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EARLY START

Malaysia Completes Preliminary Report; Investigating the Ferry Owner; Obama in Japan

Aired April 24, 2014 - 04:30   ET

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


(COMMERCIAL BREAK)

JOHN BERMAN, CNN ANCHOR: Happening now, a sea bed search for missing Malaysia Airlines Flight 370 finding nothing. The Bluefin sub nearly finished with its mission now, so is it time for investigators to come up with a new plan? This as Malaysia completes a new report on what might have happened to the vanished jetliner, but this report being kept private.

So, why? A team of reporters covering all the angles live, ahead.

POPPY HARLOW, CNN ANCHOR: Overnight, more bodies pulled from a sunken ferry off the coast of South Korea. More than 130 passengers still missing as divers comb the ship. This morning, the investigation into what went so terribly wrong broadens from the crew to the ferry's incredibly wealthy owner. We're live in South Korea with the very latest.

BERMAN: Happening now, President Obama on a pivotal diplomatic tour through Asia. What he is doing this morning and why he's talking about a new punishment for Russia. We're live with the latest there as well.

Welcome back to this global version of EARLY START. Great to see you this morning. I'm John Berman.

HARLOW: And I'm Poppy Harlow. It is 32 minutes past the hour.

This morning, the search for Flight 370 may be closer to entering a new phase, more than six weeks after the jet disappeared. Overnight, we learned a piece of metal found on the Australian coast was not from the jet. And with more than 90 percent of its search mission now complete, an unmanned sub so far has not found one single trace of debris.

So, many are asking, are search crews looking in the right place? What needs to be done next?

Our Erin McLaughlin is live in Perth for us this morning.

You know, Erin, when this news broke on our show yesterday, you were very cautious about this, as were we, saying, you know, we have had so many leads and they have all fallen through, and so did this one. ERIN MCLAUGHLIN, CNN CORRESPONDENT: Absolutely, Poppy. Officials from the onset of that announcement were very cautious about it, as you said. There have been so many false leads in this search. That object, that piece of metal found about 190 miles south of Perth in the end turning out to be seemingly nothing more than sea junk, the kind of sea junk that really has muddied the waters of this ongoing visual search, which we understand today some 11 planes and 11 ships are still out on those waters looking for any signs of MH370.

And despite hours and hours and hours of searching, that search so far yielded nothing more than garbage, really highlighting what seems to be a problem in the Indian Ocean of the amount of garbage and waste being found. Officials, though, saying that the -- Australian officials saying that they really don't expect, or it's really unlikely at this point to find any pieces of debris from that visual search. The focus really is on the Bluefin-21 at the moment and this ongoing underwater search.

As of this morning, it was on its 12th dive. About 90 percent of this narrowed search area completely scoured and ruled out. And officials are focused now as well on what comes next once that entire search operation has been completed, Poppy.

HARLOW: So, that is the question, what is next? The weather there not ideal once again in terms of that aerial search, but they're focusing, as you said, under water, but they only have that Bluefin- 21. Do we know yet if they are bringing in other unmanned submersibles?

MCLAUGHLIN: Well, it's certainly something that the Australian and Malaysian authorities are discussing. We know that they are right now trying to hammer out some sort of longer-term agreement based on a proposal from Malaysian officials that would involve broadening the search area, potentially introducing more underwater assets to the search. We expect that agreement to be completed, they say, within a week's time. It will not be publicized, however, but authorities at the moment saying that it's looking like a search operation planned as far as through July, Poppy.

HARLOW: Wow. People want answers, absolutely, and so far, nothing. We appreciate the report this morning. Thanks, Erin.

BERMAN: On the subject of answers, investigators now say they've completed a preliminary report on what caused the jet to disappear, but as of right now, they have no plans to make it public. Odd.

Sumnima Udas is live in Kuala Lumpur with that part of the story.

Sumnima, just another step, really, in the PR complications facing the Malaysian government.

SUMNIMA UDAS, CNN CORRESPONDENT: That's right, John. It's really a requirement from ICAO, which is the International Civil Aviation Organization, that any country has to submit that report within 30 days. Now, Malaysia got an extension because of the complexity of this particular incident. But as you mentioned, they've marked it confidential, and it's actually allowed to do that according to ICAO rules, but it's unusual. For example, in the Air France case just a few years ago, which crashed into the Atlantic Ocean, that report, that preliminary report was made public, and that's normally what most countries do.

Now, why the Malaysians chose to mark this report confidential, that's a question a lot of people are asking, and of course, that's a question a lot of the families of passengers on board MH-370 are asking, because they keep saying they feel like the Malaysians, Malaysian authorities, aren't being transparent enough, and they keep saying they feel like they're hiding something.

