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FIFA President To step Down; Man With Knife Shot By Anti-Terror Unit; Senate Poised To Vote On USA Freedom Act; TSA Chief Out After Test Failures; 400 People Trapped Inside Luxury Cruise Ship; TSA Chief Sacked; Luxury Ship Capsizes. Aired 1-1:30p ET

Aired June 02, 2015 - 13:00   ET

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

ANNOUNCER: This is CNN breaking news.

WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 6:00 p.m. in London, 1:00 a.m. Wednesday in Beijing. Wherever you're watching from around the world, thanks very much for joining us.

And we have major breaking news we're following. FIFA president, Sepp Blatter, has stepping -- is stepping down. Just only moments ago, FIFA officials made the announcement at a news conference in Zurich, Switzerland. All this coming on the heels of a corruption scandal that erupted last week.

Let's immediately go to our International Sports Anchor Alex Thomas who's joining us from London. Alex, clearly, a bomb shell right now. He was only re-elected last week. All of a sudden, he was getting another term. Today, this. What happened?

ALEX THOMAS, CNN CORRESPONDENT: Wolf, we were speaking on Friday and talking about, potentially, the most historic week in the history of the planet's most popular sport. And now, I can safely say this is the most momentous day in the sport of soccer. We've never seen anything like it. I'm absolutely flabbergasted and a loss for words which isn't great for a correspondent.

But Sepp Blatter who's been at FIFA 40 years -- this year his 40th anniversary. He's the third longest serving president in FIFA's history. That's the world governing body for soccer. But his fifth term has lasted only four days. He was re-elected at the age of 79 on Friday, beating challenger Prince Ali Bin Al Hussein. In a week, two investigations in Switzerland and the United States saw dawn raids, arrests and indictment charges listed that read something like a Hollywood mafia movie.

And then, ever since Blatter's re-election on Friday, day after day has seen more lines, developments, scandals, and it seems that Blatter clearly has bowed to pressure and has quit -- Wolf.

BLITZER: Because it was only the other day he was reelected and the runner-up, Jordan's Prince Ali Bin Al Hussein, that he pulled out. There was a second round of balloting. Do we assume that Prince Ali now will emerge as the leader of FIFA? THOMAS: I don't think so, Wolf. In a 12-minute news conference, the

reign of Sepp Blatter in charge since 1998, came to an end. He spoke for several minutes. And then, Domenico Scala spoke. He's the chairman of FIFA's audit and compliance committee. And he now has a huge job and he laid out what's going to happen next.

And that is this. Only FIFA's Congress can elect a new president. And that's the 2009 National Soccer Association's from every corner of the planet. They came together in Zurich, Switzerland Friday to re- elect Blatter ahead of Prince Ali. They shall now be asked to come back for an extraordinary Congress but it won't happen until December, at the earliest. It'll happen sometime between December and March next year, because the next FIFA Congress, otherwise, wouldn't have been until Mexico next May.

They have to decide on a new president. Blatter says he will not stand again. He's not seeking for a new mandate. He understands that he can't lead this organization going forward with the scandal that it's been hit with.

And instead, they're going to look for a new man. I think, Wolf, my reading of this, and I've only had moments to digest it, is the floor is absolutely open. Anything is possible. And soccer is really looking for a new leader to turn a new page in its history.

BLITZER: And everybody's going to wonder what happened over the past few days. Only the other day, he was re-elected and talking about what he planned to do over the next several years. All of a sudden, he resigns today. Something happened in between and we're going to try to find out. Stay with us, Alex.

Christine Brennan is joining us on the phone, she's a CNN Sports Analyst. Christine, I assume you're as flabbergasted as the rest of us?

CHRISTINE BRENNAN, CNN SPORTS ANALYST (via telephone): Wolf, I am, and I can't help but thinking what happened over the last four days to change things. Sepp Blatter is one of those officials that we know well from the International Olympic Committee, from all of these FIFtems (ph). And they are FIFtems. These federations that run sports. They're -- they are invincible. They're leading lives that we can't even imagine in a Democratic society. And so, he had this. It was his. He had won and it was over. And the thought that now he's giving that up four days later tells me something changed.

And as we know, the scandal continues, the FIFA scandal with -- "The New York Times" actually reported that Blatter's top lieutenant at FIFA made 10 million in bank transactions. The federal authorities believe that. That was reported on Monday. Is it possible that they are getting closer to Blatter them -- himself? And if that's the case, maybe he knows more about the investigation and maybe he realized he had to go.

