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China Detains Canadian; Stocks Jump on Trade Talks; Google Denies Bias Claims; EPA Announces Changes; Documents Detail Sandy Hook Shooter. Aired 9:30-10a ET

Aired December 11, 2018 - 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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[09:30:50] POPPY HARLOW, CNN ANCHOR: All right, a really troubling development this morning. A former Canadian diplomat has reportedly been detained in China.

JIM SCIUTTO, CNN ANCHOR: Yes, is this tit for tat?

HARLOW: Right.

SCIUTTO: This as Meng Wanzou, CEO of Chinese smartphone maker Huawei, hears her fate today in a bail hearing in Vancouver. She was arrested ten days ago in Canada and faces extradition now to the U.S., allegedly for helping her company circumvent U.S. sanctions on Iran.

Joining us now is CNN's Matt Rivers in Beijing with more.

Matt, this, as you know, was a concern because China has done this in the past. I mean, in effect, I don't know if you want to call it hostage taking, but retaliatory arrests when you have situations like this. Is that how it's being read in Beijing?

MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: It's certainly the speculation in the x-pac (ph) community here, those of us who are from, you know, other countries living here in China, that is the speculation that's rampant right now.

Now, to be clear, we don't know for a fact that China detained this former Canadian ambassador named Michael Kovrig as punishment in retaliation for what happened to the CFO of Huawei, Meng Wanzou. But it is certainly a possibility given the timing. So this diplomat, former diplomat, works for an NGO called the International Crisis Group. Here was traveling here in Beijing, usually based out of Hong Kong. Here in the mainland, though, and the NGO, ICG, actually put out a statement saying they believe he has been detained by Chinese authorities.

And like you said, Jim, this does happen every now and then. Not with regular occurrence, but it does happen where China takes into custody western NGO workers for a number of different reasons. But this jumps off the page because of the timing of all this.

You mentioned Meng is going to have a 1:00 p.m. bail hearing in Canada. But I can tell you that there has been incredible uproar here in China over what they -- the Chinese state media is calling Meng's unfair treatment, basically trampling on her human rights is what one state-run newspaper editorial wrote. So there has been the fear here that retaliation could be coming in some form. And what we could be seeing here with the detention of this former Canadian diplomat is a form of retaliation.

Jim. Poppy.

SCIUTTO: Yes. and that, of course, will spark talk of maybe a trade to diffuse it.

HARLOW: Yes.

SCIUTTO: Matt Rivers in Beijing, thanks very much.

Right now, listen, the market has been watching these China trade talks with some fear, some trepidation. Right now they are surging. Of course the president tweeted earlier today that there is progress. Not clear what that progress is.

HARLOW: Right. We want the details.

Let's go to Alison Kosik at the New York Stock Exchange with more.

The markets like what they're seeing this morning, but, wow, what a whiplash we've seen over the past few weeks down there.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, you said it. And you're talking trade. And trade, guys, has really been the driver to all this volatility we've been seeing in the markets, not just last week but yesterday. Yesterday was a real wild one where we saw the Dow drop more than 500 points and then make a total u-turn and end in the green yesterday.

This morning we are seeing a solidly higher open. The Dow up more than 350 points on positive news about trade. We learned that there was a phone call between secretary -- Treasury Secretary Steve Mnuchin, Trade Adviser Robert Lighthizer, and the top trade negotiator for China. And on this phone call they apparently discussed a timeline for these trade negotiations and even possibly implementing some of the agreements that were made on the sidelines of the G-20 in Argentina a couple of weekends ago.

So this positive news is buoying the market forward. But the idea here is, don't get too complacent because if there's a negative headline that comes out about trade, you can see the markets make yet another u-turn.

There are also other concerns lingering in the background. I'm talking about the Brexit chaos, those geopolitical issues, about what's going to happen with Brexit now that Prime Minister Theresa May pulled that vote from parliament yesterday. And then the questions of, what is the Fed going to do when it comes to interest rates. Yes, it is expected interest rates will go up in December, but the question is, what will happen in 2019? That continues to weigh on the markets. We will be watching closely.

Poppy. Jim.

HARLOW: Alison, we will. You'll be there. Thank you so much.

So ahead for us, he has avoided the political spotlight pretty much completely until now. We're talking about Google's CEO. That changes in minutes. He will take the hot seat on Capitol Hill. He is testifying before the House Judiciary Committee. What is it about? It is largely about accusations that Google search results unfairly target conservatives. Google has said that is unfounded. But what will the CEO say when he takes questions?

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[09:39:20] HARLOW: In minutes Google's CEO, Sundar Pichai, testifies before Congress for the first time. The first time he'll ever publically testify on Capitol Hill. He's expected to respond to claims of political bias by the president and other top Republicans. In August, the president blasted Google, accusing it of, quote, rigging search results against him and, quote, suppressing the voice of conservatives. Google defended its search engine, insisting it is not used to set a political agenda.

