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Iran Slaps Israel; Diplomatic Damage Control

Aired September 24, 2012 - 19:00   ET


ERIN BURNETT, HOST: OUTFRONT next, Iran's President Mahmoud Ahmadinejad calls for the elimination of Israel, but is America to blame for rising tensions? And damage control at the U.N. over the death of the American ambassador to Libya, but the president of the United States noticeably nowhere to be seen. And a brawl breaks out at a plant that makes Apple products, forcing it to shut down. So, what's it going to mean for your new iPhone?

Let's go OUTFRONT.

Good evening everyone. I'm Erin Burnett. OUTFRONT tonight, Iran slaps Israel. Iran's President Mahmoud Ahmadinejad is on American soil tonight and I was with him today. He was smiling, making jokes, very relaxed as he took questions from a group of journalists at his hotel. He kept asking us to exchange views. Not just ask questions. But we had a lot of questions we wanted to ask and in his answers, he called Israel's threats to attack Iran's disputed nuclear program, in his words, a blip on the radar screen.


PRES. MAHMOUD AHMADINEJAD, IRAN (through translator): Principally, we do not take seriously what the scientists say in threatening Iran.


BURNETT: So it's hard to imagine a more clear blow off than that right? Well until you hear this.


AHMADINEJAD (through translator): They have been occupying those territories for the last 60 to 70 years with the support of force of the westerners. They have no roots there in history. Iran is a vast, great country that has been herself as such for thousands of years. Again, they do not even enter the equation for Iran.


BURNETT: Well, it isn't just Israel either. Ahmadinejad said he takes no one seriously who questions Iran's claims that its nuclear program is for peaceful purposes.

(BEGIN VIDEO CLIP) AHMADINEJAD (through translator): Everyone knows that Iran is not seeking a nuclear bomb or a nuclear weapon and so unfortunately, the scene resembles more that of a comedy show than anything else.


BURNETT: A comedy show. Well maybe this would be funny if it weren't the real world that we all live in, a situation that could end in war. The U.S. National Security Council spokesperson responded to those comments at the breakfast this morning saying "President Ahmadinejad's comments are characteristically disgusting, offensive and outrageous. They underscore again why America's commitment to the security of Israel must be unshakable and why the world must hold Iran accountable for its utter failure to meet its obligations."

Now, Ahmadinejad will address the United Nations and the world in a speech on Wednesday. That happens to be the holiest day on the Jewish calendar. Prime Minister Netanyahu of Israel will take the podium the day after and he's been aggressive on the need to stop Iran's nuclear ambition. He says Iran will be 90 percent of the way to a bomb in six or seven months. A bomb that he says will hurt America.


BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: All the things that you see now in these mobs storming the American Embassy is what you'll see with a regime that would have atomic bombs. You can't have such people have atomic bombs.


BURNETT: So, what's causing this escalation? Two words -- the United States, specifically the election battle between these two men. Either Mitt Romney or Barack Obama will be the one to decide on the war or peace question. Prime Minister Netanyahu seems to be betting on Romney. Romney has known him for 35 years. He visited him in Israel on the campaign trail and hey I even saw one of Mitt Romney's books on Netanyahu's study shelf at his study in Jerusalem. Bibi even appears in a pro Romney ad in Florida.


UNIDENTIFIED MALE, POLITICAL AD: The fact is that every day that passes, Iran gets closer and closer to nuclear bombs.


BURNETT: Right now, the candidates are dueling over how to handle the conflict.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: The president's decision not to meet with Bibi Netanyahu, prime minister of Israel, when the prime minister is here for the United Nations session I think is a mistake.

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: So, if Governor Romney is suggesting that we should start another war, he should say so.


BURNETT: Tonight, the Israeli response to Iran OUTFRONT. Earlier, I spoke with Ido Aharoni, Israel's consul general in New York and I asked him for his reaction to Ahmadinejad's comments.


IDO AHARONI, CONSUL GENERAL OF ISRAEL IN NEW YORK: Well, I think it's the wrong framing to look at it as you know, Iran versus Israel. This is a much larger issue. It's the world; it's the west versus Iran. I think that what bothers them, what really threatens them at the end of the day is everything that we stand for. Not necessarily the things that we do and I say we, I mean the United States, Israel, the rest of the western civilization. And they're being threatened by all the things that we cherish and that we value like freedom of speech and women's rights and so on and so forth. And this is really what bothers them. I think Israel is only the excuse.

BURNETT: When -- he was very clear to say several times, we don't take seriously. Obviously he never uses the word Israel. He always the uses the word Zionists, the threat of the Zionists to attack Iran's nuclear program. Should the world take those threats seriously because there is a lot of talk about whether -- the talk out of Prime Minister Netanyahu is more bluster and that he could only do it if the United States was there. Is there some truth to that?

