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Early Start with John Berman and Zoraida Sambolin

President Admits ISIS was Underestimated; ISIS Advancing on Kobani Syria; Massive Protests in Hong Kong; Bodies Being Recovered at Japan Volcano

Aired September 29, 2014 - 05:30   ET

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

CHRISTINE ROMANS, CNN ANCHOR: President Obama opening up about what the U.S. did wrong during the rise of ISIS. This as new airstrikes target the terrorists in Iraq and Syria. We're taking you live for the very, very latest.

A chilling new message from al Qaeda. Warning the West of retribution for those airstrikes in Syria.

Violent protests in the streets of Hong Kong. Police using tear gas, pepper spray, batons. Pro-democracy demonstrations out of control, but things have taken a new turn this morning. We are live in Hong Kong with what's happening right now.

Welcome back to EARLY START. I'm Christine Romans. 30 minutes past the hour. John Berman has this Monday morning off.

President Obama is admitting the administration was not prepared for the threat ISIS posed. The president acknowledging on "60 Minutes" that one reason the rapid expansion of ISIS took officials by surprise, intelligence agencies underestimated ISIS and overestimated the ability of the Iraqi military to fight off the terror group.

CNN's Erin McPike has more from the White House.

ERIN MCPIKE, CNN CORRESPONDENT: Christine, in a new interview with CBS' "60 Minutes", President Obama acknowledges that the U.S. intelligence community did underestimate the strength of ISIS and what it was doing to set up its operations inside Syria. And then he said that that is the context for how the United States is going to have to go forward in battling terrorism in the future.

This idea that terrorist groups can take advantage of a Middle Eastern nation torn apart by a civil war that has descended into chaos.

Listen here to more of what he said in that interview.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Well, I think our head of the intelligence community, Jim Clapper, has acknowledged that I think they underestimated what had been taking place in Syria.

STEVE KROFT, "60 MINUTES": But he didn't say that -- just say that we underestimated ISIL. He said we overestimated the ability and the will of our allies, the Iraqi army, to fight.

OBAMA: That's true. That's absolutely true.

(END VIDEO CLIP)

MCPIKE: But a lingering question from this interview and what President Obama has said in the past month, this idea that the U.S. with some support was able to quash al Qaeda, but it has now reconstituted itself in Syria as ISIS by taking advantage of the chaos there. What is to say that another terrorist group won't then take advantage of the ensuing chaos again -- Christine.

ROMANS: And that is the big question, Erin McPike at the White House for us.

Now the House Speaker John Boehner says there is no way to avoid boots on the ground against ISIS. The speaker told ABC News on Sunday that ISIS fighters are barbarians and that, quote, "If we don't destroy them first, we're going to pay the price."

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R), HOUSE SPEAKER: I think it's going to take more than airstrikes to drive them out of there. At some point, somebody's boots have to be on the ground. That's the point.

Listen, the president doesn't want to do that. If I were the president, I'd probably wouldn't have talked about what I wouldn't do. And maybe we can get enough of these forces trained and get them on the battlefield, but somebody's boots have to be there.

(END VIDEO CLIP)

ROMANS: And again, the president has repeatedly said no, there will be not -- we're not doing that again. There won't be boots, American boots on the ground.

Now those overestimated Iraqi soldiers are now getting a second chance from the Iraqi Army, even though they were defeated or fled in earlier battles. Iraq's government desperately needs trained soldiers to fight ISIS and is offering a de facto amnesty for former deserters. Officials say more than 11,000 have signed up.

U.S.-led attacks against ISIS from the air continued Sunday. New attacks against ISIS from the air on Sunday. U.S. Central Command saying those airstrikes in Syria hit an ISIS tank, four modular oil refineries, a command and control center. In Iraq, targets included an ISIS safe house and checkpoints. But ISIS is still taking new territory in Syria. Shelling intensified Sunday on the town of Kobani. Driving a new wave of refugees up against the nearby border with Turkey.

I want to go to there to that border between Syria and Turkey this morning. Our Arwa Damon is there. She's been there all morning in what is a very close proximity, quite frankly, to ISIS making big advances in that part of Syria.

Arwa, let's being with the new airstrikes in Syria? What can you tell us?

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Christine, those airstrikes that did take place to the east of us have done very little to impact the battle field, which really can serve as sort of a microscopic view to the bigger picture.

