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STARTING POINT WITH SOLEDAD O'BRIEN

Tropical Storm Hits East Coast; Obama Administration Criticized for Phone and Internet Surveillance Programs; Michele Opts Out of Chinese Summit

Aired June 7, 2013 - 07:00   ET

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


JOHN BERMAN, CNN ANCHOR: Which state will get hit the hardest? We're going to track this storm.

CHRISTINE ROMANS, CNN ANCHOR: First your phone calls and now your Internet activity. The controversy surrounding the NSA's spying is growing by the minute, from the political fallout from the president to the public outrage, we cover all the angles.

And The IRS forced to defend spending your money on a parody video like this one. So hear what the head of the agency had to say about "Star Trek" and "Gilligan's Island" when confronted by lawmakers.

And check out this video. The Norwegian Navy blowing up one of its own ships to test out the new long range stealth missile. The full video is just ahead.

BERMAN: It turns out Norwegians have great aim.

ROMANS: I'm Christine Romans. It comes from that Vikings heritage.

BERMAN: I'm John Berman. It is Friday, June 7th. Welcome to STARTING POINT.

ROMANS: It you live on the east coast, prepare to keep getting wet. Tropical storm Andrea is the kind of rainmaker the east coast hasn't seen since hurricane Sandy. In other words, you might want to rethink your weekend plans or make sure you carry an umbrella with you at all times. The storm has already walloped Florida, seriously injuring one woman and made it ways through Georgia, and today it's expected to churn up the eastern seaboard bringing heavy rain, flooding and the possibility of isolated tornadoes depending where you are.

Nick Valencia is on Wrightsville Beach, North Carolina. Nick, what are the conditions like right now.

NICK VALENCIA, CNN CORRESPONDENT: It's pretty windy right now, Christine. The wind has slowly started to pick up in the last couple hours since we've been here, and the waves are inching towards the shore. There's no rain yet, but that could quickly change.

(BEGIN VIDEOTAPE)

VALENCIA: Rain, rain and more rain. Fast-moving tropical storm Andrea is making her presence known up and down the eastern seaboard. The first storm of the hurricane season will dump rain through the weekend in every state from Florida to Maine, oarts of the northeast seeing rain totals that they haven't seen since super-storm Sandy last October. In roadways all across the south, downed trees and closed streets, making it challenging to get around.

UNIDENTIFIED FEMALE: It's pretty bad and the flooding around here is getting worse and worse.

VALENCIA: In Florida, Andrea spawned multiple tornadoes. One twister near Palm Beach, flipping a 28-foot boat, blowing cars off of driveways and snapping trees in half.

UNIDENTIFIED MALE: I didn't hear it coming.

VALENCIA: Another reported tornado near Fernandina Beach, Florida, tearing apart this roof.

UNIDENTIFIED FEMALE: As soon as I put the phone down, a huge gush of wind and I looked out the window. It was literally like it was coming off the ocean and I got so frightened I screamed.

VALENCIA: The sunshine state pummeled with rain for two days as the flood threat now spreads up the east coast. Forecasters predict some areas could see as much as six inches of rain. And as you see in this picture taken in Florida after Andrea, brighter days will come after this long, wet weekend.

(END VIDEOTAPE)

VALENCIA: Now officials have not issued any evacuations for this area. We've seen residents out for their morning jog, another handful of residents enjoying the view. But there are other residents, Christine, who have gotten out of town anticipating some wet weather to come here to North Carolina. Christine?

ROMANS: And after it leaves you, it will be moving up the coast where it will hit us. Nick Valencia.

BERMAN: Let's find out where it's going to hit after it is done with nick. Let's check in with Alexandra Steele at the weather center for us. Good morning, Alexandra.

ALEXANDRA STEELE, AMS METEOROLOGIST: Hi, good morning. We are going to see this rocket north and east. That is the good news. It's going to move northeast, 28 miles per hour now, could even increase in speed.

