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ANDERSON COOPER 360 DEGREES

Wildfires Char Central Washington State; David Sweat Talking To Authorities About Escape; Sweat Hospitalized, Condition Upgraded; Sweat Say Prison Guard Not Involved In Escape; Fugitives Planned To Kill, Then Flee To Mexico; FBI Launches Prison Heroin Probe; Allegedly Hateful, Totally Tax-exempt; Flag Takedown Gaining Steam; 4th of July Terror Threat Warning; All Banks Closed In Greece. Aired 9:00-10:00p ET.

Aired June 29, 2015 - 21:00   ET

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


[21:00:00]

(COMMERCIAL BREAK)

UNIDENTIFIED MALE: This is CNN, the world's news network.

ANDERSON COOPER, AC360 HOST: Good evening. 9: 00 P.M. here in New York, 6:00 P.M. in the Pacific Northwest where a fast moving wildfire is burning up thousands of acres of Central Washington State and forcing a lot of people to leave their homes. We're going to get a live report from the front lines where earlier today, they also had to deal with a deadly chemical leak.

We begin though tonight with captured fugitive, David Sweat, wounded, hospitalized, and say sources, now talking, telling investigators that he and his now dead escape partner Richard Matt, planned to murder their alleged compliances husband and then flee to Mexico. Happily, it did not go according to plan either for Matt, who was shot and killed last week or Sweat, who was cornered and shot yesterday.

Alexandra Field has the timeline of his takedown.

(BEGIN VIDEO CLIP)

ALEXANDRA FIELD, CNN CORRESPONDENT: David Sweat, captured, still close to clean-shaven and seemingly in good shape before taking two bullets to the torso.

Did he have any fight in him when he was taken down?

KEVIN MULVERHILL, SHERIFF, FRANKLIN COUNTY, N.Y.: It doesn't appear that way and I can tell you when they had unloaded the (inaudible), he was only semi-conscious.

FIELD: 22 days after escaping form the Clinton County Prison, the manhunt ends within striking distance of the Canadian border.

MULVERHILL: They come across the dirt road that runs basically along the border to Stebbins Woods Road. And once he gets to Stebbins Woods, he's within a couple 100 yards in the border.

FIELD: Five days earlier, the deadly duo parted ways. Sweat tells investigators form a hospital bed.

Richard Matt may had been slowing him down. 49-year old, Matt, reeked of alcohol when he was shot dead by a tactical team, Friday. According to sources who also tell CNN, there's evidence Matt was sick possibly from contaminated food or water. That evidence, part of a trail, scattered through out the outer on deck forest ultimately leading to two convicted killers.

The first big break, day 17, 23 miles west of Dannemora, confirmation that DNA evidence ties both men to a cabin in the town of Belmont. One of the cabin's owners reports a shotgun is missing.

MAJOR CHARLES GUESS, NEW YORK STATE POLICE: We have since day one operated under the beliefs that these men are armed, they're extremely dangerous. They're cunning.

FIELD: Another break in the case comes days later. A break-in in a cabin in the town of Malone prompts a massive search of the area.

By Friday, day 21, more evidence is found as police reveal new information.

UNIDENTIFIED MALE: The suspects may be headed towards Canada.

FIELD: 16 miles south of the border, Matt blows his cover, shooting at an R.V. and the driver calls police.

What could've motivated that shooting?

MULVERHILL: No idea. No idea. You know, obviously, it appears tat Matt consumes an alcohol. If it was the alcohol or the fatigue, or you know, the starvation, he made a tremendous error.

FIELD: Search teams head to the same area where someone inside this cabin also called 911.

What was moved around? What did you notice when you gotten...

BOB WILLET, MONROE, N.Y. RESIDENT: Not much moved around just a bottle of gin that moved off one counter to another.

FIELD: It was Matt's final mistake.

MULVERHILL: Trooper walking along this side of the road right here and here's a cop, you know? I mean, that's really what broke the case on Friday.

FIELD: Richard Matt refuses to drop his weapon when a border patrol team surrounds him in the woods. He's shot dead three times in the head. Two days late, two miles south of Canada, police and constable close the case.

UNIDENTIFIED MALE: Then all was sudden the streets are just full of law enforcement cars all the way down.

FIELD: Sergeant Jay Cook on a roving patrol spots Sweat walking down this road. He single handedly captures the convicted killer.

UNIDENTIFIED MALE: You guys got him? Cool.

(END VIDEO CLIP)

COOPER: Cool indeed.

Alexandra Field joins us. Now, how long was David Sweat in Constable, before he was shot and captured? Is it not?

