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Inflation Worries; Judge to Decide if Trump Family Must Testify in Civil Probe; Russian Invasion Threat Escalating?. Aired 2-2:30p ET

Aired February 17, 2022 - 14:00   ET

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

[14:00:39]

ALISYN CAMEROTA, CNN HOST: Hello, everyone. I'm Alisyn Camerota. Welcome to CNN NEWSROOM.

VICTOR BLACKWELL, CNN HOST: I'm Victor Blackwell. It's good to be with you.

Today. America's top diplomat, Secretary of State Tony Blinken, said that Russia is laying the groundwork to justify an invasion into Ukraine. Now, Secretary Blinken changed his travel plans to give a last-minute speech to the United Nations and detailed several scenarios the Kremlin might use.

(BEGIN VIDEO CLIP)

ANTONY BLINKEN, U.S. SECRETARY OF STATE: Russia plans to manufacture a pretext for its attack.

It could be a fabricated so-called terrorist bombing inside Russia, the invented discovery of the mass grave, a staged drone strike against civilians, or a fake, even a real attack using chemical weapons. Russia may describe this event as ethnic cleansing or a genocide.

I am here today not to start a war, but to prevent one.

(END VIDEO CLIP)

BLACKWELL: Now, President Biden echoed the urgency, and he warned the potential invasion could come very soon.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: We have reason to believe that they are engaged in a false flag operation to have an excuse to go in. Every indication we have is they're prepared to go into Ukraine,

attack Ukraine. My sense is, it will happen within the next several days.

(END VIDEO CLIP)

CAMEROTA: So, along with those false flag warnings, there's a heavy focus today on the Donbass. That's a contested area in Eastern Ukraine. Both separatists and Ukrainian armed forces report renewed shelling there;.

The Ukrainians say a kindergarten building was hit and two civilians were hurt. Also, the White House is calling the expulsion of a high- ranking U.S. diplomat from Moscow unprovoked and an escalatory step.

Bart Gorman was the number two official at the U.S. Embassy in Moscow. He was forced out earlier this year and left Russia's capital last week.

Let's go to CNN's Erin Burnett. She joins us from Lviv, Ukraine.

So, Erin, great to have you there.

We heard that -- these false flag warnings from President Biden and Secretary Blinken. And they were very specific. So tell us the feeling on the ground there.

ERIN BURNETT, CNN HOST: They were extremely specific, right? They said they could even launch some kind of a real chemical attack that they would actually do that was real and then blame it on someone else as a pretext.

They laid out some very specific scenarios. I will say, in terms of talking to regular people on the ground, these developments that are happening happened late in the day here, these warnings from the secretary of state of the U.S., as well as from President Biden. So the feeling here on the ground today is much as it has been in recent days, concern, worry, but not panic.

Now, whether that changes over the next day, we will see. But, right now, I would say, in terms of regular people, that is the feeling, even as we are now hearing a whole new level of specificity and timing coming out of Washington.

BLACKWELL: And, as you say that there's no panic there, there are the signs that the number of troops is increasing. Up to 7,000 additional Russian troops have been moved to the Ukrainian border in the last 48 hours, despite what we heard from Russia that there was a potential pullback of some.

BURNETT: Yes Victor, that's absolutely right.

They're saying there's been more troops added. And, in addition, they're saying that those troops are moving into fighting position. They're now saying that more than half of the battle groups that Putin has assembled along the Ukrainian border, sort of a horseshoe around Ukraine, Belarus, Russia, and Crimea in the south, are now all within 30 miles of the Ukraine border, positioned for attack.

And Secretary Blinken laying out very clearly how this will go, right, that first there will be the pretext that Alisyn mentioned, and that then there would be -- the Russian government would get involved and say that there was a crisis. Then the attack would begin. Russian missiles and bombs drop across Ukraine, communications are jammed. Cyberattacks shut down key Ukrainian institutions.

And then they say that it will continue with conventional and unconventional attacks. So, it is a new level of specificity that we have just simply not seen before, even though Secretary Blinken acknowledges, when we say imminent, we know we have said it before. We know there are some who will be skeptical, but we will take the criticism if Russia chooses diplomacy, because we simply don't see that as the option that they are -- look likely to take right now.

