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Early Start with John Berman and Zoraida Sambolin

Strikes Across Ukraine After Kyiv Denies Drone Attack on Kremlin; PacWest Bank Shares Crater on Report It Might Be Next to Fail; Suspect Captured After Daylong Atlanta-Area Manhunt; Special Counsel Probes Handling of Mar-a-Lago Surveillance Video. Aired 5- 5:30a ET

Aired May 04, 2023 - 05:00   ET

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

[05:00:26]

CHRISTINE ROMANS, CNN ANCHOR: All right. Good Thursday morning. Welcome to our viewers in the United States and around the world. I'm Christine Romans.

We begin with what could be retaliation for Wednesdays drone strikes against the Kremlin in the heart of Moscow. Russia accusing Kyiv of trying to kill President Vladimir Putin with two drones, although the damage appeared minor and Putin was not in the Kremlin at the time. Ukraine strongly denies any involvement.

A short time ago, attacks on Ukrainian cities, including Odesa, Kherson and the capital of Kyiv.

One of the drones shot down over Ukraine today had the words for the Kremlin and for Moscow written on them.

CNN's Nic Robertson live in eastern Ukraine.

Nick what are we learning about the strikes on the Kremlin and what has been the fallout this morning in Ukraine?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yeah, President Zelenskyy has said absolutely we do not attack Putin, we do not attack Moscow. He said, we defend our own cities, our own villages. We are struggling with ammunition. So, a flat-out denial coming from Ukrainians.

Overnight, of course, concerns how would Moscow respond to essentially to the Ukrainians appears to be completely trumped up allegations that they tried to assassinate President Putin.

Over Kyiv, according to one Ukrainian official, the biggest fly of UAVs, attract drones and missiles they've seen so far this year. All of them shot down, though to be falling in the city.

In the south, Odessa, 15 attack drones fired or sent to that region, 12 shot down, three landing on educational facilities. As you mentioned, only tail fence of a couple of those drones, written from Moscow, from the Kremlin. So, is that the Kremlin's response? Is this all of it? But the place that really bore the biggest brunt of Russian attacks yesterday was Kherson, in the south and east of the country. A town that Russia fears Ukraine might be used as a launch pad to launch its counteroffensive, 539 artillery shells fired on the city, 82 of them landing near the station, 23 people killed, 46 wounded, two of them children.

This is by far since the beginning of the whole war, the biggest attack on Kherson, biggest devastation, biggest number of fatalities and casualties.

Was that a part of the Kremlin response for this alleged drone attack on the president? Perhaps not. Perhaps this looks more like Russia trying to head off what it sees as a coming Ukrainian counteroffensive -- Christine.

ROMANS: Yeah, so much -- I mean, so much of the facts around what happened to the Kremlin, with those drone strikes, too, I mean, Russia say one thing, but we know that they often don't tell us what's really happening. So, just -- it makes it -- fog of war for sure.

All right. Nic Robertson, thank you so much. Nice to see you see.

All right. To the U.S. now, investors fear PacWest may be the next to fail. Its shares fell by half in after hours trading. It was down only 2 percent at close.

You can see there. But this big plunge came overnight after Bloomberg reported the regional bank is looking to raise capital to break itself up or possibly find a buyer.

Now, that last option is problematic because according to Bloomberg, potential buyers aren't many around the block. Like other regional banks, the value of PacWest loan and bond holdings have evaporated as interest rates surged. That's what led to the failure of three other regional banks, SVB, Signature and just this week, First Republic.

All right. To Atlanta now where the chaotic manhunt is over for a Coast Guard veteran accused of killing one and wounding four others in a Midtown medical building. Police captured the suspect 11 miles away at a gated condo complex in Cobb County.

(BEGIN VIDEO CLIP)

REPORTER: So they yelled at him get down?

DEBRA SANSAVIERI, WITNESSED ARREST: Yes.

REPORTER: So it was clear that they caught the guy?

SANSAVIERI: Oh, yes.

