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Greece Formally Requests Third European Bailout; Chinese Government Fights To Stabilize Stock Market; Putin Welcomes Leaders To "BRICS" Summit; London Tube Strike Shuts Down Trains For Millions; Glitches Hit Three U.S. Companies On Same Day; Sticking Points Hinder Final Iran Nuclear Deal; Trump: I Would Get Along With Vladimir Putin; Jack Warner Accused Of Racketeering, Fraud; Financial Crisis Takes Its Toll On Greek People; Luis Santos' Killing Haunts Arnold Schwarzenegger; Pope Francis Pays Brief Visit to La Paz. Aired 3-4a ET

Aired July 08, 2015 - 03:00   ET

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

(COMMERCIAL BREAK)

MAX FOSTER, CNN ANCHOR: The confederate flag the center of controversy after a racially motivated shooting in the U.S. is now coming down in one state capital.

ROSEMARY CHURCH, CNN ANCHOR: Wild trading in China as the government tries to stop a stock market crash.

FOSTER: Plus killing the clemency and the aftermath. Arnold Schwarzenegger's decision as governor is now under scrutiny.

CHURCH: Hello and welcome to our viewers here in the United States and all around the world. I'm Rosemary Church.

FOSTER: I'm Max Foster and this is CNN NEWSROOM.

CHURCH: That divisive confederate flag that flies at the South Carolina statehouse grounds may soon come down after more than 12 hours of debate. Lawmakers voted overwhelmingly to remove it even surpassing a required two-thirds majority. The bill now goes to Governor Nikki Haley for her signature.

FOSTER: She led the core to bring it down shortly after the racist killings in Charleston last month with Dylann Roof, who walked into a black church and killed nine people. He posed with pictures of a similar confederate flag and reportedly wanted to start a race war.

That flag holds an important place in southern history. Confederate soldiers carried it into battle during the U.S. civil war. For many African-Americans it's a painful reminder of slavery.

CHURCH: Governor Haley tweeted shortly after the house votes saying simply it's a new day in South Carolina.

All right, well, it is now official. Greece has formally applied for its third international bailout. The country faces a weekend deadline to submit a plan and reach a deal before running out of cash. The government is asking for a three-year loan package promising new reforms in exchange for rescue aid. The European Union plans to decide on the request on Sunday.

FOSTER: Banks across Greece will stay closed until Monday and the daily withdrawal limits of 60 euros also remains in place. Reuters approached the head of the Greek banking association who says the ATMs will have enough cash until Monday.

CHURCH: It is just after 10:00 a.m. in Athens and that's where we find CNN's Isa Soares this morning. Hi there, Isa. Of course, you and I spoke last hour about whether the Greek leadership actually understood that this is their last chance to present solid reforms that European leaders are serious. Is that message getting through and what are we learning so far about what may be included in the new proposal?

ISA SOARES, CNN INTERNATIONAL CORRESPONDENT: Hi, Rosy. I think they have been told and made abundantly clear let's say, put it that way, what is exactly at stake and how much they have to put forward in order for Europe to approve. I think Europe yesterday when we saw the speeches we saw there was a huge divide between members of the European parliament, but I think the message was very clear.

You either put your house -- your financial house in order or you are out. We have heard so many times about there being a deadline. But Donald Tusk yesterday said this is it, this is the final deadline. We need credible and serious proposals.

In terms of the proposals we know they asked for a three-year bailout. Reports at this time suggest anything around 50 billion euros. That's how much the IMF said was needed for Greece to survive economically as well as needing some sort of debt relief.

We know they formally asked for debt relief. In terms of the sticking points between them, I've broken them down slightly so viewers get a sense of what the friction has been.

First of all, retirement age, Europe has been asking Greece to raise the retirement age from 62 to 67. Greece said not a problem, we'll do that. Pension, they want the pensions to be cut further. Greece said that its red line.

We cut our pensions further many people are living below the poverty line so no way. So one thing that Europe is asking to reform its pension system. The pension system here is subsidized by the national government.

So what Europe is saying make that more independent, whatever you put in you get out when you retire. The third point is raise taxes on businesses. This is something that Greece wants to do, but Europe says your businesses, the economy is already too taxed.

[03:05:01] Can you do anything else? Can you cut spending any other way? And then there are cuts in spending when it comes to military spending that Greece agreed to and one of the red lines is this VAT in the islands.

