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CNN NEWSROOM

House Grills Holder; White House Battles Three Scandals; Latest on Cleveland Kidnapping Case; Ariel Castro Not a Monster?; Big U.S. Brands Won't Sign Safety Pact; O.J. Simpson Testifies Today; Stock Futures Down Ahead of Open

Aired May 15, 2013 - 09:00   ET

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


CAROL COSTELLO, CNN ANCHOR: And when did they know it? Forty years later that simple, iconic question from the Watergate era once again hangs over the White House. Some Republicans are accusing the embattled Obama administration of abusing its power and your trust. Unlike anything we've seen in generations.

(BEGIN VIDEO CLIP)

SEN. ORRIN HATCH (R), UTAH: Never seen anything quite like this except in the past during the Nixon years.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I can tell you that people who make those kind of comparisons need to check their history.

(END VIDEO CLIP)

COSTELLO: This morning, though, double trouble. The IRS accused of targeting and bullying the president's critics and the FBI investigating government snooping on a news agency and even its reporters' personal calls.

Later today lawmakers will grill the president's attorney general, Eric Holder. Now keep in mind the Republican National Committee has called on Holder to resign, although that wouldn't be the first time. Holder has long been a lightning rod for criticism.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Ladies and gentlemen, will you please join me in welcoming the 82nd attorney general of the United States, Eric Holder?

COSTELLO (voice-over): Eric Holder, America's first African-American attorney general, stirred controversy from the moment he took office. At a Black History Month event Holder said the country remained voluntarily socially segregated.

ERIC HOLDER, ATTORNEY GENERAL: Though this nation has proudly thought of itself as an ethnic melting pot, in things racial we have always been and we, I believe, continue to be in too many ways essentially a nation of cowards.

COSTELLO: America's first black president stood by Holder, a man he nominated as the nation's chief law enforcement officer for his toughness and independence. But some Republicans take issue with how Holder demonstrates those traits.

RICK SANTORUM (R), FORMER PRESIDENTIAL CANDIDATE: I believe Eric Holder is one of the worst attorney generals in the history of the country because he selectively enforces the law on a variety of different funds based on his own ideology.

COSTELLO: Two years ago Republican Congressman Peter King called for Holder's resignation, upset because Holder favored civilian criminal trials rather than military tribunals for the 9/11 terror suspects. King wrote in a "New York Post," quote, "The guy just doesn't get it and because he doesn't he should resign forthwith."

There also was anger over Holder's assertion that Arizona's tough immigration law would lead to racial profiling and that the Justice Department would no longer defend the Defense of Marriage Act which defines marriage as between a man and a woman.

But the pot really boiled over in 2011 with "Fast and Furious," a failed ATF operation that put weapons in the hands of suspected gun smugglers. One of those guns had killed Border Patrol Agent Brian Terry. Republicans accused Holder of a cover-up.

GOV. RICK PERRY (R), FORMER PRESIDENTIAL CANDIDATE: If I'm the president of the United States, and I find out that there is an operation like "Fast and Furious," and my attorney general didn't know about it, I would have him resign immediately.

COSTELLO: Through it all, Holder remained defiant, charging some of his critics were playing gotcha politics. He told the "New York Times", quote, "This is a way to get at the president because of the way I can be identified with him. Both due to the nature of our relationship and, you know, the fact that we're both African- American."

But this time even some Democrats are appalled at the latest controversy, mainly that Holder's Justice Department secretly collected phone records of journalists at the Associated Press. Still, Holder remains resolute when it comes to his record.

HOLDER: I'm proud of what we have done. There have been a whole host of things that this administration has done, this Justice Department, in particular, that are consistent with what I think the president campaigned on and what we promised at the beginning of this administration.

(END VIDEOTAPE)

COSTELLO: But Holder is a busy man these days. He has now launched a criminal investigation into the IRS. As you know, IRS employees have for the past 18 months targeted conservative groups with the words Tea Party or patriots in their names. As a result, applications for their tax-exempt status were delayed.

