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Fifteen Million Under Flood Alerts In Western U.S.; The Fallout From The SVB Collapse; Israelis Protest Netanyahu's Plan. Aired 3-4a ET

Aired March 12, 2023 - 03:00   ET

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

[03:00:00]

LAILA HARRAK, CNN ANCHOR: Hello and welcome to viewers joining us from the United States and all around the world. I'm Laila Harrak.

15 million people under flood alerts in California and Nevada as yet another new storm approaches. We'll take you to Monterey County.

The fallout from the Silicon Valley Bank collapse as customers wait to hear if they will recover their money. Many worry if it will lead to even more bank closures.

And in Israel, hundreds of thousands take to the streets to protest the prime minister's plan to overhaul the court system. We're live in Tel Aviv to discuss why some see the plan as a step away from democracy.

We begin this hour in the Western U.S. where 15 million people in California and Nevada are under flood alerts. And some of those flood watches have now been extended through Wednesday. And even as the rain tapers off and flooding slowly improves across much of California for now, more rain is expected Sunday. And the next big storm system is forecast to arrive late Monday night and last through at least Wednesday.

Well, that would be the 11th atmospheric river event of the season. There are concerns especially in Monterey County where a breached levee has already flooded one town and emergency crews have rescued more than 90 people.

CNN's Mike Valerio has that story.

MIKE VALERIO, CNN NATIONAL CORRESPONDENT: Well, this is still the center of the flood response and rescue efforts here in the town center of Pajaro. Now, about five kilometers away, we have a levee that was breached several hours ago and that is why we have all of this water being dumped into the center of this small town in Monterey County in the central coast of California.

Now, after the dawn hours on Saturday, we saw National Guard vehicles go up and down this main drag of Pajaro rescuing families, couples, dogs even, making sure that everybody was okay. And we had the opportunity to interview a spokesman from Cal Fire, one of the agencies responding to this effort. Take a listen when he told us they realized the levee had a breach and how many rescue operations they've accomplished in the early hours so far.

(BEGIN VIDEO CLIP)

CAPT. CURTIS RHODES, CAL FIRE: We were notified of the levee breached at midnight last night. So, we deployed down here 3:00 A.M. this morning. We did have the high water team with us. That's part of the emergency operation center. They have been countywide this week. They have their high water vehicles and have been successful in nine rescue high water rescue situations this morning.

(END VIDEO CLIP)

VALERIO: So, the deepest water that we have behind us is about one meter deep, but the concern here is that, of course, we have kind of a quiescent moment with the sun shining at this hour but we have yet another atmosphere river system taking aim at California Tuesday into Wednesday, the 11th storm system of this season. The serious concern is that without this levee fixed by Tuesday and Wednesday, we could have even more water here in the center of town.

Mike Valerio, CNN, Pajaro, California.

HARRAK: And we are also watching severe weather in parts of the U.S. Storms are expected from Oklahoma to Mississippi to the overnight hours. A number of severe thunder storm warnings are in effect right now. And that severe threat moves east through the day.

Parts of the southeast could see severe storms with hail, damaging winds and tornadoes. Meanwhile, heavy snow will make for treacherous travel in the northern plains and upper Midwest. North Dakota, Minnesota and Wisconsin could get 8 to 12 inches of snow through the day today.

California's governor says he is in touch with the White House, and the U.S. Treasury, regarding the sudden collapse on Friday of Silicon Valley Bank. It is the second largest failure of a financial institution in U.S. history. In a statement, Gavin Newsom says, everyone is working with the FDIC to stabilize the situation as quickly as possible to protect jobs, people's livelihoods and the entire innovation economy ecosystem.

CNN's Matt Egan has more.

MATT EGAN, CNN REPORTER: This happened so fast, it is stunning.

[03:05:01]

Silicon Valley Bank may not be a household name but it held $200 billion-plus in assets. That's makes this the second biggest collapse of a bank in U.S. history behind only the 2008 implosion of Washington Mutual.

Now, the FDIC has seized control of this bank. The FDIC says that depositors will get access to their cash by Monday morning up to the $250,000 insurance limit. But we know that some startups and individuals and small businesses, they hold more than $250,000 at this bank. And it's not really clear what's going to happen and whether or not they are going to get all of their money back.

