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Russia Denies Its Jet Collided with U.S. Drone & Forced It Down; Congressman's Video Explanation of SVB Collapse Goes Viral; Nor'easter Buries Parts of NY & New England Under 3 Feet of Snow; White House Blasts Russia's "Reckless" Intercept of U.S. Drone. Aired 7-7:30a ET

Aired March 15, 2023 - 07:00   ET

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

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: But we do expect that it's going to come back with a vengeance.

[07:00:04]

UNIDENTIFIED FEMALE: Ron DeSantis is drawing backlash from the establishment wing of his party after aligning himself with Trump on Ukraine.

UNIDENTIFIED FEMALE: The Florida Governor saying, "While the U.S. has many vital national interests, becoming further entangled in a territorial dispute between Ukraine and Russia is not one of them."

SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: It's a misunderstanding of the situation to say this doesn't matter, to say that war crimes don't matter.

MIKE KRZYZEWSKI, DUKE UNIVERSITY MEN'S BASKETBALL COACH: Quick's story?

POPPY HARLOW, CNN ANCHOR: Yeah.

KRZYZEWSKI: OK --

HARLOW: We want all the stories.

(Voice-over): And one-on-one with the legendary Coach K.

(On camera): One of the things that I've learned about you is how hard you are on yourself.

KRZYZEWSKI: Sometimes there's nobody that holds the leader accountable. It was always not about winning and losing for me. It was about being worthy of winning.

(END VIDEOTAPE)

DON LEMON, CNN ANCHOR: And good morning, everyone. We are covering a lot today. We begin with tensions on the rise after the Pentagon says a Russian fighter jet hit a U.S. spy drone and forced it to crash. Two Russian jets intercepted the drone over the Black Sea yesterday. The U.S. says one of them dumped fuel in the drone and then collided with its propeller, forcing the drone to go down.

Vladimir Putin is about to make a public appearance in Moscow, and we are waiting to see if he weighs in on the incident.

Following the crash, Russia's ambassador was summoned to the State Department. He claims there was no collision and that the drone crashed on its own. Here's what the White House had to say about that to our very own Jake Tapper.

(BEGIN VIDEO CLIP)

JOHN KIRBY, NATIONAL SECURITY COUNCIL COORDINATOR FOR STRATEGIC COMMUNICATIONS: Well, it won't surprise you that we obviously refute the Russian denial. And I think anybody, after a year now, Jake, should take everything that the Russians say about what they're doing in and around Ukraine with a huge grain of salt.

(END VIDEO CLIP)

LEMON: That was yesterday. And now National Security Council spokesman John Kirby will join us live to give us the latest developments this morning.

We're also expecting to hear from Defense Secretary Lloyd Austin at the Pentagon in about an hour as he meets with allies about the war in Ukraine.

Let's bring in now our Chief Anchor and National Security Correspondent, Jim Sciutto. Jim, good morning to you. How significant is this U.S. drone takedown. And what are U.S. drones doing in the Black Sea region?

JIM SCIUTTO, CNN ANCHOR AND CHIEF NATIONAL SECURITY CORRESPONDENT: To the first question, we're year into the biggest war in Europe since World War II. with Russia on one side, of course, it invaded Ukraine, but the U.S. backing the other side. And both those countries, the U.S. and Russia, have taken great pains for that year to make sure that U.S. and Russian forces don't come into direct conflict, and yesterday they did over the Black Sea here, granted, a U.S. drone, but you have a Russian plane circling it, dumping fuel on it, eventually taking that U.S. aircraft down.

And by the way, that's the second time in a month, keep in mind six, seven weeks or so, where one superpower has taken down another superpowers aircraft. You had the U.S. shooting down a Chinese surveillance balloon after it traveled over the U.S. And now you have Russia taking down a U.S. surveillance aircraft. This is the world we're living in right now. And it's very dangerous.

KAITLAN COLLINS, CNN ANCHOR: Yeah, it is very dangerous. And it raises a lot of questions also about these surveillance aircraft they're flying around there. The Pentagon is not saying where this one came from, but obviously, clearly, they're out there monitoring grain deals, shipments. What that's all looking like.

