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CNN International: U.S. House to Vote on Debt Ceiling Bill Amid Criticism; North Korea Says Launch of First Spy Satellite Fails; U.S. and China at Odds Over Aggressive Intercept of Spy Plane; DeSantis Visits Iowa, Says He'll Meet More Goals Than Trump; Elizabeth Holmes Reports to Federal Prison in Texas. Aired 4-4:30a ET

Aired May 31, 2023 - 04:00   ET

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

[04:00:00]

BIANCA NOBILO CNN ANCHOR: Hello and warm welcome to our viewers joining us in the United States and all around the world, I am Bianca Nobilo.

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

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Briefing after briefing, phone call after phone call, all taking place behind the scenes letting Democrats know that they need their support for once in a long, long time Washington is actually going to spend less money.

RON DESANTIS, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: Stop passing the buck to subsequent generations to clean up your mess. D.C. has imposed its will on us for far too long. It's time we imposed our will on Washington D.C.

UNIDENTIFIED FEMALE: This was expected North Korea has said it was going to try to put a military satellite into space.

UNIDENTIFIED MALE: It does kind of change the dynamics in terms of how we perceive North Korea as a threat.

(END VIDEO CLIP)

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

FOSTER: It is Wednesday May the 31st 9:00 a.m. here in London, 4:00 a.m. on Capitol Hill where the U.S. House is set to vote on a critical bill to prevent the nation from defaulting on trillions of dollars of debt.

NOBILO: While many lawmakers seem confident, they'll get the votes to send the bill to the Senate, the House Speaker will be busy trying to wrangle last-minute support from Republicans who don't like the deal.

FOSTER: Kevin McCarthy told Republicans, quote, if you think I failed I think you're wrong -- when confronted with complaints about concessions. Meantime, the House majority leader says some Republicans have already reconsidered and put their support behind the bill.

(BEGIN VIDEO CLIP)

REP. STEVE SCALISE (R-LA) HOUSE MAJORITY LEADER: I think everybody's been waiting a long time to see from Washington not how much more is Washington going to spend, but for once in a long, long time Washington is actually going to spend less money next year than it is this year. And that is a reform that all of us can support.

We've been waiting for years to get a chance to finally turn the direction of this country around so that we can get away from this mentality that every year Washington thinks it can just keep printing money, spending money it does not have, raising taxes, creating new programs. And ultimately taking freedoms away from the American people. And that change starts with this bill.

(END VIDEO CLIP)

FOSTER: CNN's Melanie Zanona has the details on the last-minute negotiations from Washington.

(BEGIN VIDEOTAPE) ,

MELANIE ZANONA, CNN CAPITOL HILL REPORTER: Well, the House cleared a key procedural hurdle that will get them one step closer to passing the bipartisan debt deal. The House Rules Committee on Tuesday approved a rule for the bill despite opposition from two hardline conservatives on the panel. So, essentially this will clear the way for a floor vote. But they still need to pass the actual underlying bill and there has been opposition from both the far-left and the far- right. So, party leaders have been working furiously behind the scenes to try to sell this deal, to try to whip this deal.

House Democrats will huddle on Wednesday morning with their party leadership and the White House officials. And Republicans huddled behind closed doors on Tuesday evening. Where we're told that Speaker Kevin McCarthy made a forceful sales pitch for this deal. He touted a number of victories in the bill. And some conservatives did get up and express their concerns with what they view as a watered-down bill that gave way too many concessions to the Democrats.

But despite the conservative opposition, Kevin McCarthy is expressing confidence that they'll be able to get this over the finish line. Take a listen.

REP. KEVIN MCCARTHY (R-CA) U.S. HOUSE SPEAKER: I've talked to many about whether they're for or against the bill. I'm not sure what in the bill people are concerned about. Everybody has an opportunity. Everybody has an opportunity for their own opinion.

ZANONA: And of course, once it passes the House it still needs to go over to the. Senate. Republican leaders there also expressing confidence that they'll have enough votes with Democrats to put this over the finish line. But one other potential land mine that Speaker Kevin McCarthy has to look out for, is maintaining his speakership. Because there have been a several number of conservative hardliners who have threatened to force a vote as ousting him as speaker. Congressman Matt Gaetz said that if a majority of Republicans end up opposing the deal on the House floor that he does believe there will be an effort to remove him as speaker.

