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U.S. Drops Cuba from List of State Sponsors of Terror; Muhammad Cartoon Contest Set for Tonight in Phoenix; U.S. Fine Tuning ISIS Strategy as 2 Car Bombs Explode at Baghdad Hotels; Is Baghdad In Danger of ISIS; Does Iraq Need 3-State Solution; Should Senate Renew NSA Surveillance; Republican Presidential Candidates Pressured to Rise in Polls to Participate in Debate. Aired 1:30-2p ET

Aired May 29, 2015 - 13:30   ET

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

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ANNOUNCER: This is CNN breaking news.

[13:30:24] WOLF BLITZER, CNN ANCHOR: The breaking news, the United States how has formally dropped Cuba from its list of state sponsors of terrorism. The move removes one of the final barriers to restoring full diplomatic relations between Washington and Havana. Today, the expiration of a 45-day period when Congress could have blocked this move.

Let's go to our correspondent, Patrick Oppmann, joining us live from Havana right now.

Patrick, walk us through what's going on. Cuba, as you know, has been on this list, the State Department list of countries that formally support international terrorism going back to 1982, and now this presumably sets the stage for the full diplomatic relationship that is about to be resumed.

PATRICK OPPMANN, CNN CORRESPONDENT: Absolutely, Wolf. Not only a major shift in U.S. Policy towards Cuba, but also the removal of probably the last major obstacle that stood in the way of full diplomatic relations between these two countries which were broken in 1961, so 54 years in the making, Wolf. This is really the key point Cuban officials were telling for them to go ahead and agree to reopen embassies in Havana and Washington and they basically said they cans imagine the United States restoring diplomatic relations with the country that considered to be a terrorist. Does go back to the Reagan years when they reported revolutionary groups like the FARC rebels in Colombia. They promised the State Department they will no longer finance or fund any group involved in terrorism. So as well, some give and take here and we are expecting officials tell us this will lead to the resumption of relations between Cuba and the United States within weeks. More changes to come.

BLITZER: It represents a huge potential economic bonanza for Cuba right now. Now that Cuba is no longer on the international terror list that State Department has, U.S. investors, U.S. companies will be able to go in, build hotels really do some important work. The Cuban economy could get going as a result of this, especially in the area of tourism.

OPPMANN: It's going to provide a boost without a doubt. The U.S. economic embargo remains in place, but after the embargo, the sanctions were involved with the terrorist designation were some of the most punishing out there. Didn't allow Cuban officials to use the dollar in transactions. Kept U.S. companies from doing business here because they knew how much more exposure and scrutiny from the United States government was going to be brought down upon them. Now it really will probably lead to more investment, loans that Cuba will have the ability to ask for IMF loans. If the Cuban government wants to on the Cuban economy, which needs all the help they can get.

BLITZER: I'm sure it will happen now that the full diplomatic relationship is going to be restored.

Patrick Oppmann is our man in Havana.

Patrick, thanks very much for joining us for that report.

Still ahead, another Muhammad cartoon contest set for tonight here in the United States. This, after a terror attack on the contest outside of Dallas, Texas. Details when we come back.

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[13:37:20] BLITZER: A former U.S. Marine is not hiding his anti- Islam feelings as he has organized a rally outside a Phoenix mosque later today. He's billing it as freedom of speech rally complete with a Draw Muhammad cartoon contest.

Sara Sidner is on the scene for us in Phoenix, Arizona.

Sara, what does the organizer hope to accomplish with this rally later today?

SARA SIDNER, CNN CORRESPONDENT: It's clear that he is against Islam. His T-shirts make that very clear. We can't say what they say because there's vulgar language on the T-shirts. But he, as you mentioned, has gone into hiding and we don't expect necessarily to see him.

However we looked on their Facebook for this organization. There are more than 700 people who have now said they are going to show up. Their point is -- well, there are many different points, and one of those points is, for those who plan to exercise their freedom of speech, they're also encouraging people to exercise their Second Amendment, the right to bear arms, just in case there is trouble. That has a lot of folks concerned, including the police, who will have a presence out here.

We also talked to some of the folks that are linked to this mosque behind me, and talked to us a little bit about the fear that the message on the Facebook brings.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Any time people are bringing weapons and encouraged to bring weapons to protests, this has happened here, you know, this upcoming protest, this happened at a -- outside an Islamic event in Garland, Texas, and we're seeing more and more of this intersection of gun culture taking place, so there is a fear.

