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Two Dead in London Helicopter Crash; Fallout from Armstrong's Admission; JPMorgan, Goldman Sachs Report Earnings; White House to Unveil Gun Control; Interior Secretary Ken Salazar Stepping Down

Aired January 16, 2013 - 09:00   ET


SOLEDAD O'BRIEN, CNN ANCHOR: Texas Congressman Joaquin Castro, New York Congressman Peter King, and actor Gabriel Mock, the star of the hit show "Suits."

JOHN BERMAN, CNN ANCHOR: I love that show.

O'BRIEN: That's ahead.

"CNN NEWSROOM" with Carol Costello begins right now.

Yes, you can come back tomorrow for that.

Hey, Carol, good morning.

CAROL COSTELLO, CNN ANCHOR: Good morning. And thank you.

Happening in the NEWSROOM, fireball in London. A deadly crash as a helicopter slams into a construction crane. New details on what may have caused this frightening accident.

Under the gun. Much of the eastern United States, from Louisiana to Maine, getting rain, snow, and ice. And this is just the beginning. An arctic blast plunging south.

Champion cash. A startling look at the money, the players and the influence. SEC schools spending the most three times what most people earn in a year. It's an eye-opening look at the athletes and the almighty dollar.

Plus this.


SHIRAZ KHAN, AUSTIN RESIDENT: I don't know if I want this guy to be the face of Austin anymore.


COSTELLO: Outrage at the cyclist and the confession and now will cycling be booted out of the Summer Olympics because of Lance Armstrong?

NEWSROOM starts now. And good morning. Thank you so much for being with me, I'm Carol Costello. We begin this morning with a spectacular and horrifying helicopter crash in the heart of London. The chopper hit a construction crane high atop a building shrouded in fog and the flaming wreckage rained down on rush hour traffic below.

Zain Verjee is in London with all the latest details.

Good morning, Zain.

ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Good morning, Carol. Can you imagine going to work, it's a typical day, cold, foggy, rainy in London, and something like this happens? Well, thousands of commuters were facing this exact situation. Thick fog, plumes of smoke and fireballs raining down in lines from the sky.

Basically what happened was a helicopter went off course. You know, police are going with the theory -- one of them at least -- of the issue of poor visibility at that time, crashed into a crane, got its rotor blades snapped off and then took part of the crane with it and then just came crashing down onto the ground onto one of the main roads that you're looking in that video. That is called Wandsworth Road. And it apparently landed right on top of two cars.

Police are saying two people are dead, 13 are injured, one critically. And a man they say ambulance services pulled someone out from a burning car. So police are saying, Carol, this is a total miracle that it wasn't worse. I mean, this was at, like, 8:00 a.m. local time and there's traffic, but an hour later there would have been way more people there -- Carol.

COSTELLO: That's just amazing. And just to make it clear, terrorism was not involved. It appears to be a tragic accident.

VERJEE: Yes. Police have ruled that out. I mean, they're looking in to what exactly happened obviously. You know, one of the things that we immediately sparked off the possibility of terrorism right at the beginning with the fact that the British intelligence headquarters, MI-6, is actually located right in that area of Vauxhall.

Now, I don't know, Carol, if you've seen "Skyfall," OK? But you know that scene just -- just on the Thames River where the building burst into flames on one part of the floor, well, that is exactly where MI-6 is. Partly also in that area you've got businesses. There's a major market. There are major housing developments and actually the U.S. embassy is supposed to be moving to Vauxhall.

This is going to be the area of the new location of the embassy. At this time of day, too, Carol, it was totally packed with commuters. Think of Penn Station, right? Like that's a main thoroughfare and a main point where travelers coming into New York City will get off at.

Well, this is exactly the same thing. People were totally stranded. Hundreds of people just decided to walk to work because there was no other option. One of the main issues right now, Carol, is that crane. You know, remember during Hurricane Sandy the focus was on that crane in New York City? Well, it's dangling dangerously right now. Police are focusing on that area. They've cordoned it off and they're asking people just to stay away from that scene, so that's really what could potentially provide the greatest threat.

