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Quest Means Business
U.S., Iran Trade Attacks In First Major Escalation In A Month; Bank Of England Governor Warns Advanced Artificial Intelligence Threatens Financial Stability; Russia Targets Kyiv With Relentless Drone Attacks; Zelenskyy: We Need New Interceptors To Shoot Down Drones; Europe Protests Russian Finance Minister's Surprise Visit To G20 Meeting At United States Invitation; Search Continues After Deadly Ferry Accident Off Cyprus. CNN Visits Nepali Town Ravaged By Deadly Floods. Aired 4-5p ET
Aired August 31, 2026 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:16]
JIM SCIUTTO CNN HOST: There is the closing bell ringing on Wall Street. Stocks lower as tensions flare once again in the Middle East.
Those are the markets and these are the main events.
Oil prices jump as the U.S. and Iran exchange military strikes for the first time in a month.
The Bank of England Governor warns that A.I. could pose a serious danger to the global financial system.
And Russia's Finance Minister makes a surprise visit to the G20 meeting in North Carolina after an invitation from the Trump administration.
Live from Washington. It is Monday, August 31st. I am Jim Sciutto, in for Richard Quest and this is QUEST MEANS BUSINESS.
Tonight, the U.S. and Iran trade attacks reigniting the military conflict between the nations for the first time in a month. Tehran says it fired on
U.S. Military forces in Jordan and the UAE. Iranian state media released this footage of what it says are those missiles launching.
Tehran says those strikes were in retaliation for a U.S. attack on Iranian rocket launchers on Larak Island, you can see it there, right in the Strait
of Hormuz. The U.S. says Iran was trying to lay sea mines in the Strait.
President Trump today said the U.S. would hit Iran hard. Oil prices higher on the news. Brent crude you see there above $90.00. West Texas
Intermediate just above well, closing in on $86.00.
Kristen Holmes is in Washington, and Kristen, where does The White House think negotiations stand with Iran? Of course, the strategy has been
military pressure to get Iran to the table hasn't quite worked yet. Are they worried that these strikes show that strategy is still failing?
KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: It is clear that they do not want to stick with any kind of military operation strategy and
that's what we heard from President Trump just a few minutes ago, after he said on Fox News that he was going to hit them hard, that there was going
to be a response for those strikes. He then walked it back just a few minutes ago, talking to reporters in the Oval Office, saying any kind of
action would be very limited.
He said he didn't know who was in control of Iran. They don't know who is actually leading Iran at this time, and he went on to talk about some of
the military goals and achievements that the United States has had since the beginning of this war. We've heard it before talking about depleting
their Navy, their Air Force, et cetera.
So it does seem as though any kind of really hard or large scale military operation is not something that they are willing to do. I will also note
President Trump did post an A.I. video of the U.S. bombing Kharg Island. Vice President J.D. Vance was asked about that. He said he wasn't
telepathing any kind of military engagement, but instead was just sending a warning shot or sending a message to the Iranians.
All of this to say the negotiations appear to be completely at a standstill. There are no talks happening as of last week. We were told by
both sides there are no conversations. We know mediators and the negotiators, these other countries have been trying to bring both sides
back to the table.
But there really is overall an understanding, at least with the U.S. officials we are talking to, that the military operations or strikes are
not going to be something that brings them to the table, which is why you've seen this shift in strategy from The White House really focusing on
this economic strangulation, this Economic D-Day that we heard the Secretary of Treasury, Scott Bessent, talking about last week.
Again, questions as to how long something like this would take to actually work, what the enforcement is going to look like, and if it will actually
work, given the fact that Iran has already been under fairly strict international sanctions for years and it has not changed their position on
having a nuclear program.
Right now, though, it does seem as though they are walking away any kind of ongoing military action. We know that that that was something that they
were trying to get away from, that why we haven't seen anything for the last month.
And just a reminder, part of the reason or the reason, they say that they struck these two rocket launchers that were coming from Larak Island was
because they say, they being Central Command, that they saw them loading up mines to shoot into the Strait of Hormuz.
The central waterway is now really front and center in any kind of conversations that these two sides may have down the road, but it is
obviously the clear sticking point. What everyone is focused on is trying to keep the Strait of Hormuz open and keep those prices down.
You mentioned the high rising prices of crude oil. We also know the global oil price went up three percent, if they continue military actions, likely
it would stay that way. And remember, the U.S. itself is really trying to lower costs in any way that they can, including through avoiding any kind
of military conflict that could raise those global oil prices.
[16:05:10]
SCIUTTO: And those oil prices, right to gas prices. Kristen, before we go, we just got this news in that the Supreme Court, of course, the
conservative led Supreme Court has now allowed President Trump to continue with the construction of his much ballyhooed ballroom, while legal
challenges proceed.
No one knows better than you, given that this is where you go to work every day. But you know, that thing is already mostly built. I wonder, when you
speak to White House officials, do they believe they've already won this battle, regardless of where the court challenges go from here?
