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White House Reacts to Netanyahu Victory; Progress Reported in Iran Nuclear Talks; Carly Fiorina Responds to Israeli Election, Congressional Budget Battle; Tsarnaev's Friend Says He Loaned Him Gun. Aired 7-7:30a ET

Aired March 18, 2015 - 07:00   ET

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


MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Meanwhile, his opponent was saying that he wanted to repair the relationship between the U.S. and Israel.

[07:00:10] So you know that right now the White House is hardly high- fiving and celebrating this win. Analysts, though, are saying that, even though President Obama and Prime Minister Netanyahu may despise each other, as it's been said, when you look at the longer-term deeper relationship between the two countries -- the cooperation on security, intelligence, economics -- that is going to remain strong regardless -- Michaela.

MICHAELA PEREIRA, CNN ANCHOR: All right, Michelle.

So many things to look at with this news out of Israel. So we want to turn in to Aaron David Miller. He's the vice president for new initiatives and distinguished scholar at the Woodrow Wilson International Center.

Also a former adviser to six secretaries of state on the Arab/Israeli peace process. So you're the man to turn to. Good morning to you.

AARON DAVID MILLER, WOODROW WILSON INTERNATIONAL CENTER: Thank you.

PEREIRA: You know that obviously the results aren't official-official until next week. And you're saying that it could perhaps take even longer. Is that still the case?

MILLER: I think it will take a minimum two to three weeks. There will be some bargaining going on. And I think, I mean, if in fact, and I think it's likely, that Prime Minister Netanyahu will be called upon by president of Israel to have an opportunity to put together the next Israeli government, he'll want to broaden it out as much as possible.

I mean, the high road, of course, would be a national unity government. But I'm not sure the Labour Party would participate in such an enterprise, unless they got a rotation. That is to say, unless they split up the next four years, divide it into two; Netanyahu serves two years and Herzog two.

So I suspect it will be a narrower center-right government with the religious parties. And the mystery here, the wonder boy is Moshe Kahlon.

PEREIRA: Tell us about him. He's a key figure in this.

MILLER: You know, he's a life-long Likud-nik. One of seven kids, Libyan ancestry. Revolutionized the cellular industry in Israel when he was ministry of communications by opening up competition and then -- competition and then getting the Israelis rates, frankly, that we should be paying, as well.

He's not terribly charismatic. But he's effective, and he pushes primarily on a socioeconomic agenda, a crisis in housing, supporting the middle class. And he is, in effect, the king-maker in this enterprise.

PEREIRA: Right.

MILLER: So -- I think it's clear, one last point. You know, Netanyahu has now won back-to-back-to-back elections. And within a year he'll become the longest-serving prime minister in Israel's history, surpassing even Israel's greatest prime minister, David Ben Gurian. It's quite remarkable, truly.

PEREIRA: It really is. And what is also remarkable and must be considered is, given the last-ditch efforts to sort of come from behind, Netanyahu made a series of statements over the last week that contradict things that he had said previously and also flying in the face of U.S. policy on Israel.

How do you think that is going to play going forward with the Obama administration and the White House?

MILLER: I think Michelle had it right. It's either meltdown or a dial-down. And I suspect that neither the president, nor the prime minister after the last five years of this, I guess I would describe it as the soap opera between these two, really has a stake in a fight.

I mean, the Iran deal, if it's done, is going to be done, and there's not going to be a whole lot the Israelis are going to be able to do about it. The peace process, such as it is, frankly, may not be dead, but it's -- it's in a deep freeze.

And I think, you know, we have a presidential campaign coming up. A D&R candidate are going do want to demonstrate their pro-Israeli credentials. You've got a Republican-controlled Congress. And the administration has got to sell the Iran deal, sell the Iran deal; and selling the mullahs in Washington is not easy.

So all of these things, I think, will constrain the prospects of a major fight. Tensions, but no meltdown.

PEREIRA: On the other side of it, I want to read the statement that the spokesperson for Hamas had, speaking of the Middle East peace process. Quote, "Hamas doesn't see any difference between Israeli parties, because they all share the denial of our people's rights and keep assaulting them." And he goes on to say, "All occupation leaders, whoever they are, should reassess their positions after the defeat in Gaza."

