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Japanese Princess Gives Up Royal Title to Marry Commoner; Donald Trump Responds to Naming of Special Counselor; Reports Claim Trump White House Knew of Flynn's Lobbying Before Being Named National Security Adviser; Trump Policies Weighing on Iranian Presidential Elections. 08:00a- 09:00a ET

Aired May 18, 2017 - 08:00   ET

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

[08:00:39] KRISTIE LU STOUT, HOST: I'm Kristie Lu Stout in Hong Kong and welcome to News Stream. The investigation into Russia's election meddling

is now in the hands of a special counsel.

And an undercover report on the crisis that is gripping Venezuela. A look at how it is affecting

people in their everyday lives.

Plus, a Japanese princess giving up her royal title all in the name of love.

The investigation into possible Russian meddling in the U.S. election and the alleged collusion with the Trump campaign is in new hands.

The U.S. Justice Department has appointed a special counsel to lead that probe.

Now, meanwhile, the White House is facing new questions concerning Michael Flynn. A New York Times report says the Trump transition knew that Flynn

was under federal investigation weeks before Mr. Trump was inaugurated. Here is CNN's Joe Johns.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT: The White House issuing a statement from President Trump, responding to the appointment of a special counsel. The

president says in part "A thorough investigation will confirm what we already know -- there was no collusion between my campaign and any foreign

entity." Deputy attorney general Rod Rosenstein naming former FBI Director Robert Mueller to oversee the investigation into Russia's election

interference. Rosenstein signing the order before alerting Attorney General Jeff Sessions and only giving the White House less than an hour's notice

before making it public. The surprise announcement comes after mounting pressure for the deputy a.g. to appoint a special prosecutor after

President Trump initially cited a memo Rosenstein wrote as the basis for why he fired James Comey.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He made a recommendation. But regardless of recommendation, I was going to fire Comey.

JOHNS: One source telling CNN Rosenstein is throwing President Trump overboard with a special counsel, a move the White House opposed.

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: There is frankly no need for a special prosecutor. You have two Senate committees that are looking into

this. The FBI is conducting their own review.

JOHNS: A statement from Rosenstein explaining "The public interest requires me to place this investigation under the authority of a person who

exercises a degree of independence from the normal chain of command." The move follows back-to-back bombshells for Trump, including a damning memo

from Comey where he documented private conversations with President Trump in which he says the president asked him to drop the investigation into

fired national security adviser Michael Flynn just one day after Flynn was terminated.

And today more bad news for the embattled administration. "The New York Times" reporting that President Trump knew Flynn was under federal

investigation for secretly working as a paid lobbyist on behalf of Turkish interests weeks before the inauguration, and yet still named him as one of

his top advisers, giving him access to the nation's biggest secrets. Another report by McClatchy connects the dots further, alleging that Flynn

stopped a U.S. military plan that Turkey opposed. The plan was eventually restored after Flynn was fired.

(END VIDEOTAPE)

LU STOUT: That was CNN's Joe Johns reporting.

And President Trump a few minutes ago on Twitter posted this writing, quote, "this is the single

greatest witch hunt of a politician in American history." He goes on to say,

with all of the illegal acts that took place in the Clinton campaign and Obama administration, there was never a special counsel appointed."

Democrats and Republicans are meanwhile embracing the appointment of Bob Mueller as special counsel. It seems nearly everyone agrees that his

credentials are impeccable.

Let's go live to Capitol Hill. CNN's Suzanne Malveaux is standing by.

And Suzanne, Mueller is respected by both parties. So, has the congressional reaction to his appointment been largely positive?

SUZANNE MALVEAUX, CNN CORRESPONDENT: It's been kind of a rare moment, if you will, of bipartisanship. We haven't seen this in a while. And members

of congress, Democrats, Republicans, House and on the Senate side as well, all expressing a sense of relief and seriousness about this investigation.

On the left, you have Representative Conyers who says that this really shows a sense of seriousness about the allegations of the president and his

associates. And on the right, you have someone like Senator Richard Burr of the intelligence committee who says that this really shows a sense of

seriousness about the allegations of the president and his associates. And on the right, you have someone like Senator Richard Burr of the

intelligence committee who says that this is going to reassure the American people, give them a certain sense of certainty, that this is an

investigation that is done without political influence.

