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Friday Deadline Looms For Arizona Anti-Gay Bill; Putin Orders Military Drills Near Ukraine; Report: 35 Million Gallons Of Coal Ash Waste; Delta To Avoid Rules Based On Ticket Prices; U.S. Fines Asiana Airlines $500,000

Aired February 26, 2014 - 10:00   ET

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

CAROL COSTELLO, CNN ANCHOR: New evidence the mob may have been behind one of the most legendary boxing matches ever.

And Delta, overhauling its frequent flyer programs. Soon, the biggest spenders will get the biggest perks. The second hour of NEWSROOM starts now.

Good morning. I'm Carol Costello. Thanks so much for joining me. In Arizona, the deadline grows nearer. The anger grows louder. The pressure building on Governor Jan Brewer to veto a bill that's become a lightning rod in the battle over gay rights. In effect, that bill would allow businesses to cite religious beliefs and deny service to gay customers.

Brewer via Twitter says her decision will not be rushed. Quote, "I assure you as always, I will do the right thing for the state of Arizona. Some lawmakers who actually voted for this bill now want the governor to kill it.

(BEGIN VIDEO CLIP)

STEVE PIERCE (R), ARIZONA STATE SENATE: We start seeing all the e- mails and everything show up on our desk and constituents and the businesses start calling. That's when it really went viral and took off and took a life of its own. It is too bad for Arizona. I just hope the governor gets back here and vetoes it. We had no idea it would be a reaction like this. We made a mistake and the good thing about it is now we know how to fix a mistake. That's what we are trying to do.

(ENDV VIDEO CLIP)

COSTELLO: CNN's Ana Cabrera live in Phoenix this morning. So why is the governor taking so long to make her decision do you think?

ANA CABRERA, CNN CORRESPONDENT: Well, she says she wants to hear from both sides of this issue and really take a close look at the legislation before she takes action. You get the sense that there might be a lot happening behind the scenes here at the state capital. Today, I just got done speaking with State Representative Ethan Orr, who was one of three House Republicans who actually voted against this legislation when it initially came up for a vote. The governor asked him to come and meet with her this afternoon. Meantime, the protests continue to grow here in the courtyard of the state capital. Hundreds turning out in the past few days and we're expecting an even bigger crowd here today potentially reaching about 1,000 people.

We are wills now hearing from several high-profile political figures who are urging the governor to veto this bill, Senator McCain and Mitt Romney speaking out against the bill. Several big businesses now also joining this fight against the bill including Apple, Intel, AT&T, American Airlines, Delta Airlines, just to name a few who have spoken out opposing the legislation.

And the NFL also calling into question what's going to happen with the Super Bowl or at least poising the question that things could change next year if this law actually takes effect here. So there could be enormous economic consequences if the governor signs the bill.

But again, Governor Jan Brewer saying she will not be pressured. She is going to take a look at the legislation. She is going to listen to both sides before she makes her decision -- Carol.

COSTELLO: All right, we'll check back, Ana Cabrera, reporting live from Phoenix today.

A couple of minutes ago, you heard Anderson Cooper's conversation with one lawmaker. He asked the governor to kill the bill he voted for. Mums the word from several of his colleagues who also voted to support the bill. CNN's Randi Kaye has more for you.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: No comment right now. We are waiting for the governor.

RANDI KAYE, CNN INVESTIGATIVE CORRESPONDENT: We came all the way from New York to try and see why you voted the way you voted.

UNIDENTIFIED MALE: Bring everybody from New York you want to. We have great weather. Spring baseball is right here.

KAYE: I hear you are the man that gives great quotes. We are going to caucus. Give me 30 seconds.

UNIDENTIFIED MALE: My 1:00 is here. I'm very late.

KAYE: Thirty seconds. Just tell me, please, sir.

UNIDENTIFIED MALE: I'll catch you on the way out.

KAYE: Can I ask you why you supported it?

