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Dems Versus White House; Second Software Flaw in Boeing 737 MAX; Trump Wants Herman Cain on Fed Board; Big Payday for MacKenzie Bezos; Notre Dame Coach: We Don't have Enough Women in Power. Aired 5-5:30a ET

Aired April 05, 2019 - 05:00   ET

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


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[05:00:06] CHRISTINE ROMANS, CNN ANCHOR: House Democrats versus the White House. Neither willing to compromise on how much to reveal of the Mueller report or the president's taxes.

BORIS SANCHEZ, CNN ANCHOR: Plus, breaking overnight, not one, but two major software flaws in the Boeing 737. Boeing's CEO says the company owns the responsibility to fix these issues.

ROMANS: Does a former pizza executive belong on the board of the Federal Reserve? The president looking to install loyalists as he battles the Fed chair.

SANCHEZ: Plus, MacKenzie Bezos is now the world's fourth richest woman. What she got and what she lost in the divorce from the Amazon founder.

ROMANS: He's still the richest person in the world, even after $35 billion.

SANCHEZ: Yes, and she didn't get half. Yes.

Good morning, and welcome to EARLY START. I'm Boris Sanchez, in for Dave Briggs.

ROMANS: And I'm Christine Romans. It is Friday, April 5th.

Nice to see you, Boris.

SANCHEZ: Good to be with you, Christine.

ROMANS: It's 5:00 a.m. in the East.

Let's begin in Washington. The White House and House Democrats gearing up to fight on two fronts, the Mueller report, and President Trump's tax returns.

First, on Mueller, House Judiciary Chairman Jerry Nadler demanding communications between the Justice Department and Robert Mueller's office about the special counsel's report. SANCHEZ: Yes, and Nadler wants to clear up reported discrepancies between two different summaries of the 400-page report, Attorney General Bill Barr's four-page summary, and the still-secret summaries actually written by Mueller's team.

(BEGIN VIDEO CLIP)

REP. JERRY NADLER (D-NY), CHAIRMAN, HOUSE JUDICIARY COMMITTEE: Yes, and I think it's inevitable that Mr. Mueller is going to testify at some point, but the first thing we need is -- well, is the release of the report and the documents.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Do you think it's inevitable that Mueller is going to come before your committee?

NADLER: At some point, yes.

(END VIDEO CLIP)

ROMANS: Sources tell us several of Mueller's investigators are frustrated with the way Barr summarized the special counsel's findings, in particular on obstruction of justice.

The DOJ is defending the attorney general's handling of the report. The Justice Department saying every page of the report was marked as possibly containing information that should not be publicly released.

SANCHEZ: Every page.

Now, the president, you might recall, has encouraged the release of the report, but he's changing his tune. He tweeted this out, quote: This is the highest level of presidential harassment in the history of our country. Also notably, he says there's nothing they could give Democrats that would make them happy.

Meantime, the White House is threatening to block Democrats' demand for the president's tax returns. The president is suggesting the Justice Department could become involved.

For more, let's turn to White House correspondent Abby Phillip.

(BEGIN VIDEOTAPE)

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Christine and Boris, President Trump is now facing the full brunt of this new reality in Washington as Democrats who now control the House of Representatives are using their oversight power to ask for a number of things, one of them being the full Mueller report to be released to the public and to the relevant committees, and also now, the president's tax returns.

They are asking for six years of tax returns, personal and from his businesses. And the president is responding to all of that by essentially dismissing it, saying that he's not inclined to allow them to have access to those returns.

The problem for President Trump may be that this request was not made to him personally but, rather, was made to the IRS using an obscure part of the U.S. code that allows select committees on Capitol Hill to gain access to certain people's tax returns.

Now, it's clear that the White House and the president's allies on Capitol Hill are going to be pushing back on both of these requests.

REPORTER: Are you asking the commissioner of the IRS not to disclose to the House Ways and Means Committee your tax returns?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They'll speak to my lawyers, they'll speak to the attorney general.

PHILLIP: It's not clear what exactly he meant by that and what role he believes Bill Barr will have in this. But either way, the White House continues to insist that President Trump is still under audit and that those tax returns won't be released until those audits are completed -- Christine and Boris.

(END VIDEOTAPE)

ROMANS: All right. Abby Phillip at the White House, thank you.

Breaking overnight, Boeing acknowledging a second software issue in the 737 MAX flight control system. This new issue, separate from the anti-stall system under investigation in two recent crashes. Boeing tells "The Washington Post" the new problem involves software that affects flaps and other hardware. Boeing calls this issue relatively minor. Its discovery delayed a planned software update last week.