COSTELLO: All right. Zain Verjee reporting live for us from London.

Also this morning new concerns for the airliner that's been billed as the future for air travel. Just hours after the new 787 was forced to make an emergency landing, Japan's major airlines grounded their entire fleet at half of the 50 Dreamliners in service all around the world. And today's incident the crew reported battery problems and a burning smell.

It's the latest in a series of incidents over the past 10 days. Those concerns had already prompted U.S. and Japanese officials to conduct their own safety reviews. Problems over the past week and a half include a battery fire, a braking problem and two fuel leaks. Nippon Airways and Japan Airlines have returned their Dreamliners to service as early as tomorrow, but safety and production concerns are weighing on the American manufacturer. Boeing stocks fell nearly 5 percent in pre-market trading this morning.

We'll have to wait until tomorrow night to hear exactly what Lance Armstrong had to say to Oprah Winfrey, but whatever Armstrong says in the TV interview it will not be enough for the World Anti-Doping Agency. For Armstrong to come clean with them, he would have to make a full confession under oath and tell all he knows about doping activities. Then the group could reconsider its lifetime ban on Armstrong.

There's also this development, with far greater significance. An International Olympic Committee -- an International Olympic Committee member suggests that if Armstrong implicates top cycling officials in widespread doping activities, the IOC could consider dropping the sport from the Olympics.

CNN's George Howell is in Armstrong's hometown of Austin, Texas.

Good morning, George.

GEORGE HOWELL, CNN CORRESPONDENT: Carol, good morning. You know my hometown as well, and I actually worked here in Austin some 12 years ago. I covered a big citywide celebration with Lance Armstrong. It was 2001, just after he won the Tour de France three times, brought so many people together, some 15,000 people together if I remember correctly.

It was a great celebration. Here you had an athlete who, you know, not only inspired the world but he was also a cancer survivor and people took note of that. But now when you think about Lance, you can't help but be disappointed and when you talk to people here in Austin, you can tell that they are looking at it differently.


KHAN: Well, he's an icon here, you know. People looked up to him, they admired him, but now they're going to kind of look at him maybe in a little bit of negative light now, you know, like, do we really want Lance Armstrong to be the icon of Austin, Texas? I mean, that's a lot of people have that question in their mind now that, you know, I don't know if I want this guy to be the face of Austin anymore.


HOWELL: You know, there's also a bike path here in Austin. A lot's changed. There's a new bike path named after Lance Armstrong. There's the store, you know, that he co-owns, but, you know, some people are questioning whether that bike path should be renamed. People are thinking differently about him given what they expect to happen tomorrow when he will admit after years of denying it that he did take part, Carol, in doping.

COOPER: George Howell reporting live from Austin, Texas, this morning.

Tomorrow at 3:00 Eastern we're going to have a half-hour special on why we cheat and we're not just focusing on Lance Armstrong. We'll take a look at everyone, Alex Rodriguez, Barry Bonds, anyone, or how about retired General David Petraeus. Why do we cheat?

It's also going to be our "Talk Back" question. That's tomorrow, so you can weigh in. That's Keep that in mind for tomorrow for that half-hour special beginning at 3:00 p.m. Eastern time.

And this just in to CNN, fourth quarter earnings in full swing on Wall Street and this week we're hearing from the big banks, Goldman Sachs and JPMorgan reporting higher earnings before today's opening bell.

Alison Kosik is digging in to those numbers for us, so let's start with Goldman.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: OK, actually, let's start with JPMorgan.


KOSIK: Because JPMorgan -- JPMorgan is going to catch your ear because I know you'll like this. You know that CEO Jamie Dimon, he had to take a huge pay cut, but besides that the company itself posted solid profits. JPMorgan actually made a profit of about $5.7 billion in the final three months of 2012. That's up more than 50 percent from a year ago. Now, if you look at banks overall, they've actually outperformed the broader market in the last year.

