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EARLY START

President Obama to Delivery Major Speech; Ukraine Pledges to Oust Separatists; A Look at Stocks; Search for Flight 370 Moving to Next Phase

Aired May 28, 2014 - 05:30   ET

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


JOHN BERMAN, CNN ANCHOR: And developing overnight, Donald Sterling vows to fight back against the NBA, revealing his new legal strategy to keep the L.A. Clippers in his hand.

The shorthand for his strategy is this is going to be ugly.

Welcome back to EARLY START, everyone. I'm John German.

CHRISTINE ROMANS, CNN HOST: I'm Christine Romans. Thirty minutes exactly past the hour.

First, a breaking news from Afghanistan. An attack has left two Americans hurt in the city of Herat. That's in the far western part of the country, near the Iranian border. The Americans were in a vehicle from the U.S. consulate and there are reports they were fired upon with a rocket propelled grenade. The Americans are being treated for their injuries said to be light.

BERMAN: The USS Bataan is on its way to Libya this morning. Officials sending the warship and some 1,000 Marines as the country continues to spiral out of control. Americans are now being advised to leave Libya immediately due to what the State Department calls an unpredictable and unstable security situation. The warship and the Marines will be there to help with any possible evacuations.

ROMANS: Meantime today President Obama will talk to the graduating class at West Point. But this speech will be more than just another commencement address. The president is set to recalibrate his foreign policy plans and detail the U.S. role in the world going forward. It comes a day after he announced the future of U.S. troops in Afghanistan.

Thousands will remain in Afghanistan for the next year before almost all are withdrawn by the year 2016.

Jim Acosta has more this morning for us from the White House.

ACOSTA: John and Christine, President Obama will answer his foreign policy critics in a speech to graduates at West Point later today after more than a decade of war in Iraq and Afghanistan. Aides to the president saying now is the time for the U.S. to redefine its leadership in the world. The president's vision, officials say, is for the U.S. to intervene in foreign crises but not act unilaterally. In recent weeks, the president has come under heavy criticism over his handling of the civil war in Syria and the crisis in Ukraine. But White House officials say the U.S. now has greater flexibility to tackle global challenges with the war in Afghanistan winding down. The president laid out his plan to dramatically reduce troop levels in Afghanistan in a speech at the White House yesterday.

(BEGIN VIDEO CLIP)

OBAMA: The bottom line is, it's time to turn the page on more than a decade in which so much of our foreign policy was focused on the wars in Afghanistan and Iraq.

(END VIDEO CLIP)

ACOSTA: The president's plan for Afghanistan will call for less than 10,000 troops in that country next year and only a fraction of that as he leaves office in 2017. A group of Republican senators led by John McCain attacked the president's proposal as a monumental mistake -- John and Christine.

BERMAN: Our thanks to Jim for that report.

So one of the biggest international flashpoints facing the U.S. right now is the bloody violence in Ukraine. Sanctions against Russia appear to have little effect so far. And now the new president-elect in Ukraine is promising to ask for more U.S. military help in the fighting there against the pro-Russian militants in the east. This a day after government forces ended a militant takeover of the Donetsk airport. The battle there leaving dozens dead.

Our senior international correspondent Nick Paton Walsh is live in Donetsk.

And, Nick, it's fair to say that the government there has changed its course in dealing with the militants.

WALSH: It's definitely wanting to show that it has teeth in this military operation in the past 72 hours. A more recent example of that is over the skies of Donetsk, a city of about a million people. There's been a jet flying for the last hour. Quite low. Low enough to make the roar of its engines very audible as people going about their daily business here. And it does feed into a campaign the separatists have been pushing yesterday that somehow a deadline passed yesterday after its bombing was a possibility. That's something the Ukraine officials themselves denied.

But it feeds into that climate of tension here, the violence at Donetsk airport on Monday. The most extreme that I have seen in terms of clashes and heavy weapons used since this crisis began. We don't know the full death toll. We know that 40 are dead according to the mayor, including two civilians, most of them pro-Russian separatist militants. But we also don't know quite what happened inside that airport building. That's still held by Ukrainian forces who say they suffered no casualties. But it marked a significant change. Before that most Ukrainian military operations have been pretty ineffectual in trying to assert control. This is quite different, helicopters and jets being used, palpably the new president, Petro Poroshenko, wanted to show the military force was an option for him.

The question we have to ask now is official results from these elections are due in the next few hours or so, no doubt that Petro Poroshenko has won, but that gives the opportunity then for potentially more international recognition. Well, Moscow, then saying, OK, we congratulate you, Petro Poroshenko, let's talk. Is there a negotiated move from this? Is the violence we've seen Kiev trying to show they have force is an option before they sit down and talk or is this actually about a military solution?

