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No Classified Materials Found at Biden Vacation Home; Top U.S. House Republican Hopeful After Biden Meeting; Federal Reserve Hikes Interest Ratees a Quarter Point; Ukraine Launches Nationwide Anti- Corruption Raids; Remembering Tyre Nichols. Aired 4-4:30a ET

Aired February 02, 2023 - 04:00   ET

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

[04:00:00]

BIANCA NOBILO, CNN ANCHOR: Hello and a warm welcome to our viewers joining us in the United States and everywhere around the world. I'm Bianca Nobilo live from London. Max Foster has the day off today. Just ahead on CNN NEWSROOM.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is the third property that is associated with President Biden that the FBI has visited.

UNIDENTIFIED MALE: The president from the very beginning of having total cooperation with the Justice Department.

UNIDENTIFIED FEMALE: Tyre was a beautiful person. And for this to happen to him is unimaginable.

UNIDENTIFIED MALE: Legacy of Tyre Nichols is that we have equal justice swiftly.

UNIDENTIFIED MALE: This time the man many consider the greatest player in NFL history seems to really mean it.

UNIDENTIFIED MALE: It is time. He has proved everything he needs to prove. So go ahead, move forward.

(END VIDEO CLIP)

ANNOUNCER: Live from London this is CNN NEWSROOM with Max Foster and Bianca Nobilo.

NOBILO: It is Thursday, February 2, 9:00 a.m. here in London 4:00 a.m. in Rehoboth Beach, Delaware. Where FBI agents have wrapped their search for classified documents at the President Joe Biden vacation home. A lawyer for the president says that they didn't find anything. Mr. Biden has repeatedly insisted he did nothing wrong in handling classified material, a claim echoed by the White House.

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IAN SAMS, WHITE HOUSE COUNSEL'S OFFICE: Look, I think that we are not going to get ahead of potential speculation and steps that could happen in the investigation. The president has been fully cooperative and he's directed his team to be fully cooperative. And that's because he believes in the independence of the Justice Department. He believes in giving them the space to conduct a thorough review and to conduct that review efficiently. That's why he's moving quickly to give them access to his home in Wilmington, to get access to his home in Rehoboth so they can do a full search so that they are able to get access to the information so that they can move ahead in their review.

(END VIDEO CLIP)

NOBILO: The searches into multiple properties would appear be a clear sign that the U.S. Justice Department is remaining vigilant in its investigation. CNN's Jessica Schneider reports

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JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: This was a third FBI search and it lasted for 3 1/2 hours Wednesday at President Joe Biden's Rehoboth Beach, Delaware house. No classified documents were found, however. And President Biden's personal attorney released a statement after the search saying that it was conducted in coordination and cooperation with the president's attorneys. And in an earlier statement he said that the FBI and the DOJ had the president's full support and cooperation.

And of course that cooperation has really been a constant theme from the White House. They've repeatedly sought to differentiate the ongoing investigation into President Biden's handling of classified information from that obstruction investigation that's going into former President Trump and his team because of documents found down at Mar-a-Lago.

Notably though at the same time this FBI search was underway, the special counsel handling Biden's case had just started on Wednesday. It's Robert Hur, he will be leading that investigation. But there is still a lot of questions as to what exactly has been found from Biden's homes and even his former office. Our team has learned that dozens of classified documents in all have been found. No details though on what exactly the documents contain.

And Biden's team on Wednesday did say that even though no classified documents were found, DOJ did take some handwritten notes that were from Biden's time as vice president from the Rehoboth home. So, that's the second instance where handwritten notes have been taken. The last time was during that search about two weeks ago that lasted 13 hours at the Wilmington house.

So now the question is will there be any more searches by the FBI and it really is still a possibility as this investigation moves forward.

Jessica Schneider, CNN, Washington.

(END VIDEOTAPE)

NOBILO: Attorneys for Hunter Biden are calling for a criminal investigation into a computer repair shop owner and several Republican political figures. They say private and personal information about the president's son has been exploited and weaponized. Biden's lawyers are not saying how Rudy Giuliani, Steve Bannon and others came into possession of the information but is reported to have come from Biden's laptop. Take a listen to former FBI deputy director Andrew McCabe.

