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EARLY START

Undersea Mission Almost Complete; New Russia Sanctions Expected; Obama and President of South Korea Hold Press Conference

Aired April 25, 2014 - 05:00   ET

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


GEORGE HOWELL, CNN ANCHOR: Happening right now, the underwater search for missing Malaysian Airlines Flight 370 is nearly complete. And so far, crews have found no sign of the vanished jetliner. Is it time for a new strategy?

This as Malaysia's prime minister reveals exclusively to CNN when investigators will tell the world everything they know about that plane's disappearance.

We are live with the latest.

POPPY HARLOW, CNN ANCHOR: And a rising crisis in Ukraine. Soldiers fighting pro-Russian separatists in the streets, battles turning deadly. The United States blaming Russia for the uprising and escalating violence, giving the Kremlin a major warning.

We are live in Ukraine with the latest on the ground there.

HOWELL: And happening in just moments, President Obama is set to speak in Seoul, South Korea, about Ukraine, North Korea, and the issues facing that region. We are live in Seoul with the latest.

Good morning and welcome back to EARLY START. I'm George Howell. It is 5:00 on the East.

HARLOW: Happy Friday.

HOWELL: It is good to be here.

HARLOW: Good to have you with us.

HOWELL: Absolutely.

HARLOW: I'm Poppy Harlow, April 25th, 5:00 a.m., as you said, here on the East Coast.

We begin with the latest in the search for missing Flight 370 and the new defense of the investigation by Malaysia's prime minister in an exclusive interview with our Richard Quest. The prime minister of Malaysia says that a preliminary report on why the jet disappeared will be released to the public after families' outrage boiled over.

(BEGIN VIDEO CLIP) NAJIB RAZAK, MALAYSIAN PRIME MINISTER: I have directed an investigation, internal investigation team of experts, to look at the report, and there's a likelihood that next week we could release the report.

RICHARD QUEST, CNN AVIATION CORRESPONDENT: Why not release it now, prime minister? Is there something in it that's embarrassing to Malaysia?

RAZAK: No, I don't think so, but I just wanted to be -- you know, this team to go through it. But in the name of transparency, we will release the report next week.

QUEST: You will?

RAZAK: We will release it.

(END VIDEO CLIP)

HARLOW: Now, these reports are usually released 30 days after an accident or a plane goes missing. Malaysia got an extension on that, has completed the report but not released it to the public, and the families are furious about that, this as an unmanned submarine is on its 13th mission scanning the ocean floor with 95 percent of that search zone, though, now covered. Still no sign of any debris from the plane.

Erin McLaughlin is live for us in Perth this morning.

What can you tell us, Erin?

ERIN MCLAUGHLIN, CNN CORRESPONDENT: That's right, Poppy. As of this morning, about 5 percent of that narrowed search area left to go. The majority of it completely ruled out. So, what do authorities do when they basically have ruled out the majority of their best guess as to where the black box may be? It's something that Australian and Malaysian officials are discussing now, hammering out a longer-term search agreement.

One of the things that the Malaysians had proposed is broadening out the search area. Right now, they're only searching a 6-mile radius around that second ping, that second acoustic detection picked up by the towed pinger locator. Well, there are three other detections that were made. Some analysts suggesting maybe they should do the same for those areas as well, also suggesting, perhaps, a broader search area along that arc, the so-called half handshake between the plane and the Inmarsat satellite, where some authorities have said they believe that represents where the plane went down into the water. So, that's certainly being discussed.

Also being discussed, possibly introducing more powerful submersibles into the mix, such as perhaps the Orion, which is capable of going about a mile deeper than the Bluefin-21 and staying under water for weeks on end. The Australian defense minister has been quoted as saying that more powerful submersibles are being considered along the lines of the submersibles that discovered the Titanic or the HMAS Sydney, which is World War II wreckage.

Now, we understand from our sources that this agreement could be reached within the week, and some authorities are talking about a search operation, planning for a search operation through July -- Poppy.

HARLOW: When it comes to those more powerful submersibles, Erin, we know they exist, but they could be anywhere in the world. And we also know it takes a significant amount of time to get them there to where you are. Do we have any sense if any of those are on the way?

