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HALA GORANI TONIGHT

Turkish Paper Publishes Security Images of a Saudi Officer in Istanbul; Mnuchin Pulls Out of Saudi Economics Conference; Turks Obtain DNA Samples in Saudi Consulate; Brexit Impasse Continues; Critics: U.S. Giving Saudis more Time for Cover Story; Mnuchin to be No-Show at Saudi Investor Conference; Showdown in Texas for U.S. Senate Seat. Aired 2-3p ET

Aired October 18, 2018 - 14:00   ET

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


[14:00:00] HANNAH VAUGHAN JONES, CNN INTERNATIONAL HOST: Hello, everyone. Live from CNN London. I'm Hannah Vaughan Jones in for Hala Gorani.

Tonight, new evidence from the day he disappeared. A Turkish paper publishes security images of a Saudi officer in Istanbul on that very day.

It all comes as President Trump's treasury secretary says he won't go to a high-profile investor conference in Saudi Arabia. Also, no major Brexit

break through on the so-called make or break talks in Brussels, but there's some sounds of optimism. Are we any closer to an all-important deal?

But first, a pause, a withdrawal, and an image. There's new developments in the story of the missing journalists Jamal Khashoggi tonight. U.S.

Secretary of State Mike Pompeo says the U.S. is taking a wait and see approach to investigations into Khashoggi's disappearance. He claimed the

Saudis need more time to put their report together but critics call that a stall tactic.

(BEGIN VIDEO CLIP)

MIKE POMPEO, SECRETARY OF STATE: I told President Trump this morning that we ought to give them a few more days to complete that so we have a

complete understanding about that so we can make decisions about if the United States should respond to the incident surrounding it.

(END VIDEO CLIP)

JONES: Now to the withdrawal then. Moments after Pompeo spoke the U.S. Treasury Secretary said he would not attend an important Saudi investment

summit. Many of the world financial leaders announced they would also skip the event. Then we come to the image. Turkish media published

surveillance footage said to show one of the main Saudi suspects in Istanbul and at the Saudi consulate on the day Khashoggi disappeared.

These show a man and sources tell CNN he played a pivotal role in the operation. He is believed to be a member of the Saudi crown prince's

personal security detail. We'll continue to cover this story from all angles. Nic, to you first, what more do we know then at the moment about,

in particular, this one individual, Maher Abdulaziz Mutreb, and his movements and his reasons for being in Istanbul.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It's very interesting, Hannah. In the mid 2000s he was the first secretary at the Saudi embassy

in London. He was also the second intelligence liaison officer there in the embassy and yesterday he was identified by CNN and other news

organizations in photographs being -- appearing very, very close to him.

They're putting him in the inner circle. Sources tell CNN he was to this new security unit placed around the crowned prince. So, this is a story

that developed. Remembering last week, the recordings from the airport, from the hole, from the conciliate here were leaked by Turkish officials to

Turkish news agencies that showed what they said was a sequence of events.

Of these two planes coming from Saudi Arabia. 15 operatives called a hit squad coming in and going in and disappearing. So, what does this new

information add and it seems that Turkish officials are also leaking and highlighting how these figures have been identified and played a role here.

A pivotal role. Would have known the plan according to a Turkish official here.

So those images, these images have been highlighted to show his involvement and point the finger at him. Arriving at the airport, going through

passport control and checking in the hotel and perhaps the most intriguing of all is identified as leading the group of 15 that were in this group.

[14:05:00] So, this information, what we have been developing and builds a case against somebody in the crowned prince's inner circle. So that that

could have happened without a sign off from the top, this evidence seems to put holes in that kind of a theory, which is what we have been told to

expect, that kind of language in a statement that may come soon from Saudi officials.

JONES: Well, stand by for us. Jeremy, we played earlier the latest from Mike Pompeo. He briefed us now on what the U.S. approach is going to be on

all of this. This sort of wait and see game, but we don't know, I guess, any more detail of what Pompeo briefed the President on about the Saudi

approach to all of this.

JEREMY DIAMOND, CNN CORRESPONDENT: That's right. We really did learn very little from the Secretary of State this morning as he stepped out from the

west wing to speak with reporters taking barely two questions, neither of which he really answered fully and that comes despite the fact that he just

returned from this major diplomatic mission to meet with the Saudi Crown Prince.

The king as well as top Turkish officials when he went to Istanbul as well. So, when he returned, we were expecting to have a new set of facts that

perhaps the Secretary of State might present to the American people but instead what we heard, the only new thing that we heard was that he was

urging the President to give the Saudis a few more days to continue their investigation.

As we know, the Saudis and the Turks are conducting investigations into the disappearance and alleged killing of him and the Secretary of State saying

that, you know, listen, we want to wait for these investigations to wrap up before we offer any facts or any judgment on what actually happened here.

