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Catholic Priest Killed in France; Hillary Clinton Wins Presidential Nomination; Claiming the Dead in Venezuela's Capital; Shocking Allegations of Child Abuse in Australia; Less Than 10 Days to Rio Olympics; Disappointing Earnings from McDonald's Causes Stock to Drop. Aired 1-2a ET

Aired July 27, 2016 - 01:00   ET

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


[01:00:14] JOHN VAUSE, CNN ANCHOR: This is CNN NEWSROOM, live from Los Angeles. Ahead this hour, a gruesome attack at a French church leaves an elderly priest dead. At least one of the suspects was known to authorities and was under house arrest.

Hillary Clinton makes history. The first woman to be nominated by a major U.S. party as their presidential nominee on the same night as her husband delivers a personal speech to try and get her elected.

Plus long lines have become a way of life in Venezuela, and now long lines to claim the bodies of the victims of a murder epidemic.

Hello, everybody. I'd like to welcome our viewers all around the world. Good to have you with us. I'm John Vause. NEWSROOM L.A. starts right now.

The French president says the chilling terror attack inside a small Catholic Church was carried out by ISIS. The country has been left shaken after two men murdered an elderly priest by slashing his throat. French officials say one of the terror suspects was known to authorities. He had tried to travel to Syria twice, was forced to wear an electronic tag, a condition for his house arrest.

The attack happened about 120 kilometers northwest of Paris. The two men stormed the Catholic Church during morning service, taking hostage the priests, three nuns, two parishioners. One witness says the 86- year-old priest was forced to kneel before being killed. A hostage was also stabbed. Both terror suspects were shot dead by police.

Senior international correspondent Fred Pleitgen is in Saint-Etienne- du-Rouvray. He joins us now.

Fred, clearly a lot of questions right now for French security in particular how this attack was carried out by at least one man who is known to authorities, wearing a tag, all of this while the country is on high alert.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. It certainly is on high alert and there certainly are a lot of questions. Look, one of the things that the French authorities said is that there are simply so many individuals that they have to monitor, that they really have a hard time keeping up with. Now the French president Francois Hollande in the past has said that

he wants to double the amount of people who are at least trying to keep track on those who they say are the biggest threat to French society. It's a designation called Fiche S. And the French authorities say that there are some 10,000 people who have that designation on them and it takes several police officers to simply monitor one of those people. So certainly it is a tall task for French law enforcement and certainly one that they've been struggling with over the past couple of years.

And if you look at this case, it really is quite remarkable. You already mentioned that Adel Kermiche, the 19-year-old, was supposed to wear a tag, or was wearing an electronic tag to keep track of him. Well, there's more than that. He was also not even allowed to leave his parents' house, where the authorities made him live. Unless between 8:30 and 12:30 during the day.

Now he carried out this attack, the authorities say, at around 9:25 a.m., was when it began. So even with that very small window he still managed to escape the surveillance and then managed to carry out this attack.

Now the authorities haven't even identified the second man who was also involved in this, who was also shot by police as he then exited the church after committing the murder of this priest. So you're absolutely right. There are a lot of questions for the French authorities at this point in time. However, they say it simply is very, very difficult to keep up and to keep track of the many, many people that they deem to be a threat in two places, like, for instance the church that you see behind me, John.

VAUSE: Fred, what more do we know about Reverend Jacques Hamel, the priest who was murdered?

PLEITGEN: Well, you know, it's one of the really tragic things about all of this, is that the community here says that this was a very good man, someone who helped out a lot in the community, someone who was very dedicated to this community and someone who really did not deserve what happened to him. It really is something that hit this community very hard.

We had the mayor come out yesterday saying he spoke to Francois Hollande and says he never wants anything like this to happen again. He said let us be the last ones to have to shed tears. And Jacques Hamel really left a mark on this community. He was 85 years old. And he could have retired about 10 years ago, but he didn't want to because he loved the work of being a priest so much and he felt that it was so necessary here in this community.

He was very helpful to citizens of this community. Have said to them when they were in need. So certainly someone who was very loved and also someone who was very much part of outreach to the Muslim community here in this town as well, which is a very sizable one. So certainly, this is a very tragic event for France.