But it will be fascinating to watch how that plays out because there has to be a reason, Wolf, why this occurred. This didn't just happen because Blatter thought, oh, this is the best for FIFA. No. It's all about himself and he has to be doing this for some reason that we don't yet know.

[13:05:02] BLITZER: Yes, we don't yet know the reason, although there's been a lot of speculation, Christine, that the U.S. attorney general, Loretta Lynch, who filed all these charges the other day -- the other day against these other FIFA leaders, the FBI director, James Comey. They repeatedly said their investigation is by no means complete.

In fact, it's only just beginning. And they fully left open the door that more indictments, potentially, were on the way. I can only assume they are looking very, very closely at Sepp Blatter and what, if anything, he knew about these alleged wrongdoings, bribery and all these other financial irregularities. That's the assumption I'm working on, Christine.

BRENNAN: And I am too, Wolf. How can you not be looking at Sepp Blatter, the man in charge since 1998? This organization, we are finding out -- because of the good work of Loretta Lynch and the Justice Department and the FBI, we're finding out that this organization is corrupt to the core. This is a man who's been running it since 1998.

As I said, how did he not know? I mean, I'm asking questions because you and I are journalists and we have no idea for sure. But we've been in this business for a while and it just makes sense that Blatter had to know. It just defies logic that he wouldn't know.

And so, if he knew, then are the authorities closing in? This is what this tells me without, again, any specific knowledge. But just logic and common sense tells you there's more to this now.

But Blatter, absolutely, Wolf, he had to know. He's the man. He is soccer. He's been soccer in the worldwide now for, well, we're mentioning 40 some years, but really, in charge for the last 17. You know, this is a guy running the whole organization. FIFA is crumbling around him and the authorities are, of course, moving in and finding things out that we kind of thought about but never would have known for sure until the U.S. was investigating and is doing this.

And now, you have to wonder if he's next and he, of course, would be just a huge, huge figure to fall if the U.S. does start to investigate and find that he was also involved.

BLITZER: Something happened over the past four days to convince him to resign. We'll try to figure out and learn what that was. Christine, thanks very much.

There's another breaking story we're following right now. This one out of Boston. A police officer and an FBI agent shot and killed a man who was being watched by the U.S. Joint Terrorism Task Force. The Boston police commissioner says when the man was confronted by authorities, he pulled out a large military style knife which he refused to put down.

Deborah Feyerick is following the story for us. Deb, do we know why this man, first of all, was being watched? DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT: Well, what we're

learning, Wolf, is that investigators from the Joint Terrorism Task Force had this man on radar. It was for potential terror activity. Now, we're learning specifically that it seems to be he was making threats against police officers, perhaps imminent threats against those police officers.

Now, at about 7:00 a.m. today in Boston's Roslindale section, the police officer and FBI agent confronted the man. And when the man turned around, he was brandishing what they describe as a fairly large military style knife. Well, he was told, repeatedly, to put down the knife. He didn't and, therefore, police felt and the FBI agent felt they had no option but to shoot him down dead. He was taken to a hospital and there died of his injuries -- Wolf.

BLITZER: We're going to have more on this story that's developing, obviously, right now as well. Deborah, thank you.

The U.S. Senate here in Washington votes today on a bill that would give the National Security Agency, the NASA, some of its surveillance powers back. Major provisions of the Patriot Act expired after Senator Rand Paul and others blocked the extension of the law. Right now, the Senate is taking up a House version known as the USA Freedom Act.

Republican Congressman James Sensenbrenner of Wisconsin is the chairman of the House Judiciary Committee and introduced the Patriot Act in the House shortly after the 911 attacks. He also introduced the USA Freedom Act. Mr. Chairman, thanks very much for joining us. What's going to happen now?

REP. JAMES SENSENBRENNER (R), WISCONSIN: Well, the Senate is going to have a vote. And I hope that they pass the Freedom Act unamended and send it to the president for his signature which will happen because the president has repeatedly stated he supports this bipartisan compromise which was overwhelmingly approved by the House.

BLITZER: If the Senate makes changes, it has to go back to the House. You, then, have to review it. It has to pass the House again. You could be going back and forth on the House-Senate conference committee. Do you think that's likely?

