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Trump, Cruz Escalate War of Words; Bombs, Three Tickets Split Record Powerball Jackpot; Gunfight Rock Jakarta in Brazen Attack; New Details About Freed Sailors; Aired 10-10:30a ET

Aired January 14, 2016 - 10:00   ET

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

[10:00:03] CAROL COSTELLO, CNN ANCHOR: Brian Stelter, thanks for stopping by again.

STELTER: Good to see you.

COSTELLO: Appreciate it.

The next hour of CNN NEWSROOM starts now.

And good morning. I'm Carol Costello, thank you so much for joining me. We begin with a high stakes showdown in the key state of South Carolina tonight for the 2016 Republican candidates will gather for their latest debate. And that debate comes as a war of words between Donald Trump and his newest target Ted Cruz escalates.

Joining me now from North Charleston, South Carolina, is CNN's Sara Murray. Good morning.

SARA MURRAY, CNN POLITICS CORRESPONDENT: Good morning, Carol. You're right, we are seeing this feud between Donald Trump and Ted Cruz grow even more pitched. Now even though Trump leads in South Carolina, the two are locked in a dead heat in Iowa. And that's why you're seeing this war of words, Donald Trump questioning whether Ted Cruz is even qualified to be president because he was born in Canada.

And Ted Cruz essentially going from saying he wouldn't reciprocate these attacks to going after Trump for everything from having New York values to being too cozy with Democrats, to Cruz saying he would be more electable in a general election.

Now I think the big question is how this plays out on the debate stage tonight. Donald Trump indicated that his campaign event last night that the citizenship stuff would come up, but it's possible he leaves it up to the debate moderators to sort of do his dirty work for him rather than going directly for Ted Cruz.

Now, as for the Cruz camp they are very aware that Donald Trump can be unpredictable. And they tell me that they are preparing for everything, whether it's Trump essentially ignoring them to Trump going full boar against Ted Cruz.

The other battle you're going to want to watch is the battle for the establishment lane, Marco Rubio, Chris Christie, John Kasich, Jeb Bush. These guys are all vying for a win in New Hampshire. And they are going to be going after each other on this stage. So we'll essentially have two different fights potentially going on as each tries to claim the mantle of the most conservative and then the establishment candidate. So a lot to watch tonight, Carol.

COSTELLO: All right, Sara Murray reporting live from South Carolina this morning.

The bromance as Sara said may be over for Senator Ted Cruz and Donald Trump, we'll see tonight on the debate stage. In debates past Mr. Cruz has refused to attack Mr. Trump, tweeting just last month, quote, "The establishment's only hope Trump and me in a cage match. Sorry to disappoint. Donald Trump is terrific."

And as you can see the two men were quite friendly that night. And at previous debates back slapping and handshaking. But that was then and this is now. And in the face of attacks about Cruz's eligibility to be president he's taking the gloves off.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R), PRESIDENTIAL CANDIDATE: I think he may shift in his new rallies to play "New York, New York" because, you know, Donald comes from New York and he embodies New York values.

(END VIDEO CLIP)

COSTELLO: Oh. Here to discuss, Republican strategist Cheri Jacobus and columnist for "Above the Law" and Republican strategist Kayleigh McEneny.

Welcome to both of you.

KAYLEIGH MCENENY, REPUBLICAN STRATEGIST: Good morning.

CHERI JACOBUS, REPUBLICAN STRATEGIST: Hi, Carol.

COSTELLO: So will we see more of a fight between the two men, Cheri?

JACOBUS: You know, I don't think we will. And here's why, Donald Trump can say a lot of things at his rallies that are not true, that are over the top, and that might not slide very well with other people. And I think that he tends to play it relatively safe at the debates. He still tries to please his base, but he's a little bit more careful because he knows everybody else is watching.

Not everybody in his audience is a Trump supporter. And he knows that debate moderators may call him on it. I do think that Sara's correct that he'll try and leave it to the moderators, but at some point they have to ask him directly about his comments about Ted Cruz. And he's going to be accountable for that.

