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Spying Scandal Intensifying; Senator Graham Threatens to Block Obama Nominees; Millions May Lose Pre-Obamacare Coverage; Hernandez Case Turns to Gun Trafficking; Putin: Gays, Lesbians Welcome in Sochi

Aired October 29, 2013 - 09:00   ET

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

POPPY HARLOW, CNN ANCHOR: President Vladimir Putin welcomes all Olympians, regardless of sexual orientation. We're going to dig into that.

You are live in the CNN NEWSROOM.

Good morning, everyone. I'm Poppy Harlow in today for Carol Costello.

MARTIN SAVIDGE, CNN ANCHOR: And I'm Martin Savidge. Good morning to you.

HARLOW: Good morning to you.

SAVIDGE: Good morning to all of you.

Questions about NSA spying on world leaders. They are growing. What did President Obama know and when did he know it?

Today, the directors of the National Intelligence and the NSA testify on Capitol Hill. Meanwhile, the president has ordered a review of intelligence gathering.

CNN's Jim Sciutto now joins us from Washington.

Good morning, Jim.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Good morning, Martin.

The administration now considering hard limits on intelligence gathering. Particularly of word leaders overseas. This is part of a review that began this summer. The same review which the White House says was how the president first learned of spying on foreign leaders such as The German chancellor, Angela Merkel.

Now administration officials saying the president did not know she in particular was a target and would not know specific targets as a matter of policy. But another U.S. official telling CNN he would have had to know about the framework of such programs, including the countries targeted. Still, a lot of hard questions for the administration to answer.

(BEGIN VIDEOTAPE) SCIUTTO (voice-over): President Obama would not confirm the NSA was spying on the phone calls of U.S. allies like Germany's chancellor Angela Merkel. But in an interview with the new cable network Fusion, he both defended U.S. intelligence activities.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The national security operations generally have one purpose and that is to make sure the American people are safe.

SCIUTTO: And conceded that maybe they've gone too far.

OBAMA: I'm initiating, now, a review, to make sure what they're able to do doesn't necessarily mean what they should be doing.

SCIUTTO: Senior administration officials tell CNN President Obama did not know about the NSA surveillance of Merkel and other allies until earlier this year. And when he found out, he ordered a stop to some of the programs.

But the Democratic chairman of the Senate Intelligence Committee, Dianne Feinstein, usually an ally of the White House, says that's not good enough and wants a, quote, "total review of all U.S. intelligence programs."

European lawmakers are in Washington this week pressing the case for limits. The head of the E.U. delegation told me E.U. citizens find U.S. spying disturbing.

CLAUDE MORAES, EUROPEAN PARLIAMENT CIVIL LIBERTIES DELEGATION: They feel very uneasy. They don't know why it's happening. Why our strongest ally is doing it.

SCIUTTO: Amid reports the U.S. surveillance of leaders of allies began back in 2002, well before the Obama administration, here's one explanation former Vice President Cheney gave CNN's Jake Tapper.

RICHARD CHENEY, FORMER VICE PRESIDENT: We are vulnerable, as was shown on 9/11, and you never know what you're going to need when you need it. The fact is, we do collect a lot of intelligence, without speaking about any particular target or group of targets, that intelligence capability is enormously important to the United States, to our conduct, our foreign policy, to defense matters, to economic matters, and I am a strong supporter of it.

(END VIDEOTAPE)

SCIUTTO: The director of National Intelligence, James Clapper, announced overnight that he is declassifying a trove of documents about the collection under the Foreign Intelligence Surveillance Acts, or FISA. This is the act that authorize collection of data on virtually every telephone caller here in the U.S.

Later today, Clapper and the head of the NSA, Keith Alexander will be testifying on the hill about that program.

But, Martin, you can be damn sure they're going to be getting a lot of questions about spying overseas, how far it should go and what limits the administration is really considering placing on it now.

SAVIDGE: Yes. Absolutely. I mean, this is a huge story, especially in Europe.

Jim Sciutto, thank you very much.

HARLOW: Meantime, Republican Senator Lindsey Graham turning up the heat on the Obama administration for its handling of last year's Benghazi terror attack and its aftermath. The outspoken critic of the administration is threatening to block all presidential nominations before the Senate until survivors of that attack testify before Congress.

Take a listen to Graham on FOX News.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: For god sakes, let the House have a select committee where you get three or four committees together to look at this situation as one unit, rather than stove piping. And where are the survivors? Fourteen months later, Steve, the survivors, the people who survived the attack in Benghazi, have not been made available to the U.S. Congress for oversight purposes.

