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White House on Russia; Russian Troops Seen Firing; Putin Speaks About U.S.; Sanctions for Russia; Stocks Rebound

Aired March 04, 2014 - 14:00   ET

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

BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar, in for Brooke Baldwin.

(INAUDIBLE) President Obama and his secretary of state reject Russia's reasoning for what's happening in Ukraine. Right now, Ukrainian ministry officials say at least 16,000 Russian troops are in Ukraine's heavily pro-Russia state of Crimea. Russia says it's protecting the interest of oppressed ethnic Russians living under a new government. But John Kerry, who visited Ukraine's capital of Kiev today, and President Obama insisted what Russian President Vladimir Putin says does not match what's happening on the ground.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I don't think that's fooling anybody. I think everybody recognizes that although Russia has legitimate interests in what happens in a neighboring state, that does not give it the right to use force as a means of exerting influence inside of that state.

JOHN KERRY, SECRETARY OF STATE: We condemn the Russian Federation's act of aggression. It is clear that Russia has been working hard to create a pretext for being able to invade further. Russia has talked about Russian-speaking minority citizens who are under siege. They're not. And in fact this government has acted remarkably responsibly by urging total calm.

(END VIDEO CLIP)

KEILAR: Now, today, Mr. Putin would not acknowledge to reporters that Russian troops were even in Crimea, but he did say his intentions are not a takeover of Crimea.

(BEGIN VIDEO CLIP)

PRES. VLADIMIR PUTIN, RUSSIA (through translator): We are not going to go to war with Ukraine, but Ukraine has the army. I want you to understand clearly. If we do this, it will only be to protect local people.

(END VIDEO CLIP)

KEILAR: Now, Russia plans to meet with NATO tomorrow, but Russia has rejected a meeting with the U.S., Ukraine and the United Kingdom. Secretary Kerry has promised $1 billion in loan guarantees to Ukraine. And I'm going to turn now to senior White House correspondent Jim Acosta.

So, Jim, you have both the secretary of state and President Obama expressing a lot of support for Ukraine today and the administration seemed to offer President Putin perhaps a way out of this crisis.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Brianna. And I think that's what the president, what the administration has been saying all along through all of this, that there are these off-ramps for Vladimir Putin, if he wants to bring in international observers to deal with some of these questions that he has about the safety of ethnic Russians, which, by the way, the administration rejects, then bring in international observers.

I will tell you, Brianna, that we just came out of a -- what was supposed to be a budget briefing. And as you know, the president was making those remarks earlier at a budget event. It just shows you how much Ukraine and the events of Crimea are dominating everything right now. And I had a chance to ask White House Press Secretary Jay Carney about Vladimir Putin's claim that those are not Russian troops in Crimea and Jay Carney said that, quote, "it is patently obvious that those are Russian troops in Crimea." So at this pointing, the United States and Russia are really on different pages when it comes to the facts, as you heard the president saying earlier this morning that Vladimir Putin is just dealing with a different set of interpretation, a different set of facts at this point.

But one thing that I thought was very interesting about what President Obama said, Brianna, is when he said that it appear that from looking at reports that Vladimir Putin is pausing and reflecting on what's happening in Ukraine and I asked Jay Carney about that and they are basically taking that from remarks that Vladimir Putin said earlier today. So that might be an indication perhaps of some hope that this is heading in the right direction, but at this point the administration and the president on down, they just don't believe that Vladimir Putin is dealing with reality on the ground in Crimea.

Brianna.

KEILAR: Let's talk about the stakes here, Jim. Some have said that this is President Obama's biggest test on foreign policy. That's quite a statement.

ACOSTA: Right.

KEILAR: But when you're looking, what is at stake for him here?

ACOSTA: Well, as you know, Brianna, you've been here at the White House. It seems that every few months or so there's the biggest test of President Obama's presidency. Syria was one of those tests. Iran's nuclear program was one of those tests. And now you have Ukraine.

But you do have the sense, and even though the president has rejected that he's involved in this international chess match with Vladimir Putin, that the president is being tested here and he is being tested by Vladimir Putin. But what the president believes and what the administration has said will continue to be the case is that the United States has the world on its side and that Russia does not have the world on its side. And as Vladimir Putin continues to go down this road, he's going to continue to isolate himself not only strategically because, you know, you have a lot of bordering states to Russia who are saying, hey, wait a minute, maybe we'll be next.