MCLAUGHLIN: Not at the moment. That's something that Australian authorities have not said, just something that we understand that they are considering. We hope to get more information on that in the coming days.

But they are certainly considering deploying more underwater submersibles into this area, a potentially broader search area, Poppy.

HARLOW: Again, 95 percent of that search area now complete with the 13th mission under way of the Bluefin-21. We will come back to you later in the show for any updates.

Erin, appreciate it. Thank you.

HOWELL: Now on to the crisis in Ukraine and new word into CNN this morning that new sanctions could come as early as today against some key allies of President Vladimir Putin. Russia says the U.S. is behind what's been happening in eastern Ukraine, but the White House is insisting it is Russia that's causing the unrest.

And the administration is promising action. Listen.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: Let me be clear: if Russia continues in this direction, it will not just be a grave mistake. It will be an expensive mistake.

(END VIDEO CLIP)

HOWELL: Phil Black is live in Donetsk, Ukraine, this morning with the very latest.

Phil, there is a lot of optimism and hope a few weeks back about the Geneva deal. Is that in the rearview mirror now?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Yes, very much. The hope and optimism, if there ever was a substantial amount, George, has faded very quickly, not long after the ink dried on that document, really.

What we're seeing on the ground continues to be something of an escalation. We've seen the most assertive action yet by the Ukrainian military in its efforts to try and dislodge pro-Russian forces from around the town of Slaviansk, which is really the heartland of the pro-Russian movement in this region.

We saw them advance on pro-Russian positions, checkpoints around the town. Gunfire is said to have been exchanged. There were some big fires at some of these barricades, part of a defensive move by pro- Russian forces there.

But despite risking their lives to challenge these positions, the Ukrainian military then simply withdrew.

Now, remember, up until this point, they have been accused of being too timid, too cowardly. There seems to have been no direction to the security response. So, it's unclear what this latest move means entirely. Whether it is finally the start of a large, dedicated effort to try and dislodge pro-Russian forces or just more of the same stop-start, uncertain security response we have seen so far.

We know that the Russian response to this Ukrainian military move has been pretty tough, some very strong language condemning it, and then backing it up further still with new Russian military mobilizations just across the Ukrainian border in Russian territory, where they say they are now conducting more military exercises.

But it obviously continues to fuel what has been the enduring fear of this crisis, that Russia could still choose to take direct military intervention here in eastern Ukraine, George.

HOWELL: Phil, you know, when it comes to the U.S. and these sanctions, does Russia take sanctions seriously when the U.S. threatens sanctions?

BLACK: Not so far. The sanctions so far, if they have hurt Russia, Russia has clearly been prepared to weather that hurt and says it will continue to do so. It doesn't like sanctions.

It believes that the United States is, according to one senior Russian official, treating it like a naughty school girl, if you like. It doesn't like being spoken to in this way, doesn't like being threatened, promises that it will continue to respond in the same sort of way if this continues.

But what we are clearly seeing from the Russian government is continued defiance. The United States says the Geneva agreement is very clear. There can be no interpretation to it. Russia carries a responsibility to persuade these armed groups to put down their weapons and go home.

Despite that very clear U.S. interpretation, Russia does maintain the opposite interpretation. It says it is the Ukrainian government that is breaching this agreement through the use of military force and the responsibility lies with the United States to pull the Ukrainian government into line because of the influence they have.

You can clearly see the distance between those two positions is opposite. They are still talking past each other. There is no reason to believe that this can be settled diplomatically any time soon, George. HOWELL: A very delicate carrot-stick situation, sanctions and Russia not taking that seriously.

Phil Black reporting in Ukraine, thank you so much for that report.

HARLOW: All right. Well, new information this morning after three Americans were killed at a Kabul hospital. We are hearing from the wife of one of the victims.

Also, a rising conservative hero to some. Well, Nevada rancher Cliven Bundy on the record now after making some very controversial comments. What he is saying, straight ahead.

