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Probe Blames Navy for Crash; Exxon Violated Sanctions; Protesters in Minneapolis Aired 9:30-10a ET

Aired July 21, 2017 - 09:30   ET

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

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[09:31:40] POPPY HARLOW, CNN ANCHOR: This morning the initial investigation into that deadly collision between a U.S. Navy destroyer and a Philippine cargo ship shows the U.S. Navy could be to blame. Findings show multiple errors by the crew of the USS Fitzgerald and a failure to take action in the final moments leading up to the crash. Two defense officials tell our Barbara Starr, seven of our country's finest and bravest died in that collision. You see them all right here. Among them, Xavier Martin, just 24 years old, a son who followed in his father's footsteps, joining the Navy as a teenager. His father calls him a supernova and a bright shining star.

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BROOKE BALDWIN, CNN ANCHOR: How proud of your son are you?

DARROLD MARTIN, FATHER OF FALLEN SAILOR XAVIER MARTIN: Words can't describe how proud of him. I can't - I have - well, I've kept every text from the time he's joined the Navy. And there is just numerous texts that I've expressed how proud I am. I'm so proud to be his father. I could not ask for a better child. Never.

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HARLOW: Joining us now, live at the Pentagon, is our Pentagon correspondent Barbara Starr.

Barbara, you're the one who got this reporting, this information. What else are the investigators telling you?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, first, of course, just continuing, utter heartbreak for these seven Navy families. But what investigators are finding, and it is the preliminary findings, more information could come to light, is that there were a series of cascading errors by the Navy crew manning the ship at the time. The - you know, they knew this cargo ship was out there. They knew it was approaching. But for some reason nobody sounded a warning or an alarm of imminent danger. There was no action to change course until it was too late. The ship apparently just kept on the course it was on at the time.

And that's what's so inexplicable, what kind of seamen ship was actually at play here, at work. And so that's - that's where it goes now, the investigation. They know that the crew failed to respond. But why they failed to respond remains a critical question.

You know, the devastating wreckage is perhaps one of the bigger issues now. A hole ripped below the water line. The compartments flooding. That's where the seven sailors died. But the damage so severe there was a real possibility, officials saying, that this ship could have sunk and the entire crew could have perished at sea. So this becomes even beyond the seven and the tragedy for those families, you know, just the potential of utter catastrophe.

And that's why the Navy has to figure out now what exactly happened, why it happened. And there will be accountability. There is a good chance, we are told, that some of the crew will face charges because this collision never should have happened. It is the responsibility, they say, of the U.S. Navy at sea to stay out of the way of other ships.

Poppy.

HARLOW: Barbara, before you go, quickly, aren't there a lot of failsafes in place so things like this don't happen?

STARR: Well, that's right. I mean it starts with having the bridge manned and people even outside on deck watching for approaching ships, sounding the verbal alarm to those driving the ship that danger is imminent. And it does appear that for some reason that just did not happen here.

[09:35:13] HARLOW: Barbara Starr breaking the news of that preliminary investigation this morning.

Thank you for the reporting.

Secretary of State Rex Tillerson's former company, the company he was CEO of for a really long time, now under fire and facing a big fine. The Treasury Department going after and fining millions of dollars against oil giant Exxon Mobil. Why? For its dealings with Russia while Tillerson was in charge.

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HARLOW: A powerful earthquake striking Turkey's coast and the nearby Greek islands, leaving at least two people dead, hundreds more injured. You can see the people running into the street near the epicenter in Turkey. It was a 6.7 magnitude quake. This was the scene on the Greek island of Kos. Some buildings reduced to rubble. We're told tourists that were killed, two of them, from Sweden and Turkey. At least a dozen aftershocks have been felt since the initial quake.

[09:40:09] And the U.S. is expected to ban American citizens from visiting North Korea. That is according to two tour groups that take western tourists there. The U.S. State Department spokesperson had said last month it was being contemplated. This news, of course, follows the death of Otto Warmbier, the American college student arrested in North Korea last year after being held for 17 months. He was handed over to the United States in June and died just a few days later. Exxon Mobil fighting back after the Trump administration and Treasury Department hit the oil company with a $2 million fine. Why? For, quote, blatantly violating U.S. sanctions on Russia. The violations happened in 2014. That is when now-Secretary of State Rex Tillerson was CEO of Exxon. The Treasury Department says those violations were egregious and, quote, caused significant harm.