So, how did we get here and how did we get here so fast? Well, shares of this bank's parent company collapsed 60 percent on Thursday after warning of a rapid need to raise cash. And that appeared to spark a run on the bank with some companies racing to pull their money.

This is also a symptom of the Federal Reserve's war on inflation, because we know interest spikes, like the one going on right now, tends to break things somewhere in the financial market. We also know that the Fed's rate hikes have hurt the value of tech companies, the same tech companies that Silicon Valley Bank caters to. It's also hurt the value of the bonds that banks like this one rely on for funding.

Now, U.S. -- meeting on Friday to discuss this bank failure, and I spoke to Treasury Deputy Secretary Wally Adeyemo and asked him what he thinks about this situation. Listen to what he said?

(BEGIN VIDEO CLIP)

WALLY ADEYEMO, U.S. TREASURY DEPUTY SECRETARY: The federal regulators are paying attention to this particular financial institution and that when we think about the broader financial system, we're very confident in the ability, in the resilience of the system and also the fact that we have the tools that are necessary to deal with incidents like what's happened to Silicon Valley Bank.

(END VIDEO CLIP)

EGAN: But, thankfully, experts that I'm talking to, they're hopeful that this is more of an isolated incident than a systemic one. Most banks are not as exposed as this one to one single sector. Major banks they lend to not just tech companies but retailers and factories and media companies.

Moody's Chief Economist Mark Zandi, he told me that he doesn't think that this failure is a sign of broader trouble in banking and that the system is as well capitalized as ever. Let's hope so, because the last thing we need is a series of bank failures. Back to you.

HARRAK: Well, joining me now is Rana Foroohar, she is a CNN Global Economic Analyst and a Global Business Columnist and Associate Editor for the Financial Times. And she joins me now from New York to discuss the fallout from Silicon Valley Bank's collapse. So good to have you with us, Rana.

Part of what makes this so stunning is that this company was here today, gone tomorrow. What led to the sudden collapse and subsequent unraveling?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, as you know, we've been going through a real change in monetary policy in the last couple of years. Rates have started going up. And just to set the scene, I mean, we have been really, for four decades now, in kind of a falling rate environment. So, the way banks operate, the way businesses operate in general is sort of predicated on interest rates being low. That's changed now. Interest rates are going up. So, what did that do to Silicon Valley Bank? Well, this was a bank that was kind of a go-to bank for California investors, for venture capitalists, and there was so much money pouring into this bank at the beginning of the pandemic when tech stocks really boomed because everybody was online and we all needed technology. All the money that was being created in the valley when into the bank, they didn't have enough places to really lend it out so they started investing it in government bonds.

Now, the yields on those bonds haven't really changed but the amount they have to pay in deposits has been going up as interest rates go up. Now, that leads to a mismatch essentially between supply and demand on the balance sheet and that's what took Silicon Valley Bank down.

The question is, is it going to spread? And I think the answer might be yes to some of the smaller institutions that have been playing the game of trying to get more money from deposits.

HARRAK: I want to pick up on that last part, but, first, taking a listen to U.S. Treasury Secretary Janet Yellen. She -- this was her reaction when she was asked about the Silicon Valley Bank's demise. Let's take a listen.

(BEGIN VIDEO CLIP)

JANET YELLEN, U.S. TREASURY SECRETARY: You mentioned Silicon Valley Bank. There are recent developments that concern a few banks that I'm monitoring very carefully. And when banks experience financial losses, it is and should be a matter of concern.

(END VIDEO CLIP)

[03:10:07]

HARRAK: So, this is not the only bank she thinks. I mean, in terms of contagion, could this spread?

FOROOHAR: It's not something that's going to look like a Lehman Brothers moment, I don't believe, and I also don't think it's going to affect the largest institutions. Those institutions, the JPMorgans, the Citigroups, they're pretty well capitalized. They've come under a lot of regulation in higher capital standards since 2008.

