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Former House Speaker Accused of Hush Money Cover-Up; NSA Surveillance Programs Set to Expire; FIFA President Defies Calls to Step Down Amid Scandal; National Spelling Bee Crowns Co-Champions; Flash Flood Emergency in Dallas. Aired 6-6:30a ET

Aired May 29, 2015 - 06:00   ET

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

(BEGIN VIDEOTAPE)

DON LEMON, CNN ANCHOR: Bombshell, a top Republican indicted.

[05:58:19] UNIDENTIFIED FEMALE: For lying to the FBI.

JOE JOHNS, CNN CORRESPONDENT: As well as trying to hide large financial transactions.

UNIDENTIFIED MALE: Hush money is being paid to somebody.

JOHN BERMAN, CNN ANCHOR: The Obama administration says it is fine-tuning its ISIS strategy in Iraq.

ARWA DAMON, CNN CORRESPONDENT: The Sunnis have been asking for weapons for well over a year now.

UNIDENTIFIED FEMALE: They are calling it the freedom of speech rally, round two.

ANDERSON COOPER, CNN ANCHOR: Aren't you playing into the narrative of ISIS, of al Qaeda?

UNIDENTIFIED MALE: True Islamist terrorism.

UNIDENTIFIED MALE: Why are you resisting, ma'am?

UNIDENTIFIED MALE: She knows she's pregnant, and she's escalating the situation.

UNIDENTIFIED FEMALE: The police in this case escalated the situation.

UNIDENTIFIED FEMALE: I'm not that way. You made me feel that I'm -- a way that I'm not.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Chris Cuomo, Alisyn Camerota and Michaela Pereira.

CHRIS CUOMO, CNN ANCHOR: Good morning to you. Welcome to your NEW DAY. It is Friday, May 29, 6 a.m. in the east. And we have not one but two major scandals on two continents that you'll be hearing about today.

In Zurich, Switzerland, soccer's governing body is going ahead with an election for its next president, despite a growing corruption crisis. We're going to get to that in a second.

ALISYN CAMEROTA, CNN ANCHOR: But first, a scandal rocking the political world here in the U.S. involving a man who was once second in line to the presidency. Former House Speaker Dennis Hastert accused of agreeing to pay $3.5 million in hush money to a long-time acquaintance and lying to the FBI about it.

CNN has both stories covered for you. We begin with senior Washington correspondent Joe Johns live in Washington.

Joe, tell us what we know about this.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Alisyn.

When FBI agents started investigating mysterious transactions made by former speaker Dennis Hastert, they wanted to know if he was paying someone off, if he'd perhaps been the victim of a crime, or even if there was some innocent excuse for big cash withdrawals from his bank account. The federal account indictment, however, tells only part of the story.

(BEGIN VIDEO CLIP)

DENNIS HASTERT, FORMER SPEAKER OF THE HOUSE: The president of the United States.

JOHNS (voice-over): The former speaker of the House, once second in line to the presidency, now facing federal charges, accused of making false statements to the FBI and trying to hide large financial transactions that the government alleges was hush money.

According to the indictment, Dennis Hastert agreed to pay $3.5 million to someone only identified as Individual A after meetings between the two five years ago. Payments meant to compensate for and conceal Hastert's, quote, "prior misconduct."

The indictment does not describe what that misconduct was but does say Individual A knew Hastert most of Individual A's life and was a resident of the Illinois town where the former speaker of the House was high school teacher and coach for years.

HASTERT: In consultation with the White House...

JOHNS: In December of last year, the FBI launched an investigation on the payments and whether Hastert was trying to avoid currency transaction reporting requirements, as well as using the cash to cover up past misconduct.

PAUL CALLAN, CNN LEGAL ANALYST: That's why they would be looking into this. If there was a pattern of withdrawing around $10,000 from the bank without another explanation. JOHNS: Hastert told FBI agents that the withdrawals were because

he did not trust the bank system. The government alleges that was a false statement.

It's a stunning turn for the former Republican leader who was House speaker from 1999 until he stepped down in 2007. Since then, he's been a lobbyist at this Washington firm, which quickly removed Hastert's biography from its website after the indictment was announced.

