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EARLY START

Britain Gets a New Prime Minister; U.S. and U.K. Divided on Iran?; Massive Protests in Puerto Rico; DOJ Warning to Mueller; South Korea Fires Warning Shots at Russian Military Plane; FDA Takes on Vaping. Aired 4:30-5a ET

Aired July 23, 2019 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:30:34] CHRISTINE ROMANS, CNN ANCHOR: The U.K. will announce a new prime minister this morning. Big changes could be in store if Boris Johnson gets the job.

(BEGIN VIDEO CLIP)

ERIK HANELL, STENA BULK CEO: It looks like the crew is in good health considering the circumstances. Of course, a lot of psychological pressure on them, I'm sure.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: A CNN exclusive. Concern for the crew of a British ship detained by Iran. How is the U.K. responding?

ROMANS: Stay in your lane. The DOJ warns Robert Mueller not to stray from his report when he testifies tomorrow.

BRIGGS: And vaping is as bad as cigarettes. The FDA hopes magic will keep teens from picking up the habit.

We'll also have the latest from Puerto Rico, one of the largest protests ever in a U.S. territory.

ROMANS: Yes.

BRIGGS: Good morning, everyone. Welcome back to EARLY START. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It is 31 minutes past the hour here in New York.

Let's begin, though, in the U.K. where it is a pivotal day in London. Boris Johnson or Jeremy Hunt in just hours, a new prime minister will be announced. Number of government ministers are pledging to resign if Johnson, the polarizing front-runner, wins. And that list is growing.

CNN's Nic Robertson joins us live from 10 Downing Street with the very latest. Good morning, Nic.

NIC ROBERSTON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, good morning, Christine.

Well, Jeremy Hunt, currently, the foreign secretary, maybe the new prime minister. Unlikely. He passed me here just a few minutes ago, and he said and some listening, lovely day. It's going to be a scorch in London, but the odds are not in his favor to become prime minister.

Whoever does likely, Boris Johnson, is going to immediately inherit some huge issues, rising tensions with Iran. He will, of course, had been elected on the strength of what he said about Brexit, getting that deal, and choosing a new cabinet, all those resignations that we're hearing about. The chancellor of exchequer saying he'll leave before Theresa May steps out of office. Minister within the foreign office stepping down. And a couple of other ministers, one of them lingering on the doorstep as he went in for a final cabinet meeting with Theresa May just now expected to go as well.

Not everyone in the current cabinet supported Boris Johnson. Boris Johnson has said he will have a do or die Brexit, meaning come the 31st of October, even if the U.K. doesn't have a deal, he will leave Britain and take Britain out of the European Union. He has said all of the cabinet members should be similar thinking. That they should all back a no deal Brexit, so expect changes to come.

But who is Boris Johnson? We've seen him on that zip line, of course, famously dangling, holding two British Union Jacks when he was mayor of London. He's seen as something of a comedian, if you will. Huge charisma, part of the reason that he will be voted in if is he voted in, voted in by the conservative party members.

But he is an intellectual. He is incredibly smart, the top of his class at university and a school, but also seen as somebody someone who's trustworthy. He's lost two jobs over his inability to tell the truth, one as a senior position within the Conservative Party, another as a journalist fired for lying.

But right now, the last cabinet of Theresa May being held right now. Boris Johnson, if it is him, that will be announced in an hour and a half. He won't immediately rush down to Downing Street to take up the reins. That will happen tomorrow. Theresa May will leave, go see the Queen. Boris Johnson will visit the queen, and he'll arrive here in a little over 24 hours. If it is him, the 177th prime minister in Britain.

ROMANS: All right. Nic Robertson for us at 10 Downing Street -- thank you so much.

BRIGGS: Also of concern in the U.K., a CNN exclusive now, Melissa Bell speaking with a CEO operating the British tankers seized by Iran. He says the ship did not violate any kind of law and shares his concerns for the crew seen here on Iranian state TV.

(BEGIN VIDEO CLIP) HANELL: One of the requests we have recently, which was yesterday, was that we should have access to the crew. And I have confirmed that they have received the request but we're still waiting for reply. It looks like the crew is in good health considering the circumstances. Of course, a lot of psychological pressure on them, I'm sure.

(END VIDEO CLIP)

BRIGGS: President Trump also disputing Iran's claims that it detained 17 people acting as CIA spies.

Meantime, differences are emerging between the U.S. and U.K. as allies respond to Iran.

Matthew Chance live in United Arab Emirates, near where the tanker was seized.

[04:35:02] Matthew, good morning. What are we hearing?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Britain has, of course, imposed those tough measures on Iran over the course of the past 24 hours, announcing a maritime protection force to patrol the Straits of Hormuz, a short distance for here, where that British flagged tanker was seized last week by Iranian Special Forces.

