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Early Start with John Berman and Zoraida Sambolin

Police Kill Black Man During Traffic Stop in Minnesota; Justice Department to Probe Police Shooting; Trump Hammers Decision Not to Charge Clinton; FBI Chief Testifying Over Clinton Email Probe; Chilcot Report: Iraq Posed "No Imminent Threat"; Trump Defends Praise of Saddam Hussein. Aired 4:30-5a ET

Aired July 07, 2016 - 04:30   ET

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

(COMMERCIAL BREAK)

[04:31:59] ANNOUNCER: This is CNN breaking news.

BORIS SANCHEZ, CNN ANCHOR: Breaking news: a new officer involved shooting overnight. A black man shot and killed by police during a traffic stop. A dramatic video captures the aftermath and it was streamed live on Facebook.

CHRISTINE ROMANS, CNN ANCHOR: This as the FBI and Department of Justice meet over how to investigate the police killing of Alton Sterling. There are new protests in that case and a new video as calls for justice grow louder.

SANCHEZ: Good morning and welcome back to EARLY START. I'm Boris Sanchez.

ROMANS: Nice to have you this morning, Boris.

I'm Christine Romans. A lot to go through this morning. Thirty-two minutes past the hour.

Let's begin with our breaking news this morning with what might be the most disturbing police shooting video yet. Here's the scene. Just hours ago, in Falcon Heights, Minnesota, just outside Minneapolis, just after 9:00 p.m. local time, a car stopped by police. A man at the wheel. A child in the back, and a woman in the front passenger seat live streaming on Facebook moments after gunshots.

We want to warn you: the video here we are about to show you, it is graphic. Some of you will find it very troubling. We show it to you because the woman, her name is Diamond Reynolds, she clearly wanted the public to see exactly what she saw.

(BEGIN VIDEO CLIP)

REYNOLDS: Stay with me. We got pulled over for a busted tail light in the back and the police (AUDIO DELETED) he's covered. He's killed my (AUDIO DELETED) boyfriend. He's licensed -- he's carried -- he's licensed to carry. He was trying to get out his ID and his wallet out his pocket and he

let the officer know that he was -- he had a firearm and he was reaching for his wallet and the officer just shot him in his arm. We're waiting for a backup.

OFFICER: Ma'am, keep your hands where they are.

REYNOLDS: I am sir, no worries.

(EXPLETIVE DELETED)

REYNOLDS: He just got his arm shot off. We got pulled over on Larpenteur.

OFFICER: I told him not to reach for it! I told him to get his head up!

REYNOLDS: He had, you told him to get his ID, sir, his driver's license. Oh my God. Please don't tell me he's dead.

(EXPLETIVE DELETED)

(END VIDEO CLIP)

ROMANS: Just -- just remarkable. Let's than an hour ago, police holding a one-minute news conference. They refuse to take any questions. Here's some of what police said.

(BEGIN VIDEO CLIP)

JON MANGSETH, INTERIM CHIEF, ST. ANTHONY POLICE DEPARTMENT: During the stop, shots were fired. One adult male was taken to the hospital. We have been informed that this individual is deceased. A handgun was recovered from the scene. The BCA will be providing additional information as their investigation progresses.

(END VIDEO CLIP)

ROMANS: The St. Anthony Police Department telling CNN they have not seen that video, but know about it. They know it exists. The driver, his name is Philando Castile. He was 32 years old. His family tells us he worked as a cafeteria supervisor at a local Montessori school.

SANCHEZ: And in just a matter of a few hours, the FBI and the Justice Department will meet with Louisiana state police to discuss how to investigate there the police killing of the man named Alton Sterling in Baton Rouge.

[04:35:01] The 37-year-old African-American CD vendor was fatally shot early Tuesday morning during a struggle with two officers outside a convenience store. It all started after someone called 911 complaining that they had been threatened by a man with a gun.

(BEGIN VIDEO CLIP)

DISPATCH: Copy suspicious code 2 at 2100 North Foster, cross of Fairfield. Selling CDs on the corner. Gun in his pocket. He pulled a gun on a complainant and told him he couldn't be around there.

(END VIDEO CLIP)

SANCHEZ: There is now a second video emerging of the deadly encounter between Sterling and the two police officers. This very disturbing video shows the struggle unfolding, and the fatal shots and then one officer removes what appears to be a gun from Sterling's pocket. Watch.

(BEGIN VIDEO CLIP)

(EXPLETIVE DELETED)

UNIDENTIFIED MALE: He's got a gun! Gun!

UNIDENTIFIED MALE: If you move, I swear to God --

(GUNFIRE)

UNIDENTIFIED MALE: Get on the ground!

(GUNFIRE)

UNIDENTIFIED MALE: Shots fired. Shots fired.