Remember, John, importantly, NATO are now saying they have signs of Russia's troops. The Kremlin said we're on the move away from the border weeks ago. They say they're now actually seeing signs of them withdrawing. That would definitely pull the rug from some separatist militants here who thought Russia was coming to their aid and it shows perhaps that the Kremlin wants to see publicly at least them talking about peace rather than saying they might come to the aid of their compatriots here if their lives or rights are in danger -- John.

BERMAN: Is this the turning point we've been waiting for? Nick Paton Walsh, live in Donetsk this morning. Thanks so much.

Edward Snowden is speaking out this morning, telling NBC News that he was more than just a low-level hacker when he leaked reams of classified U.S. intelligence. Snowden insists he was trained as a spy, living and working overseas and was even given a fake name by the government.

(BEGIN VIDEO CLIP)

SNOWDEN: I worked for the Central Intelligence Agency, undercover, overseas. I have worked for the National Security Agency undercover, overseas, and I worked for the Defense Intelligence Agency, as a lecturer at the Joint Counterintelligence Training Academy where I developed sources and methods for keeping our information and people secure in the most hostile and dangerous environments around the world.

So when they say I'm a low-level systems administration, that I don't know what I'm talking about, I'd say it's somewhat misleading.

(END VIDEO CLIP)

BERMAN: A lot of energy he's putting into giving a sense of importance to his position there. This interview took place in Russia which has granted Snowden temporary asylum.

ROMANS: The top White House attorney is being asked to investigate how the identity of the CIA station chief in Afghanistan was compromised. President Obama was preparing for a briefing during his visit to Afghanistan Sunday when the names of everyone meeting with the president including the CIA station chief, those names given to the press and distributed on the White House e-mail list. The station chief's identity is classified. The concern now is he might be in danger.

BERMAN: The White House is putting on hold a comprehensive review meant to find a way to shield 11 million undocumented immigrants from being deported. Homeland Security Secretary Jeh Johnson was looking into ways to let immigrants stay in the country. But now the administration says it wants to focus more on pushing immigration reform in Congress.

The VA is refusing to confirm whether three of its top officials will show up at a House hearing tonight. Lawmakers want to ask -- wanted to ask them about an alleged cover-up at the VA hospital in Phoenix where dozens of veterans died allegedly because of an excessive treatment delays. If the VA officials do not appear before that committee tonight, Republicans are threatening to subpoena them.

ROMANS: Time for an EARLY START on your money today. A look at stocks around the world. They are higher after this blockbuster day on Wall Street. Here's where we are year to date. The S&P hitting the 12th record of the year. The Dow closing in on its record. S&P 500 up 3.4 percent.

Corporate profits driving stocks right now and the biggest beneficiaries of good corporate profits, CEOs. The "Wall Street Journal" just out with its annual list of CEO pay. Oracle's Larry Ellison taking the top spot. CBS' Les Moonves number two.

On average, CEO Pay was up more than 5 percent last year. The median pay was $11.4 million. That's about 225 times the median household income in America which has been declining down to about $51,000 in 2012.

I always love to put that first number and that third number on the same screen. It really is a tale of two different jobs. The guy at the top and the rest of us.

BERMAN: And we've been discussing this. I submit that I am the boss of nothing.

ROMANS: You're the boss of your mouth. You are the only one who can control what comes out of your mouth.

BERMAN: At this hour, even that is questionable.

(LAUGHTER)

All right. Thirty-eight minutes after the hour. Donald Sterling's fight to keep the L.A. Clippers, it's getting ugly this morning. In a formal response to the NBA Sterling blasts the league and the process. He says the NBA is violating his constitutional rights and it hasn't treated others the same way that it's treating him for making similar offensive comments. What he calls similar offensive comments.

Team owners are set to meet next week to vote on Sterling's his future. In a statement, the NBA says if they vote to sustain the charges against Sterling, his interest in the Clippers will be terminated and the team will be sold. In the meantime, his wife, Shelly Sterling, her attorney says she is working to try and sell the team, but has received no formal offers yet.

ROMANS: There will be offers. When the time comes, there will be offers.

BERMAN: Big, big offers.

ROMANS: Big offers.

All right. A campus in mourning remembering the six students murdered in a rampage last week. The message the father of one victim had for the crowd ahead.

(COMMERCIAL BREAK)

ROMANS: Southern California still in mourning today for the six people killed in a stabbing and shooting rampage near the campus of UC Santa Barbara. While many gathered Tuesday to remember the victims others say it's time this terrible tragedy finally leads to action on guns and mental health.

Our Kyung Lah has more.

(BEGIN VIDEOTAPE)

LAH: 20,000 students, people in the community, all filling this sports stadium here on the campus of UCSB. They are here to remember the victims. They are not here to talk about the crime or the shooter. They came to honor the six people who they lost.