REPORTER: And was at your pool?

SANSAVIERI: Yes.

REPORTER: And your condo development?

SANSAVIERI: Yes.

REPORTER: Are you shocked?

SANSAVIERI: Shocked. Beyond shocked.

(END VIDEO CLIP)

ROMANS: More now from CNN's Nick Valencia in Atlanta.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Look at this. They all have shields and giant guns.

NICK VALENCIA, CNN CORRESPONDENT (voice-over): Another deadly mass shooting in America. This time during the lunch rush in Midtown, Atlanta.

JOSH MCLAURIN, ATLANTA SHOOTING WITNESS: In the middle of a lunch, I just started people hearing say, hey, you know, we are on lockdown. There's an active shooter next door.

VALENCIA: According to Atlanta police, it happened inside an 11th floor waiting room at Northside Hospital Medical.

These couple was on the ninth floor at the time.

UNIDENTIFIED MALE: My son was inside the procedure room when we heard the popping and it was just really nothing until we see everyone locking doors and scurrying through the doctor's office.

[05:05:05]

And then they put the television on. And we saw the breaking news on the television and it mentioned that it was that address. So, it's surprising that it was in the same building that we were in.

VALENCIA: At least one person is dead and four others wounded. The Atlanta Police Department has identified 24-year-old Deion Patterson as the suspect in the shooting, releasing surveillance camera images of him wearing a hoodie and carrying a backpack.

MAYOR ANDRE DICKENS (D), ATLANTA: Thanks to the highly trained police officers across our region, we are able to bring the suspect into custody without further harm.

VALENCIA: A high level source telling CNN that the suspect and his mother were at the hospital for a medical appointment for Patterson. At some point, he became agitated and allegedly started shooting with a handgun before leaving the building, according to police.

CHIEF DARIN SCHIERBAUM, ATLANTA POLICE: We believe he carjacked a vehicle a short distance away and was able to flee the scene as law enforcement was descending on this area.

VALENCIA: We've learned the suspect is a former member of the Coast Guard and was discharged in January.

DEPUTY CHIEF CHARLES HAMPTON, ATLANTA POLICE: He spent about maybe two minutes inside the building where he then exited on foot. What we were able to pick up on the camera network system is that he went to a shell gas station where he commandeered a vehicle. That car was a pickup truck was left running.

VALENCIA: The suspect's mother is reportedly cooperating with police. Atlanta police say all the gunshot victims are women.

SCHIERBAUM: Unfortunately, a 39-year-old female has lost her life. And of those that are injured, it's a 71-year-old female, a 56-year- old female, a 39-year-old female, and then a 25-year-old female.

VALENCIA: The four injured victims were taken to Grady hospital. Three are in critical condition, one in stable.

SCHIERBAUM: It's still too soon to know why these individuals were chosen.

VALENCIA: Nick Valencia, CNN, Atlanta.

(END VIDEOTAPE)

ROMANS: All right. The special counsel investigating former President Trump's possible mishandling of classified documents has been zeroing in recently on surveillance footage from Mar-a-Lago. CNN reporting exclusively, prosecutors have been asking about how Trump Organization employees handled the video after it was subpoenaed last summer.

CNN's Katelyn Polantz has more from Washington.

(BEGIN VIDEOTAPE)

KATELYN POLANTZ, CNN SENIOR REPORTER, CRIME AND JUSTICE: The Special Counsel Jack Smith working for the Justice Department investigating Donald Trump has been busy in recent weeks. Just last week, he was personally sitting in to witness some of the testimony of former Vice President Mike Pence at a grand jury looking at Donald Trump and the aftermath the 2020 election for possible federal crimes.

That is not a typical thing. There are many prosecutors that work for Smith that are in and out of the grand jury, out of the federal court house, almost daily. I don't believe anyone has ever spotted Smith there personally, and he was in the room for some of the Pence testimony to witness it himself.

Just underlining how serious of an investigation, how substantial a witness Mike Pence, the former vice president, was bringing him in under court order, under subpoena, to testify to that grand jury, potentially about his former boss Donald Trump.

