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CNN NEWSROOM

Accused Ohio Kidnapper Back in Court; Leaker's Girlfriend Now in Spotlight; NSA Leaker Remains in Hiding; Google Goes on the Offensive; Wind, Heat Fuel 5 Colorado Wildfires; Walgreens Fined $80 Million In Drug Probe; Interview with Congressman Ed Royce on Investigation Launched into State Department

Aired June 12, 2013 - 09:00   ET

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


(BEGIN VIDEOTAPE)

PAMELA BROWN, CNN CORRESPONDENT: It's our first glimpse inside the so-called house of horrors where Ariel Castro allegedly held Gina DeJesus, Amanda Berry and Michelle Knight against their will for more than a decade. FBI agents once again analyzing evidence and re- creating the terrible scene.

This video from our affiliate WOIO shows a disco ball and silver garland hanging in Castro's front room.

Wednesday Castro is making his second court appearance, facing an astounding 329 charges, including aggravated murder.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: The vast way of charges is the prosecutors way of signaling this is a very important and heinous case.

BROWN: His defense attorney told CNN that Castro will plead not guilty to all the charges in this indictment in which he is accused of using vacuum cords, chains and tape to restrain the girls in his basement and did purposefully and with prior calculation and design cause the unlawful termination of Michelle Knight's unborn baby.

But this indictment covers just half the time the women were allegedly held, meaning more charges are likely. Legal experts say the prosecutor's office is playing a balancing act.

TOOBIN: What makes this case unusual is that as much as prosecutors want to throw the book at Castro, they also have to consider the needs of the victims who may not want to testify, who may not want to relive this experience.

BROWN: An attorney representing the victims tell CNN the survivors continue to have confidence in the prosecutor's office and sincerely hope for a swift and just results.

Donations continue to pour into the Courage Fund set up to help the women now at nearly $1 million. Since returning home a month ago, the women continue to heal privately. One family friend says they are adjusting to their new lives, visiting nail salons and going to the park. CHRIS KELLY, ADVISER, CLEVELAND COURAGE FUND: They're exceptional human beings. Having gone through this ordeal and to be able to come out of it and start to heal and move forward so quickly is amazing.

BROWN: Pamela Brown, CNN, Cleveland, Ohio.

(END VIDEOTAPE)

CAROL COSTELLO, CNN ANCHOR: And Pamela Brown is inside the courtroom right now. She will watch the arraignment. As soon as it's over, she'll come out of the courtroom and she'll brief us on what happened. But right now we want to bring in CNN legal analyst Paul Callan to kind of walk us through what we can expect to happen in the courtroom.

Hi, Paul.

PAUL CALLAN, CNN LEGAL ANALYST: Good morning, Carol. We're really going to see somewhat of a replay of what we've seen previously. You know, he was arraigned on fewer charges when he was first arrested. The grand jury is now indicted and handed down, really, an indictment with a staggering number of counts, 329 counts. Those counts could add up if you had consecutive sentences to 3,000 years in prison and the possibility of a life sentence or the death penalty on an aggravated murder count.

So he will be advised of the charges against him. Normally attorneys waive a reading of the charges, obviously, if they had to read all of them, it would take the entire day. Usually the subject of bail comes up. But bail is already $8 million in this case, which is probably more than adequate to keep him in prison.

So I'm not sure if prosecutors will seek an increase in bail. They could at this proceeding or a later proceeding they'll ask for more bail.

COSTELLO: Will Castro enter a plea?

CALLAN: His attorney may ask for a plea of not guilty on his behalf. Sometimes it gets deferred and, bear in mind, defense attorneys are looking probably at a potential insanity defense and that will depend on psychiatric evaluations and other factors as the case goes forward. So I'm not clear whether the final plea in the case will actually be entered today.

COSTELLO: All right, Paul Callan, we're going to get back to you. We're going to keep our eye on the courtroom in Cleveland as soon as this hearing gets under way. Of course, we'll take you back -- let me see. I can see Ariel Castro through the door here.

CALLAN: Thank you, Carol.

COSTELLO: So let's pause for a moment to see if he's walking into the courtroom, and he is. So let's watch the proceedings now.

Paul, you stick around.

CALLAN: OK.

(BEGIN LIVE FEED)

JUDGE LAUREN MOORE, CLEVELAND MUNICIPAL JUDGE: All right, good morning, everyone. You can be seated.

JAYE M. SCHLACHET, DEFENSE ATTORNEY: Good morning, your honor.

MOORE: Morning.

Mr. Schlachet, Mr. Weintraub, good morning.

SCHLACHET: Good morning, your honor.

