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Court Docs: Accused Leaker Has Had Top Secret Clearance Since 2021; Retail Spending Fell In March As Consumers Pulled Back; Boeing Finds Manufacturing Issue With 737 Max, But Says Jets Are Safe. Aired 11-11:30a ET

Aired April 14, 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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[11:00:30]

KATE BOLDUAN, CNN ANCHOR: The suspect accused of leaking classified Pentagon documents just face to judge standing in court in shackles. His family also in the courtroom. What we're learning this hour about when he got his top secret clearance.

JOHN BERMAN, CNN ANCHOR: The NRA stage now set for some big name Republicans, Trump, DeSantis, Haley, Pence, all heading to the gun convention event America's Gun Violence Crisis.

SARA SIDNER, CNN ANCHOR: Right now Parisian authorities are tightening security as protesters prepare to learn the fate of the pension reform changes they've been fighting against for weeks. These major stories and more right here on CNN News Central.

BOLDUAN: This just in to CNN Court documents show that Jack Teixeira had top secret clearance. The 21-year-old Massachusetts Air National Guardsman appeared in a Boston Federal courtroom this morning. He has now been charged with allegedly being behind that massive leak of classified military documents. According to new detail from court this morning, Teixeira allegedly began posting the documents around December of last year.

Teixeira was an IT specialist. And he entered the Air National Guard in September of 2019 and was recently promoted to the rank of Airman First Class. Let's get to the courthouse and find out what happened inside outside the courthouse is Jason Carroll for us in Boston. What are you -- what happened in court, Jason?

JASON CARROLL, CNN NATIONAL CORRESPONDENT: Well, it's not just what happened, Kate, as you can imagine in court, but outside of court as well, just a few moments ago, right outside federal court, two women who were sitting in the family row during the court proceeding, exited the court and were surrounded by a pack of reporters and cameras, myself included. As we headed down the street, I repeatedly asked if they had any comments at all about what it just happened with Jack Teixeira.

They refuse to comment, kept walking down the street to find their car. In terms of what happened inside court. This was Jack Teixeira's first initial court appearance, appeared in front of the federal judge where he was read the charges that he's now faces including unauthorized retention and transmission of National Defense Information 793 under the Espionage Act, also number two unauthorized removal and retention of classified documents and or material.

Again, this happened during his initial court appearance. The judge overseeing the proceeding asked him if he understood the charges that he was facing very softly. He said yes. Also, we should just point out that during this, the affidavit with this particular case was unsealed as well, where we learned more information. Teixeira apparently holds the top secret security clearance that he was granted back in 2021. He had access to quote, highly classified programs since 2021.

And this alleges that he began posting classified documents starting in 2022. And apparently he used a government computer to search a database using the term leak looking for that term. That was on April 6th, of course, after it became known in the public that someone was leaking classified documents. Throughout the proceeding, there was a section set up for family members, few people sitting there, two women, one of them were in purple, who you also saw exiting the courtroom who we were shouting questions at.

At one point she was praying during the proceeding. She was crying during the proceeding as well. As it ended during its conclusion, a man also sitting in the front row shouted out, we love you Jack, love you jack. And then the defendant in this case, Jack Teixeira, did not look back that said, you too, dad. At that point, the judge in the case set a detention hearing. That's going to be for next Wednesday. But again, some dramatic moments inside court but even more dramatic moments outside court as these two women were leaving and lots of questions, shouted to them about if they had any comment about Jack Teixeira. They had none.

BOLDUAN: Jason, thank you so much, Sara?

SIDNER: Joining us now is -- CNN's Evan Perez and CNN chief law enforcement and intelligence analyst John Miller. Thank you gentlemen for being here. There is a lot to go over. I want to start with you John. He was 21 years old. But when he was 19 in 2021, he had access and top secret clearance. Is that unusual in this sort of world of I don't know, cybersecurity?

[11:05:23]

JOHN MILLER, CNN CHIEF LAW ENFORCEMENT AND INTELLIGENCE ANALYST: You know, it's not unusual in this context. We have to look at this two ways, because this question, Sara, keeps coming up is how is a low ranking 21-year-old, you know, granted access to such sensitive material. Number one, where he works, he works at an intelligence operation for the Air Force as a member of the National Guard.

Their job is literally to live in the classified world. You can't get into the building where he works without a secret or top secret clearance. Number two, the what he does, what he does is he's a cyber transport engineer. Basically, in English outside of the military nomenclature, that means he's a network engineer.

So in this classified facility that's launching drones, conducting surveillance and overseas theaters, supporting soldiers Special Operations Unit, back in this base where kids are sitting, you know, I used to call them kids, were 20 something year old soldiers are sitting in dark rooms controlling these drones. There are a team of people who keep those systems running. And because of that, they need access wide access to those systems. If there's a glitch, they have to go in and straighten it out. That's what he did.