FIELD: Anderson, investigators are trying to answer that question by trying to figure out if any of the homes in this area had been broken into or burglarized, or things are out of place, if anything is missing. We know that they've already connected at least one of both of the men to at least three cabins. They believe that when they look at the trail form here all the way to Dannemora, they'll find a lot more places that they used for shelter.

When you look at that picture of David Sweat after he was shot right out here in this field, investigators are pointing out that he appears to be pretty close to clean-shaven and that might be a good sign that he actually had shelter pretty recently.

[21:05:02]

COOPER: Yeah, fascinating. Alexandra Field, thank you.

More now in David Sweat's condition and what he's reportedly telling authorities?

Miguel Marquez joins us from outside the hospital in Albany where Sweat is recovering. So what is the latest you're hearing about how he's doing?

MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT: Well, he has been upgraded from critical to serious condition so he is getting better. I think the hospital here wants to get him as stable as possible and then get him into some other correctional facility that can keep him improving. They certainly want to keep him alive because he is the best link they have to explain everything about how they actually got out of that maximum security prison.

He is telling investigators that he left Matt some days before because he was slowing him down. That's when things sort of to tumble out of control for him. Also saying, during the initial escape, what they were hoping to do was to meet up with Joyce Mitchell, the prison worker once they popped about that manhole, kill her husband then flee to Mexico. When she didn't show up, there was a lot of discussion whether she was their plan A, it turns out, she was in fact their plan A.

They'd hope to be toasting margaritas in Mexico possibly with her but of them certainly when that didn't work out, they were scrambling for a plan B. Clearly, didn't go very well. They only made it about 32 miles in 22 days. Anderson?

COOPER: And I'm sure there's new information about Matt's condition before he was killed.

MARQUEZ: He was dressed in fatigues, he was in poor shape but in some ways in fairly decent off, he had good boots on, camouflage fatigues, dressed basically as a hunter. He had a lot of bug bites on him but the morgue is saying that he wasn't as swollen as they might have expected him to be indicating that perhaps, he was able to take shelter for some time indoors.

Clearly, officials believe he was sick because he got either drank bad water or ate bad food and had a reaction to it. Also, that clearly at some point, he just went off the rails and started drinking alcohol and that didn't help his cause at all. Anderson.

COOPER: Fascinating. Miguel Marquez. Thank you, Miguel.

Prison guard, Gene Palmer was in court today. A new attorney we should point out by his side, his lawyer waving any additional preliminary hearings. Now the case goes to a grand jury now which might not convene for a month according to local district attorney, Andrew Wylie. That is not all he's saying about Mr. Palmer who has said in a sworn statement that he passed that chopped meat not knowing it contained escape tools to Richard Matt.

To the latest on that, we're joined now by Keshia Clukey, reporter of the Albany Times Union. Kesha, I understand you're learning more about what Sweat is telling authorities particularly when it comes to Gene Palmer. What have you learned?

KESHIA CLUKEY, REPORTER, ALABNY TIMES UNION: Yes. So far, we're hearing that Sweat had told authorities that Gene Palmer didn't know about the escape plan so he was just as his statement to police said, clueless about it and had just given them these tools not knowing what they were actually doing with them.

COOPER: That also backs up with the district attorney. You told me a while ago that he had passed a polygraph to that effect and they believed him.

You've been following this manhunt closely, what is the mood like on the ground now? I mean, we saw a lot of relief from people applauding police officers law enforcement.

CLUKEY: Yes. Last night, it was -- there was almost a parade like feel in areas of like Malone and Dannemora where people were throwing candy and waving flags and just cheering at all the officers just a really feeling of relief, excitement. Someone said to me, it feels like the Super Bowl. So it -- and then, today was really more of business as usual. Kids were back to playing in the street, I'm hearing a lot of moms saying, "We feel safe having our children sleep in their own beds now."

COOPER: And I'm wondering, this investigation into Clinton Correctional Facility, in addition to all the lapses that led to the escape, did the people in the community -- I mean many of whom worked at the prison or have worked at the prison have a sense of just how bad things were before this escape?

CLUKEY: I think they had some sense of it but like you said, a lot of the community either is working for the correctional facility or know someone, is related to someone, I think there's a lot of protecting your own and also maybe a little bit of fear in wanting to turn other people in because of that one desire to protect their own. So I think that there was some people where in the dark about how bad it actually was but there was little bit of knowledge going out into the community.

COOPER: Well, we'll see what the investigation finds more. Keshia Clukey, thank you very much.

We got a taste of the top of the program of how the manhunt for Sweat ended.