CRAIG WEINTRAUB, DEFENSE ATTORNEY: Good morning, your honor.

MOORE: I have a very hefty indictment in front of me here. Obviously we're here for the arraignment of your client.

Mr. Schlachet?

SCHLACHET: Judge, we will waive reading of the arraignment rights. We'd like to enter a plea of not guilty. We will waive the reading of the indictment. Waive the 24-hour period and just enter the plea.

MOORE: Very good, gentlemen. I will enter not guilty plea on behalf of your client. The case is assigned to Judge Michael Russo. Your first pretrial will be June 19th of 2013 at 9:00 a.m. and I will continue your client's original bond at this time.

SCHLACHET: Thank you, your honor.

WEINTRAUB: Thank you, your honor.

(END LIVE FEED)

COSTELLO: All right. You can see that was quick. Ariel Castro being led back to his prison cell. As you can see, he's grown a beard, but he appears -- appears he's shaven, he's well groomed. But, again, he looked down at the ground.

He didn't look up not once, Paul Callan. Not once.

CALLAN: No, he didn't. You know, it went as I thought it would. They waived the reading of the indictment and we've already got enough bail. We've got $8 million in place. You know, he's dressed in the orange jumpsuit and looking at the ground and it's really hard to get a read on what's going on with him, obviously.

I have no doubt that, you know, defense attorneys are consulting with psychiatrists and trying to weigh the possibility of an insanity defense here. It will be a tough defense to prove to a jury because of all the planning that went involved in allegedly holding these three women captive.

But, frankly, I don't know what other defense he would have, unless somehow some of these victims change their story and say that they consented to the confinement, which I don't think you're ever going to see happen. Otherwise he's still be facing --

(CROSSTALK)

COSTELLO: That would be stunning. The most interesting charges against him -- the most interesting charges against him, Castro, Paul, are the aggravated murder charges. And these -- these came about because he apparently forced one of the women to have abortions when she became pregnant. Apparently he punched and kicked her repeatedly in the stomach inducing abortion. And that's why Castro has been charged with aggravated murder.

Will those charges, will they stick, you think?

CALLAN: That, you're absolutely correct, is the most interesting question in the case. And it's interesting because that is a count in which he could face the death penalty under Ohio law.

Ohio has a very unusual statute which says, basically, that if you kill a fetus being carried by a pregnant women, that is aggravated murder. And the death penalty may apply, depending upon the circumstances. But here's the problem for prosecutors. Since she was held in captivity and never taken to see a physician, how do they prove definitively that she was, in fact, pregnant?

Now of course every women will say, believe me, I know when I'm pregnant. But, bear in mind this has to be proven beyond a reasonable doubt before a jury. And I -- the defense can say how do you know it wasn't hysterical pregnancy or how do you know it wasn't something else? And in the absence of medical testimony, it's not as easy to prove that as you might think.

Now the other issue they have to prove, assuming that fetal development had gotten such far enough along that the women can testify realistically that she was pregnant and, you know, and she knew that as a result of what she saw after the miscarriage, you have to then prove that the fetus was lost because of the beating directly and not because of something else. Stress or the stress of captivity or other things.

COSTELLO: Right.

CALLAN: So very, very difficult counts to prove and the most important counts in the indictment.

COSTELLO: All right, Paul Callan, thank you so much for enlightening us this morning. We appreciate it.

Again, Ariel Castro in court for his arraignment, which is really a formal reading of the charges. His lawyer entered a not guilty plea on his behalf. Pretrial hearing is scheduled for June 19th.

Pamela Brown is inside the courtroom. When she gets out of the courtroom, we'll take you back to Cleveland. But let's move on to other news this morning. The man at the center of the U.S. intelligence leaks is still in hiding, but his girlfriend and her pole dancing YouTube channel are front and center.

This is Lindsay Mills. A professional dancer who dated Edward Snowden for the last four or five years. Her father said she did not know Snowden's plans to expose the secret government program that monitors phone calls and online activities. And Mills' online blog, which has since been taken down, she speaks only vaguely of the drama now involving her life. Her cryptic comment, quote, "Surely there will be villainous pirates, distracting mermaids, and tides of change in this new open water chapter of my journey. But at the moment, all I can feel is alone," end quote.

U.S. prosecutors are reportedly preparing charges against her boyfriend, Edward Snowden, and he has not been seen since checking out of this posh Hong Kong hotel on Monday. One of the journalists who publicized his claims says he believes Snowden is now taking refuge in a so-called safe house.

CNN's Anna Coren is live in Hong Kong.

Safe house, what exactly is that?