You look at the -- you look at the KBW index is up 30 percent in 2012 compared with the S&P 500 which was only up 13 percent.

And you know what's driving these banks? The housing market recovery. We certainly saw that with JPMorgan. New mortgages totaled $1.6 billion, that's up more than 50 percent.

The company also slashed the amount of money it holds in reserve to cover bad loans, and what shows is that credit conditions are improving.

OK, so as for JPMorgan CEO, Jamie Dimon, he is paying the price for last spring's trade gone bad in London, the infamous London wale trade that cost the company more than $6 billion. Those were trades that were made -- they're making big bets on complex derivatives. The company -- the company says Dimon bears the ultimate responsibility, so guess what, the bank cut his total salary, which includes his bonus, they cut it in half to $11.5 million.

I know, poor Jamie Dimon.


But do you know what, he made $23.5 million last year, so $11.5 million, what a pauper.


COSTELLO: I'm glad he won't have to apply for food stamps.


Goldman Sachs, we'll touch on that before you go?

KOSIK: OK, Goldman had a strong finish as well. Also benefiting from the housing recovery and the credit conditions that are getting better. Goldman is booking a profit of almost $3 billion and that's triple from a year ago. And despite what CEO Lloyd Blankfein called a challenging economic conditions for most of the year, Goldman pretty much coming out very strong.

What's most interesting with Goldman, Carol, is that there's this shift going on from making money on trading and investment management to Goldman getting most of its growth from lending money.

You look at Goldman shares, they've recovered in 2012 from a really, really tough 2011. Shares lost almost half their value in 2011, most of it coming after the summer debt ceiling debate. Well, guess what? Shares of Goldman have gained 48 percent in 2012. The rally has continued this year. Goldman Sachs shares right now are up 2.5 percent in the premarket -- Carol.

COSTELLO: All right, Alison Kosik reporting live from the New York Stock Exchange.

Snow, ice and rain, a huge winter mess stretching from Maine to Mississippi. We hear there's a 40-mile backup in Massachusetts.

We'll be right back.


COSTELLO: Thirteen minutes after the hour, time to check our top stories.

The U.S. House has approved spending more than $50 billion to help the northeast recover from Superstorm Sandy, despite the fact that 179 Republicans voted against the measure. Money will go toward repairing flood-damaged transit systems in New York and New Jersey as well as cash grants directly to storm victims. The bill now goes to the Senate.

A Nevada police officer is under a federal grand jury investigation after being caught on dash cam video kicking a man in the head, who was in a diabetic shock. This happened in 2010. Affiliate KSNV says the Henderson, Nevada, police sergeant was disciplined but he did not lose his job, was not demoted and was not charged. The victim settled his case with the city.

In money news Samsung has hit a mobile milestone. The electronics giant said it has sold 100 million phones and tablets from its Galaxy S series. The newest flagship of the series, the Galaxy S-3 has sold 40 million phones alone.

Ice and snow makes travel difficult across many parts of the country. In Louisiana dozens of accidents were reported and several roads closed because of freezing rain and low temperatures. In Chattanooga, Tennessee, a car was crushed when a tree came crashing down because of strong winds. And in Dallas, more than 170 flights were canceled due to freezing rain at destinations across the south.

Wintry weather stretches all the way to Maine, though, parts of the northeast could see up to six inches of snow today.

In a little more than two hours President Obama and Vice President Joe Biden will unveil their plan to fight gun violence.

Here's what we're expecting them to say. According to an official familiar with the situation the president will press for a ban on high-capacity magazines, push for universal background checks and an assault weapons ban, and request funding to treat mental illness as well as funding to enhance school safety.

Already the NRA is on the attack before it's even seen the plan. The group released this ad which paints Obama as an elitist hypocrite.


NARRATOR: Are the president's kids more important than yours? Then why is he skeptical about putting armed security in our schools when his kids are protected by armed guards at their school?