HOLMES: Well, I am not sure if it was us, but I do think that, you know, I've been talking about this a lot last week as well when we saw the first
of these court rulings happening and The White House has told me time and time again that they believed that this was going to go to the Supreme
Court. The Supreme Court was going to rule in their favor.
And I do want to be very clear, that came out as I was speaking to you. So I have not read through the ruling, but it does, in fact, seem to say that
they are going to continue the construction, meaning that the Supreme Court would have ruled in President Trump's favor here.
They do believe they have this argument when it comes to security. Now, interestingly, one of the things that we've discussed at length here is
this idea that it only became this issue of National Security when it became an ongoing legal battle, President Trump hadn't really mentioned
this idea that it was an entire military apparatus until there started to become a pushback on the building of the ballroom.
And then it shifted from just a ballroom in which he has talked about hosting guests, particularly President Xi, he has mentioned several times,
and came into this idea that it was also a drone port, which it will be, and an underground bunker with hospital facilities and it was necessary for
National Security.
So they've relied heavily on that argument, and it certainly seems, again, I want to read through this before I make any full throttled endorsements
here of what the Supreme Court is saying, but it certainly seems as though that argument was working with the Supreme Court, given the fact that they
haven't stopped them from building right now during this interim period and allowing it to continue.
SCIUTTO: Yes. One note, I should say that the ruling was five-four with the Chief Justice, John Roberts, interestingly, citing in dissent with the
courts three liberals.
Kristen Holmes, always good to have you.
HOLMES: Thank you.
SCIUTTO: Yemen's Houthi rebels, backed by Iran, have threatened to shut down commerce in the Red Sea. CNN's Nic Robertson is reporting from Perim
Island, which is just off the coast of Yemen in what is known as the Bab El-Mandeb Strait. He used this exclusive look to show how the Houthis are
using geography to their advantage at another key choke point.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Right now, we are standing on Perim Island, also known locally as Mayyun Island. And what
you're looking at behind me there is the Bab El-Mandeb Strait. And what I can see looking out, looking over that shoulder, is Eritrea and what I can
see looking out over that shoulder is Djibouti. I see the mountains rising up out of the sea. It is the African continent.
And that tells you just how narrow the Bab El-Mandeb Strait is. It is about 10 miles or so across to Africa, 15 kilometers, something like that. what's
happening here? Theres been a little known war that has been simmering here in Yemen for over a decade, between the Yemeni government and the Houthis.
And I think a lot of people don't know much about this conflict. They kind of think that the Houthis are a ragtag force, but they're not.
They are Iran's strongest proxy at the moment. They've got hypersonic missiles. They've been hitting Israel. They've got ship seeking
sophisticated missiles that can target them from a long distance and they've been hitting international shipping, Saudi oil tankers in the Red
Sea here, Bab EL-Mandeb, Red Sea up there. So you've got the Houthis with their Iranian sponsors that have been ramping up the war here in recent
weeks and they are turning what was a local war into a geopolitical one, if you will, that has global consequences.
A few years ago, 10 percent of the global oil trade came through here, vital for commercial shipping to, now, it is down to about half of that.
And if Iran continues to push its proxies here and they continue in their operations to try to take the rest of the Red Sea coast, then they would
take this place here, Perim Island, Mayyun Island, they would take it.
That would make shutting off this strait the Bab El-Mandeb Strait much, much easier for them, that Bab El-Mandeb Strait that potentially has
political consequences for President Trump. Because, of course, if you shut off this route for oil, getting to global markets, particularly Asia, then
that's going to drive up the price of oil and that makes -- that gives President Trump political vulnerability, politically, particularly going
into the upcoming U.S. Midterms.
And this really appears to be what Iran is doing at the moment.
(END VIDEOTAPE)
[16:10:10]
SCIUTTO: Nic Robertson there at another key choke point. Well, former Venezuelan President Nicolas Maduro says he is, "standing firm" in a social
media post sharing photographs taken back in June.
Maduro and his wife have been in custody in New York since January, after U.S. Forces captured them in a daring raid. They now face gun and cocaine
trafficking conspiracy charges. They have pleaded not guilty.
Well, President Trump says the U.S. has reached a deal with Venezuela to control some 65 billion barrels of the country's oil reserves. Trump says
it will more than double U.S. Reserves, along with increasing oil supply, and he hopes, reducing gasoline prices.
The political situation, however, remains fraught. That could pose a challenge to long term investment there.
Tom Kloza is chief energy advisor at Gulf Oil, and he joins us now from New Jersey.
Tom, good to have you.
TOM KLOZA, CHIEF ENERGY ADVISOR, GULF OIL: Nice to be here. It seems as though the weekend events in the Strait of Hormuz overshadowed the
Venezuelan deal.
SCIUTTO: Well, it shows you that the market responds to a lot of different events. I mean, focusing on Venezuela for the moment, it allows the U.S. to
hold a 55 percent stake, notably, more than half controlling 65 billion barrels of Venezuelan oil reserves.
In your work, in your professional life, is there a precedent for a deal like this? And if so, where?