(COMMERCIAL BREAK)

HOWELL: We now know a Chicago pediatrician was among the three Americans killed in a shooting at a charity hospital in Afghanistan. Dr. Jerry Umanos moved to Afghanistan in 2005 after practicing in inner city Chicago, saying he felt called to be there.

His wife says she forgives the man who killed him.

(BEGIN VIDEO CLIP)

JAN SCHUITEMA, WIFE OF CHICAGO DOCTOR KILLED IN KABUL: Our family has suffered a great loss. Our family and friends have suffered a great loss, and our hearts are aching. While our hearts are aching for our loss, we're also aching for the loss of the other families, as well as the loss and the multiple losses that the Afghan people have experienced.

(END VIDEO CLIP)

HOWELL: Umanos also trained Afghan doctors. He died when an Afghan guard opened fire. The guard apparently tried to take his own life but survived and is being questioned. Officials say the other two victims were father and son.

HARLOW: Meantime, Attorney General Eric Holder is staying put for the moment. Justice Department officials say the 63-year-old who was recently hospitalized for an elevated heart rate plans to stay through the fall midterm elections, but he has made it clear that he will step down before the end of President Obama's second term. Officials say Holder plans to see through several key initiatives currently under way, including criminal justice reforms and advancing gay rights.

HOWELL: Here's a question, is the housing market starting to slow down? The industry newsletter "Inside Mortgage Finance", says in the first quarter of this year, lending hit its lowest level in more than a decade as Americans decided not to seek out loans for new purchases or refinances. This news comes the same week as the government reported a double-digit decline in new home sales over the last year.

HARLOW: All right, let's take a look at markets. Stocks in Europe trading lower right now. Asian markets closed mixed. The big focus for investors right now, it is the situation in Russia and Ukraine. Just this morning, S&P, one of the rating agencies, downgraded Russia to BBB minus, one rating above junk. Russia's stock market has tumbled this year, down 14.5 percent this year, thanks largely to tensions with Ukraine.

Here in the United States, though, investors seem torn between focusing on those tensions and focusing on stronger-than-expected earnings from corporate America. Two stocks you're going to want to watch today, Amazon and Starbucks, both those companies reporting quarterly earnings yesterday.

Amazon seeing profits jump 32 percent. Starbucks announcing bad weather this winter did not keep people from drinking those lattes. Stores open for a year or more saw sales jump 6 percent.

I want to take you now to Seoul, South Korea. We see the president and his team walking in there for this press conference. A key focus, we are expecting possibly to hear about North Korea and anything possibly about sanctions on Russia for the situation in Ukraine.

Let's listen in.

(BEGIN LIVE FEED)

ANNOUNCER: President Obama and President Park Geun-hye. The joint press conference will begin with the opening statement by two head of states followed by Q&A session.

First, President Park Geun-hye will deliver the statement.

PRES. PARK GEUN-HYE, SOUTH KOREA: I'd like to extend my sincere welcome to his Excellency, President Obama, to the victims of the sunken ferry Sewol and their families, President Obama expressed consolation and sympathy and provide support. I truly thank you from the bottom of my heart.

This is being simultaneously translated. President Obama's visit to Korea is the fourth time, and Seoul is the city he most frequently visited during his term. Of all the U.S. presidents, the number of his visit to South Korea outnumbered that of his predecessors.

This reflects President Obama's special interest on Korea and full commitment and confidence to farther strengthen U.S./ROK alliance. The most recent North Korea's provocation is the possibility of engaging on other nuclear tests, thereby imposing threats and provocation amongst the situation.

President Obama's visit to Korea sends a strong message to Korea that its provocative acts not be tolerated. President Obama spares no efforts to exercise deterrence against North Korea's provocation and strengthen our mutual cooperation. Above all, faced with the threat, the U.S./ROK's defense capabilities is solid and will be farther cemented.

Tomorrow, President Obama and our visit ROK/U.S. combined forces commence for the first time ever since it was formed in 1978 to reaffirm U.S./ROK deterrence capabilities against DPRK.

DPRK's new pattern of provocation will bring about a new level of international pressure. We also exchanged views on what measures the U.S. and Korea need to take jointly together with the international communities in the face of DPRK's provocation. We sincerely hope that North Korea takes the course DPRK's stability while making the right choice to dissolve the stress and hardship the North Koreans undergo.