AHARONI: Look, there is no question. There are 193 members at the United Nations. There's only one member, Iran that is openly calling for the destruction of another member, Israel. There's only one member of the United Nations that is openly denying the Holocaust. There's only one member of the United Nations that is constantly habitually instigating violence all over the world. From Latin America through North Africa all the way to Central Asia and certainly in the Middle East. For all those reasons and many more, the world simply cannot and should not tolerate the very notion of Iran becoming nuclear.

BURNETT: Do you ever feel conflicted when you look at Iran -- it has a Jewish member of Parliament -- there's been a series on the Holocaust, television series that aired in Iran. There is a small Jewish community there. Do you ever feel conflicted at all in that sometimes their actions in that way don't appear to be anti-Jewish?

AHARONI: Well I don't think the world has an issue with the Iranian people. I think the world has an issue with the ongoing threat posed by the Iranian leadership. I think what they're doing is irresponsible and reckless in the first place for their own people and for their own good. The question of whether we can trust the Iranians I -- why should we take the risk? We've seen this before. They mean what they say and they say what they mean. And they're behind a very long string of attacks against Israeli and Jewish targets all over the world. Only recently in Bulgaria, before that, you know we had to deal with numerous attempts to carry out attacks against Israeli and Jewish targets in recent years.

BURNETT: When you say they mean what they say and they say what they mean, obviously you're referring to the terror attacks. But another thing we just heard President Ahmadinejad say is everyone knows Iran is not seeking a nuclear bomb or a nuclear weapon. He says it again and again and again and the question, however large or small it may be over whether that is true, is why at least the United States hasn't taken more action. But Israel knows?

AHARONI: Well I think -- well I think that it's not, you know, it's not by Israel. I mean, you have to look at the reports compiled by the international community. The most recent report actually admitted to the fact that Iran's been lying all those years and they are indeed attempting to achieve military nuclear capabilities --

BURNETT: The IAEA report.

AHARONI: Exactly. Let me remind our viewers that once Iran becomes nuclear, they do not only enter the so-called zone of immunity, but they will spark immediately a regional nuclear arms race and we may end up with terrorists organizations with access to nuclear devices. This will ultimately change the way we live. This will ultimately change the way we travel. This would ultimately change the way we do business and we have to think about that. Nuclear Iran will change everything in a very fundamental way.

BURNETT: Do you feel that the United States understands that? I mean there's something like the tough statement we heard out of the National Security Council, but then there's the fact that the U.S. has so far declined failed to act, that clearly Prime Minister Netanyahu who has been frustrated by some of that appearing reticent on the part at least of the president of the United States.

AHARONI: Well, certainly, you know, I have no desire to enter this political mine field, especially you're in the midst of this --

BURNETT: And it is a mine field --

AHARONI: National election season. I can just say you know very broadly that we've been working very closely with this administration on this issue and many other issues. The level and the scope of the cooperation between the two security establishments is unprecedented and sometimes among friends you can have disagreements as we've had with the --

BURNETT: We've heard about some of them. They've been very loud and very angry.

AHARONI: You know but it's perfectly understandable and legitimate. But by and large, the United States is Israel's best friend, best ally and we'd like it to stay that way.

(END VIDEOTAPE) BURNETT: Well, the U.S. is doing damage control today at the U.N. following a death of the U.S. ambassador and Mitt Romney levels new criticism at the president. And early voting is underway. Did you know that millions of Americans are going to be making their Election Day picks now, now, well before Election Day? Who is going to benefit? This could turn the whole race. And what is going on with American Airlines? Hundreds of flights canceled.


BURNETT: Our second story, diplomatic damage control. So today at the U.N. General Assembly in New York, Hillary Clinton met with leaders of four countries where anti-American protests have broken out. Those included Libya, where Ambassador Stevens and three other Americans were killed. While Secretary Clinton met with world leaders though President Obama was noticeably absent. He scheduled no one-on- one meetings today with foreign officials. Mitt Romney meanwhile launched a new and aggressive attack on comments the president made to "60 Minutes" in which he called the recent unrest in the Middle East, bumps in the road.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Bumps in the road, we had an ambassador assassinated. These are not bumps in the road. These are human lives. These are developments we do not want to see.


BURNETT: Is the criticism fair game or is it as the White House called it, desperate and offensive? OUTFRONT tonight, Colin Kahl, Obama's foreign policy spokesman and surrogate and former deputy assistant of secretary of defense for the Middle East. Colin good to talk to you. So bumps in the road does seem like an awkward choice of words given that three Americans and the U.S. ambassador were killed, doesn't it?

