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CNN International: Latest from Bakhmut; Paul Whelan: Confident "Wheels are Turning" Towards his Release; Facebook Parent Company Fined $1.3B for EU-U.S. Data Transfer; What Happens if the U.S. Runs Out of Money; British Bomb Maker Helps Train Ukrainian Forces. Aired 8-8:30a ET

Aired May 22, 2023 - 08:00   ET



MAX FOSTER, CNNI HOST: Hello, welcome to CNN "Newsroom", I'm Max Foster in London. Just ahead, Ukraine denies that Russia has completely captured the busy city of Bakhmut, the latest from the ground. Also ahead, CNN's exclusive conversation with Paul Whelan, an American wrongfully detained in Russia, what he has to say about U.S. efforts to get him out.

And a record breaking fine slapped on Meta. What European regulators say is a very serious infringement, details coming up.

So Ukraine is denying Russian claims that Moscow has completely captured Bakhmut the scene of some of Europe's bloodiest fighting in decades.

A top Ukrainian general acknowledges that Kyiv holds a significant part holds an insignificant part of the decimated Eastern city but says his troops maintain control of the outskirts. The Governor of Russia's Belgorod region, meanwhile, claims an area close to the border was shelled by Russian forces earlier.

And Ukraine's energy company says external electricity to Zaporizhzhia nuclear power plant, which is held by Russian troops, has now been restored after a failure earlier. CNN's Sam Kiley joins me live from Southeastern Ukraine. Just tell us about this apparent incursion into Russia.

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, so Max, this is now being claimed by the Russian Governor of the Belgorod region is saying that what he's describing as a sabotage team crossed from Ukrainian territory into Russian territory and conducted some kind of operations in those border villages.

Now at the same time on social media, and we have no independent verification for this yet. The Russian Legion, which is a legion inside the Ukrainian Armed Forces of Russian dissidents opposed to the rule of Vladimir Putin. They have a blue and white flag, for example, they say that they have indeed crossed into Russia that they did conduct some operations there.

And indeed, the Russian security forces are now they say hunting for them. So there is some synergy in terms of overlap in terms of these claims here. This is somewhat problematic for the Ukrainians who at the moment have been conducting longer range, very secret operations inside Russian territory that they never or very seldom claim responsibility for.

But usually make some kind of wry tongue in cheek remark when there's an incident inside Russia. But this is the first time it seems that there may be some hard evidence of an actual cross border, physical incursion by troops badged to the Ukrainian Armed Forces.

So this will come in of course, as Bakhmut continues to be the scene of very heavy fighting with the Ukrainians flanking to the north and the south of the city and the mercenary group continuing to claim that they control the central urban area of that city, Max.

FOSTER: OK, Sam, thank you. The Ukrainian President says is a crucial moment for the fate of peace in his country and for the future of rules based world order. It comes as U.S. President Joe Biden announced a new $375 million military aid package to Ukraine. Mr. Biden and Volodymyr Zelensky met at the G7 over the weekend.

With President Biden vowing America and the rest of the G7 nations have Ukraine's back in its fight against Russian aggression. The U.S. and Papua New Guinea have signed a new Defense Cooperation Agreement this coming during U.S. Secretary of State Antony Blinken's visit to the Pacific island nation.

New pact is expected to expand U.S. access to military facilities in Papua New Guinea at a time when Washington and Beijing vie for influence in that region. Paul Whelan remains optimistic that the U.S. government will eventually succeed in bringing him home.

He's been wrongfully detained in Russia since 2018, and was sentenced to 16 years on an espionage charge. In an exclusive interview with CNN, he says he feels confident his case is a priority in Washington now. He just got wishes, just wishes it would go a little faster.

PAUL WHELAN, WRONGFULLY DETAINED AMERICAN IN RUSSIA: I feel that my life shouldn't be considered less valuable or important than others who have been previously traded. And I think there are people in D.C. that feel the same way and they're moving towards a compromise and resolution to this as quickly as they can.

There will be an end to this, and I hope it's coming sooner than later, but it is depressing on a daily basis you know going through this.

FOSTER: He spoke to CNN by phone from prison. Kylie Atwood takes a closer look now with a case life in New York. I mean, you can absolutely understand how he feels because the Americans were able to trade, you know, for all of the U.S. prisoners, and some do get left behind and he was one of them.


KYLIE ATWOOD, CNN U.S. SECURITY CORRESPONDENT: Yes, that's right and he's now been left behind twice. So remember, it was early last year that Trevor Reed another American who was wrongfully detained was able to leave Russia as part of a prisoner swap and then late last year there was Brittney Griner the WNBA player

Read another American who was wrongfully detained was able to leave Russia as part of a prisoner swap. And then late last year, there was Brittney Griner, the WNBA player who also left Russia as a result of a U.S.-Russia prisoner swap. And Paul Whelan has been wrongfully detained in Russia for more than four years now.