Europe wants to completely eliminate that VAT because it is just too much. But Greece wants to keep it. Greece says we need to keep the VAT on the islands because that will impact tourism -- Rosy.

CHURCH: Yes, interesting points coming out there. At least there is some progress, but still a lot to be decided. Isa Soares reporting there live from Athens, many thanks to you.

Well, in the third week of trading volatility, Chinese stocks rallied Thursday.

FOSTER: Beijing announced more measures to halt the slide that began in mid-June including a ban on large shareholders from selling. The Shanghai Composite is up more than 5 percent and the Shenzhen Composite as well up nearly 4 percent.

Ivan Watson joins us from Shanghai with the latest on this. These are really extraordinary restrictions on the market.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: They are and their reactions on the market perhaps a psychologist would diagnosis it as bipolar. You've had a major selloff on Wednesday and today the Shanghai Composite leaping upwards almost gaining back the losses that took place in a really devastating day on Wednesday here.

So you can just imagine investors swinging from euphoria to despair just in the last 36 hours. But what we've really seen is effectively a crash over the course of the last three weeks. The stock markets here in China losing more than $3 trillion worth of wealth in that very short period of time.

With analysts saying that the longer the selloff would go on the more potential consequences it could have for the Chinese government itself. Take a listen.

(BEGIN VIDEO CLIP)

OLIVER RUI, PROFESSOR, CHINA EUROPE INTERNATIONAL BUSINESS SCHOO: So far, this crisis or panic is contained in the stock market alone. But if the government cannot rebut or calm down the market in very short times, weeks or days, then this kind of pessimistic sentiment will be easily spilled over to the banking sectors because the leverage -- I mean, the people borrow money to buy the stock, where the money come from, most of them from the banks.

(END VIDEO CLIP)

WATSON: Now it's important to note the Chinese government has incredible amount of influence on the stock markets here and it's taken a lot of measures over the course of the last few weeks to try to stop the bleeding there, cutting interest rates announcing tens of billions of dollars of stock purchases.

Announcing within the last 24 hours there is going to be an investigation by police into possible short trading -- short selling going on that was described as malicious. There have been gains today. People are going to feel a lot better about that.

But it is also important to note does that reflect the true value of the market because roughly half of all companies listed on the Chinese stock market have suspended their trading.

So we don't really know does this truly reflect the value of the stock market which all analysts say was effectively a bubble. That's what attracted so many people to invest their money into this market in recent months. That's why so many people were so frightened and panicked that their savings were going up in smoke -- Max.

FOSTER: Ivan, thank you very much indeed. We'll keep on touch of top of those markets.

CHURCH: We certainly shall, but let's take a very short break for now. Still to come, three major U.S. companies grind some operations to a halt suffering from big computer problems creating a chaotic day for traders and travellers. Why officials say it's nothing to worry about.

FOSTER: Sticking points are delaying a nuclear deal with Iran as negotiators could face the final stretch of their talks. We have the latest from Vienna in a live report.

(COMMERCIAL BREAK)

[03:13:16]

CHURCH: All right, we do want to take you live now to Russia where President Vladimir Putin is welcoming world leaders to the "BRICS" Summit. He is speaking now. We are not seeing the pictures quite yet, but the group includes emerging economic powers like Brazil, India, China and South Africa.

FOSTER: He is anxious to show his country in a leadership role not isolated over the stand of the western powers on Ukraine. So this offers him an alternative platform, really to show off Russian power and those markets that haven't been affected by sanctions.

And the BRICS want to launch a development bank meant to counter the western dominated financial system. The World Bank in particular is going to be interesting to see if they can get it together.

CHURCH: All right, we will keep an eye on that. We didn't have success with those live pictures, but we will go to that as soon as get them.

But moving on now, crashers and congestion in London this morning as commuters scramble to get around. Millions of people take the tube every day, of course, but it is shut down until Friday because of a strike.

Train workers are demanding better pay over a new 24-hour rail service that will operate on weekends starting in September. London over ground and transport for London rail staff are not on strike and are operating as normal. FOSTER: TFL has added 200 extra buses and river services today to help commuters. If you bike to work over there, a few extra cycle hubs are available as well. Go to the transport for London website on your screen.

CHURCH: Max, you are very relieved because you get a couple of trains every single day.