Right behind me is a village that is under ISIS control and all morning, we have been watching ISIS fighters on motorcycles bringing in some weaponry, moving with complete and total impunity into this village. There are only two villages right now that stand between ISIS fighters and the town of Kobani. So despite the fact that these airstrikes are ongoing, they are not really striking anything significant.

They are not diminishing ISIS' abilities. In fact we spoke exclusively to an ISIS fighter. And it's very rare that they speak -- speak to Western media but he was from Raqqa. He goes by the pseudonym Abu Talha. He had to get specific permission from his emir to conduct the interview and because ISIS had cut communications in Raqqa, he traveled to the border with Iraq to be able to access Skype and speak to us.

He would not talk directly to me because I am a woman. The conversation -- the questions were being asked by one of our male colleagues. But he was scoffing at this notion that the strikes on oil and other installations are going to impact ISIS' capabilities.

(BEGIN VIDEO CLIP)

ABU TALHA, ISIS FIGHTER (Through Translator): We, the Islamic State, we have revenue other than oil. We have other avenues and our finances are not going to stop just because of oil losses. They hit us in some areas and we advance in others. If we are pushed back in Iraq, we advance in northern Syria. These strikes cannot stop us, our support or our fighters.

(END VIDEO CLIP)

DAMON: He also told us they knew that the U.S., other intelligence agencies and nations were tracking their movements via satellite and radar. They were aware of the fact that the locations of their headquarters and main bases were known and that is why well in advance of these U.S. airstrikes, they moved the bulk of their fighters out and they also made sure that their military equipment, especially that hardware, that they managed to get their hands on in northern Iraq was well hidden.

Some of it inside civilian neighborhoods, some of it was dug in a fairly elaborate network of tunnels hidden underground.

Now to go back to what is happening here this morning, we just heard according to an eyewitness and saw the smoke rising, further in that direction, two mortar rounds landing inside Turkey. Yesterday, three mortar rounds landing in this location as well.

Now yesterday we did see Turkey respond. This is nation that has been struggling to deal with the impact, the ripple effects of the crisis in Syria is having. Turkey changing its rules of engagement. And if mortar rounds do land inside Turkish territory, the military here does have the authority to respond in kind.

The situation is very tense. A lot of people around us who have been watching all of this unfolding for the last few days say that they fail to understand how it is that the U.S. and its coalition partners are not doing more to stop the ISIS advance.

Just in this part of the country, over the last 10 days, upwards of 200,000 refugees have crossed into Turkey. The town of Kobani under siege since then. People not just worried about the potential of a massacre at the hands of ISIS, but also, according to residents inside Kobani, a humanitarian crisis. They say that they are running low on food, prices have skyrocketed and everyone here just saying we need more help.

ROMANS: What a remarkable situation. Arwa Damon right there on the border, reporting it for us.

Thank you so much, Arwa.

Thirty-eight minutes past the hour. The head of al Qaeda's affiliate in Syria is calling the U.S.-led coalition against ISIS a, quote, "crusader alliance and vowing to fight back." In a rare audio statement, the leader of the al-Nusra militants warns his own fighters to reject Western help in Nusra's own battle against ISIS.

U.S. officials see al-Nusra as a terrorist group. But Syrian rebels view it as an ally in their fight against both ISIS and Syrian president, Bashar al-Assad.

U.S. intelligence working to confirm this morning whether a leader of the al Qaeda-linked Khorasan Group was indeed killed in the U.S. airstrike on Syria last week. A jihadist Twitter account offered condolences over the death of the Khorasan operative. But Deputy National Security adviser Tony Blinken said -- he couldn't confirm that report. And U.S. intelligence wants to be sure the Khorasan leader wasn't trying to fake his death and go underground.

Time for an EARLY START on your money. Global markets mixed this morning. Protests in Hong Kong sending the market there to the lowest level since July. Here in the U.S. futures are lower this morning.

Senator Elizabeth Warren wants to investigate whether the Fed is too cozy with big banks. The allegations stemmed from secretly made tape that allegedly showed the New York Fed pushing back against tougher regulations on banking giant Goldman Sachs. Warren said the tapes raised disturbing issues and that congressional hearings are necessary.