I think the lower tier candidates will probably go after each other because they're all vying for the spot, you know, to be third or fourth or whatever. But we're going to see a smaller group at this debate. I think the messaging is going to be crisper and clearer. And I think that is going to be incumbent upon each candidate to be very, very good.

I expect Rubio to probably remain positive. He does better that way. I think it's going to be apparent that Trump is not quite up on the issues. So all the things that we've seen before will be a bigger spotlight on it. And it will just be seen if somebody is really good, they'll look really good. If they're weak in some area, we're going to see that weakness. Everything will be bigger than it was before.

COSTELLO: OK. OK. I want to go back to the Cruz-Trump thing for just a minute, Kayleigh, because Cruz brought up Trump's New York values. And that's code for he was a liberal in the past. I read on Politico this morning that's his new strategy in combating Trump so why wouldn't we hear that tonight?

MCENENY: You know, I think we will hear that. But I think it's a flawed strategy on the part of Ted Cruz because there's an easy retort for Donald Trump, and it's this. You know, Ted Cruz has kind of meshed himself in the northeast establishment circuit, places like Princeton, like Harvard Law, like Goldman Sachs. These are not places known for Iowa conservative values.

And I'm not faulting Ted Cruz for going to these institutions at all, but if he brings up the New York values, Donald Trump will simply retort with that. And it would be wise, I want to point out, for Ted Cruz not to attack Donald Trump.

[10:05:03] We've seen every candidate who attacks Donald Trump fall precipitously in the polls be it Carly Fiorina, be it Jeb Bush, who attacked Trump relentlessly. And folks in the establishment were praising him as having a stellar debate performance.

But what happened? Just 1 percent of the people who watched the CNN debate thought that Jeb Bush won. So if Ted Cruz attacks, that will be a flawed strategy.

COSTELLO: Oh no, no. I hear you, but, Cheri, Ted Cruz has gone down in the polls since Donald Trump started to attack his citizenship, right? And there's nothing to that. And then Ted Cruz has come out and he's hit hard back against Trump. So isn't it the dawn of a new era?

JACOBUS: Well, at some point there does have to be a clear cut answer on this. And I think that there is. I think --

COSTELLO: There is a clear cut answer on it.

JACOBUS: Well, I don't think that Ted Cruz needs to use his debate stage to say, yes, I really am eligible. That should not be how he uses his time. I think that Donald Trump looks bad when he attacks him on it. And you can have that debate on the side. I don't think it's going to help them tonight. And, again, you have to look at this audience. These are people who are not all -- there's a lot of undecided voters out there.

So while you've got the candidates that will be trying to appeal to the Iowa voters and the caucus goers as well as the New Hampshire primary voters, you know, there's this national audience as well. But they know very well that there are certain messages that are going to work in certain rooms that you cannot say nationally. And I think they know that with the attacks.

With regard -- I'm going to disagree that people go down in the polls because they attack Donald Trump. They only have the courage to attack him when they're already slipping. And what we've seen is a lot of people in the media who have coalesced around Trump for various reasons and I've said this before on CNN and on Twitter and other places I think a lot of the right-wing media folks have coalesced around Trump because they know that this means Hillary and the White House, and that means ratings and book sales.

You can't write an anti-Hillary book or sell one if she's in the White House. So it's been very confusing to a lot of Republicans why he's gotten this support, why Trump has not been called on the carpet for things that would do other candidates in.

(CROSSTALK)

MCENENY: I don't think they're confusing. I think people appreciate Trump's straight talk. You know, we've had Mitt Romney, we've had John McCain. Folks don't want that anymore. People want straight talk. They want honesty. And for better or worse when Donald Trump speaks that's what you get, his honest opinion. And people believe him. They think he's authentic. That's why he's doing well on the polls. I don't think it's confusing.