Mr. Obama demands the wealthy pay their fair share of taxes, but he's just another elitist hypocrite when it comes to a fair share of security. Protection for their kids and gun-free zones for ours.


COSTELLO: It's a tough ad.

Dan Lothian is at the White House.

But I understand the president is fighting back with his own P.R. strategy because when he makes his big announcement, he'll be surrounded by children who wrote letters to him begging for gun control.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. You know, we see the White House do this in the past. Usually, it's around a fiscal fight where the president's putting pressure on Congress, he'll be surrounded by families from across the country. Well, in fact, the president, as you pointed out, will be surrounded by these young kids who wrote letters to the president in the wake of the Connecticut shootings.

In addition to that, though, a White House official confirming that the president will also be joined with some Newtown families, families impacted by the Newtown shootings at this event here today.

So, clearly this is an effort by the White House to put pressure on lawmakers. As we've been pointing out, there are two tracks here that will take place, things that Congress can do and things that the president plans to do on his own. And so, this is one way for the president to use the public to put pressure on Congress, Carol.

COSTELLO: OK. So, to this point the president can do things on his own. I'm a little confused, because yesterday, the Vice President Joe Biden mentioned 19 executive actions, but apparently that's not what we're going to hear today.

So, what's going on?

LOTHIAN: That's right. You know, that is a number that came up when he met with those Democratic House members to talk about some of the proposals that he had been getting from these meetings that he held with a variety of people.

And the White House this morning is staying away from any numbers, but insisting that the president is still looking to do things on his own through executive orders or executive action. I mean, clearly, this is something that is controversial. There are a lot of gun rights groups out there that are concerned about the president acting on his own and how that could impact their second amendment rights.

But the president will be moving forward with some executive action. We will wait to see exactly what the details of that will be when he makes the announcement today, but White House spokesman Jay Carney saying that the president understands that there are limits to what he can do on his own within existing law.

COSTELLO: OK. So, I guess in a little more than 2 1/2 hours we'll know for sure.

Dan Lothian reporting live from the White House.


COSTELLO: And for today's event, Wolf Blitzer heads up our special coverage. That will start at 11:45 a.m. Eastern Time.

Another change in the Obama administration. CNN has learned Secretary of the Interior Ken Salazar will be leaving his post at the end of March. Salazar told the president he expects to return to his ranch and family in Colorado. Salazar has served as secretary of the interior since 2009.

A new NRA ad going after the president. You saw it just a little while ago. Some say that ad goes too far. Is the NRA leadership on target or out of touch? It's our "talk back" question today.


COSTELLO: Now, it's your chance to talk back on one of the big stories of the day. The question for you this morning is the NRA leadership on target or out of touch?

Personal now, a new NRA web ad makes no bones about it. Want to take away our guns? We're going for the jugular.


NARRATOR: Are the president's kids more important than yours? Then why is he skeptical about putting armed security in our schools when his kids are protected by armed guards at their schools? Mr. Obama demands the wealthy pay their fair share of taxes, but he's just another elitist hypocrite when it comes to a fair share of security.


COSTELLO: Normally, presidential kids are off limits, but when it comes to Second Amendment rights nothing is sacred. NRA President David Keene told CNN the organization is mobilizing for a fight and engaging its members. This ad is just the start, a response to the president's reluctance to put armed guards in every school.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I am skeptical that the only answer is putting more guns in schools. And I think the vast majority of the American people are skeptical that that somehow is going to solve our problem.


COSTELLO: That's the thing. By saying that President Obama opened the door to the NRA's latest salvo. If our elitist president's kids are protected by armed guards, why aren't yours?

Although the ad has prompted a few snarky tweets from "The New York Post's" Robert George, he says, or he tweets, "Obama is so elitist! Never gets stopped and frisked despite using drones to kill Americans."

