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White House & Pentagon Respond To Russia's Downing Of U.S. Drone; Ukraine Vows To Hold On To Bakhmut Despite Russian Onslaught; Fulton County Investigators Say They Have Another Recording Of Trump Call Pressuring GA Officials. Aired 3-3:30p ET

Aired March 16, 2023 - 15:00   ET

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

VICTOR BLACKWELL, CNN HOST: Mm-hm.

BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT: ... who can ship in and keep that stuff from hitting the shore because you don't want it. It's much harder when it hit the shore.

BIANNA GOLODRYGA, CNN HOST: Listen, 5,000-mile smelly blob is a tourism turn off, so hopefully they'll get this fixed and maybe call some of those people to help remedy this.

WEIR: But there is time. It probably won't hit till July just to give you some concepts.

BLACKWELL: All right.

GOLODRYGA: A few months there.

WEIR: Yep.

GOLODRYGA: Bill Weir, thank you.

WEIR: You bet.

BLACKWELL: Thanks, Bill.

Top of a new hour on CNN NEWSROOM. I'm Victor Blackwell.

GOLODRYGA: I'm Bianna Golodryga.

We begin this hour in Washington where we just heard from both the White House and Pentagon concerning the Russian downing of a U.S. drone over the Black Sea.

BLACKWELL: New video just declassified today shows the moment a pair of Russian fighter jets approached the U.S. drone and forced it down.

Let's bring in CNN's Oren Liebermann at the Pentagon and Jeremy Diamond at the White House.

Oren, you first.

Let's start with what the Pentagon is saying about this new video. OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: Well, the video itself is pretty incredible, a very close look at what happened early Tuesday morning over the Black Sea and there are essentially two pieces to it. In the first one a Russian fighter jet makes a pass at a U.S. MQ-9 Reaper drone dumping jet fuel. But crucially, you see the drone itself is still operating, a propeller spinning, the drone flying.

In the second clip of the video or the later part of the video, you see a Russian fighter jet make another pass. Here you see the same dumping of jet fuel. And this is where the Russian jet collides with the U.S. drone damaging its propeller and ultimately forcing it down.

It's critical because this is what backs up the U.S. account of how this all played out over the course of 30 to 40 minutes or so over the Black Sea. And it undercuts the Russian account, which was that there was no physical contact between the Russian jet and the drone, and basically blaming the United States for the entire encounter, despite the fact that the U.S. has flown drones over the Black Sea since the beginning of the war and even before that.

The Pentagon just a moment ago holding a press briefing and, of course, addressing the fallout of the drone and the incident itself.

(BEGIN VIDEO CLIP)

BRIG. GEN. PAY RYDER, PENTAGON PRESS SECRETARY: It's not unusual for us to release imagery of unsafe, unprofessional incidents. We've done that in other situations and so particularly in this case, given the reckless and dangerous behavior and to demonstrate publicly what type of actions the Russians had taken, we felt that it was important to provide this imagery.

(END VIDEO CLIP)

LIEBERMANN: The U.S. has - said it's very difficult for the U.S. to recover the drone. There are no navy ships in the Black Sea. Russia, meanwhile, senior Russian officials have made it clear they will try to go after this and try to recover it. We've learned from two U.S. officials that Russia has arrived at the scene of the crash site. That's about 80 miles or so south west of Crimea.

But the U.S. has downplayed the significance of what might be recovered. First, they wiped or erase the sensitive software from the drone before it crashed. And second, it crashed, so there's remnants, pieces, debris, wreckage, but not an actual drone that's sitting there waiting for the Russians to pick it up.

GOLODRYGA: So at best a symbolic propaganda for the Russians if they are able to capture it and that's a big if.

Jeremy, what more are we hearing from the White House? We heard from the military officials yesterday, both the Defense Secretary and Chairman of the Joint Chiefs saying that this is why it's important to keep the channels of communication open between their counterparts. But we're also hearing reports that this may have been ordered by the Russian military itself. JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Yes. The White House is not weighing in on that fact directly. But what they are saying is that this action by the Russians was clearly reckless and irresponsible. And they are also saying that the decision to release this video was in part intended to directly undercut Russian denials of this, because what you saw is as U.S. officials made this allegation a few days ago about this unsafe encounter of the Russian fighter jet clipping this U.S. drone, the Russians then denied it and that's when you saw the U.S. come out with his video, which appears to show - appears to back up that U.S. account, although you don't of course see the very collision that they are talking about. You do see the damage to the U.S. drone.