JACOBUS: Well, I disagree. I think that there are many candidates who are authentic and who are straight talkers. And they don't have to be politically correct. And what we see with Donald Trump, it's not about him being politically incorrect. He goes a lot further than that. And I think that we're going to see that crystallized, again, the messaging will be crisper as this debate -- at this debate tonight because there's fewer candidates.

We're getting closer now to when people actually go and caucus in Iowa and vote in New Hampshire. I don't think that Donald Trump is Teflon. I've never thought he's Teflon. I've just seen him basically not been responded to because the media has reported on him and covered him differently. He's gotten vastly more media coverage than all of the other candidates combined.

And that has resulted in him getting an early boost as well as the fact that there's such a huge field which was very unfortunate. And until that field narrows, Trump still has an edge. I don't think he's going to win Iowa. Then he loses his frontrunner status and he loses his greatest talking point. And then it's a whole new ball game.

COSTELLO: OK. I've got to let Kayleigh have the last word.

MCENENY: I just think it's naive to think that Donald Trump is succeeding because of media coverage. Plenty of other people get media coverage, they don't succeed. Donald Trump is reaching into the heart of voters and selling a very important message that's reminiscent of that of Ronald Reagan. He wants to make America great again.

People believe he can create jobs, people believe he can defeat ISIS. It's a direct contrast to our current president. People are buying it. It's not the media coverage, it's the message.

COSTELLO: All right. I got to leave it there.

JACOBUS: But studies say otherwise.

COSTELLO: I got to leave it -- OK. Cheri Jacobus, Kayleigh McEneny, thanks to both of you.

MCENENY: Thanks, Carol.

COSTELLO: The big Powerball number turned out to be three. Three lucky tickets will be split for that record $1.5 billion jackpot. And the owners of those tickets, well, their lives will be changed forever. One of those golden tickets was sold at a Chino Hills, California, 7-Eleven, where you didn't need to be a winner to celebrate.

That's one happy 7-Eleven man. Hundreds of people flocked to the convenience store when they heard the winning ticket was sold there.

Sara Sidner -- this is incredible.

(LAUGHTER)

SARA SIDNER, CNN CORRESPONDENT: Isn't it cool? We were so thrilled to see that people were that enthusiastic when they didn't even win. And look at what just went on the wall here, on the door, I should say. Look, they made the front page of the local paper. Jackpot. That's Mr. Farooki with his hands up. And he's not even the store owner. The store owner has been here all night long with his family.

[10:10:04] He's been cleaning up the store, making sure that everybody can get to what they need even with all the media here and all the onlookers who've been inside and outside of the store. He's literally been cleaning up for the past five hours. He finally went home exhausted after talking to a lot of us. But here's what he had to say.

I mean, can you believe this crowd out here? It was really wild. There were dozens of people that just kept coming. And you hear that, they're screaming "Chino Hills," so proud of their community and they say it is very much like a football game on Friday night. Like a "Friday Night Light" celebration. But here's what the owner of this store who's been here 24 years had to say about the fact that he's getting a million dollars just for selling the winning ticket.

(BEGIN VIDEO CLIP)

SIDNER: What do you think about the crowd that just showed up here?

BABIR ATWAL, OWNER, 7-11 WHERE WINNING TICKET WAS SOLD: Well, I just love them. And they love me. SIDNER: What is this selling the winning ticket mean for you and your

store?

ATWAL: It's feeling really, really good. And whoever the lucky person come here, I'm thankful for their purchase.

(END VIDEO CLIP)

SIDNER: And, Carol, we should mention this, too. People have been coming in. If you look right in there, you can, you know, take your ticket and you scan it to see if you've won. And the lottery officials are saying, hey, make sure you check that ticket. Just because you didn't win the big jackpot, there are still dozens of people who will become millionaires. They'll win either a million, most people a million or $2 million if they've got five out of six. So it's worth checking those tickets because there are plenty of people that never check them. And they never win because they didn't bother to check, Carol.

COSTELLO: And you're right about that because my producer, Alexis, checked her tickets and she won $7.

SIDNER: Better than nothing, right?

COSTELLO: True. I didn't win anything. Sara Sidner, thanks so much.

