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STARTING POINT WITH SOLEDAD O'BRIEN

Secretary of State Kerry In Turkey; Detroit's Financial Emergency; Hotel Sued Over Body Found In Water Tank; Manning Admits Leaking Classified Docs; Countdown To Forced Spending Cuts; Coach K Upset After Duke Caught In Fan Rush; Unique Look For March Madness; Tiger Woods Went Into Water To Save Par; Miami Heat Join "Harlem Shake" Craze; F-35 Fighter Jets Fly Again; Girls Gone Broke?; Businessweek Editor Apologizes; "Do You Like Girls?; Is The NFL Ready For Openly Gay Player?

Aired March 1, 2013 - 07:30   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: -- spending cuts the country's top CEOs have been telling him. That's just ahead in a couple. First though, John Berman, has got a look at some of the day's other top stories. Good morning.

JOHN BERMAN, ANCHOR, CNN'S "EARLY START": Thanks, Soledad. Secretary of State John Kerry is in Turkey right now where he will meet with several leaders in Ankara. A senior State Department official says Kerry will express his concern over the Turkey's prime minister's comments equating Zionism with crimes against humanity.

Also the overall breakdown of cooperation between Israel and Turkey will be discussed. They are also expected to discuss the Syrian conflict and aid to refugees and rebels during the international conference on Syria held in Rome yesterday. The secretary of state announced a $60 million package of nonlethal aid for the Syrian opposition.

In just a few hours, Michigan's governor will unveil a financial roadmap for that troubled city of Detroit. He is expected to declare a financial emergency paving the way for possible state takeover.

Sources say he will endorse findings of a state report that says Detroit was in dire straits with no plan to reverse it. This will likely mean an emergency manager will be appointed to handle the city's fiscal affairs.

Two guests staying at the Cecil Hotel in Los Angeles, where a 21-year- old woman's corpse found floating in a rooftop water tank, they have filed a class action lawsuit against the property.

O'BRIEN: Knew that was going to happen.

BERMAN: They say the water they used was not fit for human ingestion or even for washing. The woman found in the water tank, Elisa Lam, is said to have been floating there for as long as 19 days. The hotel refused to offer refunds to guests who wished to leave.

UNIDENTIFIED MALE: No refunds? That's outrageous. BERMAN: Lawsuit. No surprise right there.

O'BRIEN: I think they will wish they offered the refunds.

BERMAN: Army Private Bradley Manning admitting in court he leaked thousands of classified military diplomatic files to the whistleblower web site, Wikileaks. But he claims he never meant to harm the United States, he only wanted to spark a national debate.

Manning pleading guilty to 10 of the 22 charges he is facing, but not to the most serious charge, which is aiding the enemy. This is all leading up to his court martial, which is in June.

So surfers in Vancouver got a big surprise last week while out hunting big waves off the Pacific Rim National Park. They were surfing next to a group of killer whales probably not a good idea. So the surfers got back to shore really fast. The whole thing was captured on camera.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is a once in a lifetime thing you are in shock and amazement. And a great spectacle to see so I think it's just a great moment.

(END VIDEO CLIP)

BERMAN: Terrifying, but great. The surfers they did make it to shore safely. The whales were apparently that close to shore because they were chasing a pack of sea lions.

UNIDENTIFIED MALE: Only great if you get to talk about it after.

O'BRIEN: We're just a couple of hours away from an important meeting happening in Washington, D.C. The president is going to meet with top congressional leaders at 10:00 to discuss those forced spending cuts that go into effect by midnight if a deal is not reach.

Keep in mind, this is the first time that they will be speaking about those cuts this week and this would be Friday. The cuts were designed to be so painful as you remember that neither party would even dare to let them happen and here they are happening.

So exactly what is going to happen to American businesses? Bob Moritz is the chairman and senior partner of PricewaterhouseCoopers, which provides consulting and tax services among other things. It's nice to have you with us, sir. Appreciate your time.

So there was a change in tone. That is what we were talking about yesterday, but we know now that most likely the deadline will not be met. What specifically are these CEOs have you been going around the country talking to telling you about their concerns once we pass through the deadline?