President Obama making the case this morning that that's bringing those states closer to the west. But you also have the economic consequences, the diplomatic consequences and what the administration is hoping is that collectively all of that will bring to bear the result that they would like to see in the long run, and that is for Russia to back off of Ukraine.

Brianna.

KEILAR: Jim Acosta, senior White House correspondent, thank you for breaking that down.

And while leaders exchange tough talk, the situation on the ground in Crimea has been subdued, pretty much, except for this. Crimean TV shows Russian forces firing shots into the air to warn approaching Ukrainian soldiers who did not have weapons. This happened at Belbek Airbase in Crimea. That is where our Ben Wedeman is joining us live.

Ben, explain to us, why were those warning shots fired?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, Brianna. What happened was that the camp commander led more than 100 of his men to the positions where these men in green, it looks like they're Russian paratroopers, were located on their base, which is just outside of Sevastopol. As they approached, they were chanting one of their marching songs, but none of these Ukrainian soldiers had any weapons. As they got close to the Russians, the Russians started to fire warning shots overhead. Nonetheless, the Ukrainians continued to move forward and you see quite clearly -- we obtained a tape actually shot by one of those soldiers. You see one of the Russians holding his weapon, prepared and shouting. He shouts to them "I have orders. I will shoot you in the legs if you come any further."

Fortunately, there were cool heads on both sides. The Ukrainian camp commander basically said to the Russians, look, we don't have any weapons. You have the weapons here. Eventually the situation calmed down and a real crisis was averted. If there had been bloodshed, that would have been the first bloodshed since Russian troops came into -- or started to deploy around the Crimea last Friday. And this incident really underscores the hair-trigger that this area is really facing.

Brianna.

KEILAR: And, Ben, you're also seeing another side to this crisis, Ukrainian soldiers who are taking a more casual approach.

WEDEMAN: Well, the Ukrainians - I wouldn't say casual, I would say that they're being cautious. They're trying to avoid provocations, avoid and sort of really serious confrontations. But they're very nervous. And we were at this Belbek, the base outside this city, where you have to keep in mind that these are not just soldiers and officers on these bases, they live with their families as well. They have children, wives, husbands in some cases. And they are worried that if there is a bloody confrontation at one of these bases, it would be more than just their comrades who could be at risk. So you go to these -- I've been to several of these bases where there have been Russians around the perimeter or the men in green with the Ukrainians on the inside and most of the time the situation is under control. But I wouldn't say it's laid back. There's really, as we saw today, the potential for real violence.

Brianna.

KEILAR: And that's obviously the concern there, that there could be a provocation with unintended consequences. Ben Wedeman, thank you so much.

You know, we just heard today from Russia's Vladimir Putin breaking his silence in a press conference in Moscow with some unusual accusations against the U.S.

(BEGIN VIDEO CLIP)

PRES. VLADIMIR PUTIN, RUSSIA (through translator): How is it possible to bring this to anarchy to an armed coup, to bring the country to such chaos is unacceptable. Our western partners are doing this in Ukraine for the first time. I have a feeling in America some people sit in some lab doing experiments like on rats without knowing the consequences. Why do they need to do this? Nobody has an explanation.

(END VIDEO CLIP)

KEILAR: Joining me now from Moscow, Phil Black, our international correspondent.

So, Phil, Putin there defending the invasion. He called it a humanitarian mission. He even said the troops that have effectively taken control of Crimea are not in fact Russian. How did he justify the moves that we understand Russian forces have taken?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Yes, what invasion effectively, President Putin said today.

KEILAR: Yes.

BLACK: He insists, as you've touched on, that these soldiers on the ground, despite how professional they look, how they're armed, despite the fact they're driving around armored vehicles, some of them with Russian registration plates on them, insists they're not Russian forces but, in his words, local self-defense teams. Very well prepared local self-defense teams. He says he was asked about the uniforms and he said, well, these are things you can pick up in shops across states that used to belong to the Soviet Union. He was pressed on this a little. He said, were Russians part of this? And he said no.

So it would seem that this is trying to fit the Russian narrative that what you're seeing on the ground there in Crimea is a local, homegrown, grassroots rejection of what's going on in Kiev, the change of government there. Vladimir Putin also spike a lot today about the need to respect Crimean's' right to determine their own destiny, basically. And we know that in the near future, they're planning to hold a referendum to vote on whether or not they should seek greater independence from Ukraine.

Brianna.

