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THE SITUATION ROOM

Dorian Batters Virgin Islands and Closes in on Puerto Rico; Interview with Rep. Mike Quigley (D-IL), Intelligence Committee on Trump's Erratic Behavior; Trump Tells Aides He'll Pardon Them if They Break the Law to Build Border Wall by 2020; Trump Slams Puerto Rico as Storm Bears Down the U.S. Territory; Purdue Pharma in Talks to Settle Opioid Lawsuits; North Korean Submarine Could Threaten U.S.. Aired 5- 6p ET

Aired August 28, 2019 - 17:00   ET

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


[17:00:00]

DANA BASH, CNN HOST: You can follow me on Twitter @DanaBashCNN or tweet the show @TheLeadCNN. Our coverage on CNN continues right now.

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WOLF BLITZER, CNN HOST (voice-over): Happening now, breaking news, hurricane impact: Dorian batters the U.S. Virgin Islands and closes in on Puerto Rico as a category 1 hurricane, threatening floods and landslides in areas devastated by Hurricane Maria two years ago.

This storm could slam Florida by Labor Day as a powerful category 3 hurricane.

Best thing ever: President Trump is already battering Puerto Rico, calling the U.S. territory, quote, "one of the most corrupt places on Earth," and saying he is the best thing that's ever happened to the island. He is also hammering FOX News, accusing it of promoting Democrats, saying, quote, "FOX isn't working for us anymore."

Climbing the walls: President Trump seems to be climbing the walls with worry over his election prospects. Sources say he has told aides to break the law if they must to build his border wall before the election and offering pardons for any wrongdoings.

And underwater threat: satellite photos now suggest Kim Jong-un may be building a huge nuclear-capable submarine that could pose a major new threat to the United States.

What is going on in that North Korean shipyard?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

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UNIDENTIFIED MALE (voice-over): This is CNN breaking news.

BLITZER: Breaking news: a new forecast is just in for Hurricane Dorian, now a category 1 storm, it's ripping through the U.S. and British Virgin Islands and approaching Puerto Rico, home to 3 million Americans. The storm is expected to intensify and could hit Florida over the Labor Day weekend as a category 3 hurricane.

Puerto Rico is still recovering from Hurricane Maria, which killed nearly 3,000 people two years ago and, as the island braces for impact, it has already been slammed by President Trump, who calls it one of the most corrupt places on Earth.

President Trump also tweeting about his border wall, saying it is going up very fast, although no new miles have been built. Sources say the president has told aides he will pardon them if they need to break the law to build the wall before the presidential election.

I will speak with national hurricane center director Ken Graham. And our correspondents and analysts will have full coverage of the day's top stories. First, let's go straight to Puerto Rico. CNN's Polo Sandoval is on the scene for us.

Polo, what is the latest there now?

POLO SANDOVAL, CNN NATIONAL CORRESPONDENT: I want you to look directly behind me, way off in the distance, those dark and ominous clouds, that's what Dorian looks like from 40 miles away here from our vantage point in San Juan, Puerto Rico.

Talking to people on the beach tonight, they tell me that is as close as they want the storm to make it. But the reality is very different, according to emergency officials who spoke out, saying, overnight, we are expecting major rain and, with that, a serious threat of flooding.

(BEGIN VIDEOTAPE)

SANDOVAL (voice-over): Tonight, Dorian is intensifying and shifting its path, now taking aim at the Virgin Islands and Puerto Rico's eastern side. Hurricane Dorian is tracking along the same course as Hurricane Maria two years ago, a category 4 storm many residents are still trying to recover from.

UNIDENTIFIED FEMALE: This is all that Maria left. FEMA only gave me $8,000 which to repair.

SANDOVAL (voice-over): And officials in San Juan say Dorian is not Maria, at least not in terms of wind they're expecting Dorian to have more of an impact on rivers due to rain.

CARMEN YULIN CRUZ, SAN JUAN MAYOR: We are certainly very much more ahead in terms of planning than we were two years ago. Our entire medical services organization is all powered by generators.

SANDOVAL (voice-over): Puerto Rico could see up to six inches and more mountainous areas could see up to 10. Heavy rain already affecting parts of the British and U.S. Virgin Islands, which forecasters say could see up to four to 10 inches in just a couple of hours time.

One resident capturing on camera a bright blue surge of electricity hitting a transformer in the midst of all of the rain.

JAMES RUSSO, FEMA COORDINATING OFFICER: This is not a good place to be. In the next two or three days. The good news is, is this will be a very quick storm. This will come through in six or seven hours and it'll be over and we can assess the damage.

