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Debt Stalemate at Home Looms Over Biden G7 Talks Abroad; Disney Scraps New Florida Biz Complex & 2,000 New Jobs Amid DeSantis Feud; Gov. Bans TikTok "To Protect Montanans Personal, Private Data"; Prosecutors: Teixeira was Warned About Classified Docs. Aired 3-3:30p ET

Aired May 18, 2023 - 15:00   ET

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

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[15:01:35]

BORIS SANCHEZ, CNN HOST: Keeping his economic commitments abroad while managing a debt crisis at home: President Biden says the best use of his time was to cut short his trip to Asia. But how will that message be received by allies in the Pacific?

JIM SCIUTTO, CNN HOST: A plane crashes in the Amazon. The question now is, did four children - how did for children on board that flight survive? Rescue crews in Colombia desperately searching for those kids who they believe are alive after spending 17 days alone in the jungle. We're going to have the latest on that search.

BRIANNA KEILAR, CNN HOST: And the governor of Montana thinks China poses enough of a surveillance threat to ban a wildly popular social media app from his state. But how will he force TikTok out of the hands and pockets of teenagers? And how much does the Beijing-backed app gather from Americans? We're going to ask someone from TikTok.

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

SANCHEZ: The ongoing debt standoff in D.C. is rippling all the way across the Pacific for President Biden's summit with allies in Japan. Today and Hiroshima, Biden was peppered with questions about the looming us default, something that wasn't really supposed to be on the agenda for these G7 meetings.

Biden's already cut his trip short so we can get back to hopefully finalizing a deal to raise the debt ceiling. Leaders in Washington have about two weeks to avert a potential economic disaster. Today, lawmakers on both sides finally expressed some optimism about a deal.

Let's take you now live to Japan with CNN's Marc Stewart.

And Mark, this debt ceiling fight has become a focus of the questions President Biden is receiving something he probably did not look forward to. MARC STEWART, CNN CORRESPONDENT: Well, Boris, those questions are for good reason, because I cannot stress enough. If the U.S. has a debt ceiling default, not only would it likely put the U.S. economy into recession, it could create global financial shockwaves. And that's very relevant for members of the G7 not only for their own individual economies, but also for the collective task at hand for the G7 policy decisions, positions relating to the war in Ukraine, the impact of Russia as well as the growth and dominance of China.

At the heart of these discussions, money is a big part of it. And that is why these G7 nations care so much about what's happening in the United States. As far as the President, he is getting questions about it in these early hours leading up to the G7. But he's not overly anxious to talk about it. Take a listen to this exchange.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: The bottom line, Mr. Prime Minister, is that when our countries stand together, we stand stronger. And I believe the whole world is safer when we do.

So, thank you again for having me here today. And we look forward to the next several days.

UNIDENTIFIED MALE: (Speaking in Foreign Language).

UNIDENTIFIED FEMALE: Thank you very much.

(CROSSTALK)

UNIDENTIFIED FEMALE: Mr. President, can you guarantee allies that the U.S. won't default?

(CROSSTALK)

UNIDENTIFIED FEMALE: Let's go. Let's go.

BIDEN: Thank you very much.

(END VIDEO CLIP)

[15:05:02]

STEWART: Reporters were asking the President questions about the status of the debt ceiling talks and he said something to the effect of: "Let's go." He will may be able to evade reporters tomorrow, but he will not be able to avoid world leaders of the G7 when they meet face-to-face in just a few hours here in Japan.

Boris, as we have been reporting, they will likely ask him questions and answers about where things currently stand and the extent of the risk that is involved.

SANCHEZ: There's so much on the line with these debt ceiling negotiations. Marc Stewart from Hiroshima, thank you so much.

Let's get a check on the status of those debt negotiations in Washington.

CNN's monitor Rogers live for us on Capitol Hill.

And Manu, there has been a noted shift in the tone from not only President Biden, but specifically from House Speaker McCarthy about the way that these negotiations are going.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: Yes, and that could be significant because for days, Kevin McCarthy has indicated that things were not going well and suggested that perhaps the U.S. could get into a default because the fact is that they were nowhere near an agreement.