UNIDENTIFIED FEMALE: George Chen. Kathryn cooper. James Hong. Christopher Ross Michaels-Martinez. David Weng. Veronika Weiss.

LAH: Also here at the memorial was a call to action by the father of Chris Martinez. Chris Martinez, just 20 years old, was at the I.V. Deli Mart getting a sandwich when he was killed. His father says that this needs to be prevented from happening again. He had this message for lawmakers in Washington.

RICHARD MARTINEZ, SON KILLED IN SHOOTING RAMPAGE: Not one more. Not one more. Not one more person should have to die because of this ridiculous situation.

LAH: This father and many people who are in this crowd say what will prevent it, what needs to happen now is a true conversation, a true national discussion about the proliferation of guns and the status of mental health in this country.

Kyung Lah, CNN, Goleta, California.

(END VIDEOTAPE)

ROMANS: Thanks for that, Kyung. I'm always just so odd by how parents in a situation like this can be so well-spoken in their grief. I mean, I just -- I look at him and I can't believe how he's able to channel that grief into something. It's just remarkable.

BERMAN: It may be therapeutic somehow but I agree with you. I don't think I could speak at all let alone in public.

ROMANS: It seems days of severe weather. Not letting up with a big thunderstorm threat today for millions in the south and middle part of the country. Those storms could lead to severe flooding.

BERMAN: In Texas, many are saying enough is enough. They can't go on. Another day of heavy rain causing this flooding in the Houston suburbs. More than four inches of rain fell there in just two days. Much of that area still under a flood watch through this morning.

ROMANS: Cleanup underway this morning in North Dakota where a tornado slammed into this trailer park not far from Bismarck causing all this damage. Nine people hurt, one seriously. Most of those living at that camp -- whoa -- they were oil workers and their families.

You can see the trailers. Trailers in the path of something like that, there is just no chance.

BERMAN: And Indra Petersons will tell you these people should have a plan if they are taking this video. Indra is tracking the storm threat for today.

PETERSONS: Yes. Always a plan. We got the thunderstorm morning about an hour before. If nothing else that's the time you really do want to think of a plan that you should have in place.

Talking about flooding, that's going to be another concern out there today. A lot of rain continues to fall into the southeast. Look at this amount, Houston saw five inches of rain since Saturday. San Angelo, over 6.5 inches in that region and the story is not over with yet. Notice this low very slow moving, still pulling all that moisture out of the gulf. So more heavy rain is expected over the next several days.

And not light amounts by any means. So another four to six inches we're talking in Louisiana and Mississippi. So the big threat here of course still remains to be the flood threat.

The other thing we're going to be looking at is the severe weather side of this. So the heavy thunderstorms around New Orleans today, we do have the threat for even tornadoes. Of course straight line winds, large hail also a possibility. Also out towards Montana.

The other big stories can be a lot of scattered thunderstorms we've been seeing the last several days. We're still going to be looking at them. Think about delays, especially for flying. Philly, Houston, D.C. All of you looking for the threat for more of those thunderstorms. Temperature wise, the big story, the drop continues. Boston already felt it yesterday, New York City, today about 58, notice D.C. 76 by tomorrow. They're dropping down as well. So I wouldn't call it chill after this winter, but cooler.

(LAUGHTER)

ROMANS: Cooler. All right. We'll take it. Thanks, Indra.

Let's take a look at what's coming up next on "NEW DAY." Kate Bolduan joins us now.

BERMAN: Fresh back from '60s.

ROMANS: I know.

(LAUGHTER)

KATE BOLDUAN, CNN ANCHOR, NEW DAY: That's exactly right, and feeling good. Thanks, all that free love.

We've got the --

(LAUGHTER)

We've got the very latest coming up in the show on the Donald Sterling side. The L.A. Clippers owner making it clear he won't go down without a fight. He's making that clear yet again in a scathing response to the NBA's efforts. He claims he's being unfairly singled out and that his racist comments don't violate his contract. But can he really fight the league on this?

And also, is his wife already selling the team as he's releasing his statement? We're going to be breaking that down.

And also today, President Obama is delivering a major speech at -- at the West Point graduation, outlining his vision of America's role in the world. So will his new strategy, will his speech, appease critics who have called his foreign policy passive, even weak in the past?

We are going to talk with his secretary of state, John Kerry. He'll be on the show, joining us live.

ROMANS: Fantastic, can't wait for that. Thanks, Kate.

BOLDUAN: Thanks, guys.

ROMANS: The underwater search for missing Malaysian Airlines Flight 370, it ends today, rather, but after months looking for clues, finding no answers, what is the next plan here? What are investigators going to do next? We are live in Malaysia right after the break.

