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Quest Means Business

Ukraine Crisis; Russia Pulls Out Military Forces and Equipment Out of Ukraine; U.S. Believes Russian Invasion Still Open; Cyberattack in Ukraine; Growing Cyber Dangers; Hong Kong's Highest COVID Surge Outbreak; Hong Kong Hospitals Overwhelmed with COVID Patients; 3 Substances Found in Kamila Valieva's Test Sample; Olympic Doping Scandal. Aired 3-3:21p ET

Aired February 16, 2022 - 15:00:00   ET

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

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ZAIN ASHER, CNN INTERNATIONAL ANCHOR: All right. With one hour left of the trading day, the markets are in the red. Weighing on investor's mind,

Ukrainian situation and potential fed tightening as well. The Dow is pretty much flat at this point in time, only down 28 points or so. Those are the

markets and these are the main events.

Western allies call on Russia to provide evidence it's withdrawing some troops after military exercises near Ukraine. And the surge of COVID cases

overwhelms Hong Kong's hospitals forcing them to move patients outdoors. And Joe Biden's nominees for the fed get stuck in political gridlock.

Live from New York. It is Wednesday, February 16. I'm Zain Asher in for Richard Quest and this is "Quest Means Business".

Good evening. Tonight, the U.S. and NATO allies are disputing Moscow's claim that it is de-escalating tensions with Ukraine. They're calling on

the Kremlin to provide better proof. The Russian Ministry of Defense has released this footage which it says shows its military equipment

withdrawing from Crimea. It says, tactical exercises there have finished. NATO's leader says, he seen no evidence of a meaningful drawdown. And the

White House says it believes the window for an imminent Russian attack remains open.

Ukrainian President Volodymyr Zelensky says his country will not be intimidated. He declared Wednesday a National Day of Unity calling on

people in Ukraine to stand proudly together without fear.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKY, UKRAINIAN PRESIDENT (through translator): Together with you, we know that there is nothing we should be afraid of. We are not

afraid of any kind of threat. We are not going to go back. We are all united by our power, by your power, by your will, and your dedication and

your courage and wisdom. We are all united and we have been united by this in the last eight years.

(END VIDEO CLIP)

ASHER: Zelensky told several cities watching as Ukrainian troops trained with some of their new weaponry provided by the U.S. and other Western

countries as well. NATO says, it is gravely concerned about Russia's military activity in Ukraine despite the Kremlin's reassurance. CNN's Jim

Sciutto has more.

(BEGIN VIDEO CLIP)

JIM SCIUTTO, CNN NEWS ANCHOR (voiceover): A very public display. Russia's Ministry of Defense posting video of armor leaving Crimea across the Kerch

Strait and it says, returning to their home bases. Their participation in exercise said to be over. A few hours later, another convoy of fuel trucks

filmed getting ready to leave Crimea as well. Then, filmed on that same bridge, also heading East. All part of a choreographed effort by the

Kremlin in the ongoing information war over its intentions in Ukraine. Russian diplomats across Europe scoffed at Western claims that an attack is

imminent. But both U.S. officials and NATO officials, including the secretary-general say, in fact, Russian troop numbers are continuing to

rise.

JENS STONTENBERG, NATO SECRETARY GENERAL: So, just that we see movement of forces. So, battle tanks to confirm a real withdrawal. It has been a big up

and down, back and forth all the way, but the trend over the last weeks and months has been a steady increase in the Russian capabilities close to

Ukraine's borders.

SCIUTTO (voiceover): This is one of the videos issued Tuesday by Russia's defense ministry on units beginning, it claims, to go home. Followed up on

Wednesday with more footage of the tanks loading on to trains, destination unknown. Back in Crimea, the much-advertised pull-out involved units whose

bases are, in any case, around Russian cities still close to Ukraine. Analysts say it will take at least several days to establish whether there

is a true draw-down of Russian forces from positions around Ukraine.

For now, the picture remains mixed. There is plenty of Russian armor and air power still within just a few miles of Ukrainian border. This,

according to social media videos uploaded in the past day. Satellite images from earlier this week show bombers and helicopters arriving at air bases

close to Ukraine. The joint exercises in Belarus continue as well. Although the Belarus defense minister insists every piece of Russian equipment will

leave when those exercises are over.

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All the while, a very public war of words continues over Ukraine's aspirations to join NATO, over the fate of the break-away Eastern regions

of Ukraine, and over Russia's demands for cast-iron security guarantees. President Putin and Russian officials repeat that Ukraine's desire to join

NATO must be off the table. That, however, is a nonstarter for the U.S.

So far, the path to diplomacy and much of the weaponry seem frozen in place.

(END VIDEO CLIP)

ASHER: A Ukrainian intelligence report obtained by CNN claims that the Russian troop build-up is still ongoing. But says, right now, Moscow does

not have enough troops in place for a full-scale invasion. I want to bring in CNN's Correspondents Alex Marquardt, who's in Mariupol in Ukraine and

Melissa Bell who's joining us from Brussels.

So, Alex, I want to begin with you. So, right now, Russia has 150,000 troops on its border with Ukraine. What more is needed? How many more

troops would be needed for a full-scale attack at this point?

