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TikTok CEO Testifies on Capitol Hill; Interview with Rep. Ro Khanna about Issues of Data Security with TikTok App; Trump Hush Money Grand Jury Not Meeting Today; Fed Raises Rates by Quarter Point; Blinken Faces Questions on Afghanistan Withdrawal. Aired 11-11:30a ET

Aired March 23, 2023 - 11:00   ET

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

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KATE BOLDUAN, CNN ANCHOR (voice-over): Hello everyone.

AT THIS HOUR, the CEO of TikTok is on Capitol Hill, facing serious questions about the company's security and he's also pushing back hard against lawmakers.

Plus former president Trump's legal troubles taking yet another turn; his own attorney ordered to testify in the classified documents investigation.

And a striking rise in anti Semitism in America. A new report just out shows anti Semitic incidents have hit a new record high. This is what we're watching AT THIS HOUR.

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BOLDUAN: Thank you so much for being here. I'm Kate Bolduan. We are starting on Capitol Hill today. That is where the CEO of TikTok is facing withering criticism from lawmakers. The app, which has a reported 150 million users in the U.S. alone is facing a potential U.S. ban over national security concerns.

This stems from the fact that it's parent company ByteDance is based in China. The CEO you see right there testifying live, Shou Chew, is pushing back hard against this criticism, telling them and fears really telling them that the app is not a vehicle for the Chinese government to spy or spread propaganda in the United States.

But some lawmakers are not buying it. Listen.

(BEGIN VIDEO CLIP)

REP. CATHY RODGERS (R-WA): We do not trust TikTok will ever embrace American values, values for freedom, human rights and innovation. TikTok has repeatedly chosen the path for more control, more surveillance and more manipulation.

Your platform should be banned.

(END VIDEO CLIP)

BOLDUAN: Natasha Bertrand is monitoring this hearing for us. She's live in Washington.

Natasha, what stands out to you from this testimony so far?

NATASHA BERTRAND, CNN WHITE HOUSE CORRESPONDENT: Well, as you just showed the hearing started out very fiery with the chair of this committee, the House Energy and Commerce Committee, telling the CEO outright that the TikTok platform should be banned and that it is surveilling us all.

Now there have been some contentious exchanges between the TikTok CEO and other lawmakers as well, including Democratic members. This is not a partisan issue, it seems, especially on this committee.

And during that exchange, the CEO was asked specifically whether China can access any of the data that is currently being collected and stored by TikTok, particularly whether ByteDance, the Chinese parent company of TikTok, whether any of those employees can access any user data. Here is that exchange.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Yes or no, do any ByteDance employees in China, including engineers currently have access to user us user data?

SHOU CHEW, CEO, TIKTOK: Today, all U.S. user data is stored by default in the Oracle cloud infrastructure and access to that is controlled --

(CROSSTALK)

UNIDENTIFIED MALE: -- any American ByteDance employees in China, including engineers, currently have access to U.S. data?

SHOU: Congressman, I would appreciate -- this is a complex topic today. All data

(CROSSTALK)

UNIDENTIFIED MALE: -- it's not that complex.

Yes or no, do they have access to use your data?

SHOU: We have -- after project Texas is done, the answer is no.

(END VIDEO CLIP)

BERTRAND: So this has been a constant referring by the text -- by the TikTok CEO, essentially that TikTok has taken steps to move all U.S. user data to servers stored in the U.S., overseen by American employees at an American company, that company being Oracle.

Now that transition is not fully complete yet. But as he just said in that clip TikTok is working, he says to complete that transition under a project known as project Texas to alleviate some of these national security concerns that lawmakers and the American public writ large might have about the platform.

Essentially his argument is that as soon as all of that user data is stored on U.S. soil, China ByteDance, they will not have access to any of this user data. That has been at the core of concerns by U.S. lawmakers, that China can collect this data and potentially use it for nefarious reasons.

He is saying that pretty soon that will not be a concern at all, Kate.

BOLDUAN: Still, even in explaining that Texas project they -- lawmakers were not -- some of them not convinced. Still let's see what happens. It's still continuing as we speak. It's good to see you, Natasha.