Now, as far as the contents of the report, not much is known, of course, because it is confidential, but a source did talk to us, giving a little bit of insight into what exactly is in it. It says -- they said that it doesn't go into great detail about what exactly happened, just basic details on the flight history, and it also includes the safety recommendations that commercial aircraft be tracked in real time.

BERMAN: Seems benign enough to make public, certainly.

Sumnima Udas in Kuala Lumpur.

As Sumnima just reported, the families not happy at all with the level of transparency and the fact that the Malaysian government wants to keep this report secret. And in a few minutes, we'll go live to Beijing where Ivan Watson has the families' really desperate pleas now to get a copy of that report, so stay with us for that.

HARLOW: Meantime, divers in South Korea are making progress this morning in a slow, grim search of that capsized ferry, more than a week after the ship overturned. The death toll now stands at nearly 170, but more than 130 of those on board are still missing. Many of them were high school students. Today, a very difficult day. Classes resume at their school, which is south of Seoul.

Now, investigators seem to be focusing in on the crew but also looking into the owner of the ship, digging into the company that owned the ship and also its reclusive billionaire owner.

Our Nic Robertson is live in Jindo, South Korea, this morning.

Nic, I'm wondering what the latest is. And I know that a joint task force of sorts was coming to the harbor where you are to meet with some of the families? Is that correct?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: That is. The families have been pretty angry. Some of them were taken out to the search site today, and they say they barely saw any divers working. Civilian divers have been pulled off. It's only the navy divers working on the operation now. The family members are getting desperate. One woman said she looked to see my daughter before her body decomposes. There's a real level of frustration for the remaining families. They're also saying the tides are going to get faster, harder to work in over the next couple days, the weather's going to get worse over the weekend.

There's an element of a race against time, so a lot of frustration. The investigation into the ship's owner, so far, no prosecution, no arrest from the police, but it is raising a lot of questions about his role. We've heard from employees, the crew saying there were problems with the ship's operation with its steering, also alterations made to it -- Poppy.

HARLOW: Why did this happen? How could this happen? That is the question.

Appreciate it, Nic. Thank you.

BERMAN: President Obama taking on Russia this morning, blaming the Kremlin for the crisis in Ukraine and promising new sanctions. We're live with what the president's been saying overnight.

HARLOW: And Jeb Bush giving perhaps his most revealing comments about 2016. Is he ready for a run for the White House? That's next.

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HARLOW: President (AUDIO GAP) this morning, where in just over an hour, he'll take part in a state dinner with the emperor. But first, the president again taking aim at Russia.

White House correspondent Michelle Kosinski is live in Tokyo, traveling with the president.

What did he have to say overnight?

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Hi, Poppy. Of course, this topic is going to come up. It's overshadowed virtually every presidential appearance over these last many weeks, and the questions always revolve around sanctions. We know that the administration has had additional sanctions teed up and ready to go against Russia, charging more individuals, possibly more entities like banks or companies.

But the question has been additionally, why? Are they working? What good do the sanctions really do?

The administration has insisted that they feel sanctions have been a deterrent, that Russia hasn't invaded Ukraine, at least not on a full- scale military sense. But the president sounds increasingly pessimistic. I mean, administration officials were calling it progress a week ago, that Russia even sat down at the table with Ukraine, signed an agreement to take concrete steps to de-escalate the situation, but that appears not to have happened.

Here's what the president said today. (BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: (IANUDIBLE) Instead, we continue to see --

(END VIDEO CLIP)

KOSINSKI: So, when will we see additional sanctions? The president wouldn't put a real time frame on it, and we've heard different things from different administration officials over the last week or so. I mean, first it sounded almost like a deadline that Secretary of State John Kerry was giving, saying let's see what happens through the weekend. And Susan Rice said, well, let's look and see in coming days.

Well, today President Obama said it will be days, not weeks, of waiting and seeing how Russia handles the situation, because it really doesn't seem to be doing much, if anything at all, to de-escalate. So, that's when we should see sanctions, still coming days -- Poppy.

HARLOW: You know, that is completely dominating this trip. I mean, overnight also talks between the United States and Japan for a major trade agreement fell through once again, and that's certainly not getting the attention.

KOSINSKI: Yes, well there was no major breakthrough. We're not sure whether they have fallen through. Going into this trip, there was something of a stalemate. U.S. officials have said Japan really needs to step up more, open up sectors of its economy, like cars, agricultural products, especially rice and beef, and that Japan really hasn't put in enough to a trade deal.

Well, today, President Obama described the talks as making some progress. He didn't really characterize it in detail, but he did say that the Japanese prime minister agreed that something needs to be done with their economy. He admitted that the stagnation that they've seen in recent years, you know, they really need to push forward. And of course, President Obama feels that this trans-pacific trade partnership is one way to help that situation, Poppy.

HARLOW: Thanks so much, Michelle. We appreciate it. We'll get back to you later in the show.