SANDOVAL (voice-over): Tonight, Puerto Ricans are not taking any chances, many homes and businesses already boarded up, boats removed from the water, drivers are all filling up their tanks.

Shelters are open on the island ahead of what could be a busy weekend. Meanwhile, in Florida, major preparations are also underway, with the storm expected to make landfall there during the Labor Day weekend.

LENNY CURRY, JACKSONVILLE, FLORIDA, MAYOR: We've done this before. We've been through this together. This is no time to panic. We don't --

[17:05:00]

CURRY: -- know what will develop in the days ahead but it is time to know your evacuation zone.

CARLOS GIMENEZ, MIAMI-DADE MAYOR: These are things we all should have been prepared for, if not Dorian then maybe some other storm but it is the height of the hurricane season and we all need to be prepared.

(END VIDEOTAPE)

SANDOVAL: This morning, when Dorian's forecasted path shifted further west, I can tell you that officials scrambled some the resources from the southern island, to the northeast and southeast.

And the big area of concern is two islands off the coast of Puerto Rico, part of the municipal system, that were devastated two years ago with Maria -- Wolf.

BLITZER: Polo Sandoval, be careful over there, in Puerto Rico for us.

CNN's Omar Jimenez is on the eastern side of the island, right in the path of the storm.

Omar, the area was hit hard by Hurricane Maria nearly two years ago.

What is the biggest concern right now where you are?

OMAR JIMENEZ, CNN CORRESPONDENT: Nearly two years ago but people still have Hurricane Maria very much top of mind, as Hurricane Dorian threatens this portion of the island. And rainfall was really the major concern here, in fact, from the beginning, they said it was not a Hurricane Maria wind event.

But the flooding and the rain that would come with it was a major concern. Now on the other side of the day, now, it seems that we have gotten past some of the more serious bands of Dorian, for this spot in particular. But that's because it was just, it is now moving just east of us, particularly over the Virgin Islands, which were hit and have been hit and I should say are currently being hit, very, very hard, with the brunt of this storm.

In fact, in a spot south of St. Thomas, sustained winds 80 miles an hour and wind gusts over 100 miles an hour. And one of the major concerns there, not just in the immediate sense but also in the long term, is the director of disaster recovery for the Virgin Islands, specifically pointed to Hurricane Maria and said that they just do not have enough permanent work that has been done in the nearly two years since Maria to withstand another storm.

This is exactly what they feared. So we can imagine the damage assessment on the other side of when this passes and it is going to be a significant one. And while they say they do know what to do, the difficulty is going to be actually doing it, once we are on the other side of Dorian, as it continues to build strength and making its way to the U.S. mainland.

BLITZER: Omar, be careful over there as well.

Joining us now, Daryl Jaschen, the director of the Virgin Islands Territorial Emergency Management Agency.

Daryl, thanks so much for joining us. I know it is an incredibly dangerous and difficult time right now. Tell us more about the conditions you are seeing on the ground in the Virgin Islands right now.

DARYL JASCHEN, VIRGIN ISLANDS TERRITORIAL EMERGENCY MANAGEMENT AGENCY: Well, first of all, tonight, we have been activated the last two days, so right now, we anticipated every step of the way, we are very close to the National Weather Service, with our emergency responders, first responders from the islands here, St. Croix, St. Thomas and St. John.

We have tracked the last couple of days, the storm progress, Tropical Storm Dorian, going through St. Croix this morning, heading to St. Thomas and then at 2:00 this afternoon, it went to a category 1, right before it landed over by the airport.

So we had a little scare for that. Right now, the hurricane has gone beyond the island of St. Thomas and now open waters. And we feel very blessed, going through that event today.

The individuals in the territories are very resilient. We have gone through this before. Very seasoned with what is going on. We had a tremendous team with first responders and emergency responders from the federal side and inhouse and federal responders were here for Irma and Maria and we're welcome to have them back in our environment right now.

We are hunkered down on the island of St. Thomas and St. John and St. Croix last night and we're prepared today.

BLITZER: What is your current assessment?

How significant will the damage be once the storm passes? JASCHEN: The damage assessment right now is primarily to our islands of St. Thomas and St. John. We do have island-wide power outage there. The good news is, we have crews still remaining here from Irma, Maria, that are doing restoration and the water and power authority are very prepared to go out and start doing restoration once we have safe conditions.

Right now, we are still under curfew. Tomorrow morning we will reassess the curfew situation. The importance right now is to be safe.

BLITZER: That's critically important. As you know, Hurricane Dorian was originally supposed to have a bigger impact on Puerto Rico but the U.S. Virgin Islands, where you are, bearing at least for now the brunt of the storm.