She's going to get back into it. Joining me right now to discuss some of this, Democratic congressman Ro Khanna of California. He sits on the newly created House Select Committee on China. TikTok's parent company has offices in his district.

Congressman, thank you for coming in.

So this declaration from TikTok that ByteDance is not an agent of China or any other country, also talking about this firewall for American data, protecting it from unauthorized foreign access. You don't seem to trust that statement that we've heard previously and heard just now from the ByteDance CEO, the TikTok CEO.

Why?

REP. RO KHANNA (D-CA): I don't because I don't think China recognizes a truly independent private sector. The state intervenes in almost every company.

[11:05:00]

KHANNA: We have seen this in how they treated Jack Ma. Even if a company is independent today, if Xi Jinping changes his mind, next day, they can appropriate the data or appropriate the assets of a company.

We have to be clear they need to sell it to an American company. And by the way, China does not treat American companies with any respect. I mean, they're far more restrictive than we are on them. And so this is common sense to me, sell it to an American company and let's move on.

BOLDUAN: What about what's being proposed this morning, as Natasha was laying out, the CEO, saying that they're in the process of transitioning to store all U.S. data on U.S. soil and servers here.

Is that -- would that do anything to pacify your concerns?

KHANNA: No, I just don't understand what we get from this.

What does America lose by forcing the sale to an American company?

It's not like we want massive Chinese companies to invest in the United States. We have plenty of places we can go for foreign direct investment. We can go to Europe. We could go to India. We can go to Japan, South Korea. China has been totally unreciprocal (sic). We have a $450 billion trade deficit with China.

They have taken so much of our manufacturing base. They don't play fair and now they may have access to data of millions of our young people. I saw that the TikTok CEO said, well they're not -- a majority are over 18 but a majority may be between 18 and 24. He's parsing numbers.

This needs to be an American company that controls this.

BOLDUAN: China has responded for the first time to the administration's ultimatum that either sell to an American company as you're talking about or be banned in China. The Chinese government spokesperson for the Chinese government told "The Wall Street Journal" today this.

"If the news is true of a forced sale, China will firmly oppose it."

So what do you do then?

KHANNA: What are they going to do?

They oppose almost every American company going into China. They don't -- they have tariffs on all our exports. They --

(CROSSTALK)

BOLDUAN: -- support a ban?

KHANNA: But if they don't sell if they don't have a sale of it, then yes. But I think we can force the sale. I think that that is something that the government can do. Our government can do and we have plenty of technology companies.

They could then develop the platform. Look I think that millions of people are on TikTok and they want access to that kind of a technology. But there's no reason that an American company can't do that.

BOLDUAN: Your Democratic colleague, Jamaal Bowman, he is out saying before this hearing, saying that TikTok is being targeted unfairly and that it's in all of this is whipping up, in his words, xenophobic anti China rhetoric.

Let me play what the congressman said in a press conference yesterday.

(BEGIN VIDEO CLIP)

REP. JAMAAL BOWMAN (D-NY): In terms of TikTok's behavior and its -- and its risk to national security, it poses about the same threat that companies like Facebook and Instagram and YouTube and Twitter pose. (END VIDEO CLIP)

BOLDUAN: He says they don't and the CEO said the same thing. They don't gather any more information than any of the other social media companies do.

What do you say to that?

KHANNA: Well, the congressman's larger point about needing a reform of social media is correct. I mean, one third of American teenage girls have contemplated suicide, according to "The New York Times."

One of those reasons is social media. We need to do far more to protect children and young people from the negative impacts of social media and that needs to be broad based.

But TikTok portrays a unique concern and that is that they ultimately are tied to the Chinese Communist Party. They are at the control of that party now. Maybe the Chinese Communist Party right now is not intervening but they could choose to intervene at any moment.

And I don't think they may necessarily be totally sinister where they take all the data.

But what if they subtly try to have videos on TikTok that are mitigating the human rights concerns with the Uyghurs?

What if they have rhetoric on TikToker videos that are making their claims over Taiwan or islands seep through?