(BEGIN VIDEOTAPE)

ANDREW MCCABE, FORMER FBI DEPUTY DIRECTOR: He is basically recasting himself here as victim of potential cybercrimes and trafficking in stolen property and other issues like that.

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So you have Hunter Biden's lawyers bringing these claims to the relevant law enforcement -- the heads of the relevant law enforcement agencies here, both the Department of Justice and national security division and in the state of Delaware. Saying hey, our client has been victimized by this trafficking of his material without his consent. This may have been, you know, exceeding the authorization that the repair shop had to access his files. They certainly didn't have his permission to share this information with anybody else and we need to get involved and investigate what's happened to our client. I think that it is an aggressive but appropriate move at this point.

(END VIDEOTAPE)

NOBILO: In a 2021 interview, Hunter Biden said that he didn't remember dropping off his laptop for repair, although the repair shop owner said he did.

The controversy surrounding U.S. Congressman George Santos are continuing to grow. Santos has been caught in a number of deceptions about his education, work experience and family is now being investigated by the FBI. They are looking into this U.S. Navy veteran's allegation, that Santos set up a GoFundMe account to pay for life-saving surgery for his beloved service dog but took off with the money instead. Here is what Rich Osthoff told CNN last month.

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RICH OSTHOFF, U.S. NAVY VETERAN: I don't want you to ever hurt anybody like you hurt me again, George. And nobody else should ever have to go through that. I almost killed myself when that dog died. That's why I'm here. I don't want him to be able to do it again.

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NOBILO: Osthoff said that he's cooperating with the feds and handed over text message exchanges with Santos to them. Santos declined to comment and he was asked about this issue on Wednesday.

Now two new developments in the investigation into Donald Trump's alleged role in a hush money payment scheme. Sources say a top executive at the Trump Organization Jeffrey McConney is set to appear before a Manhattan grand jury today. His expected appearance comes as prosecutors ramp up their probe into the scheme to stop adult film star Stormy Daniels from going public about a past alleged affair with Trump just before the 2016 presidential election. Trump has denied the affair.

Now there's no tangible progress in talks over raising the U.S. debt limit. But top House Republican Kevin McCarthy sounded hopeful that he and President Joe Biden can reach an agreement long before the deadline that would trigger a default, possibly as early as June.

REP. KEVIN MCCARTHY (R-CA) U.S. HOUSE SPEAKER: I thought the meeting today was a good first start. That doesn't mean that it all comes to fruition, but walking out I can see that it could come together. I was very hopeful from the meeting. It was better than I thought. Just like anything else.

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NOBILO: But each day without a deal brings the U.S. one step closer to default and the consequences would be dire. CNN's Phil Mattingly has the latest on the negotiations.

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PHIL MATTINGLY, CNN CHIEF WHITE HOUSE CORRESPONDENT: President Biden and Speaker Kevin McCarthy met for more than an hour in the Oval Office, there was nothing on camera. There were no statements by the two leaders at least before the meeting. After the meeting the Speaker came out described the meeting that lasted more than an hour as productive. Said it was a good meeting. Said markets that are concerned about the potential for a U.S. default, the first in the history of the country, should feel better about things.

Why? Well, that still remains an open question. I think the fact that they had a conversation at all seems to be viewed as progress from McCarthy's side of things. However, the two prospectives which are wildly divergent in terms of what the outcome should be. When it comes to the debt limit, they're still wildly divergent.

And while McCarthy said it was a positive meeting, Biden in a statement after the meeting said it was a productive discussion. There is no clear way to lay out a path toward avoiding default at this point in time. And still White House officials make it abundantly clear the president is dead set on the idea that there will be no negotiations despite what Republicans insist. Take a listen.

MATTINGLY: I understand that he has made that abundantly clear repeatedly. I'm saying are you closing -- can you close the door on any other alternatives and Congress from fulfilling their constitutional obligation.

KARINE JEAN-PIERRE, WHITE HOUSE PRESS SECRETARY: Look, what I'm saying is we've been clear about -- when we've been asked if there's room for negotiation, we have said this should be done without any conditions. There shouldn't be a way to go around this to get this done. This is something that Congress should act on now. MATTINGLY: The White House Press Secretary Karine Jean-Pierre there

eluding to the fact that there is no other off-ramp then Congressional action. That's something the financial markets have assumed may be a possibility. Whether it's prioritizing payments to certain creditors, maybe even minting a trillion dollar coin. A number of different theories out there. White House officials saying, no, there is no other option. Congress has to act. And they have about five months to do so.

