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Pressure Builds on Governor Brewer; General Motors Recalls 1.4 Million Vehicles; Credit Suisse Accused Of Hiding $ From IRS; FBI Investigated First Ali-Liston Fight

Aired February 26, 2014 - 06:30   ET


CHRIS CUOMO, CNN ANCHOR: Let's bring in CNN political commentator Michael Smerconish from Philadelphia.

Good morning, counselor.


CUOMO: Thank you for being on NEW DAY.

This is the big question, will the governor veto the bill or not? And if she does, does she do it for matters of law or simply politics?

SMERCONISH: Well, I think she does. And I think she does it for both of those reasons. I should first tell you that I thought she would have vetoed it by now because I think that politically speaking, it's pretty much a no-brainer. Maybe I'm being distracted by looking at this through a national prism and not through the prism of Arizona politics, because to state the obvious, the Arizona state senate felt comfortable in passing this.

So, I think there's a tendency for many on the outside looking into to view through our own lenses and not maybe what's perceived at a local level. But the business stakes are just too high, I think, for her to do otherwise. I'm sure she's concerned about her own legacy. And I would be shocked if it went all the way to late Friday or even Saturday before she took that action.

CUOMO: This is a little complicated when you start digging at it because the law would probably pass constitutional muster federally if it gets challenged, because LGBT not a protected class under federal law, not a protected class under Arizona state law, three major cities in Arizona have created their own civil rights ordinances that protect the class, so legally, they may have a case.

So, I guess this speaks more to the trend of culture in the country. Is that what you think it's about? That this is a law that's seen as not nice by people?

SMERCONISH: Well, I think legally, it's a close call the way that you've described it, because you have on one hand those who say through the First Amendment, they have a right to pursue their faith. On the other hand, these businesses that we're talking about are places of public accommodation. So, we're not talking about the Catholic Church suddenly being forced to perform a same-sex marriage against their tenets. This is the baker, this is the photographer, this is the florist who because of a wedding coming up of a same-sex couple, asserts a religious objection.

But if they're holding themselves open to the public, if they're saying, you know, we're here for all commerce and they've got to leave to that because it becomes a very slippery slope. What if I'm the owner of a lunch counter and now I say pointing somewhere in the bible, I'm uncomfortable serving a couple that's biracial? I mean, I think it's opens a Pandora's box that Arizona can ill afford.

CUOMO: And perhaps by extension, you're going to see this play into the Republican politics as well. You see a lot of Republicans coming out saying, I don't like this law, I don't like this law. Gay marriage is one of these touch stone issues where the party needs to get its story straight, right?

SMERCONISH: Chris, that's the issue I was making reference to at the outset, because this I think bodes poorly for the GOP brand nationally. I'm sure that's why you saw Jeff Flake, I'm sure that's why you saw John McCain want to come out in opposition to this because they recognize that there's a lot of harm here that can be done for the party both in 2014 and 2016. It's just not the side of the issue that's trending in the way the American people are looking at it.

CUOMO: And yet, rigidly religious tend to be Republican. They feel they have a legitimate case here. You may alienate them. It's about self-definition. So, to be continued.

Let me ask you one more political question, Michael, before I let you go.


CUOMO: So, Speaker Boehner meets with the president. This is what the Republicans have been asking for, the Democrat to reach out, the president to reach out. Within hours, Boehner goes out and bashes him on the same old levels. Is this proof positive that the Republicans do not want to play with the Democrats?

SMERCONISH: Well, yes. But, you know, someone else could look at it and say the fact that they haven't met for 14 months bodes poorly for both of them. I happen to think it's a disgrace. I wish they'd be having a cocktail together on a regular basis. I think that incivility is borne of a lack of this kind of personal meetings.

You know, they did meet with regularity in 2010 and 2011. And I guess you could say they don't have a lot to show for that. But I think the American people are so sick and tired of this rote polarization and they would much rather see the president and the speaker of the house meeting on a regular basis. CUOMO: And now, you see, you know, obviously, Obamacare is still the big battleground, but the numbers are now at 4 million. At some point, will the numbers become compelling enough, Michael, where they start having a more civil debate about what the alternative is.