KEILAR: And, Phil, what did he say about Ukraine's new leaders, as well as the whereabouts of the ousted president, Viktor Yanukovych?

BLACK: Well, he said the new leadership of Ukraine seized power through an illegal coup. Take a listen.

(BEGIN VIDEO CLIP)

PRES. VLADIMIR PUTIN, RUSSIA (through translator): As to the -- whether this current authorities are legitimate, the parliament partly yes, but the rest of them are not. The executive -- the acting president, of course, is not legitimate. The legitimate president only Yanukovych.

(END VIDEO CLIP)

BLACK: President Putin said he met with Viktor Yanukovych just two days ago and Putin's position is that Yanukovych is the one true legitimate leader of Ukraine, but he said he said to Yanukovych's face that he has no political future. That he's effectively political dead meat. Despite that, Putin points to the fact that Yanukovych wrote a letter to Russia asking for military assistance in Ukraine as one of the reasons why military action in that country would in effect be legitimate, why it would be in keeping with international law, because, in Putin's view, that one legitimate leader, even if he has no power, has no future, asked for that Russian help.

Brianna.

KEILAR: Phil Black, thank you so much.

And we have much more on the crisis in Ukraine coming up. The U.S. is threatening sanctions against Russia. We're learning more about those sanctions and how Putin might respond.

Plus, the Dow reacting to the events going on in Ukraine, but maybe not how you would expect. After tanking yesterday, check this out, the Dow up almost 210 points. We'll explain what's behind that big rebound.

And we're also following developments in the Oscar Pistorius trial. The blade runner charged with murdering his girlfriend. Hear how today's testimony could be a major blow to the prosecution's case so far.

(COMMERCIAL BREAK)

KEILAR: We continue CNN's extended coverage of the crisis in Ukraine. There are new developments involving NATO. CNN has learned that NATO plans an extremely rare meeting with Russian officials tomorrow in Brussels. NATO's secretary general spoke after an emergency meeting requested by Poland.

(BEGIN VIDEO CLIP)

ANDERS FOGH RASMUSSEN, NATO SECRETARY GENERAL: We will consult whenever any ally thinks that the territorial integrity, political independence or security of any NATO member is threatened.

(END VIDEO CLIP)

KEILAR: NATO's Secretary General Rasmussen said Russia continues to violate Ukraine's sovereignty. NATO has also told CNN that it, quote, "sees absolutely no verification" of any of the claims being made by Vladimir Putin that there is violence and a need for humanitarian assistance for Russian citizens or ethnic Russians living in Crimea.

So let's talk now about economic sanctions. CNN's Jim Sciutto is reporting for us today that measures being considered by the Obama administration include freezing overseas assets of Russian individuals and companies, banning Russian leaders and business people from international travel, perhaps even excluding Russian banks from the International System of Finance, which would obviously hurt economically.

Now, Josh Rogin's with us. He's the senior correspondent for "The Daily Beast."

So, Josh, listening today, as you have, to Secretary Kerry, his emphasis seemed to be less about threatening sanctions than pleading with Putin to fix his problems with Ukraine politically, not militarily. How do you think -- do you think that's sort of an accurate assessment? And how do you think Putin may be responding to those urgings from the U.S.?

JOSH ROGIN, SENIOR CORRESPONDENT, "THE DAILY BEAST": There's no doubt that the Obama administration is pursuing a two-track approach. One is to prepare punitive measures against Vladimir Putin if he doesn't agree to make progress on the issue, and two is to give him an off- ramp to allow him a path of diplomacy that would allow him to escape this crisis, avoiding the punishments that the U.S. and the rest of the west are preparing.

It's clear from Vladimir Putin's press conference today that he does not see these sanctions as a threat. He basically said, bring it on. And he warned that sanctions work two ways. They punish the people being sanctioned but they also punish the people bringing the sanctions. This is, of course, the same dynamic that prevented us from sanctioning Russia after the 2008 invasion of Georgia. So sanctions are a risky game. They take a long time to play out. It's not clear that they would be effective in changing Putin's calculus. And this is surely in the mind of Obama and Kerry and lots of other countries, including Germany and Britain, who are less amenable to sanctions as they decide whether or not to pursue them.

KEILAR: Yes, let's talk about that because if you're Germany, if you're Britain, you're more concerned about putting sanctions on Russia, as you mentioned, because of the economic ties. A lot of gas needs in Europe are fulfilled by Russia. Do you think there's any chance that the British and the Germans would sign on to meaningful sanctions against the Russians, or do you think we would see what we saw in 2008 when it came to Georgia?

