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Investigators: Flight 370 Crew Likely Unconscious; Case Of The Missing Emails; GoPro Goes IPO; Danger And Death On The Dance Floor

Aired June 26, 2014 - 16:30   ET



RENE MARSH, CNN AVIATION AND GOVERNMENT REGULATION CORRESPONDENT (voice-over): Now the search returns to go miles underwater.

UNIDENTIFIED MALE: The search will still be painstaking of course, we could be fortunate and find it in the first hour or the first day. But it could take another 12 months.


MARSH: Meanwhile the man who had been the face of the Malaysian investigation has been replaced. The change had nothing to do with the missing plane, but did have to do with politics. We're talking about Hishammudin Hussein. He was only the acting transport minister. He does remain the minister of defense. He has now gotten back into his original position, no longer in charge of this investigation at this point.

JIM SCIUTTO, CNN ANCHOR: They're talking about a big change here now sending all the resources to a whole other spot in the ocean. It's very stuff. How much confidence do they have in this latest of many analyses?

MARSH: The bottom line is this. This is all that they have. They have very little data. They've taken that data. They've refined it as far as they can possibly go. They've built in those assumptions we just talked about in the piece. So they feel as confident I guess as you can feel with lack of any other hard evidence.

SCIUTTO: Maybe that's something we have to accept that they're doing their best with imperfect information. They are never going to be 100 percent sure until they find the plane on the bottom of the ocean. Thanks very much, Rene Marsh.

When we come back, as another government agency admits to losing e-mails, one message we do have suggests a U.S. senator and his wife were targeted by the IRS. What raised those suspicions?

Plus thrill seekers are already sold, but investors not quite. Why the hottest accessories for sports junkies isn't big enough for Wall Street?


SCIUTTO: Welcome back to THE LEAD. I'm Jim Sciutto in today for Jake Tapper. It is the latest twist in the case of the missing e-mails. The mystery started a couple weeks ago when the IRS claimed that some of the e-mails at the center of a scandal over whether the agency unfairly targeted Tea Party groups had disappeared.

Now it's the Environmental Protection Agency that's told the House Oversight Committee that they are unable to access some e-mails from a biologist who worked on a controversial gold and copper mining project in Alaska. So what's going on here? Can be this really just be an error, a computer glitch or is there something more sinister, something political behind it?

We are going to bring in Tom Foreman now to explain. Tom, no one knows more about this high tech stuff than you. Tell us what's going on here.

TOM FOREMAN, CNN CORRESPONDENT: I'm sure somebody does. But before we do anything else, let me get to numbers rolling back here because to understand this problem, you have to talk about not just the words involved but also numbers, really big numbers.


FOREMAN (voice-over): If every federal worker in the executive branch alone sent and received as many e-mails as an average business user, that would be more than 325 million a day or 3,777 every second. That's a lot to keep track of 37 and now not only the IRS but also the EPA is saying --

GINA MCCARTHY, EPA ADMINISTRATOR: We may have some e-mails that we cannot produce that we should have kept.

FOREMAN: The IRS boss says part of the problem is budget cuts have made it hard to improve or maintain the government's vast network of computers.

JOHN KOSKINEN, IRS COMMISSIONER: Since January 1 of this year, for example, over 2,000 IRS employees have suffered hard drive crashes.

FOREMAN: Still, listen to what the U.S. archivist says about losing those records and not reporting it.

UNIDENTIFIED MALE: They did not follow the law.

FOREMAN: This is a long-standing problem. Back in 2008, Citizens for Responsibility and Ethics in Washington noted that many agencies still print out documents and then physically store the paper. And millions of important records have been lost. In the controversial firings of those U.S. attorneys under President George W. Bush, some memos regarding the interrogation of terror suspects and in the Bernie Madoff investigation. Exchanges between government officials that are pure gold to watchdog groups.

ANNE WEISMANN, CREW: It's unguarded moments where they say what really happened. What they're really thinking. FOREMAN (on camera): That's why you want these emails kept.

WEISMANN: Absolutely.