SMERCONISH: I took note of the numbers. I think the Obama administration is right to be gratified by the peek they are reaching. I keep asking the question of, who are those 4 plus million people, because this is not just a reflection of raw numbers. In order for that fiscal model to have stability, its needs to be a good cross section.

For example, are the young invincibles a large part of that poll? Or are these folks with a lot of preexisting conditions who are going to be economically speaking a drain on the system? And I don't know the answer to that question yet.

CUOMO: But that is the right question and, of course, the caveat is, it takes time. We all knew it would take time. Social Security takes time. All the entitlement programs would take time. But it is the right level of analysis and hopefully there will be better ideas that come out of one party or the other to improve the situation.

Michael Smerconish, you certainly improve our situation this morning.


CUOMO: Thanks for joining us. We'll have you again on NEW DAY.

SMERCONISH: Have a good day. Thank you.

CUOMO: You, too.


KATE BOLDUAN, CNN ANCHOR: Coming up next on NEW DAY, it's a NEW DAY exclusive -- the friend who found Philip Seymour Hoffman dead is talking to us about the actor and also his own big settlement with "The National Enquirer". What's behind that?

Plus, a very scary story from India. A leopard is terrorizing a town there. Why hasn't anyone been able to stop it? We're going to have the very latest.


BOLDUAN: Let's go around the world now starting in Turkey where opponents of the prime minister are staging mass demonstrations following new corruption allegation.

CNN's Arwa Damon has more.


ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: We just saw riot police moving towards the location where people are gathering. This round of demonstrations parked after wiretaps were leaked of the conversation between Turkish Prime Minister Recep Tayyip Erdogan and his son. The discussions centering around how to move and hide vast amounts of money. The prime minister is saying that these tapes were immorally edited together.

Either way, Turkey, a key NATO ally once again finds itself in the midst of political turmoil -- Kate.


BOLDUAN: Arwa, thank you very much.

And to India now where officials are on the hunt for a leopard that has injured several people, forced schools to close but has evaded capture even after being cornered inside a hospital.

Here's CNN's Sumnima Udas with story.


SUMNIMA UDAS, CNN INTERNATIONAL CORRESPONDENT: Pandemonium in a busy city, just 40 miles north of New Delhi, after a leopard crawled to an upscale neighborhood and inside a hospital where it wandered through several wards and remained there for 10 hours. Wildlife experts fired tranquilizing darts, but still, the leopard managed to jump out of a concrete scene and escaped. A massive hunt is now on schools and markets shut, many in the area terrified of this lurking leopard after it mauls more than five people.

Back to you, Kate.


BOLDUAN: Sumnima, thank you very much.



We want to look at this huge recall growing bigger this morning. General Motors announcing it is expanding its recall for faulty ignition switches to include nearly 1.4 million vehicles. The problem is now linked to some 31 crashes. The number of deaths resulting from the issue has now been revised up to 13.

We want to bring in Mike Austin. He's the automotive editor for "Popular Mechanics."

Good to have you here this morning with us.

Let's talk about this. It doubled. The numbers have increased. There's more models involved, 13 fatalities.

Tell us about the significance and the size of this recall. This is really -- is it unprecedented? MIKE AUSTIN, POPULAR MECHANICS: It's not unprecedented, but the size is huge. It would be -- based on between 2013, it'd be the second largest recall compared to all the recalls last year. And fatalities are very rare in terms of automotive recall. So --


AUSTIN: This is -- it's a really big deal and I think G.M., the expansion of the recall shows how seriously are --

PEREIRA: Is there anything that owners can do specifically? They're talking about this ignition switch. What is G.M. advising owners of these vehicles to do?

AUSTIN: So, what's happening is the car is switching off. The switch is faulty and it turns the car -- so G.M. is saying --

PEREIRA: And it disables the airbags?

