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Early Start with John Berman and Zoraida Sambolin

Wagner Chief Admits Ukrainian Forces Advancing Near Bakhmut; Rep. George Santos Pleads Not Guilty To 13 Federal Charges; Yellen: Default Would Produce Economic And Financial Catastrophe. Aired 5:30- 6a ET

Aired May 11, 2023 - 05:30   ET

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

[05:30:00]

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: There is a level of understanding among Ukrainian military officials here that there's an expectation among allies that they've got all this NATO equipment and about the much talked about counteroffensive that's coming. People say is the Bakhmut's success is part of that? At the moment they're saying no, look, we're going to evaluate each step as we go.

But they are concerned also about getting this extra push -- the counteroffensive just right, and they'll be concerned about it in Bakhmut today.

This is what one officer who is involved in that fight told us.

(BEGIN VIDEO CLIP)

OLEKSANDR, UKRAINIAN ARMED FORCES OFFICER (through translator): It is hard to say whether five, 10, or 50 kilometers will be liberated. This is why I understand that on one hand, the international community is watching us and trying to help us, but we have to understand that this is not a game. This is war and you have to understand that first of all, there are human casualties. For us, the victory is when a soldier returns from the battle and not when he dies. There's a proverb that you should not for Ukraine but you should fight for Ukraine.

(END VIDEO CLIP)

ROBERTSON: So those gains he's talking about there -- that he's talking about -- the bigger counteroffensive.

President Zelenskyy speaking to European broadcasters overnight and said that he felt that Ukraine wasn't quite ready -- that it still needed a little bit more equipment. And he echoed what that officer had said about them not wanting to create or have too many Ukrainian casualties -- wanting to get this operation just right.

But help on the horizon -- literally, just over the horizon. The British military announcing that they are going to supply Storm Shadow air-launched cruise missiles that range 250 kilometers, 155 miles. It's exactly the sort of support Ukraine has been looking for --

CHRISTINE ROMANS, CNN ANCHOR: Yes.

ROBERTSON: -- and President Zelenskyy has been asking for. The ability of Ukrainian fighter jets to stand back from the front line and fire way into Russian-controlled territory inside Ukraine. That, when it arrives, will be significant.

ROMANS: Absolutely. All right, Nic Robertson for us in Eastern Ukraine. Thanks, Nic.

Escalating violence in Pakistan has left at least eight people dead after paramilitary forces arrested ex-Prime Minister Imran Khan on multiple counts of corruption.

(BEGIN VIDEO CLIP)

Gunfire in the streets of Islamabad, Pakistan.

(END VIDEO CLIP)

ROMANS: Khan's arrest on Tuesday intensified clashes between the military and his supporters. Nearly 200 people have been arrested.

CNN's Sophia Saifi joins us from Islamabad this morning. Khan's lawyer has also told CNN that he was tortured and beaten in police custody. What have we learned?

SOPHIA SAIFI, CNN PRODUCER: Christine, these are claims by Khan's lawyers, and Khan's lawyers met Khan briefly at that special briefing that happened at the police compound in the capital city of Islamabad. We have reached out to police officials as well as to the Pakistani government to get a response and have not received one so far.

We also know that what you spoke of right now that there's actually been quite a bit of a clamp-down, so those protests that we saw against military installments and the homes of military officials have kind of quelled down. Pakistan's government -- federal government, as well as various provincial governments, have asked the military to come in to provide extra security to military and institutional installments across the country.

So in Islamabad, which is the capital, there is a sense of calm. Those protests have calmed down. Pakistan's military put out a very strongly-worded statement last night that there will be zero tolerance for any sort of violence by Khan's supporters. They also accused Khan's supporters of trying to incite a civil war.

Pakistan's Prime Minister Shehbaz Sharif also addressed the Pakistani people yesterday and in that address he said -- he called Imran Khan's supporters terrorists.

Imran Khan is an incredibly popular politician in this country. But there have been various other arrests overnight of senior party leaders of Imran Khan's party, the PTI.

So at the moment, it appears to be that a lot of the senior party leadership has been decapitated by these arrests. We're just going to have to wait to see how this plays out -- Christine.

ROMANS: All right, Sophia. Thank you so much for that for us from Pakistan.

All right, quick hits around the globe right now.

