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ERIN BURNETT OUTFRONT

French Politicians Gives U.S. Advice; Mitt Romney's Windsurfing Moment; Iranians arrested in Terror Plot in Kenya

Aired July 3, 2012 - 19:00   ET

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


ERIN BURNETT, CNN ANCHOR: OUTFRONT next, a French politician telling the U.S. how to run its economy. Does it add up?

And Iranians caught with 30 pounds of explosives. Their target supposedly were Americans.

And a judge has ruled this pilot insane.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Oh, my god. Oh, my god. I'm distraught. Oh my god. We've got Israel, we've got Iraq. We've got Israel, we've got Iraq. We're going to get (INAUDIBLE). Take it down.

(END VIDEO CLIP)

BURNETT: Does the ruling put JetBlue on the hook for allowing him to fly that plane?

Let's go OUTFRONT.

Well, good evening, everyone. I'm Erin Burnett. OUTFRONT tonight, ooh-la-la. France's most powerful woman sticking her nose in America's business. It is sort of her job to do that. Christine Lagarde, head of the IMF, had a doom and gloom message for Washington today.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: Economic recovery remains tepid, and downside risks have intensified. What we see is clearly a risk that confidence be eroded.

(END VIDEO CLIP)

BURNETT: And she didn't stop there. She took on President Obama, too. In fact, she called his $3.8 trillion budget, which he says will reduce the deficit from 8.5 percent to 5.5 percent of our economy by next year as too rapid. Among her suggestions, more infrastructure spending, housing initiatives and further extension of the emergency unemployment benefits.

Now, hey, we're all for ideas from anyone, but this did seem to be a pretty naked endorsement of the spend, spend, spend idea which is in vogue in Lagarde's home country of France right now, where they've pledge to cut the retirement age from 62 to 60.

Well, here's how some of that has seemed to be working for France. The country's debt is now 90 percent of the size of the economy. Many economists say that's when an economy can no longer grow. Thanks to having too much debt. But you know what? Maybe she is right about America because America is only nearing 70 percent on that crucial ratio of debt to the size of our economy.

So as hard as this advice may be to take from someone who is French -- we're being tongue-in-cheek, everyone, don't get all bent out of shape -- is it right?

Steven Moore is with us from the "Wall Street Journal" editorial board and Gillian Tett, U.S. managing editor of "The Financial Times."

Great to see you both.

STEPHEN MOORE, WALL STREET JOURNAL EDITORIAL BOARD: Thank you.

BURNETT: Stephen Moore, I mean, you know, it may be hard to take it from someone who is French, but, you know, she points out, we have a little bit more room, and when you look at that crucial ratio, maybe she's right.

MOORE: Well, oui, oui, it is hard to take. And you know, what she's saying is that she wants the United States to be more like France. Right? I mean we're at 70 percent of our debt to GDP, they're at 90 percent. She wants more spending, she wants more stimulus. And there's a couple of problems with that, one is it didn't work so well in the United States when we tried that a couple of years ago.

But also, I mean, why would we want to move in the direction that France and Italy and Spain and Greece have done. We should move away from that model. It's almost like, you know, the Charlotte Bobcats coach, you know, explaining to LeBron James how to win a championship.

(LAUGHTER)

BURNETT: Gillian, Gillian, I guess you're here to represent the socialist views of the continent.

GILLIAN TETT, MANAGING EDITOR, FINANCIAL TIMES: Well, I do represent the global sentiment. And I certainly wouldn't defend what people at the French government have been doing over the last year or two, but at the same time, what she was saying is, watch out, America. Because America is heading towards a so-called fiscal cliff that could be a very nasty shock at the end of the year, if the fiscal issues are left unresolved.

And at the moment, the global economy simply cannot afford another shock when we have the Eurozone already in problems and China also emitting some warning signals. So it's really in that context that she was talking about America.

BURNETT: And do you think when she talked about the fiscal cliff, which she did specifically, she was saying, look, the effect on the rest of the world is just going to be huge. I mean is that -- I mean, obviously, the U.S. is the most important economy in the world still. But is that fear mongering on some level?

TETT: There is a lot of concern about the impact that going off that fiscal cliff or even a period of so-called bungee jumping, sort of going off a bit and then having a deal, and going off again, due to global sentiment. Because the reality is, we've seen in Europe what happens when political citizens fail to get their act together.

BURNETT: Right.

TETT: And also, we've got plenty of American politicians getting very frustrated with the Eurozone. It would be so ironic if at the end of the year, due to political paralysis here in America, we had yet another shock to the global economy, not out of the Eurozone, but out of the U.S.

BURNETT: Now that is true. That would be a very great irony that would humiliate a lot of people in the United States, Steve Moore.

MOORE: Well, look, the last thing we have to worry about the United States is spending too little money. I mean we've jacked up our debt by $5 trillion over the last four years. We're spending nearly $4 trillion at the federal level. In fact, I think cutting government spending right now would be very positive thing for the U.S. economy.

It was interesting. She didn't mention -- all these things that she said that the United States should do, more unemployment insurance, pay more people to stay unemployed, housing assistance, infrastructure, she didn't talk about the one -- and I know, Erin, that you disagree with me on this one.

BURNETT: Yes.

MOORE: But I think the big danger is all those tax rates going up on January 1, 2013. And she didn't mention that at all. But I think that does have negative effects for businesses incentives to invest and hire workers by now.