AUSTIN: Right. And G.M. is saying take everything off the key ring, including the key fob, the remote, just have the key on it. And, obviously, if you have anything happened with the car, if you have any issue, you know, go to a dealer and they'll work something out with you, because you shouldn't be driving it if you actually have the incident that they're -- you know, the recalls --

PEREIRA: Are they changing the ignition switch? They're putting different ones in the newer models, correct?

AUSTIN: Yes, they're putting in a new switch. I mean, the original recall had to do with a part that was out of spec. And they didn't realize there was a problem with it. So, they're replacing those parts. But they won't have the parts until April. So, if your car is part of the recall, you have to I guess you have to watch it carefully.

PEREIRA: G.M. has actually released a statement. Let's read it to you. "Ensuring our customers' safety is our first order of business. We're deeply sorry. And we're working to address these issues as quickly as possible." That's the G.M. of North America president, Alan Batey.

These problems date back to, what, 2004, 2005? Why only now the recall? What took them so long?

AUSTIN: You know, it's hard to figure out when something actually is a problem based on a faulty part or, you know, something goes wrong. They had a bulletin where they knew that this was something going wrong, but it didn't expand to a safety issue until recently.

PEREIRA: And, you know, the more technological our cars get, I suppose not with this incident, but the more difficult it is to pinpoint where these troubles start.

AUSTIN: It's hard to -- cars are hugely complex. It's hard to figure out all the things to go wrong. But interesting thing is, nowadays, it's a lot easier to track everything down because they have all of that data and all the technology to figure it out, you know, the specific parts in the specific models affected.

PEREIRA: Mike Austin from "Popular Mechanic," thanks for walking us through that.

AUSTIN: Thanks.

PEREIRA: All right.

Kate, Chris?

CUOMO: All right. Thanks, Mick.

The weather has turned bad again. A lot of people are going to deal with dead car batteries and worse as the weak continues. So let's get to Indra Petersons, our meteorologist, to figure out what's going on.

What do we see?

INDRA PETERSONS, AMS METEOROLOGIST: For perspective, Chicago now is on track to be the third coldest winter since we've been keeping records. Why? Look at these temperatures. I mean, right now, with the windchill, 15 below. That's what it feels like out towards Chicago and the afternoon highs are not any better.

We're talking about temperatures, especially in the Upper Midwest, 20, almost near 25 degrees below average in the afternoon, high just 39 should be where you are. Just 11 degrees, that's what they're expecting, even once you look at New York City, below freezing today, just looking for 29.

By tomorrow, it's going to be miserable, already 24, 48 hours. Tomorrow expected to be even worse, we're going to start to see temperatures 30 below average in the upper Midwest and still looking at temperatures a good 10, 15 below down into the South.

Now, we are adding a little bit of snow to this as well. Not a lot, unless of course you're by the lakes, some lake effect snow will produce some higher amounts, otherwise, everyone else looking for a dusting or maybe under an inch.

Another huge story, keep stressing this, is what is going on out West. Why? Because they're expecting rain. Look at this -- we're talking about 11, 12 inches.

We're talking about below where they should be. We're talking about the driest they've ever been since we've been keeping records. That means 15 percent of the state has an exceptional drought.

Today, finally, they're talking about seeing rain. And it looks like by Friday, a huge storm expected to make its way into the area. That is good news. That, of course, it also means the threat for flooding. We're talking about 15 percent of the state talking about exceptional drought. This is something they really need.

BOLDUAN: They need it, yes. Thank you so much, Indra.

CUOMO: All right. Let's take a break.

Coming up on NEW DAY -- boy, it was one of the greatest moments in sports and history in general. Sonny Liston versus Cassius Clay, a fight for the ages just resonated for years. Now, a horrible thought coming out of new FBI documents that we're going to bring to you. Did the mob fix the fight? We'll lay out the documents for you and you decide.

PEREIRA: Plus, quite a battle on late night TV. Paul Rudd versus Jimmy Fallon and rocking it for the camera. It's our "Must-See Moment." Wait for it.