[14:05:00]

CAMEROTA: Let's talk about that, Erin, because so many leaders in Europe, in NATO, the U.S. have tried diplomacy.

And the Russians have said they are open to diplomacy. Where are we at this hour?

BURNETT: Well Secretary Blinken says that he has reached out to the Russian foreign minister, Sergey Lavrov, and requested a meeting here in Europe next week.

Obviously, there continue to be some meetings going on. But as of -- thus far, nothing has yielded anything, Russia putting out an 11-page sort of response in its state media today, saying that the United States has not put anything on the table that is useful or productive, but they're still willing to talk.

So it seems like both sides still say they're willing to talk. And yet none of the talks have yielded anything, essentially running up against many walls, one of which just simply remains, point blank, this issue of NATO, upon which U.S., Ukraine and NATO will not yield, that Ukraine has the right to choose what alliances it chooses. And Russia says that that simply cannot be.

There has been no movement on either side on that. And that is where we are right now, that they say they will talk, but the U.S. is saying that right now they think Russia is using that as a stalling technique. They call it a Potemkin village, right, that you put up the fake village and everything looks nice, and there's nothing actually behind it.

They say that Russia is treating diplomacy right now as a Potemkin process.

BLACKWELL: All right, Erin Burnett for us live there in Lviv giving us some crucial reporting from Ukraine.

Erin, we will see you in just a few. Let's now get a closer look at Donbass. That's the region in Eastern

Ukraine where both Russian separatists and Ukrainian forces say that the shelling happened.

CAMEROTA: CNN's Clarissa Ward has been embedded with the Ukrainian military and has more details from the scene of the incident.

(BEGIN VIDEOTAPE)

CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT: So, we are here at a kindergarten less than three miles away from the front line, where Ukrainian authorities are telling us that pro-Russian separatists fired two shells on this -- on this kindergarten.

There were 20 kids, roughly, here at the time it happened this morning between 8:00 and 9:00 a.m. Fortunately, they were in a different part of the building. You can see just behind me -- I'm trying not to move too much because our signal isn't great here.

But you can see behind me the aftermath from where that shell hit. And three people who worked at the school, according to local authorities, were treated for concussion. They have subsequently been released from the hospital. The children were all safe, as I said.

But, really, what this goes to show is an escalation of incidents here on this front line. There had been regular cease-fire violations along these front lines, but you might see two or three a day. Ukrainian authorities say, today, they have seen more than 30.

And hitting a kindergarten is, of course, a significant escalation, no sense that this was specifically targeted. But I think what this gives you a sense of, John, is just how dangerous things can become very quickly with a lot of people believing that the Russian side is looking for a pretext to launch some kind of an incursion.

And I should say, while we're here on the Ukrainian side looking at this aftermath of a pro-Russian separatists shelling, on the other side of the border, they're claiming that Ukrainian forces have been shelling them as well. And I don't know if you could hear that. There is some shelling in the distance there that we can hear, as I mentioned, less than three miles from the front line, but, clearly, a lot of fears that the situation is certainly escalating.

(END VIDEOTAPE)

BLACKWELL: Our thanks to CNN's Clarissa Ward for that report from the Donbass region.

Let's bring in now John Sipher, former CIA deputy chief of Russia operations.

Thanks for being with us.

We heard from Secretary Blinken today, going beyond just the general warning of a potential for a false flag operation. He talked about what it could -- the form it could come, mass grave, a staged drone strike against civilians or a fake or even real attack using chemical weapons.

What we saw in Luhansk, does this fit the M.O. of potentially what could be that false flag?

JOHN SIPHER, FORMER SENIOR CIA OFFICER: Yes, absolutely.

I think the administration and Secretary Blinken and even President Biden in his speech are calling out Putin's game. It's a game he's been playing for a long time. He played it before when he went into Crimea, when they went into Eastern Ukraine and in Georgia, Moldova and other places. And so I think that's good for them.

What we're seeing today, it's just really hard to say, because, in a situation like this, a crisis situation like this, there's Russian troops, there's separatists, there's others. Someone could launch off an attack or like we saw against a kindergarten.

