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New York Times Reports, Industry Leaders Penned Letter Expressing Concern About OceanGate's Experimental Approach; Banging Sounds Heard as Crews Search for Missing Sub; Powell Testifies Before House Financial Services Committee. Aired 10-10:30a ET

Aired June 21, 2023 - 10:00   ET

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

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JOHN BERMAN, CNN ANCHOR: Oxygen is running out, maybe less than 12 hours left, racing to locate the missing sub near the Titanic, hoping that the noises heard overnight provide some direction.

KATE BOLDUAN, CNN ANCHOR: And what is it like to be inside OceanGate's Titan submersible when it loses communication with the surface? You're going to hear from someone who experienced that very thing.

SARA SIDNER, CNN ANCHOR: A potential catastrophic outcome was waiting to happen, according to a former employee and an industry watchdog. Were safety concerns ignored by the submersible company? Those stories and more right here on CNN News Central.

BERMAN: We are getting new information in just the last few minutes on the search for the missing sub near the Titanic. The U.S. Coast Guard is redirecting its search this morning after a Canadian military plane picked up underwater noises.

Now, there are five people on board running out of oxygen, running out of time. A new round of ships left Newfoundland this morning to join the search efforts.

Now, noises are not uncommon in the open ocean, but rescuers say they heard banging sounds in 30-minute intervals, regular spaces. An ocean expert and friend of one of the missing sub passengers told us that fact could be significant.

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TOM DETTWEILER, OCEAN EXPLORER AND FRIEND OF PAUL-HENRI NARGEOLET: The banging sounds are interesting because knowing P.H. Nargeoloet and his experience with submersibles and his background in submarines, this is exactly how he would try to indicate that they were still alive and tries to communicate with surface.

He would do some banging. He would do it on a regular schedule so that it was distinguishable from the background noises that are in the ocean all the time.

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BERMAN: CNN's Miguel Marquez is in St. John's in Newfoundland, which is the closest land mass to where this search is going on. Miguel, what are you seeing this morning?

MIGUEL MARQUEZ, CNN SENIOR NATIONAL CORRESPONDENT: Well, we saw a lot of activity here over night in early this morning, a Coast Guard ship, a third Canadian Coast Guard ship now headed out that way. It takes 12, 18 hours to get from here to the site where they're searching. The Horizon Arctic left earlier this morning.

[10:05:02]

This is after three U.S. military planes, C-17s, very big cargo planes for the U.S. military, flew into St. John's Airport and that gear was put onto the Horizon Arctic and that is on its way out there right now.

With regard to the banging, they heard it over a four-hour period, every half hour or so. They put more sonar buoys into the ocean. They heard other noises later on and it wasn't banging, but they're not clear what it was. They moved resources. They moved ships that were on the surface to the area where they thought the banging was coming from. They put remote-operated vehicles down to the area hoping to find the submersible, but they did not.

So, now, they're putting more resources on it. They have several Coast Guard ships, Canadian Coast Guard ships, that do side-sonar, which means they can basically map the bottom of the ocean looking for a visual signature of the submersible to see if they can find it in that area where that banging was coming from. But it is all hands on deck. If they are alive, they have very little time left and people here and everywhere just hoping that this terrifying ordeal comes to a happy ending. John?

BERMAN: Yes, they still have hope, that's for sure. But we are waiting for more updates at this point from the Coast Guard and other officials. Miguel Marquez, keep us posted. Thank you very much. Kate?

BOLDUAN: Hope, holding out hope with the understanding of just how risky, how dangerous it is down there, as everyone knows.

And, really, there's only a handful of people who have ever seen the Titanic's wreckage in person but it is part of a growing trend known as extreme tourism, where people pay out huge sums of money to push the boundaries of conventional travel. It is understandably and inherently dangerous. And CNN has now learned that two years ago -- CNN has learned that years ago, two employees raised safety concerns about the now missing OceanGate submarine.

CNN's Tom Foreman has more on this. He's joining us now. Tom, what are you learning?

TOM FOREMAN, CNN CORRESPONDENT: Hi, Kate. As the hours tick down, the questions are coming up more and more about how this reached this point, specifically how this submersible was developed. You mentioned the employees there. An industry group also jumped in, and there was a letter that was found by The New York Times from them in which they said about what was happening at OceanGate. Our apprehension is that the current experimental approach adopted by OceanGate in developing this craft could result in negative outcomes from minor to catastrophic that would have serious consequences for everyone in the industry.

And it went on to say, your marketing material advertises that the Titan design will meet or exceed the DNVGL safety standards. These were standards developed a long time ago for this type of vessel. Yet it does not appear that OceanGate has the intention of following these class rules. Your representation is, at minimum, misleading to the public and breaches an industry-wide professional code of conduct we all endeavor to uphold.

Simply put, Kate, years ago, there were people in the company and outside the company saying your approach to developing this craft is too experimental, too outside the norms, and is not being submitted to the standards that worldwide maritime organizations expect.

