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THE LEAD WITH JAKE TAPPER

TWA Flight 800 Case Investigation Reopens; Taper: The New Word On Wall Street; Where's The Economy Going?; Rallying On Immigration; Christie Disses Giants, Jets; Remembering Michael Hastings

Aired June 19, 2013 - 16:30   ET

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


JAKE TAPPER, CNN ANCHOR: Welcome back to the LEAD. I'm Jake Tapper. Now, it is time for our national lead.

It was the stuff of nightmares. All 230 people aboard TWA flight 800 died when the plane went down in flames in the Atlantic Ocean, minutes after takeoff from New York's JFK airport. The year was 1996. After an exhaustive four-year investigation which included the dredging of the ocean to piece together more than 95 percent of the aircraft. The national transportation safety board said the cause of the crash was a spark from bad wiring, one that set off the fuel tank. But now, almost two decades later six retired members of the investigated team are changing their story. It's all the center of a new documentary, TWA flight 800 that makes the claim that the fuel tank theory is bogus and an explosion outside the plane brought the plane down.

(BEGIN VIDEO CLIP)

HANK HUGHES, NTSB ACCIDENT INVESTIGATOR: Primary conclusion was the explosive forces came from an outside the airplane, not the center field tank.

UNIDENTIFIED MALE REPORTER: Would that statement have been in your analysis?

HUGHES: I doubt the right one.

ROBERT YOUNG, TWA AIRTIME ACCIDENT INVESTIGATOR REPRESENTATIVE: The agenda was that this was an accident, make it so.

(END VIDEO CLIP)

TAPPER: But not so fast. Former FBI assistant director James Kallstrom who headed up the criminal probe after the crash, he joins me now with his side of this painful story.

Mr. Kallstrom, Thank you so much for joining us.

The documentary claims an explosion outside the plane caused the crash and the true cause was covered up by the government. Seventeen years later, what was your reaction to the documentary?

JAMES KALLSTROM, LEAD FBI INVESTIGATOR, TWA 800 CRIMINAL PROBE: It is not true, Jake. You know, we had an exhaustive investigation. I had a thousand agents assigned at the peak. And we took very seriously the idea that a missile could have shot down the plane. You know, 727s don't blow up in fireballs that can be seen 40 miles away. We are at a very high state of alert in the United States during in that period of time.

So the chances were, I mean, we didn't know for sure. We had no idea, but it could have been terrorism. It could have been the intervention of some maniac at the airport either by bringing aboard a plane, putting a bomb on the plane in the luggage or in the storage areas or some mechanic putting something somewhere or a missile shot at the plane.

We used all the assets of the United States, all the missile experts in the military. We shot missiles at planes so we could study, you know, what kind of damage they did to the aluminum frames. FBI agents are great at looking at bombs because we look at a lot of bombs. But, we weren't great at looking at missile damage. So, we built up a reservoir of that detail. We recovered 97 percent of the airplane from the ocean. Over the hoots and cries of many in the Congress and politicians and elsewhere, why is the FBI still in this investigation. And the answer is the FBI investigates title 18 crimes, crime aboard American-flag carrying aircraft being one of them. And so, it was our responsibility to find out was this an act of terrorism? And we couldn't do that until we had most of the airplane which took us a long time. We ended up with 97 percent of it after dredging, after going to the White House twice to get permission to keep spending money to do this thing.

So, I'm very, very confident that we had enough of that airplane to make the judgment that no criminal intervention to our knowledge at the time, our knowledge in 1996. That didn't bring down the aircraft.

Now, the NTSB, a separate organization that does the civilian end of these investigations --mechanical, you know electrical, pilot error, those things. They drew the conclusion of the center fuel tank exploding.

TAPPER: Sir, do you have any explanation as to why these former investigators now retired seem to be suggesting there was a cover-up. They were directed to say that this was an accident when they thought the explosion came from outside the plane. Do you have any idea? Have you talked to them?

KALLSTROM: Not to my knowledge. I think it is preposterous quite frankly, Jake. You know, I understand now just from the little bit I read in the paper that they are retired. You know, if they felt that way back then they could have come to me. I was someone desiring to get to the bottom of this thing, believe me. And I had a reputation for not, you know, not pussyfooting around. Yet it seems they have waited until they have their pensions before they became whistleblowers. So, I think it's a bunch of bull crap. I don't understand it if they felt that strongly.

