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Southwest Meltdown Leaves Passengers Stranded; Passengers Stranded by Southwest; Edward Russell is Interviewed about Southwest's Failure; Some Buffalo Supermarkets Reopen; Santos Admits to Lying on Resume; Partners Turn on Bankman-Fried. Aired 9-9:30a ET

Aired December 27, 2022 - 09:00   ET

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

[09:00:23]

JESSICA DEAN, CNN ANCHOR: Good morning, everyone. I'm Jessica Dean in Washington. Jim Sciutto is off today.

And we begin with a travel nightmare for thousands of people stranded at airports across the country as Southwest Airlines experiences a meltdown. Already more than 2,800 flights canceled today, nearly 90 percent of those are on Southwest. The airline now apologizing, but as you can imagine, that's little comfort for people who may miss out totally on seeing their loved ones this holiday season.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I'm beyond frustrated, and hurt, because I can't see my dad.

UNIDENTIFIED FEMALE: My mom is in the hospital and I wanted to be there for her once she like got discharged. Unfortunately, because of the situation, they are saying that the closest flight is the 29th.

UNIDENTIFIED MALE: Are you going to make it home today?

UNIDENTIFIED MALE: No, likely not. I mean, I heard someone say over the intercom not to expect to get a flight within the next four days. So, that's definitely not what I wanted to hear.

(END VIDEO CLIP)

DEAN: People just missing their family and loved ones. The log jam starting with the powerful winter storm that hit western New York the hardest. Look at that. This morning people in Buffalo struggling to get food, water, medicine, after days of driving bans and closed stores. We're going to take you live there in just a moment.

But let's -- let's go first to our team covering this ongoing holiday travel chaos after the weekend's deadly snowstorm. We're going to begin with CNN's Gabe Cohen, who's live at Baltimore Washington International Airport.

Gabe, good morning to you.

We know Southwest Airlines has canceled thousands of flights across the U.S., especially where you are. BWI, of course, a big hub for them. Help us understand why this is happening. The bad weather has really already passed. This is - this is specific to Southwest.

GABE COHEN, CNN CORRESPONDENT: Yes, Jessica, that's right. And that is the million dollar question is why is it happening to them. Largely the airline has blamed that winter storm and yet they are the only major U.S. airline that's dealing with this fallout at this point.

Take a look behind me at this board and you can see just how many cancellations we're talking about. Southwest canceling more than 60 percent of their flights today. And they've already canceled more than 60 percent for tomorrow. The company telling me they'll likely only be running just over a third of their scheduled flights in the days ahead.

And take a look behind me here and you'll just see how many stranded pieces of lost luggage there are sitting here in Baltimore. And this is just a small piece of it. These bags cover the entire wall across this room.

We spoke to a woman a little bit earlier. She slept in this airport days ago. She was trying to get to her family in New Hampshire. Finally, she arrived a couple days later. Last night she was trying to get back. Another canceled flight. She took an overnight Amtrak, finally arrived here, but she hasn't seen her bag since she was initially trying to get out of here on Thursday. She came down searching for it. They -- she tells me the folks here have no idea where it is.

Take a listen to her.

(BEGIN VIDEO CLIP)

SABRINA HULL, STRANDED PASSENGER: I'm frazzled and fried. I have no clothes. My luggage is still here. So I never got to give anyone presents. I don't have any luggage. I have a toothbrush and deodorant and gum and this is it since Friday.

(END VIDEO CLIP)

COHEN: So, again, Southwest largely blaming the winter storm, but their pilots union says that this is mostly because of outdated processes and outdated IT. CNN obtaining a transcript of a message from the CEO of Southwest sent on Christmas where he said he acknowledged problems with their operations and the need to modernize them. Certainly a lot of questions, Jessica, and passengers stranded just searching for answers. They can't even get on the phone to a customer service agent for help.

DEAN: I can't imagine the frustration and all those bags behind you, Gabe. And that's just a portion of them. Thank you so much for that update.

Let's go to CNN's Adrienne Broaddus now. She's at Chicago's Midway International Airport, another hub for Southwest there.

