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Severe Weather Moves to East Coast; Partial Government Shutdown Enters Day Seven; House Democrats Call for Hearings in Wake of Guatemalan Kids' Death in U.S. Custody; New Details on Kevin Spacey Assault Allegations; Aired 4:30-5a ET
Aired December 28, 2018 - 04:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[04:30:00] CHRISTINE ROMANS, CNN ANCHOR: An unplanned holiday light show. A transformer blows up lighting up the skies above New York. And the skies, well, they won't be quiet today either. A very messy end to the holiday week.
JOE JOHNS, CNN ANCHOR: 800,000 federal workers are not going to get relief any time soon. The government shutdown is going to last into 2019.
ROMANS: And the stock market not finishing the year quietly. The Dow roaring back 900 points. Bouncing from big losses to close up in the final hour.
(BEGIN VIDEO CLIP)
JERMAINE MASSEY, CLAIMS HOTEL STAFF HARASSED HIM: Why? Why are they coming?
UNIDENTIFIED MALE: Escort you off the property.
MASSEY: Because what, and I'm staying here?
UNIDENTIFIED MALE: Not anymore.
(END VIDEO CLIP)
JOHNS: Allegations of racial bias at an Oregon hotel. A black guest asked to leave the lobby. His lawyer says the only thing he's guilty of is calling his mother while black.
ROMANS: All right.
JOHNS: Welcome back to EARLY START. Here we go. The beginning of the last weekend of the year. I'm Joe Johns.
ROMANS: Thank you.
(LAUGHTER)
ROMANS: I'm Christine Romans. It is 31 minutes past the hour. Much as it looked like an alien invasion it was not an alien invasion or so we're told. See for yourself. The skies over New York City lit up with this eerie blue glow by a transformer explosion at a power plant in Queens. A spokesman for Con Edison, the utility, telling CNN a substation experienced a brief electrical fire after a couple of transformers tripped offline. It didn't seem so routine, though, to these folks.
(BEGIN VIDEO CLIP)
JIM MURPHY, WITNESSED TRANSFORMER EXPLOSION: Holy (EXPLETIVE DELETED). Oh, my god.
(END VIDEO CLIP)
JOHNS: It takes an a lot to get a New Yorker to rant like that. This was the view from miles away in Manhattan. The light visible as far away as New Jersey. The unearthly effect enhanced by a relatively low 2,000-foot cloud ceiling. The explosion is powerful enough to shake buildings and rattled windows.
Residents reported temporary power outages which also briefly shut down LaGuardia Airport in Queens. No flights took off for an hour. The airport switched to a backup generator and resumed normal operations around 10:20 p.m.
ROMANS: All right. Also in the skies above New York, the storm system we've been tracking all week. A very messy day in store for the Great Lakes and the eastern states just like in the Midwest and south yesterday. Two deaths have now been reported in Louisiana. A 58-year-old woman, she died after a tree fell on her camper trailer. Another person died in Kansas in a crash on I-70. It's a blizzard conditions there that shut down that interstate.
JOHNS: This system stretches the entire U.S. from north to south. In South Dakota sleet and snow fell across the state. Icy roads and limiting visibility. The Nebraska state patrol closed about 130 miles of I-80 due to snow, ice and high winds. And in Kenner, Louisiana, rain and high winds were the apparent cause of electrical explosions and power line pyrotechnics like you've never seen.
Meteorologist Ivan Cabrera has your Friday forecast.
IVAN CABRERA, AMS METEOROLOGIST: Christine and Joe, good morning. Wild night for some of us across the south with torrential downpours and frequent lightning. And the big storm system extends from the gulf all the way up into Canada. And on the northern end of it, we're talking about blowing snow continuing so blizzard still in effect at this hour.
This will be the big deal of course, 50 million of us under a flood threat from Louisiana all the way up into New Jersey as a result of two to four inches of rainfall that's going to fall for the next couple of days with this very slow-moving system. And that's going to be the problem here.
Also we've had very heavy rainfall the last several days. And so the soil is saturated. So it's not going to take much. And this will continue Saturday into Sunday. Not looking like a great weekend as a result of the rain. Also if you're flying, if you're still trying to get home, right, this will be the issue for today. In New York will have some significant delays not just because of the rain but also the winds will be gusty at times throughout today. Diminishing, though, by the time we get into tomorrow -- guys.