COLIN KAHL, OBAMA'S CAMPAIGN FOREIGN POLICY SURROGATE: Well look, the president's initial response to events in the region were to express our outrage, to express our condolences, to make it clear that those who are responsible for this will be brought to justice. Let's remember it was Governor Romney whose first impulse was to politicize the deaths of Americans and attacks on our diplomatic facilities. I think the question that President Obama was asked on "60 Minutes" was a broader question about trends in the Middle East and I think what he said was basically true, which is that the democratization process in the Middle East like it has been everywhere in the world throughout history, is a long and winding road and that it has a lot of bumps and tribulations -- trials and tribulations in it and that we can't expect countries that lived under decades of dictatorship to make it all the way to peaceful Jeffersonian democracy overnight.

BURNETT: And to your point is it I think in the news cycle that we're in, anyone could say words that whether they're not elegant and obviously that was what Mitt Romney referred to his own poorly chosen words, but it is hard when ever single word out of your mouth when you're adlibbing is going to be criticized. But what about the situation about how the Obama administration handled this? We have now learned here at CNN that the U.S. Consulate in Benghazi did not meet standard U.S. Consulate security requirements. This is obviously a rather damming thing to be discovering at this point considering what ended up happening there. Former ambassador to China, Jon Huntsman recently told me he thinks consulates there are many around the world who are not beefed up on security the way that they should be. Shouldn't the administration be responding to that?

KAHL: I think the administration is responding to it. I mean the State Department goes through regular reviews of security procedures all over the world and updates them to take into account how the situation on the ground changes. I mean I spent a lot of time in Iraq and as we were transitioning from our military presence there to the State Department presence there, we looked very closely, for example, at the security procedures at our consulates and embassies, so I expect in the aftermath of these incidents there will be another review and steps will be taken to improve security where it's needed.

BURNETT: So let's talk a little bit about Libya and the mixed messages because this is another thing that it still seems very confusing to me at least. On the 16th of September, our ambassador to the United Nations, Susan Rice, called the attacks spontaneous. Jay Carney agreed with that. Then he called it a terrorist attack and today during a taping for "The View" on ABC the president did not call it a terrorist attack, but also said it wasn't just a mob action. After 13 days, shouldn't we know, especially given that the Libyan government has been very consistent from the beginning in saying that this was preplanned.

KAHL: Look, I think there's a lot of conflicting evidence. And frankly I'm not privy to the classified information on this and even if I was, I guess I couldn't tell you about it. But my sense was that this was a spontaneous event that some actors opportunistically took advantage of to commit an act of terrorism. Now, I think we're still sorting through how much of that was preplanned, but clearly they took advantage of a protest to do this.

BURNETT: Or they could have ignited the protest, right (INAUDIBLE) everything planned (INAUDIBLE) and I guess we don't know. But it does -- I still remain a little confused about that, but I wanted to ask you one other thing before you go and that is also on "The View" when the president was talking to the women there, he talked about the anti-Islamic film, which still remains at the center of all of this, and he said -- I want to quote him here -- "The best way to marginalize that kind of speech in the anti-Islam movie is to ignore it." Yet Colin the White House is spending $70,000 to run an ad on prime time Pakistani television, which we've done the math, is equivalent to seven plus million dollars of an ad buy in the U.S. in which he and the secretary of state say they denounce the movie.

KAHL: Yes, look, I think that you know we made clear from the very beginning that we're going the stand up to our values and what's difficult in this part of the world is that they don't have a lot of experience with films coming out that aren't basically giving the blessing by the state. So in this case, it's hard to make the argument prima-facie that this was a film that wasn't endorsed by the United States government. So I think the public service advertisements that are in Pakistan are basically just to make clear that while we have the freedom of speech in this country this wasn't a film that the U.S. government endorsed. And I think that's the right approach to take in a place like Pakistan.

BURNETT: You know, when they're the highest hate of America and the lowest like of America in the world and we actually think that money is going to be well spent?

KAHL: Well I think that we have an interest in making clear that while we stand up for our values and free speech that the U.S. government did not endorse this film in order to create some distance between this film and U.S. government policy because after all what we're seeing around the region is not a reaction to U.S. policy, it's a reaction to a particular set of events in this film and I think we're trying to create some distance.

BURNETT: All right, well thank you very much, Colin. Appreciate your taking the time.

Next, what is the legal definition of motherhood? This is getting increasingly complicated with science. A woman going to court to keep the child that she gave birth to and a strong warning from the World Health Organization about another virus, this one is in the same class that causes SARS.