[16:05:00]

But as of right now, Kevin McCarthy says that he's going to have the votes and he's going to keep his job.

Melanie Zanona, CNN, Capitol Hill.

(END VIDEOTAPE)

NOBILO: North Korea says its attempt to launch its first military spy satellite has failed. State media reports the missile carrying the satellite malfunctioned during the second stage of launch and crashed into the sea. Pyongyang also says it will attempt another launch soon.

FOSTER: Meanwhile, South Korea says it has identified a piece of the satellite in the Yellow Sea and is trying to retrieve it. And the U.S. says the launch and technologies are directly related to Pyongyang's inter continental ballistic program. And even though it failed it is assessing it. For more let's go to CNN's Paula Hancocks live in Seoul. So they'll be analyzing, obviously, what they discovered in the waters.

PAULA HANCOCKS CNN CORRESPONDENT: Absolutely, Max, and hoping it gives some kind of indication as to where Pyongyang is in its quest to be able to put a military satellite up into space.

Now the reason that North Korea says it needs to do this is so that it can monitor and track and look at realtime information because of what it believes is the hostility of the United States. The have talked about the U.S.-South Korea military drills as being hostile in nature and this is what they say for the past year and a half. They have been having so many missile launches and so much testing that has been happening --something South Korea and the U.S. reject.

But what we saw today is that this did fail. It failed in the second stage according to Pyongyang. And it is interesting that they were quite so quick to admit failure. That is not something that North Korea is well known for. But they say that they will try again very soon.

Now there has been some political fallout here in South Korea as well. As there was an air raid siren about 6:30 this morning followed by an emergency alert telling residents to evacuate when they were in no danger. About 20 minutes later they admitted that was a mistake. And it has shaken and eroded some trust in the emergency alert system here.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (through translator): I thought it was an urgent situation and soon it turned out to be false so I was very confused. Such an important issue must be delivered cautiously but this time it was not.

UNIDENTIFIED MALE (through translator): At the moment the Korean government seems to have a backward system on issues of warnings and disasters. So, it needs to be improved. But it seems it's not going well.

(END VIDEO CLIP)

HANCOCKS: So, it has been widely condemned this launch by North Korea. The U.S., Japan, South Korea all saying that it violates U.N. Security Council resolutions which bans North Korea from using ballistic missile technology. So even that North Korea believes that it has the right to put a satellite into space, the technology to do so is banned by the U.N. -- Max Bianca.

FOSTER: Paula in Seoul, thank you.

NOBILO: Tensions between the U.S. and China are rising again after a Chinese fighter jet intercepted in American spy plane over the South China Sea.

FOSTER: The U.S. military says China carried out an unnecessarily aggressive maneuver during the incident.

NOBILO: Our Kristie Lu Stout is covering this from Hong Kong for us. Kristie, the South China Sea is possibly the most contentious body of water in the world. Seven different countries have conflicting territorial claims. And walk us through exactly what happened and how Beijing is now responding.

KRISTIE LU STOUT CNN CORRESPONDENT: Yes, the U.S. is effectively accusing China of this risky encounter over this potential flash point area of the South China Sea. And Beijing is pushing back with fresh comments from that ministry of foreign affairs today. Now on Tuesday, this is what we heard from U.S. military. They said that a Chinese fighter jet carried out a, quote, unnecessarily aggressive maneuver near U.S. military plane over the South China Sea in international airspace.

Now the incident took place last week on May 26th and video of the encounter has been released. Let's screen it right now. Now this video was filmed from the cockpit of a U.S. reconnaissance plane, an RC-135 and it shows the Chinese J-16 against that clear blue sky. It's moving along from right to left and then it makes a move. It cuts directly in front of the U.S. plane and the U.S. plane visibly shakes. That is the result of a wake turbulence that was generated by that maneuver. Now the U.S. Indo Pacific command said that the plane was conducting safe and routine operations.

