@jaketapper, and check out our show page. that's it for today. i'm turning you over to one mr. wolf blitzer, he's right next door in a place i like to call "the situation room." \s happening now, escape as a captured fugitive spills details of a dramatic breakout and getaway, a prison guard accused of aiding the escape appears in court, the second employees to be charged as the fib launching a broader corruption investigation at the prison. did other guards help the inmates put together an escape plan. isis arrest. a new jersey man is the latest to be charged with plotting to help the terror group, as federal authorities are warning of possible threats tied to the july 4th holiday. after blood counter attacks abroad u.s. law enforcement is on a heightened state of alert right now. and you're fired.

after his harsh comments nbc dumps donald trump cutting ties with the presidential candidacy by jumping the miss usa and miss university pageant. i'm wolf blitzer you're in "the situation room." our breaking news a captured killer is talking. we're getting stunning new details on how he and a fellow convict managed to evade authorities for three weeks. that comes as a prison guard accused of aiding in the escape appears in court today in a series of related charges. at the same time the fbi has launched an investigation into possible widespread corruption at the clinton correctional institute, including drug trafficking and heroin use. our correspondents, analysts and guests are all standing by. miguel marquez is outside a hospital in albany where the survive fugitive has upgraded to serious condition after he was

shot by a state trooper near the canadian border. miguel, what's the latest? >> yeah he's in serious condition, so he is starting to stable i'd, the hospital officials say they can take care of him here until he's completely stable and ready move but his run for the border as they were headed towards mexico he's telling police that's where he says -- told investigators they were heading from their breakout in dan dannemora. on sunday he was shot twice while trying to run for the canadian border saying they had planned to meet up with joyce mitchell but she never showed up. they were going to kill her husband and then run to mexico. that didn't work out. it was very unclear whether or not that was their plan a, and now it's very clear it was, and for three weeks he and richard matt we are in the wilderness

searching, scrambling for a plan b. wolf? >> thank you very much. the prison guard, gene palmer charged with this conduct, and has just appeared in court. jean casarez is in plattsburgh, new york. how did that go, jean? >> reporter: well it was very short, but it was extremely important. we're here at justice court, and the defendant gene palmer arrived. the media absolutely covered him. he would not say anything, though. as he went into court. the purpose of the hearing to the defense waived any more hearings which is the very preliminary court. they waived on to county court. now this case will go to a grand jury. the district attorney said afterwards he may wait up to a month to go to the grand jury because the defendant gene palmer does have a brand-new attorney. he is rich area dreyer from albany new york practices

criminal law for four years. he just said they would be going on to county court. i want to give you a bit of color from the courtroom. the charges were not read. he did not enter a plea. i sat right behind the defendant gene palmer. he was nervous, he was serious. you could tell he was not used to being in this position. this is a correction officer now charged with promoting prison contraband tampering with physical evidence and official misconduct. that is in regard to giving and he admitted to new york state police giving tools at least four times introducing them from the outside to the inside of the prison. screwdriver and pliers to david sweat and richard matt. after they escaped, burning and burying paintings that the two had given to him. wolf? >> is it a sense that the charges leveled against him are more serious or about the same as the charges level against the woman who is accused of aiding in this escape?

>> that is an interesting answer because actually gene palmer has more charge against him, three felonies and one misdemeanor, as compared to joyce, who facilitated allegedly the escape. because she is urge chacharged with facilitating an escape which ironically is a misdemeanor. so gene palmer has more serious and potential more time in prison than joyce. >> thank you very much jean casarez, with the reporting. let's look at the clues that led to the end of this three-week manhunt. brian todd is here in "the situation room." he's looking into this part of the story. what are you finding out? >> tonight we're getting new information how this automatic started to unravel. rich art matt got sick then inexplicably fired on a camper. it was a crucial split between them.