SIDNER: It's just I think, for a lot of people looking at from the outside in, it just seems like someone of his stature in this -- in the government shouldn't have access. But like you said, it's literally his job to know what the heck is going on.

MILLER: He is the guy who keeps it running, Mr. Fix it. Now, here's the differences, his access is supposed to keep the system running. He's not supposed to be going in becoming a consumer of that intelligence, printing out documents, distributing them. But he had his access for a reason.

SIDNER: All right, Evan, we've learned some new information coming out of that first hearing. What did you hear what struck you?

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, I think, you know, you can see from this document how hasty the government had to move to make this arrest and to bring these cases as John knows, I mean, you know, we've covered these cases over the years, and they can take months, sometimes years to put together an espionage case, act case.

And in this case, you know, the news breaks on just last week, you know, that this -- that these documents were out there, the FBI launches an investigation the following day, which is last week, last Friday. By Monday, they're interviewing one of the users of this Discord group that he was a member that he led, that Teixeira lead. And certainly two days later, they have all of the user information from Discord, provided all of this information.

And they're -- they pretty much know who he is, and that they have their man, within a couple of days of the launch of this investigation. That is --

MILLER: That's five days.

PEREZ: That's extraordinary fast, right, for an investigation of this kind. And it really what it shows you it goes to, I mean, perhaps a reflection of his age, you know. He did not really take very good care to hide himself, you know. This is not someone like Edward Snowden or Chelsea Manning, who was trying to blow the whistle on something that they thought was, you know, government wrongdoing. He was just showing off to a group of, you know, young men on a chat group, you know, who are fans of gaming and wars and stuff like that.

So that's why it appears that the FBI was able to pretty much very quickly figure out who he was, and try to put together the case. Now the question is, you know, for the FBI is, you know, they need a few days to try to figure out how bad is this. Was he working for a Foreign Intelligence Service, things like that, you know, that took a few more days for them to do. And that's why you saw that extraordinary scene that we've now seen so many times, you know, the FBI sitting on his house, news reporters, walking to the front door and news helicopters overhead, and you execute an arrest in a public way that the FBI usually doesn't do.

SIDNER: Yes, live on T.V. And you see him which remarkable to me is like before the arrest, you see him sitting on his porch sort of going through some papers in the sun. And the next thing you know, he's being arrested.

PEREZ: Perhaps enjoying the last bit of sunshine, he's going to have for a while.

SIDNER: Potentially. Absolutely. I do want to ask because you brought up Chelsea Manning, you brought up WikiLeaks, Chelsea Manning got 35 years. Wikileaks has a huge trove of information. This information that was out was out for an entire month they think on Discord, which is a long time for it to be sitting there and people to be sifting through it. It touched on some of the allies of the United States as well as the enemies. What could he face? Is this big enough similar to the Chelsea Manning case or is this something that is a little less damaging, although certainly a bit damaging?

MILLER: So I was talking to Evan just before we went on trying to figure out what is the scope of this, you know. We were originally talking about 100 documents. Now there's published reports out there saying, you know, there may be 500. So first you have to get a handle of it but let's zero in on the legal piece, which is, he's going to be charged with unauthorized access of these documents, unauthorized use of these documents, but the how many documents, every one of those can become a count in an indictment.

[11:10:21]

So now we have a probable cause arrest. Today, we have an affidavit filed in the form of the complaint. Soon there will be an indictment by a grand jury. And that's where we'll see all these counts where he could be facing consecutive sentences for each count. Now, what's the judge going to do at the end of the saga? And that's going to really hang on the questions that Evan brought up, which is, was he working for a foreign government? Was this really espionage? Or was this very irresponsible handling and a violation of his oath?

And that'll be somewhat determined it in the sentence along with the damage done. You don't have, you know, Robert Snowden, you don't have you know, the FBI agent who gave up names of sources in Russia, Robert Hansen. What you have a kit -- what we're looking at now, as it appears, you have a kid who was trying to be cool to his friends by showing his access to classified reporting.

PEREZ: And the plan is still to, I think, eventually bring him to the Northern District of Virginia, which is where the Pentagon is located. And there, he's going to be facing some very tough judges and a jury, probably of military members, people who take that same oath. And so he's in for a very tough, tough road ahead, you know. And of course, in a lot of these cases, often you have defendants who will plead, you know, as a way to try to minimize what they get.

So, there's a lot of things that are in the works here. And as John pointed out, I mean, every one of these documents could be a charge. And so he's, you know, it's going to be a little while before the prosecutors have a full handle on how bad this is.

