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Republicans Accuse Government of Paying Ransom to Iran for Hostages. Obama Administration Denies Claims; North Carolina Man Arrested, Accused of Trying to Provide Material Support to ISIS; 11- Year Old Questions Mike Pence About His Influence on Trump's Tone; Florida Congressman, Others, Appeal to CDC and Government to Provide Better Zika Support; Russian Olympic Teams Await Official Decisions on Eligibility for Olympics. Aired 10:30-11:00a

Aired August 04, 2016 - 10:30   ET

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

[10:30:00]

NIMA ELBAGIR, CNN CORRESPONDENT: -- this really is a case, at the moment -- not just in London but across Europe -- and people need to continue to be vigilant, and continue to be prepared. Even as our thoughts, of course, are still with those who were injured. And the woman who lost her life in this attack.

CAROL COSTELLO, CNN HOST, NEWSROOM: All right, Nima Elbagir reporting live from London, thank you.

Good morning, I'm Carol Costello, thank you so much for joining me. $400 million loaded onto wooden pallets and secretly airlifted on cargo planes. It sounds like something out of a movie, right? Except now it's being used as the latest line of attack by Republicans. They are accusing the White House of paying ransom to Iran in exchange for four American hostages.

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: And that probably was hostage money. To get hostages out for $400 million. Because it was exact diamond (ph). Our leaders are incompetent.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MIKE PENCE (R), VICE PRESIDENTIAL CANDIDATE: Hillary Clinton and Barack Obama have essentially put a price tag on the head of every American travelling abroad. They have abandoned our long-standing opposition to negotiating with terrorists, or paying ransoms. And that is judgment this country cannot stand for four more years.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP) REPRESENTATIVE ADAM KINZINGER (R), ILLINOIS: I absolutely think this was a ransom. This is an embarrassment for our country. And frankly, this puts more American citizens at risk. Because now the Iranians, who captured another person recently, still have people in custody, now look at this and say, "OK the price." And maybe ISIS says this, too. The price of an American soul is $100 million.

(END VIDEO CLIP)

(END VIDEOTAPE)

COSTELLO: All right. But Obama administration officials are pushing back. They insist the payment was actually tied to a failed arms deal that happened way back in the 1970s. So let's talk about that.

Trump supporter is here, Pax Hart. Basil Smikle, the Executive Director at the New York State Democratic Party, and Hillary Clinton supporter is with me. And Republican strategist Rich Galen also here. Welcome to all of you.

RICH GALEN, REPUBLICAN STRATEGIST: Thank you.

PAX HART, TRUMP SUPPORTER: Thank you.

BASIL SMIKLE, EXECUTIVE DIRECTOR, NEW YORK STATE DEMOCRATIC PARTY: Thank you.

COSTELLO: So Basil, I will start with you. So Hillary Clinton was not Secretary of State when this, when this $400 million was airlifted to Iran, right?

SMIKLE: Correct.

COSTELLO: But Republicans are still tying her to that because she's tied herself to Obama.

SMIKLE: Right.

COSTELLO: So ...

SMIKLE: Well listen, and the Republicans are going to do this. This sort of fits in with a lot of the rhetoric that they've had over the last several weeks and months. Including Donald Trump, chief among them, thinking this sort of dystopian view of America and the future. The truth of the matter is ...

COSTELLO: But still, it sounds bad, right?

SMIKLE: ... but the truth of the ...

COSTELLO: $400 million being flown to Iran at the same time these four American hostages were released?

SMIKLE: But there's been some reporting on this over the last day or so. And the tick-tock is such that this money has been negotiated with and litigated for -- negotiated rather than litigated -- for almost as long as I've been alive.

And so this is not something that just popped up out of nowhere. That Hillary Clinton is -- sort of negotiated the release of the hostages in exchange for this money. I think that's, that is, that just faults, number one. And number two, yes she did bring Iran to the negotiating table. But that's where her involvement ends.

COSTELLO: OK so Rich, this is such a complicated story. So I'm just going to make it clear for our viewers, this deal that the Obama administration officials are talking about. So during the 1970s, back when we were friends with Iran, when the Shah of Iran was still in power, remember?

GALEN: Yes, I remember.

COSTELLO: Evidently ...

GALEN: You don't, I do.

COSTELLO: ... you know, I mean -- no I really do remember. So the United States sold military equipment to Iran. And Iran was to pay them $400 million. Well the military equipment was never delivered. So that means that for all of those years the United States owed Iran this $400 million. Does that ...

GALEN: Yeah ...

COSTELLO: ... jive with you?