And the situation has developed from there in the sense that the British say that they're not going to be part of any U.S. maximum pressure policy. It's just being seen as further evidence of a rift between the United Kingdom and Washington when it comes to their policy on Iran. Britain still wants to see Iran on a nuclear deal that was agreed with that country to be put back in force and still maintain its opposition to the United States, pulling out unilaterally from the deal last year.

It's perhaps surprising given the confrontation that Britain is engaged in with Iran over the Iranian seizure of that British flagged vessel on Friday, and with this new prime minister about to take office in Britain, probably going to be Boris Johnson as we've heard, we could see a possible change in stance of the British government towards the Iran issue perhaps, bringing it more towards the Trump viewpoint on the issue of Iran. But we'll have to wait and see, it's certainly very interesting to watch.

BRIGGS: Sure. If Brexit wasn't enough, imagine Boris Johnson handling Iran.

Matthew Chance live this morning in the UAE. Thanks.

ROMANS: All right. To Puerto Rico now where hundreds of thousands of protesters take to the streets, blocking a major express way, launching an island-wide strike to demand the resignation of the governor, Ricardo Rossello. Singer Ricky Martin is among the celebrities there fueling the demonstrations.

A river of protestors flooding the streets near the governor's mansion. On Sunday, Rossello said he will not step down and he will not run again. The embattled governor claiming he can regain the confidence of his people.

(BEGIN VIDEO CLIP)

SHEPARD SMITH, FOX NEWS ANCHOR: Governor, who's come forward to support you in the middle of this chaos?

RICARDO ROSSELLO, GOVERNOR OF PUERTO RICO: There are folks that have supported me.

SMITH: Who specifically is supporting you today?

ROSSELLO: The role -- look, there are people.

SMITH: Could you give me one name?

ROSSELLO: There is a protest -- well, it's -- I've talked to --

SMITH: Just one name.

ROSSELLO: -- people from different groups. A lot of people from the administration.

SMITH: Governor, you're not able to give me the name of one person who supports you continuing as governor, is that correct?

ROSSELLO: I can. So, the mayor of San Sebastian, for example.

(END VIDEO CLIP)

ROMANS: So, CNN asked San Sebastian mayor if he does support Rossello, the mayor called the governor's claim wrong and mentioned the impeachment process.

More now from Nick Paton Walsh in San Juan.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Dave, Christine, Monday started peacefully with hundreds of thousands of people blocking an expressway, sending a message they wanted to but then frankly, they changed direction and a small number of them ended up here in front of the governor's mansion. And as you can see now, the police had to move in to clear them out. There was a smaller number of protesters, some turned up with masks and an altercation began with the police. Some of protesters throwing what seemed like water bottles initially. Ranks of police changed. You can see them behind me here.

And then tear gas was fired by the police to disperse the crowd after they used a number of warnings to try and move the protesters on. That led to them being chased through the streets by some of the units you can see here. And then also continued a sense of a standoff in San Juan.

So many had hoped that today would go peacefully. The protesters had wanted their message of unity to try and change Governor Ricardo Rossello's mind, to get him to step down immediately.

Now, you have these ugly scenes, frankly, where it will feed into the protesters' narrative that they face a brutal, corrupt government here, and feed into the government's narrative that they have hardcore elements in the protest who won't accept political compromise -- Dave, Christine.

(END VIDEOTAPE)

BRIGGS: Nick Paton Walsh there in San Juan.

The Justice Department with guidance for Robert Mueller on the eve of his must-watch testimony before two House committees. Mueller being warned by the DOJ to remain within the boundaries of his written report. In other words, don't say anything you haven't said already.

So, why is the Justice Department cautioning Mueller who's already said this?

(BEGIN VIDEO CLIP)

ROBERT MUELLER, FORMER SPECIAL COUNSEL: Any testimony from this office would not go beyond our report. We chose those words carefully and the work speaks for itself. And the report is my testimony.

(END VIDEO CLIP)

BRIGGS: For more on the testimony, here's Jessica Schneider in D.C.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Dave and Christine, the DOJ has informed Robert Mueller that any of his testimony in those back-to-back hearings tomorrow must remain within the bounds of his public report.

[04:40:10] It's a blunt warning from the Justice Department and it came via email on Monday. And it was in response to Robert Mueller asking for guidance on how he should testify.

[04:10:01] The DOJ is also telling Mueller that he cannot testify about any redacted portions of the report, nor about any conduct of any uncharged third parties. Now, that would likely prevent Robert Mueller from making any comments about the president, since Democrats are sure to ask if Donald Trump would have been charged with obstruction if he had not been the president.

