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Lukashenko: Wagner Chief Prigozhin Has Arrived In Belarus; DOJ Releases Scathing Report On Epstein's Incarceration; Pressure On Real Estate Industry As Offices Remain Empty. Aired 11:30a-12p ET

Aired June 27, 2023 - 11:30   ET

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

[11:30:00]

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: The security services that they did an amazing job stopping Prigozhin's advance the Moscow. Well, we know that's not true because they did, Prigozhin's troops, got almost all the way to Moscow and turned around by themselves. And, on that aside, if you listened to Lukashenko, it had nothing to do with the Russian troops. So, what are we hearing Kremlin -- from Putin here as sort of a Kremlin lie if you will that the troops and the security services in Russia didn't really prevent Prigozhin. So, we know that effect. It's not true.

And then the other lie from Putin in that big gathering there inside the Kremlin with the military. He says you all stuck together and did such a good job together. Well, if one piece of it is a lie, what about the other piece?

The history of the security services in Russia is they don't really work well together. We know that Putin met with his security chiefs last night. And today, we hear from the national guard chief saying we're going to be getting tanks and bigger heavy weapons in the future.

Kind of creates the impression that during Prigozhin's advance on Moscow, the National Guard was saying, what can we do? We've only got machine guns. We can't take these on.

It doesn't sound like what Putin is telling the Russians is the verifiable truth. He went on to meet with some other Russian soldiers. And he was there saying basically, very simple terms.

The Russian government's good. Yevgeny Prigozhin is actually greedy and bad. How did he frame that?

He said, look. Some of the Wagner fighters died fighting on the front lines for Russia. They were good. They did a great job. We, by the way, the Russian government actually pumped a billion dollars into Wagner. We help pay for them. So, he was kind of making himself and the government look good.

Prigozhin -- he said and he reminded everyone that promotion comes out of a company called the -- called a Commodore. And this company, he said, was -- a Concord, rather. This company, he said actually got a billion dollars worth of contracts from the government. Then he went on to say that perhaps some of the money that the government had given to Wagner had been misspent. He's laying the groundwork here for potential financial charges against Prigozhin. And that just after this morning when we heard the FSB had laid -- put aside laid down their charges against anyone involved, including Prigozhin that involved in the insurrection. So, you know, what we're hearing from Putin is he's going to go after Prigozhin on probably financial grounds.

JOHN BERMAN, CNN ANCHOR: Yes, look. Just its very picture speaks of, you know, look at me, I'm in control. That's the message he seems to be trying to convey in that image right there.

Nic, very quickly, you know. What's going to happen to Prigozhin? If he is in Belarus, what happens to him?

ROBERTSON: Well, according to Lukashenko, Prigozhin has vowed to Lukashenko that his people that come with him, if any do, and they're welcome to call him, Lukashenko, that they won't kill anyone. If that happens, then all bets are off. We don't know.

Lukashenko is painting of some kind of hero. Lukashenko said that Prigozhin was only trying to sort of save, you know, his own commanders and his own troops. They've just come out of the frontline. They were -- they were sort of emotional, angry, half-mad is the language Lukashenka used. And this is why Lukashenko can paint himself in such a big position of talking Prigozhin down from the ledge, so to speak.

BERMAN: Nic Robertson, great to have you this morning. Thank you so much. Sara?

SARA SIDNER, CNN ANCHOR: All right. I want to follow up on that conversation. We've got retired U.S. Army Major Mike Lyons here with us, and Georgetown University Adjunct professor and CNN contributor Jill Dougherty. She was a longtime CNN Moscow bureau chief, we must also mention that.

I'm going to start with you, Major. Let me talk to you about President Lukashenko. He's revealed that he spent hours negotiating with Wagner mercenary Prigozhin to stand down and come to Belarus. Does Lukashenko seem to be sort of bragging here? Does his bravado in this make Putin look weak? Because Putin certainly did not manage to do this.

MAJ. MIKE LYONS (RET), U.S. ARMY: Yes, there's just so much confusion I think going on with this. What -- why does he even allow him to go to Belarus, to begin with, OK? That's the first thing.

