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Tragedy At Ohio State Fair; Scaramucci Alerting FBI About Leaks of His Financial Data; Trump to Ban Transgender People From Military Service; U.S.: North Korea Capable of Nuke Missile Launch Next Year. Aired 4-4:30a ET

Aired July 27, 2017 - 04:00   ET

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

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[04:00:29] GOV. JOHN KASICH (R), OHIO: This fair's been here a long time. This is the worst tragedy in the history of the fair.

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CHRISTINE ROMANS, CNN ANCHOR: A deadly accident at the Ohio state fair. People sent flying more than 20 feet from one of the most popular rides.

DAVE BRIGGS, CNN ANCHOR: Is the White House communications director accusing the chief of staff of leaking a cryptic message from Anthony Scaramucci?

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I will do everything in my power to protect our LGBTQ citizens.

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ROMANS: Despite that promise from candidate Trump, the president now says transgender people should not serve their country in the military. And overnight, the Justice Department with another surprise move angering gay rights advocates.

We have reporters at the Pentagon, Capitol Hill, the White House, and DMZ with all of our top stories this morning.

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

BRIGGS: I'm Dave Briggs.

You mentioned the DMZ. Will Ripley there to talk about the update on the North Korean nuclear capability, frightening stuff ahead.

But it is Thursday, July 27th. It's 4:00 a.m. in the East.

And we begin with that tragedy on the opening day of the Ohio state fair in Columbus. One person was killed when a ride malfunctioned, seven others injured, three in critical condition this morning. The accident caught on video. We're only showing part of that video because of its graphic nature.

Authorities say the victims were apparently thrown off the fireball ride when part of it broke apart.

ROMANS: Ohio Governor Kasich ordering all rides at the fair to be shut down and offering his condolences.

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KASICH: It's kind of hard to imagine that you have family that goes to a state fair and those calls come that there was a terrible accident, a terrible tragedy, and somebody you love was involved.

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ROMANS: After the accident, people rushed in to help. According to witnesses, a piece of the structure snapped off, hurling riders some 20 feet in the air.

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SUSIE BUCHANAN, ATTENDED FAIR: The ride, it goes really, really fast and goes in circles and rocks right to left. I heard a girl scream, help. I look over and seen something fly out. And then I'd seen it flat to the ground.

UNIDENTIFIED MALE: The whole part broke off. Two people flew out in the air. I was able to get off the ride. It happened simultaneously. Looked to the right, seen the car flying, two people flying out of their seats. It was crazy.

BUCHANAN: It just looked like, I don't know, something I never seen before.

UNIDENTIFIED FEMALE: I feel terrible for those people that they've left behind, their families. You know, you come over, you think you're going to have a lot of fun. Then you end up with something like this. This is really a shame for those families.

(END VIDEO CLIP)

BRIGGS: Can't imagine the rides. The fair's chief ride inspector says there were no red flags when the fireball ride was examined before the tragic accident. We mentioned all the rides have been shut down until they can be inspected. State officials say the fair will be open this morning with all other activities resuming as scheduled.

ROMANS: All right. To politics now. Some apparent infighting at the highest levels of the White House with the president's new communications director seeming to suggest a White House chief of staff, Reince Priebus, had a hand in leaking his financial disclosures. Now, Anthony Scaramucci says he's going to the FBI.

Now, this bizarre episode began with a cryptic tweet from Scaramucci. Here it is: In light of the leak of my financial disclosure info, which is a felony, I will be contacting the FBI and Justice Department. #swamp.

And he tagged Reince Priebus.

BRIGGS: Now, the reference to Priebus is not at all clear. But CNN contributor Ryan Lizza tweeted this: In case there's ambiguity in his tweet, I can confirm Scaramucci wants the FBI to investigate Reince for leaking. That's the chief of staff to the president of the United States.

All this coming after a political story that listed millions in earnings and salary from his stake in the company called SkyBridge, before he left to go to the Export/Import Bank in June. Not entirely clear whether "Politico" got the document by leak or public record. In an interview taped before all this happened, Scaramucci said this --

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ANTHONY SCARAMUCCI, WHITE HOUSE COMMUNICATIONS DIRECTOR: I know I'm in the cesspool called Washington or a swamp called Washington.

[04:05:01] So, it will be virtually impossible to get rid of every leak. But I think we can take dramatic steps to get rid of leaks.

