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Hunter Biden in Court Over Paternity Dispute; Debt Ceiling Showdown; Judge Denies Trump Mistrial Request; J.P. Morgan Takes Over First Republic; Texas Manhunt. Aired 1-1:30p ET

Aired May 01, 2023 - 13:00   ET

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

[13:00:35]

BORIS SANCHEZ, CNN HOST: A massive manhunt, 250 law enforcement officers, a dozen agencies, and zero leads, zero leads. There's a desperate search under way right now for the man accused of killing five of his neighbors in Texas, including a 9-year-old child.

BRIANNA KEILAR, CNN HOST: Bank takeover. J.P. Morgan is snapping up First Republic after the second largest bank failure in U.S. history. How safe is the banking system? And could any of this push us closer to a recession?

JIM SCIUTTO, CNN HOST: Donald Trump asks for a mistrial. The judge says no, the former president accusing the judge and making -- quote -- "unfair and prejudicial rulings" in the ongoing civil battery of defamation case brought by E. Jean Carroll. She is back on the stand as we speak today.

We are following these major developing stories and many more all coming in right here to CNN NEWS CENTRAL.

SANCHEZ: We begin this afternoon with a manhunt for a mass murderer.

Despite the work of hundreds of law enforcement officers, after 60 hours, this man is still on the run, and officials say they have zero leads. Francisco Oropesa is accused of a bloody rampage inside his neighbor's home.

It all happened Friday night near Houston. The San Jacinto County Sheriff's Office says that Oropesa gunned down five members of the same family, including this mother and her 9-year-old son.

The husband and father spoke about surviving the attack. He says that he and some other neighbors had asked Oropesa to stop shooting his rifle into their yard because a baby was trying to sleep, and that set the shooter off. Listen.

(BEGIN VIDEO CLIP)

WILSON GARCIA, FATHER AND HUSBAND OF VICTIMS (through translator): That was my 9-year-old son and my wife too and two people who died protecting my 2.5-year-old daughter.

My 1.5-month old son was protected with a lot of clothes, so the killer wouldn't kill him too.

(END VIDEO CLIP)

SANCHEZ: The child was hidden under clothing.

CNN's Ed Lavandera is live in Cleveland, Texas, for us, where all of this took place.

And, Ed, we're getting new information on the suspect. Bring us up to speed.

ED LAVANDERA, CNN SENIOR NATIONAL CORRESPONDENT: Well, we have learned from a source with U.S. Immigration and Customs Enforcement that this suspect, 30-year-old -- 38-year-old Francisco Oropesa, has a long history of deportations here in the U.S.

According to this ICE official, Oropesa has been deported at least four times, twice in 2009, once in 2012, another time in 2016. Of course, this raises a lot of questions over exactly how someone like this, given that history and the inability to go in and buy a weapon from a licensed dealer, how they could have a -- how he could collect a collection of firearms here in this neighborhood in Cleveland, Texas.

This is where the attack all unfolded on Friday night and where Francisco Oropesa was able to escape from. We're now at about 60 hours since he escaped from this crime scene, and has been on the run seen -- on the run since.

We have seen helicopters flying overhead throughout the day today, and this as family members are still struggling to come to terms with the ordeal that unfolded here.

(BEGIN VIDEO CLIP)

FRANCIA GUZMAN, MOTHER OF SHOOTING VICTIM (through translator): She never left me alone. It's very difficult to know that I won't hear her voice anymore. She left full of excitement. And now I'm just hoping she will come back, even if it is in a coffin, so that I can say goodbye.

(END VIDEO CLIP)

LAVANDERA: And that was a one of the mothers of one of the victims.

We spoke with a gentleman by the name of Wilson Garcia, who lived here in this house. He was one of the people who was able to escape. His wife and 9-year-old son were killed in this attack. He said they'd actually never had any problems with Francisco Oropesa here, that their wives were friendly, and that, even some time ago, he had helped him take down a tree from his property.

So they were very stunned by just how quickly and how angry that entire situation Friday night became. Wilson Garcia also told us that they called 911 five times asking for help, but that law enforcement wasn't able to make it here in time before the deadly rampage started. [13:05:15]

SANCHEZ: Well, reading the details of the attack, Ed, it's devastating. They were killed execution-style. That is just terrifying information.

Ed Lavandera from Cleveland, Texas.