KLOZA: No, there is precedent for nationalizing oil companies. We certainly saw that with all the Middle Eastern countries and then we saw it for
Venezuela. But to have a -- you know, a U.S. entity embark on a joint venture. This is unprecedented and it is really a stunning deal.
The one thing I would question, though, is the amount of oil. Venezuelan oil is really, really difficult to bring to the surface and to the market.
It is very -- it is more like silly putty than it is like the oil that we get out of the Permian Basin. So there are a lot of different challenges
ahead beyond the international legal conflicts that might ensue.
SCIUTTO: In your view, is it a fair deal?
KLOZA: Well, I am not going to comment on whether it is not fair or not. I will leave that to the geopolitical analysts. I do think that it might
bring some more oil to the U.S., but in years, not in weeks, months or whatever. So it really has no impact on gasoline prices.
You know, there is a lot of propaganda out there and to suggest that this is going to lead to lower gasoline prices in the immediate future is really
a reach. It may be cheaper for the next President because of Venezuelan oil and particularly, you know, we didn't hear this, but they could try to
resurrect some Venezuelan refining. The world is short in refining right now as opposed to really being short of crude oil.
SCIUTTO: Now, what are the issues, well, frustrations with President Trump is that U.S. oil companies didn't run in there, eager to invest and in
effect, do this for the U.S. and he, it seems, is making the case here that, well, now I've got to get the government to do it and it is quite
interesting, he is using a Pentagon pathway to do so.
Can you explain why U.S. oil companies were not so eager? It was about security, was it not?
KLOZA: Yes, it was about security. It was about the stability of the government, the stability of U.S. citizens traveling there, and the
stability, really more so of the utilities and everything that you need to extract the oil. You know, it is not just bringing it up from the Orinoco
Basin or the other reserves there.
You've got to upgrade it with really, really expensive equipment. And there are billions of dollars in litigation from companies that claim that they
were, you know, they were basically deceived when Venezuela nationalized, you know, some of the operations of ExxonMobil, ConocoPhillips, you name
it.
SCIUTTO: Let me ask you this for someone who, of course, watches and knows the markets very closely, this is a deal between the U.S., but Donald
Trump's government and he won't be president for more than a couple more years and the current government of Venezuela, which, by the way, has not
been chosen by fair elections and we don't know when those elections are going to happen.
But you could have changes on both sides of this deal within the next couple of years. I mean, is it a lasting one?
KLOZA: You know, it is difficult to say. I mean, clearly the Venezuelan people have been behind the eight ball for a long time, suffering with
terrible poverty. But, you know, they may insist on living in poverty rather than giving the United States this huge, huge percentage of
reserves.
[16:15:01]
So this is untested. I've never seen anything like it. You know, I do harken back to the beginning of this century when Venezuela was a great
supplier of crude, and they also operated a lot of refining.
They would send heating oil to the U.S. Northeast. Those seem like many, decades away.
SCIUTTO: Tom Kloza, Gulf Oil, thanks so much for joining.
KLOZA: Thanks, Jim.
SCIUTTO: Well, the head of the Bank of England is warning that new A.I. models pose big concerns for the global economy. But a very different
message from President Trump as he defends A.I. data centers.
We will discuss coming up.
(COMMERCIAL BREAK)
SCIUTTO: The head of the Bank of England is warning that advanced A.I. poses the most immediate concern to global financial markets. Andrew Bailey
heads the Financial Stability Board, an international watchdog. He says new A.I. models could change the scale, speed and cost of cyber risk and he
points out the lack of protocols in place to manage the technology.
Bailey laid out the problem in a letter to G20 Finance Ministers and Central Bankers. President trump posted a very different take on social
media. He defended A.I. data centers and said communities that don't want them will end up being backwards and poor. Trump argues that if the U.S.
stops developing A.I., then other countries, notably China, will take the lead.
Joining me now is Jacob Ward.
Jacob, before we get to the A.I. data centers, let's begin on Andrew Bailey's risk. What specific cyber risk is he talking about here?
JACOB WARD, CNN CONTRIBUTOR: Well, Bailey is -- you know, he comes from a world where you really worry mostly about things like debt or valuations
and suddenly he is saying that the most immediate threat to the global financial system is not those things. It is, in fact, what frontier A.I.
does to the cost of a cyberattack. And he is laying out several combined problems here.
One, speed. The A.I. makes possible a kind of attack that no human has the reflexes to respond to. The second is scale. You can operate against
thousands, maybe millions of targets without having to employ anybody. Once upon a time, you needed a whole crew of cyber criminals to do this. Now you
don't need that anymore.
And the third is your ability. You don't need any kind of expertise. We've already seen people with no ability to code, no ability to deal with
encryption, suddenly just renting a tool for essentially a few hundred bucks and able to then go after losses that can amount to the hundreds of
thousands or even millions of dollars.
[16:20:11]
And so it is a totally new category of threat that Bailey is clearly reckoning with here.
SCIUTTO: You know, whenever I hear U.S. politicians talk about this risk, there is occasional hearing on Capitol Hill. What I don't see is a whole
lot of action, right? And I think, and you know this better than me, given that this is your bread and butter, but I don't hear a lot of impressive
specific knowledge as to how to address these risks.