That tone changed earlier today when the Speaker told me and some other reporters that he sees a path to getting a deal. He believes that there is a structure that could - a deal can be formed around and he indicated that a bill could be on the floor of the House as soon as next week.

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REP. KEVIN MCCARTHY (R-CA): Maybe be important to try to have the agreement, especially in principle, by sometime this week.

RAJU: In the negotiations, did you guys closed the gap (ph)?

McCarthy: Well, look, we're not there. We haven't agreed to anything yet, but I see the path that we could come to an agreement. And I think we have a structure now and everybody's working hard. And I mean, we're working two or three times a day, then going back getting more numbers.

I mean, I think I have the greatest respect for Shalanda and for Ricchetti. And I just believe where we were a week ago and where we are today is a much better place.

(END VIDEO CLIP)

RAJU: And he was referring to the two White House officials who are in the room, part of these negotiations, like Shalanda Young was the top Budget Director at the White House, Steve machete, who is White House counselor, part of these negotiations with McCarthy's top emissaries.

Now, McCarthy declined to provide details about exactly what they are agreeing to. It's still unclear exactly the length of debt limit increase, what spending cuts to attach to it. But we know that they are talking about everything from certain work requirements for certain social safety net programs, caps on discretionary spending.

The question will be how far or how strict those caps will ultimately be. Also ways to ease the permitting process for energy projects. Those are among the issues that are on the table here. But even if they were to get a deal, they got to sell to the broader House and Senate Democratic and Republican caucuses that will be no easy task to try to go through all the processes and passes before potential default as early as June 1st, Boris. SANCHEZ: And some Democrats have expressed the anxiety over those work requirements for certain government programs. It'll be interesting to see how that plays out.

Manu Raju from Capitol Hill, thanks so much, Jim?

SCIUTTO: This news just in to CNN, Florida governor, Ron DeSantis says war on Disney might have just gotten a bit more ugly, posed some costs. The company now says it is scrapping plans to build a new campus in the states citing "changing business conditions" that campus was expected add some 2,000 jobs.

CNN's Natasha Chen joins us now.

What more do we know about this move? Do we know if it's a direct response to DeSantis' war on the company?

NATASHA CHEN, CNN NATIONAL CORRESPONDENT: Well, Jim, I got a letter from Disney's chairman of Parks, Experiences and Products, Josh D'Amaro, that was sent internally, a Disney spokesperson shared it with us. And he doesn't go into detail about what exactly caused this, but I will read a portion of it here for you.

He says, "Given the considerable changes that have occurred since the announcement of this project, including new leadership and changing business conditions, we have decided not to move forward with construction of the campus. This was not an easy decision to make, but I believe it is the right one."

Now, as you mentioned, this was going to be 2,000 jobs moving from here in California to Central Florida and some people had already started to move to the new location. So he's telling folks in this letter that the remaining employees do not have to make the move now. And for those who have already gone to Florida, they will work with them individually, case by case, including the possibility of moving them back here to Burbank in the Los Angeles area.

Now, according to the Orlando Business Journal, this was going to be a 1.8 million square foot office complex in the Lake Nona Region that's just east of Walt Disney World. And as you mentioned, this is happening in the midst of a very contentious moment between Disney and the Florida leadership right now, namely Gov. Ron DeSantis, Jim.

[15:10:03]

SCIUTTO: And notable those jobs would have been moving from California to Florida. Any response yet from the governor's office? I know it's been quite a short time ago.

CHEN: This - right, this just came in. We have not yet heard from the governor's office. I do understand - I'm hearing as we speak that Orange County mayor might issue a statement about this as well. I'm waiting to see what local leaders have to say, Jim.

SCIUTTO: I'm sure they're following job growth in those communities.

Natasha Chen in L.A., thanks so much. Brianna.

KEILAR: The state of Montana will soon prohibit all residents from using the social media app TikTok on their personal devices. Republican governor, Greg Gianforte signed a bill that bans the app from operating within state lines to quote, protect Montanans' personal and private data from the Chinese Communist Party.