(EXPLETIVE DELETED)

(END VIDEO CLIP)

SANCHEZ: The shooting sparked outrage in Baton Rouge with protesters lingering well into the night as Sterling's family members demand justice.

Investigators say the officers were wearing body cameras, but that they became dislodged during the struggle. Sources tell CNN both officers were interviewed on Tuesday night and they're now both on paid administrative leave.

ROMANS: All right. Thirty-six minutes past the hour. Donald Trump expected to be on Capitol Hill today meeting with the Republican lawmakers. They'll be trying to win their support ahead of the Republican national convention. It's now less than two weeks away, but exactly who will be speaking at the convention is still a mystery this morning.

Trump had promised to release the lineup on Wednesday. He now says the speaker list will be out today so he could focus on what he called crooked Hillary and the rigged system under which we live.

At the rally last night in Ohio, Trump blasted the Justice Department for not charging Hillary Clinton over her use of e-mail as secretary of state. But he also swiveled to defending a controversial graphic that he tweeted last week attacking Hillary Clinton, an image critics are calling anti-Semitic. Trump sticking to that defense, late last night tweeting a picture of Disney's "Frozen" book with a similar star on the cover. Trump wrote, "Where is the outrage for this Disney book? Is this the star of David also? Dishonest media, #frozen."

For the very latest, politics reporter Sara Murray, she's traveling with the Trump campaign.

(BEGIN VIDEOTAPE)

SARA MURRAY, CNN POLITICS REPORTER: Good morning, Boris and Christine. On the day when Loretta Lynch decided she was not going to bring charges against Hillary Clinton, Donald Trump started off right on message. He was hammering Hillary Clinton, calling her a liar for everything she said about her e-mails in the past and saying any normal American would have gone to prison for the kinds of things that Hillary Clinton got away with. But then he went off on tangents, doubling down on his campaign decision to put out a graphic of Hillary Clinton, a six-pointed star and piles of cash behind her.

DONALD TRUMP (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: It could have been a star for anything. To me, it was just a star. But when I really looked at it, it looked like a sheriff's star.

But CNN started this dialogue going, it's the star of David, and because it's the star of David, Donald Trump has racist tendencies. These people are sick, folks. I'm telling you.

So, we have unbelievably dishonest media. Think of that. You have the star, which is fine. I shouldn't have taken down. They took the star down.

I said, too bad. You should have left it up. I would have rather defended it. Just leave it up and say, no, that's not a star of David. That's just a star. It is all about corrupt Hillary, corrupt Hillary.

MURRAY: That was one of a number of instances where Trump essentially blamed the media for ginning up controversy. But that is just one of a number of story lines that emerged in the outskirts of Cincinnati, Ohio, last night. He also appeared alongside former House Speaker Newt Gingrich. This is one of the folks that Trump has essentially been auditioning to be one of his VPs.

Now, we know Gingrich is in the formal vetting process, but it's anyone's guess still who Donald Trump will choose.

Back to you, guys.

(END VIDEOTAPE)

ROMANS: All right. Sara, thank you for that.

Hillary Clinton out with a new college affordability plan. It covers the cost of tuition for some families. Who gets a free ride? Free college education at a state's school if she's elected.

Well, here's her plan -- low and middle income students would pay nothing for tuition at in-state colleges. Any student whose family earns $85,000 a year or less would be eligible at first. The income level would go up by $10,000 each year until 2021 when it hits $125,000. That would cover more than 85 percent of all families. That's according to the Clinton campaign.

Tuition at state schools is already much cheaper than what private college charge. Last year, the average tuition for in-states students at public colleges was 9,410 bucks. Compared to private colleges, 32 grand a year. It won't pay room and board, which usually costs more than a year of tuition at public colleges. It's one reason, a big reason why 2/3 of people earning a bachelor's degree at public colleges, they take out student loans, according to the college board.

It's a sign, Boris, I think that Bernie Sanders has pulled her to the left, because he was saying, she originally was saying debt-free college tuition and then college degree. Now, she's saying a free college degree. It's also Hillary Clinton trying to round out her pro-family policies as she is defining Trump as a bankruptcy frequent flyer scam artist.

SANCHEZ: Yes. It can't hurt her to try to capture some of Bernie's base for sure.

ROMANS: Right, absolutely.

SANCHEZ: Very enthusiastic crowd.

Hillary Clinton officially cleared of any charges related to her email use as secretary of state, but Republicans have found a new to keep the controversy alive. We'll explain, next.

(COMMERCIAL BREAK)

[04:45:17] SANCHEZ: Just hours from now, FBI Director James Comey testifies on Capitol Hill. Lawmakers want know how Comey squares his decision to recommend against pressing charges over Hillary Clinton's emails with that tongue-lashing that accompanied his announcement. The FBI director calling Clinton's use of the personal e-mail server and classified messages it sometimes carried extremely careless. Comey's called to testify all part of a Republican effort to keep the Clinton e-mail controversy in the headlines.

