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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Idaho on Fire; Egypt on Edge; U.S. Stops Aid to Egypt; Christie's Social Stands

Aired August 20, 2013 - 05:00   ET

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


ZORAIDA SAMBOLIN, CNN ANCHOR: Wild fires raging in the west. Communities evacuated as fast-moving flames continue to spread this morning. Is there any relief in sight?

CHRISTINE ROMANS, CNN ANCHOR: Cutting off Egypt. New reports this morning the U.S. is stopping some of the support it sends to the battle torn country. We're live.

SAMBOLIN: And the White House introduces us -- how adorable. It is the newest member of the first family.

ROMANS: Dogs in the early hour of the morning.

SAMBOLIN: I know.

ROMANS: Always good. It's a good way to start the Tuesday with puppies, right?

SAMBOLIN: Always.

ROMANS: Good morning. Welcome to EARLY START. I'm Christine Romans.

SAMBOLIN: And I'm Zoraida Sambolin. Nice to have you with us. It is Tuesday, August 20th. It is 5:00 a.m. in the East.

ROMANS: All right, let's begin in Idaho where the fire crews this morning think they may, they just may have turned the corner on this massive 160-square-mile Beaver Creek Fire near Sun Valley. It's about 9 percent contained and some 2,000 homes remain evacuated. But some residents were allowed to return to their homes Monday. And there's some hope an aerial assault may be slowing down the blaze now.

Dan Simon, for us, on the fire lines in Idaho.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT (voice-over): Fire continuing to ravage one of the country's most scenic spots. A drive through the mountains and you can understand why many celebrities like Tom Hanks, Arnold Schwarzenegger and Bruce Willis choose this area to build multi- million-dollar vacation homes. And why some insurance companies call in their own firefighters to help prevent a calamity.

But as a Red Cross official told me -- NICOLE IRWIN, AMERICAN RED CROSS: Many people think this is an affluent area, and it is, but there are many people who are affected by this that are from different socioeconomic backgrounds. And that's who is staying with us.

SIMON: Staying in a shelter like this high school where we met Orlanda Cabrito.

ORLANDA CABRITO, FIRE EVACUEE: I think just not knowing. I think the outcome if we're going to be able to go home or if we're going to have a home. I think that's the most nerve-racking.

SIMON: The Beaver Creek Fire is a true beast, spreading across an area larger than the city of Denver.

(On camera): Surrounded by bone dry trees and brush, it's clear this fire could be burning for a long time. The key is to keep the flames away from homes. The wind has a way of pushing the fire in different directions.

BETH LUND, FIRE INCIDENT COMMANDER: We have plenty of resources right now. And it's just a matter of having people in the right place at the right time, which I believe we do at this point and time. It's just a lot of work to go ahead and get this thing contained.

SIMON (voice-over): Dan Simon, CNN, Ketchum, Idaho.

(END VIDEOTAPE)

SAMBOLIN: With dozens of fires now burning across the west, is there any help in store from Mother Nature? Indra Petersons is going to answer that question for us this morning.

Is there going to be any rain?

INDRA PETERSONS, CNN METEOROLOGIST: Yes. It's kind of a mixed bag. We have red flag warnings in the area, even though there's more moisture coming into the area. The reason for that is something we call virga. What it is, is first we have to moisten up the atmosphere. It's kind of tough to explain, but basically it's still dry all the way down to the ground. But first you need it to rain.

It evaporates. That's what we call virga. And eventually after several days and more moisture, you'll see the moisture go all the way to the ground. We'll stop having that rain evaporates, and unfortunately, with this threat over the next several days we're going to be looking at dry lightning, and not the rain just yet.

I'll pull you to the weather map, it might be a little bit easier to understand. Take a look. First we just have some spotty showers in through today. But as the low moves closer, we get day after day and more thunderstorms. We'll eventually get that moisture going all the way to the ground and we'll stop this thing, winds and dry lightning by tomorrow.

Hopefully we see actually more rain hit the ground. So hopefully that makes sense. Today, really the threat of strong winds and dry lightning. And eventually by the end of the week, we'll moisten up and get more thunderstorms and rain on the ground out there.

Speaking of way too much rain into the southeast, look at what we saw again yesterday. This pattern, no, it is not changing.