"And Obama is so elitist! Planes can't fly over the White House, but the condo board won't let me install a rocket launcher on my roof." But political scientist Larry Sabato tells me the NRA ad is effective. It rallies its members to defeat the gun proposals. More importantly, the ad supports an issue most Americans agree with armed guards in schools, and it creates plenty of buzz.

Still, most Americans don't like the NRA's tactics. In a "Washington Post"/ABC News poll taken before the new ad, only 36 percent have a favorable impression of the NRA's leadership.

So, the "talk back" question for you today, is the NRA leadership on target or out of touch?, Or tweet me @carolCNN.

I'll be right back.


COSTELLO: Good morning. Thank you so much for being with me. I'm Carol Costello.

Stories we're watching right now in THE NEWSROOM:

Stocks are poised to open lower when the bell rings on Wall Street in just about four minutes. Investors are weighing more earnings reports. JPMorgan Chase and Goldman Sachs already reported earnings that beat expectations. Ringing the bell, very, very soon, are executives of Russell Indexes, a leading global index provider.

In London, a fiery helicopter crash has killed two people and injured 13 others. The crash happened early this morning when the helicopter hit a construction crane atop a new luxury residential building, killing the pilot and sending flaming wreckage onto the road below. The whole thing happened at the height of rush hour. Police told CNN, it's a miracle it wasn't worse.

A Bronx woman in New York indicted and accused of running a scam tied to the Newtown massacre. Prosecutors say 37-year-old Nouel Alba posed as the aunt of a child killed at Sandy Hook Elementary and solicited donations for a funeral fund. She's now charged with making false statements to the FBI.

Putting an end to gun violence in America. Since the tragedy of Sandy Hook Elementary school, we've heard talk of everything from executive actions to assault weapons ban, to expanded background checks.

But some say the answer could lie in one federal agency, the Bureau of Alcohol Tobacco and Firearms and Explosives, the ATF. It's part of the Justice Department and the ATF's mission includes preventing the illegal use and trafficking of firearms.

But an agency that is so critical to gun regulation has been without a permanent director for six years.

Mike Buochard is a former assistant director of the ATF. He joins us now from Las Vegas.

Good morning.


COSTELLO: So, how is it possible that there's such an important federal agency doesn't have a director for six years?

BOUCHARD: Well, it's unusual. I'd never heard of a law enforcement agency not having a director for that long. Particularly with the mission that ATF has with highly political, a lot of sensitive issues, a lot of dangerous issues in an industry that they regulate, and also where they try and prevent violent crime.

COSTELLO: So, what's been the big roadblock to appointing a permanent director?

BOUCHARD: Politics, quite frankly. I was still with ATF when they proposed making it a Senate-confirmed position. The career people in ATF were all opposed to it. We knew basically what would happen.

In fact, most of us said to the people who were trying to put the proposal together, we'll never get a director confirmed for this agency. And so far, that's been correct. And it's just very difficult having acting people come in. They're all very well qualified, but what you need to look at is they all have other jobs. So doing such an important task, important job, leading such an important agency, part time is very, very difficult and dangerous.

COSTELLO: So, Obama's nominee, I'll just throw a name out, he runs the ATF Chicago office. He was characterized by the NRA as anti-gun.

But you have to wonder these days what anti-gun means. What does it mean anymore? Anything? I mean, you can be anti-gun if you're against any gun regulation.

BOUCHARD: Right. There is no definition. I've been termed anti-gun and I do consulting for the firearms industry. I consult and try and keep gun dealers out of trouble.

But yet, some of the people say I'm anti-gun because occasionally I'll talk about commonsense approaches to reduce gun violence.

COSTELLO: By some people, you mean the NRA. I mean, let's just get -- the elephant in the room. It's the NRA that's blocking the confirmations and it's the NRA that's calling you and others anti-gun.

BOUCHARD: Without a doubt. And I just don't know why, you know, the president's nominee and other people who have been nominated, including the first person that the president, President Bush, put forward had been confirmed as a U.S. attorney and was in the Republican Party, and the opposed him quite frankly because they said ATF was too tough on gun dealers.