So the ban will go into effect in January and it says there is a potential fine of $10,000 per day for breaking the law. That also applies to app stores that host TikTok. Nationwide, this app is already restricted from all government issued mobile phones and some federal lawmakers have called for a national ban.

I'm joined now by Eric Ebenstein. He is TikTok, Senior Director of Public Policy.

Eric, thank you so much for being with us at a really crucial time here.

ERIC EBENSTEIN, SENIOR DIRECTOR OF PUBLIC POLICY, TIKTOK: Thanks for having me.

KEILAR: Is TikTok going to take legal action, or do you think that is something that's going to fall to First Amendment advocates like the ACLU?

EBENSTEIN: So we're still reviewing our options. This was just signed yesterday. But what I'll say is we have hundreds of thousands of users and creators and around 5,000 small businesses that use TikTok within Montana, and we're going to stand by them and be with them.

KEILAR: You've known this was coming for some time, though, and you don't have a lawsuit ready. So is it possible that you will not sue?

EBENSTEIN: We've seen a lot of chatter on the Internet on Twitter elsewhere, from both sides of the political spectrum where you see civil and digital Liberty organizations pointing out the First Amendment and other constitutional flaws with this piece of legislation and we're eager to see what happens going forward.

KEILAR: So let's speak about the concerns that are coming out of Montana that prompted this. The concern there with TikTok and also that we've heard more broadly in the U.S., including the President Biden has is that the communist Chinese government will be able to influence TikTok's parent company, which is Chinese, to use the app to spy on Americans.

And TikTok has had a credibility issue on this, right, because Chinese employees were actually surveilling American journalists and the first executives of your parent company lied about it. So do you see why the American government, why Americans would have some reticence and taking TikTok at its word on this being a safe app?

EBENSTEIN: Thanks for bringing that question up. I get that a lot. And there's a lot of misinformation and confusion around some of those issues. TikTok is not available in China and our corporate parent is not headquartered in China.

We're a privately held company and 60 percent of the investment in that company, our global institutional investors, a lot of them are based here in the United States. But I do want to take it one step further. We've been engaging for a good couple of months over a year now maybe with Oracle, who is our trusted technology partner on a program you may have heard about called Project Texas.

And what Project Texas is, is a regime by which us user data will be stored on - by an American company in the cloud. That's something that's already happening. And we think that's responsive to any additional questions that may be asked about us. Although to be clear, there has never been any evidence, never any proof about any kind of information sharing. We've steadfastly denied that.

KEILAR: Information sharing with the Chinese government, sure, but accessing American user data by Chinese employees that has happened and you have the FBI and the DOJ here in America looking into that.

I mean, this is a concern. So no, it's not a sharing with the Chinese government that is proven. But you have TikTok, saying that this - even the accessing of this by Chinese employees is something that doesn't happen, right? And that turned out to be a lie.

EBENSTEIN: So National Security concerns are rightly in the purview of the federal government. That's not within the basis of governance for Montana or any other state. We think there's probably a reason why no other state currently has a similar bill. This is an outlier.

And in fact, the Montana governor over the last couple of days of session sought to totally amend the bill that he - that his party was pushing, because it seemed as though there are serious questions about enforceability, owing to the First Amendment and the fact that the federal government takes primacy here.

KEILAR: But I'm talking about the credibility issue.

EBENSTEIN: It's another reason why we have Project Texas stood up. We think that we have a very, very strong regime that shows how to protect data security with American company and American people handling those jobs, we have a separate entity called USDS. And that's the United States Data Security. And those are the only employees in the United States will have access to us user data.

[15:15:04]

KEILAR: So Project Texas is this effort, of course to silo TikTok from any influence, which is the concern here. In a March congressional hearing, your CEO really leaned on this, can you give us a date for the completion of it? You said it stood up. It's not complete, though, right?

EBENSTEIN: We're making serious significant progress and we think by the END of the year, many of our milestones will be ...