And one of the reasons, Kristie, why they feel this way is because of who was selected as the special prosecutor. This is a former FBI director Bob

Mueller. He was director for 12 years. He was nominated under President George W. Bush, also worked under the Obama administration. Many of us,

journalists, know him well after his work after 9/11. And many lawmakers respect him. They say that he has a great sense of integrity. I want you

to take a listen, just a sample of some of those lawmakers.

(BEGIN VIDEOTAPE)

REP. JASON CHAFFETZ, (R) UTAH: He's as good as it gets. His credentials are impeccable. He's in the latter part of his career. He has nothing to

prove. He's been silent politically. It doesn't get better than Robert Mueller.

SEN. CHRIS COONS, (D) DELAWARE: He's exactly the sort of person that many of us hoped would be named for special counsel.

(END VIDEO CLIP)

MALVEAUX: So, there are a lot of other investigations, however, that continue. And this is really going to be interesting to see how it

influences them. You have the FBI, you have the inspector-general. But you also have here on Capitol Hill senate and house intelligence

committees, a senate judiciary committee and a House oversight committee, all of them involved in looking at the same thing. So how is this going to

work? At least some of these committees had personally asked, requested of the White House and the FBI for the Comey memo to be made public and for

Comey to publicly testify before the committees as early as next week. That might not actually happen, because the main focus, it is believed, is

certainly going to be on the special prosecutor's investigation and who they will actually draw into that investigation. So that is still

something that is being worked out, Kristie.

LU STOUT: Got it. So, even though we have a number of congressional probes that have been under way, it is Mueller's federal investigation that

will be front and center going forward.

And meanwhile, before you go, Suzanne, what had been the mood on capitol hill especially right after the news broke, right after the appointment of

a special counsel for the Russian investigation? Was there a sense of relief?

MALVEAUX: There was a sense of relief. There was also a sense of surprise, really. I mean, the only person who had been given a heads up on

this was House Speaker Paul Ryan. Rank and file, many of them had no clue that this was coming. So it was the initial shock of it all.

But then certainly among Republicans I think there was a sense of relief here that, look, you are

going to have a serious investigation, but it takes some of the weight off these various committees and his lawmakers who quite frankly have to go

home to their voters, constituents and not necessarily be under the same amount of scrutiny and pressure about, well, what are you going to do about

this Russia investigation, this Russia thing, and Trump and his associates? They can say, yeah, we're working on it, but also there's a special

prosecutor that is in place. It also allows Republicans who are in charge here of congress at least in the majority to try to push through or

redirect the focus again to their policy agenda. They are trying to push forward health care reform as well as tax reform. These are the kinds of

things they've been dying to talk about.

So, we'll see next week should be very interesting, the weeks to follow, because the special prosecutor and that investigation could take months, if

not years. They are hoping in the short-term that they can get some of those policy initiatives pushed through - Kristie.

LU STOUT: Yeah, interesting to hear about the knock-on effect for domestic policy in America as a result of this appointment. Suzanne Malveaux

reporting live for us. Thank you so much and take care.

Now, leaving the turmoil at home, Mr. Trump is headed for a major test in foreign diplomacy. He is about to embark on his first trip abroad as U.S.

president visiting Saudi Arabia, Israel, The Vatican, attending NATO and G7 summits. His aides are already giving us a taste of what to expect.

Now, CNN has learned while there Mr. Trump will not announce plans to move the U.S. embassy from Tel Aviv to Jerusalem.

Let's go to CNN's Oren Liebermann who is standing by in Jerusalem for us. And Oren, President Trump, again he will soon leave just the chaos in the

White House to visit Israel. He's made the U turn on the embassy move. So, what do Israeli officials hope to achieve with this visit?

OREN LIEBERMANN, CNN INTERNATIONAL CORRESPONDENT: Well, important to note he's not just visiting Israel, he's also visiting the Palestinian

territories and will meet with the Palestinian president in Bethlehem. Israeli officials were certainly hoping there would be an announcement on

the embassy move, that's because the White House and the Trump administration had not given any clear indication until the last 24 hours

about what their move would be. Until we learn from administration officials that the embassy will remain where it is in Tel Aviv.

