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Obama: IRS Actions "Intolerable And Inexcusable"; Fort Hood Sex Assault Scandal; Castro Attorney: He's Not A "Monster"; Leila Fowler Investigation; Jodi Arias Trial Enters Sentencing Phase; Outpouring Of Support For Jolie; E.U.'s New Recession

Aired May 15, 2013 - 06:00   ET



BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT (voice-over): -- facing a criminal investigation after a watchdog report found the agency targeted conservative groups starting in 2010. The agency's inspector general found the IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax exempt status based upon their names or policy positions instead of indications of potential political campaign intervention.

After reading the report Tuesday night, President Obama called it intolerable and inexcusable after promising action Monday.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: People had to be held accountable and it's got to be fixed.

KEILAR: IRS officials told investigators they acted on their own without influence from outside groups. The report says managers were ineffective in overseeing lower level IRS employees who didn't have sufficient knowledge of the rules governing tax-exempt organizations.

It is not the controversy the Obama administration is facing. Expect fireworks today when the Republican-led House Judiciary Committee grills Attorney General Eric Holder over the Justice Department's subpoenaed phone records of journalist at the Associated Press.

ERIC HOLDER, U.S. ATTORNEY GENERAL: This administration has put a real value on the rule of law and our values as Americans. I think the actions that we have taken are consistent with both.

KEILAR: Tuesday, reporters questioned Holder at a Medicare fraud event and peppered White House Press Secretary Jay Carney with questions at the White House briefing.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: You know, the president is a strong defender of the first amendment and a firm believer in the need for the press to be unfettered.

KEILAR: Republicans are seizing on these new controversies.

SENATOR MITCH MCCONNELL (R), MINORITY LEADER: 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. REPRESENTATIVE KEVIN YODER (R), KANSAS: It lies at the president's feet. These are things going on within his administration targeting opponents.

SENATOR ORRIN HATCH (R), UTAH: I've never seen anything quite like this except in the past during the Nixon years.

CARNEY: I can tell you that people who make those comparisons need to check their history.

KEILAR: Brianna Keilar, CNN, Washington.


ZORAIDA SAMBOLIN, CNN ANCHOR: Regarding that IRS scandal, the House will hold its first hearing on Friday.

JOHN BERMAN, CNN ANCHOR: A new sex scandal is rocking the Army this morning. A sergeant in Fort Hood, Texas assigned to prevent sexual assault is himself accused of sexual assault and now prostitution allegations are swirling around this case, remarkable. CNN's Shannon Travis is live in Washington with the details. Good morning, Shannon.

SHANNON TRAVIS, CNN CORRESPONDENT: Good morning, John. Yes, the latest on this probe is that this soldier is under investigation and has been suspended from all duties. He is, as you mentioned, John, a sergeant first class there at Fort Hood, Texas, part of his job, app preventing sexual assault.

The Army has not named him and the soldier has not been charged as for specifically. What military officials are investigating, pandering, abusive sexual contact and maltreatment of subordinates according to the army?

Listen to this, John, an administration official tells CNN there is a distinct possibility this involved some sort of prostitution-related activity, but we want to be clear. Investigators have not yet determined if that's the case or even the scope of the potential criminal contact -- John.

BERMAN: So I have to admit, Shannon, I woke up this morning and I was confused. I was like a case of someone assigned to prevent sexual assault charged with sexual assault. I thought we just heard that. It turns out we did just hear that. The second time in a short period of time we heard such a thing. What's going on here and what is the DOD doing to stop this?

TRAVIS: That's right. I mean, it's unfortunately all too familiar, these allegations. You remember, you're talking about the case of that Air Force officer who was arrested for allegedly grabbing a woman's buttocks and breasts in a parking lot in Northern Virginia. That actually, that incident, wasn't too far from the Pentagon, and as you mentioned he also worked to prevent sexual assault in the military.

He was in a court appearance last week and didn't enter a plea. As you question about what the military is doing, they're very concerned about these allegations, John. Defense Secretary Chuck Hagel has directed all military branches to retrain, re-credential and rescreen all sexual assault prevention and response personnel and military recruiters according to a Pentagon spokesman.

So again they are taking these allegations very seriously and obviously want all of their members to know that they'll be watching very closely.

BERMAN: It seems to be a serious issue, Shannon, one that does not go away. Shannon Travis in Washington for us this morning. Thanks very much.

SAMBOLIN: It is 4 minutes past the hour. Attorneys for Cleveland kidnapping suspect Ariel Castro say their client is not the monster that everyone claims he is and they are now revealing how they plan to plea. Pamela Brown tracking the latest developments in this case, she is live from Cleveland this morning. What are Castro's lawyers say, planning to do, Pam?