But the tech giant reportedly not taking any chances when it comes to preparing its CEO. "The Washington Post" is reporting this morning Google spent $17 million this year lobbying regulators to gather intel on what the CEO could be asked today. That's according to top aides of members of the House Judiciary Committee.

[09:40:04] Earlier this morning I spoke with a Google executive who told me lawmakers will be, quote, pleasantly surprised at how thoughtful Pichai is and his willingness to roll up his sleeves and work with Washington on regulation.

Sean Captain joins me. He's a reporter for "Fast Company." He's written extensively about this.

Good morning.

And I think we're all anticipating this. It is going to be really important on a number of levels.

We know a little bit about what Sundar is going to say, so let me read some of this prepared testimony for everyone. Quote, I lead this company without political bias. He goes on to say, to do otherwise would go against our core principles and our business interests. We are a company that provides platforms for diverse perspectives and opinions.

This is his first time in the spotlight. What are you expecting?

SEAN CAPTAIN, REPORTER, "FAST COMPANY": Well, having read that testimony and looked at all of it --

HARLOW: Yes. CAPTAIN: He's definitely trying to portray Google as the all-American company. He made a lot of emphasis around that, that they're, you know, they're an American brand, that they're good for America, that they're -- you know, have the country's best interest at heart. And he's clearly trying to play to that notion that, you know, we're on your side, which is going to be tricky because there's a lot of reasons why people feel that he has not -- they've not served America well.

HARLOW: So, in terms of some of the political accusations against Google, the president made them, didn't back it up with evidence. But there is something from -- Breitbart surfaced this. OK, you'll remember Sergey Brin speaking after the election. I think we have a full screen we can pull up here, this video that we cans how you.

Or actually we can play it for you because listen to this.

CAPTAIN: OK.

HARLOW: This is where some of the Republican criticism comes from.

(BEGIN VIDEO CLIP)

SERGEY BRIN, GOOGLE CO-FOUNDER: As an immigrant and a refugee, I am -- I certainly find the selection deeply offensive. And I know many of you do, too. And I think it's a very stressful time, and it conflicts with many of our values.

(END VIDEO CLIP)

HARLOW: Now, a Google executive responding to that said, look, there is nothing to suggest any political bias in that. House Republican Leader Kevin McCarthy said to expect questions on this today. I mean, how will Google's CEO respond to that? Do you think he'll say, look, Sergey Brin, you know, the co-founder, shouldn't have said that?

CAPTAIN: Probably no. I think probably the way that you characterize that, saying that, you know, their -- the way that Google spokesperson had characterized it, saying that there's nothing inherently bias. He's just showing that there, you know, concern about what's happening in the country. I think Google's going to do a lot of what Google does, what tech companies do, is stand behind the technology, saying the algorithm is sound. You know, we're based on data science. We're, you know, bringing back the results that, you know, are most valuable without any bias in them. And it's very easy to out tech politicians.

HARLOW: Yes.

But you do write in your piece this morning, which is important to note, that it doesn't make any sense for Google to even try to alienate any one of any certain political strife. I mean they're not going to lay out all the secrets of their algorithm here, but that that wouldn't even be a smart business move by Google to do that one way or the other.

CAPTAIN: I mean Google's an advertising company ultimately. HARLOW: Right.

CAPTAIN: I mean the more eyeballs they get, the better.

HARLOW: China. You hope that China will come up today. I think it's a very important topic that lawmakers should ask about today. The code name for Google's exploration, shall I say, into China is Dragon Fly. And reports that it is exploring expanding into China with a censored search engine has even caused uproar within the company and it's caused some to protest, some employees of Goggle to protest. This is an area of common ground, of concern for Republican and Democratic lawmakers. What should we expect on that front today?

CAPTAIN: Well, yes, this is where, when I was looking at his comments about what a patriotic company Google is, this is what I think might have been in his mind because on the left, obviously -- well, on all sides, but especially on the left, there's a concern about the human rights abuses in China, especially the situation with the Weger (ph) concentration camps.

HARLOW: Yes.

CAPTAIN: On the right, there is that, plus the notion of saying, hey, Google, you -- kind of funny. Hey, Google, you dropped out of a Pentagon contract, Maven (ph), to provide AI to the Pentagon. So you're -- you know, you're abandoning the U.S., but now you're cozying up with China. So it took a double whammy and I think they're going to take a hard hit on both sides for that.

HARLOW: Before you go, I do want to read part of this testimony at the end here because he says we recognize the important role of government in setting rules for the development and use of technology. He has seemed, I would say, Sean, consistently open to the clearly coming regulation from Congress on big tech. What's your read?

CAPTAIN: Yes. I think -- I mean it's been pushed for so many reasons because of, getting back to that earlier concern about conservative bias or liberal bias, California's new regulation, European new regulation. I think -- I mean the handwriting is on every single wall at this point and they have to try to show that they're proactive and try to take -- sort of control the narrative to the extent that they can on that.

