Return to Transcripts main page

WOLF

White House: 75 Percent of ISIS Fighters Dead; Former Iraqi Ambassador Talks Fight Against ISIS; Ceasefire to Evacuate Civilians from Aleppo Collapses, Shelling Resumes; Controversy over Trump's D.C. Luxury Hotel; Dow Poised to Hit Huge Milestone. Aired 1:30-2p ET

Aired December 14, 2016 - 13:59   ET

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


[13:30:00] BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: We saw about 600 people who had fled the areas of the city that the Iraqi army managed to retake, but they saw the fighting that happened this morning, some of them were injured in mortar attacks, and they decided they had to leave.

So, what we're seeing is that, yes, ISIS has been driven out of Fallujah, Ramadi, other Iraqi cities, but not giving up easily and putting up quite a fight. And as you mentioned before, they've managed to retake Palmyra in Syria from Syrian and Russian forces.

So, yes, they've taken, definitely, a beating within the last two years, but they're far from out when it comes to this battle.

WOLF BLITZER, CNN ANCHOR: You heard the special U.S. envoy say, yes, there have been gains but this war against ISIS will continue for years.

Ben Wedeman, in Irbil in northern Iraq, not far away from Mosul, thanks very much.

Let's discuss the U.S.-led fight against ISIS.

Joining us, the former Iraqi ambassador to the United States, Lukman Faily.

Mr. Ambassador, thanks for joining us.

LUKMAN FAILY, FORMER IRAQI AMBASSADOR TO U.S.: Thank you for having me.

BLITZER: Is the war against ISIS moving along to your sanction as an Iraqi?

FAILY: On the Iraqi side, yes. It's more or less the last chapter in the book of ISIS in --

(CROSSTALK)

BLITZER: When will Mosul be liberated?

FAILY: I think we're not talking about Mosul. Mosul, sooner than that. BLITZER: How long? A few weeks?

FAILY: A bit more, I would say, because the problem we have here, we have a lot of civilians. The government is very concerned about that. The destruction of infrastructure. The rule of engagement is slightly different than normal wars here. We have to take street by street, inch by inch.

BLITZER: You accept the numbers that the U.S. government is putting out, there are only, what, 12,000 to 15,000 ISIS fighters, yes?

FAILY: Yes, but they are hardened fighters. That's the key issue here. They are reducing the suicide bombs. Those who blow up themselves, they are reduced every day. So, in that sense, the through put of new jihadis are not there. So, it's an attritious war.

BLITZER: It's a what?

FAILY: A attritious war.

BLITZER: A war of attrition, if you will.

FAILY: Yes.

BLITZER: So what you're suggesting is it could go on for a while.

These hardened ISIS fighters include the leader of ISIS, Abu Bkar al Baghdadi. Do you believe he's hiding in Mosul or in Syria, the so- called capital of the caliphate in Raqqa?

(CROSSTALK)

FAILY: I don't have intelligence but I imagine he's not in Mosul, because that's the end him. From that sense, he might have more breathing space in Syria than in Mosul.

BLITZER: This destruction of ISIS in Iraq, the Iraqi army doing most of the work but the U.S. air strikes are really killing most of this ISIS fights. Is that right?

FAILY: They are the game-changer.

BLITZER: The air strikes?

FAILY: Yes, of course. The allies, including the U.S. are doing this, in terms of gathering, targeting of key official sort of things, Special Operations. To that effect, I think the U.S. has done a tremendous job. If you compare it to last year, then we have a major change now.

BLITZER: And the government in Baghdad is onboard? Because, you know, there have been divisions, as you well know --

FAILY: Yes.

BLITZER: -- within the Iraqi government. This Iraqi government is committed to retaking Mosul, liberating that city and destroying ISIS?

FAILY: Yes. We are losing a lot of good people as a result of that, unfortunately. The Iraqis now know that they need this fight. The need to do it. They are spearheading it. The U.S. support is

crucial, but this is a manifest war --

(CROSSTALK)

BLITZER: Wat has changed? Because, in 2014, when ISIS troops went into Mosul, they took that city. The Iraqi army ran away, left behind a lot of U.S.-provided military equipment, armored vehicles, mortars, other kinds of sophisticated hardware. They just ran away. Why is the Iraqi army now fighting as opposed to giving up as in 2014?

FAILY: They are no longer frightened by ISIS?

(CROSSTALK)

BLITZER: Why were they frightened by ISIS?