One of the big problems here that I'm discovering in the comms team is that senior people are really the guys doing the leaking, and they ask junior people to leak for them. And so, I'm very proud to be reporting directly to the president so that I can hermetically seal off the comms team from this sort of nonsense.

(END VIDEO CLIP)

ROMANS: All right. That drew this response from the Department of Justice: We have seen an astonishing number of leaks in the classified national security information in the recent months. We agree with Anthony that the staggering number of leaks are undermining he ability of our government to function and to protect this country.

BRIGGS: Now, after all this went down, Scaramucci deleted the initial tweet and sent this one -- "wrong! Tweet was public notice to leakers that all senior administration officials are helping to end illegal leaks. And again, he tagged Priebus.

We reached out to Ryan Lizza. He stands by his reporting that Scaramucci does want Priebus investigated by the FBI.

ROMANS: All right. The Justice Department filing a brief in a major federal lawsuit, claiming the landmark Civil Rights Act of 1964 does not, does not apply to gay people. DOJ lawyers injecting themselves into the case of skydiving instructor Donald Zarda who claimed he was fired after exposing his sexual orientation to a customer. Zarda was killed in a skydiving accident before his trial began. But the case is moving forward.

BRIGGS: Now, the Justice Department's involvement especially unusual because the DOJ is not a party to the suit. Lower courts have been split on this issue for years. The American Civil Liberties Union blasted the DOJ's position as a gratuitous and extraordinary attack on LGBT people's civil rights.

ROMANS: That move coming just hours after President Trump announced on Twitter his intention to ban transgender people from serving their country in the military. Both the decision and the announcement coming without a plan in place to implement the change. It leaves thousands of active duty service members around the world who are transgender in limbo. They've been told by the president they are not supposed to serve, yet there they are in the military.

BRIGGS: What a mess.

The president's decision met with bipartisan outrage on Capitol Hill. Sources tell CNN house Republican leaders knew the White House was looking to change policy related to transgender people, but only regarding the use of taxpayer money for medical treatments. The announcement of a total ban going far beyond what was expected, catching many in Congress by surprise.

Here's more from CNN's Barbara Starr at the Pentagon.

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BARBARA STARR, CNN PENTAGON CORRESPONDENT: Christine, Dave, the president's tweets catching the Pentagon and the heads of the military services by surprise. The president saying the United States government will not accept or allow transgender individuals to serve in any capacity in the U.S. military. This appears to close the door to transgender persons being recruited into the military and open the door to those already serving being forced out of the military.

There may be as many as 6,000 transgender persons already on active duty. One of the criticisms that has been levied in public is the medical costs that would be associated. But a Rand Corporation study has estimated any medical costs, any medical treatment for transgender persons in the military could amount to $8 million or so compared to nearly $50 billion in the annual military medical care health bill.

So, one of the questions now is how does all of this proceed, how does a tweet from the president of the United States be translated into actual military guidance and policy so commanders around the world know how to proceed -- Christine, Dave.

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ROMANS: All right. Barbara, thank you.

Disappointment and disgust on actually both sides of the aisle in the wake of that military transgender ban.

Senator John McCain especially vocal, insisting Americans who serve their country should be treated like patriots. Here's his statement: Any American who meets current medical and readiness standards should be allowed to continue serving. There is no reason to force service members who are able to fight, train, and deploy to leave the military regardless of their gender identity.

BRIGGS: CNN's Jake Tapper spoke to Lieutenant Commander Blake Dremann, who is believed to be the first openly transgender service member to be promoted after President Obama lifted that ban last summer. Listen.

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LT. COL. BLAKE DREMANN, U.S. NAVY: We've caused no disruptions. There's been no readiness issues. We continue to deploy. We need to focus on the mission and less on the social aspects of the military.

The only thing that brings up social aspects are people who can't move past it and focus on the mission. And that's what we need to be able to do.

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[04:10:01] BRIGGS: Caitlyn Jenner, perhaps the most notable transgender American, calling out the president after he announced the ban, tweeting: There are 15,000 patriotic transgender Americans in the U.S. military fighting for all of us. What happened to your promise to fight for them?

LGBT rights groups estimate about 15,000 transgender individuals are serving in the ranks.

ROMANS: The Senate will be back at it this morning after another swing and miss on health care. Senators rejected a repeal-only proposal with seven Republicans joining Democrats opposing the GOP measure. Momentum seems to be building for a so-called skinny repeal of Obamacare that would likely keep the Medicaid expansion but eliminate the individual and employer mandates.