KEILAR: But why say it stood up, because it's not? EBENSTEIN: ... because we're - it's - there are parts of it that are already happening today. If you are new TikTok user today in the United States, all of your user data is stored by Oracle on their cloud. Going forward, we're going to have additional milestones to announce, and we expect that most of them will be completed by the END of the year.

KEILAR: So there was an employee of the parent company or, pardon me, of TikTok, the - there was a Chinese-based employee who was trying to get information. He ended up being fired, information from the U.S.- based employees of TikTok about that Oracle server, the location and details of it. Can you assure Americans that that kind of funny business is not happening anymore?

EBENSTEIN: I'm not familiar with that precise case. But I can tell you Project Texas has stood up for exactly the purpose we're talking about, so that we have the most walled off secure data regime so that U.S. user data - U.S. users can feel secure.

We have 150 million American users who are on TikTok every month, and around 5 million businesses who are making their livelihood on TikTok and we care deeply about them and we want them to continue to grow with us. So we want to make sure that they feel secure in their user data with us.

KEILAR: How much of Project Texas has stood up at this point.

EBENSTEIN: We have about 1,400 USDS employees currently on board. We have seven offices in operation that we're working with Oracle on to go through this. All new U.S. accounts, US user data are being stored on the Oracle Cloud.

I can't give you a percentage, but we're making great progress and we'll continue to share updates over the course of the year.

KEILAR: And where are you on the approval process as you're looking toward that with the U.S. government?

EBENSTEIN: We continue to engage with the - with Biden administration and we look forward to a successful resolution of those issues.

KEILAR: All right. We'll be looking for that, because that is something that is in progress. Eric Ebenstein, you told me I would butcher your name.

EBENSTEIN: You were close.

KEILAR: I told you I would not.

EBENSTEIN: You did good.

KEILAR: Eric Ebenstein, thank you so much for being with us. We appreciate it.

EBENSTEIN: Thank you.

KEILAR: Boris?

SANCHEZ: Self-described FBI whistleblowers testifying during a contentious hearing on Capitol Hill. Republicans saying it's proof the FBI is "weaponized" against conservatives. Democrats are saying it's the witnesses who have an agenda. An update on that hearing.

And a simple traffic stop in Iowa turned into a death defying chase. A police officer hanging onto the roof of a car going at speeds of more than 50 miles an hour. Some footage that looks like it came from an action film, when we come back on CNN NEWS CENTRAL.

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[15:22:00]

SCIUTTO: They missed clear red flags. Today, new details about how the alleged Pentagon document leaker's superiors warned him repeatedly about his handling of classified documents. Federal prosecutors claimed that Jack Teixeira's misconduct was documented on three separate occasions months before he was arrested for posting a whole trove of classified information online.

He is now accused of acknowledging in an online community that the material was not public and that he should not have been sharing it.

CNN's Natasha Bertrand is at the Pentagon.

Natasha, I mean, just so many shocking details in this in retrospect, a whole host of red flags that were worn. But they knew about this, he'd been sharing this kind of stuff, warned him and yet he maintained his access?

NATASHA BERTRAND, CNN WHITE HOUSE REPORTER: Yes, Jim. And we should note, this is exactly what the Air Force Inspector General is looking into right now and two commanders in that unit have been temporarily suspended following some of these revelations. But look, just to remind our viewers here of what prosecutors laid out in these court filings yesterday.

Apparently, according to prosecutors, Jack Teixeira was warned several times. Three times beginning in September of 2022 to stop looking at classified information that really had nothing to do with his activities and his job duties on a day-to-day basis.

In September, he was actually caught by his superiors taking detailed notes of classified information and actually stuffing them in his pockets. He was then asked whether he was going to shred that document.

But that's significant, of course, because the notes that he took on this classified intelligence were eventually what he then went on to post online.

Now, in October, just one month later, he was, again, in a classified briefing, attended a classified briefing at the Air National Guard there in Massachusetts. And he was asking very detailed and probing questions about classified intelligence that, again, had really nothing to do with his day-to-day job as an IT person for the Air National Guard there.

And he was actually given a cease-and-desist order by his superiors to stop dealing in that kind of classified information. We'll fast forward to January, and yet again, he was caught by his superiors looking at a classified intelligence system that again did not comport with his day-to-day duties as an IT person for the Air National Guard there.