The tapes are part of a former Fed investigator's suit over her wrongful termination. The New York Fed said it rejects the accusation and that the former investigator was let go because of her performance. Happening now, a major push for democracy in Hong Kong. Tens of

thousands of protesters taking to the streets in Hong Kong. We are live there after the break.

(COMMERCIAL BREAK)

ROMANS: The streets of Hong Kong this morning filled, filled with protesters. Huge crowds of demonstrators began filling the streets on Hong Kong Saturday becoming the target of police swinging batons and firing tear gas. This follows a week of student-led pro-democracy boycotts and protests.

At issue the demonstrators say is the heavy hand of Beijing trying to control the outcome of the city's coming elections for chief executive.

Standing by live in Hong Kong, CNN's Ivan Watson.

And, Ivan, there has been a sort of a shift, I mean, from the tear gas and from the police presence we had seen. What I see around you is a sea of young people. Tell us what's happening.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Absolutely. I mean, I'm standing in what's supposed to be the main highway that runs through Hong Kong, Christine. And as you can see, it is packed with thousands and thousands of protesters and demonstrators who have gathered here. And the tear gas and some of the harsher measures used by riot police before dawn this morning, that has evaporated. And the kids are really out there.

You can see -- I mean, just filling the highway ramps that normally at this hour, shortly before 6:00 p.m. local time, would be full of buses and cars and taxis taking people home from work. There's a sign in the distance there that says, quote, "We demand universal suffrage." And that's what these protests are all about.

The demonstrators saying they want true democracy. Real elections in 2017. A chance to elect their top official in Hong Kong. They say they don't want the ruling communist party in mainland China to hand pick vetted candidates that then they would have to vote for.

The central government, the local authorities here in Hong Kong, they say all of this is illegal. The Chinese government says that these are the actions of radicals here. But I've got to say, this is one of the most peaceful and polite mass protests I have ever covered. People walk up giving me water, offering me crackers. Nobody even smoking cigarettes or drinking beer around here.

It is a very peaceful scene. There are police very close by. There are no tensions with them at the moment. And right now what we have really is a test of wills between protesters who are shutting down, paralyzing downtown Hong Kong's financial hub to try to get their local authorities to give in to their democratic demands -- Christine.

ROMANS: It's just remarkable, just remarkable on a Monday to see banks closed. The financial center basically stopped so that all of those people can protest for their right to vote for whom they choose.

Thank you so much for that, Ivan Watson. Amazing pictures there.

Let's take a look at what's coming up on "NEW DAY." Chris Cuomo joins us now.

Hey, Chris.

CHRIS CUOMO, CNN ANCHOR, NEW DAY: Good morning, Christine. How are you?

We're going to have the latest reaction to that surprising admission from President Obama. He says the U.S. underestimated ISIS as the terror group came together in the ruins of Syria's civil war.

We're going to also reveal results of a CNN-ORC poll. Where are you on all these big pressing issues? You're going to be surprised to hear how much of the country supports the airstrikes against ISIS. We're also going to speak with Senator John McCain and Tom Ridge, the former head of Homeland Security. We're going to give you the perspective on where things stand in the war today.

Another story we're watching in Washington. More trouble for the Secret Service. This may be the most serious yet. To be honest. The agency really take four days to realize that bullets had entered the White House in 2011. A new report says that's what happened.

We're going to speak with the "Washington Post" reporter who broke that story for you, Christine. So we'll get into that. That matters. It's one of those stories that seems to have alluded us.

ROMANS: Yes.

CUOMO: But no more.

ROMANS: No. That does matter. And since Berman got the day off, he's sleeping, and we should crank call him actually. Berman is sleeping in so I'll be joining you up there in a few minutes. All right?

CUOMO: I look forward to seeing you and I will do that.

(LAUGHTER)

ROMANS: OK. Thanks.

Forty-seven minutes past the hour. A remarkable story out of Japan. Dozens killed when a volcano suddenly erupts. Hundreds of hikers stranded. We're live right after the break.

(COMMERCIAL BREAK)

ROMANS: Central Japan, the site of a somber recovery mission today. Crews air lifting bodies out of an area near the summit of Mount Ontake. At least 37 people presumed dead after the volcano summit erupted. Will Ripley is there for us with the very latest this morning.

Hi, Will.