Who is working on something substantial now? Building guardrails, passing legislation that stays ahead of a technology that is moving just so
quickly?
WARD: Well, the fact that the bankers are essentially circling the wagons on their own here signals something larger, a bigger problem that we have.
I mean, you know, here, you had Bill Gates just the other day writing, you know, this is a guy who is famously anti-regulatory, right, was the subject
of some antitrust stuff that made him crazy and he wrote an enormous 6,000 word treatise arguing that were going to need something on the order of
what we use for international, you know, nuclear nonproliferation treaties or ozone regulation or airline regulation.
You know, there is clearly an appetite, certainly from the people who are on the front lines here to understand it. And so the question is, how are
you going to get that across to, you know, policymakers? I mean, one comparison that I look at, there is a pre-sort of A.I. comparison that in
2016, Bangladesh Bank was the subject of a heist that moved about $81 million out of the New York Fed through SWIFT and the attackers tried for
almost a billion dollars that required months. It was well-resourced. It was a state crew. It required the resources of a nation state to make that
kind of thing possible.
And what Bailey is pointing out here is that the resourcing requirement is now disappearing. I think if you could somehow walk a policymaker through
that and just say, look, it used to be that you had to have some skills to pull off cybercrime. And now any yahoo with an internet connection and a
few hundred bucks can do this. I hope that they would take it as seriously as they need to.
What's so strange to me, Jim, is we are in this weird moment where you've got President Trump, you know, decrying the public outrage over data
centers. But what's clearly happening with data centers is that people are suddenly visualizing the effects of A.I. in their lives. They think to
themselves, oh, this is the thing that's possibly taking my job, possibly reprograming my kids and there is the monolithic building that's at the
center of it, right? They can imagine that.
We are going to need something like that, a tangible loss or something you can point a camera at, frankly, to get policymakers, I think, to understand
this once and for all.
SCIUTTO: But the trouble is, it reveals what seems to be the core of President Trump's response to this, and that matters. He is the President
of the biggest economy in the world and A.I., arguably the A.I. leader, at least, certainly one of them and his approach seems to be let the industry
do whatever it wants to. Right? Which is not unlike, you know, his approaches to other industries here. What does that mean for this country?
WARD: Well, I think, you know, perhaps if President Trump, as seems likely, is really only thinking about the concerns of the C-suite at these
companies, right, he seems to really be on the side of the top people in these sectors, as opposed to the rest of us. Well, you know, maybe he
should just listen to their concerns, if nothing else.
I mean, we know already, according to the FBI that the total U.S. cybercrime losses reported last year were almost $21 billion, an individual
financial sector firm, according to an IMF report from 2024, could be looking at anything from, you know, tens of millions to as much as $152
million in cybercrime losses a year now that we are in this weird A.I. generative A.I. world. And so, you know, if he is not going to listen to
the rest of us, maybe he will listen to the CEOs who are about to get this in the throat as it turns out that, you know, these tools and this kind of
crime are suddenly accessible to anybody.
SCIUTTO: And you imagine that U.S. adversaries used this to supercharge what are already quite significant attacks on this country, and that
certainly Russia is in that category, China, North Korea, Iran. But to your point, you don't even have to be that big, right? If you could use A.I. to
weaponize?
WARD: Not only do you not have to be that big, Jim, you don't have to even have to speak English or have any cultural, you know, fluency at all.
I mean, it took armies of well-trained Russian hackers to take on our elections just a few years ago. Now, suddenly you don't need anybody who
needs to be able to write English to be able to create absolutely Incredibly realistic seeming communications and get into people's lives in
all kinds of ways.
SCIUTTO: Jacob Ward, thanks so much for scaring the heck out of us.
WARD: Always, appreciate you.
[16:25:04]
SCIUTTO: Coming up, Ukraine's capital has now been struck by five straight days of drone attacks.
President Zelenskyy says his military is still looking for ways to intercept some of these latest Russian weapons. We will take a look next on
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
SCIUTTO: Welcome back.
We will hear from a former CIA Russian operative about the Russian Finance Minister's surprise visit at the G20 meeting in North Carolina, and why the
Met Gala is canceling its celebration of the designer, John Galliano.
The headlines this hour: A month of relative military calm between the U.S. and Iran is over. The two nations exchanged fresh military strikes. Tehran
says it fired on two U.S. Military bases in Jordan and the United Arab Emirates. They said this was in response to a U.S. attack. U.S. Central
Command says it targeted two Iranian rocket launchers as Iran was prepared to deploy mines in the Strait of Hormuz.
Two people have been confirmed killed by flash flooding in the Grand Canyon in Arizona on Saturday. Officials are now searching for some dozen others
who are still missing. There was more rain in the forecast, which could then bring more flooding.
The jury in Lindsay Clancy's murder trial will resume deliberations on Tuesday. They are deciding whether she is criminally responsible for
killing her three young children. Clancy's attorneys argue she was experiencing postpartum psychosis at the time, while prosecutors believe
there is evidence she deliberately planned the killings. If convicted of first degree murder, she could face life in prison without the possibility
of parole.
