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Early Start with John Berman and Zoraida Sambolin

Prison Break Bombshell; Texas Bracing for Tropical Storm Bill; Stocks Down Around the World; U.S. Takes Out Top Al Qaeda Leader; Goldman Sachs to Give Consumer Loans. Aired 5:30-6a ET

Aired June 16, 2015 - 05:30   ET

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

(COMMERCIAL BREAK)

[05:31:54] CHRISTINE ROMANS, CNN ANCHOR: Happening now, the search for two dangerous killers has gone cold. As prosecutors reveal the woman accused of helping these inmates escape could face new charges. What else she may have done ahead.

JOHN BERMAN, CNN ANCHOR: And breaking, severe storm warnings, Texas bracing for major flooding. Tropical Storm Bill about to make landfall with that state. Neighborhoods evacuated, schools closed. We are live with what is to come.

ROMANS: Breaking overnight, a top al Qaeda leader killed in a U.S. drone strike. What does this mean for the terror organization going forward? We are live. Jomana Karadsheh called this the biggest win for the Americans since Osama Bin Laden. Welcome back to EARLY START. I'm Christine Romans.

BERMAN: I'm John Berman. It's 32 minutes past the hour right now. Developing overnight, a shocking new twist involving Joyce Mitchell, the prisoner worker who allegedly helped two convicted killers escape from a maximum security facility in upstate New York.

Sources tells CNN that Mitchell was sexually involved with one of the inmates, may have been forced to helped them break out and may have been involved in a plot to have the two convicts kill her husband. Here is what the local district attorney had to say about that.

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ANDREW WYLIE (D), CLINTON COUNTY DISTRICT ATTORNEY: In an agreement between Joyce Mitchell and both Matt and Sweat, as to whether they were going to harm Lyle Mitchell, I'm not going to comment on that.

(END VIDEO CLIP)

BROWN: Mitchell is being held in a six by nine foot cell this morning. Authorities say she is calm and cooperative. But the search for the two escaped convicts seems to have gone cold. Let's get the very latest from CNN's Miguel Marquez.

MIGUEL MARQUEZ, CNN CORRESPONDENT: Christine, John, we now know there was a sexual relationship between Joyce Mitchell and Richard Matt, one of the escapees, according to a source close to the investigation. We are also being told that the relationship between all three of them was somewhat more complicated than we understood at first.

She began to befriend them and the sexual relationship developed with Richard Matt. Then she began to help them. Along the way, though, she had second thoughts about all of this and the relationship turned.

It became more of a blackmail situation where the two inmates were telling if she did not continue to help them, that they would turn on her and tell authorities what she was doing.

At some point, the source says they may have even turned on her husband, who worked in the prison, telling her that they'll kill him if she doesn't continue to help them.

This went all the way to the night of the escape where she agreed to be their getaway driver and then backed out getting cold feet and finally going to authorities after checking herself into the hospital for anxiety.

We spoke to David Favro. He is the sheriff here in Clinton County and he says at this point the escapees, he is not sure whether they are in the woods behind me or gone all together.

(BEGIN VIDEO CLIP)

SHERIFF DAVID FAVRO, CLINTON COUNTY, NEW YORK: There is no physical evidence that I'm aware of that has been presented to indicate that they are and there also hasn't been any physical evidence that I'm aware of to indicate that they are not.

(END VIDEO CLIP)

MARQUEZ: Joyce Mitchell is being held at the Clinton County Jail for now according to the sheriff and he says that she is under 24-hour supervision, a one-on-one supervision, in a small six by nine cell with a person sitting in the doorway watching her every 30 minutes.

[05:35:10] They write down whatever has happened and take a log of everything that is going on with her. She is not on suicide watch they say, but they are watching her very closely because they are not sure how well she will take all of this stress -- Christine, John.

ROMANS: Tropical Storm Bill bearing down on Texas. They are bracing for a battering this morning. The lone star state already water logged and preparing for more heavy rain and high winds today. Tropical Storm Bill moving quickly through the Gulf of Mexico.