Did that make it more difficult for you to prepare?

JASCHEN: Not at all. We always anticipate and watch and the storms can change, in any direction. And we are prepared for the weather updates and it is the first part of the decision point, what are the --

[17:10:00]

JASCHEN: -- conditions going to be in the next 12 to 24 hours to make sure we adjust as we need to with other activities, responsiveness as well as opening up our shelters last night on the island of St. Croix to make sure our population can come in there and this morning, open up shelters on the island of St. Thomas and island of St. John.

BLITZER: Be careful over there. We will stay in close touch. Good luck to all of those folks at the U.S. Virgin Islands. We appreciate the update.

And joining us is the director of the National Hurricane Center, Ken Graham.

Thanks for joining us.

First of all, what's the impact that Dorian is having on communities in the Caribbean that are clearly still struggling to recover from Hurricane Maria?

KEN GRAHAM, NATIONAL HURRICANE CENTER: I will tell you, Wolf, they're getting all sorts of rainfall. They're getting the winds. And that's always a dangerous combination. Right here, satellite and radar, looking right next to each other here. You can see the eye moving north of the islands.

But we have to remember, that some of these bands can linger on a little bit later. Even if this eye moves northward, look at these rain bands coming out of there. You can still get some rainfall overnight and dangerous winds.

So not over yet for the island so we have to keep an eye on it throughout the entire night.

BLITZER: After passing through the Caribbean, Hurricane Dorian is expected to strengthen, correct me if I'm wrong, as it approaches the United States mainland.

How significant is the threat to the East Coast right now?

GRAHAM: Things shifted overnight because the center, the weak system, the aircraft of the hurricane hunters was seeing the center jump around a little bit so yesterday's forecast was a little further to the west and now as it shifted eastward and we don't have the mountains to deal with, we have more water to deal with.

And all of it is very warm water and not moving over the terrain. We expect it to strengthen. So possibly a major hurricane by the time we get close to the Florida coastline.

BLITZER: What steps should people be taking, let's say, from Florida, from Miami all the way up to Jacksonville, maybe into Georgia, South Carolina, what kind of steps should they be taking over the next few days?

GRAHAM: Well, Wolf, you make a great point about all of these different areas. Look how large this cone is. You're stretching all the way, the entire coastline of Florida, has to be ready. So listen to those local officials. Have all of the plans ready. Know what you're going to do. Know your evacuation zone.

This is one of the bigger pieces of advice that I have to give, Wolf, is listen to the latest forecast. The forecast changed somewhat. There is some uncertainty in the modeling as we go to the extended forecast. Listen for the latest. It can change. Be prepared. Listen for the latest. We will get through it together.

BLITZER: Has this storm been difficult to forecast?

GRAHAM: It has been extremely difficult, because, when it started off, it really, when you have a small system like this, the smaller the system, the more impact you can have, based on the forecast, whether it goes over the mountains or if it goes over the water.

Very difficult when it is that small. And in this case, going over the water, we think it is going to get stronger and stronger with time.

BLITZER: Do you worry that the changing forecast will make it more difficult for people in the path of the storm to prepare?

GRAHAM: I think it is the thing that we've been talking about for the last few days here, we stressed the uncertainty. And look at this cone, Wolf, we expect the center to be anywhere in this cone two- thirds of the time.

So the big thing we have to stress is not the center forecast, not just where that line is, not where the center is but listen to where it could be, anywhere from Georgia, the entire coast of Florida. We're letting people know, if you're in there, you have to assume you're going to be impacted and you have to be ready.

BLITZER: That water, I take it, is pretty warm right now, which will be bad news for this hurricane, because it is going to intensify, right?

GRAHAM: Yes, it is interesting, because the previous forecast, when it was further to the west, you had some islands to go through, the Bahamas. And you also had some shear to deal with. This new forecast, why it changed overnight, is you're further out in the ocean, where the warm waters are and less shear.

And that's why the forecast intensity went up. It is just a different path.

BLITZER: Ken Graham, we will check back with you, thanks to you and all of the people who work with you, for what you're doing, you're going to be saving lives indeed. We appreciate it very much.

GRAHAM: You bet.

BLITZER: Let's go to our meteorologist Allison Chinchar at the CNN Weather Center.

What is your big take-away from what you just heard right now, where is this heading?

ALLISON CHINCHAR, AMS METEOROLOGIST: Two take-aways. Number one, prepare. Even if you go out, you buy supplies, water, Pop-Tarts, whatever. And then you find out it is not coming to you, you're just out the money for water and Pop-Tarts but always better to be prepared.