So clearly Hamas doesn't care about the inner workings. They have a stance against Israel through and through.

MILLER: Well, yes. I mean, essentially, you've got three, three states. You've got the state of Israel and two state-lets. And that situation, frankly, in the period ahead is not going to change.

Sadly, I think the two-state solution is kind of in a Bermuda Triangle, sandwiched between a situation that's too hard for it to be implemented and too important for all of the parties, including the prime minister, despite what he said to abandon, wouldn't surprise me in the least.

If you end up with an effort to, at some point, in the next 22 months, to revive this peace process based on a two-state solution, wouldn't surprise me at all.

[07:05:14] PEREIRA: I'm curious how his win, Netanyahu's win, potentially could affect the nuclear discussions going on with Iran right now?

MILLER: You know, if there's a deal, a framework agreement, there's going to be a lot of opposition to it in Congress. There's -- there's going to be a tendency among Republicans and I suspect more than a few Democrats, to at least have congressional input. And the Israelis will watch that situation extremely carefully. And to the extent that they can, they will try to marshal opposition to it.

There are no good deals from Israel's perspective, only deals with varying degrees of risk. And unlike the other candidate, Isaac Herzog, who I think would have been more inclined not to fight the administration publicly on this, this prime minister is way too committed on the Iran issue. It's almost messianic for him, and he's going to want to fight.

So there is -- there is a real opening there for -- for some continuing tensions over this deal.

PEREIRA: We always learn so much from you. I want to start calling you Professor Aaron David Miller.

MILLER: Oh, please. Whatever you do, Michaela, don't call me a professor. Truly.

PEREIRA: Well, we learn so much from you regardless. Thanks so much. We appreciate it -- John.

JOHN BERMAN, CNN ANCHOR: All right. Thanks so much, Michaela.

You and the professor were just talking about the effect of the Israeli elections on the negotiations between United States and Iran over their nuclear development right now. Those negotiations happening in Switzerland. Our senior CNN international correspondent Nic Robertson is there.

Nic, what's the latest?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hey, John, good morning.

Well, the latest is Energy Secretary Ernest Monitz is meeting with his sort of Iranian counterpart Ali Akbar Salehi, who is the head of the Iranian atomic energy -- atomic energy organization. They're talking technical issues, but what Secretary Kerry has said, and we've heard repeatedly from the State Department, there are still gaps to cross. There are political decisions that the Iranians need to take.

But so far, today, Secretary Kerry has not met with the Iranian Foreign Minister Zarif. Indeed they're waiting for the outcome of this technical discussion that's going on right now.

But earlier on today, Zarif, the Iranian foreign minister, took a walk along the waterfront here. I was able to shout down and ask him, you know, how things are going. He said, "They're going."

So I said, "Well, where are they going?"

And he said, you know, "We're trying."

He seemed quite relaxed. Smiling and happy. But the reality is, the clock is ticking, the deadline for a framework agreement, the 31st of March, is approaching right now. And the fundamental, the fundamental hurdles have to be crossed, although ground has been covered, remain big; and time is really of the essence here -- Alisyn.

ALISYN CAMEROTA, CNN ANCHOR: OK. Nic, thanks so much for that.

Well, we also have some breaking news to tell you about. Japanese police are investigating death threats against Caroline Kennedy. Authorities in Tokyo say phone calls have been made threatening to kill Kennedy, who is the U.S. ambassador to Japan. Reports out of Japan say the death threats came last month, and the caller spoke English. This, of course, comes just months after the U.S. ambassador to South Korea was stabbed in Seoul.

PEREIRA: A former airman with the U.S. Air Force is expected to plead not guilty this morning on charges that he tried to join ISIS. Authorities say Tairod Nathan Webster Pugh was headed to Syria by way of Turkey in January when he was turned back by Turkish officials and returned to the U.S. Authorities say a letter on his laptop indicates that Pugh was trying to wage jihad.

BERMAN: Coffee and race relations proving to be a bitter combination for Starbucks. The company is facing an online backlash on a new initiative from its CEO to start a conversation about race with its customers. Baristas -- I guess those are the people who serve you the coffee -- are being strongly encouraged to begin the dialogue.