Our next guess, Paul Meldrum was nearby during those tense and violent last moments. He was here form Canada visiting friends when it all went down. I spoke to him before our broadcast.

(BEGIN VIDEO CLIP)

Paul, I knew you were visiting very close to where David Sweat was shot.

[21:10:03] Can you explain what you and the other people you were with saw and what you heard?

PAUL MELDRUM, HEARD DAVID SWEAT CAPTURE: We arrived at friends place for an unscheduled visit and was in about a minute, the lady that we are visiting mentioned that she heard some gunshots. We saw a police car go zooming by the house. We looked out the window and we saw police officers running across the field.

We saw police cars arriving from both directions east and west and then a flurry of activity was officers running to a certain point in the field stopping just passed the big Elm Tree running back. More officers arriving and then, within about two or three minutes, I counted 30 police vehicles. I went outside as I figured everything was pretty safe at that point. And probably another 10 to 12 vehicles arrived within the next two or three minutes after that.

COOPER: It must be -- have been pretty incredible. I mean to know this hunt that was going on and suddenly find it happening right where you were.

MELDRUM: It's something you never think will happen to you. I mean, when we came -- we're Canadian. We came across the border to visit our friends and we joked, well, maybe if we went across this fellow, we'll collect the reward and what of the odds of that happening. And when we visit our friend, we happened to mentioned that he'll be at all (ph) worried and she said, "Well, no. That fellow is never going to show up in your -- our farm. We'll never see him." So, it's kind of surreal. COOPER: I understand. The family you are visiting is an Amish family and I mentioned that just because Amish people often don't have radios or television. I'm wondering how up to speed they were on the manhunt?

MELDRUM: I don't believe our friends were aware of what the fugitive looked like but they were very much aware that there was a fugitive in that area. They have been contacted by police and we're told just to be weary and to be careful and she told me never did she think that would happen.

COOPER: I know. I mean, you said you work in Montreal. You live in Ontario. How much attention did the prison break get in Canada because that's where these guys were allegedly headed?

MELDRUM: When the -- I think his name was Matt was captured, was shot...

COOPER: Right.

MELDRUM: ... and killed by law enforcement officers closed to the border that became national news. So, the major networks in Canada were carrying high up in their story line. Local news cast were carrying it. And it was leading the newscast for quite -- for the last four or five days.

COOPER: Yeah.

MELDRUM: Just one other thing I think you should know, Anderson, is where they took down David Sweat, he was literally 30 seconds from getting into the forest.

COOPER: Wow.

MELDRUM: He came across the road and he was -- where he was taken down. If that officer had not managed -- had seen him or had not shot him that stopped him, he was 30 seconds from a deep dense forest. That forest extends north directly across the border into Canada and the forest continues for some time. He was within a mile and mile any half of the Canadian border and had he gotten into that dense bush it would have been difficult to find him.

COOPER: Fascinating. Paul, thank you so much.

MELDRUM: My pleasure, Anderson.

(END VIDEO CLIP)

COOPER: A lot more ahead on this and more on the prison. Where do the FBI has now started investigating possible corruption there including perhaps a heroin ring. We'll bring up the speed on that.

Also, late word on moves in South Carolina as we take down the Confederate battle flag and the group that the Charleston should have credit toward shaping his views -- that organization and others (inaudible) a lot of the experts is (inaudible) but get this. They also have tax exempt status. The question is why. We're digging deep.

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[21:17:12]

COOPER: Well, the breaking news tonight, captured fugitive David Sweat talking to authorities from his hospital bed. His condition upgraded. Now, one of his reportedly self-confessed enablers, Prison Guard Gene Palmer was in court today. That's him heading to court state police have sworn -- a sworn statement from him detailing the favors he did for Sweat and Richard Matt.

However, the Local District Attorney Andrew Wylie says that Sweat has told authorities, Palmer was not involved in the actual escape plan. That said, his alleged actions plus other reports and numerous security lapses and guards sleeping on the job, it does make you wonder what exactly was going on inside that prison. And if you -- and you would not be alone in asking that questions.

State investigators have been at the Clinton Correctional Facility since last week if you may know. And today we learned that the FBI has launched a probe of its own. Details on that now from our Justice Correspondent Evan Perez who joins us from Washington.

So, this FBI probe, what do we know about it?

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Well, Anderson, it does appear that this prison was dysfunctional place. The FBI is investigating possible criminal activity inside the Clinton Correctional Facility including heroin trafficking.

Now, investigators want to know whether the two former fugitives, Richard Matt and David Sweat were working with guards as part of the drug raid. Now, law enforcement officials tells CNN that some of the prison employees who've been interviewed have described why it's quite availability of heroin at the prison and the role of employees in getting the drugs inside.

