estate mogul following those inflammatory comments.

[04:05:00] Here's what Trump had to say about this controversy on "CNN TONIGHT" last night.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: They fold under pressure. That's the problem with our country. Everybody folds under pressure.

Macy's was unable to handle pressure. They folded like dogs.

JONES: So, there you have it. Donald Trump is still not backing down.

And given the history, this is not the last we are hearing of the story yet -- John, Christine.

(END VIDEOTAPE)

ROMANS: He never expressed concern that his shirts were made in China before this. Now he says this is going to be central part of his campaign. He is going to hold Chinese to accountability for the moves.

BERMAN: Nor did he explain how dogs fold. I didn't know dogs folding was something that you use.

ROMANS: New trouble this morning for Trump's Miss USA pageant. Rapper Flo Rida has announced he is bowing out. He was the last scheduled performer on the bill appear Craig Wayne Boyd, Natalie La Rose, and J. Balvin all dropped out as well. And retired NFL running back Emmitt Smith quit as a judge, leaving just one of the five celebrity judges still listed. NBC and Univision have already pulled the plug on the network broadcast telecast. But officials say the Miss USA pageant will go on as scheduled, streamed online July 12th.

BERMAN: Happening now, new concerns over security about the Fourth of July holiday. The FBI, Department of Homeland Security and National Counterterrorism Center all say the threat level is much higher this Independence Day because of ISIS and the group's aggressive use of social media. The officials fear that Islamic State supporters could be inspired by the terrorists call for attacks during the Islamic holy month of Ramadan.

Major cities including New York are now deploying radiation detectors and other resources in waterways and the air. Thousands of security cameras are already in place to help authorities patrol the streets.

(BEGIN VIDEO CLIP)

JOHN MILLER, DEPUTY COMMISSIONER, NYPD: This may be potentially the most complex counterterrorism overlay for this event ever. I think you saw a couple of days ago, we had three coordinated attacks overseas in France and Kuwait and in Tunisia. So, given the world situation, we wanted to put those layers of protection behind the regular patrol piece.

(END VIDEO CLIP)

ROMANS: Egypt also facing an increased threat from ISIS. ISIS militants hit five Egyptian checkpoints with simultaneous attacks. At least 17 soldiers killed. Dozens more injured. The latest attack comes just two days after militants assassinated Egypt's top prosecutor on a Cairo street. Now, concerns are growing over the terror group's expanding reach.

CNN's Jomana Karadsheh live in Amman, Jordan, with the very latest.

Good morning.

JOMANA KARADSHEH, CNN CORRESPONDENT: Good morning, Christine.

Egyptian security officials are describing this as an unprecedented kind of attack to take place in the northern Sinai region. They estimate that about 300 militants launched this coordinated attack we saw taking place yesterday morning. They say that several checkpoints were attacked using car bombs and different kinds of weapons. Now, ISIS' affiliate in the area, the Sinai state as it calls itself, claimed responsibility for the attack. They say that they attacked 15 checkpoints, that they used at least three suicide bombers in the attack.

The assault was focused on a town called Sheikh Zuwaid. This is about 200 miles from Cairo, but close to the Gaza border. And lots of civilians were trapped in that area, and people, residents there, they described the situation as a battlefield that lasted, a battle that went on for hours in the area. Ambulances and military force reinforcements were paralyzed. They could not reach the area because land mines were planted along the way.

But the Egyptian military using air force as they carried out air strikes and the military in the overnight hours announced they are in 100 percent control of this area. They killed 100 militants. They say 17 security forces were killed in this operation. Now, the death toll could rise as the dust from this battle settles.

But a lot of concern about what this actually means, Christine, if this is a new phase of the insurgency in the northern Sinai region. If this is a new tactic that is going to be used by ISIS by launching this kind of sophisticated and coordinated attack.

ROMANS: Sophisticated and coordinated.

All right. Jomana, thank you so much for that this morning.

BERMAN: New meaning set in Vienna today for Secretary of State John Kerry as he tries to get a new nuclear deal with Iran. The new deadline is next Tuesday. The head of the International Atomic Energy Agency is in Tehran for talks with Iranian officials. This is important. He is seeking agreement on a plan for interviewing scientists and granting access to sites where Iran is thought to have conducted nuclear-related experiments.

ROMANS: A new chapter opens in relations between the United States and Cuba. President Obama Wednesday announcing they have agreed to restore full diplomatic relations after more than five decades.

[04:10:01] The president is calling for Congress to lift the embargo that prevents Americans from traveling or doing business in Cuba. The two countries will open embassies this summer in Washington and Havana. They will exchange ambassadors.

Secretary of State Kerry will travel to Cuba for the formal opening of the American embassy.