The online reaction has been so negative that one Starbucks executive had to delete his Twitter account. The company is not backing down, saying its "Race Together" campaign is worth the discomfort that it's causing. PEREIRA: CEO Howard Schultz never backs away from trying to engage in

some tough and often controversial discussions. There was the gun control debate that was brought into his stores. This is an interesting one, because it is uncomfortable for people to talk about. But it is needed.

BERMAN: Conversations about race are not supposed to be comfortable, as you say.

PEREIRA: Right.

BERMAN: The question is are they supposed to happen when you get your coffee?

PEREIRA: And is the barista thinking, "I just want thought I had to make a latte?"

CAMEROTA: Well, you know, they are philosopher kings, I find, when I go to Starbucks. So I do want to hear what they have to say about this, as well as what you have to say on Twitter.

With the race for 2016 taking shape, there's speculation about whether a prominent female will run. We're not talking about Hillary Clinton. In fact, she's one of Hillary's most vocal critics. Carly Fiorina is going to join us live next.

PEREIRA: A friend of Boston Marathon bomber Dzhokhar Tsarnaev taking the witness stand, testifying against his friend. What did he know about the gun used to kill an MIT police officer?

[07:10:01]

(COMMERCIAL BREAK)

CAMEROTA: With the 2016 Republican field continuing to take shape, one woman is considering throwing her hat in the ring. Carly Fiorina is the former chairman and CEO of Hewlett-Packard, and she joins us this morning. She's also the chairman of the Unlocking Potential Project.

Good morning, Ms. Fiorina.

CARLY FIORINA, FORMER CHAIRMAN & CEO, HP: Good morning, Alisyn. Please, call me Carly.

CAMEROTA: OK, I'd love to, Carly. Thanks so much for being on NEW DAY.

Let's talk about the news of the day, and that is that Prime Minister Benjamin Netanyahu appears to have won and pulled off a victory by a bigger margin than polls had suggested. Are you pleased?

FIORINA: Well, I am pleased. And not only was it a fairly decisive victory, it would appear, but 70 percent of Israelis voted. So I think this is a pretty clear mandate that the people of Israel respect and appreciate a very strong leader. And that's what Bibi Netanyahu has been.

CAMEROTA: You know, in the days, the last, say, 48 hours, he really sort of ramped up his rhetoric. And in fact, he vowed just yesterday that, if he were to win, he would not be interested in any sort of Palestinian statehood or two-state solution.

Now that's different than what the White House has said it wants and what Benjamin Netanyahu himself said that he wanted in 2009. How do you explain that change of course?

FIORINA: Well, I think Bibi Netanyahu has demonstrated over and over again his willingness to come to the negotiating table with Palestinians, to try and find a solution, a two-state solution. But I think it's also clear he has been rebuffed over and over and over again.

[07:15:21] And unfortunately, this White House seems to continue to equate Hamas, a terrorist organization, to a legitimate democratic state, Israel. And so I think Netanyahu is basically saying, "Look, until I see progress on the other side, a willingness, for example, to indicate that Israel has the right to exist, sort of basic table stakes, I'm not interested in a state on the other side." I think, obviously, the majority of the Israeli people agree with him.

CAMEROTA: OK, let's talk about a fight that's going on back here at home. And at the moment, it's within the Republican Party about what to do about the budget. There are defense hawks, and there are fiscal hawks -- some who want to tighten our belt and some who want to beef up military spending. Whose side are you on?

FIORINA: Well, you know, I actually think that this is a great example of why we need leadership, not management. Management is people doing the best they can within the existing system. Leadership is changing the system when that's required.

And let me be very specific about what I mean. I think, honestly, it's time we go to zero-based budgeting. We have no idea how our taxpayer money is being spent. We never examine any budget from top to bottom and haven't for decades. What we're arguing about now, and what we have been arguing about for years, is the rate of increase or the rate of decrease. We never see the whole budget.

And so people are forced into these agonizing choices. I'm quite certain that if we had zero-based budgeting and could actually look at all the money that's being spent, we could figure out a better way.

CAMEROTA: One of the things that Republicans talk about doing is doing away with Obamacare. Just yesterday, we reported that 16 million Americans are now covered by Obamacare. Are you comfortable with them losing their insurance?

