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EARLY START

A New Government for Iraq?; V.A. Hospital Scandal: Death Cover- Ups?; Severe Storm Threat; World Cup Latest

Aired June 24, 2014 - 05:00   ET

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


MIGUEL MARQUEZ, CNN ANCHOR: Can a new government save Iraq as terrorists move on to Baghdad? Secretary of State John Kerry promises U.S. support if the country's ethnic groups can come together and compromise. We are live in Iraq with what's happening today.

CHRISTINE ROMANS, CNN ANCHOR: Shocking new allegations about the secret wait list at V.A. hospitals. Whistleblowers telling CNN records were changed to cover up the number of patients who died waiting for medical care. Lawmakers demanding answers on Capitol Hill, late into the night. We're breaking down all the developments this morning.

MARQUEZ: Tornadoes tearing through the Midwest, communities flooded with water and there are more severe storms are on the way. Indra Petersons is tracking what you need to do.

Good morning. Welcome with EARLY START. I'm Miguel Marquez.

Good to see you back.

ROMANS: Nice to see you. Thanks, Miguel.

I'm Christine Romans. It's Tuesday, June 24th. It's 5:00 a.m. in the east.

Let's begin this morning in Iraq where Secretary of State John Kerry is getting a sobering assessment of the situation on the ground. Iraq's Kurdish president told Kerry Iraq facing a new reality. It comes a day after Kerry sat down with Prime Minister Nouri al Maliki, who has agreed to begin the process to form a new government.

Meantime, the ISIS push toward Baghdad is getting louder with conflicting reports of who has control of the largest oil refinery in Iraq. And the more red you see on this map, the more the extremist footprint continues to grow.

Let's get to Nima Elbagir in Baghdad live with the very latest.

And, you know, oil officials are telling us the southern part of the country where two-thirds of the oil output is, is still safe. When you look at the red stain spreading through Iraq, clearly is a very, very difficult time right now. Bring us up to speed.

NIMA ELBAGIR, CNN CORRESPONDENT: It is incredibly tense here, Christine. And that tension is only ratcheted even further by these with the claims of who actually does have control of Baiji, which is the major domestic refinery here in Iraq.

We are already seeing just the impact of the battle for control. We're seeing it translate into pews that stretch for hours in the north of the country, and the impact that that's having on the morale that you can appreciate. It's already pretty, pretty low in what remains under government control in the north of the country.

There was one message that Iraqis on the government side were looking for in Secretary Kerry's visit and they got it. That is help is on the way.

Take a listen, Christine.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: The support will be intense, sustained and if Iraq's leaders take steps to bring the country together it will be effective. It will allow Iraqi security forces to confront ISIL more effectively and in a way that respects Iraq's sovereignty while also respecting America's and the region's vital interests.

(END VIDEO CLIP)

ELBAGIR: The key phrase there, of course, was if Iraqi leaders take the necessary steps to bring the country together. This help from the U.S., it doesn't come without strings. They're going to need some movement on the political front to bolster the help, because the U.S. knows perfectly well that without some kind of a political resolution on the horizon to bring those Sunni tribes back over from the ISIS side, that any military support will be, you know, sticking fingers into the dam. It will only help in the near term. But the longer term solution that has to come from within Iraq itself -- Christine.

ROMANS: All right. What a mess trying to figure out how to fix it. Thank you so much, Nima.

Meantime, a new poll shows the American public is not pleased with the president's performance. "The New York Times"/CBS poll shows 58 percent disapprove of the way Obama is handling foreign policy. It's up 10 points from the last month. A slim majority, 51 percent, do support the decision to send 300 military advisers to Iraq.

MARQUEZ: And breaking overnight, startling new allegations of manipulation at the Veterans Administration. A key whistleblower says records were changed to show how many of them died waiting for care.

Speaking publicly for the first time, Pauline Dewenter told our Drew Griffin she was ordered by supervisors in Phoenix to make changes some within weeks as the waiting list scandal blew up.

(BEGIN VIDEO CLIP)

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Somebody is going on that electronic wait list and where people are identified as being dead, somebody is changing that saying, no, they're not dead.