Thank you so much, Ed.

We do want to play some sound for you now, what the lead agent from the FBI's Houston office said about the lack of progress in this investigation. Listen to this.

(BEGIN VIDEO CLIP)

JAMES SMITH, FBI HOUSTON SPECIAL AGENT: But, right now, we just don't know, because, if we did, we would have him in custody right now. We do not know where he is. We don't have any tips right now to where he may be.

And that's why we have come up with this reward, so that, hopefully, somebody out there can call us. I pretty much can guarantee he's contacted some of his friends. Right now, we're just -- we're running into dead ends. Right now, we have zero leads.

(END VIDEO CLIP)

SANCHEZ: Let's turn now to CNN security correspondent Josh Campbell. He actually used to be an FBI supervisory special agent.

And, Josh, we want to ask you about that lack of leads, but, first, the detail that Oropesa had been deported four times, and yet he was back in the United States. How does that happen?

JOSH CAMPBELL, CNN SECURITY CORRESPONDENT: You know, it is certainly astonishing.

I can tell you, Boris, that one group of people that are likely not astonished are agents with border protection, Immigration and Customs Enforcement. We continue to hear from the unions representing those officers, for example, saying that they need more resources, as they try to enforce the U.S. laws that are on the books right now.

And this just shows you, as Ed was reporting, four separate times where this individual comes into the U.S. and is then removed. You have officers at the border that are trying to stop people from illegally crossing, but there are also agents and officers throughout the country who are trying to locate those who may be in the country illegally.

And we know, in this case, at least according to a source speaking to CNN, that, at least at one instance, the suspect was convicted of a crime there in Texas, convicted of DWI, and ended up serving jail time, and so this certainly one of the -- only the most recent incident that's going to cause a lot of spotlight to be on these immigration laws, because this person now, four times in, he comes in the United States, and now stands accused of killing five people.

SANCHEZ: Yes, bringing the issue of immigration into focus, especially as Title 42 is set to expire in about 10 days. We will have more on that later.

But, Josh, now to the investigation. At last check, investigators found a cell phone that was apparently tied to the suspect that was discarded. They found some clothes there. Tracking dogs found a scent, but then the trail went cold. What do investigators do when that happens?

CAMPBELL: Yes, they're running out of leads.

As you mentioned, the cell phone was a critical piece of evidence at the outset whenever this happened on Friday, but then, on Saturday, authorities actually found that phone discarded. They were able to triangulate the location of where that is.

We have seen that in many different cases involving people that are on the run. But when that phone is discarded, they can no longer, obviously, track that person. We are told that they also recovered a collection of clothing near that phone. That allowed the canines, the tracking canines, to get on that scent.

And then, eventually, they ended up losing the scent as well. So we're told by authorities that they are essentially going door to door in and around this area northeast of Houston asking people, have you seen this person, asking people, do you have Ring doorbell camera footage, for example, where we can go back and look through that to see if maybe we see the suspect or his vehicle passing by?

They're trying to create this timeline. I'm also told, Boris, from a law enforcement source that I just spoke with a short time ago that this is very much taking on an international effort as well, because U.S. and Mexican authorities are now working together at the border on the lookout, hoping to spot this person if he does indeed try to flee back to Mexico.

SANCHEZ: Yes, seeing how easy it was to get into the country at least five times, and maybe just as easy to get out for him.

Josh Campbell reporting from Los Angeles, thank you so much for that perspective -- Brianna.

KEILAR: Boris, a dramatic move aimed at halting two months of chaos in the banking industry, overnight, federal regulators stepping in to seize control of First Republic Bank and its $233 billion worth of assets, then immediately selling it to the nation's largest bank, J.P. Morgan Chase.

Right now, Wall Street is reacting positively on the takeover news, up about 112 points here. First Republic is the second largest bank failure in U.S. history, it is worth noting, the largest since the 2008 financial crisis, and it is the third U.S. bank to fail since March. Regulators are hoping that this move will boost confidence in the U.S.

banking system, especially when it comes to these regional banks across the country.

We have CNN business and politics correspondent Vanessa Yurkevich joining us now.

So, Vanessa, explain to us how things went down overnight and why this happened now.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Hi, Brianna.

[13:10:00]

Well, the First Republic branch behind me is operating as normal, just with new owners. You have J.P. Morgan inking the deal to buy First Republic Bank late last night, the FDIC announcing the news this morning.