SANCHEZ: Yes, all this coming a day after the release of the preliminary report on the Ethiopian airlines crash that was obtained by CNN. It left families devastated, here's the mom of Samya Stumo. The family is now suing Boeing.

(BEGIN VIDEO CLIP)

NADIA MILLERON, MOTHER OF CRASH VICTIM: Obviously, this could have been prevented and that's what makes me cry because all of these people -- it's not just Samya. One family lost their whole family -- grandparents, parents, children. Another guy lost his wife and his 1- year-old child. I mean, this is just repeated 157 times and we've met so many of these families and this could have all been prevented.

(END VIDEO CLIP)

SANCHEZ: Boeing's CEO acknowledged the company has a major issue to fix.

(BEGIN VIDEO CLIP)

[05:05:00] DENNIS MUILENBURG, CEO, BOEING: It's apparent that in both flights the maneuvering characteristics augmentation system, known as MCAS, activated in response to erroneous angle of attack information. It's our responsibility to eliminate this risk. We own it and we know how to do it.

(END VIDEO CLIP)

SANCHEZ: Now, our aviation analyst Miles O'Brien says the MAX jet has a fundamental problem and the software fix is just a band-aid that does not address larger concerns.

The back-to-back disasters have raised questions whether years of looser oversight at the FAA have been a factor.

CNN's Tom Foreman has more.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): The report says the trouble starts right after takeoff with airspeed and altitude readings from the left side of the 737 MAX 8 that don't match the readings from the right side, and two sensors on the front disagreeing about the angle of the aircraft's nose. A sensor on the right shows steady readings around 15 degrees, but the one on the left swings wildly from 11 to nearly 75 degrees steep, as if the plane is rocketing upward.

ALASTAIR ROSENSCHEIN, AVIATION CONSULTANT: What stands out and is significant is the difference in angle attack indication between the left-hand side and the right-hand side of the aircraft. There was a 60-degree difference. And this feeds directly into the MCAS computer system -- the system which forces the nose down in the event of a perceived stall. This is the same as the Lion Air accident.

FOREMAN: The report does name MCAS, but Boeing has now acknowledged it was involved. The captain asked the first officer to pitch up together, to pull back on their controls simultaneously. It does not work. Instead, the flight data recorder shows the plane diving -- in all, four times without pilots' input. An impact warning sounds in the cockpit: "don't sink, don't sink."

The report says the cockpit crew even figures out what is wrong and disables the MCAS system. Then, the captain asks his first officer about a key part of the plane needed to regain control -- the trim. The reply, "It is not working."

FOREMAN (on camera): Still, only a couple of years ago, Boeing was talking about how much it appreciated the government's new streamlined approach to regulation, particularly in regard to the MAX line of planes. And now, these planes are surrounded by investigations into how they were developed, how they were tested, how they were certified, and whether people should ever really trust them again.

(END VIDEOTAPE)

ROMANS: Tom Foreman, thank you for that.

To business, a controversial choice from President Trump to fill the last seat on the fed's powerful seven-member board.

(BEGIN VIDEO CLIP)

TRUMP: I recommended Herman Cain. He's a very terrific man, a terrific person. He's a friend of mine. I would think he would do very well there.

(END VIDEO CLIP)

ROMANS: The president, if Herman Cain and Steven Moore, another of his picks, are confirmed by the senate, would reshape the board to his liking, to Trump loyalists and Fed critics, away from a peer reviewed academic PhD. economists and toured, men who know less about monetary policy, want the Fed to support the president.

So, what is a Fed? It's meant to be an independent body meant to be a shock absorber for the U.S. economy. It has two goals: maximum employment and price stability. Supporting the jobs market making sure inflation is not too high or too low, which is destabilizing.

Now, Cain has some experience with the central bank. He once served as a director to one of the 12 regional Fed banks, the Kansas City Fed. That's not an uncommon role for a local business executive.

Trump also appointed the Fed chief, Jerome Powell, and has been complaining about it ever since.

(BEGIN VIDEO CLIP)

TRUMP: I think we have much more of a Fed problem than a problem with anyone else.

My biggest threat is the Fed because the Fed is raising rates too fast.

I think the Fed is far too stringent and they're making a mistake.

(END VIDEO CLIP)

ROMANS: You know, grumbling about the Fed is not uncommon for presidents, because, you know, they don't have control over what the Fed does. The Fed can raise interest rates or cut interest rates. It's sort of again, the shock absorber to the economy. Most presidents would like to have easier monetary policy heading into an election.