BERMAN: So this detente with Cuba could help U.S. improve its troubled relationship with another Latin American nation, namely Venezuela. Reuters says the two governments are now engaged in quiet diplomacy. A senior administration official calls it the most extensive dialogue in years with trying to improve relations with Venezuela. The president there, Nicolas Maduro, has clashed repeatedly with the United States.

ROMANS: All right. Breaking overnight, Bernie Sanders, wow, drawing huge crowds in Wisconsin. The Democratic presidential candidate, look at this, some 10,000 people, we're told at a campaign rally in Madison, all of them turning out to hear Sanders, a progressive alternative to Democratic front runner Hillary Clinton. They loved him in Wisconsin.

Sanders says large turn outs of campaign events have surprised him. This, no doubt, is his biggest surprise yet and a lot of folks saying when you look at crowds like that, it tells you Hillary Clinton is vulnerable from her left, from her left. Progressives want more.

BERMAN: The number Bernie Sanders is talking about is 10,000. The number Hillary Clinton is talking about this morning is $45 million. The Clinton campaign reporting a record fund raising haul for the first quarter in the race. You can see the difference in styles there.

ROMANS: All right. Are major U.S. airlines conspiring to keep ticket prices up? The Justice Department confirming they have been subpoenaed. We have latest on possible price fixing and the investigation into that.

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ROMANS: Developing this morning: several major airlines are promising to comply with federal subpoenas. The Justice Department says it's looking into what it calls possible unlawful coordination among the air carriers to limit capacity and keep ticket prices high. The subpoenas rattling the stock market, airline stocks tanked yesterday.

[04:15:01] Shares of American Airlines downed almost 3 percent, Delta, United, Continental, Southwest, JetBlue all down significantly.

Let's get the very latest on this federal probe, let's go to CNN's Rene Marsh in Washington.

(BEGIN VIDEOTAPE)

RENE MARSH, CNN AVIATION & GOVERNMENT REGULATION CORRESPONDENT: We can confirm United, American and Southwest Airlines have all received demand letters from the Department of Justice. The feds are asking several major airlines for documents and communications that could prove they worked together to manipulate capacity of flights.

In other words, limit available seats and keeping planes full and ticket prices high for consumers. Now, consumer advocates have been suspect of the major airlines because they say multiple airline mergers means less competition and higher prices for consumers.

Right now, four major airlines control 80 percent of the market. But specifically, what sparked this federal investigation was a letter from Connecticut Senator Richard Blumenthal. He asked DOJ to investigate after learning about public comments airline executives made at an industry conference. In one instance, Blumenthal says Southwest Airlines CEO announced plans to expand capacity for flights which many in the industry believed air fare cuts were next.

Southwest CEO came under fire from others in the industry and had to quickly reassure investors the airline wasn't going rogue. The senator saying that was just one example that suggested industry collaboration.

Now, the airlines we have heard from all say they plan to cooperate with the investigation, but the allegation alone is a bitter pill for passengers. The four major carriers saved billions combined on fuel. They made millions and millions on baggage fees, and yet prices for consumers, it remains high.

Reporting in Washington, Rene Marsh, CNN.

(END VIDEOTAPE)

BERMAN: Our thanks to Rene for that.

A new shark attack in the North Carolina, off the outer banks. The victim was a man in his 60s. He says he was attacked by a gray shark at least seven-feet in length, hold underwater, he says he sustained bites to his rib cage and hip, lower leg and both hands. The Carolinas have experienced an average of just over six shark attacks per year. But so far this year, the region has had ten.

ROMANS: A suspect in custody is in custody this morning in connection with setting the CVS on fire during the Freddie Gray riots in April. Twenty-four-year-old Raymon Carter was arrested Wednesday on federal arson charges. Baltimore Police Commissioner Anthony Batts says that Carter's action caused more than a million dollars in damage. Police say Carter acted alone. Their investigation, though, continues. He faces five to 20 years in prison if convicted.

BERMAN: The severe weather in the south and Midwest could affect millions of people. A suspected tornado struck the Kansas City area Wednesday.

Wow! Look at that! It looks like the Wizard of Oz. That is a funnel cloud along the Kansas and Missouri border. The air was heavy with that cloud of debris in the area.

On the ground, the damage was visible. Trees snapped in half. Buildings damaged. The storm knocked out power to about 150,000 homes and businesses.

ROMANS: More severe weather in the forecast for the region today. Let's bring in meteorologist Pedram Javaheri for the latest.

PEDRAM JAVAHERI, AMS METEOROLOGIST: Good morning, John and Christine. Nice working with you again.

Yes, the severe weather in southern Missouri and Arkansas. If your travel plans for Fourth of July from Little Rock to Memphis to Nashville, some active weather, counting some 800 lightning strikes, in a three hour period this morning. So, certainly, a lot of rumbles.