And then Putin comes out yesterday and gives Wagner troops three choices. You can go into the Russian military, you can go home, or you can go to Belarus. Oh, and by the way, your leader is in Belarus.

I still have a hard time thinking of Putin is just going to give up on Wagner It's just too important to him geopolitically. So, he's got to try to figure out a way to resurrect or do something with them. Maybe 25,000 troops are also in that area. It's a lot of troops. You're just --

SIDNER: It's a huge number.

LYONS: You're just flipping a switch --

SIDNER: Yes.

LYONS: And taking their equipment away and repurposing them. So, there are so many things to do. There's a lot of this, who's who.

Perhaps Prigozhin goes to Belarus and helps Lukashenko that -- and of that border there to the south in Ukraine and creates problems for Poland. So, again, I'm still not convinced that Putin is going to put Lukashenko or Prigozhin on ice, so to speak.

SIDNER: All right, we will come back to that in a minute. I'm going to go to Jill now because Putin had to utter the words civil war in his speech after all this went down. This whole mess of the infighting of Russians. How is this playing on Putin's sense of power?

[11:35:07]

JILL DOUGHERTY, CNN CONTRIBUTOR: Well, I mean, what he has held has a real quandary. Because you know, what happened over the past few days is completely abnormal. So, in kind of an Orwellian way, he has to present it both to the Russian people and to those Wagner fighters that this is somehow normal.

But let's take the Russian people. I mean, there's Putin. That stage behind him is one of the most historic buildings in the Kremlin.

It just -- you know, is a symbol of power in the state. So, Putin is saying these people -- these soldiers rescued the state. And so, if you're an average citizen looking at that, you know, the message is, everything's back to normal. Putin is in charge.

But I think with this very interesting development of Putin coming out at the last minute and saying that the government -- the Russian government, gave a billion dollars to Wagner and another billion to the company as we just heard that Wagner -- that Prigozhin owns, that reminds me of how Putin has dealt with people who are kind of pout part of the power structure. He doesn't want to necessarily kill them, and murder them. That might not look particularly good.

But you can certainly go after them, actually, and stick them in prison forever. So, I think once again, this is not over. We're in the middle of something. And I think now, we have to look at what had -- what is going to happen to Prigozhin in that sense.

SIDNER: All right. I do also agree with you, Jill, that one of the most staggering things that we've learned, things that you don't normally hear about is how much money the Russian government -- the mushroom military was paying Prigozhin. He's gotten mercenaries all over the world. As you mentioned, 25,000 fighters who have been following him. Very few of them went over when they were told you can come join us now in Russia or not. LYONS: Yes.

SIDNER: Very few of them did that. So, you have these 25,000 fighters walking around that are -- that are seemingly loyal to Prigozhin. You have Prigozhin now in Belarus.

Is there any chance that he stays alive? What happens with him and his fighters? Is there any chance that they join the military of Russia?

LYONS: Yes. I think it's a low chance to join the Russian military. It all comes down to how they're going to be financed, how they're going to be paid. I think they could somehow matriculate your -- their way up to Belarus and reform there.

He's -- it's not just him. It's the lower-level commanders that are involved with this as well. And he at least has that unity. And what he has are troops that are loyal to him and not the state.

SIDNER: When you start talking about that, you know, Jill had mentioned him potentially jailing Prigozhin. How precarious are things in Russia now? Is there a sense by other people who may want to take power that this is their chance? Is Lukashenko trying to show you know, sort of his prowess in all of this, and his power to negotiate in all of this, and this could have like a regional ripple effect, could not, Jill?

DOUGHERTY: Well, I think you know, Lukashenko is doing what Putin wants partly. And then the other part is Lukashenko can kind of look like a hero who did something. But don't forget, you know, the government, the structure of Belarus is totally dependent upon Putin, economically. It's a disaster.

