Return to Transcripts main page

Erin Burnett Outfront

Ukraine: Russia Depleting Supply Of Key Hypersonic Missiles; Second Biggest Bank Failure In U.S. History Rattles Markets; DeSantis Makes Debut In Iowa Ahead Of Widely Expected 2024 Run; President Of Small Pacific Island Nation Takes On Xi Jinping. Aired 7-8p ET

Aired March 10, 2023 - 19:00   ET

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

[19:00:29]

ERIN BURNETT, CNN HOST: OUTFRONT next, trench warfare. New video into OUTFRONT takes us to the dangerous front lines as the mother of the Ukrainian soldier killed speaks out. Her son's brutal execution by Russians that was seen around the world, and now you're going to hear her first here OUTFRONT.

Plus, the collapse of the second largest bank in American history, that happened in the span of 48 hours and is affecting the entire banking industry and perhaps beyond. I'll speak to the CEO of a company whose money was with that bank, got a call from a panicked investor to get out now. You'll hear what happened.

And the president of a little known group of islands calls out China's Xi Jinping accusing China of bribery, personal threats to his safety, all over Xi's potential invasion of Taiwan.

Let's go OUTFRONT.

And good evening. I'm Erin Burnett.

OUTFRONT tonight, executed by Russian soldiers. Her son's death was seen around the world. She had to watch it herself, and the mother of that Ukrainian soldier is now speaking out for the first time. The video of his death difficult to watch, but important to show the depravity of what's happening on the front lines. It sparked global condemnation.

The Ukrainian was executed after he said "glory to Ukraine", and then there was that barrage of bullets erasing a life.

His final words that mean so much to his mother.

(BEGIN VIDEO CLIP)

UKRAINIAN MOTHER (through translator): I didn't sleep the entire night. It kept flickering before my eyes. But I felt some kind of lightness and some kind of ray of light when I saw how my son died.

And it's so hard, but I really felt like I saw my son's character, so resilient, so unbreakable because he said, mom, I will never surrender to captivity. I kept hearing him repeat "glory to Ukraine" throughout the night. He was such a warrior, so brave and fearless. You wouldn't even imagine.

(END VIDEO CLIP)

BURNETT: Now, that soldier's identity has still not been confirmed. But the mother you just heard says she is sure that it's her son.

And it comes as we're getting new video into OUTFRONT tonight that takes you to the frontlines of that ongoing brutal hell battle for Bakhmut. This is a first-hand account, the intense fight taking place there. What you look at here is what appears to be a rocket-propelled grenade launcher fired, followed by the deafening sounds of incoming and outgoing gunfire.

And tonight, we have new video of the attacks that Russians are facing from the air. So what you're looking at here are Wagner fighters. They're hiding in an abandoned home. And that home hit by a Ukrainian strike, goes across. Those that survived quickly run to take shelter in another building. That building then is also hit.

As we always say here, each one of these is an individual life that should not be lost because this war should not be happening. But it shows the reality of what's happening on the ground. NATO intelligence says that Putin right now is losing five men for every Ukrainian that is killed in the battle around Bakhmut, five to one. And let me explain why the head of Russia's private army is beefing up recruitment efforts.

As of tonight, Yevgeny Prigozhin says there are new recruitment centers in 42 cities across Russia. According to a published document, the majority of the alleged recruitment centers are in Moscow and St. Petersburg.

Now, these are the areas that have sent the least amount of fighters to the front lines, the wealthier, the more elite areas. All of that, though, this intense and massive recruiting effort is pretty incredible coming from Prigozhin, in the context of him this week saying he doesn't have any ammunition and that former Russian military officials won't take his calls. He's been completely blocked.

But as Russia continues to struggle with manpower, they've also seriously depleted their supply of sophisticated hypersonic missiles. We know they've been using a lot in the Ukrainian air force says that Putin used nearly 40 percent of his Kinzhal hypersonic missiles since February.

And that would be very significant because these are Russia's most advanced weapons, able to travel up to 1,200 miles and fly at ten times the speed of sound, which make it's virtually impossible for Ukraine to intercept, unlike many of the other Russia's other missiles, which, we show you some here, you can see intercepted by Ukrainian's air force. That was on Wednesday night. And you see it, the hit and the interception.

Let's go to Melissa Bell. She's out front in Kharkiv tonight. She's been near the frontlines.

And, Melissa, what is the latest on the ground tonight where you are?

MELISSA BELL, CNN INTERNATIONAL CORRESPONDENT: Well, Erin, a difficult day along those front lines in the eastern part of the country out here in Kupiansk, in the northeast of Ukraine, where we spend a lot of the day, heaving artillery, incoming and outgoing.

[19:05:03]

But all along that front line, those flash points again seeing heavy fighting for the south, and as you mentioned, Bakhmut, the worst hit of all. And this of course just a couple of days after Ukraine was hit by some of the worst aerial bombardments since this war began. Those air defense systems severely tested. Remember, systems that have had to adapt every step of the way over the course of the last year.

(BEGIN VIDEOTAPE)

BELL (voice-over): Every missile taken down means lives saved.