SIDNER: Well, the arrest happened quickly. So now they're looking deeper into what this may turn out to be, which may not be what it appears right now. Both of you, thank you so much for joining us, John Miller and ever Perez. We appreciate you being here. John?

BERMAN: Yes, great discussion. New retail sales figures released just this morning, what do they show, down 1 percent from the previous month. CNN's Vanessa Yurkevich is with me now, that's the big number, what's underneath?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, this tells us that the Federal Reserve is going to like this number, because it's a sign that the economy is cooling. And that is what they want to see consumer spending retail sales make up such a big part of the overall economy and U.S. GDP. So let's dig into those numbers. We saw nearly every category fall. We saw car sales, down 1.6 percent. Year over year, just up a little bit.

We saw electronics on the decline down 2.1 percent, year over year, down 10.3 percent. That's significant year over year. And then groceries, this is where people really feel it day to day. Groceries down point 1 percent, that's good. But year over year, still spending a little more than they are used to or are comfortable with. Gas prices also on the decline month over month and year over year, partly because gas prices have fallen over the last year.

And this is the one place where we really saw a jump in spending by consumers, food services and drinking places. This is a sign that people really still want to go out. This is where they want to put their money, their spending up about 0.1 percent month over month, and up 13 percent year over year. People want to spend to go out. And this is coming on the heels of two inflation reports that we saw this week, consumer spending and producer prices.

Those were down. This all put together these retail sales and those two reports signify that maybe just maybe the Federal Reserve is sort of hovering over the territory of a soft landing. That's their goal. Putting all these reports together, signal they might be moving in that direction.

BERMAN: It might be some good news there. In the meantime, I'm going to go look for some drinking places, at some point.

YURKEVICH: Me too. It's Friday.

BERMAN: Good euphemism, thanks Vanessa. All right, Kate?

BOLDUAN: And then you toss to me. Joining us now Global Business columnist and associate editor, editor for The Financial Times, Rana Foroohar. It's great to see you, Rana. Thank you for coming in. Let's start where John, what John and Vanessa were talking about these retail sales numbers out this morning. How do they fold into the larger picture that complicated picture that we are seeing with the U.S. economy right now?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: So complicated is the right word. I mean, are we up? Are we down? You know, I think that we are basically in a pretty good place, given everything that is happening in the world. I mean, think about it. You know, we've come through a pandemic, we have major interest rates hikes happening that are very unusual in the context, historically, that tends to cause a lot more disruption even than we've seen.

I'm not saying that we haven't seen some disruption. Also, consumers were in a better position going into whatever turmoil we're seeing right now, because their balance sheets were in pretty good shape, you know. After the great financial crisis, people stopped taking on a lot of debt. And then of course, all the fiscal payments that you had during COVID helped to cushion things.

BOLDUAN: You mentioned interest rates, and I saw something from the Atlanta Fed President that I wanted to ask you about. He's now saying that the Fed may be able to pause the interest rate hikes after one more move and I think believe he said a move of a quarter percentage point. And the reason is and what that means in saying that is he's really expressing confidence that what they've done is working. Do you share in that confidence?

[11:15:21]

FOROOHAR: I do. I will say that cautiously but you can see labor inflation for example, which, you know, little labor inflation is OK. You don't want it run away. It's actually starting to moderate part of that actually, this is a whole another story. But immigration is up. Immigration has actually cooled off the labor market a little bit and created some flexibility. So that's really great. Yes, it's a good thing to remember.

I think the Fed feels like. look, we don't want to err on the side of being too dovish. You know, because we don't want to repeat the mistakes to the 70s. But, yes, I think they're watchful and yet pretty optimistic.

BOLDUAN: I want to ask you about France as well, when you talk about everything going on and how it all the ripple effects and what it actually impacts. We've been seeing and covering these protests over the over Macron's pension plan, pension reform plan for weeks now. Today, we're expected to learn kind of the fate of if this pension plan is going to go through and what that is really -- what that's going to look like then if it sets in then September. Macron says he's making these changes, because it's necessary, the entire pension system will collapse.

FOROOHAR: Yes.

BOLDUAN: Is he right?

FOROOHAR: You know, it's always funny as an American to hear the French with their hair on fire about, oh, my gosh, we want to work two years less, oh, my gosh, the whole pension system is going to collapse. But let's face it, European pensions, and particularly French pensions are pretty generous. You know, I don't think that having folks work two years longer in what is a pretty cushy system is going to be it make a huge difference.

I think what this fight is about in a broader way, and this is a fight that I think we're going to see in other countries and possibly even the U.S. is, look there is a public pie that is shrinking, right? I mean, state budgets, our country budgets are under pressure in a lot of different places. And baby boomers who are ready to retire want their piece of the pie. But young millennials are saying wait a minute, I'm going out into this crazy job market. Maybe I want some debt forgiveness, maybe I want my share of the pie.