And alive or dead which is a pretty stunning statement given the fact that it's been nearly two weeks since he disappeared after entering the Saudi

conciliate and the Saudis have offered no alternative explanation so far and as we know, the President and the Secretary of State have really

emphasized the importance of the U.S.-Saudi relationship over the last several days. Really giving up what public leverage they might be able to

impose on the Saudis.

They do insist that in private they urged the Saudis that they will need to come up with a pretty thorough investigation and that explanation will

ultimately be able to be fact checked by reporters and the public and also remember members of Congress that will have access to U.S. intelligence

briefings about what happened here and so far the indications are that U.S. intelligence are indicating this could not have occurred really without the

authorization of the crown prince.

JONES: Back to you, on this issue of whether indeed he is dead or alive, the question that Mike Pompeo refused to answer earlier on. There's so

much forensic activity going on in Istanbul. Is there an ongoing search now for a body?

ROBERTSON: Investigation and we understand Turkish authorities will make the results of that clear. They have searched the conciliate here. They

have searched the house and there's a period of a missing couple of hours for two of the bans that they have seen and scrutinized on television.

Between the conciliate and the console generals house when he disappeared. There's an effort to figure out where the vehicles went and what they did.

On the question of whether or not there's a body and Turkish officials have been really clear within a couple of days of him actually going into the

conciliate and disappearing, Turkish officials began to say that he was murdered pretty soon after getting there. So Turkish officials are there

in their minds that he is dead.

[14:10:00] They were looking for DNA in this building. The state news agency says they have been able to get some DNA samples here. But it seems

at the moment, that here at the conciliate they haven't been able to find a body, but, you know, this is what Turkish authorities believe they're

searching for. I think here we have to stress as well, the gruesome nature of what Turkish officials believe happened here was the haven't been able

to find a body, but, you know, this is what Turkish authorities believe they're searching for.

I think here we have to stress as well, the gruesome nature of what Turkish officials believe happened here was the dismemberment. So, any search,

it's included the police looking in areas outside of Istanbul where the vehicles could have gone to leave material, but so far, nothing seems to be

developing. And of course, the body is hugely important. Not just for his family but for the investigators here so that they have a murder

investigation rather than a missing persons investigation. It has different legal implications.

JONES: Thank you to you both. Well, the world is obviously watching the fall out from all of this and so we should say are the markets. Let's take

a look at how things are at the moment. The DOW fell more than 300 points on the news that Steve Mnuchin was pulling out of this Saudi conference in

a week or so time. Now it's not only his decision to pull out that's prompted this fall off in the DOW. Many other things at play in the

moment. Global uncertainty and also ongoing trade wars between the U.S. and China but a big drop off in the DOW. Down 370 odd points. We'll stay

across that through the hour. President Trump emphasized the Saudi royal's strong denial of any involvement in his disappearance. He may be taking a

pragmatic approach because there is a lot on the line here for Washington. Here to discuss the U.S. handling of the situation, is CNN Political

Commentator, Doug Heye that joins us from Washington. Good to see you.

DOUG HEYE, CNN POLITICAL COMMENTATOR: Thank you.

JONES: I want to dive into what Donald Trump's motivation might be in all of this. His policy is America first. With that in mind, when he's

thinking about what Americans want, what do Americans want their President to do about the Saudi U.S. relationship.

HEYE: First and foremost, American voters are concerned about what they pay at the pump. While America is more fuel efficient or energy -- self-

filling than it ever has been there's still really big concerns about what this will cause for average Americans. The other thing is Saudi Arabia has

been a strategic ally. That's something the President identified and that's important as well.

But then there's obviously very serious human rights concerns and concerns with how Saudi Arabia will ultimately treat the truth here with the added

complication that somebody who was involved in this situation has now been killed in a car crash, with the timing of that being potentially more than

a consequence. If you're talking to Democrats, they'll point out Donald Trump's business ventures where the Saudis spent a lot of money at his

hotel.

And one thing we know consistently, whether domestic policies or foreign policy is that Donald Trump tends to believe people who are nice to him.

People that have thrown events for him and so forth tend to get the benefit of the doubt and the rest of the people don't.

JONES: I'm wondering how much this is all playing into potentially midterms. Whether this is a factor at all for American voters. If we get

to the point where perhaps the gruesome details of his apparent death are revealed to the public. Whether that might somehow sway the American

public mood and therefore sway the American President's view on what to do next.

HEYE: Let's go back to the border. If we have video and audio and there's talk that there may be some audio of this, that may change things but in

the meantime, voters are not focusing on this as something that they will be voting on when they go to the poles in a few weeks. They're focused on

their health care costs. They're focused on the economy doing well right now and there's 100 different things that American voters are focusing on.

