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Biden: China Is Most Consequential Geopolitical Challenge To U.S.; Jury Reaches Damages Verdict In Case Against Alex Jones; Key Inflation Measure Shows Prices Rose Faster Than Expected. Aired 3- 3:30p ET

Aired October 12, 2022 - 15:00   ET

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

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VICTOR BLACKWELL, CNN HOST: It's the top of the hour on CNN NEWSROOM. It's good to have you. I'm Victor Blackwell.

President Biden just updated Congress on what his administration sees as the biggest national security threats facing the country. In his newly released national security strategy, Vladimir Putin's invasion of Ukraine is not America's top geopolitical challenge, according to Biden. That distinction goes to China.

Russia was, however, at the heart of a key global meeting today. U.S. Defense Secretary Lloyd Austin met with about 50 other NATO defense ministers on how to boost Ukraine's air defense systems. Ukraine is facing a third day of an intensified air assault from Russia, which was condemned by the defense ministers for continuing to target civilian facilities.

CNN's Kaitlan Collins is at the White House. CNN's Barbara Starr is at the Pentagon.

Kaitlan, you're up first. Let's begin with the President and his just released national security strategy. Why is China above Russia here?

KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes. It might surprise some people given, of course, Russia's ongoing invasion of Ukraine. But basically what this document gets into is what they think the biggest long-term threat is going to be.

And in this document, President Biden and his administration make the argument that they think that that is overwhelmingly China, that they are going to be focused on outcompeting China, because the argument that they make when it comes to, obviously, keeping Russia is - in mind - is that China is the only country they say that wants to fundamentally reshape the international order, and has the diplomatic military technology aspects to do that, that potential to try to change and reshape that international order.

Though, of course, they do note many times Russia is the biggest short-term threat and given this ongoing invasion of Ukraine. And it actually delayed the publishing of this document. This is a national security strategy document that every new administration is required to issue. But the Biden administration's win was delayed because of that invasion of Ukraine. It's about a 48-page document.

And basically, Jake Sullivan, who is the President's National Security Adviser laid out to reporters earlier talking about this saying what they wanted to highlight, how they were looking at how this invasion of Ukraine has shaped things and also how it's factored into what they rank these threats as. And China, Russia, democracy at home are the three priorities laid out in this document.

And when it talks about Russia, and the difference there when it comes to its invasion of Ukraine and what China could potentially do, they say that, obviously, the Russian invasion has displayed how maybe the military was not as fearsome as people once believed it was.

Obviously, we've seen how they've suffered setback after setback on the battlefield, seeing the way that they've struggled with their strategy in Ukraine and so I think that is also part of the factor here. And it goes back time and time again, talking about outcompeting China, especially on the technological front and making sure that the United States is competing in that sense, something that you often hear from President Biden.

But Victor, I think one way they really summed up how they are viewing things in this document and as Jake Sullivan told reporters, they said the post cold war era is definitively over.

BLACKWELL: Kaitlan Collins, appreciate that explanation.

Barbara, let me come to you on this defense ministers' meeting, NATO defense ministers. Secretary Austin was there, the Chairman of Joint Chiefs, Gen. Milley was there as well. What are the big takeaways?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Victor, they started today really just outside the NATO parameters, sitting down amongst themselves, about 50 nations represented to talk about what to do next to offer Ukraine critical weapons to push back against the Russians. The Ukrainians are very successful right now, by all accounts, with their counter offensive.

But over this week, we have seen the Russians launch a barrage of missiles and weapons at Ukrainian civilian areas. And Gen. Mark Milley, the U.S. Chairman of the Joint Chiefs said deliberate killing of civilians is a war crime, very tough language this morning in Brussels.

So now, they are talking about what comes next and what Milley is laying out is a network of weapons and capabilities that can take Ukraine forward, they hope, in the coming months, and establish a much more long term military capability against Russia. Listen to a little bit of what Gen. Milley had to say.