FAILY: Because I think there was a psychological element to it. There was a lack of cohesiveness in the Iraqi community, in the Iraqi army. The issue changed with international support. I think the key issue now is psychologically people see beyond ISIS and it no longer frightens us. That's a key issue.

BLITZER: The point you're making, ISIS is clearly losing in Iraq but not necessarily losing in neighboring Syria? Is that you're saying?

FAILY: I have to say, I haven't yet seen a clear strategy in Syria to be comfortable that the fight against ISIS in Syria is winnable and is lasting.

BLITZER: What is the difference between what's happening in Iraq as opposed to what's happening in Syria? Just this week, ISIS took over Palmyra, an ancient, beautiful city, with a lot of archaeological treasures there. There's enormous fear these ISIS terrorists will just blow it up.

FAILY: They've already done it in parts of Mosul and other areas of Iraq. Here, we have irreparable damage to human history. It's not just to the region and to Iraqi and Syria. The key difference as to why, I think in Iraq people know that terrorism is not winning and people politically, and the prime minister and others are working together. You don't have that in Syria. People still don't know if they should have two Syria or one Syria. Even on that extent, so, hence, there is no clear strategy and, hence, the fighting will carry forward.

[13:35:09] BLITZER: The effort to destroy ISIS in Syria, destroy their caliphate headquarters, as they call it, in Raqqa, there's really nobody that's going to go in and do it on the ground? Is that --

(CROSSTALK) FAILY: No, no. No, there are people. There are people. But the key issue is the scale of the challenge that is bigger. The partnership you have in Iraqi army, you don't have it with the Syrian army. You have more geopolitical concern, Iran, Syria, Hezbollah, others, and none of that in Iraq. So, you have two different rules of engagement, two different scenarios, or two different battlefields, unfortunately.

BLITZER: One very final question before I let you go, Mr. Ambassador. What's the reaction in Iraq -- and you're obviously Iraqi, former Iraqi ambassador to the United State -- to the election of Donald Trump? What do you expect a Trump administration to do as opposed to the Obama administration?

FAILY: I think it's -- you have to have a longer view of this, the fight against terrorism. It needs to be more proactive rather than reactive to the situation. And to the Iraqis, it's an opportunity more of a concern as others of the region do have. Iraqis see it as an opportunity.

BLITZER: An opportunity, like there's a new president?

FAILY: To the new collaboration, different perspective. The history of that relationship is somewhat irrelevant now and we need to work on the relationship forward.

BLITZER: So what your government is trying to is have an improved relationship with the incoming Trump administration? Is Rex Tillerson, incoming secretary of state, assuming he's confirmed, is he well known to people in Iraq?

(CROSSTALK)

BLITZER: Because Iraq is major oil -- potentially, if you ever got peace, it could be a major oil exporting country?

FAILY: We are already number two in OPEC in oil production, so we are already achieving that while we are conducting the war. Yes, I have been in meetings with the previous prime minister, current prime minister, where the recommended person, the secretary of state, have been to --

BLITZER: So you've met Rex Tillerson?

FAILY: Yes, sir.

(CROSSTALK)

BLITZER: What's your impression of him?

FAILY: Very professional person. He knows geopolitics, maybe too well. To that extent, I think we do have a partner here.

BLITZER: Did Exxon-Mobil have a big business opportunity in Iraq?

FAILY: Yes, they do. BLITZER: Because I remember when Iraq started to pump oil, the

Chinese and others started developing the oil, as opposed to the U.S. didn't get those contracts?

FAILY: No. Exxon, Chevron and other countries do have contractors. So, to that extent, yes, he has experience. He knows the people. He has all of that. He has a decade of leadership of the company engaged in Iraq. So, to that extent, we do have a friend.

BLITZER: Mr. Ambassador, thanks very much for joining us.

FAILY: Thank you. Thank you for having me.

BLITZER: The former Iraqi ambassador to the United States, Lukman Faily.

A ceasefire designed to evacuate civilians from Aleppo has collapsed. The Syrian pro-government forces resumed shelling of that city. The United Nations now says the bombardment is in an area packed with civilians and is, quote, "almost certainly a violation of international law" and most likely constitutes war crimes.

ITV News correspondent, Dan Rivers, joins us now from inside Aleppo.

Dan, in an earlier report, you said you're witnessing one of the darkest chapters in the history of the civil war in Syria right now, where every shred of humanity, you said, seems to have deserted Aleppo.

Tell viewers here in the United States and around the world what you're seeing right now.

