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President Obama On Guns In America; South Korea To Resume Anti- North Broadcasts; North Korea Facing Sanctions After Nuclear Test; Paris Police Kill Armed Man; Paris Attacker Shot Dead Holding ISIS Flag Symbol; ; ISIS Battles For Control Of Libya's Oil Fields; Soldier Killed In Afghanistan Identified; Wall Street Rattled by China; Obama Gun Control Measure. Aired 1-1:30p ET

Aired January 7, 2016 - 13:00   ET

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


ASHLEIGH BANFIELD, CNN ANCHOR: Be sure to tune in at 8:00 tonight for this town hall with President Obama on guns in America. And just next hour as well on the other side of the gun debate, we're going to be joined by Republican Congressman Trey Gowdy.

Thanks so much for watching, everyone. My colleague, Wolf Blitzer, starts right now.

WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 7:00 p.m. in Paris, 2:30 a.m. Friday in Pyongyang, North Korea. Wherever you're watching from around the world, thanks very much for joining us.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following several breaking news stories across the globe right now, including the border tensions escalating on the Korean Peninsula. The south about to strike back at the north for claiming it tested a hydrogen bomb.

And two suspected terror attacks. A man with a meat cleaver and an ISIS flag symbol shot and killed in Paris. Plus, a truck bomb exploding in Libya, killing dozens of young police officers.

Also in the Middle East, the feud between Saudi Arabia and Iran clearly heating up dramatically right now. Iran now claiming its embassy was targeted during Saudi-led air strikes in Yemen.

We're covering all of this as only CNN can with our reporters across the globe from Paris to Pyongyang and beyond.

But I want to begin on the Korean Peninsula right now where the south is just hours away from retaliating against the north for claiming it tested a hydrogen bomb. Here is what will happen. The south will switch on these loud speakers along the heavily armed border with North Korea, the demilitarized zone as it's called, and resume the same propaganda broadcasts that Pyongyang has considered an act of war in the past. And the timing clearly is important here. The broadcasts starting up as North Korea's unpredictable leader, Kim Jong-Un, celebrates his 33rd birthday. CNN's Will Ripley is the only American reporter inside North Korea right now. He filed this report for us from Pyongyang just a short time ago.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN CORRESPONDENT: Wolf, if the South Korean government makes good on its threats to turn on those loud speakers and blast propaganda across the demilitarized zone into North Korea, it would be a very significant development that really has the potential to escalate the situation here on the peninsula, a situation that is already very tense.

The reason for that is simple. Today is the supreme leader, Kim Jong- Un's, 33rd birthday. And so, for the south to essentially blast its propaganda into North Korean territory on a very important day for the North Korean regime, well, we don't know exactly how they would react to that, but we do know how they reacted over the summer. That was the last time that South Korea turned on the loud speakers when two of their soldiers were injured in landmine blasts. North Korea responded with artillery fire. They called it an act of war and assembled troops to the border. That situation eventually deescalated.

But things are very tense right now after North Korea conducted its fourth nuclear test in the last 15 years in a test site in the northern part of the peninsula.

The North Koreans, who I met with in Pyongyang just a few hours ago, told me that the test was conducted deeper into the mountain than previous tests using new technology. Technology that prevents radiation from spilling into the atmosphere in large quantities. That may explain why Japan, China and South Korea are all saying right now that they are not detecting any significant change in radiation levels, even though some experts say it could take weeks for that radiation to turn up in the atmosphere.

One more interesting note from my meeting with the North Koreans, Wolf. They said they are not afraid of sanctions as a result of their nuclear test. They say they have lived with crippling sanctions for so many years, they'll just tighten their belts and continue to develop their nuclear program, no matter what the rest of the world says -- Wolf.

(END VIDEOTAPE)

BLITZER: Will Ripley, thank you very much. Will Ripley reporting for us from Pyongyang in North Korea.

There's other breaking news we're following and this time out of Paris where a suspected terror attack on a police station is setting off alarms, just as the city marks the one-year anniversary since the "Charlie Hebdo" massacre. Officers say they shot and killed a man who tried to enter the police station wielding a meat cleaver and shouting Allahu Akbar. He was also carrying fake explosives and a piece of paper with an ISIS flag symbol. This comes as we learn new details about who was behind November's

deadly terror attacks in Paris. Investigators now revealing the orders came from two senior operatives in Belgium, both still at large.