We don't know if the Kremlin supported that or didn't support that. And it's very easy for people to miscalculate. But that's exactly the kind of thing the Russians could do. And I really think Secretary Blinken did a good job to let the public and the international community understand the kinds of things Putin does, so that, when we see these things, we're not fooled and fooled again like we have been in the past.

[14:10:06]

CAMEROTA: I want to talk about that, fooled again, like we have been in the past.

You have studied Putin. And you say that, for years, the U.S. has been treating Putin the wrong way. How so?

SIPHER: Well, yes, they have.

When this administration came in, their policy towards Russia is, we want a stable and predictable relationship with Russia, so that you can focus on China. Well, frankly, Putin never wanted a stable and predictable relationship with us. He wanted to turn over the table, and he wanted to continue his ongoing sort of political war against us.

So, if you look back, essentially, since 2008, when they went into Georgia, now, Putin has been involved in all sorts of covert attacks, disinformation, subversion. You saw the stories about them going after our troops in Afghanistan. They have been attacking our interests in Syria. They have been trying to mess with our elections.

They have been supporting violent groups. They have done assassinations in Europe. So this has been going on. Previous administrations, they wanted to give Putin a chance to change. They wanted to try to not push too hard, because they thought maybe he would come around.

And so what I think they have realized now is, he's never coming around. And so we have to stiffen our spine, toughen up, focus on deterrence, solve this crisis, to the best of our ability, call him out that, if Putin chooses to do anything, it's a war of choice, and it's a completely manufactured crisis, and then move on from there.

So I think the administration has looked at the past, realized where we are, and is trying to deal with it in a sober and sensible way.

BLACKWELL: I want to drill down on the specificity that we heard from the secretary, because it is remarkable some of the things he outlined here.

I wonder, if the person who now has the role you used to hold, the CIA deputy chief of Russia operations, if this list comes from the history of attacks or false flag operation from Russia or if it's based on specific intel likely that he brings this list to the U.N. Security Council?

SIPHER: And that's a great -- that's a great call.

And it could be a bit of both. The one thing I can say for sure is, the administration understands that they're trying to communicate directly to Vladimir Putin. They want the international community to understand how Putin operates, absolutely, but the main goal is to influence Putin to back off, to suggest, hey, we know what you're up to, we have good information and good intelligence.

And so it's in the administration's interests not to share intelligence that might be iffy or wrong, because Putin would then see that as weak. He needs to know that, oh, my God, the Americans and the NATO allies are sort of into what I'm up to and they're calling me on this. And I have to now take that into consideration.

So it's probably a bit of both. Putin's pattern is pretty clear, and it's very similar to the pattern that the Soviets did during the Cold War, frankly. And Putin was a career KGB officer. But I will bet you it's based on solid intelligence.

And I'm sure the administration is working very closely with the intelligence community to make sure that they can share information, but without really hurting sources and methods.

CAMEROTA: John Sipher, thank you very much for all of your expertise. We'd really appreciate it.

Let's bring in now our military analyst, retired Air Force Colonel Cedric Leighton. He was a member of the Joint Staff at the Pentagon. He also served as deputy director for training at the National Security Agency.

So we have been talking a lot about the Donbass. Can you just tell us about this area, why it's suddenly so important today?

COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: Sure, Alisyn.

And if we take a look at the map right here, you see this is a part of Eastern-Southeastern Ukraine. This is the area where there's a large preponderance of Russian -- ethnic Russian people, Russian-speaking people. And there's always been this degree of separatism in this area.

The Russians took this as an excuse in 2014 to go in and take this area because these separatists wanted to be free of the Ukrainian state at that time in 2014. So they occupied this territory with the help of Russian forces, some of them as little green men, as they were known, the ones that didn't have name tags on them.

They came in here and they came down there into Crimea, took those areas. And during this time, one of the interesting things about this is, they changed the clocks. They're now on Russian time, not on Ukrainian time.

BLACKWELL: Let's head north, where we know that there are some new images of Russian forces adding positions in regions of Belarus and dispersing in others.

What do you think is happening there?

LEIGHTON: So, Victor, right here, when you look at Belarus, this is the whole country of Belarus.