And Smith like I said has been very, very busy. He is busy in the coming days. We're learning not just related to the January 6th inquiry, is bringing in many, many witnesses and also having major allies of Donald Trump, people from the Trump Organization at its high levels, handling security, the chief operating officer are set to testify to the federal grand jury in Washington on Thursday.

Those men, their names are Matthew Calamari Sr., and Matthew Calamari Jr., father and son. They are the people that would be responsible for the handling of surveillance tapes by the Trump Organization. And they are of interest right now we know because the Justice Department, Jack Smith and his investigators, they are questioning them and others about the handling of surveillance footage that the Justice Department wanted to obtain last year.

It ultimately was turned over and showed employees of Donald Trump moving boxes in Mar-a-Lago at the resort, out of a storage room. But now, the handling of that surveillance tape itself when it was requested by the Justice Department has become an area of inquiry into a possible obstruction case, as well, related to Smith and his many inquiries on that side, the Mar-a-Lago documents case.

Katelyn Polantz, CNN, Washington.

(END VIDEOTAPE)

ROMANS: All right. Americans -- Americans are about to pay more again for their mortgage, car loan and credit cards. The U.S. Federal Reserve hiked its benchmark interest rate for the tenth time in a row, this time by a quarter percentage point.

But now, the Fed chairman is hinting, hinting that rate hikes might take a pause next time around.

(BEGIN VIDEO CLIP)

JEROME POWELL, FEDERAL RESERVE CHAIRMAN: Decision on a pause was not made today. You will have noticed that in the statement from March, we had a sentence that said the committee anticipates that some additional policy firming may be appropriate.

[05:10:06]

That sentence is not in the statement anymore. We took that out. Instead, we're saying that in determining the extent to which additional policy firming might be appropriate 2 percent over time, the committee will take into account certain factors. So that is a meaningful change that we're no longer saying that we anticipate.

And so, we'll be driven by incoming data, meeting by meeting. And we'll approach the question at the June meeting.

(END VIDEO CLIP)

ROMANS: So the Fed raises rates to try to tame the high prices you see when you go shopping or pay for services. But it also means that you end up paying more for things like a new mortgage. A 30-year fixed mortgage was 4.61 percent back when the rate hikes

started over a year ago. Now, it's 6.34 percent. So, what does that mean? On a $500,000 loan with 20 percent down, that is an extra almost $600 a month.

Now, a new car loan at about 4.5 percent last year was the interest rate, now almost 7 percent. And on a six-year auto loan, that's another 63 bucks a month. Credit cards averaged 14.5 percent before the rate hike campaign began.

And now, they are record high above 20 percent. So, if you pay just the minimum on a $2,000 balance, it's going to take you 11 more months to pay it off all because the fed is raising interest rates to try to lower inflation.

All right. Quick look at Wall Street afterhours trading here. You can see stock index futures down just tiny bit. We're watching those.

For a check of markets around the world, let's bring in Clare Sebastian in London and Kristie Lu Stout in Hong Kong.

Okay, first to Clare. The markets seem to be taking the Fed rate hike mostly in stride. Is that maybe because of this hint this will be the last increase for a while?

CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT: Yeah, Christine, here in Europe I think that the attention has now shifted a bit away from the Fed and towards European Central Bank which meets today and announces its rate decision, but the same question will apply in how -- that is how close to the end of their rate hiking cycle they are.

The ECB is expected to raise rates again today and inflation still high in the euro area, at 7 percent, but core inflation data this week has dropped just a little bit. So that may be factored in there.

Banks in Europe are pretty mixed today. There is still scrutiny on that sector because of the continuing turmoil we're seeing in the U.S. regional banks. PacWest, of course, shares afterhours falling by about a half on that report, that they could be considering strategic options.

And I think rate centers here in Europe will be looking to the Fed and to that turmoil in there, the U.S. regional banks as a cautionary tail when they make their decision today, Christine.