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Exactly. What is a safe house? I mean, it could be anything whether he's staying in an apartment, a hotel. If he's staying with a human rights group. We really don't know.

We do know, however, that he is in Hong Kong. That has been confirmed by "The Guardian" journalists who are fiercely protecting their source. You know, there was information in the local press today that Edward Snowden had in fact been in touched with human rights groups. We contacted them. We contacted immigration lawyers as well in the city and none of them had said they had had any contact whatsoever with the 29-year-old.

But, Carol, you would have to assume that he must be getting help from someone.

COSTELLO: Yes. What is the public sentiment there?

COREN: Yes, it's interesting. You know, obviously in the United States there are some people who see him as a traitor for what he's done. Well, here in Hong Kong, I think they're really welcoming the fact that he has chosen this city to release this highly sensitive information. Certainly people feel that it validates the fact that, although Hong Kong is part of China, the one country, two systems, it's also autonomous. So it validates its free speech policy.

But there's a feeling that, you know, people want Hong Kong to protect him, want to grant him asylum. So that will be very interesting to see how this goes.

The lawyers we've spoken to, Carol, say that if he does apply for asylum, this is something that could drag out the extradition process for months, if not longer.

COSTELLO: All right. Anna Coren, reporting live for us from Hong Kong.

Internet giant Google says it did not betray the trust of its users by supplying unlimited information to the feds and is asking the government to clear its name by allowing it to divulge confidential details of what exactly it has handed over.

CNN's Jen Westhoven covers all things business.

And so Google is going on the offensive. But will the courts allow them to actually do that?

JENNIFER WESTHOVEN, CNN BUSINESS CORRESPONDENT: Right. And not just Google, all these other tech companies are chiming in, too. We haven't heard from the cell phone companies, but it's very interesting to me that Google is finally -- you know, they released the statement out yesterday.

We've got a quote from it, where basically they're saying that it's time for the government to lift the veil of secrecy. To let them talk about, not the information itself, but what they're sharing and what they're not sharing. And here you see Google saying in this quote, they think that the government can talk about that or let it be talked about without harming national security. So without putting the public at risk.

Now immediately after this we heard from other tech companies. So here comes Microsoft saying, yes, we think that having this kind of information out there is going to allow Americans to understand and debate these important issues. If we don't have the facts, what kind of debate are any of us are really having in the public right now?

COSTELLO: And the other thing the Internet companies want to prove is they're not really handing over all that much information because everybody has in their mind, oh my god, they're handing over everything that I put online to the government right now.

WESTHOVEN: Yes. What is the point of having a password to anything.

COSTELLO: It's --

WESTHOVEN: Yes. It's very fascinating. But even, you know, after that where they had Twitter coming out, Facebook said -- a lot of times these companies put out what are called transparency reports and they say, this is what the government asks us for, this is what we tell them, this is what we don't. Twitter -- excuse me, Facebook said, we don't even bother because if we had this gag order on all of this, anything we would give you would be basically lying.

So they're saying, we don't want to lie to people, you shouldn't be lying either. All this stuff came through, mostly the lawyers, but I'll tell you, Google, their chief architect is called, he says he believes the NSA's behavior is disgusting. The Justice Department said they would consider Google's request. COSTELLO: We'll see.

WESTHOVEN: What do you think about that? Consider.

COSTELLO: I hope that they will.

WESTHOVEN: It's not really an action word.

COSTELLO: No.

(LAUGHTER)

Jen, thanks so much.

In the meantime, one leading congressman believes Snowden should not only be the target -- shouldn't be the only target of prosecutors, I should say. Republican lawmaker Peter King of New York says the journalists who help exposed the NSA leaker should also face charges.

(BEGIN VIDEO CLIP)

REP. PETER KING (R), NEW YORK: If they only knew that this was classified information, I think action should be taken, especially somebody of this magnitude. I know that the whole issue of leaks has gone into over the last month. But I think something on this magnitude there is an obligation both moral but also legal. I believe against a reporter disclosing something which would so severely compromise national security.

As a practical matter, I guess there have been in the past several years a number of reporters who have been prosecuted under it. So I -- the answer is yes.

(END VIDEO CLIP)

COSTELLO: One of those journalists Glenn Greenwald of "The Guardian" voiced disbelief on Twitter. His tweet, "Is it true, as I was just told, that Peter King on CNN called for criminal prosecution of journalists reporting the NSA stories?"

I can tell you, Glenn, it is, indeed, true.

Strong winds and hot temperatures will not help firefighters today in Colorado. They're battling at least five wildfires. The biggest south of Denver where 5,000 homes are under a mandatory evacuation order. Across the state, at least 12,000 acres and dozens of structures have already burned. Colorado's governor spoke earlier about the danger.