BURNETT: The company that makes the iPhone for Apple was forced to suspend production today and the reason, apparently the employees were literally fighting. There was a brawl and according to police reports, 2,000 Foxcon (ph) employees were involved in a brawl at one of the facilities dormitories last night. The fight resulted in broken windows, a fire and 40 people that actually needed medical attention. It took 5,000 police officers almost four hours to finally restore order. Now, according to analysts, the plant's shutdown shouldn't really affect the supply line for the iPhone simply because of the way the factory spreads out its manufacturing. So you know you'll be able to get your Apple product even though no doubt thinking about those working conditions might be something that crosses your mind and that brings us to tonight's number, five million.

That's the number of iPhone 5s that Apple sold just this weekend and while this did break the previous record of four million held by the iPhone 4s, it was a million less than analysts were expecting. You may think, oh my goodness that's crazy, they must be really failing, no not really. Let's explain. The five-million-figure only includes sells from wireless carriers, Apple stores and online orders the customers have received. What it does not include is early orders from Apple's online store that hasn't been delivered yet and that number is expected to be in the millions, so it could come out you know well above expectations. We're not sure. But Apple has just barely scratched the surface when it comes to sales.

On Friday, the iPhone 5s goes on sale in 22 more countries and 100 more by the end of the year and analysts expect Apple to sell 45 million of the phones in the December quarter alone. A lot of people buying them for Christmas, Hanukah, Cuanza (ph), whatever it might be and analysts and investors say that if Apple can achieve that, its stock keeps going up and these are big ifs, but here's what the bottom line might be. That Apple could be the first company ever in the United States, in the world, to be valued at a trillion dollars. Some of you will say bubble. Some of you will just say wow I want a bite of that Apple.

All right well millions of voters will have the opportunity to cast their vote well before November 6th. Early voting is huge in this country and it may change the strategy and perhaps the entire result of this year's general election. And an ongoing dispute at American Airlines is forcing the cancellation of hundreds and hundreds of flights -- why?


BURNETT: Welcome back to the second half of OUTFRONT. We start the second half of our show with stories we care about, where we focus on our reporting from the front lines and first, a European court has ruled that radical Muslim cleric Abu Hamza can be extradited to the United States from Great Britain. Hamza also known as Mustafa Kamala Mustafa faces 11 charges in the U.S. including conspiring in 1999 to set up an Islamic jihad training camp in Oregon. Hamza had argued he would face degrading treatment in a U.S. prison. The European Human Rights Court disagreed and cleared the way for four other men to be extradited. No date has been set but the British home office said in a statement, it will work to ensure they're handed over to the United States as quickly as possible.

Well, France says Mali has sent a letter to the U.N. Security Counsel requesting authorization for military force to help dislodge the armed Islamist groups that are occupying the northern half of the country. French foreign minister quoted by AFP says that France would provide logistical support for the operation.

And be sure to tune in tomorrow. We're going to have an exclusive interview with Malian Prime Minister Cheick Modibo Diarra, talking about that and, of course, all of those weapons from Libya that are not fuelling the al Qaeda conflict in his country.

Google shares now closing at a new record high, $749.38. Previous record was just blow that. Mark Mahaney, an analyst for Citigroup, upped his target for the stock, says it could go to $850. Previous was $740. That's a pretty big jump.

Facebook, though, did not get the love today. Shares were down 9 percent, down to $20.79. After a report in Barron's came out negative on the stock, saying it could go down as low as $15 a share.

Well, in a speech at the Peterson Institute, International Monetary Fund managing director Christine Lagarde urged policymakers to step up and make clear what they're going to do to help the economy, blaming uncertainty over policy for the continued economic crisis. (BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, IMF MANAGING DIRECTOR: The number of factors are weighing the global economy down. At the center of them, clearly we see uncertainty -- uncertainty about what policymakers can and will deliver on their promises and this is having not tangible but real effects, increasing divergence of economic fortunes in the eurozone and a tepid recovery in the United States of America.


BURNETT: She also called the fiscal cliff a threat for the entire global economy.

Well, it's been 417 days since the U.S. lost its top create rating. What are we doing to get it back? Well, Congress is doing nothing because they're not around right now.

All right. Our third story OUTFRONT, don't call it Election Day because it's now election days. There are all lots of them. These countdowns that you're seeing to election is all just a load of, you know, slight inaccuracy.

Chances are, you can vote right now if you don't want to wait until November 6th. By the end of this month, alone, at least some voters in 30 states are going to be able to cast their ballots in the presidential election. You know, you don't even have to prove you're going to be out of town on Election Day to vote early these days.

