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STARTING POINT WITH SOLEDAD O'BRIEN

Martha Stewart In Court; Winter Storm Smacks Midwest; John Kerry In Qatar; Menendez Accuser Recants Story; Hit And Run Baby Dies; Hate On Campus; 12-Year-Old Dies After Bullying Incident; Heat Reach 15th Straight Win; Brittney Griner Dunks In 60-Point Game; Golf Stars Release New Music Video; Ben Stiller And 9-Year-Old Girl Steal Show; Matthew Fox's New Film "Emperor"

Aired March 5, 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: Welcome back, everybody. You're watching STARTING POINT. In just about two hours, Martha Stewart will be in a New York City courtroom. She's expected to testify at a civil trial that pits Macy's against retail rival, JCPenney. It's all over this partnership that she had with her company Martha Stewart Living Omnimedia.

CNN's Christine Romans is live outside the courthouse for us this morning. Walk us through the nuts and bolts of this case -- Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: You know, it's interesting, Soledad, because yesterday a judge in this courtroom said look, you all should have resolved this without coming to the court. They didn't, and now Martha Stewart will actually testify here today.

This is a case of Martha Stewart doing a deal with Macy's after she came out of prison eight years ago, a deal that helped rebuild her brand and then she turned around, despite an exclusive contract with Macy's and wanted to sell her stuff in a store within a store in JCPenney. Macy's not happy.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): It's been eight years since Martha Stewart left prison, serving five months for lying about a stock sale. Goodbye wrap sheet, hello cotton sheets. A deal with Macy's helped her company rebuild.

PAMELA DANZIGER, PRESIDENT, UNITY MARKETING: Macy's was really important in giving her a leg up, and, you know, giving her a helping hand.

MICHAEL KUPINSKI, DIRECTOR OF RESEARCH, NOBLE FINANCIAL CAPITAL MARKETING: Macy's obviously recognized the brand and the value of the brand, the quality of the merchandise.

ROMANS: Now Stewart is back in court. Macy's is suing her company over a deal with JCPenney. Her defense, a contract loophole, quote, "The Macy's contract is written to allow Martha Stewart Living Omnimedia to sell a broad range of products in JCPenney, with no restrictions whatsoever in a store inside JCPenney." But brand experts say the suit is trouble.

DANZIGER: She was married to Macy's. But she went off and had an affair and got in bed with a direct competitor with JCPenney, and I think it just shows really bad form.

ROMANS: Stewart's company struggling, losing $56 million in 2012. It shuttered magazines and laid off workers. The shares are beaten down. Last year, the Hallmark Channel cancelled the Martha Stewart show. These aren't exactly salad days, but neither was the insider trading case.

MARTHA STEWART, TELEVISION PERSONALITY: I want to focus on my salad.

ROMANS: Now she wants to focus on retail, 29 percent of her company's revenues came from merchandise last year. You can find her wares at Home Depot, Pet Smart, even Staples and if she prevails, JCPenney.

KUPINSKI: I suspect that the court is going to allow JCPenney a certain number of products that are going to go into their stores, whether they're branded by Martha Stewart or not branded by Martha Stewart.

ROMANS: But at what cost?

STEWART: Talk to the customers.

DANZIGER: I don't think anybody, any other business is beginning to want to get involved with her in the future. I think she's really hurt her brand and hurt herself.

ROMANS: Very messy business dealings for the woman who pedals perfection.

(END VIDEOTAPE)

ROMANS: And Soledad, these are three household names. Normally between companies you don't hear about their contract law disputes, but this is Martha Stewart. This is JCPenney and this is Macy's. The Macy's CEO when he testified last week, he said he considered Martha Stewart his friend and long time business partner.

When she called him in 2011 and said, I'm doing a deal with JCPenney, he said he was sick to his stomach. He hung up the phone and has not spoken to her since -- Soledad.

O'BRIEN: Christine Romans for us this morning. Thanks, Christine. It's so interesting. You hear Terry Lundgren talk about that. One of Christine's interviews was describing how it's almost like cheating on someone. That's really how the CEO seemed to describe it, that he feels personally betrayed.