So, where do the Israelis look now? Now it seems, especially with all the controversy surrounding Trump specifically related to Israel, and there are

three big ones going on right right now, one would be the revelation of a classified Israeli information to the Russians, another would be the

embassy, and then the third where is the western wall in the eyes of the U.S. official. It would seem from the Israeli perspective, all they can

ask for is a visit without any hiccups, without any surprises and without any hitches.

There will certainly be a reaffirmation of the close strength, the close alliance between the

U.S. and Israel that's very much expected given that those will be sort of the expected statements that both sides are certain to make.

As for what else Trump could do in his meeting with the Israelis, that remains to be seen. There isn't a clear idea of what it is exactly he'll

say. He is expected to make a big speech at the Israel Museum, which is in Jerusalem not far from our bureau here.

As for his meetings with the Palestinians and with Palestinian President Mahmoud Abbas, there is a hope there that perhaps he could announce he's in

favor of Palestinian self-determination, which is another way of saying Palestinian statehood. That it would be a big victory for the

Palestinians.

It would seem they're a little more relaxed here. Abbas has done everything right leading up to this meeting. He had a good meeting with

Trump in Washington, and then he'll meet Trump again with the other Arab States in Saudi Arabia before Trump makes his way to this region.

LU STOUT: Got you.

So, different expectations from Palestinian leaders as well as Israeli leaders. And I have to ask you about the alleged leak, you know reports

that Donald Trump gave sensitive Israeli intelligence to Russia, has that had any chilling effect on relations between Israel and the U.S.?

LIEBERMANN: Not any major chilling effect, not any really that we've seen. Israeli officials have almost gone out of their way in a sense to make sure

that it's clear to everybody without commenting or confirming on the alleged leak that relations between the U.S. and Israel at every level,

including in the intelligence community, remain strong.

Now, we have spoken to some former Israeli intelligence officials who say this is quite a shock. And one former head of Mossad, which is effectively

Israel's CIA, said this could be a possible catastrophe and Israel may want to consider holding sensitive information from the American intelligence

community and from President Trump. But other former intelligence officials we spoke with weren't that severe about the possible

consequences. They say there could be some small damage, some localized damage. First, it's important to find out exactly the extent of the leak,

then clarify it and then essentially move on, because the depth of the relationship between the U.S. and Israel and their respective intelligence

communities is so broad and so important to both countries.

LU STOUT: Absolutely. Oren Liebermann reporting live for us from Jerusalem, thank you.

Now, President Trump is also working his way into another major relationship, one with

South Korea. And Seoul says a special envoy of President Moon Jae-in met with Mr. Trump and both agreed dialogue with North Korea is possible, but

only if the conditions are right.

Mr. Trump and Mr. Moon are set to meet in Washington next month.

Now, with uncertainty over the future of the White House, let's look at how the markets are

reacting. And most Asian's stocks are down in Thursday's close. Japan's NIKKEI dropped 1.3 percent,

Australia, Shanghai, Hong Kong's Heng Seng also fell.

In Europe a similar scene, shares are down across the board. All these follow Wednesday's big

tumble on Wall Street.

You're watching News Stream. And still to come, it seems that the Trump team knew that Michael Flynn was under investigation before he came to the

White House. We go live to Washington for the latest.

Also ahead, protests, repression, violence. Venezuela is spiraling out of control. Now, Nick Paton Walsh goes under cover to avoid arrest. He finds

millions are in need of food. And a street magician who says in Venezuela there's no magic left.

(COMMERCIAL BREAK)

[08:16:01] LU STOUT: Welcome back.

And back to our top news story. A new man has been chosen to head the U.S. investigation into possible Russian meddling in the 2016 presidential

election. The Justice Department has appointed Robert Mueller as special counsel. He was director of the FBI for 12 years until 2013. Last week

President Trump abruptly fired Mueller's successor James Comey.