Now, I will say that, recently, banks of all sizes have been pushing back against the idea of holding more capital. I think those arguments are going to be very hard to sustain when you see an incident like this. It just kind of reminds everybody that, hey, we need to know the regulatory is safe, we need to make sure that the bank's business models are safe. I wouldn't be surprised to see some smaller institutions have a ripple out effect, and also private equity, I think, shadow banks are going to be under more scrutiny because of this.

HARRAK: What I wonder though is did nobody see this coming? I mean, was there no oversight? And in terms of bank regulators, were they completely absent?

FOROOHAR: No, I wouldn't say that. I really wouldn't say that. I mean, I have to say that post 2008, the large systemic financial institutions, the big banks, that if they fall, you start to get a global domino effect that brings down the economy, this is not what we're talking about here.

But what it does underscore is that as the interest rate environment changes, you might see ripple effects not just in a small bank but in different kinds of currencies, what we saw in the U.K. a few months ago when the pound sterling came under so much pressure, that's all about a changing environment and interest rates, and with that comes risk. And it is true that it's hard to tell exactly where the risk is going to be particularly if it involves institutions that are really not in the top tier of regulation.

HARRAK: Now, the hope, Rana, is that hopefully a resolution could be found this weekend, but come Monday morning, what are some of the possible scenarios that we could see unfold?

FOROOHAR: What I have been hearing is that folks that are connected to Silicon Valley Bank, businesses that have any overlap with this bank are looking very carefully at their balance sheets, in some cases trying to reallocate their money, make sure things are safe. I think we're going to see on Monday what the market thinks about this.

One thing that I would expect just looking out even beyond the week a little bit longer term, midterm, I think you're probably going to see a continued slowdown in the tech sector, because what this says to me is people are going to be a little anxious about what's happening in the valley, in general.

I think it could also mean that maybe the Fed is going to rethink hiking rates this fast or maybe they're going to slow, pull back a little bit on the size of rate hikes. Because the truth is when you shift from a low interest rate environment, particularly as long as we've had that, to something different, you are going to see dominoes falling.

HARRAK: Rana Foroohar, it's so good to have your insights. Thank you so much.

FOROOHAR: Thank you for having me.

HARRAK: Officials in Mexico are investigating the disappearance of three women from Texas who went missing after crossing the border late last month. The group disappeared one week before four were kidnapped in the border city of Matamoros.

CNN's Rafael Romo in Atlanta has more.

RAFAEL ROMO, CNN CORRESPONDENT: It's been just a little over a week since four Americans from South Carolina were attacked and kidnapped in Mexico. As we previously reported, two of them tragically were killed. And now there's a new mystery. Three women living in Texas are believed to be missing in Mexico after they crossed the U.S. border over two weeks ago, according to police. Authorities say the women are two sisters a friend who crossed into Mexico on February 24. They were headed to the city of Montemorelos in the Mexican state of Nuevo Leon to sell clothes at a flea market. Mexican authorities told CNN about 80 agents from several law enforcement agencies looking for the women.

Regarding the kidnapped Americans, CNN has obtained and geolocated new video showing all four of them just hours before they were attacked on March 3rd. It was a live stream video taken by one of the victims. The images showed the group driving to a medical appointment in Matamoros, across the border from Brownsville, Texas, but they never made it there.

Mexico is the second most popular destination for medical tourism globally. In 2020 alone, there were an estimated 1.4 to 3 million patients traveling into the country to take advantage of inexpensive treatment, according to Patients Beyond Borders, an international health care consulting company, contacted by CNN.

[03:15:00]

Rafael Romo, CNN, Atlanta.

HARRAK: Plans to overhaul Israel's judicial system are facing more protests. Coming up, why a former prime minister reportedly says this is his country's greatest crisis ever.

(COMMERCIAL BREAK)

UNIDENTIFIED MALE: I'm here to demonstrate and to sound my voices against the dictatorship that they establish here in the name of the so-called law, judicial reform. It's not judicial reform. It's a revolution that's making Israel go to full dictatorship. And I want Israel to stay a democracy for my kids, for my grandson. It will be here because Israel is a democracy country and it must stay as one.

(END VIDEO CLIP)

HARRAK: Israeli protestors say they are fighting for democracy, as mass rallies against the right-wing government and its plans to overhaul the judicial system enter their tenth week. Organizers say half a million people turned out for rallies across the country on Saturday, this out of an Israeli population of just more than 9 million.