BRIGGS: It could also buy time for Senate Republican leaders to hammer out a final bill in conference committee with the House. Now, it appears Democrats are changing their opposition approach.

We get more from CNN's Ryan Nobles on Capitol Hill.

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RYAN NOBLES, CNN WASHINGTON CORRESPONDENT: Dave and Christine, good morning.

And this will be another important day on Capitol Hill as it relates to Republicans' hopes to repeal and replace Obamacare. At some point on Thursday, the 20 hours of debate will be over after the motion to proceed, and then the amendment process begins.

But we don't exactly know how this amendment process will play out. Our initial thought was that Democrats would use this as a public relations opportunity to offer up hundreds of amendments that would force Republicans to take tough votes on issues related to health care. But last night on the Senate floor, Senate Minority Leader Chuck Schumer called an audible, saying that Democrats would not offer up any amendments until Republicans show the details of their plan, the so-called skinny repeal.

Now to a certain extent, this is just theater by the minority leader. Democrats will never have enough votes to stop the process if Republicans are able to cobble together at least 50 votes on a plan that they can agree on. But at this point, that seems like a long shot.

Republicans still have yet to write the language of the so-called skinny repeal. And we don't exactly know what will be contained in the legislation.

Meanwhile, a group of bipartisan governors including some from key states of Ohio and Nevada sent letters to both McConnell and Schumer, pleading with them to return to regular order as it relates to health care and pass a bill that has bipartisan support. Now, this is something that still seems unlikely -- Dave and Christine.

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ROMANS: All right. Ryan Nobles, pulling some long hours there at the Capitol.

BRIGGS: Indeed.

ROMANS: All right. Could the president really make a recess appointment to replace Attorney General Jeff Sessions? Democrats already working to prevent that, and Republicans seem to agree.

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[04:16:49] BRIGGS: President Trump not letting up on Jeff Sessions. Sources telling CNN the president is being urged by some of his top advisers to consider making a recess appointment to replace his attorney general in order to avoid a messy confirmation process.

Now, there are several political and procedural hurdles, but the idea is to wait for the Senate to formally adjourn into recess, then name a replacement. Senate Democrats already working on strategies to block such a move.

CNN's Jeff Zeleny has more from the White House.

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JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, the escalating feud between the White House and Justice Department is continuing. But, increasingly, it's looking like a one- way feud.

Attorney General Jeff Sessions at the White House on Wednesday for routine meetings. He did not meet the president. President Trump, in fact, was not in the West Wing when he was in there for his meetings.

But President Trump, of course, is still sending messages on Twitter, sort of urging and goading the attorney general into investigating Hillary Clinton. But at the White House briefing on Wednesday, the new White House

Press Secretary Sarah Huckabee Sanders was asked again and again about the attorney general, what his standing is. And this is what she said:

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Look, you can be disappointed in someone but still want them to continue to do their job. And that's where they are.

REPORTER: Does he want him to continue in that job?

SANDERS: I think that I made clear last week if there comes a point there doesn't, he'll make that decision.

ZELENY: The reality here, though, is the people we talked to in the Justice Department say that Jeff Sessions is simply doing his job. He's going to keep his head down, do his job, focus on immigration, sanctuary cities, other matters.

As this fight goes on, it looks like it's becoming more business as usual -- the attorney general keeping on with his job. Capitol Hill, Republican senators, one more reason to not be pleased by this president -- Christine and Dave.

(END VIDEOTAPE)

ROMANS: All right. Jeff Zeleny at the White House, thanks.

A huge win for President Trump's jobs promise. Foxconn, the Taiwanese manufacturer, is coming to Wisconsin. Flanked by Wisconsin Governor Scott Walker and House Speaker Paul Ryan, CEO Terry Gou says Foxconn will invest $10 billion in an LCD panel plant in Wisconsin, which the president takes credit for.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: To make such an incredible investment, Chairman Gou put his faith and confidence in the future of the American economy. In other words, if I didn't get elected, he definitely would not be spending $10 billion.

(CHEERS)

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ROMANS: Foxconn employs hundreds of thousands in China, assembling products for Apple and Microsoft. The CEO teased shifting production to the U.S. shortly after Trump's inauguration. But he has promised that before with little result. In 2013, Foxconn announced a $30 million plant in Pennsylvania that still has not been built.