UNIDENTIFIED MALE: No, thanks.

KAYE: What do you make of all the attention it is getting?

UNIDENTIFIED MALE: There is a lot of misunderstanding.

KAYE: Do you want to explain and set the record straight?

UNIDENTIFIED MALE: I don't but I appreciate you offering.

KAYE: You have nothing to say at all, sir?

(END VIDEOTAPE)

COSTELLO: Randi Kaye trying to get some answers and as you heard Ana Cabrera report Governor Brewer is going to begin discussing this bill with various lawmakers later today. Of course, we'll keep you posted.

Also, into CNN this morning, Russia's president sending a message, Vladimir Putin has ordered surprise military exercises for his troops in an area bordering Ukraine. The weekend ousted president who had recently aligned himself with Moscow.

Today, in Southern Ukraine, new scuffles erupted between pro-Russian protesters and those seeking closer ties with the west. Our Frederik Pleitgen who is on the scene there says those clashes have since died down and the protest appear peaceful again.

For the first time, the United States is making plans to bring home every single U.S. troop from Afghanistan by the end of the year. It's the latest sign of the Obama administration's impatience with the Afghan President Hamid Karzai, who has refused to sign a security deal.

That deal would keep some troops in Afghanistan after 2014. But this morning, a senior Pakistani official warns of a, quote, "holocaust" if that actually happens. CNN's Pentagon correspondent, Barbara Starr at the Pentagon with more. Good morning, Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Carol. That agreement that Karzai won't sign is vital, essential. It has to get signed for U.S. troops to be able to legally stay in Afghanistan and operate after the end of 2014. No agreement, no troops. It's that simple.

Defense Secretary Chuck Hagel arrived in Brussels this morning for a NATO Defense Minister's meeting. This is expected to be topic number one. The Pakistanis are already pointing out that this could be a regional security crisis is that, you know, their feeling is that there could be civil war in Afghanistan.

Thirty percent of Afghan troops could defect if the U.S. goes. This will be a crisis because it will give the U.S. very limited ability to keep an eye on al Qaeda and the Taliban and the concern for U.S. Security for all of us. This could become a safe haven again for those militant groups. The U.S. won't be able to keep an eye on the other side of the border in Pakistan.

Which al Qaeda still basically calls its home, s lot at stake, Karzai will be leading off later this year. There are new elections. The hope is a new afghan president may see it differently. The Pentagon making clear the clock is ticking. They cannot wait around forever. Some decisions will have to be made -- Carol.

CNN's Barbara Starr, a new warning for people in North Carolina. Do note, touch the river water and do not eat fish from the Dan River until all testing is complete. More than three weeks ago, a pipe burst under a pond holding coal ash waste. As much as 35 million gallons of toxic sludge might have seeped into the river.

That's enough to fill 53 Olympic size swimming pools. Protesters demanding answers from duke energy, the company responsible for this. Protesters delivered 9,000 signatures demanding all coal ash ponds being removed.

MARY ANNE HITT, SIERRA CLUB: Duke has plenty of money to not only pay to clean up the spill, but to clean up all the other toxic coal ash sites that are threatening other communities.

Duke energy says the drinking water is safe. The federal government has launched a criminal investigation into that spill. General Motors is recalling nearly 1.4 million cars over a deadly safety problem that can cause cars to abruptly shut off while they are being driven.

A total of 13 deaths have been linked to faulty ignitions that can be jarred into the off position. The automaker is adding four models including the Saturn ion and the Chevrolet HHR and the Pontiac solstice.

Big changes coming from members of Delta's frequent flyer program will base on how much you pay for your ticket instead of how far you have traveled. The change has some fliers saying it prefers the high- profit corporate travelers over the rest of us. Christine Romans is here with the story.