SCIUTTO: 100%, by the way. Listen, this is not just happening here over the Black Sea, around Ukraine. This is happening all over the world. You have U.S. surveillance aircraft flying all around China, both manned and unmanned. You have U.S. surveillance aircraft as well as NATO and others, here with the war in Ukraine.

Keep in mind, though, you also have Russia. It often flies its aircraft up here over Alaska, deliberately testing U.S. defenses. You'll see U.S. aircraft scrambled in defense. That's a dangerous world because those are multiple opportunities to have interactions like we had yesterday over the Black Sea.

Let's talk for a moment about what kinds of aircraft are flying. This is the Reaper drone. This is the one that. Taken down yesterday, one of the smaller unmanned aerial surveillance vehicles. But you got other ones, flying all over the world. The Global Hawk, longer range one, also unmanned. This is one that the U.S. uses frequently around China. And this is the other issue, because a lot of these surveillance aircraft, they're not all drones. Some of them are manned. The P-8A Poseidon. This flies both in Europe near Russian airspace, but also in Asia, near Chinese airspace. That's got a crew. I've been on one of those. And of course, the concern is that the next interaction is not between Chinese and Russian aircraft and U.S. aircraft that are unmanned, but that it's manned and manned.

We had that in 2001 when you had a Chinese jet hitting a U.S. jet over Hainan Island. You had dangers to U.S. cruise. And when you have crews involved, that's where the danger of escalation gets even worse.

HARLOW: Also, Jim, this week you've got Chinese, Iranian and Russian forces, their armies and their navies coming together for these joint military drills, an obvious message they're trying to send here, right?

[07:05:02]

SCIUTTO: And the latest in a series.

HARLOW: Yeah.

SCIUTTO: It shows that China and Russia are partners to many degree, in many respects. You remember just before the war in Ukraine, they announced this no limits partnership between Russia and China.

The fact is, there have been limits to date at least. We do not believe the U.S. does not believe that China is arming Russia and Ukraine, but in a whole host of other ways, they are supporting each other and Iran as well.

Remember, it's Iranian drones that have been coming into Ukraine to help Russia. There's talk of Russia helping Iran with its missile program. That's an alliance that has allied against the U.S. and its partners. And again, that's the new world we're living in here, and one where there's an enormous amount of concern about how that could escalate. LEMON: Jim Sciutto, thank you very much, sir.

SCIUTTO: Thanks.

LEMON: Moments from now, I'm going to speak with the White House, John Kirby. He's going to join us to talk about this and more.

HARLOW: There's also a lot of new fallout this morning over the sudden and stunning failure of Silicon Valley Bank. Take a look at stock futures right now.

Yesterday, we did see bank stocks rebound, the market's broadly down a little bit here, ahead of the open. Fears lingering that the recent banking turmoil could impact the broader economy. The Justice Department and the Securities and Exchange Commission now both investigating the collapse of SVB, examining stock sales that the Chief Financial Officers and others made there days before the collapse.

Shareholders have also filed a class action lawsuit against the bank's parent company. Democrats on Capitol Hill have unveiled a new bill that would restore those banking regulations rolled back in a bipartisan bill back in 2018.

COLLINS: It's a complicated issue. It sparked frustration and a lot of questions. We've tried to talk to about a lot of those here. One lawmaker was trying to calm concerns that people had about this over the weekend. He went on TikTok and explained what he had learned in this emergency congressional briefing that lawmakers had with treasury officials.

Democratic Congressman Jeff Jackson had this to say.

(BEGIN VIDEO CLIP)

REP. JEFF JACKSON, (D) NORTH CAROLINA: We caught it early enough so that taxpayers won't have to pay. We can pass the bill on to the banks as long as this panic stops here. You can be angry at all with this so long as you know that your deposits at your bank are protected because the full weight of the federal government has decided they will be.

You need to hear that. You need to know that it's true, and you need to share that message so that we can make sure this becomes a political debate and not a financial crisis.

(END VIDEO CLIP)

COLLINS: A concern that many people had. Joining us now is that lawmaker Jeff Jackson of North Carolina. And, Congressman, thank you for joining us this morning. Obviously, there's a lot of questions about what Congress is going to do here. Do you think that there should be congressional hearings?