ROBERT MORITZ, CHAIRMAN AND SENIOR PARTNER, PRICEWATERHOUSECOOPERS: Well, it's clear that the CEO community is concerned about this. But I guess, I want to put into context their mindset. This just another episodical issue in a long continue of uncertainly.

And the reality is we've been going through this for a while now and this is just another data point or another episode that the CEOs have to deal with. So as a result, they are focused on three things.

One is how do they deal specifically with these cuts? That is dependent on which industry, sector or market they may be in. So for example, the defense industry may start cutting people, which has an implication of reduced employment, which impacts in the local market place retail and consumer companies.

In other organizations, they may not cut people. They may cut contractors, which impacts the professional services firms. So each organization is trying to deal with the downstream implications of that.

The second piece is actually dealing with just general uncertainty over the next year, two or three, which they've been doing over the last two or three years. Some organizations are well prepared for that uncertainly and trying to turn that into a positive capture more market share, take advantage of the opportunities.

So each organization is somewhat different. But it's still definitely a concern on a broader scale than the sequestering.

O'BRIEN: You had mentioned three things so dealing with the cuts themselves. Uncertainty which is always -- or I should say usually bad for business, unless you are able to say, run with the ball, when things are uncertain if you are well enough funded to do that. What is the third thing?

MORITZ: The third thing is just the disappointment in Washington because you have CEOs that actually see tremendous positive momentum from a commercial perspective when you look at consumer spending up until this point.

When you look at the housing market and unfortunately, if you break up the economy, between what I'll call the commercial side versus government side, you definitely see that dichotomy. So the headwinds that are unfortunately as a result of the impasse in Washington, is their biggest concern.

That's where they step back and say how does the government get together regardless of your political affiliation and say, listen, we have a large debt issue. We have a large growth issue and yes, we have tax and unemployment issues. How can we get leadership to step up and actually deal with this?

What the business community is trying to do with organizations like fix the debt is give those politicians the backing and confidence to actually take the tough calls and actually make those decisions without retrospective short term.

LAUREN ASHBURN, CONTRIBUTOR, "THE DAILY BEAST": This is Lauren Ashburn, when you do that, are politicians even going to be open to it? Paying attention? I mean, they have left down. They are done with talking about this?

MORITZ: Yes, which is the scary part and the frustrating part for the CEOs. So some of them actually say, you know what? I have become numb to the whole political situation. It's so frustrating. I can only deal with what I can control and as a result, I can't even spend the time nor do I want to spend the time to try to influence.

HOWARD KURTZ, HOST, CNN'S "RELIABLE SOURCES": But you're part of this group, "Fix the Debt," which means you believe the debt can be fixed. It has to be disillusioning for you, the fact that there are no serious negotiations to avoid these draconian budget cuts.

MORITZ: Absolutely. That's where the group of CEOs are frustrated because the either the options have been too small, too late or too much of a focus on kick the can down the road. Everybody is focused on think longer term, think bigger and actually make the tough decisions need.

O'BRIEN: According to the Congressional Budget Office, the actual savings they are saying for this year would be $43 billion in this current fiscal year, but if you are looking at the cost over this 2013 year, a million jobs lost, the GDP, which would have been 2 percent roughly.

It would now be projected to be 1.4 percent. You overall lose 6 billion because of those job losses. It just seems like the savings are undercut by losses in doing something that undermines the economy of the United States. What's in a non-political context? Maybe there is none. What is the fix to this?

MORITZ: Well, the fix is leadership roughly defined. CEOs, for example, are actually thinking long term and positively are making the investments, are thinking longer term and actually saying regardless of that, it's an opportunity for me.

I can capture market share in a down market. And what we see from a CEO perspective is actually dichotomy between winners and losers right now where they are actually making those long term investments to better position their companies for the future.

O'BRIEN: That sounds good for CEOs, but when you think about the worker bees, right -- you know, when they talk about the job cuts. We are really talking about individuals and people who are consultants and workers, it's brutal for them. These numbers are ridiculous.