This is something where people are saying in any case this would have been a horrible murder, but to have it hit this man, who of course also was 85 years old is simply something that is very difficult to comprehend for many people in this town and indeed even in this nation even after it's been struck by terrorism on so many occasions over the past year and a half -- John.

[01:05:08] VAUSE: Yes, the murder was small in scale but it is being felt acutely across France.

Fred, thank you for that. Fred Pleitgen live at this hour with the very latest.

Hillary Clinton made a surprise appearance at the end of day two of the Democratic National Convention, thanking delegates via satellite for nominating her for the presidency. Secretary Clinton is the first woman to be nominated by a major U.S. political party.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL NOMINEE: If there are any little girls out there who stayed up late to watch, let me just say I may become the first woman president but one of you is next.

(END VIDEO CLIP)

VAUSE: Katie Vause, who stayed up late at home, I know you were watching.

During the roll call Clinton's former rival Vermont Senator Bernie Sanders did his part to try and unify the party.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (D), FORMER PRESIDENTIAL CANDIDATE: Madame Chair, I move that the convention suspend the procedural rules. I move that all votes, all votes cast by delegates be reflected in the official record, and I move that Hillary Clinton be selected as the nominee of the Democratic Party for president of the United States.

(END VIDEO CLIP)

VAUSE: The keynote speaker of the night, Hillary Clinton's husband, former U.S. president Bill Clinton making his 10th convention speech. This one his most personal.

(BEGIN VIDEO CLIP)

BILL CLINTON, 42ND PRESIDENT OF THE UNITED STATES: In the spring of 1971 I met a girl.

(END VIDEO CLIP)

VAUSE: Let's bring in CNN Politics reporter Tal Kopan live from the convention center there in Philadelphia.

Tal, it seemed a difficult needle for Bill Clinton to thread there, talking about the love of his life, the romance, especially given all the public challenges their marriage that's faced over the years.

TAL KOPAN, CNN POLITICS REPORTER: Yes, absolutely. You know, there were times that it felt a little bit awkward to be perfectly honest as he was telling his love story. But you know, his challenge was to sort of humanize Hillary Clinton, to tell America why he fell in love with her, what he has seen of her that they haven't. And you know, it really hit its stride toward the end and sort of a, you know, signature Bill Clinton way. It had sort of a subtle build to it. And it got to the point where, you know, he got to this rhetorical section where he talked about the real Hillary and -- you know, as opposed to the cartoon version, which is what he labeled the Hillary you might hear of at the Republican National Convention.

So he did a pretty effective way of telling his life story, telling his story with Hillary Clinton, and then, you know, getting at the politics, undercutting the messaging coming from the other side at the same time.

VAUSE: And the way he did that, Tal, is that he released or he shared some of these personal details about Hillary Clinton that we'd never heard before, like this one.

(BEGIN VIDEO CLIP)

B. CLINTON: So in 1974 I went home to teach in the law school and Hillary moved to Massachusetts to keep working -- to keep working on children's issues. This time trying to figure out why so many kids counted in the census weren't enrolled in school. She found one of them sitting alone on her porch in a wheelchair.

What's more, she filed a report about these kids. And that helped influence ultimately the Congress to adopt the proposition that children with disabilities, physical or otherwise, should have equal access to public education.

(END VIDEO CLIP)

VAUSE: And again a tough job to find something new about a woman who has been in the public spotlight for three decades.

KOPAN: Yes, absolutely. You know, it was sort of interesting how he in some ways rewrote their political history with her as the star. You know, he has been the sort of focal point of the Clinton family for so many decades now. He was the governor. He was the president. She was sort of the woman behind the scenes. And what he did tonight was he sort of tried to turn that on its head and portray her as even though she was behind the scenes as a true driving force behind much of his career.

He talked about, you know, accolades that he received and him getting to do the fun part like give speeches, he said, while she did the actual hard work. And he really tried to portray her as the sort of quiet force behind much of his work and much of her own work that he may have gotten credit for or may have never even been known. But he kept repeating the theme that she is a change maker. That was one of his sort of lasting themes from the speech, and it was this idea that she has been working behind the scenes for years and years in things we may have seen the results of and things we may have never seen the results of.