I did ask the White House Press Secretary Karine Jean-Pierre moments ago if the President was involved in the decision of releasing this, she would not say that. But what she did say is that she slammed those - the Russian behavior here. But she said that they don't see this as raising the risk of armed conflict with Russia. Listen.

(BEGIN VIDEO CLIP)

KARINE JEAN-PIERRE, WHITE HOUSE PRESS SECRETARY: We've been clear - the Pentagon has been clear, my colleagues at NSC has been clear as well, the actions by Russians pilots in international airspace were reckless and dangerous. We have raised those concerns directly with Russian leadership and we will continue to exercise our rights in international airspace.

Clearly we do not seek armed conflict with Russia. We maintain direct lines of communication for reasons like this to minimize risk of escalation. But again, we do not seek armed conflict with Russia and so I leave it there.

(END VIDEO CLIP)

DIAMOND: And the National Security Council Spokesman, John Kirby, said that he believes that this video provides a clear and convincing evidence of the case that the U.S. has laid out But in terms of whether this was an intentional action by the Russians or not.

[15:05:03]

John Kirby said that it's clear that this was reckless flying by the Russians, but they don't know based on this video, whether or not this was the intention of that Russian fighter pilot to clip this U.S. drone, Bianna? Victor?

GOLODRYGA: All right. Jeremy Diamond and Oren Liebermann, thank you.

BLACKWELL: The battle for the Ukrainian City of Bakhmut is grinding on, Ukraine vows to hold on to the destroyed city despite Russia's vicious onslaught.

Look at this drone video, it shows the level of destruction after months of fighting here. Look how broad - look at the scope of what's happened here. GOLODRYGA: Yes.

BLACKWELL: Tens of thousands of people have died defending Bakhmut since the battle started more than seven months ago.

GOLODRYGA: Really give a sense of how decimated that city has turned.

CNN's David McKenzie joins us from Kyiv.

So David, what's the latest? Obviously, we got this intense fighting in Bakhmut, some good news for Kyiv there that you've got for Polish MiGs on their way, but that's not going to help in the current battle in the East right now.

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, let's talk Bakhmut first, Bianna. Now, certainly those images show you just the level of destruction that a city that had more than 70,000 people living there before the start of this conflict down to a few thousand people refusing to leave, an entire city block just completely flattened because of this ongoing grind and conflict in this eastern city that U.S. officials even admit doesn't necessarily have strategic value in this war, but certainly has very symbolic value.

President Zelenskyy has vowed to fight on in the last day or so both those supporting Russia. And the Ukrainians admit that this war is extremely grinding that part of the front line and there have been heavy losses on both sides. The Russians and also particularly the Wagner mercenary group have managed to gain some ground there but at least one think tank in the U.S. believes that because of the losses they are taking in men and operations, they may not be able to encircle that city anytime soon.

BLACKWELL: That drone video is just jaw dropping, block after block just destroyed after so many months of fighting.

David McKenzie force there.

David, thank you so much.

GOLODRYGA: Well, after weeks of concerning economic headlines Treasury Secretary Janet Yellen testified in front of the Senate today. She said high inflation was the number one problem facing the country right now and remains the President's top priority. Now, while Yellen was originally scheduled to discuss the President's 2024 budget, Senators also grilled her about the controversial action she and the federal government took to rescue Silicon Valley Bank.

(BEGIN VIDEO CLIP)

JANET YELLEN, UNITED STATES SECRETARY OF THE TREASURY: There was a run on the bank, it had high reliance on uninsured deposits. And there was a massive withdrawal of deposits that led to liquidity problems, the bank had to be closed for that reason.

SEN. MIKE CRAPO (R-ID): So do you agree then that is a liquidity risk that we're dealing with in this issue? YELLEN: Well, there was a liquidity risk in this situation.

(END VIDEO CLIP)

BLACKWELL: Yellen also said that no taxpayer money is being used to reimburse those depositors. Meantime, stocks are surging on word that major banks are in talks to rescue another ailing financial institution, First Republic Bank.

CNN's Matt Egan is with us now.

Tell us more about this bank that maybe most Americans have not heard of.

MATT EGAN, CNN REPORTER: Right. Sort of like Silicon Valley Bank, which not that many people had heard of before last week, it became the second biggest bank failure ever in U.S. history. So now a lot of the attention has been on First Republic Bank.