McCarthy says they thinks they can reach a deal long before that. However, has not laid out what the Republican plan is. White House officials made clear they're not moving off of their plan at this point in time. A clean debt ceiling increase, McCarthy said that's something he told explicitly it was not on the table. Where things go from here obviously is still very much an open question.

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At this point though, Biden and McCarthy committing to continue speaking on what could be potential economic catastrophe they're trying to avoid.

Phil Mattingly, CNN, the White House.

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NOBILO: U.S. financial markets are hoping to keep the momentum going when trading begins on Wall Street in just a few hours. Stock futures are looking to open but of course that could change. Stock futures at the moment mixed picture. We'll see if they can keep -- keep that positivity going to the rest of the day. Because on Wednesday the Dow gained ground late in session but then finished flat. The Nasdaq surged 2 percent and the S&P 500 closed more than 1 percent higher.

The rally was surged by the Federal Reserve's announcement that inflation is easing and it would be hiking interest rates by only a quarter of a percent. CNN's Matt Egan has the details.

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MATT EGAN, CNN REPORTER: Bianca, the Feds warned inflation isn't over, but it is shifting. This 25 basis point rate increase from the Fed is the smallest since this fight against inflation began back in March. But the Fed is still trying to slow this economy down, to knock inflation down. But it's gone from slamming the brakes on the economy to tapping the brakes. And that is an important shift because it lowers the risk that the Fed ends up causing an accident either in financial markets or in the real economy or in both.

And the Fed is changing its tune on inflation a bit. The statement says that inflation remains elevated, but it also concedes that it has eased. And during the press conference Fed Chair Jerome Powell, he declared that the disinflation process has begun and he said he's pleased to see the prices are cooling off.

Also during the press conference Powell didn't really seem bothered by the January boom in financial markets even though soaring stock prices actually makes the job harder for the Fed to cool off inflation. Markets seemed to like what Powell had to say with stocks rally during the press conference.

But I would note that Powell did still talk tough about inflation. He said that it is way too premature to declare victory. And listen to this clip.

JEROME POWELL, U.S. FEDERAL RESERVE CHAIR: It is very difficult to manage the risk of doing too little and finding out in 6 or 12 months that we actually were close but didn't get the job done. Inflation springs back and we have go back in. And now you really do worry about expectations getting inadequate and that kind of thing. This is a very difficult risk to manage.

EGAN: And Powell didn't really seem worried about the Fed going too far, saying that they know how to deal with that. At the end of the day -- listen, the Fed sounds more encouraged about inflation. The Fed is slowing the pace of rate hikes. Their job isn't done here, but it does feel as though we are much closer to the end of this rate hiking campaign than the beginning -- Bianca.

(END VIDEOTAPE)

NOBILO: Matt Egan there for us.

And it seems things could get worse for some U.S. retailers. Bed Bath & Beyond announced his closing nearly 90 locations as the company nears bankruptcy. "Wall Street Journal" reports that the company failed to make debt payments totaling more than $28 million that were due on Wednesday. Bed Bath & Beyond is no stranger to closures though. Since last February its announced the closure of more than 200 stores.

A rescue operation is ongoing in eastern Ukraine in the city Kramatorsk where officials say a Russian missile hit a residential area killing at least three people. Eight others were wounded in the attack and one official says that at least two people may still be trapped under the rubble. At least eight apartment buildings were damaged and one of them completely destroyed.

Meantime in a nearby Bakhmut, Ukraine reports heavy fighting while pro-Russian forces claim to be close to encircling the key Ukrainian city. And all of this, as Ukraine is also stepping up its fight against what it calls its internal enemy, corruption. Security forces raided locations across the country on Wednesday.

And to discuss this Scott McLean is joining us now. Scott, this has been a story that's ramping up of late. Zelenskyy's very visible fight against internal corruption. But the reports that we're getting, particularly the raiding of this billionaire Ihor Kolomoyskyy who had very close connections to Zelenskyy throughout his political career seems to be a whole new level of commitment to this.