BURNETT: Got to say, she said everything else she said, Gillian, she might as well have gone there. It's almost as if she avoided it because it's third rail. Hey, you jump in and tell America how to run its economy, come on, go -- go all the way.

TETT: That's not beside the fact that the IMF is there to look after global economy, and America is the world's biggest economy. And so obviously, the rest of the world is very concerned about what happens here. And it's not so much the details of any kind of fiscal measures that are worrying people right now. It's a threat that there may not be any plan that actually by the end of the year we'll have gridlock and that will really sap business confidence.

And it's a confidence issue right now which is key. MOORE: Yes.

BURNETT: Right.

TETT: Because we're already seeing businesses freeze for fear of what's going to come out of the Eurozone. If it's not freezing for fear about Washington as well.

BURNETT: True.

TETT: That's going to be very bad news.

BURNETT: We've all --

MOORE: Yes. Well, I agree with that. I mean I do think, you know, it's still the case, even with all our problems, we're the hub of the world economy. And, look, when we catch a cold, the rest of the -- the world catches pneumonia, especially Europe right now. So I agree with the sentiment. Yes, let's get growth up in the United States -- for everyone. I just think more of the same spending and borrowing is not the best --

BURNETT: And Steve, you're just finishing a study that I know you're getting ready to publish.

MOORE: Yes.

BURNETT: It really looks -- at this crucial question right now, which is if you borrow money and spend it on stimulating the economy, unemployment benefits or whatever else it might be, how does that affect growth?

MOORE: Yes, we looked -- Art Laffer and I looked at 30 OECD countries and we looked at countries that have the biggest fiscal stimulus from 2008 to 2010. And surprisingly, Erin, we found that the countries that actually had the most stimulus spending actually had the weakest recovery. So there's no evidence whatsoever that government spending causes an economic turn-around. In fact, just the opposite.

BURNETT: Gillian, do you think France will be the country that leads the way, though, on the spending, as President Hollande wants to do? Will they?

TETT: I am not here to endorse uncontrolled spending at all.

BURNETT: Yes.

TETT: But at the same time, I would say the one thing we've seen from the Eurozone in the last year or two is that uncontrolled austerity in an unintelligent way doesn't work either.

BURNETT: Right.

TETT: If you just cut randomly, that's not good either. What everyone on both sides the (INAUDIBLE) need to do is come together and craft a sensible, moderate pace and carefully planned program for trying to balance the debt and ensure there is growth. I mean, U.K. at least has a plan, it's trying to implement it.

BURNETT: Right.

TETT: It's having a pretty patchy record right now. But the real tragedy is just how few countries across the western world have an intelligent plan at all.

BURNETT: Right. It's about telling people the truth, and the truth can be really, really hard to --

TETT: Yes.

BURNETT: To take and to tell.

Gillian, Steve Moore, thank you very much. As always, good to see you.

And still OUTFRONT, how Mitt Romney is looking like John Kerry -- John Kerry in more ways than one. One of them being that he's tan and in great shape. But there are others.

Plus, her husband charged with killing 16 civilians while on tour in Afghanistan. Does Kerry Bales think her husband Robert is guilty? I'll ask her.

And Aimee Copeland making a miraculous recovery in her battle with the flesh-eating bacteria. Her parents OUTFRONT tonight with details of her first day in rehab.

(COMMERCIAL BREAK)

BURNETT: This video caught our attention today. Yes, who is that? Who are those amazingly good-looking people? Mitt Romney and his wife, Ann. And they really are. I mean, you know, sickly good- looking. Particularly Ann. Skiing on a lake in Lake Winnipesauke where the Romneys will celebrate the Fourth of July.

This scene reminded us of another presidential candidate. Enjoying some summer downtime. Also equally good. Actually, much better because I have to say, Ann was driving the jet ski. Mitt looked like he was holding on for dear life.

John Kerry clearly knows how to wind surf. There he was back in 2004. But the question is, is Mitt Romney having his wind surfing moment? A very smart man once told me this.

(BEGIN VIDEO CLIP)

ERICK ERICKSON, EDITOR, REDSTATE.COM: I think both parties need to pass a rule, neither one of us will ever nominate anyone from Massachusetts again.

(END VIDEO CLIP)

BURNETT: Well, that man joins us now. Erick Erickson, along with John Avlon and Roland Martin.

Erick, you stand by that?

ERICKSON: Yes, you know, if this isn't going well for Mitt Romney, the interesting thing for him is that Eric Fernstrom is probably the guy from Massachusetts who may need to go. But I'm a little bit shocked by the Obama campaign really pushing this out to the media today because, you know, I lived down in Georgia. We call those the red neck version of the ski boat. We all have them, and none of us are in the 1 percent.

BURNETT: Yes, well, I mean -- I'm saying, to be fair, the comparison with the wind surfing was mine. I was unable to resist that. But, all right, so you're saying jet skis are not wind surfing. But still, Lake Winnipesauke, fancy New Hampshire --

ERICKSON: You know, this is the same thing with like Mitt Romney going to New Hampshire and Barack Obama going to Martha's Vineyard. Neither of them seem to want to relate to the rest of America. It's a problem both campaigns have.

BURNETT: John Avlon, it's true, they both go to very --

JOHN AVLON, CNN CONTRIBUTOR: Well, and quite notably.