(END VIDEOTAPE)

JOHNS: Hastert will have to stand in front of a federal judge at some point for his initial court appearance. Our attempts to get a statement from him through his former law and lobbying firm have so far been unsuccessful -- Chris.

CUOMO: All right, Joe, a lot of questions here. Let's bring in CNN political analyst and editor in chief at "The Daily Beast," John Avlon; and CNN political commentator, Republican consultant and Sirius XM host Margaret Hoover.

This is one of those tricky ones where you don't want to get ahead of the story. An indictment is provided, actionable information, but it tells you everything except what you want to know most; Margaret Hoover, it's why. We don't know why.

But what we do know is that they believe, the authorities, that Dennis Hastert was playing with money in a way that violates the law. And they believe they got him two different ways. What's your suspicions?

MARGARET HOOVER, CNN POLITICAL COMMENTATOR: I'm not going to take the bait, Chris Cuomo.

CUOMO: You must.

HOOVER: I am not going to -- honestly...

CUOMO: This is your person.

HOOVER: Denny Hastert was considered by Republicans a real savior at the time he came into the speakership and a really steady hand on the tiller throughout the time that he was the speaker of the House. He's respected by his colleague, both on the House of Representatives and in K Street, where he's been a lobbyist for several years. Nobody should get ahead of themselves on this. I think they are...

CUOMO: Hand on the tiller but skimming from the till, John Avlon.

HOOVER: Yes, and really breaking the law. This is incredibly disappointing.

CUOMO: It's just an indictment. HOOVER: This is incredibly disappointing.

CUOMO: Just an indictment.

HOOVER: Any time you're taking that much cash out and trying to hide it.

CUOMO: If they're right.

HOOVER: And then if they're right, it seems like he was not cooperating with the FBI, that also makes them angry at you. I mean, clearly, something is awry here. It seems to go out of character, but let's not get ahead of ourselves. There are a lot of people sort of swirling about how awful this could be. Let's wait until we know what it is.

CAMEROTA: Let's just talk about some of the money that we do know. He made payments of $50,000 to this individual every six weeks. When that aroused suspicion, he started taking out just $10,000.

CUOMO: How do we know it was because he aroused suspicion?

CAMEROTA: Because it says. It says that when they -- that something 00 somebody asked him why he was doing that. And so then he started doing $10,000, which he then bundled for drops of $100,000 every three months.

AVLON: What we do know, according to this indictment, is that Denny Hastert was apparently being subject to some sort of blackmail or extortion, and it was worth $3.5 million over the last few years since he left the speakership. And the indictment indicates it is for covering up bad acts, misdeeds that went possibly back in Denny Hastert's history.

Those are the outlines of the accusations. Your mind can go a lot of ugly places with that little bit of information.

HOOVER: Your mind can.

AVLON: I think, frankly, we don't need to get into the rumor mill.

CUOMO: Alisyn's right also. And I think it's material to the analysis that it's not just someone. It's even better than that. You're even more right. It's bank representatives came to him and said, "Yes, you know, what's up with the $50,000 in cash." And then he changed.

What does that show? That shows knowledge of potential regulation. You know, right? If you just changed for some other reason, maybe he didn't know about the wire transaction.

AVLON: Yes, yes, yes. Look, this is political intrigue. This is FBI. This is the language of indictments, but this is also some pretty ugly accusations that could get uglier. [06:05:06] And the reason it's been such a bombshell in

Washington is that Denny Hastert has been considered Mr. Clean by his colleagues. He came in after the scandals of Gingrich, after Bob Livingston was -- had to step down before he even became speaker because of accusations of adultery. So this is not only personally shaking to people in the Republican establishment and the Washington establishment, it has a sense of a trap door, in which case it could get much worse.

CUOMO: You don't need to speculate, though, Margaret, just to take one step back on what you said. He lied to the FBI, according to the indictment. That's it in terms of, you know, if you want to say this is fair or not to Dennis Hastert. If the indictment is provable, that's it; you don't need to know any more from the point...