The San Francisco-based bank has almost $200 billion in deposits, the stock had been plunging over the last week, moving higher today up 7 percent. But you got to remember, this morning, it actually opened down 36 percent. And the turnaround was driven by the fact that now there's this industry led rescue effort. A source familiar with the matter confirms to CNN that big banks including JPMorgan, Wells Fargo, Citigroup, Bank of America and Truist, they are in talks to provide a lifeline to First Republic Bank.

Now, this would be structured as deposits, about $30 billion in deposits that would go from the big banks to First Republic. And the goal here would be to try to provide them some additional financial firepower, right, to offset some of the deposit withdrawals that they've been facing.

But you we to remember the big banks have actually had this influx, the spike of deposits over the last week because of the fact that people had been nervous. And we're also getting word from U.S. officials that they are encouraged by these rescue talks.

A U.S. official telling CNN that this would be a welcome sign of confidence in the banking system, just the fact that they're discussing a lifeline and this would be complementary to actions that regulators have already taken to try to bolster confidence in the system.

[15:10:06]

And clearly this is going overly well on Wall Street. I mean, stocks opened the day down, then they moved sharply higher on these rescue talks. We are still, of course, waiting for official word from any of the companies nothing just yet.

GOLODRYGA: So a lot more concerned, though, in questions asked by senators of the Treasury Secretary, what more did we hear?

EGAN: Yes, during the hearing Secretary Yellen did face a lot of questions about the health of the banking system. She is trying to reassure the public and lawmakers that the banking system is sound. And one of the questions she was faced was from Sen. Mark Warner, who was asking about the fact that some venture capital firms were telling their tech startups to pull their money from Silicon Valley Bank. And he sort of described this as the first internet-driven run on banks. Listen to the exchange between Yellen and Warner.

(BEGIN VIDEO CLIP)

SEN. MARK WARNER (D-VA): There were some bad actors in the VC community who literally started to spur this run by virtually crying fire in a crowded theater.

YELLEN: One of the reasons we intervened and declared a systemic risk exception is because of the recognition that there can be contagion in situations like this. The liquidity requirements and needs of a bank with such heavy reliance on uninsured deposits that are runnable, I think we need to think about that.

(END VIDEO CLIP)

EGAN: So Yellen, again, trying to make sure that there is no contagion here, that the problems at Signature Bank and Silicon Valley Bank don't spread elsewhere. We've seen the government step in with rescue efforts. And now today, it appears that the industry is doing the same thing.

BLACKWELL: All right.

GOLODRYGA: All right. Matt, thank you.

EGAN: Thanks.

BLACKWELL: Thanks, Matt.

GOLODRYGA: Joining us now is Damian Paletta. He's a Deputy Business Editor at The Washington Post and Douglas Holtz-Eakin is a former Chief Economist on the White House Council of Economic Advisers and he's also the President of the American Action Forum.

Doug, let me start with you. Because we heard there from Sen. Warner who accused some of these investors of being bad actors and crying fire in a crowded theater. But from everything that we now know about the fundamentals of SVB, there were problems there. So is that the right description because there was a fire, it appears, at this bank? What more could investors have done?

DOUGLAS HOLTZ-EAKIN, CHIEF ECONOMIST, WH COUNCIL OF ECONOMIC ADVISERS UNDER PRESIDENT G. W. BUSH, OF THE AMERICAN ACTION FORUM: Yes. I think the real problem was the bank and we know that it had a heavy investment in long-dated treasuries that had diminished in value, because of the interest rate rise, they hadn't managed this process at all.

And outside depositors could see this. They knew what the balance sheet looked like and it was yelling fire, because there was a fire. So let's get our money before the entire bank burns down. That's not bad behavior. That's prudence and it's the bank's failure and the supervisors' failure to put it in that position.

BLACKWELL: Damian, the optimism we're seeing across the market after the reporting that the big banks are coming in with this lifeline for First Republic. Does that solve their issue short term? And also, is this replicable if we see this with other mid-sized banks? How many times can they all get together and extend 10s of billions of dollars to these banks?

DAMIAN PALETTA, DEPUTY BUSINESS EDITOR, THE WASHINGTON POST: That's a great question. I mean, obviously, it's a positive development that this bank, which has about $200 billion of assets, it's a pretty big bank in California, is about to get a rescue from other banks. But at the same time, we can't be in a situation where every four or five days, a major U.S. Bank is on the brink of failure and there has to be a rescue plan.