JACKSON: Yes, I think there should be congressional hearings. I think there will be congressional hearings. I think the purpose of those congressional hearings will be twofold. First, an accountability phase. You referenced stock sales by the CEO

in the weeks before the bank collapsed. And the second is going to be to inform the regulatory response.

You mentioned that Democrats had already filed a bill that was designed to reinstate some of the protections against this type of thing that were rolled back a few years ago, and I would be very surprised if that did not end up being a bipartisan effort at this point.

COLLINS: You think so? You think that they could actually get that passed? Because we've heard from some of -- I know progressives want to get that passed, but we've heard from some more moderate members, including Democrats, who voted for it, who said they're not so sure yet that that actually would have made a difference here.

JACKSON: I think what we're going to see over the next few weeks is that it probably would have made a difference. And I respect people who are going to give this a little time before they say what legislation they're going to support.

But what I think you're going to see through the investigatory process is that, when we rolled those protections back, there were capital requirements and liquidity protections that all of a sudden no longer applied to banks like Silicon Valley Bank. And we'll never be able to be 100% sure that it would have made a difference. But it looks like, a major contributing factor more importantly, if we're going to have regional banks going forward and protect against this type of systemic risk, a domino effect, you're going to need these kinds of protections in place to give people confidence.

LEMON: Listen, obviously something needed to be done to help in this situation. We had Kevin O'Leary on the other day and others who are equating the administration's response to this as nationalizing the American banking system and fearing that the taxpayer is going to really bear the burden here of backstopping the banks. Is that a potential consequence of this, do you think?

JACKSON: No, that's not even close to accurate. We let the bank fail. All of the leaders of the bank are out of a job. The stockholders were wiped out. The bondholders were wiped out. The people that we backstopped were the depositors. And the only reason we backstopped the depositors was because if we didn't, it was looking like there was going to be a run on several other regional banks.

And we backstopped the depositors with a fund that's funded by the banks, basically an insurance pool of funds. It's got about $100 billion in it. And what we said was, as long as this panic stops here, that fund will be more than enough to cover the backstop for the depositors at these two banks that failed. It is not at all a nationalization or a bailout of the banks. It's completely different from 2008.

[07:10:12]

HARLOW: Well, Congressman, it's not just Kevin O'Leary. I mean, the former Deputy Treasury Secretary under the Clinton administration, Roger Altman, said this to Kaitlan on the program yesterday. Here he was.

(BEGIN VIDEO CLIP)

ROGER ALTMAN, FOUNDER AND SENIOR CHAIRMAN, EVERCORE: This is a breath- taking step which effectively nationalizes or federalizes the deposit base of the U.S. Financial system. Now, you can call it a bailout. You can call it something else, but it's really absolutely profound.

(END VIDEO CLIP)

HARLOW: It's profound. And that basically what the federal government is saying here to all depositors at all banks now is, we will ensure whatever you put in the bank. And I think the moral hazard question becomes, does that mean that people don't assess the riskiness of where they're putting their money? I mean, we saw crypto, for example soar on Monday after the market saw. Well, the government's here.

JACKSON: Well, it is true that it was a profound step and that it was the government stepping in and backstopping depositors. Although, to be clear, it was in the case of two specific banks. Although I think it's a realistic question at this point about are we going to take new steps to backstop depositors? Are we going to change our policy generally?

I know Senator Mitt Romney had some comments to that effect. Look, we have to decide how we protect against systemic risk for regional banks, because it turns out there was a larger risk of a domino effect than we knew even a week ago.

And that is going to involve a serious conversation about is $250,000 the right threshold? That's what the federal government insures right now for depositors. Are we going to have to change? That will be a big part of the conference.

HARLOW: I mean, it would be stunning if the federal government were to say to another bank on the brink or collapsing, well, we did this for SVB and Signature. We're not going to do it for your depositors. I think this -- that's the point is this indicates to everyone they're safe.

Just let me ask you, Barney Frank, former Democratic Congressman, one of the authors of Dodd-Frank, that legislation to protect against too big to fail banks, right? Sat on the Signature Bank board, made two and half million dollars in that capacity, and said that the government basically didn't need to fold Signature Bank. He said, "We were the ones they shot to encourage others to stay away from crypto." What do you think?