ROLAND MARTIN, CNN CONTRIBUTOR: That's a whole lot into her brain. And look, department stores are competitive. JCPenney, the Dallas- based company, they lost a ton of money. They've been losing money like crazy. So they want this kind of deal. Macy's guys saying, look -- O'BRIEN: It's all about the contract. What do the specifics of the contract stipulate -- and a store inside a store? It's like what's the definition of store is. It's like what's the definition of store is, is going to hint upon.

John Berman is going to look at other stories that are not the JCPenney and Martha Stewart story.

JOHN BERMAN, ANCHOR, CNN'S "EARLY START": In not Martha Stewart news this morning, another winter storm beating down on the nation's midsection, significant snowfall making travel pretty awful around several Midwestern cities and towns this morning.

This was the scene in Minneapolis as this late season storm dumped a nice coat on the twin cities. Severe weather warnings are still in effect for much of that area. Chicago, meanwhile, bracing for biggest snow of the season for them right now, up to ten inches could cover the metro area today, making delays at O'Hare and Midway Airports, unfortunately, very likely.

Secretary of State John Kerry arriving in Qatar overnight, the latest stop in his Middle Eastern trip. This is Kerry's first official trip in his new cabinet position. He began the day in Abu Dhabi before flowing to Doha.

Our Jill Dougherty is traveling with the secretary. She had a one-on- one interview with him this morning. We are expecting a live report on that at the top of the hour.

A Dominican woman who claims she had sex for money with New Jersey Senator Robert Menendez now says her story is totally false. That she was paid to make up the accusations and that she never even met Menendez. That is according to court documents.

However, "The Daily Caller," which first broke the scandal says these new reports are getting the escorts all confused. They claim the Dominican woman is not one of the two prostitutes they originally interviewed for their investigative report last fall.

This is kind of a messy tangled weapon. Our Adrianna Hauser is live with the latest from Miami this morning hopefully to clear some of this up. Good morning.

ADRIANA HAUSER, CNN CORRESPONDENT: Good morning, John. Well, the "Daily Caller" claims "The Washington Post" is one of those newspapers that got it wrong. "The Washington Post" seems to base its article on affidavits similar to the ones we have, and we obtained those through a Dominican attorney, Venecia Castillo, during a press conference.

Castillo is an acquaintance of Senator Menendez and a cousin of Solomon Melgan and Melgan is a friend, of course, of Menendez and a political donor who live here in Florida. In those documents, they're notarized, a woman identified as Nexis Delos Santana says she is the girl in the video.

That she was paid to read out loud a script saying that she slept with Menendez, but that she never actually met Menendez, Melgan or Castillo. Santana adds that she never knew she was being recorded. Castillo assures that Santana is the girl who appears in one of the videos wearing a yellow dress.

He also presented another notarized confession, an attorney called Miguel Galvan, who pins the blame on another attorney, a third attorney. Galvan says this attorney asked him for help with a divorce case by finding him witnesses who would make prostitution claims.

CNN has tried to contact both attorneys, but we have gotten no response yet. The documents show also, John, that Santana and Galvan asked a judge for legal protection because they claim they were tricked, and that court hearing will take place later today. So we'll be paying attention to that hearing today -- John.

BERMAN: As you said, a tangled web that still needs some unravelling. Adriana Hauser, our thanks to you from Miami this morning.

A manhunt is under way here in New York City as police search for the suspect in a hit-and-run crash that claimed the lives of two parents and their newborn baby. Police are looking for 44-year-old Julio Acevedo, who was arrested last month on a drunk driving charge.

The expectant parents, Nathan and Raizey Glauber, both 21, were killed while en route to the hospital early Sunday morning. Their baby boy was delivered after his mother's death, but he died yesterday of his injuries.

So officials at Ohio's Oberlin College are figuring out how to deal with a rash of racial incidents on campus. Classes were suspended Monday after a student reported a person wearing what appeared to be a KKK hood and robe near the school's African heritage house.

Instead of classes, administrators asked students, faculty and staff members to gather in small groups yesterday to discuss racism at Oberlin. The Oberlin Police Department says 15 racial incidents have been reported on campus in the last month alone. Oberlin not the type of college you would necessarily expect to see this.

O'BRIEN: Such a crazy story. If you think about that, 15 cases of racial incidents at Oberlin in over a month?

