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EARLY START

Prosecutor to Focus on Epstein's Associates; Curtailing Legal Immigration; Contaminated Water in Newark; Report: Starbucks' Pumpkin Spice Latte Returns This Month; Morgan Stanley: Trade War Will Cost Consumers; 2 New Anti-Ebola Drugs Show Promise. Aired 4:30-5a ET

Aired August 13, 2019 - 04:30   ET

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


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[04:32:19] ALISON KOSIK, CNN ANCHOR: Jeffrey Epstein's high-profile inner circle is in prosecutor's sights. The financier went unchecked for hours the night of his suicide. One guard on duty was just filling in.

WILL RIPLEY, CNN ANCHOR: Give us your tired, your poor -- nah, maybe not. New criteria could mean more denials for immigrants who would rely on the U.S. government for assistance.

KOSIK: Toxic tap water. Residents of one New Jersey city may have been drinking water laced with lead for months or even years.

RIPLEY: Are you ready for fall?

KOSIK: No.

RIPLEY: Are you ready for fall in two weeks? Because it's not going to get any cooler. But there's an annual rite of pumpkin spice latte, it's coming.

KOSIK: I don't want to say goodbye to summer yet.

RIPLEY: I'm not ready. I haven't been in the beach yet.

KOSIK: Ooh.

RIPLEY: Welcome back to EARLY START. I know, for me.

Will Ripley here in New York.

KOSIK: Good morning. I'm Alison Kosik. It's 30 minutes past the hour here in New York.

And prosecutors seeking justice for Jeffrey Epstein's accusers are focusing on the accused sex trafficker's inner circle. Epstein's jail cell death has left prosecutors to pursue his well-connected associates. Some of them are accused of assisting him in abusing underage girls.

The federal prosecutor in Manhattan is suggesting he'll focus on the conspiracy charge. It accused Epstein of working with employees and associates to operate a huge sex trafficking ring. On Monday , FBI agents were in the U.S. Virgin Islands, searching the mansion on Epstein's private island. Yesterday, Attorney General Bill Barr offered this warning to Epstein's associates.

(BEGIN VIDEO CLIP)

WILLIAM BARR, U.S. ATTORNEY GENERAL: Let me assure that this case will continue on against anyone who was complicit with Epstein. Any co-conspirators should not rest easy. The victims deserve justice and they will get it.

(END VIDEO CLIP)

RIPLEY: Barr says he was appalled and angry to learn of the Manhattan federal detention center's, quote, failure to adequately secure Epstein. The apparent suicide puts a spotlight on short staffing and budget issues at federal prisons.

In Epstein's case, a source tells CNN, at least one of two employees on duty on his unit wasn't a regular guard, was just filling in. Epstein was supposed to be checked on every 30 minutes around the clock. But a source is now telling CNN's Athena Jones he was, in fact, not checked for hours before his death.

(BEGIN VIDEOTAPE)

ATHENA JONES, CNN NATIONAL CORRESPONDENT: Good morning, Alison and Will.

The list of questions surrounding Epstein's apparent suicide is growing longer. Justice officials have also uncovered broader problems at the Metropolitan Correctional Center, which for a long time was considered one of the best-run facilities in the entire Bureau of Prisons system.

It's not clear what else has been found but the person briefed on the matter said it goes beyond the 24 hours before Epstein's death.

[04:35:03] We know employees at MCC have complained about being overworked and having to work consecutive days of overtime. Justice officials now say the MCC has suffered a breakdown of protocols for a period that goes back years.

And there's more news on the legal front. Epstein accusers are asking a federal judge to unwind the non-prosecution agreement Epstein reached with federal prosecutors in Florida over a decade ago in that previous sex abuse case. That would give authorities greater power to go after Epstein's alleged co- conspirators.

That 2007 deal granted immunity to Epstein's alleged co-conspirators and identified four women by name -- Alison, Will.

(END VIDEOTAPE)

KOSIK: All right, Athena Jones. Athena Jones, thanks very much. One of the women accused in connection to Epstein is this British socialite, Ghislaine Maxwell. She's a wealthy jetsetter known for her political connections and she's now a prime target for Epstein's alleged victims who are demanding accountability.

International correspondent Max Foster joins us now live from London.

Good morning to you, Max.

So, who is Ghislaine Maxwell? What was her role in Epstein's world?