that turned the tide for law enforcement. >> the tale of two takedowns begins nearly six days ago. that's when david sweat says he decided to break off with richard matt because matt was slowing him down. one laws enforcement source tells cnn there's evidence matt was sick possibly from contaminated food or water. underwear with matt's dna on it had been fouled near an old outhouse. 12:20 friday afternoon, a key clue. cabin owner bob willett gets a call from his son who checked on the cabin near dwayne new york. >> when i was talking to him on the phone, there was a gunshot then. >> those shots might have been fired at those fired at a passing camper. he immediately notices something out of place. >> just move out one counter to another, and it was -- it was a ring and it was wet. the cap was on the floor. >> authorities could later smell alcohol on matt's body from a few feet away.

another clue which responding officers are insigh willett's cabin, they snell gun powder in the air. they step outstyled. >> there was movement detected by officers on the ground what they believed to be -- >> 3:45 p.m. friday a tactical team comes pace to face with richard matt. he's shot three times in the head. shortly after his death, investigators find a camp near route 41 in malone new york. they discover another important clue dna from discarded material that matches david sweat. >> picnic style pepper shakers, and we believe possibly these two males were using pepper to throw the scent off of the dogs that were tracking them. >> 3:20 p.m. sunday almost 48 hours after matt was killed a state police sergeant notices david sweat jogging down a road near consequence tan, new york. sweat is shot and captured. >> a law enforcement officials sell richard matt and david

sweat had been gathering their own clues, from conversations with guards at clinton. jeff dumas is a former corrections officer at clinton. >> they gathered information, they had a pretty good layout of the surrounding areas of hunting camps, what could be in them as far as maps knives, weapons that are left there. >> reporter: jeff dumas says a lot of corrections officers at clinton have hunting cabins in that area that they often talk out loud about the cabins and supplies they need for them. he says inmates listen to every word. now according to a law enforcement officials, guards at clinton are being questioned about the friendly conversations they have had with inmates, including these two escapees and others. wolf? >> as you know brian, some items found on david sweat, could be used to help get more information. >> that's right. governor quoem orr when david sweat was arrested he had maps

tools, bug repellants wipes, pop tarts, a lot of stuff. they need to find out whether he got those items before or after the escape wolf. hopefully that's what he's revealing tonight and in the coming days as he's talking more and more to investigators. >> that's right. >> franklin county new york that's where the, thanks again for joining us. is there any indication that either matt and/or sweat attacked or harmed any residents of your area while they were on the run? >> none at all, we're extremely thankful. no law enforcement we are injured. >> is there any evidence sheriff, that anyone in the outside helped these two guys along the way during their three-week escape? >> not that we detected over at least -- you know my part of the investigation when they

entered into franklin county we didn't detect anywhere -- i think there is a possibly that head broken into camps. >> are you looking into any of these places where they stayed to see if they had any specific accomplices, or may have directed them, for example? >> yeah any of owners they've deposed, been spoken to by the state police and not necessarily interrogation, but, you know following any of those leads up. >> i want to show you and our viewers a photo. this one shows both matt and sweat in the woods, taken from what's called a trail cam. has your department first of all, seen this photo, as far as you know? >> i haven't, but a lot of those leads and details went into the command center at cadyville. >> do you know if it played a role in the capture? >> i'm sure it did. we had over 2500 leads that came

in you know maybe ten or 15 of those were credible. so i'm sure this photo played a big part in how we we reacted. >> that picture was taken june 24th so it's a significant to law enforcement, including you. as of right now, the stuff that brian todd was talking about that was discovered together with david sweat, what other indications, what other clues was it providing? as to whether or not others may still be at large, accomplices? >> i don't know as far as accomplices, like i say, the items they have really sfrnt illustrate -- snow mobile maps that type of thing, those were the items. and even the sweat was wearing

would not by uncommon. >> so presumably they stole these items from inside one of those cabins. is that what your suspicion is? much more with the sheriff when we come back. when you don't get enough sleep... and your body aches... you're not yourself. tylenol® pm relieves pain and helps you fall fast asleep and stay asleep. we give you a better night. you're a better you all day. tylenol®.