Two threats with this -- the rain and thus the flooding, again between two and four inches locally, even more than that. There is the isolated tornado threat, especially through the Carolinas, North Carolina and coastal Virginia. That is where the concern is. A tornado watch, already had a tornado warning this morning. Doppler radar indicated tornado. That has expired.

Heaviest rain here you can see, in eastern North Carolina into Virginia. That's where we're going to see heavy rain today. Wind gusting this afternoon between 30s and about 41-mile-per-hour wind gusts. The strongest wind gust, though, right off the coast where the heaviest bands of rain are.

So here's its movement this morning. Center of circulation right now northeast of Savannah. We're going to watch that move north and eastward. By tomorrow see where the center is, where the heaviest rain is. Wet night tonight, New York and Boston, for the first part of tomorrow, clears by Saturday afternoon, and Sunday, we'll see partly sunny skies there.

So, you guys, the biggest threat will be the rain and especially in the coastal Virginia, North Carolina, isolated tornado threat this afternoon and today.

BERMAN: So keep on the lookout for the good news, maybe this storm passing through more quickly than we expected.

STEELE: Absolutely, very quickly.

BERMAN: Appreciate it, thanks.

ROMANS: Are your Gmail messages and Facebook posts mined by the U.S. government. That's a question every American has a right to ask this morning. There are new reports that intelligence agencies in this country are accessing the central servers of nine of the country's biggest technology firms and they've been mining the data in the servers for years. The operation is called Prism, and according to the "Washington Post," and "The Guardian," nine giant Internet firms are caught up in it.

The program reportedly began in 2007 but has expanded under the Obama administration. And this morning CNN is working to confirm a "Wall Street Journal" report that the agency may be collecting credit card transactions as well. It's not known whether the credit card data was collected once or as part of an ongoing effort. As we confirm the different details, we're going to reveal them to you. Here are the details we do now from our own Barbara Starr.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT: A potentially explosive disclosure about how easily the government can collect information on-line. "The Washington Post" and the British newspaper "The Guardian" are reporting the national security agency, the NSA, and the FBI, are tapping directly into the servers of nine leading Internet companies, including Microsoft, Yahoo! Google, Facebook, AOL, Skype, YouTube, and Apple. That's according to a top secret NSA presentation, intercepting data like video, photographs, and e-mails, flowing online.

GLENN GREENWALD, REPORTER, "THE GUARDIAN": What this program enables the national security agency to do is to reach directly into the servers of the largest Internet companies in the world, things that virtually every human being in the western world now uses, to communicate with one another. STARR: The program appears to be intended to grab non-U.S. intercepts, many of which flow through the robust U.S. Internet. One slide in the NSA presentation explains, "Your targets communications could easily be flowing into and through the U.S." CNN has not confirmed the authenticity of the documents.

Several of the companies reportedly cooperating with the government issued denials of involvement. This follows the stunning news that a secret federal court order directed Verizon to hand over phone records of millions of Americans. Former intelligence officials and privacy advocates say it's reasonable to presume other telephone companies got similar orders.

STEVE AFTERGOOD, FEDERATION OF AMERICAN SCIENTISTS, SECRECY AND INTELLIGENCE: If this is an open-ended and indiscriminate collection process as it seems to be, then logically one would expect it to be much bigger than Verizon business.

STARR: And it all these, the administration needing to explain this exchange in March.

SEN. RON WYDEN, (D) OREGON: Does the NSA collect any type of data at all on millions or hundreds of millions of Americans?

JAMES R. CLAPPER, RETIRED LIEUTENANT GENERAL: No, sir.

WYDEN: It does not?

CLAPPER: Not wittingly.

STARR: That Verizon program, lawmakers say having access to that data helped law enforcement stop terrorist plots from being carried out.