A new Treasury Department report put it this way. Quote, "The IRS inspector general found that IRS agents used inappropriate criteria to identify Tea Party and other groups." And the report also cited ineffective management that allowed the criteria to be in place for 18 months, which resulted in substantial delays in applications and unnecessary questions.

And today at 1:00 Eastern we'll hear more from Holder. He is due to testify in front of the House Judiciary Committee.

As for what the president's mouthpiece is saying about all of these scandals, Press Secretary Jay Carney sang a familiar tune, at least 11 times.

(BEGIN VIDEO CLIP)

CARNEY: All I can tell you is that I cannot and he cannot comment specifically. I can't comment on the specifics of that. We simply can't comment on the specific investigation. But I cannot and he cannot appropriately comment on the specifics. This I think refers to this investigation so I cannot comment on that. And we can't comment on an ongoing criminal investigation. I'm not going to comment on the specifics of an investigation here.

I just can't comment on the specific reports that you cite. And I cannot comment on this specific investigation for all the obvious reasons. It would be inappropriate to comment on the specific investigation. You know, I cannot comment on the specific case.

(END VIDEO CLIP)

COSTELLO: This from an administration that promised full transparency.

Brianna Keilar is at the White House this morning.

Brianna, even President Obama's friends says he needs to do something dramatic to turn the tide, as in he needs to fire someone.

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Well, and I think, Carol, that you're already seeing perhaps the way paved on that because last night the White House put out a statement from President Obama saying at least when it comes to this controversy involving the IRS that he is having his Treasury secretary Jack Lew. He is requesting that he hold accountable the people in the IRS who are responsible for this.

And I think when you see the report, that's going to mean not necessarily just the folks at the IRS who executed this but also those who are overseeing this because the report cites ineffective management. But the question is, is that going to be I guess you could say dramatic enough to show that he's really leading on these issues?

The White House, and you heard from Jay Carney's comments there, Carol, feels that it's in a bit of a pickle here because when it comes to the IRS story, they were loathed to be seen as too much involving themselves in what is supposed to be an independent investigation of an agency in their administration and then when it comes to the Department of Justice's seizure of AP records, there is this sort of firewall between the White House and the Department of Justice as history has made it so but the president also sort of runs the risk of looking somewhat ineffectual and removed from this and Republicans are certainly seizing on that, Carol.

Here's Mitch McConnell.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: But we do know this. We can't count on the administration to be forthcoming about the details of this scandal. Because so far they've been anything but.

(END VIDEO CLIP)

KEILAR: So, Carol, it's really a delicate line that the White House is trying to walk here but certainly, yes. I think they do need to do something to show that they are sort of in control here and they aren't just bystanders as they're watching these controversies unfold.

COSTELLO: Brianna Keilar, reporting live from the White House this morning.

In other news, 13 of Boston's 14 deputy fire chiefs have signed a letter of no confidence in the city's fire chief. "The Boston Globe" reporting the deputies said Chief Steve Araiba failed to assume command responsibility after arriving on the scene of the marathon bombings. The deputy chiefs also suggest his conduct was part of an ongoing pattern. "Abraira shields himself from immediate accountability while setting the stage for undermining the confidence and authority of his command staff. While acknowledging his ultimate accountability for department operations, he avoids on-the-scene responsibility."

That's from the letter. Abraira defended his post-bombing actions to "The Globe" saying that when he arrived on the scene he was comfortable with the level of response.

And we're learning new details about how Cleveland kidnapping suspect Ariel Castro allegedly treated three women for their years in -- in their years in captivity.

CNN's Pamela Brown has the latest developments from Cleveland.

Good morning, Pamela.