Now, we know that Matt and Sweat had a lot of freedom inside this prison and the question now is was there alleged involvement in some of the criminal activity part of the reason for that freedom. Anderson.

COOPER: And do we know if either Joyce Mitchell or Gene Palmer are suspected of being involved in this heroin ring or other illegal activity?

PEREZ: Well, you know, that's one of the big concerns here is that the FBI has already identified a couple of prison employees other than Mitchell and Palmer. And so, the question -- the suggestion here is that problems run much deeper than just those two people who have now been arrested and charged, Anderson. And we should say that the New York State Inspector General is doing its own investigation into the security and other lapses that led to the escapes.

COOPER: Evan Perez, fascinating development. Thank you. And we are just now learning more about David Sweat and his movements inside the prison before he and Matt broke out. Our Deborah Feyerick has late details. She joins us now. What are you hearing from sources?

DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT: Well, this goes to really what Evan was saying in terms of the amount of mobility that David Sweat had inside that prison. We know that he worked in the tailor shop. And that tailor shop, you have to think of a very long list warehouse kind of facility. And you have inmates from all different blocks working there. It was considered a plumb assignment.

So, it wasn't just people from the honor block but David Sweat was very well-regarded within that tailor shop. And so he could move very easily between all of the different floors, talking to different inmates, different prisoners from different blocks.

[21:20:06] And so, he really had very big access.

And so, when you talk about the culture of the prison, you have those who were well-regarded and have those who wanted to sort of befriend those additional -- those inmates because there was a hierarchy within the prison and there was a sense of who have the dues to get things done.

COOPER: That's interesting.

FEYERICK: Yes.

COOPER: Access is sort of power inside.

FEYERICK: 100 percent.

COOPER: You're also learning more and understand about Gene Palmer.

FEYERICK: And this is also very interesting, Gene Palmer was an intelligence officer what inmates call a snitch officer and so his job was really to collect intelligence and, because of that he would go to the tailor shop he would speak to the inmates from the various blocks, so even though he himself was also assigned to the honor block, the A block, he too was able to go in and talk very casually and freely and openly with some of this prisoners.

And one of them actually told me that -- a former inmate actually told me that, he would show them pictures from his camping trips that he took up in the woods, again the sort of, social manipulation where the inmates are manipulating the guards, but there's a culture of code dependency and this is all going to be part of the investigation of that authorities are looking into and that is, you know, when your in there it is world into itself.

COOPER: Right.

FEYERICK: And so, as one corrections officer told me. He said, you know, look there are no secrets in prison, everybody knows what's going on but it was the code dependency that may have allowed some of this criminal activity to happen not only at Clinton and that's the big question, it's not...

COOPER: Right, how was right...

FEYERICK: ... to Clinton Correctional.

COOPER: ... is this really?

FEYERICK: It's -- is it prisons across New York State...

COOPER: Right.

FEYERICK: ... so when you talk about the single investigation this investigation can lead to something much bigger and much more significant.

COOPER: Right because we hear about a possible heroin ring inside the prison that shouldn't be a surprise I mean there's drugs in prison throughout the United States.

FEYERICK: That's exactly and inmates are a very, very clever as how they smuggle those drugs in.

COOPER: I want to talk about that a little bit Deborah Feyerick, thank you very much. Joining us now someone he knows Clinton Correctional Facility from the inside, Jeff Dumas, former correction sergeant there.

Jeff thank you very much for being with us, I appreciate it. What would you make of this investigation that's now been launched by the FBI, the fact that there drugs in the prison (inaudible) as Deborah and I was talking about I meant that's a pretty common problem in a lot of different prisons.

JEFF DUMAS, FMR CORRECTIONAL SERGEANT: Yeah, it is. As far as the FBI probe, they can do what want, they can investigate it, but as you just stated earlier, the amount of drugs that are going into the prison systems not only New York State but the across the country, it happens everyday. They are smuggled in by family members on visits, and so it's going to take a policy change on behalf of the Department of Corrections to stand and stop the flow of drugs into the facility.

COOPER: So I know, I mean this are going through a metal detector I assume or they actually search for contraband like, you know, heroin in a balloon or something.

DUMAS: They do go through metal detector and obviously the drugs and that type of contraband that does not set the metal detector off. We have no probable cause to search them. Until we have a probable cause then we can in effect search and of risk. But we have a narcotics unit that works out of Albany that is topnotch. They do this stuff everyday and they constantly make arrest. So they are stemming the flow, put the policies that govern the visiting room, they allow some of the stuff to get in.