[03:15:04] FOSTER: The thing about the transport system in London in the U.K. is it's always so tight. If there is a disturbance, it does cause chaos, but often people will stay at home.

CHURCH: I have seen a few people on Twitter saying they are working from home.

FOSTER: Any excuse.

CHURCH: All right, well, officials are trying to figure out how massive computer glitches brought three U.S. companies to a halt on Wednesday. The computer failures hit United Airlines, the New York Stock Exchange and the "Wall Street Journal's" website, all within hours of each other.

FOSTER: United flights were grounded worldwide and the stock exchange was forced to halt trading for three hours, the most stock exchange in the world, certainly the biggest. CNN Money's Laurie Segall reports.

(BEGIN VIDEOTAPE)

LAURIE SEGALL, CNN MONEY CORRESPONDENT (voice-over): Digital glitches one after the next.

UNIDENTIFIED FEMALE: We are continuing to follow breaking news right now. United Airlines has grounded planes nationwide.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Right now, here is the New York Stock Exchange trading has suddenly been halted.

UNIDENTIFIED FEMALE: This is what you see when you try to go to the "Wall Street Journal" website.

SEGALL: First, United Airlines grounding its fleet worldwide. Planes at stand still for more than an hour due to a computer problem. Next, at 11:32 a.m., trading halted at the New York Stock Exchange. The epicenter of the financial universe issuing a statement, "We're currently experiencing a technical issue that we're working to resolve as quickly as possible."

By noon, the "Wall Street Journal" online had a problem. A 504 error message greeted visitors to the "Journal's" home page. So were they all connected? It doesn't look that way.

UNIDENTIFIED MALE: At the present moment we have no indication that any of these glitches are connected other than it just being a very bad day. SEGALL: The Department of Homeland Security tells CNN there are no signs of malicious activity at least when it comes to NYSE and United Airlines. United says it was a failure of equipment, a router that went bad. It fixed the router and things got back to normal, if you can call it that.

Airline experts say this morning's glitch is causing backups that could ripple into tomorrow. The NYSE says the trading halt was a technical issue and not a cyber-breach.

But it raises serious questions about the system's vulnerability just like 2010's flash crash, which pushed a trillion dollars in equity into a free fall into a matter of seconds, before rebounding moments later.

UNIDENTIFIED MALE: I would imagine people are trying to affect these systems constantly. What these glitches kind of illustrate is that their technology is not in fact bullet proof. The New York Stock Exchange and United Airlines and other carriers or operators of this caliber are going to be vulnerable to anyone who is willing to spend enough money to get vulnerabilities that will affect them.

SEGALL: Even if these technical glitches are just that, the cost of doing business in the modern era, the public's trust is at stake. Laurie Segall, CNN Money, New York.

(END VIDEOTAPE)

FOSTER: A top U.S. senator says President Barack Obama believes the chances of getting a nuclear deal with Iran are now below 50/50. This comes as they face what maybe the last stretch of negotiations towards a deal.

CHURCH: But several key sticking points are delaying the process including Iran's request that the U.N. lift its arms embargo and missile sanctions, but world powers are reluctant to do that.

Senior international correspondent, Nic Robertson, is in Vienna where negotiators are meeting and he joins us now. So Nic, President Obama clearly lowering expectations of any deal being reach, but what is the sense in Vienna? What is being said about the possibility that common ground might be found?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: It's less about what is being said and more that so little is being said. Yesterday after the intensity of the talks on Monday night into Tuesday, the deadline, what happened yesterday seemed like a very, very slow day.

And I think that tells you a lot about the nature of the talks and we're hearing from such senior positions essentially setting expectations low or at least staking out a very hard and firm position for their own domestic political consumption.

But also perhaps as a very strong signal to the Iranian delegation that talks are still ongoing and when President Obama lowers the expectations this has to send a signal to the Iranians that Obama's team here, Secretary of State John Kerry is not going to be budged and shifted in his position.

I think it's not just setting expectations down but it's, perhaps, you know, showing the strength and unity around that position. We know late last night, Secretary Kerry was meeting with the P5+1, at a foreign level at least, including the British, French and German foreign ministers who flew in last night.

Also we understand that meeting could have been included as well the foreign minister of Iran, Mohammad Javad Zarif. Really today so far, we don't have a good read on what to expect on what is going to happen.