We don't want another country to have that kind of influence on so many of our young people.

BOLDUAN: And things we've seen like Russia and their influence campaign on Facebook and other social media platforms, like Twitter in previous elections as well.

Answer me this, Congressman. There are people who are going to say my info is already out there. The government probably has all my data. Other apps have my data as well.

Why does it matter here?

What do you fear China will do with this user data?

KHANNA: Well one day could compromise and target individuals with the user data but what I fear more if their ongoing have access to this platform, if they start to prop up videos that are trying to influence the outcome of our election.

What if they say a candidate who's not speaking out against Chinese human rights abuses?

We're going to put their videos higher up on TikTok?

I'm not saying they're doing any of this right now. [11:10:00]

But we know that China has launched propaganda campaigns into other countries. We know that they have launched cyberattacks.

So why would we make ourselves vulnerable?

And here is the final point, Kate, on this issue, China has simply not played fair since they've been in the WTO. Our trade deficit with them have exploded. They don't allow American companies access. They don't allow American tech companies access into their markets.

Ask Google, ask a lot of the social media companies and tech companies and they have taken a lot of manufacturing jobs.

So why should we not have equal reciprocity and fairness?

I mean, they are far more restrictive. If this was an American company, they would have stolen all the IP.

BOLDUAN: Trade might be in the backdrop of this whole thing and that is a very significant thing. We will continue that it's good to see you, Congressman. Thank you for your time.

Programming note, everybody. After this big day on the Hill, Abby Phillip takes a look at TikTok and the security concerns raised from Capitol Hill to the White House and also happening in states across the country.

"Is Time Up for TikTok? airs tonight at 9 pm Eastern.

Turning now to the investigations into Donald Trump. CNN has learned that the grand jury investigating Trump's alleged role in a hush money scheme will not hear anything to do with this case today when it meets.

That likely pushes the Manhattan DA's investigation into another week. Separately and also significant, Trump's own defense attorney has been ordered to testify tomorrow before another grand jury. This one convened by the special counsel looking into his possible mishandling of classified documents.

Paula Reid has this for us. She's tracking all of it for us.

Paula, let's start with the Manhattan DA. We're hearing that the grand jury is not going to be hearing details on Trump's case. If we want to call it that.

So what is happening?

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: It's not unusual for a grand jury to hear evidence on multiple cases. So we know this grand jury is meeting today but they're not going to hear evidence in the Trump matter. They will return on Monday. We've learned and they could at that time possibly hear from a witness. There was some speculation about whether this means the district

attorney is reconsidering. But what we know from our reporting, Kate, is behind the scenes, they are taking a moment to regroup. They are reflecting on the historic nature of potentially indicting a former U.S. president for the first time.

But they're also reconsidering how to proceed after, on Monday, a defense witness went before the grand jury to attack the credibility of the witness, Michael Cohen. So we've learned they're considering bringing Cohen back to rebut that testimony or potentially another witness.

And we know that prosecutors have had conversations with attorneys for other witnesses. Nothing specific about testimony but we know they've been in touch and that door for potential testimony is still open.

Then the question is, do they move on to vote on a possible indictment ?

And we just don't know that at this point.

BOLDUAN: It continues to -- we have the new reporting is there and but there's still -- leaves so many questions. As honestly, it should be with a grand jury.

In the classified documents probe at the special counsel investigation into Trump's possible mishandling of classified documents, this move to force Trump's attorney to testify seems like a big one.

What's going on here?

REID: It's incredibly significant while what's going on here in Manhattan may be the most imminent legal threat, what's going on down in D.C. is perhaps the most serious at this moment because, here, the special counsel has successfully convinced the federal judge and an appellate panel that prosecutors have enough as evidence to suggest that Trump's conversations with his attorney, Evan Corcoran, may have been part of criminal activity.

And this decision happened really fast. This was a rocket docket. This all happened very quickly. It really gives momentum to the special counsel to get evidence that can really make or break this case.

Now Corcoran is expected to testify before the grand jury tomorrow. Surprisingly the Trump team isn't going to take this to the Supreme Court to see if they could win. There so he is expected to testify tomorrow. We don't know exactly what he's going to say.