[01:10:04] VAUSE: In many ways, you know, one of the biggest applause lines of the night was the moment when he referred to the constant attacks on his wife. You mentioned this about the real Hillary Clinton. And that those constant attacks she was getting -- that she was getting at the Republican convention last week. This is part of what Bill Clinton had to say about that.

(BEGIN VIDEO CLIP)

B. CLINTON: The real one had done more positive change making before she was 30 than many public officials do in a lifetime in office. The real one has earned the loyalty, the respect, and the fervent support of people who have worked with her in every stage of her life, including leaders around the world who know her to be able, straightforward, and completely trustworthy. Earlier today you nominated the real one.

(END VIDEO CLIP)

VAUSE: Isn't this the problem, though, for Hillary Clinton? If you're a supporter you'll believe what Bill Clinton has to say. If you believe the Republicans you're going to go with them. Can anyone be on the fence right now about Hillary Clinton?

KOPAN: Well, the polls don't show many people on the fence. That's for sure. You know, this election cycle we've had some of the most sort of well-known and -- you know, the candidates with people who have the most minds made up about them already, it's actually remarkable. You know, there are some undecided voters out there and there may be some who are sort of, to use a political term, something like a little bit squishy in their opinion on her, who may be able to be influenced by a speech like this.

But you know, I think Bill Clinton understood that when he went into it and he tried to find a way to make the case that while there are two versions of his wife being portrayed out there that viewers can try to begin to unpack, you know, which one should I believe? And so I think it was an acknowledgment of the fact that there are multiple views of his wife and an attempt to sort of undercut the other side and say, you know, to anyone whose mind isn't totally made up maybe take a look at your assumptions and give this woman another look and maybe just try to see her from the other perspective. So I think, you know, it was an acknowledgment of exactly what you're saying.

VAUSE: And very quickly, can you explain the significance of Bernie Sanders, the Vermont senator, calling for Hillary Clinton to be nominated by acclamation during the roll call?

KOPAN: Yes. You may have heard the word unity bandied about a few times this week. You know, this was all about showing that the party is united, that even though Bernie Sanders has this ascendant candidacy he is standing behind Hillary Clinton in full. And it's a throwback to when Hillary Clinton did the same thing to Barack Obama in 2008.

It's an attempt to show that no matter what protests you might see that the Democratic Party is comfortable with their nominee and they're happy to be moving forward, to borrow a campaign term, together.

VAUSE: Tal Kopan there live at this very late hour in Philadelphia. We appreciate you being with us again. Thank you.

KOPAN: Thanks for having me.

VAUSE: And U.S. President Barack Obama will not rule out the possibility that Vladimir Putin is trying to help Donald Trump win the White House. That comes after WikiLeaks released thousands of e-mails stolen from the Democratic National Committee allegedly by Russian hackers.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I think the FBI's still investigating what happened. I know that experts have attributed this to the Russians. What we do know is that the Russians hack our systems. Not just government systems but private systems. But, you know, what the motives were in terms of the leaks, all that, I can't say directly. What I do know is that Donald Trump has repeatedly expressed admiration for Vladimir Putin.

(END VIDEO CLIP)

VAUSE: WikiLeaks founder Julian Assange says there's a lot more material to come on the U.S. election. He spoke with CNN's Matthew Chance about the source of the stolen e-mails.

(BEGIN VIDEO CLIP)

JULIAN ASSANGE, EDITOR-IN-CHIEF, WIKILEAKS: What we try and do as a source protection organization is we like to create maximum ambiguity as to who our sources are because, you know, maybe it was a hard drive that came from eBay. Maybe consultants. Maybe hacktivists. Maybe state activists. Maybe a little bit --

(CROSSTALK)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: But you're not specifically ruling out the Russian Secret Services, are you? So who are you protecting?

ASSANGE: Well, perhaps one day the source or sources will step forward and that might be an interesting moment. Some people will have egg on their faces. It will be interesting. But obviously, to exclude certain actors is to make it easier to find out who our sources are. So we never do it.