(END VIDEO CLIP)

SIDNER: Take a look at this. This is one of the new elements out here, a camera. There are at least four of these cameras outside of the mosque that have been put up in the last 24 hours. We were here when one of them was put up. That is because they want to be able to survey the crowd. They are expecting a large crowd out here. One never knows. All of this sort of stemmed from what happened in Garland, Texas, with the two men who, by the way, did attend this mosque at times, went and tried to shoot up another gathering similar that was having a Draw Prophet Muhammad contest. By the way, they are also still planning to have that contest but have it in a park about three minutes from here -- Wolf?

BLITZER: Let's hope it's peaceful and quiet.

We will stay on top of the story with you, Sara. Thank you.

Still ahead, the U.S. may be refining a strategy as far as the war against ISIS is concerned, but a plan to directly arm Sunni fighters in Iraq may face a lot of flack from the Iraqi government in Baghdad. We're going to discuss the ramifications and more when we come back.

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[13:43:24] BLITZER: As Iraqi forces battle it out with ISIS, the U.S. Now considering arming Sunni tribes with weapons directly. If that happens, the plan would directly bypass Iraq's Shiite-led government in Baghdad. The Pentagon says it's, quote, "fine tuning its strategy against the terror group." Meanwhile, at least nine people are dead, 14 others injured today after two car bombs went off at two separate Baghdad hotels.

Let's go to Baghdad. Our senior international correspondent, Arwa Damon, is standing by.

Arwa, what does this mean? What's going on? First of all, the reaction by the government there to the possibility that the U.S. would start directly arming the Sunni tribes in the Anbar Province?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, here's the thing, Wolf. It surely will cause tension with the government that wants everything to be funneled through it and its channels. The problem is that the government is not moving quickly enough. The government has already promised the Sunni tribes it would arm them and that has yet to materialize. Meanwhile the Sunnis are growing angry and disenchanted but they're angry and disenchanted with the United States. We did ask that question specifically of the deputy head of Anbar's Provencal Council who was one of the last officials to leave Ramadi before it fell to ISIS, and he said, America has betrayed us, America took too long to do anything, we were asking for air strikes, asking for the tribes to be armed as far back, Wolf, as last summer. People don't trust America right now. If the U.S. does decide to arm the tribes, yes, they will take those weapons, if that's all that they have. But rebuilding that vital trust between the Sunnis and the Americans, and then the government here, that is going to be incredibly difficult at this stage.

[13:45:16] BLITZER: The -- another couple terrorist explosions and bombings at luxury hotels in Baghdad where you are today and it's very worrisome when you think about this, Arwa -- and I want to get your reaction, you've been covering this and risking your life doing so. Just before ISIS forces took over Mosul a year ago, the second-largest city in Iraq, they began by having these suicide bombings improvised explosive devices, scaring Iraqi troops who fled. Just before the ISIS troops took over Ramadi, they had a series of terror explosions in Ramadi, scaring Iraqi troops. They fled leaving behind their weapons as they did in Mosul. It looks to me like what ISIS is trying to do in Baghdad, the Iraqi capital, launch these terror explosions, scare Iraqi troops and eventually go in. But I wonder what the reaction there is to what's going on? It was horrific today. If you look at the video of the one hotel it looks like the Murrah Federal Office Building in Oklahoma City from 1995 here in the United States.

DAMON: The explosions were quite powerful, Wolf. They did shake buildings quite a distance away from those hotels, as well, and perhaps what is the most disturbing thing at all how easily it seems the ISIS fighter that carried out the double attacks was able to breach through the security perimeters around the hotels. Is itself released a statement describing exactly how this happened. One of their fighters drove a vehicle packed with explosives into the parking lot of one of the hotels, left the vehicle there, went and grabbed a second one and drove it to the second hotel and both of them exploded. Somehow the security measures in place there and at both of these hotels you have a checkpoint, security checks, vehicle searches, were breached. This is what people in Baghdad have been so afraid of in the sense that they have been bracings themselves for ISIS to retaliate and ISIS did also say in that statement, that these attacks were revenge for the government and the Iranian backed Shia militias owe fives into Sunni areas and this was a warning to the government and Shia population as well. There isn't a sense, however, that ISIS is going to be able to take over Baghdad the way it did take over Mosul but Wolf, that's not because people have faith in the capabilities of the Iraqi security forces, it's because they believe that Iran will not let Baghdad fall to ISIS.