COOPER: I also understand that there some questions about testing of, of inmates that there use to be kind of a higher threshold for or a kind of lower threshold it was easier to test inmates now it's actually more difficult is that correct?

DUMAS: Yes, that's correct.

COOPER: Explain what happen.

DUMAS: What happens is, random we have random urine samples that are taken, so and it's just computer generated and we take the inmate away, we process it and if it comes back positive, then his sanctions, he will be keep locked 23 or 24 hours a day, disciplinary of sanctions and that's what happens.

Well, now you have a mind set from certain groups to advocate for the inmates that, hey this is happening too much and they got, they kept getting on the state. So the state raise the threshold just a little bit. So now we have some inmates with the drugs in their system but if doesn't pass that threshold, well there's free to go and so now it's created basically a little bit more the way for the inmates with the drugs, and it's detrimental to security.

COOPER: Is there a financial incentive for the prisons not to have the inmates locked up so much, I mean not to have them tested and there for failing test I mean to kind of raise the standard?

DUMAS: Well, the drug problem is a problem and it adds to the inmates who cause us problems. So whether it's fighting whether it's drugs, when we locked them up 23 out 24 hours a day for disciplinary reasons, the attitude in Albany and with some of legislatures actually in New York State government they want to get rid of solitary confinement.

[21:25:14]

COOPER: Right.

DUMAS: They don't want it. So we have no recourse for disciplinary sanctions if that happens. So they are trying to keep inmates from being locked up, even though they misbehaved we can't locked them up they don't want them do that they want them to go to programs and the federal government does give the state money for programs. So if the inmates are in programs there's no money there.

COOPER: Do you think -- I mean what you're saying is essentially what we need -- changes are kind of more systemic it really need to happen. I mean you can change personnel...

DUMAS: Yes.

COOPER: ... but, but really policies need to change, who's in charge of making prison policy, making sure that things are running as they should or it's the warden or is it officials higher up in that?

DUMAS: It's higher up. The wardens have been eliminated through the state, the warden choose to run their own facility and they were the king at that area, but we've done a way with wardens we've now called them superintendents and all the superintendents process state answer to Albany. Albany is the one that makes decisions, so their -- they are the ones that need to change the policies. And the policies that you always see in the movies where an inmate goes and visits and they all they'll be either with the pain last between them...

COOPER: Right.

DUMAS: ... where they'll visit on a T.V screen with a telephone, well that doesn't happen. That literally sit on with the table between them that's maybe a foot and half two foot wide and their visitor is right there across above, their visitor can rub their neck, can give them a kiss, but for the most part they stays seated. And in somebody's visiting rooms you have 40 to 50 inmates plus wives, sisters, mothers, kids and you only have two correction officers trying to watch all that. So...

COOPER: Two correction officers in a room of 40 or 50 inmates with...

DUMAS: With family members.

COOPER: ... all family members? Wow.

DUMAS: Yes, so.

COOPER: So it's easy to pass contraband it's easy for, for items to get in.

DUMAS: Yeah we try to combat it, the best that we can and intelligence really works for our advantage. If we get word that indeed there's going to be a shim that's coming in, but we do -- the officers do the best that they can to try to stop the flow. If New York State came up with visiting from via phone and video, like a T.V set, that would be phenomenal.

COOPER: That makes a big difference there (ph).

DUMAS: .It would decrease (ph) -- a huge, huge impact.

COOPER: Jeff, I appreciate your expertise, I appreciate you being on. Jeff Dumas, thank you very much.

DUMAS: Thank you, Anderson.

COOPER: Coming up next the surprising fact about alleged hate groups like the one that the Charleston killer reportedly drew inspiration from it turns out they don't have to pay taxes almost no matter what they preach. We'll investigate why that is.

Also new developments in the effort to move the confederate from the state Capitol grounds in South Carolina.

Plus, the breaking news tonight in Central Washington's State, look at this images a fast moving wildfire consumed thousands of acres so far damaged dozens of homes. Details ahead.

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[21:32:10]

COOPER: There's word tonight the South Carolina legislature has enough votes to remove the Confederate flag from the state house ground in Columbia that's according to the Associated Press.

Now today Presidential candidate Jeb Bush weighed in on the issue while campaigning in South Carolina, said the flag has become a racist symbol in praise efforts to take it down. The confess gunman who murdered nine people inside the Emanuel AME Church who told police that he wanted to start race war at post some photos with confederate flag credits a group called The Council Conservative Citizens was shaping his views on race.

The organization is well known among those who track hate groups but despite its reputation as a hate group it's also totally tax exempt. (inaudible) Drew Griffin.