JACKSON: I would disagree with his assessment of this. I respect his expertise, but I think there was a situation where that bank was flashing red. There were a number of other banks that were flashing red according to the Treasury Department. And in that moment, you cannot risk a number of banks collapsing all at once, because that's how a financial crisis begins. Erring on the side of caution is what you have no choice but to do in

that situation. So you fail the bank, you backstop all the depositors, and you stop the dominoes right then and there. Can I have you, Congressman, before we let you respond to what we're hearing from some Republicans on this, saying that because SVB was a woke bank, as people like James Comer, other Republicans are referring to it as saying that was part of why they failed, not because they parked too much cash in these long-term treasury bonds?

JACKSON: Yeah, let's just address that. First of all, the investments that SVB lost money on weren't anything to do with social justice. This, they were to do with bonds. They were to do mainly with mortgage-backed securities. That's where they lost money and got into trouble.

Second, in a moment of, I won't say national crisis, but extreme national tension where the main concern is fear spreading. It really would help if our leaders were more serious in how they approached this and throwing out labels like woke just because they know that's going to rile up maybe 25% of the country is a really unserious way to approach this and can only hurt the situation.

LEMON: We didn't get to see on camera. But he bowed his head inside when Kaitlan was asking that question about a frustration.

HARLOW: And Republican former head of the Sheila Bair, Congressman agrees with you. She said as much yesterday. So thank you very much.

LEMON: Thank you, Congressman. Appreciate it.

HARLOW: Tune in tonight, CNN Prime Time 09:00 p.m. Eastern Bank Bust. What is next for America's Money? We'll speak with experts about how this happened, what it means for you and your bank, ahead.

LEMON: All right, let's talk about the weather now. Now to the winter storm that's blasted and buried so much of the northeast. Some parts of New York and New England waking up to three feet of snow. Winter weather alerts are set to start expiring this morning.

Looking now, this is Burlington, Vermont, and Plymouth, New Hampshire, looks cold, obviously. CNN's Derek Van Dam is in Worcester, Massachusetts, where people are digging out from this Nor'easter, appropriately dressed but man, now the cleanup.

[07:15:01]

DEREK VAN DAM, CNN METEOROLOGIST: Yeah, quite literally. I mean, look, you can see residents from the city working to clean the streets and the sidewalks here. Some people like in New York or Boston, think, hey, this was a bit of a dud Nor'easter. You only got a trace of snow in New York, half an inch in Boston. But you can't say the same for places like Colrain, Massachusetts, and Stony Creek, New York. They got clobbered with 36 inches. That's three feet of heavy, wet snow. So just like any Nor'easter, this was a game of mile, separating the biggest impacts from the smallest. Take a listen.

(BEGIN VIDEOTAPE)

VAN DAM (voice-over): The first Nor'easter of the season hitting the Northeast, with parts of New York, Massachusetts, and Vermont seeing over three feet of snowfall. From New Jersey up through Maine, this late season storm brought heavy snow, winds, and coastal flooding.

UNIDENTIFIED FEMALE: It's a heavy, wet. It's not going to be fun to shovel.

VAN DAM: In Derry County, New Hampshire, a boy got stuck under a downed tree. For 19 minutes, firefighters and police officers used their bare hands, chainsaws, and shovels to free the child. The storm left cars stranded and downed trees in the streets.

In Massachusetts, crews working to restore power in difficult conditions throughout the day. Tuesday, hundreds of thousands throughout the Northeast experienced power outages from the late season snow.

UNIDENTIFIED MALE: It's just crazy how it's like it comes so late this year.

UNIDENTIFIED MALE: Hopefully this is the last snow storm.

UNIDENTIFIED MALE: It's really heavy -- really heavy snow, heavier than usual. Moving it through like, you know, it's a workout.

VAN DAM: In Worcester, Massachusetts, two to three inches of snow were falling every hour. In the Boston area, residents struggled on the roads.

UNIDENTIFIED FEMALE: Whether good or bad, I have to go to work. It's been rough, very rough, you know.

VAN DAM: Parts of New York and New Jersey were both under a state of emergency.

UNIDENTIFIED FEMALE: I didn't know what to expect. I mean, when they're saying it's a state of emergency, I'm like, uh-oh, so I think we got more than we expected so far.