I want to take you day into day. Here is Tuesday. Stationary front still in place. But watch this guy. We have some changes on the map. Wednesday, stationary front, more rain still in the southeast. But we will start to see potentially some severe weather moving into the Great Lakes region. And then by Thursday, same old thing. We are still talking about flooding the southeast, one to two inches, even two to four inches possible. Heavy thunderstorms. I mean, that guy is not going anywhere.

ROMANS: Wow.

SAMBOLIN: That's insane.

PETERSONS: Yes.

SAMBOLIN: It's like every morning, all you have to do is reload the same graphic. It's unbelievable.

PETERSONS: Pretty much. It looks identical. Yes.

SAMBOLIN: All right, thank you, Indra.

ROMANS: Professor Petersons, this morning.

SAMBOLIN: Yes.

ROMANS: With the virga explanation. Thank you.

SAMBOLIN: All right. And developing this morning, word into CNN that the U.S. is now holding back some aid to Egypt as it evaluates the aftermath of a violent crackdown on protesters there. But the move is only temporary and no decision has been made on whether to stop giving the country more than a billion dollars in assistance.

ROMANS: And Egypt's control to Suez Canal where a lot of oil goes through the Suez Canal, so it is in the U.S.' best interest to make sure that it's a partner with Egypt all the time to keep that Suez open. So it's a --

SAMBOLIN: That's balance.

ROMANS: It's a fine line. It's a fine line on U.S. --

(CROSSTALK)

SAMBOLIN: It's very, very complicated.

ROMANS: Yes.

SAMBOLIN: There are new developments in Egypt overnight as well. Have many worried that the country may be inching back towards authoritarian rule. A court has now ordered former leader, Hosni Mubarak, released after more than two years in detention.

And the spiritual leader of the Muslim Brotherhood has now been arrested as well.

Reza Sayah is in Cairo. He's following all of these latest developments for us.

How do these two situations that have happened overnight, how could they potentially affect the situation there on the ground?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Zoraida, first off, we should point out that Hosni Mubarak is still in jail and he's not going to be going out of jail, at least for now. But there was a lot of confusion and some speculation yesterday that he could be released very soon. That's because a court came out and dropped one of his corruption charges.

He still faces a separate corruption charge in a charge linked to the killings back in 2011 during the uprising. But his lawyer came out and publicly cited a law here in Egypt that says, you cannot keep someone detained for two years without a conviction. And that's why he claimed Mubarak would be released soon.

However, a court has not made any kind of official decision yet. But, I mean, if he's released in the coming weeks, look out. That's going to add another explosive element to this conflict.

And then last night, you had Mohammed Badie, the spiritual leader and the top official of the Muslim Brotherhood, arrested in an apartment in Cairo. He's been wanted for weeks for allegedly inciting deadly violence.

His arrest means dozens of senior Muslim Brotherhood leaders are in jail. Hundreds of others have been detained or wanted. Hundreds of other supporters have been killed. The international community condemned the arrests and the killings. The U.S. or Washington, as you mentioned before, is holding back some aid in an effort to press this government to make some changes, Zoraida.

But at least for now, no indications that this government is giving into the pressure and increasing sign that it's launching and continuing a crackdown against the Muslim Brotherhood. The question now, will the Muslim Brotherhood stop fighting in the streets with demonstrations or will they fight back? Will they escalate this conflict?

SAMBOLIN: Reza, the administration, the Obama administration is being very careful with the choice of words here. They're calling it a reprogramming of some funds to Egypt while a review is under way. So what is this aid that is being held up?

SAYAH: This is military aid and funding. Some Apache helicopters are not going to be delivered. Several weeks ago, some F-16 jet fighters, they were held back. Essentially, it seems, Washington is giving itself some flexibility. The option of turning off aid if this conflict escalates some more.

But at least for now, they haven't made the official word that they're cutting off aid and again, if you take a step back and look at things, all this pressure, all these messages coming from Washington, the rhetoric, these moves, no effect on this interim backed government. There are increasing signs that what they want to do is dismantle and wipe out the Muslim Brotherhood.

SAMBOLIN: All right. Reza Sayah, live in Cairo, for us this morning. Thank you for that report.

