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Republican Candidates React to Trump Comments; Heightened Security Ahead of July 4th in U.S.; Meetings on Iran Nuclear Deal Continue; Burned Southern Churches Get DOJ's Attention; New Details on Richard Matt's Death; Feds Investigation U.S. Airlines. Aired 1:30-2p ET

Aired July 02, 2015 - 13:30   ET

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

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R-SC), PRESIDENTIAL CANDIDATE: When you label a group of people as rapists and drug dealers, it's more about you than it is them. So I'm not trying to create a political issue over this.

JEB BUSH (R), PRESIDENTIAL CANDIDATE: I don't agree with him. Pretty simple.

SEN. RAND PAUL (R-KY), PRESIDENTIAL CANDIDATE: I really haven't watched Donald Trump too much. I don't know what he's been saying. But he - apparently he's drawing a lot of attention.

[13:30:00] SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: He has a way of speaking that gets attention. I credit him for focusing on an issue that needs to be focused.

(END VIDEO CLIP)

WOLF BLITZER, CNN HOST: Let's talk more about Donald Trump, the race for the White House.

Our chief political analyst, Gloria Borger, is here.

So how do Republicans deal with this dilemma, whether repudiate Donald Trump, ignore Donald Trump, or go after him or what?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: They have to deal with him now because he's doing well in the polls. We just got some word that Chris Christie today also took on Donald Trump, obliquely. He said we have to lower the rhetoric. We have to stop being negative all the time. Made the point that this is now what we need to do as a party nationally.

Look, they have a problem here. This is Reince Priebus, the chairman of the Republican National Committee, this is his nightmare, Wolf. He wanted to have sort of a serious, sedate race about issues. There have a lot of candidates in the Republican field who have a lot of ideas. And instead what they're talking about are Donald Trump's comments about rapists coming in over the border. And what some of these candidates will do, I believe, is start using Donald Trump as a foil, because they can attack him without taking him too seriously. And they will start using him as a foil and say, that's not what the

Republican Party stands for. That's what George Pataki just did. George Pataki is way, way down in the polls. Donald Trump is taking up all the oxygen in the room right now. And so from Pataki's point of view he can come out and say, you know what, that is wrong. He should not say that. This is not what our party stands for. And as Chris Christie was saying, if you're a party that wants to win more than 27 percent of the Hispanic vote, because you have to, if you want to win the presidency, you know, you've got to start taking on Donald Trump.

BLITZER: Donald Trump's numbers in our new poll, his numbers are going up. Look at Marco Rubio, his numbers are going down. Scott Walker, the governor of Wisconsin, his numbers are going down. I don't know if that's a trend, if it's a little blip right now.

BORGER: If you take apart the polling, look inside the polls, you see Donald Trump appeals to an older conservative group of sort of base Republican voters because his anger and his kind of stream of consciousness about all of America's issues really strikes a cord with those voters. Those voters are looking at Scott Walker. They're looking at Marco Rubio. So temporarily, at least, in our polling, they seem to be the ones suffering the most. Chris Christie, one could argue, as the so-called "tell it like it is" candidate, also stands to suffer from Donald Trump's entering into this race.

One thing I want to point out, which I just looked up, in April 2011, Wolf, you know who is number one in the polls? Donald Trump. Donald Trump. Now different, not a declared candidate at the time, and all the rest, but he does have this way of being a showman and kind of rising up in the polls. But there is a certain amount of gravity here that I believe eventually will take hold.

BLITZER: Donald Trump is having an impact and we'll see what happens.

Gloria, thanks very much.

Up next, July 4th, terror fears. We'll talk about the intelligence, the jitters. The California Congressman Ed Royce, the chairman of the House Foreign Affairs Committee, he is standing by live.

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[13:37:28] BLITZER: Let's get back to our top story, the terror threat leading up to the July 4th holiday weekend here in the United States. There's heightened security in many areas, especially New York City, as well as here in Washington, D.C. And today, those jitters may have played a part in the massive response to reports of a shooting at the U.S. Navy Yard here in Washington. The area was locked down but police found no evidence of a shooting.

Joining us now from Orange County, California, Republican Congressman Ed Royce, chairman of the House Foreign Affairs Committee.

You're all the way on the West coast. Here in Washington for at least an hour or two this morning, Mr. Chairman, there were a lot of concerns about what was going on and the reaction was intense. Hundreds of law enforcement personnel swarmed to that area at the U.S. Navy Yard not far from Washington national park. Was it overreaction? What do you think?

REP. ED ROYCE, (D-CA), CHAIRMAN, HOUSE FOREIGN AFFAIRS COMMITTEE: Wolf, what you see is law enforcement on a very heightened state of alert. If anything breaks anywhere, they go into action. So far, I think we need to say thank you to the FBI. They have arrested 49 ISIS supporters here in the United States and have taken them into custody to make certain that during this period, of time where ISIS has called for these attacks, that at least those 49 supporters who discussed doing it are off the streets.