What's happening with Saudi Arabia and the journalist is getting some discussion, not the level that it should, but as a voting issue, I don't

think it plays into any voter's minds and, in part, because everybody has baked in what they think of Donald Trump.

[14:15:00] So, if you're a Donald Trump supporter, whatever he decides he's going to do on this, very similar to North Korea you'll think is the right

thing to do. If you're a Donald Trump opponent, you'll think he's wrong regardless of the actions that he takes. Politically this may be a wash.

JONES: Donald Trump has already been very clear in mentioning the security aspect of the U.S.-Saudi partnership as well. He said on camera that they

need the Saudis in order to keep Iran in check. Now Iran has much more traction with the American public as well. Is that a bigger factor in what

Trump does next more than money? Is containing Iran more important than finances?

HEYE: Sure. The two aren't mutually exclusive. But being a strategic ally for the United States, pulling out of the Iran deal was a very

important factor for Trump voters. They support it almost unanimously. That's something that will factor in for the President. Dollars and scents

are never far behind with Donald Trump and foreign governments spent a lot of money at Trump businesses and he knows that and that's something that he

factors in. That's why a lot of people think he's getting the benefit of the doubt right now. We'll see if that's the case.

JONES: I'm just wondering about your thoughts on Mike Pompeo's words to the press earlier when he said it's a wait and see. They'll give the

Saudis almost the benefit of the doubt. Just a couple more days to complete their investigation. Overall, how is the Trump administrations

handling of this case going down in Washington right now?

HEYE: Well, in Washington, there's a lot of head shaking and a lot of hand ringing. People are troubled by what they heard from Mike Pompeo but we

will have to wait and see and it's up to the President. How the President reacts to this and makes final decisions is going to be more important than

what we have seen over the past few days but if they ultimately get the benefit of the doubt because they were always going to get the benefit of

the doubt, that will be a problem for American credibility overseas which is shaken already on so many different levels.

JONES: Doug, great to have you on the program with your analysis of this. Thank you. We should also say that Doug mentioned earlier about a car

crash in relation, perhaps, to this, CNN hasn't been able to substantiate those claims at all. In the meantime, the Trump administration is, as we

were just talking about, willing to wait for the Saudis to conduct their investigation into the disappearance, citing the long relationship between

the U.S. and the kingdom.

How is that playing out, though, in the region? And against information it seems, OK, seems to implicate the Saudis on all of this. We heard from

Mike Pompeo earlier and then also reports at the moment, largely in "The Washington Post" and from other outlets as well suggesting that the U.S.

and the Saudis might be trying to come up with a mutually agreeable version of events. Is the truth just sort of debunked here? They're hoping this

is all just going to wash over.

CLARISSA WARD, CNN INTERNATIONAL CORRESPONDENT: There's no possibility of this washing over. There appears to be some kind of a scramble to come up

with a narrative, at least within the kingdom. And also began to explain what role if any the crowned prince had in it. Washington expanded every

benevolence it had to the kingdom. Oh, we need to give them a few more days to complete their investigation. This after they have already been

given 17 days. But at this stage, I do think that the U.S. understands that this is very serious. We saw the secretary of treasury saying that he

would no longer attend this investment conference.

[14:20:00] There is a demand among the American Congress for some kind of sense that Washington is trying to hold Saudi Arabia's feet to the fire.

And if it's discovered that he was killed -- that we essentially know -- but that he was killed on some order from the highest levels of authority

in Saudi Arabia or even if this was an interrogation gone wrong, people want to feel that there's a sense that the U.S. will punish Saudi Arabia

for this and that's a very difficult line for the White House to walk because of all the interest that the two countries share.

JONES: And if it is found that he was killed and there is some link somehow to Saudi society and the royals in particular, questions will no

doubt be asked as to why he was such a threat? Why would they go to such lengths to get him out of the picture? To remove this one journalist link

somehow to Saudi society and the royals in particular, questions will no doubt be asked as to why he was such a threat? Why would they go to such

lengths to get him out of the picture? To remove this one journalist from the picture here.

WARD: I mean, that's such a good question and a conversation I have been having with so many sources and sources in Saudi Arabia trying to wrap

their head around this. Why would you expend so much political capital? Why would you jeopardize the relationship with the U.S., all sorts of deals

and international treaties to essentially kill or potentially abduct and interrogate even a man who, while critical of the kingdom, did not in

anyway, shape, or form, pose some kind of a threat to the kingdom or to its leadership.

He was a journalist. The Saudis would call him a dissident but even if you were looking at him in this context, this is not someone trying to whip up

an opposition within Saudi Arabia. He never called for regime change in Saudi Arabia. He was a long-time insider of the royal court, and so, it

sort of begs why would you have such a hand fisted operation directed at someone that presented very minimal threat. It would appear to indicate to

some that were watching this closely that the leadership in Saudi Arabia have a very thin skin.