BURNETT: -- lovely New England lookouts.

AVLON: They do. And quite notably, Barack Obama is not going to Martha's Vineyard this year. That -- that vacation plan has been called off. But you know, obviously, the reason this video popped is that it does recall the wind surfing moment. And there's -- you know, just having fun with it, maybe the message isn't just not nominate folks from Massachusetts but --

BURNETT: Right.

AVLON: -- avoid water sports when you're running for president.

BURNETT: Avoid water sports.

AVLON: Maybe that's --

ERICKSON: Oh, god.

AVLON: But, I mean, look, you know, in all seriousness.

BURNETT: John Kerry was really good. I mean he purposely aimed for that. I've got to say.

AVLON: And I'm not quite sure what -- I'm not quite sure what Mitt Romney is doing behind his wife on the jet ski, but that's really a judgment. Look, obviously, on a superficial level, you've got a -- you've got a stiff Santorin Massachusetts --

(CROSSTALK)

BURNETT: She wears the suit.

Roland, she wears a suit. It's the best part about him as a candidate.

ROLAND MARTIN, CNN CONTRIBUTOR: First of all, I'm trying to figure out why Erick is standing by that shirt with a T-shirt underneath. OK?

(LAUGHTER)

BURNETT: Whoa. Whoa. Whoa.

(CROSSTALK)

MARTIN: But here's the deal. Here's the deal. This makes no sense --

ERICKSON: Because I've got my swimming suit on and I'm going to the beach after I get off here.

MARTIN: If I'm Mitt Romney, I would -- I would channel Allen Iverson. I would say, jet skis? Really? We're talking about jet skis? Not policy. Jet skis. That's what we're talking about? This to me is what drives me nuts. Every time we have a conversation where it's -- whether it's wind sailing or jet skiing, the president should also say, golf? You're talking about golf? Of all the things out there, you're talking about golf?

This is just nonsensical. Guess what? Americans jet ski. Americans wind surf. Americans play golf. Americans go to Martha's Vineyard.

BURNETT: This is all true.

MARTIN: So I think we -- Americans go to Jackson Hole, Wyoming. Americans do all these things. So how about this here? If we questioned them on policy, as opposed to silly stuff, that to me makes sense. Not a jet ski.

BURNETT: You know what, that's a very fair point, John Avlon.

AVLON: Amen, Roland. Yes. Amen.

BURNETT: Right, I mean --

AVLON: No, I think -- look --

BURNETT: Erick, that was the impassioned defense that you were supposed to provide.

(LAUGHTER)

ERICKSON: Well --

MARTIN: But he can't have that patterned shirt.

ERICKSON: You know, I'm looking forward to going to the beach for the Fourth of July.

(LAUGHTER)

AVLON: Yes.

BURNETT: But this -- this brings me, though, to something, Roland, which is interesting. Let's look at the polls because this is serious. A new poll shows Mitt Romney and Barack Obama pretty much tied on a crucial issue for Mitt Romney, who would better handle the economy. Essential tie, 48 percent for Mitt Romney, 47 percent for Barack Obama.

I don't need to tell everybody, this is within the margin of error. More willing -- more likely to get the economy moving? Barack Obama, 44 percent, Mitt Romney, 42 percent.

ERICKSON: Yes.

BURNETT: That's pretty damning.

MARTIN: See that date, June 28th, July 1st?

BURNETT: Yes.

MARTIN: That's the most important thing. These mean nothing right now. OK? We could spend a lot of time poring over numbers --

BURNETT: Now why do you say that? Because people are feeling in a good mood --

MARTIN: No, no, because --

BURNETT: -- because of the holiday?

MARTIN: No. No. It's because so many things can happen literally over the next four months that could totally change this election. Remember in 2008, what took place when Senator John McCain suspended his campaign, he goes to Washington, D.C., Senator Obama does not. I mean that really cement the race. That was October. So many different things can happen. And so I really don't get excited over who could possibly handle the economy better. It's really going to come down to those critical states as opposed to some overall number.

AVLON: Look, of course, statewide numbers are what determine who wins the electoral college. And, of course, it's still early. We all get that. But what I think is significant about these polls right now is that it does show that the economy is largely a jump ball. And to some extent, momentum seems to be slightly shifting towards President Obama at a time when the Romney campaign keeps saying it's all about the economy.

Every day, we don't talk about the economy is a bad day for us.

BURNETT: Right.

AVLON: And so that's why I think these are indicative of the way the winds are shifting right now.

ERICKSON: Yes, but there's a problem with right now.

BURNETT: Erick, Erick, let me -- let me just ask you a question about what Mitt Romney should do.

ERICKSON: The problem is that --

BURNETT: Hold on, I just want to get to this before the end of the conversation. These tweets that are out about the Mitt Romney campaign.

Erick, you know, from Rupert Murdoch saying Mitt Romney last week, "Tough O' Chicago pros will be hard to beat unless he drops old friends from team and hires real pros. Doubtful." He then continued that, Jack Welch, the well-known former leader of General Electric, said, "Hope Mitt Romney is listening to Murdoch advice on campaign."

Is it time for a shake-up, Erick?

ERICKSON: Yes, I'm not sure that it is. Because Mitt Romney has a very insular campaign. And one of the problems that Mitt Romney has is very much like what George W. Bush had, which is a great deal of loyalty to his staff. And he doesn't necessarily cut strings when it's time.