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(BEGIN VIDEO CLIP) GEN. MARK MILLEY, CHAIRMAN OF THE JOINT CHIEFS OF STAFF: A lot of the

countries that were here today have a wide variety of systems and the task will be to bring those together, get them deployed, get them trained because each of these systems is different. Make sure that they can link together with the command and control and communication systems and make sure they have radars that can talk to each other so that they can acquire targets on the inbound flights. So it's quite complicated from a technical standpoint. It is achievable and that's what we're aiming at.

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STARR: So air defense, getting the weapons into Ukraine that can shoot down incoming Russian missiles. Now, a very top priority, short, medium, long range systems hopefully going to Ukraine in the coming months. It's a top priority for the Ukrainians, a lot of caution about giving them the longest range system seen as a potential escalation against Russia.

But the fundamental underlying point here, of course, is to keep Ukraine a free and sovereign country and to have it be able to defend itself over the long-term, so this does not happen again in Europe. So the Russians don't get aggressive in their next steps towards Eastern Europe so NATO and the U.S. would not have to step in yet again, Victor.

BLACKWELL: Barbara Starr, thank you. Thank you, Kaitlan Collins, as well.

Joining me now to discuss, CNN National Security Analyst Steve Hall. He's a former Chief of Russia operations for the CIA and CNN Military Analyst and retired Air Force Col. Cedric Leighton. Gentlemen, welcome to you.

Steve, let me start with you. I hope you were able to hear Kaitlan's explanation from the White House on why China topped Russia as a greatest national security threat. But considering that, we've heard the Armageddon talk of the last couple of days, are you surprised that China is above Russia on this list?

STEVE HALL, CNN NATIONAL SECURITY ANALYST: No, Victor, I'm not. I think over the long-term, which is what these strategic planning documents have a tendency to focus on, China is undoubtedly the much greater threat, because it is a rising power, with much more power, much more capability both military and economic than Russia has.

Russia is a failing power. Russia is a diminishing power and is becoming more diminished every day that they continue to fight against the Ukrainians. Now, if we're talking about nuclear weapons, which we tend to do these days, I think the fact that the focus as the primary risk on China is yet another emphasis that this administration has not - does not believe that there is any indication yet that Russia is interested in using nuclear weapons, because if there was strong indications of that, there might be a change in that in that national security document. BLACKWELL: Yes. Colonel, these two challenges, Russia and China, are

not happening completely separate from one another. Obviously, what happens in Ukraine is potentially impacting what China does related to Taiwan. But just draw the line for us of how one challenge influences the other as we now read over this document released by the White House.

COL. CEDRIC LEIGHTON (RET.), CNN MILITARY ANALYST: Sure, Victor. Well, the basic idea here is that everything is interdependent and China and Russia have established a very close relationship. Of course, one can debate how close it actually is in the latest iterations of it, where China is moving in and perhaps in a bit of a different direction from Russia.

But nonetheless, the Russians use a lot of Chinese made weapons systems and vice versa. The Russians provide a lot of support to the Chinese as well and the tactics that are being used. The Chinese are watching very carefully what the Russians are doing in Ukraine and they could potentially use those same tactics and techniques in order to attack Taiwan. And that's one of the big connections there.

Plus, this access, if you will, that has been formed between President Xi and President Putin of China and Russia is one in which they have pitted themselves in essence against the United States and the other countries that want to protect and preserve the current international order.

BLACKWELL: Steve, I want to get your thoughts on this statement from the President in his interview with Jake Tapper, in which he says that Putin is not irrational. He's just making some irrational statements. Do you believe that Putin is a rational actor?

HALL: I think that Putin is probably a rational actor. But the definition of what a rational actor does and does not do in the West, in the United States and amongst our European allies, is I think quite different than what a - what the Russians understand in specific and what Vladimir Putin understands to be rational. But, yes, I mean he has not reached yet for the nuclear button. As a matter of fact, his rhetoric has been a little bit less pointed recently on the nuclear side.