Flood watches are in effect for Houston, Austin and San Antonio. Houston announcing its schools will be closed because of this tropical storm. Everyone is preparing for the worst.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: These guys are helping us -- we bought 1,000 sand bags because it is the only measure we can take.

UNIDENTIFIED MALE: The storm is about to make landfall and we will not go out and execute rescues. Everything is after the storm passes. That is why we are urging the community to shelter in place and to put yourselves in a safe place.

(END VIDEO CLIP)

ROMANS: That's really important. He says we are not going to be able to get to you until the storm has passed. Get yourself in a safe place now.

Let's go to Galveston, Texas and bring in CNN meteorologist Jennifer Gray. Jennifer, the Houston school system just announced it is closed for the day. Tropical Storm Bill means there will be no school.

JENNIFER GRAY, AMS METEOROLOGIST: Yes, that's right, Christine. You know, it is very important. A lot of times people say it is a tropical storm. No big deal. When you have the flooding and you have the water coming in, people cannot get to you.

Highway 87 to the east of Galveston has been closed down for that very reason. They are urging all of the residents to get out. They have ordered voluntary evacuations there. We are on Galveston Island. You can see behind me a nasty Gulf of Mexico. The water coming is in.

We are right along the sea wall, the 17-foot high sea wall that was built in the '60s to protect Galveston Island from storms like Bill. You can see the water coming in. Normally this is all beach down here. The tides are running 4 to 5 feet above normal this morning.

So we are expecting the high winds, but more importantly the flooding. We have seen flooding across Texas in less than a month ago. Now we are expecting more major flooding across Texas.

We could see anywhere from 4 to 8 inches of rain in this area once the storm pushes inland, it should become a tropical depression later this evening. The flooding will remain. We could see up to a foot of rain in the Dallas area. That will pump moisture in portions of Oklahoma and Missouri as well.

So the main threat with this will be the rain. Let's look at the radar now. We can show you that we are seeing a couple of those squalls come in. This morning, we had one 20 minutes ago. That will continue with the storm 50 miles offshore.

It should make landfall in the 8:00 hour local time a couple miles to the southwest of us. We are expecting to see this continue with the flooding and then the winds dying down gradually throughout the day.

John and Christine, but I cannot stress enough. Texas has gone through enough when it comes to the water. Once this heads into the Red River Valley, we know the Red River has been running very high over the last week or two. This is going to be devastating for portions of Texas, guys.

ROMANS: So schools are closed. Businesses are closed. We know that oil prices are up because refineries are closed along the coast there. Again, those rescuers are saying we are not going to be able to get to you right away so shelter in place now, flooding to come. All right, Jennifer Gray, thank you for that. A dangerous situation developing there.

New questions this morning about e-mails to and from Hillary Clinton, more than 120 pages of e-mails between Hillary Clinton and a close confidant, Sydney Blumenthal, have just been turned over to the committee investigating those attacks in Benghazi.

They include information about weapons in Libya and the security situation in Benghazi in the year and a half before those attacks. Blumenthal will face the House committee investigating the attack in a closed door hearing today.

BERMAN: President Obama and his Republican allies in Congress have abandoned plans on the second vote on a Pacific trade deal today. The president spoke by phone with House Speaker John Boehner on Monday. The speaker has decided to try and pass a temporary rule that will allow him to bring the deal back up anytime between now and July 30th.

That would give the president and Republicans six weeks to resurrect this measure. They have to get a lot of votes back, which are going to be awfully hard. The House soundly rejected this.

ROMANS: That was a Democratic rebellion against their boss. All right, time for an EARLY START on your money this morning. European and Asian stocks are lower so are U.S. stocks futures. Yesterday, the Dow dropped 107 points erasing the games for the year.

Weighing down the markets, a standoff between Greece and its creditors and a looming interest hike and the United States fed has a two-day meeting starting today.