SENSENBRENNER: Well, I hope it isn't likely. There are some authorities that the security people and intelligence people need. And it's not just cutting back on what type of surveillance is needed but we also have got to reinstate the lone wolf terrorist provisions and the court-ordered roving wiretap provisions which also expire.

Together, with my other House sponsors, we did send a statement out that said that all three of the proposed Senate amendments are poison pills. And if the Senate wants to have the bill bounce back and forth or further delay with the conference committee, then very important provisions of this law will end up not being implemented and I think that would make the American public more vulnerable.

[13:10:26] BLITZER: The Freedom Act, which you support, passed the House of Representatives overwhelmingly with 338 votes, obviously a bipartisan statement of support. It moves the collection of the bulk phone data from the NSA to the various phone companies, telecommunication companies like Verizon or AT&T. Some have complained, though, they wonder how long these phone companies would have to retain all of this bulk data. Can you answer that?

SENSENBRENNER: Well, there's no provision in the Freedom Act that says they have to retain it longer than is necessary for their ordinary business purposes, like sending out bills and making sure that the bills are paid. If we need real time intelligence on who's calling whom, that's sufficient. The NSA could go to the Foreign Intelligence Surveillance Court and get a warrant, but the warrant could only name a specific person. There would be no bulk collection, either under the expired provisions of the Patriot Act or some other laws, like the National Security Letter Law which are not a part of the Patriot Act. So, I'm not overly concerned about that. And I think that saying that we have to put in the law how long the phone companies keep their records beyond normal business practices is really a red herring.

BLITZER: Because some have complained. Senator Angus King, the independent senator from Maine, he said he doesn't know. If they have to keep it for six days, six weeks, six months, six years, that's a problem. You've heard that complaint?

SENSENBRENNER: Oh, I've heard that complaint. And we know they're going to keep it long enough to make sure they can send out their bills and collect them. And if somebody doesn't pay their bills, they're going to have to keep the records long enough to be able to go to court to get a judgment to collect them.

So, again, I think that's a red herring. People keep accounts receivable and billing records long enough to protect themselves. I think that will be long enough to protect the public because, again, old intelligence is useless intelligence.

BLITZER: Do you think American -- the American public is less secure today than it was on Sunday before the NSA, the Patriot Act, expired?

SENSENBRENNER: No, I don't think so. I think the Patriot Act has made Americans safer which is not safe but safer. On the other hand, the original intent of the Patriot Act was to prevent data mining. And beginning in 2006, the NSA, under both the Bush and Obama administrations, ignored the law.

Last month, the Second Court of Appeals in New York said that the administration completely misconstrued the stated intent of the law and said that what they were doing with bulk collection was illegal. I think the court got it right. And that means that (ph) they'll be able to have corrections to only target people who are suspected of terrorism, the safer American people are. And every day the Senate delays on sending this bill to the president is going to make us less safe.

BLITZER: Mr. Chairman, thanks very much for joining us.

SENSENBRENNER: Thank you.

BLITZER: James Sensenbrenner, Chairman of the House Judiciary Committee.

Other news we're following, the fallout has begun after a stunning report on TSA security failures. Just ahead, I'll speak with a Florida Congressman who actually helped create the security agency. We'll find out what he says is going on right now.

Also, a race against time to rescue more than 400 people trapped inside a luxury cruise ship that may have been hit by a tornado.

[13:14:18]

(COMMERCIAL BREAK)

[13:17:35] BLITZER: The Transportation Safety Administration, the TSA, has a new boss today. The acting director, Melvin Carraway, is out. He was reassigned following revelations that his security agents failed to detect banned items, including weapons and explosives, get this, 95 percent of the time during a recent inspection by the Department of Homeland Security inspector general. Homeland Security Secretary Jeh Johnson has already made some changes directing the TSA to revise its screening procedures, conduct training and reevaluate its screening equipment.

Joining us now from Capitol Hill is Representative John Mica. He's the former chairman of the House Transportation Infrastructure Committee. He helped set up the TSA following the 9/11 attacks.

Thanks very much, Congressman, for joining us.

I know you've been very critical of the TSA in the past, even suggesting occasionally it's out of control. This report, which we all learned about yesterday, it is so shocking. What was your reaction?