[03:20:06] But in context of the deadline blown through, an extended deadline, and the playing down of expectations, the sense here really at the moment, is this really could go either way -- Rosemary.

CHURCH: Yes, interesting, and Nic, what does happen if no deal is made? What then?

ROBERTSON: You know, it's hard to imagine a scenario and this is what we've been led to expect, that rather than everyone getting up and walking away from everything that has been accomplished, and a lot has been accomplished.

Both sides are saying, you know, accomplishment, progress, substantial progress across all areas, those key stumbling blocks are political stumbling blocks.

So likely what we would see if there wasn't a deal would be to try to park as we saw what have been agreed so far and get a statement that at least nailed down the progress that's been made and agree to come back at a later date.

This is speculation at a moment, but it is unlikely that we'll see people will throw their papers in the air and walking away. They have come too far, put in too much personal effort, and have too much political capital riding on it as well as a belief that a deal is the best way forward.

But again, both sides saying it has to be a good deal and that they will walk away from a bad deal. We don't know which way this is going to go, but I think we would expect to the very least to see progress nailed down in some text and agreement to come back later.

CHURCH: We don't know which way it will go. But Nic Robertson watching it very closely there from Vienna, thanks for joining us live.

This Saturday marks the 20th anniversary of the Srebrenica massacre. The day Serb forces swept into the town and executed an estimated 8,000 Muslim men and boys.

FOSTER: On Wednesday, Russia vetoed a U.N. resolution that would have condemned the massacre as a crime of genocide. The Russian ambassador appealed for the council not to vote on the resolution.

(BEGIN VIDEO CLIP)

VITALY CHURKIN, RUSSIAN AMBASSADOR (through translator): We appeal to the authors of the draft and you, Mr. President, to not put it to the vote. Otherwise we will have to vote against it because of the reasons I've just named. Our vote against it if it turns out to be inevitable will not however mean that we are deaf to the suffering of the victims of Srebrenica and other areas of Bosnia Srebrenica.

PETER WILSON, DEPUTY PERMANENT REPRESENTATIVE OF THE U.K. (through translator): The horrific events at Srebrenica amounted to a genocide, to call it anything else now will hinder and not help reconciliation. And that is why there are many voices from the region that are calling for us to proceed and to vote and honor the victims as we do so. And for that reason I think it is vital now that we proceed to a vote.

(END VIDEO CLIP)

FOSTER: A ceremony marking the 20th anniversary of the massacre will be held on Saturday in Bosnia. Former U.S. President Bill Clinton and other world leaders are expected to attend.

CHURCH: All right, we move to the weather now, severe storms and an apparent tornado turned deadly near Venice, Italy on Wednesday.

FOSTER: Meteorologist Pedram Javaheri joins us. You have incredible video.

PEDRAM JAVAHERI, AMS METEOROLOGIST: People don't think about Europe and tornados too frequently. We have about 2,000 tornadoes on our planet every single year. You have 1,100 in the United States and about 300 in Europe and the remaining 600 scattered around the world.

The United Kingdom actually has the most number of tornados for any country in the world for its land area. It gets about 50 tornados per year. No other area that small gets them.

We'll jump right into Italy because the video as Max is saying just absolutely remarkable when it comes to what transpired in Italy. And there it goes as we see the tornado, 20 people injured and one fatality with this. This happened just west of Venice.

But just absolutely stunning footage, you can see how close this person was to this tornado as it was occurring across this region. The area around Venice and we often times we get waterspouts. But as a whole we talked about the 300 tornados per year.

You go back to the year 2000 we have had over 3,000 plus tornados in Europe. The four top nations in the U.K., you come down to Italy, 12 is the number five there for most tornados of a European country. That is an average of one per month.

Not far away in Switzerland, temperatures in Geneva, 39.7 Celsius on Wednesday. That is an all-time record for any observation point north of the Alps in Switzerland. Geneva is at 39.7 that's about 104 Fahrenheit, incredible heat even in areas around Switzerland.

Well, to the other big story, we have three typhoons we're watching for you. Linfa is riding parallel right to the coast of Hong Kong.

[03:25:09] We know winds about 120 kph. This would be equivalent to a Category 1 hurricane. I think the winds will gradually die down. It is going to be the heavy rainfall expected in an area that sees the wettest weather generally in the Southern China in four decades.