DAN RIVERS, CORRESPONDENT, ITV NEWS: You can hear it right now, Wolf, this constant percussion of artillery, tank fire, and early on air strikes pounding this increasingly small area of Aleppo. We've seen rockets streaking behind us and landing just a few hundred meters behind. So, both sides exchanging fire as the ceasefire seems to have completely broken down.

We were there at dawn this morning waiting for departure of what we thought would be hundreds maybe thousands of rebels and civilians. That didn't happen. We waited for buses, and realized there was clearly a problem, a breakdown in negotiations. It appears Iran, one of Syria's key allies in this conflict was unhappy with the terms of this deal. It wanted to tie the fate of people here in eastern Aleppo with the fate of pro-Assad civilians surrounded by militias elsewhere in Syria, and that was unacceptable to the rebels in Aleppo. The whole thing started to fall apart and then the shooting started.

BLITZER: Because the Russians and the Turks, the Russian government and the Turkish government, they put together this so-called ceasefire that lasted basically a few hours. That's it.

But what you're suggesting is that Iranian militia forces aligned with the Syrian regime of Bashar al Assad, they decided the ceasefire was bad, and they broke it up? Is that what you're telling us, Dan? [13:40:06] RIVERS: That's certainly seems to be the suggestion here. We had a briefing this morning from sources within the Syrian military who were saying, look, actually, what happened was there were many more rebels than we anticipated, twice as many and, suddenly, saying they wanted to bring families out. So, we dealing with 12,000 rather than the 2,000 people we thought we going to be bussing out.

There are lots of rumors here. We understand that the Iranian, unhappiness with this deal was part of the problem and that led to this breakdown. The Syrians are saying, no, that wasn't the case, it was the rebels, in fact, changing the number of people that wanted to come out. It's all a bit academic now, because the fighting is in full swing behind me, as you can probably hear.

The only good thing is perhaps a call from the president and Putin trying to put it back together between Russia and Turkey, whether that can smooth over the difference with Iran, we'll have to wait and see. An evacuation happening tomorrow instead.

BLITZER: Dan, we heard very strong language over the past 24 hours from top Obama administration officials, including Samantha Power, U.S. ambassador to the United Nations, and from the White House press secretary, saying that they are deliberately targeting, for example, playground schools, where children are right now, to scare their parents, if you will. That's why they're killing all of these children.

Who's doing that? And who's going after civilians, women and children, specifically, to scare others? Would that be the Syrian army, Iranian militia, Russian air force power, others? What can you tell us about that?

RIVERS: It's really difficult from my perspective to tell you with certainty who's firing which weapons at which targets. Of course, the Syrian military and the government here would absolutely deny they are harming civilians. They're casting this as a battle against terrorism. They have repeatedly told us the people located up in eastern Aleppo are terrorists and, therefore, this is a legitimate counterterrorism operation.

You know as I do, we've talked to dozens of people inside eastern Aleppo through social media. They are clearly teachers, hospital workers, kids, families, who are stuck there. You have these two competing accounts. And frankly, the evidence is overwhelming that there are civilians, genuine civilians, still trapped in there. This afternoon, we saw really terrible things as buildings were being hit with artillery. Couldn't tell you what the buildings were. They looked like apartments, Wolf.

But we also saw really bright burning material over to my left, which looked like it could be something like phosphorous. No way to confirm that, but clearly, all of this would be profoundly in contravention of the norms of war, the Geneva Conventions, and lots of other international law besides. Whether it constitutes war crimes, that's for the International Criminal Court to decide in many years to come. It's impossible for us to say, if schools are specifically targeted, but I can tell you the fighting is back on and it's on in a very fierce way.

BLITZER: An awful situation there.

Dan Rivers, please, be careful over there.

Dan Rivers joining us. He's inside Aleppo, one of the few Western journalists who's there right now.

Dan, thank you so much for that report. Good luck over there. Be careful, as I say.

Coming up, a major controversy brewing over Donald Trump's stake in his new luxury Washington, D.C. hotel. Why Democrats are now saying there may be a conflict of interest when he takes office on January 20th. The details, that's next.

(COMMERCIAL BREAK)

[13:47:20] BLITZER: Conflicts of interest, we've heard a lot about that since Donald Trump won the presidency. Critics have claimed his business interests cross too many boundaries. Today's controversy parked itself right on Pennsylvania Avenue here in Washington, D.C.

Our senior political reporter, Manu Raju, has been reporting on this.

Manu, Democrats saying his business interests in the Trump International Hotel near the White House, on Pennsylvania Avenue, there's a conflict there when he becomes president.

