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U.S. Prohibits Flights; Bodies & Black Boxes; New MH17 Pictures; Putin's Dirty Money; Journalists Detained

Aired July 22, 2014 - 14:00   ET

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

BROOKE BALDWIN, CNN ANCHOR: Wolf, thank you.

Hi there. I'm Brooke Baldwin. Great to be with you on this Tuesday.

We have major breaking news to pass along to you right now. The continuous violence in the Mideast has thus far remained contained within the region, but its impact is starting to spread.

Here's what we know at this hour. The FAA has just issued a notice to all U.S. airlines telling carriers that they are prohibited from flying into Israel's main airport in Tel Aviv. You have the German carrier Lufthansa also suspending flights, and KLM has canceled a flight for later today.

Here's the backdrop. All of this coming after word that a rocket, or at least debris associated with a rocket, has landed near Tel Aviv's Ben Gurion Airport causing major damage to a home. After that attack, three different U.S. carriers, Delta, United, and U.S. Airways suspended flights to Israel on their own even before the FAA issued its notice.

So we have CNN's Atika Shubert. She is standing by for us live, here she is, at Ben Gurion Airport. Also, our aviation correspondent, Richard Quest, is standing by for us as well.

And, Richard, I'll get to you in just a moment.

But, Atika, since you are there, let's begin with you and tell me if you're seeing, what you're hearing, flights coming and going or not at all?

ATIKA SHUBERT, CNN CORRESPONDENT: No, no, no, we've seen plenty of flights coming and going. The airport seems to be operating as normal. But having said that, just a few seconds ago, before we were actually live, the sirens went off, there was a red alert and we actually saw a rocket interception in the air just above the airport, and then just a few seconds later, a plane taking off. And so that perhaps goes to show the reality here that the airport is dealing with.

Rockets are landing and are being intercepted right above the airport. In fact, that rocket that you mentioned earlier landed just a mile from here. We are in the town of Yahood (ph), where that home was destroyed by a rocket. So this is the environment that the planes are flying in and out of and this is why the FAA has put out that notice not to fly in or out of this airport for the next 24 hours.

BALDWIN: Atika, let me just stay with you, just given what you have just reported, that you yourself have - you've seen, you know, this rocket being intercepted just over Ben Gurion. I'm curious what the airport itself has said in the wake of this decision by multiple air carriers.

SHUBERT: Well, what we heard is a statement from Israel's transportation minister, Yisrael Katz, criticizing the airlines for diverting their flights, telling them basically that by doing this they are, quote, "offering a prized terrorist." So as far as Israel is concerned, they see this as an overreaction.

I mean you have to put this into perspective. If Tel Aviv, which is really the only major airport Israel has, starts to see all this massive cancellations, it will be a huge blow for Israel. We're talking about 14 million passengers a year that come through here. So this would be a significant thing if all of a sudden all these start flights - flights start canceling.

BALDWIN: Richard Quest, let me just pose that to you, to Atika's point, about, you know, Israel saying that this is an overreaction. Do you think it's an overreaction?

RICHARD QUEST, CNN AVIATION CORRESPONDENT: Whether it is or not it doesn't matter because, Brooke, the reality is that following on from MH17, then the airlines have no choice. MH17 showed that when the country involved, in that case Ukraine, doesn't take responsibility for closing the air space and ICAO doesn't move in and do it for them, then the airlines are left with no other choice. It's unsatisfactory.

I was just talking, as you heard on Wolf's program a second ago, we were just talking to the head of Malaysia Airlines, the chief operating officer, and he makes the point, they're not intelligence agencies. They have to go on the best advice.

Now, you have three of the world's largest airlines, Delta, United, U.S. American. When they choose to say, we're not flying, rightly or wrongly, when the FAA says we're prohibiting it, when Norwegian, Air France, Lufthansa Group, which includes Austria and Swiss, when all those airlines say, we're not flying, whether rightly or wrongly, you've got to take that seriously. And that's something that frankly the Israeli transport authorities, rather than saying you're giving a prize to the terrorists, need to be asking whether the air space is safe.