Adrienne, what are you hearing? I see more bags behind you, too.

ADRIENNE BROADDUS, CNN CORRESPONDENT: Bags on top of bags on top of bags. There's a little bit of organization to the chaos here, Jessica. If you look over this way, you'll notice that the luggage is grouped by cities or the airport where they were supposed to go.

We've been speaking with travelers throughout the morning. Many of them frustrated. You see some employees going one by one looking at the luggage. Travelers we heard from say they can't get their luggage if Midway was not their final destination.

Listen in.

[09:05:00]

(BEGIN VIDEO CLIP)

MANDI ANGELO, TRAVELER STUCK AT CHICAGO MIDWAY AIRPORT: I am traveling with my son trying to go to a family wedding in Miami. The next flight that was offered was in January. And they couldn't even get us home back to Pittsburgh. So, it has been a very, very stressful night. Lots and lots of people sleeping on the floors at the gates.

The story right now is that our bags are still going to the original destination, even though we are not traveling there anymore and just trying to get home. They don't really know when they're going to show up there.

(END VIDEO CLIP)

BROADDUS: And Mandi, who you just heard from, has left Chicago Midway with two people she met here. They rented a vehicle and they are now traveling to Michigan.

Meanwhile, you see a Southwest employee helping a gentleman locate his luggage. Likely Midway was his final destination because a spokesperson told me if Midway was not the final destination for passengers, the luggage here would continue on to where it was supposed to go.

We also heard from another couple who live with diabetes. They were really struggling because they don't have their medication, their insulin.

Jessica.

DEAN: Oh, yes, not a good situation there.

Adrienne Broaddus in Chicago, thanks for that update.

And passengers aren't the only people frustrated by these delays and cancellations. Even Southwest employees are running into major obstacles trying to work their next flight.

Let's listen to what the VP of the pilot's union told CNN this morning. (BEGIN VIDEO CLIP)

MIKE SANTORO, VICE PRESIDENT, SOUTHWEST AIRLINES PILOTS ASSOCIATION: What went wrong is that our IT infrastructure for our scheduling software is vastly outdated. It can't handle the number of pilots, flight attendants that we have in the system with our complex route network. We don't have the normal hub to hub - you know, hub and spoke like the other major airlines do. We fly a point to point network, which can put our crews in the wrong places without airplanes, mismatched. And that's what happened.

We're tired of apologizing for Southwest. The pilots of the airline. And our hearts go out to all of our passengers. It really does.

(END VIDEO CLIP)

DEAN: As we were hearing from Gabe, sometimes it's the airlines saying it's the winter storm but it's the pilot's union saying it's this outdated software. Southwest Airlines is acknowledging that it didn't have the manpower to answer the volume of calls to rescheduled both the passengers and also the crew.

Here's what a spokesperson said last night.

(BEGIN VIDEO CLIP)

JAY MCVAY, SPOKESPERSON, SOUTHWEST AIRLINES: With those cancellations, and as a result we end up with flight crews and airplanes that are out of place and not in the cities that they need to be in to continue to run our operation. So that is ultimately exactly how we ended up where we are.

But we do apologize to our customers. We will do everything that we need to do to right the challenges that we've had right now, including while we are, you know, willing to offer hotels, ride assistance, vans, whatever that looks like, rental cars to try and make sure these folks get home as quickly as possible.

(END VIDEO CLIP)

DEAN: And here with me to discuss this further is Edward Russell. He's the editor at "Skift's Airline Weekly."

Edward, it's great to see you.

I just want to lay this out for people. This is, as we've talked about, a Southwest Airline specific problem right now. And we want to give people some context.

So, according to Flight Aware, nearly 90 percent of today's flight cancellations are on Southwest. That's 2,500 flights. The next highest cancellations is Spirit Airlines with 82. So that kind of shows you where we are.

And people haven't only faced these massive flight cancellations. We were just hearing from them. It's reports of hour long waits on the phone, if they can get anyone on the phone, all these lost bags. The crew, the pilots seem frustrated. What needs to be done to make this right for the travelers?