[05:40:10] With the tropical storm threating Houston, oil prices up 1 percent right now.

Big story out there in retail, folks, Gap will close a quarter of its stores, 175 stores in North America slashing 250 corporate jobs. The brand needs a makeover trying to get back its cool factor and attract millennials. Sales are sinking.

The company has fallen behind trends, facing steep competition online and from cheaper and fast fashion brands. It is no longer smart business apparently to have a location in every mall. When you think about -- over the next, what, five or six years, closing a quarter of stores, that's thousands and thousands of workers.

BERMAN: Do you still fall into the gap?

ROMANS: I don't think so.

Breaking overnight, Al Qaeda confirming the U.S. has killed its number two, that's right. Al Qaeda's number two killed. We are live with new details ahead.

(COMMERCIAL BREAK) BERMAN: Breaking this morning, al Qaeda in the Arabian Peninsula has confirmed a top leader has been killed by a U.S. drone strike. We are talking a top as it gets.

Nasser Al-Wahayshi, he was the number one leader of al Qaeda Arabian Peninsula, the number two leader in al Qaeda worldwide hit along with two of his associates in a drone attack apparently, a major intelligence coup for the United States with potentially a major impact on al Qaeda. Not just in the Arabian Peninsula but worldwide.

[05:45:09] CNN's Jomana Karadsheh is tracking these major developments for us. Good morning, Jomana.

JOMANA KARADSHEH, CNN CORRESPONDENT: John, as you mentioned, a major blow to al Qaeda globally as well as the al Qaeda in the Arabian Peninsula at a time that that group is really expanding the territory controls, its influence and its presence in Yemen taking -- exploiting the chaos and instability in Yemen.

In the past few hours, in a video statement released by the media arm of AQAP, a spokesperson announced the killing of Nasser al-Wahayshi, the top leader of AQAP in a U.S. strike along with two other Jihadis.

In the same statement, they also were fast to announce a new leader for the group. He is the former military chief of AQAP and was the obvious successor for the group. The U.S. has yet to confirm this drone strike and give out details on what happened.

But what we heard last night was two senior security officials in Yemen told CNN that it was a suspected U.S. drone strike that killed al-Wahayshi in Yemen on Friday.

Now this would be a significant blow to a group that the U.S. considers the most dangerous branch of al Qaeda that has really focused its efforts on targeting U.S. and international interests worldwide. This is a group that has attempted three thwarted attacks in the recent years against U.S. airliners.

So a major blow and as you mentioned, this man was also the number two leader of al Qaeda. Experts say this would be the biggest blow to al Qaeda since the killing of Osama Bin Laden -- John.

BERMAN: Major developments overnight. Jomana Karadsheh, thanks so much.

ROMANS: All right, breaking news, former Egyptian President Mohammad Morsi and 16 other Muslim Brotherhood leaders handed life sentences on espionage charges by an Egyptian court. Three other members of the Muslim Brotherhood have been sentenced to death. More on this breaking story ahead on "NEW DAY."

BERMAN: The NAACP leader accused of lying about her race. She is now stepping down and she is about to speak publicly. Will she explain why she as her parents say, lied about her race. That's next.

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BERMAN: We could hear as soon as this morning from Rachel Dolezal. She resigned as head of the Spokane Washington Chapter of the NAACP. But so far she has not addressed the allegations about the fact that she seemed to have lied about race.

Dolezal put out a statement saying she will never stop fighting for human rights insisting the full story has not been told. Her parents say they are white, she is white, and they have no idea why she has been trying to convince everyone that she is black.

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EZRA DOLEZAL, RACHEL DOLEZAL'S ADOPTED BROTHER: She has put on dark makeup on her face and parading around saying she was born black. Knowing what it was like growing up as African-American. I call it black face. That's pretty much what it is.

