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Obama under Fire on Immigration Crisis; Family of Woman Beaten by Officer Will Sue; Dow Reaches 17,000; Synthetic Drug Cash May Aid Terrorists; Hollywood Skin Guru Accused in Plot to Kill

Aired July 07, 2014 - 10:30   ET

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

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BRIANNA KEILAR, CNN ANCHOR: Good morning. I'm Brianna Keilar, in for Carol Costello. Thank you for joining me.

And thousands of undocumented children are streaming across the southern border into the United States. The impact of this crisis is being felt all the way to Washington. Lawmakers -- Democratic, Republican -- they're slamming the Obama administration for not doing enough to stop those children from entering the country.

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SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: The President has sent a message out whether he knows it or not if you get to America you can stay. He needs to speak to the people in that region, take a leadership role saying children coming here illegally will be sent back. If you don't do that you're going to incentivize more children coming here illegally.

But we need to tell the governments in question you are not going to have a good healthy relationship with the United States, you are not going to get American taxpayer dollars if you do not engage in stopping this.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. HENRY CUELLAR (D), TEXAS: It would be nice for him to come down to the border but again with all due respect I think he's still one step behind. They knew this was happening a year ago, last year and again they're just -- they are not reacting fast enough at this time.

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KEILAR: Now joining me to talk about this, Jim Acosta, he's our senior White House correspondent. We have Patricia Murphy, political columnist for "The Daily Beast" and Will Cain, CNN political commentator and columnist for "The Blaze".

Jim, to you first here --

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Sure.

KEILAR: -- President Obama had said that immigration was the top priority for his second term. Working with Congress obviously, you know, that's not going to happen we expect. But he's heading to Texas on Wednesday. He is not going to the border. But he can't really escape the issue as he heads to a border state, right?

ACOSTA: I would say certainly not, Brianna. And having Henry Cuellar, a fellow Democrat, essentially call him out on CNN's "STATE OF THE UNION" yesterday, I think that puts the White House in even more of a jam here. You know the President is heading down to Texas later on this week. He's going to be talking about the economy. He's going to be doing some fund-raisers.

At this point, the White House says he has no plans to go to the border. Of course things could change, his schedule could change. But keep in mind, and you know this Brianna having worked here at the White House, they are reluctant to put the President in a position where he might interfere or that the security apparatus right around him might interfere with first responders. And that's essentially what these border patrol folks are doing at this point.

And you know, the thing that the White Houses says is that, look they have had senior administration officials heading down to the border. Jeh Johnson, the Homeland Security Secretary, he's been in the border area the last couple of weeks. Cecilia Munoz, a top domestic policy advisor to the President, she's been down there as well.

And they are trying to really control this at the source -- Brianna. Jeh Johnson is heading to Guatemala tomorrow. The customs and border protection folks, they've released an ad campaign in Central America, it's not even running in the United States, it's running in Central America, warning of the dangers of making that very long trek, really aiming at those young people who are desperate in trying to get out of the violent situations.

They are being told by these criminal gangs, if you get to the United States you get to stay. They are trying to drive home the point that not only do you not get to stay but it can be very costly to your life. And in one of these ads it shows an actor portraying a teenager who's lying dead or unconscious in the desert. So they know this is a desperate situation.

KEILAR: Yes. And we'll keep playing that ad so that you can see that. And as we do, Patricia, I want to talk to you about some of the criticism that the President is getting from within his own party. Most of the criticism he's getting is from Republicans. But to hear a Democrat say this -- sort of explain this to us. Obviously Henry Cuellar has some local consideration but this isn't good for President Obama.

PATRICIA MURPHY, "THE DAILY BEAST": It's not good for President Obama and I would say a community that is most worried about what's going on are immigration activists themselves. They have been pushing the President for a long time that if he wasn't going to be able to get anything through Congress then he need to take steps to do something through executive action to do something to expand protections of illegal immigrants who are already here, to maybe even give them work visas.