AVLON: He resigned from his lobbying firm last night.

The rest is political intrigue. However, what is fueling intrigue, I think, and it's not -- we're not introducing new ground here, is that at times material to this indictment, point one of the thing, the first thing they quote is from approximately 1965 to 1981, defendant John Dennis Hastert was a high school teacher and coach in Yorkville, Illinois. Why would they put that in?

AVLON: Why would they put that in?

CAMEROTA: He was a wrestling coach. Well, the reason they say that they put in that he was a high school teacher and wrestling coach is because the individual to whom he was paying money he supposedly knew from that time.

HOOVER: And the individual seems to be from Yorkville, Illinois. So it is likely related, it seems.

CUOMO: The land of Lincoln or the land of Blagojevich or both.

CAMEROTA: Both.

I mean, and that's why it has this whiff of scandal. Is because it was -- it wasn't just malfeasance in Congress. It was something before that maybe.

AVLON: So more to come on this story, but a major political bombshell in Washington.

CUOMO: They're also looking at whether or not he was extorted, by the way. You can be guilty of the wire transactions, but also you were doing it because somebody else was doing criminal activity to you.

AVLON: That is the strong implication in this indictment.

CAMEROTA: All right. More to come on that story, we're afraid. John Avlon, Margaret Hoover, have a great weekend.

HOOVER: You, too. CAMEROTA: Let's get over to Michaela.

MICHAELA PEREIRA, CNN ANCHOR: Well, not the only scandal we're following. We're following right now FIFA's Congress, convening in Zurich ahead of today's vote. Want to show you a live look. President of soccer's world governing body, Sepp Blatter, is up for re-election amid a -- All right. I'm sorry. We need to head to Sunlen Serfaty at the White House.

Why don't we turn to you? Sunlen, what can you tell us?

SUNLEN SERFATY, CNN CORRESPONDENT: Well, Michaela, here at the White House, we're looking forward to a weekend session by Congress by the Senate to try to get these NSA reforms in place. The Senate needs to act to extend the Patriot Act.

The White House has been ratcheting up the warnings, saying that there would be dangerous interruptions in their ability to track terrorists if the Senate does not act this weekend.

Now the deadline to act is midnight on Sunday. But the wheels actually do start turning much earlier than that, according to administration officials at 4 p.m. On Sunday, the NSA will need to start winding down the surveillance programs, informing phone companies, shutting down servers on their end.

Officials say if the Senate approves the House-passed measure, though, and President Obama does sign the piece of legislation before 8 p.m. on Sunday night, they say the process can be reversed. So the White House here has been increasing their pressure on Capitol Hill, saying that the House-passed reform bill is the only way forward.

Here's the White House communications director.

(BEGIN VIDEO CLIP)

JEN PSAKI, WHITE HOUSE COMMUNICATIONS DIRECTOR: There isn't a Plan B. There's no magic bullet. There's no switch here. This is really an issue that the Senate needs to work through. The question is why can't the Senate move forward? Can the Republicans work through their family feud to get to an agreement over the next couple of days?

(END VIDEO CLIP)

SERFATY: And Republican senators have been working throughout the recess this past week, trying to strike a deal, but Alisyn, there is no breakthrough yet -- Alisyn.

CAMEROTA: Sunlen, thanks so much for that. Let's get to Chris.

CUOMO: All right. We have more news to discuss this morning. We want to get to Nick Paton Walsh, because there's an evolving situation going on overseas. So we're going to go to Nic Robertson right now, excuse me, senior international correspondent with more from Switzerland. Nic, what is the latest?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the Congress, the FIFA Congress has gathered. They've already voted on one issue, the FIFA budget. Two hundred out of the 209 members voted to pass the FIFA budget which, given all the allegations of corruption that are abounding right now, that in itself shows you the majority of the delegates here don't seem to be too concerned about precisely how the money within the organization is being handled, $5.9 billion they raised over the last four years.

But of course, the key thing is that vote on who's going to be president. And right now Sepp Blatter, the incumbent, who is very tarnished at the moment with allegations of corruption of many of the individuals running close to him, does seem to be the lead candidate.