(COMMERCIAL BREAK)

BERMAN: Welcome back, everyone. This is interesting. It is the end of the line for now for the Bluefin-21. The unmanned underwater drone today is ending its final mission, searching the floor of the Indian Ocean for Flight 370. This comes as investigators prepare for what they're calling the next phase in this search. Saima Mohsin is live in Kuala Lumpur with more.

And, Saima, give us a sense of how long before there will be underwater vessels searching again because they're essentially taking a few months off here in some ways.

SAIMA MOHSIN, CNN CORRESPONDENT: Yes, at least a few months, actually, John. And that's because there's going to be quite a lengthy process of them trying to find the vehicles for the next phase. What they're doing is, and they haven't done it yet, by the way, is first of all the authorities have to invite (INAUDIBLE) to get contractors to say, hey, we want to be responsible for the phase two of the search.

Once they have done that, they're going to carry on negotiations, they're going to have to nail down a contract. And then phase two will start. They are estimating that could take up to at least August before that starts. And this will then be, hopefully, many more underwater search vehicles employed under phase two. They're really going to try and ramp it up. So they want side scan sonar equipment.

Now what that will do in comparison to the Bluefin-21 is searching a much greater area under the water. The Bluefin could look around 40 kilometers square at a time. These side scan sonar vehicles, these towed scanners can look a far vaster area. Particularly the U.S. Navy Orion has one that it tows that will be able to look at a greater area if they can employ that in phase two as well.

BERMAN: All right.

MOHSIN: So they want to have many more vehicles searching a wider area -- John.

BERMAN: That's the plan, but will take months to implement that, you say.

Saima Mohsin for us in Kuala Lumpur, thanks so much.

ROMANS: All right. Possible arson now being investigated as the cause of a deadly fire at a hospital in South Korea. Police there are now questioning a man in his 80s in connection with that fire. A fire at the facility that treats people with dementia. The man himself was a patient there. Police say he is denying any role in the blaze. At least 21 people died in that fire, several others were injured, some critically.

All right. No driver? No problem. Google has its latest innovation showing you pictures of how it's going to take you from here to there without even touching the steering wheel. What it means for the future. Driverless cars. And an early check of your money, next.

BERMAN: And coming to CNN, a new series from executive producers Tom Hanks and Gary Goetzman. It is "THE SIXTIES: THE DECADE THAT CHANGED THE WORLD." We're talking the space rage, the cold war, what else?

ROMANS: Free love. BERMAN: Free love. Civil rights and so much more. The 1960s really reshaped Americans' lives in ways that still affect us today.

Be sure to watch. You can also set your DVR which is a terrific idea for the premier. That's tomorrow night --

ROMANS: They have that in the '60s, right?

BERMAN: They have a DVR just like in the '60s. The premier is tomorrow night 9:00 p.m. Eastern and Pacific right here on CNN.

(COMMERCIAL BREAK)

ROMANS: All right, welcome back. Let's get an EARLY START on your money this morning. This is the futures you're looking at. A higher open on Wall Street today. Banner day yesterday. Record for the S&P 500. The Dow, the S&P and the NASDAQ are all up now for the year. The S&P a little more than the others.

Health care expenses are growing and worker salaries aren't keeping up. That's according to a new study from Aflac. Employers are asking workers to contribute more to premiums, 56 percent of companies asked employees to pay a bigger share of premiums last night, 59 percent say they'll do the same this year.

For employees, that means less pocket money to cover unexpected medical bills. Two-thirds say they would not be able to handle the financial costs associated with a serious illness or injury.

All right. Google is giving the world a glimpse at its driverless car. The company has been building prototypes. This is the latest model. These cars don't have steering wheels, no pedals. They rely on software.

Just days ago California approved a new set of regulations to govern driverless cars. Right now, to take a car on the road it still requires a steering wheel in case of emergency and someone with a valid license behind it.

BERMAN: A car that relies exclusively on software.

ROMANS: Software. What could go wrong?

BERMAN: What could possibly go wrong?

"NEW DAY" starts right now.

CHRIS CUOMO, CNN ANCHOR: Breaking overnight, Donald Sterling fires back calling the NBA proceedings a sham. Vowing not to sell because of, quote, lover's quarrel went public. But is his wife already selling the team for billions? Yes, billions.

KATE BOLDUAN, CNN ANCHOR: Happening today, President Obama set to take on his critics in a major foreign policy speech. This just a day after announcing plans to pull out of Afghanistan. MICHAELA PEREIRA, CNN ANCHOR: Not one more. A massive and emotional outpouring in Santa Barbara. A huge vigil for those who died. The father of one of the slain students makes an impassioned plea to the nation.

CUOMO: Your NEW DAY starts right now.

ANNOUNCER: This is NEW DAY, with Chris Cuomo, Kate Bolduan, and Michaela Pereira.

CUOMO: Good morning. Welcome to NEW DAY. It is Wednesday, May 28th, 6:00 in the East.