REP. JOHN MICA (R), FLORIDA: Well, nothing's new in Washington or with TSA. In fact, Wolf, I got a report that CNN did in 2007. The title is "Airport Screeners Fail to Find Most Fake Bombs." It was you all reported, CNN, in 19 - I'm sorry, in 2007 that 75 percent of the time they failed. And in this report it says also they had 30,000 screeners. We now have 46,000 screeners and they're failing 95 percent of the time according to this report. So they're spending more money, bigger bureaucracy and they're performing even worse.

BLITZER: I remember that report that CNN did back in 2007. We all assumed, though, in the aftermath of that report, some major changes, improvements were being made at screening locations, at airports all over the country. But in this new report, the inspector general, the Department of Homeland Security said there were 70 attempts to smuggle through TSA agents, fake bombs, guns, explosives, and 67 times, 67 times they got the stuff through the TSA, which is so shocking, so worrisome. What do you do about that?

[13:19:47] MICA: Well, it's even worse than that, Wolf. That was DHS and TSA. They're doing red teams, checking themselves. There are other reports like GAO, and I have many reports here of showing the failures in training, recruitment, retaining personnel. And the equipment management, they don't even know how much equipment they have. They don't know how to maintain it. They don't keep regular reports on it. Some of the equipment they bought, we spent millions, pluffers (ph), they had to be destroyed by DOD after they spent millions of dollars storing them. The back scatter equipment, which you don't see at the airport, the misplacement of the equipment they've got out there for detection and the failure of that equipment, we see, is not working after spending billions of dollars and hiring thousands and thousands of more people. And we have 14,000 bureaucrats in TSA across the country, 14,000, and 46,000 screeners. It's out of control.

BLITZER: Because some people say maybe these screeners aren't being paid enough. I know you've, in the past, proposed privatizing this whole operation. What would that do?

MICA: Well, first of all, the government needs to get out of the screening business. It needs to set the standards, the protocols. It needs to do the audits and inspections and it needs to also go after people who pose a risk connecting the dots. The intelligence and security portions, not what they're doing, trying to manage this huge bureaucracy, get them out of that business and into the security business, like almost all the other countries have done, U.K., Israel. We're like Romania and Bulgaria. We have this huge government bureaucracy that never stops. Get people to do what they do best and government has an important role in setting the standards and protocols and auditing the process.

BLITZER: Congressman, thanks very much for joining us.

MICA: Good to be with you. Thank you.

BLITZER: John Mica, the representative from Florida.

Coming up, hundreds of people trapped inside a luxury ship now floating upside down in China. The latest on the rescue efforts. That's just ahead.

(COMMERCIAL BREAK)

[13:25:26] BLITZER: China's weather service confirms a tornado hit the area where a luxury cruise ship capsized. More than 400 people are now missing. The ship was on a 13-day trip along the Yangtze River when it went down about two miles from shore in 50 feet of water. Our David McKenzie has more on the all-out effort underway right now to rescue the people trapped beneath the hull.

(BEGIN VIDEOTAPE)

DAVID MCKENZIE, CNN CORRESPONDENT (voice-over): A harrowing escape after hours trapped below. Chinese rescuers pulled the 65-year-old woman to safety after frantic searching. She made it out, hundreds of others haven't, after the Eastern Star overturned with more than 400 passengers on board. Rescuers searched Tuesday for the hundreds still missing. Local media reported they could hear knocks within the ship's hull. And rescuers using hammers tried to make contact for proof of life.

YANG CHUANTANG, CHINA TRANSPORT MINISTER (through translator): As long as there's even a little hope, we will give it 100 percent and we'll absolutely not give up.

MCKENZIE: According to state media, the ship's captain and chief engineer made it out alive. They said the ship had been hit by a tornado and up-ended in 50 feet of water. Now they are in custody of the authorities and being questioned. China's weather service confirms there was severe weather at the time.

MCKENZIE (on camera): The frantic search continues from the staging ground next to the Yangtze. But as the hours tick by, the hope fades. And the weather is playing its part, making it more difficult to try and find anyone trapped in the hull.

MCKENZIE (voice-over): Passengers families wept as they gathered to wait for news. News that for too many could be full of grief.

David McKenzie, CNN, on the banks of the Yangtze River.

(END VIDEOTAPE)

BLITZER: A terrible story that is.

When we come back, the shocking news out of the world of soccer. The FIFA president, Sepp Blatter, announcing he's resigning only four days after he was re-elected.

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