He's been before the grand jury before but invoked attorney-client privilege and it is remarkable that they have been able to get around that, arguing what is called the crime fraud exception.

He's also going to hand over documents that include handwritten notes. A big win for the special counsel. What it means for their investigation. We'll find out. BOLDUAN: We will continue to stand by. That's great to see you,

Paula. Thank you so much. But I do have many questions about this. Also joining me now is CNN legal analyst and former federal prosecutor Jennifer Rodgers.

It's good to see you again, Jen. So let's start with the imminent here in Manhattan, when it comes to the grand jury being convened here. What does it mean?

What does it mean to you to hear that this moves into another week, that they're taking a pause if you will, to kind of consider what's happening?

JENNIFER RODGERS, CNN LEGAL ANALYST: Well it's hard to know what we don't know. Of course, we don't know what they're considering. But I will say this from my own experience.

If you have trouble in the grand jury, if the grand jurors do not seem to be with you, they're questioning your case, you're worried about how many votes you're going to lose, that's a really, really bad sign for the case afterwards, because the grand jury is the easy part. You don't have to have a unanimous grand jury.

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RODGERS: The standards are much lower and it's effectively one sided. You put in your own evidence, the way that you want without any cross examination, usually without any rebuttal from witnesses.

So if you can't win them, really overwhelmingly there, that says problematic things for down the road.

BOLDUAN: And then having to do with the CNN's reporting that prosecutors are considering and might want to bring back a witness to rebut testimony. You know that that testimony had called into question Michael Cohen's credibility, maybe even bringing back Michael Cohen himself to rebut the testimony.

What does this timing suggest anything in relation to that?

And if that's necessary, what that means as they're kind of clearly so far down the road in this investigation.

RODGERS: Well, if they want more evidence to come in before the grand jury votes, then they'll have to bring it in. It looks like they're thinking about that now; they'll do it next week. I mean, they can get the indictment very quickly.

So if they bring a witness in on Monday, they can go in right afterwards and ask the grand jury to vote. Apparently Trump is coming on Tuesday. So maybe they're keying it to that so that he could be arraigned on Tuesday.

The bigger question to me -- and of course, this is all speculation.

But what does this mean about the strength of their case? How problematic is Michael Cohen?

Can they get around using him for such a big part of the case?

Maybe they can try to use other evidence where they would have used him. These are the questions. I think they're probably considering.

BOLDUAN: The special counsel's investigation into classified documents, how significant do you see it as this decision from the judge to force his -- Trump's own attorney, Evan Corcoran, to come in to testify tomorrow?

RODGERS: So it's really significant. It's very, very rare. I have never had that happen in a case where you pierce the attorney client privilege. So this is a big deal. I think this evidence is going to be very helpful to them. It will effectively prove obstruction of justice and will help them prove the underlying crime because knowledge and intent is such a big deal.

What did Trump know about improperly retaining these documents?

If he told his lawyer, you know, if he lied about that and you can prove that, then you know you're there on both of those accounts.

BOLDUAN: What do you think?

What would be the key question that he would need to answer -- or that the documents, that his handwritten notes would be able to provide in this?

(CROSSTALK)

BOLDUAN: Is it too intent?

RODGERS: It could be one of two things either. They're in it together and they were saying, OK, we know we have the documents but we got to lie about it, in which case they're both on the hook.

Or Trump is lying to Corcoran. If they can prove that, Trump is lying to Corcoran then he has obstructed justice. And of course, it shows that he knew he had the documents, which, yes, knowledge and intent are the key as far as whether he improperly retained those documents and mishandled them.

BOLDUAN: It's good to see you, Jennifer. Thanks. Let's see what happens next. I appreciate it. Thank you.

So the Federal Reserve raised interest rates again. It's what many smart minds expected.

But what does it mean for you today, tomorrow, next week?

That's next.

