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CNN International: Negotiators Closer on Deal to Raise U.S. Debt Limit; Washington Post: Trump Staffers Moved Boxes of Papers; Oath Keeper Founder Sentenced to 18 Years in Prison; Millions of Americans to Travel for Memorial Day Weekend; Iran's Drone Transfers to Russia. Aired 4-4:30a ET

Aired May 26, 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: Happy Friday and a warm welcome to our viewers joining us in the United States and all around the world. I'm Bianca Nobilo.

MAX FOSTER, CNN ANCHOR: I'm Max Foster joining you live from London, just ahead on CNN NEWSROOM.

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UNIDENTIFIED MALE: Negotiations between the Speaker and his top allies and the White House still ongoing, still unresolved.

UNIDENTIFIED FEMALE: Stewart Rhodes, the founder of the Oath Keepers was sentenced to 18 years in federal prison on Thursday.

UNIDENTIFIED FEMALE: Memorial Day weekend is just the start of what is going to be a very busy summer travel season that we're expecting.

(END VIDEO CLIP)

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

FOSTER: It is Friday May the 26th, 9:00 a.m. here in London, 4:00 a.m. in Washington. Where the White House and congressional Republicans are moving closer to a deal to pay the U.S. government's bill. The potential compromise would reportedly raise the debt ceiling, but cap federal spending levels for two years.

NOBILO: Veterans and defense spending would be spared but as CNN's Manu Raju reports, nothing is final until its final.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: The negotiations between the speaker and his top allies and the White House still ongoing, still unresolved even as the U.S. is steering the process of the first ever debt default as soon as next week. And amid warnings that the U.S. credit rating could be downgraded if the national debt limit, which stands at $31.4 trillion is not raised. The dispute still over federal spending and how far to go in cutting spending. Republicans have demanded that as part of the negotiations. They've also pushed for a range of policy measures including new work requirements on certain social safety net programs like food stamps. Something Democrats have resisted but the White House has now -- it's indicating it could go along with an order to get a deal to raise the debt limit, potentially through the end of 2024.

Now there are a number of concerns. Some progressives are concerned and a number other and even some moderate Democrats about the White House giving up too much in the negotiation. And some conservatives are worried that the speaker is watering down the Republican position and are warning they may not support any deal that is reached.

REP. JAMAAL BOWMAN (D-NY): I'm very frustrated. You know, I called on the president to invoke the 14th Amendment and linked a coin and do not negotiate with hostage takers. I mean, we don't negotiate with terrorists globally. Why are we going to negotiate with the economic terrorists here that are the Republican Party?

REP. BOB GOOD (R-VA): And if that were true, that would absolutely collapse the Republican majority for this debt ceiling increase.

RAJU: How many Republicans would vote against it?

GOOD: I don't want to make predictions because I haven't seen what is, you know, I've just heard rumors that there may be some sort of deal that would be less than desirable I believe to the majority of Republicans.

REP. RALPH NORMAN (R-SC): So, it looks like we're watering it down which is not acceptable. The 218 passed a bill that would make sense.

RAJU: Even if a deal was reached right away, it is still uncertain whether or not this will go through the legislative process and be enacted by June 1st, or how quickly that could occur. That's because it will take probably at least two days, maybe even longer to get the bill text drafted in any sort of framework that is reached -- a framework agreement that is reached. Also, it will take some time to get a cost from the Congressional Budget Office. It will take three days in order for it to move through the House. Given that Speaker McCarthy has promised 72 hours for members to review this legislation.

And then in the Senate it's anyone's guess. And any individual Senator can hold up progress there. Maybe up to a week or so. So, that all indicates how difficult this will be for Congress and the White House to get this done in time and avoid that default, especially given the disagreements that still remain between the White House and House Republicans.

Manu Raju, CNN, Capitol Hill.

(END VIDEOTAPE)

FOSTER: We have been hearing for weeks, of course, how a U.S. default would raise and wreak havoc for American consumers and Wall Street as well.