WILL RIPLEY, CNN CORRESPONDENT: Hey, Christine, the search efforts are expected to resume at first light. It is now evening here in Japan. But earlier today, they had to cut everything off because the conditions at the summit of this volcano, Japan's second highest volcano, that became too dangerous. There was ash and gas that was spewing out of the summit. It created a very large plume that was also -- it's been dumping ash on our live location here.

At times, even in the past hour it almost look like a light snow was falling. So a lot of people are wearing protective gear. We have helmets just in case large embers were to come from the mountain. They're expecting it could erupt again in the coming days. That's what seismologist are watching right now. But this eruption over the weekend happened without warning. And the mountain was full of people, hikers who were taking in the peak autumn viewing season including those 36 people, at least 36 people who are near the summit and they're now presumed dead.

We know at least two dozen bodies are there right now. Twelve bodies have been taken off the mountain. They've been identified and families continue to gather here. They're sleeping on the floor and local evacuation centers waiting for confirmation of their loved ones, holding out hope that perhaps they're up there on the mountain alive but knowing that, the rescuers have come back. The news has not been good -- Christine.

ROMANS: Not good at all. I mean, it is evening there waiting for first light for more recovery and rescue mission. Thank you so much, Will Ripley, for that story from Japan this morning.

Fifty-three minutes past the hour. Another big motor vehicle recall. This one from a name legendary for quality. We're going to get an EARLY START on your money next.

(COMMERCIAL BREAK)

ROMANS: Let's get an early start on your money this Monday morning. Stock futures are lower. Last week was tough for stocks. Analysts say we could get a repeat of that this week. Got a number of economic reports this week. And it ends with a jobs report at the end of the week. So that is really important thing to keep an eye on. This could be a little bit tough this week.

Harley Davidson is recalling every one of its 2014 touring bikes. That's 126,000 motorcycles. The problem lies with the clutch. It may not disengage and it can cause a crash. A spokeswoman for the company says the flaw is connected to 19 accidents. None have caused serious injuries. Last year, the motorcycle maker recalled a small number of the same bike for an issue with the same part.

All right. Coffee lovers, that morning cup of Joe can feel like a national holiday. At least one little sip of holiday. Today is officially, though, National Coffee Day. And the celebration

can mean a free or cheap cup of coffee. Krispy Kreme is offering a free regular coffee or a discounted iced coffee. Dunkin' Donuts is also giving away a free medium cup of coffee. McDonald's has had a free coffee promotion that ends today.

But if you're looking for a Starbucks fix, you may be disappointed. The coffee giant is yet to announce its plans for the day.

There you go. You need a jolt of java, don't you?

"NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think they underestimated what had been taking place in Syria.

(END VIDEO CLIP)

CHRIS CUOMO, CNN ANCHOR: Breaking overnight, the U.S. underestimated the rise of the ISIS while overestimating the ability of the Iraqi Army to fight it. A big admission from President Obama as a new CNN- ORC poll shows the majority of Americans approve the airstrikes. But are they confident they'll be enough?

MICHAELA PEREIRA, CNN ANCHOR: Happening now. Tens of thousands of protesters back on the streets in Hong Kong. A day after armed police use tear gas and batons to try and break up crowds. Dozens injured as demonstrators demand democratic elections. We're live on the ground.

CUOMO: Stunning security lapse. A report calls out the Secret Service for botching its response to a 2011 shooting at the White House. Why did it take them four days to realize that bullets actually penetrated the first family's residence. We're going to get out there for you this morning.

CUOMO: Your NEW DAY starts right now.

ANNOUNCER: This is NEW DAY, with Chris Cuomo, Kate Bolduan and Michaela Pereira.

CUOMO: Good morning. Welcome to NEW DAY. It is Monday, September 29th 6:00 in the East. Kate is on maternity leave. Michaela Pereira and I at the helm.

Good to have you back, my friend.

PEREIRA: Thank you, darling. It's good to be back.

CUOMO: Tell us about the vacation a little later on.

Up first, an admission from President Obama that is getting a lot of attention. U.S. intelligence officials underestimated ISIS. In a "60 Minutes" interview the president also admitted those same intelligence officials overestimated Iraq's ability and will to fight back against the extremist group. This as U.S.-led air attacks counted very specific ISIS targets in northern Syria and Iraq throughout the weekend. Air attacks, by the way, that three out of our Americans now support.