I'm concerned about Eric Fehrnstrom and he gave the Etch-A-Sketch remark, he gave now the "It's not a tax" remark on Monday. Internally Romney people seem to be saying they're upset with him for doing that. At the same time, though, you know, the president up until the Supreme Court gave him a win last week had a significant series of bad weeks. Polling isn't going well for him in the battle grounds. Even CNN has him behind Mitt Romney in battle grounds.

BURNETT: Right.

ERICKSON: And no one wants to talk about should Barack Obama's team do this. I'm not sure it's necessarily to talk about Mitt Romney's team when they're neck and neck in the polls and he really hasn't done anything wrong in the past few weeks.

AVLON: Right. And this is a Republican campaign being run out of Massachusetts so there are a lot of consultants wanting in. But to change your campaign's team at this point would be so destabilizing and so demoralizing. You want to reach out and grow your campaign, I think is what I'm hearing Erick say. But I think getting rid of your top staff especially when you're in the real heat, that would be I think a terrible management decision among other things.

BURNETT: Final word --

MARTIN: Governor Romney should ignore people like Jack Welch and Rupert Murdoch. Neither one have ever run for political office, they've never won. And so the way you operate in business is different when it comes to politics. If you shake your team up, that's going to lead to another host of stories about saying you never trusted it. Then it becomes this whole thing where it just eats yourself up.

Stick to your game plan. You move forward, anything happens, you get to September, October, that's a different ball game.

BURNETT: Hey, Roland --

MARTIN: You don't thing anything now.

BURNETT: You're not -- you're not a consultant for the Romney campaign tonight. I'm just checking.

MARTIN: No. But I'll tell you what, though --

BURNETT: I'm just checking. You know, he might need you.

MARTIN: I'll take some Romney money, though.

(LAUGHTER)

MARTIN: I don't mind another check.

BURNETT: Buy yourself a jet ski. Thanks to all three of you. We appreciate it. Nothing wrong with having fun, doing whatever you're going to do.

All right. Iranian nationals are accused of hiding 30 pounds of explosives, potentially targeting Americans, enough to blow up a major hotel. We're going to go live to that story.

And the world's top poker player will soon make off with more than $18 million. And that is no joke.

(COMMERCIAL BREAK)

BURNETT: Our third story OUTFRONT, Iranians found with a massive stash of explosives accused of planning a terror attack. Now these are two Iranian nationals arrested in Kenya for plotting to plant explosives in Kenya and neighboring countries. And reportedly, they were targeting U.S., Israeli and British interests, including embassies or hotels.

Our David McKenzie is in Nairobi, and I asked him whether there is any doubt that these plots were actually backed by the government of Iran.

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, the Kenyan officials are being very circumspect at this point, Erin. I mean they try not to get too much out there. This is an active case. And of course these two gentlemen, these Iranians, have not been convicted of anything yet. But they were found with 30 pounds of explosives, hidden in a golf course on the coast of Kenya.

That amount of explosives could take down a hotel, a large building, or dare I say it, even an embassy. So certainly, these were not small-scale terrorists, if they are, in fact, terrorists. And the finger would be pointed at least initially and the Israeli government is pointing towards the Iranian government, which has long denied any links to terror. But in this case, if they are found to be Iranian operatives, a very serious allegation. And what could have been extremely serious terror attack.

BURNETT: Yes. And I know obviously the U.S. government has accused the Iranian government of being behind an attack in the U.S., again, an accusation not confirmed. But what can you tell us about any sort of details against -- about plots that these men were planning against American targets?

MCKENZIE: Well, what we do know is that they were plotting a serious and damaging terrorist attack. Either here in Kenya, or across -- from here, in the neighboring countries. What we do know is that there's been a history of terror attacks in Kenya by international terrorists, starting in the late '80s with the U.S. embassy bombings. And of course there have been Israeli targets as well in the early 2000s and now mostly comes from neighboring Somalia.

But with this case with the Iranians, it's a little bit different. If it's proven to be true, certainly with that amount of explosives, if put together, would be a major terrorist operation. We're not talking about a small grenade attack or trying to attack a nightclub, which we've seen in Nairobi. This would be a major scale terror attack. And, of course, the U.S. is particularly worried about these kind of attacks, and when these men were picked up.

There was a warning, an imminent terror threat warning by the U.S. embassy, specific to Mombasa. Now we don't know if these two incidents are connected, but certainly a lot of dots could be joined up in the coming weeks -- Erin.

BURNETT: All right. Well, thank you very much, David McKenzie reporting for us from Nairobi tonight.

And ahead, Robert Bales charged with killing more than a dozen Afghan civilians. So does his wife think he did it? Kerry Bales OUTFRONT, next.

And a judge has just ruled a JetBlue pilot insane after passengers subdued him during mid-air rant. Now can that airline be held responsible financially for allowing him in the cockpit?

(COMMERCIAL BREAK)

BURNETT: Welcome back to the second half of OUTFRONT. We start the second half with stories we care about, where we focus on our own reporting from the front lines.

And first, former Commerce Secretary John Bryson will not be charged for a hit and run incident in California. In a report obtained by OUTFRONT, the Los Angeles County District Attorney's Office says it found insufficient evidence to prosecute the former Cabinet member. Tests found that Bryson didn't have alcohol in his system but that he had taken the sleeping pill Ambien. Prosecutors, though, could not say the drug played a role in the crashes and Bryson resigned from his post after the incident, saying he suffered a seizure.