This is one of the wetter seasons of the year, of course, but the rain becomes thunderstorms on Friday and finally partly cloudy skies returning on Saturday.

And we are also watching another typhoon, Chan-Hom, that is three to four days out and this one could potentially impact portions of Shanghai toward Friday and Saturday so we are going to watch that as well next.

CHURCH: A lot going on.

JAVAHERI: Yes.

FOSTER: Thanks, Pedram.

CHURCH: The chairman of the U.S. Republican National Committee reportedly wants Donald Trump to tone down his remarks on illegal immigration after he called Mexican immigrants rapists and criminals.

A Republican source tells CNN that during a phone call on Wednesday, Reince Priebus told Trump how they address illegal immigration is important to winning back the Hispanic vote.

FOSTER: In an interview on Wednesday with Anderson Cooper, Trump doubled down on comments he's made about illegal immigrants. He also said he, quote, "can't guarantee the legal status of workers that he contracts."

Cooper asked Trump, what he would do about Edward Snowden as well, the former National Security Agency contractor, who leaked government information.

(BEGIN VIDEO CLIP)

ANDERSON COOPER, CNN HOST, "AC360": Former Attorney General Holder just the other day said perhaps some sort of plea deal could be in the works. He also said that Snowden spurred a necessary debate. What would you do about Snowden?

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: I think he is a total traitor and I would deal with him harshly. And if I were president, Putin would give him over. I would get along with Putin. I have dealt with Russia.

I think I'd get along with him fine. I think he would be absolutely fine. He would never keep somebody like Snowden in Russia. He hates Obama. He doesn't respect for Obama. Obama doesn't like him either. But he has no respect for Obama, has a hatred for Obama and Snowden is living the life. Look, if that -- I'm president, Putin says, you're gone, I guarantee you that.

(END VIDEO CLIP)

CHURCH: Donald Trump there, world according to Trump. Well, Snowden remains in exile in Moscow. A Justice Department spokeswoman says Snowden is expected to face charges if he ever returns to the United States.

The European stock exchanges are open for the day. Just ahead, we will go live to London to see if the Greek debt crisis is moving the markets.

FOSTER: Plus the alleged corruption scandal surrounding FIFA is heating up again. The organization's former vice president is expected in court soon for an extradition hearing. Details coming up on CNN NEWSROOM.

(COMMERCIAL BREAK)

[03:31:23]

FOSTER: Welcome back to our viewers in the United States and around the world. This is CNN NEWSROOM. I'm Max Foster.

CHURCH: I'm Rosemary Church. It is time to check the headlines for you this hour. South Carolina lawmakers have voted to remove a confederate flag from capitol grounds after more than 12 hours of debate. The measure will now go to Governor Nikki Haley who says she will sign it into law. The momentum to take down the flag came in the wake of a racist shooting at a black church that killed nine people.

FOSTER: China has announced another round of measures to halt the market slide and it appears they are having an effect. The market is in positive territory today. Interest rates were cut to a record low and brokerages plan to buy billions worth of stocks.

CHURCH: Transport in London is reporting numerous crashes on heavy congestion in the city this morning. More commuters than usual are flooding the roads because of a tube strike. TFL has added 200 buses and other means of transportation to try to help millions of people get around until trains start running again tomorrow morning.

Well, just hours from now, former FIFA Vice President Jack Warner is expected in court for an extradition hearing. The United States requested his transfer from Trinidad and Tobago.

FOSTER: Warner was one of 14 executives charged by the U.S. over alleged racketeering with wire fraud, money laundering and bribery. Warner is also accused of taking $10 million to influence voting in South Africa's bid to host the 2016 World Cup. He denies any wrong doing and has threatened to turn whistleblower exposing other corruption in FIFA to support his case. CHURCH: All right, let's bring in Keir Radnedge with the "World Soccer" magazine for some analysis on this. He joins us via Skype from London. Thank you, sir, for talking with us.

So Jack Warner is wanted in the U.S. on corruption charges, but he has vowed to fight efforts to extradite him from Trinidad to the United States. What is likely to happen at this extradition hearing later this morning, do you think?

KEIR RADNEDGE, "WORLD SOCCER" MAGAZINE: Well, the latest reports from Trinidad suggest that the authorities there have not yet received the formal paperwork that they need and expected that the hearing today would be a comparably short one.

