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Early Start with John Berman and Zoraida Sambolin

Democratic Debate Showdown; Cruz Rips Trump Claiming GOP Front- Runner Is "Encouraging Violence"; Trump Campaign Manager Cleared; Lawyers Spar Over Loaded Gun In Will Smith Case; U.S. Stock Market Reaches 2016 High; U.S. Companies Hiding Trillions In Offshore Tax Havens. Aired 5:30-6a ET

Aired April 14, 2016 - 05:30   ET

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

[05:31:00] LYNDA KINKADE, CNN ANCHOR: Bernie Sanders and Hillary Clinton face-to-face on the CNN debate stage tonight, days before a critical primary in New York.

JOHN BERMAN, CNN ANCHOR: Ted Cruz in a CNN town hall. He blasted Donald Trump. He says Trump's campaign encourages violence. Trump's campaign manager, though, cleared apparently, of battery charges.

KINKADE: Russian jets making a simulated attack on a U.S. Navy vessel, coming within 30 feet of the battleship. We'll go live for a report there.

Welcome back to EARLY START. I'm Lynda Kinkade in for Christine Romans.

BERMAN: Great to see you this morning. I'm John Berman. Thirty-one minutes past the hour right now, but we are counting down to the final hours -- the battle in Brooklyn. It is tonight. Bernie Sanders and Hillary Clinton -- they face off in a critical debate in Brooklyn. You can watch it right here live on CNN, 9:00 p.m. eastern time. And the stakes, they are high.

The New York primary just five days away, and if Bernie Sanders could pull off an upset then it might lead to a contested convention for the Democrats. The flip side is if Hillary Clinton pulls off a convincing win here this race could be all but over. The latest Quinnipiac poll has Hillary Clinton out on top by 13 points, but Bernie Sanders says he is up to this challenge.

(BEGIN VIDEO CLIP)

CHRIS CUOMO, CNN ANCHOR, "NEW DAY": It's a big debate. There's been a lot of hot talk. What do you expect on that stage tomorrow night? What's going to be different?

SEN. BERNIE SANDERS (I-VT), DEMOCRATIC PRESIDENTIAL CANDIDATE: I think it will be a good debate in which Sec. Clinton and I discuss the very strong differences of opinion that we have about how we go forward in this country. And if that takes place I will be very happy, and I'm confident that the vision that I am bringing forth is a vision that will be supported by the vast majority of the people of New York.

CUOMO: It will be different than what we've been hearing the last few days?

SANDERS: Well, I'll tell you about it tomorrow.

(END VIDEO CLIP)

BERMAN: I'm bad at math but I think it's less than 16 hours. Now we have a clock to help you with the math. Fifteen hours and 27 minutes now until those candidates take the stage. Let's get more now from CNN's senior Washington correspondent, Jeff Zeleny.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: John and Lynda, the Democratic presidential campaign sounding more like a rock concert. I'm here in Washington Square Park, Wednesday night. Bernie Sanders supporters rallying by the thousands, and Hillary Clinton supporters also gathering in the Bronx.

But they're all building up to that debate tonight in Brooklyn. It's going to be the first time that both candidates have come face-to-face in five weeks, coming at a critical moment in this campaign. Now, Bernie Sanders believes a win in New York could elevate him forward and really change the course of this race.

The Clinton campaign believes the math is on their side. But no question when they come face-to-face tonight at that debate stage, it is one moment -- one opportunity for Bernie Sanders to raise some of those questions in person he's been raising behind the scenes.

Now, Hillary Clinton will be making the argument that Bernie Sanders is untested. Bernie Sanders will raise questions about Sec. Clinton's judgment. That's why tonight in Brooklyn is so important. This final debate before next week's New York primary -- John and Lynda.

(END VIDEOTAPE)

KINKADE: Jeff Zeleny, thanks for that report. Well, let's bring in CNN's senior political analyst, Ron Brownstein. Great to have you with us, Ron.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Good morning.

KINKADE: Now, it was not that long ago that Sanders and Clinton couldn't even agree on a date to have a debate. It's now happening tonight. They're both pushing their New York credentials but polling consistently shows that Clinton is well in front.

BROWNSTEIN: Yes, you lose seven out of eight contests and suddenly you've got to talk. Look, I was at an event last night for Bernie Sanders. It was a remarkable event. Giant, sprawling, wrapped crowd, but it was a reflection of both how far he has come and how far he still has to go. When you kind of think about from where Bernie Sanders started this

race as a septuagenarian socialist who had never been elected anyplace bigger than Vermont, look at some of the things he's done. He's now won, in the cumulative analysis of all the exit polls, 71 percent of all voters under 30, which is more than even Barack Obama won in 2008.