Voters in all but two of the battleground states are going to be able to cast their ballots at some point before Election Day without any excuse at all. You don't think you're like getting up early on Election Day.

In total, up to 40 percent of voters are expected to vote early this year. Up from 33 percent last time around and only 15 percent in the year 2000.

So which side benefits more in this lengthy Election Day, and how will it impact what happens on the battlefield between now and November 6th?

John Avlon is with me, senior political columnist of "Newsweek" and "The Daily Beast." David Frum, former speechwriter for George W. Bush. And Bill Burton, cofounder super PAC for President Obama, Priorities USA.

OK, great to see all of you. I really appreciate it.

So, John Avlon, who's the winner from this?

JOHN AVLON, CNN CONTRIBUTOR: Who's the winner? Well, if you change the rules, you change the game. The Obama campaign's been very focused on high voter outreach, GOTV. The Romney camp says they're responding in kind. The fact that Romney and the Republicans have done better with older voters might give them an edge stereotypically on early voting. Folks don't feel like leaving home.

But when they tell reporters they're not targeting a specific demographic, that does seem like a little bit of a warning sign, because you got to be highly targeted. As you said, it's not just Election Day. It's election weeks. And so right now, it's voting day, and every lost week the Romney campaign has is not a good thing for their turnout model.

BURNETT: So, Bill Burnett, you're out there trying to make decisions on where your ad money is going to go, what state you're going to put it in -- how important is this early voting for you when you make that decision on where to spend money?

BILL BURTON, PRIORITIES USA: Early voting is pretty important, and when you consider the fact that this places like North Carolina, people are voting and can vote every day until Election Day, and other places like Nevada, and other states, people are always certain to go to the polls. It really matters.

But, you know, the ground game really matters and the president's put a lot into the infrastructure to make sure the campaign is set up in field offices all across the country in contacting voters. But the other thing that matters is what's happened in the news from day-to- day. And when you look at the miserable couple of weeks that Mitt Romney has had, you can't imagine that's helping his early voter effort in places where people are already going to the polls.

BURNETT: Let me ask you, David Frum. Forty percent of people could be voting early. I mean, that is a pretty stunning statistic. I think most people out there -- I mean, would be shocked, at least I am. I mean, that's nearly half of the country.

I mean, so is this race basically going to be decided well before November?

DAVID FRUM, CNN CONTRIBUTOR: I doubt it. Early voters are motivated voters and they are older voters. And that means they're going to be in this cycle, probably most more amenable to the Republicans. There are also a lot of military voters in these voters. And again, that's a Republican group.

But as the country becomes more and more divided, that we are battling the two parties over fewer and fewer people, and those people are not going to be voting early because they're not so motivated and they're not so old.

BURNETT: So, Bill, you think it's going to lean Republican? We were talking about this today and some said, no, no, no, it might lean Democratic, because they can go out, get motivate, say I know you don't think you're going to vote, go out and vote now, get it done, that way it's behind you.

BURTON: Well, no, I think it's the campaign that benefits is the campaign that has the better infrastructure on the ground that can capture the energy that there is, especially among the people on their side. So I think that you know, the president in 2008 had this huge expansive ground game that was able to do better than you've seen in a presidential election before. I think this time, you know, the proof will be in the pudding, but I have a hard time believing the president doesn't have a pretty good ground game out there right now, able to capture a lot of those voters who are feeling great about his campaign and are really concerned about Romney's campaign is going.

BURNETT: He's got apps, John Avlon, apparently where you can get one and know everyone in your neighborhood and their political party and their age, and everything, and the last things they bought on I made that part up, everybody. But basically --

BURNETT: Which is very cool, but the idea it's all going to come down to some 72-hour GOTV effort, which has been the way the campaigns done in the past. The whole point is it's not going to do that. I mean, you've got 40 percent of Americans voting early, every day counts. Every ad counts.

A late-inning push isn't going to have to same impact it did in the past. So, all the technology is great, and the old ground game muscle is fun to flex. It's not going to have the same determinative outcome it did in the past.

BURNETT: I know. Just sad because I love the Dewey defeats Truman. I want to have the possibility of that movement. That's what we live for.

But, all right. One of the big issues and why the president just appeared on ABC's "The View." It's going to air tomorrow.

David, he was there. He loves it. He loves sitting on that couch. He obviously wants to court women. I don't know why, because they appear to already love him. The latest Pew Poll, the president is up 19 points among women.

It's a pretty huge, it's a huge gap. Is it a waste of time for him to be sitting down with the ladies of "The View" instead of meeting with world leaders of whom he meet with none today?

FRUM: Startling that he would not use this opportunity to meet with world leaders. He turned down Benjamin Netanyahu. He turned down Egyptian President Morsi.