MORITZ: Absolutely.

O'BRIEN: Thank you for talking with us this morning. Hopefully next time we have a conversation we are celebrating how they been able to come to some decision before this really looming deadline, which is March 27th. That's when we have to really fix this. You continue to pay things for the government.

KURTZ: This is the new normal, just lurching from one self-imposed crisis to the next. O'BRIEN: Yes, so how do you change that? It really seems like again in the political context, everyone is fine with that because they need a looming deadline to be able to get in front of the camera and to talk and point fingers.

ASHBURN: You vote the bums out.

BERMAN: The voters haven't done that yet.

ASHBURN: Right, exactly.

O'BRIEN: I don't know if it's elections. I don't know if that's it.

KURTZ: The public pressure if cuts are as impactful as we're being warned is the only thing that will move politicians and their own self-interests to cut the deal.

O'BRIEN: Tired of it.

All right, still ahead this morning on STARTING POINT, Tiger Woods going to great lengths to try to save a shot. Yes, that shot right there. That's up next on our "Bleacher Report." Back in a moment.

NFL prospects raising some eyebrows, claiming scouts were asking players about their sexual orientation. Wade Davis a former NFL player for the Tennessee Titans and sports agent, Drew Rosenhaus will weigh in on that, straight ahead.

(COMMERCIAL BREAK)

O'BRIEN: In college basketball, when the final buzzer sounds, nothing says upset like fans storming the court, but Coach K. getting a little tired of it. Joe Carter has got details in this morning's "Bleacher Report." Hi, Joe. Good morning.

JOE CARTER, CNN SPORTS CORRESPONDENT: Good morning, Soledad. You know, Duke has lost four times so far this season, after each of those four losses, fans from the other team, they have decided to celebrate by rushing the court.

You know, it seems like a given. You beat Duke, storm the court. Last night, it happened again, number three Duke lost to unranked Virginia, and the Cavalier student section quickly emptied to celebrate the huge win, center court.

Well, Mike Krzyzewski, Duke's head coach is not a fan of this kind of celebration.

(BEGIN VIDEO CLIP)

MIKE KRZYZEWSKI, HEAD COACH, DUKE: Congratulations to them. They should have fun and burn benches and do all the stuff they do. I'm all for that. Great school, great kids, but get us off the court. That's bottom line.

(END VIDEO CLIP) CARTER: All right, so if you are into neon colors and wild animal patterns, you will love the new college basketball uniforms. Adidas put these together for six basketball schools, Baylor, Cincinnati, Kansas, Louisville, Notre Dame, UCLA, they are all going to wear them during March Madness.

And at first glance, the color, color really stands above all, so at least come game time, you are not going to be able to mistake one team for another.

Tiger Woods went with his rain pants on the sixth hole at the Honda classic yesterday. He hit his ball into the pond. Off came the shoes, of came the socks, on came the water pants and the shot so pretty right on to the fair way. Tiger actually saved par on the hole and possibly his round. He is six shots behind the leader.

Well, the sports world has really taken to this latest internet sensation called the "Harlem Shake." Now here is the Miami Heat. Get some! Yes, Lebron James in the crown and cape. Chris Bosch is to the left with ghetto blaster, and the guy underneath the teddy bear costume, that's Dwyane Wade. Good times.

For more, fans storming the court, want reaction, logon to bleacherreport.com. Upset win over Duke, Virginia's big win. Soledad, I mean, this "Harlem" craze, it's like that call me maybe thing we did last summer, 2012.

O'BRIEN: It stays and goes finally. Thanks, Joe.

ASHBURN: It's too early to be seeing that kind of stuff. I'm sorry.

O'BRIEN: Yes, I agree with you.

Something else the sports world is talking about. An NFL hopeful claims scouts at the Combine were asking about sexual orientation. Is this an isolated incident? Does it hurt his potential? We're going to talk to a well known sports agent and a former NFL player about that. Back in a moment.