ROMANS: Egypt's military rulers have a strong supporter this morning. Saudi Arabia, King Abdullah, publicly condemning the Muslim Brotherhood and he is backing the violent government crackdown that's killed close to 1,000 people. The Saudis are also vowing to write a blank check to Egypt to make up for any short falls that might occur if the U.S. or other nations decide to cut aid.

SAMBOLIN: Pakistan's former leader, Pervez Musharraf, has now been indicted in a 2007 assassination of Prime Minister Bhutto. The charges include murder and conspiracy. And his legal team says Musharraf has pleaded not guilty.

Bhutto supporters have long alleged Musharraf and his government did not do enough to protect her during an election rally six years ago. He put the blame for her killing on terrorists.

ROMANS: More trouble this morning at Japan's Fukushima Nuclear Power Plant. Its operator now says some 300 tons of radioactive water had leaked from a storage tank and seeped into the ground. And that's -- high radioactivity is being found in salt water, sea water actually near the plant, in the northeastern part of Japan. The plant suffered a meltdown after being severely damaged in an earthquake and tsunami back in 2011.

SAMBOLIN: Nine minutes past the hour. And we're finding out more this morning about the injuries suffered by Boston bombing suspect, Dzhokhar Tsarnaev before his capture by police. Court documents show his trauma surgeon told the judge Tsarnaev had multiple gunshot wounds. Including one right through his mouth.

He also had a fractured skull and injuries to his throat when he was found on April 19th after hiding in a boat in that residential backyard. Three people were killed and more than 260 people wounded in the bombings at the Boston marathon.

ROMANS: The Army psychiatrist accused of a shooting rampage at Ft. Hood in 2009 could take the stand in his own defense today. Prosecutors are expected to wrap up their case against Major Nidal Hassan this morning. Two weeks after the trial began and much sooner than originally thought.

After the judge ruled that much evidence prosecutors say would show Hassan's motives, it would not be allowed. Hasan is acting as his own attorney and has indicated that he plans to call himself to the stand. If convicted of killing 13 unarmed fellow soldiers and wounding more than 30 others, he could face the death penalty.

SAMBOLIN: President Obama is telling financial regulators, get to work. Many of the new rules that were supposed to be in place have yet to be completed. And the president told the Treasury secretary and officials from the federal reserve and other agencies, in a White House meeting that the work must be finished soon.

ROMANS: Five years after the crisis, it's almost the five-year anniversary.

All right. Say hello to the newest member of the Obama family. Sunny the dog. Just arrived in the White House on Monday. She is a Portuguese waterdog just like Bo, just over a year old, they are romping right there. On the white House Lawn, the PR said they've been getting along just line.

SAMBOLIN: No kidding.

ROMANS: And the first family had made a donation to Washington. It means it means deciding to honor the new first pet's arrival.

(CROSSTALK)

SAMBOLIN: You're the perfect little sister and also great, great dog for kids with allergies.

ROMANS: Yes.

SAMBOLIN: Which is one of the girls have.

ROMANS: Yes.

SAMBOLIN: All right. So coming up, Governor Chris Christie signing controversial legislation that is not sitting well with some members of his own party.

ROMANS: And Dick Vandyke, pulled from a burning wreck on a California freeway.

SAMBOLIN: These are crazy pictures.

ROMANS: I know. Why he says, you know what, someone was looking out for him.

(COMMERCIAL BREAK)

SAMBOLIN: Welcome back to EARLY START.

New Jersey's governor, Chris Christie, is getting a lot of attention these days, telling Republican leaders about the best way to lead his party into the future and making some controversial moves and few hot- button social issues.

Here is Poppy Harlow with more.

(BEGIN VIDEOTAPE) GOV. CHRIS CHRISTIE (R), NEW JERSEY: And I just signed the bill and I think a statement --

UNIDENTIFIED REPORTER: Is the government stepping too much?

UNIDENTIFIED REPORTER: Is this a position you've already held or has it evolved?

(CROSSTALK)

POPPY HARLOW, CNN CORRESPONDENT (voice-over): Governor Chris Christie put his stamp of approval on a bill banning so-called gay therapy for minors. The controversial practice which aims to turn gay children straight through therapy is opposed by the American Medical Association and the American Psychiatric Association.