[03:20:01]

Allies of Prime Minister Benjamin Netanyahu, who is on trial for alleged corruption, say there reforms are needed to balance the government. But opposition leader and former Prime Minister Yair Lapid says the country is facing its greatest crisis ever.

He was quoted by the Haaretz newspaper saying this. A wave of terrorism is hitting us, our economy is crashing, money is escaping the country, Iran just signed yesterday a new agreement with Saudi Arabia, but the only thing this government cares about is crushing Israeli democracy.

Let's get you more now on this developing story. I'm joined by Haaretz's Senior Editor Amir Tibon. Amir, a very warm welcome.

Extraordinary scenes, record number of people rallying in cities across Israel for what I believe is the tenth week. How would you characterize these demonstrations? What compelled so many people to come out?

AMIR TIBON, SENIOR EDITOR, HAARETZ: People in Israel are feeling today that they are fighting for their country and for the future of their own families, their children, their ability to live here. There was an election in this country in November and a new government was sworn in, and it is the most extreme government, most religious government in the history of this country.

And a large segment of the Israeli population, the more liberal- leaning parts of the population, but also some conservatives who believe this government has gone too far, are now fighting back against this judicial plan that the government calls a reform but is basically an attempt to give the government unlimited power, absolute power with no checks and balances. And so this is really, for many Israelis, better for the very idea for Israel as a democratic and Jewish state.

HARRAK: What has the reaction been from the Netanyahu administration to these mass protests?

TIBON: What the protest has done, really, it has exposed the fact that in this government, a lot of the ministers and the senior lawmakers view a large segment of the Israeli population, I would argue even a little more than half, as anarchists, traitors, terrorists. These are the kinds of words that the people in the streets have been receiving from people in the government, from people very close to Prime Minister Netanyahu. His son, who is a close adviser of his, compared these people to terrorists.

And who are these protesters? We're talking about many people who are soldiers and officers in the reserve forces of the Israeli military. There has been an unprecedented wave of pilots in the Israeli airports who were joining these demonstrations and warning that they signed up to serve in the military of a democratic country and they will not serve in a dictatorship.

And we're seeing people who fought in all of Israeli's wars, including some of the veterans of the 1948 war for Israel's independence, join these protests and say, again, we fought to establish here a Jewish democratic homeland, now we are seeing an attempt to erode democracy here and create something much more similar to formerly democratic counties, and that is not what we fought for, that is not the vision we have for this country.

HARRAK: How unprecedented is this? TIBON: There have been protest waves in Israel before. We like to call ourselves the only democracy in the Middle East. And part of that means that people can take to the streets. But what we are seeing here, ten straight weeks, when we see hundreds of thousands of people take to the streets, and so close to an election that happened just a few months really is unprecedented.

And we are seeing also the range of the people who are involved here. It started, would I say, with just a few tens of thousands and people who are much more strongly opposed to the right-wing religious government, but now it's spreading all over the country.

We're seeing it even in some religious communities. We're seeing it not just in Tel Aviv, where you had more than 200,000 people demonstrate yesterday but also in peripheral parts of Israel that are usually considered strongholds of Netanyahu's Likud Party.

And so it's spreading all over the country and it's reaching also parts of the economy system here that usually stayed away from politics and from demonstrations, whether it's the high tech sector that is warning the government. This plan would weaken Israel as the start of nation and hurt the Israeli tech engine.

We're seeing even the banks warning the government that they're seeing a phenomenon of Israelis pulling their money out of the country because of this plan. So, really, it's spreading to such a wide range of populations and sectors, this is something that I don't remember in the history of the Israeli protest movement.

HARRAK: So, what happens now, Amir? Are these reforms a done deal? Will the court overhaul happen regardless of these mass demonstrations? And is there a way out of this impasse?

TIBON: There are two possible scenarios we are looking at right now here in Israel. One scenario is that there will be some kind of a legislative compromise.

[03:25:02]

There are people in the government who realized that this initiative has gone too far, that the plan is too extreme and that the backlash is so strong that it is time to perhaps look for a way out and maybe find some kind of a compromise.