GALEN: ... I don't doubt for a second that that part of the story is true. I also don't doubt for a second that it was by the Iranians, decided, that they wanted to make it a quid pro -- appear as a quid pro quo. I'm also old enough to remember when Ronald Reagan was inaugurated in 1981, in January of 1981, that the Iranians then waited until he had actually taken the oath of office before they allowed the plane with the hostages to clear Iranian air space.

The deal to get the hostages out was made, but they decided to make it look like a quid pro quo. So they've done this before. And the good news for our side, is it's something that the Press Secretary at the White House, at the briefing, has got to talk about. Something that Mrs. Clinton has got to talk about. It's not talking about something that Trump said, it's about something the administration did. True or false, whatever you want to say, from a political standpoint, yay.

COSTELLO: Pax, you agree with that, I would assume?

HART: You know, oh my God, it's -- I'm -- everything that was, that's been pointed out, I think is great. It's the appearance of that we were giving ransom money. It's the appearance to ISIS, it's the appearance to any other terror state. That we're -- that -- the appearance that we are paying ransom for Americans. That's going to be the takeaway of this.

And yeah, Hillary Clinton's fingerprints are all over this. And this is part of, this is ... COSTELLO: Now just to make it clear again, Hillary Clinton was not

Secretary of State when the $400 million dollars ...

HART: I understand that ...

COSTELLO: ... went to Iran.

HART: ... I understand that, but she, she ...

COSTELLO: And she did not have anything to do with the hostage negotiations, either.

HART: But she was part -- what -- and ...

COSTELLO: She was part of the Iran deal, however ...

HART: Exactly. That's -- that's the point ...

COSTELLO: OK.

HART: She came into this -- you know, I, honestly I used to think that Barack Obama appointed Hillary Secretary of State to ruin her political career, to neutralize her as a threat for his real action. And I'm beginning to wonder if maybe that was actually the case.

You know, it's like, this is part of the last whole, kind of -- it's, you know and the White House response of kind of parsing out individual elements of this, and dismissing them. And ignoring the overall negotiation that we're having with Iran, ignoring the overall position that America, on the world stage, is -- of we are weak, we are, we are powerful and we must be punished ...

COSTELLO: Well ...

HART: ... and we may, you know ...

SMIKLE: Well and we ...

COSTELLO: Well let's just come back to -- Republicans will tie Hillary Clinton to this because she has tied herself to the Obama administration, right? So she somehow what, does she have to separate herself from it? Or not?

[10:36:30]

SMIKLE: Well she came up -- there was a statement yesterday that said, A, she was not Secretary of State at the time. B, the President's telling of this -- of the $400 million, and how it was delivered, and the fact that this is money that's been long-standing to the Iranians -- is also true.

So I think -- so it seems like we're spending a lot of time engaging potential conspiratorial theories. It -- we don't need to look for the false. We actually could just look at what happened. And say, "you know what? There may not be anything there." And it should ...

COSTELLO: No ...

SMIKLE: ... and if the Republicans are going to tie ...

COSTELLO: Actually ...

SMIKLE: If the Republicans are going to tie Hillary -- say well, Hillary Clinton is tied to Barack Obama, she can't get away from him -- I'll take that. Because today his ratings are 54 percent. And the country feels confident in where ...

COSTELLO: OK.

SMIKLE: ... in where it's going. So ...

COSTELLO: Rich, what -- actually, Rich, is this conversation is like showing me, is that this is such a complicated tale.

GALEN: That's right, you're exactly right.

COSTELLO: That voters may say, "what?" Or ...

GALEN: And the other, the other ...

COSTELLO: ... they might say, "there's something here."

GALEN: The other thing, Carol, is that I covered Municipal Court as a young reporter. And you listen to the prosecution take the same set of facts and you say, "this guy needs to be just taken out back and whipped." And then the defense would come on and say, "this guy needs to be beatified." It's just the same set of facts that you present differently.

The problem is that -- and as you point out -- the job of the prosecutor and the defense attorney were to minimize the case to the point that the jury understood what they were trying to get to. And so far I don't think either side's doing a terribly good job. Just like -- and I don't think it's got legs anyway. I think this will be gone in three days.

COSTELLO: All right, I ...

SMIKLE: I will ...

COSTELLO: I got to leave it there.

SMIKLE: Sure.

COSTELLO: Thanks to all of you. Pax Hart, Rich Galen, Basil Smikle, thank you.

SMIKLE: Thank you, too.

COSTELLO: Because I have to get to breaking news, actually. A North Carolina man has now been arrested, accused of trying to provide material support to ISIS. CNN Justice Correspondent Evan Perez has more on that for us. Good morning. EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Good morning, Carol. This man

is accused of trying to form an ISIS sleeper cell here in the United States. His name is Erick Jamal Hendricks. He's 35 years old and he was arrested in North Carolina.