And knowing the people at NTSB and the science they brought to it, for them to disregard something that was important or correct, I just don't see that it's possible. I have no idea why they came forward now other than the fact maybe it's a good time for the idea of blowing whistles and making documentaries.

TAPPER: In 1996, ABC reporter Pierre Sallinger, a former spokesman for President John F. Kennedy said he had a government document saying Navy gunners accidentally shot down the airplane while conducting missile tests. What was your response to that?

KALLSTROM: I'm being kind when I tell you that he was out of his mind. Here is a guy who worked with JFK; here is a guy who did time in the Senate as the senator of the United States of America. You know, over in Cannes with probably too many drinks in him waving a piece of paper around saying its report from French intelligence that the U.S. Normandy, a proud cruiser of the American fleet, you know, with 450 Patriots aboard shot down a commercial airplane. You, know it was preposterous. It was the ranting of some whacko on the internet. It was not a report from French intelligence.

But nevertheless, we went forward. I called the chairman of the Joint Chiefs of Staff for actually prior to that. We looked at every military asset in the area. We interviewed every member of the U.S. Normandy. By the way, they were out of range of TWA flight that ended by about 200 miles. But, it is just preposterous thing to say. And it hurts the families. I mean, that's the thing that irritates me about this thing now coming forward. You know, it's basically BS in my view. And the families have to go through this whole thing. And we were tight with the families. We were emotional friends and connected with them all the way into this thing. Si, I think it's basically terrible.

TAPPER: The NTSB released a statement this morning about the demand being made by film makers to re-open the case.

Quote, "while the NTSB rarely reinvestigations issues that have already been examined our investigations are never closed. And we can review any new information not previously considered by the board."

It seems they are open to taking another look. I'm not sure why they would say that if so much time and expense was already made to investigate. What would your reaction be to it being opened up again?

KALLSTROM: Well, you know, if they have evidence that's credible, I don't know what it could be. This fellow is a physicist but he is an armchair physicist. You know, I don't know any of his ability. He didn't see the plane. He wasn't working there. The FBI is in the same position. We reopened the case also.

That plane is in a hangar in Virginia. It's been in a hangar either in New York or Virginia all this time. There it is. There is all the pieces. Bring your best scientists. We have had the best we could find. MIT all around the world look at this. Metallurgists, we had our own look at this thing and hired the main one from Alcoa. We had our owned metallurgists looked at this. You know, this was not something that was done in haste. It was done after a year and a half after a thorough, thorough investigation.

TAPPER: All right, James Kallstrom, former assistant director of the FBI. Thank you very much for talking to us today. And good luck to you in retirement.

KALLSTROM: My pleasure, thank you.

TAPPER: Next in the money LEAD, the head of the Fed says the economy is improving but free money is still flowing. So where do we stand now?

Plus, amnesty, the word that might kill the immigration reform bill. Many conservatives coming to Washington are Fed up. I will ask democratic congressman Joaquin Castro whether he thinks the immigration reform bill has a chance in the house.

(COMMERCIAL BREAK)

TAPPER: Welcome back. Now it's time for the money LEAD.

The Dow closed today with a loss of more than 200 points, just at the top of the hour despite Ben Bernanke not doing what many were expecting. The Fed has been trying to stimulate the economy buying $85 billion in long-term bonds every month. There was speculation that Bernanke would announce he would wind that down to taper it off. It didn't happen. But Bernanke hinted that day would come soon. They are calling it the taper. As I said, a word you will probably get sick of hearing soon as CNN business anchor Christine Romans explains.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN ANCHOR, YOUR MONEY (voice-over): Hollywood has it girls. Wall Street has it words.

KEITH MCCULLOUGH, CEO, HEDGEYE RISK MANAGEMENT: He's got to stop with the bond buying and start to taper.

ROMANS: Taper is the latest it word on Wall Street.

UNIDENTIFIED MALE: Ladies and gentlemen, this is tonight's top ten list.

ROMANS: It won't make Letterman's top ten lists.

UNIDENTIFIED FEMALE: The taper?

UNIDENTIFIED MALE: The taper.

ROMANS: It's not a zoo animal or a CNN anchor or way to wear your jeans. Its Federal Reserve chairman Ben Bernanke's toughest job yet. How does he taper down from historic stimulus? It is likely the final challenge for the chief.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: He's already stayed a lot longer than he wanted or he was supposed to.

ROMANS: And he's done what no Fed chief has done before. Basically, he is holding a fire hose spraying $85 billion a month straight into the economy. It can't go on forever. And the obsession on Wall Street over when it will end is probably the most important driver of your 401(k) right now.