PAMELA BROWN, CNN CORRESPONDENT: Good morning to you, Carol. That's right. We're learning some new information from sources this morning. Sources say that Castro's behavior toward the women evolved over time and that there were varying degrees of treatment with the three women. According to sources I spoke with, Amanda Berry who fathered Ariel Castro's child, was treated slightly better than the other two women.

But again, we have to keep in mind here that these were poor conditions that the women were living in according to sources so it's all relative in that everything was to a varying degree. But nothing too significant as far as their treatment. But we have learned, Carol, from a source, that Michelle Knight was Ariel Castro's main punching bag and that he abused her with anything and everything including hand weights according to the source. So it appears that Amanda Berry was treated slightly better than the rest and that Michelle Knight was treated the worst.

We also learned that all three of the women were underweight when they were rescued from the home by authorities. That Michelle Knight is in the worst condition. That she has vision loss and muscle and joint damage and various physical issues as a result of the abuse she endured according to sources we spoke with.

COSTELLO: I also understand we're hearing from Ariel Castro's attorneys for the first time. What are they saying?

BROWN: Yes. It might be a little bit surprising for people to hear, Carol, that his attorneys are saying that he is going to plead not guilty if he faces kidnapping and rape charges from a grand jury indictment. That his attorneys say that they're going to mount the best defense possible, that at this point Castro hasn't told them anything of what he's done as far as, you know, the kidnapping and rape charges go.

We have been reporting that Castro has confessed to at least some of his actions over the past 10 years to authorities during interrogations but, again, his attorneys are saying that he hasn't told them or confessed to them what he's done. So maybe a little bit surprising for people to hear.

Let's take a listen to what his attorneys had to say.

(BEGIN VIDEO CLIP)

JAYE SCHLACHET, DEFENSE ATTORNEY: Well, I think that the initial portrayal by the media has been one of a, quote, "monster." And that's not the impression that I got when I talked to him for three hours. He is a human being and what's offensive is that the media, and I don't mean it towards you, but the media and the community wants to -- wants to demonize this man before they really know the whole story. And I think that it's unfair and it is just not equitable.

(END VIDEO CLIP)

BROWN: Castro's attorney that we just heard were interviewed by one of our affiliates here in Cleveland, WKYC, and also during that interview his attorneys talk about wanting to move the trial outside of Cuyahoga County because of all the media attention and because of recent high profile case involving a convicted serial killer of 11 women who kept the women in his home. That was a case many people know of Anthony Sowell.

And also they talked about how they know how Castro made contact with the women and an explanation for that will come out in court -- Carol.

COSTELLO: All right. Pamela Brown reporting live from Cleveland this morning. Just ahead in the NEWSROOM, we hear from a teenage girl who was trapped 17 days in a collapsed factory building in Bangladesh.

(BEGIN VIDEO CLIP)

Translator: Suddenly I heard the call to prayer. Then I heard sounds. I heard the sounds of voices and I wondered where is the sound coming from?

(END VIDEO CLIP)

COSTELLO: A CNN exclusive, next.

(COMMERCIAL BREAK)

COSTELLO: Fifteen minutes past the hour. Time to check our top stories.

This afternoon, a paramedic who responded to last month's fertilizer plant explosion in West, Texas, is expected to plead not guilty to having bomb making supplies. That's according to a lawyer for Bryce Reed. Details of Reed's arrest, rather, came as authorities last week announced they've launched a criminal investigation into the blast that killed 14 people. They have not tied Reed to the probe however.

To Fort Hood, Texas, where an Army sergeant who helped run a sexual assault prevention program is now accused of sexual assault. An administration official tells CNN there is a, quote, "distinct possibility the accusation may be related to prostitution." The soldier has been suspended, no charges have been filed.

To Mexico where officials are preparing for possible evacuations. The shadow of a volcano near Mexico City. "The L.A. Times" reports more than 10,000 people could be displaced if volcanic activity intensifies. Authorities are warning of a possible lava flow and a big shower of ash. The volcano has been active since 1994.