VAN DAM: The New York State Department of Transportation doing what it can to keep the roads clear.

SCOTT COOK, REGIONAL SPOKEMAN, NY DEPARTMENT OF TRANSPORTATION: Well, first of all, always keep an eye on the weather. Don't drive if you don't have to. When there's weather, you've got to give yourself time.

VAN DAM: Some people trying to remain in good spirits despite the difficult conditions.

UNIDENTIFIED MALE: Just amazing, in Jamaica. You don't have it. Now you have it. Just take it a play. It's quite beautiful.

UNIDENTIFIED MALE: I'm alive in spirit, and I love the snow. I love all the weather. I live in New England. Come on. (END VIDEOTAPE)

VAN DAM: OK, so we like to refer to this in the weather community as heart attack snowfall, because it is literally so heavy, so wet, and very difficult to shovel. It's kind of back breaking. You got to be careful. Problem now is that this is stuck to the power lines and to the trees. And now that the wind has picked up on the backside of the Nor'easter, the potential for more power outages still exists today. Don?

LEMON: All right, Derek Van Dam in a very snowy worst of mass. Thank you, Derek.

COLLINS: I think I want one of those hats.

LEMON: Yeah.

HARLOW: Looks good.

COLLINS: All right. This morning we are tracking a major development that happened over the black sea yesterday. The white House called it reckless. We're going to discuss where things stand now, whether or not the U.S. is any closer to recovering that drone, one like the one you see there after Russia forced it down. John Kirby is standing by.

(COMMERCIAL BREAK)

[07:22:31]

LEMON: So this morning, the U.S. is demanding answers after a Russian fighter jet took down a U.S. air force drone. The Reaper drone, like the one you see here, was flying over international waters over the Black Sea when one of the Russian jets intentionally flew in front of and dumped fuel on it several times, according to U.S. military.

Now, the aircraft then hit the propeller of the drone, prompting U.S. forces to bring the drone down in international waters.

Let's discuss now. Joining us now is the White House National Security Council Spokesperson, Mr. John Kirby. John Kirby, Rear Admiral, as a matter of fact. Thank you very much. We appreciate you joining us this morning.

JOHN KIRBY, NATIONAL SECURITY COUNCIL COORDINATOR FOR STRATEGIC COMMUNICATIONS: Yes, sir. Good to be with you.

LEMON: So I have to ask you first off, has the drone been recovered and what is the status?

KIRBY: It has not been recovered and I'm not sure that we're going to be able to recover it. I mean, where it fell into the Black Sea very, very deep water. So we're still assessing whether there can be any kind of recovery effort mounted. There may not be.

LEMON: OK, so having said that, you said that the U.S. would do everything, every effort to protect our equities over there. Part of protecting the equity is securing the data that may have been on this drone. Has the U.S. been able to wipe the drone's data or destroy parts of it so that is not useful to enemies? Russians?

KIRBY: What I can tell you, Don, without getting into too much detail here, is that we took steps to protect information and to protect -- to minimize any effort by anybody else to exploit that drone for useful content.

LEMON: OK, but you said you're not saying for sure. You said you took steps to minimize so that others can't exploit.

KIRBY: That's right.

LEMON: So that -- it's not foolproof?

KIRBY: We did the best we could to minimize any intelligence value that might come from somebody else getting their hands on, on that drone.

LEMON: But others can get their hands on it, it's possible?

KIRBY: Well, I mean, I can't -- I certainly can't speak for Russian efforts or what they may or may not be trying to take off the surface of the water. I can just tell you that we're still assessing that situation ourselves.

LEMON: Has the U.S. learned more or understand why Russia took this down? We're saying that our military is saying that it was a deliberate effort. Russia is saying not. The ambassador to the U.S. says that it was near the border. Is that an actual reason? The actual reason?

KIRBY: It was in international airspace, flying over the Black Sea international waters. It is not uncommon, and nor has it been since the beginning of this war, for us to have -- to have these kinds of flights, conduct these kinds of flights.