Prince Ali bin Hussein of Jordan is the contender. He's offering to increase the number of teams at the World Cup from 32 to 36. He's offering to increase the funding for football associations around the world from a quarter of a million dollars to $1 million, substantial increase.

[06:10:07] But the reality is, Sepp Blatter has a strong following in Africa, in Asia. South America tends to go with him as well. The Europeans have come out strongly for the contender Prince Ali, but at this time it does look like Sepp Blatter is going to be the one who continues to lead FIFA. Alisyn.

CAMEROTA: Oh, so fascinating. Thanks so much for that development, Nic. We'll check back with you.

Breaking news, moments ago a flash flood emergency issued for northeast Dallas and neighboring areas after more than 5 inches of rain slammed the region overnight. Creeks overflowing their banks, contributing to dangerous flash flooding.

This as Houston and other storm-battered parts of Texas brace for five more days of rain. At least 35 people have died from severe weather, nine people remain missing this morning.

CUOMO: All right. Big headline for you. Two people are in custody, and there's a manhunt in Kansas for a third suspect. Why? Well, a police officer was shot across the border in Oklahoma during a chase. Authorities say the officer tried to pull over an SUV. There were three people inside. They sped off, firing shots at the police cruiser, and hit the officer in the head. His condition is unknown. We'll stay on the story.

PEREIRA: For the second straight year two teenage wordsmiths are sharing the title of national spelling bee champs.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: If you spell this word correctly, the Scripps National Spelling Bee will declare you and Vanya co-champions. Nunatak. GOKUL VANKATACHALAM, CO-CHAMPION, SCRIPPS NATIONAL SPELLING BEE:

Nunatak. Nunatak, N-U-N-A-T-A-K. Nunatak.

(END VIDEO CLIP)

CUOMO: How does he know that? It's not even a word.

PEREIRA: It's a word, nunatak.

CAMEROTA: Use it in a sentence.

PEREIRA: Fourteen-year-old Gokul Vankatachalam and 13-year-old Vanya Shivashankar are your new spelling bee winners. They had to spell "scherenschnitte."

CAMEROTA: What?

PEREIRA: That's what Vanya had to spell for her final word. She's also the first champion to be the sibling of a past winner. Her sibling won the spelling bee back in 2009. They're going to be here this morning.

CAMEROTA: Oh, my gosh.

PEREIRA: We're going to ask them to spell NEW DAY. No, I'm kidding. They're joining us this morning, fresh off their win. They're both veterans of the spelling bee contest. So I'm sure this year they were excited but not as nervous as past years when they, you know...

CAMEROTA: What did their parents do right that we can take a page from?

PEREIRA: A lot.

CUOMO: Because I'll tell you, it's not as simple as just knowing -- they rarely know the words. It's about understanding the...

CAMEROTA: Etymology.

CUOMO: The etymology, the phonetics.

PEREIRA: The reason it was a tie is they ran out of words.

CUOMO: They started making them up. "Scherenschnitte" is not a word. That's exactly what my mother does when she sneezes. It's the same thing.

You remember what happened last year?

PEREIRA: Yes.

CUOMO: We had a tie last year. The kids were nervous when they came on. Odd that they're not nervous spelling these impossible words, but they're nervous on the show. So I suggest that -- so what are you guys going to do to figure

it out? There can't be two No. 1's. We can only be one. We wanted to loosen them up. Like he should go get pizza, take it out back, you know, and figure it out, maybe a video game. And John Oliver crushed me for being mean to the kids. So this year I'm playing it differently. It was amazing.

PEREIRA: Are you going to be a super and sweet guy? Are you suggesting an arm wrestle?

CUOMO: I'm not going to suggest that they do anything. I don't care how tight they are on the show.

CAMEROTA: OK. But I still think we should still play a practical prank on them. Now accepting suggestions.

CUOMO: I don't want another scherenschnitte.

PEREIRA: Pranking teenagers? No. Come on.

CUOMO: That was a real scherenschnitte there last year.

CAMEROTA: That was a nunatak.

PEREIRA: A nunatak. Going to be a fun day.