Taper, as unlikely Wall Street lingo joins a list that includes quantitative easing, fiscal cliff, sequester, remember TARP? Sometimes the jargon sounds Greek to the rest of us.

Speaking of Greece, austerity is the word on the street there, the opposite of Bernanke's actions. If he were a little rascal he would be this guy throwing money from the window. The dilemma for the Fed take away the training wheels too soon and the economy could crash. But fail to taper and this economy may not take flight on its owned.

(END VIDEOTAPE)

ROMANS: And Jake, let's stay with that metaphor because the Fed chief in his press conference today, he told reporters, he said look, this has not reached cruising speed yet. And until it has a reasonable sustained cruising speed, the stimulus in to the economy will continue.

But Jake, he did lay out a road map for when that stimulus will go away, a roadmap that has a seven percent unemployment rate target on it. And that's what moved Wall Street, the Dow down more than 200 points.

TAPPER: All right, Christine Romans, thank you. And thanks for the cameo. Appreciate that.

ROMANS: You're welcome.

TAPPER: So, what does this tell us about our economy and the odds of your well, wallet getting fatter?

Let's break it down the news with Rana Fordohar. She is "Times" assistant managing editor and CNN's global economic analyst.

Welcome, Rana.

RANA FORDOHAR, ASSISTANT MANAGING EDITOR, TIME MAGAZINE: Thank you.

TAPPER: So what did you take from Bernanke's statement today? Is this a sign of a fragile economy or is it guarded optimism?

FOROOHAR: What's amazing is that Bernanke essentially said he was going to do nothing right now and yet the markets reacted in the way that they did. I think this will be a theme for the next six months because what the Fed does is very data driven. They are looking at unemployment figures. They are looking at consumer sentiment, markets, and growth figures. So every time we have a new bit of data coming out and certainly a new Fed announcement. I think you are going to see very, very volatile markets.

TAPPER: Let's talk pocketbooks. I want to put up this new CNN/ORC poll about what people's personal financial situation is compared to a year ago, 36 percent say that they are better off, 44 percent say they are worse off. So in the middle of this recovery, what do you make of that? FOROOHAR: Well, it is really interesting. It reflects the incredibly bifurcated nature of the economy we are in. People at the very top are doing pretty well. There are also jobs for those at the very bottom and Americans have gotten their balance sheets in order over the last few years. The spending rate has gone up. Debt is down. Credit card delinquencies at are record lows.

But there are a large group of people in the middle that are still out of work, that have had flat wages for four years and don't have any expectation of getting a raise anytime soon. So I think that that's why you are seeing those two different sentiments in the poll.

TAPPER: Rana, we wait for the jobs report, the first Friday of every month. We are still days away from that, but you think it is going to have a bigger impact these next few months.

FOROOHAR: I do. I think that because the Fed has explicitly said they are looking at that unemployment number, they want it to come down to 7 percent and then on down to 6.5 in the next couple of years, markets will be looking at that. There is going to be a lot of anxiety and a lot of volatility right on that first Friday every month. That's my prediction.

TAPPER: All right, Rana Foroohar, thank you so much for joining us. Welcome aboard.

FOROOHAR: Thank you so much.

TAPPER: Coming up on THE LEAD, immigration reform, it seems to be on the ropes. I will talk to Congressman Joaquin Castro, a Democrat from Texas about his mission to try to save it.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. I'm Jake Tapper. In other national news, the future of immigration reform is more fragile than a glass menagerie. The House committee last night moved forward a bill that would crack down on undocumented workers. In a recent slew of contentious moves from all parties involved. Immigration reform has created friction between the White House and Congress, between the House and Senate, between Republicans and Democrats who usually get along so well.

The bill in the Senate is moving forward, but the action in the House is questionable. What do Americans want? The latest CNN/ORC poll shows that 62 percent of Americans think border security should be the main focus of immigration reform.

For all the latest on immigration reform, I'm joined by Democratic Congressman Joaquin Castro of Texas. He is meeting with the Democrats in the House immigration group, the "Gang of Seven." He did earlier today. He's meeting later today with House Speaker John Boehner. Thanks for being here, Congressman.