(BEGIN VIDEO CLIP)

GOV. JOHN HICKENLOOPER (D), COLORADO: People have to be prepared, they have to make sure that their homes -- if you're in the wildline fire area to make sure your homes are defensible. And we have to make sure we have our firefighters and our police officers and all of our first responders ready. Right. And they have been. (END VIDEO CLIP)

COSTELLO: One of the fires south of Colorado Springs is threatening the iconic Royal Gorge suspension bridge. "The Denver Post" reports that not far away, 800 inmates have been evacuated from a state prison just as a precaution.

Our Dan Simon has the latest for you from Colorado.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT (voice-over): Raging wildfires across Colorado are forcing thousands to get out of harm's way.

UNIDENTIFIED MALE: Get out now!

SIMON: The Black Forest Fire south of Denver multiplying in size in just hours, and engulfing thousands of acres in its path. This thick billowing smoke visible for miles, massive flames consumes dozens of buildings in this heavily wooded area.

TERRY MAKETA, EL PASO COUNTY SHERIFF: We are still at zero containment. The fire is still pretty well-scattered. It's not just one wall of fire.

SIMON: Firefighters say record-high winds and high temperatures are fueling the fast-moving fires.

MAKETA: With night fall, we hope that the wins have certainly died down since earlier today.

SIMON: The Black Forest Fire, one of at least fires ablaze across Colorado. Some 150 firefighters and the National Guard aiding in the battle.

MAKETA: We have other fires around the state that are also draining the resources. But right now, I cannot be more pleased with the support that we've received.

SIMON: This area is no stranger to devastating fires. Last summer, the Waldo Canyon Fire killed two and destroyed 346 homes.

UNIDENTIFIED MALE: I'm not experienced with wildfires. I'll tell you what? I won't underestimate it again.

SIMON: And Colorado was not alone. In northern California, a firefighter was killed while fighting a wildfire caused by lightning.

Lightning was also the cause of another growing wildfire near Kingston, New Mexico. And earlier, not showing any signs of slowing down.

(END VIDEOTAPE)

SIMON: And live now in Colorado Springs, this black forest fire. It's believed it has destroyed or damaged dozens of homes at this point. This fire is not contained at all, zero percent. When you have five fires raging throughout the state of Colorado, as you can imagine, resources are stretched a bit thin, Carol.

So, the big priority is making sure you have enough firefighters on the front lines so they can effectively battle this blaze -- Carol.

COSTELLO: All right. Dan Simon reporting live from Colorado Springs this morning.

Turning now to your money. Walgreens is paying a record fine of $80 million to settle claims it knowingly allowed drugs like the painkiller Oxycodone to hit the black market.

Alison Kosik is at the New York Stock Exchange to tell us more, really?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, really.

You know, this also goes back to a distribution center, Carol, that's located in Jupiter, Florida, which received bigger than usual orders of prescription pain killers from half a dozen pharmacies located in the state.

Now, DEA rules that Walgreens is supposed to report the activity, but here's the things -- it didn't and the government says, as a result, triple the average number of painkillers were delivered to the pharmacies. The DEA says these locations knew the drugs were not for legitimate medical use and there were tens of thousands of violations and that Walgreens negligently allowed painkillers to actually make their way to the black market.

Now, the fine is being the biggest in DEA story, and it's jus the fine because the Walgreens Center is banned from distributing similar drugs until next year. The company said in part, "We are fully committed to doing our part to prevent prescription drug abuse. We will also continue to advocate for solutions to combat the abuse of controlled substances and ensure patient access to critical medications."

The company also says it enhanced compliance systems so this doesn't happen again. So, this is really interesting that Walgreens got caught in this kind of net.

Ahead of the open real fast, we are seeing shares of Walgreens fall. As for the broader market, futures are pointing to a higher open -- Carol.

COSTELLO: All right. Alison Kosik reporting live for us this morning.

Recipe for a brawl. Mix in two teams that don't exactly like each other and four batters hit by pitches and then clear the benches. The fight broke out at the Dodgers Stadium in the seventh inning of the game between L.A. and the Arizona Diamondbacks. Look at that. They're just going to head to the stands for a second.

There were six ejections, including Dodger rookie sensation Yasiel Puig. Major League Baseball will most likely come down with some suspensions and fines. We'll keep you posted.

Just ahead on the NEWSROOM: A State Department memo raising questions about possible prostitution, drug deals and sexual abuse near U.S. embassies. The worst part: some are accused of a cover up.