Warner is on a bail at the moment of $2.4 million, I understand and he's hired very expensive team of lawyers and experts in the extradition field to contest the application when it is eventually formally made.

CHURCH: How strong is the corruption case against Jack Warner?

RADNEDGE: Well, this goes back to his ten years when he was the man in charge of football in the Central Caribbean and North American zone. His two sons and his former close aid, Chuck Blazer, have all given a great deal of help to the U.S. Justice Department investigation. So to that extent, Warner is facing very, very serious charges and obviously, a very serious mountain of evidence.

CHURCH: All right, watching that extradition hearing as you say, it is likely it will be very short process. The paperwork not completed yet, but talking with Keir Radnedge, many thanks to you for joining us.

FOSTER: Also watching and waiting to hear from Greek leaders today on their plans for a new bailout loan. It's not clear how much money they are asking for, but they are promising tax and pension reform in return.

[03:35:05] CHURCH: Meanwhile, the banks will still be closed until at least Monday and people are limited to withdrawing just 60 euros a day.

FOSTER: The crisis has taken a painful toll on Greeks. As CNN's Phil Black sees the signs of suffering in a once thriving town that's now experiencing one of the highest unemployment rates in Europe.

(BEGIN VIDEOTAPE)

PHIL BLACK, CNN CORRESPONDENT (voice-over): In Greece even economically depressed industrial towns are very beautiful. This is a town about an hour's drive north of Athens. But the stunning scenery means little here.

These are people without ATM cards, mostly pensioners lining up for hours, yelling, shoving each other, and desperate to get inside a bank. This woman's watch was broke man the crowd. Look where we are today, this man says. We are being humiliated before the world.

This community's economic pain began long before Greece's recent cash shortage. Halkida (ph) once thrived on local industry. Now factories surrounding the town lay broken and empty.

They've been scaling back and closing down steadily since the start of the crisis in 2008. The mayor says that the flow on effect has hit every business, every person. He tells me unemployment is over 30 percent. Among the young, it's over 60 percent.

Every day around 300 people now come here for free food. It's not much, but these are the most desperate and their numbers are growing. We meet a person laid off six years ago after working 28 years in a local factory.

He doesn't like relying on charity. He says it feels dark, but without it, there would be no solution but suicide. This cement factory used to be the pride of Halkida, but no one builds in Greece anymore and the plant closed in 2013. More than 300 jobs lost.

The former workers have a standing protest here in the center of town. They want the factory reopened and Greece to move on any way it can.

(on camera): Do you want Greece to stay in the euro?

ELIAS KOUKOURAS, LAID-OFF WORKER: We prefer to have money, any money and you can -- we can -- with this money, any name to manage our lives.

BLACK: People here say to admire Halkida's beauty is to look through a narrow misleading window. The reality is poverty and employment, and a community that dreams of recovering its dignity. Phil Black, CNN, Greece.

(END VIDEOTAPE)

CHURCH: All right we want to take you back to Russia, where President Vladimir Putin has just welcomed world leaders to the BRICS Summit. The group includes emerging economic powers like Brazil, India, China, and South Africa.

FOSTER: Giving them an alternative really from countries that put sanctions on him. It's also an opportunity for President Putin to show that he's on the international stage despite being let out of the G7 earlier in the year and he's still a player and it works for the whole group there, really.

We'll follow the developments as they unfold. China trying to create an alternative to the World Bank as well, that's probably going to be the big announcement.

Now a decision Arnold Schwarzenegger made while he was governor of California is under fire. The movie start brushes off questions over why he granted clemency to a convicted killer. Details ahead.

(COMMERCIAL BREAK) [03:42:13]

FOSTER: Just into CNN an incredible video, a flight in the U.S. halted its takeoff on Thursday morning because of what the airline calls mechanical issues.

CHURCH: Yes, take a look at this, a Southwest Airlines flight heading to Boston was trying to take off from Chicago's Midway Airport. A video from one of the passengers shows a shower of sparks under the wings.

FOSTER: This passenger much be quite concerned at this point, 143 on board. Southwest says they are all safe and being rerouted to their final destinations and the plane will receive further inspection. I'm sure that the passengers would like to talk about it as well.

CHURCH: Yes, I must say, I mean, very unnerving, but the person taking that footage seemed very calm.

FOSTER: What else can you do?