(BEGIN VIDEO CLIP)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: It was from the killer own manifesto we learned of the link to the council of conservative citizens classified as a hate group by the Southern Poverty Law Center. The council can best be described as a pro-white group interested in preserving the white European race.

The United States government classifies it differently. How? As a civil rights organization and get this with that classification the group enjoys tax exempt status.

JARED TAYLOR, SPOKESMAN, COUNCIOL OF CONSERVATVE CITIZEN: We have always encouraged active political involvement, speech, but no actually no violence, no (inaudible).

GRIFFIN: Jared Taylor is the spokesman for the council which professes the United States is a Christian country opposing any efforts to weaken the Christian heritage, opposes the massive immigration of non-European and non-Western peoples along with any efforts to mix the races of mankind or weaken the structure of the American family through toleration of sexual licentiousness, homosexuality, and other perversions.

While the group condemns the church killings it makes no apologies the shooter found inspiration for pulling the trigger on what many believe is it hate field website.

TAYLOR: No the council does not take any responsibility. What he learned from our website was the truth. So we have absolutely no apology for publishing facts.

GRIFFIN: The council is one of many supremacist hate groups granted tax exempt status by the IRS. They include the church of Jesus Christ Christian associated with the Arian nations, the National Policy Institute promoting a white European America, the New Century Foundation which pushes pseudo scientific studies and research that report to show the inferiority of blacks to whites. How was it possible? Federal law prohibits the IRS from discussing any case involving a taxpayer or organization but watch the group say the IRS is just under staffed, under funded and recently under scrutiny for it's handling of tea party organizations.

[21:35:00] CNN senior legal analyst Jeffrey Toobin says Congress want to say hands off IRS when it comes to any group involve in politics or social welfare.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Basically Congress has said if an organization defines itself as public policy oriented, the IRS basically has to honor that and grant them tax exempt stats.

GRIFFIN: The Council for Conservative Citizens took in just $67,000 in donation in its filing for 2013. It doesn't pay any salaries and though up until last week you could find links on its website to purchase items like Confederate flags. It doesn't appear to have any other purpose than to distribute its political views. Political views that may that inspired a 21-year old white racist to kill nine black people praying in a church.

(END VIDEO CLIP)

COOPER: This is pretty incredible. Could this group actually loss its tax-exempt status?

GRIFFIN: You know, the one thing it remembers the IRS does not keep a list of hate groups. We do that watch, those groups.

So this is just an organization according to the IRS. And as Jeffrey said as long as it fits into this general category of promoting a public good, a public policy, then as long as all the paper work is filled in correctly the IRS basically approves it.

COOPER: The idea that, you know, saying mixing of the racist is bad is permanent to public good, is pretty interesting interpretation. So even though pointing it out to the IRS they still don't really take any action.

GRIFFIN: What has happen in the past some Nazi groups, you know, Nazi groups have lost their status because of extra scrutiny after they've been in press. So they might get a little more scrutiny, the paper works out of order and their taxes and status gets yank technicalities.

But even in the case of the Westboro Church the group that protests the funerals of Iraq and Afghan soldiers coming home it was a huge petition to take away the tax-exempt status. Didn't do a thing, because it all fits into the general categories where this kind of speeches is protected, where this public policy groups are protected under the IRS paper work rules.

COOPER: Interesting. Drew Griffin. Drew, thank you.

GRIFFIN: Yes. COOPER: Well, coming up this hour warning about possible terror threats around the 4th of July holiday after three deadly attacks Friday, including the one that left dozens of foreign tourists dead under Tunisia resort. We have the latest on that next.

Also had imagine each and every bank in the entire country closing, well, that's what happening now in Greece which is near financial collapse. We're getting an update from our Richard Quest in Athens.

(COMMERCIAL BREAK)

[21:41:29]

COOPER: A warning tonight about possible terror threats around the upcoming 4th of July holiday. Law enforcement across the country got a bullet in saying extremists could be planning to coincide with Independence Day. This comes after a call from ISIS to conduct attacks in the west and three separate and deadly attacks on three different continents late last week. Our chief national security correspondent Jim Sciutto reports.

(BEGIN VIDEO CLIP)

JIM SCIUTTO, CHIEF NATIONAL SECURITY CORRESPONDENT: The most deadly ISIS inspired attack on westerners today as it happens. Gun fire ringing out at a Tunisian resort, Friday, leaving at least 38 foreign tourists dead, most of them British.

CHRIS CALLAGHAN, ATTACK SURVIVOR: This is lady was bleeding so heavily and I was laying in her blood, trying to keep her awake. It was dreadful. I've never witnessed anything like it.