ROMANS: You know, look, this is about dollars, not distance. Meaning how much money you spend on Delta tickets will be how you get your miles, not how many miles you actually fly. It is not even miles. It is actually dollars. They are still calling it a mileage program. Let's say today, you are someone like me, an infrequent traveler, maybe six months ahead of time, you bought a ticket for $650 to go from New York to L.A.

Today, you get 5,000 miles in your frequent flyer account. Next year, you will only get 3,250. Let's say you are this elite platinum flyer for delta. On a Thursday, you decide to go to Heathrow for a meeting. Suddenly, you have spent $5,000 for a business class trip. Today, would you get 20,000 miles for that flight?

Next year, in 2015, you will be rewarded. You will have 45,000 miles. This is the top tier traveler. Why do they care about so few people? That top 2 percent of flyers, they account for about 20 percent of the revenue. This is Delta trying to go after united and their other frequent flyers.

COSTELLO: It seems the people with the most money get the most perks.

ROMANS: It absolutely is true. This is about also for the rest of us, look for your cheapest fares, go to budget carriers. Don't pack bags, because of all these add-on fees. You are going to pay a lower fare on the front end and not get the miles to go with it. The big thing will be to see whether the other big carriers follow suit, whether they see Delta eating into their business traveler clientele and they try to do it too.

COSTELLO: Christine Romans, thanks so much.

Still to come in the NEWSROOM, the idea of genetically altering embryos to produce healthier babies. Sounds like something out of science fiction, right? It's real. We'll talk about that next.

(COMMERCIAL BREAK)

COSTELLO: Checking our top stories at 14 minutes past the hour. Asiana Airlines has been slapped with a $500,000 fine for not helping victims fast enough. They say the Korean line was slow to get a phone number to relatives and didn't contact some families until five days after the crash.

This morning, President Obama takes his push to create jobs and boost the economy back on the road to Minnesota where the president will announce a new competition for $600 million in grant money. The White House says the grants will target infrastructure projects. Pope Benedict is telling an Italian newspaper and old age and nothing else was the reason for his retirement. The pope made these comments when he stepped down last year. In a letter, the pope emeritus says he wants to quell media speculation that he left due to any conspiracy plots against him.

Genetically modifying children, a controversy that could soon become reality. This morning, the FDA is considering a new technique that uses the DNA of three parents to eliminate genetically inherited diseases in newborns. It works by replacing defective parts of cells in the mother's egg with those from a donor.

(BEGIN VIDEO CLIP)

ARTHUR L. CAPLAN, NYU LANGONE MEDICAL CENTER: You have an embryo and its battery is broken. Remember your high school text book and cells divide. In these little embryos, these are people born with a disease. They can't make power. You are giving them a new battery.

That's a therapy. I think that is a humane, ethical thing to do. It is risky. You might transplant the thing and have something go wrong. It is not without risks, but it is treating a disease where we get into the sticky part is what if you are trance transplanting batteries and while we're at it we will make you taller, stronger, faster or smarter.

(END VIDEO CLIP)

COSTELLO: Critics say it presents a host of other concerns, but we are already doing that in other ways.

(BEGIN VIDEO CLIP) KAPLAN: There are fertile people starting to go to infertile clinics that have people starting to say, test my embryos. I don't want one that has a risk of breast cancer. Fertile people sorting out embryos. You are starting down the road of making better babies. I will make a prediction. We argue about abortion.

The big issue over the next five to ten years is going to be how far do we go in pursuit of the perfect baby? Do I think we are going down that road? Yes. Does it creep me out? Yes. Is it possible to draw a clear line and say you can never do any of this? I don't think so. The FDA holds its second day of meetings on the topic today. It is sure to be watched by supporters and opponents and the like.

Still to come in the NEWSROOM, the fix was in at least that's what the FBI saw this about the first Ali/Liston fight. Pamela Brown is on the story. Good morning.

PAMELA BROWN, CNN CORRESPONDENT: Good morning, Carol. It was one of the greatest moments in American sports history. Sonny Liston versus Cassius Clay, but could the fight have been rigged? We'll tell you about new documents fueling that speculation.