BLITZER: Arwa Damon in Baghdad for us.

Be careful over there. Thank you very much.

From Iraq policy to national security policy, to a surprising indictment, lots to discuss today.

Let's bring in the director, president and CEO of the Wilson Center in Washington, Jane Harman. She served nine terms in Congress as a Democratic representative from California.

You're on the Intelligence Committee, the Homeland Security Committee. Is Baghdad potentially in danger right now? There are thousands of Americans there, U.S. diplomats, contractors, military personnel. What's going on?

JANE HARMAN, (D), PRESIDENT, WOODROW WILSON CENTER & FORMER CONGRESSWOMAN: Well, I agree with the reporting that it's unlikely to fall, but Iraq is a failing state. Maybe Joe Biden was right, eight years ago or so, when he said it should be partitioned into three parts. We haven't had a lot of success into making it in one country and agree with her comment the U.S. policy helping the embattled Sunnis in Iraq has been slow. I think we should provide the weapons.

BLITZER: Directly.

HARMAN; Directly because I think the Abadi government, sadly, has been basically funneling support to the Shia and to go into Anbar, which is the Sunni sector of Iraq, with Shia militia, sends the wrong message. Let's remember that tide turned last time because of the so- called Anbar awakening. The moderate Sunnis helped us and I think that's the strategy again. I hope it succeeds but we are late to the party and sadly Abadi is not the strong replacement for mall lackey that we hoped.

BLITZER: Haider al Abadi, you referred to the vice president, Joe Biden. He did support three zones, areas in Iraq, Kurdistan, Kurdish area, Shia area, Representative Gabbard, a Congresswoman from Hawaii, and Iraq war veteran, said here on CNN this week, there's a three- state solution that's required right now. Are you willing to go that far?

HARMAN: No. I'm talking about a confederation, which is what Biden said. The tragedy right now is that the Sunni piece would probably be run by is. Let's understand that what just happened, at least as I understand it in Baghdad, is right out of the Zarqawi playbook. Zarqawi was the leader of al Qaeda in Iraq who we took out about nine years ago, and this vicious player whom al Qaeda in Pakistan denounced, but ISIS is the successor to Zarqawi's tactics are now playing out. These hotels were holding wedding parties. The targets weren't just Americans. It's tragic.

[13:50:16] BLITZER: The NSA surveillance program ends by midnight here in the United States, unless the Senate were to take action to extend it. They're to come back in an emergency session to deal with it. What's your recommendation? Continue the program, accept what the House of Representatives passed, do what Rand Paul says and forget about it?

HARMAN: I strongly oppose Rand Paul's position. I think both houses of Congress should come back tomorrow. Tomorrow is Saturday. The program expires at midnight on Sunday. The House should be available to make a last-minute deal with the Senate. It shouldn't just be, we passed a bill, although it's a decent bill, so we're leaving town and the Senate can take it or not. It should be, we passed a responsible bill, and we're here to defend it. The Senate, on the other hand, miscalculated the whole thing. I think Mitch McConnell thought that as the last act before vacation, he could ram through just a straight continuation of the program. Well, under their rules, a Rand Paul can block that action, and they effectively did it. If I were a Senator coming back and one asked my advice, my advice is come back sooner, consider alternatives, including the House bill, but don't let three valuable programs -- we're not just talking about the telephone metadata program, but the rolling wiretaps, expire when the threat is up. No one is missing.

BLITZER: I want to get your quick reaction to a really surprising, disturbing story that broke last night involving the former Republican speaker of the House. Charged by the U.S. government now, U.S. attorney, with trying to pay hush money to an individual to cover up past misconduct. We were all stunned by this information? You worked with Dennis Hastert.

HARMAN: I thought he was a thoroughly decent guy and a very solid leader who healed Congress while he was leading Congress. I worked very closely with him on 9/11 and afterwards. I think this -- I don't know if the charges are true, but this is obviously a human tragedy for the family.

BLITZER: Certainly is.

Jane Harman, thanks for much for coming in.

Jane Harman, of the Wilson Center here in Washington.