PAULINE DEWENTER, PHOENIX V.A. SCHEDULING CLERK: Correct.

GRIFFIN: To hide the fact people died on that lift?

DEWENTER: That's my belief.

GRIFFIN: What would be any other purpose?

DEWENTER: There wouldn't be any other purpose.

(END VIDEO CLIP)

MARQUEZ: Now, meantime, lawmakers kept pressing for answers at a late night hearing. But V.A. officials could provide little clarity.

(BEGIN VIDEO CLIP)

REP. JACKIE WALORSKI (R), INDIANA: Under all the scrutiny, all the lights, all the spirit of full disclosure, Phoenix is still doing this kind of stuff and you guys have had them under a microscope and you physically have been there four times and this is new?

DR. THOMAS LYNCH, U.S. DEPARTMENT OF VETERANS AFFAIRS: Congresswoman, I don't know the details of the accusation.

WALORSKI: Could you provide it for us? When we're going to probably get -- I think the details were out. But could you provide the V.A. answer to that in a timely manner?

LYNCH: I will certainly try, as I understand it.

(END VIDEO CLIP)

MARQUEZ: Now, it is unclear if this activity stretched beyond the Phoenix facility. Dozens of centers are currently being investigated.

ROMANS: The Treasury Department will investigate just how the IRS lost thousands of e-mails to and from ousted administrator, Lois Lerner. The IRS commissioner told a House Oversight Committee, the investigation has already begun. The IRS says Lerner's hard drive crashed in 2011 and e-mail data was lost. The back up system only retained emails dating six months at a time. The commissioner took the hearings chairman to task for suggesting he was holding something back.

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA (R), CALIFORNIA: You didn't tell your I.G. that some of the documents weren't going to be provided? Or did you cause someone to find out at the White House, at Treasury, or you're I.G.?

JOHN KOSKINEN, IRS COMMISSIONER: I did not. If you have evidence of that, I'd be happy to see it.

ISSA: I asked you a question. KOSKINEN: And I answered it. I did say I would provide you emails,

that disappear if you have a magical way for me to do that. I'd be happy to know about it. In fact, we are going to provide you 24,000 e-mails from the time --

ISSA: My time has expired and I have lost my patience with you.

(END VIDEO CLIP)

ROMANS: This is the seventh investigation over the IRS targeting conservative groups. White House attorneys will testify before the committee tomorrow.

MARQUEZ: Wow! Rough and tumble.

ROMANS: Yes.

MARQUEZ: Happening today, a hearing for the House Homeland Security Committee to discuss children coming to the U.S. without their parents. More than 15,000 kids have crossed the border for Mexico alone since October. The U.S. said it doesn't have the resources to care for all the children. Vice President Biden met with leaders in Central America to discuss the problems.

ROMANS: And those countries don't want the children back.

MARQUEZ: Well, look, it's impossible for the U.S. because if the parents are there, they've got to get them back. If the parents were here or somewhere else, they're trying to get them here, it's a really tough situation.

ROMANS: And many of those country, officials are saying don't send them back to us, because we don't have the ability to take care of them, either. It's remarkable.

MARQUEZ: The kids have to go with their parents, wherever they are. They have to go through some system which is also the problem because they are minors. It just clogs up the entire system.

ROMANS: All right. A federal court of appeals releasing a memo justifying the 2011 drone attack that killed Anwar al-Awlaki. He was a U.S. citizen who defected to al Qaeda in the Arabian Peninsula. The memo saying the White House believed it was legal to take out the cleric, as long as he posed an imminent threat. But redacted portions leave several questions about why he was a threat. Why he was a threat, that was left unanswered.

MARQUEZ: President Obama with a push to help expand family benefits for the working class at a White House summit. He urged the government and businesses to allow flexibility for family leave and child care. Obama points to a lack of paid maternity leave. He says the U.S. is the only developed country that does not mandate it. He says outdated policies are increasing challenges facing working parents.