PAMELA BROWN, CNN CORRESPONDENT: Well, Zoraida, our affiliate here in Cleveland WKYC interviewed Castro's attorneys, and his attorneys say that essentially they talked with Castro in jail for three hours and they say he will plead not guilty if he faces kidnapping and rape charges with a grand jury indictment.

His attorneys say they will mount the best defense possible. Now what we've been reporting along with several of our affiliates that Castro has confessed to at least some of his actions over the past 10 years to authorities during interrogations. One of his attorneys says that Castro has not confessed anything to him.

So, again, his attorneys are saying that Castro will plead not guilty, and that they are looking to move the trial outside of Cuyahoga County because of all the attention that this case garnered and also on the heels of another high-profile case accused of murdering 11 women and keeping them in his home.

So let's take a listen now to what his attorneys told our affiliate, WKYC.


CRAIG WEINTRAUB, ARIEL CASTRO'S 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 talk to him for three hours.

JAYE SCHLACHET, ARIEL CASTRO'S ATTORNEY: He a human being and what's offensive is that the media, and I don't mean it towards you, but the media in the community 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: And Zoraida and John, despite the image portrayed in the media, we just heard his attorneys talking about -- his attorneys did reiterate that Castro told him he loves his daughter dearly, the 6- year-old girl living inside the home that we know he fathered through DNA tests. He loves his little girl and that is committed to her and her future.

SAMBOLIN: Well, she is adorable what is not to love. Pamela Brown live in Cleveland for us. Thank you.

BERMAN: It's 7 minutes after the hour. Leila Fowler's 12-year-old brother will appear in a California courtroom today to face charges in the stabbing death of his sister. The 8-year-old girl found dead in her northern California home last month. Police just released the 911 call that summoned officers to the scene and it's interesting. The children's stepmother, Christa Walters, made the call. She never mentioned in this call that Leila had been attacked.


PRISCILLA RODRIGUEZ: My children that are home alone had a man just run out of our house. My older son in the bathroom and my daughter started screaming. When he came out, there was a man inside of my house. The man is gone, though. They say they ran out.

UNIDENTIFIED DISPATCHER: OK. Of course, how old are your kids?

RODRIGUEZ: It's 12 and 9.


BERMAN: The Fowler family has hired a defense team to represent their son. They visited the boy Tuesday at a Juvenile Detention Center.


MARK REICHEL, DEFENSE ATTORNEY: He's actually doing very well right now as well as can be expected in these really difficult times.


BERMAN: Fowler's brother will be tried as a juvenile on second-degree murder charges.

SAMBOLIN: It is a big day in court for O.J. Simpson. He will be testifying today in an attempt to get out of prison. The disgraced football star is trying to get his robbery, assault and kidnapping convictions thrown out. Simpson never testified in his 1995 murder trial or the 2008 case that actually landed him in prison. His attorneys tell us what we can expect.


PATRICIA PALM, SIMPSON ATTORNEY: We're telling him to take the stand, tell the truth. We'll walk him through each of the claims and, you know, then he'll take on cross and I'm sure he'll do fine. OSVALDO FUMO, SIMPSON ATTORNEY: He's going to have to go through every issue on the stand, his attorney. He'll be up on the stand all day, I'm sure.


SAMBOLIN: Simpson claims his old lawyer was ineffective and tells him he was within his rights to take back property that he believed had been stolen from him as long as it was done without trespass or any physical force.

And also in court today, convicted killer, Jodi Arias, for the sentencing phase of her trial. Before jurors can consider imposing the death penalty, they must answer a key question here, was Arias cruel when she killed ex-boyfriend Travis Alexander.

Arias is now out of the prison psychiatric ward and hae sent her first tweet since being convicted. She is warning her followers to avoid getting scammed. This is what she wrote. Any donations to my family or me are made only at jodiariasisinnocent dotcom. Any other source asking for donations is fraudulent. Thank you.

BERMAN: Thank you.

SAMBOLIN: Bizarre.

BERMAN: Indeed.

It's 9 minutes after the hour. Coming up, Brat Pitt speaking out about his wife's surgery, removing both her breasts, how he says they made it through this with their family and how it made them stronger.


BERMAN: Welcome back, everyone. So this morning millions of American women are having discussions started in a stunning revelation by Angelina Jolie. Her test for breast cancer gene and her revelation that she underwent breast removal surgery is inspiring so many others to discuss their health and discuss their fierce, demystifying what happens when a woman decides to go through with this surgery. For us here at CNN, it really is something that has hit very close to home.