CHARLES BLOW, CNN CONTRIBUTOR: I'm thinking about the shock I'd feel if I was a freshman walking around and you see a guy walking around in a KKK robe walking around your campus and you're paying tens of thousands of dollars to go there?

O'BRIEN: If you're the parent of that, you'd be like that has to stop pronto.

MARTIN: Saying look, we've got to come together as a university.

O'BRIEN: I think you're exactly right about that. Police investigating what happened in a case of bullying. This story is so, so sad. It appears to have led to the death of a 12-year-old sixth grader. His name is Bailey O'Neill. He died on Sunday after he was removed from life support.

The kid began having serious seizures that forced doctors to eventually put him into a medically induced coma after a bullying incident in the school that happened on January 10th. Now the police haven't said if they're going to file charges. His family though, as you can imagine, completely heartbroken.

(BEGIN VIDEO CLIP)

ROB O'NEILL, FATHER OF BAILEY O'NEILL: I don't have nobody to call me dad anymore. No more phone calls. No more hanging out. Just no one to say daddy, you know? It's the worst feeling.

(END VIDEO CLIP)

O'BRIEN: My God, what a terrible, terrible story. Senator Bob Casey is a Democrat from Pennsylvania. He's the chairman of the Joint Economic Committee. He wrote an op-ed on cnn.com about bullying legislation that he has now proposed. We'll talk about that, sir, in just a moment. Good morning and welcome to you.

I want to start though with the story of this little kid, Bailey. Apparently, he was bullied at school and he was punched in the face in the schoolyard, taken to the hospital. He was treated for a concussion. He was treated for a broken nose.

Those serious seizures actually began a little bit later. What has been your reaction to this case that eventually ended a little more than a month of those seizures, he ended up dying?

SEN. BOB CASEY (D), PENNSYLVANIA: Well, Soledad, it's a horrific story, of course. But I don't know any more than what you've reported. So I think it's a case still under investigation. But I know this for sure, when you speak to the larger question of bullying, this is an epidemic. Unless we deal with it, we're going to have all kinds of problems down the road for these young people who can't function, can't study, can't do the work --

O'BRIEN: Do you think it's worse than it was? I mean, do you think that bullying today is worse than it was, say, when I was in elementary school and high school, or do you think that we are more sensitized to it, talking about it more and reporting on it more?

CASEY: No, I think it is worse today. The technology makes it worse. In the old days when I was growing up, if you were bullied at school and you left the school, pretty much that was it until maybe the next day, as difficult as that was in those days.

Today, it follows you home. You're not only harassed online sometimes over and over again, hour after hour, but you have an audience of people that are witnessing it and sometimes participating in it. So I think it's worse, and until we deal with it, I think the legislation that I have with Senator Kirk is one way to deal with it.

It is to say to school districts and states, you've got to have policies to prohibit it, you've got to have prevention programs and you've got to keep records and make sure that students and parents know their rights.

O'BRIEN: Give me specifics because I think there are a number of schools that have had incidents and they say we are a zero tolerance school. We do not want to see our children bullied. We completely support fixing that. What can we do that you could possibly legislate?

CASEY: Well, the first thing I should say is there are a lot of schools that are engaged in these activities already, but not enough. It should be across the board. Having specific policies on bullying is important.

Secondly, making sure they're putting in place a program so people talk about and understand it. The good news here is that you have a lot of schools that have undertaken this, even in the absence of a federal statute.

I think we have to make it a much bigger issue. I think what CNN did the other night and has done for a number of months now by highlighting elements of the movie "Bullying" I think has heightened the awareness.

O'BRIEN: That movie, we talked a lot about that when that was coming out. That was absolutely brutal. I want to turn to my panel. Who was bullied on this panel? Really, you were?

DARYL HANNAH, ACTRESS, ACTIVIST: Yes.

O'BRIEN: Hang on, not you. Daryl Hannah was bullied?

HANNAH: Every day after school I was punched in the stomach until the air went out of my system and left on the ground to try to catch my breath.

O'BRIEN: By whom?

HANNAH: I don't want to name names on TV --

O'BRIEN: Now's your chance, revenge.

HANNAH: My neighbor. He lived on the corner and he would punch on the stomach since we get off the school bus and leave my laying there every single day.