And on the hills of Hillary Clinton's comments about her family's money, Vice President Joe Biden gave a look into his own finances. It turns out, he doesn't have much in the bank. Poor Joe.

Biden says he doesn't own any stock. He doesn't have a savings account, although his wife does. White House disclosure forms backed all this out. Both claims for his part, Biden says he has a great pension and a good salary.

ROMANS: Now, for the record, he should be saving 10 percent.

MARQUEZ: He should be saving more.

ROMANS: He should be saving 10 percent, and then investing another 10 percent. But there you go, way to go, Joe.

MARQUEZ: A lot of grand kids, I suppose.

ROMANS: Time for an EARLY START on your money.

Futures pointing slightly lower this morning. Yesterday, the major three averages end of the day mixed. The Dow broke a seven-day win streak. The Dow very close, Miguel, to 17,000.

That would be another big milestone in what has been a phenomenal run. It closed above 16,000 for the first time ever just seven months ago.

European shares right now are mixed on lower than expected business confidence in Germany. Asian stocks ended the day higher. We're still watching these tensions in Iraq, weighing on the oil market. Oil prices pulled back slightly from $107 a barrel we saw last week.

Some Wall Street watchers are saying that there's some complacency in the oil market. Exports from Iraq have remained unaffected, though, by the insurgents' advance on Baghdad, that's easing fears of the supply destruction. So, my sources were saying, they think they're actually going to see record post-war exports.

If the southern part of the country can stay out of the hands of ISIS, that production is going to keep going.

MARQUEZ: Well, it's mostly Shia. There's not a lot of production from Iraq. But I take it anything the oil creates --

(CROSSTALK)

ROMANS: Absolutely. Absolutely.

All right. To other problems, what millions waking up to the threat of dangerous storms one day after tornadoes tore through the Midwest.

Indra Petersons is tracking what you can expect today.

Tell us something good, Indra.

ROMANS: Well, she will after the break, my friend.

MARQUEZ: Oh, yes.

ROMANS: Plus, Donald Sterling trying to prove he hasn't lost his mind as his wife tries to sell the L.A. Clippers without his consent, next.

(COMMERCIAL BREAK)

ROMANS: Wow, millions in the Midwest waking up to heavy damage after some violent storms rolled through.

I want to look at this picture in Ohio -- 20 miles southwest of Cleveland, trees uprooted, roads flooded, roofs missing from homes.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: My ears started to pop, there was a huge boom. I looked out the window and I saw debris flying at an angle headed like in a northwest direction, assuming coming from this area since it was going at this diagonal. I watched the aluminum siding peel off the houses, and then I ran for the basement.

(END VIDEO CLIP)

MARQUEZ: This is going to be an every day occurrence. Check this out. In southern Minnesota, torrential rains turned a chunk of roadway into a river. Several bridges were also shut down when the rising waters reached the road.

ROMANS: I flew over there on Sunday. Unbelievable.

And in Iowa, Cedar Rapids looked like a swimming pool. Still, water -- rushing water -- there was water everywhere. A disaster proclamation of an issue for eight counties in Iowa.

Indra Petersons has a look at your forecast.

More severe storms in the forecast today. So, that water has enough time to dry up before more comes.

PETERSONS: The last thing you want to see is this much green on the map, right? Especially with all these flooding concerns and more showers are going to be in the forecast for Cedar Rapids, also in through Minnesota. But, yes, the severe weather threat, still again today, right around Colorado, especially a little bit farther south into that panhandle of Texas. About 3 million of you, you have that threat.

But, generally speaking, everyone else looking for that afternoon type thunderstorm activity. Northeast watching a couple of fronts kind of swinging through the next couple days. We'll see more of those showers kind of picking up.

Now, today, the bull's eye kind of Upstate New York, really, places like Pittsburgh, Cleveland, you are going to see the heavier rain today, in comparison to yesterday. And by tomorrow, with those fronts swinging through, we're going to shift into some of those bigger cities. The Boston, New York City, Philly, even D.C. will start to get some of that rain, going into through tomorrow, kind of lasting through Thursday or so. Temperature-wise, still hot, not too bad, average -- remember, we're

kind of seeing that weather we should be this time of year, a lot of 80s, even 88, that hot and muggy feeling is out there, 90s in the Southeast. Notice behind the cold front that swing through, we will see a little bit of a cool-down maybe into the Upper Midwest. Otherwise, look at that, 101 out towards El Paso. It's dry and hot, thank you on that one.