SCOTT MCLEAN, CNN CORRESPONDENT: And you know, lot of this is carryover from things that officials knew or suspected before the war and now they are, you know, finally trying to do something about it. Because I think that there's recognition in the country that they can't go back to the status quo which was a reputation as one of the most corrupt countries in Europe. And frankly, there are still very big problems as we're seeing here today with these raids.

And President Zelenskyy said, look, he is willing to fire as many top officials as it takes to stamp out this problem. And as he should.

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He was elected in part on a promise to do something about corruption and to try to clean up the situation. And so this latest crackdown includes searches of the state tax service, dismissal of the entire management team of the customs agency and notices of suspicion given to senior officials in the defense ministry, if you can believe that.

There were also these officials -- the former management of two of the largest oil companies in Ukraine, that were also told that they were under investigation for tax fraud allegations totaling $1 billion.

One of the other searches that was done was on the home and office of the head of the Kyiv tax authority. And officials there found cash totaling $175,000 U.S., luxury cars, luxury watches, things like that. That person is accused of essentially looking the other way on some $1.2 billion in unpaid tax.

And what's interesting here is the timing. Because tomorrow there is a Ukraine/EU summit taking place this Kyiv. Ursula von der Leyen has arrived in Kyiv. She tweeted not long ago saying, we are here together to show that the EU stands by Ukraine as firmly as ever and deepen further our support and cooperation.

Of course one of the things that is likely to be discussed is corruption because the EU is not going to allow Ukraine to become anywhere close to being a member unless they can stamp out the problem.

NOBILO: Scott McLean, thank you.

Police in Pakistan say they can now confirm the Pakistani Taliban are responsible for Monday's deadly suicide bombing at a mosque in Peshawar. Officials say the attacker was let through a security checkpoint because he was wearing a police uniform. Police believe a network aided the bomber and that they are closing in on it. Authorities have also revised the death toll lower now reporting 84 were killed in the attack, down from the more than 100 they previously said.

Israeli warplanes bombed central Gaza early Thursday morning. Palestinian news agency WAFA reports that F-16 warplanes launched at least five missiles causing a fire and damaged nearby homes. The Israel Defense Forces said in a tweet that the strike is in response to a rocket launch from Gaza. The IDF claims its fighter jets struck a chemical and weapons manufacturing site belonging to Hamas.

And still to come, it's for real this time, that is what NFL legend Tom Brady says about retiring, again. And plus Texas gets hit with more snow, ice and freezing rain. How the

winter storms have gone from bad to worse as road conditions turn deadly.

And also ahead, an outpouring of grief at the funeral for Tyre Nichols whose violent death at the hands of Memphis police shocked the nation.

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KEYANA DIXON, TYRE NICHOLS' SISTER: I see the world showing him love and fighting for his justice. But all I want is my baby brother back.

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KAMALA HARRIS, VICE PRESIDENT OF THE UNITED STATES: We demand Congress pass the George Floyd Justice and Policing Act. Joe Biden will sign it. And we should not delay and we will not be denied. It is nonnegotiable.

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NOBILO: U.S. Vice President Kamala Harris was among the mourners attending an emotional funeral for the 29-year-old Tyre Nichols in Memphis, Tennessee on Wednesday. Nichols died last month following a violence encounter with Memphis police. Five former officers now face murder charges. One of the city's main brigades was -- bridges was lit up as a tribute to Nichols. And will get more now from CNN's Ryan Young in Memphis. And we have to warn you that some of the images in his report may be disturbing.

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ROWVAUGHN WELLS, TYRE NICHOLS' MOTHER: Tyre was a beautiful person. And for this to happen to him is just unmanageable.

RYAN YOUNG, CNN NATIONAL CORRESPONDENT (voice over): A goodbye to a beloved son, moving tributes and a call for change.

RODNEY WELLS, TYRE NICHOLS' STEPFATHER: We have to fight for justice. We cannot continue to let these people brutalize our kids.

YOUNG (voice-over): Grieving family and friends celebrating the life of Tyre Nichols today.

ROWVAUGHN WELLS: I promise you the only thing that's keeping me going is the fact that I really choose to believe my son was sitting here on the side of me from God.