NOBILO: But the impact would also be felt across the globe naturally. Here's CNN economics and political commentator, Catherine Rampell on that.

(BEGIN VIDEOTAPE)

[04:05:00]

CATHERINE RAMPELL, CNN ECONOMICS AND POLITICAL COMMENTATOR: Let's say there are actually missed payments on some of the Treasury securities that people around the world, companies or corporations -- companies or countries around the world hold. That would have devastating impacts. And that's because it doesn't only affect the holders of those bonds, notes other kinds of securities, it also affects the rest of the financial system. You should think of the Treasury as sort of the building block upon which much of the other financial -- the rest of the financial system, other markets rest.

So, for example, treasuries are usually considered the safest of safe assets. Everything else is benched marked against them in terms of how risky they are. If suddenly U.S. debt, U.S. treasuries are revealed to be riskier that has some cascading effects that basically reset the perceived riskiness of everything else.

Treasuries are also often used, for example, as collateral in a lot of other trades. If that collateral suddenly becomes worth a lot less than people thought it was -- which is what happens basically if we default on our debt. Then that can affect lots of other markets as well.

(END VIDEOTAPE)

NOBILO: The question now is, how long can both sides hold out? There are six days left until the deadline. When I say six days left, but then the treasury intimated yesterday that they would sell this $119 billion worth of debt which was due on the deadline. So maybe the deadline is not as ironclad?

FOSTER: Yes, and I think a lot of people obviously assume that there will be some sort of deal by that date. But it could go one key before hand. Because the markets could just get nervous that a deal isn't going to be done. And then you have that cascading fear. These are the markets as they open today -- as we're expecting them to open. These are the futures. They are only down slightly but they have been down, haven't they, here in there and they are pointing to the debt ceiling. If there is a sudden bout of fear next week, that could be a worry before they reach a deal.

NOBILO: It certainly could. The markets are likely to pressurized things. Because until now it has seemed like a bit of a boy cried wolf situation because this often occurs and people don't believe that they will default. But as it gets closer to the deadline it becomes more plausible.

FOSTER: New developments into the investigation into former President Donald Trump's handling of classified documents, at his Mar-a-Lago estate. "The Washington Post" reported Thursday that two Trump employees moved boxes at Mar-a-Lago just one day before the FBI showed up to retrieve classified documents. Sources told "The Post" that investigators think the timing is suspicious and a sign of possible obstruction.

NOBILO: "The Post" is also reporting that Trump and his aides allegedly carried out a, quote, dress rehearsal for moving sensitive papers, and that Trump had classified documents in a visible place in his office. During CNN's Town Hall earlier this month, Trump claimed that he hadn't shown classified documents to anyone.

(BEGIN VIDEO CLIP)

KAITLAN COLLINS, CNN ANCHOR: When it comes to your documented, did you ever show those classified documents to anyone?

DONALD TRUMP, FORMER PRESIDENT OF THE UNITED STATES: Not really, I would have the right to. By the way were declassified --

COLLINS: What you may not really?

TRUMP: Not that I can think of. Let me just tell you, I have the absolute right to do whatever I want with them. I have the right.

(END VIDEO CLIP)

FOSTER: These revelations comes as the many investigations and as special counsel Jack Smith obtains more evidence that could undercut Trump's defense. The National Archives will hand over 16 records that show Trump was aware of the correct declassification process which undercuts claims that he did not have to follow a specific process to declassify documents.

NOBILO: Earlier CNN spoke with Josh Dawsey, one of "The Washington Post" reporters who worked on the story.

FOSTER: He detailed the reporting and explained the bigger picture, take a listen.

(BEGIN VIDEOTAPE)

JOSH DAWSEY, WASHINGTON POST POLITICAL INVESTIGATIONS AND ENTERPRISE REPORTER: What we're learning is that one day before federal authorities came to Mar-a-Lago last June to pick up classified documents in return for a subpoena, that video camera footage shows two Trump employees -- two employees of the former president at Mar-a- Lago moving boxes back into the storage room.