CHURCH: All right, another story we are watching closely, Arnold Schwarzenegger is being called a dirty politician for a decision he took while he was California's governor.

FOSTER: Now on his last day in office, Schwarzenegger commuted a prison sentence of a man convicted in a fatal stabbing, who is the son of another powerful politician as well. As CNN's Kyung Lah reports, the decision devastated the victim's family.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): "The Terminator" rebooting his blockbuster franchise with all the spectacle you'd expect from Arnold Schwarzenegger, but we are here because the former California governor ignored requests for interviews from CNN and is still appearing to dodge our questions.

(on camera): Will you answer another question from CNN.

(voice-over): We are here to ask him about someone else who says they are being ignored by Schwarzenegger, Fred and Kathy Santos.

FRED SANTOS, VICTIM'S FATHER: He plays a hero in the movies, yet in real life he is not a hero. He is a dirty politician.

LAH: They are the parents of Luis Santos, an average college student whose young life and death got tangled up in the highest levels of California politics.

October 4, 2008, 2:16 a.m., grainy surveillance video captures several figures running.

UNIDENTIFIED CALLER: We have three people stabbed at least, maybe four. LAH: Four friends out on the San Diego State University campus jumped by strangers. You can't make out the actual, but three were injured and one of them, 22-year-old Luis Santos, the left ventricle of his heart slice in a stabbed wounds, bleeds to death.

The attackers fled, speeding out of San Diego to Sacramento, their home. They stopped at this 7-11. You can see one of the men carrying a big Gulp cup. They filled with a $1.30 worth of gas using it to torch their bloody clothes.

They ditched their knives in the Sacramento River, weapons that were never recovered. It only took police hours to identify four suspects and soon a motive.

[03:45:10] UNIDENTIFIED FEMALE: They were kicked out of a party so they decided that they were going to stab some people.

LAH: Two of the suspects fingered Ryan Jett and Esteban Nunez as Luis Santo's killers. The defendants initially pleading not guilty.

SANTOS: My concern was that politics might interfere with justice with the legal system.

LAH (on camera): It was immediate.

SANTOS: Once I knew the connection.

LAH (voice-over): The connection? Defendant, Esteban Nunez's father is Fabian Nunez. At that time of the murder, Nunez was California's most powerful lawmaker. In 2004, when he was sworn in as California's assembly speaker, his son was by his side. Now the politician was standing by his son.

Nunez called on his political friends to support his son at his bail hearing. Letters from a union leader, state political leaders even then mayor of Los Angeles, Antonio Villaraigosa, who wrote to the court that Esteban Nunez is a young man of good and upright character.

(on camera): Was anyone in power speaking up for your son?

SANTOS: No, nobody in power is speaking. We are just regular folks.

LAH (voice-over): While politics swirled above the murder trial, just days before it began, Nunez and Jett were offered a plea deal by the prosecution.

UNIDENTIFIED FEMALE: And I pray that the universe will deliver you a just punishment for your empty and satanic souls.

LAH: Then at sentencing, 16 years behind bars each, the maximum penalty for manslaughter and assault.

LAH (on camera): What did you think about that?

KATHY SANTOS, VICTIM'S MOTHER: Well, I thought it was better than nothing, which is why we agreed to a plea deal so that there is punishment.

LAH: What happened?

KATHY SANTOS: Well, we got cheated out of that.

LAH (voice-over): What the Santos' didn't know Fabian Nunez had forged a close friendship with Governor Arnold Schwarzenegger. On his very last night in office, without ever hearing from the Santos family Schwarzenegger commuted Nunez's sentence slashing his 16 years to just seven. He is set to be released early next year.

BONNIE DUMANIS, SAN DIEGO COUNTY DISTRICT ATTORNEY: I think it was political cronyism at its worst.

LAH: Over several week, CNN repeatedly requested an interview with Fabian Nunez which he denied, but Nunez did speak to reporters in 2011.

UNIDENTIFIED MALE: From the beginning my son was the headliner in this case.

LAH: He alleged the prosecutors were hungry for a conviction because of Esteban's connection to a powerful man.

UNIDENTIFIED MALE: It was a totally different standard, legal standard applied to my son.

LAH: In this letter objecting to the court sentence, Nunez argued that his son did not harm Mr. Santos and that Jett was the real killer, something that witnesses told police. But prosecutors maintained Esteban wielded a knife, his role in the crime equal.