So a lot of red flags here that the U.S. is investigating now that was part of, of course, this investigation into why this access to classified information was not curtailed. And we should note that prosecutors say he was well aware of the fact that he was doing something he was not supposed to do when it comes to classified intelligence, posting it on a social media platform where he boasted to the other users on that platform that the information was not public, a friend kind of responding there on the platform that he should continue to leak that sensitive military information for their amusement, Jim.

SCIUTTO: Well, amazing that basically his commanders told him to do things but apparently didn't and make sure he did those things like, for instance, shred the document with classified notes in it.

Natasha Bertrand at the Pentagon. Thanks so much, Brianna.

KEILAR: Well, the FBI has revoked the security clearances of three agents over the January 6th attack on the Capitol.

[15:25:02]

The FBI saying that one agent was actually there that day. The other two voiced alternative theories on the attack. Today two of those agents testified on Capitol Hill in a hearing that has now wrapped up. They were star witnesses before Republican-led House Subcommittee.

Republicans say there, whistleblowers exposing the FBI and DOJ's bias against conservatives. The panel's focus: "The weaponization of the federal government."

CNN's Sara Murray kept a close eye on this hearing for us.

So Sara, tell us what stood out to you.

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Well, look, I mean, Republicans are trying to use these FBI employees to make the case that the FBI which is known for being a pretty conservative law enforcement body is full of liberals who are out there targeting conservatives.

And so they put forward some witnesses who frankly have some credibility issues. I mean, two of the men they put forward today have had their security clearances hold. The other man they put forward has had his security clearance suspended. In one of the cases, one of the men who was featured, urged his colleagues at the FBI to exercise extreme caution in opening any investigations into the January 6 rioters, another one of the folks that they featured today objected to a SWAT team arrest of one of the January 6 rioters.

But take a listen to these so-called whistleblowers today, giving their own version of events.

(BEGIN VIDEO CLIP)

GARRET O'BOYLE, FORMER FBI SPECIAL AGENT: The smear campaign disgusting as it is, is unsurprising. Despite our oath to uphold the Constitution, too many in the FBI aren't willing to sacrifice for the hard right over the easy wrong.

STEVE FRIEND, FORMER FBI AGENT: Working as an FBI special agent was my dream job. My whistleblowing was apolitical in the spirit of upholding my oath. Nonetheless, the FBI cynically elected to close ranks and attack the messenger.

MARCUS ALLEN, SUSPENDED FBI AGENT: I was not in Washington, D.C. on January 6th, played no part in the events of January 6th and I condemn all criminal activity that occurred. Instead, it appears that I was retaliated against because I forwarded information to my superiors and others that question the official narrative of the events of January 6th.

(END VIDEO CLIP)

MURRAY: So you heard it there, Brianna. These witnesses feel like they're being retaliated against and having their security clearances pulled or suspended. The FBI in the letter we obtained, laid out pretty detailed rationale for why in a number of these cases, agents had their security clearances pulled.

KEILAR: Did it seem pretty normal, the reason they were pulled?

MURRAY: A lot of these had to do with either appearing at the Capitol riot or expressing sympathy toward Capitol rioters and in a number of these cases, they laid out a variety of reasons. It wasn't just one instance, it was an instance where someone had been warned to stop doing this behavior. They continue to do it anyway.

Or, in the case of Steve Friend who is there testifying, it was not just not wanting to participate in this SWAT arrest, but also making unauthorized disclosures in media interviews, also bringing a flash drive into the FBI building and downloading documents from an FBI computer, so.

KEILAR: Participating in illegal activity or in a way sanctioning it or empathizing with it. I mean, these are pretty serious thing.

Sara Murray, thank you so much. Boris?

SANCHEZ: Happening now, the race to rescue four kids, the Colombian government believes survived not only a plane crash, but 17 days alone in the Amazon jungle. We're going to take you live to Colombia in a moment.

And it's a bird. It's a plane. It's a couch? Details behind a soaring sofa when we come back.

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