ROMANS: Yeah.

Now to Kristie, you know, one thing the Fed chief said yesterday, he said it is still possible for the U.S. to avoid a recession, that would certainly send a good message elsewhere around the world. But there are so many -- so many conflicting signals here on the U.S. economy and the global economy honestly.

KRISTIE LU STOUT, CNN ANCHOR & CORRESPONDENT: Yeah, for this day, traders appear to focus on the positive data, it was a mixed day in Asia, shares across China actually edged higher after the Fed raised interest rates as expected by a quarter of a percentage point and then signal a pause in its rate hike campaign.

If you look at the Asian trading day, that mixed picture. I should add that the Nikkei 225 in Japan was closed for a public holiday, but you can see the Shanghai Composite edged up stronger, 0.8 percent after the midday holiday, got a lift from robust holiday, big holiday spending in China has surged past pre-pandemic levels for the first time in three years. That lift also reflected here in Hong Kong as well. Shares in Seoul, shares in Australia, earlier declines.

On Wednesday, again, for the second time this year, the Fed raised rates right after a bank failure coming just two days after the collapse of First Republic Bank, second biggest bank failure in U.S. history and the Fed has been raising rates to fight inflation, now although inflation is cooling in the U.S., still, it's more than twice the target of 2 percent.

So, analysts in Asia are expecting more choppy waters ahead. We have this from David Chao. He's the global market strategist at Invesco Asia Pacific, based out of Singapore. He said, we anticipate volatility in the near term helped by uncertainty around Fed policy, concerns about hitting the debt ceiling and fears of more issues with regional banks, unquote.

So, so also weighing on investors here, people are also concerned about the softening U.S. labor market. So a lot of anxiety still even though a mixed trading picture this day -- Christine.

ROMANS: All right. Clare and Kristie, thank you so much, both of you. A lot going on and it's all global.

All right. Just ahead, mystery in Moscow -- if Ukraine didn't send drones to hit the Kremlin, and who did?

Plus, new revelations from convicted killer Alex Murdaugh, the lies he told about the death of his housekeeper.

And a big development on the burning issue, states that just burned gas stoves in new buildings.

(COMMERCIAL BREAK)

[05:18:52]

ROMANS: All right. Overnight, Russia unleashing a barrage of airstrikes after accusing Ukraine of launching drones against the Kremlin and attempting to assassinate Vladimir Putin.

Ukraine says the drones that struck the city of Odesa had handwritten words reading, quote, for Moscow and the Kremlin, suggesting retaliation for the Kremlin attack which Ukraine denies involvement in.

Let's bring in CNN global affairs analyst and senior managing editor at "The Military Times", Kim Dozier.

Kim, thanks so much for joining us this morning. Ukraine has denied that it is responsible for that Kremlin drone attack. You know, what do you make of this retaliation this morning? Apparently it is for that attack? And who could have been behind the drone attack on the Kremlin if it wasn't Ukraine?

KIM DOZIER, CNN GLOBAL AFFAIRS ANALYST: Well, we may never know because we can't get independent analysis of the drone wreckage. Russia says that it was a specific type of drone that is in the Ukrainian arsenal. And Ukraine does actually have armed drones that can fly that far. I mean, something like more than 500 miles from Kyiv to Moscow. But it's only about 300 miles from the Ukrainian border to the Russian capital.

[05:20:00]

So, technically, it could have been Ukraine. There was a 12-hour delay between the attacks and Russia's official response and statement to the world. It could have been during that time that they were scrambling to figure out how do we explain something that breached our security perimeter as Red Square was mostly closed in preparations for Russia's victory parade on My 9th.

And the result was as we all saw, this announcement that Ukraine was trying to kill the Russian president. It's sort of a rhetorical response that gives Russia more of an excuse to step up attacks and of course inspire its own people to attack. And perhaps that explains the words on those drones headed for Odesa.

