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Early Start with John Berman and Zoraida Sambolin

Prisoners Used Power Tools To Escape; "We Don't Yet Have A Complete Strategy"; Battle For Baiji Refinery Ongoing; Volcker: State Budgets Near Collapse. Aired 5:30-6a ET

Aired June 09, 2015 - 05:30   ET

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

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JOHN BERMAN, CNN ANCHOR: Happening now, police in New York searching for convicts and searching for answers. The manhunt stretches into three countries three days after their escape. The question this morning, did the prison employee help the killers get away?

CHRISTINE ROMANS, CNN ANCHOR: Working on a strategy. President Obama saying the battle against ISIS will take some time and commitments from the Iraqis. Is he securing anymore support of a G7 and why is the president admitting for the second time that the American strategy against ISIS is a work in progress.

BERMAN: Protests erupt in Texas. A lot of concern over what some considers to be an excessive use of police force that was caught on camera. Now the police officer's union is speaking out and facts emerges this officer has faced some accusations before.

Welcome back to EARLY START, everyone. I'm John Berman.

ROMANS: I'm Christine Romans. It is 30 minutes past the hour. Developing this morning, the manhunt intensifying for two convicted killers escaped from a maximum security prison in upstate New York.

Officers are setting up roadblocks using bloodhounds and searching door-to-door in the area around Clinton Correctional Facility. The drag net is also widening now stretching from Canada just 20 miles from the prison all the way to Mexico to where one of the inmates was once incarcerated.

Authorities are also zeroing in on how Richard Matt and David Sweat managed to escape and who might have helped them? The latest now from CNN's Jason Carroll.

JASON CARROLL, CNN CORRESPONDENT: John, Christine, investigators still following up on now hundreds of leads that have come in to them. One in particular in terms of the investigation has to do with the woman who works at the prison.

She knew both Richard Matt and David Sweat, knew them well, worked with them tailoring clothes at the prison. Unclear what involvement she may have had with their escape and what an escape it was.

Just to recount how it all happened, both of them were in side by side cells and got a hold of power tools and cut through a steel wall and maneuver down a catwalk behind that wall, crawl through underground pipes just about 24 inches wide and finally emerging on the other side.

Outside of a manhole located just about a block or so from the prison. I spoke to a man who used to be a guard at the prison, worked here for some 40 years. He said everything he knows about the prison leads him to believe that these men had at least at the very least inside help.

(BEGIN VIDEO CLIP)

JACK RUGAR, RETIRED PRISON GUARD: A lot of help there somewhere.

CARROLL: Is it your thinking they may have had help from the inside or outside or combination of both?

RUGAR: Combination of both. You don't cut through a steel wall without somebody hearing it.

(END VIDEO CLIP)

CARROLL: Despite the violent pasts of the inmates, both of them were housed in the so-called honor block of the prison. This is the place in the prison where inmates are put who has exhibited good behavior.

As a result, they had access to other resources such as washers and dryers and access to phones and outdoor time and televisions, things of that nature.

In terms of the investigation, where we stand now in this massive manhunt more than 300 members of law enforcement on the ground, but at this point, they could be anywhere -- Christine, John.

BERMAN: All right, thanks to Jason for that.

This morning, President Obama is back in Washington facing new criticism for saying that the United States does not yet have a complete strategy for training Iraqi forces to fight ISIS.

President Obama's political foes are calling this an admission that his ISIS policy is failing. But administration officials quickly suggest that the Pentagon is working on a strategy with three basic options they say for the president's review.

Expanding the number of conventional U.S. troops on the ground training Iraqis, increasing the number of green berets in 12 advice and assist teams now on the ground and the flow of weapons to Iraqi forces. CNN's Michelle Kosinski with more now from the White House.

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hi, John and Christine. Yes, it is surprising to hear the president say these words, I mean, in any context regarding ISIS that we don't have a complete strategy. Critics are jumping all over this reminding people of something the president said almost a year ago that we don't yet have a strategy. Back then, remember, he was only referring to what was going on at the time in Syria. Again, now, when you look at the totality of what he said during the press conference, he clearly wasn't referring to an overall strategy against ISIS, but how best to accelerate the plan to train and equipped Iraqi forces.

