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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Sebelius on the Hot Seat; NSA Chief Defends Spying Operations; Record Highs on Wall Street; Murder Mystery

Aired October 30, 2013 - 05:00   ET

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


JOHN BERMAN, CNN ANCHOR: Overnight, it happened again. The Obamacare Web site goes down. And this morning, the woman responsible for implementing the law will be grilled by Congress over what went wrong and who's to blame.

(BEGIN VIDEO CLIP)

REP. MIKE ROGERS (R), MICHIGAN: Have the allies of the United States during the course of that time engaged in anything you would qualify as an Espionage Act targeted by the United States of America?

GEN. KEITH ALEXANDER, NSA DIRECTOR: Yes, they have, Chairman.

(END VIDEO CLIP)

ZORAIDA SAMBOLIN, CNN ANCHOR: They spy on us, too. The surprising defense from the NSA chief, denying claims that the United States is eavesdropping on Europe citizens.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In light of all of this information, are you telling us you don't know anything more about Michele's death?

(END VIDEO CLIP)

BERMAN: So, did a Utah doctor murder his wife to be with his mistress. The explosive trial, the twists and turns as the other woman takes the stand with intimate details about their relationship.

(END VIDEO CLIP)

SAMBOLIN: We have so much for you this morning.

BERMAN: A lot going on.

SAMBOLIN: Good morning to you. Welcome to EARLY START. I'm Zoraida Sambolin.

BERMAN: And I'm John Berman. It is Wednesday, October 30th. It is 5:00 a.m. in the East.

SAMBOLIN: So, we're going to begin with Health and Human Services Secretary Kathleen Sebelius just hours from entering the lion's den. At 9:00 a.m. Eastern Time, Sebelius will face off with House Republicans who have been call for her head over the botched Obamacare rollout. In all this, folks, after a dark night for the healthcare.gov. The Web site suffering another outage, making it impossible for anyone to sign up.

We get more senior White House correspondent Brianna Keilar.

(BEGIN VIDEOTAPE)

BRIANNA KEILAR, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Almost a full month before healthcare.gov went live, CGI, the main contractor on the site, highlighted glaring problems.

A confidential report obtained by CNN raised red flags like "We don't have access to monitoring tools", "Not enough time and schedule to perform adequate performance testing", and "Hub systems are intermittently unavailable" -- meaning the site quits working at times. Plainly stated warnings, and yet, they weren't passed on to President Obama. He didn't know there were problems until after the site launched.

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: Well, I think it became clear fairly early on, the first couple of days?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: But not before that, though? Not before October 1st?

SEBELIUS: No.

KEILAR: When embattled Health and Human Services Secretary Kathleen Sebelius testifies before Congress today, she will point a finger at some of the private contractors her agency hired, a subset of those contracts for healthcare.gov have not met expectations, she said in her prepared remarks -- which she will deliver after another outage hit the site overnight.

UNIDENTIFIED MALE: Do you swear that the testimony --

KEILAR: Last week, those very contractors pointed the finger at HHS.

UNIDENTIFIED MALE: We have no role in the development of the Web site.

KEILAR: Tuesday, the head of the Centers for Medicare and Medicaid Services in charge of implementing Obamacare told Americans who have struggled with the Web site that she's sorry.

MARILYN TAVENNER, CMS ADMINISTRATOR, HHS: I want to apologize to you that the Web site has not worked as well as it could.

KEILAR: Republicans grilled Marilyn Tavenner about Americans on the individual insurance market who have seen their current coverage canceled or modified, more than 1 million so far by CNN's estimate.

UNIDENTIFIED MALE: You have no idea?

KEILAR: As they pressed her for the number of Americans who have been unable to enroll in Obamacare, she kept the script.

TAVENNER: We will have those numbers available in mid-November. In mid-November. In mid-November. Chairman Camp, we will have those numbers available in mid-November.

KEILAR: Brianna Keilar, CNN, Washington.

(END VIDEOTAPE)

BERMAN: The director of the embattled NSA defending his agency surveillance operations. General Keith Alexander telling members of the House Intelligence Committee that the U.S. has never gathered e- mail and phone of citizens in France and Spain, insisting the work of the NSA is focused on keeping the American people safe.