Our Terrorism Analyst Paul Cruickshank is joining us now live from Paris. Paul, first of all on that thwarted police station attack today. What's the latest you're hearing?

PAUL CRUICKSHANK, CNN TERRORISM ANALYST: Well, Wolf, the latest is that it appears the suspect's been identified, that's according to French media. That he was from the south coast of France, an area called Sainte-Maxime (ph). He was 20 years old.

[13:05:07] It seems, at this point, that it was an attempted terrorist attack inspired by ISIS. He tried to launch this attack at exactly 11:30 a.m. this morning which was the exact time a year ago that the Kouachi brothers launched their deadly killing spree against the "Charlie Hebdo" offices. So, some real symbolism there. He may have been trying to attach himself to that cartoon's cause. Cartoons creating a lot of anger across the radicalized community -- Wolf.

BLITZER: We've also learned, Paul, and you're an expert on all things terror related, not only in France but in Belgium as well, that two suspected terror operatives in Belgium now are believed to have actually ordered those attacks that happened in November in Paris. What do you know about that? What does it mean for this investigation which clearly continues?

CRUICKSHANK: Wolf, this is a stunning new development. I was told by a senior Belgium counterterrorism official that there are these two senior operatives still at large who they believe played a very senior role in the conspiracy, more senior than Abdelhamid Abaaoud, the ring leader in Paris.

And, indeed, they were issuing orders over the phone before, during and after the Paris attacks. They were identified by the Belgians, in terms of their pictures on December 4. They circulated those pictures to the public, to the media, to try to get ahold of them. They now believe they know their real identities. Before, they just knew fake identities that they were using, Wolf.

And they used those fake identities, fake Belgium identity cards, to travel with Salah Abdelsalam, that other attacker still at large, to Hungary. They believe to pick up some attackers from there to transport them to France, and also to wire money to the female cousin of Abdelhamid Abaaoud so he could find lodgings in France.

I'm also hearing new details about the investigation with the relation to a bomb factory in Brussels in the district of Schaerbeek. They have located that. They actually found a sewing machine that was used to stitch together the suicide vests which were then transported, Wolf, to Paris. All sorts of new information now coming out.

BLITZER: Paul Cruickshank on the scene for us in Paris. Thank you. We're also following breaking news out of Libya where at least 50

people are dead after a truck bomb ripped through a police training center. Officials say most of the victims are police officers who had gathered for an assembly when, suddenly, that truck came plowing in.

CNN's Nick Paton Walsh is following all of these late breaking developments. He's joining us live from Beirut right now. Nick, what are you hearing? What's the latest?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, this bears all the hallmarks of ISIS, Wolf, but they haven't claimed responsibility for it. Devastating destruction though. Targeting police recruits. The list of over 70 injured in the nearby hospital showing they were mostly in their 20s and 30s. Sort of aspiring to bring law and order to anarchic Libya here. Sixty dead by what was potentially a fuel tanker laden with explosives driven by a suicide bomber.

Now, let's wind back a little bit here as to why we have ISIS able to wreak such havoc here in Libya. Since Colonel Gadhafi left power, the militia that fought for his oust (ph) still, they split pretty much into two rival governments, some Islamist in the capital of Tripoli and the rest to the east more recognized by the international government. There had been a hope late last year that they'd get their act together as a national unity government. That hasn't really happened.

What we have instead now is chaos that ISIS has been exploiting over the past year or plus. They used to be mostly in the town of Sert on the coast, very close to Europe's shoreline too there. But now, they're expanding to the east towards the oilfields. Some of those, in fact, a source of Libya's wealth. They're, in fact, on fire now as ISIS tried to attack and cease them. And they've moved west towards this town of Zliten where today's devastating attack was.

Deeply troubling because while Libya is very close to Europe too, it starts to be ISIS' fallback position, frankly. They're losing territories, according to many officials, 14 to 30 percent, depending on who you listen to in Iraq and Syria. And many think that perhaps they're looking to Libya as a place they run back to when life gets tougher for them in the place they began, their so-called caliphate -- Wolf.

BLITZER: We know that -- and you know this. You've been there in Iraq. ISIS, they've gained control of some of Iraq's wealthy oil fields and they're making a lot of money selling that oil. What -- are they trying to do the same thing in Libya now? Going after -- Libya's got a ton of oil, a lot of oil in Libya right now. Are the ISIS terrorists there trying to do the same thing?