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He clearly knows that he's in trouble in Ukraine and he is doing, I think, what is a time honored military - Russian military approach, which is prepare more cannon fodder for that - for a long term, long run, hopefully, grinding war that he wants to pursue. So all of those are rational in the sense that they make sense, if you're Vladimir Putin. They might not make sense to you or me, Victor. But if you're Vladimir Putin, it makes sense.

BLACKWELL: And Colonel for you on Saudi Arabia, the President says there will be consequences. There's a bill that's been introduced in the Senate to pause arms sales to Saudi Arabia for a year in response to their cutting production of oil, OPEC plus the cut. They say that Blumenthal and Ro Khanna who will introduce a

corresponding bill in the House, they say this will rebalance the relationship. Do you think that that will rebalance the relationship, pausing sales?

LEIGHTON: That could potentially force the Saudis even further into Russia's arms. But there's a big caveat to that statement that I just made, because if Russia's performance continues to be as bad as it has been so far in Ukraine, the Saudis' mind on their own rethink their relationship with the Russians. But it's pretty clear that they've developed a very close relationship with Putin and do they intend to move forward in that direction.

So the risk for the United States is that we could lose a foothold in the Middle East and that could have consequences for a lot of our operations throughout that part of the world.

BLACKWELL: Yes. All right. Col. Cedric Leighton, Steve Hall, thank you.

A Connecticut jury has now reached a verdict in the penalty phase of the defamation trial against Alex Jones and his company Free Speech Systems. The judge already found Jones liable for defamation and emotional distress of several family members of the Sandy Hook shooting victims. CNN's Jean Casarez joins us now. All right. What's the latest?

JEAN CASAREZ, CNN CORRESPONDENT: The latest is they do have a verdict and this is the third full day of deliberations. As you said, it is all about the damages, the compensatory damages, those general damages to make them whole, as the judge told the jury for the misconduct that Alex Jones perpetrated upon them for so many years.

The major focus of the plaintiff's case was Alex Jones, his viewership, which was in the millions, his radio show and how hours after the Sandy Hook massacre took place, that he started laying the groundwork, saying that this was all the government's doing that it was fake. It was fraudulent. Nobody died, but it was setting the stage so they would come and take your guns.

Well, that argument and that theory went from his radio show out to social media and the bounds were virtually endless. The amount of viewership that Alex Jones through testimony that was shown gathered after he started these lies, absolutely multiplied as the weeks and the months and the years went on.

And the prosecutor in their evidence showed that as of the end of September of this year, that in his radio show, he said he had nothing to apologize that he's actually was the one that brought out and showed what was happening in all of this. So what they tried to show to garner the hurt the damages that these people went through and they undertook was to show that it was never ending since 2012.

And Victor, there's 15 plaintiffs, 14 families and there's one current FBI officer who Alex Jones also said he was one of the first ones that went to the school. He also said that he was a fake, he was fraudulent. He was an actor. They were all actors and this never ever happened.

BLACKWELL: So as we have learned in covering these cases, that there are compensatory damages and punitive damages, we're not going to hear numbers for both of those today, right?

CASAREZ: Very good point, no.

BLACKWELL: Just set the expectation.

CASAREZ: No. Compensatory really there is any limit. They can - they have to be unanimous, but it can be any figure they want. The punitive according to Connecticut law, which is fascinating, because punitive damages are punishment damages. You're punishing someone for malicious behavior, one time behavior. And normally, that's where you get the damages and the money, but in Connecticut, it's only limit to attorney's fees.

Well, the jury doesn't know what the attorney's fees are, so they are just simply supposed to mark yes or no. Punitive damages to be awarded to the plaintiffs, yes or no. And they just determined the briefing schedule and the argument. And so the attorneys alone in a couple of weeks will come in, show what their attorneys fees were and then they will hash out exactly how much money they should receive.

BLACKWELL: Okay.

CASAREZ: The judge makes the final determination.

BLACKWELL: So that decision has been made. We're going to take a break. And as soon as that comes down, we'll bring it to everyone live. We'll take a quick break. We'll be right back.