FIORINA: Well, obviously, we have to have a better solution than Obamacare. And when we don't provide a solution, people are rightfully concerned. I think what we need to do is try what we have never tried. We have never actually tried a competitive health insurance market. The truth is, health insurance companies have worked with regulators

to build laws that protect their competitive position. They've done it within 50 states for decades; they did it to try and help write Obamacare along with the drug companies. Let's try competition, the one force that we know that lowers prices and provides better value. And, yes, let's take care of those people who truly need to be taken care of so that they have access to quality, affordable health care.

I'm a cancer survivor. I know how important it is that preexisting conditions be covered. But Obamacare has boiled the ocean. And for the 16 million people that are now covered, there are so many people who find themselves worse off because of Obamacare, not better off.

CAMEROTA: Carly, we have some new CNN polls just out at 6 a.m. this morning that I want to show you. It asked Republicans about their choice for nominee in 2016. Let me put these up on the screen for you.

It talks about Jeb Bush. It talks about Scott Walker, Rand Paul, Mike Huckabee, Ben Carson. There's one name that's conspicuously absent here. What's going on? You apparently did not -- you needed to get at least 1 percent to be considered there. So, statistically, you weren't in that list. How do you change that?

FIORINA: Well, I'm new to politics, obviously. So there are a lot of American voters who don't know who I am yet. So I'm not at all surprised by that positioning in the polls.

And I would just say, we talked at the top of the segment about how the polls in Israel were wrong four days before an election. My goodness me. This is a long time before the election. So I think it's a little soon to start worrying about the polls.

CAMEROTA: But what do you do to get traction among the Republican field?

FIORINA: Well, I continue to reach out and meet with lots of voters all over this country. I've spent a lot of time in various states, including Iowa and New Hampshire in 2014, where I worked hard to help elect others. And I will continue to do that in 2015. There's plenty of time.

CAMEROTA: There sure is.

OK, I want to show you two book covers. One is yours. And one is former Secretary of State Hillary Clinton's. Yours is on the left. And it's called, "Tough Choices." Hers is on the right called "Hard Choices". it's hard to miss the similarities between these two book covers. Which one came first?

FIORINA: Well, my book was published in 2006. So quite a long time ago.

CAMEROTA: And what do you make of Hillary Clinton using a very similar cover and title for her book now?

FIORINA: Well, I could ask what difference does it make? Or I could say, imitation is the sincerest form of flattery.

[07:20:00] CAMEROTA: You're being -- you're being very circumspect and diplomatic, given that, I mean, you have had some tough words for Mrs. Clinton. You have been quite critical of her, particularly with the whole email controversy that she's embroiled in. What do you want to see happen there?

FIORINA: Well, you know, I think Mrs. Clinton needs to understand that transparency is a core principle of leadership, because people need to trust leaders' character and competence and motivation. They need to see that actions match words.

And so honestly, I think she believes this is a partisan issue. It's really not. This is a person, basically, who's saying her server can't possibly have been hacked, because it was guarded by Secret Service agents. Goodness, if hackers can get into Sony and Bank of America, they can get into a server in her basement.

Secondly, she says basically, "Trust us, everything I deleted is personal." But remember, this is the same person who told us that Benghazi was a demonstration gone bad and the fault of a videographer in L.A. when clearly she knew that this was a purposeful terrorist attack.

So I hope that she will be more transparent, and I would just say that leaders need to build trust. And she's not building a lot of trust right now.

CAMEROTA: Do you want her to hand over her server? Her entire server, private and public?

FIORINA: Well, you know, I think it's in her interests to be as transparent as possible about this. I think it's also clear that she does not intend to be so.

CAMEROTA: Carly Fiorina, it's great to have you on NEW DAY. Thanks so much.

FIORINA: Thank you. Thanks for having me.

CAMEROTA: Michaela.

PEREIRA: Alisyn, I'll only ask this. Your dresses were the same color. Who bought it first?

BERMAN: What difference does it make, you could ask.

PEREIRA: What difference does it make, indeed.

All right. Still ahead, damage control now by two of the world's most famous fashion designers, Dolce and Gabbana, speaking exclusively to CNN about those comments about in vitro fertilization that triggered calls for a boycott of their brand.

