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Early Start with John Berman and Zoraida Sambolin

Saudi Arabia's King Abdullah Dies; Yemen's Government Resigns; Japan Awaits Word on Hostages' Fate; Obama Won't Meet With Israeli Leader; Violence Escalates in Ukraine

Aired January 23, 2015 - 04:00   ET

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

JOHN BERMAN, CNN ANCHOR: Upheaval in the Middle East. The leader in America's most important ally there dies overnight. The government of another key partner crumbles. Changes that could spell trouble for the U.S. war on terror. This morning, the U.S. moving workers out of the region as al Qaeda looks to increase its power.

We have live team coverage, ahead.

CHRISTINE ROMANS, CNN ANCHOR: The deadline passes for two hostages held by ISIS, threatened with execution doesn't pay a hefty ransom. This morning, waiting word on this fate. We are live in Tokyo with the latest.

Good morning. Welcome to EARLY START. I'm Christine Romans.

BERMAN: And I'm John Berman. Great to see you. It is Friday, January 23rd. It is 4:00 a.m. in the East.

Breaking overnight, the leader of the most powerful American ally in the Middle East has died.

Later today, the funeral for Saudi Arabia's King Abdullah bin Abdulaziz will take place. He died at age 90 on Thursday after coming down with pneumonia. His half brother, Prince Salman bin Abdulaziz has already been declared Saudi Arabia's new king, the country which is so key to the U.S. war against ISIS and al Qaeda in the Middle East. The leadership there is also largely in control of world oil prices.

I want to bring in our senior international correspondent Nima Elbagir for the latest.

Good morning, Nima.

NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, John.

Well, given, as you rightly said, the upheaval, the instability across this border region, continuity in approach is what the White House is going to be looking for now. And that's what King Salman bin Abdulaziz has said. He will offer, speaking to state television, he says that he will maintain the same approach taken by his deceased half brother King Abdullah.

But there are realities in terms of the differences between the two men that will be causing nervousness, not just in Washington, but in other Western capitals who are fighting the ISIS threat and the broader insecurity in this region. King Salman is seen to be much more conservative. He is seen to be closer to the kingdom's religious clerical establishment. In the '80s, like much of the Saudi elite, he was part of the support for the mujahedeen in Pakistan, part of that broader tract to Osama bin Laden, of course, was involved with.

But he is also very much within the conservative tradition in Saudi Arabia. Believe it or not, King Abdullah, within Saudi politics, was seen very much as a reformer, as a modernizer. King Salman is not. This will be concerning not just in terms of perhaps a Sunni support base that could grow in the fight against ISIS, but also in terms of the rapprochement that the White House is looking for with Iran, how Saudi Arabia will view that in the coming months and years. That's going to be through the prism of King Salman's relationship with the Saudi clerical establishment and what they are willing to tolerate.

But for now, of course, Saudi Arabia is very aware that any sudden moves in terms of their political outlook will be very, very worrying for their allies. And they will be taking this very slowly, John.

BERMAN: It is a pivotal moment in that region, to be sure. Nima Elbagir, thanks so much.

ROMANS: Also happening this morning, another key U.S. ally in the Middle East poised on the brink of chaos which could open the door to al Qaeda. The government of Yemen now in shambles as the president, prime minister and cabinet all resign in the space of a few hours. Officials say they want to wash their hands what of they call destructive political chaos in the wake of a deal that gives rebel insurgents more power.

Up until now, the government of Yemen has been a key ally to the U.S. in the fight against al Qaeda in the Arabian Peninsula. The terror group may now try to fill the political vacuum.

In response to the turmoil, the U.S. embassy in Yemen's capital now cutting its staff, further reducing its staff there.

CNN's Jomana Karadsheh joins us now live with the very latest on this.

Certainly, a very troubling development, something that counterterrorism officials feared for several days now. This is a failed state situation on the brink of chaos.

JOMANA KARADSHEH, CNN CORRESPONDENT: Absolutely, Christine. This is really the concern here. This political uncertainty in Yemen right now really creating that atmosphere of chaos and uncertainty and pretty much a political vacuum to come.