BOLDUAN: Welcome back. It's that "Money Time" part of the morning. Chief business correspondent, Christine Romans, is in our money center. What are you looking at this morning?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: I'm looking at stocks, you guys, making a run at record highs. Futures are up this morning. You know, stocks measure how much money companies are making and corporate earnings growth is the best since 2011. So, how are companies making that money? By cutting jobs. JPMorgan Chase cutting 5,000 jobs, blaming weaker mortgage lending and improving technology.

Look, you can get a loan and deposit checks with a click of a button. So, JPMorgan doesn't need as many people. The bank also raised its profit goal for the year.

All right. Another bank, Credit Suisse using cloak and dagger tactics to help rich Americans to hide their money overseas away from the IRS. Very James Bonds stuff here, guys. Secret elevators and special Zurich airport French, you can hit it right off the plane so your ski trip isn't disrupted so you could hide money from the U.S. government, this, from a Senate investigative report. A hearing is being held on that today -- guys.

BOLDUAN: I'd say so. I think that's a good reason for a hearing. Thanks, Christine.

ROMANS: You're welcome.

BOLDUAN: Amazing details coming out on that.

CUOMO: All right. This is a tough story to even talk about, but we have to. It's incredible new potential developments. You know, it is nearing the 50-year anniversary of the epic 1964 heavy weight title match. Boy, oh, boy. Just shock the world, right? That was the line.

Young up star, Cassius Clay, defeating Sonny Liston, one of the most feared boxing champions in history. Now, these recently unearthed documents that show the FBI looked into claims that the fight might have been rigged by the mob. What did they show? What did they prove? CNN's Pamela Brown joins us with that.

PAMELA BROWN, CNN CORRESPONDENT: That is the big question. Of course, there have been rumors swirling about this for decades now, and these documents may shed some new light on the rumors. As you pointed out there, Chris and Kate, a day after the 50th anniversary, the Muhammad Ali versus Sonny Liston boxing much, there are some new details emerging that may fuel even more speculation about this fairytale fight.

The FBI reportedly received tips from a couple of sources before the fight that it may have been fixed. And for the first time, we are hearing the FBI launched a brief investigation to the matter to confirm or deny the rumors.


BROWN (voice-over): Even 50 years after that bell rang, Muhammad Ali's underdog victory against then heavyweight champion, Sonny Liston, still has people mesmerized.

UNIDENTIFIED MALE: Another jawing (ph) right hand --

BROWN: Ali's round three pummeling of Liston cut open the heavyweight's eye, leading the expected winner on the sidelines. Liston bowed out of the fight right before round eight, the most surprising upset of the century, forever writing Ali into the history books.

UNIDENTIFIED MALE: I'm the king of the world!

BROWN: But now, four decade old FBI documents are surfacing, suggesting Ali's win may not have been as big of a surprise as we thought. These memos released to the "Washington Times" showed the FBI looked into whether the historic fight might have been rigged by Ash Resnick, a Las Vegas mobster, allegedly link to Liston.

According to "The Times," the pages sent directly to FBI head, Jay Edgar Hoover, stated Liston and the suspected mob boss both reportedly made over one million on the fight.

UNIDENTIFIED MALE: This is such a big deal because it presents a shred of doubt on whether or not this was truly a Cinderella story, and not just any Cinderella story, but the upset of the century.

BROWN: Among the more than 100 pages, there is no evidence that then 22-year-old Ali knew about the scheme. The bureau eventually ended their probe into the possibly fixed fight in June 1966, citing a lack of information.


BROWN: And important to mention here, that under Director jay Edgar Hoover, the FBI looked into the conduct of many, many Americans and the guidelines were doing so were much less stringent than they are now. Meantime, important to note also, there's no evidence indicating Ali was in on the rumored scheme or even knew about it. His camp is not offering a comment at this time.

BOLDUAN: Fascinating, though.

BROWN: It sure is. A talker.

PEREIRA: It's hard for you to talk about, isn't it?