SCIUTTO: All this from what is proving to be a lethal weapon for the terror group, the lone wolf attacker. In this case, a radicalized Tunisian university student seen here running away from the resort after the attack, and moments later, shot dead by police after he stopped to pray.

And now with the July 4th holiday approaching here in the U.S., U.S. law enforcement, here's a senior counter terror official tells CNN, "Definitely on a heightened state of alert" based on ISIS' call to conduct attacks on the west.

MICHAEL MCCAUL, TEXAS REPRESENTATIVE: There is a great deal of shatter, a high volume if you will, that were being on the coastal side here to warn the public to remain vigilant.

SCIUTTO: ISIS' inspired recruits are answering the brutes call to attack anywhere, anyhow during the Muslim holy month of Ramadan. Spokesman and senior leader Abu Mohammed al Adnani promising 10 times the rewards in heaven.

In a single day, Friday, a gunmen stormed a beach resort in Tunisia.

A suicide bomber attacked a mosque in Kuwait killing 27 worshippers.

And another assailant beheaded a man in Southern France and attempted to blow up a U.S. owned factory.

SETH JONES, RAND CORPORATION: ISIS is able and willing to inspire people to conduct attacks across multiple continents and they're willing to do relatively easy attacks to pull off the armed assault style attacks which is not that difficult to do.

SCIUTTO: The fear of such attacks on the July 4th weekend, prompting the FBI to issue a bulletin urging both law enforcement and the public to be vigilant.

(END VIDEO CLIP)

COOPER: And that was Jim Sciutto reporting.

Banks in Greece were closed today. The Greek stock market shut down in a desperate attempt to keep money in the country and stable financial collapse. Now, it's bad news obviously for the people of Greece, for the tourists and the U.S. stock market were not thrilled about it either, the Dow falling 350 points today. The Greek government is calling for a referendum vote six days from now on a bailout proposal. Richard Quest joins me from Athens.

So Richard, how could what's happening in Greece end up having an impact on people here in the United States and elsewhere?

RICHARD QUEST, CNN ANCHOR: I think it has an effect on the rest of the world through the wider European picture particularly the Eurozone. For example, if Greece really does go down the tubes, goes bankrupt, even if it does leave the Euro, the Grexit the people are talking about, then you're looking at a situation where Europe has great volatility. The markets in Europe could be in turmoil.

[21:45:00] And if Europe is the United States' largest trading partner and it is a very, very short fuse between European markets and the United States, I promise you, Anderson, if there are real -- if it's real volatility in Europe, the U.S. is going to feel the effect.

COOPER: And I know this doesn't come to a vote in Greece until next week but in the meantime there are strict limits on how much people can take out at the bank everyday there, right?

QUEST: Yes. This is it. 60 Euros, I've got 320 Euro bills and 60 Euros is the maximum that Greek people, Greek citizens can take out. It worked out about $66, $67 depending on the rate of exchange. Now, visitors and foreign people with foreign bank accounts, they can take out as much as they like. They are not affected.

I have to tell you what's fascinating and what I discovered since I've been here at this crucial day is there is no sense of panic. There is no sense of chaos. People have not got very focus on this vote which takes place on Sunday and no matter which way you pass it, this vote does effectively become will Greece stay in the Eurozone. Do the people want the austerity that will be required to stay in or as the prime minister says it's time to renegotiate and they will probably vote no. That's going to be the debating point.

COOPER: All right, Richard Quest, I appreciate it. Thank you.

Up next, the breaking news, the Washington State of massive wildfire forcing evaluation is damaging homes. Looking at live pictures right there, thousands of acres have already burned. Details ahead.

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[21:50:32]

COOPER: Breaking news from Washington State tonight, a catastrophic wildfire in the woods of governor (ph) -- one that is forcing evaluation, shutting down businesses, and risking firefighters' lives. The fire started yesterday afternoon in the central part of the state and has scorched thousands of acres and damaged dozens of homes.

Report of Allison Grande from Seattle Affiliates Station KIRO joins me now.

So what's the latest on the ground?

ALLISON GRANDE, KIRO REPORTER: Anderson, firefighters have their hands full here. I want to show you this house behind me here. This house was consumed by flames and what they're calling the Sleepy Hollow fire. It came over this bridge and wiped out this entire house just around 8:30 last night.

Folks here have leveled two evacuations but they hadn't gone to the level of level three get out. You have to get out. But they knew it was time when they saw the light growing up over the edge so they were able to escape but when they came home today their home is complete gone. If I show you over here you can see how this wildfire really just came down that hill.