He said, you know, it is not just an American question as he waits to get a more complete plan from the Pentagon which we know could include sending more American trainers there, but it's also something that the Iraqis need to leave up to.

[05:35:04] I mean, he mentioned in some areas there is capacity to train more, but there aren't enough recruits. The Iraqi government also has to prove that it's going to continue to be inclusive because the lack of that has deterred more people from joining up there.

Also President Obama expressed confidence in some recent ISIS gains we have seen like the takeover of the city of Ramadi or just temporary and that ultimately ISIS will be defeated.

You look at some recent polls of Americans, though, I mean, just last week about 2/3 said they feel the strategy against ISIS is not going well -- John and Christine.

ROMANS: U.S. officials casting doubt this morning on Iraqi claims their forces have liberated the strategic oil town of Baiji. Officials with access to the latest intelligence say half the city remains in the hands of ISIS.

For the very latest, I want to bring in CNN's Jomana Karadsheh. Good morning, Jomana. And sometimes it feels to me and, correct me if I'm wrong, it feels as though the Iraqi officials are a little too eager to announce that they've retaken a town or made strides against ISIS, about half the town. That sounds to me like they still have work to do.

JOMANA KARADSHEH, CNN CORRESPONDENT: It is, Christine. We have seen this over the past year. Depends on the definition of what the liberation is when it comes to Iraqi officials and such declarations. As you mentioned on Sunday, we heard from Iraqi military officials and also Shi'a militia members saying they recaptured most of the city of Baiji.

They describe what was left in the city pockets of resistance. We are hearing a much more cautious assessment of the situation there from the U.S. according to officials with access to the latest intelligence.

As you mentioned, they say half the city remains under the control of ISIS and they are saying it is too early to declare Baiji liberated at this point.

But they are also pointing to some progress taking place around the key strategic facility, the Baiji oil refinery, that's Iraq's largest oil refinery. It hasn't been functioning for months now, but it has been the majority of the complex under ISIS control. Very strategic for them and also very symbolic to keep hold of the refinery, and it has been an intense battle to try to take it over. According to U.S. officials, Christine, they say there has been some progress that Iraqi forces manage to open some supply lines into refinery to expand the foothold there so a battle that still ongoing for control of Baiji -- Christine.

ROMANS: The refinery so strategic because ISIS is skimming that oil using that oil on the black market to fund its operations. Thanks so much for that, Jomana.

BERMAN: All right, new this morning, we now know the name of the officer involved in the controversial pool party aftermath in Texas. Protesters are accusing Corporal Eric Casebolt of McKinney Police Department, of racial misconduct.

You have seen the video. Apparently pushed a girl to the ground, he pulled out his gun on two boys. We see it on the video. Protesters say he should be fired, but some people who live near the pool say police were there to keep order and that the situation is being blown out of proportion.

The police union concedes the officers should not have used profanity, but they maintain the officer's actions were not racially motivated. Casebolt who has been put on leave was once sued for excessive force and racial animus back in 2008, but a judge dismissed that case a year later.

All right, new this morning, this is an interesting development. Community leaders in Cleveland will bypass prosecutors and go directly to a judge to seek charges in the shooting of 12-year-old Tamir Rice. They say they plan to file their request today in municipal court.

The investigation into his shooting was handed over to the county prosecutor last week, but local leaders say they are skeptical. They don't trust the process. They are pointing to other police involved shootings where officers were cleared.

ROMANS: All right, the video is hard to watch and now this man, a South Carolina grand jury returning a murder indictment against the police officer who shot and killed an unarmed black man in North Charleston back in April, an indictment.

Now former Police Officer Michael Slager was captured on video firing eight shots at the victim, Walter Scott, as Scott fled following a traffic stop. If he is convicted, Slager could face life in prison.

BERMAN: You know, it is interesting. In Cleveland, they don't trust the process. They are trying to bypass it, but in North Charleston, South Carolina right now, that officer just indicted. He was charged almost immediately and now indicted by a grand jury. So it's interesting to see things happening in different ways in different places.

A new report by the Department of Homeland Security, it reveals the TSA failed to identify 73 active employees with links to terrorism. You heard that correctly. The report says the workers with links to terrorism had access to planes, tarmacs and luggage in airports across the country.

[05:40:04] This morning on Capitol Hill, there will be a hearing. The DHS Inspector General John Roth will testify before a Senate committee. He will try to explain how the workers slipped through the cracks.