Our Michelle Kosinski is at the State Department with more.

Is Tillerson saying anything?

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: No, he's not saying anything. And the Treasury is calling this, what Exxon did at the time while he was leading the company, reckless disregard for the U.S. sanctions imposed on Russia. The Treasury says in 2014 Exxon repeatedly did business with, signed eight different documents with a man named Igor Sechin and he's a close friend of Vladimir Putin's. He's the head of the state oil company Rosneft. And he was sanctioned also in 2014 after Russia took over Crimea.

So the State Department was asked repeatedly about this. They've mostly referred all questions to the Treasury Department. But also asked repeatedly, why doesn't Secretary of State Tillerson come and address reporters and the American public directly. It was clear that was not going to happen. But here's some of what the State Department said.

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KOSINSKI: The company he led violated the sanctions scheme. So how can the American people trust that he is committed to continuing with this (ph)?

HEATHER NAUERT, STATE DEPARTMENT SPOKESWOMAN: I think he was very clear with President Poroshenko, the United States, this administration, the president have all been very clear about our support for the Ukrainian government, for its - for its sovereignty and territorial integrity.

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KOSINSKI: Here's where it gets tricky. Exxon is calling this fundamentally unfair. They are suing the Treasury Department now to try to get rid of this fine. They say that they had gotten guidance from Treasury in 2014 about how to work under these sanctions because the gas company, Rosneft, was not sanctioned, but the CEO, Igor Sechin, was sanctioned. So they said Treasury helped them to understand back then that it was OK to do some business with the company, just not personally with Sechin. Treasury, though, came back and said, no, that's not how sanctions work. When you read the sanctions, it makes it clear and that Exxon should have known better, Poppy.

HARLOW: The devil's in the details, as always. Michelle Kosinski at the State Department, thank you. HARLOW: An embrace forged from tragedy. Two families who lost loved ones in police shootings coming together with a common message, justice must be served.

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[09:47:43] HARLOW: Two families in Minneapolis brought together by tragedy. It was an emotional first meeting between the mother of Philando Castile and the fiancee of Justine Ruszczyk, both who lost loved ones at the hands of police. The two embraced as hundreds gathered on the streets of Minneapolis last night demanding justice for Justine. The Australian bride-to-be fatally shot by an officer there last weekend after calling 911 to report a possible sexual assault.

Our Scott McLean is following the latest in Minneapolis.

The police officer that fired those shots, when we spoke last, was not saying anything. Has that changed?

SCOTT MCLEAN, CNN CORRESPONDENT: That has not changed, Poppy.

And I will tell you, the people who came out here last night, they all had a common message, and that is, this police shooting should have never taken place. As you mentioned, Justine Ruszczyk was killed in this alley late Saturday night after calling to report a sexual assault. And last night's march was a pretty interesting group of people. A lot of the neighbors, people who may have known Justine from this area, and a handful of activists who were calling for police accountability.

As you said, one of them Valerie Castile, the mother of Philando Castile, who was killed by an officer during a traffic stop in the Minneapolis area last summer. She said that she knew that her son's death would not be the last at the hands of police. And, coincidentally, he was killed - or Justine Ruszczyk was killed, excuse me, on his birthday.

We're also hearing from the police chief for the first time. She said that the police officer, Mohammed Noor, again, who is not speaking to investigators, was well trained and a good hire. But in this case, she is not standing behind him.

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CHIEF JANEE HARTEAU, MINNEAPOLIS POLICE: Justine didn't have to die. Based on the publicly released information from the VCA, this should not have happened. On our squad cars you will find the words, "to protect with courage and serve with compassion." This did not happen.