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BLACKWELL: All right. We are following the breaking news out of Connecticut. A jury has reached a decision in the penalty phase of the defamation trial against Alex Jones and his company Free Speech Systems. Jones was already found liable for defamation and emotional distress. This is of several family members of the Sandy Hook shooting victims, also an FBI agent.

We are expecting that decision to be announced in the courtroom in just a few minutes. We will bring it to you live when it happens.

Now, let's turn to the economy and despite warnings from bankers, economists and investors, President Biden is now playing down some fears that a recession is likely in the near future.

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JOE BIDEN, PRESIDENT OF THE UNITED STATES: Every six months I look down the next six months to see what's going to happen. It hadn't happened yet. It hadn't - there has - there is no guarantee that we're going through this. I don't think there will be a recession. If it is, it'll be a very slight recession.

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BLACKWELL: Just this week, JPMorgan CEO, Jamie Dimon, warned the recession could be here in the next six to nine months as the Fed aggressively raises interest rates in an attempt to tame inflation. But in a new important measure of inflation out this morning signals that their efforts to curb inflation may not be working as hoped. CNN Business Correspondent Rahel Solomon is with me now. So what does this new data show us?

RAHEL SOLOMON, CNN CORRESPONDENT: Well, Victor, at a time when we look at every inflation report for any signs of a sustained downward trend in inflation, this was not that, inflation increased. So this was producer inflation, wholesale inflation, factory level inflation, you can hear it very different ways.

But essentially, what it showed is that monthly inflation still grew, prices still grew about four tenths of a percent. That is twice what economists were expecting over the last year. Another way to think about it over the last year prices for producers are up 8.5 percent.

The reason why this report is important is because it gives us a sense of what is to come in consumer prices. So you don't want to see prices going up there for producers, because that tends to mean that prices will go up for us consumers. Now, you can see that we had actually seen a few months where prices have declined. And so this was a reversal of that, right? This was not that.

So moving forward, we're all looking for as the Fed, of course, tries to tame inflation is are we in store for recession? Is it inevitable? And if so, what might that look like?

So when the President talks about a mild recession or a slight recession or JPMorgan says we'll see some sort of recession, essentially what we're talking about is how many people are going to lose their jobs. For perspective, yet unemployment rate right now is at about 3.5 percent, that is practically a 50-year low. The Fed sees that going closer to about 4.4 percent. Bank of America this week said about 5.5 percent. So it appears that many people are expecting folks to lose their jobs, the question is how many.

BLACKWELL: All right. Rahel Solomon, thank you.

Now, let's go to Waterbury, Connecticut. The jury there has reached a decision in the damages trial against Alex Jones.

The jury is coming back into the courtroom now. Again, this is the penalty phase. A judge has already determined that Jones and his company, Free Speech Systems, are liable for defamation and emotional distress. So we're going to hear their decision in just a moment.

We have Areva Martin with us. Jean Casarez will be back in just a moment as well. Areva, I'm going to come to you but be prepared for me to cut you off

if we start to hear from the judge or the jury. Your expectations as we come to this moment.

AREVA MARTIN, CNN LEGAL ANALYST: I expect there to be some pretty large damages awarded by this jury. As you said, Victor, this isn't a question of liability. The Judge has already determined that Alex Jones is liable. This is just a question of how much of these families be paid for their pain and suffering for the emotional distress that they experience as a result of Jones spreading vicious lies ...

BLACKWELL: All right. Areva, let me interrupt, let's go now into the courtroom.

UNIDENTIFIED MALE: Ladies and gentlemen of the jury, as your number is called, please answer here, rise and remain standing. Jordan number one?

UNIDENTIFIED FEMALE: Here.

UNIDENTIFIED MALE: Jury number two?

UNIDENTIFIED MALE: Here.

UNIDENTIFIED MALE: Jury number three?

UNIDENTIFIED FEMALE: Here.

UNIDENTIFIED MALE: Jury number four?

UNIDENTIFIED MALE: Here.

UNIDENTIFIED MALE: Jury number five?

UNIDENTIFIED MALE: Here.