ROMANS: All right. Thanks, Indra.

MARQUEZ: Thanks, Indra.

The FBI says nearly 170 victims of child sex trafficking have been rescued in a nationwide crackdown in the past week. And more than 280 alleged pimps now behind bars. They conducted a sting in more than 100 cities this year as part of the Innocence Lost Program. Some 3,600 children have been rescued since 2003. Officials say children are increasingly being prostituted online.

ROMANS: New details on the murders of two police officers and a bystander in Las Vegas earlier this month. It turns out the shooters had much bigger plans in store.

Police say Jerad and Amanda Miller were heavily armed carrying armor- piercing bullets and wearing adult diapers. They planned to hunker down inside a Wal-Mart and kill as many officers as possible. Both suspects died at the scene.

MARQUEZ: Who comes up with these plans? My God.

A new report cites crucial missteps but no evidence of political interference in the Jerry Sandusky investigation. It took investigators nearly three years to arrest the former Penn State assistant coach. He's now serving 30 to 60 years in prison. The state attorney general ordered the report after suggesting Governor Tom Corbett may have delayed the investigation when he was attorney general.

ROMANS: All right. Aaron Hernandez due back in court today for a hearing in the 2012 double murder of two men outside a Boston nightclub. The ex-NFL star also charged in the murder of a semi-pro football player in 2013. Lawyers for Hernandez are now asking for unedited news footage from when a warrant was served at his home, attempting to contradict police testimony in that case.

For more on the story, don't miss "Downward Spiral: Inside the Case Against Aaron Hernandez" tonight at 9:00 Eastern on CNN.

MARQUEZ: Such an unbelievable source.

ROMANS: It really is.

MARQUEZ: So much way incredible.

New developments in the saga, literally, to pry the Los Angeles Clippers away from Donald Sterling. Attorneys for Shelly Sterling and Steve Ballmer went to court to try to remove Donald Sterling from the process. Ballmer is trying to make sure he can avoid buyer's remorse. But the long-time owner is still standing in the way.

CNN's Sara Sidner is in L.A. with more.

(BEGIN VIDEOTAPE)

SARA SIDNER, CNN CORRESPONDENT: Very clear in court is that Shelly Sterling's attorney and Steve Ballmer's attorneys want to make sure that Steve Ballmer, the former Microsoft CEO who plans on buying the L.A. Clippers for $2 billion, is not going to be sued from now until eternity by Donald Sterling. They are trying to get a judge to approve that what is in that trust does make Shelly Sterling the sole trustee and therefore able to sell the team.

Now, here's what happened -- the defense, Donald Sterling's attorney says, no, no, no, the judge should actually be looking at whether or not he is truly competent or incompetent mentally.

Now, there are two doctors who have said that he is not competent and that is in the court record. But Donald Sterling's attorney says they have another expert that they should be able to bring in to say that he is competent, that he should not have been removed as a trustee. That's what the fight is all about.

ADAM STREISAND, ATTORNEY FOR STEVE BALLMER: This trust says you give me two doctors who say he doesn't have capacity, we're done, she's the trustee, and she can enter into that deal.

BOBBY SAMINI, ATTORNEY FOR DONALD STERLING: Our position is he didn't lack capacity. That the two doctors that were brought in and gave their opinions were essentially brought in for a particular purpose and they got it. I think, you know, most people would agree that's probably not an equitable way to resolve this.

SIDNER: The judge asked the attorney to file their motions, get all their paperwork in and he'll look at all this next week.

Guys, back to you.

(END VIDEOTAPE)

ROMANS: Wow.

