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The Situation Room

Pipe Bomb Suspect in Court; What Happened to Malaysia Airlines Flight 370?; Trump Blasts Federal Reserve Chair; Federal Agents Swarm Minnesota. Aired 11:30a-12p ET

Aired December 30, 2025 - 11:30   ET

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

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WOLF BLITZER, CNN HOST: Happening now: The FBI and the U.S. Department of Homeland Security both say they're sending extra resources right now to Minnesota to investigate claims of widespread fraud.

And it follows this viral video on YouTube boosted by Vice President Vance accusing Somali American-run childcare centers of taking federal money without actually caring for the children. Critics say there's no proof of wrongdoing and they believe the accusations are part of the Trump administration's efforts to target Minnesota's Somali American community.

CNN law enforcement correspondent Whitney Wild is joining us from Minneapolis right now.

Whitney, what were you learning, first of all, about this investigation?

WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: Well, Wolf, I think it's important to remember that the investigations into a major fraud problem here in Minneapolis goes back at least a decade, specifically about problems and frauds involving day cares.

But it's so much broader than that. There are 80 indictments within the last few years of fraud, many of those indictments concentrated in Minneapolis area's Somali American community. And this is something that local news has been reporting on for years here, I mean, award- winning, long-running investigative series here from local reporters who have been trying to raise the alarm about a major fraud problem here in Minneapolis.

And it was just earlier this month that prosecutors unveiled more indictments, more fraud cases here. So this is something that has been a long-running issue in Minneapolis. Even still, it seems that it did not catch the attention at the broad scale until there was this YouTuber, Nick Shirley, who came to Minneapolis and began knocking on doors here at some of these day cares, saying that he was exposing more fraud.

We have called several of these day cares. One answered. Several did not. We have reached out to state officials here. Here's what the Minnesota Children Youth Commission statement says: "We have questions about some of the methods that were used in the video. We do take the concerns that that video raises about fraud very seriously."

This is a major political headache for Governor Tim Walz. It will not go away. We have been reporting on this problem plaguing Walz as a leader here for 14 months. We have a story about these issues back in October of 2024, our reporter Rob Kuznia putting together a very detailed, long report on this.

So when you look at the political ramifications here, this is a problem that Walz just seems to not be able to shake.

We reached out to the governor's office and here's what he said, Wolf: "The governor has worked for years to crack down on fraud and asked the state legislature for more authority to take aggressive action. He has strengthened oversight, including launching investigations into these specific facilities, one of which was already closed.

"He's hired an outside law firm to audit payments to high-risk programs, shut down the Housing Stabilization Services program entirely" -- that was one that local reporters exposed was rife with fraud -- "and announced a new statewide program integrity director and supported criminal prosecutions."

Wolf, this is just the latest chapter and a long-running story. We have no indication this story is anywhere close to finished -- Wolf.

BLITZER: All right, Whitney Wild, we're glad you're there. Thank you very much for joining us.

And just ahead: President Trump insults the Federal Reserve chairman, Jerome Powell, once again and threatens to sue him. More on that just ahead right here in THE SITUATION ROOM.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We have a fool at the Federal Reserve. He's an absolute fool. The guy's just incompetent. There is nothing you can do about it. He's just a very incompetent man.

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BLITZER: New this morning, President Trump is now threatening -- get this -- to sue, to sue the Federal Reserve Chair Jerome Powell and says he may still fire him as well. Listen.

(BEGIN VIDEO CLIP) TRUMP: So we're thinking about bringing a gross incompetence, what's called gross incompetence lawsuit. It's gross incompetence against Powell. I'd love to fire him, but we're so close. Maybe -- maybe I still might.

(END VIDEO CLIP)

BLITZER: The two have been at odds over interest rates since Trump took office in January. Powell's tenure as the Fed chair ends in May and Trump says he plans to announce his replacement next month.

Remember, Trump actually picked Powell to lead the nation's Central Bank back in 2017 during his first term.

Joining us now is CNN business and politics correspondent Vanessa Yurkevich.

Vanessa, tell us more about this threat, a threat of a lawsuit against the Federal Reserve Chair Jerome Powell. What's this all about?

[11:40:00]

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, Wolf, this isn't the first time that President Trump has threatened to sue Jerome Powell.

This is what he's saying his administration is thinking of doing, filing a gross incompetence lawsuit against Jerome Powell over the handling or mismanagement, as the president calls it, of the renovations of two buildings at the headquarters of the Federal Reserve in Washington, D.C.