BALDWIN: Richard Quest, this has just me thinking bigger picture as we've been reporting on the downed MH17 over Ukraine or, you know, Israel's perspective that it's overreaction, but, you know, these airlines going based upon this intelligence that they should -- and our own reporter there reporting, you know, this rocket intercepted over her head, over Ben Gurion Airport. How will this change how we fly from here on out?

QUEST: Oh, it's going to have a dramatic change over time because ICAO, IATA, the airlines, they're going to have to rethink, first of all, any conflict zone. The opportunity for surface-to-air missiles has now rewritten this - this theory. But also, most crucially, the government - the airlines themselves are going to have to basically put the pressure on - you don't have to hit the airline or the plane. You only have to hit the runway. You only have to create a threat. You only have to create the perception. This is about perception. And I accept the Israeli point that there may be no real risk, but as long as the perception, you need to deal with that.

BALDWIN: Richard Quest, thank you. Atika Shubert, thank you for us.

Pivoting to the other huge story we're following for you this afternoon, this grim arrival of both human remains and evidence from the downing of that flight, MH17, in eastern Ukraine. The so-called morgue train, here it is, delivering many of the victims to relative safety in the Ukrainian city of Kharkiv. The remains are being held in a factory awaiting flight then on to the Netherlands.

Here's what else we know. Also aboard this train were the plane's black boxes, the flight data and cockpit voice recorders that were handed over by the pro-Russian rebels who controlled that crash site. And we now have a chilling new image from the Pentagon. It depicts the Malaysian airliners flight path, seen on the left side of your screen in yellow, OK. The path of the surface-to-air missile. That's what you see in green. The point of impact and the spot where the plane exploded as it hit the ground.

President Barack Obama, who signed a condolence book earlier today at the embassy of the Netherlands, pressuring Vladimir Putin to use his power to get these rebels to back off. Putin responding to the calls from Moscow.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): Concerning the event linked to the horrible tragedy which occurred in the sky above Donetsk, we, of course, again, express our condolences to all families of the victims. Of course it is a tragedy. Russia will do everything it can for a thorough, comprehensive, deep, and transparent investigation. We are being called upon to influence the separatists in the southeast. Everything that is within our power, I repeat, we will, of course, do.

(END VIDEO CLIP)

BALDWIN: Joining me now on the phone from Kharkiv, Ukraine, Nick Paton Walsh, our senior international correspondent.

Nick, let's begin with this moving morgue, this train. Where are the remains now?

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): The remains are now in the factory where - which is close to the railway station where they pulled up to and slowly being worked through by Dutch officials and other international experts and Ukrainian officials trying to get them in a condition where they can at least be put in coffins and then flown back to Amsterdam. Brooke, I should tell you, I've just come out of a press conference been given by Ukrainian officials with the head of the Dutch delegation standing behind them. And some confusion (INAUDIBLE) say now emerging (ph) at the sheer number of bodies that were on that train. I only have spoken to a Malaysian security official who was on the train and said that there were 280 believed to be in good condition, in his words, along with over 80 body parts as well. There are now from the head of the Dutch delegation suggestions that perhaps only 200 bodies may be on those trains. That's the number he says he is confident that he has seen at this particular stage. A harrowing moment certainly for those and the relatives, the people on board those trains who are (INAUDIBLE) quite whether the bodies (ph) may be at this stage.

Brooke.

BALDWIN: Right, as you're pointing out, 200. Do the quick math and that's 98 victims, 98 bodies still unaccounted for and presumably back in eastern Ukraine at that crash site.

Let me ask also you, Nick, about the black boxes, the analysis of the black box data. Who will be taking custody from here on out?