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BOLDUAN: So the Federal Reserve met and the Federal Reserve raised rates again, this time by a quarter percentage point. That's the ninth straight increase but Fed chair Jerome Powell signaled that they could be hitting the brakes soon. Matt Egan joins me now with a look at this, fresh back from Washington and that announcement.

Matt, what does this mean?

For everybody at home?

What happened yesterday?

MATT EGAN, CNN BUSINESS SENIOR WRITER: I mean, this really is a very confusing time for the economy, right?

Because many metrics, the economy is hot, it's not too hot. That's what the Fed is worried about. And then we have these bank failures. Fed chair Jerome Powell, he stressed that the banking system is safe.

But he also acknowledged that there is this risk of a credit crunch where it gets harder for all of us to borrow and that slows the economy. So there's so many moving pieces here.

I think one of the big takeaways for everyone at home is that the Fed really means business when it when it comes to like trying to fight inflation because they had every excuse not to raise rates but they did anyway. The good news is for savers right?

Because money in the bank is finally going to earn something depending on where you put it. Not so much of the big banks but if you hunt around, especially online, you can see online savings rates as high as 5 percent. Same thing with one year CDs. If you look around, you could go above 5 percent. So that is encouraging.

The bad news, of course, is for borrowers. Mortgage rates, they're above 6.5 percent; auto loan rates are at 12 year highs. And credit card rates are at record highs. And let me show you what that last point means.

So say you have a $2000 credit card balance. If you're making minimum payments, it would take you more than 15 years to pay that off at current rates. And during that time frame, you would rack up over $2,700 in interest now. There is never a good time to have a credit card balance or to make the minimum payment.

But this is probably the worst time and all because of the Feds war on inflation.

BOLDUAN: I mean, that is a very important warning for everybody else. It's good to see you, Matt. Thank you so much. Appreciate it. AT THIS HOUR, secretary of state Tony Blinken is testifying before

Congress, he is facing questions about the chaotic U.S. withdrawal from Afghanistan in 2021. Kylie Atwood's following this very closely for us, she joins us now.

He's facing questions from the Republican majority and also a possible subpoena.

What's happening with this?

KYLIE ATWOOD, CNN NATIONAL SECURITY CORRESPONDENT: Yes, well, the chairman of the committee holding up that subpoena in front of the secretary of state today, saying that if he didn't get all of the documents that he has repeatedly asked for from the State Department over the course of the last few months by Monday, he's pushing his deadline, which was actually last night, to Monday, that he's going to issue that subpoena.

And right now they're caught up over one set of documents. That's a dissent cable that was written by diplomats who were serving at the embassy in Afghanistan.

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ATWOOD: To leadership at the State Department before the U.S. withdrew from Afghanistan, talking about the fact that there needed to be more done to prepare for that evacuation.

And Chairman McCaul is saying that they need to see that dissent cable. They need to see what these diplomats were urging the State Department to do that the department wasn't doing to prepare.

The secretary of state. Responded and saying, listen, this is a cable. This is a channel for diplomats at the State Department to express their concerns without fear or favor.

He doesn't want to provide that dissent cable because he doesn't want to have a chilling effect on the workforce at the State Department, so that you know any kind of concerns that they voice to the secretary of state could actually be provided to Congress.

And one of the moments that I think was really key to note on today was a woman in the audience, who the chairman actually pointed out. She started crying. She is the mother in law of a woman, a service member, who died during this evacuation.

And she was standing there and Chairman McCaul was talking about how she still has questions. How the committee still has questions about how this evacuation happened, how these service members died. How so many Afghans got caught up in this.

And he said that they're not going to rest until they get those answers. So it's very clear that Chairman McCaul, even though the secretary of state is trying to provide documents to this committee. We knew that yesterday, 3,000 pages of documents were provided the committee. There are still questions and it appears that the chairman is prepared

to move forward with that subpoena. In the coming days. Kate

BOLDUAN: OK. Great reporting. Thank you, Kylie.

Just in to CNN, a court now finding that the parents of Ethan Crumbley should stand trial for involuntary manslaughter, a major decision that has the potential of setting precedent here for holding parents accountable for the actions of a school shooter -- after a school shooting by a minor child -- that's ahead.

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