And two days ago, we expected it to be a tropical storm. Now it is looking like a major hurricane. So you really need to pay attention. Especially as this storm continues to intensify, which it did for the latest update.

Now up to 80 mile-an-hour sustained winds, starting to pick up speed a little bit, northwest at about 14 miles an hour. You can see all of this heavy rain here, over the Virgin Islands and then starting around eastern portions of Puerto Rico as well.

And here's a look at the track. It will go out over open water. With the warm water, it will help the system intensify over the coming days before it finally begins to veer off toward the coast of Florida. You may notice that track is very wide.

[17:15:00]

CHINCHAR: The question is why?

Why is there all of the uncertainty about where this system goes?

Here is something to note. Tropical systems always want to go north. So it takes something incredibly powerful to prevent it from going north. So in normal circumstances, this would start to veer north, maybe heading back towards the Carolinas.

But you have this very intense high pressure system here that is essentially steering it and pushing it over towards Florida.

And the other question becomes, what happens to this low pressure system and this ridge that is really starting to take shape across the central U.S. and how much of an impact does that have on Dorian in the coming days to whether or not it ends up making a second landfall, somewhere along the Gulf Coast region?

A lot of the models are in agreement that very heavy rainfall is expected to take place as the storm intensifies over the open Atlantic.

Then the question becomes, where is that exact landfall point?

And really, we're going to have to keep a close eye on how much more this intensifies and any more wobbling that this storm may end up doing in the short term.

BLITZER: The latest forecast for us, thank you. We will get back to you very soon. We're staying on top of this story. Thank you very much.

Up next, as the storm moves in, President Trump is already battering Puerto Rico, calling the U.S. territory, quote, "one of the most corrupt places on Earth."

And sources say President Trump has told aides to break the law, if they must do so, to build the border wall with Mexico, before the presidential election, offering pardons for any wrongdoing.

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[17:20:00]

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BLITZER: As Hurricane Dorian closes in on Puerto Rico, President Trump is already slamming the U.S. territory as he lashes out in all directions, apparently worried about his own election prospects. Our White House correspondent Boris Sanchez has the latest.

(BEGIN VIDEOTAPE)

BORIS SANCHEZ, CNN CORRESPONDENT (voice-over): Tonight, president Donald Trump signing an emergency declaration, securing aid for Puerto Rico but not without insulting the island and reigniting a feud with the San Juan mayor Carmen Yulin Cruz and demanding credit for offering aid.

Trump tweeting, "FEMA and all others are ready and will do a great job. When they do, let them know it and give them a big thank you, not like last time, that includes from the incompetent mayor of San Juan."

Later adding, "Puerto Rico is one of the most corrupt places on Earth. Their political system is broken and their politicians are either incompetent or corrupt. Congress approved billions of dollars last time, more than anyplace else has ever gotten. And it is sent to crooked politicians. No good. And by the way, I'm the best thing that's ever happened to Puerto Rico."

The president once again alluding to the false claim that Puerto Rico received $92 billion in disaster relief following Hurricane Maria in 2017. In reality, Congress allocated about $40 billion in aid, with the island only receiving a fraction of that.

TRUMP: I have taken better care of Puerto Rico than any man ever.

SANCHEZ (voice-over): And now, the Trump administration is slashing $155 million in FEMA disaster relief funding, according to documents newly obtained by CNN, rerouting $271 million within DHS toward efforts to cut migration along the southern border with Mexico.

In a statement to CNN, FEMA claims the move will not impact ongoing, long-term recovery efforts across the country. This, as sources say Trump is so determined to fulfill his promise of a border wall before the 2020 election, that sources say he is encouraging aides to ignore environmental regulations, fast-track billions of dollars in funding and aggressively seize private property to build the wall.

CNN confirming reporting originally in "The Washington Post," that Trump is promising staffers he will pardon them if they break the law. Trump also reportedly demanding the wall be painted black, making it hot to the touch, and topped with steel spikes to make it more intimidating.

Trump responding today that the story was made up by "The Washington Post," only to demean and disparage. Despite Trump's claim that the wall is going up fast, Customs and Border Protection tell CNN that zero new miles of border have been built but that about 60 miles of dilapidated barrier have been replaced and plans in place for roughly 110 miles of new wall.

Meantime, the White House is shying away from a major indication the president plans to host next year's G7 meeting at his Miami area golf resort, the White House tweeting out, "Trump shares the location of the next G7 summit," attached to a video of Trump, talking to reporters about the Doral at the G7 in France.