Comey had been leading the probe into possible collusion between Mr. Trump's associates and Moscow. And sources say that back in February Comey

wrote a memo recording that the president asked him to end the FBI investigation into former National Security Adviser Michael Flynn.

Now, Flynn himself is the subject of a fresh report by The New York Times. The paper says that Flynn told the Trump transition team weeks before the

president's inauguration that he was being investigated by the feds for working as a paid lobbyist for Turkey.

Now, for details on the appointment of Mueller's special counsel, here is our justice reporter, Laura Jarrett.

(BEGIN VIDEOTAPE)

LAURA JARRETT, CNN CORRESPONDENT: A fast-moving chain of events here at the Justice Department late Wednesday with the deputy attorney general, Rod

Rosenstein announcing a special counsel, Bob Mueller, former FBI director has been appointed to lead the Russia investigation on behalf of the

Justice Department.

A group of reporters were gathered here on Wednesday afternoon, and given briefing materials, including the special counsel statute, the special

counsel order from Rod Rosenstein, as well as a press release.

I'm going to read a little bit of the press release to add context here. He said in part, "My decision is not a finding that crimes have been committed

or that any prosecution is warranted. I have made no such determination. What I have determined is that based upon the unique circumstances, the

public interest requires me to place this investigation under the authority of a person who exercises a degree of independence from the normal chain of

command."

And, of course, the deputy attorney general leading this decision to appoint a special counsel because Attorney General Jeff Sessions recused

himself from anything having to do with the Trump campaign, the Russia investigation, or the transition earlier in March.

We're also learning a little bit about the timing and sequence of events on Wednesday. And now know from a source that the deputy attorney general's

office phoned the White House Counsel's Office to inform them of this decision, but did not give them a head's up. Rather they were told after

Rosenstein signed this order.

I'm also told by a source that Jeff Sessions, the Attorney General was informed after Rod Rosenstein signed this order. We now know as well that

Bob Mueller, who is going to be the special counsel is able to put together his own team to lead this investigation.

He has 60 days to put together a budget of his choosing, and he can pick staff both from within the department and outside. And we're learning that

he's already picked two of his former partners WilmerHale, one who worked on the Watergate investigation.

Laura Jarrett, CNN, from the Justice Department.

(END VIDEOTAPE)

LU STOUT: Now as reported, there are new and startling developments over who knew what and when in the Trump camp about Michael Flynn, the man who

Mr. Trump picked to be his first national security adviser.

The New York Times reports that weeks before the inauguration, Flynn told the transition team's chief lawyer that he was under investigation for

secretly lobbying on behalf of the Turkish government.

Now, McClatchy News revealed that Flynn stopped a military operation that Turkey opposed.

Now, journalist Vera Bergengruen is following the story. She joins me now live from Washington. Vera, thank you so much for joining us here on CNN.

Can we first start by establishing the timeline? So, according to your reporting, the Obama team had a plan to retake Raqqa from ISIS. We know

that Turkey doesn't want the Kurds to be involved. Team Obama then tell then President-elect Trump to go ahead with the plan once in office. What

did then Trump adviser Michael Flynn say and do?

[08:20:00] VERA BERGENGRUEN, JOURNALIST: So Michael Flynn, we don't know why this has not - he hasn't spoken about this, but he told Susan Rice,

predecessor, to hold off on the plan and that they would make the decision once they were in office.

And back then we didn't know that he was a foreign agents for the Turkish government. And he registered a month later and revealed that he had been

paid half a million dollars to lobby on behalf of Turkish interests during the campaign.

He wasn't being paid at the time he made the decision, but lawmakers and journalists are now looking with fresh eyes that all of his decisions that

he might have made and all of the access he had to information and how he might have used that to benefit his client.

LU STOUT: That's right, it's the timeline and what he did and when he did it and the fact that he was receiving payments from Turkey that makes this

very alarming.

But as you said, we still don't know the why. I know that you've been pressing your sources there in Washington, D.C. When you're asking around,

why did he stop this mission, this mission in Raqqa? Is it because of sound policy reasons, or is it because of the payments he received from

Turkey? What kind of responses are you hearing?