Senior political reporter Manu Raju has more.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Good morning.

Now, the FBI director expected to get a grilling today in the House Oversight Committee where Republicans believe that he made the wrong decision and not referring this case to the Justice Department even Director Comey had some very, very strong words about Hillary Clinton believing that she handled classified information carelessly. They believe she was given preferential treatment in that decision to not prosecute this case even further. They say this is a clear violation of federal law.

So, expect to hear a push in the questions about why Comey made this decision. And then, from Comey's perspective, he believes he has a good story to tell. He believes that the FBI made a right decision, the prudent decision ahead of thorough investigation and expect him to layout his reasoning why. Now, this is part of a larger Republican effort to keep this issue

alive. Speaker Paul Ryan believes that Hillary Clinton should be denied classified briefings all together. That she should have security clearance revoked and she should release all of her transcripts in talking with the FBI to show whether or not she was speaking truthfully to federal investigators.

So, guys, this is just really, really the beginning of a very aggressive effort to keep this issue alive, headed into November because Hillary Clinton's political problems may not be over just yet -- Christine and Boris.

(END VIDEOTAPE)

ROMANS: All right. Manu Raju, thank you for that.

Baltimore prosecutors are 0-3 so far, but they will try again for a conviction and the arrest and death of Freddie Gray. Opening statements are scheduled today in the trial of Police Lieutenant Brian Rice. He is the highest ranking officers of the six charged in the case. Rice opted for a bench trial, leaving his fate in the hands of a judge rather than a jury. The judge has barred prosecutors from using evidence of Rice's police training.

SANCHEZ: Bill Cosby will be back in a Pennsylvania courtroom this morning for a pre-trial hearing at his sexual assault case. Cosby's attorneys are trying to get the case thrown out. They claim his accuser Andrea Constand should have been forced to testify in May where the comedian was forced to stand trial. Cosby is accused of drugging and molesting Constand back in 2004.

ROMANS: Former FOX News anchor Gretchen Carlson has filed an explosive sexual harassment lawsuit against the network's chairman, Roger Ailes. Carlson claims Ailes explicitly asked her for a sexual relationship during a meeting in his office and forced her out when she refused his advances. Ailes vigorously denies the allegation, calling it offensive and insisting that Carlson is retaliating for the network's decision not to renew her contract.

SANCHEZ: It's a bit of weather now.

Millions of people across the Midwest could be in the path of some severe weather today. This storm system ripped through southern Illinois on Wednesday, heavy rain, powerful winds toppling trees. This one coming down right on this guy's car. The tornado touched down in Metropolis, blowing the roofs off of homes and leaving thousands without power.

ROMANS: All right. For the latest on today's severe weather across the Midwest, time to bring in meteorologist Pedram Javaheri.

(BEGIN VIDEOTAPE) PEDRAM JAVAHERI, AMS METEOROLOGIST: Boris and Christine, the severe weather threat really hasn't moved much since yesterday. In fact, much of the Great Lakes, parts of the Upper Midwest, even including parts of Minnesota yet again in the threat zone for hail, wind and tornadoes.

The month of July, people get complacent with the tornadoes you can see. Well over 120 for this time of year. The northern states, including Minnesota, have the highest likelihood of tornadoes this late into the season.

And the storms still rocking and rolling in the early morning hours. Cedar rapids, Iowa, getting some strong storms this morning, even around Nashville, upwards towards Louisville also getting in some strong storms. And this is an area that has just been inundated. We have the flood watches though in place. Some areas across town saw upwards of 4 inches yesterday. And, of course, more storms coming in today.

Now, the heat is still on across much of Texas and into the Southeast. Several million people across these areas dealing with excessive heat advisories and air quality alerts in place for much of the metro areas in the northeast as well in these temperatures, tell you why, 92 in Detroit. Temps around New York and Boston also into the mid-90s as well, guys.

(ED VIDEOTAPE)

ROMANS: All right. Pedram, thank you.

That's your weather. How about money? Fears of Brexit is rattling investors. I mean, around the world, every market you look at, you can see the fallout from Brexit still.

[04:50:00] One sector, though, is getting crushed and there's a little relief in sight. I'm going to show you the dramatic drops when we get an early start on your money, next.

(COMMERCIAL BREAK)

SANCHEZ: Ten years after his death, Saddam Hussein is making headlines on two continents. In the U.K., shockwaves over a blistering report slamming Britain's role in the war in Iraq and the removal of Saddam Hussein. That report triggering in emotional apology from former Prime Minister Tony Blair.

And here in the U.S., presidential hopeful Donald Trump is taking heat for praising Saddam Hussein. Trump though has defiantly fired back.