And notice here you have some of the more standard areas, such as training grounds, airfields, Russian military presence all throughout this country. This country is basically Vladimir Putin's satellite nation. It used to be, of course, a part of the -- a constituent part of the Soviet Union back before the end of the Cold War. That is an independent country. It's very closely aligned to Russia. All of these forces here have been aligned for quite some time.

[14:15:06]

This Russian military presence is very notable because it's really close to the Ukrainian capital of Kyiv right here. It's only 56 miles from here to here, the Russian -- excuse me -- the Belarusian and Ukrainian border to Kyiv 56 miles.

So that allows you to move very quickly if you need to get from one place to the other. And this shows right here, for example, in Asipovichy, you have this imagery right here of a Russian area where the -- the cantonment area, where they have different types of weapons systems displayed here, primarily missile tells right here.

These are launch-capable vehicles. They can be deployed very quickly to anywhere that the Russian forces need to take them.

CAMEROTA: Colonel, there's something that seems significant. And that's a new bridge that's being constructed in that key area. So that doesn't sound like de-escalation.

LEIGHTON: No, it doesn't.

And, in fact, if you look at the imagery right here, this was taken on February the 14th, on Valentine's Day. No bridge whatsoever. Everything's clear. Go back to the next day, February 15, there's this bridge. It's a pontoon bridge put together, Alisyn, by the Russian military, who's very good at this. Russian military engineers put these bridges together. They have practiced this many, many times. They have got lots of bridges like this, and they put them across rivers like this one because it allows them to get to where they're going very quickly.

This particular bridge is about four miles from the Ukrainian border. It will allow them to move things like tanks, armored personnel carriers, even missile launch vehicles, into position. That's the kind of thing that they're doing here. It's very important to note how quickly they're doing it.

And it is also something that tells us that they're moving in a direction that we don't want them to move in. This is basically preparation for war.

CAMEROTA: Colonel Cedric Leighton, thank you very much for explaining all of that to us.

LEIGHTON: You bet, Alisyn.

CAMEROTA: So, this afternoon, a judge will decide if former President Trump and his children Don Jr. and Ivanka will have to sit for a deposition in a civil investigation into their family business by New York's attorney general. We have details of what happened in court.

BLACKWELL: And Treasury Secretary Janet Yellen says current inflation rates are not acceptable.

And one major food company says that it may raise prices again. We will tell you how much it could cost you.

(COMMERCIAL BREAK)

[14:22:00]

CAMEROTA: A judge is expected to make a decision today on whether former President Trump and some of his family must comply with subpoena requests.

This is related to the New York attorney general's civil probe into the Trump Organization. Prosecutors are trying to determine whether the company inflated the values of its properties.

BLACKWELL: Kara Scannell is with us now.

So, this is pretty consequential decision that's coming. When can we expect it?

KARA SCANNELL, CNN CORRESPONDENT: Yes, Victor, so the judge said we will hear about this in about 40 minutes from now, just around 3:00 p.m.

This followed a two-hour hearing this morning that, at times, got fairly contentious. And the issue here is, of course, as you said, the New York attorney general wants to subpoena Donald Trump, Donald Trump Jr. and Ivanka Trump for their testimony. Now, the Trump's lawyers are saying that they shouldn't have to

testify because James is involved in a parallel criminal investigation, saying, if they want them to testify, then they should get the same sort of immunity that they would get if they appeared before a grand jury.

But the judge was fairly skeptical of that view. And he said, well, why couldn't you just not answer the questions, take the Fifth Amendment, saying, isn't that what Eric Trump did 500 times? Because that is what the former president's son did.

Now, Trump's lawyers were saying, well, he did that, but that was before James became part of this criminal investigation. So this is kind of the rub here. I mean, at one point, it got almost so funny at the end, where the judge and Trump's lawyers were going back and forth, and Trump's lawyers saying, well, if he does take the Fifth, it's going to be on the front page of every newspaper, and it'll make it difficult to seat a jury if he ever is charged criminally.

The judge kind of threw up his hands and said, I will have a decision at 3:00.

CAMEROTA: OK, we will be waiting for that.

Meanwhile, there's a Trump-related property that's also relevant to the House Over -- to the House committee investigating him. So what's that nexus?