[07:25:06]

And it is also not uncommon for the Russians to try to intercept them, to try to harass them. This is the first time that it's ended up in this particular circumstance where a Russian pilot actually struck the drone, causing us to have to bring it down. That's the first time that's happened. But it's not the first time that they have accepted or tried to harass these flights.

LEMON: Should we be more careful? Should the U.S. be more careful about flying over these waters?

KIRBY: The message that we deliver to the Russian ambassador is that they need to be more careful flying in international airspace near U.S. assets that are, again, flying in completely legal ways, conducting submissions in support of our national security interests. They're the ones that need to be more careful.

LEMON: He said, what if, you know, this happened over New York or near New York City or near San Francisco? Is that a fair assessment?

KIRBY: No, it's not. First of all, they don't belong in Ukraine. Secondly, they certainly don't belong in Crimea. And we were flying again well outside of airspace that was -- that's claimed by Ukraine or any other country.

The Black Sea doesn't belong to Russia. It belongs to many countries. And the United States has been operating there on the sea and in the air. And we're going to continue to operate again in complete accordance with international law.

LEMON: You told my colleague, Jake Tapper, yesterday that the incident could have led to miscalculations and escalations beyond Ukraine. That sounds ominous, as if there can be an escalation. What do you mean by that?

KIRBY: What I mean is, when you have a situation like this, it does increase the risk of miscalculations, misunderstandings. And the last thing that we want, certainly the last thing that anybody should want, is for this war in Ukraine to escalate, to become something between the United States and Russia, to have this actually expand beyond that. That's not only not going to be good for the people of Ukraine. It's not going to be good for the people of Europe or even around the world.

We've been working very, very hard throughout the beginning of this conflict, Don, to make sure that it doesn't escalate, particularly into that area. And I think we can all understand how that would be -- that would be absolutely horrible for everybody.

LEMON: I want to be clear about something I asked this moment ago, saying Russia is denying that there was any physical contact between its aircraft and the drone, again saying it wasn't intentional. Is there -- intentional -- is there video of what happened?

KIRBY: There was some imagery collected around the incident. We're still going through that video right now.

LEMON: Has there been any communication between Russian officials overnight? Any -- if you open up any communication channels, have you spoken to them concerning this?

KIRBY: Well, we brought the Ambassador into the State Department yesterday here in Washington D.C. We certainly conveyed a very direct message to him about our deep concerns over this reckless, unprofessional behavior by Russian pilots. So, yes, we have communicated directly through diplomatic channels as appropriate with the Russian government.

LEMON: As you know, several Senate Republicans are criticizing Florida Governor Ron DeSantis. This is not his position on the war between Ukraine and Russian. Listen, it's not just Republicans. It's very hawkish. People in the Republican Party saying it's not in the U.S. interest and it's more of a territorial dispute. But DeSantis is voicing the opinion of some Americans. Is the White House worried about the public's support of Ukraine -- for Ukraine at this point? KIRBY: We've been very grateful for the support that the American people have shown for our support to Ukraine. Certainly we have appreciated the bipartisan and bicameral support on Capitol Hill for going forward and supporting Ukraine.

Just today, Secretary Austin is hosting yet another contact group meeting virtually from the Pentagon today, where he will meet with dozens of other allies and partners to see what more we can do to help Ukraine in the weeks and months ahead. But the support from the American people has, has been very, very important.

And I think you heard in Warsaw when President Biden gave that very, very stirring speech and made it very clear what's at stake here. It's not just about Ukraine, although that is first and foremost what's on our minds keeping the Ukraine safe, making it whole and independent and sovereign. But it is very well the cost and the blood and the treasure that it could cost the American people and our allies and partners.

If Mr. Putin succeeds here, if we just back off and say that's it, we're not going to support him anymore, where does it stop? What's Putin's next aim? What's his next goal? Where next is he going to go? And the cost could be exorbitantly higher than it is right now.

LEMON: This morning, officials in Beijing say that Russia will hold joint military exercises with China and Iran in the Gulf of Oman through Sunday. Is the White House concerned about that?

KIRBY: No. Look nations are -- they conduct military training exercises. It's not the first time that the Russians and the Chinese have trained together. So we're going to watch it. We'll monitor it obviously to make sure that there's no threat resulting from this training exercise to our national security interests of those of our allies and partners in the region.

[07:30:00]