BERGENGRUEN: We truly don't know. His - it was reported by The Washington Post back in

February that they decided to hold off on the plan because they said there was gaps in it and they didn't trust it and that the Trump administration

was going to conduct its own review.

However, ultimately, the Secretary Mattis conducted his 30-day review on military strategy and ended up approving the same plan and Trump just

approved it a couple of weeks ago. And the U.S. is going to be directly arming Syrian Kurds to retake the capital. So, it just delayed the

operation by a couple of months.

LU STOUT: I know that in your reporting you've been asking members of congress the following question, if Flynn acted on behalf of a foreign

nation, would this be considered treason?

BERGENGRUEN: The word is definitely being floated around. However, we know it's very

difficult to convict anyone of treason. It would have to be benefiting an enemy of the United States, which means you would have to have openly

declared war on the country or entity, and, you know, this doesn't really legally fit the bill. However, the word is still being used in private

conversations with many lawmakers.

LU STOUT: OK, Vera, we'll leave it at that. But thank you so much for your reporting and

for sharing your findings with us here on the program. Take care.

Now, police in Washington are investigating an assault on pro-Kurdish protesters. Men in suits believed to be staff of the Turkish embassy and

President Tayyip Erdogan were beating and kicking the protesters, but the embassy claims that the protesters were from the Kurdistan Workers Party,

and you can see some of them did some beating of their own.

The D.C. mayor calls it a violent attack on a peaceful demonstration. It happened as Mr. Trump met with Mr. Erdogan in the White House.

And News Stream will continue after this short break.

(COMMERCIAL BREAK)

(HEADLINES

[08:26:50] LU STOUT: Of course, as we have reported, the president has also been reacting on Twitte. Our senior Washington correspondent Joe

Johns joins us now live. And Joe, I mean, Mueller's appointment took the White House by surprising. They've been processing it since. Now, POTUS

responded on Twitter, of course. Tell us how.

JOHNS: Yes, you read the statement that was sort of carefully crafted after the president huddled with his aides last night, a bit non-committal

if you will. But this morning a much more visceral reaction from the president on his Twitter account as he tends to do, almost every morning

without fail, though he's been quiet the past couple days.

So, the most recent tweet says "this is the single greatest witch hunt in American history," obviously referring to the investigation into Russian

involvement in the last election."

And then the previous tweet to that, with all the illegal acts that took place in the Clinton campaign and Obama administration, there was never a

special counsel appointed, a counsel is spelled incorrectly there.

The president apparently referring to the campaign of Hillary Clinton, his opponent in the last election and not to Bill Clinton who ran for the White

House twice and won.

So the president with a much stronger reaction this morning, much more visceral and perhaps a bit surprising given the fact that Bob Mueller has

been appointed as the special counsel to investigate all these matters. It will be interesting to see what the president's lawyers would have to say

to him about tweeting under these circumstances - Kristie.

LU STOUT: Yeah, so a visceral reaction via Trump Twitter to the appointment of a special prosecutor. There's also something else for the

Trump White House to respond to, these new accusations about Michael Flynn and his lobbyist work in Turkey and what the president knew before he made

him his national security adviser.

So, what is the White House saying about that?

JOHNS: We don't have a lot on that, quite frankly. Obviously, their hands are limited in some way simply because this is a federal ongoing

investigation and there are reports, and we have reported here on CNN, that grand jury subpoenas have been issued in the Flynn case. But what you're

referring to is The New York Times report occurring today that the campaign of Donald Trump was made aware of the fact that Flynn was under federal

investigation for his work lobbying essentially on behalf of the interests of the government of Turkey, though he didn't get paid directly by the

government of Turkey, got paid by intermediary.

Apparently, Michael Flynn did tell the campaign that he was under investigation. And interestingly enough, he was still brought on as

national security adviser.

We're trying to put together a timeline on all of that and do our own reporting for CNN, but that's an unusual circumstance if an individual

tells you he's under federal investigation, you go ahead and put him in one of the most powerful jobs in the White House relating to national security,

Kristie.

[08:30:08] LU STOUT: All right, Joe Johns reporting live for us, thank you.