And one thing that he spoke about over the phone was just how dire the situation really is for him right now. Of course, he is in a Russian prison he has to do forced labor. He says the conditions are quite poor. But he's hopeful because he's been able to actually hear some of the public remarks that U.S. officials, including President Biden have made about him.

With Biden saying just a few weeks ago, at the White House Correspondents Dinner that he will continue working to in everything that the Biden administration is able to do until Paul Whelan is home. Listen to what he said about just how encouraging it is to hear those public remarks from U.S. officials.

WHELAN: The public displays and events such as the press corps dinner and the U.N. visit, demonstrate to not just me, privately, but to the world that our leaders are impacted by this and they do want me back and they are working to try to get me home. If you consider all of the people and all of the agencies in my four countries that are working on this, it's incredible and I think they're going to get it done.

ATWOOD: And when he spoke there about the U.N., what he was talking about was the fact that his sister actually went and spoke at the United Nations during the Security Council meeting that was attended by the Russian Foreign Minister, he was able to watch the remarks that she delivered at that meeting.

And he said, he watched those remarks with Russian prisoners who were stunned that she was able to make such clear remarks in front of the Russian Foreign Minister, of course, calling for his release saying that he did nothing wrong. And it's the Russians who have committed a crime here by holding him in prison.

And I do think it's important to note that as he is, you know, pushing for his own release, the reality is that there's another American Evan Gershkovich, who was wrongfully detained by Russia, that Wall Street Journal reporter just about two months ago. And the concern for him, obviously, is that he could be left behind if there's a deal for Evan Gershkovich that leads him out.

But what he's saying right now, Paul Whelan is that he's been told by U.S. officials that he is a priority, just as much as evanesce. And we know from behind the scenes, talking to U.S. officials, that what they're really trying to do here is put an offer on the table for Russia that can secure the release of both of these wrongfully detained Americans. FOSTER: OK, Kylie Atwood, thank you for joining us then from New York. Now, Facebook's parent company, Meta has been slapped with a record fine for transferring user data across the Atlantic, the $1.3 billion fine is the largest levied under Europe's data privacy law.

European regulators say Facebook transfer data from EU users to servers in the U.S. Meta plans to appeal and says such data transfers are necessary to its business. Melissa Bell, live for us with the details. Just explain, I mean, it is complicated, but it's a massive figure so hugely important.

MELISSA BELL, CNN PARIS CORRESPONDENT: It is and I think that figure, Max, is reflection of the impatience of European regulators slapping this huge fine on what is the eve of the five year anniversary of the GDPR, that signature European piece of legislation that essentially seeks to protect the privacy rights of European citizens.

Now, what the European regulators that look into these issues have found our systematic continuous abuses by Meta. This will goes back a few years to an Austrian lawyer, Max, who had sought to bring a case against Meta, Facebook at the time, because he'd found that his personal data was finding its way onto American servers in breach of that GDPR rule that of course, led the regulators to look into it.

And although they have warned measure, they say several times, it has been to no avail. Hence, the severity of the fine hence also the strictness of the ban, because essentially for the next six months, and until metric can be found to comply. This ruling means that any European citizens, privacy personal data has to be stopped from being transferred to American servers.

Essentially, what we're talking about, Max, as a fundamental disconnect, that goes back years between American data and how that functions, the cloud act that essentially gives the NSA the American Security Agency, pretty large powers to look at any of that data that exists in the United States or on servers that are in the U.S.


Of course, you have to go back 2013 remember Edward Snowden and all we learned about the amplitude, how vast are those NSA surveillance programs can be and European attempts to try and protect their citizen's rights. In the end coming today with that huge fine as you say they will appeal and they have six months now to comply, Max.

FOSTER: OK, Melissa, thank you. The Greek Prime Minister describes his party's win in Sunday's parliamentary election as a political earthquake. His center right New Democracy party got more than 40 percent of the vote but fell short of the majority needed to form a government.

The Prime Minister has indicated the rejects the mandate to form a coalition government this likely sets the stage then -- election likely in a month or so. Journalist Elinda Labropoulou joins us live from Athens, a truly spectacular performance from him. Many just didn't see it coming. ELINDA LABROPOULOU, JOURNALIST: No, they really didn't, Max. I mean, all the polls before the elections were proven wrong. And he has won by a landslide, basically, at least with double the amount of votes that people expected all the same due to a short difference in the electoral system.

Just this once it meant that the threshold to be able to win an outright majority was very high 45 percent, which all degrees knew it would be a very difficult number to reach. As a result, we've this vote and it was always known. And this is something that's also reflected in the amount of people that went to the polls.