And according to the documents filed in court today by the Justice Department, he had been in touch with a number of people on social media. And his goal was to try to recruit fighters that he was going to house in a secure place, in order to launch attacks on U.S. military members and other people in the U.S. government.

Now one of the things he wanted to do, according to the court documents, is he wanted to use some of the personal information of U.S. military members that's been released by ISIS -- this kill list that's been on the internet now for a couple of years -- and he wanted to use that as a way to target members of the military.

There's -- the irony here is that the person who stole that information, the hacker who was responsible for getting that information into the hands of ISIS, Ardit Ferizi, is sitting in a jail cell just a few miles away from here, in Northern Virginia, where he is awaiting sentencing. He's pleaded guilty to stealing that information and providing it to ISIS.

The hacker, the ISIS hacker who spread that information, who published that information online, Junaid Hussain, was killed in a drone strike last year, Carol. It's also notable that in April of 2015, according these documents, that's last year, just before that attack on a Prophet Mohammad contest -- a drawing contest in Garland, Texas -- this man, Hendricks, was in touch with Elton Simpson. Who's one of those guys who was trying to carry out that attack, if you remember. A security guard was able to stop that attack before anybody else got hurt. Carol?

COSTELLO: Evan Perez reporting live for us on the breaking news this morning, thank you. Still to come in the Newsroom, fearing an explosive spread of the virus, Florida lawmakers press the CDC for more money to fight Zika.

[10:40:20]

(COMMERCIAL BREAK)

COSTELLO: Donald Trump's running mate, Mike Pence, is campaigning in Raleigh, North Carolina. He's at a rally there, small one. An 11- year old boy got up and asked him a question about softening Donald Trump's tone. Let's listen.

(BEGIN VIDEO CLIP)

GOVERNOR MIKE PENCE (R), VICE PRESIDENTIAL CANDIDATE: What did you say that I've been doing?

MATTHEW, AUDIENCE MEMBER: You've been kind of softening up on his words (ph). PENCE: Let me tell you, Matthew. Number one, this boy's got a

future. Nicely done. Let me tell you what, I couldn't be more proud to stand with Donald Trump. And we are shoulder to shoulder in this campaign we're working on, honestly.

But sometimes, you know, what I've learned, Matthew -- and you'll learn it when you're governor of North Carolina -- I'm not kidding about that -- is sometimes things don't always come out like you mean, right? And Donald Trump and I are absolutely determined to work together.

We have different styles, you might have noticed that. I said that at our convention. I said that, you know, we nominated someone larger than life, known for charisma. So they wanted to kind of balance the ticket.

I went on a motorcycle ride last Friday. It was a -- I realized ...

COSTELLO: All right you hear Mike Pence handling a question from an 11-year old boy, much more in that -- much more on that on CNN in the hours to come. In other news this morning, Florida officials are ramping up the fight against Zika. Aerial spraying began this morning over a Miami neighborhood experiencing an outbreak of the virus.

So far 15 people have tested positive for Zika. In response, the Florida governor, Rick Scott has ordered free Zika testing statewide for pregnant women. This comes as the CDC shells out $720,000 to Florida to help stop the spread of the virus. But some Florida lawmakers say that's not nearly enough.

I'm joined now by Florida Congressman Carlos Curbelo, who is part of the delegation requesting more money to fight Zika. Welcome, Sir.

[10:46:40]

REPRESENTATIVE CARLOS CURBELO (R), FLORIDA: Carol, good morning from Miami, thanks for having me.

COSTELLO: Nice to, nice to have you here. How much money does Florida need?

CURBELO: Well we don't know the exact amount but what we do know is that we think the CDC should use a proportional allocation system for disbursing these funds. Here in Florida, we're especially exposed to this threat. In fact, we're the only part of the country right now where mosquitos are transmitting this disease.

So I'm going to be meeting with the Director of the CDC -- who's in town -- later this morning. And we're going to be asking for our fair share. And I remind everyone, when we're talking about Miami, this is an international tourism destination, it's a trade hub. So what happens here doesn't only affect us, it really affects the whole Southeast of the United States, and other parts of the country as well.

So we're hoping we can get more resources. And with that, I'll also tell you that Congress needs to act. And we've been pressing both our colleagues in the House, and in the Senate, to pass some long-term funding so that we can respond to this threat. Not just in the short- term, like we're doing a decent job of right now ...

COSTELLO: Well, and ...

CURBELO: ... but also in the long-term.