DUMANIS: He's actually stabbed two of the four boys, himself. As to Luis, there is a question as to whether or not he was the stabber, but he participated in what caused that stabbing.

LAH: The only justification Schwarzenegger gave for his decision was in his actual commutation letter where he cited Esteban's lack of criminal history compared to Jett's. The Santos' family, now suing the state, learned of Schwarzenegger's stunning move from a local reporter.

(on camera): Anything you want to say to Arnold Schwarzenegger?

FRED SANTOS: No, it would be a waste of my breath.

LAH (voice-over): We decided to go ask for him. After ignoring our requests for interviews, we caught up with the former governator now "Terminator" at his premier.

(on camera): Hi. I'm Kyung Lah from CNN. I want so to ask you a question about your political roots. Esteban Nunez, why did you commute his sentence?

ARNOLD SCHWARZENEGGER, FORMER GOVERNOR OF CALIFORNIA: Since we're here today for the movie promotion we always just talk just then about movies. I'm happy to talk about "The Terminator" and love to talk about the --

LAH: But they are --

UNIDENTIFIED FEMALE: Thank you, everyone.

LAH: The family is trying to go to the Supreme Court, sir.

(voice-over): We try again. Arnold -- and again.

(on camera): May I ask you a question on behalf of the Santos family?

(voice-over): He won't respond, returning to his Hollywood life while the Santos family returns to theirs minus the glamour.

(on camera): Why are you continuing to fight?

FRED SANTOS: We were not there to protect him and prevent him from being killed. This is the only thing we can do for him.

(END VIDEOTAPE)

FOSTER: Jerry Brown, who became governor after Schwarzenegger, has signed a law requiring governors to notify prosecutors before granting anyone clemency. That way a victim's family would know too.

CHURCH: Yes, and Fabian Nunez, the father of the convicted man bluntly told the "Los Angeles Times," quote, I used my relationship with the governor to help my own son. I'd do it again. There it is. I would do it again.

[03:50:08] FOSTER: The pope's tour of South America has taken him to Bolivia. Next on CNN NEWSROOM, we will take you to Santa Cruz where Pope Francis hopes to spread goodwill.

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CHURCH: Welcome back, everyone. Pope Francis is now in Santa Cruz, Bolivia, part of his eight-day tour of South America.

FOSTER: On Wednesday, the pope spent time in one of the world's highest cities, La Paz, but his visit was cut short due to concerns over altitude sickness. As CNN's Shasta Darlington explains.

(BEGIN VIDEOTAPE)

SHASTA DARLINGTON, CNN CORRESPONDENT (voice-over): La Paz celebrating the coming of Pope Francis. At 3600 meters, nearly 12,000 feet, quite a challenge for a 78-year-old pontiff.

At the airport, Pope Francis, greeted by indigenous children and presented with a traditional bag by President Evo Morales, a traditional bag to store coca leaf.

[03:55:05] According to many Bolivians, that's the best way to stave off altitude sickness and it's sold at markets like this one. Piles of tomatoes, cheese and eggs and next to the dried chiles, coca leaves. Dona Maria choose the leaves every day.

Do you think Pope Francis will try it? He's going to chew it, she says. He's here he's going to chew it. Further down the road Dona Privitiva shows me how it's done. It's for hunger, she says, it gives you energy and for altitude.

(on camera): She says it will get rid of any hunger, make me feel stronger, and hopefully help with the headache.

(voice-over): And it does help with the headache. And there is the tea made of coca leaf. Coca leaf is the main ingredient of cocaine, but chewing and drinking tea are considered safe and legal here.

The Vatican tried to limit the effects of altitude by limiting Pope Francis' trip to four hours. Joyous followers lined the ways the pope drove from the airport to the main plaza. He showed no signs of fatigue as he kissed children and waved at crowds, but we may never know if coca leaf helped him keep up his spirits. Shasta Darlington, CNN, La Paz.

(END VIDEOTAPE)

CHURCH: What a response he's getting.

FOSTER: The crowds are immense. In Paraguay, they will be even bigger.

CHURCH: Absolutely. Thanks for watching CNN. I'm Rosemary Church. "EARLY START" is coming up for our in the United States.

FOSTER: And I'm Max Foster. For viewers elsewhere do join me for more CNN NEWSROOM right after this break.

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