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Feds: Former Governor, Wife Accepted Illegal Gifts From Businessman; Three Dead In Indiana Whiteout, Pileup; Icy Weather Causes More Than 100 Crashes; Five Dead, 30 Missing In Elderly Home Fire

Aired January 24, 2014 - 10:00   ET

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

JOE JOHNS, CNN CORRESPONDENT: A source familiar with the criminal case has told CNN that last year federal prosecutors offered Governor McDonnell a plea deal that would have spared his wife exposure to criminal charges. A source who asked not to be identified said McDonnell rejected that was first reported by "The Washington Post."

The source speaking to CNN characterized McDonnell's decision as throwing his wife under the bus. The source also said McDonnell and the team asserted they did not believe the Department of Justice could get a conviction against McDonnell at trial based on the evidence they had. McDonnell has said he didn't break any laws.

So Carol, we are waiting for whatever happens there in Richmond and we'll get back to you when it does.

CAROL COSTELLO, CNN ANCHOR: All right, Joe Johns reporting live from Washington. Thanks so much. Also this morning, millions of Americans are shivering from the cold and shuttering from the record cost to stay warm. Two weeks aft dreaded polar vortex, a new arctic blast is plunging temperatures to record lows and driving up heating costs for most of us, propane, natural gas, heating oil, all surging.

Some propane customers are seeing their prices double if they are lucky enough to get their tanks refilled, the reason? Brutal January cold, it has shattered to 1,100 records and counting just this month.

In Northern Indiana, at least three people died when whiteout conditions said cars and semitrailers plowing into one another. At least 30 vehicles crashed, 20 people sent to the hospital. Three died.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: As soon as we seen the brake lights, already too late. We looked back and told everybody. Brace yourself for impact, crashed into the back of the semi. The bumper of the semi fell off, pierced the door and stabbed my friend. A semi and two trucks behind us actually like hit the back of our truck. So we had to climb out through the back of our windows and the sunroof.

(END VIDEO CLIP) COSTELLO: In Central Louisiana, there are not many sleds around. So it's time for kids to improvise in this dusting of snow. Yes, you heard right. This is Louisiana. This is part of a wintry mix stretching back into Texas. CNN's Nick Valencia is in Houston where people are getting slammed. Good morning.

NICK VALENCIA, CNN CORRESPONDENT: Good morning, Carol. Yes, Interstate 45, if you've ever been to Houston or lived here, you know, that interstate moves in a snail pace, but it's even worse today because those icy road conditions. I just got off the phone with the spokesman for the city of Houston. He tells me there are too many accidents to count right now, the worst on Interstate 45 with the big rig going through the center divider.

He says the city is really suffering from the cold weather. This is part of a country that's not used to getting winter storm warnings especially Houston. If you fast forward a couple of days, Carol, it's going to be 70 degrees this weekend. So as you can imagine what the people here are dealing with. What's happening here is really what's happening all throughout the state of Texas, in West Texas and Central Texas.

People waking up to ice accumulations, you showed that video in Michigan City, Indiana, terrible crashes there. The Texas Department of Transportation, they tried to do their best. Yesterday, they were out laying down some antifreeze solution on the roadways, a mixture of sand and mashed-up rock to create traction for drivers on these roadways.

They say it is working. Though, they do have a lot of accidents. You mentioned the skies as well. Big concern here in Houston, Houston really hit hard with cancellations. If you are flying out of the Houston area, it is really good to check your airlines. More than 100 flights, more than 100 flights already canceled, many more delayed -- Carol.

COSTELLO: All right, Nick Valencia reporting live from Houston. By the way, that big traffic jam that you saw over Nick there was actually from Indiana.

A grim scene in a small town in Quebec, the home for the elderly gutted by fire and frozen over by water used to fight the blaze. Five people confirmed dead, 30 others still unaccounted for. Many are believed to have been trapped. Some of the residents of the facility weren't able to get around on their own. Others had Alzheimer's. Authorities expect the death toll to rise.