That they're perhaps overly concerned with people critical of them. That they are overly concerned about what is being said about them in the media.

All of those things are red flags for other leaders in the international community that want to see leadership in Saudi Arabia. Focus on the

important issues and not easily distracted by things such as criticism which are inevitable when you're leading any country, Hannah.

JONES: Live for us there with that global analysis. We appreciate it. Thank you. Still to come tonight on the program, European council gets in

touch with his emotions about a possible Brexit deal. Next.

[14:25:00] COMMERCIAL BREAK)

JONES: The European Council President says Brexit talks are bringing us closer to a deal but he admits this.

(BEGIN VIDEO CLIP)

DONALD TUSK, EUROPEAN COUNCIL PRESIDENT: Maybe a more emotional impression than rational one.

(END VIDEO CLIP)

JONES: Whether reason or sheer will, he echoed that upbeat mood. He believes a deal will be done with the U.K. Erin has more and it seems like

they're striking much more positive notes there over in Brussels. Does this mean a deal is really finally in sight?

ERIN MCLAUGHLIN, CNN CORRESPONDENT: Well, at this point it's entirely unclear. The German chancellor Angela Merkel saying where there's a will,

there's usually a way, but while there's plenty of good will here in Brussels, it's hard to see from this vantage point how they're going to be

getting a deal done out of all of this, especially when you also hear Angela Merkel say that the signs have exhausted every avenue possible to

solving that North Ireland backstop question and now they're looking for a political solution and believe me, they're not looking to Brussels to that

political solution. They're looking to London and the political situation that Theresa May faces there and they're just not seeing the arithmetic at

the moment for her to be able to get any deal that would be palatable to Brussels. She's confident that she could get a good deal through

parliament.

(BEGIN VIDEO CLIP)

THERESA MAY, UK PRIME MINISTER: I am confident that we can achieve the good deal and that when I take that deal back to parliament, I think

members of parliament will have -- I'll be asking members of parliament first to recall that we're delivering it to the British people. We gave

them that choice. They voted to leave the EU and we would be delivering on that vote and I ask them to think about the importance of protecting jobs

and livelihoods in the U.K., protecting our security in the U.K. protecting the union of the United Kingdom.

(END VIDEO CLIP)

MCLAUGHLIN: It's worth remembering that on Sunday night, according to EU sources, they have actually become very close to reaching a draft agreement

but at the 11th hour the political decision was taken in London to quash that deal saying much more time is need to solve this impasse. The

question being, what does time lend this process? What does time give Theresa May in terms of room to maneuver politically there in London.

JONES: Any word on the street from where you are at least as to how her conservative party members are likely to respond if she does, indeed, come

back with any kind of a deal?

MCLAUGHLIN: That very much depends on what sort of deal she is able to ultimately reach here. But a good indication of that response, an

indication of how sensitive this is a proposal and extension of the implementation period following that Brexit date. That didn't sit well

back home. It was a bit of a PR nightmare within Theresa May's own party as they grappled with potentially extending that transition period in order

to soften or soft the need for a North Ireland backstop. And just how that is done is not clear but there is will there to get it done.

[14:30:00] JONES: Thank you so much.

As the investigation continues, the hunger for an outcome, some sort of information is growing, but with different sides pursuing their own agenda,

will we ever get to the truth? We'll discuss this next. Plus, the U.S. Treasury Secretary backs out of a conference over this case and many more

top officials are now doing the same.

(COMMERCIAL BREAK)

[14:30:54] VAUGHAN: A we turn now to our top story, the disappearance for journalist, Jamal Khashoggi, U.S. secretary of state, Mike Pompeo, claims

the U.S. needs to give the Saudis a few more days to probe the case, at least that's what he told President Trump earlier today after his trip to

the region.

Now, many expected a more robust response from Washington, but strategic interest seem to be having an impact.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: If you look at Saudi Arabia there an ally, and they're a tremendous purchaser of not only military

equipment but other things. When I went there, they committed to purchase $450 billion worth of things.

MIKE POMPEO, U.S. SECRETARY OF STATE: They're an important strategic alliance of the United States. We need to be mindful of that as well.

(END VIDEO CLIP)

JONES: So, will we ever get to the truth then of what happened to Jamal Khashoggi? And what does the reaction say about geopolitics at the moment?

Our senior international correspondent, Nick Paton Walsh has been writing about this, joins me. Nick, good to see you.

Mike Pompeo has already said that facts stays matter in all of this, a flyaway comment from him. Based on what we've seen so far from Washington,

how do you think U.S. -- the U.S. is handling it and what are their priorities?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: It's skewer to say the most important thing for them is that business interest rather than

their place as a super power who would normally define the more conduct you'd expect from people in order to get the business deals and the

military relationships in the first place.