Bottom line is, a vehicle like this, engineers will say, should be tested to maybe two, three, four, five times the amount of pressure you expect to encounter. And the question is, was this one tested to that level at any point?

BOLDUAN: Yes. And, you know, the company is going to be facing these questions continued now going forward. It's good to see you, Tom. Thank you very much. Sara?

SIDNER: Joining us now is Titanic expert scientist, undersea explorer and a physician, Joe MacInnis. Thank you so much. You were part of the first expedition to locate the wreckage of the Titanic, but you had an experience down there that may, in some ways, rival this. Did you actually get stuck without communications for a while? And what was that like?

DR. JOE MACINNIS, MEMBER OF FIRST EXPEDITION TO LOCATE TITANIC WRECKAGE: Well, on my second dive to the Titanic, I made one in 1987 with the French government research sub and then with the Russian research sub from Russian Academy of Sciences in 1991.

And on that dive, we made 17 dives to the Titanic. I co-led the expedition. We made 17 dives. We did the science. And on the last dive, I climbed into the sub with the chief pilot and we went down to the Titanic and landed on the floor of the pilot house and spent some time reflecting about what we'd done and what we'd seen and having a moment of respect for the ocean and for the Titanic accident.

And as we were about to leave, the pilot put on the thrusters, up we went and stopped about meter above the floor and then he put it back down.

[10:10:10] So, he found out very quickly that we were stuck. And so, wisely, because he was an excellent pilot, called in the second sub. And they came in. The two pilots talked about what the situation was. And we had put our -- the pilot had slid his left side skid underneath the sub. When he landed, the skid went under some telephone wire. And so with the help of the second sub and conversations between the two, we moved up and down and backwards and were able to kind of tiptoe out of that pretty tense situation. But, again, it was great coordination, great pilots, great submarines.

SIDNER: Just thinking about being in that space, for most of us humans, feels anxiety-provoking, to say the least. Can you give me a sense of what it is like when you're in that scenario? You are 12,000 feet under the pressure of the water. What does it feel like? What is the sense of being there? And what might these explorers and these folks that went down there, businessmen as well, be feeling right now?

MACINNIS: Well, I can't say. I can only imagine, like the rest of us, what they're feeling. It is a very confined space, the subs that we use, and so you get used to that. But for these folks who are doing this for the first time, it must be red line moments for them.

But the news is that P.H. is with them. P.H. Nargeolet is one of the members of the team and you couldn't have a better person with you in a situation like this than P.H., who's made 35 dives to the Titanic, who is calm under pressure. The best kind of leadership will be coming from P.H. He will be calm, quiet, and doing all the right things to conserve energy, to conserve oxygen and to conserve psychological, emotional energy as well.

SIDNER: Because that expends more oxygen as well if you start to hyperventilate or you start to freak out. Dr. MacInnis, can you talk to me about how significant the sound that sonar has picked up? There has been every half an hour for about four hours. A banging sound is how it has been described. Is that something that you're trained to do to try to make sounds so that someone might find you or does that tell you that this is definitely human activity or something else?

MACINNIS: Well, as your previous guest mentioned, it's an indication, possibly, of human activity that is coordinated. And, again, this is the kind of thing that we would hope.

We're all engaged in this kind of collective imagination of what's going on down there, and we're beset with fear and sadness and hope and uncertainty. But these sounds have given us a sense of hope, and let's hope that we can solve this problem before the oxygen runs out. They haven't got much time left.

SIDNER: Yes. We know that it takes 12 hours basically to get down there, and they only have about 12 hours left of oxygen. But you said they could conserve a little more. Everybody is hoping that this ends with the five people coming up and being alive. I appreciate your time, Dr. MacInnis, and all of the exploration that you have done to explain that to all of us. John?

BERMAN: All right. Stepping inside this sub, a look at the cramped cabin as new questions are being asked about what went wrong.

And unscripted comments from President Biden about Xi Jinping come as a surprise to some U.S. officials. How could this threaten whatever progress there was between the

secretary of state and China.

Vandals targeting an LGBTQ monument during pride month, the suspect police are now looking for.

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BOLDUAN: As rescue operations continue for the missing sub, we are hearing more about what it's like to be inside that vessel 12,000 feet below the surface. Mike Reiss, he is one of the original writers on The Simpsons. He took one of these trips that we're talking about. Speaking to a CNN-affiliate, he describes the risk that he knew he was taking when he stepped inside. Listen.

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MIKE REISS, SIMPSONS WRITER WHO TRAVELED ON OCEANGATE SUBMERSIBLE: We are all part of this ongoing experiment. It's not a tour. It's not a fun trip. This is they're doing research and inventing the technology as they go. So, before you even get on, you sign this long, long waiver that mentions possible death three times on the first page. It's just so you know what you're getting into.

And, in fact, when I stepped onto the sub, I just knew part of my mind was going, well, this could be the end.

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BOLDUAN: CNN's Gabe Cohen, he toured the same OceanGate Titan sub in 2018. He joins us now.