So I think in some ways this French fight even though it's particular to France, actually reflects this bigger issue that we're all going to be seeing, boomers, the millennials as a political and economic conflict.

BOLDUAN: So interesting. It's great to see you Rana. Thank you.

FOROOHAR: It's so good to see you.

BOLDUAN: Sara?

SIDNER: All right, thank you, Kate. Several 2024 Republican nominees are going to be taking the stage at the annual NRA convention just days after that deadly mass shooting in Nashville and the most recent one in Louisville. We're live in Indianapolis.

Plus, an eyebrow raising new report involving Boeing's highly scrutinized 737 Max jets. The manufacturing issue that the company has now uncovered and why they're saying the jets are still safe.

Also, protecting NFL quarterbacks, the innovative change the league is rolling out to prevent concussions. That's all ahead.

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[11:22:42]

BERMAN: The toxic fire that has been burning all week in Indiana is now fully extinguished. The Richmond Indiana Mayor confirmed that they're now turning their attention to collecting air and water samples at that recycling plant. Former President Trump asked to delay his sexual assault and defamation trial. This is after his attorneys say a billionaire donated to Democratic causes, who had donated Democratic causes, had paid some of the accusers' legal fees. Trump's lawyers have asked to reopen discovery and delay the trial brought by former magazine columnist E. Jean Carroll. They wanted to delay the trial until May. Carroll opposes that delay. NBA legend Magic Johnson to be part owner of the Washington Commanders, a person familiar with the matter tells CNN a deal is close to sell the team to a group led by Wall Street billionaire Josh Harris, the NFL and the Commanders would not comment on the deal. Maybe we'll help the Commanders finally win. Sara?

BERMAN: Well, Boeing has just disclosed yet another complication with their 737 Max aircraft, this one being described by a company as a manufacturing issue. But Boeing says there's no immediate safety concern here. This is the same plane that was grounded worldwide for nearly two years after a pair of deadly crashes. CNN's Pete Muntean has more on this. Pete, this has to be very bad news for Boeing. What more do we know?

PETE MUNTEAN, CNN AVIATION CORRESPONDENT: Boeing stock already down but we have to be clear here, Sara, this is very different from the issue in the system that warned pilots that they were about to stall that was at the center of those crashes back in 2018 and 2019 of the 737 Max that killed almost 350 people abroad. This is a manufacturing defect, still a very big deal.

And Boeing is now disclosing a non-standard manufacturing process used in a fitting in the rear part of the fuselage of the Boeing 737 Max. Boeing is disclosing this just now. It says the biggest impact is on planes still on the production line, although the current fleet that is out there now could also be impacted though the planes are still safe to fly.

The FAA says there is no immediate safety issue for the 950 some odd Boeing 737 Max 8s that are flying out there right now. So we will have to wait and see exactly how Boeing deals with this. a big commentary here, a major problem for Boeing. When it comes to their quality control issues, they've had it not only now with the 737 Max, but also with the 787. And this has the potential to slow deliveries Boeing says, of this airplane, it's the bestselling airplane right now for Boeing.

[11:25:26]

And they're trying to get these off the factory floor. United Airlines has about 200 on order just took delivery of their hundreds 737 Max, Southwest Airlines also waiting for these of course, that's the airline that only flies the 737. So this is a really big back end business issue for Boeing. We'll see if it has a much larger issue on the flying public, although right now, no impact on passengers on their flights just yet, Sara?

SIDNER: Yes, it's interesting, because I remember where some of the airlines were saying, hey, you know, if you don't want to fly this airline after what happened with the 737 Max, you could change I mean, that's how big of a deal, it went for two years that these were pulled from the market. Now we are hearing of another thing. It may not be a safety issue, according to Boeing, but it is something that is concerning. Pete Muntea, thank you so much. Kate?

BOLDUAN: Let's stick with airlines right now because this morning, the FAA is cracking down on unruly passengers on flights. They're now asking the FBI to investigate more than a dozen cases. And this includes last month's incident, you'll probably remember onboard a United Airlines Flight. This is what a 33-year-old man, he tried to stab a flight attendant on the flight with a metal spoon. He then tried to open the emergency exit door.

That incident is one of 17 that the FAA sent to the Justice Department. The other incidents ranged from passenger threats to even alleged sexual assault. The FBI can bring actual criminal charges. The FAA itself cannot. It can only hand out fines, and they have been doing that. And though, last year alone, the FAA imposed more than $8.4 million in fines on passengers in connection with more than 2,400 incidents. John?

BERMAN: Kate, security in Paris incredibly tight this hour after chaos on the streets, a major court ruling is coming.

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