our breaking news the capture inmailed david sweat is giving details. the prison guard accused of

misconduct appears in court today, and we have new details about an fbi investigation into possible widespread corruption. sheriff, is the area now safe? can all the residents in your county franklin county breathe a sigh of relief? or are there still fears out there? >> absolutely. i talked to a number of community members. they're extremely thankful. the kids will all rest well tonight, have a good sleep tonight. you can never really plan how it went down. i'm glad that no civil juans were injured.

i think any of us expected there to be a really big gun battle and i'm glad it country come down that way. thank you, sheriff, for joining us. joining us now is our justice reporter evan perez. i understand you're getting new information how the fbi is broadening this investigation into what shaped? >> that's right, wolf. the dysfunction in this prison is the focus of this investigation by the fbi. we're told they're looking into drug trafficking run, whether people were surprises heroin to the prisoners and whether some of the employees were actually involved. this is something that comes from some of the interviews the

employees have painted a picture of rampant heroin use. this is now the beginning of a much bigger problem to see whether or not there's bigger corruption issues. this is even more shocking. take us inside an fbi investigation. what was going on at that time is then uncovered information about this heroin trafficking ring. so what started as just what happened cause the escape who helped in that regard has now expanded into actual corruption of public officials in the prison.

here's the question -- should it be shut down? should the prisoners be moved elsewhere, at least no now? >> no keep them now, it's one-stop shopping for interrogating. seriously i don't know where else they could put these people for now, but certainly they need to figure out what happened there. the structure and building and physical location might be just fine if you have the right corrections officers who are honest employees and do what they have to do to maintain control. apparently that all broke down. >> pretty shocking stuff indeed. lessons learned and move forward. >> it needs to be an independent investigation, and -- >> you don't trust the governor to do this? >> i trust the governor i just don't trust everybody who works for the state of new york -- >> so the fbi? >> not necessarily. it could be another igs from another state. just some other officials that

aren't here. because the governor has liability here the head of the prison system the head of that jail not just heroin corruption and trafficking, that type of thing, but this happened on their watch. if people had been killed. if an innocent civilian or law enforcement officer had been killed during this escape that's really their responsibility to keep control of these inmates. >> it's supposed to be a maximum-security prison supposed to be the place where you are assured these people can't get out. >> the governor is saying in 100 years no one has ever escaped, which is true no one has escaped until now, so they have to learn some lessons, hand if these other accusations that you're talking about, widespread drug use, heroin use, that's pretty shocking. let me get matthew involved in this. quickly, matthew, you want to react to what we've been talking about? >> i have to agree with tom. there needs to be an independent investigation as to what created the environment that caused these security compromises. now that one suspect is dead and one suspect is captured we can

go tack and start from the beginning. the security lapses and try to figure out what happened and what activities these two were doing while they were in the woods, in the cabin, if there were other cabins stole items, hurt people whatever. there's still a lot of investigation. >> matthew, we also heard david sweat is now supposedly speaking to authorities. we were told the plan was to have mitchell drive them to mexico. so what's the incentive here for this killer who's going to spend the rest of his life in jail? what's the incentive for him to cooperate? >> at this point, there's no traditional incentive. as tom pointed out yesterday there's no disincentive to not talk. he's in custody, going to be in jail for life. he's injured right now, so using good interview techniques hopefully ability to get more information out of him. that would vailate.

joyce mitchell's story and other people. >> the only incentive he might have is if he's going to be in solitary confinement which humanably he will be. he'll be locked up in a small cell maybe a tiny window maybe they'll give him a bible to read if he's a good prisoners, after a few years, "moby dick" maybe one hour a day, the only incentive to have is maybe he'll only have to spend 22 hours in a that will sore confinement. >> i'll tell you, one incentive he may have is the fact that other prisoners now know he was a snitch he was providing information that he had a very close relationship with the employees of the prison the guards and that they were using information from him from those two fugitives, whorl building

their plan now people know that they were -- so they would -- he would have a very big incentive to cooperate. >> and your sense also is this guy -- he wants to show off? >> absolutely. he's pulled off the greatest escape of our times. he doesn't care if it's 22 or 23 hours. it's going to be bad no matter what but i think he would be narcissistic enough want to brag about what they pulled off, how they pulled off this fabulous escape. they were out there for three weeks, his ego has taken the best of him already. >> but i would be very careful for believe a word he says. he ease a liar a killer obviously no good. stand by. we have much more. also coming up in the wake of terror attacks on three continents an american accused of supports isis there's now an ominous new fbi warning about the fourth of july holiday. also ahead, donald trump

fired by nbc, and the newly declared presidential candidate. guess what? he's firing right back.