Maybe the main goal was to turn down Morsi. And it is a strange thing that he has time to do this electioneering.

Just one point about your number of women voters, look, talking about 50 percent plus a little bit of the population, I don't think it makes sense to talk about them as a block.

BURNETT: Fair point.

FRUM: Married women vote differently than single. Older vote differently from younger women. And for Republicans, the number to track is how do Republicans perform among married women. If they lose -- if they fall below 50 percent among that category, then they're in a lot of trouble.

Now, one of the challenges for Republicans is, of course, that the percentages of women who are married is shrinking as basically the baby boom ages and as baby boom wives outlive baby boom husbands.

BURNETT: Bill, final question to you and I wanted to give you a chance to weigh in. If you were advising him and I know you're not, because you're at the super PAC. But would you say, hey, look, you know what? You're going fine among women. Take this opportunity that Mitt Romney doesn't have to sit down with all these world leaders and get those pictures of yourself looking presidential, that he can't have at that uniquely at this moment, at the U.N., you are able to get. Why isn't he doing it?

BURNETT: Well, I'm not going speak to why the president did or didn't meet with leaders at the U.N. today. Don't presuppose to know more about our foreign policy than the folks at the White House do.

But the president looks more presidential every single day, and not just because he climbs on Marine One, or down the stairs of Air Force One, when he's talking about issues that impact our national security and impact our role in the global community, he does it with so much more command of the issues than Mitt Romney can hope to muster that I think he's doing that job every single day just by doing his job.

BURNETT: You just did your job, dodging my question, but giving an answer that you believe in, which is your job, too.

All right. Thanks to all three of you, appreciate it.

And speaking of women, our fourth story is debating the definition of motherhood in a courtroom, because this is what's at the center of a child custody case tonight in Texas. The 48-year-old Cindy Close says she and her friend, Marvin McMurray, agreed to have a child together so they used his sperm and donated eggs. Close became pregnant with twins through in vitro fertilization. But after those twins were born in July, close says McMurray revealed to her that he was gay, told her she was just a surrogate and demanded custody of the children.

David Mattingly has the story from Houston where a judge is trying to clear up this complex case.


DAVID MATTINGLY, CNN NATIONAL CORRESPONDENT (voice-over): Cindy Close says she made the biggest decision of her life without once thinking that she needed to legally protect herself.

(on camera): We're leaving an awful lot here just on faith and on trust.

CINDY CLOSE: That's my nature, unfortunately. MATTINGLY: What has that cost you?

CLOSE: It has cost me my heart. It may cost me my children.

MATTINGLY (voice-over): In July, Cindy Close gave birth to twins, a boy and a girl. But the new single mom never got to take them home. They are not the center of a legal battle in Texas, challenging the definition of a mother.

CLOSE: I'm their mother because I love them. I love them. It's no different than someone who adopted a child. Love is what it takes to be a mom. Biology doesn't have to be there.

MATTINGLY: In this case, Cindy Close was using eggs from an anonymous donor and sperm from a long time friend who approached her with a surprising question a few years ago.

CLOSE: Basically, he said what would you think about being a married stay-at-home mom and financially securing your own home? Just think of it.

That's what he said to me. That began this discussion.

MATTINGLY: It might have sounded like a proposal, but it wasn't. Cindy says her friend wanted them to be co-parents, living apart, but raising the children together. Cindy said she believed the children would live with her, until the day she got the shock of her life.

(on camera): When did you find out he was gay?

CLOSE: The day my children were born.

MATTINGLY: What did you do?

CLOSE: It was horrible. I just -- I cried and I told him, he's doing to steal my babies, he's going to steal my babies, and I don't know what to do. That's what I did.

MATTINGLY (voice-over): While the children were still in the hospital, court documents show their biological father asked the court to declare him the sole parent, arguing Cindy Close was not the mother, not genetically related and her role was that of a surrogate. The children now live at his partner's house. Neither the father nor his attorney agreed to comment.

UNIDENTIFIED MALE: My children are involved, they're minors and we're in litigation.

REPORTER: But you don't think Ms. Close should have any relations with your children?

UNIDENTIFIED FEMALE: We're not going to give any comments at this time.

MATTINGLY: And the bitter court battle has begun, with the potential of shaping the legal definition of a mother. (END VIDEOTAPE)

BURNETT: David, does Cindy Close get to see her children at all? I mean, those scenes of her by the crib were very moving. Has she had the opportunity to see them at all since they were born?

MATTINGLY: Yes, she actually gets to see them two hours a day, but the children are being kept at the house that belongs to the father's partner. She says it's very awkward for her to go over there, but she does have two hours a day with the children. She can't take them anywhere. It's just to stay in the nursery and enjoy them while she can.