ALEX MARQUARDT, CNN SENIOR NATIONAL SECURITY CORRESPONDENT: Well, I don't think you're going to find, Zain, a definition for full-scale attack. It

really runs the gambit of all -- they could do all kinds of things. But, you know, we did hear a similar thing from President Zelensky's spokesman

today at this event in Mariupol where the president was handing out medals to service members.

And he did say the same thing, that they couldn't launch a full-scale invasion. He put a bit of a finer points on it and he said that they would

not be able to take and hold Kyiv. And of course, you know, you take a capitol and then it's -- and then you're essentially, you're often times,

in charge of the country.

The figure that he was talking about was the 150,000 that President Biden had mentioned in his address yesterday. That was the highest number of

Russian troops surrounding Ukraine that we had heard from the U.S. side. This spokesman for President Zelensky also was cautiously optimistic about

this news of Russian troop movements, I mean, you heard the skepticism there in Jim's piece. It's always good when Russian troops are moving away

from Ukraine, if that is indeed the case. It appears to be the case in Crimea. But as the spokesman noted, they have seen Russian troops leave

before, like last year, and then simply come back.

So that, you know, Ukraine has very much the same attitude as NATO, that it very much remains to be seen. We did hear from President Zelensky today on

this day of unity which he had called for just two days ago. Zain, you'll remember that he kind of mocked this reporting and he said the information

that he got that Russia could carry out an invasion today, on Wednesday the 16th. And today when -- as he presided over this ceremony, he said, whether

it's the 16th, 17th, 18th, next month or at the end of the year, that we will be ready to fight. And he made the point this is 2022 and not 2014.

And the point there is that they have come a long way in the eight years since Russia invaded and annexed Crimea.

There has been a war simmering not too far away from me, about 25 kilometers away where Ukrainian service members have been dying in a fight

against Russia-backed separatists. And so, the Ukrainian military is much stronger today, not just because of that fighting, because of the

international support that they have gotten. So, they're in a much better place. And, Zain, I should note that's also one of the reasons that you're

not finding wide-scale panic in the streets. People are going about their normal lives. And when you ask them why, they'll say, well, we've been

threatened by Russia for eight years, and so this isn't anything that's new for them. Zain.

ASHER: Yes. But as you point out, they have learned a lot of lessons from what happened in 2014. Melissa, let me bring you in because given the sort

of continued threat posed by Russia, what sort of long-term adjustments will NATO be making to their presence in Eastern Europe?

MELISSA BELL, CNN CORRESPONDENT: Well, what's so interesting about the -- it's actually the general's comments, as he came out of that meeting with

NATO defense ministers today, Zain, was that regardless of what now happens around Ukraine, Russia's actions have been leading up to all of this. So,

the troop build-up, the demands being made by Moscow that security guarantees be given by NATO, for instance, that NATO vow never to expand

further Eastwards, that it retreats behind 1997 lines. Those demands, the military build-up, all of that, he says, have convinced and galvanized NATO

ministers around a new idea that in fact far from retreating. What NATO now needs to do is strengthen its Eastern flank. So, there was a substantial

strengthening in the shape of battle groups that were sent Baltic states in 2014. The command structure was adapted.

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The NATO task force was tripled -- the size of it was tripled. Now, what they want to do beyond the deployments that we've seen over the course of

the last few weeks in direct response to the Russian military build-up is increase in a more permanent and long-term and strategic way deployments to

their Eastern flanks. So, battle groups that'll be sent to countries like Romania, the first is to be led by France. As Jens Stoltenberg speaking at

the end of that meeting.

But the result is, Zain, that regardless of what happens now, whether or not there is further incursion into Ukraine by Russia, the actions of

Moscow over the last few weeks have really forced NATO to come together. And remember, this is an organization that some of its members were

doubting the point of just a few years ago. Emmanual Macron wondering whether NATO wasn't braindead, whether it wasn't time for Europe to shift

its strategic ambitions and create its own defense strategy.

Well, what Vladimir Putin has achieved single handedly is to move on from those debates, unify a NATO and in fact, not just unify it, but decide it

that it is time for it to strengthen. And that is, I think, something that would have been unimaginable only a year ago, Zain.

ASHER: All right, Melissa Bell, live for us there, thank you so much. Alexander Marquardt, thank you to you, too.

As it worries about Russian troops gathered on its border, Ukraine is also facing a possible cyber war. The country saw a high-volume cyberattack

Tuesday that temporarily blocked access to the websites of its defense agencies and banks. One government minister called it the largest such

attack in the country's history. Ukrainian officials says that it's too early to know who exactly is responsible, but the U.S. government which is

helping investigate suggests Moscow is uniquely suited to carry out this kind of massive attack.

I want to talk about this now with George Kurtz, the CEO of CrowdStrike, a global cyber security firm. So, George, what is the evidence point to here

when you look at this cyber security attack in Ukraine? What does the evidence point to in terms of who is responsible?