WALSH: That is the contention, at the moment, yes. And the attacks you've seen in the past two weeks suggest they're moving towards the Al Sidra oil fields there. Attempts, reports say, of air forces flown by one of the two rival governments, the more internationally recognized one, to try and attack them as they try and do that. [13:10:10] But, as you say, oil is the key to Libya's wealth. It used to be one of the wealthiest countries in northern Africa. That has slowly deteriorated. Some of that money being held by sanctions. Some, frankly, just running out right now. If ISIS get their hands on that, they won't suddenly become part of the national oil trade, but they can sell it on the black market. It's made them millions per day in Iraq and Syria.

They could do the same thing in Libya. That's still a fair stretch off now. Libya is slightly less simple than Iraq and Syria, some might say. Less long-term chaos for them to exploit. But they seem to be increasingly focusing their attentions on it, boosting their numbers and, most importantly, expanding the amount of territory they hold. Europe has the need to put ISIS on the (INAUDIBLE) and Libya in its sights for a while. They just don't have the unity government need right now to achieve that. Deeply worrying -- Wolf.

BLITZER: It's clearly the wealthiest terror organization in the world right now. ISIS, hundreds of millions of dollars they've stolen in oil, gold, banks. They have a lot, a lot of money to do damage.

Nick Paton Walsh in Beirut for us. Thank you.

The Pentagon, meanwhile, has identified the U.S. soldier killed this week in Afghanistan. Staff sergeant, Matthew McClintock, who was supporting operation freedom sentinel in the Marjah District of Afghanistan. He died from wounds he suffered when his unit was attacked with small arms fire. The commander of the Washington National Guard describes McClintock as, quote, "the best of the best." The 30-year-old was from Albuquerque, New Mexico. He was a husband and a father. Father of a baby boy. Our deepest, deepest condolences to his family.

Now, to the widening rift between Saudi Arabia and Iran. In the latest incident, Iran accuses the Saudi-led coalition of an air strike on its embassy in Yemen's capital of Sanaa. Several guards reportedly were wounded.

For more on this, I'm joined by CNN's Global Affairs Analyst Bobby Ghosh. He's also the managing editor of "Quartz." Bobby, there's a dispute now. The Saudis are denying that they hit the Iranian embassy in Yemen. The Iranians insist it was hit. What are you hearing?

BOBBY GHOSH, CNN GLOBAL AFFAIRS ANALYST: Well, the A.P. has reported that -- reported citing eyewitnesses at the compound where the embassy does not look like it was hit at all, that some bombs fell maybe 500 yards away, even further out. It's a little hard to know because there are not that many journalists on the ground who can travel freely. Yet, the fact is that Sanaa has been targeted repeatedly for air strikes since the beginning of the year, since that cease-fire broke down.

We're not going to know for certain, I suspect, until tomorrow until the dust has cleared a little bit and we get live pictures or at least photographs from the scene to be able to judge whether this actually happened. But the fact is, it almost doesn't matter. The Iranians were quick to announce that they had been -- they had been hit. They were quick to denounce this. This came from the foreign ministry. And it speaks to the escalating tensions between these two countries, the two superpowers, if you like, the two great powers of the Muslim world.

BLITZER: There's no doubt, Bobby, they are fighting a proxy war in Yemen right now that has that huge border with Saudi Arabia.

GHOSH: Well, yes. And in Yemen, actually, it's not so -- on the -- it's not really a proxy war so much because of Saudi Arabia -- Saudi actually has some boots on the ground and it does have its -- this coalition that it leads that is striking against targets. The targets are mainly Shiite targets. There's a Shiite group of rebels called the Houthis who are supported, to some degree, by Iran. So, Iran has a proxy in Yemen but Saudi is directly committed to a substantial degree.

BLITZER: You know, it's interesting, and you understand the region as well as anyone, Bobby, that the Saudis obviously severed diplomatic relations with Iran after the Iranians, or at least elements in Tehran, burnt and ransacked the Saudi embassy there. Sudan followed suit. The United Arab Emirates followed suit. Other countries, Sunni Arab countries, have now gone ahead and downgraded the relationship with Iran, the United Arab Emirates, Kuwait, Qatar. I'm surprised about Kuwait and Qatar. Explain how significant this is because they were always trying to have a relationship with both sides.