KEYANA DIXON, TYRE NICHOLS' SISTER: I see the world showing him love and fighting for his justice. But all I want is my baby brother back. LATOYA YIZAR, TYRE NICHOLS' SISTER: I'm just trying to go home. Don't I deserve to feel safe?

YOUNG (voice-over): A young father, artist and avid skateboarder who died after a violent encounter with Memphis police.

BEN CRUMP, CIVIL RIGHTS ATTORNEY: Why couldn't they see the humanity in Tyre? Because we have to make sure they see us as human beings.

YOUNG (voice-over): Civil rights leaders, community members and officials, including Vice President Kamala Harris.

HARRIS: This is a family that lost their son and their brother through an act of violence at the hands and the feet of people who had been in charge with keeping them safe.

YOUNG (voice-over): With the families of other victims of police brutality in attendance.

REV. AL SHARPTON, CIVIL RIGHTS ACTIVIST: The mother, Philonise and Kiki is here of the Floyds. There is Botham John's sister and Brandon, the mother of Eric Garner from New York is here. They know what it is to sit in a funeral like this.

YOUNG (voice-over): A service painfully familiar for black communities in America.

REV. DR. J. LAWRENCE TURNER, SENIOR PASTOR, MISSISSIPPI BLVD. CHRISTIAN CHURCH: We serve notice to this nation that the rerun of this episode that makes black lives hashtags has been canceled and will not be renewed for another season.

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YOUNG (voice-over): The videos of the brutal police beating were released less than a week ago and more videos of the incident are expected to be released soon. The city of Memphis saying it's preparing to release the recordings once an administrative investigation is complete and that the Nichols family and their attorneys have already seen the audio and video footage.

The investigation has led to firing of five officers and later three fire department personnel. Additionally, two more Memphis police officers and two members of the Shelby County Sheriff's Office have been placed on leave.

Contradictions between the video of the fatal beating and the initial police report have prosecutors looking into further charges, including charges of false reporting and that police account for every other officer and fire department personnel at the scene.

Personnel files for the five former Memphis police officers charged in Nichols' death show several received written reprimands or short suspensions for violating department policies. Including Demetrius Haley who received a written reprimand in November of 2021 for failing to document his role in the detention of a suspect who said she suffered a dislocated shoulder as she was arrested. And Desmond Mills Jr., who received a written reprimand in 2019 for failing to document the use of physical force during an arrest. None of the officers charged in Nichols' death have previously been disciplined for excessive force. But even as questions in this case linger, the call for change is clear.

SHARPTON: We are going to change this country because we refuse to keep living under the threat of the cops and the robbers.

YOUNG: One of the most emotional parts is when you had Tyre's sisters talking about him wanting just to get home. That poem that she wrote spoke to him about just trying to reach home. And you think about him calling out for his mother. A lot of emotion here especially with other mothers coming to this funeral to pay their respects to this family.

Ryan Young, CNN, Memphis, Tennessee.

(END VIDEOTAPE)

NOBILO: As Ryan just mentioned, Memphis authorities are now looking to release a lot more recordings of the tragic incident. Speaking earlier to CNN, the lead prosecutor explained how these additional recordings could result in more charges being filed. Take a listen.

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STEVEN MULROY, SHELBY COUNTY DISTRICT ATTORNEY: It's fair to say that the incident report that has gone public does not match up on all fours with what one sees when you look at the video that's already been released. There is a lot of footage, maybe as much as 20 hours, and some of it I think may be more relevant because of the audio and a lot of it depicts things that take place, you know, after the beating has already occurred and, you know, people are sort of talking afterwards, even after the ambulance takes Mr. Nichols away.

(END VIDEO CLIP)

NOBILO: The five former officers now charged with Nichols' murder expected to be arraigned on February 17.

Still ahead the U.S. and Philippines are deepening their military cooperation concerned over China's growing influence in the Pacific regions. We'll have a live report on their defense pact.

Plus, the latest on the extreme weather hitting the U.S.

DEREK VAN DAM, CNN METEOROLOGIST: Ice and snow continues across the deep south while an epic once in a generation event unfolds across northern New England. Some of the coldest air in the entire northern hemisphere will settle into the region by the weekend. I'll have all the details and how much ice we can expect and how cold it will get, coming up after the break.

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