GEORGE KURTZ, CEO, CROWDSTRIKE: Well, when you look at denial of service attacks, particularly this large, distributed denial of service attacks,

many cases they're hard to attribute. But I think all signs point to Russia, specifically given the conflict. You know, when you think about

what's been done in the past in 2015, knocking out the electric grid and you look at just the psychological operations that I think are part of the

Russian repertoire, it's obviously something that people are concluding. And at the end of the day, I think what they've been able to do is send a

message of their capabilities and letting people know that cyber will be an important element to any physical conflict.

ASHER: Yes, I mean, this is so interesting. I mean, how much damage do you think a cyberwar could do to Ukraine or any other country for that matter?

KURTZ: Well, you have to look at the kinetic piece, the physical piece of what could be done and I think there's a pretty good blueprint certainly in

the Ukraine, as I mentioned in 2015 knocking out the electrical grid. But if we look at what happened yesterday, disrupting banks, sending fake ATM

messages out in terms of, you know, ATMs not working. There is a big psychological element aside from just a physical piece. And, I think, one

of the areas that probably is not getting enough attention are things like deep fake videos which would leave part of the psychological operations.

What does it all mean when you put all of these techniques together? Again, part of the whole cyber umbrella but not only disrupting physical

operations, not only disrupting perhaps the psychology of what, you know, the people of Ukraine, but then also combining that with, perhaps, a deep

fake video. And, you know, it becomes very concerning, obviously, as this unfolds.

ASHER: CrowdStrike actually just issued that sort of brand-new annual threat report for 2022 which showed, among other things, an 82 percent

increase in ransomware-related data leaks in 2021. 82 percent increase. Why the rapid rise, do you think?

KURTZ: Well, we have to break that down a bit. So, when we think about ransomware and most people are familiar or have heard of it, it's basically

a malware that encrypts critical files on your computer. And over the last couple of years, corporations and even individuals have gotten a bit better

in terms of backing up that data. And if there's an encryption event that happens, they restore the back-up. Well, the adversaries in this particular

case, the e-crime actors have evolved their techniques to the paint where they're actually stealing the data first.

So, even if you try to restore from backup, they basically leak this information, they weaponize the information and they put it out on the

internet in a slow drip in order to take control of the situation and put more pressure on the victim to actually pay the ransom. And that's what

we've seen.

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ASHER: So, what does that mean in terms of what larger companies can do to shore up their cyber defenses?

KURTZ: Well, this is really one of the top one or two talking points for any board of directors, any corporation, any entity right now. I can tell

you I'm speaking to a lot of CEOs just over the last week, everything that's going on, obviously, in the geopolitical environment. But in

particular ransomware and destructive malware that's out there.

So, things like critical systems either be protected and workloads with endpoint security and taking really a zero-trust approach which means that

these systems and cloud workloads don't trust anything else. They're armored by themselves and it's very important to protect them. And it's

also important to protect the identity of the users who are logging into those systems. And we call this out in the report, the identity of users,

normal users, or system admin users are being abused to get into these systems and then move laterally across the network, plant ransomware, and

then detonate it, and leak that data.

ASHER: All right. George Kurtz for us there. Thank you so much. Appreciate it.

Hong Kong is struggling with its worst COVID outbreak of the pandemic. Now, China's president is weighing in telling city officials to get it under

control. Could a lockdown be the next step? That's next.

(COMMERCIAL BREAK)

Hong Kong has been committed to keeping COVID cases at zero. But the city is the most new infections since the pandemic began. More than 4,200 cases

were reported Wednesday. More than double Monday's figure. Hospitals are feeling the strain. Some patients have had to wait outside before they can

be admitted. China's president is now telling Hong Kong officials to do what they must to get the outbreak under control. That has raised worries

that a city-wide lockdown could be coming. CNN's Kristie Lu Stout reports.

KRISTIE LU STOUT, CNN CORRESPONDENT: Chinese President Xi Jinping is urging the Hong Kong government to take the main responsibility to

stabilize a growing COVID-19 outbreak. This, according to local pro-Beijing media on Wednesday. Quoting Xi, they say, The Hong Kong Special

Administrative Region government should take up the responsibility. It should mobilize all forces and resources that can be mobilized, and take

all necessary measures to protect Hong Kong people's lives and health, as well as ensure Hong Kong's social stability.

[15:20:00]

Other reports at the Beijing will help Hong Kong by boosting its testing, treatment, and quarantine capacity. Hong Kong's Top Leader Carrie Lam,

issued a response thanking Xi for his concern while promising to unite Hong Kong to fight the virus. Now, Xi's message comes as Hong Kong grapples with

a growing fifth wave of infection. On Wednesday, the city reported 4,285 new daily COVID cases and 7,000 more preliminary positive cases, a

significant rise from the previous day.

Now, a number of public hospitals are running out of beds and some have set up outdoor treatment areas. At the Caritas Medical Center, patients are

waiting outside for care. The parking lot has been turned into a field hospital and isolation facility. Now, despite the worsening situation,

Carrie Lam, on Tuesday said that the city remains committed to its dynamic zero-COVID strategy, a policy designed to suppress every outbreak. Kristie

Lu Stout, CNN, Hong Kong.

END