As you remember, when the feds arrived at Mar-a-Largo Trump's teams said, come with us to the storage room, that's where the documents are. You can do a search. They would not let them in the boxes.

Well, we reported that the boxes were previously moved after the subpoena arrived. And then the night before federal officials came to Mar-a-Lago, they were put back into the storage room. We're also reporting that federal investigators probing the classified

documents, the handling of former President Trump, have notable witnesses who have told them he displayed classified information to visitors, left it out and showed it to others.

[04:10:00]

And we're also reporting that before this time where they did not get the documents back, they went through what was called an apparent dress rehearsal according to the federal judge, when the National Archives asked for the documents back before. So, out of the same playbook on how not to give the documents back was what they did with the National Archives as well.

(END VIDEOTAPE)

FOSTER: More than two years after the deadly attack on the U.S. Capitol, a federal judge on Thursday handed down the toughest sentences yet for two convicted ringleaders of the insurrection.

NOBILO: But Oath Keepers founder Stewart Rhodes -- seen on the right -- expressed no remorse for his actions. And now claims that he is a political prisoner. We have the latest from CNN's Katelyn Polantz in Washington.

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KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Stewart Rhodes, the founder of the Oath Keepers, was sentenced to 18 years in federal prison on Thursday. That is a sentence, the largest among any January 6th Capitol riot defendant. And the reason Rhodes is receiving that much time is because the judge decided he was the reason the members of the Oath Keepers came to Washington DC on January 6th. And decided to move into the Capitol in their right gear in military-esque gear, as a unit.

Now, Rhodes spoke to the judge today and said that he had no remorse at all. That he still believes that the election of 2020 was illegal. That this was an illegitimate government governing the United States. And so, the judge responded to that quite harshly. Telling Rhodes that his crimes of seditious conspiracy and other crimes amounted to domestic terrorism in the sentencing. And also, that he believed Rhodes poses a continuing ongoing threat to the American Republic, to American democracy.

There was another person sentenced today too. A deputy who was working with Rhodes on January 6th -- a man named Kelly Meggs from Florida. Meggs was a very different defendant, in that he did express remorse. He said he was sorry to be involved in an event that put such a black eye on the country. But the judge also gave him quite a significant sentence, believing it to amounted to a crime of domestic terrorism, seditious conspiracy. And the judge gave him 12 years. Kelly Meggs, whenever he was receiving his sentence, was crying. But the judge also took a step back and told him quite sternly that violence was not the answer and is not the answer for people who disagree with the political process in the United States. Judge Amit Mehta, he also said we have a process, it is called an

election. You don't take it to the streets with rifles. You don't hope that the president invokes the Insurrection Act so you can start a war in the streets. You don't rush into the U.S. Capitol with the hope to stop the electoral vote count. We will slowly but surely descend into chaos if we do.

More sentences for Oath Keepers are to come. But these were the most significant sentences so far in the January 6th seditious conspiracy cases.

Katelyn Polantz, CNN, Washington.

(END VIDEOTAPE)

NOBILO: It is the start of a holiday weekend in the U.S. But extreme weather could dampen some Memorial Day plans. Parts of west Texas and the Rockies could see storms, the forecast includes damaging winds and large hail too.

FOSTER: Meanwhile, the South could also see gusty winds and dangerous surf along the coast. Heavy rains is expected in the Carolinas and mid-Atlantic. But as you get further north, you'll likely see some sunny skies. Some of that weather could impact travel plans for the millions of Americans on the move this weekend.

NOBILO: The Transportation Security Administration says it's planning to screen about 10 million airline passengers between Thursday and Monday. Delta Airlines says holiday weekend tickets sales are up 17 percent from last year. The airlines insist that they are staffed up for the increase. But they're worried that the federal government could cause delays because about one and five air traffic controller positions are vacant. For some passengers, the price of the ticket is their biggest worry.