It also added this in a statement, quote, the United States will continue to fly, sail and operate safely and responsibly wherever international law allows unquote.

The spokesperson for China's Embassy in Washington responded to that U.S. military statement saying this, quote, China urges the U.S. to stop such dangerous provocations and stop deflecting blame on China, unquote.

And just within the last hour so, China's ministry of foreign affairs offered a very similar response while adding this line. This is from Mao Ning.

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Quote, China will continue to take necessary measures to resolutely defend its sovereignty and security, unquote.

Now the latest encounter May 26th follows what the U.S. has cold a recent trend of increasingly risky behavior by Chinese military aircraft. In late December, a Chinese military plane came within 20 feet of a U.S. reconnaissance military plane, forced it to take evasive action. Now the latest encounter also comes as, of course, tensions continue to simmer between the U.S. and China over Taiwan and of course over territorial disputes in the South China Sea. Bianca and Max back to you guys.

NOBILO: Kristie Lu Stout for us live in Hong Kong, thank you.

STOUT: Thank you.

NOBILO: Florida Governor Ron DeSantis is making big promises on his first campaign tour as a presidential candidate telling conservative voters in Iowa, this time we imposed our will on Washington. Take a listen.

(BEGIN VIDEO CLIP)

DESANTIS: We must put an end to the culture of losing that has infected in the Republican Party of recent years. Not in Iowa, not in Florida, but in way too many places.

We need to inspire Americans from around the country to maybe pick up their family and moved to the nation's capital for two, four, six or eight years because we need people who live in the country to come out to D.C. to reassert the right of, we the people to run our own government.

(END VIDEO CLIP)

FOSTER: While he didn't call out Donald Trump by name, DeSantis says that he will accomplish more Republican goals than the president did in his single term. CNN's Jeff Zeleny has the latest.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN CHIEF U.S. NATIONAL AFFAIRS CORRESPONDENT: A week after formally announcing his presidential bid, Florida Governor Ron DeSantis in Iowa making his first campaign appearance Tuesday night just outside Des Moines. The first of a three-state tour of early voting states going on to New Hampshire and South Carolina. But meeting with Republican voters, he made the case that he is the

Republican for this moment. He did not make a reference, by name at least, to former President Donald Trump but there were thinly veiled messages in his speech.

DESANTIS: So, the point of all of that is that when we say that we will do something it is not fluff. We follow through and we produce results. And so, as president I pledge to be an energetic executive that will take these important issues head on and deliver results.

ZELENY: So, even though there are no direct references to former President Donald Trump, clearly, he is the one candidate who hangs over this race, looms large in this field. But at this point Governor DeSantis is doing something he has really done. He's holding press conferences which he did Tuesday night here in Iowa. He's also meeting voters individually, one-on-one, trying to make the case that he is from a new generation. That he says he has the energy for this job. So, clearly some subtle distinctions there. There are more to come.

Jeff Zeleny CNN Clive, Iowa.

(END VIDEOTAPE)

FOSTER: A Washington -- or rather a watchdog group is accusing DeSantis's allies of illegally funding the governor's campaign with huge amounts of cash.

NOBILO: The Campaign Legal Center filed a complaint with a federal election commission saying that DeSantis's allies violated federal campaign finance laws by directing or transferring over $80 million to the super PAC Never Back Down.

FOSTER: That money was raised through the Florida state political committee and as a result it can't directly fund DeSantis's campaign. So instead, his allies have been maneuvering to transfer that money through a super PAC and it appears Florida election officials recently changed the state's campaign finance guidelines in a way that could allow the transfer to happen. It's unclear whether the federal election commission will or can block the transfer.

NOBILO: Coming up on CNN NEWSROOM, a dangerous car crash caught on video in the state of Georgia. The details of what happened just ahead.

FOSTER: Plus, the 11-year-old boy shot by police after calling 9-1-1 speaks about his frightening ordeal. We'll hear how he says it forever changed his life.

NOBILO: And tech leaders are warning about a new way that the world could end. Not from a pandemic or nuclear war but artificial intelligence.

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(COMMERCIAL BREAK)

FOSTER: The Biden administration imposed a new round of sanctions on Tuesday. Aimed at combating America's deadly opioid epidemic.