O'BRIEN: Did you tell people?

HANNAH: Too scared.

MARTIN: The point she just made, this is part of the problem when you talk about bullying and fighting. The senator is right. All the policy comes from the school, what happens when they leave the school grounds? What happens when you're fighting and no longer on the school bus?

So unfortunately, we have kids all across America who are fighting other kids and it's difficult for a school district to control that when they may be walking home in a park. It's very difficult.

O'BRIEN: He's right about the social media part, right. How many times have we seen kids take their iPhones and they shoot it and it doesn't just stay in the school or after the school day and on the school bus it continues on.

The senator has legislation which is called safe schools improvement act. We thank you for talking with us, sir, about that this morning. This kid's story is so, so sad. We appreciate your time, Senator.

MARTIN: The Chicago story, the kid who was beaten after school died as well.

O'BRIEN: Just breaks my heart. We got to take a break.

Still ahead, a new movie about exactly what happened immediately after World War II and how our nation handled the nation of Japan is called "Emperor." It stars Matthew Fox and he's going to join us to talk about this new role for him straight ahead.

(COMMERCIAL BREAK)

O'BRIEN: Lebron James and Dwyane Wade leading the Heat as they steamroll through the NBA. Vince Cellini has more on the impressive streak in today's "Bleacher Report." Hi, Vince. Good morning.

VINCE CELLINI, "BLEACHER REPORT": Good morning. Some NBA teams may go a week or so without a loss. The Miami Heat has not dropped a game in more than a month. The defending champs kept it rolling Monday night in Minnesota, 97-81 the final. MVP candidate Lebron James shaking off a sore left knee to score 20 points to go along with 10 rebounds.

But it was his teammate Dwyane Wade doing the heavy lifting for the Heat, looking healthy again. He had 32, 10 assist and seven rebounds. Miami made it a franchise record 15 straight wins. They go for 16 in a row Wednesday at home to struggling Orlando.

Monday in Waco, Texas, Brittney Griner of Baylor honored on senior night and then she put on a show in her final regular season home game, including her first dunk at her home floor since her freshman year. The 6'8" senior set a big 12 single game record, 50 points in beating Kansas State and moving her top ranked Lady Bears to 29-1. Griner has been outstanding, second all time in scoring in women's division one hoops.

And at long last, the wait is over, as the golf boys released their second music video. The golf boys include Bubba Watson, Ben Crane, Rickie Fowler, and Hunter Mahan, who obviously have lots of down time between tournaments.

And finally this, Monday, world tennis day, during an exhibition at Madison Square Garden, Rafael Nadal plucking Ben Stiller out of the crowd to participate and he matched him up against 9-year-old Rebecca Suarez. Stiller trash talking his opponent, but Rebecca actually had the last word, coming up with terrific shots like this one. She has game. Eventually Rebecca made the actor pay with a tremendous return that handcuffed Stiller all before celebrating victory and soaking in the ovation from the New York City crowd. So that is nicely done.

More sports? Sure, we have it for you. Visit bleacherreport.com. You can find out what Joe Flacco's new record deal means for other quarterbacks around the NFL. As it turns outs, after Flacco's press conference to announce his $120 million deal, he was hungry. So he stopped at a McDonald's drive-through. So Soledad, he remains a regular guy.

O'BRIEN: Even with all that money, he remains --

MARTIN: I love Flacco's response. I'm not feeling respected with my $120 deal. You think?

O'BRIEN: My husband was at that tennis game yesterday. Hilarious, unbelievable, that little girl. Good for her.

Speaking of sports, next hour, we're going to meet Khalil Edney. Remember, we're showing you this yesterday, high school basketball player made a 60-foot buzzer beater shot, winning the sectional championship. We'll talk with him about that in a moment.

Up next, we're going to talk about a gripping new war movie that takes a look at how the United States decided to handle Japan's emperor right after World War II. They had to decide whether or not they would hang him, convict him as a war criminal. The star of "Emperor" is Matthew Fox. He's here with us. We're back in just a moment.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. For six seasons Matthew Fox played Dr. Jack Shepherd on the hugely successful TV drama "Lost." Since then he's taken in the big screen. His latest film is a historical drama "Emperor." As the Japanese surrender at the end of World War II, Fox's character is tasked with whether Japan's emperor will be hanged as a war criminal.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What the hell is this?