MAX FOSTER, CNN INTERNATIONAL CORRESPONDENT: Well, she's known here, Alison, as the daughter, well-known her as a daughter of Robert Maxwell. He's a media tycoon who died in disgrace, really, in mystery as well in 1991 out at sea. She had a very privileged upbringing, was very well-connected. After her father's death, though, she relocated to New York and started this new life which is the focus of this investigation.

What we find she's the figure that often appears in photographs associated with the Epstein case. So, alongside President Trump, for example, in Mar-a-Lago, the wedding of Chelsea Clinton, but also behind Prince Andrew, who stands alongside Virginia Giuffre, who accuses Epstein of suggesting she should be having sex with Prince Andrew which ultimately happens, the palace, Buckingham Palace, denying any of this involvement.

Now, that's all made her very central to this investigation. We have these documents who were unsealed last week and many references to Maxwell in there. If I pluck out a couple of the comments. One of the main women, primary co-conspirator acting as a madam for Epstein and assisting in international trafficking and numerous other young girls were used for sexual purposes as well in addition to Giuffre.

Now, Maxwell hasn't responded to this. She hasn't made a public statement since Epstein was charged in July. She has previously denied all of these allegations.

"Washington Post" saying there's some mystery about where she is. Investigators don't know where she is. "New York Times" suggesting her lawyer said she moved to London after New York and "The Guardian" said she retains addresses in London and in Salisbury. So, the investigation may be shifting to the U.K.

KOSIK: So, that was my next question. She's mentioned in these documents. Investigators, though, are looking for her. Where does that leave the case, because she seems to be central to the accountability part of this case now?

FOSTER: She literally has gone into thin air, because if U.S. investigators can't locate her, that would suggest that she's not in the United States. Here in the U.K., there's been no leads on that whatsoever despite, you know, some vociferous investigating by the British tabloids. You know what they're like, Alison.

KOSIK: Oh, yes. FOSTER: They dig deep.

And they haven't found anything yet. So, people in Salisbury, who are in London looking for leads, but also in Paris where she also had part of her youth.

KOSIK: OK. Max Foster, thanks so much.

RIPLEY: Fascinating there. The White House is apparently moving to dramatically reduce the levels of legal immigrants to the United States. A controversial new rule increases the administration's ability to reject green cards. Green cards for immigrants who would be likely to depend on the government for aid like food stamps, housing assistance and Medicaid. The new criteria is designed to skew the process in favor of highly skilled, high income immigrants, the kind President Trump has said repeatedly that he prefers.

The administration is re-interpreting an 1882 law. It's known as the public charge rule. And it clamps down on legal immigration. It was intended to make sure immigrants would not become a public burden.

(BEGIN VIDEO CLIP)

KEN CUCCINELLI, ACTING DIRECTOR, U.S. CITIZENSHIP AND IMMIGRATION SERVICES: Throughout our history, self-reliance has been a core principle in America. The virtues of perseverance, hard work, and self-sufficiency laid the foundation of our nation and it defined generations of immigrants seeking opportunity in the United States.

REP. RAJA KRISHNAMOORTHI (D-IL): I think that he ignores the fact that many, many immigrants -- legal immigrants -- have come here, experienced some of those tough times, received assistance, and then went on to do great things for our country. And I hope that people remind him of that fact.

(END VIDEO CLIP)

[04:40:01] KOSIK: This reinterpretation of the public charge rule is set to take effect in mid-October and it already is face legal challenges. It comes just a week after a gunman in El Paso targeted Latinos.

California Congresswoman Norma Torres who came to the U.S. from Guatemala at the age of five is slamming it. She calls a rule to rid the country of people who look like me.

RIPLEY: Guatemala has a new president-elect and President Trump, he's probably taking notice because Alejandro Giammattei has been an outspoken critic of an immigration deal that his predecessor signed with the United States last month.

Let's go live to London and bring in CNN's Nick Paton Walsh.

So, Nick, Giammattei, he faces some really tough negotiations with President Trump, especially over this immigration issue. NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. Look,

there's a huge question as he comes to power, not until January, but he's obviously pressing the works what he's going to do when he's finally in the chair. He said, yes, we need to have this ratified by various parts of the government. That's in line with what was said beforehand.

But forget all that, frankly. It's kind of the beginning of horse- trading because essentially there's a stark choice ahead of him. The U.S. plan really uses Guatemala as a kind of holding facility, really, it's an ugly term but it's kind of where migrants heading north will be expected to apply for asylum in Guatemala first and only if they fail can they apply asylum in the United States. That will kind of slow the process down an awful lot. They only get through Mexico, too. It's called tougher restrictions.