And there's a lot of concern because we have seen this in other countries, where terror organizations really take advantage of this and also that sectarian rift that is increasing in Yemen. And the fear, as you mentioned, is that al Qaeda's branch in Yemen, AQAP, could take advantage of that, could take advantage of the sectarian rift to gain support and this chaos to operate more freely in the country. And with the stepping down of President Hadi and his government, that's the key ally of the U.S. over the past couple of years, President Hadi and his government have been trying to fight AQAP on the ground and also authorizing U.S. drone strikes that had been taking place there.

So, a lot of concern about the U.S. war on terror in Yemen and what happens next, what's the alternative, as we see the Houthi movement really tightening its grip on government and the capital, Sana'a, really not much of a U.S. ally there. Although they have been fighting AQAP, their position when it comes to the United States, one of their main slogans of this historically Iranian-backed group is death to America. And they have publicly said they oppose U.S. drone strikes and U.S. involvement in Yemen.

So, really, a lot of concern about the current situation, the political chaos in the country and what this means for AQAP especially at the time when we see this group seemingly trying to reassert itself on the international scene as a major terror organization, recently claiming responsibility for that attack in Paris on "Charlie Hebdo" -- Christine.

ROMANS: Jomana Karadsheh for us in Amman, Jordan, this morning -- thank you.

BERMAN: All right. Six minutes after the hour.

Happening right now: the deadline for Japan to pay that huge ransom for two hostages held by ISIS, that deadline has passed with no word so far this morning on their fate. The Islamic terror group said it would kill the two men unless Japan hands over $200 million. The Japanese government has been scrambling over the last several days to contact ISIS while saying it will not yield to terrorists, saying that publicly, at least.

Standing by live in Tokyo now, CNN's Will Ripley.

Will, what's the latest?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: John, there is a new report out from a very reputable public broadcaster here in Tokyo, NHK, which perhaps gives us some sort of a window into the thoughts of ISIS. NHK claims to have been e-mailing with essentially a spokesperson for the terror group who says that the $200 million they are demanding in exchange for the two hostages would be used for humanitarian purposes and infrastructure development for ISIS as a result of the damage from the coalition air strikes. And when this spokesperson was asked by e-mail from NHK, if Japan, the government, and ISIS are communicating, that spokesperson had no comment.

Japanese officials here in Tokyo, the government's top spokesperson is not confirming this report and they continue to say that they have not had a direct line of communication with ISIS. But given the fact that you have a spokesperson for this group and apparent spokesperson still talking about a ransom, granted some of these e-mails happened in previous days and hours before the deadline, it gives us a thought since we have not heard anything from ISIS, there may still be hope.

But we don't want to give people false hope because the government still isn't confirming what this public broadcaster is reporting.

BERMAN: All right. Will, we're watching this situation very closely. Thanks for being with us.

ROMANS: Iraq this morning calling for more weapons in its fight against ISIS. But as oil prices plunge, the nation is hoping Western allies will provide arms on credit. Iraq's prime minister says the oil problem has been disastrous for Iraq's economy. Oil exports accounted for 85 percent of Iraq's budget and the drop in prices posing a new challenge in the country's battle against ISIS.

BERMAN: U.S. military bases in Europe are stepping up security measures following the recent attacks in Paris and the continuing intelligence that foreign fighters are returning to their home countries from Iraq and Syria. Officials from the U.S. European Command did not specify the exact steps being taken, but generally, these types of security measures include physical checks of people and vehicles that enter these bases.

ROMANS: The first round of bilateral talks between the U.S. and Cuba ends without much concrete progress, but an optimistic tone. The two sides have agreed to meet again and no date has been set, but still needing further discussion is the reopening of embassies, the economic blockade on Cuba, and Havana's place on the list of terror sponsors. A State Department official called the talks positive and productive.

BERMAN: On a day marking the 42nd anniversary of the Supreme Court decision legalizing abortion, House Republicans passed an anti- abortion bill. It wasn't really the one they wanted most, though. Republican leaders were forced to shelf an earlier measure that would call for outlawing most abortions after 20 weeks of pregnancy. They lost support of many women in Congress, as well as moderates. Instead, the House passed more limited legislation prohibiting the use of taxpayer money for abortions.

The vote comes as abortion protesters swarm Washington at the annual March for Life.

ROMANS: All right. Nine minutes past the hour. Time for an early start on your money.

Stocks climbing, European and Asian stocks higher, so are U.S. stock futures. The rally because of European Central Bank's decision to launch a massive bond-buying program. That news also boosted stocks yesterday.