REPRESENTATIVE JIM JORDAN (R), OHIO: This would be laughable if it wasn't so serious.

FOREMAN (voice-over): And sometimes it is laughable anyway. Listen to a former IRS attorney when asked if she even recalled who worked on the computers that held those all-important records.

JENNIFER O'CONNOR, FORMER IRS ATTORNEY: I think his first name may have been Ben.

UNIDENTIFIED MALE: A dude named Ben?

FOREMAN: Undeniably many government agencies try to manage the avalanche of information that often it sounds like the end of "Raiders of the Lost Ark." Even if they keep all those e-mails, where are the important ones? Maybe Ben knows.


FOREMAN: Now skeptics argue, this is just a convenient way to avoid oversight. Investigators say they want to see some messages and any agency out there says look at those massive numbers. We can't find it. It's not our fault. How do we know if that is true especially since from the moment I started talking here it's possible that well more than a half million more e-mails are generated by the government -- Jim.

SCIUTTO: I think a half million came to my inbox as well. But Tom Foreman, thanks very much. I want to bring in our political panel, CNN "CROSSFIRE" host and Democratic strategist, Stephanie Cutter, and CNN political commentator and Republican strategist, Kevin Madden.

I want to give you both a chance to answer on this as you look at this. Is this just government ineptitude or is there something nefarious going on here? I'll give you the first chance, Kevin.

KEVIN MADDEN, CNN POLITICAL COMMENTATOR: I think that's what we're trying to get to the bottom of it. It could be a little bit of both. I think the real frustration not only by members of Congress, by the viewing public is that there aren't basic answers to standard questions. And there isn't a basic level of cooperation with what should be standard oversight by Congress. I think that's where you're seeing a lot of frustration.

The average American, look at this through the eyes of the average American. They know that if they had to get audited, they'd have to turn over a whole host of information about their taxes. And yet, the government can't come up with a standard level of cooperation on the e-mails they should have stored on government computers. That's real frustration and what's driving this.

SCIUTTO: That sounds reasonable. Do you think there's party involved here?

STEPHANIE CUTTER, CNN HOST, "CROSSFIRE": I don't think there's anything nefarious going on. I think the viewing public also understands that 750,000 pages of documents have already been turned including tens of thousands of e-mails. Dozens of congressional hearings. Dozens of written requests from Congress. It's not that there's a lack of cooperation.

Unfortunately, these e-mails are lost. They are trying to recreate them. Many of them have been re-created. The bottom line here is that the Tea Party, there's no evidence that the Tea Party was nefariously targeted. That was at the root of this investigation.

SCIUTTO: The Treasury issued a report in 2013 that established that.

CUTTER: And progressives were on the list of search terms also. And you know, at the end of the day, the IRS has to make sure nobody is skirting the law and doing political activity and getting tax breaks while doing it. That's at the end of the day what this was about. There's no evidence that there's anything nefarious here, not one piece of it.

SCIUTTO: Kevin, I want to give you a chance. There's another case with Lois Lerner reportedly considering an investigation of a Republican Senator Chuck Grassley over his wife's speaking event. That seems to enter the political realm.

MADDEN: And we need more answers to those. That provides enough evidence and it does spur more outrage by the folks up on Capitol Hill and the folks watching this at home. So I think that you know, with that, the one thing I think that's important about these e-mails if there was nothing nefarious going on and no action wrong actions were taken, these ought to be an evidentiary trail that actually helped acquit these folks of their stories. Help them at least get out from underneath this. So it's in the interests of everybody.

SCIUTTO: That's an oversight issue less than a political issue.

CUTTER: The 750,000 documents that have been turned over already do acquit them. I think that we can't miss that fact.

SCIUTTO: There's another big political story today that relates to the administration. This is about the Supreme Court's decision on recess appointments. You know, undermining it a power that not only President Obama has used, but previous presidents of both parties. How much of a blow is this to President Obama especially going forward in light of dysfunction in Congress and for future presidents?