And there are arguments in favor of all kinds of reforms in the judicial system in Israel, just like in any governmental system, but not this very extreme plan of the current government that basically gives unlimited powers to those in power.

But just as likely the scenario where the government insists on going with the court plan. There are several people pushing it who are very extreme and do not want compromise and they have continued with the legislation for the past few weeks despite pleas by the president of Israel, Isaac Herzog, to stop, put a halt to the legislative process and sit down to talk, and they refused to do it. And I believe that if they will put forward this legislation and pass it as it is, there is some likelihood that the Supreme Court of Israel will strike down parts of this legislation or maybe even the entire thing. And then what will happen is something truly unprecedented in Israeli history, a full-on constitutional crisis where the majority in our parliament in the Knesset will these pass these laws, harming the Supreme Court, limiting democracy.

The Supreme Court will strike it down and then we will have a fundamentally dangerous but very important question, who will the authorities in the country, the military, the police, the internal security agency, who will they listen to, the government or the court, the court of law?

HARRAK: Extraordinary times indeed. Amir Tibon, Haaretz's Senior Editor, thank you so much for sharing your views with us.

TIBON: Thank you.

HARRAK: Well, after weeks of protests, the French government is pushing ahead with plans to reform the pension system. By a vote of 195 to 112, the country's senate adopted a bill backed by President Emanuel Macron, while this as demonstrators took to the streets again on Saturday.

The bill would gradually raise the retirement age from 62 to 64 and it's still several steps away from becoming law, while police say more than 1.2 million people protested the plan last week and strikes have disrupted power, oil refineries, schools, airports and trains.

Iranian authorities have arrested more than 100 people in connection with the suspected poisoning of hundreds of school girls. Many of them were treated at hospitals for unexplained illnesses in recent months. Iran's state-run news reports those arrested come from several cities, including Tehran. According to the interior ministry, initial inquiries show possible motives include mischief. But it also said some people wanted to create fear and horror and shut down classrooms.

The suspected attacks happened mostly at girl schools and come as Iranian leaders faced women's protests over strict dress codes.

Football fans in England tuned in for one of the BBC's most popular programs on Saturday, but only got 20 minutes of highlights and a lot of dead air. We go live to London for more on the furious fallout over the BBC's Gary Lineker.

(COMMERCIAL BREAK)

[03:30:00]

HARRAK: Welcome back to our viewers in the United States and all around the world. I'm Laila Harrak and you're watching CNN Newsroom.

Maybe the BBC should have seen it coming, but sidelining its star football presenter on Saturday backfired in spectacular fashion. League fans accustomed to longtime host Gary Lineker and his lineup of pundits and commentators instead got match clips splayed out wordlessly from a deserted studio.

BBC Director General Tim Davie says he has no intention of stepping down over the fiasco and aims to resolve the crisis quickly. But that may be much easier said than done in light of the tsunami of support that's building behind Lineker and what it means to be, in the BBC's words, impartial.

CNN Sports Senior Analyst Darren Lewis joins us now live from London. So good to see you, Darren. The blowback has been enormous. This story mushroomed into something so much bigger.

DARREN LEWIS, CNN SPORTS SENIOR ANALYST: Absolutely, Laila. Good morning from here in the U.K., where we are still reeling from what has been (INAUDIBLE) today of drama, kicked off Tuesday when the government unveiled controversial plans to ban people arriving in the U.K. from ever claiming asylum. Lineker called the plan on Twitter.

And that's quite key. He tweeted that. He did not broadcast his opinions on television. He tweeted in a private capacity that, in his words, the plan was immeasurably cruel, directed at the most vulnerable people in language, again, his words, that is not dissimilar to that used by Germany in the 30s.

Now, some M.P.s here in England took umbrage to that. BBC three days later suggested that he would step away from presenting the football highlight show match of the day until, quote, we have an agreed and clear position on his use of social media. But the groundswell of support for him was massive.

His co-presenters and pundits say they too would step away from the show. Other people that the BBC sought to replace them said they too would step away. Primarily, players and managers were instructed yesterday that they did not need to speak to match of the day. One of them, Laila was the Liverpool head coach, Jurgen Klopp.