He's now won white voters in every state outside of the south with an exit poll, except for Ohio and Iowa. That is remarkable. But the problem he faces is that he's got two other hills that he hasn't gotten over. Hillary Clinton is still dominating among self- identified Democrats. He's relying mostly on independents. It's hard to win a party's nomination if you can't win the partisans in that party.

[05:35:00] And the other thing that he really has not done is crack the African-American community. She's won over three-quarters of all African-American voters. Not by as wide a margin in the Midwest as the south, but even there it was two to one.

And the problem Bernie Sanders has is his two weaknesses converge in these northeast states that are coming up in New York, in Pennsylvania, in Maryland, and later in New Jersey, because they're close primaries open only to Democrats, with a large African-American population. So that leaves him in a tough position in the next few weeks even though May is likely to look so much better -- significantly better.

BERMAN: That's the reason why a lot of people think you might see a tough Bernie Sanders tonight on that debate stage. Let's look at the flip side. Hillary Clinton -- what do you think she needs to do tonight? What do you expect you'll see from her?

BROWNSTEIN: Well look, I think the grooves are cut pretty deep in this campaign. What we've seen so far is probably what we're going to get. She is going to emphasize her pragmatic ability to get things done, to work change through a clogged system, and that appeals to her natural constituency.

She is the same way that he is. The candidate of the young. She is winning significantly among voters over 45 and they are 60 percent of the primary voters. They are a bigger share. So I think she's going to emphasize her scars as a way of underscoring her ability to drive change through the system. And I think Sanders, as he said last night, swing for the fences. That's what one of the people introducing him said last night -- swing for the fences.

I think one of the big lessons of this campaign, John, is whether you're talking about the blue collar voters flocking to Trump on the Republican side or that young voters flocking Sanders on the Democratic side -- there are a lot of people out there who are frustrated enough that they're willing to consider alternatives that in the past would have been beyond the pale, both in terms of their agenda and their pedigree -- their background.

So, there's something out there in terms of whether you're a candidate like Clinton who is kind of working more within the conventional system. There's something you have to hear in what's happening so far.

KINKADE: And, of course, we know that Bernie Sanders is leaving after the debate tonight to go to the Vatican.

BROWNSTEIN: Yes.

KINKADE: He's not going to continue campaigning here. Is that good or bad?

BROWNSTEIN: Well look, New York is a tough place for him. I think it's very hard to see how he ultimately gets over the top. And going to the Vatican, I think, these will become nationalized campaigns. The ability to deliver a message across the whole country from association with Pope Francis, even indirectly, I think is a positive for him, particularly when you think that the Latino vote is critical in California and New Mexico on that last day. And it has been more open to him than the African-American vote and I think that's a good way to kind of, in particular, send a signal there.

BERMAN: Big CNN town hall last night. Ted Cruz in this building, just down the hall from where we are right now, answering questions from voters and Anderson Cooper. He had a lot of criticism for the Trump campaign -- the Trump team -- in the way they've been running things. Let's listen to what Ted Cruz said.

BROWNSTEIN: Yes.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: It is bizarre. Donald and his team -- it's almost like they are subjects in a clinical course in psychology. There are all sorts of different behaviors they display but one of them is projection. That the conduct they do, regularly they accuse everyone else of doing.

(END VIDEO CLIP)

BERMAN: Well, the subject of the Trump team -- we've got two pieces of news yesterday. One big piece of news. Number one, he's bringing on Rick Wiley. Donald Trump is bringing on Rick Wiley who ran Scott Walker's campaign. A well-known guy in Republican circles to direct the political operation for his campaign.

The other news, campaign manager Corey Lewandowski -- there's going to be a news conference down in Florida today. He will not be charged with battery for whatever happened with that reporter from Breitbart, Michelle Fields.

BROWNSTEIN: Yes. Well look, Trump is trying to professionalize his campaign at this point, particularly in this hand-to-hand combat over delegates. It's kind of late, right? A lot of this organization had to happen months ago. In some ways lack of organization in the non- primaries that is hurting him would not matter as much if he was following the trajectory of previous front-runners.

Previous front-runners at this point were moving up from that 35-40 percent range of the vote to over 50 percent. In fact, John McCain, in 2008, hit 50 percent in 11 consecutive contests to drive Mike Huckabee from the race. Donald Trump has not yet hit 50 percent in any state, although he probably will in New York. If he had, his delegate numbers would look better than they do.

With Corey Lewandowski, the standard for a crime, obviously, is one thing but I think a lot of the political damage has already been done to both him and Donald Trump when he tweeted that the reporter was delusional and yet the video clearly shows him interacting with her.

BERMAN: Ron Brownstein, great to have you with you. Happy debate day.

BROWNSTEIN: Happy debate day.