(END VIDEO CLIP)

VAUSE: Russia denies it's behind the hack. The Trump campaign calls the allegations crazy.

Venezuela's spiraling economic collapse means long lines for everything. And as many grow increasingly desperate, the country's murder rate has soared.

[01:15:03] In the capital Caracas the growing violence has led to the bleakest, saddest lines of all. Relatives waiting to claim the bodies of their loved ones. And there's a warning. Many viewers will find the images in this report from Paula Newton disturbing.

(BEGIN VIDEOTAPE)

PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT (voice-over): In one of the world's most violent countries, and especially in its murderous capital Caracas, death often comes suddenly, randomly. Killers acting without mercy.

Ishmael Garcia's (PH) mother says they only wanted her son's motorcycle but took his life, too. Garcia, a 33-year-old photojournalist, was visiting his girlfriend on Caracas' west side. Within minutes a man who every day documented Caracas' savage contagion of crime bled out on the pavement like thousands before him. His mother says she is so heartbroken and shocked she struggles to remember to breathe, let alone make sense of what happened.

Taking a ride in one of many Venezuela's barrios or slums, and you venture into a no man's land of drug dealers, thieves, gangs and militias. Even police aren't safe on the streets. The murder rate is at least 10 times higher than in most U.S. cities. The crippling economic crisis has only made things worse. People risking their life every time they line up for food. Some will end up queuing here, too, racked with grief and outside Bello Monte, Caracas' central morgue.

(On camera): This is another one of the humiliations that Venezuelans tell us about. They have to line up for everything, including the bodies of their loved ones. We're here outside the morgue and we can already smell death.

(Voice-over): The reason? Gruesomely explained here in images inside the morgue obtained by CNN. So many victims of crime, the corpses literally pile up. Workers tell us bodies are here sometimes for months, no refrigeration.

And then there's this. They call it the rotten freezer. Human remains protrude from body bags, indignities usually reserved for countries ravaged by war. And then there's the autopsies -- improvised tools, shortages of chemicals, face masks, even gloves.

Luis Alberto Liao (PH) knows what's inside. He just identified his 17- year-old brother, Jesus, shot four times, still doesn't know why. He's been trying to claim Jesus' remains for three days; a confusing, expensive process. Finally the makeshift hearse with his brother's body leaves the morgue.

LUIS LIAO, CLAIMED BROTHER'S REMAINS (Through Translator): I feel like I have something in my chest that hasn't allowed me to break down yet, but it's tough.

NEWTON: In life, death, even burial, there is an alarming degradation of humanity as society spirals.

PROF. ROBERT BRISENO LEON: Everybody lives in fear in Venezuela, the poor, the middle class, the rich.

NEWTON: Professor Roberto Briseno Leon (PH) has led several research studies on the cause of the staggering crime here. He says there is a culture of impunity.

LEON: That means that 91 percent of the homicides there is not even one arrest. So what we are really living in Venezuela is a process of incivility in the everyday life.

NEWTON: Incivility clearly extends not just to life here, but death, too.

Paula Newton, CNN, Caracas.

(END VIDEOTAPE)

VAUSE: And since Paula filed that report, a fence has been built around the morgue, restricting access there. CNN has made repeated attempts to contact authorities in Venezuela for comment but we've received no response.

The mother-in-law of Formula One chief Bernie Eccleston has been kidnapped. Reports from Brazil say if happened Friday in Sao Paolo. And the criminals, they are demanding $36 million in ransom. Eccleston is one of the most powerful men in sport. "Forbes" magazine believes his family is worth more than $3 billion.

We have new images from surveillance cameras reportedly showing the scene outside a deadly stabbing rampage at a facility for the disabled near Tokyo. The apparent suspect pulls up to the scene, opens the trunk of the car, and then he walks inside. He returns to the car and drives away about 45 minutes later. 19 people were killed and dozens of others were wounded.

The 26-year-old suspect met with prosecutors on Wednesday. He's a former employee there and turned himself in to police. Several months ago he wrote in a letter he had the ability to kill 470 disabled people and he wanted the severely disabled to have the option of being peacefully euthanized.