There was not a very strong participation simply because people always knew that there may be a second round. What's the Prime Minister has done is he has already said that he will not be going ahead with trying to form a coalition. He already signaled this since his victory speech yesterday.

He said, well, clearly, you know, the support is there for his party to go ahead and try to form a majority government and we're likely to see within a days of probably a new day, announced in Greece heading to new elections, Max.

FOSTER: OK, Elinda thank you for bringing us that from Athens, new reporting on disgraced financier Jeffrey Epstein and his relationship with Bill Gates, the Wall Street Journal reporting that Epstein appeared to threaten Bill Gates over an alleged affair with a Russian bridge player.

The Microsoft co-founder met the woman around 2010. Epstein met her in 2013 and later paid for her to attend software coding school. In 2017, Epstein emailed Gates and asks to be reimbursed for the cost of the course, according to people familiar with the matter.

The email came after the convicted sex offender had tried unsuccessfully to get Gates to participate in a multibillion dollar charitable fund. According to the journal, the implication behind the message, according to people who viewed it, was that Epstein could reveal the affair if Gates didn't come up, an association between the two men.

A spokeswoman for the Gates told her the journal. Mr. Gates met with Epstein solely for philanthropic purposes. Having failed repeatedly to draw Mr. Gates beyond these matters, Epstein tried unsuccessfully to leverage a past relationship to threatened Mr. Gates.

The Russian bridge player declined to comment on Gates and said she didn't know who Epstein was when they met? According to the journal, we should note that CNN can't independently verify the claims. In the journals reporting CNN spoke to one of the Wall Street Journal reporters who broke the story just moments ago.

KHADEEJA SAFDAR, REPORTER OF WALL STREET JOURNAL: Our understanding is that Gates and her met at a bridge tournament and that they played bridge together around 2010, 2009. And then, later on Gaetz's science advisor was trying to help her find an investor for an online Bridge Company. And that's when she met Epstein in 2013.

And he reviewed a proposal to see if he could invest. She didn't end up investing. But then she wanted to take software coding classes to further her career and Epstein paid for a boot camp.

FOSTER: Well, CNN has reached out to Bill Gates for comment. It just few hours he was present Joe Biden and how speaker Kevin McCarthy will resume talks on raising the U.S. debt ceiling with time and money are really running out. So that's always just ahead.



FOSTER: What happens if the U.S. runs out of money, U.S. President Joe Biden and House Speaker Kevin McCarthy are set to meet once again on Monday to discuss a deal to lift the U.S. debt ceiling an agreement must be reached by June the first or the Treasury Department has warned the U.S. faces a potential default.

The debt cap currently stands at roughly 31.4 trillion U.S. dollars. But that limit was hit in January, forcing the Treasury Department to use extraordinary measures to provide the government with cash. But Democrats and Republicans have very different ideas on how to proceed. President Biden said he won't agree to the latest proposal from Republicans.


JOE BIDEN, PRESIDENT OF THE UNITED STATES OF AMERICA: I'm not going to agree to a deal that protects wealthy tax sheets and crypto traders while putting food assistance at risk for nearly 100. Why should mean nearly 1 million Americans. And it's time for Republicans to accept that there is no bipartisan deal to be made solely on their partisan terms.


FOSTER: Historically, the U.S. has never defaulted on its debt. So we don't know what it's like, as this will likely cause significant economic damage in the U.S. and across the globe. CNN Chief Business Correspondent Christine Romans joins us from New York to answer that huge question. What does happen if America runs out of money?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: You know the U.S. government bond market is really the cornerstone of the global financial system, quite frankly. So we don't even really know what the ripple effects would be. We just know that catastrophic Armageddon.

These are the kinds of words that economists and policymakers use when they imagine a world in which the United States doesn't have enough money to pay all of its debts. There's about $57 billion in the bank account right now, the Treasury coffers right now.

And as you get into June, there are going to be some big payments, that'll be necessary, a veteran's benefits, social security that's paid on the second, third and fourth Wednesday of the month. And the big question is what happens to the Treasury Department when they're trying to decide which bills to pay if you don't raise the debt limit.

It's sort of a Hunger Games of sorts, trying to decide what would have the less, the least amount of damage and help the most people, maybe the Treasury would decide to keep all of its fixed payments, if it could. So Social Security would try to pay a veteran's benefits would try to pay but maybe it would give contractors IOUs.

This is what they're trying to game out here, trying to figure out how that would work. Now, if you give federal contractors a big part of the American economy IOUs you're in a situation where economists at Goldman Sachs have estimated that the day after you go over this X date.

You could in effect, shut down a 10th of the American economy, it just stops all of that economic activity that would certainly cause a recession and probably cause a calamity in stock and bond markets around the world. There's always this there's just so much at stake.