Russia has now been striking Kyiv with wave after wave of drones for the last five days. Ukrainian President Volodymyr Zelenskyy says some 1,500
drones have struck his country. He says more than half of them have been jet powered. Zelenskyy says they pose a new challenge to Ukraine's already
stretched air defenses.
[16:30:26]
COMMERCIAL BREAK)
[16:30:06]
SCIUTTO: Russia is now been striking Kyiv with wave after wave of drones for the last five days.
Ukrainian President Volodymyr Zelenskyy, says some 1,500 drones have struck his country. He says more than half of them have been jet-powered.
Zelenskyy says they pose a new challenge to Ukraine's already stretched air defenses.
(BEGIN VIDEO CLIP)
VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE (through translator): The most difficult task is shooting down jet-powered drones. At present, our combat
aviation is carrying out the bulk of the defense against them. We are working to secure necessary interceptor systems.
Four companies have developed suitable interceptor drones, and one company's technology has proven to be the most successful.
(END VIDEO CLIP)
SCIUTTO: Zelenskyy says he spoke today with U.S. envoys Steven Witkoff and Jared Kushner about the situation on the battlefield, but the Trump
administration surprised a G20 meeting of finance ministers by inviting Russia to attend.
The move sparked a backlash from European officials who remain committed to isolating Russia as its invasion of Ukraine continues.
All this comes as U.S. intelligence assessments indicate Russia could soon try to test NATO's resolve. Joining me to speak about it, John Sipher,
former deputy chief of the CIA's Russia operations. John, good to have you.
JOHN SIPHER, FORMER DEPUTY CHIEF, RUSSIA OPERATIONS, CIA: Oh, glad to be here.
SCIUTTO: So, first, let's talk about what Russia is trying to accomplish here. I mean, they have already been just raining ballistic missiles down
on Ukraine, knowing that it is short of Patriot interceptors, and they are killing a lot of people. More -- I mean, the deaths of civilians, the rate
is up enormously, as you know. Now, jet-powered drones as well.
Is there any answer to that? The U.S. does not appear it's going to come to Ukraine's aid with more Patriot interceptors. Europe has talked about it.
Doesn't appear that those interceptors are coming in numbers, and now you have these jet-powered drones.
SIPHER: Yes, it's shameful that we're not helping, and the problem is essentially that Putin's stuck, right? So, he is been doing this for
several years. He is doing the same thing over and over, maybe a little more, a little less at different times, and it's not really changing things
on the battlefield. So, he is -- he is ramping up just the murder of civilians and hoping that, that will change things.
But anybody who is been to Kyiv or been to Ukraine, understands that the Ukrainians are ready to give in. They still very much support the war and
support the government. And so, you know, unless, you know, I think Europe is committed. It will start to give them stuff that they can get. The
Ukrainians are trying to change the calculus by hitting some things in Russia that to keep pressure on the Russians. But sadly, probably for the
near future, we are going to continue to see this kind of real carnage.
SCIUTTO: The Trump administration seems to be making another go at getting talks going between, certainly, the U.S. and Russia and Ukraine as well.
Do you see any potential there of genuine progress?
SIPHER: No, I don't. And I think it's, in fact, it would be better if the U.S. stayed out of it. I think the Europeans have started to pick up their
game, and the Ukrainians are very clear on what they want to do.
I think, the CIA director's visit last week there was a mix of public messages and leaks. It was really hard to figure out what was happening
there.
But the fact that the Treasury Secretary Bessent today met with his counterpart and talked about renewing peace negotiations suggests to me
that, that probably was one of the main things that Ratcliffe was in Moscow to talk about.
And the danger there is that, you know, if we to try to get back in on this, and it looks to Trump somehow that the -- that the Russians are
willing to maybe consider this, what do we give in return?
SCIUTTO: Yes.
SIPHER: Because previously, when we tried to get involved in peace plans, with this 28-point peace plan, it was really an embarrassing document that
was better described as a surrender plan.
So, this is dangerous for Europeans and Ukrainians. The fact that we want to play this game again.
SCIUTTO: So, in the midst of this, the U.S. gives this invitation, which clearly has upset our European partners to the G20 meeting here in the U.S.
Do you see that as part of that attempted new push for negotiations?
SIPHER: Yes, I think last week when we saw Ratcliffe in Moscow, we were wondering: was there some intelligence? Was he trying to warn the Russians
that maybe some of this hybrid activity in Europe had gone too far?
(CROSSTALK)
SCIUTTO: Yes.
SIPHER: What -- was he trying to, you know, not saying so publicly, but try to get Russia to help on Iran?
Although, those things are possible and may have been discussed, but I think now the fact that Vestin's (PH) involved with this and the reporting
is suggesting that it's part of the peace plan, it is a White House effort to maybe restart these discussions, and I don't see anything good coming
out of that.