(BEGIN VIDEO CLIP)

ALEXANDER: There has not been a mass casualty here in the U.S. since 2001. That's not by luck. They didn't stop hating us. They didn't say that they were going to just forgive this. They continue to try.

(END VIDEO CLIP)

BERMAN: General Alexander did seem frustrated or at least angry, went on to say that media outlets have misinterpreted documents that were leaked by Edward Snowden, and that much of the data from Europe was collected by intelligence agencies of our allies. They collected the phone records said General Alexander and shared them with the U.S.

SAMBOLIN: U.S. Special Forces revealing they were just hours from embarking on a dangerous covert operation earlier this month to capture a major Benghazi terror suspect. This is a U.S. official telling CNN. Special Forces were ready if ordered to enter Benghazi and capture Ahmed Abu Khattala, a leading figure in the Ansar al- Sharia militia.

But the mission never materialized, partly because there was so much publicity inside Libya and the western press about another raid in Libya just hours later. That raid led to the capture of suspected al Qaeda operative Abu Anas al Libi in Tripoli, and he is now in U.S. soil and he is facing terrorism charges.

BERMAN: Vice President Biden will be hosting Iraqi Prime Minister Nouri al-Maliki for breakfast this morning. Maliki will then meet with President Obama on Friday. He is asking the U.S. for more counterterrorism aid and he'll also discuss purchasing American-made Apache helicopters and other kinds of military equipment. Senate leaders are warning the president that Maliki is leading America back to civil war and he's who too receptive to the influence of Iran.

SAMBOLIN: Meanwhile, nuclear talks between Iran and U.N. appear to be gaining traction. Both sides calling Tuesday's discussions in Vienna very productive, while agreeing to meet again on November 11th in Tehran. The negotiations are designed to ease international concerns about Iran's nuclear ambitions. The head of the U.N.'s International Atomic Energy Agency praising Iranians for their cooperation during the two-day session.

BERMAN: Records just keep falling on Wall Street. The S&P 500 and the Dow soaring to all-time highs yesterday. Investors giddy over reports that the Federal Reserve plans to maintain its market friendly stimulus spending for several more months now. That's the look of giddy right there on Wall Street.

The Dow finishing up 111 points on Tuesday, closing at the record high of 15,680. The S&P 500 also at a new high, closing at 1,771.

SAMBOLIN: President Obama's pick to be the next Federal Reserve chairman is running into a bit of a road block. Janet Yellen's been dominated, but Senator Rand Paul says that he intends to hold up the nomination until the Senate agrees to vote on the Federal Transparency Act. That measure passed the House in 2012 but it stalled in the Senate. Paul is insisting it is needed so the American people can see what the Federal Reserve is actually doing with the country's money supply.

It's "Money Time" in about 15 minutes from now. Christine Romans will have much more on the markets and what the Fed is likely to do a little later on today.

BERMAN: Survivors of Superstorm Sandy lighting up Union Beach along the Jersey Shore. Look at this -- hundreds of people raising some 20,000 lights into the sky, each glimmer symbolizing the hope that Union Beach will come back stronger than ever one year after the storm.

(BEGIN VIDEO CLIP)

NANCY DILAURO, SANDY SURVIVOR: You will see homes that are being rebuilt. But the shame of it all is that they really need a lot more help than they've been given. And it's very sad. It's very sad. But they are strong and they live up to their name.

(END VIDEO CLIP)

BERMAN: In a statement, President Obama said the last year has been a reminder of the strength and resilience of the American people.

SAMBOLIN: And they need a little patience as well, more patience.

Let's get a check of your midweek forecast. Indra Petersons is live in the weather center.

We hope it's good news.

INDRA PETERSONS, AMS METEOROLOGIST: Yes. I mean, we're watching the storm trying to make its way across the country.

Today, mild, though, this morning, especially in the Northeast. Temperatures still a little bit below normal, as a cold front swept there a couple days ago. So, Boston right now, about 55. Providence about 57.

It's a little chilled. These are going to be your highs as we go into the afternoon again. They are below normal.

The big story will actually be, the system is going to be making its way across the country really throughout the week and it will have a severe component to it. That's something that we're going to be watching.

Keep in mind, it's a system that brings a little snow through portions of Wyoming and Colorado. But it brought heavy snow for the last few days. We can tell near about a foot of snow like Craig, Montana, got over a foot of snow from the same system.