Essentially, these are two buildings that are under renovations currently. The Federal Reserve had budgeted $1.9 billion, but it has run over budget to $2.5 billion. And, essentially, the Federal Reserve is saying that, yes, there has been some overrunning construction costs because these are historic buildings.

They have also had to remove asbestos and lead, make it handicapped- accessible, and update the entire HVAC system of this main building and an additional building. But the president has taken such an interest in this and such an interest in what he's called the mismanagement of this project that he visited the Federal Reserve with Jerome Powell to take a look at exactly why this was over budget.

And we have heard this for many months now, that the president has really latched onto this idea that Jerome Powell is just not equipped to, number one, handle this renovation, but also not equipped to be in his current role.

So this lawsuit, many think it probably will not come to fruition, but it certainly is a threat against the chair of the Federal Reserve, Jerome Powell, Wolf.

BLITZER: And amidst this, Vanessa, President Trump has also renewed his threat to fire Powell before his term ends in May. Does Trump even have the legal authority to do that?

YURKEVICH: Yes, again, not the first time we're hearing from the president wanting to fire Jerome Powell or threatening to do so.

Listen, Wolf, this has never been done before. We have never seen the head of the Federal Reserve removed from his position before the end of his term. This would rattle global markets really catastrophically if the president decided to do this. He has said that he wanted to fire Jerome Powell because he did not lower interest rates fast enough.

Well, we are currently seeing that the Fed funds rate, which has been lowered three times in recent months, is at its lowest level in three years. Trump would also need cause for firing him. And that cause really is a big question mark. And that's probably why we're hearing about this lawsuit again.

Could that be cause for his firing? And then one more point, Wolf, is something called TACO, Trump always chickens out. This is a term coined by Wall Street. And that's probably why you see Wall Street not really making any moves right now, because they don't believe, essentially, that Trump is going to follow through with this threat, again, Wolf, a threat that he's made time and time again.

Jerome Powell is almost at the end of his term coming up in May. And we know from the president himself that he plans to announce his nominee for the head of the Federal Reserve. Removing Jerome Powell right now would do way more harm than good for the economy, which we know is really critical to President Trump right now, Wolf.

BLITZER: Certainly is.

All right, Vanessa Yurkevich reporting for us, excellent report. Thank you so much.

YURKEVICH: Thank you.

BLITZER: Coming up: One of the biggest questions in aviation right now, what happened to Malaysia Airlines Flight 370? We will take a closer look at the technology that might finally provide the answer.

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BLITZER: Happening now: A new search for Malaysia Airlines Flight 370 is under way nearly a dozen years after the Boeing 777 with 239 people on board vanished from radar after takeoff at Kuala Lumpur.

The Texas-based firm Ocean Infinity is now making its third attempt to find the long-lost plane.

Joining us now, CNN aviation safety analyst David Soucie. He wrote a book about MH370 back in 2015.

David, what do you think the chances are that this latest search that is now just begun turns up something critically important, something new?

DAVID SOUCIE, CNN SAFETY ANALYST: I will tell you, Wolf, I have been really apprehensive about these continued searches, until now.

I think now we have got three things going for us. One is the revised data analysis of the area, and that's being used with A.I. We didn't have A.I. before to try to find these areas. So, a lot of data, got it sorted out. The other thing is, they're using a new swarm technology for the underwater vehicles that are being used.

Instead of just one device out there looking, we have got multiple devices and multiple control ships out there. And then, third, there's been some great things about how we look at the current flows in the ocean. And we have some parts that came up on Le Reunion Island, if you remember, and Madagascar that they have remapped back using this new technology.

I'm very confident that they're going to find something on this search.

BLITZER: Yes, let's hope.

After all these years, David, what new information do you think can be gained if they do find wreckage?

SOUCIE: Well, what I'm hopeful is that the voice recorders and the data recorders, if they find the main body of this aircraft, those should still be intact on the ocean floor. It may be difficult to find. But if they do find that main body of the aircraft, they should then be able to find the flight data recorder and the voice recorders, which are made to last this long.

They could go 10, 15 years. With the way that the EEPROM chips hold the data, it could be very well intact. And, hopefully, they would find that and get some answers.

BLITZER: How has technology, David, improved over the past 10 years or so that could improve the search? And I'm not just talking about A.I.

SOUCIE: Mostly, it's about the swarms of underwater vehicles.

So, if you recall, before, they would go out with a huge ship and they would put one device in, and they would search a very narrow path. And they'd have to go back and forth and back and forth to try to get this scan of the ocean floor.

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The new technology now allows for multiple units underwater to be to be tracked by a single robotic boat. There's not even anybody on board this boat that controls these swarms. So they can be out there looking in multiple areas all at one time.

