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THE LEAD WITH JAKE TAPPER

Russia to Fly Bombers Near U.S.; Protests Over Missing Students Turn Violent; ISIS Safe Haven; Putin's Next Move

Aired November 13, 2014 - 16:00   ET

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


JAKE TAPPER, CNN ANCHOR: The terrorists of ISIS posting a warped show-and-tell to show how they can hide from coalition bombs and enemy fighters.

I'm Jake Tapper. This is THE LEAD.

The world lead. It's an underground labyrinth complete with trenches, tunnels, even bedrooms. In new video, ISIS terrorists seem almost giddy about how they have been ducking the U.S. air assault, this as a new audiotape could prove that their leader is still alive.

And call him an equal opportunity agitator. As President Vladimir Putin beefs up Russia's military presence in Ukraine, plans are revealed to put long-range bombers on patrol and uncomfortably close to U.S. soil.

Plus, the money lead. No, you have not been sniffing too many exhaust fumes. Gas prices really are that low. Today, a new forecast of how long they will stay that low and what it might mean for your pocketbook.

Good afternoon, everybody. Welcome to THE LEAD. I'm Jake Tapper.

We're going to begin with the world lead. As more U.S. troops prepare to head over to Iraq to fight ISIS, the terrorist group's media machine is now attempting to show it has the upper hand against the U.S.-led coalition. In this new video released on YouTube, ISIS terrorists take us on a tour of what they claim, claim is an elaborate network of tunnel of bunkers designed to protect from an air assault.

And with U.S. intelligence still struggling to sort out whether recent airstrikes killed or wounded the evil mastermind at the helm of the right group, a newly released audiotape could help clear up the confusion.

Let's bring in Pentagon correspondent Barbara Starr.

Barbara, what have we learned from either of these tapes?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, look, Jake, these tapes are part bragging and part threats by this group. But, as you say, the real question for U.S. intelligence right now is Abu Bakr al- Baghdadi dead or alive?

(BEGIN VIDEOTAPE) STARR (voice-over): ISIS is burrowing in for the long fight. In a new video, the terror group shows off its latest strategy to survive, ISIS fighters in an underground tunnel system in Iraq sheltered from coalition airstrikes.

And ISIS' leader has come out of hiding. Less than a week after reports he was targeted in an airstrike, the group released audio only of Abu Bakr al-Baghdadi suggesting he survived. The new message purportedly the voice the leader, al-Baghdadi called the coalition terrified, weak and powerless and threatened volcanoes of jihad everywhere.

CNN cannot confirm the authenticity of the audio. With over 800 airstrikes so far, the nation's top defense official today again there will be no U.S. boots on the ground in the fight against ISIS.

CHUCK HAGEL, U.S. DEFENSE SECRETARY: U.S. military personnel will not be engaged in a ground combat mission.

STARR: But the Joint Chiefs chairman seemed to leave the door open for greater U.S. involvement in Iraq.

GEN. MARTIN DEMPSEY, JOINT CHIEFS OF STAFF CHAIRMAN: I'm not predicting at this point that I would recommend that those forces in Mosul and along the border would need to be accompanied by U.S. forces, but we're certainly considering it.

STARR: As the United States prepares to send 1,500 additional military personnel to Iraq, the Joint Chiefs chairman says Iraq will need 80,000 of its own troops to recapture territory it has lost to ISIS. But the idea got a skeptical reception.

REP. LORETTA SANCHEZ (D), CALIFORNIA: I'm asking, what's the difference in the men, of the Iraqi men that we have in the forces there in making a difference, not running away from the battle?

STARR: Dempsey admitted, even with more training, Iraqi forces still need to show that they are up to the fight.

DEMPSEY: One of the assumptions is that the Iraqi security forces will be willing to take back Al Anbar and Nineveh province. If those assumptions are rendered invalid, I will have to adjust my recommendations.

(END VIDEOTAPE)

STARR: And in some very late-breaking news, CNN learned a short time ago there's been now a third round of airstrikes inside Syria by the U.S. against another al Qaeda affiliate called the Khorasan group.