Right over the top, swoop down this hill and the garage there was right up against the side. So it jumped in to the house and then the house was gone. This has been smoldering all day. Firefighters are back here now keeping an eye on it to make sure that this house doesn't flare up again because neighbors around here are concerned about ember because that's the biggest concern here with some winds in this area, they have seen some embers travel even from this fire up in the hill outside of Wenatchee right in for downtown areas and it hit some of the production plants there. We had an ammonia leak earlier today which forced even more evacuations.

COOPER: Do we know how many houses and business have been damaged so far?

GRANDE: So far, 28 structures have been damaged. They haven't been able to get an area look to have a better count of how many of those are homes and how many could be outbuildings or barns. It's kind of a bit of rural area but with the number of folks who have been evacuated, we believe that many of those are going to be home that has been burned. They set up some evacuation shelters at a local high school here. Many folks took advantage of that. Other folks that have to get out went to stay with friends and relatives who live in different parts of Wenatchee. COOPER: I also understand there -- I mean there been a number of emergency evacuations and I know the Northwest has got a tough time with drought conditions, high temperatures, little rain. Does there -- is there any relief in sight here?

GRANDE: You know Anderson, it's been very dry on both sides of the cascades here in Washington State. High fire danger in the Seattle area, even higher over here as we drove over. This year, I could see how dry it was. Conditions here are more a like what we'd expect to see in August and it still June. Because of embers that were flying from this fire there was a fire down at the Bluebird factory down in Wenatchee and that triggered an ammonia leak as well.

So firefighters were battling fires up on the hills. They're also fighting fires right in town in Wenatchee as well. At point today, they told folks to stay inside, close your windows. Turn off the air conditioning. Go in the innermost room inside your house to make sure that that ammonia leak isn't a problem and now that's been lifted.

COOPER: Wow. Allison Grande, I appreciate your reporting. Joining us now by phone is Wenatchee Mayor Frank Kuntz. Mayor, thanks for being with us. More than a thousand people evacuated the area. Is there any timeline for when people might be able to get back to their homes?

FRANK KUNTZ, MAYOR WENATCHEE: Some of them are able to get back to it now on the western slope of valley. We've gone from a level three to a level two so folks have at least access to their property. And things are starting to I think reach within the city limit calm down a little bit. Embers are really concern in neighborhood so it's been better but we got a long ways to go.

COOPER: Do you have any idea how the fire started?

KUNTZ: We really don't other than it was along one on the roads, the road that we called Sleepy Hallow in the valley. It started right next to the road. Our firefighters really hadn't come up with origin of exactly what (inaudible) roadway.

COOPER: I mean how many firefighters do you have battling the blaze?

KUNTZ: Currently around 200. A number of them are -- came from different areas of our state. Our local crew is actually getting a little bit of break right now. They been have it for 24 straight hours so they're getting a bit of rest but I believe there are something in the neighborhood 200 firefighters (inaudible).

COOPER: And we talked about the drought, I know it was about 100 degrees even away from where the fire was. There was a little rain today. Did that help contain things?

[21:55:02]

KUNTZ: It helped briefly but we are still dry that once it gets up 200 degrees in a kind of grasses that we have near right back to where we were, you know, yesterday which is it is still hot and there are still clouds in the area. Again, this was 100 degree for the next week so we'll continue to have this problem turning while.

COOPER: Do you -- are you getting more firefighters coming to the area? Is there a need?

KUNTZ: Yes. Yes we are but on the same time , you know, Anderson, we've got areas to our East. I know there's been too fires in Douglas County which is a neighboring county. So we had to take their firefighters and have them come to our area when they are needed out there. We've got a number that came from Seattle area which has helped a bunch, but, you know, resources are thin.

COOPER: Yeah. Well, listen we wish you the best and we appreciate you're talking to us tonight. Thank you so much...

KUNTZ: You bet.

COOPER: ... Mayor Frank Kuntz from Wenatchee. We'll be right back.

(COMMERCIAL BREAK)

COOPER: Allow us to be continuing to cover the developing story out of Wenatchee in Washington the fire which so far has continuous to burn the drought condition certainly not helping matters at all.

That does it for us. Thanks very much for watching us. CNN tonight with Don Lemon starts now.

DON LEMON, CNN HOST: CNN tonight exclusive video of the arrest of prisoners escaping David Sweat on the run for three weeks after a stunning prison break.

[22:00:05] I'm going to talk to the couple who witnessed his take down by New York state troopers.

This is CNN tonight. I'm Don Lemon.

David Sweat is talking to investigators now then he is back in custody. We're going to see...