So, what next? Well, if he decides he wants to go ahead with this deal that's fine. That puts huge pressure on Guatemala's bureaucracy there and very unpopular with many Guatemalans as well. If he says no, well, the Trump administration said very explicitly there could be tariffs, there could be sanctions, there could be taxation and remittances from Guatemalans working in the United States, sending it back to Guatemala. That's a huge part of their economy.

And remember, too, 42 percent of Guatemalan exports go to the United States. So, they could potentially be economic damage to Guatemala. Far outweighs damage done by hundreds of thousands of asylum seekers milling around Guatemala as they work out what's going to happen with their procedure.

Put a lot aside, essentially what this is, is the United States laying out a series of road blocks to say do not come. A lot of people say it violates humanitarian law, U.S. law, and also the moral premise that the United States welcomes in huddled mass.

But this is a big decision in Guatemala, key to the Trump immigration strategy -- Will.

RIPLEY: Nick Paton Walsh, live in London, thank you.

Breaking overnight, a California highway patrol officer is dead in a shooting during a traffic stop. This is near the 215 Freeway in riverside. Two other officers were hurt. One of them we're told critically.

Fellow officers lined the streets around Riverside Medical Center as the slain officers body was taken away. Authorities were looking into why the man opened fire at officers in the first place before police shot and killed him.

KOSIK: A friend of the gunman who killed nine people in last week's Dayton's massacre face federal firearms charges. Police say 24-year- old Ethan Kollie provide Connor Betts with body armor and 100-round double drum magazine that were used in the shooting. A probable cause affidavit says Kollie allowed agents to search his home and admitted doing hard drugs with the gunman. Prosecutors are emphasizing, Kollie did not intentionally help plan the Dayton shootings.

RIPLEY: We have a bit of good news this morning in the battle against a historic Ebola outbreak in Africa. There are two drugs, drugs developed here in the U.S. that could help. We're live in Johannesburg.

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[04:47:46] KOSIK: Welcome back.

Morgan Stanley has a warning that the trade war with China will likely make the global economic slowdown worse.

We saw that fear on Wall Street play out on Monday. The Dow dropped 391 points Monday afternoon while the S&P 500 and the Nasdaq lost a little over 1 percent each. The mood not much better around the world, calling an escalation between U.S. and China precarious.

Morgan Stanley warned in a note to its clients the next round of tariffs has the potential cut into muscle.

President Trump unexpectedly announced he would path 10 percent tariff on another $300 billion on Chinese goods. That's expected to go into effect on September 1st. That wave of tariffs would hit a wide range of goods including iPhones, auto parts, TVs and harm consumer demand.

Despite the president's claims that China pays for those tariffs, studies show that U.S. families and consumers -- yes, they are the ones who pay the higher cost. Economists at the New York Fed studied the tariffs last year and found the total cost to consumers was $831 per household. The bill could rise with Trump's new tariffs next month.

RIPLEY: The man accused opening fire at a mosque in Norway over the weekend appeared in court with two black eyes and wounds to his face and neck.

CNN's Salma Abdelaziz is live in London.

Do we know where these marks came from?

SALMA ABDELAZIZ, CNN REPORTER: well, will this 21-year-old man named by Norwegian media as Philip Manshaus, as you said, did have these injuries in court. What we do know he wasn't able to kill anyone when he attacked that mosque in Oslo. And that's because, if you can believe it, a 65-year-old man, a 65-year-old worshipper was able to overpower him.

Mind you, the suspect was wearing body armor, he had two weapons, was dressed in all-black. He was able to be overpowered and to sit on him until police arrived. That's potentially where these marks came from. A real hero's story there for that 65-year-old worshipper.

But what is of real concern to authorities in this attack is that it appears to be inspired by other right-wing attacks. There are some posts on the messaging site 8chan that appears to be linked to this man, to this very suspect where he praises the El Paso shooter in the U.S., where he praises the Christchurch attacker that was the attack earlier this year on two mosques in New Zealand that killed more than 50 people.

[04:50:08] There's also reports that he was wearing a GoPro helmet on his head which means he could have been trying to livestream this attack.

So, real concerns that this is a copycat attack and it is being (AUDIO GAP), and what it shows here in Europe, they are struggling to contain that rise in the right-wing just like in the U.S. -- Will.

RIPLEY: And incredible, that man was able to stop him before doing any serious harm in this case.

Salma, thank you so much.