BURNETT: And Texas does not allow same-sex marriage. So does this make it more complicated as the father tries to keep sole custody?

MATTINGLY: Well, that argument really hasn't come up. It hasn't been relevant to anything we've heard in court so far. Remember, the father is the biological father of these children. That is not in dispute. What is in dispute is Cindy Close's relationship to those children. Was she a surrogate or is she legally the mother?

BURNETT: Well, thank you very much, David. Something that gets a lot of people thinking.

Well, the World Health Organization has issued an alert about a new virus related to SARS, and we're going to tell you about it.

And then why Marco Rubio is so frustrated with American Airlines and why you might be, too.


BURNETT: We're back with tonight's "Outer Circle", where we reach out to our sources around the world.

And we begin tonight in London where a man is in critical condition with an unknown virus that is related to the deadly SARS infection. The World Health Organization has issued a global alert over the new virus.

Atika Shubert is in London and I asked her if she knows how he even contracted the virus.


ATIKA SHUBERT, CNN CORRESPONDENT: Erin, authorities here do not know exactly how or where the man contracted this virus. All we know is that a Qatari man is in critical condition with a corona virus. This is the same class of virus that causes the common cold, but also, SARS. Now, unlike SARS, this virus doesn't just cause severe respiratory illness, it also seems to cause kidney failure.

Now, fortunately, it doesn't seem to spread as quickly as SARS, but this is something medical authorities are still trying to figure out. What they do know is that a second patient was diagnosed earlier in June with that same virus. That patient died.

What authorities are looking at now is to see if these two patients were in any way connected and how or where these two may have contracted that virus. And that will help authorities to figure out whether or not this virus is spreading or whether it has already much more widespread -- Erin.

BURNETT: All right. Thanks very much to Atika. Obviously, a pretty frightening story there that we're going to be following. But now, we go to Nepal where three mountain climbers are missing after an avalanche swept through the Himalayan Mountains. At least eight were killed, possibly more. We just don't know the full count at this time, but it is the worst disaster in Nepal in nearly two decades.

Sumnima Udas is in New Delhi following the story and I asked her about the search and rescue.


SUMNIMA UDAS, CNN CORRESPONDENT: On the second day of the search and rescue mission, Nepali officials tell us eight bodies have been recovered so far. Most of them are European nationals. One is Nepali, and 21 mountaineers have been rescued and have been brought to Kathmandu, and are undergoing treatment. Most are suffering from frostbite.

And we spoke to helicopter companies who have been conducting these search and rescue missions for the past few days and they were telling us they have not been instructed to go back and find these three missing people. But the reality is they don't expect to find anymore survivors at this point.

Now, this is just the beginning of the main climbing season in Nepal. (INAUDIBLE) some of the world's highest mountains is becoming an increasingly popular activity in Nepal, especially for adventurist tourists. But this is a grim reminder now of how dangerous that can be.


BURNETT: And now, let's check in with Anderson with a look at what's coming up on "A.C. 360." Hey, Anderson.

ANDERSON COOPER, CNN ANCHOR: Hey, Erin. We're keeping them honest tonight in the program.

The killing of Ambassador Stevens and three others in the terror attack in Benghazi, Libya, on 9/11, it's opened the door about security, about government transparency and lastly about us, about the reporting on this program. And on CNN, reporting based in part on the ambassador's journal which CNN discovered in the rubble three days after the attack.

Now, ahead on the program tonight, how this weekend, the State Department calls CNN's handling of the journal disgusting and indefensible. We'll deal with that head-on tonight. Full transparency, which is the hallmark of this program.

Also tonight, keeping them honest in a story you might remember, a story that launched a Senate investigation. A veterans charity, DVNF, that has, as far as we can tell, given very little direct donations to disabled veterans, despite raising tens of millions of dollars. Its chief fund-raising company, Quadriga Art, is now under investigation in three states.

Drew Griffin has been on the money trail from the beginning and joins me with that update.

Those stories and also tonight's "Ridiculist" all at the top of the hour, Erin.

BURNETT: All right, Anderson. See you in just a few moments.

And now our fifth story OUTFRONT: Flight cancellations on the rise, but there's a contract dispute with American Airlines pilots that could be to blame. American has canceled at least 570 flights in the past week. This is frustrating to people around the country, including Senator Marco Rubio, who took to Twitter to vent his frustration.

What else you going to do when you're sitting there waiting?

"Every American flight I've been on this week has been at least two hours late or canceled. This one, already one-hour delayed."