BERMAN (voice-over): Angelina Jolie is receiving a lot of praise, a lot of support following her revelation of having a preventative double mastectomy. Her partner of eight years, Brad Pitt, is among the stars commending Jolie for going public with her difficult choice.

She could have stayed private about it and none would have been no wiser with such good results, but it was really important to her to share the story and for others to understand that it doesn't have to be a scary thing. In fact, it can be an empowering thing and something that makes you stronger and us stronger.

Breast cancer survivor and singer Sheryl Crow tweeted her support. I commend Angelina Jolie for her thoughtfulness in sharing her story today regarding her mastectomy so brave. Angelina's admission in a "New York Times" op-ed dominated talk shows prompting Barbara Walters to make her own news on "The View."

BARBARA WALTERS, CO-HOST, "THE VIEW": My sister passed away from ovarian cancer and I had my ovaries removed. It's a decision you have to make that's preventative.

BERMAN: On "The Talk," Sharon Osbourne who underwent a double mastectomy last year offered these words.

SHARON OSBOURNE, CO-HOST, "THE TALK": She is so brave and is going to help so many women, and I think it makes her sexier than ever.

BERMAN: Jolie is also receiving words of encouragement from TV host and reality star Giuliana Rancic who has been incredibly public with her own battle with breast cancer and her decision to have her breasts removed.

GIULIANA RANCIC, HOST, E! NEWS: I just didn't want to be looking over my shoulder for the rest of my life. I knew that I want add child, and really what it came down to was just wanting to live, wanting to enjoy this incredible life and this incredible world. And I just didn't want to leave, didn't want to go anywhere and I wanted to be healthy.

And I want to do whatever it took to get me healthy. And, really, what this is all about, this Angelina news, or my news, what it's all about is getting women to just start the dialogue with their doctor.

BERMAN: For us, the most personal reaction to Jolie's piece came from our own Zoraida Sambolin who simply said, Angelina empowered me to share my story. On Tuesday Zoraida shared that on April 9th she was diagnosed with breast cancer and would be undergoing a double mastectomy herself. The same course of treatment Rancic had in 2011.

RANCIC: I know that right now, life is so crazy and your head is spinning and things are so tough. But I promise you, you will get back to normal, and you will come out of this better than before. I promise you.


ZORAIDA SAMBOLIN, CNN ANCHOR: I really appreciate that you got those words of support and encouragement for me.

BERMAN: They're easy to find. I think there are a lot of people right now who are out here supporting you.

SAMBOLIN: You know, it's interesting, yesterday, when we were talking about this, I said I got diagnosed three weeks ago. I went back to the calendar to really document exactly when did it happen, it was five weeks ago.

You know, your life is kind of crazy, as Giuliana said. And, you know, the first three days, all I thought, going to bed was this and getting up this and what is going to be my decision. That is all I thought about.

I will say this because I got a lot of e-mails from a lot of women and some men as well, that the women's in particular, the one whose have contacted me and said that this inspired you to go and get that mammogram that you have put off no longer do it, and I want you to call me or to text me or to e-mail me with the results, because that made me a little nervous. One of the things I will say I've done from the very beginning, I've been very vigilant about my mammograms. I have not missed an appointment because I have an ongoing issue.

So, please, if that is what you get out of this story, please do that. Do it for you, do it for your family, do it for the men who love you, who contacted me about it. Please, just go out and do it. Take care of you.

That's it. All right.

BERMAN: That's it.

Russian officials calling the arrest of a U.S. diplomat in Moscow accused of spying, quote, "Cold War provocation." The Russian security agency FSB says Christopher Ryan Fogle tried to recruit a Russian intelligence officer and was caught red-handed with spy gear, including wigs, recording devices and what appeared to be a stack of euros.

So far, no comment from the U.S. embassy. The State Department will only say that an officer at the embassy in Moscow was briefly detained and then released.

New developments this morning in a cold case involving a missing cruise ship passenger from Connecticut. George Smith of Greenwich was on his honeymoon in 2005 when he just disappeared from the royal Caribbean ship somewhere between Greece and Turkey. His body was never found and no one had been charged in his death. No official word why the FBI in New York has just reopened the investigation into his presumed death, but it is interesting.

SAMBOLIN: Three people at a senior citizens complex arrested on drug and prostitution charges.

BERMAN: What --

SAMBOLIN: Yes. That's what I said. A 75-year-old man, listen up, and a 66-year-old woman were busted in northern New Jersey for possession of drug paraphernalia and allegedly using cocaine on the premises. We have their pictures there for you. Mug shots.