The reason this is so important, again, we're looking at all these ingredients coming together. It's that cold air there and then warm moist air that the system is about to move into. And for that reason we have that severe weather threat today.

So, really, anywhere from Kansas City, pretty much down to the Dallas, and even portions here farther south, into Texas today, we're looking for an isolated threat of tornadoes, but definitely, some severe thunderstorms and even more, strong winds are going to be out there today. The same system, by the way, making its way across the country for Halloween for us. So, that's what's we're going to be monitoring here.

SAMBOLIN: I always ask for good news. I think that's relative, right? Where you live?

All right. Thank you very much.

BERMAN: All right. Coming up: the trial that so many people are talking about.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He had never loved Michele.

(END VIDEO CLIP)

BERMAN: The doctor accused of killing his wife. The bombshell confession he made to his mistress' mother shortly after his wife's death.

SAMBOLIN: And singer Chris Brown facing possible time in jail, reaches into Lindsay Lohan's playbook.

BERMAN: Plus, it is time for your "Morning Rhyme." Tweet us with your own original verse. It can be about anything folks. Halloween is coming up. Maybe a Halloween theme, #early start or #morning rhyme. We'll read the best one on the air in the next half hour.

(COMMERCIAL BREAK)

BERMAN: Welcome back to EARLY START, everyone.

Dramatic testimony in a trial of a Utah doctor accused of drugging and drowning his wife so he could be with the mistress. Now, jurors are hearing from the other woman and her mother.

CNN's Jean Casarez was in the courtroom.

(BEGIN VIDEOTAPE)

JEAN CASAREZ, CNN CORRESPONDENT (voice-over): Day two of Gypsy Willis' testimony took jury back into her tangled love affair with Martin MacNeill. A secret kept from his wife Michelle along with the rest of the family before and after her death.

UNIDENTIFIED MALE: Were you exchanging terms of endearment in texts?

GYPSY WILLIS, MISTRESS OF MARTIN MACNEILL: I expect so, yes.

UNIDENTIFIED MALE: I love you. I miss you. I wish you were here at work, that kind of thing?

WILLIS: Probably.

CASAREZ: Martin, a respected physician and Mormon Sunday school teacher is accused of murdering his wife of 30 years with a lethal combination of drugs after pushing her to get a facelift so he could with Willis. She moved into the MacNeill home soon after the funeral as the family nanny and she says, Martin's lover.

With MacNeill looking on, Willis admitted she sent him hundreds of texts as well as provocative photos even the day after his wife died.

WILLIS: I took pictures of myself whenever I thought I looked OK. Yes.

UNIDENTIFIED MALE: You described the content of these two pictures for me?

WILLIS: They are of me in a mirror. You know, exposing my back.

UNIDENTIFIED MALE: Is it exposing below your back as well?

WILLIS: There is one picture where it is a little bit suggestive.

UNIDENTIFIED MALE: It is showing your buttocks.

WILLIS: Yes.

UNIDENTIFIED MALE: And the other one, it is not showing your chest area but you are shirtless.

WILLIS: Well, I'm -- my back is exposed.

CASAREZ: And it wasn't long before talk of marriage was in the air.

WILLIS: It was a diamond ring.

UNIDENTIFIED MALE: How big?

WILLIS: How big carat? UNIDENTIFIED MALE: Yes.

WILLIS: It was 4 1/2 carats.

UNIDENTIFIED MALE: Do you remember the cost of the ring?

WILLIS: Around $7,000.

UNIDENTIFIED MALE: In terms of the marriage plan, the two of you were very serious about getting married?

WILLIS: I believe so.

UNIDENTIFIED MALE: Were the of two you ever officially married?

WILLIS: No.

UNIDENTIFIED MALE: Despite not being officially married, you still held yourself out as Gillian MacNeill?

WILLIS: Yes.

UNIDENTIFIED MALE: And did you have a marriage date on this?

WILLIS: The marriage date is listed as April 14th.

UNIDENTIFIED MALE: Of what year?

WILLIS: 2007.

UNIDENTIFIED MALE: What is the significance of April 14th, 2007?

WILLIS: That is day of the funeral.

CASAREZ: Despite their hidden relationship, Willis denied any involvement in the death of Michelle MacNeill.