KINKADE: Thanks, Ron. Well, still to come, new details about the moments leading up to the shooting death of former NFL star Will Smith. What prosecutors are now revealing about that case. That story just ahead.

(COMMERCIAL BREAK)

[05:43:00] KINKADE: Welcome back. New details in the death of former New Orleans Saints star Will Smith. Lawyers are now sparring over a loaded gun found in Smith's SUV, as the attorney for the alleged shooter questions why it took police days to find additional weapons. CNN's Jean Casarez picks up the story.

(BEGIN VIDEO CLIP)

JEAN CASAREZ, CNN CORRESPONDENT: John and Lynda, the Orleans Parish coroner released their report saying that Will Smith actually was shot eight times. Seven of those shots were into his back and the other was into his left side.

The family attorney for Will Smith also spoke yesterday for the first time, saying that Raquel, his wife, had actually been shot two times. Once in the right leg, which broke her femur, and then the other in her left leg that went through her thigh.

The family attorney also wanted to talk about and agreed with the police, saying that inside the vehicle of Will Smith there was found a 9 mm handgun. It was fully loaded. None of the shots had been fired in that gun at all. The family attorney also said that they wanted to clear up what they call lies and distortions being perpetrated by the defense council for Cardell Hayes.

They said, first of all, that Will Smith did not have the gun in his hand or brandishing a fireman at all when he was shot those eight times. And secondly, in that initial encounter, what the defense is calling a hit-and-run, that no one in the car of Will Smith believed that their Mercedes SUV touched in any way the Hummer in front of them. So when they left that scene they were not fleeing the scene of an accident because in their mind there was no accident.

[05:45:00] Finally, Raquel Smith is still in the hospital at this point. The attorney says that they believe her physical wounds eventually will heal but the emotional trauma may last a lifetime -- John and Lynda.

(END VIDEO CLIP)

BERMAN: Jean Casarez, thanks so much. Time now for an EARLY START on your money. Alison Kosik here.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning to you. I'm seeing some red arrows, seeing some green arrows, so a mixed picture around the world. Asian markets ended higher but European markets are in the red. We're seeing red arrows for U.S. markets early at this hour as well.

A great day for Wall Street yesterday. The Dow, Nasdaq, and the S&P 500 all closing at their highest levels for the year. The Dow jumped more than 1 percent, rising about 187 points and adding to Tuesday's gains. In just two days the Dow has jumped more than 350 points. Getting close to 18,000 again.

The financial sector led the rally. We saw J.P. Morgan's earnings report. It wasn't too great but it was just good enough -- just good enough for Wall Street to rally. Today, we're going to get profit reports from Bank of America and Wells Fargo. This, as first quarter earnings season starts. We're really revving up and marching on.

BERMAN: Tis' the season. All right, Alison, thanks so much. We're going to take a look at what's coming up on "NEW DAY". Chris Cuomo joins us now. Been a lot of hot talk, Chris.

CUOMO: There has been a lot of hot talk. I believe you're stealing a phrase from me, John Berman. I respect that. We are here at the Brooklyn Navy Yard just off the water with the wind howling, and I'm sitting here just because. However, this is also the site of the big debate tonight. That's going to be held inside where sane people would be at this hour.

But there's a lot going on. This event last night, that you've been covering brilliantly this morning, that Sanders had at Washington Square Park was a big deal. He had the tens of thousands. Most of them were young. But, it was the message there. There was an edge that we hadn't seen before. There was an edge to Sanders that we hadn't seen before. What does that mean for tonight?

We're also going to cover the Republican side of the ball. There are shake-ups on the Trump team that people didn't see coming and they're probably deeper than many people understand. We'll be talking about the state of play there, why these changes are being made, and what it means going forward.

Is that good enough for you, John Berman, inside?

BERMAN: We'll see you down there in a few minutes, Chris. Thanks.

KINKADE: Thanks, Chris. Well, first it was Bruce Springsteen, now it's the former Beatle's drummer, Ringo Starr. Why he is canceling his North Carolina concert. We'll get an early start on your money next.

(COMMERCIAL BREAK)

[05:54:00] BERMAN: The United States beefing up its fight against ISIS with President Obama offering up a detailed account of the progress U.S.-backed forces have made so far. It was a pretty rare visit to CIA headquarters where the president talked about a bad few months for ISIS, describing how U.S.-backed forces have taken territory back from ISIS. Still, political turmoil in Iraq and an uptick in violence in Syria could threaten those gains.

KINKADE: Well, in the wake of the Apple privacy fight, two high- ranking senators are pushing a new bill they say will help fight terrorism. The proposal would grant courts the authority to order tech companies to give law enforcement access to encrypted communication. That means companies like Apple would have to provide data to law enforcement in an intelligible, decrypted form if ordered to do so.