ROMANS: All right, Ivan, thank you for that.
OK. Another stunning head-scratching day on Wall Street if you missed it. Stocks staged a major comeback late in the day. The Dow closed up 260 points, that's about 1 percent. Not a lot, just 1 percent. But it had been down 611 points earlier in the day. That's almost a 900-point rebound.
[04:35:04] The Dow has staged 13 sort of 5 percent big rallies since the financial crisis. So it doesn't happen very often. The S&P 500 and the Nasdaq both closed narrowly higher. Investors are looking for certainty. And there is still a cloud of chaos surrounding a possible slowing global economy, trade policy and recent moves by the Federal Reserve.
President Trump has been buoyed by the recent market boosts. We're told, a source telling CNN the president called his advisers from Air Force one when he was on his way back from Iraq. He was so glad that markets closed higher on Wednesday. The president often uses the market as his own personal barometer of his political standing. In his phone calls, the president repeated that he believes the economy is doing great.
The economy is strong. But consumer confidence has fallen this month as benefits from last year's tax cuts begin to fade. The Conference Board said its consumer confidence index fell to 128.1 in December. That's the lowest since July.
Now Thursday's stock market gains don't erase what has been a dismal December for Wall Street. The three major stock market averages are all on track to end the month lower and it looks like for the year lower stock investors will have their worst returns in a decade.
JOHNS: And a dysfunctional U.S. government is not going to end this year functioning. It is now day seven of the partial government shutdown at this point. It's guaranteed to spill into the new year. Both the House and Senate adjourned Thursday with no deal even on the table. And with the president back from his surprise trip to Iraq, he has now returned to Twitter with a whopper claim and on Twitter, at least, he seems to be ignoring the pain that's about to get worse for 800,000 unpaid federal employees.
CNN's Abby Phillip at the White House with the latest.
ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Christine and Joe, President Trump is back in Washington after saying earlier this year the federal workers supported his plan to keep the government shutdown until he gets border wall funding. The president is now saying that those who are not getting paid in this government shutdown are all Democrats.
Now that statement drew a rebuke from one of the largest union representing federal workers who said this in a statement today. "A government shutdown doesn't hurt any one political party or any one federal employee more than another. It hurts them all. It hurts their families and it hurts all of our communities."
But even as there continues to be this blame game and back and forth between the two parties, we still are no closer to finding out what it will take to end the shutdown. The president yesterday repeatedly refused to say how much he would accept in border wall funding and whether he would come down from his original proposal of $5 billion to $2 billion.
Now the White House is issuing a statement saying that the president is not backing down from his desire for more border security. Even one of the president's top allies suggested yesterday that the president has not heard much from Democrats and that this shutdown could last for many days to come -- Christine and Joe.
JOHNS: Abby Phillip at the White House.
The impact of the shutdown is about to get very real for federal employees working or sitting at home unpaid. Credit cards from holiday shopping, rent, electricity, a lot of people have bills to pay in the new year. And get this, the U.S. Office of Personnel Management tweeted advice to federal employees on how to deal with their precarious financial situations.
ROMANS: One suggestion federal employees offer to perform chores in exchange for rent payments. One sample letter to a landlord reads, in part, "I would like to discuss with you the possibility of trading my services to perform maintenance, for example, painting, carpentry work in exchange for partial rent payments."
JOHNS: The Navy Federal Credit Union now offering help on how to request, receive or repay loans for anyone whose pay is affected by the shutdown.
The effects also stretching into space. NASA's new Horizon Probe is on target for the New Year's rendezvous with the most distant object ever to be explored by human kind. But due to the shutdown no live NASA webcast.
ROMANS: All right. House and Senate Democrats are calling for action after the deaths of two migrant children in U.S. custody. Democrats in the House calling for Customs and Border Protection oversight hearings and for Homeland Security to preserve documents connected to the children's deaths.
On the Senate side the ranking Democrat on the Judiciary Committee Dianne Feinstein is calling for hearings on CBP's treatment of immigrant children. Homeland Security Secretary Kirstjen Nielsen will visit the U.S.-Mexico border today following the death of the Guatemalan 8-year-old Felipe Alonzo Gomez in border control custody. The boy's mother now speaking out.