So I'm going to block every appointment in the United States Senate until the survivors are being made available to the Congress. I'm tired of hearing from people on TV and reading about stuff in books. We need to get to the bottom of this.

(END VIDEO CLIP)

HARLOW: Well, Graham's threat comes in the wake of a "60 Minutes" report that is new where eyewitnesses to the attack in Libya describe warning signs that they saw leading up to it. One, a former British soldier who trained unarmed guards at the compound's gates. He described concerns that he saw with another group of Libyans charged with defending the compound. Listen.

(BEGIN VIDEO CLIP)

MORGAN JONES, FORMER BRITISH SOLDIER: Because I was saying, these guys are no good, you need to -- you need to get them out of here.

UNIDENTIFIED FEMALE: You also kept saying, if this place is attacked, these guys are not going to stand and fight?

JONES: Yes, I used to say it all the time. You know, in the end, I got quite bored of hearing my own voice saying it.

(END VIDEO CLIP)

HARLOW: Well, Green Beret commander, Lt. Col. Andy Wood, you see him, we'll bring him up in a moment. He was one of the top American security officials in Libya. He told "60 Minutes" that the -- that he raised concerns directly with Ambassador Stevens just three months before Stevens was killed in the attack. Listen to him. (BEGIN VIDEO CLIP)

LT. COL. ANDY WOOD, GREEN BERET COMMANDER: I made it known in a (INAUDIBLE) meeting, you are going to get attacked. You are going to get attacked in Benghazi. It's going to happen. You need to change your security profile.

UNIDENTIFIED FEMALE: Shut down the special mission?

WOOD: Shut down operations. Move out temporarily or change locations within the city. Do something to break up the profile because you are being targeted.

(END VIDEO CLIP)

HARLOW: All right. Let's talk about this more with CNN's Athena Jones. She's live on Capitol Hill for us this morning.

So, Athena, the Senate is expected to take up soon several high- profile judicial appointments, some other nominations. Could Graham block or delay any of these nominations?

ATHENA JONES, CNN CORRESPONDENT: Hi, Poppy. Well, under Senate rules, Senator Graham can single handedly hold up the entire confirmation process. It would take 60 votes to use some procedural moves to get past his objections. And as you know, 60 votes, that 60- vote threshold is a high bar to pass.

This is not something that is new to the administration. Senator Graham held up the nomination of CIA -- of John Brennan to be CIA director because he had questions about Benghazi. He wanted to hear from the White House when the president first contacted the Libyan government about the attack.

So this is something that the administration has had to deal with, this back and forth over the Senate confirmation process. You may also remember over the summer Senator Rand Paul, the Republican of Kentucky, put a hold on the -- on the confirmation of James Comey as FBI director because he had questions about drones, about drones surveillance in the U.S.

So this is something that one senator under Senate rules is able to do, able to stand in the way of all of these -- all of these confirmation votes. And the real question is whether Senator Reid could get the 60 votes needed to get past it.

HARLOW: Right.

JONES: And whether these witnesses that Senator Graham wants to hear from are going to be produced.

HARLOW: So this -- so he said this on "FOX and Friends" yesterday morning, so there's been 24-odd hours or so for people to react to this on the Capitol Hill.

What is the reaction there? JONES: Well, so far, we haven't heard from senator -- from Senate Majority Leader Harry Reid about this. But the White House has said this is a political move. That they've acknowledged that there wasn't enough security in Benghazi. And the White House is arguing all along when it comes to these confirmation processes is to allow a vote for these nominees to go forward and not be blocked for political reasons.

But the fact of the matter is that Senator Graham has the power to do this under the rules of the Senate. This one senator can stand in the way without -- unless there's that 60 votes -- that 60 votes to get past him -- Poppy.

HARLOW: All right. Athena Jones, appreciate the reporting, thank you.

JONES: Thanks.

SAVIDGE: Believe it or not, it's been four weeks to the day -- I imagine to the White House seems a lot longer -- since Obamacare and the Web site was launched and then promptly crashed. With a resounding thud.

Next hour, that debacle faces blistering criticism on Capitol Hill. That as a federal administrator has to explain her agency's failures in creating that Web site. Testifying today is Marilyn Tavenner with the Centers for Medicare and Medicaid Services. And of course today's hearing sets the stage for her boss, Health and Human Services Secretary Kathleen Sebelius, who faces a grilling from lawmakers tomorrow.

As the first Obama officials face their congressional critics there is a new shocker now hitting home for millions of Americans. Many may lose their private insurance coverage that they have now.

Let's get the very latest from senior White House correspondent Brianna Keilar.