But we are getting new details about how this unfolded, Jamie Dimon, the CEO of J.P. Morgan, holding a media call earlier today, saying that, initially, they weren't interested in any kind of deal like this, but the financials ended up making sense.

Yesterday, the FDIC held an auction. Bids had to be in by 4:00 p.m. It was very competitive, but, ultimately, J.P. Morgan walking away with the deal. This took 800 employees from J.P. Morgan, additional employees from the FDIC and from the Treasury to get this deal done.

But what it means for customers of First Republic Bank is important. The big question is, are people's deposits secure? And the answer is, yes, deposits are safe, and people can take out money, put in money into First Republic Bank, no problem.

Also, all 84 branches across the country are now operating as J.P. Morgan. Additionally, the FDIC will insure all deposits. And why now? Well, last week, First Republic had their first-quarter earnings call. And we heard from them that deposits fell by 41 percent. That's $100 billion. Markets responded, shares of First Republic dropping to about $3 a share, down from $122 a share in March.

But Jamie Dimon also talking about what this means for the future of the banking sector. Is this the last bank failure, or is there more to come? Listen to what he said earlier this morning.

(BEGIN AUDIO CLIP)

JAMIE DIMON, CHAIRMAN, J.P. MORGAN CHASE: So, this is getting near the end of it. And, hopefully, this helps stabilize everything.

The American banking system is extraordinarily sound. And, obviously, if, going forward, you have recessions and rates going up and stuff like that, you will see other cracks in the system. But that's to be expected. The system is very, very sound.

(END AUDIO CLIP)

YURKEVICH: Jamie Dimon went on to say that he does not believe this deal will impact a recession in any way, nor, Brianna, did he do this deal to stave off a recession -- Brianna.

KEILAR: All right, Vanessa, thank you for that report.

Let's discuss this more in the implications of this massive bank takeover with Aaron Klein. He's a former deputy assistant secretary at the U.S. Treasury Department. He's also a senior fellow at the Brookings Institution.

And, look, our thanks to Vanessa, as she's reporting there that deposits are secure just for the everyday people out there who may be looking at this and worrying. But when you hear Jamie Dimon there saying, extraordinarily sound, very, very sound,I do think that a lot of people still worry that there could be some trickle-down effect to them.

Should they be worried?

AARON KLEIN, FORMER U.S. DEPUTY ASSISTANT TREASURY SECRETARY: So, look, first of all, people shouldn't be worried; 98 percent of Americans have less than $250,000 in the bank.

And all that money is 100 percent insurance. So very few people have money that could potentially be at risk. Number two, I agree with Jamie that most of the banks in America, the vast, vast majority, are in good shape.

But, look, we have over 9,000 banks and credit unions in America. On any given year, a couple of them will fail, sometimes bigger ones. First Republic and SVB, they're not your normal bank. These banks cater to big-tech companies and really rich people. These were not Main Street banks, by any stretch of the imagination.

So, most banks rock-solid, the system overall in pretty decent shape. Could a few more banks or credit unions fail this year? Yes.

KEILAR: So, you helped write Dodd-Frank, just to be very clear. You were up on the Hill on the Senate side working on that. Then you were at Treasury.

So, obviously, you know all about this. You know all about the financial crisis of 2008. This current situation that we're looking at that -- I mean, we all have a hangover from 2008. You have to be honest. But this current situation is very different in size and in substance.

But both of these crises were sort of based on this assumption that the economy would keep chugging along, as is, right? And I guess my question to you then is, did Dodd-Frank solve for a past crisis, but failed to imagine how other economic factors like rocketing interest rates could drag down an economic institution?

KLEIN: So, it's important to understand what Dodd-Frank is and what it isn't.

Dodd-Frank and any act of Congress sets rules and regulation. But that rule and regulation has to be implemented by bank regulators through supervision and judgment. You can't legislate judgment or competence.

What we saw in Silicon Valley Bank, what we saw in First Republic, what we saw at Signature were incompetent boards pursuing business models that failed, simultaneously, regulators failing to enforce the rules that were part of this system in a timely manner.

So I think Dodd-Frank can be judged as a concept. And, look, should there be different things done? Yes, I think that we went too far rolling it back and, most importantly, there are a set of rules and structures put in Dodd-Frank to allow bigger banks to fail, but that was kind of stopped at $250 billion.