ROGIN: Sure. The best sanctions are multi-lateral sanctions, but of course the Russians care much more about their economic relations with Europe than they do with their economic relations with the United States. That runs both ways because, of course, Germany and Britain have more to lose and their economies are on more shaky ground. The idea here is to get to a position between the allies that we could all agree on before we even make this decision.

The problem is, is that these events are moving fast and we risk falling into a position where the situation in Crimea becomes more or less intractable and then the effectiveness of the sanctions goes down over time. So we're racing against the clock here and the Obama administration wants to work with allies before deciding what to do, but time is really not on their side.

KEILAR: So, Josh, you say the unilateral sanctions, obviously, aren't as effective as multi-lateral sanctions with more countries supporting them, but what could the U.S. really do? I mean there's discussion of sanctions against some of, say, Putin's cronies, some of the wealthier Russians. Obviously they want to travel. The U.S. could stop that. They could sort of get -- they could get in the way of their finances. Would that be effective or are you just talking about something on the margins here?

ROGIN: Right. So we've got two baskets of options. One goes against individuals. These could be government officials, military officials, business officials. These could be Crimeans who are working against the government in Kiev. And the idea here is to find those people who can really influence Putin and put the squeeze on them and hopefully they'll put the squeeze on Putin to change his mind.

The second basket of options are things that hurt the Russian economy more broadly. Banking sanctions, trade sanctions. This is meant to put pressure on Putin from all sectors of different sectors of the Russian society. These are the ones that are much more difficult to implement and have much more effect on the global economy. So this is all part of what the administration is deciding now. They haven't made a decision. I think the jury is still out. We'll have to wait and see where they decide to go.

KEILAR: Yes. And we'll be waiting to see after they weigh their options what they come up with. Josh Rogin, thanks so much for breaking it down for us.

ROGIN: Any time.

KEILAR: And next, take a look at the markets today. The Dow up 209 points. This comes after uncertainty in Ukraine caused a very big drop, you'll remember. We'll be heading to Wall Street next to check that out. Plus, critics calling out President Obama for being weak, for not responding quickly enough to the situation in Ukraine. How are Democrats defending against those accusations? We'll be talking to both sides.

(COMMERCIAL BREAK)

KEILAR: Stocks are rebounding today after Russian President Putin said, at least for now, he has no plans to take military action in Ukraine. You can take a look. The Dow is up more than 200 points, the S&P reached a new all-time high and the Nasdaq hit another 14-year high. Business correspondent Alison Kosik joining us now.

So markets in Europe, as well as Asia, also did pretty well today. This is quite the bounce-back that we saw from yesterday.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh, yes, the bulls certainly taking charge around the world. And you look at the Dow. You know, you think about what happened yesterday. It had one of the biggest losses of the year. And today, it's shaping up to be one of the biggest gains of the year. And you look at the S&P 500, it's never been higher.

Analysts also have a positive spin on this. They say that the sell-off that happened yesterday wound up being a buying opportunity for many investors. It really does seem to be the case. So before you kind of pop those champagne corks and think, ah, this is fine, not out of the woods yet. You know, many American companies continue watching the developments in Ukraine and Russia very closely. Big companies like Deere and Caterpillar and Dupont. Those companies do a lot of business in Ukraine. It's a big agricultural country. But analysts say as long as the situation doesn't get worse at this point, the market concerns will definitely fade.

And as you said, it seems to be the thinking overseas as well. Those markets in Asia and Europe, they turned around as well. We also saw oil prices do a 180. They're recovering from a big surge yesterday. Oil prices are down 1.5 percent. Remember, a lot of oil flows from Russia through the Ukraine. So the thinking, at least for now is, is that, you know, with oil being one of Russia's biggest exports, it's a big money maker, so maybe Russia is not going to want to stop selling it.

Brianna.

KEILAR: Yes, that's right. Lots of pipelines going from Russia through the Ukraine to Europe.

KOSIK: Right.

KEILAR: Alison Kosik, thanks so much.

Has President Obama done enough in response to the situation in Ukraine? Well, it depends who you ask. So next we're talking to experts on both sides of the aisle about his reaction to this so far.

Plus, could a little known treaty force the U.S. and other nations to take action? We'll tell you about a document called the Budapest Memorandum and how it could impact the U.S. response here.

(COMMERCIAL BREAK)