WALSH: The black boxes have been still in the territory of Ukraine. (INAUDIBLE) we just heard from a key Ukrainian official leading the investigation here that the Dutch will be taking the lead in the investigation. And we also know that expertise (ph) from Britain will be used to go through the content of those black boxes but will eventually find their way to (INAUDIBLE) in the United Kingdom. So a complex international arrangement here of corporation (INAUDIBLE) taking on the sheer volume of country (ph) (INAUDIBLE) that were killed on MH17. But the process will hopefully yield some sort of parity as to what happened in the final few minutes of MH17's flight though (ph).

BALDWIN: The big question is, were they tampered with, how much would that affect the investigation? Nick Paton Walsh on the phone. Thank you so much, Nick.

And just ahead, we're also seeing today these new photographs could reveal the key evidence of what brought down Flight 17. What these small holes tell investigators about those final moments for those 298 passengers on board the plane.

Also, yachts and mansions and professional sports teams. One columnist says he knows how to hit Vladimir Putin where it hurts. The regime's dirty money.

And I'll speak live with a reporter who says she was detained by pro- Russian rebels while investigating the crash site. Here what happens as she sat on a bench surrounded by gunmen deciding her fate. Stay right here. You're watching CNN's special live coverage.

(COMMERCIAL BREAK)

BALDWIN: Welcome back. I'm Brooke Baldwin. You're watching CNN. Investigators are trying to piece together this puzzle of exactly what happened to Malaysia Air Flight 17. And take a look at one of now the biggest clues. This is wreckage. These are obviously pieces of the plane scattered all over this rebel-controlled field area in eastern Ukraine. These photos of the debris support the idea that the airliner was taken down by a missile. And all these tiny holes, that could come from shrapnel, possibly from a warhead designed to detonate and splinter into deadly fragments near this plane.

Some answers could, of course, also come from the black boxes here. Investigators finally have them. But who can say what really happened to them since the plane went down Thursday?

Reed Foster joins me live from London. He's a defense analyst with IHS Jane and has analyzed these photos.

And so, Reed, first of all, welcome. And if we can, let's put the pictures back up on the screen because from all the analysis I've read of yours, let's begin with just the small holes. I mean, can you, more or less, confirm that that must be shrapnel?

REED FOSTER, DEFENSE ANALYST, JANE'S DEFENSE WEEKLY: Well, it is consistent with a fragmentation warhead. These warheads are designed to detonate and create as many fragments, obviously, in the vicinity of the aircraft as possible. The intent of these fragments is to try to disable the aircraft and it doesn't take very much, obviously, for these fragments to find their way into engines or perhaps control surfaces, hydraulics or even the pilot or crew cabin in order to create catastrophic damage.

BALDWIN: So, just to fully understand, as I'm horrifically picturing this plane, you know, cruising along at 32,000 to 33,000 feet in the air, a missile of this nature, it's not like it has a direct hit on the plane but rather explodes near it, perhaps beneath it, like a shotgun, as you point out, instead of a rifle.

FOSTER: Certainly, yes. I mean these weapons are not intended to strike the aircraft head-on and sort of have a -- penetrate the aircraft and then explode. It's actually much more effective for these particular type of weapons to come into proximity, in this case probably, you know, 50 to 15 meters away from the aircraft, then detonate. The warhead will fragment into hundreds of smaller fragments about the size of dimes or quarters and at that point it is like a shotgun effect if you think of the spreading out of a cloud of fragments. And, obviously, each one of those fragments is traveling at incredible speeds and obviously do significant damage when they impact an aircraft obviously itself traveling at speeds with all the pressures from the altitude as well as the blast wave itself. So these weapons are quite effective at what they do and have a very high probability of a -- taking down a soft skin aircraft, especially when it's a civilian airliner.

BALDWIN: If, in fact, it did how you're describing the damage it could have done it did do, I'm just thinking about the 298 people on board. And I know this is trying to be delicate, but at least for these people, these children, these adults, was it quick? FOSTER: Yes. I mean we can assume that there was a detonation outside

the aircraft itself. And at that point, you know, the aircraft would have been almost immediately rendered, you know, the flight profile would have deteriorated in such a degree that it would have very rapidly started losing altitude at that point. So it is a weapon that, like I said, is not so much one that will impact the aircraft directly, but the damage that's caused in the exterior aircraft is enough to ensure that it will likely disable the aircraft if it does get a direct hit on it.