This is a group of hard-core al Qaeda operatives the U.S. has been going out of concern they are capable of making bombs that can get past airport screening. Now we have a third round airstrikes against them -- now word yet how successful those strikes were, Jake.

TAPPER: Barbara Starr at the Pentagon, thank you so much. What makes ISIS such a threat, national security experts say, is not

its willingness to be more barbaric than other terrorist groups, but rather two things, one, its Western members, Americans and Europeans who might be able to return home undetected, and, second, its vast wealth.

ISIS is, experts say, the richest terrorist group in the history of the world. They are even contemplating, they claim, creating their own currency. ISIS announced on social media that it wants to mint its own gold, silver and copper coins.

They say doing so would free them of any ties to the "tyrants' financial system," a reference to the Western money, especially the U.S. dollar. But that's not all they might have in mind.

And joining me now is Jimmy Gurule. He's the former undersecretary of the U.S. Treasury Department. He just testified before members of Congress about stopping the flow of cash into ISIS.

Thank you so much for being here. We appreciate it.

Explain for us how this group has been able to make so much money.

JIMMY GURULE, FORMER U.S. TREASURY UNDERSECRETARY: Well, unlike its predecessor, al Qaeda, which raised money principally from external sources, ISIS...

TAPPER: Donations from Saudi Arabia and Qatar.

GURULE: Donations -- Saudi Arabia, charities, for example.

ISIS is principally, primarily self-funded. And the largest stream of funding coming to ISIS is through the illicit sale of oil and territories in Iraq and Syria that contain oil wells and oil refineries that ISIS controls.

The estimates are that they bring in as much as $1 million to $2 million a day from the sale of oil on the black market.

TAPPER: And what are their other sources of funding?

GURULE: In addition, they have raised as much as $20 million from ransom hostage payments. They also raise money from extortionate payments and taxes that they impose on the people in the territories that they control, the businesses in the territories that they control and, then, finally, on the sale of ancient artifacts that have been stolen from Iraq and Syria.

TAPPER: I thought that there was some question about funding coming from Qatar and other countries.

GURULE: There is. There is. There is some external funding, but their primary sources of funding are internal.

TAPPER: Is there a way for the U.S. to stop these funding sources? I know the U.S., the coalition has tried to target some of these portable oil and gas refineries.

But what about, for instance, the people who buy this illicitly obtained oil and gas?

GURULE: No, exactly, exactly.

The Treasury Department needs to be focusing in the middlemen, the smugglers, the people that are actually transporting as much as 20,000 to 30,000 barrels of oil a day across the border into Turkey and then also into Syria.

TAPPER: They are not targeting them?

GURULE: Well, they haven't identified any individual. At least they haven't placed them on the Treasury list for blocking and freezing the assets of the middlemen, of the smugglers, of corrupt border guards at the border that are looking the other way when the oil is being smuggled across the border into Turkey.

And I think the Treasury Department needs to intensify its efforts on those types of individuals.

TAPPER: It would seem obvious that you need to go after those guys in order to stop this trade.

GURULE: Well, I think it is. But my sense is that the Treasury Department has had some difficulty in developing some traction, establishing its footing and focusing and identifying those individuals.

TAPPER: What do you make of this ISIS plan to create its own currency? Is that something that could really actually happen?

GURULE: Well, it's hard to say.

Right now, the estimates are that they have as much as $1 million -- to $2 billion in reserve. This is the wealthiest terrorist organization that the world has ever known. And so with that kind of money, it's hard to understand, what's the potential? What could they do with that?

So, certainly, it's a possibility. But I think the difficulty of course with that kind of money is, is you can't just put that money in shoe boxes and place it under your mattress. It has to enter into the financial system at some point in time.

So, I think the Treasury needs to be focusing on banks, banks in Qatar, for example, and in Kuwait that may be the recipients in handling money for ISIS.

TAPPER: They have so much money, they say, and yet the current undersecretary for terrorism and financial intelligence, David Cohen, says they don't have enough money to actually run a country or set up the so-called caliphate that they want to. Do you agree with that?

GURULE: Well, I'm not so sure. I think they have again -- the estimates are that they have as much as

$1 billion in reserve, that's in their possession. And certainly some of that has to go back into humanitarian activities for the people in the populations that they control, but they certainly have ample funds to finance their terrorist operations, to kill innocent civilians, to orchestrate and plan and implement terrorist attacks. They shouldn't be taken lightly.