We've seen a startling bit of behavior from the Saudi government themselves and where they're being sort of defiant in their silence. They've spent

very little time even find to refute the allegations against them. They're not providing alibis, for example, for the Marriott of allegations against

their key security officials, we have reports who have been involved in this assassination.

They don't even necessarily say they make a huge effort to find Mr. Khashoggi himself, who was still missing. There's no body still there. I

know we have the Americans, you would normally expect as sort of their -- the kind of offshore of truth in all of this, sort of trying to uphold the

higher moral standard.

Mike Pompeo used to work as director of the CIA. They have, truth will set you free up and blazing in their lobby. He just said the facts when

something he wanted to talk about. They seemed totally obsessed with the importance of their relationship.

There's also a real weakness here. You can imagine if the Saudi and American relationship was incredibly strong. And this goes back decades,

the U.S. used the Saudis as a proxy supply weapons to Mujahedin against the Soviets in Afghanistan. They've been through some stuff together.

And this, Mike Pompeo, flies the other side of the world, meets a man in his mid-30s who's the supreme new power in Said Arabia, Mohammed bin

Salman, the Crown Prince. And he's bene able to get out of them some kind of compromise. That means everyone can save face and we can all move on

three months from now.

JONES: And as far as Turkey's role in all of this is concern, of course, it was played on Turkey's soil. They are the ones who apparently hold all

the evidence as to what happened to Jamal Khashoggi. What is Turkey's geopolitical speaking? What is Turkey's game plan with all of this?

WALSH: Well, they sort of played this bizarre role of sort of the arbitrar, the chief voice of outrage in all of this. But remember, Turkey,

the biggest jailor of journalists in the whole world. So them being particularly upset by Mr. Khashoggi's fate is sort of strange to some

degree.

[14:35:01] But on top of that as well, the fact they have a longstanding enmity with Saudi Arabia over their relationship with Qatar. The Qataris

and Turkey are friendly. The Saudis tried to blockade against the Qataris recently. The Turkish supply food, the Qataris responded by buying Turkish

currency when the Turkey are having a currency crisis.

This seems to be the Turkish selectively choosing the evidence. They must clearly have had within hours of this instance happening. Intelligence

service is extremely competent and drip feeding it slowly over hours and days to make sure this never goes off the radar, to make sure Washington

deals has somehow compromises relationship with the Saudis.

And really within this, we're left asking, who's active with the greatest hypocrisy? The people who belligerently carried out this terror murder,

the investigators who seemed completely obsessed with using it to their own political ends or the supposed strong allies of the people accused of

murder who seem much more keen on business relationships, money, and trying to hide the fact that their relationship isn't really that stronger that

managed to get a scapegoat potentially or a solution out of the Saudis that quickly.

JONES: And the (INAUDIBLE) months all of this, today, the Washington Post published Jamal Khashoggi's final calling and fittingly, it was about value

of the free press. This is what he writes in part. "The Arab world is facing its own version of an iron curtain imposed not by external actors,

but through domestic forces vying for power."

He goes on to say, "The Arab world needs a modern version of the old transnational media so citizens can be informed about global events. More

important, we need to provide a platform for Arab voices."

He's talking there in part about holding truth to power. I mean, now that Khashoggi is very much out of the picture is that voice didn't for

everyone.

WALSH: No, I think the one thing that this come from this is that there is a hunger globally for the truth here. And the reason we're seeing one,

Pompeo flying around the world and Donald Trump repeatedly to talk about this is the American body of politics expects a higher stand with its

officials than it's currently getting from this current White House. And I think possibly there has been a grossness calculation, if you believe that

Riyadh is behind this.

They could make somebody disappear and then nobody would care to follow up. We still don't have the body though. We still don't have the Turkish

laying out the full out scope of the evidence that they clearly have. And we still have this lingering questions exactly how important it is. For

all three parties involved in this now to establish the facts of somebody's apparent murder. It's extraordinary.

JONEs: It is extraordinary. Fascinating analysis from you and it's a fascinating article, as well, that you've written on CNN online. Thank

you, Nick.

And now U.S. Treasury Secretary Steven Mnuchin, has backed out of a major investor conference in Saudi Arabia. He's joining a string of other

leaders who dropped out of the event known as Davos in the Desert. This is, of course, all over, the case of Jamal Khashoggi. British, French,

Dutch ministers also made their withdrawal announcements today.

So to talk about the impact of all this, I'm joined by John Defterios from Abu Dhabi. John, Mnuchin only pulled out today, the conference is just

around the corner. He says he did so because it was Donald Trump's call, his boss' call on this. Who else is going to follow soon and are they

going to continue with this conference at all now?

JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Well, let's start with Mnuchin himself, Hannah. Most that I spoke to here in the region that he

was going to go as a sign of support from the White House for Saudi Arabia. I think the widely held viewed sent a wrong signal at the wrong time.