(BEGIN VIDEO CLIP)

JESUS MEDINA, TRAVELER: Way more expensive, way more expensive. I looked at flights internationally. It's actually cheaper to buy internationally and to stay at a hotel internationally than it was domestically. So, definitely, definitely a lot pricier than I expected.

(END VIDEO CLIP)

NOBILO: The Ron DeSantis campaign is revealing how much he raised one day after joining the presidential race and it's a lot.

FOSTER: Plus, Ukraine's air defenses take on Russian missiles, as Moscow launches a massive wave of new strikes. We'll take a report about the attacks that were felt across much of the country.

NOBILO: Plus, Iranian military drones keep coming to Russia despite international sanctions on Moscow. CNN investigates the murky web that transports those weapons and largely goes undetected.

[04:15:00]

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NOBILO: Belarus has confirmed Russia has begun transferring tactical nuclear weapons to Belarusian territory. Ukraine's northern neighbor has been Moscow's closest ally since this war began last February when Russia invaded. Russia has repeatedly used Belarus as a staging ground for incursions into Ukraine.

FOSTER: Russian and Belarusian defense ministers signed the agreement on Thursday to deploy the tactical nuclear weapons. Opposition leaders in Belarus denounced the move and the U.S. government says NATO is not changing its defensive posture. Experts say the move isn't only dangerous, it's against the law.

(BEGIN VIDEO CLIP)

JOE CIRINCIONE, NATIONAL SECURITY EXPERT: It's illegal. This violates several international agreements including -- that Belarus has signed. Including the Nuclear Nonproliferation Treaty where it says it will be a non nuclear state, will not possess nuclear weapons. It violates the Budapest Memorandum of 1994 when Belarus gave up the Soviet nuclear weapons that have been stationed there. It violates the Belarusian Constitution. It violates Putin's own statement of just two months ago when with China, he declared that no nation should station nuclear weapons outside their own territory. Here he is doing that.

(END VIDEO CLIP)

FOSTER: Meanwhile, we are getting reports of a new wave of Russian strikes on Ukraine that pummeled the country for hours overnight. Salma has been looking at that. What can you tell us -- Salma?

SALMA ABDELAZIZ, CNN CORRESPONDENT: So, a massive wave of attack drones and missiles coming overnight that hit Kharkiv, they hit Dnipro, they hit Kyiv. The Ukrainian Air Force saying 17 cruise missiles and 31 attack drones.

[04:20:00]

One official in Dnipro described it as an extremely difficult night. Saying that this lasted for hours. It was extremely loud. There was damage to buildings. We don't know if any casualties so far or injuries. But put this in the context, of course, of this expected counteroffensive, and you begin to understand everything that Ukraine is juggling. From a tax to civilian areas, all the way across the country to, of course, these very difficult battles along those front lines.

And of course, recently, Bakhmut mostly lost to Russia. Ukraine insists that it does have pockets of resistance. But again, on the back foot in Bakhmut on those front lines and dealing with a massive barrage of missiles and drone attacks.

NOBILO: Washington has stated publicly since last summer that they believe Iran is supplying Russia with drones to aid their invasion of Ukraine. You've been investigating this because it is a claim denied vehemently by Iran.

ABDELAZIZ: Yes, so those drone attacks that happened last night and many of the drone attacks you've seen over the last weeks and months, those drones are Iranian-made -- according to Ukrainian officials. We as journalist have seen, our teams on the grounds have seen the remnants of these Iranian made drones. The question is, how are they getting there? Take a look.

(BEGIN VIDEOTAPE)

ABDELAZIZ (voice-over): These calm waters are home to a secret Russia doesn't want you to know. Experts say Iran is quietly sending weapons on ships like this one across the Caspian Sea to replenish arms for Moscow's war on Ukraine.

Concealing movement at sea is considered nefarious, and potentially a violation of international law. But in the Caspian Sea, there's a growing number of gaps in vessel tracking data known as AIS.

With a more than 50 percent increase and ships hiding their movements between August and September of 2022 -- according to maritime trafficking data. Most of the vessels going dark are Iranian or Russian flagged tankers. The timing is suspicious too. This practice picking up last summer just as White House officials revealed that Russia had purchase hundreds of drones from Iran.