UNIDENTIFIED MALE: Conclusion of my investigation, sir.

UNIDENTIFIED MALE: What investigation? This is just your opinion. I don't see any evidence.

UNIDENTIFIED MALE: I have no concrete evidence, sir, but it is what we must do.

UNIDENTIFIED MALE: Based on what, your vote of confidence?

UNIDENTIFIED MALE: Based on the fact that we're here to rebuild Japan and we will -- UNIDENTIFIED MALE: I am about to make the biggest decision of the occupation, which will determine the future of Japan and all I have is conjecture.

UNIDENTIFIED MALE: We will never know the extent of the emperor's involvement, sir.

(END VIDEO CLIP)

O'BRIEN: The movie opens on Friday. It's so nice to have you.

MATTHEW FOX, ACTOR, "EMPEROR": Thank you for having me.

O'BRIEN: Tommy Lee Jones is Macarthur. He's basically saying he's got to make the biggest decision of the post-war. It's the biggest decision for Japan, but really the implications were huge. I mean, you know, set up for us the conundrum in declaring the emperor of Japan as a war criminal and hanging him?

FOX: Well, the one thing that Fellers, Fellers is Macarthur's right hand man and was with him through a large portion in the South Pacific campaign. He's a Japanese expert. In our story, he had fallen in love with a Japanese woman in 1930, and their love was torn apart by the war breaking out.

So Macarthur tasks him with the responsibility of in this ten days making this determination and the film focuses on that 1945 investigation. Fellers really understands that even though in the end he can't find any evidence one way or the other that removing the emperor as the emperor of Japan is going to lead to chaos in Japan.

And he understands more than most westerners the implications of that and that the Japanese people look to the emperor in the way a westerner really couldn't understand. And to remove that position would -- would be terrible.

O'BRIEN: A cultural understanding really is what made him make the right decision, certainly, from a historical context as we look back. Do you like historical movies? Are they harder to do because you have to kind of get into the -- research the role?

FOX: That was part of the attraction to it for me. I really knew very little, almost nothing about this moment of our history.

O'BRIEN: It kind of always ends with Nagasaki and Hiroshima, right? We never really think post those events.

FOX: That's right. I think the movie does a great job of reminding us there are always going to be conflicts. It's the way we exit those conflicts that oftentimes determine how we'll look back at that over history. For me I think that the U.S. foreign policy decisions made at that time were really a shining moment for U.S. foreign policy.

And the recommendations that MacArthur made to Washington after Fellers' recommendations to him I think were very -- he was looking down the field and looking at the big picture. There was a lot of pressure to remove the emperor and to put him on trial because of Pearl Harbor and because of, you know, the Japanese aggression.

MARTIN: I talked to David Hardwood of "Homeland." He said he began to study everything about the CIA. For you, did you begin to look at other examples when America had to make a decision? Saddam Hussein in Iraq, other kind of stories where same thing in this case, you take over a country, now you are making a decision about the future of the country?

FOX: You know, I didn't. I mean, I really just focused on this specific moment we were dealing with. I did a lot of research on Fellers. I read all the reports. The film had done an amazing amount of research up to that point. I felt like it was represented in the script.

I had the luxury of nobody really knows Bonner Fellers. So, you know, as an actor you sort of walk this line of how much you're going to use the research and how much the research just might get in the way of filming you're trying to create.

O'BRIEN: Matthew Fox, the movie is called "Emperor." It opens on Friday. It looks great. Good luck with it. Thanks for talking with us. We appreciate it.

Got to take a short break. Still ahead, you're looking live at Minnesota. Look at that. Late winter storm coating the Midwest heading towards the nation's capital. We'll take you there live with the forecast.

Then some new details about the relationship between President Bush 41 and President Bush 43, really interesting letters that they shared that we'll share with you, straight ahead.

(COMMERCIAL BREAK)

O'BRIEN: Welcome, everybody. STARTING POINT this morning, bracing for a big snow. A late winter storm barreling down on the Midwest making its way to Washington, D.C. as those colored bars were not the storm. Team coverage on the ground as we track the storm for you.