Dramatic pictures coming from Central Indiana, flames and smokes from a rural church as it is engulfed in a massive fire. WISH TV reports fire crews had to truck water to the scene, which is 40 miles outside of Indianapolis. The cause of the fire unknown. There have been no reports of injuries.

Attorney General Eric Holder says the government is working on a way for banks to handle legal marijuana revenue. Banks fear they will be accused of money laundering if they accept money deposits from pot businesses so business owners deal mostly in cash. Holder said, quote, "Huge amounts of cash just kind of lying around with no place for it to be appropriately deposited is something that would worry me from just a law enforcement perspective so expect there to be changes in the laws."

The nation's second busiest commuter railroad is running again this morning after grinding to a halt last night. New York's Transit Authority says a power failure resulted in three main Metro North lines being shut down for about two hours. Look at all the chaos it caused in Grand Central Station. Huge crowds of people were standing around waiting for their train to come. The rail line takes thousands of people from New York City to Connecticut and the suburbs every day.

High-end retailer Neiman Marcus now says more than 1 million shoppers had their credit card information hacked during a three- month-long data breach. Thousands of cards have already seen fraudulent charges. Alison Kosik is here to tell us more. Good morning.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning, Carol. So this turns out to be a big change from just a few days ago when news of the breach first came out. Neiman Marcus said it didn't know how many people or it didn't say how many people were affected. Now, it is saying 1.1 million people were affected.

Now, there is no word on whether the hack is connected to what happened at Target's security breach. But we are certainly already seeing the fallout, 2,400 Visa, Master Card, and Discover Cards have been used fraudulently.

The good news, if this happened to you, you are not going to be on the hook for those charges. What Neiman Marcus is doing is it is reaching out to its customers. But here's my advice, don't wait for them to get to you. You should monitor your card online. Call the issuer immediately if you see anything suspicious -- Carol.

COSTELLO: This is kind of disturbing because we heard a lot about Target, minimal amounts about Neiman Marcus. It leaves you wondering, what's the next store to pop up?

KOSIK: Yes, it does make you wonder and some are warning that this may just be the tip of the iceberg. It also makes you wonder, how safe are these cards? Banks are generally better on reimbursing for unauthorized charges on credit cards instead of debit cards because the bank will reverse charges on credit cards almost immediately.

But with debit cards, there is actually limit on how much banks will reimburse. The whole thing is really raising questions about our credit cards, those magnetic strips because we've got that old technology from the 1960s. Credit cards in Europe, they have those microchips in them, which encrypt data, the harder to hack.

A recent survey shows most of the credit and debit card fraud, yes, it happens right here in the U.S. In fact, 47 percent of global fraud happens right here in the U.S., but here is the kicker, Carol. Only 27 percent of transactions happen here. So we are really getting the brunt of this fraudulent activity -- Carol.

COSTELLO: Alison Kosik reporting live from the New York Stock Exchange, thanks so much.

Still to come in the NEWSROOM, Edward Snowden still on the run in Russia, found time to answer a few questions about his current legal status in an online "Q and A." What he is saying about his chances of a fair trial in the United States next.

(COMMERCIAL BREAK)

COSTELLO: Checking our top stories at 10 minutes past the hour. Lawyers for the family of a brain dead pregnant woman will ask the court today to force a Texas hospital to remove her from life support. Marlice Munoz's husband says his wife is now just an empty shell. He simply wants to bury her. The hospital says they are following Texas law, which forbids cutting life support to a pregnant patient.

A second woman has now come forward alleging she was sexually abused by a California teacher. This is the same teacher who was confronted by another alleged victim in a YouTube video that went viral. The second victim has filed a complaint against the Valverde School District claiming the school system knew about the teacher's history of sexual abuse but did nothing.

The U.S. Attorney's Office has subpoenaed two groups linked to Governor Chris Christie, Christie's re-election campaign and the State Republican Party Committee. That's part of the investigation into the bridge lane closures. A spokesman says both groups intend to cooperate with the requests.