We consider that the security environment is experiencing threats imposed by DPRK's nuclear program and missile activities. Therefore, we share the view that the timing and condition of the transfer slated for 2015 can be revealed.

We also agree to beef up our capacity to effectively deal with DPRK's nuclear and missile threats. As a part of that effort, Korea's air and missile defense will be developed into an independent system and will corroborate to enhance the probability while securing its efficient operation.

The vital foundation of our alliance is high-level security dialogue, which we plan to report in the later part of this year to advance foreign ministers affair talk is scheduled. We expect talks will be meaningful activity on current issues, regions of our alliance, present and future of the Korean Peninsula. Based on strong deterrence capabilities of ROK and the U.S., we decided to lay the groundwork for a sustainable peace and peaceful unification and make joint efforts to build new Korean Peninsula. To realize that, it is crucial to achieve progress in DPRK's denuclearization. We share the concern over DPRK's continued attempt to enhance its nuclear capabilities, so with a sense of urgency, we will make progress in the denuclearization.

Based on our close coordination, we will continue our efforts to induce consistent response and active cooperation from the international communities, including the five parties. North Korea's pursuit of two goals at once on nuclear arsenals and nuclear development are incompatible. DPRK must recognize that to lay the groundwork for unification in the Korean Peninsula.

I explained to President Obama my initiative for peaceful unification presented in last month, in December 2012, as President Obama mentioned, in Seoul, residents of both South and North Korea will eventually become free citizens of an integrated country, reflecting development process of human history, areas built due to conflict, distrust, social cultural differences, eventually collapse.

During that process, I believe we need to shower constant the north Korean residents with caring interests and deliver message of hope, especially efforts that are necessary to provide humanitarian assistance to North Koreans and recover our common sense of identity. Peaceful unification in the Korean peninsula will provide new economic opportunities to its neighboring countries and allies and contribute to promote global peace and stability.

Though North Korean regime rejects the initiative I proposed in Dresden, my proposal will ensure minimal value of life to be enjoyed by North Koreans and recover common sense of identity between North and South Koreans. With that principle in mind, we will pursue the initiative.

President Obama and I shared a view that while the tension and conflict persist in Northeast Asian region, we must actively seek ways to promote peace and collaboration in the Northeast Asia. In that context, I strongly support the U.S. policy to rebalance toward the Asia-Pacific region as it contributes positively to the regional peace and cooperation.

I firmly believe that President Obama's Asia trip demonstrates his strong commitment toward his policy of rebalancing toward the region and his pledge to implement the commitment. As the U.N. Security Council member, South Korea stands side by side with the U.S. to resolve any major issues undermining peace and stability in the global community. The U.S. and Korea are marching together to carry out development cooperative activities in Asia, Africa, and also poverty fightings. We'll gather our wisdom to tackle new global challenges, such as climate change, energy, nuclear security, cyber security, marine security and et cetera.

Another important pillar of our alliance is practical cooperation in economic, social and cultural sectors. This topic has continued so far and will continue. Of course, FTA, together with the U.S./ROK mutual defense treaty have become two major linchpins of our alliance. We plan to expand mutual beneficial cooperation based on FTA.

We shared the view that followed by FTA, between the two countries, TTP will enable both of our countries to expand our cooperation in the future. We will closely coordinate with each other regarding Korea's participation in TPP.

Regarding the issue of the energy, scientists from two sides are conducting research in the field of I.T.., high-tech manufacturers, polar regions, space explorations in these areas. They are closely collaborating. Farther down the road, energy-related companies and experts from both sides have strengthened cooperation in clean energy and shale gas sector. Thus, we are stepping up the bilateral partnership to a new level.

Today, after 60 years, precious nine Korean cultural artifacts were returned to Korea. Such social and cultural cooperation between the U.S. and Korea will enrich our friendly ties and achieve farther development.