COSTELLO: Now to Bangladesh where recovery efforts have ended following last month's collapse of a garment factory building. More than 1,100 people were killed, but thousands more were rescued alive including a teenager Reshma who survived 17 days before workers plucked her out of the rubble.

CNN spoke one-on-one with Reshma in the exclusive interview.

(BEGIN VIDEO CLIP)

RESHMA, SURVIVED 17 DAYS BURIED IN RUBBLE (through translator): I keep sleeping off and on. I couldn't see anything. It was so dark. There was a hole. I didn't know if it was dirty water or what type of water. I was thirsty so I drank.

Suddenly, I heard the call to prayer. Then I heard sounds. I heard the sounds of voices and I wondered where is the sound coming from? Where is the sound coming from?

I was really, really happy and I said, God, save me, God.

(END VIDEO CLIP)

COSTELLO: Reshma said her clothes had been torn off in the rubble. Rescuers threw in a flashlight and that allowed her to find and change into a fresh set of clothing that were with her in the rubble. But she seems to be doing OK. Just an amazing story.

And now the pressure is on the world's retailers to help improve safety at other Bangladesh garment factories. More than a dozen major European clothing companies have agreed to this new safety plan, including H&M. But many U.S. retailers like Walmart and the Gap are refusing to join in. Some say they want to make their own plans.

CNN's Christine Romans is live in New York.

And you'd think if there is something retailers could gather around it would be this but they're not. Why?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: The bottom line here is that these big American retailers have lost control of their supply chain, right? The clothes hanging in your closet are made under conditions, Reshma making the clothes in your closet for example under conditions that were unsafe.

But now, the American retailers appear to want more control over whatever process is going to happen next for having safety in those factories.

Carol, only one American retail brand, big maker of retail brands is signing on. It's PVH. They make Tommy, Calvin Klein, Izod. They joined with the European companies that are joining the safety pact. They want independent safety inspections, reports to be made public. They want to cut ties immediately with factories that don't comply.

Now, Walmart, who after H&M, is the biggest user of Bangladesh factories says that it's going to have its own plan and it will be better than the European one. It wants its own inspections and it's going to report the outcome of those inspections to the public by June 1st.

Many critics, Carol, say you can't have the retailer pay for its own inspections because it's a conflict of interest. And many have said, look, Walmart, there was a fire in a factory that made Walmart clothes last year that killed 112 workers. Walmart didn't even authorize that factory to be making its clothes. So, it doesn't really have control of which factories are making its products.

George Miller, who is a Democrat from California, he's pretty outraged by all of this. He singles out Gap as well. Gap is not signing on to this international pledge because it's worried about legal ramifications if it signs on to an international pledge.

Listen to what George Miller says.

(BEGIN VIDEO CLIP) REP. GEORGE MILLER (D), CALIFORNIA: These big brands that are resisting, the Gap and others, they have to decide, do they want to continue to have blood on their label? Should the low price of their garments be subsidized by the blood of these poor workers in Bangladesh and elsewhere around the world?

(END VIDEO CLIP)

ROMANS: So, you got Sears as well not signing on, really only one major American retailer signing on to this international pledge. The deadline for that is today, of course. And that's a five-year plan. Even those who say, come on. Five years.

These are big, huge, global brands. They shouldn't be doing business in these kinds of conditions. They should have made it better before now, before all these people died. But at least shining a light on it.

We'll see if the American retailers will have their own pact which is what they're talking about negotiating now, Carol.

COSTELLO: All right. I'm sure you'll continue to follow the story.

Christine Romans reporting from New York.

ROMANS: You're welcome.

COSTELLO: Still ahead on THE NEWSROOM: we are expecting to hear from O.J. Simpson in court. He is expected to take the stand in just about three hours.

(COMMERCIAL BREAK)

COSTELLO: All day, we're keeping our eye on two big blockbuster courtroom battles.