Meantime, after an apology from the United States, Pakistan agreed today to reopen key supply routes for U.S. and NATO trucks going into Afghanistan. Now this comes after months and months of arguing, thanks to an incident in November where Americans killed 24 Pakistani soldiers.

Pakistan demanded an apology before reopening the border crossings, and the secretary of state, Hillary Clinton, today delivered that apology, telling Pakistan, quote, "We are sorry for the losses suffered by the Pakistani military." Now, in exchange for that apology, Pakistan has dropped its demand that every United States truck that crosses its territory on the way to Afghanistan pay a $5,000 fee. That fee will stay at $250 per truck, and that is what the United States considers a win tonight.

Well, French police have raided homes and offices belonging to the former French president, Nicolas Sarkozy, amid an investigation into illegal campaign financing. "Agence France Press" is reporting the probe centers around allegations that France's richest woman gave cash-filled envelopes to Sarkozy aides to fund his campaign.

Liliane Bettencourt is the heiress to the L'Oreal cosmetics empire. She's France's richest woman.

The raid comes just weeks after Sarkozy lost his presidential immunity because he didn't win re-election.

Christian Malar with France TV3 told OUTFRONT there are no signs tonight that police actually found anything in those raids today, though.

And there is a July 4th to celebrate for, one of the most American of industries, carmaking. U.S. car sales surged in June. And these are big numbers, everyone.

Chrysler, 20 percent jump in sales, its best June since 2007. Yes, you are right to recognize that is a summer before the financial crisis. So that's a real number. That's when the economy was at its peak.

G.M. also posted double digit gains. Analysts say the bump in sales comes from steady demand, low gas prices and those low interest rates -- thanks to the Feds' extraordinary easing.

Well, it has been 334 days since the United States lost its top credit rating. What are we doing to get it back?

Those car sales are a great sign and so is this: U.S. factory orders rose more than expected in May. They were up about 7/10 of 1 percent.

And now our fourth story OUTFRONT: A wife speaks out. The allegations against her husband, Army Staff Sergeant Robert Bales are horrific, 16 counts of premeditated murder. Many of them women and children. Almost four months after her husband was accused of gunning down innocent Afghan civilians, Kari Bales is speaking out. And I spoke to her just before the show and she told me about life since the alleged massacre, about her visits with her husband, and why she continues to love him.

(BEGIN VIDEOTAPE)

KARI BALES, WIFE OF STAFF SGT. ROBERT BALES: I just know that my husband isn't capable of this. And I'm really hoping for a fair trial.

BURNETT: Right.

BALES: It's been really difficult to have him be guilty instead of, you know, innocent until proven guilty. And --

BURNETT: Do you think he'll get that fair trial? I mean, obviously, the international focus on this, the domestic focus on this has been intense.

BALES: Huge.

BURNETT: Do you think he'll get -- can get a fair trial?

BALES: I'm really hoping that he did. Because he's -- you know, he's a great American, he has fought for his country, he sacrificed a lot being away from his family. And we do need help. I need help with his defense fund.

And we do have a defense fund together for all of the legal fees that are being -- that are coming about. And it's balesdefensefund.com.

And we have received so much support from all over the world, not only just this country.

BURNETT: Wow.

BALES: People sending letters, cards of encouragement, and also contributions. But we do need more for expert witnesses. It's very costly.

BURNETT: So the military has accused your husband of the illicit steroid use and alcohol abuse. And his lawyer, John Henry Browne, had said -- I just wanted to quote exactly what was said. "Steroid use is going to be an issue in this case, especially where Sergeant Bales got steroids and how he got them."

Do you know anything about that, those crucial questions?

BALES: I don't. I never discussed that with my husband over the phone. Nope.

BURNETT: And I know you did speak to him about two days before the alleged incident. He was totally normal? BALES: Perfectly fine. What are you doing tonight? I happened to be at a candlelight party at a friend's house. We were just talking about that and how the kids were doing. Yes, it was typical. Typical conversation.

BURNETT: And it was -- do you think in a sense, in general, he was protecting you? I know you had said you didn't know about the brain injury in Iraq until after he got home.

BALES: Right.

BURNETT: He didn't want you to know to hear about whatever is happening --

BALES: Yes, and I feel bad that I didn't maybe question more. I think about it that way. But he did want to protect us. He protected me and protect the kids, because he faced it. He didn't want us to have to face it.

BURNETT: So how often have you spoken to him sense?

BALES: We actually get to talk once or twice or three times a week. He's -- it's very open for him. So --

BURNETT: And have you talked about the night, what happened that night?

BALES: Not at all. Not at all. We're always monitored. So I'm not going to ask him the question, knowing that we're being recorded.

BURNETT: Right.

BALES: And we've talk about -- I've talked about it with his lawyers, which -- who I can talk about and he has talked about it with the lawyers, which are the important people to talk about it with.

BURNETT: Right.

BALES: It's interesting to me that everyone wants to know, why didn't you ask him? Well, we're monitored.

BURNETT: So you can't.

BASLES: I don't -- you know, he's talked about what he knows. But as far as saying what happened, that will be maybe whenever all of this is done, and we're alone, truly alone. Maybe.

BURNETT: And the husband, father of your children.