CNN's Dan Simon is in El Paso, Texas. DAN SIMON, CNN CORRESPONDENT: Christine and Joe, Secretary Nielsen is
headed to the border and her stated purpose is to examine the medical screenings that are taking place in the border control stations. Obviously with two children who have died within the past month, she is facing this fresh new crisis and one of the things she has ordered her agency to do is to offer enhanced medical screenings and she wants to witness that process firsthand. She'll be in El Paso on Friday and in Yuma, Arizona on Saturday.
[04:40:04] In the meantime, we are getting a better understanding in terms of why this father and the son made this entry into the United States. The mother spoke to Reuters. And one of the things she told them is that they were under the impression that if you travel with a child, you have a better chance of gaining entry into the country.
She says she was essentially encouraged by neighbors to do this. One of the quotes she gave Reuters was lots of them have gone with children and managed to cross. Even if they are held for a month or two. And it is statements like that where critics say that is the problem with U.S. immigration policy that it incentivizes bringing children across the border.
That is if you're a family from a country that does not border the United States you are not automatically deported. Oftentimes family members are allowed to essentially go free while their immigration proceedings are pending.
Christine and Joe, back to you.
JOHNS: The president is now seizing on the murder of an officer in California as police vow to pursue the suspect relentlessly. Corporal Ronil Singh was gunned down during a traffic stop for a suspected DUI Wednesday morning. Newman Police Chief Randy Richardson says Singh was his first hire.
(BEGIN VIDEO CLIP)
RANDY RICHARDSON, NEWMAN POLICE CHIEF: Please remember the man. Please remember the husband. Please remember what he was. What he came to this country to do. His 5-month-old, he will never hear talk. He will never see his son walk. He doesn't get to hold that little boy, hug his wife, say good night anymore because a coward took his life.
(END VIDEO CLIP)
ROMANS: The Stanislaus County Sheriff's Department is leading the investigation and has identified a suspect. Now the sheriff would not release the suspect's name but says he is in the country illegally. And that led President Trump to take to Twitter where he linked Corporal Singh's death to the need for border security.
JOHNS: The president's surprise trip to Iraq not sitting well with the country's lawmakers. Some Iraqi politicians demanding American troops leave Iraq, something President Trump made clear will not happen. The president landed with no heads up and despite last-minute efforts did not meet with Iraqi officials.
The political party of the current Iraqi prime minister which is aligned with Iran says the president's visit shows no respect for the country's sovereignty. It called for, quote, "condemnation of the visit of the arrogant Trump." Still the Trump administration is vowing to maintain close cooperation with Iraq. A White House spokesperson says the U.S. and Iraq will work together on regional security issues and the ultimate defeat of ISIS.
ROMANS: All right, 42 minutes past the hour. This Friday morning it turns out the referee who ordered the black varsity wrestler to cut off his dreadlocks, he's been in trouble before.
(COMMERCIAL BREAK)
[04:46:35] JOHNS: A guest at an Oregon hotel is alleging racial bias after he says he was harassed by staff for taking a phone call in the lobby.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Oregon Police will be here in a minute.
MASSEY: Thank you. Call them. I'm waiting.
UNIDENTIFIED MALE: OK.
MASSEY: They are coming why? Why are they coming?
UNIDENTIFIED MALE: Escort you off the property.
MASSEY: Because what? And I'm staying here?
UNIDENTIFIED MALE: Not anymore.
(END VIDEO CLIP)
JOHNS: OK. So that's the voice of Jermaine Massey. He was in the lobby of the Portland DoubleTree Lloyd Center where he had checked in. After he told a hotel desk staffer he was taking a personal call in the lobby, a guard started to question his presence.
ROMANS: Police arrived and Massey was asked to leave the hotel. The officer escorted him back to his room to gather his belongings and offered him assistance to find a different hotel but Massey declined. The hotel's general manager says the incident is unfortunate, adding that they have reached out to Massey. Massey's attorney characterized the incident as calling his mother while black. No comment yet from the employees in the video.
JOHNS: It turns out the referee who told the New Jersey varsity wrestler to cut his dreadlocks was investigated in 2016 for using a racial slur. A source from the New Jersey Wrestling Officials Association tells us Alan Maloney was given a one-year suspension for racist language aimed at a fellow referee. But because the incident did not happen at an athletic event, the suspension was overturned on appeal.