A British tabloid publisher apologizing to Prince Harry for just one instance of spying on his private life. Harry and multiple celebrities are suing Mirror Group Newspapers for snooping on an industrial scale.

Police in China arrest a man they say used ChatGTP to create a fake news story about a train crash. Beijing is cracking down on deep fake technology. New rules on AI were implemented in January.

People in a Swiss Alpine town ordered to evacuate as geologists warn a large massive rock could collapse in a landslide. Experts say glacier melt has affected those rocks.

[05:35:00]

All right, just ahead, George Santos now facing federal criminal charges over his extension web of lies. And a splash zone in Camden Yards. We'll tell you what the Orioles are planning for fans.

(COMMERCIAL BREAK)

ROMANS: Here is today's fast-forward lookahead.

Title 42 ending just before midnight tonight. Border cities preparing for an influx of migrants as the COVID-era policy expires.

Closing arguments and jury deliberations today in a notorious Idaho murder case. Lori Vallow Daybell is accused of killing two of her children and her husband's previous wife. Prosecutors say it was part of Daybell's doomsday religious beliefs.

The Environmental Protection Agency will announce strict new emissions rules for coal and natural gas power plants. The EPA says the rules will cut nearly all of these plants' carbon emissions by the year 2042.

All right, fresh calls for New York Congressman George Santos to step down after he pleaded not guilty to 13 federal charges of fraud, money laundering, and other crimes. The freshman Republican also says he plans on running for reelection. House Speaker Kevin McCarthy says he won't support that.

[05:40:05]

CNN's Paula Reid has more.

(BEGIN VIDEOTAPE)

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT (voice-over): New York Republican Congressman George Santos adopting the Trump playbook after being indicted on 13 criminal counts. REP. GEORGE SANTOS (R-NY): The reality is it's a witch hunt.

REID (voice-over): Surrounded by reporters after his initial court appearance, Santos was pressed about allegations he fraudulently received more than $24,000 in unemployment benefits during the COVID- 19 pandemic while he was working at a Florida-based firm.

SANTOS: This is part of my defense. This is inaccurate information and I will get to clear my name on this. During the pandemic, it wasn't very clear. I don't understand where the government is getting their information but I will present my facts.

REID (voice-over): The indictments, spanning 20 pages, details allegations that Santos illegally solicited campaign contributions, which were then funneled into his personal bank accounts and used for various personal expenses, including credit card and car payments, personal bills, and even designer clothes.

And federal prosecutors allege he made false statements on multiple financial disclosure statements filed with the House of Representatives prior to being elected in 2022.

"Taken together, the allegations in the indictment charge Santos with relying on repeated dishonesty and deception to ascend to the halls of Congress and enrich himself."

The U.S. Attorney said in a statement Santos pleaded not guilty to all charges and was released on a $500,000 bond.

After his successful 2022 election, he was exposed for a series of lies about his personal history. He lied about attending college, working for powerhouse financial firms, and his mother being present at the World Trade Center during the 9/11 attacks.

SANTOS: Did I embellish my resume? Yes, I did, and I'm sorry.

REID (voice-over): Two veterans accuse Santos of raising funds for lifesaving surgery for their dog only to keep the money for himself, which Santos denied.

RICHARD OSTHOFF, NAVY VETERANS, CLAIMED SANTOS TOOK MONEY RAISED FOR DYING DOG: It's an open wound and every time I see him it's like pouring salt into it again. But I'm not in that bad place I was six years ago.

SANTOS: Good morning. Shabbat Shalom to everybody.

REID (voice-over): He even lied about being Jewish and having grandparents who survived the Holocaust.

SANTOS: So, as I've said many times and I think you've heard me say this, I always joke I'm Catholic but I'm also Jew-ish, as in ish.

REID (on camera): As one of the conditions of his release, the congressman needs permission to travel anywhere other than New York or Washington. On Thursday, he says he's going to head back to Washington for a vote on a border bill. And then his next court hearing is back here in New York on June 30.

Paul Reid, CNN, Central Islip, New York.

(END VIDEOTAPE)

ROMANS: All right, to sports now.

The Warriors keep their title defense hopes alive with a must-win game-five victory over LeBron James and the Lakers.

Andy Scholes has this morning's Bleacher Report. Good morning, Andy.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Christine.

So it was survival night in the NBA on Wednesday. Defending champs living to fight another day, sending that series back to L.A. for a game six.