He will also outline the report's findings, which says the TSA lacks effective controls to block potential employees with criminal histories who work in the U.S. illegally. That's problematic.

ROMANS: Let's get an EARLY START on your money this morning. Asian and European stocks are lower. Dow dropped yesterday when the Dow erased all gains for the year. Stocks down three sessions in a row.

The big banking story today, huge restructuring in HSBC, slashing up to 50,000 jobs. HSBC will sell its operation in Brazil and Turkey losing 25,000 positions. Cut another 22,000 to 25,000 across the bank. The bank wants to save $5 billion a year by the year 2017. The focus now shifts to online banking and self-service. That means it will shutter 12 percent of its branches.

BERMAN: All right, stormy weather heading for the northeast before the big spike in temperatures later this week. You will want to stick around for this. An early look at your forecast next.

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BERMAN: We have severe storms in the northeast. Let's go to meteorologist, Pedram Javaheri, for an early look at the weather -- Pedram.

PEDRAM JAVAHERI, AMS METEOROLOGIST: Good morning, John and Christine. The storms rolling through here are not going to be impacting the region until 10:00 or 11:00 a.m. Northern New England, second reinforcing shot comes in Wednesday night into Thursday.

[05:45:04] A couple of days of at least interior New England getting some active weather, but the warm and humid air still locked in place across the southeast with the severe storm possibility again stretching out in the upper Midwest and northeast.

Talk about 200 reports of severe weather on Monday alone, every single one of them, either wind or hail, no tornadic activity and that pattern I think will continue and notice a couple inches in New England especially northern New York over the next couple of days with rainfall 1 inch to 2 inches across the coastal Carolinas, 2 inches to 3 inches in New Orleans.

Heat and humidity in place in Mobile, temperatures into the mid-80s. Close to 90 is the average temperature, but warming towards the middle portion of the week. Speaking of warming up, how about the northwest.

That's the hottest place in the country in the past couple of days. In fact, portions of Washington State, is warmer than Death Valley, California in the last two days -- guys.

ROMANS: All right, thanks, Pedram, for that.

Let's take a look at what is coming up on "NEW DAY." Alisyn Camerota joins us now. Hi, Alisyn.

ALISYN CAMEROTA, CNN ANCHOR, "NEW DAY": Hello. Hello to the champion of the quiz show, John Berman.

BERMAN: Thank you from the former champion. I appreciate it.

CAMEROTA: I'm only mildly bitter.

ROMANS: It is temporary, Alisyn. There may be chances for you to reclaim your crown.

CAMEROTA: I hope so. All right, thanks so much, guys. Let's talk about what's coming up on NEW DAY because two cold blooded killers are still on the loose at this hour. The manhunt is stretching from Canada to Mexico and so many questions about how they pulled off the prison break? Authorities are questioning a female prison worker. Did she help these inmates break out? We have the latest on the investigation.

And also comedienne, Joan Rivers, would have been 82 years old this week. Her daughter, Melissa, has new book out about her mom. It's called a "Book of Joan." It is full of surprises and punch lines and poignant moments and Melissa Rivers will join us live on NEW DAY.

ROMANS: I'll look forward to that. All right, thanks, Alisyn.

BERMAN: All right, Oscar Pistorius appears headed for freedom as soon as this summer. This is not sitting well, not at all with the family of the girlfriend that he killed. We will get the reaction from Reeva Steenkamp's family next.

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[05:50:47]

BERMAN: New this morning, the family of Reeva Steenkamp is expressing outrage over word that Oscar Pistorius will be released on parole in August after serving just ten months of a five-year prison sentence for culpable homicide.

The South African Olympic runner was found guilty last year of fatally shooting his girlfriend on Valentine's Day back in 2013. Pistorius claimed he mistook Steenkamp for a home intruder.

Her parents have released a statement saying, quote, "We do not seek to avenge her death and we do not want Mr. Pistorius to suffer, that will not bring her back to us. However, a person found guilty of a crime must be held accountable for their actions.

Incarceration of ten months for taking a life is simply not enough." South African prosecutors are appealing the conviction. They argue that Pistorius should have been found guilty of murder.