Still to come in the NEWSROOM, FBI director James Comey heads to Philadelphia just after the agency announces the shooting of a police officer being investigated as a terror attack.

Plus, a bomb explodes and terrorists launch a brazen attack in the heart of Jakarta. We'll have a live report for you next.

(COMMERCIAL BREAK)

[10:16:38] COSTELLO: Terrorists carry out a series of coordinated attacks in the heart of an Indonesian business district. And an ISIS affiliated news agency says the terror group is behind the siege.

This is just one of several explosions in a brazen midday assault in Jakarta. This was the terrorists' first target, actually. It's a Starbucks coffee shop that's a favorite for Westerners. And that's not lost on the American icon. The company issuing a cautious statement in the aftermath, quote, "While this store will remain closed based on the stabilization of the situation being conveyed by local authorities, we will open all stores in Jakarta and across Indonesia tomorrow."

CNN's Kathy Quiano is in Jakarta. She joins us now with more on this. Hi, Kathy.

KATHY QUIANO, CNN CORRESPONDENT: Hi, Carol. It's just said, you know, people here are trying to cope with the situation here. Starbucks saying that they will be open tomorrow. There was a bit of a scare earlier, it turned out to be a false alarm. An explosion was heard right in front of the Starbucks. It turned out to be a tire that was exploding from a truck that was just passing by.

But you can sense here the anxiety and the concern that people have. People have been running down the streets because at the top of their minds they think that, you know -- you know, the threat is still there. What the police are doing, though, now are, you know, investigating. They're trying to find links from these attackers, trying to identify them.

And then later on possibly finding out what their links are to people who may have planned this attack, who may have funded it. And certainly at the top of the list will be groups who have pledged allegiance to ISIS. One of them is called the East Indonesian Mujahadeen based in eastern Indonesia headed by Indonesia's most wanted terrorist Santoso.

So they're going to look into that, but again, the city is now in quite of a shock. The people are rallying together saying that they're not afraid. They're saying that we will live as normally as we could. We are not scared. Certainly people will take precautions in the next few days as they find out what and who may be behind these attacks, Carol.

COSTELLO: All right. Kathy Quiano reporting live from Jakarta this morning.

Checking some other top stories for you at 18 minutes past, today FBI director James Comey meets with employees at the agency's Philadelphia field office. This is just one day after the FBI announced the shooting of a city police officer is being investigated as a terrorist attack.

Last week Officer Jesse Hartnett who survived the incident was ambushed by an ISIS sympathizer while sitting in his patrol car.

Also new this morning, police in Italy say they have a suspect in custody in the murder of American Ashley Olson. He's described as an illegal immigrant from Senegal who accompanied her home from a bar last week. Police say physical evidence puts him inside her Florence apartment where she was eventually strangled.

Al Jazeera America will shut production on April 30th after struggling with low ratings during its two years on the air. Bu the company says it's not leaving the United States entirely, focusing instead on its digital services.

Still to come in the NEWSROOM, you've seen the disturbing video. American Navy sailors on their knees with their hands behind their heads.

[10:20:02] Well, now new insight into what they were feeling as Iran detained them.

(COMMERCIAL BREAK)

COSTELLO: The Pentagon is still trying to figure out what happened when two Navy boats strayed into Iranian waters and into Iranian custody. This video shows the sailors on their knees, hands on their head moments before their capture. The group now back in U.S. custody is describing to a U.S. Defense official as tired and upset.

But perhaps the most jarring development out of all of this is video of one of the commanders apologizing to Iran.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It was a mistake. That was our fault. And we apologize for our mistake. It was a misunderstanding. We did not mean to go into Iranian territorial water.

The Iranian behavior was fantastic while we were here. We thank you very much for your hospitality and your assistance.

(END VIDEO CLIP)

[10:25:05] COSTELLO: But the Obama administration insists it did not apologize to the Iranians.