(BEGIN VIDEO CLIP)

JURGEN KLOPP, LIVERPOOL MANAGER: It's a really difficult world to live in. But if I understand it right, then this is about -- it's a message, an opinion about human rights and that should be possible to say.

(END VIDEO CLIP)

LEWIS: Now, look. I think as far as the whole thing is concerned, I had believed yesterday that it would die down. But one of the BBC's senior broadcasters that is highly respected appeared to suggest that there was no end in sight.

[03:35:03]

Take a look at this tweet from yesterday. And we have to tell you today there have been further former footballers who have suggested that they will not take part in any highlight show planned for today. There are four matches in the English Premier League for this afternoon and those individuals have been slated to appear, to summarize them, to comment on them. But this is a row about impartiality and it doesn't appear to be going anywhere, anywhere soon.

HARRAK: So, now what?

LEWIS: Well, it's a really good question. Because three years ago when the BBC director general, one of the most senior people at the corporation took charge, he put impartiality at the heart of his founding principles. But here's the thing, Laila, there are lots of people inside and outside the BBC who say there are other people employed by the corporation whose opinions had not been checked and they would appear to breach those impartiality rules.

In addition to that, the question has been asked, had Lineker backed government policy, would there be this backlash, would he have been suspended? That was put to the BBC director general, Tim Davie, yesterday. He said he wouldn't be drawn into what he described as hypotheticals.

But the problem for this is that the BBC had a contract with the Premier League here in England to show those highlights every week and to have that preview show as well, got to do it again next week. If they don't, they could well be in breach.

Now, I'm not a legal expert, I'm sure we'll get somebody on who will tell us what the ramifications are, but, certainly, it would appear that with Gary Lineker not backing down and others are prepared to stand in his corner, two things, A, it could well spill outside of sport and, B, there is no end to this any time soon.

HARRAK: That struck such a cord. Darren Lewis in London, thank you so much.

LEWIS: Thank you, Laila.

HARRAK: The revered U.S. football coach, Bud Grant, has died at the age of 95. Grant coached the Minnesota Vikings for 18 seasons in the 80s, winning numerous divisional titles. They reached the Super Bowl four times but the league's top prize eluded them. Grant also spent 14 seasons as a player and coach with the Winnipeg Blue Bombers, winning Canada's football championship four times.

Grant was versatile. He also played two seasons of pro basketball, winning an NBA championship as a rookie. The Vikings owner has called the hall of famer a once-in-a-lifetime man, forever synonymous with success.

Russian military wives and mothers make a personal appeal to Vladimir Putin, their message, stop sending troops to what they call the slaughter in Ukraine. That's ahead.

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[03:40:00]

HARRAK: We now want you to see a video that Ukraine says shows close combat for the city of Bakhmut.

Ukraine says Russian troops walked into an ambush by Ukrainian snipers in the city's industrial zone. Six Russian troops were reportedly killed. The footage posted by Ukraine's border guard, doesn't show any people but you could hear the gunshots. CNN could not geolocate the video but nothing in it suggests that it is not from Bakhmut.

Well, meanwhile, the leader of Russia's Wagner mercenaries is claiming more progress in the fight for the city while the wives and mothers of Russian conscripts have a new appeal to President Vladimir Putin.

Scott McLean is monitoring developments in Ukraine for you and he joins us now live from London. Scott, what more can you tell us?

SCOTT MCLEAN, CNN CORRESPONDENT: Hey, good morning, Laila. Look, the Ukrainian military said yesterday that in just the 24-hour span of time, there were 23 combat engagements, what they say. So, the fighting there continues to be extremely fierce.

The advantage for the Ukrainians in Bakhmut is that, look, they call it a fortress. It is extremely well-fortified. But beyond that, it is like any other town or city in Eastern Ukraine. It doesn't really hold any kind of special significance or strategic importance but it has this sort of strategic or this symbolic importance, excuse me, which one Ukrainian commander in the east says continues to grow every day because the Ukrainians believe that every day that they hold onto it allows them to regroup, send more troops in and prepare for some kind of a bigger attack. They also think that if they let the city fall to the Russians, that it would allow them to much more easily exploit opportunities further deeper inside of Ukraine.