UNIDENTIFIED MALE: In light of all this information, are you telling us you don't know anything more about Michele's death?

WILLIS: That is correct.

CASAREZ: But the bombshell of the day did not come from Gypsy. It was her mother who took the stand and recounted a conversation she had with Martin MacNeill shortly after he became engaged to her daughter.

VICKI WILLIS, GYPSY WILLIS' MOTHER: He said to me that he had never loved Michelle. And then amended that to say, I -- well, I did, I loved her as a sister but I did not love her the way I love Gypsy.

CASAREZ: Jean Casarez, CNN, Provo, Utah.

(END VIDEOTAPE)

BERMAN: Wow.

SAMBOLIN: Yes, that's about the only word to express emotion about that, wow.

Sixteen minutes past the hour.

Chris Brown is checking into rehab. The R&B singer seeking anger management treatment. This just one day after appearing in court on another assault charge. Brown was arrested following a scuffle in Washington. That was this past weekend.

He's still on probation for a 2009 felony conviction for assaulting his former girlfriend singer Rihanna. He could face up to 180 days in jail.

BERMAN: All right. It's that time of year, I've been hearing about it all morning. The Bulls are playing.

SAMBOLIN: Rose is back. I'm so excited.

BERMAN: The NBA season up and running, LeBron James and the Heat got things started, raising their second straight banner last night.

Andy Scholes joins us with the "Bleacher Report."

SAMBOLIN: Beating my Bulls, beating my Bulls. But it's OK, Derrick looked good.

BERMAN: Good morning, Andy.

ANDY SCHOLES, BLEACHER REPORT: It is (INAUDIBLE) last night, you know, guys. But it was all about LeBron and the Heat. They are the favorites to win once again this year. But before they begin their quest for a three-peat, they celebrated last year's championship won last time. For the second straight year, the Heat raising the championship banner into the rafters and receiving their fancy rings, 242 diamonds in this year's ring, guys.

Now, the champ, they were in championship form last night from the start. They held the Bulls to 33 points. In his first game back, Derrick Rose looked pretty good but he did just score 12 points in the game. The Heat, they were victorious, they won season opener, 107-95.

All right. No Kobe, no problem for the Lakers last night. Kobe's still out with his torn Achilles. This is supposed to be the year the Clippers establish their dominance in L.A. But apparently, they weren't ready for the Lakers bench.

The reserves for the purple and gold played the entire fourth quarter and they scored a ridiculous 74 points in the game. The Lakers, they upset the Clippers on opening, 116-103.

Game six of the World Series is tonight. And getting to Boston for the game turned out to be a travel nightmare for the Cardinals. The mechanical problems kept plane on the ground and the players stranded on the tarmac for more than six hours last night. Team finally boarded a new plane and arrived in Boston shortly after 11:00 p.m.

Fans are paying big bucks to see Big Papi and the Red Sox potentially make history tonight. A ticket sold for more than $12,000 on StubHub for tonight's game. Standing room only tickets going for close to 1,000 bucks. Tickets are so expensive because Boston hasn't clinched a World Series title at home since 1918.

All right. Turning on BleacherReport.com today, we're used to seeing Patriot's head coach Bill Belichick roaming the sidelines wearing a hoodie and a scowl. But you never have seen him like this. Check him out.

That's Bill Belichick dressed up for Halloween. He's almost unrecognizable, smiling, wielding a sword, got an eye patch, went as a pirate. I guess this is his favorite costume because it's the second time he's worn it in the last three years.

BERMAN: Recycling.

SAMBOLIN: Little recycling.

BERMAN: He's a convincing pirate.

Andy, thank you so much.

SCHOLES: All right.

SAMBOLIN: All right. So, you want to be pampered in business class but you can't afford the airfare? Yes, that would be us. With a little effort, you could be taking off in an upgraded seat without that premium price tag. It is today's "Road Warriors".

Bumping up to business class on international flights just got a little more affordable. There's new software called PlusGrade. It's allowing passengers to bid online for premium ticket upgrades. It's being used by more than a dozen international airlines.

So, here's how it works for you. The bidding is auction style. Of course, the highest offer will bin. Bidding options are also airline specific. So, it's really insurance to research your carriers policies. You may be eligible for a first class upgrade.