And I talked to immigration activists probably two months ago and there really was a belief that the President was going to act broadly and act aggressively on the executive order front. Maybe even grant work visas to the 11 million immigrants who are here now.

That basically is gone. There is no hope for that right now because of what's going on at the border. And immigration activists, Democrats as well and Congress believe that because of the administration has let that situation get so out of control and so dangerous he is even hemming himself in. Not only what Congress is willing to do but what he can even do through executive action. His options are quickly disappearing and coming off the table as that situation in California and Texas get so difficult.

KEILAR: And Will, as we see President Obama, even if it is going to be modest executive action we expect him to take some. How do you think that is going to play with Republican voters? Sort of the base that we expect would already be energized to come out in the midterm elections?

WILL CAIN, CNN POLITICAL COMMENTATOR: Horribly. But I would imagine it would play horribly with the entire American population. I'm thoroughly confused, Brianna, how it has come to be that the idea of reform is executive action and actions that exacerbate the exact problem we're seeing now.

The fact that of the last decade, we've seen roughly about 4,000 unaccompanied minors coming across yearly and in the past couple years that has doubled and tripled and quadrupled to since October -- 50,000. We cannot ignore that that is connected to the executive actions President Obama passed in 2012, granting deferred action to existing illegal immigrant children.

Now we all know that that is not supposed to apply to anybody coming across the border right now. But those illegal immigrants coming across right now don't believe that. In fact, they are coming across and in most cases turning themselves in directly to border patrol -- the first border patrol they can find because they know they're not going to be deported.

Jeh Johnson yesterday on "Meet the Press" could not tell David Gregory that the 50,000 here illegally would be deported. So you tell me now how more executive actions and reform meaning more rights for illegal immigrants is going to stem the problem at the border? That is like a middle aged doctor, you know, adopting blood letting. I don't understand, attach leeches and exacerbate the existing problem. It makes no sense whatsoever.

KEILAR: And this is something we're going to see playing out politically through November and even through to the presidential election in 2016. Jim Acosta, Patricia Murphy, Will Cain, thank you to all of you.

MURPHY: Thank you.

KEILAR: And still to come. Baby photos, fitness selfies -- you know those, yes. You know, showing you worked out. Medical records -- that's very alarming. According to a new report those are just some of the private communications obtained by the NSA surveillance program. So how safe is your personal information and what can you do to protect yourself.

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KEILAR: The NSA may have your selfies, baby photos, medical records. According to a report by the "Washington Post", whistle blower Edward Snowden has handed over a new batch of documents that reveal 90 percent of the people whose information was obtained were not -- that information was not done -- was not obtained on federal targets, instead on quote "ordinary Internet users".

Let's bring in CNN Money tech correspondent, Laurie Segall, as well as CNN Technology analyst and host of Tech Bytes, Brett Larson. I mean let's start at the beginning here Laurie, what exactly has the NSA been collected and let's be clear, some of this is on, you know, appropriately targeted foreign people but some is not.

LAURI SEGAL, CNN MONEY TECH CORRESPONDENT: Absolutely. The first thing I should say is they have been collecting valuable intelligence information but also the other type of information they've collected is pretty eye-opening. It's intimate and almost voyeuristic to a degree from the 90 percent of folks that actually weren't targets.

Let me get to what some of that information was. Baby photos -- we're talking, you know, pictures of infants in bathtubs; fitness selfies -- you know, pictures of women in bikinis; medical records, resumes and also academic transcripts of school children. So you know, pretty eye opening when you look at it and I think people understand that a lot of this information can be valuable when it's targeted.

A lot of folks had a problem and said that, you know, the NSA does store a lot of this data. They said publicly that it's hard for them to get this data out of the system because they are not sure if it's relevant from one analyst to another analyst -- Brianna.

KEILAR: So Brett, I wonder, if you are just looking at this as a regular person. And, you know, we get upset when Facebook or Instagram is borrowing our photos, you know, or things change and we think our privacy has been compromised. In this case with the government involved, how do you protect yourself?