REPRESENTATIVE JOAQUIN CASTRO (D), TEXAS: Thanks for having me. TAPPER: So since you're meeting with Speaker Boehner, let's start what he said yesterday about immigration reform. I want to play some of that.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: I don't see any way of bringing an immigration bill to the floor that doesn't have the majority support of Republicans. Frankly, I think the Senate bill is weak on border security. I think the internal enforcement mechanisms are week and the triggers are almost laughable.

(END VIDEO CLIP)

TAPPER: Doesn't sound like he likes the Senate bill and it doesn't sound like he's going to bring a bill to the floor of the House unless he knows it will get the support of a majority of Republicans. Not just the House but Republicans. It doesn't sound like a very good prognosis.

CASTRO: Well, I mean, we're still optimistic. You know, there is no question that he's in a tough spot within his caucus. But I think in the end we'll end up passing comprehensive reform in 2013. I hope he doesn't invoke the Haster rule.

TAPPER: The Haster rule just to explain for the people at home is that you have to have a majority of the majority.

CASTRO: Right. That essentially allows 25 percent of the body to control 100 percent of the legislation if you invoke that rule. But on the big votes this year, the debt ceiling limit extension, the violence against women, the speaker didn't invoke the Haster rule. So I hope that he stays consistent on the issue of immigration. Because, you know, upwards of 60 percent of the nation supports comprehensive reform with a path of citizenship.

TAPPER: There is news of a CBO, Congressional Budget Office, report which takes a look at the bill. It was mostly good news interpreted by supporters of the bill that would cut the deficit by $897 billion over 20 years according to this report.

But I want to read another part of the report that says CBO estimates that under the bill the net annual flow of unauthorized residents would decrease by about 25 percent relative to what would occur under current law.

So it sound to me that even the CBO, which is nonpartisan and tries to be as objective as possible agrees that the border security is still relatively weak if it's only going to reduce illegal immigration by 25 percent.

CASTRO: Well, but I think that we have to consider the context. Remember, we have less border crossings with Mexico than we have had really in the last four decades or so. So we've got more resources committed to the border now than any other time in American history. I think that's why you see less crossings obviously because of the American economy over the last few years. You also see less crossings. So that 25 percent is bringing it even further below historic low levels.

TAPPER: But I think the concern of Republicans who, for any number of reasons, may want to support immigration reform is that this is going to be another quick fix like what happened during the Reagan years. You don't really prevent it from happening in the future and we have to do it again in 20 years. Why not take as strong a measure as you can to lock up the border so there is no more illegal immigration. You will get the support of conservatives.

CASTRO: I think some of what they are looking at is illusory. Some of those triggers if we actually put them in place, for example, we would never move on to the legalization part. They are so subjective. We could be here fighting about them in five or six years. So the amendment is a distraction because it's not realistic.

TAPPER: All right, Congressman Castro, thanks so much. Good luck with your effort. I hope you have a good meeting with Speaker Boehner. Tell him we said hi.

CASTRO: I will.

TAPPER: All right, thank you so much.

Up next, a special farewell to a friend of mine and a friend of the truth, we'll remember Michael Hastings.

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. It may be the true third rail of American politics picking a sports team from outside your state. New Jersey Governor Chris Christie faced the question of his favorite football team in front of a gym full of students. He managed to tick off the garden state when he told the crowd that his favorite team is the Dallas Cowboys.

That's right. He passed on the New York Jets or the New York Giants who even play in New Jersey or even the Philadelphia eagles who claim South Jersey. He went with the hatable Cowboys and got a mix of boos and some cheers. I guess, he gets points for honesty. He has also admitted he's a Mets fan. So give him a break I suppose.

Now a personal note, journalism lost a rising star yesterday when "Rolling Stone" and BuzzFeed writer Michael Hastings was killed in a single car accident early in the morning in Los Angeles. Hastings was best known perhaps for his 2010 story run away general in "Rolling Stone," which featured General Stanley McChrystal and his aides speaking disparagingly about senior members of the Obama administration.

That story resulted in the end of McChrystal's command in Afghanistan and his military career. Hastings himself was a friend and someone whose fearlessness both in terms of his reporting from combat zones and his lack of concern for what people in power thought of him, I admired. Now Hastings is the last person who would want a gauzy, saintly portrayal of a man who had his share of foibles along with those considerable, enviable talents. So let me just say I hope some of his fearlessness can be sprinkled upon journalists who remain on this earth. Michael, I will miss you. Michael Hastings was 33.

That's it for THE LEAD today. I'm Jake Tapper. I turn you over now to Jim Acosta who is filling in for Wolf Blitzer in "THE SITUATION ROOM."