EDWARD RUSSELL, EDITOR, "SKIFT'S AIRLINE WEEKLY": I mean, Jessica, that is a good question. At this point, I mean, Southwest is clearly unable to handle the level of cancellations they're at. It's going to take days, if not weeks, to fully sort this out. I mean, I recommend for travelers to start looking at other options, whether that's renting a car, as we already heard some people are, looking at other airlines, but, unfortunately, there's no good option at this point because the system has very little slack in it there's so many people already traveling.

DEAN: Right. It's like - it kind of sounds like it's time to pull the ripcord, to you point, and maybe drive, find another flight, which is expensive, it's inconvenient and people are missing really important things.

You heard that Southwest pilot saying scheduling software is to blame for this. And he was also saying that this kind of thing happens to varying degrees every year. This, of course, being an extreme situation. What do you think can be done to make sure this doesn't happen again? You know, the airline is saying it's weather. They're saying it's software. What do you think can be done?

RUSSELL: So, the airline's correct that weather set this whole cascade of events off, but you have to agree with the union, it is software. Southwest is known to have used -- to use some older technology systems, particularly for scheduling, for some time, and they have been investing, but clearly as we've seen over the last few days the investments have not been enough, especially as the airline has grown significantly in recent years.

[09:10:08]

So, you know, the level of investment needs to step up. And the truth is, is the federal government's going to be looking at this closely. We've already seen Secretary of Transportation Pete Buttigieg tweet about, you know, looking into Southwest and what happened over the holidays. So, it's really -- the pressure is on Southwest. And they have a new CEO, Bob Jordan, who took over last year, or earlier this year, and, you know, he is really going to be under the microscope, you know, for -- actually it's surprising we haven't seen him come out publicly yet and talk about this.

DEAN: That is - that's a good point.

And it's interesting, too, that we are hearing from the pilots union, They're pushing back on a lot of this. They seem very upset. Do you anticipate that we will see more of that push and pull between the airline and the pilots union as this continues?

RUSSELL: Absolutely. You know, we are in a point where a lot of - there's some angst between labor and management at Southwest and other airlines and I expect we're going to see more of that. The pilots and flight attendants of Southwest have already been upset over some of the working conditions during the pandemic. You know, this is just exacerbating the situation and I expect we're going to see more push and pull between the two.

DEAN: Yes.

All right, Edward Russell, it sounds like your advice is people is try an alternative way if you are stuck in one of these airports or planning to fly on Southwest soon, right?

RUSSELL: Absolutely. And if you're traveling over New Year's on Southwest, I would, you know, really think hard about that trip because it's better to stay home than be stuck somewhere.

DEAN: Than get stranded.

All right, thanks so much. We appreciate it.

Let's go now to western New York, where people trapped in their homes by the blizzard in the Buffalo area are now running low on food, supplies and medicine. At least 27 people have died in Erie County as a result of that storm, and most of the deaths were in Buffalo, where they've seen nearly 50 inches, 5-0 inches, of snow over the past three days. Emergency crews are now focused on calls for help as the city could now see another eight inches of snow.

CNN's Polo Sandoval joining us now live from Buffalo.

And, Polo, there's still about 5,000 homes without power in Erie County. We're hearing that some grocery stores are finally opening, but we're hearing from people that are saying they're running low on food, the grocery stores had been running low on food because they can't get deliveries. This is serious stuff.

POLO SANDOVAL, CNN CORRESPONDENT: It's such an important issue that we have to be talking about right now. In fact, we heard yesterday from Erie County officials that they were already flagging that as a potential issue of not only the centers where some of these first responders have been based out of, but also some of the warming centers where people have been basically riding out this storm. And now, five days later, still there, the issue of food.

So, what we've heard from Erie County officials is that they're now looking at surrounding counties, to some of those grocery stores that may still have some of those shelves stocked, that may have had that inventory restocked perhaps right after Christmas, to hopefully bring in some of that food to some of those locations and then, obviously, to those also in need. So that is a big priority.