CUOMO: So ahead we have some big news for you. There is a shift in strategy going on in the Middle East. The question is what is it and why? And why is the U.S. now considering sending weapons directly to Iraq's Sunni tribes? Will that help the situation or make sectarian violence more intense? That's what we're going to talk about.

(COMMERCIAL BREAK)

[06:17:52] CAMEROTA: A development out of Iraq to tell you about. This morning the Obama administration is considering a new strategy to fight ISIS: arming Sunni tribal fighters. At the moment, all U.S. weapon shipments go through the Iraqi government.

So is this a smart move or is it a risky one? Let's turn to Lieutenant General Mark Hertling, CNN military analyst and former commanding general of the U.S. Army Europe and 7th Army. General, thanks so much for being here.

LT. GEN. MARK HERTLING, CNN MILITARY ANALYST: Yes, good morning, Alisyn.

CAMEROTA: What do you think of the plan if the U.S. were to arm Sunnis?

HERTLING: Well, first of all, it isn't a new strategy. It's part of a line of operation that's been ongoing for a while. It's the arm and equip line. And I think what we're attempting to do is say, "How do we help the Iraqis move faster?" And I think what we're doing in the Pentagon, what elements are doing in the Pentagon, is saying how do we move this along? How do we help the Iraqi government get a National Guard in Anbar province or get some type of control over the Sunni tribal leaders?

Arming them directly, I've got to tell you, Alisyn, that will never work. First of all, it's logistically impossible. How do you get arms to the Sunni tribes or even to the Peshmerga? It would be very challenging.

And secondly, it's a slap in the face to the Iraqi government. The real key to this is how do you help the government generate more trust with its people? If we do something like this, it would be contrary to helping them gain that trust, and it's certainly not going to help the long-term strategy of the war effort.

CAMEROTA: By the way, we should let our viewers know, this isn't just philosophical on your part. You were in Iraq during the Anbar awakening. And you saw how arms played out there. What was the lesson learned?

HERTLING: Well, the key lesson to me, I was not in Anbar. I was in multinational division north. So we had all the five provinces north of Baghdad. And it was the same thing. It was the solemn movement. It was the awakening. It was the sons of Iraq.

But what the difference was is there was a U.S. military control cooperating with the Iraqi government. They didn't even want to do it at the time under Mr. Maliki. He did not want the Sunni tribes or even the citizens armed, because he was concerned about uprising.

But we made the promise to him: "Hey, look, we'll control this, and we'll watch very closely the leaders of these groups." Because those are the ones you put in charge, and you give them weapons, but you've got to control them.

[06:20:11} And on a daily basis, my subordinate commanders were meeting with the chiefs of these tribes, the leaders of these Sawaa (ph) movements to make sure they were leading arms correctly.

If you just dump off a bunch of guns to a bunch of tribal members you don't know what they're going to do with them. And I would -- I would suggest that would really scare the heck out of any government.

CAMEROTA: Help us understand how complicated this is. Because as we've understood it, ISIS is predominantly Sunni. It's made up of disgruntled former Saddam acolytes. So how does arming the Sunnis help fight ISIS?

HERTLING: Well, there are different groups, Alisyn. When we're talking about ISIS, we're talking an extremist arm of the Sunni religion. And they are attempting to foment challenges and disasters for the Shia-led government in any way they can as well as take over the government. What you have in the Anbar provinces are Sunni tribes.

There are, in fact, 62 different tribes in Anbar. There were 127 in the north area where I was located, all different tribal names. And they generate a lot of loyalty with their people. And in fact, the Iraqi people put religion, tribal affiliations and then government, in that order, as the way they look at patriotism.

So when you're talking about arming Sunni tribes to fight this extremist group, the majority of the members of these tribes do not want to live under this extremist ideology. They don't want them controlling their land. They want to get -- kick them out.

But truthfully, you know, giving arms directly to them could cause problems, which many people in Congress have said how do we arm people without -- without ensuring that the enemy takes those arms over? In this region, and especially in Anbar, you're really not sure who is for the government, who is for protecting the land, and who are the covert elements that might be contributing to ISIS. That's the concern.