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a new jersey man is picked up on charge of supports isis the ninth arrest this month alone. it comes in the wake of three deadly terror attacks overseas. jim scuitto is here in the "the

situation room" watching what's going on. what do we know? this is not just a usual pre-holiday warnings officials very concerned, senior counter-terror officials telling me the u.s. is definitely at a heightened state of alert. thames on the same day, inside a moving and on that beach in tunisia, at least 37 tourists killed both of those attacks, a single gunman. it's that attack that's of great concern, because it's very difficult to atracked. look at this demonstration of eye sizs. more than 3,000 attacks over the year. you can see as this explosion here in syria and iraq but how

they have spread beyond there, to egypt, tunisia, kuwait saudi arabia yemen, also going to afghanistan and pakistan. then of course the concern back when you're inspiring attackers hue how quickly in europe and, that 'tack in france on friday. then of course the boston potential recruit who was shot and killed before he was able to carry out an attack. >> what's difference about the threat now? >> the difference is a spokesman and senior leader for isis has issued a called for the holy month of ramadan. in that call he has said if you carry out an attack now, you will get ten times the rewards in heaven. that is the concern. they believe that the attacker in tunisia, the attacker -- perhaps the attacker in france as well heeded that call and the concern is and you heard mike morell saying this as well

this morning, we would not be surprised to see a similar attack in the u.s. on the july 4th weekend. there was certainly controversy when the homeland security secretary warned people away from the mall of america after that threat. there are authorities now warning people away from celebrating july 4th? >> no they are not. in fact they are encouraging people to go out, to celebrate, but at the same time they are encouraging people to heed this phrase we've heard so many times, if you see something, say something. if you see something strange, report it to the police. in fact this fbi bulletin is encouraging both law enforcement and the public to be vigilant. this is always the tough wall they walk here. it's a balancing act, right? you want people to enjoy the holiday, but want to acknowledge as well there's a real threat and everybody to do their part. >> jim scuitto, thanks very much. let's get more insight on the growing terror threat. joining us our commentator, the former congressman mike rogers

chairman of the house intelligence committee. also joining us is peter bergen and former congresswoman jane harman she heads the wood row wilson international center for scholars. what do you make about this july 4th warning, if you will directive going out for department of homeland security and fbi, to allah enforcement across the u.s. be on the lookout. >> it tells you, a, they don't have a specific threat. 24th don't have a source of information in any form that says we think in this region or this place or by this group of individuals there's going to be an attack. that tells me they don't have that specific conclusion on an event, but because of the call, so they layers these threats. there's calls over ramadan to get enjaned. somewhere in the world, that's what they're hoping for. so i think they're being prudent. you don't want to scare too much. again it's going to take

someone, an individual to go through the planning process. clearly they don't have anything on that yet, but they want to be vigilant in saying all of the threats that we have seen over this series this matrix comes together to say it is more highly likely there could be an attack. >> or a terror group, peter like al qaeda or isis for that matter. how important symbolism is the july 4th holiday? >> well we've seen attacks that happened when they were ready, which were not on symbolics days and potentially the most threatening was a christmas day 2009 attack which might have been brought down a flight over detroit. sometimes they do go for symbolic days and sometimes they just go when they're ready. >> what do you think jane? >> friday's attack was the anniversary of the so-called islamic state. so they do mark anniversaries, but july 4th is a big day in the united states people mass in public places. they have to be right once we