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Right. Because of that agreement he signed with the General Service Administration, which actually administers and owns the old post office building, turned into the luxury Trump hotel. That was a $180 million deal signed two years ago. But in that agreement, Wolf, it reads that no member of Congress or elected official of the government of the United States shall be admitted to share any part of this lease or benefit that may arise therefrom. So, come January 20th, Donald Trump will be an elected official, and there could be a conflict.

That's one reason why Democrats are saying that they have been told by the General Services Administration that if Trump does not sell his ownership stake, he's going to be in violation of that agreement.

Elijah Cummings, top Democrat in the Oversight Committee, made that point earlier today. Take a listen.

(BEGIN VIDEO CLIP)

SEN. ELIJAH CUMMINGS, (D), MARYLAND: I care about the 60-year lease President-elect Trump's new luxury hotel here in Washington, D.C., that will be breached the moment he steps into the Oval Office unless he completely divests his ownership interests according to the United States General Services Administration.

(END VIDEO CLIP) BLITZER: Manu, the GSA issued a statement through the spokesperson saying they're not going to take a definitive position on this until, what, after he's sworn in?

RAJU: That's right. They did not go nearly as far as the Democrats have gone. So they're taking a much more careful approach. And it's clear there are ongoing discussions between GSA and Donald Trump to reach a deal before January 20th.

BLITZER: Manu, thank you for that report.

Coming up, take a look at this. Live pictures of the big board, as the Dow moves closer to breaking a big barrier today. Will it hit 20,000? It's just shy right now. An update when we come back.

(COMMERCIAL BREAK)

[13:53:23] BLITZER: The Dow is poised to hit a huge milestone, 20,000. It's a little over 19,000 right now, 19,916. Meanwhile, if you're looking to buy a house, you may want to move quickly. Federal Reserve Chairwoman Janet Yellen is expected to raise its key interest rates today.

Christine Romans takes a closer look at what this could mean.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Wolf, borrowing costs are about to rise for millions of Americans and businesses. Janet Yellen and her Federal Reserve are expected to nudge official interest rates higher. A year ago, the Fed did the same and then stopped, worried about the strength of the U.S. economy. Today, Wolf, those fears are long gone.

Here's why the economy is now ready for higher interest rates. Unemployment is down to 4.6 percent, a level economists say is approaching full employment. On average, 180,000 new jobs added each month this year. Economic growth is the strongest in two and a half years. And an economy humming is starting to push prices higher, though still below the Fed's 2 percent target for inflation. We'll get a fresh consumer price index reading on Thursday.

What the Fed does will affect millions, and here's why, Wolf, borrowing costs will rise for, say, a new mortgage or a home equity line of credit or your current adjustable rate mortgage, that will cost more. Same with car loans and most credit card balances. It's pretty much as expected, what the Fed has been hinting about for months.

Here's where it gets interesting. President-elect Donald Trump has blasted Yellen, accusing her of keeping rates low to help President Obama. For several years now, though, the Fed has been begging Congress and the White House to do something to boost economic growth. Now just as Trump takes office with his pro-growth policies, higher rates are coming. Trump wants to heat up the economy. The Fed's job is to make sure it doesn't overheat. That will be the Fed political story of 2017 -- Wolf?

(END VIDEOTAPE)

[13:55:18] BLITZER: Christine Romans, thanks very much.

As Christine just mentioned, it's the strength of the economy that's allowing the Federal Reserve to raise that key interest rate, an economy, by the way, President-elect Trump is inheriting from his predecessor President Barack Obama.

Let's compare today's numbers to what President Obama was facing when he took office eight years ago, a time when the U.S. economy was in deep recession. The housing market had collapsed, spiking foreclosures by 80 percent in 2008. Those rates have declined significantly in the years since. The unemployment rate was then 7.8 percent in January, 2009, when President Obama took office. Now it's 4.6 percent. Real gross domestic product was on the decline around the time President Obama came in by about a half percent. In the last report, GDP grew 3.2 percent. And let's go back to the Dow. Right now, it's a little over 19,900. On the day President Obama took office, the Dow closed just under 8,000 points. Clearly, President- elect Trump is inheriting a much stronger economy from President Obama than Mr. Obama inherited from President Bush.

That's it for me.

The news continues right after a quick break.

(COMMERCIAL BREAK)

[14:00:10] BROOKE BALDWIN, CNN ANCHOR: All right, here we go. Top of the hour. You are watching CNN. I'm Brooke Baldwin. Thank you for --