As you say, eventually, the banks are going to run out of money to kind of bail out other banks. So it seems like if they can firewall its spread here and make the (inaudible) the last time they have to do it and it does inject some certainty among depositors and investors that the banking situation is going to settle down, then I think it could be a positive.

But if we're doing this every couple of days kind of careening from bank to bank, they're going to have to have a bigger solution, because it doesn't seem like between what - is happening here this week in the United States and what's happening in Switzerland, a long-term strategy to have governments intervening every few days to try to settle down the banking sector.

GOLODRYGA: Well, to that point, Doug, we heard from the Treasury Secretary, I'm going to quote from her today. She said, "Deposits in U.S. banks will be guaranteed only if a systemic risk determination is issued." It seems like that's much easier said than done. I mean, they were scrambling over the weekend to determine that that was indeed the case for SVB because it wasn't until it was. So do you read that as reassuring in terms of trying to prevent another situation at a different bank?

HOLTZ-EAKIN: I read this as her wanting people to think they haven't extended a blanket that guarantees every deposit the United States. But if you look at what they did with Silicon Valley Bank, they declared it systemically important so they could guarantee all the deposits. So this does nothing to constrain their behavior in any way.

[15:15:00]

They can take a look at any bank and just say, well, systemically important, let's guarantee all the deposits.

So I think they're still trying to pull back probably what was an overreach. The hundred percent guarantee of every deposit stands out as a really important precedent that they set with, with Silicon Valley Bank. I am not as worried as some the sort of broad banking system. I think the fact that all of the big banks could get together and help out First Republic Bank is a testament to the strength of the banking sector.

And what we've seen is these regional banks all have very narrow business models. First regional - Republic Bank and Silicon Valley Bank have the same customers for practical purposes and they all got in trouble at the same time and their depositors needed their money at the same time and we don't see that across the whole economy.

We don't have broad base downturns. We have a tech startup downturn and it's caught these two banks up. So I think going forward, there's less of a risk of seeing a lot of these.

BLACKWELL: Damian, let's get your take on this exchange between Secretary Yellen and Sen. Elizabeth Warren. We're all waiting to see what the Fed does on the - we expect the back end of this turmoil within the banks. But we heard from - give that to me again, control room, they just said something very important.

All right. I'll just read it since we don't have the site. She said, "Over the last few days, we have heard a lot of Republicans say that the collapse was not their fault, that it was the banking regulators that were asleep at the wheel. And believe me, I have questions for a lot of the banking regulators. But Congress handed Chair Powell the flame thrower that he aimed at the banking rules," suggesting that Chairman Powell has some culpability here. Give us the context around that from Sen. Warren.

PALETTA: Sure. So in - there's a financial crisis in 2008, obviously, that was devastating to a lot of big banks and smaller banks. In 2010, Congress passed a law, the Dodd-Frank Act that created much more rigorous regulatory structure, made the Fed more powerful in terms of making rules that were supposed to force banks to be more safe.

Some of those rules were dialed back both by a law that Congress passed with Democratic and Republican support and by actions the Fed took a few years ago to kind of go a little easier on regional banks in particular. And so those rollback of regulations, I think, is getting a lot of scrutiny now.

Why did the Fed decide to go easier on the banks when times were good, because it's when times are a little more strange, especially when there's a big change, like interest rates are going up, that these banks can come under pressure.

And so I think there's going to be a lot of scrutiny, both from Congress and even inside the Fed as to whether they went too far in rolling back those regulations and whether they need to maybe rethink what they did, so they're better prepared for what's in the future.

BLACKWELL: All right. Damian Paletta, Douglas Holtz-Eakin, thank you.

GOLODRYGA: Yet another recording of President Trump pressuring Georgian officials to overturn the State's 2020 election results has surfaced. We'll have those details next. BLACKWELL: And Trump's former fixer, Michael Cohen, is now speaking after going before Manhattan grand jury over hush money payments again, the second time in a week. Stormy Daniels also testified, more on that ahead.

(COMMERCIAL BREAK)

[15:22:11]

BLACKWELL: Fulton County, Georgia investigators have more audio of Donald Trump pressuring state officials to overturn the 2020 election. Members of the grand jury that investigated the former president tell The Atlanta Journal-Constitution that they heard a December 2020 conversation between Trump and Georgia's late Speaker of the House David Ralston.