(END VIDEOTAPE)

STARR: Now, the man you saw at the end, James clapper, the director of national intelligence took the extraordinary step of issuing a public statement overnight about all of this saying, quote, "The unauthorized disclosure about this important and entirely legal program is reprehensible and risks important protections for the security of Americans. The program cannot be used to intentionally target any U.S. citizen, any other U.S. person, or anyone located within the United States." That is the government's defense. It's legal. I think the questions are going to keep coming. Christine, John.

ROMANS: A lot of questions. It's so interesting, too, Barbara, we're a company country that overshares our financial information on Facebook and Twitter, but when it's the government we think that is looking in on us without us knowing, that's when people start to get real, real nervous. I think the story keeps developing. Thanks, Barbara.

BERMAN: Obviously there's political fallout to all of this from the secret surveillance of millions of Americans. The Obama administration insists that it has been an effective weapon in the war on terror, calling it legal, limited, and necessary. CNN's Dan Lothian live at the White House this morning. Good morning.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Good morning, John. The White House has been cautious in its response, but here in Washington there have been strong and divided feelings on this. Some lawmakers pointing to the increasing domestic terrorist threats saying this is need to protect Americans. But others say this kind of information gathering is going too far.

(BEGIN VIDEOTAPE)

LOTHIAN: This morning, President Obama is waking up in California, as a political firestorm over the government's collection of phone and Internet data intensifies.

SEN. BERNIE SANDERS, (I) VERMONT: The bottom line is that the United States government now has phone records and other records of tens and tens and tens of millions of Americans who have nothing, absolutely nothing, to do with terrorism.

LOTHIAN: The political fallout after news that the NSA was collecting American's phone records from Verizon was quick, public outrage over privacy rights already taking form online.

UNIDENTIFIED MALE: Can you hear me now?

BARACK OBAMA, (D) PRESIDENT OF THE UNITED STATES: Yes, we can.

UNIDENTIFIED MALE: Can you hear me now.

OBAMA: Yes, we can.

LOTHIAN: A stinging editorial in "The New York Times" proclaims "President Obama's dragnet" and says the administration has now lost all credibility. And the letter to Attorney General Eric Holder from the author of the Patriot Act Representative Jim Sensenbrenner, who writes he's extremely disturbed by what appears to be an overbroad interpretation of the act. Even the president's liberal base piled on. "The Huffington Post" ran a photo on its cover page showing Obama morphing into George W. Bush. But the program has its defenders.

REP. MIKE ROGERS, (R) INTELLIGENCE COMMITTEE CHAIRMAN: This program was used to stop a program -- excuse me, stop a terrorist attack in the United States. We know that.

LOTHIAN: The White House says these types of orders include data, not phone calls, and have been a critical tool in protecting the nation from terror threats. But some lawmakers want more answers, and Attorney General Holder, already under pressure for snooping on reporters, is on the hot seat again.

SEN. MARK KIRK, (R) ILLINOIS: Could you assure to us that no phones inside the capitol were monitored, members of congress?

ERIC HOLDER, U.S. ATTORNEY GENERAL: With all due respect, senator, I don't think this is an appropriate setting for me to discuss that issue. (END VIDEOTAPE)

LOTHIAN: The White House has been emphasizing that the president has been trying to strike a balance between security and civil liberties, and they insist that there are safeguards in place in order to prevent abuse. John?

BERMAN: Dan Lothian at the White House for us this morning, thanks a lot, Dan.

ROMANS: Ahead on STARTING POINT, a top IRS official who played Spock in an agency training video in the hot seat. How he fared before a congressional committee, that's up next.

BERMAN: And what's up with the Norwegian Navy. Why is it attacking one of its own ships? Look at what they did. We'll tell you why just after the break.

(COMMERCIAL BREAK)

BERMAN: This just in, it's going to be a tough commute ahead this morning in Kansas City, Missouri. You're looking at live pictures right now of a stretch of interstate 70. Look at that. It's been shut down in both directions while workers here a tractor trailer fire. Obviously they used some kind of foam to put it out right there, water that's left some kind of a mark.