The man, James Parham, also admitted to providing prostitutes to some of his younger neighbors. A 55-year-old woman has also been charged with possessing a crack pipe. She has been suspended from her job as a school crossing guard.

I can't make this up. That's an incredible story.

BERMAN: You don't hear that one every day. SAMBOLIN: No, you don't.

Coming up, a new recession. The countries that slipped back into major financial trouble and the impact it could have on the United States. That's coming up next.


SAMBOLIN: Twenty-one minutes past the hour. Good morning to you. We are minding your business.

France and the entire European Union is in recession. The E.U. economy is shrinking. And compare with that our 2.5 percent growth rate.

And for stocks, they are set for a flat open after closing at record highs yesterday.

BERMAN: Meanwhile, new developments this morning in the fallout after last month's deadly clothing factory collapse in Bangladesh. Retailers all around the world are signing on to a pact to improve safety any that country, but some American retailers, are not signing on.

Christine Romans is here to explain.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: In fact, most American retailers are not signing on here. Only one American has signed to this global pact. PVH, the maker of Calvin, Tommy and Izod. It's the only American retail economy so far to join Benetton, Mango, Marks & Spencer, and that global safety pact we told you about yesterday.

This pact legally requires companies have independent safety inspections in factories in Bangladesh and make those findings public and companies must stop working with factories that don't make safety upgrades.

American retailers, though, are balking. Walmart says it's going to do its own thing. It's going to hire its own inspector to scrutinize 279 factories it uses in Bangladesh. It will make those results, those audits public by June 1st. Walmart says it's better than the European plan. It, quote, "meets or exceeds the European plan and will get more results quickly."

But critics say, look, hiring your own inspector falls short. That's a complex of interest when the retailer, who's already lost control of the supply chain is footing the inspector's bill, 129 workers died last fall in a factory making clothes for Walmart shoppers in a fire in a factory that Walmart didn't even know was making its products.

Meanwhile, Gap isn't signing either. Gap doesn't want the pact to be legally binding. Other U.S. companies are also reluctant because they may want to protect themselves from international courts.

A California Congressman George Miller has been very outspoken on this issue. (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?


ROMANS: What you are watching here is a lot of post-crisis process from some of America's biggest household names. These companies, you know, they're basically admitting that they've lost control of their supply chain. Haven't you lost control of your supply chain when you don't even know that a factory is making clothes for you and there's a big fire there and workers are killed?

You don't -- and now, companies -- they want to be in control of the inspection process, American retailers. They are concerned about international courts and their own liability. But the point here is that they have chasing cheap labor markets, have lost control of their supply chain and now are asking, you know, for more control of monitoring these factories.

And it's something that, for people like George Miller and others critical of this, they find it just rich (ph).

BERMAN: Doesn't ring quite true for them.


BERMAN: What's the one thing we need to know about our money?

ROMANS: Some new numbers that Fidelity has crunched for us this morning. Retirees are not saving enough for health care costs. And you won't believe what you're out of pocket health care costs are.

A 65-year-old couple retiring this year will need more than $200,000 out of pocket for medical expenses.

SAMBOLIN: Oh my gosh.

ROMANS: Nearly half of those surveyed think they're going to need around $50,000. People are saving for $35,000 to $50,000 to $75,000 for out of pocket expenses. A couple -- a retiring couple, you're going to need about 200 grand and that's with or without health care reform. That's your out of pocket costs.

SAMBOLIN: Is that, though, in addition to having maybe long-term care insurance? That's an addition that?



ROMANS: Absolutely. SAMBOLIN: Thank you.

ROMANS: You're welcome.

SAMBOLIN: Twenty-five minutes past the hour.

Coming up, the murder of a model goes to trial today. The woman accused of killing Julianna Redding in court in just a few hours from now. Details on the case, ahead.


SAMBOLIN: An accused killer called the female James Bond. Did she murder model Juliana Redding? A court begins deciding that today.

BERMAN: Shocking newly released 911 calls released of the murder of 8-year-old Leila Fowler, as the 12-year-old brother charged with her death heads to court today.

SAMBOLIN: And a CNN exclusive: against all odds. A young woman survives for 17 days in the ruins of a collapsed building in Bangladesh. She speaks exclusively to CNN.

BERMAN: It's amazing.


BERMAN: Welcome back to EARLY START, everyone. I'm John Berman.

SAMBOLIN: And I'm Zoraida Sambolin. Twenty minutes past the hour.

BERMAN: The trial of an accused killer who's being called a female James Bond begins today. California prosecutors say model and actress Juliana Redding was a victim of a murder-for-hire scheme in 2008.

CNN's Stephanie Elam has a look at this case.