SANCHEZ: Yes.

ROMANS: It makes things look better for them.

SANCHEZ: Right.

ROMANS: And that's why the Fed needs to be independent.

SANCHEZ: You have to wonder how Herman Cain is going to do in front of the senate. In 2012, he dropped out of the presidential race because of allegations of sexual misconduct, so they may be a rough road ahead for him.

ROMANS: As far as I can tell, the notification has not been sent to the Senate with nominations. The president has said them publicly.

SANCHEZ: If something comes back in the background check, we may see a different name there.

We have to talk about the border, president Trump is heading there to Calexico, California. Ahead of his trip, President Trump seemed to flip-flop on his threat to close the border. Earlier on Thursday, listen to what he said.

(BEGIN VIDEO CLIP)

TRUMP: We're going to give them a one-year warning and if the drugs don't stop or largely stop, we're going to put tariffs on Mexico and products in particular, cars. And if that doesn't stop the drugs, we close the border.

(END VIDEO CLIP)

[05:10:03] SANCHEZ: And then later on Thursday, just a couple of hours later, Trump back peddled. Listen to this.

(BEGIN VIDEO CLIP)

TRUMP: I don't think we'll ever have to close the border because the penalty of tariffs on cars coming into the United States from Mexico at 25 percent will be massive.

(END VIDEO CLIP)

SANCHEZ: Yes, just hours apart there. Last week, Trump said he would give Mexico one week to stop the flow of migrants headed to the U.S. or he would close the border.

ROMANS: All right. The legendary head fencing coach at Harvard is under investigation for transactions involving the family of a former and current student athlete. Officials at the university are focusing on Peter Brand's real estate and nonprofit deals. According to the "Boston Globe", a wealthy Maryland businessman purchased his home at $980,000, when it was valued just over half that amount. The business man's son was eventually accepted at Harvard. The school says it became aware of allegations against the coach on Monday, and all applications for student athletes are reviewed thoroughly.

SANCHEZ: Quite a hefty price to pay for the home, almost double what it cost.

Jussie Smollett is refusing to repay the city of Chicago for investigating a purported hate crime. Now the city is taking him back to court. Details next.

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[05:15:24] ROMANS: All right. The divorce that everyone's talking about has been finalized between Amazon founder Jeff Bezos and his wife MacKenzie. The agreement makes her one of the richest women in the world. On Thursday, she tweeted she would keep 25 percent of the couple's Amazon stock, that gives her a 4 percent stake in the company. Based on Amazon's current market value, that stock is worth oh, a cool $35 billion. Jeff Bezos retains voting control over all of the shares, so she gave

him the voting control. He will also maintain his interest in the "Washington Post" and Blue Origin. That's a private space company.

SANCHEZ: Yes, Jeff and MacKenzie both tweeting that they're looking forward to the future. The couple first announced plans to separate in January, ending a 25 year marriage. The separation morphed into a media frenzy with reporting on Bezos' infidelity. Bezos published a tell-all blog post accusing the "National Enquirer" of trying to blackmail him. His network is estimated to be $150 billion and $35 billion settlement for MacKenzie Bezos makes her the fourth richest woman in the world behind heiress Francoise Bettencourt Meyers, Alice Walton and Jacqueline Mars.

ROMANS: That's L'Oreal, Walmart and the candy company, and Amazon.

SANCHEZ: Some lovely ladies there.

ROMANS: Four richest women in the world.

All right. Hopes raised, then shattered for the family of Timmothy Pitzen. DNA tests reveal the person who told police he had escaped kidnappers and claimed to be Pitzen is not. The news another blow for this family of the boy who vanished in 2011 at age 6.

(BEGIN VIDEO CLIP)

KARA JACOBS, TIMMOTHY PITZEN'S AUNT: It's devastating. It's like reliving that day all over again. And Timmothy's father is devastated once again.

ALANA ANDERSON, TIMMOTHY PITZEN'S GRANDMOTHER: He's a wonderful little boy, and I hope he has strength of personality to do whatever he needs to do to find us. My prayer has always been that when he was old enough, he would find us if we couldn't find him.

(END VIDEO CLIP)

ROMANS: Police say the young man found in Kentucky who identified himself as Pitzen is really 23-year-old Brian Michael Rini from Medina, Ohio.