Just ahead, Republican candidates under enormous pressure to rise in the polls or risk getting shut out of the first Republican presidential debate. Some say it's like a political version of "The Hunger Games."

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[13:55:20] BLITZER: Take a look at these remarkable pictures just coming into CNN. The Myanmar navy has intercepted a boat carrying 727 asylum seekers from Bangladesh. It comes only a week after it found a similar vessel with 200 Bangladesh immigrants. Earlier this year, Thailand started cracking down on human trafficking, and as a result, smugglers started using sea routes. Southeast Asian nations are meeting today in Bangkok to come up with a way to try to intensify the search and rescue to help vulnerable boat people stranded at sea. Look at those pictures.

Here in the United States, sharp elbows are being thrown among the crowded field of Republican presidential candidates, probably going to get even more heated. The first Republican presidential debate is more than two months away, but the rules virtually assure only those at the top of the polls will be on the stage, 10 individuals.

Our chief political analyst, Gloria burger, likens it to "The Hunger Games." This is what she writes on CNN.com: "The game now is to become a hero to a group of Republicans nationally, and it can be small since there are so many candidates in the mix, that pushes you to the top tier. It's the debate primary, and everyone has to play."

Gloria is here with me now.

It's a pretty aggressive strategy these candidates have to undertake. GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right. I think what we

like to talk about is we always say pay attention to the polls in Iowa, New Hampshire, South Carolina, the early primary states. That is, of course, still true, but now the candidates are also having to play on a national stage because the first debate sponsored by FOX News is going to be based on your national polling. They're going to take the top ten. They also have to play in a different arena at the same time, which is why you see all of them struggling to get on the air nationally to battle each other out. They're each looking for a slice of the electorate that will catapult them to the top ten.

BLITZER: Because one of the candidates, let's say Rick Santorum, maybe well known, well liked in Iowa, but may not have the national recognition.

BORGER: Right. When he won Iowa last time around, he lived in Iowa for months. He campaigned in Iowa every single day. So he didn't have the national notoriety, but he did win those Iowa caucuses. Now a candidate like Santorum is a very good example. He's got to win Iowa or do well in Iowa, but he also has to play on the national stage in order to get into that first debate. These debates are the oxygen for these candidates early on. Our CNN debate is a little different, Wolf, as you know. We're going to have two debates. A top tier and a second tier debate. But candidates are still going to want to play on the top-tier stage, right? So they'll be competing against each other.

BLITZER: And if you look at the national polls -- and there we're looking at all the Republican candidates in there. You see somebody like Donald Trump, who may become a candidate. He's got huge name recognition. Potentially he has an advantage over other Republican candidates who may not necessarily be that well known.

BORGER: That's right. Now, Donald Trump's name recognition may work to his detriment. You have no idea in that. But if you look at somebody like Mike Huckabee, who is well known as a former FOX News contributor, for example, Jeb Bush has very high name recognition. Some of these guys have some built-in advantages. But you look at Carly Fiorina, for example --

(CROSSTALK)

BLITZER: The only woman running on the Republican side.

BORGER: And she has been really trying to get a lot of national attention. What is he doing? She's appearing at the same place that Hillary Clinton is appearing, grabbing her press entourage, and making a very smart use of it so she can get on the national air waves and get that kind of recognition, because, again, early on, everybody wants to play in these debates. So it is a little like "The Hunger Games."

BLITZER: I heard Bill Krystal propose the other day, have two debates but have lottery tickets. It's not necessarily based on polling. You hard that? BORGER: I think the candidates actually might like some of that. Although, by the way, if they believe they want to play in a debate, they could all say, you know what, we're not going to play by your rules or the Republican National Committee rules. We're going to get our oxygen somehow and appear before the American public. This isn't over yet.

BLITZER: All right, we'll see what happens.

(CROSSTALK)

BORGER: It hasn't even started.

(LAUGHTER)

BLITZER: Gloria, thanks very much.

That's it for me. I'll be back 5:00 p.m. eastern in "The Situation Room."

For our international viewers, "Amanpour" is next.

For our viewers in North America, "Newsroom" with Brooke Baldwin starts right now.

BROOKE BALDWIN, CNN ANCHOR: Here we go. Top of the hour. You're watching CNN. I'm Brooke Baldwin.