BALES: Right.

BURNETT: So -- and those children are going to be seeing him again for the second time?

BALES: Yes, the end of this week. Yep. BURNETT: That's -- and do they -- what do they understand? When you go, will they ask you questions, or is it just wow, they're going to see daddy?

BALES: They're going to see daddy. And we haven't seen him for -- it's been a little over a month now. So, I try to make it every month, but it's expensive to go. But, yes, we're all excited to see daddy. We talk about daddy every day.

And our favorite thing is -- maybe you read about in my magazine was the hand. He outlines his hand and they high-five it every time the letters come in, every time he sends us letters. It's awesome.

And the last time we were there, we drew our hands together and we high-fived. So there was a lot of just being together, even though we're apart.

BURNETT: That -- I mean, that's got to be the one joy in his life. He's looking forward to seeing them.

BALES: Yes. Yes, big-time.

BURNETT: So how -- have you thought about -- this could last for years.

BALES: Right.

BURNETT: You look at the -- Nidal Hasan trial, that's been already a few years in and not gone to trial. This could take a very, very long time.

BALES: Right.

BURNETT: The children are young now.

BALES: Right.

BURNETT: But it could be during this process that you have to talk to them about this.

BALES: Right. And I'm sort of taking it day by day. They're very young now. They understood deployment. They know that daddy is at work. And now I say he's at special work so when we go to see them, they understand why he's not coming home with us. Daddy has to work.

And as far as what the future brings, I just take it day by day. Because I really don't know what the future brings.

BURNETT: If the truth comes out and he did it, but it was under the influence of steroids or something, how do you get your arms around that? I mean, is that the fault of the U.S. military?

BALES: I'm really -- I'm not -- I don't think that far down the road. I really just want the truth to come out. I don't think we have enough information. I don't -- BURNETT: Right.

BALES: You know, I just want my family to be together, the best that it can be. So I haven't thought about that, really. I don't believe my husband is capable of this. So --

BURNETT: And when you're -- when you visit him in person, do you -- do you have any moments of privacy? I mean, everything is monitored?

BALES: Everything is monitored. Always video or audio. But we, you know -- they -- they're very professional and very respectful at the prison. And so we do get to hug when we see him.

And it's amazing to see the children with him, gets to sit next to them. They don't get to sit in his lap, but they get to sit right next to him, and they get to hug him and talk to him. I'm the luckiest person to be able to see my favorite people together.

BURNETT: Yes.

BALES: We -- we were together on mother's day, and we hadn't been together since December. Excuse me.

So it was beautiful. It was beautiful. So -- but we were blessed. He wasn't supposed to be home until a year, so we're lucky that he's safe and we get to see him. So -- that's the best part.

BURNETT: That's an amazing way to look at it. They're not allowed to sit?

BALES: No. It's a rule. We follow all of the rules. Because we just want to be able to see him.

BURNETT: He can touch them and hug them.

BALES: Yes, he can put his arms around them and color and we do puzzles and play with toys and all of that. So, it's amazing. We're truly blessed.

BURNETT: Thank you very much for coming and talking to me. We appreciate it.

BALES: Thank you. Thanks, Erin.

(END VIDEOTAPE)

BURNETT: Sort of a different perspective when you sit and talk to someone's wife going through what she's going through.

Well, now, remember this disturbing video.

(BEGIN VIDEO CLIP)

(INAUDIBLE)

PILOT: Oh, my God! I'm so distraught!

(END VIDEO CLIP)

BURNETT: That was the pilot on a JetBlue flight en route to Las Vegas in March. The pilot's name was Clayton Osbon. He was incoherent, ranting about the 9/11 terrorist attacks, Israel, al Qaeda and Iraq. His co pilot locked him out of a cockpit and made him an emergency landing.

Today, a federal judge ruled that Osbon is not guilty for interfering with a flight crew by reason of insanity and he's now going back to a low-security federal prison. He's going to further examination.

Our own Paul Callan is OUTFRONT.

So, Paul, were you surprised by this verdict?

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: No, I wasn't. Because something strange -- a little back story to it. The jury was waived. The prosecutor agreed to let the judge hear the case. The defendant wanted -- the attorney wanted the judge to hear the case, and the judge agreed to it.

So usually, that sounds like everybody agrees. He's insane. And they were just sort of going through the motions, I think.

BURNETT: So, OK, he's insane. And -- even just hearing his voice, talking about how distraught he was. I mean, it makes you -- feel incredibly -- incredible empathy for the person.

But there are a lot of lawsuits already filed. Ten, I believe, civil lawsuits against JetBlue. JetBlue is -- are they now going to be liable? You hired an insane pilot.

CALLAN: Well, I think this is an extremely damaging finding against JetBlue. I mean, first of all, in order to be found insane, as a matter of criminal law is extremely difficult. Ninety percent of the time the jury doesn't buy it, it's a hard thing to prove.

Here, it is so clear that he is legally insane that the judge agrees, the prosecutor seems to agree and the defense attorney does. And JetBlue is putting this guy in the cockpit of their jet?

BURNETT: Right.

CALLAN: So I think JetBlue has got some answering to do. And the FAA, as well. You know, he's supposed to be medically examined before he flies, and he got through. So --

BURNETT: One final question. I'm just a little bit confused. He's found not guilty by reason of insanity today but he's supposed to be standing trial on June 15th and was found mentally fit for that. I don't understand.