A short break here. When we come back, Australia's prime minister has called for an investigation into allegations of abuse and torture at a juvenile detention center. Details straight ahead.

(COMMERCIAL BREAK)

[01:23:48] VAUSE: A television news broadcast in Australia has raised allegations of abuse and torture at a juvenile detention center. The video you're about to see is from the Don Dale Center in Darwin in the northern territory. And a warning, these images disturbing. This 17-year-old boy has a spit hood over his head. His ankles, neck,

and wrists were shackled after authorities say he threatened to hurt himself.

The Australian Broadcasting Corporation reports the chair he's sitting in is on a list of approved restraints, considered legal by the northern territory government. The report has caused nationwide shock. And Australia's prime minister has ordered an investigation.

Lynda Kinkaid has the details.

(BEGIN VIDEOTAPE)

LYNDA KINKADE, CNN CORRESPONDENT (voice-over): A teenage boy hooded, shackled, and strapped to a chair half naked. These images sparking allegations of abuse and torture at an Australian juvenile detention center in 2014.

They were shown on the ABC's investigative program "Four Corners." The pictures appear to show children as young as 10 being stripped naked, assaulted, tear gassed and kept in solitary confinement at the Don Dale Youth Detention Center in Darwin.

Prime Minister Malcolm Turnbull immediately called for a national investigation.

MALCOLM TURNBULL, AUSTRALIAN PRIME MINISTER: The abuse of young people in the Don Dale Youth Detention Center in the northern territory back in 2014 has shocked and appalled the whole nation.

[01:25:12] I have announced that we will establish in cooperation with the northern territory government a royal commission to inquire into those events, to inquire into the system of youth detention, the management of youth detention centers in the northern territory.

KINKADE: Reactions to the report were strong and swift. Sarah Henderson, an MP from the state of Victoria, condemned the abuse. Several of the children shown in the ABC report are aboriginal and the outrage within the indigenous community has led many to demand the Northern Territory government be sacked, claiming officials were fully aware of what was happening inside the Don Dale Center.

PRISCILLA COLLINS, NORTH AUSTRALIAN ABORIGINAL JUSTICE AGENCY: There's no cover-up. They've been fully aware of what's been going on. The reports show it. The Children's Commission's report showed it. They have access to the footage. There's no cover-up. They knew about it.

KINKADE: The Northern Territory chief minister has fired the man responsible for managing the region's detention centers for fostering what he called a cover-up culture in the corrections service.

Lynda Kinkade, CNN.

(END VIDEOTAPE) VAUSE: Next here on NEWSROOM L.A., with just days to go until the Olympics there are serious concerns that Rio might not be ready. The latest on the host city's progress.

(COMMERCIAL BREAK)

VAUSE: Welcome back, everybody. You're watching CNN NEWSROOM live from Los Angeles. I'm John Vause with the headlines this hour.

[01:30:01] VAUSE: France's president says ISIS is behind Tuesday's terror attack at a catholic church. Two men took hostages and killed a priest and what the president has called a "Cowardly Assassination." Police killed both attackers.

A prosecutor says one of the men who was already being monitored electronically because he tried to travel to Syria twice. The 26- year-old suspect in a stabbing rampage in Japan once wrote about his ability to kill hundreds of disabled people.

Surveillance video shows a man pulling up to the facility for the disabled near Tokyo, then leaving about 45 minutes later, 19 people were killed, dozens of others were hurt.

Former U.S. President Bill Clinton says his wife Hillary is the real change maker in the race for the White House. He delivered a personal and impassioned speech at the Democratic National Convention in Philadelphia.

Secretary Clinton appeared by satellite to thank delegates for nominating her for the Presidency.

Russia's Olympic team will get a personal send-off from President Vladimir Putin in a few hours before traveling to Rio. No words yet on how many athletes will be eligible to compete.

That decision will be made by Individual International Sports Federations after allegations of state-sponsored doping.

(END VIDEO CLIP)

VAUSE: Well, the countdown is on. We're now less than 10 days away from the Olympic Summer Games in Rio. The road, though, has been bumpy and plagued with setbacks.