RUTHANNE DOLEZAL, MOTHER OF RACHEL DOLEZAL: I think Rachel has in her mind come to the conclusion in order to be an advocate for African- Americans, she needs to be hostile to whites. So to try and establish her identity or her relating to the African-Americans, she felt she need to reject her family and being accusatory toward them.

(END VIDEO CLIP)

BERMAN: It's clearly a broken family dynamic going on here as well. Meanwhile, we learned that in 2002, Rachel Dolezal apparently sued Howard University, a prominently black school, where she received a master degree. She alleged she has been discriminated against in part because she was white. That suit was thrown out, crazy.

All right, what do you think about this story? It's so the interesting opinions. Tweet us @earlystart or go to facebook.com/earlystart.

ROMANS: All right, working moms, worried about leaving your kids with the sitter? Don't be. Your children may actually be better off. That's next.

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[05:57:06]

ROMANS: Good morning. I'm Christine Romans. Let's get an EARLY START on your money this Tuesday. Stocks lower across the board. Europe and Asia are lower. U.S. stock futures are down after yesterday's decline in the Dow 107 points. That erases all of the gains for the year.

So what's happening here? What's weighing things down? Talks between Greece and its EU creditors have collapsed again. Concerns about a Greek default again.

And also the fed kicks off a two-day meeting today looking for any hint about a timeline to raise interest rates and for the record interest rates will rise eventually. They are coming so be prepared.

Goldman Sachs has long been the bank of the elite but not anymore. The bank will start offering consumer loans through a web site or an app. Goldman Sachs will be able to lend money at lower interest rates and still make a profit.

BERMAN: Say that again, who?

ROMANS: Goldman Sachs, one of Wall Street's oldest banks wants to compete with startup using similar technology to disrupt the finance world.

Working moms, don't stress out. A new study from Harvard Business School says your kids are just fine. In fact, daughters of working mothers grow up to be more successful in the work force. They earn 23 percent more than daughters of stay at home moms and they are more likely to be the boss.

Sons of working mothers are more likely to contribute to child care and household chores when they grow up so they are just better human beings altogether.

BERMAN: So there. Not Harvard. You can't trust them.

All right, Tropical Storm Bill, it is fast approaching Texas. Landfall due this morning. "NEW DAY" picks it up right now.

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ROMANS: Texas bracing for floods as Tropical Storm Bill barrels in.

UNIDENTIFIED FEMALE: Torrential downpours in the early morning hours.

UNIDENTIFIED MALE: We bought 1,000 sand bags because it is the only measure we can take.

UNIDENTIFIED MALE: We are urging the community to shelter in place.

UNIDENTIFIED FEMALE: New York State official tells CNN the trail for Richard Matt and David Sweat has gone cold.

UNIDENTIFIED FEMALE: Joyce Mitchell was having a sexual relationship with Richard Matt.

BERMAN: It might have been involved in a plot to have the two convicts kill her husband.

UNIDENTIFIED FEMALE: The leader of al Qaeda's most dangerous branch has been killed in a U.S. drone strike.

UNIDENTIFIED FEMALE: This is the third significant blow to terrorism in the last several weeks.

UNIDENTIFIED MALE: If you plot and plan and strike against the United States, you will ultimately pay the price.

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CHRIS CUOMO, CNN ANCHOR: Good morning. Welcome to your NEW DAY. It's Tuesday, June 16th, 6:00 in the east. Tropical Storm Bill barreling down on Texas. The chance of significant flash flooding is high. Landfall is expected this morning so residents along the east coast of Texas are an alert. Take a look at the radar. That's obvious. That is what is churning toward the coastline. When it gets there, it cannot be good.

ALISYN CAMEROTA, CNN ANCHOR: Voluntary evacuations are underway in the city of Galveston with officials urging people who cannot get out of town to hunker down and stay safe.

We begin our team coverage of Tropical Storm Bill with CNN's meteorologist, Jennifer Gray.

[06:00:01] She is live in Galveston. Tell us what you're seeing, Jennifer.