[16:35:02]
SCIUTTO: When I speak to Ukrainians, they just don't trust. U.S. negotiators Witkoff and Kushner. And some will say it publicly, though many
more will say it privately, they frankly don't trust the U.S. in these negotiations. They feel that the U.S. will push them to give up more than
they want to, and well, will do things to please the Russian side more than the Ukrainian side. Do you think that those are reasonable fears?
SIPHER: Those are the fears that I have. I do think they are reasonable. I think, you know, Ratcliffe going to speak to the Russians and Bessent
speaking to the Russians today suggests to me that we still don't understand Russia.
And this isn't just the Trump administration; it's previous administrations too. There is this notion from Americans, and maybe it's part of our
culture, that if we could just reason with these people and give them better information, they would come to see our point of view, and it's
silly and has been proven false for decades.
For Putin, win-win means I beat you twice, right? But we, we love to blame ourselves. It's like, well, the fact that this isn't working, the Russians
are doing something we don't like, must be a misunderstanding, because we are not communicating clearly.
But the Russians, there is no misunderstanding. The truth is that Russian understands us very well and simply doesn't want the same things we want.
They see us as the enemy.
SCIUTTO: Not to be cynical here, but I do know Ukrainians who suspect this. Is there any reason to believe that not just Russia is attempting to take
advantage of Ukraine's weakness now, given its vulnerability to strikes, but that the U.S. is? That the U.S. might apply more pressure on Ukraine.
Said, hey, listen, you know, you're really getting pummeled here. You want to save civilian lives? You better make a deal.
SIPHER: Yes, that's a real danger.
Again, to go back to this visit to Moscow by the CIA director, you know, these messages, maybe he was warning them about, you know, some of the
hybrid attacks in Europe, or maybe he was trying to, you know, tell them to come to the peace table.
But our messages like that mean nothing to the Russians unless we are willing to tell them what we plan to do about it. Unless we are willing to
threaten Putin's staying power. These messages about talks and negotiation are meaningless.
The famous chess master Gary Kasparov famously said, Putin thinks this way. You know you could stop me. I know you could stop me. You choose not to.
Therefore, we both understand that all these statements are only for show. And so, unless we are willing to change things on the ground in Ukraine,
talking to the Russians and hoping that they will come around and they will come up with a good deal is a fool's errand, I think.
SCIUTTO: Yes, and tried so many times by this administration. John Cipher, thanks so much for joining.
SIPHER: Again, and again. My pleasure. Thanks.
SCIUTTO: Well, search is now underway for at least 18 people still missing after a ferry capsized off the coast of Cyprus.
It was traveling on Sunday to Turkey with some 300 people on board when it began taking on water. Nada Bashir has the story.
NADA BASHIR, CNN INTERNATIONAL REPORTER: Given the dramatic videos that we have been seeing emerging from the scene, from the aftermath, showing some
of those passengers clinging onto the side of this capsized ferry, many of them waiting to be rescued are wearing life jackets.
But as we have been hearing from eyewitnesses, from survivors, there were many who also were not able to get those life vests, were jumping into the
sea without any sort of attempt to have them rescued immediately. And of course, there is a huge investigation now underway. As we know, of course,
this has been a deadly accident; at least eight people killed, according to authorities.
But miraculously, some 241 rescued. But at this stage, it is understood that some 18 passengers are still believed to be missing.
And this is, of course, an ongoing search and rescue operation. But the fear is that this will become a recovery operation for the search and
rescue team that are currently now scoping out the Mediterranean Sea.
We have seen, of course, some of those rescues underway yesterday. Helicopters picking people up from this capsized ferry onto the nearby
port, and we have been hearing with from authorities with regards to what exactly led or may have led to this accident, this disaster, blaming the
bad weather. But, of course, that will be a central point of the investigation.
What led to the ferry capsizing? We have been learning some further details from eyewitnesses, from survivors who were on board the ferry, saying that
they began to see water rising within the vessel, and that actually, when these concerns were raised to crew members, they were not taken seriously,
at least, not immediately, and that will be hugely troubling for so many to hear, particularly, of course, the families and loved ones of those who did
not survive.
SCIUTTO: Our thanks to Nada Bashir there.
[16:39:54]
Well, heavy rain, causing deadly flash flooding in the Grand Canyon. Details on the search for more than a dozen missing hikers and why the
danger is not over, when we return.
(COMMERCIAL BREAK)
SCIUTTO: Two people are confirmed dead, up to 15 others still missing after flash flooding struck the Grand Canyon. Crews evacuated dozens of hikers
after floodwaters washed out nearly all the footbridges on the canyon floor.
Forecasters say at one point Saturday, up to an inch of rain fell in just 30 minutes. Hikers who were able to make it to higher ground described a
terrifying experience.
(BEGIN VIDEO CLIP)
ERICA VIOLA, HIKER: My mind, he is yelling at me, run, run, and I'm going. I can't run any faster. I'm going to just die. I mean, I was -- I was
scared for my life. For sure, and he was trying to help me because I -- the day before I had fallen and hurt my knee, so, it was -- it was treacherous.
I knew, if I didn't run, we were not going to make it.