Now the Olympic Organizing Committee there is admitting about half of the buildings at the athlete's village have passed safety tests. Among the complaints though, clogged toilets, flooded floors and gas leaks.

Officials say everything though, will be ready by Thursday. Australia had declared the village unlivable but announced on Tuesday great progress had been made and they will move in on Wednesday.

I'm joined now by Executive Board Member of the International Olympic Committee, Anita DeFrantz. Thank you so much for coming in. I want to talk to you about the ban for Russian athletes. WADA, the anti-doping agency, they want an entire national team ban. A lot of countries supported that. Many have pointed out that what Russia did was in clear violation of the Olympic Charter, which talks about a fundamental respect for ethical principles.

Why wasn't the IOC tougher on Russia?

ANITA DEFRANTZ, EXECUTIVE BOARD MEMBER, IOC: In the first place the report isn't finished. The McLaren report is just, you know, he was able to do a certain amount of work in the time given. So, we don't have all the facts yet. We don't have all the fact.

VAUSE: But the guy who did the report was fairly definite that he recommended a full national ban.

DEFRANTZ: Who did?

VAUSE: The WADA, the guy who put the report with the FBI.

DEFRANTZ: On the WADA, that's a different organization, yes.

The IOC has a responsibility to make sure that athletes who train and prepare for the games have a chance to compete. We don't want anybody who's doped at the games.

So, the solution was to make sure that the federations who have the closest relationship with the athletes over time and have the closest the information about, the doping history of each athlete would be the ones to make the decision and say that if there is a history on the suspicious, then they won't be able to come to the games.

VAUSE: On the other side of the coin, you have the whistle blower who started, you know, the expose in the first place, the Russian runner, Yulia Stepnova. WADA again and International Athletics both recommended she should be allowed to compete but yet she's not.

What message is that sending to whistle blowers?

DEFRANTZ: Well, I think the overall message to whistle blowers is that we're going to do everything we can to keep doped athletes out of the games. And I hope that athletes will feel that now is the time to come forward to, you know, there's something a little bit uneasy feeling about awarding somebody for doing something, especially unfortunately in her case.

Let me be clear for this, we asked for advice from our Athletes Committee and they said, well, we've looked at this case, she has a positive case, she's serving out her time, and you would be interfering with that serving of time if you were to have her go to the games.

VAUSE: Now, will you discourage others from coming forward?

DEFRANTZ: No. No. What we have to do is make sure that WADA is able to hear them in the future and be able to act carefully. We have to have a better system for people to come forward in this case.

VAUSE: This doping scandal, this is not of Rio's making.

DEFRANTZ: No.

VAUSE: But it is a cloud hanging over the Rio, one of the many clouds hanging over the Rio games.

Can you recall a Summer Olympics which had been plagued by this many problems facing these many challenges so close to the opening ceremony?

DEFRANTZ: Well, I recall in Sochi there were issues over whether the hotels were completed or not. I heard some, many of the ...

VAUSE: People weren't protesting in the streets of Sochi. There wasn't the cost to overruns in Sochi.

DEFRANTZ: Well, different organizational community ...

VAUSE: After the accumulative problems here.

DEFRANTZ: Sure, well I don't know back in '88 there were people protesting before the games in Seoul. Each games has its own set of stories and my -- I've learn over the years of being an IOC member that the two weeks before the games suppress is most deadly of all and then ...

VAUSE: Do you think we're being unfair?

DEFRANTZ: I don't know about unfair. I think there are great stories about positive things that are happening as well but we --it's kind of hard to find them, hard to find them.

[01:35:08] For example, we have women who will be competing from Saudi Arabia.

VAUSE: Right.

DEFRANTZ: The U.S. team has the largest delegation of women ever to go to the Olympic Games. So there are interesting stories.

VAUSE: You're part of the L.A. Bid Team for 2024.

DEFRANTZ: I am.

VAUSE: Looking at Rio, looking at all the controversies from Sochi to Rio, why would a city want the Olympics anyway?