TRUMP: They went to places all over the country and they came back and said this is where we would like to be.

SANCHEZ (voice-over): But a White House official tells CNN the tweet may be removed because plans for the next G7 meeting have not been finalized.

Trump today also taking aim at his favorite news outlet, tweeting, "Just watched FOX News heavily promoting the Democrats. Hopeless and clueless. They should go all the way Left and I will still find a way to win. That's what I do. Win. Too bad. I don't want to win for myself. I only want to win for the people. The new FOX News is letting millions of great people --

[17:25:00]

SANCHEZ (voice-over): -- "down. We have to start looking for a new news outlet. FOX isn't working for us anymore."

(END VIDEOTAPE)

ACOSTA: Now Wolf, on that reporting that the president told aides he would pardon them if they acted illegally to build his long-promised border wall, a White House spokesperson says the president was only kidding -- Wolf.

BLITZER: Boris Sanchez reporting for us from the White House, thank you.

Joining us now Democratic congressman Mike Quigley of Illinois, a member of the House Intelligence Committee.

Thanks so much for joining us. Let me first get your reaction to President Trump attacking Puerto Rico, as the island is riding out this hurricane, Hurricane Dorian.

REP. MIKE QUIGLEY (D-IL), MEMBER, INTELLIGENCE COMMITTEE: Yes, it's history repeating itself, unfortunately. You couple this with the fact that they are now rechanneling money used for FEMA and natural disasters for the president's political gain, it's extraordinary.

Let's me make something clear, too. I've been in Congress 10 years. And we have had to dramatically supplement FEMA to the tune of billions of dollars, because of hurricanes, wildfires and other natural disasters that are taking place at an increasing number, with a higher level of severity largely due because of climate change.

Something the president isn't helping with; rather he is hurting us.

BLITZER: Are you confident, Congressman, that the president will sign an emergency aid bill for Puerto Rico, if necessary?

QUIGLEY: In the final analysis, he will. I would like to think if there is any humanity left in the man. But at this point in time, nothing surprises me. I call on my colleagues in Congress to force the issue and help the citizens of the United States in Puerto Rico, the Virgin Islands and those who will be impacted, certainly in Florida, rather than attacking them.

It's interesting; he attacks them for political corruption, he has some level of expertise there.

BLITZER: Yes. Let's move on to another sensitive issue. As you heard, CNN has confirmed this, "The Washington Post" report, that President Trump told members of his administration that he would pardon them if they break the law to fast-track construction of his border wall with Mexico. What's your reaction to that?

QUIGLEY: Again, the president acts in the same manner that he has before, dangling pardons, which was evidenced in the Mueller report that came out previously. This is the president of the United States; by doing so, acting illegally, again, for political gain.

A reason, an additional reason, we should move forward with an impeachment inquiry. The president continues to commit acts of high crimes and misdemeanors, which the House and Senate need to investigate.

BLITZER: Congressman, thanks for joining us.

QUIGLEY: Anytime. Thank you.

BLITZER: Coming up, we will have the latest on Hurricane Dorian. A lot is developing as we speak. We'll be right back.

[17:30:00] (COMMERCIAL BREAK)

WOLF BLITZER, CNN HOST: We're following the breaking news. Three million Americans in Puerto Rico, right now, are dealing with Hurricane Dorian after the storm hit the U.S. Virgin Islands earlier this afternoon.

Throughout the day, President Trump has been sending tweets, disparaging Puerto Rico, calling it -- and I'm quoting the President right now -- one of the most corrupt places on Earth.

Let's bring in our experts.

And, Ryan Lizza, he said, Puerto Rico is one of the most corrupt places on Earth. Their political system is broken. Their politicians are either incompetent or corrupt. Congress approved billions of dollars last time, more than anyplace else has ever gotten, and it sent -- and it is sent to crooked pols. No good. And by the way, I'm the best thing that's ever happened to Puerto Rico. What's your reaction?

RYAN LIZZA, CHIEF POLITICAL CORRESPONDENT, ESQUIRE: I mean, I would like to ask some Puerto Ricans if they think that. I mean, talk about victim-blaming. I mean, this is an island that's in danger of being hit by a hurricane, right?

The most -- I can't think of a more, you know, something that previous -- more difference between previous presidents than the way he is treating this. This is a natural disaster.

And just so people remember, in normal times with a normal president, what a president did when the country was about to be hit by a natural disaster, they would make sure that, you know, FEMA was on the ground.

They make sure that people were prepared. They would send out public service announcements about what you do if you run out of water or your electricity goes out. And instead, inexplicably, this president is disparaging the political leadership of the island for no apparent reason at all.