FOSTER: The sanctions are directed at 17 individuals and companies based in China and Mexico. The U.S. Treasury Department says they're directly or indirectly involved with selling equipment used to imprint counterfeit trade markings onto illegally made pills.

FOSTER: Those pills are often laced with the deadly drug fentanyl and sold to Americans. The Chinese embassy in the U.S. condemns the sanction on Tuesday. Saying that the U.S. itself is the root cause of its drug problems.

NOBILO: A New York appeals court has agreed to protect the billionaire Sackler family from future lawsuits over their role in Purdue farmers opioid business. In exchange for immunity, the family has agreed to a $6 billion settlement with states and individuals.

FOSTER: A Purdue farmer first introduced the drug oxycodone in the 1990s. And promoted it as a non-addictive. More than a half 1 million people died from opioid overdoses between 1999 and 2020.

Some of the top minds working on artificial intelligence warned that if A.I. is left unchecked there's a risk of human extinction. Dozens of tech leaders signed on to a joint statement, published by the Center for A.I. Safety, which says, quote, mitigating the risk of extension from A.I. Should be a global priority alongside other societal-scale risks such as pandemic and nuclear war.

It was assigned by top executives and researchers at Open A.I., Google and Microsoft, among others. The center's director spoke to CNN about why A.I. poses such a threat to humanity.

(BEGIN VIDEOTAPE)

DAN HENDRYCKS, DIRECTOR, CENTER FOR AI SAFETY: So, A.I. could be bonded. Being somewhat similar to nuclear weapons. Right now, A.I. companies are locked in an A.I. arms race. So they're racing to develop increasingly powerful systems. And they're putting that priority ahead of safety.

[16:20:02]

What this means is that we don't really know how to control these systems reliably, nor do we really understand their inner workings at all. So, that means that we have an extremely powerful technology which could be, potentially, a loose cannon. So that's one possible risk. And that could possibly, like the nuclear arms race, lead to humanities extinction.

A more typical concern someone could have is, if we had advanced A.I. systems someone could repurpose them. Maliciously use it for harm. They could use it to develop a bio weapon. Or they could use it to develop a rogue A.I. agent and have that try and take over. Somebody trying to do that already but fortunately current A.I. technologies are not powerful enough to impose as the risk of extension. But given the extremely rapid pace in the A.I. arms race we may arrive at that point much more quickly than most people are expecting. (END VIDEOTAPE)

FOSTER: The disgraced founder of the failed blood testing start-up, Theranos, has reported to federal prison. Elizabeth Holmes was sentenced to more than 11 years behind bars for defrauding the company's investors. CNN's Brian Todd reports.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): In a light brown pull over and jeans, Elizabeth Holmes reports to the federal prison camp in Bryan, Texas. A far cry from when Holmes, sporting black turtlenecks, was compared to Steve Jobs and dazzled at one media event after another.

ELIZABETH HOLMES, THERANOS FOUNDER: I've always believed that the purpose of building a business is to make an impact in the world.

TODD (voice-over): Homes is starting to serve a sentence of more than 11 years after being convicted last year of multiple charges of defrauding investors, while she ran her Silicon Valley company Theranos.

JEFFREY SONNENFELD, SENIOR ASSOCIATE DEAN, YALE SCHOOL OF MANAGEMENT: We've seen a frenzies, hoaxes go throughout American history. This one ranks in the top 1 percent for the speed of the rise and the speed of the fall.

TODD (voice-over): In 2003 Elizabeth Holmes dropped out of Stanford University at only 19 years old to run Theranos. A start-up that have claimed to have created new technology that could accurately test for a range of physical conditions using just a few drops of blood.

HOLMES: So this is the little tubes that we collect the samples in. We call them the "nanotainers" and they're about this big.

TODD (voice-over): Part of the problem, analysts say, was that Elizabeth Holmes was never really qualified in the field.

SONNENFELD: She was not a hematologist. She was not a biologist. She was not a biochemist. She was a beginning engineer who dropped out of school at the very beginning of her career. She had no scientific or engineering backgrounds or know how to do this. So, this whole thing was a scam.