Five minutes later, we would have been washed away.
UNIDENTIFIED MALE: Yes, everybody was.
VIOLA: Yes, everyone would have.
(END VIDEO CLIP)
SCOTT: The closest of calls will search teams are now scouring the canyon for others who may still be stranded, and the danger isn't over. A flood
watch remains in effect with more rain possible in the coming hours.
Our Ed Lavandera is at the Grand Canyon. Ed, tell us what you're seeing there.
ED LAVANDERA, CNN SENIOR NATIONAL CORRESPONDENT: Hi, Jim.
Well, the weather once again complicating the situation here. You know, several hours ago, the sky was just blue. You could see out into the
canyon. Now, you can see that this latest round of storms has moved through difficult -- it's been raining off and on pretty steadily, and also just
you know, the visibility is down.
But we are at the top of the southern rim here. This is the trailhead for Bright Angel Trail. This is the trail that, if you follow it down, we are
at 6,800 feet here. It drops down to about 3,800 feet elevation where the Colorado River is, and once you get down there, that is where the
devastation happened.
The sign here kind of tells the story, Jim, where these trails are closed. You know, you can read here due to extreme weather conditions, flooding and
unself. The following locations are closed, and at the bottom it talks about how these trails are impassable. Bridges on the trail are non-
existent. There is no water because a water pipeline has also been destroyed in all of this.
So, just essentially impassable here at this moment, where we do know that there has, so far, been two confirmed deaths.
[16:45:02]
We are waiting to hear from park officials and rescue officials about how the search and rescue operations have gone today. We have not received an
update yet, but there are still, as last we heard, some 15 people believed to be missing.
And Jim, the stories that you can hear from the woman that you heard from there in the -- in the intro that you played, talking about how she was
just scared for her life, we have heard that repeatedly from people who have been evacuated from the area, who had to be rescued as well, where
they talked about hearing a roar that they knew wasn't thunder, but it was definitely a terrifying sound as these floodwaters and a wall of debris and
tree limbs and boulders came barreling down through the canyon, way down there in the deepest depths of the Grand Canyon.
So, a treacherous weekend. The search for survivors still continues, and we are hoping to get an update soon as to learn more about how that process is
going. Jim.
SCIUTTO: just no warning. Ed Lavandera, thank you.
Well, now to the scene of another devastating flood. Rescue operations ramping up in Nepal and China following last week's devastating flash
flooding there. Authorities say they have now confirmed 955 people killed. 4,400 remain unaccounted for.
Emergency crews are focusing on efforts to find hundreds of workers who might be trapped in hydropower tunnels. There is reason for hope.
Nepal's military says it has saved more than a hundred people by air just on Monday.
Anderson Cooper visited one of the first towns in Nepal to be struck by those deadly floods.
(BEGIN VIDEO TAPE)
ANDERSON COOPER, CNN ANCHOR: This is the town of Syapru Besi, or what's left of the town, I should say. This is all that's left of the once
bustling market district in the town. All of this area, and all the way down to the river down this hill, would have been businesses and homes.
People lived here. There was a lot of commerce.
The border with Tibet is just about 18 miles from here, and there was a very important road from that border area all the way down to Kathmandu
that ran through this town. But that road now is wiped out. It's stunning to see it up close. I don't even think the camera can really capture just
the scale of this. It looks probably just on camera like some dirt field.
But this isn't -- this isn't --you know, we talk about water and this flood that came down. And yes, there was a lot of water in it. But look, this is
-- there is rocks in this. There is boulders. There is vehicles. Everything that the sludge picked up from further upstream. It's like -- it's like --
it's like concrete essentially. And it just covers everything.
If you walk out into this area, you can tell by my shoes, you will just sink in it. It's like concrete quicksand.
This was once a destination spot for Hindus and Buddhists on religious pilgrimages. They would come here. Also, trekkers from all over the world.
There is 15 Australian trekkers who are have been reported missing in this area, as well as dozens of other foreigners. It's not clear how many people
died here in this town,
Anderson Cooper, CNN, Syapru Besi.
(END VIDEO TAPE)
SCIUTTO: Such a heartbreaking tragedy there.
Well, coming up on the show, Lionel Messi has played his last game for Argentina. We'll have more on his decision to step away from international
football, coming up.
(COMMERCIAL BREAK)
[16:51:18]
SCIUTTO: John Galliano 2027 Met Gala has been called off after public outcry. The controversial British designer was set to be the subject of an
exhibit linked to next year's gala, but was forced to pull out after news of his involvement sparked backlash across the fashion community.
Galliano, you may remember, was fired from Dior in 2011 and found guilty of public insults after a video emerged of him making anti-Semitic comments at
a cafe in Paris.
Elizabeth Wagmeister is with me now. And Elizabeth, these comments, some of these comments not new, but what change? Why do you think his actions from
many years ago are now too much for the Met to tolerate today?
ELIZABETH WAGMEISTER, CNN ENTERTAINMENT CORRESPONDENT: It's a great question, and the answer is very clearly the backlash. Right?