BLITZER: Do you -- would you have any idea why he's attacking Puerto Rico at such a sensitive moment?

JACKIE KUCINICH, WASHINGTON BUREAU CHIEF, THE DAILY BEAST: I mean, the best guess I think is that he feels like those politicians, particularly the Mayor of San Juan, have disparaged him, haven't properly thanked him, for the last response which, by the way, was a complete failure.

So people were left without resources, you know, for a long time. And you know, you had private groups going in there to make sure people had bottled water. So it -- not only does it represent a failure for this administration, but he always holds a grudge. And you know, another hurricane isn't going to dissipate that.

And the other thing is, we -- and you saw the contrast between the responses in Texas and in Florida versus Puerto Rico. It was faster for those two other states.

[17:34:55] BLITZER: It certainly was. You know, Samantha Vinograd, as the -- as the storm approaches the mainland United States, presumably over this weekend, the Trump administration -- get this -- is diverting $271 million in disaster relief funding approved by Congress to step up immigration enforcement along the border. Is that going to hurt the ability of FEMA, for example, to do the job?

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: Well, most likely, it will. And, Wolf, President Trump views the federal budget as his campaign fund. He's used his power, or frankly abused it, to finance his pet projects by reappropriating funds towards things that he thinks will sound good on the campaign trail.

Remember, he declared a national emergency on the southern border so that he could reappropriate funds from the Department of Defense. Congress said that that was illegal, but that was able to move forward. And now, yet again, the executive branch is stepping in and moving funds from disaster relief -- disasters have not gone down nor has the need to respond to them -- toward something that he believes is a political priority, which is the border wall.

The issue is that he is putting American lives at risk. His political campaign is trumping the lives of at least 3 million Puerto Ricans that could be at risk from this hurricane, as well as folks in Florida. And unless FEMA stepped in, which we don't think they did, and said that these funds weren't necessary anymore, the President is making himself the appropriator-in-chief and may be setting up yet another battle with Congress over this action.

BLITZER: Laura Coates, you're our legal analyst. Is he allowed to reprogram this money just with a signature?

LAURA COATES, CNN LEGAL ANALYST: I mean, the keyword here is appropriations. There are three branches of government, and Congress is the one that has the power of the purse to actually appropriate funds like they need to. And in this instance, they specifically already said they did not want to appropriate and earmark funds for FEMA-related beds.

LIZZA: Yes.

COATES: I mean, they are for ICE-related beds in detention centers, so they did not want to do so. So now, to try to circumvent that authority at the beginning of the hurricane season in a way to try to show the strength of the executive branch is really, as Nancy Pelosi says, highly inappropriate. And quite frankly, it's insincere, and it's sad and it's -- it's just awful to do so.

But when it comes down to what it's able to do, it's not unheard of for under one umbrella department to have funds go between different agencies in that -- to the department. What is unheard of is when Congress has already appropriated funds for a particular need and -- set to the priorities of Congress and American people, and for that to be undermined. That is the real issue.

BLITZER: We got some breaking news, some political news, I want to get to, Ryan. Senator Kirsten Gillibrand, Democrat of New York, a Democratic presidential candidate, has just tweeted she is dropping out of the race for the Democratic presidential nomination.

LIZZA: Yes.

BLITZER: She hasn't been doing well in the polls.

LIZZA: No.

BLITZER: But what's your reaction?

LIZZA: Well, it shows a couple of things. One, how important these debates are. If you can't make that debate stage --

BLITZER: Which is next week, the next Democratic presidential debate.

LIZZA: That ABC is hosting. It's going to be in Houston, Texas. She did not qualify for that debate --

BLITZER: Let me read the --

LIZZA: Yes, go ahead.

BLITZER: -- statement that she just posted on Twitter.

Today, I am ending my campaign for president. I am so proud of this team and all we've accomplished. But I think it's important to know how you can best serve. To our supporters, thank you from the bottom of my heart. Now, let's go beat Donald Trump and win back the Senate.

LIZZA: Look, you know, campaigns usually don't end, they just run out of money. And she could not raise the funds to keep that campaign going. If you get into the debate, maybe you can generate some excitement, some publicity about your campaign, and generate some more funds. That didn't happen, so it's just -- it was the death knell for her campaign.

BLITZER: Yes, the next Democratic presidential debate in two weeks. What's -- what do you think, Jackie?

KUCINICH: You know, so we'll have -- I don't think this is going to be the end of folks dropping out because Ryan is absolutely right. If you don't have that exposure, if you're not able to catch fire -- the debates that she was in, she really didn't make much of an impact. And you could argue that's because she didn't get enough time, but it just didn't happen for her.