DEFRANTZ: Well, this city loves the games. The last poll taken had 88 percent of the people wanting to have the games.

We've experienced the games in 1984, and it was a wonderful, wonderful experience. And kind of the leftover from the games was the L.A. '84 Foundation which continues to encourage kids to be involved in sport and teaching people how to coach and great things that came from the surplus from those games.

So it works. There are some cities where it works and L.A. is one of those cities.

VAUSE: But one of the big issues there has been this call to reform the entire bidding process, trying to bringing those costs down, bidding Beijing $30 billion, Sochi 50 -- I mean, the price tag is nuts. But has it been meaningful reform there?

DEFRANTZ: OK. Let me speak to the price tag first because you would -- who would spend $30 billion on a two-week sporting event? That makes no sense.

VAUSE: Exactly.

DEFRANTZ: There are building facilities that they otherwise would have to wait a while to bid. They're doing it all at once.

Sochi, for example, went from 0 to 100 percent in seven years. They had no winter sports facilities for their country. So they needed them and they built them all at once.

VAUSE: I guess my point though is that you have these autocratic governments that can bankroll these games, be at, you know, Russia or China, Kazakhstan, which has been bidding in the past if we get the total amount of money.

DEFRANTZ: Or Barcelona or ...

VAUSE: Yes. But well, they don't have the checks. So they don't have the money behind like, when you look at China, when you look at Russia, they are the -- what the concern has been is that essentially with these high price tags is that ...

DEFRANTZ: What about Vancouver, the host of the Olympic Winter Games?

VAUSE: Well, the winter games do sounds different ...

DEFRANTZ: And London in 2012.

VAUSE: Yeah. But I think London was an exception.

DEFRANTZ: No. It was ...

VAUSE: That one name as to concern though, is that cities like London, that don't have the big bankrolling, autocratic governments that can put the entire state behind something without any public dissent, without, you know, because people have spoken out in the past saying we don't want to be part of it, like Boston, we don't want to be part of it because it's too expensive.

DEFRANTZ: Oh I'm sorry for Boston because they were part of the '84 games. It was -- soccer was played there during the '84 games so, they had to experience that.

Cities have their own understanding of what the games are. And that's one of the nice things about Los Angeles.

VAUSE: The reform process needs to be put in place, right?

DEFRANTZ: We have already put that in place.

VAUSE: But is it being effective? And that's a concern.

DEFRANTZ: Well, the costs have been diminished. The costs of going, you know, that there was this kind of show or of you had to show a different venue or different video every time you went to a different -- so now you can only go three places.

Now, the sad thing is, and I understand this, bid committees are frustrated by not being able to meet the people who will make the decision. And that was the idea because the people who make the decision need to have confidence in the people who are putting on the games.

So it's been tough because on the one hand, we cut out a lot of the cost elements and on the other hand we've cut out the access to the people who are voting. . VAUSE: Well we wish you the best of luck. L.A. 2024, sounds exciting.

DEFRANTZ: Thank you.

VAUSE: OK. Thanks Anita. Thanks for coming in. Appreciate it.

Well, next here on NEWSROOM L.A., disappointing earnings from McDonald's and the concerns about what might happen next, the time cut some costs has been the growth profits.

(COMMERCIAL BREAK)

[01:40:40] VAUSE: Welcome back everybody. Some disappointing results for the fast-food, giant McDonald's despite their popular roll out of the all-day breakfast item sales in the U.S. grew just 1.8 percent in the second quarter. Stocks fell 4 percent on Tuesday.

There are concerns McDonald's might eliminate jobs and replace workers with machines to try and boost profits. McDonald's CEO has reportedly said workers could be shifted to service-orientated roles.

Joining us at the room is Sandro Monetti, Managing Editor of the L.A. Business Journal. Give me a fry.

SANDRO MONETTI, "LA BUSINESS JOURNAL": There you go. Do we call that French fries, you know?

VAUSE: How long would you completely eat it? Do this one help making any money.

Oh, God, they're awful.

OK so, it looks like All-Day hot cakes, hash browns and McMuffins. Not exactly the secret sauce, they kind of hoped that it would be. The company's problems are a lot more complicated than what they appear to be.