CUTTER: I think that as you said, recess appointments are done all the time by the sitting president. It is a presidential power. The issue in this case was whether Congress was in recess long enough. And the Supreme Court said no, there wasn't enough days. There needs be a longer period of time of recess before the president can do this.

So that will be instructive for future presidents. What there should be more discussion about is the reason the president recess appoint these people is because Congress wouldn't approve these appointees for ideological reasons. For instance, the head of the Consumer Financial Product Board was recess appointed despite the law being passed to create this position years earlier.

He was recess appointed because Congress would not move his nomination. As a result of the appointment, many things have been done to protect consumers in the financial --

MADDEN: It's the prerogative of the legislature to decide whether or not those appointments go through. I think this blow to President Obama has to do with this NLRB decision through the lens of that, but this is more about the legislature and the executive. And this is about future congresses and future presidents regardless of party.

SCIUTTO: Because this could come back to bite a future Republican.

MADDEN: Absolutely. That's something we've seen a lot of lately is this constant push and pull between the executive. I tend to be in favor of a stronger executive, but not an imperial executive. We'll continue it have these conversations regardless of who is the president and regardless of which party is in power.

SCIUTTO: We've talks a lot about 2016 and a lot about the Hillary Clinton, and other expected candidates, Jeb Bush. There's a candidate I don't think either of you thought of. We wanted to throw up at the screen a potential campaign poster for 2016 right now. Get your reaction as to his chances.

MADDEN: I like it.

SCIUTTO: Tim Howard, the USA goalie for president. He had a stellar game today. Chances against Hillary, Stephanie Cutter?

CUTTER: I may consider being his campaign manager.

SCIUTTO: I'm with him, as well. He's great to see his face on hope poster. All right. Thanks very much, Stephanie Cutter, Kevin Madden talking about IRS, lost e-mails and 2016. When we come back, it's cornered the adrenaline junkie market. Can the company that created the wearable camera, GoPro, really take on other tech giants like Google or Amazon?

Plus a mass casualty incident after dozens of concert goers are hospitalized in Boston? It's not the first time fans of this performer fell ill at his concert. Why does this keep happening?


SCIUTTO: Welcome back to THE LEAD. Time now for the CNN Money Lead. It is it the go anywhere, do mostly anything you're crazy enough to record camera. The GoPro plays perfectly to the selfie generation, an action sports junkies looking to capture that big moment and all those Instagram favorites.

The camera maker made a huge splash of its own today debuting on the Nasdaq at $24 a share, the largest IPO for a consumer electronics company in more than 20 years. Despite its popularity among skydivers, surfers, skateboarders even myself sometimes, basically anything involving riding something, the company offers just one design. So should investors be willing to take the plunge?

I want to bring in CNN Money correspondent, Cristina Alesci. Cristina, I look at this. Why is it thriving so much? It's one kind of camera, doesn't have any other models. When is that going to be replaced by my iPhone like digital cameras and video cameras before it?

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: It doesn't look like anytime soon. This company booked a billion dollars in sales last year. That's a tremendous amount of money for a young company. It is important to point out that the growth did slow, but to your point, at the end of the day, this is a camera company with an increasing number of competitors every day and very unproven media strategy they hope to capitalize on.

I spoke to the CEO, Nick Woodman about his original vision for the company and the challenges going forward. Here's what he had to say.


ALESCI (voice-over): Portable video camera that makes amateur videographers feel like action sports stars. Now GoPro is cashing in, making its shares available to the public. It's raising hundreds of millions of dollars, valuing the company at $3 billion. So what makes GoPro products more popular than other cameras on the market?

NICK WOODMAN, FOUNDER AND CEO, GOPRO: That's what traditional camera is meant for one person to film another person or another thing happening. That's what smartphone does and so it killed the market opportunity for a flip camera. GoPro enables people to film themselves, right? And turn the camera around on themselves and capture life from any perspective imaginable. If your camera comes out of the box preloaded with film --

ALESCI: Founder and CEO, Nick Woodman dreamed up the GoPro while surfing with friends about ten years ago. Now Woodman is riding a wave of a generation obsessed with filming itself. But that's not enough. He wants to transform his camera company into a media company.