have to be right 100% of the time. the odds don't favor us. just think about the kid in tunisia who surprised his whole family and village by pulling this thing off. they thought he was a quiet good kid with an advanced degree who obviously got radicalized on social media. this is the new normal. it's quiet kids who have no police records pulling something off like this. >> do you agree with that? >> yes, i think that's exactly right. the social media has enabled these attacks around the world. severe seen them in australia, attempted in this country, garland texas, it didn't work out, but this is the reality. >> all three of those attacks in france lyon tunisia, kuwait difference but maybe isis-related and lone wolf inspired if you will. different modus operandi, if you will do you believe they happened on the same day they

were related? coordinated? >> it's hard to say if they were related. i don't buy the lone wolf because it was an individual i think you have to track that back. one person can be a coordinated attack. some of the supplies that were gained raises some issues. one had a suicide vest that clearly wasn't made in somebody's basement for the first time. that tells us there was a logistics training involved in that attack. now, not all of them fit that profile, but clearly on the face shows there was an investigation. the fbi domestically has an isis investigation open in all 56 field offices. that's why i think they're concerned. this is a big and growing problem not only here. >> jane almost every other day they seem to be arrested someone. today someone in the united states for supposedly collaborating with isis or plotting a deed. >> i think there have been nine arrests this month.

i think it's 50 in the last year since march of 2014 three people have been killed evading arrests, but the number is going to go up. what we want is people to see something and say something, and we want law enforcement to build trust with communities where some of these people are. let's understand this is not only muslims who are conducting attacks in the united states that are hate crimes too. just think south carolina that tragedy just last week. there's a lot of stuff that could happen and it's easy access on how to build pressure cooker bombs or do other minor forming of use of explosives. >> and these are soft targets, peter, the factory in france the beach, the resource in tunisia, a mosque in kuwait. these are easy targets. yeah hotels and by definition they let people in similar places of worship, whether it's in charleston or kuwait. you have to let people in. >> guys we're going to continue to stay on top this story.

let's hope it's a quiet holiday here in the united states. thanks very much. coming up wounded and captured surviving escapee david sweat is revealing stunning details after three weeks on the run in the rugged terrain of upstate new york. and you're fired. this time it's donald trump himself. why nbc is dropping two major beauty pageants and cutting business ties with the republican presidential candidate. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

we're following the breaking news. the worst day of the year for u.s. stocks. markets across the globe tumbled today, amid fears of a new financial crisis that could break wide open as soon as tomorrow. let's go to our business correspondent richard quest, who is joining us from athens greece. lots of concern, richard, what is going on where you are? >> reporter: what's going on of course is that greece is just about out of money. the banks are closed the stock market is closed and the country is to have this major referendum on whether they want to have more austerity and, in other words, stay within the euro system. you can hear the sounds of the protests that are taking place, but wolf people in this country

are now being restricted to taking out 60 euros aday. that's about $65, $66 u.s. dollars. that's all they're allowed to take out. that's not going to change anytime soon. the situation is serious. there's no chance of negotiations during the course of the week. wolf as we head towards the weekend, we can only expense more tension and pressure as this crucial vote takes place. the world markets are responding. and the worry is it's going to get worse. >> the dow jones here in the united states dropped about 350 pounds today. there you see a 350 points down closing at 17,596 and that's just worrying about what's happening in greece. why should this impact america's economy potential?

>> reporter: that's a really crucial point. if you just look at the trade flowing, if you look at the automatic nature it shouldn't, but here's the problem -- drop a pebble into the water, and the ripple effects start to grow because what happens in greece could help could hurt the your owe zone. now we're starting to see the connection with the united states. the eurozone is the single largest trading partner with the united states. suddenly recession problems deep dismay in the eurozone that does have an effect with the united states. one other thing, what we used to call counter-party risk we saw it with lehman brothers. nobody really knows who is on the other side of half the deals and transactions. so if greek banks are in trouble, you are european banks in trouble? if european banks may be in trouble, the counter-party risk