And Steph Curry helping the Warriors get out to a quick 12-point lead last night. He hit that deep three right there. And then right before the half, check out Curry at the buzzer. Golden State would lead by 11 at the break.

In the fourth quarter, Anthony David -- watch this right here. He takes a shot from Kevon Looney right in the face. He would leave the game with a head injury. And according to the broadcast, he actually needed a wheelchair to get back to the locker room.

Now, Steph Curry then putting the game away a little later. A little give-and-go with Draymond there for the three. Steph -- 27 points as the Warriors get the win 121-106.

(BEGIN VIDEO CLIP)

STEPH CURRY, GOLDEN STATE WARRIORS GUARD: Coming into this game we just wanted to win one and give ourselves a chance knowing that we have a big game six down in L.A., and we obviously need that one to stay alive. I feel like we could take another step and give ourselves a great opportunity. That's the beauty of the playoffs. It's every game is kind of a narrative of its own, and that's what you love about it.

LEBRON JAMES, LOS ANGELES LAKERS FORWARD: You know, we had some good moments but not as close to 48 minutes as we needed to be. But I get another opportunity on Friday and I look forward to the match-up again.

(END VIDEO CLIP)

SCHOLES: Anthony Davis was said to be doing better after the game.

The Knicks, meanwhile, also needing a win to stay alive and they laid it all on the line. Jalen Brunson playing all 48 minutes, scoring a game-high 38 points. Quentin Grimes also played all 48.

And check out this gritty play from him with the Knicks up six with under two to go. Grimes gets drilled on the screen by Bam Adebayo and he takes a shot to his knee. But he then gets up and gets back into play and steals it from Jimmy Butler. The New York crowd just went nuts after that.

Knicks would win 112-103. Game six back in Miami tomorrow night.

You've got two more potential closeout games tonight starting with the 76ers hosting the Celtics at 7:30 Eastern.

[05:45:04]

The Maple Leafs, in hockey, also surviving but they still have quite the hill to climb. Toronto beating the Panthers 2-1 last night for their first win in the series. Florida still leads that series three games to one. It can close it out tomorrow night in Toronto.

A reminder -- it's been 30 years since a Canadian team has won the Stanley Cup.

The Carolina Hurricanes can close out their series against the New Jersey Devils later on tonight. Faceoff set for 7:00 Eastern. And then it's game five between the Kraken and the Stars. You can watch both of those games on our sister channel TNT.

All right, in baseball, the young Baltimore Orioles are enjoying their best season in years. Every time they get a good hit they've started doing water celebrations from the dugout, acting like sprinklers sometimes. Well, now the fans can be a part of the fun, too. The team is selling tickets to a section in left field call the "Bird Bath Splash Zone." And when the Orioles get an extra base hit, in that section they are going to spray the fans with water, Christine.

This is another great idea. I can see a hot Baltimore day there at Camden Yards.

ROMANS: I love it.

SCHOLES: I would want to sit there. Every time you get a good hit -- whoa, you get some water.

ROMANS: I love it. Sign me up. That sounds like a lot of fun.

All right, Andy Scholes, thanks so much. Nice to see you.

SCHOLES: All right.

ROMANS: All right, coming up on "CNN THIS MORNING" a major turn in the Natalie Holloway case. One of the last people to see her alive about to be extradited to the U.S.

And next, right here, a huge wave of migrants expected once Title 42 ends tonight. What it means for a jobs market desperate for workers.

(COMMERCIAL BREAK)

[05:50:42] ROMANS: Your Romans' Numeral this morning, 10.8. Moody's Analytics says Michigan's unemployment rate would spike to 10.8 percent if there's a prolonged debt limit breach. Today, it's just 4.1 percent. The U.S. could run out of cash to pay its bills by June first.

Looking at markets around the world, Asian markets finished mixed. Consumer prices in China slowed at the slowest rate in two years. European markets are higher. Investors waiting for an interest rate decision by the Bank of England.

On Wall Street, stock index futures at this hour are leaning a little bit higher here. The Nasdaq and the S&P 500 rose yesterday. Inflation cooling to the slowest pace in two years.

On inflation watch, gas prices rose a penny overnight to $3.54 a gallon. April's Producer Price Index, a key inflation measure, is due out later this morning.

All right, Treasury Sec. Janet Yellen is in Japan meeting with the G7's financial leaders and she's again urging Congress to prevent a U.S. default.