TODD (voice-over): Yet she was still able to sell the idea to several high-profile investors. Theranos was valued at about $9 billion at its peak. It all began to unravel in 2015. When the Wall Street journal investigation revealed that Theranos' claim that it conducted hundreds using its unique proprietary technology was false.

JOHN CARREYROU, UNCOVERED THERANOS FRAUD FOR WALL STREET JOURNAL: The Theranos proprietary device was only used for 12 tests -- 12 finger stick tests. And then all the other 250 or so tests on the Theranos menu were processed on commercial machines. You know, off the shelf machines that anyone can buy, that any lab uses. TODD (voice-over): And John Carreyrou's investigation found the few

tests that were conducted on Theranos's own unique technology were not accurate. Investors backed out. Theranos dissolved in 2018. Holmes pleaded not guilty to fraud charges. But she and her ex-boyfriend, former Theranos COO Ramesh "Sunny" Balwani were convicted. Carreyrou once described Elizabeth Holmes as a chameleon who got caught up in the heavy culture of Silicon Valley.

CARREYROU: I think the cause of her downfall is that she courted the press too much. She raised her profile too much and she courted publicity too much.

TODD: Despite having fallen so far, Elizabeth Holmes told "The New York Times" she plans to work on health care related inventions while she's in prison. She said, quote, I still dream about being able to contribute in that space.

Brian Todd CNN Washington.

(END VIDEOTAPE)

NOBILO: The attorney for Jerome Van Der Sloot says his client will not fight extradition from Peru. And that he wants to go to the U.S. Once there he'll face fraud and extortion charges linked to the disappearance of American teenager Natalee Holloway. He's been the prime suspect in that case for nearly 20 years.

FOSTER: Van Der Sloot allegedly plotted to sell false information about Holloway's remains to her family for a quarter of 1 million dollars. He's been in a Peruvian person since being convicted in 2012 for murdering a 21-year-old women.

A California appeals court has cleared the way for former Manson family member Leslie Van Houten to possibly be paroled. The court reversed a 2022 decision by California Governor Gavin Newsom to deny her release.

NOBILO: Van Houten has served more than 50 years in prison for her role in murders of Leno and Rosemary LaBianca in 1969. Despite the court's decision, Van Houten's attorney told CNN that she still expects a lengthy legal battle ahead.

[16:25:03]

Now to chilling testimony in the trial of the accused Pittsburgh synagogue shooter. Rabbi Jeffrey Myers told jurors that he expected to die when 50-year-old Robert Bowers allegedly entered the Tree of Light Synagogue and opened fire in 2018. Bowers has pleaded not guilty to 63 charges and he could face the death penalty if he is convicted.

FOSTER: Bowers is accused of killing 11 people in the deadliest attack ever on the American Jewish community. The 9-1-1 operator also testified about receiving a frantic call from 84-year-old Bernice Simon. She and her 86-year-old husband Silvan were both killed.

NOBILO: Still ahead the boy who called 9-1-1 for help only to be shot by police. Speaks about the terrifying ordeal, what he wants to say to the officer who shot him.

FOSTER: Plus, out-of-control wildfires in the eastern Canada have forced thousands of people to flee from their homes. And now they're impacting parts of the U.S. We'll have the latest.

(COMMERCIAL BREAK)

NOBILO: Welcome back to CNN NEWSROOM. I'm Bianca Nobilo.

FOSTER: I'm Max Foster. If you're just joining us, let me bring you up to date with our top stories this hour.

In a few hours, the U.S. House is set to debate and vote on the debt ceiling deal. If approved, the bill would head to the U.S. Senate. Lawmakers are running out of time as the June 5th default deadline quickly approaches.

And North Korea says it'll try a second launch of a military spy satellite after a failed attempt on Wednesday. The U.S. says the launch involved technology that are directly related to Pyongyang's intercontinental ballistic missile program and they're assessing the situation.

NOBILO: More than a dozen of schools will be closed in Nova Scotia today as 13 wildfires spread through the Canadian province. Eight of those fire started on Monday as the region experiences record breaking heat.

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