(On camera): Do you think that you were born gay?

MATTHEW SHURKA, UNDERWENT CONVERSION THERAPY: I don't know. I do think that who you are is who you are.

HARLOW (voice-over): Matthew Shurka says he underwent five years of conversion therapy.

SHURKA: They put me in this place of being uncomfortable with who I am.

HARLOW: But New Jersey council Tiera King says the therapy helped turned her straight. She says banning it hurts patients.

TIERA KING, NEW JERSEY COUNCIL: It prevents them from getting the help that they desire.

HARLOW: Christie noted his concern over government limiting parental choice, but in a statement wrote, "I believe that exposing children to these health risks without clear evidence of benefits that outweigh these serious risks is not appropriate."

UNIDENTIFIED MALE: Please welcome, your governor, Chris Christie.

HARLOW: Christie is running for second term as governor. But his action on gay conversion therapy, his unpredictable positions on stricter gun laws and medical marijuana are all being viewed through the prism of a potential 2016 bid for president.

BRIAN WILSON, FIGHTING FOR MEDICAL MARIJUANA FOR 2-YEAR-OLD DAUGHTER: I was wondering what the holdup is? It's been like two months now.

CHRISTIE: Sir, because --

WILSON: It's very well documented.

CHRISTIE: They are complicated issues.

WILSON: Very simple.

CHRISTIE: No, I know you think it's simple.

WILSON: We've had -- we've had this discussion --

CHRISTIE: I know you think it's simple and it's not.

HARLOW: That's the father of a 2-year-old girl suffering from a rare form of epilepsy pleading with Christie to pass a medical marijuana bill. On Friday, Christie conditionally agreed to allow qualified children to take edible forms of marijuana if changes are made to the bill.

CHRISTIE: Just talking about gun control isolation is not going to deal with the -- entirety of the problem.

HARLOW: Christie has previously signed legislation enacting tougher gun laws in New Jersey. But on Friday, he vetoed a proposed ban on firearms with a caliber of 50 or greater, saying the wide scope of the ban would not improve public safety.

MARK PRESTON, CNN SENIOR POLITICAL DIRECTOR: This has been a huge week for Governor Christie. The decisions he has made now are certainly going to have ramifications if he runs for president. He took actions last week on guns that are certainly going to be supportive of folks who are pro-Second Amendment. He took actions today that are certainly going to anger some social conservatives especially when it comes to this issue of gay conversion therapy.

HARLOW: The group Parents and Friends of Ex-Gays and Gays called Christie's latest move a shame, saying, quote, "It's going to hurt young people who are going to be denied their right to get the therapy they choose." Opponents of the ban say they will fight the law in court.

Poppy Harlow, CNN, reporting.

(END VIDEOTAPE)

ROMANS: All right, the journalist Glenn Greenwald now vowing to publish even more documents after authorities detained his partner for nine hours at Heathrow Airport.

Greenwald already released thousands of documents he received from NSA leaker Edward Snowden. Now he insists Britain will, quote, "regret" the way it treated his partner, David Miranda. Miranda was released Sunday after questioning. Authorities taking away his computer, cell phone and USB drives without charging him.

SAMBOLIN: Attorneys for Private Bradley Manning are pleading with military judge for leniency and asking her not to rob the former army intelligence analyst of his youth. Prosecutors want Manning sentenced to 60 years behind bars for releasing hundreds of thousands of classified documents to WikiLeaks.

The judge is expected to begin deliberating Manning's sentence a little later this morning. ROMANS: Vice President Joe Biden's son Beau, the attorney general in Delaware, undergoing tests this morning in Houston after an episode of disorientation weakness. He first felt sick last week while on a family vacation and saw doctors in Chicago and Philadelphia before spending the weekend at home in Wilmington. The White House and his office are not releasing any details about Beau Biden's condition. But the 44-year-old Biden did suffer a mild stroke in 2010.

SAMBOLIN: Concerned about that.

All right. Limo fire that killed five members of a bachelorette party on a California bridge, remember that? It's been ruled an accident. Investigators say the limousine's suspension system suffered a catastrophic failure as it went across the bridge over San Francisco Bay. That was back in May.