BALDWIN: OK. Reed Foster, defense analyst at IHS Jane's. Thank you so much, Reed, for analyzing that for us here.

FOSTER: Thank you, Brooke.

BALDWIN: And it is the question of the crisis in Ukraine, how to get Russia's president to follow the demands facing him in the conflict, take responsibility for the shootdown that the Ukrainians say Russia is behind. Today, the European Union, the EU, voted to expand sanctions against Russian individuals and organizations but they do not yet target full sectors of the Russian economy. Officials say the sanctions will go after a longer list of specific people and assets. And that seems to go along with what John McCain, Senator McCain told CNN's "New Day" this morning. The senator predicted Europe's next move would do little to put pressure on Putin.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: He has every reason not to fear anything we've done so far. It's been less than slap on the wrist for his annexation of Crimea, the first post-World War II annexation of land by a power in Europe. So he has really nothing to worry about so much and I really am not convinced that the Europeans will really do much.

(END VIDEO CLIP)

BALDWIN: Now to an opinion piece in "The Wall Street Journal." It says that if the west wants to hit Putin where it hurts, go after the corruption in his country, according to the piece, quote, "to succeed, western authorities need to follow the assets, the yachts, the mansions, the estates, the professional sports teams most owned via western shell companies and funded via western banks. It is here that the west has the leverage it needs if it wants to solve the Putin problem before something even worse happens than the downing of Flight 17."

The writer, Oliver Bullough, is the author of "The Last Man in Russia: The Struggle to Save a Dying Nation," and he joins me live from London.

So, Oliver, welcome. And let's just begin at the beginning with this corrupt money that is leaving Russia. As you describe in this opinion piece, it's going offshore. Why is it corrupt in the first place?

OLIVER BULLOUGH, AUTHOR, "THE LAST MAN IN RUSSIA": Well, this is essentially a legacy of the very rapid privatization process that happened at the end of the Soviet Union. There were all sorts of things wrong with the privatization process, but essentially the biggest thing wrong with it was based on a flawed premise, which was, that if you just gave away all these - the crowned jewels of the Soviet people and gave them to anyone, then those people who owned them would become property owners and would want to create the rule of law to protect their property. That hasn't happened because they managed to shift their ownership off shore and keep the assets in Great Britain, the Netherlands, Austria, Hungry, Latvia and so on and managed to continue to perpetuate chaos at home so they can keep stealing and keep shipping money offshore.

BALDWIN: So let's talk about the proverbial crowned jewels and the money and these assets because we have to look, too, at the United States and Europe. This is what jumped out at me in your piece. Quote, "Mr. Putin's regime is a criminal one and our banking system, our being the west, facilitates that crime. If they steal it, we fence it." How are we fencing it? What are we fencing?

BULLOUGH: Well, this is a really vast amount of money. I mean it is estimated that $100 billion will leave Russia this year. So far, there's already $75 billion that have left the country. So it may actually turn out to be more than that. And that's just Russia. If you look at Ukraine, it was approximately $20 billion -- $30 billion calculated that the Yanakovich (ph) regime was stealing from the budget every single year. This money has to go somewhere. There are these extremely complicated and ingenious mechanisms where that money manages to come through a number of different countries. Latvia is a particular soft spot. Cyprus is another one. Then they end up being - the goal is for this money to end up in western Europe or the United States where it can be spent and spent on houses, prime property in Manhattan or in London, to be spent in yachts --

BALDWIN: Are the banks not saying, hang on a second, where is this morning coming from? Are they just grateful to have the money and not asking any questions?

BULLOUGH: A lot of banks are asking, but it's clear that not all of them are; otherwise the money wouldn't be getting there. If all of the banks were doing the job they're supposed to be doing, the money would not be leaving Russia or Ukraine in the first place. So I think it's worth looking at what the international community did after September 11th when they mobilized with extreme speed and managed to close the financial channels that were allowing al Qaeda and other allowed groups funding by the international banking system.