BRETT LARSON, CNN TECHNOLOGY ANALYST: It is increasingly very difficult especially considering that they are doing these giant sweeps, you know, they're getting the dolphin with the tuna here. And it's really frustrating for a lot of users because we feel very powerless because it's -- wait, now you are getting my medical records? I can't even get my medical records so you're really grifting (ph) from between my doctor and the healthcare organization or what have you. What we're seeing here is an increase though in encryption and encryption software and new encryption protocols that are becoming easier and easier.

And one of the things that I think is very important and I think it's really important that we're having this conversation right now, is we're informing people that hey, this kind of stuff is happening. What this has done is it's spurred the tech community. It's the Google, the Facebooks, the apple computers the Microsofts to come forward and say, all right we're going to come up with an encryption protocol that the government's not going to be able to break so when you put your stuff on our Cloud drive, when you use our e-mail services, your stuff is going to be safe from the prying eyes of the government.

I mean there are plug-ins for Web browsers coming out constantly that are encrypting everything. And they're making it more and more simple. Because a lot of these encryption programs are very complicated for the average user.

KEILAR: And Laurie, this is like a whole industry -- right -- the new encryption software.

SEGALL: Absolutely. You know, when I first started covering start- ups it's what's the hot new app. Is it going to be location? Is it going to be social networking? And now I'm getting all these pitches for encryption apps because that's what the Snowden revelations really did.

You know, I actually spoke to Nico Sell, she's a hacker and she's created an app called Wicker that completely protects your communications. It's very interesting and I asked her what the Snowden revolutions did for the community. Listen to what she said -- Brianna.

(BEGIN VIDEO CLIP)

NICO SELL, FOUNDER WICKER: I think it was the best thing that's ever happened to society. I still don't think we're paranoid enough -- right. To me the NSA is just the tip of the iceberg. And I'm glad we all know about it right now. Because we've opened our eyes a little bit.

But greater threat to me and my friends and family really are the data brokers out there that are selling lists of erectile sufferers and rape victims for seven cents a piece.

So I think we've started to open our eyes and the world is a lot better place and that's going to help us all.

(END VIDEO CLIP)

SEGALL: Now, I should say, Nico's very extreme. She's actually wearing those sunglasses because she doesn't believe she's word about facial recognition but she's very prominent in the hacker community. And I would say Wicker this app is legit; it was just funded $30 million and one of the leading investors with one of the first investors in Facebook. So you know, that says something -- Brianna.

KEILAR: Yes. Maybe he knows what he's talking about. Maybe it's really going to take off. OK. Laurie Segall, Brett Larson -- thanks guys.

SEGALL: Yes.

LARSON: Thanks.

KEILAR: And still to come, for the first time Pope Francis comes face to face with victims of the Catholic Church sex abuse scandal. Why his spokesman called the event a quote, "profound spiritual encounter".

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KEILAR: Let's check our top stories.

The family of a woman beaten by a California Highway Patrol officer says they will sue. The video was shot by a passerby and I must warn you, it is very disturbing. It shows the officer repeatedly hitting 51-year-old Marlene Pinnock as she's held on the ground. Police say that she was physically combative with the officer forcing him to place her under arrest.

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ASST. CHIEF CHRIS O'QUINN, CALIFORNIA HIGHWAY PATROL: We're going to make a determination as to what transpired in this situation. And we will do the right thing with regard to dealing with the employee or the member of the public in accordance with law and policy.

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KEILAR: The officer involved has been put on administrative duty and Pinnock is still in custody under a psychiatric hold.

U.S. Authorities are analyzing this video to see if the man in it, Abu Bakr al-Baghdadi, the leader of the terrorist group ISIS. The video of a sermon in Mosul, Iraq surfaced over the weekend. And if this is indeed al Baghdadi, the video could show how comfortable the militant leader feels after his group has taken control of Mosul and much of Iraq.

Well during a private meeting today with victims of the Catholic Church sex abuse scandal, Pope Francis asked for their forgiveness and he vowed to make reparations. The meeting was arranged by the Archbishop of Boston who sits on a commission which is advising the pope on how to move the church forward in the wake of the scandal.