ROMANS: Maloney told the "Courier Post" he doesn't remember using the slur toward his colleague but says he believed him and apologized.
Video of a trainer cutting Andrew Johnson's hair in the middle of a match went viral prompting widespread criticism. The State Division of Civil Rights is investigating.
JOHNS: Graphic new details are coming to light about the sex assault accusations against actor Kevin Spacey. And this is a warning, this story has sexually explicit language.
Now the criminal complaint from Nantucket, Massachusetts, alleges Spacey bought a teenager a number of alcoholic drinks in 2016 and bragged to him about the size of his penis. He later reached over and began rubbed the teen's thigh. Spacey then unzipped the young man's pants and rubbed him both inside and over the pants. The accuser even took a very brief Snapchat video of the alleged assault. Investigators say they have that video.
CNN's Miguel Marquez has more.
MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT: Christine and Joe, despite what seems to have been a very heavy night of drinking between Mr. Spacey and his accuser, the accuser in the police report indicates that he had the frame of mind to actually take video of it. Snapchating part of the sexual assault he says to his then girlfriend.
Now one of the things that the accuser says in this report is that he had told Mr. Spacey that night that he was 23 years old. In fact, he was 18. All of this happening at the Nantucket Club Car Restaurant shortly after he got off his busboy shift that night in July 2016.
The accuser's mother spoke about this incident last year.
(BEGIN VIDEO CLIP)
HEATHER UNRUH, MOTHER OF ALLEGED VICTIM: The victim, my son, was a star struck, straight, 18-year-old young man who had no idea that the famous actor was an alleged sexual predator.
(END VIDEO CLIP)
MARQUEZ: CNN has tried to speak to Mr. Spacey or his representatives about these charges, and have not heard back from them.
[04:50:01] But Mr. Spacey himself shortly after the news broke of these charges put up a video on his Twitterfeed and just the tone, the style, the substance of it was jarring given the assault charges against him.
(BEGIN VIDEO CLIP)
KEVIN SPACEY, ACTOR: You wouldn't believe the worst without evidence, would you? You wouldn't rush to judgments without facts, would you? Did you? If I didn't pay the price for the things we both know I did do, I'm certainly not going to pay the price for the things I didn't do.
(END VIDEO CLIP)
MARQUEZ: Now Mr. Spacey does the video in his Frank Underwood character. Netflix that produces "House of Cards" says it had no comment about the video. It's not clear what the point of it is, but given the timing of the charges and the video Mr. Spacey released, it is notable and certainly was noted and remarked upon not only in Hollywood, but around the world. The arraignment for Mr. Spacey in this particular case is set for January 7th -- Christine, Joe.
JOHNS: Miguel Marquez, thanks for that.
A Republican candidate in Georgia's governor's race who made headlines promising to put undocumented immigrants on his deportation bus is now facing fraud charges. Michael Williams was indicted last week for lying to investigators and filing false insurance claims after a break-in at his campaign office in May. Williams' campaign manager said $300,000 worth of computer equipment was stolen. Williams' attorney denies any wrongdoing.
Earlier this year Williams drove around the state in his green and white "Deportation Bus" as it was called. That bus did not get him the boost he needed. Williams finished last in the five-person Republican field.
ROMANS: All right. Heart-pounding moments caught on video. An Illinois police officer barely avoids -- I can barely watch that.
JOHNS: Yes, I know.
ROMANS: Being struck by a train. The frightening ordeal caught on the officer's dash cam. The officer was approaching the tracks just as the train came speeding through the crossing. You can see the warning lights are flashing but they don't look -- look at the arm.
JOHNS: Yes.
ROMANS: They don't start flashing --
JOHNS: That's as closest it gets --
ROMANS: -- until the moment when the train barrels by. The incident is being blamed on obviously an electrical problem with the crossing gate. But look at that.
JOHNS: Just incredible.
ROMANS: Even the car right in front of him.
JOHNS: Right. It looks like a wet road, too. You know, if your brakes don't work, you've got a big problem in that situation.
ROMANS: Oh my gosh. All right. 52 minutes past the hour. Disney and Verizon in a high stakes argument over programming fees, and ESPN, ABC and consumers, uh-oh, are caught in the middle. CNN Business next.