And, Brianna, you know, this has got to be going against what many thought they heard the president say, which was they wouldn't lose.

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, that's exactly right, Martin.

The White House now admitting that some people will see their health plans change. That does go against what we heard President Obama promise. But the White House is also saying it might not actually be or it will not actually be a bad thing for many people.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): One of the president's longtime promises about his namesake health care reform plan --

OBAMA: If you like your health care plan, you can keep your health care plan.

KEILAR: -- is coming under intense scrutiny, as White House officials admit some plans will cease to exist under the law.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: It's true that there are existing health care plans on the individual market that don't meet those minimum standards and, therefore, do not qualify for the Affordable Care Act. There are some that can be grandfathered if people want to keep insurance that's substandard.

But what is also true is that -- Americans who have insurance on the existing individual market will now have numerous options available to them.

KEILAR: President Obama making an Obamacare pitch to young people who must sign up for health insurance by the end of March to avoid a fine.

OBAMA: When you look at the number of young people who actually want health insurance but are having trouble affording it, the fact that we're making it affordable for them for the first time, that's a big deal.

KEILAR: A new study shows 70 percent of eligible Americans between 18 and 34 can now purchase coverage for less than $100 per month. But that's if they can sign up. Healthcare.gov was knocked offline Sunday, along with the data hub that verifies eligibility for government subsidies. Service was restored Monday.

As the Health and Human Services Department aims for a November 30th deadline to get the site fully operational, it's giving detailed updates on problems. The latest says, in part, "We are also getting information on which parts of the application are causing the most errors. Enabling us to prioritize what we fix next."

(END VIDEOTAPE)

KEILAR: Now the Web site is key to getting young people to sign up. They tend to be of course more tech savvy and they also tend to be more healthy.

And that, Martin, is why they're key to making all of Obamacare work because they will offset, is the plan, the older, less healthy, read, more expensive, to provide health care for.

SAVIDGE: Yes. They're absolutely essential. Brianna Keilar, thank you very much for joining us from the White House.

We've got some new numbers just into CNN and they're good. Minutes ago we learned that home prices climbed again in August. According to the S&P Case-Shiller, the sampling of 20 major cities showed the prices climb at annual rate of 12.8 percent. And of course that's another sign that the nation's housing market is making slow but of course steady recovery. Good news.

HARLOW: Slow but study.

SAVIDGE: Yes.

HARLOW: It's been a long time coming back but it is coming back for sure.

Still to come in the NEWSROOM, Aaron Hernandez not only accused of murder.

SAVIDGE: The former football star is also being investigated for possible gun trafficking. The details just ahead.

(COMMERCIAL BREAK)

HARLOW: Good morning, everyone. Welcome back. Time for a check of your top stories.

MARTIN SAVIDGE, CNN ANCHOR: Two inmates that escaped from an Oklahoma jail, they are back in custody this morning today. That's the good news. Police captured Dylan Irons and Prime Brown at a convenient store Monday, about 20 miles from the Caddo County jail.

Two other men who escaped with them, they are still on the run. All four made a clean getaway, after breaking a maintenance hatch in their shower.

Texas authorities are investigating a shocking murder spree near Dallas, saying that a man apparently killed five people in four locations, including burning one of the victims. No word on the motive, no word of the IDs of the victims. The suspect is in custody.

HARLOW: And a paperwork snafu apparently keeping Jesse Jackson Jr. from starting his prison sentence. The former congressman reported to federal prison in North Carolina yesterday, but he's not technically in federal custody, as his lawyers try to sort things out. A judge sentence Jackson 30 months in prison for misusing $750,000 in campaign funds.

SAVIDGE: And another strange twist in the murder case of Aaron Hernandez. A source tells CNN the former football star is being investigated for gun trafficking. That news just one day after Massachusetts state police served his former teammate Mike Pouncey with a subpoena related to the investigation.

And for more on that, we turn to CNN national correspondent Susan Candiotti. She's on the telephone with us.

And, Susan, what more can you tell us about that?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (via telephone): Hi, Marty.

Well, of course, first, we know there's a first degree murder charge against Aaron Hernandez for the execution-style of Odin Lloyd in June and now, we're learning that the same grand jury that's been investigating that case is looking into whether Hernandez is -- might be involved in gun trafficking.

Now, according to our sources, what they're looking at in part stems from the discovery of an assault-style weapon that was hidden in a vehicle, a rental car that was taken from Florida to Massachusetts. That's when the gun was discovered.

Now, why Mike Pouncey involved, might be involved, I should say, is another matter, but he was served with a subpoena. He's a center for the Miami Dolphins. He was served with a subpoena on Sunday in Foxboro after the Miami Dolphins finished playing the New England Patriots -- Marty.