All right. Another primary day and test for the Tea Party in Mississippi. State Senator Chris McDaniel is trying to unseat long time Republican Senator Thad Cochran in a runoff election. The polls show McDaniel narrowly leading that race. He's looking to capitalize on Tea Party momentum since House Majority Eric Cantor was beaten by a relative unknown in Virginia. Cochran is seeking his seventh term in the Senate.

MARQUEZ: It's going to be one to watch.

ROMANS: Oh, yes. MARQUEZ: Six Southern states voting today, including New York. That's where 84-year-old Representative Charles Rangel is facing perhaps the toughest primary. Four decades in Congress. He's being challenged by Adriano Espaillat who has lost to Rangel by about 1,000 votes two years ago.

Harlem is shifting in demographics and could spell defeat for Rangel who's been dogged by ethical issues.

ROMANS: All right. Tough love from rock star Sting, telling his six children not to expect much cash from him. The former Police front man grew up in a tough nosed British shipbuilding town. He's now worth about $300 million and he says he plans to spend most of it himself, instead of burdening his children with massive trust funds.

MARQUEZ: That's nice.

ROMANS: I shouldn't expect $300 million from my parents either, but my parents don't have $300 million. If they did, I'd be mad.

MARQUEZ: He's going to spend it all himself. What is he going to spend it on?

ROMANS: I don't know.

All right. World Cup final round shaping up. Who's advancing and who's falling short? Andy Scholes is breaking it down for us in the "Bleacher Report", next.

MARQUEZ: Work cut out for him.

(COMMERCIAL BREAK)

ROMANS: All right. While we all wait for Team USA's big game against Germany on Thursday. Mexico came through with a huge win. The round in 16.

MARQUEZ: And Andy Scholes, he's in for the "Bleacher Report" today with everything going n in the World Cup.

Andy?

ANDY SCHOLES, BLEACHER REPORT: Good morning, guys.

All Mexico needed to advance was a draw. After not scoring against Brazil, they wanted to have a good performance heading into the knock out round. Now, their game was tied at 0-0 in the 64th minute, when (INAUDIBLE) shot is blocked, it look like a handball. Mexico's coach, Miguel Herrera, he was not happy in that miscall. They would still be scoreless in the 77th minute when Rafael Marquez gives Mexico on the board with a header off the corner. Herrera pretty pumped about that.

Mexico go on to score two more goals in this game. They were thrilled. They win the game, 3-1. They advance out of group A.

Now, also advancing out of Group A yesterday was the host country and favorite to win it all, Brazil. Their superstar Neymar had two more goals. He now has four in the World Cup. Brazil beat Cameroon, 4-1.

There are another full slate of games today. But, of course, we are all watching for Thursday's pivotal matchup with Germany. Team USA needs at least a tie to guarantee a spot in the round of 16. A loss and we're going to need some help. Kick off is at noon eastern on Thursday.

All right. Trending on breacherreport.com this morning, 17-year-old Chelsea Baker made history last night, becoming the youngest female to ever throw batting practice at a big legal game. Baker has a nasty knuckleball. She threw the summer race's top hitters, he even caused a few swing and misses, guys.

They call her the knuckle ball princess. She's just amazing. Look at these pitches.

She once went 5 1/2 years without losing a game. She says he hopes to one day play college baseball, maybe even professionally. Good luck to her with a knuckleball like that, who knows, the sky is the limit.

ROMANS: Anything you can do, I can do better

MARQUEZ: I want to be called the knuckleball princess, please?

ROMANS: OK, you got it. I'll make you a little --

SCHOLES: You were called that in high school.

ROMANS: Yes. And I've got to tell you something, Thursday at noon is when American business productivity drops off.

SCHOLES: Shuts down. You know the number yet, Christine? The productivity that will be lost?

ROMANS: A hundred percent, 100 percent productivity lost starting at noon on Thursday. Thanks, Andy.

SCHOLES: All right.

ROMANS: Knuckleball princess.

MARQUEZ: Yes.

ROMANS: All right. Breaking news this morning, Secretary of State John Kerry moving through Iraq, trying to broker a new government. Is that going to be enough to stop terrorist from taking over the entire country? We're live in Baghdad, next.

(COMMERCIAL BREAK)