And so the guy who's running things really is Putin. I would -- I would say that Lukashenko is doing his bidding, taking care of a problem temporarily, but then what happens. And then maybe some of these guys, the fighters go off to Africa, that's a possibility because Prigozhin has you know, fighters in a lot of hotspots in Africa. But we'll have to see how many actually followed him.

LYONS: Yes.

SIDNER: All right. And without being paid, that's going to start being a problem, I'm sure.

LYONS: Yes.

SIDNER: Mike, thank you -- Mike Lyons. And also to you, Jill Dougherty, thank you both for joining us on the program. Kate?

KATE BOLDUAN, CNN ANCHOR: A new report out this morning from the Justice Department laying out harsh criticism of the Federal Bureau of Prisons over the death of Jeffrey Epstein. More from the report about what happened when Epstein was behind bars, that's ahead.

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[11:43:44]

BOLDUAN: This just in to CNN. The Department of Justice has put out a brutal review of the incarceration and death of Jeffrey Epstein while in federal custody. The report details multiple failures, it says allowed Epstein to die by suicide in his cell. The report also says though that it found no evidence to contradict what it calls the absence of criminality in his death.

CNN's Kara Scannell has more on this. She's joining us now. Kara, can you talk us through what the Inspector General found here and says went so wrong?

KARA SCANNELL, CNN CORRESPONDENT: Yes, Kate. I mean, it is a scathing 128-page report. And you'll remember that Jeffrey Epstein died. He was found hanging in his cell on August 10 of 2019. That was just about 35 days or so after he was arrested and put into custody on those sex trafficking charges of minors.

And so, what they found is that the BOP's failure began about two weeks before he was even found dead. That was when Epstein was found lying on the floor of his cell with an orange cloth around his neck. It was then that the psychiatry department there said that he needed to have a cellmate. He couldn't be left alone because of his potential suicidal risk.

Well, flash forward to the night of his -- the evening of his eventual death, he didn't have a cellmate. And that's one of the problems that BOP has raised, and that they didn't replace the cellmate who had been transferred out of there. And that left Epstein alone.

[11:45:06]

Another failing, they said, that he was able to stop pile linens, right? You have the photo there of the bright orange bed linens. That was much more than other inmates would have. And that eventually is what he fastened into several nooses that the report found he had used in -- at the night that he committed suicide.

You know, another shortcoming is these guards are supposed to go and do reviews -- do prisoner accounts in the shoe. That's the special housing unit that he was placed in for some of the most you know notorious alleged criminals.

And so, they were supposed to conduct these checks every 30 minutes. But what the report found is that between 10:40 p.m. and 6:30 the next morning, they did not conduct one search, one review, or one walkthrough of these accounts. They also found that the video surveillance system that was supposed to provide a feed into the area where the corrections officers were, that feed had been down since late July.

But one thing that the report also wants to make clear here is that this was not -- you know there was no evidence of criminality here. There's been a lot of conspiracy theories surrounding Epstein's death, including, you know, a medical examiner. His team had hired said that he thought that it could potentially be more homicide than suicide. And what this report found was that the medical examiner's report found that there were no signs of defensive wounds. There were no bruises. Nothing to evidence that he was in any kind of struggle. Kate.

BOLDUAN: Oh, interesting. And a scathing review as you said. Good to see you, Kara. Thanks for laying it out. John?

BERMAN: So, commercial real estate is taking a hit forcing a major rethink on office spaces. What this could mean for the larger economy?

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[11:51:08]

SIDNER: Mostly empty offices have become a major problem for the commercial real estate industry. Building values are plummeting, as many people are still working from home post-pandemic. Now, rising interest rates could make things even worse. CNN's Vanessa Yurkevich takes a closer look.

(BEGIN VIDEOTAPE)

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT (voiceover): They're statuesque, vast, and staggering. And they're empty. Skyscrapers and office buildings once stacked high with businesses are experiencing high vacancy rates in the U.S. Nearly 19 percent. Five and a half percent higher than before the pandemic.

STEVEN DURELS, EVP & DIRECTOR OF LEASING, SL GREEN REALTY CORP.: I think it's a very unique moment. Nothing like any disruptive marketplace that I've experienced over the past 40 years.