CUOMO: Yes. I don't want to believe it.

PEREIRA: I know.

BOLDUAN: If it happened, I would sure hope that -- the idea was that Ali maybe didn't know about that.

BROWN: Right, right, right.

BOLDUAN: Exactly. I don't know if -- better at all. But --

CUOMO: I'd need a lot more proof.


CUOMO: But I appreciate you bringing it with us.

BOLDUAN: Thanks, Pamela.

PEREIRA: Here's our "Must-See Moment." Want to stick around for this one. Jimmy Fallon last night in the middle of his second week as the new host of "The Tonight Show." An epic lip sync battle. His opponent, actor/comedian, Paul Rudd. Fallon gets the crowd going, but it was Paul Rudd who hits it out of the park. A little classic Tina Turner. And then, this awesome take on queen's "Don't Stop Me Now." You have to listen to this or watch it.



PEREIRA (voice-over): Why do I feel he's performed that numerous times in his living room?

BOLDUAN (voice-over): Right. Not the first time.

PEREIRA: Fallon stopped him riding at a wall (ph), conceded, and even bowed down to the newly crowned lip sync master.



CUOMO: It takes a strong man to win. A stronger man to concede.

PEREIRA (on-camera): Absolutely.

BOLDUAN (on-camera): As we're watching this, I'm wondering how many calories Jimmy Fallon burns every night of the show. He is very active.

PEREIRA: He's moving around a lot.

CUOMO: He is a funny guy and he's doing it his own way.

PEREIRA: We need to have a lip sync battle.


BOLDUAN: Idea. You pick the --

CUOMO: Yes. You should tweet us. Bad idea.

Coming up on NEW DAY, we're going to talk about something that made so much news for so long. A lot of speculation about the circumstances surrounding the death of Philip Seymour Hoffman. Playwright, David Bar Katz, he's on the show today. He was a close friend of Hoffman. He is the man who found Philip Seymour Hoffman tragically after his overdose.

The truth about what was going on in the actor's life, the truth about the circumstances and rumors that followed his death. And a battle with the "National Enquirer" that you will need to hear about. A result you rarely hear about from the "National Enquirer."

BOLDUAN: Also ahead, a major airline overhauling its frequent flier program. Listen up, folks. This makes me unhappy. Soon, the biggest spending customers will be getting the best perks. Is this the start of a new trend?


CUOMO: Good morning. Welcome back to NEW DAY. It's Wednesday, February 26th, now seven o'clock in the east. And let's start off with our news blast. Everything you need to know right now. You ready? Of course, you are.


UNIDENTIFIED MALE: The winter that just won't quit isn't over.

UNIDENTIFIED FEMALE: Too long, too cold. I'm tired of all these layers of clothes.

UNIDENTIFIED MALE: Doesn't that business owner have the right to say get out?

UNIDENTIFIED MALE: These former leaders of the Ukraine are going to have to face consequences.

UNIDENTIFIED MALE: We need Ukrainians to decide their own future.

UNIDENTIFIED FEMALE: Our classrooms should be healthy places where kids are not bombarded with ads for junk food.

UNIDENTIFIED MALE: Polio-like illness has affected as many as 20 kids in California.

UNIDENTIFIED MALE: It happened in 24 hours.


CUOMO: We start off with President Obama telling Afghanistan time is running out. President Hamid Karzai has been dragging his feet on a bilateral security agreement that would keep U.S. troops there passed 2014. The president is now asking the Pentagon to have plans in place for an orderly withdrawal by the end of the year in case the two countries can't make a deal.

BOLDUAN: The White House is reportedly considering four options for restructuring the NSA's controversial phone surveillance program. "The Wall Street Journal" says one of the choices is scrapping the program all together. The other includes transferring the data collection operation to the phone companies or another government agency like the FBI.

PEREIRA: New developments out of Ukraine, the interim government has disbanded the riot police used in deadly confrontations with protesters. This comes on the heels of parliament voting to ask the international criminal court.