ROMANS: All right, so music streaming is not the only big news from Apple Monday, CEO Tim Cook of Apple will pay the ransom playfully demanded by members of the Cleveland Indians bull pen. The ransom note demanding a slew of Apple products including iPhones, iPads, Apple watches, in exchange for the ball hit by teammate, Brandon Moss for his 100th career home run.

On Monday, Tim Cook proudly displayed the home run ball telling the world his company is picking up the tab and will return the ball to Moss.

BERMAN: I think the major league minimum salary is north of $500,000. They can buy Apple products themselves.

ROMANS: They can buy shares.

State budgets on the verge of collapse. A former fed chief warning about crippling debt that is secretly piling up. That's next.

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[05:56:26]

ROMANS: All right, good morning. I'm Christine Romans. Let's get an EARLY START on your money. Relief is coming to former Corinthian college students. The government will forgive federal loans for students who attended the for-profit college. Some 350,000 students took out $3.5 billion in loans there.

Earlier this year, the Department of Education forced Corinthian close or sell its 100 campuses across the country. The federal government said the company was preying on all those students.

State budgets are disaster with unpaid bills and bad spending choices piling up. That is the statement from the former fed chief, Paul Volcker. He says state budgets may seem balanced, but really faulty practices are hiding huge unpaid bills and responsibilities, infrastructures crumbling. Rainy day funds are being drained. Pensions are on the verge of collapse and nothing is being done to stop it.

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PAUL VOLCKER, FORMER FEDERAL RESERVE CHAIRMAN: There is no political will because the problem is disguised by all of the gimmicks and games that people play. They borrow money to pay the pension fund. They are just exchanging one obligation for another obligation. It doesn't advance the ball at all.

ROMANS: That sounds like a Ponzi scheme than a way to run a government.

VOLCKER: That's right exactly.

(END VIDEO CLIP) ROMANS: Volcker criticized California, Virginia and New Jersey. New Jersey's governor, Chris Christie, is probably running for president.

BERMAN: Paul Volcker is one of the smartest men in terms of numbers in the world. He's agreed with you. He said yes, exactly. That guy has been in the middle of so many crises in his life and turned them around.

ROMANS: I asked him if the Federal Reserve should raise interest rates. He did not want to give advice to the new fed chief, Janet Yellen. He had to make tough choices in the past. He is critical of state governments for basically hiding their obligations and not fixing their problems.

BERMAN: The manhunt for two escaped murderers in New York has now expanded as investigators zero in on a prison employee who could have connections to these men who escape that prison. "NEW DAY" picks up that story right now.

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UNIDENTIFIED FEMALE: I think he deserves a medal for what he did.

UNIDENTIFIED FEMALE: He hit me in the face when I tried helping the girl. When two others tried to help the girl, he pulled his firearm.

UNIDENTIFIED FEMALE: There are killers on the loose.

UNIDENTIFIED MALE: You don't cut through a steel wall without somebody hearing it.

UNIDENTIFIED FEMALE: Officials questioning a female prison employee.

UNIDENTIFIED MALE: They had to have the assistance of someone.

WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": Dozens of aviation workers on terror watch list.

UNIDENTIFIED FEMALE: At least 73 people with links to terrorism.

BLITZER: Allowing them to work in secure areas.

UNIDENTIFIED MALE: This really speaks to the issue of the insider threat.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: We don't yet have complete strategy.

UNIDENTIFIED FEMALE: We are constantly evaluating how we are going to increase and ramp up the training of Iraqi security forces.

UNIDENTIFIED MALE: It's our responsibility and obligation as a Congress to declare war.

(END VIDEOTAPE)

CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome to your NEW DAY. It is Tuesday, June 9th, 6:00 in the east.

We have breaking news. Hundreds taking to the streets to protest the actions of the now suspended Texas police officer, drawing a gun on unarmed teens at a pool party, slamming a 14-year-old in a bikini to the ground.

CAMEROTA: Demonstrators are calling for that officer to be fired. He was placed on administrative leave since the video first surfaced. This as there are major developments in two other police-involved shootings.

Let's begin our coverage with CNN's Nick Valencia. He is live for us in McKinney, Texas. What is the latest, Nick?

NICK VALENCIA, CNN CORRESPONDENT: Hi, there, Alisyn. Fresh calls this morning from community residents for that officer.