[09:45:20] HARLOW: OK. Well, we'll be watching. This testimony begins in about 15 minutes.

Sean, thank you very much for joining us.

Sean Captain from "Fast Company." Appreciate it.

CAPTAIN: Thanks.

HARLOW: Today, the Trump administration is expected to roll back environmental protection on waterways across the country. How this major overhaul could affect the drinking water used by millions of Americans. That's next. (COMMERCIAL BREAK)

[09:50:06] HARLOW: All right, this morning we've learned the EPA is preparing to roll back protections that shield streams and wetlands across the country from industrial waste and other pollutants. This proposal would change which bodies of water all over this nation are protected under the Clean Water Act.

SCIUTTO: It's a change President Trump has wanted since taking office, but environmentalists and others say the shift could endanger drinking water used by millions of Americans.

CNN's Rene Marsh joins us now.

Rene, it's a great point here to explore because often folks will think these regulations are something off in the distance, might make you feel good but doesn't really affect your life. This does, does it not? It affects the water coming out of the tap that you and your kids drink.

RENE MARSH, CNN GOVERNMENT REGULATIONS CORRESPONDENT: Absolutely. I mean environmentalists are sounding the alarm extremely loudly today just for that reason, Jim, because they believe these small streams, these waterways, they all are sources, as you say, sources of tap water. They help filter larger bodies of water.

But here's the story. In about another two hours or so, the Trump administration is set to announce that they will weaken these federal clean water rules. This would impact, we're talking about millions of acres of wetlands, thousands of acres of streams that run through the United States.

The way this worked under the Obama administration was that the EPA regulated these smaller bodies of water, these streams and these wetlands. And they said essentially certain crops or pesticides could not be used near these streams and wetlands. This was a way to keep pesticides and other pollutants out of those waterways.

Well now, as I said, in just a couple hours from now, the Trump administration will loosen those regulations, and those rules will no longer be in place. And, of course, environmentalists are saying, look, this will impact things like drinking water. However, the argument on the other side, namely from the Trump administration, is that this was an example of federal government taking way too much control over land that belonged to farmers and farmers had to essentially run it by the EPA if they wanted to plant things or plant certain crops on their own land.

But, again, this is a controversial move, and we expect to hear lots of pushback, especially from environmentalists after this announcement is made in just a couple hours from now.

Jim.

SCIUTTO: Yes, fertilizers are a big pollutant. They end up in drinking water everywhere and it's a relevant issue. HARLOW: Yes.

SCIUTTO: Rene Marsh, thanks very much.

Newly released documents paint a disturbing picture of the Sandy Hook killer. Ahead, what those papers reveal about the years leading up to that just horrendous shooting.

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[09:57:16] SCIUTTO: Nearly six years, if you can believe it, after the shooting at Sandy Hook elementary school, we are getting a new and disturbing look into the inner workings of the shooter' mind. And I have to say, whenever we talk about this story, my heart goes into my throat.

HARLOW: Oh, these kids. We will all remember that day, December 14, 2012, when Adam Lanza killed his mother before going into the Sandy Hook Elementary School, murdering 26 people, including 20 children. He then took his own life, and now state investigators in Connecticut have released more than 1,000 pages of his journals and documents showing that years before the shooting he displayed so many red flags.

Our Jean Casarez has the details.

Good morning.

JEAN CASAREZ, CNN CORRESPONDENT: You know it's really stunning to read what "The Current" is reporting on. They got this exclusively. Such a negativity with all of his writings and the assessment by professionals.

These documents and writing of the Sandy Hook shooter, Adam Lanza, have never been made public before, until now. "The Hartford Current" was able to obtain over 1,000 documents from the Connecticut State Police after a five-year legal battle verve eventually decided by the state supreme court.

The documents included Lanza's own writing, as long with assessments from mental health professionals prior to December 2012 when Lanza shot and killed 20 first graders and six educators at Sandy Hook Elementary School after shooting his own mother to death.

While we knew the 20-year-old had led a life of isolation, we now know that Lanza was evaluated in 2006, six years before the mass shooting, by Robert King, a professor of child psychiatry at the Yale Child Study Center. According to the newspaper's reporting, King asked him if there were kids that he enjoyed spending time with. A 14-year-old Lanza replied, why would that be significant? According to the doctor's notes, he appeared pale, gaunt, awkward, and standing rigidly with his eyes downcast, declining to shake hands, tremulous with discomfort and looking miserable. Dr. King's report stated in part, it was difficult to interpret what this increasing social withdrawal and reclusiveness represents, but stated that his homebound education was a mistake. Many of Lanza's writings, according to "The Current," were not dated.

But at one point he wrote a list of his problems, including the lights were too bright, there were too many dirty dishes, and referring to his mother, you were in the room while I was in the kitchen. I am unable to distinguish between my problems, he wrote, because I have too many.

[09:59:55] At another point he writes in what appears to be an online communication with a fellow gamer, I incessantly have nothing other than scorn for humanity. I have been desperate to feel anything positive for someone