GHOSH: Yes, Kuwait is closer to Saudi Arabia, in terms of its political and religious leanings, but it is very close to the border with Iraq, of course, and very close to a very large Shiite population on that side of the border with Iraq. And the Kuwaitis have tried to keep good relations with Iran throughout. There was -- there was that entire period during the Iraq-Iran war when the principal of my enemy's enemy was applied. Qatar, on the other hand, typically has taken a completely independent foreign policy off from Saudi Arabia. So, the fact that both of these are now lining up behind Saudi Arabia, that has got to worry Iran because that now begins to seem much more like a Sunni versus Shia thing.

[13:15:12] Because that's the only thing that these three countries have in common, vis-a-vis Iran, that there are three Sunni-led nations, Qatar, Saudi and Kuwait.

BLITZER: Yes, the fact that Qatar now has aligned itself with Saudi Arabia and there's often been some tensions between Qatar and Saudi Arabia over these years, that is very, very significant. It sends a powerful message to Iran at the same time.

Bobby Gosh, thanks very, very much.

It's been the worst start to a trading year since 2008 and it doesn't look like it's getting a whole lot better any time soon. The Dow here in the United States dropped 300 points shortly after the start of today's trading session. Right now, it's down about 300 points. There you can see it.

Our business correspondent, Alison Kosik, is joining us now from New York.

Alison, what's rattling the markets now several days into the new year?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, this is all about China, Wolf, and we are seeing those losses accelerate just a bill right now. That's despite a major about-face from Chinese authorities on how they are handling their stock markets. You see, what happened was this week China introduced circuit breakers and those were meant to tame drastic fluctuations in their markets, but they wound up just doing the opposite. They caused even more selling to the point where trading was suspended already twice this week. So today the government went ahead, took the breakers away.

But it's not just the wild drop in Chinese stocks that's spooking the markets here in the U.S. The Chinese government is in the process of trying to stimulate its own economy. For one, it devalued the yuan again today to try to make its exports cheaper. But the way investors see it, is that China could be in much worse shape than we realize. The reason you are seeing investors hit the sell button today.

Wolf.

BLITZER: Alison Kosik in New York, we'll stay in close touch with you. Thank you.

Coming up --

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: How do you run against the Democrat, whoever it may be, and you have this hanging over your head if they bring a lawsuit?

(END VIDEO CLIP)

BLITZER: Donald Trump doubling down on his claims about Ted Cruz's citizenship, even offering his opponent some advice. My interview with Donald Trump. That's coming up.

Plus, in just a few hours, President Obama will join our Anderson Cooper for an exclusive live town hall on gun control here in the United States. My next guest is critical of the president's plans. Congressman Trey Gowdy, he's standing by to join us live. We'll discuss when we come back.

(COMMERCIAL BREAK)

[13:20:44] BLITZER: Tonight at 8:00 p.m. Eastern, President Obama joins Anderson Cooper and a live audience for a CNN prime-time event, "Guns in America." In an appearance -- in an emotional appearance earlier this week, the president unveiled his initiative to curb gun violence here in the United States through a series of executive actions which will bypass Congress.

To talk about this and other topics, I'm joined now by the Republican congressman, Trey Gowdy of South Carolina. He's the chairman of the House Select Committee on Benghazi.

Mr. Chairman, thanks very much for joining us.

I want to get a question or two about Benghazi in there, but let's talk about the president's plans now to do away with the enormous deaths here in the United States, 30,000 people a year die from gun violence in the United States. Is there any part of the president's new strategy you would support?

REP. TREY GOWDY (R), SOUTH CAROLINA: Sure. And what I would advise the president, having spent 16 years prosecuting gun violence, is, we need to do a much better job of prosecuting current gun violators. Wolf, gun prosecutions are down over the past 10 years. If you look at the current background check denials, in 2012, the last numbers I saw were 80,000 background check denials. Out of those 80,000, there were less than 500 prosecutions. So before you ask for new weapons in the war on crime, it is fair for me to say, how are you doing with your current weapons? And there's a very small percentage of our fellow citizens who are criminally inclined. Very small. So if you can put them in jail for a gun violation before they commit murder, before they commit a mass killing, why is that not a better strategy?