SCANNELL: Yes, so the House Oversight Committee is focusing on the General Services Administration, which gave that lease to Trump for the big hotel in Washington, D.C.

Now, they sent a letter to GSA, saying, you should consider terminating this lease before Trump even sells it. He's in talks to sell for $370 million. They're saying, in light of Mazars, the accounting firm, quitting and saying you shouldn't rely on a decade's worth of financials, and in light of the allegations from the New York attorney general, they're saying you should -- this is a breach of contract, you should shut down this lease.

And if they were to do that, what issue is -- what's at issue here is that Trump is -- from this sale could get $100 million in profit. So they want them to do this. Now, the GSA said, we are doing a thorough and appropriate review of the lease and making sure that everyone's in compliance.

CAMEROTA: OK, Kara Scannell, keep us updated.

BLACKWELL: Thank you.

CAMEROTA: All right, some of your standard food items could get more expensive soon.

The CFO of Kraft Heinz says dozens of products, from cheese to coffee, may see prices increase as the company deals with higher costs. BLACKWELL: Treasury Secretary Janet Yellen acknowledges that the high

inflation rate is a problem. She said yesterday that the trend is just not acceptable.

CNN's Matt Egan is here.

So, break this down for us, Matt. How bad are things really and what's being done about them?

MATT EGAN, CNN REPORTER: Well, Alisyn and Victor, it's kind of a weird time for the economy, because, in many ways, this is a strong recovery.

[14:25:05]

But people don't really feel good right now. And part of that is about COVID fatigue. But it's also about the high cost of living, right, 7.5 percent inflation in January, highest we have seen in nearly 40 years.

But we got to put context around that, because inflation was actually a lot worse 40 years ago. January 1981, consumer prices were up nearly 12 percent. 1980, it was almost 14 percent. So we're getting closer to that. But we're still well below those inflation levels.

Let's have a look at borrowing costs, because they have started to go up as the Federal Reserve has signaled a plan to fight inflation by raising interest rates. Today, we learned mortgage rates hit 3.92 percent, highest since summer of 2019.

But if you zoom out, that's actually really cheap. I mean, when my parents bought their first home in 1982, they would have killed for a 4 percent interest rate. Back then, the average was almost 18 percent.

I think the biggest difference between today and the early '80s is the jobs market, which is just on fire right now. Unemployment rate down to 4 percent right now. Back then, it was almost -- it was actually more than double that. It was 8.6 percent.

Inequality is one area where today's economy doesn't look as good, actually, as it did then. Top 1 percent in 1989, which is as far back as we can go for these stats, the top 1 percent own four times more wealth than the bottom 50 percent. Today, the top 1 percent owns 12 times more.

So the fact that inequality is getting worse certainly is not helping the mood of the economy right now.

CAMEROTA: That is such an interesting context just to see how much worse it was in many ways in the '80s.

What about gas prices?

EGAN: Right.

So, gas prices, that's a big one, because, arguably, there's no stat that is hurting the president's approval numbers as much as the fact that gasoline prices are very high, the national average at $3.52 today. That is a seven-year high.

But if you adjust for inflation, gas prices are actually lower today than they were in 2011. And they're lower than they were in the early '80s, not to say gas prices aren't up. They're up about $1 from a year ago. And they could go higher.

I mean, this Russia-Ukraine situation, if Russia's oil exports are disrupted or perceived to be disrupted, that cuts into oil prices and thus gasoline prices higher. Presidents have pretty limited options here, though, right? I mean, President Biden could try to release more barrels from the Strategic Petroleum Reserve.

Didn't really last -- the relief from that didn't really last, last time. He could try to make a deal with Saudi Arabia. Maybe an Iran nuclear deal would add some more supply. But there's no magic wand here to deal with high gas prices.

BLACKWELL: Matt Egan, thank you so much.

EGAN: Thank you, guys.

BLACKWELL: All right.

The doping scandal that has overshadowed the Winter Olympics now ends with a surprising finish for Russian figure skater Kamila Valieva. We will have more on her performance and the fallout.

CAMEROTA: And Mikaela Shiffrin's disappointing run in Beijing continues.

The U.S. skiing star crashed out again. And now she's taking on her critics -- next.

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