Also, resources coming in from other counties for help with plowing. They need to continue to clear those streets out. That's really what we're hearing from officials.

And then, lastly, those first responders to go door to door and check in with some of those folks that are still snowed in, Jessica. We have to remember that, again, this is five days in. And there is certainly a sense of frustration that is building for many people that have been cooped up this whole time. And so they are certainly hopeful, at least at the county level, that as many folks as they could, that they stocked up as much as they could by Thursday. But, still, there is a very real worry here on the ground that the longer it takes to clear out those streets, those highways, the longer folks are going to have to stay in place.

That driving ban here in Buffalo, it is still in place. This was put in, in the morning. It was put in Friday morning. And they are hopeful that maybe they could revisit that today. But, for now, it still remains in place. The death toll, sadly, is a number that continues to rise. At last check still 27, but do not be surprised if that number goes up in the next hour or two as officials have feared that as they go door to door that they are encountering situations where the occupants of a home sadly did not survive the last five days of this storm.

As far as conditions, they really do speak for themselves. At least we're not getting that snow. There were about three to five inches that were expected today, but nonetheless they're certainly making progress. And then that light at the end of the tunnel, temperatures in the 50s coming Friday.

Back to you.

DEAN: All right, and they can't come soon enough for the people there in Buffalo who have now been enduring this for five days and it looks to continue.

SANDOVAL: Yes.

DEAN: Polo Sandoval, for us on the ground in Buffalo, thank you so much.

And several cities across the south, they're facing serious water issues due to the freezing temperatures. A boil water advisory issued in Memphis, Tennessee, is expected to last a few more days as utility crews work to repair several water main breaks there.

[09:15:00]

And in Jackson, Mississippi, a local emergency has been declared. Water now being distributed to residents as crews work to restore water pressure there.

And in Georgia, boil water advisories have been issued for Clayton, Forsyth and Butts Counties due to damaged pipes and low water pressure.

Up next, a stunning admission from a Republican congressman-elect in New York. He now admits he completely fabricated much of what he put on his resume. What does it mean for George Santos' political future?

Plus, we are live in El Paso, Texas, as we wait to see if the Supreme Court will rule today on whether to end Trump-era border restrictions. Border agents say they are seeing 1,500 migrants crossing every day despite the freezing temperatures. And a little later, we've had a good run but a new projection shared

exclusively with CNN shows gas prices could still climb back above $4 a gallon by May. We'll explain why.

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[09:20:03]

DEAN: Republican Congressman-Elect George Santos now says, yes, he did embellish parts of his resume and lied about going to college, but he says he can still serve in Congress. Santos spoke with WABC last night after "The New York Times" found discrepancies from his past, but he insisted he did nothing illegal.

(BEGIN VIDEO CLIP)

REP.-ELECT GEORGE SANTOS (R-NY): I'm not a fraud. I'm not a criminal who defrauded the entire country and made up this fictional character and ran for Congress. I've been around a long time. I mean, a lot of people know me. They know who I am. They've done business dealings with me. And I'm not going to make excuses for this but a lot of people overstate in their resumes or twist a little bit or engrandiate (ph) themselves. I'm not saying I'm not guilty of that.

I want to make sure that if I disappointed anyone by resume embellishment, I am sorry.

(END VIDEO CLIP)

DEAN: I mean, resume embellishment.

Joining me now is CNN national political reporter Eva McKend.

He says resume embellishment. He doesn't fully really apologize there. But we're talking about just telling untruths. This isn't an embellishment. He didn't work at these places. He didn't go to these schools.

EVA MCKEND, CNN NATIONAL POLITICAL REPORTER: Yes, and, Jessica, to say that he embellished I think would be the most generous framing possible, all right. These -- this is not an embellishment. These are pretty bold lies. But the only ones that he's sort of somewhat fessing up to is the ones that concern his education and his work history. He conceded that he never, in fact, worked for Citi Group or Goldman Sachs. He says that he worked for a company that worked with those financial groups. But who even knows if that's the truth. He does not have a college degree. He, of course, said that he graduated from Baruch and NYU.