YURKEVICH (voiceover): The pandemic emptied offices around the country. Today, the number of people returning to in-person work is less than 50 percent in 10 major metro areas, forcing companies to rethink physical office space. Half of the biggest global companies say they'll need less real estate in the next three years leaving landlords with loans to pay in a bind.

YURKEVICH: If there's no tenant, you're not making money.

DURELS: Right.

YURKEVICH: What do you do?

DURELS: There's no recouping you know lost income for downtime.

YURKEVICH (voiceover): Steven Durels runs the leasing at SL Green, New York City's largest commercial landlord. With more than 30 million square feet of space to rent, the collapsing demand for office space means their tenant vacancy rate shot up from three percent pre- pandemic to 10 percent today. That calls for some creativity.

AMANDA WEISENTHAL, HEAD OF DALES & PRODUCTION, BACKLOT: You can build the set in here. You can have a fight scene in here. YURKEVICH (voiceover): SL Green is now working with Backlot, a company that connects landlords at 332 buildings across New York and New Jersey with film and TV companies. This episode of Law and Order was filmed in this vacant office in midtown Manhattan. The watcher on Netflix and these East Side offices.

WEISENTHAL: I think people are starting to look holistically at how they can support a revenue stream.

YURKEVICH (voiceover): This year, SL Green says it will earn three million dollars from film and TV shoots.

DURELS: It's really helped mitigate the loss of income during the downtime periods.

YURKEVICH (voiceover): Empty office buildings could be turned into residential. A big need. This project in Washington, DC once an office building is being turned into apartments.

But that's not an easy quick fix process. Less than one percent of apartments nationwide are converted from commercial properties. And across the river in Arlington, Virginia, the city is trying to get ahead of its empty office space problem at 22 percent.

RYAN TOUHILL, DIRECTOR, ARLINGTON ECONOMIC DEVELOPMENT: I'm sitting right today in Northeastern's DC campus. Last year, University was not allowed to take up space in a -- in an office building.

YURKEVICH (voiceover): Thanks to new city zoning laws, that's now possible along with seven new types of commercial businesses like animal boarding, hydroponic farms, and pickleball. It's already happening in South Jersey. This 22,000 square-foot pickleball facility was a vacant Burlington Coat Factory in a Strip Mall. Regional mall vacancy is at a record high.

YURKEVICH: Were there a lot of options like this on the market?

ANDREW PESSANO, CO-OWNER, PROSHOT PICKLEBALL: Yes. I think we had more opportunities than we thought there would be in the market.

YURKEVICH: Pickleball is the fastest-growing sport in America. So, does that mean that the sport needs to find places to play quickly?

PESSANO: The greatest threat to the growth of pickleball is the lack of facilities.

(END VIDEOTAPE)

YURKEVICH (on camera): And pickleball is obviously a great way to get people into a commercial space. But the question that a lot of landlords and companies are asking is how do you bring people back into the office?

[11:55:01]

One landlord told us that businesses need to think about how people want to work. They want to work the way they live. So, what they're seeing is a lot of companies redoing -- reinvesting in office space, creating higher ceilings, more natural light, better cafeterias, better food to offer employees to try to get them back into the office.

The big banks are the ones that are lending to these landlords. It's a mixed bag on what they're saying about this potential commercial real estate problem.

Some are saying it's manageable. Some are saying it's a financial crisis in the making. We got to wait and see here. This is just the beginning but it's something to keep an eye on, guys.

SIDNER: All right. Vanessa Yurkevich, thank you very much. I have an idea. Why don't they just turn it into affordable housing, or if they want us to come in, why don't they just give everybody a race?

BERMAN: Look. What gets me in every day is the camaraderie. (INAUDIBLE)

BOLDUAN: I got way more to say but we're having zero seconds.

BERMAN: And the friendship. Thank you all for joining us.

BOLDUAN: Thanks all.

BERMAN: This is CNN NEWS CENTRAL. "INSIDE POLITICS" is up next.

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