In addition, the resolution on these devices is thousands times better than it was before. So, before, you would look at it and say, is this a rock? Is it a boat? Is it a crashed airplane? We didn't know the difference. Now these devices have very high resolution of what they're looking at on that ocean floor.

I think that's the things that will be most critically different in this search.

BLITZER: Does the location of the current search give you any new clues about what they think might have happened, why this plane, this 777, this Boeing 777 vanished?

SOUCIE: No, they really didn't get many clues from the current search. The current search, if you're talking about the ocean currents -- maybe I misunderstood your question -- but the ocean currents gave us more information about where it might be located.

However, the parts that have been located gave us some information, the leading edge of some of the flight control things that were found. The flaperon was found. And you can tell from that it came off in flight. It didn't happen, it didn't come off once the aircraft hit the ground. It came off in flight, which tells us that the aircraft made a rapid descent and it came apart somewhat in flight, at least the flight controls did.

So that gives us some clues to how quickly the aircraft descended from its last known handshake that we know about.

BLITZER: So what's your bottom-line assessment right now, David? Do you think they're going to find something that's going to explain what happened?

SOUCIE: I will tell you, I'm very confident that they will. This search area, if you recall, before, it was about the size of Florida. Now it's about the size of Connecticut. I mean, it's really reduced.

And that's not meaning that it's a less effective search. It means that it's more concise search. So, yes, I feel very confident. I have got a very high confidence that we're going to find something on this search.

BLITZER: Let's hope.

All right, David Soucie, as usual, thanks so much for joining us.

SOUCIE: Thank you.

BLITZER: And coming up: The man accused by the U.S. Justice Department of planting pipe bombs outside both the Republican and the Democratic Party headquarters in Washington on the eve of the January 6 insurrection returns to court shortly. Why federal prosecutors argue he should remain behind bars.

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BLITZER: New details this morning about the legal defense of the manicures of planting pipe bombs here in Washington, D.C., on the eve of the January 6 attack.

In a new filing, attorneys for Brian J. Cole argue he should not be detained pending trial. They say he has been diagnosed with autism and is absolutely in -- no danger to the community. According to a U.S. Justice Department memo, prosecutors claim that Cole gave a detailed confession after he was arrested earlier this month.

CNN senior justice correspondent Evan Perez is here with me in the situation.

Evan, Brian Cole is due in court this afternoon for a detention hearing. Walk us through what will happen.

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, what we expect, Wolf, is for the government to make the case that he is a danger to society, to the community, and they will go through what he has said in his alleged confession.

They claim that, during this confession, he said that he was concerned that the 2020 election was stolen, which is, of course, a claim that President Trump was making at the time. And it really was the claim that brought all of those thousands of people to the Capitol for the January 6 -- the riot that happened at the Capitol.

But Brian Cole says that he was not motivated by that, it wasn't at all connected to the congressional certification of the vote, that he was simply lashing out at the two parties, which he said were in control of everything. And, again, his frustrations were about the 2020 election.

In his defense, his lawyers are saying that he poses no danger to the community, that he has an autism spectrum disorder level one, that he's also got an obsessive-compulsive disorder. And they say that house arrest, an ankle bracelet, an ankle monitor would be sufficient to make sure that everything is fine while he awaits trial.

The irony of all of this, Wolf, is the fact that, obviously, President Trump has pardoned more than 1,500 people who were associated with the riot on January 6 of 2021. These bombs were found outside the RNC and the DNC just before that riot started.

And, as it stands right now, the current Trump administration, this is -- he is the only person essentially who would be held accountable for anything that happened that day, because the president, of course, has either commuted the sentences or pardoned all of the people who were associated with the riot.

BLITZER: What other new details, Evan, I'm just curious, are we learning from these just released court documents detailing Cole's apparent confession?

PEREZ: Right.

I mean, he describes how he has an interest in history. He learned about these bombs reading in history, reading about how bombs were made. He apparently played video games where he learned about some of the ingredients used to make the pipe bombs. He went through with the FBI exactly how he made them and why he placed them at the RNC and the DNC headquarters that day.

BLITZER: All right, you will let us know what happens in court later today.

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PEREZ: Yes.

BLITZER: Evan, thank you very, very much. Happy new year, healthy new year to you as well.

PEREZ: Happy new year. Thank you.

BLITZER: And, to our viewers, thanks very much for joining us this morning. You can always keep up with us on social media @WolfBlitzer and @PamelaBrownCNN. We will see you back here weekday mornings 10:00 a.m. Eastern. I will be back Friday morning.

"INSIDE POLITICS" with our friend and colleague Phil Mattingly starts right now.