Though what's going on with Jamal Khashoggi.

Also, the White House is very quick right afterwards to suggest nobody else will be sent from U.S. government to replace him, a deputy minister or

anybody else within government.

To be really blunt here, I don't think this has handled very well. First, Mnuchin was on board, Hannah, and then he said he would make a decision on

Friday. They rolled that back to Thursday and then it kind of dropped the bomb saying he wasn't going to go. It actually even hit Wall Street there

for a little bit.

Also, Mike Pompeo is trying to nuance this, suggesting we need to give the Saudis more time going ahead. They're a very important strategic partner,

but they have to be much more transparent.

But also, let's look at what's transpired for the week to your question here. We have three ministers before Mnuchin stepped away today. U.K.

trade minister, the French finance minister, and the Dutch finance minister. It was an awful week overall for this Davos in the Desert. We

have a chart here with a number of different players that have stepped down, very high profile, International Monetary Fund, a string of bankers.

These were all the people that would go to the world economic forum in Davos. They're very proud to have them in Saudi Arabia. And they're not

going to go. This basically is something that's reversed badly on Saudi Arabia. But lot has transpired since the event of last year. We had 4,000

people on the ground that was cheering panels. I remember it well.

This is the same venue, the Ritz-Carlton was used as a hotel. We have 380 Saudis in there and they took $100 billion on a crackdown by the Crown

Prince. A lot has transpired in the last 12 months since the last Davos in the Desert, if you will.

JONES: And I'm wondering if it would be more cost effective for the Saudis just to ditch the conference altogether now, especially if they do go ahead

a bit, they're going to keep the global spotlight on them for that much longer.

[14:40:06] DEFTERIOS: More cost effective or is this Arab pride playing out? So the Crown Prince is very defiant and suggested it wants to proceed

with this. I have to also be very candid. The organizers are not very forthcoming with any information. We've asked numerous times as we wait

for the latest list of speakers and the panels, the number of attendees. We've gotten nothing back so far.

But this is this art, if you will, Hannah, I'm trying to stay engaged in Saudi Arabia, something that Mike Pompeo tried to do as a government

official, just think what the CEOs are faced with. They don't want to show up because they're so shocked by what's happened with Jamal Khashoggi as

this investigation takes place.

But it's also the largest economy in the Middle East and North Africa. It's the number one oil exporter. We're spending over a trillion dollars

within Saudi Arabia on infrastructure. So if you're a global CEO that's in that game, you want to be president of Saudi Arabia, but you're not aligned

with what the Crown Prince is today.

He marched in a year ago as the great reformer. If you look at what's transpired beyond the arrest of the Saudi leaders, you have the Qatar

embargos still taking place. The Yemen war going sideways. And you've had this tension with Canada as well. It doesn't look good and it's not easy

for these CEOs to show support in this sort of climate. That's crystal clear.

JONEs: We'll wait and see how it all plays out. John Defterios, thank you very much.

Now, CNN has obtained exclusive satellite imagery that appears to show Russia upgrading some of its military bases along the Baltic Sea. A move

that is certain to make NATO allies in the region very novice indeed.

But the U.S. military says, it is ready for any challenge from Russia. CNN's Fred Pleitgen has this report from aboard a U.S. warship in the North

Atlantic.

(BEGIN VIDEOTAPE)

FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: The USS Iwo Jima off the coast of Iceland, in the hangar deck, marine gearing up for an air

assault, retaliation if there's an attack on a U.S. ally. Corporal Derek Hussinger is part of the invasion force.

COL. DEREK HUSSINGER, U.S. MARINE CORPS: When we get our guns situated, put that tripod down, set the gun up, and you know, stable platform gets

addressing fire.

PLEITGEN: The exercise also a deterrent, as the north Atlantic region becomes more contested.

With this exercise, the U.S. and its allies are practicing their response in case a friendly nation gets attacked. Well, the adversary in this

exercise is fictitious, it comes as a time with growing tensions with the U.S. and Russia.

PLEITGEN: As the marines raced to the Icelandic Coast, new evidence that Russia is beefing up its capabilities right in the heart of Europe. CNN

has exclusively obtained satellite images from the Israeli firm image sat international, seemingly showing massive construction work at Russia's

bases in Kaliningrad upgrading a nuclear storage facility there, adding new bigger ammunition bunkers and upgrading the military air field.

PLEITGEN: Is Vladimir Putin building up his military in Kaliningrad. Russia's defense ministry didn't respond to CNN's request for information,

but the commander of U.S. Naval Forces in Europe and Africa tells me there's a pattern of Russia upgrading its capabilities in the region.