(COMMERCIAL BREAK) [07:26:10] CAMEROTA: Gut-wrenching testimony expected today in the Boston bombing trial. Jurors set to hear crucial forensic evidence, including how the suspect got his hands on a gun to kill an MIT police officer. CNN's Alexandra Field has more for us from Boston -- Alexandra.

(BEGIN VIDEOTAPE)

ALEXANDRA FIELD, CNN CORRESPONDENT (voice-over): New testimony from a long-time friend of Dzhokhar Tsarnaev. Twenty-one-year-old Stephen Silva, shown in a beige prison jumpsuit, says he gave Tsarnaev this .9-millimeter handgun two months before the Boston bombing. Prosecutors say it was used in the Watertown shoot-out with police.

The same gun also used to kill MIT Police Officer Sean Collier. According to Silva, the serial numbers on the gun were obliterated, scratched off.

UNIDENTIFIED MALE: Having been as good a friend of Dzhokhar's as he was, this I'm sure was very difficult for him. But I think he knew it was right.

FIELD: In prison on weapons and drug charges, Silva told the court the two met in eighth grade. They would hang out and smoke pot. One day Tsarnaev asked to borrow the gun for a robbery, but never returned it.

Jurors also hearing from the man who discovered a bleeding Tsarnaev hiding in his boat in this Watertown back yard. After spotting what he says was a lot of blood, David Henneberry testified he looked inside the boat, and that's when he saw the body.

An FBI agent also testifying that Tsarnaev carved the words "stop killing our innocent people, and we will stop" in the boat's wood planks while hiding inside.

Other evidence found nearby: destroyed cell phones and an ATM card belonging to Dun Meng, who was carjacked during the Tsarnaev brothers' terror spree.

Alexandra Field, CNN, Boston.

(END VIDEOTAPE)

PEREIRA: Let's look at some of our top stories right now.

Breaking overnight, Prime Minister Benjamin Netanyahu claiming victory in Israel's election, announcing he is ready to move forward with forming a new coalition government. Early results show Netanyahu maintaining a slim lead over his chief rival, who has already called to congratulate the prime minister. Official election results are not expected, though, until next week.

BERMAN: A former airman with the U.S. Air Force is due in a Brooklyn courtroom this morning on charges that he tried to link up with ISIS. Authorities say Tairod Nathan Webster Pugh tried to enter Syria via Turkey in January, but he was caught by Turkish officials and returned to the U.S. Authorities allege a letter on Pugh's laptop says he was waging jihad.

CAMEROTA: Russians, including President Vladimir Putin, celebrating the first anniversary of the annexation of Crimea. The Russian leader expected at a huge concert in Moscow's Red Square today, featuring some of his favorite artists. "Newsweek" reports the Kremlin is giving Russians cash to attend these celebrations.

PEREIRA: Italian fashion designers Dolce Gabbana now trying to extinguish quite a social media firestorm in a CNN exclusive. The uproar began after Domenico Dolce referred to IVF babies as "synthetic children born from rented wombs."

CNN's Anna Coren spoke to the pair exclusively. Have to go quite a distance to walk back from those comments.

ANNA COREN, CNN CORRESPONDENT: Yes, and Michaela, they definitely are trying to play it down. If anything, they say that it's been blown out of proportion, and they're shocked at the firestorm that has erupted on social media.

They were interviewed by this Italian magazine over a week ago. The issue was on families. They were asked if either of them want to have children. Now Stefano Gabbana, he said that he would love to have children, whether it be through IVF or adoption.

When the question was put to Domenico Dolce, who is a little bit older -- he's 56 years old from Sicily -- he said that, "I'm a gay man. I cannot have children. It does not adhere to my family values."

But he clarified during our interview, Michaela, that he does not judge those who do. Take a listen.

(BEGIN VIDEO CLIP)

DOMENICO DOLCE, FASHION DESIGNER: I support all the world, every people just...

STEFANO GABBANA, FASHION DESIGNER: Maybe he choose the wrong -- word.

DOLCE: Word.

COREN: Talk about face from fashion icons Dolce and Gabbana after igniting a firestorm. The designers behind the luxury brand told an Italian magazine that babies born from in vitro fertilization are synthetic, coming from wombs for rent.