This was a decision that any company and any museum would know would be controversial when you have someone with a well-documented history of anti-
Semitism and racism, in -- as you said, he was fired from Dior in 2011, after he was caught on video saying, "I love Hitler."
So, then, to appoint him to be the honoree of the Met Gala and have an exhibit that is celebrating his work, of course, that would be
controversial. But it wasn't until after the backlash, and in fact, last week, the New York Times reported that after board members and trustees
were scrambling to do damage control, well, then just a few days later this morning, that is when the museum announced that they would be pulling this
exhibit and they would not be honoring him.
Now, I also want to note that the Met Gala in May falls on Yom HaShoah, which is the day of Holocaust remembrance. So, could it be a worse day to
be honoring John Galliano? But I do want to read to you part of his statement, because the museum they say that it was his decision to pull
out.
So, let me read to you what he said. He said, "After much reflection and discussion with the Met and those involved, I have decided with great
sadness that it is best for the exhibition not to take place at this time. I remain fully accountable for the pain caused by my words in the past,
particularly, the hurt I caused to the Jewish and Asian communities, and I remain deeply sorry for it. I understand that meaningful atonement is not
achieved through an exhibition, institutional recognition, or a single public gesture. It is a continuing responsibility demonstrated through
listening, learning, and one's conduct over time."
He went on to say that he did not want what he called the debate, the backlash about this exhibition to damage the Met.
So, this is a big public scandal that seems like it could have been avoidable, but this is a huge decision and definitely not one that would
have been taken lightly for the Met to have pulled this exhibit and to change plans for the Met Gala, which of course is a huge, huge public
celebrity-filled event.
SCIUTTO: No question. Elizabeth Wagmeister, thanks so much.
Well, to sports now and the possibility of the end of not just one but two eras in sports. Argentine soccer star Lionel Messi has just announced his
retirement from international football. Messi described it as a decision that hurt, but said he would left everything on the field.
This comes amid simultaneous speculation that 24-time tennis Grand Slam winner Novak Djokovic might also hang up his racket after crashing out in
the first round of the U.S. Open this weekend.
Don Riddell, with me now.
I suppose first start with Lionel Messi here. Listen, I think, you could say he is going out on the top, right? I know he wanted to win a second
World Cup most recently this year, but he won one four years ago.
[16:55:07]
Is he out for good?
DON RIDDELL, CNN SPORTS ANCHOR: Not quite the tippy top. But yes, he is kind of going out on top.
And look, he is not completely done, Jim, because he is still playing for his club side into Miami in Major League Soccer, and clearly, he is still
got it because he scored four goals in one game against Montreal over the weekend.
But I think, we all sense that when it comes to the national team, the end was nigh.
Remember, he is 39 years old. This World Cup that we just saw him play in, which was his sixth World Cup, which was extraordinary, was kind of a bonus
because a lot of people expected him to step down after the 2022 tournament, where he finally led Argentina to the title, and clearly,
another one in four years' time when he is 43 is going to be a bridge too far.
And if you were watching him during the tournament, he was pretty emotional after a lot of those games, and he was also dealing with, you know, just
the utter heartbreak of his father, who was dealing with a serious illness, and he passed away just a few weeks ago, so, there is been a lot of emotion
in Lionel Messi's life.
But I think he knew during this tournament that it was going to be his last one. But hey, what a legacy. I mean --
(CROSSTALK)
SCIUTTO: Yes.
RIDDELL: Yes. Just, you know, look at what he achieved: 21 years with the national team, 207 games, 125 goals. He won the World Cup. He won the Copa
America twice. He was the player of each of those tournaments on two separate occasions. I mean, just incredible what he's achieved. No
question.
SCIUTTO: Yes, not bad. Not bad to say the least.
All right. So, Djokovic, it's kind of a different story here, at least, what we saw this past weekend. I mean, we saw a guy with injuries catching
up to him, and really difficult for him to swallow that bitter pill, it seems.
RIDDELL: Yes, I mean, you know, Djokovic has still got it. I mean, he in very recent times has shown that he can still contend really deep into
major tournaments. But it's been a few years now since he's won one, and he is been chasing a 25th, which would be the all-time record. I mean, many
would say he is already the greatest of all time, but that's what he is been pursuing, but it's becoming ever more elusive.
And I think it was a real shock to see how this played out on Sunday in the first round. It's the earliest he is gone out in a Grand Slam tournament in
more than 20 years.
He just looked, you know, all over the place. I mean, he threw up at least once. He seemed to be hurting throughout. He made 70 unforced errors. It
was not a good night for Novak Djokovic, and he has now hinted that he needs to figure out what's next because he doesn't know how much longer he
can keep doing that -- like that for.
(CROSSTALK)
SCIUTTO: Sire. Well, he would be the first sportsman or woman to say that and then change their mind. So, I suppose we should watch.
Don Riddell, thanks so much.
And that is QUEST MEANS BUSINESS. I'm Jim Sciutto. Up next, "THE LEAD WITH JAKE TAPPER".
Thank you, guys.
(COMMERCIAL BREAK)
END