BLITZER: Are we overreacting to these possible threats out there because of what happened on three continents last week in Tunisia, in Kuwait, in France, these ISIS attacks by sympathizers, lone wolves apparently?

ROYCE: We're not overreacting. This is the one-year anniversary of the establishment of caliphate and they've asked their supporters specifically in the United States to create a calamity for the infidels. And so on this Fourth of July weekend and going forth, the following week, they've asked ISIS supporters to take things into their own hands and get to it, get to these martyrdom attacks. So that's why you see the FBI taking the actions that they're taking right now.

I talked with one of the senior FBI lead investigators working on this, and he shared with me that, you know, so far, they've been pretty effective in tracing down these individuals and taking them into custody.

[13:40:00] BLITZER: Let's talk a little bit about these negotiations, final negotiations on this Iran nuclear deal. Secretary of State John Kerry is in Vienna meeting with the Iranians, other members of the U.N. Security Council and Germany. I know you're being briefed. I'll ask you, are you being briefed on what's going on in these talks? You're the chairman of the Foreign Affairs Committee.

ROYCE: I am being briefed. For many of us, the big issue, the first issue is whether or not the international inspectors will have the ability to go on to the military bases anywhere, anytime. And the point that I'm making to the administration is that the mistake we made in the framework agreement with North Korea years ago was that we didn't have this ability for international inspectors to really, you know, talk to the North Korean scientists and go to these sites and get access.

So here's where we are right now. We have 1,000 pages of documents in the hands of the IAEA. They want to talk to the scientists in Iran who did these tests to try to develop a nuclear weapon. That's one of the requirements, you know, get these questions answered, these 12 questions.

And the other major point is the ability to go anywhere to do the inspections. And you hear these red lines come down from the ayatollah that, no, no one is going to talk to scientists, no one is going to go on the military bases. So this is the one key point.

The other point that the ayatollah is making is he wants the sanctions lifted immediately before the inspections, and that would give the regime $50 billion, $60 billion. Because they use it to support terror, this is a big concern.

BLITZER: Sounds like you're deeply concerned.

Let me ask you about these inspections. Let's say they say, yes, IAEA inspectors can go to the military bases and inspect. How much lead time, though, would the Iranians have before the inspectors would show up, because there have been some suggestion it could be days, if not necessarily weeks, before they would actually show up during which time presumably the Iranians could shift things around.

ROYCE: That's the concern. And second would be would the international inspectors have this ability to do this or could Iran then go through a process where maybe its allies could convince Russia or China to run a little interference for them since Russia is helping them on their nuclear program. That further slows the process and allows them to move the equipment or get things off site. And this is a key, key question because without verification in the agreement, the agreement isn't worth anything more than what it's written on. And so, so far, we can sense the attitude from the ayatollah. This isn't the only attitude we sense from him. He continues to mass produce ICMBs and saying "death to America." So it's the attitude that we're getting out of the regime that's equally concerning and that's why we have to have verification.

BLITZER: Ed Royce is the chairman of the House Foreign Affairs Committee.

Mr. Chairman, we'll continue this conversation. Thank you.

ROYCE: Thank you, Wolf.

BLITZER: Still ahead, new details about the last moments of prison escapee Richard Matt's life. We'll have a live report from Upstate New York outside the prison. Stand by.

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[13:47:36] BLITZER: The debate over the display of the Confederate flag has dominated the headlines here in the United States. But according to a new CNN poll, the American public, the public opinion on the flag itself remains about where it was some 15 years ago. The new poll shows 57 percent of Americans see it as southern pride, 33 percent see it as a symbol of racism. 55 percent favor removing the flag from government property over the 43 percent who think it can stay.

Meanwhile, the U.S. Attorney General Loretta Lynch says a series of fires at black churches across the south will have the full attention of the U.S. Justice Department.

(BEGIN VIDEO CLIP) LORETTA LYNCH, U.S. ATTORNEY GENERAL: So recent tragic burnings of the predominantly black churches that have been happening really throughout the south and even the Midwest, and in our own state in Charlotte, recently had an incident there. And we don't have the full details about those, but I want you to know those also have our full attention and that this is a serious issue that we will be addressing with the appropriate care and we will see where those matters lead us as well.

(END VIDEO CLIP)

BLITZER: At least six churches caught fire in the south since the racist killings in Charleston, South Carolina, church two weeks ago, leading to questions whether they could be racially motivated. At this point, only two of those fires at these predominantly African- American churches, are confirmed arson.

Other news we're following, the body of a former prison inmate, Richard Matt, is being moved to Buffalo, New York, where he's expected to be buried.

Meanwhile, we're learning more details about how Matt died.

Jean Casarez is joining us from outside the prison in Dannemora in Upstate New York.

Jean, we know Matt was shot and killed, but tell us what you're learning about the events leading up to his death.