CAMEROTA: Yes. That is. Thanks so much for trying to explain -- helping to explain all the complications. General Mark Hertling, great to see you.

Let's get over to Michaela.

PEREIRA: All right, Alisyn. Trouble brewing in Arizona. Another Prophet Mohammed cartoon drawing contest is scheduled to take place outside an Islamic community center today. The organizers are telling everyone who participates to bring their guns. We'll have details ahead.

(COMMERCIAL BREAK)

[06:26:51] CUOMO: Breaking news this morning. A flash flooding emergency in effect in Texas. This time it's Dallas, not Houston, that's bearing the brunt of Mother Nature's wrath.

Let's get right to meteorologist Chad Myers. We know that the storm front was going to move, but what is happening right now?

CHAD MYERS, CNN METEOROLOGIST: I know it's only 5:26 in Dallas right now, but if you're heading out the door, know that many roadways are flooded today, this morning from Garland back to Plano. That's where the flash flood emergency is.

And still a flash flood warning for most of Dallas and Ft. Worth. I know I-20 was closed for a while because of water on the roadway. And many of the roads around Dallas this morning are covered in water. A lot of rainfall still happening now.

There's Dallas. Here's Ft. Worth. There's the area that rained so hard. This is rainfall accumulation. So from Garland to Plano all the way up to about Allen, Texas, over six inches of rainfall. And it is still raining in some spots.

This is a storm that developed overnight in west Texas, rolled through the eastern part of the state and right over Dallas. It's exactly what we expect to happen again tonight. Another mass of clouds will develop right over here. And it will come right back into Dallas for about 5 a.m. tomorrow morning. We'll be talking about the exact same thing tomorrow morning with another round of storms, Alisyn.

CAMEROTA: Oh, just what they don't need. Chad, thanks so much for that.

MYERS: You're welcome.

CAMEROTA: Former House Speaker Dennis Hastert accused of paying hush money to someone and lying to the FBI about it. According to the federal indictment, Hastert agreed to pay $3.5 million to a person identified as only Individual A. The nature of the alleged misconduct still unclear.

CUOMO: The D.C. Metro system is pulling all issue ads, religious and more, from trains and buses for at least the rest of the year. Why? Well, the suggestion is that it's a reaction to a group trying to place ads featuring the winning Mohammed cartoon from a contest in Texas. That's where two deranged men opened fire in the name of ISIS and got gunned down for their efforts.

Now, despite that near disaster, speaking on NEW DAY Thursday, the group's head warned against censoring the cartoons.

(BEGIN VIDEO CLIP)

PAMELA GELLER, PRESIDENT, AMERICAN FREEDOM DEFENSE INITIATIVE: The media and the political academic elites are censoring this cartoon. And we think the American people should see that you are self-enforcing the Sharia.

(END VIDEO CLIP)

CUOMO: No one is questioning the right to show the cartoon. It's just about whether or not, morally, it's the right thing to do. And the group's head went on to call the Washington Metro board cowards because of their decision.

PEREIRA: Meantime, there's concern in Arizona that a repeat of that Texas shooting could happen tonight. Hundreds of people are expected for another draw Mohammed cartoon contest. A protest outside an Islamic community center is being organized. The organizer is a former Marine. And he's not mincing words. CNN's Sara Sidner has more.

(BEGIN VIDEOTAPE)

SARA SIDNER, CNN CORRESPONDENT (voice-over): The words on John Ritzheimer's shirt make his stance very clear. The former Marine is against Islam. He and more than 450 others have signed up to do something about that. They're going to hold a Prophet Mohammed cartoon drawing contest.

JON RITZHEIMER, "DRAW MOHAMMED" CONTEST ORGANIZER: The cartoon contest especially I think it's stupid and ridiculous, but it's what needs to take place in order to expose the true colors of Islam. True Islam is terrorism, yes, the ones that are out committing these atrocities and stuff, they're following the book as it's written.

SIDNER: After the contest, he says, they'll hold a peaceful protest, where the pictures of the prophet are held up for the world to see. And just in case...