Based on the past six decades of unwavering trust built between the two nations, the U.S./ROK alliance will advance farther so as to effectively handle the challenges in the Korean Peninsula, northeast Asia and the world. Our alliance will continuously strengthen its role as a linchpin for peace and stability in the Asia-Pacific region. And also contribute to the people of the U.S. and Korea and the world.

Once again, welcome to Korea, President Obama, and I wish you a successful Asia trip. Thank you.

Next, President Obama will deliver the statement. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you, President Park, for your kind words and warm welcome.

And I want to thank the people of South Korea for your enduring friendship and unfailing hospitality.

As I said earlier, I know my visit comes at a time of great sorrow for your nation. And again, on behalf of all Americans, I want to express our deepest condolences. Our edo (ph), to all the families who have lost loved ones on the ferry, Sewol. So many were young students with their entire lives ahead of them.

I'm a father of two daughters of the same age or close to the same age as those who are lost, and so, I can only imagine what the parents are going through at this point. The incredible heartache.

I brought with me on this trip, in addition to the flag that I mentioned earlier, a magnolia tree from the south lawn of the White House. These magnolia trees have stood for more than a century, and they represent in our country beauty and with every spring renewal. The same qualities embodied by all those students.

So, during my visit, this tree will be presented to the Danwon High School as a reminder of their beautiful lives and the friendship between our two nations. And going forward, the United States will continue to offer whatever support we can provide as you respond to this tragedy.

You know, these difficult days remind us that whatever the challenges, our two nations stand together. Our alliance remains a linchpin of security in Asia. Our solidarity is bolstered by the courage of our service members, both Korean and American, who safeguard this nation. America's commitment to the South Korean people will never waver.

And, President Park, I want to thank you for your strong personal commitment to our alliance. I was honored to welcome you to Washington for your first foreign trip as president, and we've worked closely ever since.

In our discussions today, we agreed to continue to modernize our alliance, including enhancing the interoperability of our missile defense systems.

At the same time, President Park recommended and I agreed that given the evolving security environment in the region, including the enduring North Korean nuclear missile threat, we can reconsider the 2015 timeline for transferring operational control for our alliance. Together, we'll ensure that our alliance remains fully prepared for our mission.

With regard to North Korea, the United States and South Korea stand shoulder to shoulder, both in the face of Pyongyang's provocations and in our refusal to accept a nuclear North Korea. Threats will get North Korea nothing other than greater isolation. And we're united on the steps Pyongyang needs to take, including abandoning their nuclear weapons and ballistic weapons programs and living up to their international obligations.

Of course, we're also deeply concerned about the suffering of the North Korean people, and the United States and South Korea are working together to advance accountability for the serious human rights violations being committed by the North.

I mentioned to President Park that the United States supports the Korean people's desire for unification, and I share President Park's vision. As you outlined, Madam President, in your recent speech in Dresden, the unified Korea that's free from the threat of war and nuclear weapons. It's a vision of a unified Korea where people throughout this peninsula enjoy the political and economic freedoms that exist here in the South.

Beyond this peninsula, our alliance is increasingly a global one. We're grateful for South Korea's partnership from typhoon relief in the Philippines, to humanitarian efforts in Syria. As madam president mentioned, we're working closely on new clean energy technologies to address climate change and with the international community on an ambitious, new climate agreement.

Around the globe, we're leaders in development because we want more people to experience the kind of incredible growth and progress that South Korea shows is possible.

And finally, we agreed to continue expanding our extraordinary economic ties. Since we signed our free trade agreement two years ago, our overall bilateral trade has gone up. The United States is exporting more to South Korea and South Korea's exporting more to the United States, which supports good jobs in both countries.

Today, President Park and I discussed how we can make sure that we implement fully, which would ensure that South Korea can eventually meet the standards of the Trans-Pacific Partnership.

So, President Park, thank you again for your partnership and for all that you've done to keep our alliance strong. I'm looking forward to our working dinner tonight. Time and again we've seen how much our people can accomplish together, not just for our own countries but for the security and prosperity of the people around the world. And we very much appreciate your leadership on that project.

UNIDENTIFIED MALE (through translator): Next, we'd like to take questions from the media, the first from the Korean side. Please state your name and affiliation before you pose your question.