And the head of the Wagner private military contractor doing much of the fighting in that part of the country released a video yesterday purporting his troops making inroads, continue making inroads. He says that he's standing just 1.2 kilometers from the city administration building in the center of the city.

And that building, a five-storey one, is smoking, there's smoke coming from it. He says that, look, he calls on his man men to cover the flanks because he says that if they don't, that the Wagner fighters will be surrounded, just as the Ukrainians who were fighting in the town center are surrounded.

In a separate video, he also described the motivation of his Russian troops. Listen.

(BEGIN VIDEO CLIP)

YEVGENY PRIGOZHIN, HEAD OF WAGNER MERCENARY GROUP: What is our goal? Why are we fighting? The goal is simple, to not disgrace Russian weapons, to not disgrace Russia, not to bring Russia to the point that it itself collapses. Most likely, this is the goal of American, British intelligence services, which work for the long haul and work to destroy Russia. In which the ruler must continue losing ratings, the army must become weaker and weaker until the Russians say what the (BLEEP) is our self-consciousness. (END VIDEO CLIP)

MCLEAN: So, Laila, one other thing to mention, and that is that, according to an independent Russian news outlet, a group of Russian women, mothers and wives, released video calling on President Putin to stop sending their husbands and sons to the slaughter, in their words.

These women claim that they were mobilized in September and that they joined assault groups and were sent to the frontlines in March with just four days of training. In fact, one woman says that her husband was part of a group five groups sent in to try to storm well-fortified Ukrainian positions against 100, what she says, well-armed Ukrainian troops.

[03:45:05]

So, she says that, look, these men are willing to defend their country, they are willing to go to war but they're willing to do it in their specialty, not as ill-equipped storm troopers. Laila?

HARRAK: Scott McLean reporting for you from London, thank you so much, Scott.

A 13-year-old Ukrainian girl is caught up in the Kremlin's propaganda offensive with a war in her homeland. Anya Naumenko was brought to Moscow to appear at recent rallies celebrating the Russian army. But as Melissa Bell reports, she is now paying the price for being dragged into Moscow's hype machine.

(BEGIN VIDEOTAPE)

MELISSA BELL, CNN CORRESPONDENT (voice over): Vladimir Putin celebrating his army. The special guests this year, children bused in from Ukraine's occupied territories.

UNIDENTIFIED FEMALE: Thank you, Uncle Yuri, for saving me, my sister and hundreds of thousands of children in Mariupol. I forget a little.

UNIDENTIFIED FEMALE: Anya, don't be shy. Go hug Uncle Yuri. Everyone give a hug. Look, it's the man who saved you all.

BELL: But who is Anya? By tracking down family members too scared to speak on air, an exclusive CNN investigation has found the story of 13-year-old Anya Naumenko, or Anya, as she's known, who was brought especially from her foster family in Mariupol for the event in Moscow.

And behind the propaganda, Anya's own bewildered view posted to her social media. Look at all the rows, she says, before being told where she will stand and what she will say.

It was a year ago that Anya's home town of Mariupol was pounded, devastating heavy artillery forcing its population underground to basements, like this one. A refuge shared for much of the three-month long siege by Anya, her family and Kateryna Pustovit, who is now in Germany. She couldn't believe her eyes when she was her on stage.

KATERYNA PUSTOVIT, FRIEND OF ANYA'S FAMILY: We were like a family. We saved ourselves, saved our lives.

BELL: But in early April, Anya's mother. Olga, left the basement was killed by Russian shelling. Anya's grief for her mother, like so much else, innocently shared online. I want to be with you, she writes.

By the end of the siege, Anya and her siblings were separated by their mother's death. Anya was sent to a foster family in Mariupol. Karim Khan, the head of the International Criminal Court, believes that through its propaganda, Moscow risks incriminating itself.

KARIM KHAN, ICC CHIEF PROSECUTOR: Regarding Anya, it's very troubling. And the Rome Statute and, in fact, the Geneva Conventions make it clear regarding how children must be treated by occupying powers. The law is present. Too many think it's an optional extra.