[13:15:09]

KEILAR: Rollbacks weren't the only thing that contributed to this.

KLEIN: Absolutely. No, no.

In fact, there was borrowing from these weird things called Federal Home Loan Banks, which skyrocketed. First Republican and Silicon Valley Bank where the two largest borrowers from the San Francisco Home Loan Bank. Both of them, right, failed; $28 billion at First Republic was pledged to this Home Loan Bank at the time of its failure.

That's one of the reasons why taxpayers are losing $13 billion here. So, there's more regulation that needs to be done. But, look, at the end of the day, any regulatory system is only as good as his supervision and judgment the regulators execute. And, in this case, they were lacking.

KEILAR: It would be good if you could legislate common sense, though I will say that, Aaron.

Aaron Klein, thank you so much for your time today.

KLEIN: Thank you.

KEILAR: Jim.

SCIUTTO: All right.

Also perhaps fueling some economic anxiety, Congress has just weeks to reach an agreement on the debt limit, in order to, if it gets there, avert a potential global financial crisis. Last hour, President Biden made it clear he does not like a new House GOP bill that would raise the debt ceiling, but require $4.8 trillion in spending cuts over the next decade, including adding work requirements for things like food stamps and Medicaid.

CNN's Phil Mattingly, he's at the White House. Phil, we know, the president does not want to negotiate on this. But

McCarthy got something through the Republican-controlled House. Has the administration's position, no negotiation position, has that changed?

And, if so, what do they negotiate on is? What is he willing to offer?

PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, the short answer is, no, the position hasn't changed.

In fact, to some degree, based on what you heard from the president just a short while ago, it's hardened, the president once again leveling attacks at Republicans, making clear that the effort to get this bill across the finish line in the House mostly just to launch negotiations right now doesn't look like it's going to work.

Take a listen.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: So, the threat by the speaker of the House to default on the national debt is off the table.

For over 200 years, America has never ever, ever, ever failed to pay its debt. To put it in the capital and colloquial terms, America is not a deadbeat nation. We have never, ever failed to meet the debt, and, as a result, one of the most respected nations of the world.

We pay our bills. And we should do so without reckless hostage-taking from some of the MAGA Republicans in Congress.

(END VIDEO CLIP)

MATTINGLY: And, Jim, instead of using this as an opening to actually sit down and have discussions, administration officials, the president and the like, repeating they want a clean debt ceiling increase, and using some outside analysis to try and bolster their point.

Moody's Analytics putting out a report saying, with that $4.8 trillion in cuts, while it would be significant in terms of debt reduction, what it would also do is slow down the economy, to the tune of maybe 780,000 jobs over the course of the next year, when compared to a debt -- clean debt ceiling increase.

That, administration officials, are absolutely using to their messaging advantage right now, but all of this underscoring that, as the calendar continues to tick closer to whatever that X-date, that default timeline would be, there's no clear pathway forward still -- Jim.

SCIUTTO: So, just quickly, if McCarthy and Biden aren't speaking, is anybody speaking about this?

I mean, people have talked about McConnell being the way forward here. Are we there? MATTINGLY: Senate Republicans are making very clear they're staying behind the speaker right now. They believe that's a conversation for the speaker and the president. Those conversations are not happening yet. Something needs to unlock.

But, at the moment...

SCIUTTO: Yes.

MATTINGLY: ... there's no secret back channel, Jim.

SCIUTTO: There you have it, Phil Mattingly at the White House.

So, Boris, no progress.

SANCHEZ: No progress, and that X-date looming closer and closer...

SCIUTTO: Yes.

SANCHEZ: ... with no apparent solution.

Still ahead: Trump accuser E. Jean Carroll back on the stand today in the civil battery and defamation case against the former president, the judge just denying Trump's call for a mistrial. We will take you live to court.

Plus, a tornado ripping through Virginia Beach, up to 100 homes damaged, and the schools are now closed. We have the latest from there.

And, as Ukraine prepares its historic counteroffensive, Russia's making a major leadership change. We will take you live to the ground in Kyiv -- just minutes away.

(COMMERCIAL BREAK)

[13:23:31]

SCIUTTO: Developing right now, a judge has denied Donald Trump's motion for a mistrial in his civil battery and defamation case.