SAVIDGE: So, do we have any idea where this investigation's going from here, Susan?

CANDIOTTI: Well, it will be interesting to see what, if anything, we learned after Pouncey presumably testifies before the grand jury, as an example. Now, Pouncey and Aaron Hernandez were teammates when they both played for the University of Florida.

Now, both Pouncey and his brother, his twin brother, were pictured in a photograph that was shown on Twitter some time ago and they were wearing hats that read "Free Hernandez." This back in July, after Hernandez had been charged with the murder of Odin Lloyd. They did issue an apology later, saying they realize that was an insensitive thing to do.

SAVIDGE: And before you go, what's the latest on the double homicide in Boston? Does Hernandez still have to worry about that?

CANDIOTTI: Yes, a lot of troubles for Aaron Hernandez. Along with being charged with murder, there's a grand jury in Boston. We still don't know what they came up with yet -- looking into whether Hernandez is linked to an unsolved double homicide from July 2012. That grand jury investigation is very active, ongoing.

SAVIDGE: All right. Susan Candiotti with the very latest there. Thanks very much.

HARLOW: All right. And still to come, a controversial Russian law on homosexuality has many threatening to boycott the winter games in Sochi.

SAVIDGE: But now, Russia's president says that everybody's welcome. What's going on? That's next.

(COMMERCIAL BREAK)

SAVIDGE: Russia's President Vladimir Putin is rolling out the welcome mat for gays and lesbians at next year's Winter Olympics in Sochi.

HARLOW: He assured the International Olympic Committee president and other supporting officials that there will not be any discrimination at the Winter Games despite Russia's controversial law on homosexuality that has had many threatening to boycott the games.

(BEGIN VIDEO CLIP)

PRES. VLADIMIR PUTIN, RUSSIA (through translator): We're doing everything, both the organizers and our athletes and fans, so that participants and guests feel comfortable in Sochi regardless of nationality, race or sexual orientation.

(END VIDEO CLIP)

HARLOW: CNN's Phil Black joins us now from Moscow.

So, Phil, when this law made all of the headlines in recent months, there were a lot of people calling on sponsors, big-name companies, to pull out of the game, don't support the games. And, of course, sponsors are key.

I'm wondering after hearing this from Putin, is this real, is the sense on the ground this is real or rhetoric?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Well, you're certainly right, Poppy. The criticism of this law has put a lot of people in a very awkward position. The International Olympic Committee, Olympic sponsors, and forth, they don't want to be associated with an Olympic Games that runs the risk of being accused of not living up to Olympic ideals.

So, this is clearly an attempt by Vladimir Putin to cool some of the international anger, repair some of the damage that is being done to Russia's reputation, but also the reputation of the Sochi games, by Russia's gay propaganda law.

This is the law here that makes it illegal to tell children that gay and straight relationships are equal. It has been branded as discriminatory by many people around the world. Russia insists it is just about protecting children. Despite the Russian defense, there has been suggestion, the games be boycotted, although it hasn't been seriously embraced. More serious, I think a threat to the games has been the talk of protests and demonstrations during the games in solidarity with Russia's gay community.

That is something that president doesn't want. He does not want these games to be tarnished in any way. He does not want this to become the dominant theme or dominant issue of Russia's chance to shine before the world -- Poppy.

HARLOW: What's the sense of people on the ground with you after hearing this?

BLACK: Well, the intriguing thing about this law, this country, Poppy, is that it is supported by a majority of the population. This is a highly conservative traditional population increasingly close to the Russian Orthodox Church and its beliefs. Those beliefs do not include tolerance and understanding and acceptance towards gay people.

That said, Russia does not like to be bossed around either. So for Vladimir Putin to really come out and say this, to extend something of an olive branch, to make this concession, to make this public statement, that in itself is quite extraordinary. And it shows the pressure that Putin, the Russian government feels over this issue, Poppy.

HARLOW: Phil Black, thank you, appreciate the reporting. All right. Still to come: a big announcement from the nation's biggest employer.

SAVIDGE: Yes, that's Wal-Mart, if you don't know. They're promoting thousands of its employees and it is trying to answer its critics. Christine Romans has just spoken with Wal-Mart's CEO and she'll join us with that interview.

(COMMERCIAL BREAK)

SAVIDGE: Good morning. Thanks for joining us. I'm Martin Savidge.

HARLOW: And I'm Poppy Harlow, in today for Carol Costello.

Well, today, the nation's largest retailers announcing a big boost to the employees who maybe helping you this holiday shopping season.