Iranian voters are finding it hard to get away from mentions of Mr. Trump and his policies. Now Washington's tough stance on Iran is causing a lot

of frustration there. And it could affect this Friday's presidential election.

Fred Pleitgen reports now from Tehran.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Iranian conservatives mobilizing days before the protection. Their candidate,

Ebrahim Raisi, looking to unseat the moderate incumbent Hassan Rouhani and make Iran assertive, his supporters say.

UNIDENTIFIED MALE (through translator): Raisi has morals, he's a good man. He's knowledgeable and he does what he says.

UNIDENTIFIED MALE: I think Mr. Raisi, if being president, our relation with the United States will be worse.

PLEITGEN: Conservatives say the nuclear agreement reached between Iran and world powers two years ago, weakened Iran and hasn't brought the economic

benefits many hoped for. Despite the removal of sanctions, unemployment remains high, especially among those with university degrees.

And of course, relations with America and the west pay a major role in Iran's upcoming election. Many people in this country feel that the U.S.

has not kept up its end of the bargain in the nuclear agreement, and they want a future president to take a harder line.

Instead of detente, the Trump administration has been talking and acting tough on Iran. Slapping Iran with new sanctions after its military

conducted ballistic missile tests earlier this year.

PLEITGEN: So there's a Trump factor then, a little bit?

HAMED MOUSAVI, STAFF, UNIVERSITY OF TEHRAN: Absolutely. Absolutely. I think in the last debate when issues of foreign policy were discussed, the

conservatives were criticizing Rouhani for not being tough on the Americans.

PLEITGEN: Rouhani continues to defend the nuke deal and accuses Iranian hardliners of undermining efforts to ease tensions with the west.

HASSAN ROUHANI, PRESIDENT OF IRAN (through translator): When they wanted to jeopardize the deal, we witnessed what they did. They broadcast the

underground bunker with rockets to destroy the deal. They wrote on the missiles to destroy the deal so we could not benefit from it.

PLEITGEN: Rouhani's comments are drowned out by a wall of noise at the conservative rally, where they hope their efforts will be enough to give

Iran a new conservative government.

(END VIDEOTAPE)

LU STOUT: And that was CNN's Frederik Pleitgen reporting from Tehran.

Now, the government in Venezuela is sending 2,600 troops to put down unrest in a western province where a 15-year-old boy was killed. There were

candlelight vigils in Caracas and other cities to honor at least 43 people who have now perished during six weeks of anti-government protests across

the country. Now one of the richest and most powerful countries in Latin America, Venezuela, is on the

verge of a total breakdown. Constitutional crisis has led to shortages of everything. Millions can't even afford to feed themselves.

Now, the government is cracking down and intimidating journalists even taking CNN's sister network CNN en Espanol off the air.

Now, our senior international correspondent Nick Paton Walsh traveled to Caracas reporting under cover to avoid arrest and this is what he found.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Venezuela's dark lurch into poverty and chaos was on display. As you drive

into the capitol, this food truck breaking down for mere seconds before it was looted.

(HONKING)

PATON WALSH: Basic food is scarce. No shortage of bleach, but long lines for bread.

This crisis all created by the mad policies of a government that now wants to hide the collapse, cracking down and intimidating journalists. We had to

go under cover and much of our film covertly to avoid arrest.

For some poor nearing starvation, the people demand change. In violent clashes, tens of lives lost...

(GUNFIRE)

PATON WALSH: ...as desperation meets tear gas and police birdshot.

You've heard of Molotov cocktail. That's too simple for a once suave, gas- rich state. So this is a sewage bomb.

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

PATON WALSH: "Mixed with gas and ammonia," he says, "prepared directly for the police that throw tear gas bombs at us worth $60 each. My country

doesn't have food and we can't even protest peacefully."

(on camera): During today's standoff, the crowd sometimes attacks by pro- government thugs on motorcycles who open fire indiscriminately.

(SHOUTING)

PATON WALSH (voice-over): Gunfire takes at least one life this day, that of 27-year-old Miguel Castillo.

But it doesn't stop the daily battle to eat. Virginia has been doing this for 18 months to find her five kids. She can't find work since she had this

little one. Here she sometimes finds what she calls meat.