BELL: CNN has reached out to Russian officials for the comment on the children featured in Putin's rally last week, Moscow has not responded. But for all the tragedy of Anya's short life so far, the propaganda event has brought her fresh troubles. Daily and violent threats under her adolescent posts, Anya, don't be shy, when we celebrate Mariupol again, you will be hanging from post downtown, just one of the threats made but a reflection of so much more of the abuse young Anya has received.

PUSTOVIT: We need to stay human. She is a child who survived the war, famine, lost her mother. She is small. Even if she looks like an adult, she is a child.

BELL: But children, as symbols of the future, play an important part in Orwellian displays of loyalty to Moscow, like this one held in occupied Mariupol last week. Two visions of childhood, one carefree, the other twisted.

Melissa Bell, CNN, Kyiv.

(END VIDEOTAPE)

HARRAK: We'll be right back with more news after short break. Stay with us.

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HARRAK: Hollywood is polishing the Oscar statuettes for its biggest night of the year, the 95th Academy Awards are on later today. And ten films are up for best picture, from popcorn favorites like Avatar, The Way of Water, to the German war drama, All Quiet on the Western Front. And there's something for everyone, but as Stephanie Elam reports, organizers hope hit movies, not other kinds of hits, will be the focus.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: And when we're done with this, we're going to be carpeting all of Hollywood. STEPHANIE ELAM, CNN CORRESPONDENT (voice over): The Oscars are back, the first since the slap made Hollywood's biggest night the Academy's biggest nightmare.

CHRIS ROCK, COMEDIAN: It still hurts.

ELAM: Just a week after Chris Rock took aim at Will Smith --

JIMMY KIMMEL, HOST, JIMMY KIMMEL LIVE: Second I saw Will Smith get up out of his seat, I'd have been halfway to the (INAUDIBLE).

ELAM: All eyes will be on host Jimmy Kimmel, who says he will address the slap.

KIMMEL: Comedians are mad about it. It's one of those things for a group of people that find everything funny, it's like not funny, you know. But, of course, you know, you have to.

ELAM: The fallout also upends Oscar tradition since Smith won best actor last year.

MATTHEW BELLONI, FOUNDING PARTNER, PUCK: They have to find somebody to present best actress. Because, typically, the tradition is if you win best actor, you come back and you present best actress. But that's not going to happen because he's banned from the show.

ELAM: This year's drama should come from the awards. Possible upsets --

JAMIE LEE CURTIS, ACTRESS: I've been an actress since I was 19.

ELAM: -- a late SAG award surge from Jamie Lee Curtis could lift her over supporting actress favorite Angela Bassett.

[03:55:01]

Neither veteran has ever won.

What does that mean for you?

ANGELA BASSETT, SUPPORTING ACRESS NOMINEE, "BLACK PANTHER, WAKANDA FOREVER: You know what, it's just a clear example that you've got to hold on.

ELAM: SAG and Critics' Choice Winner Brendan Fraser will go down to the wire with Austin Butler for best actor.

The Elvis star won a BAFTA, the British Oscar, a bellwether since the academy has welcomed more international voters.

BAZ LUHRMANN, DIRECTOR, ELVIS: Denzel Washington said to me, you're about to work with a young actor, because he had just worked with him, whose work ethic is like no other. He was right.

ELAM: If there's an Oscar shocker, it could be for best actress, where Michelle Yeoh is expected to win for Everything Everywhere All at Once.

Cate Blanchett's BAFTA win keeps her competitive, but the outlier, Andrea Riseborough, whose role as an alcoholic in the small film, To Leslie, led to a social media push inside Hollywood that won her a surprise nomination. She was allowed to remain a contender after an academy investigation into the tactics of the campaign, a probe that upset some of Riseborough's supporters.

BELLONI: There could be a protest vote that goes on here. And if there is a shocker on Oscar night, it's going to be if she wins.

(END VIDEOTAPE)

HARRAK: And that was our Stephanie Elam reporting.

Thank you so much for watching. I'm Laila Harrak.

Kim Brunhuber picks up our coverage with another hour of CNN Newsroom after a quick break. Do stay with us.

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