So, airlines won't say how much a winning seat will cost, but there's a really good chance you'll pay less than a full price business class ticket. Upgrades do vary by airline, depending on when and where you fly. But as most airlines adopt this new system, the bad news it may be harder to get all of those free upgrades that we have been accustomed to.

BERMAN: Addicted to, I think, would be the other way --

SAMBOLIN: That's true.

BERMAN: All right . Twenty minutes after the hour.

Coming up, it was a record day on Wall Street. My goodness, look at those smiles. What is sending stocks soaring? We'll tell you. "Money Time", next.

(COMMERCIAL BREAK)

SAMBOLIN: Hey, welcome back to EARLY START.

It's "Money Time". Christine Romans is here.

I know. I had too much coffee, now too much green tea, you got to deal with me this morning.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Oh, no. But maybe it will be good for the market this morning, because --

SAMBOLIN: Wouldn't that be great? More and more.

ROMANS: It has been a caffeinated month for stocks, a year, really. Another day, another record high for stocks. Futures this morning were higher again after the Dow and S&P both finished at records yesterday.

For the Dow, this is the 32nd record close this year. S&P matched its 33rd of the year. And the NASDAQ matched by 12 points, that was even with another outage due to human error that froze things for nearly an hour at NASDAQ, quite a rally this year. Let me show it to you.

The NASDAQ is up 31 percent. The Dow's up 20 percent. And the S&P 500 is up 24 percent.

Here's something really interesting for stock investors watching their 401(k)s. There have been king-size inflows. In fact, it's been a tidal wave of cash and ETFs, exchange traded funds, $277 billion worth. That's the most for one year since back in 2000 when traded $24 billion (INAUDIBLE) funds.

We've still got two months to go this year, so it shows you that investors believe in their rally and are putting their money where their mouths is.

And the other big story on investors' mind this morning -- the Fed. Chairman Ben Bernanke and his team wrapping up another two-day meeting. No changes to the $85 billion a month in the stimulus, that's been helping to keep interest rates low.

There might be some important clues about future Fed thinking. The Fed might acknowledge a weak job market, and that might mean any cut in stimulus would be delayed until sometime next year. That's good for low interest rates. That's probably good for the stock market.

The other thing to look for, is the Fed says anything done by the damage done to the economy by the government shutdown. That would be another reason for the Fed to hold off on trimming its stimulus.

Again, keeping interest rates low and keeping stock markets high. So, that's what we're looking at right now.

SAMBOLIN: Can we switch gears and talk about something that really caught my eye this morning?

ROMANS: This is breaking news, actually.

SAMBOLIN: It is a problem for me. A global wine shortage?

ROMANS: Breaking news. It is true, Zoraida. You can start stockpiling in your basement.

SAMBOLIN: I'm going to.

ROMANS: There's not enough wine in the world. The industry is experiencing an undersupply of nearly 300 million cases a year. This is according to a research report by Morgan Stanley. That's despite the fact wine producers make 2.8 billion cases of wine a year -- still not enough to keep up with global demand. Rising global demand. Production actually fell last year because of bad weather in France and Argentina.

The biggest consumers of wine. Take a guess?

SAMBOLIN: I know this one. France?

ROMANS: Zoraida Sambolin --

(LAUGHTER)

ROMANS: France --

SAMBOLIN: France, United States and China. Incredible.

ROMANS: France, United States and China.

SAMBOLIN: Four hundred million cases a year, we consume.

So, my question was: is this good for folks who have these local wineries, perhaps, right? Buy local.

ROMANS: I think it would be. You're seeing a lot more of local wineries popping up and organic wineries, and the whole locavore movement for wine. Absolutely, absolutely.

But, you know, we'll see what it means for prices. I think -- I'm going to watch the price angle of that. Cheap wines are going to get more expensive because of this. But, you know --

BERMAN: You keep watching that prices. I'll keep dealing with the wine. And, you know, we'll be OK.

ROMANS: You supply the shots of Margaux, I'll supply the, you know, whatever --

SAMBOLIN: I'll drink.

ROMANS: At $9.99 is what I get outside the --

SAMBOLIN: Thank you, Christine.

All right. Coming up, a bold break-in. A young girl snatched from her bed in the middle of the night. We have new developments in the search for the man who tried to kidnap here. That's coming up next.

(COMMERCIAL BREAK)