CALLAN: No, he's found competent to stand trial. He's had a trial now. He's been found insane and not guilty by reason of insanity. The next hearing has to do with how long and where he's going to be committed mentally in the future. So --

BURNETT: OK. Not really a contradiction.

CALLAN: No, it's not. They'll decide now what facility he'll be kept at, and then the facility and the psychiatrist will come back to the judge, and the judge will decide how long he has to stay in.

BURNETT: JetBlue has got to be concerned tonight. Well, thanks very much to Paul Callan.

And OUTFRONT next, Aimee Copeland survived her battle with flesh- eating bacteria. She started rehab. She's been there just one day and her parents join us to talk about it next.

And a veto overturned in North Carolina, all because a politician hit the wrong button.

(COMMERCIAL BREAK)

BURNETT: So right this minute, the richest poker tournament in history is being played out. On Sunday, there were 48 players that paid $1 million each to play in the tournament. I mean, we're not joking. They paid $1 million.

Now we're down to the final seven and it might sound crazy that people would pay $1 million for a poker tournament, until you realize just how much they're playing for. The winner of this tournament will take home -- I mean, this is just unbelievable, $18.3 million.

All right? Just how much is that? It is actually the largest ever first-place prize in any sporting event in the world outside of boxing. Second and third place, as you can see, settling for a paltry $10.1 million and $4.4 million, respectively.

Fourth through ninth, wow. This has got to be what's most unbelievable about it. They still get $1 million or $2 million each.

So you may say, what are these guys going to do with all of the money? Because obviously the guys that are playing are all famous pros, they are CEOs, they're entrepreneurs, they are very wealthy. At least one of them, Greenlight Capital co-founder David Einhorn, has vowed to give anything he earns or wins to a charity called City Year, which brings us to tonight's number, $5,533,328. That is the amount of the tournament's purse that is being donated to charity, specifically, one charity. It's called onedrop.org.

It's an organization that develops access to water and sanitation projects in developing countries -- obviously, a transformative amount of money for any organization. And the tournament was actually the brainchild of a guy named Guy Laliberte, poker player and founder of Cirque du Soleil.

And at this moment, he is in sixth place in the tournament. Britain's Sam Trickett is currently in first. And what I learned to day is they're going to take a dinner break. But apparently, they get so into this, that it could be several days before any of these gentlemen actually take a shower. That was the grossest thing I heard all day.

And now let's get to the "Outer Circle" where we reach out to our sources around the wobbled.

We go to London, where the top two executives at Barclays, CEO Bob Diamond and chief operating officer Jerry Del Missier resigned today within hours of each other. Regulators in the U.S. and Britain find fined the bank nearly half a billion dollars for manipulating lending rates. Those lending rates are directly linked to how much Americans pay on their mortgages.

So, earlier I asked how serious and widespread the scandal is for Barclays of our own Richard Quest.

(BEGIN VIDEO CLIP)

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Erin, having said he wasn't going to resign, and battled against the critics, the decision by Diamond to go and then the chief operating officer to also leave, shows just how serious this has now become. Diamond said it was because of external pressure. And we're still trying to work out whether that was the Bank of England or the regulator, the FSA, who said that as chief exec, his position was no longer tenable.

What it means for Barclays is it's lost its three top executives. And the scandal shows no sign of going away. Diamond will be giving evidence before the House of Commons select committee. It's feared and thought he's going to name names of people in government and regulators who perhaps were also in on the act. And even if they didn't agree to what Barclays was doing, at least didn't stop them.

All that is speculation. For the moment, all we know is that Barclays has paid a huge fine. They rigged one of the most important interest rates in the world. And the investigation continues -- Erin.

(END VIDEO CLIP)

BURNETT: All right. Thanks very much to Richard Quest.

And now our fifth story OUTFRONT: day one of rehab. Aimee Copeland has just finished her first full day with therapists. You know her. She is the 24-year-old Georgia woman who nearly lost her life after flesh-eating bacteria ravaged her body. She spent 60 days in the hospital. She was given a 1 percent chance of survival.

And now, she is out of the hospital on the next stage of what has been a miraculous recovery.

OUTFRONT tonight, her parents, Donna and Andy Copeland.

Good to see both of you.

Donna, I know that Aimee arrived at rehab yesterday, she had her first full session. How did it go?

DONNA COPELAND, MOTHER OF FLESH-EATING BACTERIA VICTIM: It went really good. She was really -- she leapt all slept all the way to rehab, so she was really eager and wanting to go, was alarmed that she had a lot of people coming in and out of the room, so it did tire her out. But she was just really eager and just really excited about it.

BURNETT: Andy, she was -- it sounds like every time I've spoken to you, how you describe her, just that there's never been a moment where her energy and her faith have flagged.

ANDY COPELAND, FATHER OF FLESH-EATING BACTERIA VICTIM: Well, absolutely. You know, and it's interesting. I went and saw her, and basically, she is in a new wheelchair. She can mechanically operate. And it's really interesting.

At first, she had it on turtle speed. And so I took her down to the gymnasium and she did about five laps around the gym. By the time we left the gym, she had it on rabbit speed. She's going to be like Earnhardt at Talladega real soon.

(LAUGHTER)

BURNETT: I like the image.