A reporter on the scene said she heard several explosions coming from the burning truck and saw flames shooting at least 50 to 100 feet in the air. No word on the injuries or how the fire started. Quite a mess.

ROMANS: Wow.

Major development in the extremely strained relations between North and South Korea. The countries are now trying to agree on a date to begin talks that would result in the reopening of a jointly operated industrial complex. Today South Korea offered to begin high-level talks next Wednesday in Seoul. Pyongyang responded with a request for a preliminary meeting to take place Sunday. North Korea halted activity at the facility in April following months of it tension in the region.

BERMAN: The veteran IRS official seen in a now infamous training video as Spock from "Star Trek" had a new role to play at a congressional hearing in Washington. He was playing the role of witness and certainly didn't seem like he was having quite as much fun. Faris Fink called before the House Oversight Committee Thursday to testify about a 2010 IRS conference in Anaheim that cost taxpayers more than $4 million. CNN'S Dana Bash has more from Washington.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT: The star witness was the star of this now infamous IRS "Star Trek" video, Spock. UNIDENTIFIED MALE: Total anarchy will occur in 11:11 hours.

UNIDENTIFIED MALE: What were you thinking?

FARIS FINK, IRS COMMISSIONER, SMALL BUSINESS & SELF EMPLOYED DIV.: Those videos were at the time they were made, were attempt to, in a well-intentioned way, use humor. It's embarrassing. And I apologize.

BASH: Faris Fink is now commissioner of the IRS division that held a lavish $4 million conference in Anaheim, California, where parody videos estimated to cost $50,000 were played.

REP. ELIJAH CUMMINGS, (D) MARYLAND: I live in a block where most people don't even make $50,000 a year. But yet, we can produce a video that has no redeeming value. None.

BASH: During the conference, Fink, a 32-year IRS veteran, stayed in an upgraded hotel suite like this. Fink didn't know how millions of taxpayers dollars were spent at this conference.

REP. JASON CHAFFETZ, (R ) UTAH: You're totally ignorant and -- of the expenses?

FINK: I was not involved in the planning.

CHAFFETZ: Who was?

FINK: Or execution.

BASH: Lawmakers repeatedly blasted IRS hypocrisy requiring taxpayers to save receipts but not saving its own documents. That $4 million conference may have cost more.

UNIDENTIFIED MALE: Could it be $6 million? Think carefully. You're under oath.

FINK: Yes.

UNIDENTIFIED MALE: Could it be $6 million.

GINK: There's no way I would know that.

BASH: Two IRS employees were placed on administrative leave this week for accepting free food at the 2010 conference, but part of the problem was, most of the lavish spending was allowed under IRS rules then. Since, they've been changed. Dana bash, CNN, Capitol Hill.

(END VIDEOTAPE)

BERMAN: And our thanks to Dana for that report.

So, you have to take a look at the latest weapon in Norway's military arsenal. That is some serious Scandinavian fire power right there. That's the Norwegian Navy blowing up one of its own ships to test out a new long range stealth missile. I assume most of its warfare will not be engaged on its own. The 180 lb. naval strike missile inflicted serious damage on the decommissioned foot long KNM Tronheim (ph). Naval strike missiles are the latest generation surface warfare systems being developed by the Scandinavian Navy team. The Polish Navy is set to arm themselves with these missiles which clearly work pretty well.

ROMANS: Wow. Yes. It worked.

Ahead on STARTING POINT the first lady ruffling some feathers over a decision to skip a diplomatic trip to China with the president. Michele Obama says she has a good reason. We'll explain that next.

(COMMERCIAL BREAK)

ROMANS: Welcome back to STARTING POINT. minding your business this morning. Your job, your economy, where do things stands, answers in just over an hour. The May jobs report out at 8:30 eastern making investors a little nervous this morning. Dow futures down about 20 points. Expectations are low, 158,000 jobs added, 7.5 percent unemployment. That's another sign we're in kind of a soft patch with the labor market.