ADM. JAMES G. FOGGO, COMMANDER OF U.S. NAVAL FORCES EUROPE-AFRICA: They're putting a lot of their modern weapon systems, anti-ship cruise missiles,

radars, Sebastian system, the S-300 and S-400 in there.

PLEITGEN: Sending a message of strength to Moscow, the U.S. and its NATO allies are gearing up for an even bigger exercise in Norway.

FOGGO: If they want to challenge us, we will challenge them. We're not going to be intimidated by those systems that are out there.

PLEITGEN: And that challenge is now playing out in the North Atlantic region, with an increasingly assertive Russia and the U.S. showing it won't

back down.

Fred Pleitgen, CNN, aboard the USS Iwo Jima in the Atlantic Ocean.

(END VIDEOTAPE)

JONES: Fred, thank you. Still to come tonight on the program. U.S. congressional elections take place next month and we're just over four

hours away from the CNN Town hall, focusing on the closely watched Senate race in Texas. What to expect in that race, coming up next.

(COMMERCIAL BREAK)

[14:45:17] JONES: The U.S. elections, coming up next, Democrats are of course hoping to win control of at least one House of Congress a Senate

race in Texas is drawing a lot of attention.

Incumbent Republican, Ted Cruz is facing a challenge from Democrat Beto O'Rourke. Our Ed Lavandera has an update.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Senator Ted Cruz.

ED LAVANDERA, CNN CORRESPONDENT: Ted Cruz has mastered the postcard size political punch.

SEN. TED CRUZ (R), TEXAS: If you want a big government gun- grabbing liberal. Well, the Democrats are giving you one.

BETO O'ROURKE (D), TEXAS SENATORIAL CANDIDATE: Hey everybody.

LAVANDERA: The rapid fire jabs at Democrat Beto O'Rourke are designed to deflate the El Paso congressman's soaring campaign.

CRUZ: On job-killing regulations -- he's for them, I'm against them. Guns. I'm for them, he's against them. On Taxes. He's for them, I'm against

them.

LAVANDERA: In the last few weeks, Senator Cruz has unleashed a wave of television ads criticizing O'Rourke, painting him as dangerous and

radically liberal. O'Rourke has been hesitant to fire back directly saying he prefers to follow the positive path that has brought him to this point

so far.

UNIDENTIFIED MALE: Beto O'Rourke is no friend of Texas energy.

LAVANDERA: The Cruz television campaign and laser-focused message seemed to have halted O'Rourke's forward march in the polls. A CNN poll shows

O'Rourke seven points behind.

UNIDENTIFIED MALE: Beto O'Rourke wants to be a senator.

LAVANDERA: For weeks as O'Rourke has literally run and barnstormed through every corner of the state, we've asked him how he would respond to the Cruz

campaign's criticisms which seemed to be working.

Are you worried that those critics and those things are going to stick?

O'ROURKE: Yes.

LAVANDERA: Are you fighting back at him?

O'ROURKE: I think people are sick of the pettiness and the partisanship and the smallness.

LAVANDERA: Can you take the gloves off and fight a little bit tougher and dirtier if you have to?

O'ROURKE: We're fighting for a positive future for this country, not fighting against anyone. It's not against another party.

LAVANDERA: But with early voting starting next week, O'Rourke is shedding the nice guy approach.

O'ROURKE: Senator Cruz is not going to be honest with you. He's going to make up positions and votes that I've never held or have ever taken. He's

dishonest. That's why the President called him Lying Ted and it's why the nickname stuck because it's true.

LAVANDERA: Democratic strategist Herald Cook worked for Ann Richards, one of the last Democrats to hold state wide office in Texas. Cook says

O'Rourke must sharpen his attacks before it's too late.

HAROLD COOK, DEMOCRATIC STRATEGIST: You can be high-minded while you're drawing a clear contrast between yourself and your opponent.

LAVANDERA: And (INAUDIBLE) hasn't been it up yet?

COOK: He hadn't done it yet. And he needs to get on it because it's time.

LAVANDERA: An anti-Ted Cruz PAC has rolled out an ad roasting Cruz for cozying up to President Trump who once said the Texas senator had done

nothing for Texas.

UNIDENTIFIED MALE: If somebody called my wife a dog and says my daddy was in on the Kennedy assassination, I wouldn't be kissing their ass.

O'ROURKE: (INAUDIBLE)

LAVANDERA: O'Rourke has rarely talked about Ted Cruz and President Trump in his campaign speeches but in recent days, that has changed.

O'ROURKE: We need a full-time senator.

LAVANDERA: He ripped into Cruz for shutting down the federal government and rolling back healthcare protections and even unleashed his sharpest

criticism yet of the Texas senator for campaigning with the President.

O'ROURKE: Senator Cruz will put his political ambition, his prospects in the next election ahead of anything else, including his family, including

those he is sworn to represent here in Texas. Texas has lost its voice in the U.S. Senate in Senator Cruz.