One possible difference here, this time, generous tax incentives. The Wisconsin governor says the state will offer up to $3 billion in tax incentives to create these 13,000 jobs. That translates to about $230,000 from taxpayers for each job there. [04:20:02] But the president on the campaign trail, he hit Apple. He

hit other companies for, you know, selling their products in the U.S. but making them overseas, employing hundreds of thousands overseas.

BRIGGS: Yes.

ROMANS: This is definitely a win for this president.

BRIGGS: This is what people elected him to do. If he could focus --

ROMANS: Exactly right. Use the bully pulpit, use the bully pulpit. That's right.

BRIGGS: Focus.

All right. Dramatic new video of the rescue operation that saved 17 stranded hikers from raging floodwaters Monday in Arizona. This footage shows a chopper rescue team discovering flood victims on a rock clearing in the mountains east of Tucson. You can see a crew member being lowered down, then returning to the chopper with a small child in his arms. The hikers say they were walking through Sabino Canyon in Pima, Arizona, when they got flash flood alerts on their phones but they were unable to outrun the oncoming water. That is incredible video.

ROMANS: Heroic.

All right. New U.S. intel shows that North Korea is closer to launching a reliable ICBM than previously thought. We're live near the DMZ. That's next.

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[04:25:12] ROMANS: The U.S. now believes North Korea will be able to launch a reliable, nuclear capable intercontinental ballistic missile by early next year. That's two years sooner than previous assessments.

According to a U.S. official with access to the latest intelligence, there are still questions about guidance, re-entry, and the North's capability to hit a specific target. Right now, the Kim Jong-un regime is marking the 64th anniversary of the armistice that ended the Korean War over six decades ago.

CNN's Will Ripley joining us live from near the Korean Demilitarized Zone.

Good morning, Will.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Hi, Christine.

You know, when we talk about this North Korean deadline for having a reliable ICBM that could hit the mainland U.S., analysts keep making the deadline closer and closer. Now they're looking at less than a year for North Korea to have this kind of weapon that could deliver a nuclear warhead to the mainland U.S. troubling especially considering the threat of a nuclear strike against the U.S.

I want to set the scene where I am. I'm on the DMZ, which is the heavily fortified border between North and South Korea, just across the Imjin River there. That is North Korea.

And all is quiet today. We've been watching just like the South Korean military who have been patrolling up and down this area. They haven't seen significant activity around the demilitarized zone, along the 38th parallel, and they also have not observed any ballistic missile launches, even though we knew there was heavy machinery rolling in that could have been preparing for a possible ballistic missile launch to mark this day.

The signing of the armistice on July 27th, more than 60 years ago, ending the fighting of the war that took hundreds of thousands of lives. It is on this day that South Korea has tried to extend an olive branch. They've offered -- they made an offer for peace talks with North Korea.

Today was supposed to be the deadline. They've extended it. They say they have an open invitation for Kim Jong-un to send someone to talk along the DMZ here to try to sort things out.

But so far, the only response to North Korea has been silence. This as there is word that Congress has passed this bill of sanctions, both the House and Senate. It will be heading to President Trump's desk which means yet another round of economic sanctions trying to slow a weapons program that so far keeps moving forward full steam ahead, Christine.

ROMANS: Sure does.

All right. Will Ripley for us near the DMZ -- thank you so much for that, Will.

BRIGGS: Security measures at a holy site in Jerusalem's old city now back to where they were before last month's Palestinian attack that killed two Israeli policemen. Israeli police now saying all cameras have been removed from the area. Metal detectors were removed earlier this week. Palestinians in Jerusalem protected the security measures which led to almost daily clashes with police.

ROMANS: There's good news about Republican House Majority Whip Steve Scalise. He's been discharged from a D.C. area hospital six weeks after being shot at a congressional baseball practice. Now he faces intense inpatient treatment. The hospital says he has made excellent progress in his recovery. He's in good spirits and will begin rehabilitation.

Scalise was critically injured when a gunman opened fire on a GOP baseball team as they practiced for a charity game last month.

BRIGGS: And today, they will recognize at the White House the first responders of the shooting there.

ROMANS: Good. BRIGGS: All right. The man brought in to clean up the White House

message is actually sending mixed messages. Does Anthony Scaramucci want the FBI to investigate the White House chief of staff?

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