(BEGIN VIDEO CLIP)

TRUMP: I said, bad guy, really bad guy. But he was good at one thing, he killed terrorists. Next day, Donald Trump loves Saddam Hussein. I don't love Saddam Hussein. I hate Saddam Hussein. But he was damn good at killing terrorists.

(END VIDEO CLIP)

SANCHEZ: Let's go live now to Baghdad and bring in senior international correspondent Ben Wedeman.

Ben, good morning to you.

All of this news coming against the backdrop of turmoil in Iraq, the suicide bombing last week that killed 200 people. How are the people on the ground there dealing with this recent news?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Boris, you would be surprised actually, people were fairly indifferent to the release of the Chilcot report, a massive report, 2.6 million words, the equivalent of five "Wars and Peace."

But for most Iraqis, this is water under the bridge. We contacted the prime ministry. They told us that as far as they were concerned, the Chilcot report is a strictly British matter. Another reporter I know contacted the foreign ministry asking them about the report. They said, what report?

So, for most Iraqis, the damage has been done. The Chilcot report is a searing indictment of the conduct of the war and the aftermath of the war, but as I said, the damage here is done.

As far as Mr. Trump's comments go, many people here rather surprised that he would make the suggestion that Saddam Hussein was good at fighting terrorists because for most Iraqis, the reign of Saddam Hussein was a reign of terror. Many people remember well that it was Saddam Hussein's forces that conducted what was known as the Anfal campaign in the late 1980s in northern Iraq. That left anywhere between 50,000 and 120,000 Iraqi civilians dead. The Iraqi army destroyed 4,500 villages.

On the 16th of March, 1988, Saddam Hussein's forces dropped poison gas on the village of Halabja, killing at least 5,000 men, women and children.

So, the definition of terrorists seems to be somewhat strange in the case of Mr. Trump. For Iraqis, Saddam was a terrorist -- Boris.

SANCHEZ: Yes, just bazaar a mention from Donald Trump, and obviously the Chilcot report, blistering. We are still obviously feeling the effects of it ten years on. Thank you so much, Ben.

ROMANS: All right. Fifty-seven minutes past the hour. Let's get an early start on your money this morning.

Dow futures slightly higher. Bond prices have rebounded from all-time lows. So, that's the big trigger. Investors could be waiting for Friday's jobs report. Stock markets in Europe are up. Asia mixed overnight.

OK. The Brexit is just crushing stock prices of the world's biggest banks. Check out these numbers, over the past month, Royal Bank of Scotland is down 40 percent. Lloyds is down 36 percent. Same for Barclays and Deutsche Bank down 24 percent. Now, the U.S. banking sector fairing much better, but these stocks are still battered.

Bank of America is down 11 percent over the past month. JPMorgan Chase is down 7.7 percent. Goldman Sachs is also dropping 7 percent. It is the biggest loser on the Dow in 2016. It is down about 20 percent for the year. Those are stocks which are likely in the 401(k)s.

Now, those low bond yields are difficult for the banks to deal with in the coming weeks, as they keep interest rates very, very low. Federal funds rate currently sits at a range near 0.5 percent. And new details from the Federal Reserve's last policy meeting show it is unlikely to change anytime soon.

This is the interest rate the Fed addresses at each policy meeting. It affects mortgage rates, car loans, credit cards. The Fed is concerned about the job market with the economy adding just 38,000 jobs in May. It wants to wait to see the Brexit vote. Janet Yellen said there would be consequences in the financial system. That surprise of course has sent global financial markets into disarray. That has investors rushing into bonds, which has yields plunging. You can refinance a mortgage, folks, because they are still low.

Several fed members want to raise rates soon and not wait too long. But some financial analysts feel the Fed has blown its chance. But, again, if you are on the fence of refinancing or buying a home, take a look right now, unbelievably low mortgage rates.

SANCHEZ: Yes, the Brexit throwing a wrench in the Fed's plan to incrementally raise rates.

ROMANS: Yes.

SANCHEZ: EARLY START continues right now.

ANNOUNCER: This is CNN breaking news.

SANCHEZ: We're following breaking news this morning. A new officer involved shooting overnight. A black man shot and killed by police during a traffic stop. Dramatic video captured the aftermath of that shooting and it was streamed live on Facebook.

This as the FBI and Department of Justice meet over how to investigate the police killings of Alton Sterling. There are new protests in that shooting and a new video as calls for justice grow louder.

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

SANCHEZ: And I'm Boris Sanchez.

Christine, great to be here with you.

It's Thursday, July 7th, about 5:00 a.m. on the East Coast.

We are following breaking news this morning with what may be the most disturbing police shooting video yet. Here's the scene: just a few hours ago in Falcon Heights, Minnesota, just outside Minneapolis, a car was stopped by police.