Bu one thing that be will stay under wraps until tomorrow and won't be shared beforehand with the attorney general, Mueller's opening statement. A spokesman for Mueller tells me that the DOJ will not see the former special counsel's opening remarks prior to its delivery. Now, the spokesman wouldn't comment on Mueller's frame of mind heading into the hearings since we know that Robert Mueller is a reluctant witness. The spokesman would only say that any indication of his tone or demeanor will just have to wait until tomorrow -- Dave and Christine. (END VIDEOTAPE)

ROMANS: All right. Jessica Schneider, thank you for that.

The Trump administration changing immigration rules to speed up deportations without a hearing before an immigration judge. This new procedure would cover undocumented immigrants anywhere in the U.S. who cannot approve they have lived here continuously for at least two years. Now, previously, the fast track will only covered undocumented immigrants caught between 100 miles of a land border and within two weeks of arrival. The ACLU says it will challenge the plan in court.

BRIGGS: The raw emotion of the issue spilling out in Tennessee yesterday. Neighbors and activists in Hermitage helping out a man whose 12-year-old child effectively trapped in their van by ICE agents. Neighbors brought water, gas, and eventually formed a human chain surrounding the pair and until they can get inside their home. The ICE agents had a civil warrant meaning they couldn't enter the van nor the house to arrest the man.

ROMANS: All right. Two police officers out of a job after they suggested that Congresswoman Alexandria Ocasio-Cortez should be shot.

(COMMERCIAL BREAK)

[04:46:19] BRIGGS: Breaking news overnight. South Korea says its fighter jets fired warning shots at a Russian military plane that was violating its air space.

Fred Pleitgen live in Moscow with the very latest.

Fred, good morning. What are we hearing?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, Dave.

Pretty major incident there between one America's main allies in Europe and then two adversaries obviously. The South Koreans saying there were two incidents close to their air space, one was two Russian bombers and Chinese bombers they say going close to South Korean air space. They say they scrambled fighter jets, those intercepted those planes.

The Russians for their part are saying that incident did take place. They are saying they believe the South Koreans acted in an unsafe manner. However, the much bigger incident is the second one that the Russians so far haven't acknowledged, the South Koreans are saying that a Russian reconnaissance plane actually went into South Korean air space. And that's when the South Koreans scrambled the fighter jets and fired two bursts which totaled to around 360 bullets that they fired as warning shots, they say, in the direction of that Russian plane. So, quite a major incident going on there.

And guess who's traveling to South Korea today. It's U.S. national security advisor, John Bolton. So, certainly, a lot to sort out there and certainly, quite a tense situation there with one of America's big allies there in Asia, Dave. BRIGGS: All right. Fred Pleitgen, we'll continue to track that story for us from Moscow. Thanks.

ROMANS: All right. Boeing's 737 MAX crisis starting to have an effect on the economy and weigh on GDP. Back in April, Boeing announced it was cutting back production on all 737s from 52 a month to 42. Now, economists say the cuts likely weigh on impact could worsen if it's unable to resume deliveries.

Boeing is the largest U.S. manufacturing exporter and its stock carries serious weight on the Dow Jones Industrial Average. Stock down 6 percent since the Ethiopian Airlines crashed back in March, shaving $15.7 billion off of its market cap.

And the MAX is its bestselling plane. "The Wall Street Journal" reports jets with worth $30 billion, $30 billion are sitting in warehouses where they're grounded around the world.

And extended cancellations from three major airlines are not helping here. Not clear when this MAX will return to the air. It's possible it could be grounded into late 2019, early 2020. Boeing reports second quarter earnings on Wednesday. Second quarter, GDP, by the way, is due on Friday.

BRIGGS: It turns out a Federal Drug Enforcement probe is what kept Vice President Mike Pence from flying to New Hampshire earlier this month. Top employee of the drug recovery center Pence was set to visit pleaded guilty last week to federal drug trafficking charges.

Jeff Hatch is accused of moving 1,500 grams of fentanyl from Massachusetts to New Hampshire. The plea deal says he then handed some of the drugs off to a local dealer. Hatch is a former player for the New York Giants who has been open about his addiction problems. Pence's trip was abruptly canceled with him already aboard Air Force 2. But a source says Pence was never scheduled to interact with Hatch.

ROMANS: A Facebook post suggesting Alexandria Ocasio-Cortez should be shot caused two police officers in suburban New Orleans their jobs.

The post by Gretna, Louisiana Officer Charles Rispoli referred to the freshman Democrat as a, quote, vile idiot. The officer, a 14-year veteran of the department adding that she, quote, needs a round, and I don't mean the kind she used to serve, that a reference to Ocasio- Cortez's past work as a bartender. Officer Angela Varisco liked the post was also fired.

It's interesting, the original post was in referenced to a fake news story anyway, a story that said she said the soldiers are paid too much, which is not she never said that.

[04:50:01] It's so interesting how fake things are being attributed to these congresswomen, right? And then --

BRIGGS: They're spreading. ROMANS: And then on Facebook and social media, people are reacting

losing their jobs over something that's not even true, which is all so unfortunate.