And, Gabe, we know that the space inside is cramped. We're showing video of when you were taking a tour of that same sub, but it has also now been three days that these people have been down there.

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What does it look and feel like in there?

GABE COHEN, CNN CORRESPONDENT: Yes. So, Kate, certainly as you said, there's not a lot of space. I don't like tight spaces. And that's something that you really feel when you take your shoes off and stepped into that vessel sitting in it. It was cramped. It's small. It's roughly the size of a minivan, which, of course, is why it can only fit five people. There's just a small makeshift bathroom set up on board.

But bear in mind, again, this was designed for passengers to sit inside for a short amount of time, eight, nine, ten hours. They've now been trapped down there, these five passengers, for 72 hours. So, it was never designed to handle people for that length of time.

We've also talked a lot about the off-the-shelf components on board that you notice as you enter the Titan, one of the big things, the gaming controller that's used to operate the vessel. But OceanGate has stressed that they have used some of those components to streamline the construction of the vessel, but that they cut no corners when it came to the pressure vessel, that actual vessel that people are sitting inside, the carbon fiber and titanium shell, they said it was safe and that it was tested. But, of course, as Tom Foreman went through a little bit earlier, we now know that some former employees and industry specialists had raised some concerns about the construction.

BOLDUAN: Yes. Thanks, Gabe. I appreciate it. John?

BERMAN: This morning, Fed Chair Jerome Powell is testifying on Capitol Hill, talking about the health of the economy and whether we could see another hike in interest rates.

With us now, CNN Chief Business Correspondent Christine Romans. Congress gets to talk to Jerome Powell. I get you. I win in this scenario. So, what's the answer to all this?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: So, the answer is the Fed's inflation fight is not over and the Fed chief is explaining why. Last week it, paused in its rate hike campaign but that pause will not last. The Fed chief saying that nearly all FOMC committee members think it will be appropriate to raise interest rates somewhat further by the end of the year. That's your money bite from this testimony.

And also, inflation pressures continue to run too high. It will be a long way to go to get inflation back down to 2 percent, a long way to go. That's why markets are down this morning, because the Fed is promising more interest rate hikes ahead. There have been ten. Then there was that pause and we've got a meeting coming up in July where a lot of people think the Fed will have to raise interest rates again.

The job market is strong. The Fed chief pointing out the job market is strong and the economy is growing at a moderate pace but that the inflation story has not finished yet.

BERMAN: And the other thing is that the U.S., it's not an island, right? And you can look around the world, and when you do that, what are you seeing in terms of inflation?

ROMANS: What you see is a global inflation story and some countries faring worse than others. We learned this morning that U.K. inflation is 8.7 percent and that is running hotter than many had thought it would be. The Eurozone, it's down to 6.1 percent. But these had been double-digit numbers for many of these areas. In France, it's 5.1 percent. You compare that to the United States at 4 percent. You can see we've made progress on the inflation front but not enough progress for Jerome Powell.

So, this is a global story, the inflation story, and the big concern from central bankers is that those numbers are just going to get sticky. They will get harder and harder to have more meaningful improvement there. That's where the higher rates come in.

So, John, if you're watching this at home and you're looking to buy a house or to borrow money for a car down later this year, you could have higher costs to borrow. That's what this means for people watching at home.

BERMAN: Eggs are half of what they were in January. I mean, there has been progress but there needs to be more. Christine Roman, thank you so much. Sara?

SIDNER: Omelets for all.

A race to find the missing submersible today is likely the last chance to find those aboard before their oxygen runs out. The latest on the search and the conditions the crews are facing now, coming up.

Also, Republican presidential candidates are pouncing on Hunter Biden's plea deal, calling it a sweetheart deal, but is it? Just ahead, how Attorney General Merrick Garland is responding to the criticism.

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SIDNER: Republican presidential candidates on the campaign trail are sounding off about Hunter Biden's plea deal with the Justice Department, a plea deal most legal experts say is not out of the ordinary. If a judge approves the plea deal, the president's son would likely be sentenced to probation for misdemeanor counts of failing to pay his 2017 and 2018 taxes on time. Biden had owed at least $100,000 in federal taxes both years but failed to pay by the deadlines. The plea deal would also allow Biden to avoid a separate felony gun charge.

Now, after the deal was announced, as you might imagine, former President Trump, facing far more serious charges of his own, posted on Truth Social, accusing the Justice Department of giving Biden a mere traffic ticket and saying the system is broken.

Across the board, a similar sentiment among Republican presidential candidates, many of them saying the Hunter Biden deal, once again, proves the Justice Department is unfairly targeting Republicans.

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GOV. RON DESANTIS (R-FL): Two different sets of rules depending on whether you're a member in good standing of elite society or not. If Hunter were a Republican, he would have been in jail years ago.

MIKE PENCE, FORMER U.S. VICE PRESIDENT: I, like tens of millions of Americans, is concerned, as I said on that prior program, about a two- tiered system of justice, like one set of rules for Republicans and one set of rules for Democrats.

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