COSTELLO: You bring up your fellow members of Congress but they've left for a 7-week recess without passing a Zika funding bill. How would you characterize that?

CURBELO: Well it's irresponsible. And I've been very fair in evaluating this whole Zika situation in Congress, Carol. When House Republicans brought forward a bill that I thought was inadequate, insufficient, I voted against it and said this is not enough. And my community's exposed -- I also represent the Florida Keys. I mean this is rich breeding ground for mosquitos.

We got a better bill out of a conference report. $1.1 billion more funding that didn't expire. We passed it out of the House and then Senate Democrats filibustered. So I think both parties share in the blame.

This is one of the reasons, Carol, why Americans are so frustrated. Because the government cannot get simple things done, like funding a response to a public health emergency. Which could also become an economic crisis for us here in South Florida.

COSTELLO: Well yes, remember the hysteria and concern surrounding ebola? Why do you think there's not as much concern surrounding Zika?

CURBELO: Well because for a long time there wasn't much news in the United States about Zika. Certainly down here, because we have so many flights to Latin America, people were aware. But really there was a lack of awareness, I think. Probably people from the northern part of the country, where really mosquitos aren't a threat and these diseases aren't a threat, weren't as -- didn't feel a sense of urgency.

I think ebola got a lot more coverage. But here we are, this threat is now here in the United States. And that's why we're calling for maybe the Senate to go back and proform a session. I think only two Senators would need to show up in Washington, get this bill passed. If that can't happen, let's have an emergency session of Congress, just two, three days. Get this done and make sure that in the long- term we can beat this threat.

Now I do want to say, Carol, it's not like we're not responding to Zika today. The administration is using funds that it has at its disposal. We hope they will make even more available. But we do need some long-term certainty. Agencies like the CDC need to contract with vendors, with doctors, with experts. And if they don't have the ability to do that long-term it makes it very difficult.

I'll tell you, our -- my wife's OB GYN called us yesterday. His practice is packed with women, there is a -- who are concerned about this. Pregnant women. There is a panic in South Florida, people are worried and the government needs to act responsibly.

[10:50:30]

COSTELLO: Well you've made your impassioned plea, I hope someone's listening. Thank you so much for being with me this morning, Congressman Carlos Cubelo.

CUBELO: Thank you.

COSTELLO: Still to come in the Newsroom -- you're welcome -- one day out from opening ceremonies and helicopters with armed guards are swarming Rio. Why?

(COMMERCIAL BREAK)

COSTELLO: One day out from opening ceremonies in Rio and right now hundreds of Russian athletes are on pins and needles waiting to see if they can even compete. CNN's Nick Paton Walsh live in Rio with more. Hi Nick.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Carol I'm standing right in front of Russia House (ph) where Russian officials, organizers are gathering potentially in the hours ahead -- they think -- to hear this fateful statement from the IOC which has put Russia, and very strong doping allegations against it, right at the heart of these games.

Down to the minute now we're hearing from individual federations, the IOC tasked to rule if Russian sportsman could compete here. We're just hearing the Judo guys can. We heard the weightlifters couldn't, earlier on. An official behind me is saying there's about 290 Russian sportsman who've come to Rio hoping they'll get the green light to compete. But some, sadly, will be flying home, it seems, disappointed.

When the statement comes out we will hear from a Senior Russian official behind me at a press conference, the head of their Olympic committee, at about 3:30 local time, 2:30 yours. But they are dealing with a very complicated message at this stage. Suggesting this is international conspiracy against Russia. But at the same time says (ph) they need to engender more trust in their behavior. And going ahead with competing in the games.

But security here is very high. We've just seen ourselves, along this beach, hovering above our head in the last hour, a Brazilian military helicopter. One of three that were seemingly circling around this beach. The torch is due to pass alongside us pretty soon in the hours ahead. And it's all part of this lockdown here. Very visible in its effort to try and remind people that there are 85,000 security personnel trying to keep people safe. That's one for every five of the estimated visitors they're going to get.

And we're still also hearing that there's some confusion around the security screening at the Olympic venues. Troubling there. One firm hired in a hurry to carry it out, then fired in a hurry But their employees, are telling us they're still actually turning up for work, despite having been fired. Supposedly about four or five days ago. Confusion there, and the most fundamental part, you might argue, of security screening.

And a much bigger question to be answered here, this Russian team on pins and needles here ten to hooks to (ph) learn who precisely can compete. Carol?

COSTELLO: Nick Paton Walsh reporting live from Rio this morning, thank you. And thank you for joining me today, I'm Carol Costello. AT THIS HOUR with Berman and Bolduan after a break.

[10:57:10]