SANCHEZ: Rini has a criminal history, including prison time for burglary. His brother says that he has mental issues and it's not the first time he's assumed a false identity.

(BEGIN VIDEO CLIP)

JONATHON RINI, BROTHER OF BRIAN RINI: He's been doing stupid stuff not this serious, but he's been doing stupid stuff for as long as I can remember. He used my name in a traffic stop in Norton, and then skipped court and I received a traffic warrant for it.

(END VIDEO CLIP)

BRIGGS: Timmothy Pitzen's family has searched for him ever since his mother's reported suicide on a road trip with him nearly 8 years ago.

ROMANS: All right. The city of Chicago says it will sue Jussie Smollett for $135,000. The actor missed a deadline to pay a bill the city sent. They want him to cover the cost of the week's long investigation into his claim he was the victim of a hate crime. Detectives concluded Smollett staged that attack. He has insisted he's telling the truth. The charges were dropped after he forfeited his bail and performed community service.

SANCHEZ: I still have so many questions about this story. I'm not sure we're ever going to get clarity on.

You can add one more to the Steph Curry highlight reel. Coy Wire joins us with the "Bleacher Report", next.

(COMMERCIAL BREAK)

[05:23:05] SANCHEZ: Notre Dame's basketball coach says it's time for more women to be in positions of power in all walks of life, something we can all get behind, right?

ROMANS: Absolutely.

Coy Wire has more on this morning's "Bleacher Report".

Hey, Coy.

SANCHEZ: Good morning, Coy.

COY WIRE, CNN SPORTS CORRESPONDENT: Good morning.

Muffet McGraw is in her 9th final four, she has won two national titles, including the thriller last season. She's talking about more than just basketball. Yesterday, she gave an impassioned speech on women's issues.

(BEGIN VIDEO CLIP)

MUFFET MCGRAW, NOTRE DAME COACH: We don't have enough female role models, we don't have enough women in power. All of these millions of girls that play sports across the country, they can come out every day, and we're teaching great things about life skills, but wouldn't it be great if we could teach them to watch how women lead. This is a path for you to take to get to the point where in this country we have 50 percent of women in power. We have less, right now, less than 5 percent of women are CEO's of Fortune 500 companies.

(END VIDEO CLIP)

WIRE: For the last seven years, McGraw has had an all female coaching staff, and last year's final four, she was the only female head coach. This season, three of the four are women. The action tips off tonight with Notre Dame facing the rival Geno Auriemma's UConn in a rematch of last year's semifinal. Baylor and Oregon play in the other final four match up. Now, the men's final four starts tomorrow, auburn making their first

semifinal appearance, facing Virginia, then it's Texas Tech playing in their first ever final four. They're going to take on Michigan State. Now, some players will never return to a stage like the Final Four but even for those who go on to the pros, it will be one of their greatest memories.

We caught up with Steph Curry, the Warrior's star, and asked him to reflect on a photo of himself playing in the tournament during his time at Davidson College long before he was ever a three time NBA champ.

(BEGIN VIDEO CLIP)

[05:25:00] STEPH CURRY, LED DAVIDSON TO 2 NCAA TOURNEY APPEARANCE: It's crazy how much time it's been since I had that red and black jersey on representing the Wildcats in the NCAA tournament. Obviously, great memories, especially this time of year. That always kind of comes back to front of mind when I think back where I started from and where this journey began. So, definitely an exciting time for me.

(END VIDEO CLIP)

WIRE: Perhaps every athlete should want Paul Vercammen to get them to reflect in the glory days because watch what Steph Curry did last night, the highlight of the night, a behind the back, no look pass nearly full court to Kevin Durant. KD delivers on it.

I mean, this is incredible stuff right here. What makes it more impressive, Steph Curry maybe doesn't even need those contact lenses he recently got. He doesn't even need to look for this one. Incredible stuff from curry there as they roll on the Lakers 108-90. They crushed the LeBron James-less Lakers.

Happy Friday to both of you. I say we get Paul give pep talks.

SANCHEZ: Let's dig up old pictures of all of us.

ROMANS: Not me, not me, not me, I don't like my bangs.

SANCHEZ: Coy Wire, thank you so much. Have a good weekend, Coy.

ROMANS: The White House and House Democrats go into battle over the Mueller report and the president's taxes. Democrats want to see it all. The White House not so much.

SANCHEZ: And who is tricky dick, the four-part CNN originally series explores Richard Nixon's rise, fall, come back, and destruction, featuring never before seen footage. The series continues Sunday night at 9:00, only on CNN.

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