[14:50:02] LAVANDERA: The showdown will continue for another three weeks in a race that's captivated a state not used to this kind of political

clash.

(END VIDEOTAPE)

JONES: Well, that Texas Senate race will be the focus of a CNN Town Hall scheduled to begin in just about four hours from now. Beto O'Rourke will

be the only candidate attending. CNN invited Ted Cruz multiple times but he declined.

Ed Lavandera who had that report joins us now live from McAllen, Texas. Ed, good to see you. Fascinating report there. To an international

audience, lying Ted Cruz is reasonably well-known for all the wrong reasons. But now, it seems with the president behind him, he's still on

course for a win.

LAVANDERA: Right. You know, and it's an interesting strategy on Ted Cruz's part because even though Donald Trump won the state of Texas by nine

percentage points back in 2016, the latest CNN poll that was released this week shows that he is evenly split among likely voters here in this state.

So there are pockets of the state, even though Texas is a reliably Republican state, there are a lot of corners of this state where the

President is not popular. And if you expand that out, just to adults in that CNN poll, Donald Trump's popularity dips about eight points below his

disapproval ratings. So that is an interesting strategy too as well for Ted Cruz.

And it's interesting the president is expected to campaign here for Ted Cruz early next week.

JONES: Ed Lavandera, thanks so much. We wait to see whether Beto O'Rourke will perhaps take the gloves off and fight a little bit dirtier. You can

see that Town Hall right here on CNN, as I said just about four hours from now. Ed, thanks so much.

Stay with us here on CNN, there's plenty more to come after the short break.

(COMMERCIAL BREAK)

JONES: Some of the most studied artworks in history and now an Italian artist is reimagining classical sculptures using robots and 3D scanning.

Let's take a look.

(BEGIN VIDEO CLIP)

DAVIDE QUAYOLA, VISUAL ARTIST: I'm interested in trying to discover perfection. Taking familiar object and looking at this object through the

eyes of the machine.

Experimenting with technology is not something completely new in art. For me, it's always been present and see really the times of renaissance, so

clearly, you can see this with Da Vinci or Michelangelo.

And go back to the tradition of classic masterpieces to somehow master the rules of perfection.

The Lacoon (ph) project fits into an ongoing research that I do on classical artifacts. It is really the symbol of perfection. It is the

most copied and reproduced objects in art history. The process was first, focusing on recreating a digital model of the Lacoon, combination of

different (INAUDIBLE) sessions and also additional modeling.

[14:55:03] Essentially, I'm not really designing a sculpture. I'm designing sort of sequence of coordinates. I'm almost creating an

animation of the sequence of coordinates that the (INAUDIBLE) standard machine that is used in many different industries that has an incredible

precision and can be simulated digitally.

My hands never really touched the sculpture in the end. What we want this robot -- what we want this robot to do, it is my intervention. I'm mostly

exploring the space in between an original block of matter and the Lacoon that might be inside.

It was a fascinating thing that Michelangelo was saying that sculpture was already in the block. He was simply removing the stone around it. Big

changes in -- like today's society and what technology is bringing. They're really changing the way we are looking at the world. And these

different set of eyes they seem allows you to see things differently and hopefully discover new studies, new languages.

(END VIDEOTAPE)

JONES: Finally on the program, for the buyer and for the London auction house. This is one sale that didn't quite go as planned. But now, it

seemed it wasn't a success for the artist behind it either. Banksy says his stunt, which is of course partially shredding his own artwork, seconds

after it was purchased for more than a million dollars, well, it didn't have the intended result.

A new video on Banksy's website implies the 2006 painting, entitle "Girl with Balloon" was supposed to be entirely destroyed, not just halfway.

Just like he did with this replica of the work.

Banksy accompanies the video with the message, in rehearsals, it worked every time. As you can see there.

All right. Just finally before we leave, we do want to return to our top story, the disappearance of the Journalist, Jamal Khashoggi. The world is,

of course, watching at the fallout so are the markets as well. We heard earlier that Steven Mnuchin, the U.S. treasury secretary would not be

attending the so-called Davos in the Desert in Saudi Arabia in the next week or so.

The Dow promptly then fell more than 300 points. You can see currently down 323 points or so. Closing bell in an hour or so and we know that, of

course, QUEST MEANS BUSINESS will be staying across all of that. Many other reasons as well for the Dow to be falling. U.S.-China trade talks,

meaning there's been a big sell-off on stocks.

Also a concern of Italy's budget as well, but nevertheless, certainly there was an impact as soon as Steven Mnuchin said he wasn't going to be

attending that conference. Stay across this.

Thanks so much for watching us tonight. And QUEST MEANS BUSINESS, I'll exert, is coming up next.

(COMMERCIAL BREAK)

END