I think it's time to start looking at similar methods to prevent this kind of money leaving the former Soviet countries. And I just want to say why I think that, which is that, if you look at Ukraine, the reason why MH17 was able to happen is because the Ukrainian government is so weak it cannot control all of its territory and these groups are able to thrive on the edges. If the Ukrainian central government was strong, this would not have been able to happen. And the reason it's so week is that for the last heaven knows how long, tens of billions of dollars have been looted from that country and spent in the west. We - in order to help the Ukrainians, we need to stop their leaders from stealing. And in order to do that, we need to force our banks to imply - to apply the rules that already exist.

BALDWIN: President Poroshenko trying to rebuild. But I agree, in the meantime. And talk about hitting Putin where it hurts on these - all these offshore accounts and assets to begin to stop him in all of this. Oliver Bullough, thank you so much. I just want to tell everyone, read your opinion piece in "The Wall Street Journal." I really appreciate you coming on today and just that perspective that needs to be discussed.

BULLOUGH: Thank you.

BALDWIN: And just ahead, along that same line, I will speak live with the man who went to war with Vladimir Putin, who has been behind closed doors with him. Michael Sakashvili (ph), the former president of the country of Georgia, he has advice. A lot of advice on how to handle one of his biggest enemies.

And next, detained by rebels at a Ukrainian morgue, pro-Russian rebels held these three journalists investigating the downing of this Flight 17. I'll talk to one woman who was detained and she will share her harrowing story with us next. You're watching CNN.

(COMMERCIAL BREAK)

BALDWIN: The rising tensions over the Malaysia Airlines Flight 17 crash site are not limited to pro-Russia rebels who control it and the investigators trying to access the area. Journalists in Ukraine covering the tragedy are being targeted as well. One writer for "The Daily Beast" says she was briefly taken captive at gunpoint by rebels at a Ukrainian morgue. She is Anna Nemtsova. She joins me now on the phone from Donetsk, Ukraine.

Anna, can you hear me? Welcome.

ANNA NEMTSOVA, JOURNALIST (via telephone): I can hear you well, yes.

BALDWIN: Let's just begin with the word you described as "snatched." You were snatched and spent hours detained. Tell me what happened and why.

NEMTSOVA: Well, that morning we arrived outside of the morgue looking for the bodies of the victims of MH17 flight and there were two rebel militia guys with machine guns sitting outside of the morgue. They ordered us to go -- to walk with them towards their car and get into the car. We asked why. They said that there had been an order to detain every journalist coming to morgue. So me, my Italian (ph) friends, a female reporter, and my friend and reporter from (INAUDIBLE), we were detained. And we didn't have any chance to tell our editors or our friends where we were taken. We didn't know where we were taken.

BALDWIN: What were they telling you all the while you were sitting there?

NEMTSOVA: Well, we were sitting there. The rebels told us to turn the phones off. We realized we were taken all across Donetsk city to a big prison, to a big complex. It's Ukrainian security service building now controlled by rebels, by thousands of hundreds of rebels.

So it was all barricaded. We were brought inside the building, inside the courtyard of the building where a commander of rebel militia questioned us, interrogated us and there were several more rebels with machine guns all around us. And they shared their stories, their actual human stories with us while interrogating us. They were also telling us why they felt so bitter, why they felt so angry, especially with America.

Two of us were working for American media, they said it was awful, that we were misinterpreting this conflict, we did not tell the truth about many eastern Ukraine cities being shelled and bombed by Ukrainian army and that Ukraine army was backed by America. So essentially they were angry with America supporting this conflict.

BALDWIN: Blaming the U.S. for what is happening in Ukraine. The last line of your piece, "for once we seem to be needed here." We need the journalists there covering this region. Ana, thank you so much for joining me and telling this story and getting it out there. The facts and the fiction. I appreciate you calling in from Donetsk, Ukraine.