BRIGGS: It spreads.

Ahead, it turns out the man we saw scaling down a building on fire in Philadelphia last week actually climbed up first. We'll tell you why.

(COMMERCIAL BREAK)

ROMANS: Let's try to keep the lights and the AC on. That's remaining a problem after days of hot, stormy weather.

In New Jersey, Monday's thunderstorm killed the power to more than 300,000 customers across the state.

[04:55:05] Restoration efforts may take several days. Flood watches and warnings remain in effect in northern New Jersey this morning.

In New York City, Con Edison said the storm shut off power to people who previously had electricity restored. About 8,000 customers in the dark right now in New York City and Westchester.

More than 140,000 customers in the metro Detroit area have been without power since the weekend. DTE Energy says it expects to have power fully back by tomorrow.

BRIGGS: The first TV ads against teenage vaping are out using magic to keep kids away from e-cigarettes.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm going to put it into your hand. This is what I'm going to do, OK? Watch very carefully. Boom.

(END VIDEO CLIP)

BRIGGS: The ad features street magician Julius Dein transforming an e-cigarette into a regular cigarette to make the point that one is just as bad as the other. Part of the FDA's $60 million the real cost prevention campaign. In 2018, the FDA revealed vaping increased nearly 80 percent among high schoolers and 50 percent among middle schoolers over the year before.

ROMANS: It seems like common sense if you're driving a van with more than $200 million worth of drugs on board. Don't go crashing into police cars.

BRIGGS: That's what my mom always told me.

ROMANS: One of those things mom always said.

Look, that guy didn't get the memo slamming into police cruisers. Police arrested the 28-year-old driver, seized the van and cash of methyl amphetamine. He faces charges including drug trafficking and negligent driving.

BRIGGS: God bless dumb criminals.

ROMANS: The guy we saw climb down a 19-story apartment building Spider-Man style in Philadelphia last week actually climbed up the building first and he did it to save his bedridden mother. The man identified only as Jermaine said he tried to enter the burning building through the front door but police stopped him. He said adrenaline took over. He started climbing up the fenced in apartment balconies.

(BEGIN VIDEO CLIP)

REPORTER: Was she yelling at you? Could you climb outside?

UNIDENTIFIED MALE: She was more shocked. She knew I would go over and above for her. Your mom up there. You think she's dying. You do anything he can.

(END VIDEO CLIP)

BRIGGS: Once he made it to his mom she told him she was OK. Jermaine climbed down just as easily as he went up. It was captured on video shared widely online.

Bravo, Jermaine.

ROMANS: All right. Let's get a check on CNN Business this Tuesday morning.

First, a look at markets around the world. Asian markets rose and European markets as well. On Wall Street, futures leaning a little bit higher here. Look, stocks finished slightly higher on Monday, still buoyed by hopes for an interest rate cut by the Federal Reserve. The Dow up by 18 points. The S&P 500 and the Nasdaq up a little bit as well.

The big question ahead of next week's Fed meeting is how big will the rate cut be? This is the first rate cut since 2008. Trump's fed nominee, Judy Shelton, said she would have voted for a half percentage point cut if she were on the board today.

Goldman Sachs says they expect a small rate cut but the economy is too strong to justify a bigger one.

Two years ago, Equifax exposed 150 million Americans' data. Now it's going to pay. It's going to pay millions to settle investigations about that breach. It's going to pay up to $700 million to state and federal regulators, the largest settlement ever paid for a data breach, $425 million is going to go into this fund that will reimburse all of us who purchased credit or identity monitoring services because of a breach. The deal also requires changes to how it handles private user data.

According to the FTC, consumers can't file a claim just yet. Equifax didn't respond to CNN's request. But according to "Wall Street Journal", individuals could get up to 20 grand reimbursement for lost time and money.

BRIGGS: Wow.

ROMANS: All right. Have you noticed your favorite stores while you're waiting for your favorite flight? Brick and mortar stores are struggling. Retailers are focusing on winning customers at airports.

Brands are expanding in airports around the world to get travelers to buy impulsively since they're waiting for their flight. The move makes sense. According to Boston consulting group Global Travel Revenue, which includes duty-free sales, has tripled over the past 15 years. Beauty, skin care, alcohol brands are all focusing on airports and millennials in particular who are travelling more.

BRIGGS: I never buy to those shops, do you, maybe you got three kids --

ROMANS: If I have a lot of time, I do, yeah.

BRIGGS: You're susceptible.

ROMANS: Thanks to our international viewers for joining us. Have a great rest of your day.

And for our U.S. viewers, EARLY START continues right now.

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ROMANS: The U.K. will announce a new prime minister this morning. Big changes could be in store if Boris Johnson gets the job.

END