BERMAN: Forty-six minutes after the hour right now.

News that could have a lasting impact on the U.S. military. Some of the Army's youngest officers may be forced to retire. Chief of Staff General Ray Odierno says that the Army plan to ask some 2,000 troops, mostly captains and majors, to leave the service for budget reasons. The army being forced to slash its costs in the coming years, and by the time the cuts are done next year, the Army will have reduced its force by about 30,000 positions.

HARLOW: Jeb Bush now saying he is thinking of running for president. The former Florida governor and son and brother of two former presidents revealing that at an event in New York. Bush has in the past only said he'd make a decision later this year, but these comments really the first direct indication of his plans going forward. But still, the big question remains.

BERMAN: Yes, to be fair, I think he's considering not running as well, so.

HARLOW: Right. Running, not running, considering.

BERMAN: Forty-seven minutes after the hour.

A new report is revealing what investigators know about Flight 370's disappearance, but it's all a secret, and families of those on board are frustrated. They're beyond frustrated. They are furious. We're live in Beijing with what they're saying this morning, coming up next.

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BERMAN: We're hearing this morning from the families of those on Flight 370. With no debris found more than six weeks after the jet disappeared, they say now enough is enough, insisting it is time to re-examine the search, and they want to know more about what authorities think happened, including the findings of this preliminary report from the Malaysian government on the disappearance.

Ivan Watson is with the families in Beijing.

And, Ivan, I have to imagine they're not one bit happy this morning.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: No, but they've been pretty much maintaining a state of outrage and frustration for really weeks now. We asked one woman about this object of interest that washed up on the Australian coast, whether she was disappointed to learn that it wasn't at all related to the missing plane, and her answer was, I don't trust any of the information they give us anymore. So, that gives you a sense of how much suspicion there is and doubt coming from the families of the passengers of the plane.

And one other example -- you know, this woman is sharing through social networking sites with the other families photos of herself with her missing husband, you know, celebrating a birthday together with, like, cute little birthday hats, and I saying, "Honey, I can't wait for you to come home." And I think that symbolizes, underscores how much many of the next of kin really believe that their missing loved ones are still out there somewhere. They're really still holding out hope.

And as one clinical psychologist that I've talked to who has helped deal with the families and helped guide them and who has helped survivors and next of kin of another aerial disaster, he said that this hope could be really damaging, that the fall, the downfall could be much, much worse down the road as a result of the unrealistic expectations that may have been built for some of these people.

But the final element to this is the dysfunctional relationship between the families' committees and the Malaysian authorities themselves, who have pledged numerous times over the last two weeks to meet with the families and just have not done it, have not shared information that's being shared with this international aviation organization but is being kept secret from the rest of the world and from the families.

If you look at the Korean ferry disaster, within 24-36 hours, audio recordings of the last communications between the crew of that ferry and the mainland were being shared to the international community. In the case of this plane, nobody has heard, nobody in the outside world has heard the communications over the radio between the plane's crew and traffic control, and that's something the families have asked for, and it is a request that has not been honored by the Malaysian government -- John.

BERMAN: I think there's no question, whatever the healing process is supposed to be, it is being severely hampered by the communications right now from officials.

Our Ivan Watson in Beijing -- thanks so much.

HARLOW: Meantime, this morning, we have new information about that teenager who flew from California to Hawaii inside of a plane's wheel well. We'll give you all those details after the break.

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HARLOW: Breaking news out of Afghanistan, where officials tell CNN three Americans have been killed outside of a children's hospital in Kabul, this after a security guard opened fire, then turned the gun on himself but survived. He is now being questioned by authorities. Another woman, also a U.S. citizen, was shot. She survived and is being treated for her wounds. We'll let you know more as soon as we have it.

BERMAN: All right, this morning we're hearing from the father of the teenaged boy who stowed away in a plane's wheel well on a flight from California to Hawaii. He's saying that his son had trouble in school in California and was talking constantly about returning to Africa, where he was born.

Authorities say the teen was trying to get to Somalia when he scaled a fence and hid inside the wheel well. This morning the 15-year-old is being treated at a hospital. Doctors say it's a miracle he survived the cold and lack of oxygen at 38,000 feet.

HARLOW: Breaking overnight, the FDA is imposing tough, new rules on electronic cigarettes, restricting who they can be sold to and how they can be manufactured. The regulations would ban the sale of e- cigarettes to anyone under 18, also requires makers to get FDA approval for their devices. But manufacturers will still be able to market these products online, sales of e-cigarettes, a huge market. Sales expected to be about $2 billion this year alone in the United States.

BERMAN: This could change an industry that really right now has been the Wild West in terms of regulation.

HARLOW: Totally Wild West.

BERMAN: All right. EARLY START continues right now.