TAPPER: All right, Jimmy Gurule, thank you so much. Appreciate your time.

GURULE: Thank you.

TAPPER: In other world news, just when it seemed as though Vladimir Putin could not get any more brazen, his own planes start terrorizing the skies and even get in the way of a passenger plane that had to swerve to avoid a crash. That's next.

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TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

Also in our world lead, growing tensions in Ukraine. Russian President Vladimir Putin is accused of yet again raising the stakes in his Cold War era chess match with the West.

Ukrainian officials said Thursday that more Russian troops and artillery have been moved across the border in preparation for heavy fighting and they claim an attack from Moscow is imminent. Russia's foreign minister denied the allegation and questioned Kiev's commitment to the cease-fire.

That cease-fire from September has been violated almost daily with clashes between pro-Russian separatists and Ukrainian troops. More than 4,000 people have been killed since the fighting began.

For more on this growing tension, we turn to CNN's chief national security correspondent, Jim Sciutto.

Jim, what's the latest on Russia's movements along or across the Ukrainian border? And is there actually any intelligence to suggest that a Russian attack is imminent?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, first, in the movements, there is intelligence to show that. There are satellite photos, et cetera.

But what is interesting, and you just showed that video from YouTube, that there's open-source intelligence in effect that shows these Russian heavy weapons moving across the video, as you can see right there.

From the Ukrainian perspective, when I speak to Ukrainian officials, it's their view that the reason these Russian weapons are going in now is to prepare and arm the pro-Russian separatists for a major offensive inside Eastern Ukraine. And they are connecting the dots both on the Russian weapons coming across the border in the east, but also the activity in Crimea in the south.

It's their view that they are doing a sort of panzer movement, showing Ukrainian forces that they have them outflanked.

TAPPER: What's the word on the movement of Russian fighters, Russian vessels to the Gulf of Mexico and the Caribbean? Which means they'd be flying quite close to the U.S. Is there a reaction from the Pentagon?

SCIUTTO: There is a reaction. The general position of the Pentagon is this -- it's not where you fly. It's how you fly. Because it is understood that in international airspace, it's OK, our jets do it and their jets do it as well.

The thing is, how they have flown recently has been much more provocative. The formations have changed. Where they might have been a couple of planes, now, there are four bombers flying with refuelers. There have also been cases in Europe where Russian bombers, because they are not flying with transponders, get into civilian air space, and there was a near miss with a civilian aircraft over Denmark.

So, that kind of stuff that makes them nervous. This latest step of taking the flight -- saying that you're going to take the flights over the Caribbean is, the view of the White House is, listen, there's no excuse for that. There's no training or security reason to have Russian aircraft that close to the U.S. They call that move provocative and destabilizing.

TAPPER: Provocative and destabilizing.

All right. Let's talk more about these Russian flights since Russia essentially annexed Crimea earlier this year. NATO and other European countries have noticed and worried about an uptick in Russian military jets violating their air space, simulating attack runs, conducting mock bombing runs, much more, including that near collision in March with the Swedish passenger plane, with 132 onboard that Jim just talked about.

Those incidents are documented in a new report out of Europe titled "Dangerous Brinksmanship: Close Military Encounters Between Russia and the West in 2014."

CNN's Tom Foreman has been digging into this. He joins us from the magic wall -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Yes, Jake. Take a look at these black dots that we're showing here. This report shows 40 encounters over the past eight months have rattled nerves and raised tensions to a Cold War level.

You mentioned the close call that Jim mentioned as well between a passenger jet and Russian jet along in here. But there are many others from the Russians. They staged a simulated bombing attack on a Danish island, Russian jet made threatening movements towards a U.S. reconnaissance plane, including showing that it was fully armed with missiles, Russian planes have buzzed ships. And they even out in this area practiced a cruise missile strike within range of New York, Washington, and Chicago -- Jake.

TAPPER: Tom, how close have any of these incidents been to the United States or American troops?