Look at this -- the Dow closed up 260 points. That's 1 1/2 percent. Four days in a row now of gains.

Oil this morning is up, too, about 2 percent. This is following the death of the Saudi Arabian king. Saudi Arabia is the leader of OPEC. It has a huge decision on oil prices. The king of Saudi Arabia is basically king of the oil market, a titan in the oil industry. Saudi officials have repeatedly said they won't cut oil production because they don't want to lose market share to the U.S. and others. It is seen unlikely the new king will alter that stance to push prices. That's causing kind of a muted reaction in oil prices this morning.

But you can bet, John, a lot of parsing of every word the new king says about the Saudi's plan to do with their oil wealth and their production.

BERMAN: I knew the second there was the announcement that King Abdullah died, there was movement in the market, if you're watching very, very closely.

ROMANS: Yes.

BERMAN: All right. Ten minutes after the hour.

President Obama sat down with three pre-selected YouTube so-called stars on Thursday. It was all part of his State of the Union effort to get message out to larger, nontraditional audience. But as always or as sometimes, at least, things did not go as planned. Watch what happens when Glozell Green hands over some of her signature green lipstick.

(BEGIN VIDEO CLIP)

GLOZELL GREEN, POPULAR YOUTUBER: OK, my mom said when you go to somebody's house, you have to give them something. Don't come empty handed.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: All right.

GREEN: I have green lip stick. One for your first wife, I mean --

OBAMA: My first wife?

GREEN: I mean, I mean --

OBAMA: Do you know something I don't?

GREEN: Oh.

(END VIDEO CLIP)

BERMAN: OK. Of course, a selfie here that they all took together right here.

ROMANS: Wait, is it presidential or is it cutting -- not presidential, or is it cutting edge? What do you think? You covered presidents and --

BERMAN: Well, no. I think the answer to all of that is yes. I mean, or yes and no.

I mean, no, it is not traditionally what people consider presidential. I mean, look, Richard Nixon appeared on "Laugh In", you know, in the '70s. So, presidents have always sort of stay in touch with popular culture. But there are some people saying offered green lipstick for his first wife is not something that most presidents would have to face.

Look, you want to reach voters where the voters are. If there are people out there --

ROMANS: Millions of people.

BERMAN: -- watch YouTube and who aren't watching, hey, you are making a mistake if you're not watching us.

ROMANS: And younger people.

BERMAN: But, you know, that's a good way to get to them.

ROMANS: No, it doesn't seem presidential to me, but I'm very old school about the presidency and like the stiffness of the interview process.

BERMAN: Old school, but cutting edge in so many other ways.

ROMANS: Cutting edge and old school at the same time. I try to keep it interesting.

President Obama, he met with YouTube stars, of course, as we just showed you. But he won't be meeting with Israel's leader. The White House is shunning Benjamin Netanyahu's stateside visit. We are live as the drama unfolds, next.

(COMMERCIAL BREAK)

ROMANS: There are new developments in the Israeli prime minister's planned speech to Congress. The White House announcing that President Obama will not meet with Benjamin Netanyahu when he comes to Washington on March 3rd. The official line is the president doesn't want to influence the election in Israel happening just two weeks after the prime minister's visit.

But the development marks a new low in the often testy relationship between Obama and Netanyahu.

Let's bring in global affairs correspondent Elise Labott live from Israel -- Elise.

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, Christine, we say that it marks the new low, but we always think it can't get any lower and then it does. If you can just remember, just a few short months ago, we were talking about some comments that a U.S. official made about Prime Minister Benjamin Netanyahu in a magazine. And now, we think it cannot get lower and it does.

But I think it's really interesting that the White House is using the Israeli election as an excuse not to meet with Prime Minister Netanyahu. It's kind of a dig at the prime minister's move if you remember to meet with Mitt Romney when the president was running for re-election just a few short months before Americans went to the polls. And so, in one way, it is to give an excuse not to meet, but it's also another poke at the prime minister.

This move for the prime minister to come and not consult with the White House, obviously, the U.S. White House is very mad at Congress, but equally disappointed with Prime Minister Netanyahu. What it does it, it inserts the Israeli election into President Obama's fight with Congress over Iran, but also it inserts the United States into the Israeli election -- here, in Israel, a lot of opposition parties but also columnists and the newspapers that Prime Minister is really trying to use for his own political gain with Israelis going to the polls in a few short months.