This afternoon, Jodi Arias back in court as jurors decide whether she will face the death penalty. The big question for the jury did she act with cruelty in killing her ex-boyfriend Travis Alexander. We are also following this. We're going to be following this -- court resumes at 1:00 p.m. this afternoon.

Also, in just a matter of hours, O.J. Simpson will take the stand in his latest attempt to get a new trial.

(BEGIN VIDEO CLIP)

O.J. SIMPSON, CONVICTED OF ROBBERY, ASSAULT & KIDNAPPING: I wasn't there to hurt anybody. I just wanted my personal things and I realize now I was stupid. I'm sorry. I didn't mean to steal anything from anybody. And I didn't know I was doing anything illegal.

(END VIDEO CLIP)

COSTELLO: Simpson is serving up to 33 years in prison for the 2007 sports memorabilia heist in Las Vegas. He was convicted of robbery, kidnapping, and assault, but now he blames another man, his former attorney, Yale Galanter, of giving him bad legal advice.

CNN's Paul Vercammen is live outside the courthouse in Las Vegas.

Good morning, Paul.

PAUL VERCAMMEN, CNN CORRESPONDENT: Good morning, Carol.

What O.J. is going to try to do today is push Yale Galanter under the bus, so to speak, when he takes the stand. They'll go through 19 claims that he provided ineffective counsel. In other words, he completely loused up O.J.'s first trial is the allegation.

Among things at play here: O.J. never did testify in the first trial. There is some talk that a plea bargain was offered that O.J. did or did not hear about. All of that going to come out.

On the flip side here, the prosecution basically staying silent not talking too much about this. They believe that the record speaks for itself and that O.J. was, you know, rightfully convicted in the 2008 trial, Carol.

COSTELLO: All right. We know court kicks off at noon Eastern. CNN will have special coverage here on CNN NEWSROOM as O.J. Simpson takes the witness stand.

Paul Vercammen, many thanks to you.

Coming up next, the new push to end drunk driving. A strict proposal coming from the National Transportation Safety Board. I'll talk with the head of the NTSB and one of the board's critics, after a break.

(COMMERCIAL BREAK)

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

Stories we're watching right now in THE NEWSROOM in just about 30 minutes past the hour.

Ahead of the morning's opening bell, stock futures have been down on news the Eurozone economy is in decline and France is back in recession.

Let's head to the New York Stock Exchange and Alison Kosik.

We all know we live in a global economy, so this isn't good news for us in the United States either, is it?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, you know what? The best way to tell you that link between Europe and the U.S. is to give you a great example and a good example of this is the auto industry, of how the European recession is impacting us.

And by most measures, you look at the big three U.S. automakers like G.M., Ford, and Chrysler and they're doing great. Sales are at their highest in five years. Companies are profitable. But Europe, Europe is a very different story. You look at Ford, it made $1.6 billion in profit over all last quarter, but it lost $462 million in Europe and it expects a full-year loss there of $2 billion.

Many other U.S. companies have also mentioned challenges that they're having in Europe. They mention this in their latest earnings report. Clearly, it's definitely having an impact on U.S. companies and, thus, the U.S. economy as a whole.

This is nothing new. It's something we've been living with for a while now. By comparison, our economy here in the U.S. is doing much better.

Also by comparison, look at stocks. The U.S. stock market is doing great. The Dow is coming off another record high. Tuesday was the 19th time this year, the 19th, the Dow has closed at a record high. It's up more than 16 percent year to date.

The S&P 500 is not far behind. It's up 15.7 percent for the year. You look at the U.S. economy, you look at U.S. stocks, and then you compare it to Europe. And you say, we're sitting pretty compared to Europe.

Opening bell just rang. Stocks are starting a little bit to the downside, Carol.

COSTELLO: All right. I'm sure you'll keep an eye on them.

Alison Kosik reporting live from the New York Stock Exchange.