Ominous sight in Grundy County, Iowa -- this is a perfectly formed funnel cloud rising above homes. Nearly a dozen suspected tornadoes touched down across the state on Sunday evening. There was property damaged linked to the severe weather. No injuries reported fortunately. And stocks may be down a bit this morning but overall things are looking strong. Last week the Dow soared past 17,000 and the S&P hit levels that many didn't expect until December. But if you thought the rally was winding down, well think again. Many analysts believe Wall Street's rally is going to keep going.

CNN's Alison Kosik, joining me now from the New York Stock Exchange -- where do the stocks go from here Alison?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, Brianna, so the Dow hit 17,000. Now what? Well analysts are really saying at this point now is not the time to sell your stocks and review your portfolio because the thinking is that this bull market may still have room to run.

Even though many see 17,000 as purely psychological, it really did come quickly. Analysts weren't expecting the Dow to hit 17,000 until December and it took just 7 months for the average to go from 16,000 to 17,000. So the big question is why hold on for longer if we're seeing these highs right now? Because for one, the alternatives that out there, they are not compelling to many investors.

You look at bonds -- they're expensive. Foreign stocks often experience more turbulence than the U.S. market and cash has been kind of a losing proposition for years.

Second look at the big picture: this year's performance believe it or not is only modest. You look at the Dow, it's up only about three percent this year. But that's only 30 stocks. The Dow includes only 30 stocks. The S&P 500 is up just 7 percent this year compared to what happened last year; it rallied 27 percent.

Finally if you look at the historical value of stocks they are still, believe it or not, not that expensive. So while you are paying more because the market is pushing higher there are lots of analysts out there who say overall those prices do not suggest that a pullback is going to happen quite yet -- Brianna.

KEILAR: I don't mean to be a pessimist but whenever I see the stock market rising and then I look at, you know, it crossing 17,000 I'm always wondering OK when is it going to go down -- right? Is it going to keep going?

KOSIK: That's smart. That's a smart way of thinking but think of it this way, also the economy is getting better, slow but surely it's getting better. The last few jobs reports, you look at them, they've shown serious gains. And employment, although many are still out of work, many people out there are working part time wants to work full- time. So no doubt about it there is a lot of room for improvement in the economy.

But there are this bright spots. Housing -- that's a bright spot. New and existing home sales are up. Mortgage rates they continue to stay low. And the other thing investors are looking toward is corporate earnings. The report cards of these public companies here in the U.S., second quarter earnings just around the corner. So that could actually wind up carrying the moment for stocks over the summer which is usually a very quiet time for stocks. Because you will see maybe companies reporting better than expected earnings because they are doing more with less. Not necessarily the right reasons you want to see companies doing well -- Brianna.

KEILAR: Yes. Not necessarily. All right. Thanks Alison. Alison Kosik for us at the Stock Exchange.

Today Washington State will issue the first licenses to sell recreational marijuana. Voters approved recreational pot sales for adults over 21 back in 2012. Once licenses are issued store owners will be able to open for business as early as tomorrow. And it's unclear though how many new pot shops will be opening.

Marijuana may become more mainstream but it's still illegal under federal law and federal agents are also targeting stores that sell synthetic drugs believing the profits could wind up in the hands of terrorists.

CNN's Deb Feyerick has that story.

DEBORAH FEYERICK, CNN CORRESPONDENT: Federal authorities are concerned that the next source of terrorist funding could come from a very unlikely place, convenience stores right here in the United States.

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FEYERICK: You are not supposed to ingest these but people do anyway -- synthetic drugs known on the street as fake pot. Small packets sold with names like Scooby Snacks, Crazy Clowns, Spice.

DEREK MALTZ, SPECIAL OPERATIONS, DEA: It is not really synthetic pot. It is synthetic poison.

FEYERICK: For the last year federal drug agents have been raiding gas takes and the minimarts across America. Not because the synthetic drugs are necessarily illegal but because the money, officials believe, is going overseas to fund terrorism.