CNN learned through genealogy records that contradict this claim that he has -- is of Jewish heritage and that his grandparents survived the Holocaust. The IRS has no record of a registered charity that he said that he long operated. So, it just goes on and on and on.

DEAN: Yes, the - this -- look at that list. I mean that's not embellishment. Those are - those are just lies, as you say, and false claims about very serious things. And it's not just the once you just pointed out. He also talked about this discrepancy that he gave regarding the Pulse nightclub shooting.

MCKEND: Yes, this is particularly troubling because this extends beyond a personal biography, right? He says that he -- employees of his -- he formerly said the four of them were victims in this terrible Pulse massacre that we all, of course, remember in this country, a deeply sad event. Well, he is now sort of this -- through this word soup salad in this radio interview saying that that is actually not the case.

Take a listen.

(BEGIN VIDEO CLIP)

ANTHONY WEINER: Did anyone who worked for you perish in the Pulse nightclub shooting?

GEORGE SANTOS: That worked for me directly? No. But we did have people who were being hired to work for the company at the time.

(END VIDEO CLIP)

MCKEND: So, Jessica, just another lie here.

And, you know, we are hearing from Kevin McCarthy. We have asked him, CNN, several times to comment on this. Santos indicates that he is prepared to still serve in Congress. And we haven't heard any push back from Republican leadership to that effect.

DEAN: Right. We were -- I was on The Hill early - or late last week, right before the Christmas holiday. McCarthy wouldn't answer any questions about -- repeated questions about this. And they've only got that four-seat majority in the House. So, it will be very interesting to see if they seat him, if McCarthy does anything, or if there's an ethics committee violation. We shall see.

Eva McKend, thanks so much for that reporting.

And we are learning new details in the multibillion dollar collapse of cryptocurrency giant FTX. Court transcripts showing two business partners of former CEO Sam Bankman-Fried admitted to stealing billions from customers and trying to cover it up. The two have pleading guilty to several counts, including fraud, and they're now cooperating with federal prosecutors.

CNN's Brynn Gingras is closely following this case.

Brynn, what's new from these new court documents?

BRYNN GINGRAS, CNN CORRESPONDENT: Yes, Jessica, well, we're learning the extent of the cooperation that these two former business partners of Sam Bankman-Fried are having with the federal government. Now, those names, Caroline Ellison, who had an on and off again relationship with Sam Bankman-Fried, she is the former CEO of Alameda Research, which was the hedge fund for the cryptocurrency group that those guys ran. And she said in court last week, according to these new documents that have now been unsealed, that she's truly sorry. That she knew what she was doing was wrong.

Now, essentially, as the CEO of Alameda Research, she says she knew that they were stealing billions of dollars from the FTX crypto exchange and using it to fund the hedge fund and basically pay off loans. And, remember, that money, as we have learned, was going to pay off, you know, large, lavish residences.

[09:25:01]

We know that it was going to political contributions. And she essentially said that she knew that that was what was happening and she knew that they were hiding it from investors.

Let me give you a quote for what she said to the judge in court. I understood that if Alameda's FTX accounts had significant negative balances in any particular currency it meant that Alameda was borrowing funds that FTX's customers had deposited on to the exchange.

Now, as for the other person, the other former business partner, Gary Wang, he was a former chief technology officer. He says in court that he knew and wrote the code that allowed that special privileges, as they called it, to happen between the cryptocurrency exchange and the hedge fund.

So, both these guys, we know now, Jessica, cooperating fully with the government. They were, before this cooperation, facing several decades of time in prison based on the charges that they have now pled guilty to. Of course, they won't be - they'll continue their cooperation as this case continues to move throughout the courts and we'll see what they actually face in prison when they are sentenced next December.

Jessica.

DEAN: Yes, we will.

Brynn Gingras for us. Thanks so much for that update.

GINGRAS: Thanks.

DEAN: And still ahead, more than 20,000 migrants waiting in Mexico to find out if the Supreme Court will lift the Title 42 border policy. Could it happen as soon as today? We're live in El Paso where more border fencing is going up in anticipation of that ruling.

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