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MCLEAN: The chief also said she spoke directly with Don Damond, Justine Ruszczyk's fiancee, promising him justice in this case, though she could not promise that Mohamed Noor would lose his badge. I also spoke with the family attorney yesterday, Bob Bennett, who also

represented the Castile family in that case. He said what a lot of these police shootings have in common, Poppy, is panicky police officers. He just cannot see a reasonable justification for this shooting. He also said the family is looking for justice in its largest sense, meaning not just a cash settlement, but some really meaningful reforms to police accountability.

[09:50:18] HARLOW: Scott McLean in Minneapolis, thank you for that.

So, ahead, what is happening at the White House right now? Multiple reports or multiple efforts to push back against the man heading up the Russian investigation. The president's team is looking for ways to try to undercut Bob Mueller. What's the strategy here?

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[09:55:33] HARLOW: President Trump proved that a CEO with no political experience can become the leader of the free world. So is his run going to inspire other big name CEOs to try the same. Surprisingly, every CEO that I ask says thanks but no thanks. Why is that? I asked former Xerox CEO Ursula Burns, the first black woman ever to be CEO of a Fortune 500 company.

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URSULA BURNS, FORMER CEO, XEROX: If I thought that the effort that I put into the political arena was an effort that would have more impact - equal to or more impact than the effort I do today, I would do it. I a real believer that it will not. And I know the part - it's kind of a chicken in an egg thing, right? So if you don't get involved, you can't have more of that, so on and so on. But I think I - if I did that, I wouldn't be able to do most of the things that I'm passionate about doing now.

If you could transport me into the role, I would actually feel better about taking it than if I have to run. And it's not the running part that I'm, you know, I'm fairly competitive, but it's such BS right now that we go through to run. Just to - just to run. I just need to get - if you want somebody to actually do a job, I think I would be a reasonable person to do certain kind of work.

But before I could even walk in the door, there's this other stuff that you have to do, which is ridiculous, you know, that you have to kind of know more about me than my husband knows about me. You know, I have to be more saintly than Jesus Christ was. You know -

HARLOW: And we know you're not a nun.

BURNS: And I'm not a nun.

HARLOW: Yes, that we know.

BURNS: And my husband knows me pretty well. So I don't want - and then, when you get there, a lot of it is not about constructive dialogue. It's about - particularly now it's about actually not even dialogue. It's just about - so I do understand that I'm copping out of this by saying not me now, and I feel guilty about that. I may actually have to change my mind at some point. But I think that we need to do a little bit more structural repair of the political system before I get involved.

HARLOW: Well, have you been in the White House in the last six months?

BURNS: Absolutely not.

HARLOW: So, if you were invited, because a number of tech CEOs, as you know, have gone and been invited, sat with the president, would you go? What would you say, Ursula?

BURNS: My consistent - my message to the White House, any administration, is the same. And that - and it - it is the same because this is not a political issue. We've made it a political issue. This is a human issue. This is a - this is a long term America issue. My message, Democrat, Republican, Obama, Trump, would be, has been and would be that people need - people need structures in society that enable them to do better in the future.

So, education, health care. To have a debate about whether or not you can get glasses if you need them is one of the most bizarre debates in the world. Money should not be the foundation of those decisions. And that's what - and definitely not class shouldn't be the foundation of those decisions, but that's what they are today, right?

We also want a safe environment to live in. Obviously, imagine if you have a go home and listen to a whole bunch of rancor and not be safe. So these are thing that are foundational and I say this to anyone who's in power, that's what we pay taxes for, that's what the responsibility of government is, that's what the responsibility of people who have are as well.

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HARLOW: Interesting note, Ursula Burns, born in public housing here in New York City, rose up to be CEO.

You can hear our full interview. It's on my podcast, "Boss Files." It drops Monday morning.

Good morning, everyone. 10:00 a.m. Eastern this Friday. I'm Poppy Harlow.

This morning, the White House trying to flip the script, if you will, on the Russian investigation. It appears Special Counsel Bob Mueller and his investigators now are the ones facing new scrutiny. "The Washington Post" and "The New York Times" both reporting this morning that President Trump's legal team is scrambling to find multiple ways to discredit them. The goal, according to the newspapers, exposed potential conflict of interest and then undermine the investigation.

[09:59:58] This as the president shakes up his personal legal team with some new leadership. The president had said just hours earlier that he planned a more aggressive pushback.