ROMANS: Yeah, the whole -- the whole sort of line from Russia may be for an internal audience, not external audience. And I guess we can't rule out that the Kremlin staged this itself, you know, some kind of a false flag event. What would Putin gain from that?

DOZIER: Well, one of the things that Putin has tried to do since the beginning of this war, the original aim when Russian forces when all over Ukraine before being beaten back was to decapitate the government, to take out President Zelenskyy position. But when the forces got beaten back and Zelenskyy became a public hero and the thought in U.S. intelligence and diplomatic circles, also across the West -- across Europe was that Zelenskyy became too big to kill.

So what Russia could now be trying to do, whether they were behind this attack or not, is drive the thin end of the wedge into public opinion across Europe and the United States that, hey, this is a president who would attack our president, so we should be able to take him off the board. And that could help Moscow because Moscow sees Zelenskyy as unifying force for that embattled country and for the whole Russian -- the whole Ukrainian war effort against Russia.

ROMANS: Very interesting. And I guess we can't rule out that there could be internal dissent, right, inside of Russia that could have been behind this.

DOZIER: Absolutely. There have been some strange explosions against cargo trains, et cetera, inside Russia. There could be a partisan or anti-Putin movement growing. I think that there are a love analysts and politicians in the West who would like that to be true, but we just don't know at this point.

ROMANS: Indeed.

All right. Kim Dozier of "The Military Times", nice to see you. Thank you.

DOZIER: Thanks.

ROMANS: All right. Quick hits across America now.

Convicted murderer Alex Murdaugh admitted in a recent filing that he lied about the 2018 death of the family's housekeeper. Murdaugh originally claimed she fell after being tripped by the family's dogs. Now, he says he made that up to force his insurers to make a settlement payment.

Two 10-year-old children were found working at a Louisville McDonald's sometimes until 2:00 in the morning. The Department of Labor also found three franchises that owned more than 60 locations employed hundreds of children to work more than legally permitted.

New York has become the first state to ban natural gas and other fossil fuels in most new buildings, new buildings. The law bans gas powered stoves, furnaces and propane heating, all electric heating and cooking will be required in new buildings under seven stories by the year 2026, taller ones by the year 2029.

Just ahead, global raids on organized crime, more on Italy's mafia, and an oil tanker surrounded and seized by a fleet of smaller boats. Who is behind that?

(COMMERCIAL BREAK)

[05:28:13]

ROMANS: All right. Serbia reeling from a mass shooting that left eight children and a security guard dead. Police say the gunman was a 13-year-old student at the school who carefully planned the attack and showed no remorse.

CNN's Frederik Pleitgen live in Belgrade, Serbia, with more for us.

Fred, this is such a terrible story. What do officials say led to this attack?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yeah, yeah. I mean, this is a terrible story and officials are still trying to find out how exactly it could come to this. The facts are pretty much on the table but apparently this 13-year-old went to a safe where his father had two guns inside. He knew the code for it, he took the guns and several Molotov cocktails and went on a rampage inside the school that he was attending as well.

And you're absolutely right, the police chief of Belgrade once again this morning, Christine, telling us that the child or this teenager is showing absolutely no remorse. And you can see behind me, there's a sea of flowers. And, you know, you're absolutely correct as well to state this is a nation that is absolutely reeling from this because this is something that is completely unprecedented here in Serbia. In fact, there's people coming to us and telling us that this is something that they only know from the U.S.

Here's what's going on.

(BEGIN VIDEOTAPE)

PLEITGEN (voice-over): Horror inside a school classroom, a scene all too familiar in the U.S., but this is Serbia's capital, Belgrade. This is the deadliest mass shooting in the country in over a decade. Moments after arriving at the prestigious Vladislav Ribnikar Elementary School, a 13-year-old student took out his father's gun and shot the security guard before turning it on pupils according to officials.

UNIDENTIFIED MALE (through translator): There was one girl at her desk, another at the piano. He took their lives and then he went out into the corridor to the history classroom. He went into the classroom and immediately shot the teacher and students there from the door.

[05:30:00]