ROMANS: And what about John Boehner and those who differ with the president on what the approach should be for Iran? It sort of highlights a rift there, too.

LABOTT: Exactly. I mean, House Speaker Boehner just kind of hours after the president threatened to veto legislation with new sanctions against Iran extended the invitation and announced it. Certainly, that was a poke in the eye of the White House and to say, listen, we're not going to follow your line on Iran.

Clearly, Israeli Prime Minister Netanyahu shares the sentiment of many in the Republican Party that the president is not tough on Iran. So, by Israeli Prime Minister Netanyahu coming to Congress and clearly a speech would be very critical of U.S. policy. So, that's what clearly the House was trying to do when they extended that invitation.

ROMANS: Elise Labott for us this morning in Jerusalem, thank you, Elise.

BERMAN: Happening today in Washington. Some people who will be meeting with the president, mayors from cities and towns across the country. These are the people in this nation, the men and women who actually do stuff. The president will host a reception for the mayors after they spend the day meeting with cabinet members and senior administration officials.

ROMANS: Speculation about a Jeb Bush presidential run sure to ramp up when he delivers a speech in San Francisco. It is his first public speech since forming the political action committee.

On Thursday, Bush was in Utah to meet with Mitt Romney. Would you like to be a fly on the wall of that meeting? He, of course, was the 2012 Republican nominee. Potentially, he could be a top rival for the party's nomination again in 2016.

A Bush aide says the meeting was planned well before Romney expressed interest in running again for president.

BERMAN: No, I think we're beyond the speculation phase. I mean, these two guys are basically running for president right now. Whether they continue to run for president, you know, is an open question. But Jeb Bush certainly on the campaign trail raising a huge amount of money right now.

ROMANS: Now, that Mitt Romney supporters from 2012, I mean, they have to decide who they're going to line up behind.

BERMAN: Yes, they do.

ROMANS: There's a courtship here with the money and influences and guts of the campaign.

BERMAN: And today, you know, some of Romney's key staffers will be meeting in Boston to talk about stuff. I wonder what kind of stuff. It would be interesting what comes out of that meeting.

All right. About 18 minutes after the hour.

The federal trial of accused Boston marathon bomber Dzhokhar Tsarnaev will not begin Monday as scheduled. Opening statements have been pushed back. It is taking longer than expected to seat this jury. The judge is expected to announce a new start date next week.

Defense lawyers are asking for a third now to move that trial out of Massachusetts. They claim that 68 percent of potential jurors already believe that Tsarnaev is guilty. He is charged in the 2012 marathon bombing that killed 12 people and injured more than 260. Prosecutors -- I think it was 2013. Prosecutors plan to seek the death penalty.

ROMANS: Transit officials in the nation's capital say a breakdown of radio communications hampered emergency responders trying to reach passengers stuck on that smoke-filled metro subway train. One person died on that train from smoke inhalation. Federal safety officials say ventilation fans in the tunnel near the plaza station were not functions as intended when investigators tested them shortly after the accident. It just took too long for those people to get out of the train with no guidance from emergency responders, just a real shame what happened there.

A major winter snowstorm that just slam the Northeast. Let's get to meteorologist Derek Van Dam for an early look at your weather this morning.

DEREK VAN DAM, AMS METEOROLOGIST: A very soggy start to the early weekend across the Southeast. We have a storm system developing across that region. Temperatures stay around 40 degrees for the New England coast.

We have a storm that will bring hefty amounts of rainfall to the Florida Panhandle today. Look at these impressive totals, anywhere between 2 and 4 inches between Tallahassee and Orlando.

Then, we'll start to track this system as it heads up to New England coast. Most our computer models keep it offshore. Nonetheless, a band of precipitation still expected to impact New York, Philadelphia and Baltimore, as well as Washington through Saturday afternoon and evening.

We have the potential of a quarter to a half an inch of ice where you see that shading of pink. And on top of that precipitation, it changes over into the form of snow. They could experience 2 to 4 inches locally.

Then, we will monitor a clipper system dropping south out of Canada, bringing snowfall to the upper Great Lakes end of the weekend. That low will move off the East Coast by Monday, bringing more snow to New York.

Back to you, John and Christine.