So, why would these ships want to hide their movements? Maritime security analyst martin Kelly tells us it is likely because of what these vessels are carrying.

MARTIN KELLY, LEAD INTELLIGENCE ANALYST, EOS RISK GROUP: There's a correlation between Russia requesting drones from Iran, dark poor cause in the Caspian Sea and an increase in dark air activity. And that to me was a key indicator of these three aspects combined that something was going on. Probably the export of Iranian drones to Russia.

ABDELAZIZ: This heat map from Lloyd's list shows were most of those gaps in AIS are concentrated. Mostly near Iran, Amirabad Port and Russia's Astrakhan Port. Where ships appear to be turning off their data on approach and going dark for extended periods of time.

Now, using data like this and expert analysis, CNN was able to identify eight vessels that exhibited suspicious behavior in the Caspian Sea. This is one such vessel. It's a Russian flag tanker that was seen in early January, leaving Iran's Amirabad Port making its way across the Caspian Sea to Russia's Astrakhan Port.

Now, we cannot independently verify what this tanker was carrying. But experts tell us the shipment was likely linked to the arms trade.

ABDELAZIZ (voice-over): And there are signs that Tehran could be air mailing arms too. The U.S. and Ukraine both accused Tehran of sending supplies to Russia by plane. CNN analyzed the tracking data of four Iranian cargo planes flagged by the U.S. Commerce Department for potentially carrying drone shipments. Collectively the aircraft made at least 85 trips to Moscow airports between May 2022 and March 2023. Iran has admitted that it sold a small number of drones to Russia, but it says the sale was a few months prior to the war in Ukraine.

CNN has reached out to Iran and Russia for comment but has yet to receive a response. But given the much larger volume cargo ships can carry the Caspian Sea corridor is likely the primary conduit. And experts say it is the new frontier for weapons trade between Moscow and Tehran tucked away from Western interference. It provides an easy avenue for sanctions evasion -- expert Aniseh Tabrizi says.

ANISEH BASSIRI TABRIZI, SENIOR RESEARCH FELLOW, RUSI: I think the perception in Moscow is that Tehran can teach a lot to Moscow about how to go and how to still have a significant economy, even when sanctions are imposed.

[04:25:00]

ABDELAZIZ: And there is very little the U.S. and its allies can do to stop it. And more could be on the way. Intelligence officials warned in November, Iran plans to send ballistic missiles, ammunition and more sophisticated drones to Moscow. A bustling corridor potentially providing a much-needed arsenal critical to Russia's land grab in Ukraine.

(END VIDEOTAPE)

ABDELAZIZ (on camera): Now you can't underestimate the impact of these Iranian made drones on the conflict. They are small, they are difficult to be detected by the air defense technology that Ukraine has. They can cause a great deal of damage. They frustrate Ukraine at a time when is trying to fight on those front lines. And as you heard there, the concern is that Iran could provide more than just drones.

This relationship between Moscow and Tehran is deepening. The cooperation is becoming more and more important as Russia turns to Iran for help, to replenish its arsenal. Of course, on those front lines. Iran sees an opportunity here to rebalance, if you will, it's relationship with Moscow. Experts tell us that -- and the key thing here to remember, is the Caspian Sea. Just take a look at the map, the U.S. doesn't have a footprint there. NATO doesn't have a footprint there. It is extremely difficult for Ukraine's Western allies to stop this, if at all.

FOSTER: OK, Salma thank you very much indeed for bringing us that.

NOBILO: Great reporting.

Still ahead only two candidates seem to be available challenge to Joe Biden to be the Democratic nominee this year. How are they faring? We'll take a look at the latest CNN polling.

FOSTER: Plus, a letter to Brian Laundrie marked, "burn after reading." It includes references to a shovel and burying a body. And it's now in the hands of Gabby Petito's family. (COMMERCIAL BREAK)