You look at the broad perspective about 135 storm related reports across the country, seven of which filtered down to six, which tornadoes across portions of Missouri. That goes from Kansas City, all the way out there, towards St. Louis, about 200-mile stretch there, pretty active storms, again, moving on further to the south. But a lot of rainfall left behind, flood warnings certainly in place across southern portions of Missouri, upwards of 4 to 6 inches in the region.

Oklahoma City to Nashville, this is the severe storm threat later this afternoon. The heavy rainfall is southern and eastern portions of Tennessee before it moves to Georgia by Thursday afternoon and Thursday night, guys.

BERMAN: All right. Our thanks to Pedram for that. Nice working with you as well, Pedram.

So, the United States will face Japan in the World Cup soccer final. Japan beat England Wednesday, 2-1. The winning score was an own goal. An English defender accidentally put it in her own net.

ROMANS: Felt so badly for her.

BERMAN: This sets a rematch in the 2011 World Cup when Japan beat the United States 2-0. So, the Japanese are the defending World Cup champs.

But, oh my gosh, let me tell you this, if you're tired this morning, if you feel bad, just be glad you're not British, because, you know, it's worse for them. It's heartbreaking.

ROMANS: It is. I feel badly for her. Oh, I feel so bad for her.

All right. Nineteen minutes past the hour.

[04:20:01] Will Greece leave the European Union deep in debt? The country's future is in limbo. What it means and why it will have a big impact to markets around the world.

We're live after the break.

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ROMANS: Greece's debt crisis rattling markets all week. European stocks cautiously higher right now, so are U.S. stock futures.

You know, investors are hoping Greece and its creditors will figure out a solution. There is no guarantee here. That's why stocks swung wildly yesterday on hopes that doubts that the two sides can figure it out and negotiations are on hold after a referendum vote on Sunday.

The confusion in the market reflecting confusion on the ground in Greece this morning. Just hours after the Greek prime minister told European officials he's ready to accept most of their terms, he then urged Greeks to vote on Sunday's bailout referendum, to strengthen his hand he says. And when that Sunday vote comes, no one knows what it is the Greeks will be asked or the consequences of the vote will be, a better bailout or exit from the euro?

Joining us to bring some order to the chaos or at least explain it a little bit, CNN's Isa Soares live from Athens.

And, Isa, I think it's telling that the IMF managing director, Christine Lagarde, here's what she said, she said there's so much uncertainty, so much confusion, constant movement. She thinks that there needs adulthood needed in the conversation. That is a big dig at the Greek government and their moving position.

[04:25:00] ISA SOARES, CNN INTERNATIONAL CORRESPONDENT: Oh, absolutely, Christine. Not the first time we heard that from Christine Lagarde. You remember a couple of weeks ago, when negotiations as well with Alexis Tsipras and his government, it's exactly what she said, more adults were needed in the room. It seems they need more adults lacking in the meetings.

But there is a lack of clarity and what is happening not just for European leaders, but the Greek people too, more importantly. They are just not sure exactly what they will be voting for come Sunday.

You know, the proposals have been put on the table. There is a lack of clarity of what is in the proposals. But they were being asked whether they will be the last proposals that from the last time (INAUDIBLE). So, when I asked people late last night post-Alexis Tsipras presser what exactly whether they understand the question, what some told me they were confused. They don't see the point of the question.

So, when I asked how do we interpret it, many just said, well, do we want to be in the euro or in the drachma? And that's how they're interpreting.

In terms of the numbers, we have seen the latest polls from Greek media here, the latest one conducted on July 1st or after banks opened, the question is how would you vote this Sunday, Christine? Forty-seven percent said yes, they will accept the measures, 43 percent said no. But when they were asked the second question, should Greece remain in the Eurozone at any cost, 74 percent said yes, 25 percent said no.

So, very clear, Greeks want to stay in the euro and be part of the Eurozone, but they don't want anymore austerity measures like really what Alexis Tsipras is asking for. He wants to be part of the club, but abide by their own rules, Christine.

ROMANS: Yes, what they want doesn't seem to be one of the choices being put before them, and that is the problem.

Isa Soares, thanks so much for that.

And, you know, John, the Greek people have already so much. I mean, they've lost, you know, 25 -- the economy has shrunk 25 percent in the past few years. They're going to have to raise their retirement age. Taxes are going to have to go up.

It's already hurt a lot. And there's going to be more hurt to come.

BERMAN: The back and forth is fascinating. What the Greek leaders want and doesn't want, very hard to pin down.

All right. Coming up for us, we have just stunning new details in the New York prison break. What the survivor is telling investigators right now. Spilling new information about Joyce Mitchell right there, the seamstress who may have helped them escape and what she had planned for her husband, next.

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