(COMMERCIAL BREAK)

COSTELLO: Accusations of prostitutes, drug deals and sexual abuse near U.S. embassy, if that's not enough. The State Department under Hillary Clinton is accused of covering it all up. These accusations contained in a memo sent by the State Department's inspector general and given to CNN by a whistleblower. Included in a report, a U.S. ambassador solicited sexual favors from prostitutes and minor children. A member of Hillary Clinton security engaged prostitutes while on official trips in Colombia and Russia.

In Beirut, a security official sexually assaulted embassy guards, and in Baghdad, an underground drug ring supplied drugs to security contractors. The memo claims each investigation was hindered or dropped. But the State Department says all of those cases were thoroughly investigated or are still under investigation.

(BEGIN VIDEO CLIP)

JEN PSAKI, STATE DEPARTMENT SPOKESWOMAN: First, we look into every allegation that is made seriously. We would take every allegation seriously. But I'm not going to outline the status of those or any individual cases from here.

(END VIDEO CLIP)

COSTELLO: Hillary Clinton's spokesperson says, quote, "We learned of it from the media and don't know anything beyond what's been reported," end quote.

Congressman Ed Royce joins me now from Capitol Hill. He's a Republican and chairman of the House Foreign Affairs Committee and he's launching an investigation.

Good morning.

REP. ED ROYCE (R-CA), FOREIGN AFFAIRS COMMITTEE CHAIRMAN: Good morning.

COSTELLO: Do you think it's possible Hillary Clinton didn't know of any of these allegations?

ROYCE: Well, the one thing we do know, Carol, is that the intervention of senior political appointees in this process to quash these investigations and that would include Hillary Clinton's chief of staff. It would also include a rather senior position, the undersecretary of management, Mr. Kennedy.

And, so, again, we have an example of a situation where investigators surface an issue here or actually eight different occasions, different issues. Try to bring them under investigation and then the political appointees lean in in order to try to stop the investigation or try to manage the outcome.

COSTELLO: Is it possible, though, that people under Clinton investigated these allegations? They said they did, right? But nothing came of them. Do you have access to what they found?

ROYCE: Well, yes. We have the fact that when approached about these investigations, which we did in March in my office, we got a copy of a draft and we particularly, you know, we approached the agency and asked them about these allegations. They said there's nothing here.

Now, we find out that there were investigations into the particular details in these eight cases where political appointees came in, intervened, called off the investigations and this is what is concerning to us.

Normally, you'd have the inspector general and that would be the tough cop on the beat. The top cop, as well, who would then come in and be able to play the role to make certain that the investigations continued or that the evidence came out. In this particular case, you have a situation where for four and a half years, this administration has never put forward someone for this position as inspector general. And that is after repeated requests from us.

I brought this up in April with Secretary Kerry. And prior to that, we brought this up on numerous occasions, the fact that you've got to allow the inspector general and their office to do their job. Otherwise, if political appointees are allowed to lean in and suppress evidence, then you have the type of outcome where there isn't a deterrent effect and now, here's eight cases at this moment coming forward that were all bottled up that have not been fully investigated.

COSTELLO: You know --

ROYCE: At this point, we're moving forward.

COSTELLO: Some Democrats would say the timing of this whistleblower leak is interesting. I mean, Hillary Clinton is clearly thinking of running for president and now, Republicans are calling for a congressional investigation.

Well, what would you say to that?

ROYCE: Well, the point is that these are eight examples of malfeasance and, in some cases, the conduct here is criminal. And the -- we have the facts that yes, indeed, investigations were open. And, yes, indeed, in the judgment of the inspector general's office, there was undue political interference.

There was undue interference from political appointees. That isn't our judgment in Congress. This is the judgment of the inspector general's office.

So, the real question, also, is why can't we get an inspector general, someone to head up that agency after four and a half years in order to back up the investigators so that we don't end up with a situation where this evidence is suppressed?

And, yes, now, you have investigators that are -- that are, you know, sending out information about the investigations. That's surfacing. But the real solution to the problem is to put somebody in the position of top cop on the beat.

And the other solution to the problem is for Patrick Kennedy, the undersecretary of management and for Cheryl Mills, former chief of staff for Hillary Clinton, not to get directly engaged in trying to suppress investigations.

COSTELLO: Well, your investigation is now, your investigation is now under way. We'll check back with you.

Congressman Ed Royce, thank you for being with us this morning.

ROYCE: Thank you, Carol.

COSTELLO: Up next in THE NEWSROOM: a stunning revelation from Pope Francis. He admits there is, indeed, a gay lobby in the Vatican.

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