BERMAN: All right, a series of close encounters between Russian fighter jets and a U.S. destroyer in the Baltic Sea raising tensions between the superpowers. (Video playing) Look at this video. It is remarkable. This was released by the Navy. An unarmed, apparently, Russian jet conducted one of several simulated offensive moves that came within feet of the USS Donald Cook Tuesday night.

One U.S. military official described the drill as the most aggressive action taken by the Russians in recent memory. You know, the Russians just put out a statement a short time ago -- we were talking to Matthew Chance in Moscow -- saying they did nothing wrong. It was completely within the limits and within the regulations, but obviously taking great risks there in a very provocative action.

KINKADE: They are the only ones saying that it's within regulations.

BERMAN: Right.

KINKADE: And that plane -- we know that jet came by about 30 feet away from the plane. One of about 11.

BERMAN: Crazy.

KINKADE: All right, let's get an EARLY START on your money. Alison Kosik joins us now. So what is going on with the market?

KOSIK: Good morning. Seeing a mixed picture as we start the day. Asian markets actually ended higher. We're seeing red arrows, though, for European markets. U.S. futures are following their lead. But it was another great day for Wall Street yesterday. The Dow, Nasdaq, and the S&P 500 all closing at their highest levels for the year.

The Dow jumped more than 1 percent rising 187 points, adding to Tuesday's gains. The financial sector led that rally. J.P. Morgan's earnings report was good enough, though not great, but just good enough for Wall Street. Today we're going to hear from Bank of America and Wells Fargo. First it was the boss, now one of the Beatles. Ringo Starr is the latest to join the growing line of entertainers protesting the new North Carolina law many are calling anti-LGBT. It requires people to use restrooms based on their birth gender and is seen as discriminatory against transgender people.

The former drummer for the Beatles is canceling his June show in Cary, North Carolina. The star said he hates to disappoint his fans but he has to stand against hatred. His decision follows Bruce Springsteen, who also canceled the show there. PayPal and Deutsche Bank also stopped expansion plans in the state because of the law.

There's a new report out this morning concerning a big issue on the campaign trail. Fifty of the biggest U.S. companies are hiding $1.4 trillion in offshore tax havens. That's trillion. That's according to a new analysis by Oxfam, and all this is legal. Guess how much that tax dodging is costing the U.S.? About $111 billion in lost revenue each year.

So, the big question here. Who's stashing away the most money? It's Apple. Oxfam says the technology giant is stashing more than $180 billion in their offshore subsidiaries. Coming in a close second, General Electric, which is an interesting point because Bernie Sanders pointed out General Electric as ruining the moral fabric of our country. Seeing how much money is being stashed offshore, maybe it should have been Apple.

BERMAN: Yes, essentially, they should have both sides of the campaign right now. Fascinating to see. Alison, thank you so much. Congratulations to the Golden State Warriors. In just a few hours, Bernie Sanders, Hillary Clinton -- they go face-to-face on the CNN debate stage.

We are getting very close. "NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: We can't just show up at election time and think that's enough.

SANDERS: The crises are so severe. Little step by little step is not enough.

CLINTON: Our diversity is a strength, not a weakness.

SANDERS: It is time to think boldly. It is time to think big.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Who's the most popular? Donald Trump.

CRUZ: In the last three weeks he's lost over and over again.

TRUMP: It's a rigged system, folks.

UNIDENTIFIED MALE: Rules are not being changed in order to benefit anybody. CRUZ: The odds are looking more and more likely that he can't get a majority.

TRUMP: These are the most dishonest people.

BERMAN: The Golden State Warriors -- they did it.

UNIDENTIFIED MALE: It's official. Number 73. The greatest regular season in NBA history.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo, Alisyn Camerota, and Michaela Pereira.

CUOMO: Wow, look at that. Good morning. Welcome to your new day. It's Thursday, April 14th, 6:00 in the east. We are in Brooklyn at the famous Navy Yard, site of tonight's CNN Democratic debate. We're outside on the water, wind blowing, simply because. Michaela, AKA the sane one, in the studio.

The stakes could not be higher for Hillary Clinton and Bernie Sanders just five days before the primary here in New York. Both campaigns believe this is their moment. As a result the tone has changed, not in a good way. We have the inside scoop for you on what you're going to hear tonight.

ALISYN CAMEROTA, CNN ANCHOR: Meanwhile, big news out of the Trump camp. Trump's campaign manager will not be prosecuted for grabbing that reporter's arm, as we've all seen on video. This, as Trump's war with the RNC heats up. And, Ted Cruz, last night, accusing Trump's staff of acting like thugs.

We have this race covered from every angle so let's begin with our senior Washington correspondent, Joe Johns.