She also faced some headwinds among Democratic donors set because of her decision to call out Al Franken and call for him to resign and sort of lead the charge there. She didn't back down on that. She, you know, doubled, tripled down on that decision and made it a part of her campaign. But that did -- that was, you know, part of her difficulty raising the necessary funds to continue.

And, you know, then there is the other issue with some of these campaigns that are having trouble making the debates, saying that these DNC rules aren't necessarily, you know, helpful to campaigns that aren't -- to people who aren't necessarily in the national spotlight all of the time.

BLITZER: Yes, I suspect more candidates are going to be dropping out fairly soon as well.

LIZZA: Yes.

BLITZER: Everybody, stick around. There's more news. We're following a possible settlement involving one of the big drug companies caught up in the opioid scandal.

[17:39:44] (COMMERCIAL BREAK)

BLITZER: We're following Hurricane Dorian as it nears Puerto Rico. We'll have much more on that in just a few moments.

Also tonight, we're learning new details about a possible legal settlement involving a prominent family and the giant pharmaceutical company at the heart of the country's opioid crisis. Our national correspondent Erica Hill is joining us. She has details. Tell us more, Erica.

(BEGIN VIDEOTAPE)

ERICA HILL, CNN NATIONAL CORRESPONDENT (voice-over): It's a story of pain, addiction, and enormous profits.

For years, Purdue Pharma and the family that owns it, the Sacklers, have been blamed for OxyContin's role in the nation's opioid epidemic.

SEN. JOSH HAWLEY (R), MISSOURI: The citizens of Missouri have been the victims of a coordinated campaign of fraud and deception about the nature of drugs known as opioids.

[17:45:03] HILL (voice-over): The Sacklers insisting the family and the company had nothing to do with the health crisis. But tonight, facing thousands of lawsuits, CNN has learned Purdue Pharma is in settlement talks. Which could cost the company $10 to $12 billion, according to NBC News. As part of the plan, "The New York Times" is reporting the Sackler family would give up its stake in the company and pay at least $3 billion of its own money.

It wouldn't be the company's first settlement or admission that it made billions selling pain pills.

UNIDENTIFIED MALE: Do you know how much the Sackler family has made off the sale of OxyContin?

DR. RICHARD SACKLER, CHAIRMAN, PURDUE PHARMA: I don't know.

UNIDENTIFIED MALE: But fair to say it's over a billion dollars?

SACKLER: It would be fair to say that, yes.

HILL (voice-over): Dr. Richard Sackler, Purdue Pharma's former president and current chairman, answered questions during a 2015 deposition for a lawsuit brought by the state of Kentucky. The tapes were first obtained by ProPublica.

UNIDENTIFIED MALE: Do you believe that any of Purdue's conduct has led to an increase in people being addicted in the Commonwealth of Kentucky?

SACKLER: No.

HILL (voice-over): Purdue settled that case months later for $24 million. Yet years before, the company and three executives had already pleaded guilty in federal court to misleading and defrauding doctors and consumers about OxyContin and agreed to pay more than a $600 million fine.

JOHN BROWNLEE, FORMER UNITED STATES ATTORNEY FOR THE WESTERN DISTRICT OF VIRGINIA: For these misrepresentations and crimes, Purdue and its executives have been brought to justice.

HILL (voice-over): Still, the accusations and legal challenges persist.

T.J. DONOVAN, ATTORNEY GENERAL OF VERMONT: Before it was a heroin crisis, before it was a fentanyl crisis, it was a prescription drug crisis in this state, which was OxyContin.

HILL (voice-over): Purdue Pharma tells CNN, while it will defend itself vigorously, the company is actively working on a solution with plaintiffs because it sees, quote, little good coming from years of wasteful litigation and appeals.

JOEY JACKSON, CNN LEGAL ANALYST: I don't think they're concerned about years of appeals. I think they're concerned about their financial liability and responsibility, which is going to be massive if they don't settle.

(END VIDEOTAPE)

HILL: Attorneys are expected to update the court on settlement talks at the end of the week.

In terms of that payout, "The New York Times" is reporting much of the money would actually come from restructuring the company through a Chapter 11 bankruptcy filing. So, Wolf, that means profits from drugs sales including OxyContin would actually fund the settlement. The company would also be required, according to "The Times," to offer its addiction treatment drugs free of charge.

And I do want to point out CNN has reached out to members of the Sackler family. We have yet to hear back, Wolf.

BLITZER: Erica Hill reporting for us, thank you.