Here were the German short-range Gepard. Or here, one missile taken down with machine gun.

UKRAINIAN SOLDIER (through translator): It's a pity that I didn't shoot down three. It's a shame that two got through. They hit civilian targets, all critical infrastructure facilities and people work there.

BELL: These are Ukrainian drone hunters, and day and night they scan the skies, eyes in the backs of their heads. Their machine gun loaded onto an armored vehicle trading warmth for agility.

UKRAINIAN SOLDIER (through translator): The trajectories of the missiles and drones are constantly changing, which means that stationary units were not enough. So we created mobile ones.

BELL: Most nights, this is what the skies above Ukraine look and sound like.

And more than a year into the war, all that Western equipment is helping. On Wednesday night, over 90 missiles and eight Shahed drones were detected. Of those, more than 30 missiles and four Shaheds were intercepted, says the Ukrainian military.

Here in the front line town of Kupiansk, you can see what more than a year of heavy artillery and mortar fire have done. It was, again, the case on Wednesday night. There's not much air defense can do about that.

On the whole, what the Ukrainian military says is that with western help, its air defense systems have actually been remarkably efficient, and from the very start of the invasion.

YURII IGNAT, UKRAINIAN AIR FORCE SPOKESMAN (through translator): We would probably not be talking to you now and there would be no such country as Ukraine. Thanks to the air force we really manage to hold the keys to the sky. BELL: This is a rare close-up look at Iran's technology of death, a

Shahed drone. At its head, it would've carried 50 kilograms worth of explosives. This is what 20 kilograms looks like.

And this is what that looks like on the ground. Part of Russia's devastating war of attrition with civilian casualties on most nights, way beyond the front lines of the east.

(END VIDEOTAPE)

BELL (on camera): And, Erin, beyond the direct casualties, we're only just getting power restored here to the wider Kharkiv region and Kharkiv City. There hasn't been power since those overnight strikes from Wednesday to Thursday. That means people, no electricity, no water, for all that time.

And that's part of this war of attrition, Erin.

BURNETT: Absolutely. Melissa, thank you very much there and reporting all of that.

I want to bring in now, the former U.S. ambassador to Russia, John Sullivan.

And, Ambassador, you saw there, Melissa standing with that drone, and the payload of the drone as she was showing you sort of what half of a payload would look like. But we're talking about 110 pounds. That's the payload there.

In the context of the reporting here that Ukraine is saying that Russia's used 40 percent of its highest-end missiles, the Kinzhal hypersonic missiles, six in yesterday's attack alone.

Why would Putin use so many of his best missiles in one attack at this point?

JOHN SULLIVAN, FORMER U.S. AMBASSADOR TO RUSSIA: Well, thanks, Erin. Good to be with you.

When they use a missile like the Kinzhal, which can't be intercepted by the Ukrainians, that means they definitely want to hit the target they are aiming at. They don't want to run a risk that the missile that's heading for that target is going to be intercepted.

The tradeoff they make is that it's a very expensive and sophisticated weapon system, which is why the Ukrainians can't intercept it. Why in yesterday's attack, this was payback for what happened in Russia last week when elements crossed the border from Ukraine into Russia and launched an attack.

BURNETT: So today, Prigozhin, the Wagner group chief, of course, announced he's opening these new recruitment centers across Russia, dozens of them, eight in Moscow alone, which of course as I mentioned is home to the wealthier citizens, really which has not sent many soldiers to the front lines.

[19:10:02]

Although someone was telling me the other day that sometimes now you go down to the subways, and there are people waiting to talk to men and to bring them to mobilize them.

Does this move the needle at all, this sort of recruiting, these recruitment centers?

SULLIVAN: In my opinion, absolutely not. This move indicates that Prigozhin's prior recruitment efforts in another area, the Russian prisons have been closed off to him. Russian men know if they wanted to volunteer for Wagner, Wagner would've already opened a headquarters in St. Petersburg. People know how to volunteer for Wagner.

This is more public publicity for Prigozhin. He's making these types of statements every day. His recruitment --

BURNETT: Do you think he's like existentially threatened in any way? I mean, I know there's been this ongoing fight between him and the regular military. But, you know, he's saying he has no ammo, can't get in touch with anybody, nobody will take his calls.

Is -- yeah, go ahead.

SULLIVAN: You call the minister of defense and the chief of the general staff traitors, I'm not surprised no one will take his calls in the Russian military establishment.

BURNETT: So, I -- earlier this week I spoke with a Russian journalist, and he had some really strong reporting, exclusive look at Putin's lavish life with his reputed girlfriend, the former Russian Olympic gold medalist Alina Kabaeva.

Roman Badanin is the reporter and he shared these pictures of -- reportedly of Putin's home. He said these are the -- that's the exterior in Valdai, and he also had the interiors decked out in gold, all sorts of different rooms. And he was showing us all of this. Now, Kabaeva's mansion is about half a mile away.

If this is the way Putin lives -- and we understand that he may still be spending a lot of time there -- do you think Putin's lifestyle has been affected by the war or not, Ambassador?