BERMAN: Is that an economic term? Eh?

ROMANS: Yeah, I'm not sure how you spell it, but that is a technical economic term.

Over the past year the economy has been averaging more than that, 173,000 positions a month. Even that's not great. At that pace analysts say it would take more than five more years to get back to where we were before the recession. You do want to see the private sector continuing to move forward. We would like to see this accelerate.

Feeling Richer? American's net worth hit a record high $70 trillion, tops a previous record set in 2007 just before the recession. Is that your net worth, Berman.

BERMAN: Yeah right.

ROMANS: $70 million.

BERMAN: $70 trillion times my net worth.

ROMANS: People are benefiting from the stock market rally. The S&P is up 14 percent this year. Also, home values have been rising. When you factor in inflation and population growth net worth is below pre- recession levels. That's the asterisk.

BERMAN: The fine print there.

A presidential meet and greet later today in California, President Obama will sit down with China's leader for a highly-anticipated two- day meeting. When the president welcomes China's first couple, he's going to be missing something, his better half. Michele Obama made a decision to skip the summit and that has ruffled some diplomatic feathers. CNN's Erin McPike with more on that. (BEGIN VIDEOTAPE)

ERIN MCPIKE, CNN CORRESPONDENT: A Chinese state visit is usually filled with pomp and circumstance. But when President Obama travels all the way to California this weekend to meet with new Chinese President Xi Jinping, the setting will be casual. It's being billed as a sign of progress for American and Chinese diplomacy.

The Chinese president will be bringing along his wife, Peng Liyuan.

Like Michele Obama, she is considered a rock star in China, except she Peng actually is a rock star.

But she won't be serenading Michele Obama. President Obama is going it alone. Meaning there will be no face time for the first ladies. There are mixed reactions on Chinese social media about Mrs. Obama's decision to stay home.

One said, "because our first lady is so pretty that she was scared to show up?" Another, "Why disappointed? Is it for sure understandble she put family and her kids in the first place." Still, critics say that's a mistake for the White House as it tries to thaw tensions with the Chinese.

CHENG LI, BROOKINGS INSTITUTION EXPERT ON US-CHINA RELATIONS: People in China will think this may not be just a family matter.

MCPIKE: Now I should point out it's Sasha Obama's 12th birthday on Monday and the White House says they haven't heard any complaints from their Chinese counterparts about the "mom in chief's" decision to stay home. Erin McPike, CNN, Washington.

(END VIDEOTAPE)

BERMAN: A lot of time Obama and Xi Jinping, spending at lot of casual time together, down time, people suggesting maybe the Chinese first lady could have spent down time with Michele Obama, but not going to happen.

ROMANS: But, it's clear that there's going to be a long friendship will have to develop because this is just the beginning of these are the most important business relationship in the world.

BERMAN: Crucial relationship.

Ahead on STARTING POINT reports the NSA is collecting extensive phone and internet data from U.S. citizens dominating the headlines and fueling fears of a "Big Brother" society. But, is our privacy being compromised or is this necessary security? That debate up next.

ROMANS: Tropical storm Andrea battering Florida. Seriously injuring one woman and making its way up the eastern coast. What's next in its path? You're watching STARTING POINT.

(COMMERCIAL BREAK)

BERMAN: Welcome back to STARTING POINT, everyone. I'm John Berman.

ROMANS: And I'm Christine Romans.

BERMAN: Tropical storm Andrea has walloped Florida, seriously injuring one woman. It made its way through Georgia overnight. Let's get the latest on where the storm is now and where it's headed next. Meteorologist Alexandra Steele tracking it from the weather center. Hey, Alexandra

STEELE: Hi, good morning again, John. The good news, it is racing, it is moving northeast at 28 miles per hour. So, it is clipping along. Two big threats with this. The rain we're going to see and that's kind of the flood threat. And also there is a tornado threat in coastal Virginia and North Carolina. So, here's the big picture. Maximum sustained winds at 45 miles per hour.