MALTZ: We've seized over a $100 million worth of assets. We've arrested hundreds of individuals all around the United States. We have seized guns all over the place.

FEYERICK: Usually sold as herbs not for consumption, the synthetic drugs are made in China with proceeds suspected by the DEA going to global criminal organizations.

Derek Maltz, heads special operations for the Drug Enforcement Administration.

MALTZ: If a mini mart is operating in our country and they are sending $40 million, $50 million, $60 million back, we're very concerned about that.

FEYERICK: Tens of millions of dollars, the bulk of the money going to places like Yemen, Syria and Lebanon.

MALTZ: As state sponsorship has declined, terrorism fueled by criminal activity is on the rise.

FEYERICK: Well, the DEA acknowledges there's no actual smoking gun tying synthetic drug money from the U.S. to terrorists, Maltz says the existing evidence paints a clear picture.

MALTZ: The terrorists need money to finance their operations. They need money for logistics, recruiting, for training. You cannot do that with American Express and Visa. You seed a suitcase of cash.

FEYERICK: Synthetic drugs aside, the global drug trade produces plenty of that -- according to the U.N. some $300 billion and counting.

(END VIDEOTAPE)

FEYERICK: Synthetic drug use appears to be soaring in the U.S. accounting for more than 11,000 emergency room visits in 2010. About half of those patients were teenagers.

Deborah Feyerick, CNN, New York.

KEILAR: Still to come, she's called herself a beauty guru to the stars. But now this Hollywood salon owner is at the center of an alleged murder for hire plot.

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KEILAR: A Hollywood skin care guru is at the center of a bizarre case with enough twists and turns for a movie thriller. CNN's Kyung Lah pulls the threads of this case tonight.

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KYUNG LAH, CNN CORRESPONDENT: From Jennifer Aniston to Nicky Minaj, she billed herself as a beauty guru to the stars. But now the glamour is gone for Don de Louise, accused in a murder for hire plot in West Hollywood.

UNIDENTIFIED MALE: She wanted me out of the building. Gabriel Suarez is the man deputies say was her target after he opened a skin care salon in the same building as De Louise. It wasn't long he says before de Louise started to complain.

GABRIEL SUAREZ, BUSINESS OWNER: I came in and I said can I help you because she was in my office. And she said oh good a Mexican that speaks English. And that hurt.

LAH: Hurtful words turned to potentially deadly actions according to detectives who say de Louise she plotted to kill her rival and that she sought a white supremacist for the job.

DET. STEVE MCCAULEY: Now, your phrase from that point was in essence to find somebody to take out a double minority Mexican gang. LAH: A text to a friend say prosecutors is at the heart of a murder

plot. "I found someone who is going to take Gabriel out. He's name is Chris Guile and he's an ex-Detroit Lion quarterback.

CHRIS GUILE: I met her in a pub in Big Bear.

LAH: But Guile says he barely knew de Louise and was never asked to commit a crime.

GUILE: I want to clear my name. Because it's just been -- the mental anguish I've suffered is far more than any type of football injury I've ever had.

LAH: De Louise too wants to clear her name saying she's not guilty. Her attorneys tell CNN she was the victim of a stalker who posted fake Craigslist ads claiming de Louise had a rain fantasy. She believed it was her new business rival Suarez but it wasn't. A messy twist the defense will use to make its case.

JAMON HICKS, DEFENSE: This is a mother that was concerned by not only her safety but the safety of her children. You will see that she was venting to family. She was venting to friends. This was not a case where she was trying to solicit someone to murder.

LAH: Back at his salon Gabriel Suarez isn't buying any of it. He wants to see De Louise punished and his peace of mind restored.

SUAREZ: It's scary. I'm just grateful to be OK. And that she got caught.

LAH: Kyung Lah CNN, Los Angeles.

(END VIDEOTAPE)

KEILAR: And thank you for joining me today. I'm Brianna Keilar, in for Carol Costello. "@THIS HOUR WITH BERMAN AND MICHAELA", starts right now.