Nine passengers were traveling inside that limousine. Two more than were allowed by law. Police saying no criminal charges will be filed on this case.

ROMANS: A really close call for actor Dick Van Dyke and his wife. His sports car suddenly burst into flames Monday as they were driving on the 101 Freeway in Southern California. Good Samaritans helped pull the couple out of the car.

Van Dyke says someone must be watching out for him because a nurse, a fireman and a police officer just happened to be driving by at that moment. Van Dyke's wife posted a video of their burned out Jaguar on vine. His publicist says the 87-year-old actor is fine, but slightly embarrassed.

SAMBOLIN: Embarrassed?

ROMANS: I would be. Wow.

SAMBOLIN: Look at that car?

ROMANS: Very lucky.

SAMBOLIN: Torched.

ROMANS: Very lucky.

All right, coming up, have we entered the golden era of the iPhone? I'll explain. Money time is coming up next.

(COMMERCIAL BREAK)

SAMBOLIN: Good morning to you, New York. It is 23 minutes past the hour. Grab a cup of coffee or roll over and go back to sleep.

(LAUGHTER)

We're waking up to Demi Lovato. The "X Factor" judge and pop star turns 21 today and she's spending it in Kenya on a trip with the charity Free the Children. And that young lady is helping to build a school there.

Good for her. It's a great way to celebrate your 21st birthday, don't you think?

ROMANS: Sure is. Good -- for a good cause.

All right. Welcome back to EARLY START. It's money time.

Guys, it's the longest losing streak for the Dow this year now since December. The Dow is down four consecutive trading days. The Dow losing 440 points or 2.85 percent over four days. Dow is down nine of the last 11 trading days.

Why? Interest rates are rising. And that is hurting the stock market. The spike in rates can be seen in the 10-year yield. That's what we watched. That's a chart board. It is up more than 75 percent since the beginning of May. Those higher interest rates hurt home refinancing, mortgage shoppers and it hurts companies trying to sell debt.

Now the Dow has been down but Apple shares have been up as the likely date of the next iPhone approaches on September 10th. Now Apple already working with manufacturers to get the phones out the door and shipped.

The "Wall Street Journal" says that Apple is expected to introduce both a new high end and a low end iPhone called the iPhone C. A cheaper iPhone is something analysts have long called for would likely be a big hit in China. But the iPhone is (INAUDIBLE).

Another product that could be very popular in China is a gold iPhone. Apple reportedly working on bringing a gold-toned phone to its product mix. Gold means good luck in China.

Small business in this country be warned. The IRS sent out letters to 20,000 small businesses over the past. So your notifying them of possible income under-reporting. The IRS says it's trying to I.D. businesses to get most of their reported sales to credit cards. The Idea is that a lot of cash transactions might be going unreported.

To decide who gets this letters the IRS compares the business' credit card and cash receipts with industry averages.

All right. This is one of the biggest names in the hedge fund world. But now he is banned from the industry for five years. Philip Falcon got the news from the SEC yesterday. Falcon and his fund will have to pay $18 million and admit to wrongdoing.

The SEC accused him of several instances of serious misconduct while operating Harbinger Capital. The SEC says Falcon used client's money to pay personal taxes, favored the redemption request that certain clients over others, and manipulated bond prices.

Some serious accusations from the SEC and a five-year ban. He has said -- he said to CNN he got some bad legal advice that he regrets.

SAMBOLIN: Yes. And he's very glad it's all behind him.

All right. Twenty-five minutes past the hour. Coming up a strange new development in the case of a 16-year-old girl rescued from the man police say killed her mother and killed her brother. That's after the break.

(COMMERCIAL BREAK)

ROMANS: Controversy over U.S. aid in Egypt. Taxpayer support given as protesters are massacred in the street. This morning why some American companies don't want the funding to stop.

SAMBOLIN: A shocking crime in the heartland. A college athlete gunned down at random in the streets. Why the suspects say they did it.

ROMANS: Fast-moving flames threatening thousands of homes in the west. Will firefighters get any help now from Mother Nature? Indra Petersons is tracking the forecast for us this morning.

SAMBOLIN: She's got her work cut out for her.

Welcome back to EARLY START. Happy you're with us. I'm Zoraida Sambolin.

END