This morning, a Russian official says his country will not end Edward Snowden's asylum or send him back to the United States to face trial. The NSA leaker has been in Russia since June where he was granted temporary asylum and in an online question and answer session yesterday, Snowden tells CNN he cannot get a fair trial in the United States under current law. Snowden faces espionage charges. Attorney General Eric Holder though discussed Snowden's options for returning home.

(BEGIN VIDEO CLIP)

ERIC HOLDER, U.S. ATTORNEY GENERAL: If Mr. Snowden wanted to come back to the United States, enter a plea, we would engage with his lawyers. We would do that with any defendant who wanted to enter a plea of guilty. So that's what. That gives a little context to what I said.

(END VIDEO CLIP)

COSTELLO: During that "Q and A," with Snowden online, CNN's Jake Tapper asked, under what conditions would you, Snowden, agree to return to the United States? Snowden responded, quote, "returning to the U.S., I think is the best resolution for the government, the public and myself, but it is unfortunately not possible in the face of current whistle blower protection laws, which through a failure in law did not cover National Security contractors like myself."

Let's bring in Jonathan Turley, he is a law professor at George Washington University. Welcome.

JONATHAN TURLEY, PROFESSOR OF LAW, GEORGE WASHINGTON UNIVERSITY: Thank you, Carol.

COSTELLO: Thanks for being here. The fact that the U.S. attorney general discussed options for Snowden, could that be a first step in a possible negotiation for his return?

TURLEY: Well, it is not much of a step. You know, he is basically saying, look, you can come here and try to plead guilty with us and we'll see what we can do for you. That's certainly not going to be very welcoming for Snowden. What is interesting is that he is dangling out the prospects that there might be something that could be done on a plea.

The problem for Snowden is he has committed the worst sin of all. He has embarrassed very powerful people in Washington, D.C., including the president of the United States. Those people want him ground into a fine pumice. He knows it. So I doubt that's going to be enough to get him to come back.

He is also right about the whistle blower laws. Most people seem to forget that whistle blowers historically have released classified information. That's what the Pentagon papers were all about. We tend to like the whistle blowers of prior generations and we tend to view our own fairly harshly.

But I don't see the big distinction between what he has done and the Pentagon papers. Both were classified. Both the government claimed hurt the security of the United States. Pentagon papers are viewed as one of the high points for whistle blowing in the media.

COSTELLO: So maybe Snowden just has to wait 30 years and then come back to the United States, right. If Snowden did want to come back, Jonathan, would you like to represent him?

TURLEY: Well, I have two national security cases going right now. I need another one like a hole in the head. I think there will be plenty of people that would represent Edward Snowden. I doubt that's in the cards. He is right about the problems in the legal system. My guess is he would have a very high chance of conviction.

Federal judges often limit what defendants can argue in their own defense. He his efforts to claim that he is a whistle blower could well be barred by emotion by the Justice Department. I expect they would do precisely that. He could be stripped of the main defense he wants to make in front of a jury.

COSTELLO: Interesting. Jonathan Turley, thanks so much for your insight this morning. I appreciate it.

TURLEY: Thanks, Carol. COSTELLO: Still to come in the NEWSROOM, an inside look at what it means to be in Hillary Clinton's orbit. We are talking about planet Hillary and a behind the scenes look at the drama before 2016 and that weird cover, we'll talk about that too.

(COMMERCIAL BREAK)

COSTELLO: Checking our top stories, at 18 minutes past the hour. The father of R&B singer, Mary J. Blige is in critical condition after he was stabbed in the neck yesterday. Police say Blige's father was injured during a domestic dispute with an ex-girlfriend. That ex- girlfriend has now been charged with attempted murder.

Despite his bank paying out $20 billion in government fines last year, JPMorgan's CEO, Jamie Dimon, is about to get a raise. That's according to the "New York Times." We don't know how big his pay bump will be, the "Times" reported that some board members protested his raise because of those record fines.