It is so intertwined the U.S. debt market and American debt borrowing. You know, Max, a good way to look at it here is the world relies on the U.S. debt, right? The U.S. spends beyond its means and issues debt in return that is the most sought after investment in the world. It allows the U.S. to invest in its economy and invest in itself and grow to the biggest economy in the world.

So you're hearing these rumblings in Washington that this debt is such a bad thing, but in the eyes of international investors, it is something that is strength not a weakness. But this is all politics here.


This is a political game not an economic game at this moment and that's what has investors so concerned.

FOSTER: And no politician wants the responsibility of collapsing the U.S. and potentially world economy on their back, do they? So it's never happened, as we said. Do you really think it's going to happen? Isn't this all politics and posturing that we see amongst these senior politicians?

ROMANS: So failure is not an option and we shouldn't even be here. I mean, there's broad agreement among people who hire and pay paychecks. I think that Washington should be doing a little bit better job of this right now here, right? The place for these big philosophical decisions about how you spend your money are at the ballot box and in the budgeting process, not when you have to pay the credit card bill.

So we've got this kind of backwards, but this is the third time we've been here. And so this now seems to be a fixture of modern American politics, where one party punishes the other party for spending that has already happened. And it's trying to force I guess, concessions for the future. Maybe they can find some middle ground on tying work to some welfare payments in the U.S. or maybe some permitting reform in the energy sector. Maybe there are some places where they can find some common ground, but you know, they're so far apart right now, Max.

They're just really, really far apart. And I will make, I will make the point. At some point, the U.S. national debt gets so big that it chokes out other investments in the U.S. in the decades ahead, right?

And that is a serious problem, but this right here is not the efficient way to solve that problem. You need really hard bipartisan work to fix the long term debt problems in the United States. This right here is not that.

FOSTER: OK? Washington is not being efficient to the --

ROMANS: No, it's not.

FOSTER: Christine, thank you very much indeed -- from New York.

ROMANS: You are welcome.

FOSTER: Still to come in secrecy Ukrainian soldiers are learning bomb making techniques that could prove crucial in their fight against Russia. We'll have the details coming up.


FOSTER: A massive fire has nearly destroyed the oldest post office in the Philippines. Fire fighters battle the inferno or the historic Manila central post office on Sunday for more than seven hours. It was originally built in 1926 and rebuilt after being severely damaged in World War Two.

Now the City of Manila has the task of restoring the building once again, investigation has been launched into the cause of that fire. A dormitory fire in a middle school in Guyana has claimed at least 20 lives. Officials haven't yet said what caused that fire either. It's not clear if the deaths were students or faculty.

The government has mobilized a full scale evacuation for the injured. Ukrainian forces are getting a crash course on a secret weapon that is to be used to defend themselves, CNN's Nic Robertson reports on the new tools being added to Ukraine's Arsenal.


UNIDENTIFIED MALE: These batteries -- the cold affects them. After 3 or 4 days in the cold, if you are leaving it outside, if there's no heating, these will last probably 3 weeks.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice over): Ukrainian troops get a lesson on covert bomb making.

UNIDENTIFIED MALE: And that goes through your battery. ROBERTSON (voice over): British explosives and counterinsurgency specialists pass on decades of know how. Two soldiers already well versed in normal frontline combat


UNIDENTIFIED MALE: Killing somebody, blowing up property, we are showing just how it's done.

ROBERTSON (voice over): But these are no ordinary bombs. They are secret weapons in Ukraine's clandestine arsenal to kill Russians on Ukrainian land.

SKIF, ARMED FORCES OF UKRAINE OFFICER: If we have a high priority target, we of course use equipment against it.

ROBERTSON (voice over): And it's not just individual targets. Similar technology, already in very experienced Ukrainian hands was used to bring down a building on dozens of Russian troops recently in Bakhmut.

SKIF: This equipment is used to destroy the enemy. We use it to produce explosive devices we can use on the ground on the battlefield or in the air as munitions for drones.

UNIDENTIFIED MALE: This switch can be really very little.

ROBERTSON (voice over): But it's not just the subversive skills and techniques that British experts bring that are needed in undercover operations. It's the bomb components too. Sophisticated switches, specialized microchips, night vision goggles, covert monitoring devices, even 3D printers.

Some relatively easy to buy outside Ukraine are in high demand, because troops here are in a race against time against the Russians and getting them through NATO partners simply takes too long.

SKIF: It's hard to measure his health with words or numbers because it's a great moral support for us straight to our hearts. And we are very, very grateful for his help.

ROBERTSON (on camera): It's a measure even on the eve of unexpected big counter offensive of just how much help Ukraine's Military still needs. That more than a year into the war, even the smallest of components the most modest of hands on help is so gratefully received. Nic Robertson CNN, Eastern Ukraine.


FOSTER: Thanks for joining me here on CNN "Newsroom", I'm Max Foster in London. "World Sport" with Amanda Davies is up next.