(COMMERCIAL BREAK)

BERMAN: Welcome back, everyone. STARTING POINT here, we have some quick look at your top stories right now. U.S. military F-35 fighter jets have been cleared to fly again after an engine crack grounded the entire fleet last month.

The Pentagon said the crack was discovered during a routine inspection in California. The nearly $400 billion joint strike fighter is the Pentagon's most expensive weapons system.

So brace yourself. Trouble for the girls gone wild video franchise.

O'BRIEN: That's so sad.

BERMAN: I told you to brace yourself. The soft porn video empire founded by Joe Francis has filed for Chapter 11 bankruptcy because its $16 million in debt more than that is owed to Las Vegas casino mogul Steve Wynn. But the company says the filing will not affect business, Soledad, comparing itself to other titans of American business like General Motors.

O'BRIEN: It's girls gone poor.

BERMAN: Media story here, an apology from the editor of "Bloomberg's Business Week" after the cover of Monday's issue triggered angry backlash from readers. It was supposed to warn everyone that a rebound in the housing market could lead to reckless lending practices again.

But the color illustration featured exaggerated caricatures of minorities holding fistfuls of cash. Many people probably understandably found it offensive. The editor says our cover illustration last week got strong reactions, which we regret. Our intention was not to incite or offend. If we had to do it over again, we would do it differently.

O'BRIEN: When I look at magazine covers, where are the minorities, where is the Latina in this. This one, whoa -- finally, they put all the black people and the Latinas on the cover.

KURTZ: How does that get through a whole bunch of editors? Somebody would say you can't do that.

O'BRIEN: Maybe not the right people in the room who feel offended when they look at it I would guess.

Let's talk sports. NFL hopeful Nick Kasa made waves this week not because of his performance at the Combine, but because of what he says was happening there behind the scenes.

He is a tight end defensive lineman at the University of Colorado and says he was grilled by coaches about his sexuality.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They ask you like girlfriend, are you married? Do you like girls? Those kinds of things and just kind of weird, but, you know, they would ask you with a straight face and it's pretty weird. Weird experience altogether.

(END VIDEO CLIP)

O'BRIEN: Joining us to talk about that Wade Davis, he is a former Tennessee Titans player. He came out after leaving the NFL. Also sports agent Drew Rosenhaus is back with us. It's nice to have you both with us.

Wade, I'm going start with you. You know, Nick Kasas describes it was weird and he said he thought the motivation was trying to get into somebody's head. What do you think of that?

WADE DAVIS, FORMER TENNESSEE TITANS NFL PLAYER: I think NFL scouts want to know everything about an actual player. I can remember a time when I was getting scouted as well and we were walking back from the football field and a scout asked my offensive coordinator, is Wade a lady's man? You know, for me a closet player, immediately all I heard was -- is Wade a gay?

O'BRIEN: So what was reaction to that then? Someone is asking if I'm gay and I'm gay but not telling anybody. What was your response?

DAVIS: I froze up. He wasn't asking me, but my offensive coordinator said, you know, Wade is not a ladies' man. So again, all that I heard was someone saying Wade is gay. It was a spot in my life where my next reaction was to become that ladies' man. To make sure that anytime someone else would ask about my sexuality, no, Wade is this type of guy that does --

KURTZ: Tell us about the culture of the NFL that you felt the need to be --

DAVIS: I don't think it's anything about the culture of NFL specifically. I think it's a culture of our society where you feel that being gay is a negative.

O'BRIEN: Let me ask Drew a question. Have you had clients tell you this? Have they come back from the Combine and said, gosh, they keep asking me about my girlfriend and did I have plans to get married?

DREW ROSENHAUS, SPORTS AGENT, ROSENHAUS SPORTS: No, I never have. I represent over 120 active clients in the NFL. I've been an NFL agent for 25 years. I've never had a player complain about this. Where I think we should clarify is sometimes teams will ask a player if they are married, if they have children, simply to find out more about a player's personal life, in other words, maturity.

Sometimes teams like it if a player is married and has children because perhaps they might go out less, perhaps they won't be goofing around as much, perhaps they are more mature when it comes to off the field things. So having nothing to do with sexual orientation, but I've never had a problem with this. I would really like to know the context.