He is number one in Congress, but when it comes to late night TV, John Boehner gets bumped to number two. The speaker of the House made his first appearance on "The Tonight Show" with Jay Leno and how to play second fiddle to Matt Leblanc. He talked to Jay about why he won't be making any presidential bid.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Did you ever think of running for president?

REPRESENTATIVE JOHN BOEHNER (R), SPEAKER OF THE HOUSE: No.

UNIDENTIFIED MALE: You want to show them what you did. You want to show them what you told me.

BOEHNER: I like to play golf. I like to cut my own grass. I do drink red wine, I smoke cigarettes and I am not giving that up to be president of the United States.

(END VIDEO CLIP)

COSTELLO: That's refreshing. Boehner was hesitant to endorse anyone. When asked about Jeb Bush, he said the former Florida governor would be a great choice for the job.

Republicans need to attract more women to their party. The latest Quinnipiac University poll shows women favoring Democratic candidates for Congress over Republicans by about 4 points. On a national scale, that margin is much wider. For example, President Obama beat Mitt Romney with women by 10 points.

So perhaps in an attempt to show American voters there are strong women in their party, Congressman Cathy McMorris-Rodgers will deliver the response to the president's "State of the Union." Rodgers is the fourth highest GOP leader and the highest Republican ranking woman in Congress. Now, to that bizarre "New York Times" magazine cover making headlines. Take a look at "Planet Hillary." It's an in-depth look at the big push behind a Clinton candidacy and what it's like to be on Hillary Clinton's expansive inner circle, her orbit.

But forget about that for a moment, the internet has gone wild, making fun of this cover, turning Planet Hillary into Miley Cyrus's wrecking ball and putting the fleshy moon face on Justin Beiber's mug shot. The writer of this article told CNN's "NEW DAY," she was surprised by the cover.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I kept describing this as a story about her orbit. They didn't know I literally meant an orbit.

CHRIS CUOMO, ANCHOR, CNN'S "NEW DAY": You don't fit the cover.

UNIDENTIFIED FEMALE: I didn't pick the cover. When they showed it to me, I thought, this is going to draw a lot of reaction. I didn't really imagine the Miley Cyrus name going around.

(END VIDEO CLIP)

COSTELLO: We kind of love that. Joining us now is CNN's chief national correspondent, John King. Good morning, John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Good morning, Carol. We are not talking about her hair.

COSTELLO: That's true. She didn't have any hair. What did you think of the cover? It was kind of weird.

KING: It is provocative. In this day and age, you try to do things to sell magazines or sell newspapers in this case. I am sure there are many people in Secretary Clinton's world that take offense to it. They find it disrespectful. "The New York Times" can answer for "The New York Times" magazine. It is a well-reported story about her universe and her orbit. The cover is going to cause some buzz. I'll leave it at that.

COSTELLO: OK, fair enough. I've read the article. One of the more interesting things in that article, you know, Hillary Clinton is 66 years old. She has to appeal to a much younger demographic if she decides to run for president. Chelsea Clinton is very involved in her mother's not only initiatives, but supposedly her mother's run for president. Can Chelsea, you know, help with younger voters?

KING: She can't directly help with younger voters, I mean, obviously she would campaign for her mom. She is very loyal to her mom. Should she run, I do think it is a fascinating dynamic that one of the big changes in the Hillary Clinton and the Bill Clinton political universe over the past year or two is the emergence of Chelsea.

Remember a couple of months back when Doug Van, Bill Clinton's right-hand man for a long was sort of forced out of the Clinton universe, that was orchestrated by Chelsea Clinton, who thought that it was time for him to move on. Her emergence is quite significant. Now can Chelsea Clinton convince her generation that her mom is the right candidate for president?

She can certainly try and she can certainly help, Hillary Clinton -- a lot of question that, Carol. A lot of people think the American people don't tend to go back, if you will, a generation, when it comes to picking a president. Will they go back because she is older than President Obama?