BLITZER: Well, are you suggesting, Mr. Chairman, that those 80,000 or so who were denied an opportunity because of their background checks to purchase a gun should be prosecuted?

GOWDY: Absolutely. It's against the law to lie in an application for a firearm. It is against the law to seek a firearm if you're under indictment. It's against the law to see a firearm if you're a convicted felon. There are large categories of people who cannot possess or purchase firearms. And our prosecution levels are anemic and declining in those areas.

BLITZER: So when you ask the administration why they're not prosecuting these individuals, what's the answer you get?

GOWDY: Well, I have asked both Attorney General Holder and Attorney General Loretta Lynch, and I am biased towards prosecutors, I admit that up front. They tell me these cases lack jury appeal. Nobody gets that better than I do. I've stood in front of lots of juries and didn't have the appealing case. Murder is appealing to a jury, but your objective is to prevent the murder, so you have to prosecute them for that -- that fundamental violation, whether it be a background check, whether it be a felon in possession, whether it be you've been court-martialed and you're in possession of a firearm. All those categories have prohibited persons.

Wolf, you probably know this, if you're not in the country legally, you can't possess a firearm. If you've overstayed a visa, you can't possess a firearm. So how are you doing with the current laws before you tell me we need more of them?

BLITZER: Are you going to support the president's proposal for a half a billion dollars, $500 million, to increase the issue of mental health, to make sure that people who don't have proper mental health can't go out there and buy a gun? GOWDY: Well, I am in supportive of the concept of people having access

to mental health. You don't know this, Wolf, and there's no reason for you to know this, but I had a gun pulled on me outside of church a couple years ago by a woman who was adjudicated unfit to stand trial. She was criminally irresponsible. So I have lived coming face-to-face with somebody who does not know the difference between right and wrong. So I support the notion of getting people access to mental health.

But it's already against the law for anyone who's been adjudicated mentally ill or mentally deficient to access a firearm. So it would be fair, I think, for Anderson tonight to say, Mr. President, out of those people who currently are violating the law by accessing guns, what are your prosecution levels? Because I can tell you, Wolf, they are anemic for people who currently have been adjudicated mentally ill and cannot possession firearms but yet have tried to do so.

BLITZER: Let me quickly get your thoughts on the -- your investigation into what happened in Benghazi, Libya. All of us remember the 11 hours of testimony that Hillary Clinton, the former secretary of state, provided in open session. You're now having these closed door meetings with others who were involved, the former CIA director, General Petraeus testified yesterday, Leon Panetta, the former defense secretary, will testify tomorrow. Are you making any headway? Are you learning new information about what may have happened?

[13:25:23] GOWDY: Yes, sir. We're actually doing an interview today with a witness named Charlene Lamb. We are up to our 66th witness interview. The overwhelming majority of which have never been talked to by any congressional committee before. And, you're right, Secretary Clinton was in public, but it's the only one that's been in public and it's the only one that's going to be in public because the private transcribed interviews are so much more effective for gathering information than a public spectacle. So all the rest of them are going to be in private and all the rest of them will be productive.

BLITZER: Trey Gowdy of South Carolina, he's the chairman of the House Select Committee on Benghazi. Mr. Chairman, thanks very much for joining us.

GOWDY: Yes, sir.

BLITZER: We'll be anxious to get that report. When do you think that report is going to be ready, by the way?

GOWDY: Well, boy, if you could help me speed up the administration to get me documents, I'd be grateful to you, Wolf. I want to wrap up tomorrow, but I've got a dozen more witnesses and I've got three departments that haven't given me my documents. I want to get it done as soon as possible. Maybe they'll listen to you. They're not listening to me right now.

BLITZER: All right, well, we'll stay in close touch with you and we'll be anxious to read that report.

Mr. Chairman, thanks very much. GOWDY: Yes, sir, thank you.

BLITZER: Good luck.

Tonight, President Obama, once again, will join Anderson Cooper for an exclusive one hour live town hall on gun control. You just heard what Trey Gowdy wants Anderson to ask the president. That's coming up later tonight, 8:00 p.m. Eastern, only here on CNN.

And coming up here, my interview with Donald Trump. The Republican presidential frontrunner tells me why he continues to question the citizenship issue involving Senator Ted Cruz, his main rival in Iowa right now. The surprising GOP leader joining us. We'll discuss. Stay with us.

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