(COMMERCIAL BREAK)

COSTELLO: Newly released documents are putting a spin on a debate whether the Ali/Liston fight was rigged. It happened 50 years ago this week. Now, we're learning the FBI looked into whether the upset was set up by the mob. CNN's Pamela Brown is here with more. Fascinating.

BROWN: Yes, it really is, Carol. You know, rumors about the fight have swirled for decades. Now, new details are emerging that may fuel even more speculation about this fairy tale fight. The FBI reportedly received tips that it may have been fixed. For the first time, we are hearing that the FBI launched a brief investigation into the matter to confirm or deny the rumors.

(BEGIN VIDEOTAPE)

BROWN (voice-over): Even 50 years after that bell rang, Mohammed Ali's underdog victory against Sunny Liston still has people mesmerized. His round three pummeling of Liston cut open his eye leaving the winner on the sidelines. He bowed out before round 8, the most surprising upset of the century, forever writing Ali into the history book.

Four decade-old FBI documents are surfacing suggesting that Ali's win may not have been as big of a surprise as we thought. These showed that the FBI looked into whether the historic fight might have been rigged by Ash Resnick, a Las Vegas mobster. The pages sent to J. Edgar Hoover stated Liston and the suspected mob boss both reportedly made $1 million on the fight.

ANDY SCHOLES, CNN SPORTS: It presents a shred of doubt on whether or not this was truly a Cinderella story and not just any Cinderella story, but the upset of the century. BROWN: Among the more than 100 pages, there is no evidence that the then 22-year-old Ali knew about the scheme. The bureau ended their probe in June, 1966, citing a lack of information. Important to note, at the time, under and looked into the conduct of many, many Americans and the guidelines were much less stringent than they r now. There is no evidence indicating Ali was in on the scheme or even knew about it. His camp is not offering a comment at this time -- Carol.

COSTELLO: Fascinating stuff, Pamela, thanks so much. Still to come in the NEWSROOM, a Senate investigation slams the Swiss banking giant certainly can't see Muhammad Ali wasn't a great fighter. He certainly proved it over the years after that fight.

BROWN: That's absolutely right.

COSTELLO: Pamela Brown, thanks so much. A senate investigation slams a Swiss banking giant accusing it of hiding billions of dollars from Uncle Sam. You will not believe how they did it. Christine Romans is here with details.

Imagine getting your bank statements pushed across a tabletop, hidden inside a "Sports Illustrated" magazine.

(COMMERCIAL BREAK)

COSTELLO: Happening now in the NEWSROOM, money stuffed down panty hose. Secret elevators for private meetings. You will not believe what the Senate says Credit Suisse did to hide money from the IRS.

Also ahead, a mom's tweet to Delta sparks on social media about where it is appropriate to breast feed.

Someone apparently flips off Justin Timberlake at a concert. Don't mess with J.T. He was not going to let it go either.

Good morning. I'm Carol Costello. Thanks so much for joining me. Chris Christie going back to his political roots today holding his second town hall of the year in Morris County, New Jersey. That's where Christie began his political career some 20 years ago.

Our chief congressional correspondent, Dana Bash, has more from Washington. Good morning, Dana.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Good morning, Carol. It is 111th town hall. Who is counting, right? He is known for in New Jersey for doing this kind of back and forth. It is something that he and his aides believe has helped with his popularity there. He is going to need all the help he can get because, never mind nationwide, even in New Jersey, he has seen his popularity plummet because of all the scandals that are surrounding him.

The name of the game for him at this point is really to just keep his eyes on his current job, his day job, to be the governor of New Jersey, to have these kind of town halls. The last one that he had was about sandy relief. This is going to be more focused on the big speech that he gave yesterday, which is his budget. If you look at the kind of budget that he proposed, of course, every body looks at tea leaves for somebody who potentially could be president to see where they stand on economic policy.