In a letter filed overnight, the former president's attorney argued the judge made -- quote -- ":pervasive, unfair and prejudicial rulings against Trump."

At the same time, Trump's lawyer continued to cross-examine E. Jean Carroll this morning. She claims Trump sexually assaulted her in a department store dressing room in the 1990s. Trump has denied the allegations.

CNN's Kara Scannell, she's outside the courthouse in New York. She has been covering this.

Kara, Carroll's back on the stand today. I wonder what we're hearing from her and how the cross-examination is going.

KARA SCANNELL, CNN CORRESPONDENT: Yes, Jim.

So, her second day under cross-examination, you will remember, on Thursday, a lot of the focus there was inside the dressing room at the Bergdorf Goodman department store where Carroll has alleged that she was raped by former President Trump. Today, a lot of the focus has been taking a look at the reaction and what came after that.

One of the issues that Trump's attorneys are trying to lay out here is that they say that this alleged rape never happened. So, they're asking her if she continued to shop at Bergdorf Goodman's. And they even put up a spreadsheet of some receipts of hers and the money that she spent there, showing that she went there more than 20 times and spent north of $13,000 in the decades since the alleged rape.

They also were pointing to a joke that she had made on her Facebook page in 2012 where she wrote: "Would you have sex with Donald Trump for $17,000?" And she acknowledged that yes she was joking about that.

[13:25:05]

Part of a point they're trying to make here is, if you were so scarred by this alleged rape, why are you making light of him and in light of fun?

And another point, they pointed to that she had said on her Facebook page that she was a massive fan of "The Apprentice," the television show that Donald Trump started, where it was a competition between aspiring businesspeople for a spot working with him. And she said that she was interested in the competition, not so much about him, but all part of their efforts to try to create some doubt in the minds of the jury that this alleged rape ever happened.

Another area that they were looking into is George Conway, the lawyer who is a Republican and a critic of Donald Trump, and he recommended lawyers to her, she testified, and she brought this lawsuit -- or, I should say, she retained these lawyers just two days after meeting with Conway -- Jim.

SCIUTTO: Well, classic defense strategy is go after the credibility of the accuser here. It's got to be tough on the stand.

Kara Scannell, thanks so much for covering -- Boris.

SANCHEZ: Now to another case we're watching, this one having to do with President Biden's son Hunter Biden.

He appeared before a judge in an Arkansas courtroom today for a hearing related to a years-old paternity dispute. The issue began in 2019, but it came to a head last week, when the mother of one of Hunter Biden's children asked the judge to hold him in contempt and send him to jail.

She says that he is ignoring court orders requiring him to turn over documents about his finances.

CNN's Marshall Cohen is live in Batesville, Arkansas, for us. Marshall, this case is more than just about child support.

MARSHALL COHEN, CNN REPORTER: Boris, this started as a child custody, paternity case, but it has morphed into so much more.

As you mentioned, there is a woman who lives here in Batesville, Arkansas, name Lunden Roberts who had a child with Hunter Biden several years ago. He is the father. A DNA test confirmed it. But the legal battle now is about child support payments.

And Hunter Biden's attorneys revealed in this courthouse earlier today for the very first time that he is paying $20,000 a month to this woman, that -- and that he has paid $750,000 overall. They are trying to push back on the narrative that he is a -- quote -- "deadbeat dad."

However, Boris, he is trying to reduce his payments. And as part of that process, he's going to sit for a deposition next month in June. A judge ordered that to happen today. And there will be a trial, if there's no settlement, in July.

So, this case is moving forward here. And there's a lot of people watching, not just the family impacted here in Arkansas, but also a lot of folks back in Washington, very much lining up with the request for Hunter Biden's financials that the House Republicans are trying to get as well. It's also a big part of this case -- Boris.

SANCHEZ: There are also political undertones in terms of representation. The child's mother's attorney is being represented by attorneys that used to work for Donald Trump that tried to help him overturn 2020 election results.

Marshall Cohen in Arkansas, we got to leave it there. Thank you so much for your reporting -- Brianna.

KEILAR: Next, an apocalyptic scene in Virginia right now, after a tornado just ripped through the state, destroying as many as 100 homes. We're going to have a closer look at the devastation there.

And parts of the Mississippi River are expected to crest today and drench already flooded areas.

We're live on the ground.

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