UNIDENTIFIED MALE: Jury number six?

UNIDENTIFIED FEMALE: Here.

UNIDENTIFIED MALE: Ladies and gentlemen of the jury, in the case of Lafayette (ph) et al versus Jones, Sherlach et al versus Jones and Sherlach et all versus Jones - Sherlach, I'm sorry - have you agreed upon a verdict?

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED MALE: Yes.

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED MALE: Would you please pass the verdict to me?

JUDGE BARBARA BELLIS, FAIRFIELD DISTRICT SUPERIOR COURT, CONNECTICUT: And you can be seated.

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Just bear with me.

BLACKWELL: The Judge is reviewing some of the documents from the jurors, I assume.

BELLIS: I'm just double checking the math, so I am going to send you back with just very minor instruction and I'm sorry for this, but I just want to make sure that we cross all the Ts and dot all the Is. And as Attorney Pattis had pointed out, I had asked you, you probably don't remember now because it was days ago, just to have the four person initial each page as well as sign.

Also, I don't see any decimal points, and that's fine, it's consistent throughout, so we can leave it at that. So by that, I mean there's no decimal point, zero-zero, but that is fine. I just wanted to point that out. All right. So we will send the jury back in with that and then when you're ready, you'll come back out.

BLACKWELL: Sending the jury back for, as she said, crossing Ts dotting Is, decimal points and initials on some of these documents. But the decision is in, let's bring in everyone now.

I've got CNN's Jean Casarez with us now. And our legal analysts Areva Martin and Joey Jackson as well will join the conversation. But first walk us through what is happening at this moment?

CASAREZ: Well, right now the four person is having to initial everything and there are 15 plaintiffs, 14 are family members, as I told you. But the jury had to look at each and every person singularly to determine the amount of money damages for defamation and intentional infliction of emotional distress, which included the invasion of privacy aspect. So that is why they're - that it took so long, because they had to look at each different situation.

BLACKWELL: So there won't be one number that encompasses all 15.

CASAREZ: You can add them all up.

BLACKWELL: There will be a number for one - for the first family ...

CASAREZ: Yes.

BLACKWELL: ... for the second family and it's going to take quite ...

CASAREZ: Yes.

BLACKWELL: ... a long time to read. Alex Jones is not in the courtroom today.

CASAREZ: No.

BLACKWELL: Do we know why?

CASAREZ: He doesn't want to be there.

BLACKWELL: He didn't have to be.

CASAREZ: He doesn't have to be there. It's a civil case and I think he made it very apparent at his last press conference outside that he was not going to be there and his attorney on the record in court has said that he has chosen not to be there.

BLACKWELL: Joey Jackson, let's bring you into the conversation as well. We just watched this in Texas a couple of months ago in August and the jury determined the punitive and compensatory damages about $50 million. What's the expectation here? You got 15 families, one of them an FBI agent.

JOEY JACKSON, CNN LEGAL ANALYST: Yes. I think the expectation are significant damages. When you're talking about decimal points, to me, that's an indication that there's an award. Just talking - to piggyback off what Jean talked about with respect to what those are, right, relating to intentional infliction, relating to defamation.

There's another component that I'm looking out for and that is the unfair business practice aspect of it, why? Because that, Victor, unlike the others does not have a cap. When you look at compensatory damages, just to explain what does that mean, it means damages that are designed to make you whole, to compensate you for what you've endured.

The punitive damages are to punish you for what you did wrong, you being Alex Jones and Info Wars' team. As it relates to the unfair trade practices, punitive damages are kept in Connecticut at attorney's fees and litigation costs. The unfair trade practices are uncapped. So the award there could be not only significant, but ruinous. And last point, you mentioned the Texas issue. The Texas one was important in terms of the $49.3 million because those punitive damages were capped at $750,000 per plaintiff, right, being two.

Here, right, you have with the victims in this family, because there's no cap on the unfair business practice that award, as significant as it can be, could really end the existence of Alex Jones' bankruptcy filings or not.

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