KOSIK: Two new Ebola treatments are showing promise in the fight against an outbreak of the deadly disease in the Democratic Republic of Congo. This is the second biggest outbreak ever, killing at least 1,800 people.

CNN's David McKenzie is live for us in Johannesburg.

So, David, how big of a difference could this make?

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Good morning, Alison.

Well, yes. They needed good news on this Ebola outbreak for sometime, lasting more than a year now, more than 1,800 people killed. Now, these two drugs which were part of a randomized trial that was started in November of last year were put in place in treatment centers all over the part of northeast Congo. They are showing extraordinary results compared to the existing Ebola treatments that have been around for a few years.

Now, in one case, for people coming in early for treatment with very low viral alert, they showed 90 percent recovery rate, that's compared to 70 percent death rate for people who don't get this treatment. Because of those extraordinary numbers, they just halted that trial and going to roll out these two experimental drugs one by a New York based pharmaceutical, another by a branch of the U.S. NIH, and they're going to hopefully give hope to the people who have been contracting this deadly disease.

Now, when we were there in the zone a short time ago, one of the biggest issues they had is convincing people to get beyond that mistrust to come in because they felt Ebola was a death sentence. If they can get the word out to people in this conflict ridden area of the northeast Congo that it actually is good for you to come because you may be cured, it will have a major impact on this and future outbreaks -- Will, Alison.

KOSIK: Fantastic news for this deadly disease. David McKenzie, thanks so much. Just in time for back to school, a new subscription service for your

kid's shoes. CNN Business has the details coming up.

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[04:57:02] KOSIK: Potentially toxic tap water in New Jersey. The city of Newark is handing out bottled water from four city centers. People may have been drinking tap water contaminated with lead for months or even years. The EPA is advising the city to take the action it needs.

A recent New Jersey Health Department report says Newark exceeds every other large municipality in the state in the number of children younger than 6 with elevated lead levels in their blood.

RIPLEY: From toxic tap water, to toxic algae, potentially killing dogs in the southeast. Three dogs have recently died after swimming in the same pond. This is in Wilmington, North Carolina. Another dog died after swimming in Lake Altoona in Georgia.

And while these incidents all took place in the southeast, toxic algae can naturally occur anywhere in the United States. It can look like foam or scum on the surface of the water. And it can be blue, vibrant green or red. This is scary for a lot of people who like to take their dogs swimming in ponds and lakes.

It also produces a smell that is nauseating to humans, but it can actually attract animals.

KOSIK: OK, let's get a check on CNN Business this morning. Taking a look at the markets around the world. Seeing a lot of red arrows there. Asian stocks declined amid rising geopolitical tensions.

European markets, they've opened lower as well. On Wall Street, we're looking at futures barely moving after yesterday's selloff, proving that Wall Street's trade war anxiety not going away anytime soon. The Dow dropped 391 points Monday afternoon. The S&P 500 and the Nasdaq lost a little more than 1 percent.

China's sensitive stocks including Caterpillar, Deere and Boeing all declining more than 1 percent. Three major luxury brands are facing scrutiny from China over a controversial t-shirt. Coach and Givenchy have both apologized to Chinese consumers for t-shirts that appear to undermine China's one government policy just a day after Versace was forced to do the same.

Both designs neglected to identify Hong Kong as part of China while appearing to imply that Taiwan is an independent country. Coach and Givenchy responded to the controversy online. Coach said it respects and supports China's sovereignty and territorial integrity, adding the shirt had been pulled from all channels globally.

OK. There are subscription clubs for just about everything. How about one for your kids' shoes? I'm talking about sneakers.

Just in time for back to school shopping. Nike launched the adventure club, a sneaker subscription for kids ages 5 through 10. Nike hopes the program will attract time-strapped parents into suburbs and rural areas who don't live near a shoe store. The kids sneaker club allows Nike to test out the subscription market and potentially apply it to its adult shoppers. Yay.

There's already a wait list to join the service so I'm not sure how well it will work. But, you know, things take time to get started and --

RIPLEY: But then what about the kid, the parents can't give them the shoe subscription and like Becky comes in and has the new shoes every month, and you know, you've still got the same kicks from three years ago?

KOSIK: That's a whole other discussion we'll have to take that on the sidelines.

RIPLEY: We will -- we will tackle that in our next hour.

KOSIK: OK.

RIPLEY: Thanks to our international viewers for joining us on EARLY START. Have a great rest of your day.

For our U.S. viewers, EARLY START continues right now.

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