JEAN CASAREZ, CNN CORRESPONDENT: Well, we're getting some new information, and it is significant. It was almost a week ago today. We do know that tactical unit of the U.S. Customs and Border Patrol heard that something was happening. They flew in a helicopter, landed, started doing a ground search and that is when they discovered Matt. And one of the agents moved up and asked Matt to surrender, because there was a gun next to him, we now know a .20-gauge shotgun. And he not only didn't surrender, but now the U.S. Border Patrol and Protection is saying he actually aimed that gun at the agent, and that is when they shot and killed him, striking him three times in his head. So that is brand-new information that he actually pointed the gun at them. They responded with shots to Matt, killing him.

[13:50:07] BLITZER: The other captured inmate, David Sweat, has given investigators new details about the prison breakout. But there are apparently lots of inconsistencies, right?

CASAREZ: You know, I think there's lots of questions but the main inconsistencies at this point come between David Sweat and also Joyce Mitchell. First of all, he says that they were going to go to Mexico but Joyce Mitchell was going to take them via West Virginia first and then into Mexico. She solely said to investigators "Mexico." He's also saying he never had a sexual relationship with her, that Matt was the one. She has denied any sexual relationship with either of them. So those are the inconsistencies. One more with Lyle, the husband. David Sweat is saying that it was Joyce Mitchell's idea to have her own husband killed and she's saying, I would never do that, at all, it was the escaped inmates, Matt and Sweat, that wanted to kill my husband.

BLITZER: Remember, this guy is a convicted killer and everything he says you've got to take with a grain of salt, because he's obviously a liar as well.

Jean Casarez, thank you very much.

Airline profits here in the United States remain at record highs, even though fuel prices have fallen. That doesn't necessarily fly with the U.S. Department of Justice. We have new information on the Justice Department investigation into America's biggest names in air travel.

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[13:55:43] BLITZER: We're getting some stunning new details about the crash of the TransAsia flight that killed 43 people in Taiwan back in February. You can see it crashing in this video. Investigators now say the pilot accidently shut down the plane's only working engine before it clipped a bridge and plunged into the river. The pilot can be heard on the black box saying, and I'm quoting, "Wow, pulled back the wrong side throttle." The report found that the same pilot had failed a simulator training test less than a year earlier in how to respond to an engine flameout. Pretty disturbing stuff.

Some of America's biggest airlines are feeling the heat from the feds. The U.S. Justice Department wants to know if they possibly conspired to keep ticket prices high by limiting the number of seats available. Among the airlines being investigated, American, United, Delta and Southwest. Together, they control about 80 percent of the U.S. market. But they deny working together, insisting they compete to keep seats full.

Joining us now, CNN's aviation and government regulation correspondent, Rene Marsh, who is watching what is going on.

It's a big investigation right now. It's a serious matter.

RENE MARSH, CNN AVIATION & GOVERNMENT REGULATION CORRESPONDENT: Yes. The feds are asking these major airlines for documents and communications essentially that could prove whether or not they were in communication with each other to manipulate the capacity of flights. In layman's terms, did they limit the number of available seats to keep planes packed and keep ticket prices high?

Now, as far as how DOJ come to even start this investigation, we know that Connecticut Senator Richard Blumenthal wrote a letter to the Department to investigate. He says he did that after learning about some public comments airline executives made that suggested some industry collaboration. In Blumenthal's own words, and I'm quoting, "What airlines publicly call discipline is just a fancy term for constraining the flights available to consumers and raising prices and profits, which should be the investigation's sharp focus."

BLITZER: What's the response from these airlines?

MARSH: We've heard back from a couple of them. They are saying they welcome this investigation. American Airlines has the strongest statement saying, not only were they going to cooperate but that they were confident that the Department of Justice would find that airlines aren't working together, but are, in fact, in their words, "competing vigorously every day."

BLITZER: That's where we stand right now. This is a serious investigation that they are going to presumably call witnesses and stuff like that.

MARSH: It is a serious investigation, especially when you look at the airlines. They have made record profits. They have been doing really well. They saved billions and billions of dollars combined on fuel. However, when you look at market prices, many will say, why am I paying so much? Looking at government data, the average price of a round-trip ticket increased roughly 16.5 percent from 2010 to 2014. People say, if they are doing so well, why aren't my ticket prices coming down?

BLITZER: People will always complain about ticket prices and airlines want to make profits. Obviously, they are in that business. We'll see what happens with this Department of Justice investigation.

Stick around, I want you to listen to this next report.

He was a 9/11 first responder, retired New York firefighter and, guess what, he's now a millionaire. Caramela Ricado (ph) was only going to buy one scratch-off ticket but something told him to buy two. Good thing. The second ticket won him -- get this -- $5 million. That's before taxes. His daughter is experiencing a windfall. He was forced to retire from the fire department after coming down with lung problems after 9/11. Very good story. Happy for Caramela (ph) and the entire family. Caramela Ricardo (ph) is now a millionaire.

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

Get ready. For our international viewers, "Amanpour" is next.

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

[14:00:00] BROOKE BALDWIN, CNN ANCHOR: All right, Wolf Blitzer, thank you so much.

Great to be with you on this Thursday. I'm Brooke Baldwin. And you're watching CNN.