So, Donna, what exactly is the goal of the rehab? I know and I want -- you know, for many of our viewers that have been following this step by step, for those who haven't, this is really just her learning to move within the wheelchair before she gets any sort of prosthetics, right?

D. COPELAND: That's exactly right, Erin. It's just for her to learn how to maneuver herself from the bed to the wheelchair or from the bed -- or from the wheelchair to the toilet, how to, you know, take care of her personal needs as far as brushing her hair, brushing her teeth -- to do all of those things without prosthesis first. And then she'll get the pros thesis and do those things at that time.

BURNETT: So, Andy, let me ask you a difficult question about obviously what's happened to far has been shocking for your family on every level, including financially. I know that there's been incredible generosity. But when you look out down the road, you have months of rehab, prosthetic limbs.

I mean, you -- we just looked into what this is going to cost for you. Your home renovation, you said a couple of hundred thousand dollars; prosthetic limbs; $150,000; just medical transportation, you've gotten a bill for $32,000. Insurance doesn't pay for all this, right?

A. COPELAND: Well, actually, you know, it's amazing. We just kind of put this at God's feet and somehow we had our prayers answered. I've got to tell you, there's been a lot of development in the last 24 hours on this. We actually had a call from the transportation company and they said the insurance company is covered completely all of the transportation costs. BURNETT: Wow.

A. COPELAND: So that's one down.

BURNETT: Yes.

A. COPELAND: Then which had a call from Pulte Homes yesterday and they stepped up, Stephen Haines, there's vice president over at the state of Georgia said, hey, we want to swing in the resources of Pulte Homes to make sure you can have your home built, not just to be built but to be built on time before Amy comes home from rehab.

So it seems to me that a lot of developments are really coming together. The prosthetic limbs are still the big open question. But I have faith that God will provide an answer there also.

BURNETT: I mean, that's miraculous and, you know, a testament to how so many people have responded to Aimee's story. Do you have moments, though, where you think about, you know, all this insurance that you have, so many Americans are struggling with that issue. I mean, just the situation that you would have been in, it's almost impossible to contemplate.

A. COPELAND: Well, yes. I mean, we have to take it one day at a time. And I know that there will be some costs that come in later and I feel like we'll -- I just have faith that the needs will be provided, that we'll have the resources we need. I just feel that God has been faithful with us and I think that will continue.

BURNETT: Donna, it's amazing talking to your other daughter Paige. She was saying just how -- in a sense, she was surprised how anyone could go through what Aimee went through and have been so positive and so -- bringing everyone else around her up.

As her mother, were you also surprised just at the strength that your daughter had?

D. COPELAND: I am, Erin, and she turned to Andy and I the other day, we were talking about her -- the zip line accident and all. She said, you know, I'm really glad that this happened to me and not one of the other girls that she was with. She said, I think I can -- I'm going to excel at this. She said, they might not have handled it as well as I did.

So, you know, that just really surprised me that that came out of her, that, you know -- and she's going to do this. I can tell. She is just strong-willed and she's going to really exceed at this.

BURNETT: It's just amazing. I mean, we both have to sit there and look at each other sometimes at night when you're home and say -- I mean, what an incredible daughter. But what incredible parents and parenting that you raised a human being like that.

D. COPELAND: Oh, well thank you.

A. COPELAND: We're just truly blessed to have a wonderful family. I believe we've raised two wonderful girls and Paige and Aimee, and, you know, it seems like wherever we go, it's the Paige and Aimee show. And it's been like that for a long time and people that didn't know us that we've met, they understand that.

Paige and Aimee are always the two girls. When they take them on a trip somewhere, they always tended to attract an entourage. I think that's going to continue. That's the way they are. They are very energetic, bubbly, and they are very outgoing. They just really do -- people love them.

BURNETT: I think it's safe to say there will be an entourage from this point forward. Well, thanks to both of you. Good to see you.

D. COPELAND: Thank you.

A. COPELAND: Thank you, Erin.

BURNETT: A North Carolina assembly has voted to override their governor's fracking. It wasn't a red or blue decision. This was all about red and green, next.

(COMMERCIAL BREAK)

BURNETT: So on Monday, the Republican-led North Carolina legislature voted to override their Democratic Governor Beverly Perdue. Perdue had vetoed the use of fracking, which is the way to get gas, natural gas out of rock by blasting it. The House voted to either save or override that veto. It was a very, very close vote.

The final tally was 72 to 47. That was one vote more than was needed to override the veto.

So, let's make this painfully clear. If one person had voted the over way, the governor's veto would hold and fracking would be banned in the state of North Carolina. So, being one vote away was a devastating defeat for opponents of fracking.

And beyond devastating for one particular person, Democratic Representative Becky Carney. Why? Because she accidentally voted the wrong way.

In the North Carolina general assembly, like most legislatures, this is how it works, OK? The desks are equipped with a green button for yes, red button for no. Carney is a 10-year lawmaker. She pushed the green button to override the veto. She meant to push the red.

Now, the North Carolina chambers operating rules prevent members from changing the vote if it will affect the outcome. So, again, the painfully clear concept here, Carney's vote changed the outcome, the one vote essentially that made all of the difference.

But should her constituents be punished for her mistake? After all, she did immediately know her error. It's not like she had remorse an hour later. So, we know it was a mistake and it seems like the right thing to do is to let her change her vote. But red, green, yes, no, everyone else got it right. Seriously?

"A.C. 360" starts now.