It's a bankrupt airline. They canceled 105 flights today, 76 of those were, quote-unquote, "preplanned" -- difficult word to use in this country right now. That means they planned it ahead.

Pilot sick leave may be partially to blame. It's up more than 20 percent this year as the airline and the union fight over benefits.

George Hobica follows the industry as a president of Airfare Watchdog and he is out front.

All right. Good to see you, George.

So, I mean, this has really affected American. There's no question, anyone out there would have experienced it. Half their planes are late and the rest of the industry is not even close.

GEORGE HOBICA, PRESIDENT, AIRFAREWATCHDOG.COM: Right. The other half of the industry, all major airlines, 86 percent on time versus 49 percent for American over the last week.

The pilots are pissed off. The airline employees in general are pissed off. It's not only their fault. I mean, let's face it, the unions are to blame, the government's to blame for our broken air traffic control system. We need a next-gen system.

We were talking just before the break about how it's much better in Europe. And one reason is they have a better air traffic control system. BURNETT: You're saying this is something we never invested in?

HOBICA: Right. It costs the airlines money because they can't fly their planes close enough and that means they can't pay their employees enough.

I was on a Delta flight just the other day and my flight attendant was a model. I saw her in the American Express ad in my magazine. She has to work as a model in order to survive in this industry.

BURNETT: Wow. She must love her job.

HOBICA: She doesn't love her job.

BURNETT: Wait a minute, hold on, hold on. You got to see the woman we always see doing the announcements on TV, you saw her in the flesh? She's not a bot?

HOBICA: I was flipping through the magazine and there she was. No, airline employees are really angry.

BURNETT: Wow, we always debate that. We're talking about the same woman, very beautiful woman. OK.

Sorry, everybody. I know that was a bit of a detour.

But what's going to happen with American? I always wonder this. We have airlines in this country constantly cycling in and out of bankruptcy. Maybe we don't need so many of them. I mean, why?

HOBICA: We don't. I mean, we have a lot of airlines. American is going to merge with U.S. Airways and it's going to be a stronger airline. If that causes them to have one fewer airline, basically, JetBlue is going to jump in, Spirit is going to jump in, we have Frontier. We have a lot of airlines still in this country that can fill the gap.

I think airfares are really going to remain where they are. But the main point, Erin, is that airline employees who have given back a lot --

BURNETT: They have. They work hard hours. I overhear them talking about how they sleep in bunk beds in random places. I mean, these people are working very, very hard for very little money.

HOBICA: Should we avoid American airlines? I don't -- well, actually, you have to get there for Uncle Harry's funeral, yes, I would definitely.

BURNETT: all right. Just a final question: what do we need to do to have flying in America become a better prospect for families, for people flying, like it is in Europe? I mean, I have to say, my experience is the worst it gets in this country.

HOBICA: I think we have to have a better air traffic control system. I think that we have to have consolidation in the industry so that the airlines can make a profit. You know, basically, the air traffic control system is the main thing that's keeping us from competing with other carriers in Europe.

BURNETT: Thank you very much. Learned a lot. Not least of which is that that Delta woman is real.


BURNETT: All right.

And next, a new ad campaign that seems like it's straight out of a science fiction novel.


BURNETT: So Twitter's a great way to stay current. One of the more entertaining feeds that I follow is you're anon-news. It's an account operated by Anonymous, the hacker activist group.

What makes their feed so interesting, you really never know what you're going to get, particularly when you click through on one of their links. Today, they posted a link, along with some expletives, to this picture. A computer generated mockup of a micro-air vehicle in the shape of a mosquito. Just take a look at that. It's a pretty beautiful thing.

According to descriptions we found online, this particular device would allow the user to draw blood, take DNA samples or insert devices under the skin of a target. Devices. GPS devices.

To be clear, though, this didn't exist yet, but a lot of people think the U.S. government is currently developing these little drones.

But how close are we to something like this? Is it really just science fiction or is there more to it? Is it the government we have to worry about?

Because you know what? After I saw this picture we heard about a creepy new British ad campaign from the candy company, Nestle. The Nestle "We Will Find You" promotion has the company putting GPS trackers in six of their candy bars. When the wrapper on the bar is opened, the GPS gets activated. Within 24 hours, representatives of the company hunt you down and give you a check for 10,000 pound. That's about 16,000 bucks.

We're all for fun promotions but this seems a slippery slope. I mean, really, is it worth giving up your privacy for that? Who knows what else they will know about you? They're going to know everything.

Let us know. What do you think about Nestle's promotion? Would you do it for 16,000 bucks if you had to give up your privacy forever? Let us know on Twitter @ErinBurnett.

"A.C. 360" starts now.