FOREMAN: Well, if you look up here on the northern part near Alaska and Canada, September 6th, Russian jets were spotted up in this area. Russia is suggesting we'll have full radar surveillance of this area by year's end. That is not really that uncommon up there.

But in June, four Russian planes were coming down along the coast here within 200 miles. Two of them went all the way down here to within 50 miles of the coast of California. That's the closest that they've been since the Cold War. They were intercepted by U.S. F-15s. That's just short of U.S. airspace. Such incursions are not unheard of but they're becoming more common and this was the closest one in two years -- Jake.

TAPPER: What kind of planes are we talking about? What kind of planes do the Russians even have in their arsenal for these types of flights?

FOREMAN: For some missions, Russia is using fighter jets along with refueling planes as Jim just mentioned. But the big piece of equipment on the scene is this. It's the Tupolev 95, nicknamed the "Bear" by NATO. This plane grew out of the Cold War in the 1950s, way back then. It's a turbo prop, so it looks antique compared to modern bombers like the Stealth. But it's a serious weapon.

Just take a look at the things that it has going for it. If you're going to this plane, you have a maximum speed of almost 600 miles an hour. It has a range for missions of well over 5,000 miles. It can carry 11 tons of ordinates, including cruise missiles and nukes. And like U.S. long range bombers, it is designed for big impact precision strikes -- Jake.

TAPPER: Tom Foreman, thank you so much.

When we come back -- protesters setting cars ablaze after 43 students are murdered, allegedly on orders from a mayor and his wife. And now, tourists are canceling trips as violence picks up very close to one particular resort area.

Plus, record shattered as a huge part of the country starts dealing with temperatures 43 degrees below normal.

And there's even more bad news if you were hoping for a warm up any time soon.

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TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

In another world headline today, intense images out of Mexico amid accusations of government corruption. These violent protests are happening about an hour's drive from the hot tourist town of Acapulco. Protesters are facing off with police over the disappearance of 43 students. They've been missing for more than a month now.

The government says the town mayor and his wife had a gang kidnap and kill the students, but parents are not ready to accept that. The couple is now in custody.

Rafael Romo is CNN's senior Latin American affairs editor, and he joins us live now in Chilpancingo, Mexico, where this is all happening.

Rafael, this has become a very volatile situation.

RAFAEL ROMO, CNN SENIOR LATIN AMERICAN AFFAIRS EDITOR: Yes, that's definitely true. And you get the sense, Jake, that security forces, at least here in the state of Guerrero are being overwhelmed by protesters. We were in the middle of violent protests on Tuesday where there were about 200 riot police against about 2,000 protesters. At one point, the police had to use tear gas. We were in the middle of protests and we were all hit by tear gas.

But after the fact, I asked authorities and they told me we didn't detain anybody. That gives protesters the ability to go to other places. For example, the PRI party, the main building here in the state was torched. Also, the congressional building here in the capital of Chilpancingo was also destroyed, vandalized, something that would be unthinkable in other parts of the world.

I've been talking to the parents of the 43 students who had been missing for more than a month and they tell me that part of the reason why they are so angry is because they do not trust that the government is conducting an investigation they feel comfortable with. The government has said for the most part that based on circumstantial evidence and also the fact that three suspects have told them that the students were killed, that likely, the students are all dead. But the parents are saying, we will not believe that until we see scientific evidence, DNA evidence and, in the meantime, we will believe our children are alive, hidden somewhere in Mexico.

Now, a lot of our American viewers know that here in Guerrero state, where Acapulco is located. Acapulco, the famous beach resort. This situation is making a lot of people who were considering about coming to Acapulco think about it twice because on Monday, the airport in Acapulco was blocked by protesters and actually taken over for several hours, Jake.

So, a very tense situation here on the ground in Mexico.

TAPPER: Horrible story.

Rafael Romo, live for us in Mexico, thank you so much. Appreciate it.

Coming up, it couldn't have come at a worst time for Democrats. CNN unearthing another video today of a primary architect of Obamacare suggesting that those pushing the bill were not really being as forthcoming and honest in their sales pitch to voters whom he has referred to as "stupid".

Plus, some good news for your wallet. Gas prices are plunging and expected to go even lower, but will they last? Coming up.

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