could end up back in new york. we saw it with lehman brothers we've seen it with subprime. we've seen it time and get. wolf they say the financial system is better equipped to cope with these sorts of pressures, but what we are seeing at the moment is people saying we're not so sure. >> how worried should our viewers be, richard? >> reporter: not particularly at the moment. certainly if they're coming to greece putting it in the most basic terms, if viewers are visiting greece they can take out as much money, the weather is glorious a great holiday will be had. however if the greek crisis really does impact the eurozone yes, you will see market volatility but i think this is classic, this is classically one of those occasions where you

just hold your nose and stay the course. >> rich afford quest in athens for us we'll see what happens tomorrow a critically important day. thanks very much. coming up why nbc is now telling donald trump you're fired. and what trump is telling nbc. plus new details about the bloody end of the new york manhunt as a prison guard goes to court today phasing charges for his alleged role in the breakout. milk has 8 grams of high-quality protein. which could be the difference between just living life. and milking it. start every day with the power of protein and milk life.

today nbc is joining univision in telling donald

trump, you're fired. the networks are ending their business ties with trump, including broadcasts of the miss universe and miss usa beauty pageants which trump and nbc jointly own. both networks are blaming trump's inflammatory comments about mexico and immigration when he announced he was running for president. but trump is not backing down. cnn's athena jones is joining from us chicago where trump had plenty to say about all of this this afternoon. walk us through what he said. >> he did have a lot to say. trump's comments have offended a loot of people. there were protesters outside this event today. one of them even had a donald trump pinata. and this comes as his party is trying to make inroads with hispanics, something many see as key to winning the presidency in 2016. but as you mentioned the immediate problem for trump himself is on the business front. >> am i so bad? >> reporter: nbc universal cut

ties with donald trump citing derogatory statements calling mexican immigrants rapists, drug dealers and cripple nalts. >> somebody has to tell it like it is. >> reporter: the real estate mogul stood by those comments before a packed house in chicago quoting a report by "fusion" owned by a spanish language channel and abc. >> they think it's like mother teresas coming across the border okay? this one says 80% of central american women and girls are raped crossing into the united states. well i said drug dealers. i said killers. i said rapists. >> reporter: nbc says it will no longer air the miss usa or miss universe pageants partly owned by trump, following a similar step by euna vision which also dumped the event. trump is threatening to sue. >> i'll be suing euna vision. maybe i'll be suing nbc too. >> reporter: nbc was facing growing pressure to respond. with more than 200,000 people signing on to a petition on

change.org calling on the company to dump trump. and angry protesters denouncing him outside the chicago event. the reality star and now presidential candidate had already planned to give up his hit show "the apprentice." amid the controversy, trump has been surging in the republican polls. up to second place in the first primary state of new hampshire. oozing confidence in classic trump style, he touted the latest cnn/wmur polls. >> this is a cnn poll just came out. and they have interesting categories. who's the pest on terrorism? that's a pretty important subject. trump right at the top. who's the best on handling international trade? like not even close, trump is like almost double anybody else right? that's incredible. >> reporter: as for the man besting him in that poll former florida governor jeb bush trump says he's a nice guy who can't win in 2016. >> believe me he will never,

ever in a million years bring it off. >> reporter: in a statement issued after the press conference he held here trump called nbc weak and said the company is foolish for in the understanding the serious illegal imdprigs problem confronting the u.s. he took a dig at the company for standing behind "lying brian williams" but not behind "people that tell it like it is as unpleasant as that may be." a defiant trump who sees himself as a truth-teller. >> athena thanks very much. more coming up later. meanwhile, coming up next the captured fugitive spills details of a dramatic getaway. a prison guard accused of aiding the escape appears in court. the fbi launching a corruption investigation at the prison including heroin use.

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not the other way around. happening now. escapee tells all. captured david sweat is opening up to authorities from his hospital bed as a prison guard appears in court accused of aiding in the escape. who else might have helped the killers break free? heroin behind bars? the fbi now expanding its investigation beyond the escape uncovering alleged corruption and drug trafficking inside that so-called maximum security prison in upstate new york. new isis arrests. another american is charged with plotting to help the terrorists as the u.s. goes on alert for potential attacks around the fourth of july. and black churches burn. several houses of worship are in ashes across the south.