So let's talk about this and more. Let's bring in CNN Pentagon correspondent Barbara Starr. I'm also joined by CNN political commentator and former CIA counterterrorism analyst Buck Sexton.

Welcome to both of you.

Barbara, I want to start with you because I understand you're learning new details.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: We are indeed this morning, Carol. CNN is learning exclusively what the Pentagon now thinks really did happen here. According to an official I've spoken to this morning here's what they think happened. The boat -- one of the two boats was having in fact engine trouble. The engine was running very roughly. It was not at maximum power. At the same time it was drifting off course.

The crew, the sailors, may not have even understood they were drifting off course. And they came within three miles of Iran's Farsi Island. That is a very sensitive military area for Iran's Revolutionary Guard Corps. So they come within three miles. The Iranians begin to approach them. One of their engines on the two boats is in bad shape and they really can't back off and get away. And in fact the commander you heard from talked a little bit about this and hinted about it. Have a listen to what he had to say.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The Iranian patrol boat came out when we were having engine issues and had weapons drawn so we tried to talk to them until more boats came out and took us in.

(END VIDEO CLIP)

STARR: I am told that the U.S. sailors were badly outnumbered by the Iranians, that basically the U.S. sailors had no choice, no other course of action other than to do what they did.

I will tell you, inside the most senior U.S. Navy circles there is a lot of dismay about this propaganda video being taken and these sailors being shown in this manner. This is something that the U.S. military has generally very publicly objected to. We are not seeing those public objections right now. A lot of diplomatic talk about the success here. But how urgently was the U.S. Navy looking for its sailors when they suddenly went missing?

We have also learned this morning that the initial search and rescue effort included the U.S. Navy sending a ship back into Iranian territorial waters because at that point they were concerned that maybe the sailors were overboard somewhere and in distress in the water. They shortly later found out they'd been taken by the Iranians and diplomacy took over at that point.

Still a lot of questions. And it must be said that all of these sailors certainly tired, exhausted and you have to know that that commander was not speaking of his own free will. There are Iranians in the room when he made those statements.

COSTELLO: Absolutely. Still, Buck, a former Navy commander said the incident is a severe failure by somebody. Who is that somebody, you think?

BUCK SEXTON, CNN POLITICAL COMMENTATOR: Well, it really depends on the circumstances of what happened on that boat. Was it a navigational issue? Was it essentially human error? Was it totally a technical failure? If it's a technical failure of the boat, if it's a mechanical failure, well then, certainly nobody on board could be blamed for it.

I do think it's also a failure, by the way, of the Obama administration at this point to try to tell us all that they didn't apologize and we're just supposed to focus on that. The fact of the matter is that the Iranians are scheduled to get tens of billions of dollars of sanctions relief very soon. And you would think that perhaps there could be some, not necessarily gratitude, but just maybe some more good will from them.

Instead there's this overreaction and this grotesque urge that they have to immediately try to score cheap points for domestic political reasons by using this as a propaganda video. By having American sailors with their hands behind their heads. I mean, this is what you expect from a regime that is an enemy regime whether or not you are actually at war with it. And I think that the Iranians here are trying to play it both ways.

They're saying, well, they took care of them and they did return them. The most important thing here is of course that our sailors were returned safely. But the Iranians can't help themselves. Despite the fact that the Obama administration has bent over backwards, do everything possible to get this deal done, the sanctions relief is about to kick in, there's a lot of money on the table, and they are still mocking our sailors, putting out this video, and we know that apology was under duress. COSTELLO: All right. So I just wondered, Barbara, let's try to take

the politics out. Some people are blaming the sailors for apologizing on camera, but what kind of training do they get, what choice did they have?

STARR: Well, I think it's really logical to conclude at this point that they had no choice. It is likely in these circumstances the commander of the unit at sea, which appears to be the sailor who spoke, although we don't know that for sure, you know, made the decision that they would not get into a gunfight. It would have been a suicide fight.

U.S. military members always, 24/7, have the right to defend themselves. But a commander makes a decision based on logic and reason. He is not -- he/she is not --