WOODMAN: We somewhat organically get the media business as a natural outcome. You have all this content being created on our platform. We can aggregate it and redistribute it as GoPro channel programming.

ALESCI: Consumers love the cameras, but sales were down in the first part of the year. Investors want see the company grow. It's media aspirations may be an even tougher way boost profits.

NICHOLAS THOMPSON: If I have a GoPro camera, I can upload anywhere I want. I can put it on YouTube. How is GoPro going to convince me that actually I should really go to GoPro? ALESCI: GoPro needs to find a way to capitalize off its 7.4 million Facebook likes and over 500 million YouTube views. If it could do that, it won't be just a hot camera maker but a hot stock, too.


ALESCI: You know what, Jim, the stock popped about 30 percent today, which is exactly where you want to see these Internet stocks pop to. So look, it's only day one. You know, we've seen a lot of tech companies get really hot and then come down. We'll have to see how this one plays out.

SCIUTTO: Not a bad start. Cristina Alesci, thanks very much. Coming up, dozens rush to the hospital after attending a concert in Boston. Were the conditions of the venue unsafe for fans? That's after this.


SCIUTTO: Welcome back to THE LEAD. A night out took a dark turn for dozens of concert goers in Boston last night when the venue suddenly became what authorities called a mass casualty incident. Our Jason Carroll reports.


JASON CARROLL, CNN CORRESPONDENT (voice-over): It was supposed to be a night of listening to electro superstar DJ Avicii spinning his latest at Boston's TD Garden. Instead, this was the sound of the evening as dozens were rushed to hospitals.

UNIDENTIFIED FEMALE: There was one kid, he took four cops to get him down. He was on something. I have no idea.

CARROLL: Boston emergency officials say 36 concert goers why taken to hospital and treated for alcohol, heat and drug related problems. Dozens more treated at the scene.

UNIDENTIFIED MALE: It really goes on everywhere that's an unfortunate coincidence it was so many people this one time, but it certainly isn't anything the artist did or could have done. Avicii is known for not drinking and not doing drugs.

CARROLL: So what is it about big venues and big acts that make crowds go a little bit more than wild?

UNIDENTIFIED MALE: For many people, most people, if you will, having a good time comes with doing some kind of substance. It could even be cigarettes. But most commonly it's alcohol and there are other drugs.

CARROLL: Just this year at Las Vegas's Electric Daisy Festival where did he also perform, at least one person died and nearly 800 partygoers were treated for medical conditions during that electronic music event.

Last year at the electric zoo festival in New York City, two died and four others hospitalized after overdosing on the drug called "Molly," otherwise known as NDMA or Ecstacy. The third and final day of the festival canceled. Still, thousands made their own event in New York's Columbus Circle and Times Square.

UNIDENTIFIED MALE: Just because of irresponsible people overdose on drugs doesn't mean you shut it down for 30,000 people.

CARROLL: It's not just trouble at electronic music events. Even the summertime draw of Kenny Chesney can't keep some fans from dueling in the parking lot. Nearly 75 people arrested as the Chesney's concert at Heinz Field in Pittsburgh last year. Offensives included aggravated assault and public intoxication.

UNIDENTIFIED MALE: We had a hard time getting police. A lot of police didn't want to work this event.

CARROLL: Music insiders say it's not the music causing problems. It's usually what people bring when listening to it.

UNIDENTIFIED MALE: It doesn't mean that's how you have to enjoy the concerts or enjoy the show, but there are always young people who are going to experiment, who are going to mix things. That's gone on for decades and decades.


CARROLL: Well, T.D. Garden was cited for serving alcohol to minors. T.D. Garden released a statement saying that they take the matter very seriously, and their thoughts are with the guests who were hospitalized. They've also implemented added security and measures to restrict alcohol sales -- Jim.

SCIUTTO: Jason, thank you. Now here is Wolf Blitzer in THE SITUATION ROOM.