(BEGIN VIDEO CLIP)

JANET YELLEN. TREASURY SECRETARY: A default on U.S. obligations would produce an economic and financial catastrophe. It would spark the global downturn that would set us back much further. It would risk undermining U.S. global economic leadership and raise questions about our ability to defend our national security interests.

(END VIDEO CLIP)

ROMANS: Yellen estimates the U.S. has about 21 days until default.

I want to bring in CNN global economic analyst and Financial Times columnist and associate editor, Rana Foroohar. Rana, so nice to see you this morning.

You heard that Romans' Numeral of 10.8 percent unemployment in Michigan. You can repeat that in a lot of different states if there were to be a prolonged debt limit breach. We know how dangerous it is. What is the risk here to the U.S. economy and the global economy that they don't get this right in Washington?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST, COLUMNIST AND ASSOCIATE EDITOR, FINANCIAL TIMES (via Webex by Cisco): Well, I think that as Sec. Yellen said, it's a catastrophe. Christine, I feel like you and I have been here every few years for the last decade or so walking right up to the edge. This time around it really does feel more urgent.

I mean, Sec. Yellen and other administration officials are actually reaching out to Republicans in the business community -- to more moderate Republicans -- saying you've got to help us. You've got to put pressure on the party. We really cannot get up to the limit.

And to me, what's really different this time is that the last two or three years we've seen an erosion of faith not only in the U.S. government but in the dollar. I mean, the dollar was weaponized in the work against Ukraine, which I think was totally appropriate. But as we know, that created a sense amongst many nations do we want to hold the dollar? Do we want to hold dollar-based assets? So there is already a little bit of a tailwind towards saying we might want to move away from the U.S. dollar-based financial system. If we default on our debt, that is going to add kerosene to that trend.

ROMANS: I mean, I was just reading this analysis from the Council on Foreign Relations about how this is all a gift for China. I mean, Washington is doing China's work --

FOROOHAR: Oh, yes.

ROMANS: -- for it in terms of moving away from a dollar-based world.

FOROOHAR: One hundred percent. Because if you think about what -- at the end of the day, what is money? Money is trust. Trust in the system of government underpinning it. Trust that a country will pay back debts. I mean, if you don't have trust you've got nothing.

And what the U.S. has had going for it, particularly relative to China, is trust. But if that changes, slowly but surely the global currency system could change, too.

ROMANS: Let's talk a little bit about Title 42. This expires at midnight tonight. And the Biden administration is bracing for a spike in border crossings and talking about a chaotic period here -- the president was.

I'm wondering what the immigration angle is here for the labor market, right? I mean, we have companies still aggressively hiring and hungry for labor. As concerned as they are about a potential recession they're also very concerned about not having the workers they need.

Is there an overlay here?

FOROOHAR: Well, 100 percent. I mean, look, nobody wants a huge influx of illegal immigration in ways that are chaotic or put strain on social services. But the fact is that at both the higher end and the lower end immigration has always been a net benefit to growth in the U.S. and, in particular, to labor the markets.

[05:55:06]

And it's really interesting if you look back to the Trump years. Aside from what happened at the border, Trump put -- I believe it was 473 different executive orders making it more difficult for immigrants to come in any form to the U.S. Immigration during his tenure -- legal immigration dropped 23 percent. That's student, that's H-1B visas -- all the different folks that we need.

Now, even at the lower end, when you have immigration it supports service industries, tourism, travel, restaurants, construction work. These are the sorts of things that immigrants --

ROMANS: Right.

FOROOHAR: -- go into. They're also more mobile. They tend to go where there's a bigger need in the job market.

So there was a couple of recent Fed papers -- actually, one from San Francisco and one from Dallas -- that found that more immigration during the Biden years -- we just had last year the best -- the best immigration on record since 2008. That's actually really helped create more slack in the labor markets --

ROMANS: Interesting.

FOROOHAR: -- and that is helping the fight on inflation.

ROMANS: Well, there's the economics of it and then there's the politics of it, and sometimes those do not align.

FOROOHAR: Well, yes.

ROMANS: Rana Foroohar, nice to see you. Thank you so much.

All right. Next, Donald Trump still stuck on 2020 and still can't admit he lost the election. More on the former president's remarks from last night's CNN town hall ahead.

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