O'BRIEN: What would you advise a client to do if he came back to you and said, they are asking me defensive coordinator and am I a ladies' man? What would you tell him to do?

ROSENHAUS: Well, I always tell players to be truthful in anything. I always advise my clients to be honest, to be genuine, to be themselves at all times.

O'BRIEN: Really? OK, so let's say you had a client who is gay and you are going to tell them to say, I'm not a ladies' man, I'm gay. Wade, let's ask you that question. This is a good time at the Combine before I make the next step to my career. That seems like it would be an impossibility --

DAVIS: It is. It's a question that unfortunately that you're asking a player who is very vulnerable at that time who is trying to make it into the NFL, you know, if he is actually gay. So the chances of that player feeling affirmed enough to say yes, is very, very low.

ASHBURN: I'm sorry. Is this illegal? I mean, if I'm a manager in a company, I am not allowed to ask you are you married. I'm not allowed to ask you how old you are and I'm certainly not allowed you according to HR, are you gay?

BERMAN: Well, the NFL says this goes against their policy to ask these type of questions and they, obviously, are concerned that this might be going on.

O'BRIEN: Drew, do you think there is ever going to be a day where there is an openly gay player at a high level, yes, I'm gay, yawn, everybody, move on? Do you think we will get there the next ten years?

ROSENHAUSE: Of course. Sure, absolutely. I don't see why we wouldn't. You know, frankly, I think it's going to happen and I don't know when or who, but of course and there is no reason why it shouldn't happen.

And in this particular case, again, I'd like to know what the context is, if the team was looking to find out about a player's personal life or just to get to know more about the player or a talking piece. I'm not even sure that Nick intended to get involved with the controversy.

O'BRIEN: I was going to ask you that. Do you think this hurts Nick's chances now? Let's say you were his agent. Do you feel like, you're in the Combine, they are judging you right now.

ROSENHAUS: No.

O'BRIEN: You don't think?

ROSENHAUS: I don't think this will have any impact on his draft status at all. He was just being genuine in talking about some of the questions. There are a lot of questions that go on in the Combine. Guys are interviewed by dozens of football teams. I don't think this will affect Nick Kasa in the draft and it shouldn't.

KURTZ: This is not --

ROSENHAUS: It shouldn't affect his draft status.

KURTZ: This kid deserves a medal for going public with this.

O'BRIEN: I don't know that he went public. I think he was just talking about what happened at the Combine. I don't know that he went public. I think he was just like it was kind of weird.

All right, Drew Rosenhaus, as always, great to talk to you. We appreciate it. Wade, it's always nice to have you with us. Appreciate it.

Two developing stories that we are following for you this morning, unbelievable situation happening in Florida, a man is missing after a sinkhole opened up under his bedroom basically swallowed him. His brother tried to rescue him. Eventually they were able to rescue the brother who fell into the sink hole. Other homes in the area are now in danger. We are live at the scene for you this morning.

A wildfire is creeping closer to homes in California. There are evacuations underway to tell you about. We'll have details on both of these stories right at the top of the hour.

(COMMERCIAL BREAK)

O'BRIEN: Good morning. Welcome, everybody. STARTING POINT this morning, swallowed by a sink hole over night. A man disappears as a sink hole opens up under his bedroom. His brother risked his own life to try to save him. The hole got bigger and bigger. We are following this incredible story live it at the screen.

Plus a wildfire is burning frighteningly close to homes in California and right now there are evacuations underway. We'll have the very latest on this.

BERMAN: Today is the day when $85 billion in forced spending cuts go into effect. The president and top leaders in Congress meet in a couple of hours for the likelihood of a deal is nearly zero.

This morning, there was officially no pope. Now the cardinals begin the search for their next pontiff in a secretive conclave. So the big question is when? Cardinal Francis George, archbishop of Chicago joins us live. He just got out of a meeting with the cardinals.

O'BRIEN: It's Friday, March 1st and STARTING POINT begins right now.