(COMMERCIAL BREAK)
[04:55:47] ROMANS: Lawyers for Elon Musk are moving to dismiss a defamation case filed by one of the divers who assisted in the rescue of a Thai soccer team from a cave in July. Now this feud started in an interview that Vernon Unsworth gave to CNN claiming that Musk's attempt to help rescue the 12 boys and their coach was a PR stunt and had absolutely no chance of working.
JOHNS: So in a series of tweets, Musk attacked this British diver like in this since deleted tweet, reading, "Sorry, pedo guy, you really did ask for it." Pedo meaning pedophile. Musk did apologize for the tweets. His lawyers argued Twitter is a platform for infamous hyperbole and his statements were imaginative attacks. Unsworth is asking for more than $75,000 plus punitive damages decided by the court.
ROMANS: America's oldest World War II veteran and the oldest man in the United States has died. Richard Overton passed away Thursday at the age of 112. His family said he was recently hospitalized with pneumonia. Overton volunteered for the Army in 1942 and served with the 188th Aviation Engineer Battalion, an all-black unit that served on various islands in the Pacific. He was honored by former President Barack Obama in 2013 at a Veterans Day ceremony at Arlington National Cemetery.
JOHNS: You know, you never know what kind of life-changing event is going to happen when you're looking for laundry detergent. So a CNN producer was doing just that when she saw a man with a note on his backpack saying his wife needs a kidney and including his phone number. The producer, Lilit Marcus, snapped a picture, posted it on Twitter hoping it might help, and did it ever. Within a week, more than 23,000 retweets and 35,000 likes.
ROMANS: It had been shared by a bunch of celebrities including actress Sarah Hyland, who's had two kidney transplants. The man has since been identified as Raymond Thompson. He and his wife Mylen and 4-year-old daughter Rachel, they live in Brooklyn. Thompson doesn't have a Twitter account, but says after the photo went viral, he started getting calls from as far away as Australia.
JOHNS: Wow. The Thompsons hope testing for a match can start next month. They say they are covered by insurance and don't need the money, just the kidney. Instead of giving money they're urging people to become organ donors. Only about one in five people waiting for a kidney last year found a match.
ROMANS: All right. Just about the top of the hour. Global markets mostly higher after another volatile day on Wall Street. You can see here what's happening in futures.
The Tokyo closed lower but Shanghai in Hong Kong were up. And London is continuing the bounce we saw yesterday. And U.S. futures are higher. Now look, U.S. stocks staged a major comeback late Wednesday. The Dow
closed up 258 points after erasing a 611-point loss earlier in the day. The S&P 500 and the Nasdaq both closed narrowly higher. Thursday's gains, though, won't erase what's been a dismal December for Wall Street. The three major averages are all lower this month.
You can see the Dow, you know, down -- wow, look at that -- 9 percent. S&P 10 percent, Nasdaq 11 percent. That's a really bad month.
Three main themes heading into 2019. First pressure from higher interest rates. Second, pressure from trade wars and third, pressure from political uncertainty.
Sears nearing a crucial deadline that could determine whether it survives. The clock is ticking here. The iconic retailer set today as the deadline for potential buyers to bid for its assets. Sears wants someone to buy about 500 of its stores and the Kenmore appliance brand to keep it open. The only public bidder is a hedge fund controlled by Sears chairman Eddie Lambert. Lambert is offering $4.6 billion for Sears operating assets, allowing 50,000 employees to keep their jobs.
It doesn't make his bid official. Sears could extend the deadline or plan to close all of its stores and liquidate its assets. Spokespeople for Sears and Lambert declined to comment Thursday but, you know, close the doors here any day now.
Disney and Verizon arguing over programming fees and ESPN and ABC caught in the middle. Disney and Verizon have until 5:00 p.m. Eastern Time, December 31st, to agree. If they don't, Verizon will stop carrying Disney Channels. ABC affiliates would also be blocked for Fios customers in New York and Philadelphia. In a statement, ESPN said, "Our negotiations continue in earnest and we remain optimistic that we can reach a deal."
Disputes over fees, you know, they're common. As television viewership declines media companies are demanding more for their content to make up for the lost revenue.
JOHNS: So there you go --
(END)