ROMANS: Thanks for that.

BERMAN: My question, do I need to change the oil in my snow blower?

ROMANS: Yes.

BERMAN: Do you think I do?

ROMANS: I think you do.

BERMAN: Please weigh in on that because it will require a lot of work if the answer is truly yes.

(CROSSTALK)

ROMANS: I think there could be ice, too.

BERMAN: All right. Twenty-one minutes after the hour.

A day of denials from New England Patriots coach Bill Belichick and mega star quarterback Tom Brady. They gave separate news conferences. Both said they knew nothing. Had no explanation for how the footballs in the AFC championship game were under-inflated.

This is a little bit of what Tom Brady said.

(BEGIN VIDEO CLIP)

TOM BRADY, NEW ENGLAND PATRIOTS QUARTERBACK: I didn't alter the ball in any way. When I pick those footballs out, at that point, you know, to me, they're perfect. I don't want anyone touching the balls after that. I don't want anyone rubbing them, putting any air in them, taking any air out. I would never do anything outside of the rules of play.

I'm not a conspiracy theorist. I don't know what happened. I have no explanation for it. This isn't ISIS. This isn't -- you know, no one is dying.

(END VIDEO CLI)

BERMAN: You know, it was interesting. Perhaps the most crucial thing he said as of that moment, the NFL hadn't contacted him yet about the investigation.

ROMANS: Really? BERMAN: You know, this broke Monday morning. This news conference was Thursday. Four days and not contacting one of the principle perhaps players in the whole thing, that is little strange. You know, there could be news from the NFL today.

ROMANS: I just want to get down to the bottom of what happened. It is really distracting as they head into the Super Bowl. I mean, the distraction is just unbelievable.

BERMAN: Yes, I mean, they have been there a few times. So, I think they know how to handle the situation. I mean, you never want to focus on something other than football. I will say that. So --

ROMANS: All right. Twenty-three minutes past the hour.

Fighting intensifies in Ukraine this morning, pro-Russian rebels, new advances -- are making new advances against the Ukrainian military. We are live in Moscow, next.

(COMMERCIAL BREAK)

BERMAN: The violence in Eastern Ukraine escalating this morning. Russian-backed separatists claiming victory as the Ukrainian army retreats from key strongholds at the airport in Donetsk.

Officials in Kiev say the rebels captured 16 wounded Ukrainian soldiers in the battle for the airport. At least seven civilians killed after shelled slammed into transit stops. And at least two hospitals in separatist territory shelled in recent days.

Ukraine's president claiming that more than 9,000 Russian troops have crossed into Ukraine, bringing with them hundreds of tanks and armored personnel carriers, a claim that Russia flatly denies.

Senior international correspondent Matthew Chance standing by live now in Moscow.

Good morning, Matthew. And I guess, you know, give us an update on just the violence here and the gains for the rebels around the airport, and then also the claims that the Russians are moving men and arms into the country. We have been going on for months now with the Russians denying that. Is it true?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the Russians are still denying it. I mean, I think that people on the ground have been observing these movements and observing these security situations deteriorate, particularly international monitors suspect that that figure of 9,000 troops may be something of an exaggeration from the Ukrainian president. But, I mean, undoubtedly, the amount of military amount used by the rebels, it's unlikely that that military equipment is gained locally. The rebels say they raid Soviet era arms dumps and get their weapons from there.

But the kinds of weapons we see are just simply the kinds of the weapons are only available in the Russian military. Yes, it may not be 9,000 people, but everybody is serious observer-wise think there are Russian personnel and material going into Eastern Ukraine.

In terms of the military advances, the key one is the issue of the Donetsk airport. It's become a symbolic facility, a battle has been ranging for several months. Finally, now, it seems that the Ukrainian government forces have retreated, leaving it in the hands of the rebels. That's a huge blow for the government in Kiev and major victory for the pro-Russian rebels, Christine.

ROMANS: All right. Matthew Chance for us this morning, monitoring all of these developments in Moscow -- thank you.

BERMAN: Yes, a lot of news happening this morning.

Chaos in the Middle East overnight. The leader of one the biggest U.S. allies in the region dies, the government of another key partner in shambles. Does this mean chaos as the U.S. tries to battle al Qaeda and ISIS? We have live team coverage, next.

(COMMERCIAL BREAK)