Coming up, we've got some new satellite images raising the troubling possibility that Kim Jong-un is making progress on a weapon that could threaten the United States.

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[17:51:00] BLITZER: New satellite images indicate North Korea's military may be making progress on an ominous weapon. CNN's Brian Todd has been working his sources for us. What are you learning, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight, we're told there is new activity at an important shipyard where Kim Jong-un's regime builds and tests submarines that can fire nuclear missiles. The dictator's now working on one vessel in particular which will be one of his most menacing weapons, and he seems determined to deploy it as soon as he can.

(BEGIN VIDEOTAPE)

TODD (voice-over): New evidence tonight that North Korea's ambitious young Supreme Commander may soon have another submarine to command and a new way to threaten the U.S.

New satellite photos just published by the Web site, Beyond Parallel, show what appears to be new activity at the Sinpo South Shipyard in North Korea where Kim Jong-un's regime builds many of its submarines. Two support submarines, a larger sub and a so-called midget sub, are parked there along with another support vessel. There is a crane, a vehicle in one photo, and people at the dock.

Analysts believe it all could be to support this, an enormous nuclear- capable submarine being built or renovated which Kim was photographed inspecting last month at a nearby location. Experts say the shipyard activity could mean the North Koreans are preparing for a crucial test.

DAVID SCHMERLER, SENIOR RESEARCH ASSOCIATE, MIDDLEBURY INSTITUTE OF INTERNATIONAL STUDIES AT MONTEREY: The purpose of this vessel may be to take the test barge out into open waters and test a submarine- launched ballistic missile.

TODD (voice-over): CNN talked to a top Pentagon official about the new pictures.

RANDALL SCHRIVER, ASSISTANT SECRETARY OF DEFENSE FOR ASIAN AND PACIFIC SECURITY AFFAIRS: We see very intentional modernization on the part of the DPRK.

TODD (on camera): What concerns you about the development of that submarine?

SCHRIVER: Well, you know, if you extrapolate far enough, they're looking to -- for a capability that makes them a more potent adversary.

TODD (voice-over): Another senior U.S. official has told CNN the U.S. has been tracking the development of this sub for a year and a half.

Kim successfully test-fired a ballistic missile from a smaller submarine in 2016, a vessel which, experts say, could hold one nuclear-tipped missile. This larger one, they say, could hold three or more. These subs give Kim the ability to launch nuclear missiles that would be harder to detect in advance, and analysts fear he's trying to develop a longer-range submarine.

RICHARD FISHER, SENIOR FELLOW ON ASIAN MILITARY AFFAIRS, INTERNATIONAL ASSESSMENT AND STRATEGY CENTER: They could potentially, within the next decade, develop submarines capable of transiting the Pacific Ocean within a range sufficient to launch missile strikes against the United States.

TODD (voice-over): Today's new development comes as President Trump's new Defense Secretary spoke about Kim's other missile threat.

MARK ESPER, SECRETARY OF DEFENSE: Obviously, we are concerned about their short-range ballistic missile tests. We want to understand what they're doing and why they're doing it, et cetera. But on the other hand, we're not going to overreact.

TODD (voice-over): But, tonight, experts say Kim's full steam ahead program to perfect his submarines shows he is trying to build a nuclear force that can survive enemy attacks while, at the same time, diminishing the promise of President Trump's overtures toward the dictator.

SCHMERLER: This type of activity only reinforces the fact that North Korea seems, at least at the moment, not committed to denuclearizing to the extent that the President had mentioned.

(END VIDEOTAPE)

TODD: Now, how can the U.S. and its allies counter the submarine missile threat from Kim Jong-un?

Military analysts are telling us the allies are going to have to put more spy planes in the air, more ships, and even underwater sensors in the Pacific Ocean to try to detect and intercept those North Korean submarines. It's going to be difficult, expensive, and it could provoke China and

Russia into being more aggressive in the Pacific, but the allies really may have no other choice, Wolf.

BLITZER: Very, very ominous development indeed. Brian Todd reporting, thank you.

Coming up, Dorian batters the U.S. Virgin Islands and closes in on Puerto Rico. It could slam the U.S. mainland by Labor Day as a major hurricane.

[17:54:50] (COMMERCIAL BREAK)

BLITZER: Happening now, breaking news. Storm danger. After strengthening into a hurricane, Dorian hits the Virgin Islands and lashes Puerto Rico. It's expected to strike Florida next possibly with Category 3 force. CNN is live in the storm zone.

[18:00:00] Slamming Puerto Rico. As the U.S. territory is threatened by Dorian, it's also being bashed by the President of the United States. After famously throwing --