On that recording, jurors heard Ralston talking to Trump about having the Georgia General Assembly hold a special session to overturn Biden's narrow victory in the state.

GOLODRYGA: They later heard Ralston say that he didn't think Georgian law would allow it. This marks the third known recording of the former president urging officials to push election lies.

Harry Litman is a former U.S. attorney and former Deputy Assistant Attorney General. He's also host of the Talking Feds podcast.

So Harry, we should note this is new to us. Obviously, the special grand jury had already heard this. Our question to you is what impact do you think yet another piece of video - audio has on Fani Willis' decision on whether or not she will ultimately issue an indictment?

HARRY LITMAN, CNN POLITICAL ANALYST: Yes. It was one of the most intriguing aspects, if you remember, Bianna of the Emily Kohrs' - the four persons sort of PR tour. She said there were multiple calls and everyone was struck.

We knew about Raffensperger, what are these others and we also now know about a - at least a pressure campaign as with Ralston with the governor, maybe that was by phone, maybe it wasn't. What does it do to Fani Willis? I think it overall will add to the indictment with these jurors themselves in The Atlanta Journal-Constitution or say it's going to be huge is something to note.

It's less of a clean, actual violation on its own, it seems to me, because he's saying convene a special session of the legislature. Obviously that is meant to influence the election, which is illegal, but it doesn't quite have the unmistakable punch of I just need 11,780 votes. So it'll be part of the case. I doubt it will be a separate count of the same kind of charge of election solicitation to commit fraud as the call to Raffensperger.

BLACKWELL: Harry, I found the AJC reporting fascinating because it was not just about the evidence, but also the experience of being on this grand jury. And there was one of the five that they spoke with who had a reconsideration, I guess, I'd call it of whether they should have summoned Trump. They said it was the prosecutors' decision and that he probably would have pleaded the fifth hundreds of times as he has in other cases.

But the jury said, "With the benefit of hindsight, we should have sent a voluntary invitation to former President Trump and just invited him." Is that any value - of any value to a Trump attorney, if there is an eventual indictment that you had members saying, maybe that wasn't the right thing not to invite the former president?

[15:25:02]

LITMAN: No, and remember, Victor, this a special grand jury. So I mean, it was an advisory one, so it's not even the one that will vote on charges. But I totally agree with you, it's fascinating reporting. People - I don't know if you've ever been on a grand jury, it tends to be a little tedious. These guys were very engaged. They're all talking together cohesively. They're letting out really some vivid details.

Lindsey Graham says, if you had told Donald Trump at the time that aliens came down and stole votes from him, he'd have believed it. They say it's all going to be huge. That witnesses that they most credited were the ones that are worst for Trump.

So I think we got a lot of sort of information of the feel of that grand jury and where they were going and did had. It doesn't give Trump anything to make hay with though because it's, again, not even the actual grand jury that will vote on charges.

GOLODRYGA: Okay. So from the Georgia case to the New York case, we heard from Michael Cohen. He was on ...

LITMAN: Yes.

GOLODRYGA: ... CNN this morning and talked about two days worth of testimony just this week alone, yesterday and on Monday before the Manhattan DA, Alvin Bragg. And he in his view at least believes that an indictment will come soon. What did you make of what we heard from him, especially given the fact that he is a flawed witness? He himself has said that he has perjured himself in the past. He served time in prison and yet he says that he is just seeking the truth and wanting to see the truth come down in terms of whatever happens with the President, the former president.

LITMAN: Whatever witness he is, that's the hand they've been dealt. So you - they cannot make the case except through him. And what I made of it most consequential is he's all done now. He said he finished up yesterday and they have done the best they can to show corroborating evidence. We'll see what the indictment looks like.

But what I make of it is all paths have been cleared. The next thing they will do is ask the grand jury for an indictment. They will probably do that Monday. It's a special grand jury, they just meet twice a week. Yes, it's going to be a big dramatic event in trial if trial occurs, the cross examination of him on many grounds.

But he is the star witness, warts and all. And now that he's finished, the case is finished, the grand jury has heard everything they're going to hear. The next step is to say here's a draft indictment, we recommend you approve it.

BLACKWELL: All right. Harry, thank you. The White House issues TikTok's Chinese owners an ultimatum. Sell off their share of the company or face a ban, details next.