A lot of people rallying to her side say, she could be the exception, A, because of her notoriety and B, because of the depth of their political organization and because it would be another historic campaign. We have had the first African-American president. She would be the first woman president.

If you look around right now, there is a lot of talk of inevitability. Now there was in 2007 as well so let's be careful. But there is no serious Democrat who is has yet raised his or her hand and say I'll challenge Hillary Clinton.

COSTELLO: Yes, but then again, Barack Obama kind of popped out of nowhere, right? Is it good that she is getting all of this attention so soon?

KING: It's inevitable. That part is inevitable. Does it hurt her? Does it help? We'll find out. You know, assuming she runs, we will find out during the campaign. What you have is a very interesting dynamic over the course of my life covering politics. It is the Republican Party that has been the party of it's your turn.

Bob Dole and then John McCain and then Mitt Romney, that's the way it goes. George W. Bush was in the middle of those. That's the way it goes in Republican politics. Never before have you seen the Democrats, so much of the Democratic infrastructure, the money, the top strategist galvanizing so early around one person.

That is a huge advantage in the sense that it leaves her when she finally makes a decision if it is to run with an infrastructure already in place. The organization is being built while she is saying, I'm not so sure. It could become a disadvantage. Some people worry that it is too big to succeed, if you will.

It gets so top heavy, so many egos that you end up having 2008 reducts in the infighting, but again, look around, there are a lot of people looking at it from the Democratic perspective, but all of them waiting until they get the final word from Secretary Clinton.

COSTELLO: All right, CNN's chief national correspondent, John King, thanks so much for your insight this morning.

Still to come in the NEWSROOM, Republican Mike Huckabee says, Democrats are insulting women. His comments on Uncle Sugar, an uncontrollable libido, has some people scratching their heads.

(COMMERCIAL BREAK) COSTELLO: Good morning. I'm Carol Costello. Thanks so much for joining me. Here is a reminder that there is no off season in politics. At this very moment in Washington the focus is on the 2016 presidential race as the Republican National Committee enters the final day of its winter meetings. One source of debate, where to hold the convention and when, that's the most important question, when.

CNN national political reporter, Peter Hamby is at the gathering. Tell us more.

PETER HAMBY, CNN NATIONAL POLITICAL REPORTER: Hi, Carol. Yes, in just a few minutes, members of the Republican National Committee, there are 168 of them from all over the country, are going to vote on a package of rules that would really blow up the 2016 primary calendar. Hopefully, to them, use it to their advantage.

One of the things, as you mentioned, is that they want to move the convention from late summer until June. It would be the earliest convention in decades for either party. The goal here is both to contract the Republican primary process and reduce some of the party in-fighting. But also move it up so that Republicans can access general election money earlier in the race and start spending money in a way that they couldn't frankly in 2012.

Barack Obama, the president as you remember really outspent Romney in the summer months defining him. What's going on behind the scenes here at the meeting also is you have these cities who want it host a convention running a really active lobbying campaign courting members about what city they want to go to.

They are giving goodies here, Kansas City is here and they are giving out Kansas city coffee and Russell Stover Candy that's based on Kansas City. Denver is giving out beers. They are giving Denver Bronco's tote bags. The Las Vegas Committee is very aggressive. A lot of staffers working behind the scenes, giving out free Wi-Fi, they've got a lounge.

Other cities that have come up include Columbus, Ohio, and Phoenix, Arizona. They are hosting parties, again, really courting members and hoping to bring them to their side when they eventually vote on this. That vote is not happening today, Carol. That's going to happen later this year at some point.

COSTELLO: All right, Peter Hamby, many thanks to you. One high profile Republican Mike Huckabee is not helping the party's push to attract more women voters. We will discuss his libido, Uncle Sugar comments next.

Also ahead, athletes, friends and families, all heading to Russia, but along with the excitement of the Olympic Games, some apprehension over the threat of a terror attack. We'll talk to the mom of one athlete who says she is going to Sochi.