MONETTI: Well, the problems boiled down to fast food, sluggish sales. Yeah, they introduced the all-day breakfast but people are only having the McMuffins.

VAUSE: Yeah.

No, on the rest of it.

VAUSE: And they're also having the all-day breakfast all-day long and it's cheaper.

MONETTI: It is cheaper. And so customers are continuing to come in, especially here in the United States, you know, 100 million people a month visit McDonald's in the United States. But they're not spending as much as they used to.

Revenues are down 4 percent. Shares of McDonald's are down 4 percent and suddenly there's not so much appetite there in the markets for McDonald's.

VAUSE: OK. Well, if you can't grow sales, the other way to increase your profit is to cut costs.

MONETTI: Yeah.

VAUSE: And so there's been, you know, talk for a month or so that one way they may do it is basically by robots replacing a lot of the staff. Now, this is how one inventor saw robots sort of fitting in into the future in China.

Look at our David McKenzie's report.

(BEGIN VIDEO CLIP)

DAVID MCKENZIE, CNN CORRESPONDENT: With this robot, one minute, four bowls of noodles, who says for their chef, one minute, two bowls.

So the NoodleBot is fast and it's also versatile. Mr. Sway said he can do eight different types of noodles.

This is the widest kind. He says he invented it to look like a person to give with that human touch.

(END VIDEO CLIP)

VAUSE: OK. So could that be the future? Could there be, you know, "I am making your Big Mac. Do you want fries with that?" I don't know.

MONETTI: Exactly. It could. There's a serious point here, yeah, because those robotic arms retail for $35,000.

So, the decision is do I pay $35,000 for a robot so every time you go through the drive-thru the robotic arm hands you the French fries. Or do you pay the minimum wage of, say, $15 an hour to some spotty teenager or some senior to say there you go there's your fries. And if the company wants to be a more lean profitable machine, there are some who make the argument that going with the robots would be the way to go.

The workers themselves would rather be unionized, protected and obviously are resistant to this.

VAUSE: Yeah, but the minimum wage is not $15 an hour. Right now it's like $7.40. And McDonald's pays I think $7.60 per hour on average.

MONETTI: But there's not a robot in every fast-food restaurants and people see the future and think there will be.

VAUSE: But the other -- on the other hand is that increasing or doubling the minimum wage won't actually add a whole lot to the cost a Big Mac, maybe a buck to the cost of a Big Mac but people have a living wage.

Doesn't that argument hold any water on the flip side of the social equation here?

MONETTI: It does and Steve Easterbrook, the CEO of McDonald's has addressed this. Because he has said, yes, there will be some automation, robotics in the future but he's not necessarily saying this will lead to job losses.

Not quite sure how you make the equation. He hasn't quite to explain that but he was looking to reassure people that that wouldn't be the case. But we'll see.

VAUSE: Have they thought about making the food better?

MONETTI: Yeah, they have of course about making the food better. They've thought about making the food healthier as well.

Did you know kale is now part of the McDonald's ...

VAUSE: Exactly, I do know that.

But this doesn't seem to work because they try salads and then you find out the salads have got more fat in them than the Big Mac.

Yeah, they tried the kale thing, it tastes awful.

MONETTI: McDonald's have tried absolutely everything to grow profits. You know, the only place it's really working is in Japan where they're turning 3,000 of their restaurants into Pokemon Go Gyms.

VAUSE: Nothing to do with the food. It's all about the Pokemon.

MONETTI: No, but its really working. VAUSE: OK.

MONETTI: Yes. So you can train your virtual pets while eating your fast food.

VAUSE: That's terrifying.

MONETTI: It is. But it's working.

VAUSE: Sandro.

MONETTI: It's a business plan.

VAUSE: Thanks for coming in.

VAUSE: Sure you don't want any more ...

VAUSE: Enjoy your fries. They're cold and awful.

OK, and thank you for joining us. You've been watching CNN NEWSROOM live from Los Angeles.

"WORLD SPORT" is up next. I'm John Vause and I'll be back with another hour of news from all around the world.

[01:45:03] You're watching CNN.

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