"Sometimes I find stuffed bread, rice, meat, beans and pasta. Some are conscientious, putting it in clean bags. leaving it out." So how has oil-

rich Venezuela got so bad?

(on camera): In most countries, it is the market that sets the price, for example, for rice, but here in Venezuela, the government decides how much

you should pay for most food stuffs, but also what many people's wages are. Since the oil price crashed globally, they have not kept one up with the

other. They have basically run out of money. And now for rice like this, you need to find three times as many notes as these, and that's about a

month's minimum wage.

(voice-over): Wherever you look, repression and hunger haunts this once- proud city.

This man is a juggler, a magician for kid's parties, beaten heavily, he says, in the days before his protest, now begging for food when we find

him.

"I spend two days on the streets," he says, "and two days at home. When I go home, it's because I have food. Before, I get calls to do magic at

birthday parties, but no. Now with the country the way it is, magic doesn't help."

They mourn the dead, the anger, quiet, indignant, not belligerent.

South America is looking to see if Venezuela can fix its self-made crisis without major bloodshed but they are falling so far so fast, and the ground

is getting nearer.

Nick Paton Walsh, CNN, Caracas, Venezuela.

(END VIDEOTAPE)

[08:36:45] LU STOUT: Now, Venezuela has repeatedly said its problems have been exaggerated by hostile foreign media and the drop in oil prices and

actions of opposition tycoons have contributed to the country's problems.

Now, in the second part of his series on Venezuela, powerful reporting, Nick Paton Walsh gives us a rare glimpse into a hospital where the economic

crisis is taking its toll on the most vulnerable.

(BEGIN VIDEO CLIP)

PATON WALSH: Danielle is 14 and elsewhere would probably have kept her leg. But in Venezuela, vital medicine for chemotherapy is short and so were the

odds the bone tumor in her leg wouldn't spread.

Just a little cold water, the doctor says.

Does it make you feel angry as a doctor that a procedure like this is necessary where you could prevent it if you have the right medicine?

UNIDENIFIED FEMALE: Yes. That is very sad for us.

(END VIDEO CLIP)

LU STOUT: Sadly, she's not alone. Danielle's case is not isolated.

Stay with CNN for more from Nick Paton Walsh reporting under cover in Venezuela all day on

CNN. Don't miss it.

Now, human rights group are condemning an Indonesian Sharia court for sentencing two gay men to a public caning. Now, the two were arrested

after vigilantes broke into their apartment and filmed them naked.

Now, gay sex is legal in Indonesia except in the conservative province of Aceh. That is governed by sharia law.

Experts say that this is another sign the Muslim majority in Indonesia is becoming more conservative.

Now, it sounds like a fairy tale, but there are some real life complications. Now, coming up right here on the program, what a Japanese

princess will have to give up to marry the man she loves.

(COMMERCIAL BREAK)

[08:40:10] LU STOUT: Welcome back.

Now, a Japanese princess is giving up her royal title for the man she loves. Now, news of the engagement is being greeted with enthusiasm. But

as Will Ripley reports, it's also raising questions about royal tradition and gender roles.

(BEGIN VIDEOTAPE)

WILL RIPLEY: Springtime in Tokyo, the cherry blossoms have fallen, but something else is

blooming: royal love. Well, sort of.

Princess Mako, first grandchild of Japan's Emperor Akihito, is getting engaged. This is the world's first look at her soon-to-be fiancee, Kei

Komuro (ph). He's 25 just like the princess. They met at university and he works at a Tokyo law firm, a resume any mother or father of the bride

would love, with one exception.

UNIDENTIFIED MALE: He is what they call a commoner.

RIPLEY: Komuro's (ph) only royal title was prince of the sea when he starred in a beach tourism campaign for the Japanese City of Fujisawa.

People say he loves the ocean almost as much as he loves the princess. And she obviously loves him too, because once they get married, she gives up

her royal status and becomes a commoner.

Their non-royal royal romance rekindles an old debate in Japan: why can't women who marry commoners just keep their royal titles as the men do?

(SIMULCAST WITH CNN USA)

END