SULLIVAN: Well, I mean, from what we have seen, his lifestyle has been affected in the following since, Erin. He can't travel by air anywhere close to in southwestern Russia in getting to Sochi, for example, one of his most favorite places to go, he can't travel there by air. He's now traveling more by train. He's concerned about his own safety.

As for the economic impacts, if the question is more about supporting his lavish lifestyle, I don't think that's much of a concern as concerns about his own safety.

BURNETT: As concerns about his own safety. But amazing on that just on that issue of the actual lifestyle itself, with all of the sanctions we hear about, you think that that would be barely untouched at this point.

SULLIVAN: I would think so. If money's going to go to anybody in that system, it's going to the guy at the top. And he's got plenty of it.

And the Russian people themselves are aware of this. They've seen through Navalny's organization the billion-dollar palace he's got in Sochi. So, this isn't a surprise to anyone either. But it's very interesting to see the photographs you referred to and to see it actually documented.

BURNETT: Yeah, it certainly -- it certainly is, some great reporting by Mr. Badanin and his team.

All right. Thank you so much, Ambassador Sullivan. I appreciate your time.

SULLIVAN: Thanks.

BURNETT: All right. And next, the second largest bank collapse in American history, and it has happened over the past 48 hours. The U.S. government now in control, clients unable to get their money right now.

I'm going to talk to the CEO of a startup who had a lot of money with Silicon Valley Bank. So what happened, and what does she do now?

Plus, Ron DeSantis in Iowa tonight, testing his bid for the White House, a bid that has been leaning heavily and proudly on culture war.

(BEGIN VIDEO CLIP)

GOV. RON DESANTIS (R), FLORIDA: You can't just say let it go, because then we're going to be living under an oppressive woke-ocracy.

(END VIDEO CLIP)

BURNETT: And new video tonight of the four Americans just before they were kidnapped in Mexico. And it tells us something about what they were doing.

(COMMERCIAL BREAK)

[19:17:26]

BURNETT: Tonight, collapse. The biggest bank collapse since the 2008 financial crisis. And it shut down today.

It's called Silicon Valley Bank, and it is one of the tech industry's largest lenders, also lends to individuals across the country. It is now under control of the federal government.

It was a sudden implosion, and it came after a run on deposits. So, the bank stock lost 80 percent of its value this week, 60 percent in one day alone, yesterday. This morning, shares halted. It was over quickly. And then police showed up at the bank headquarters in California

today. You're looking at that here. Customers reportedly lined up on Park Avenue in New York City. The NYPD showed up there. Those customers demanding their deposits back.

Now, to be clear, Silicon Valley is a huge bank, and its customers include individuals as well as household names you may know, like Airbnb, Pinterest, and Cisco. And this is a way bigger story, an entire banking industry is feeling the impact.

U.S. banks at one point had lost over $100 billion in stock market value in just two days. And there are fears now that this could spread beyond banking to other parts of the economy.

(BEGIN VIDEO CLIPS)

UNIDENTIFIED MALE: This is like the S&L crisis in the '80s.

UNIDENTIFIED MALE: We're not talking about a failure of this bank but that banks could fail. That's not out of the question.

UNIDENTIFIED FEMALE: This is clearly an example of something breaking. We can assume that there is serious contagion here.

(END VIDEO CLIPS)

BURNETT: Okay. So when you use the word contagion, it begs the question, why could this happen at other banks? Well, for one basic reason, Silicon Valley Bank was doing what a lot of other banks are doing right now. SVB took customer deposits and they went and invested that money in other things like U.S. government debt and mortgages. And they had been doing that for quite a while.

Well, when the Fed started to hike rates aggressively, that meant that Silicon Valley Bank immediately lost money on those investments. At the very same time as they were losing money as interest rates rose, those bank customers, those depositors, they needed to withdraw more money. So SVB started to sell assets, losing money just to raise the money needing to make good on deposit withdrawal requests.

And then that turned into a spiral of fear, and a race among the customers to withdraw assets, the run on the bank.

And yesterday afternoon, the CEO of Silicon Valley Bank, his name is Greg Becker hosted a call with clients and said, quote, my ask is to stay calm because that's what's important. We have been long-term supporters of you. The last thing we need you to do is panic.

Well, when that's the ask as a bank, you're toast. And one person familiar with the situation asking me the hypothetical question tonight, what prevents runs on a whole bunch more banks next week? Unclear.

It is an important moment, and tonight the Deputy Treasury Secretary Wally Adeyemo is trying to calm fears in an exclusive interview with CNN. (BEGIN VIDEO CLIP)

WALLY ADEYEMO, DEPUTY TREASURY SECRETARY: Federal regulators are paying attention to this particular financial institution. And when we think about the broader financial system, we're very confident in the ability -- in the resilience of the system.

(END VIDEO CLIP)

BURNETT: Alison Greenberg is OUTFRONT. She is the CEO of Roth Health. It's a maternity care startup that has money deposited in Silicon Valley Bank.

SO, Alison, thank you very much for being with me.

So, you are right in the middle of this. Let's just start with when you realized, you're a startup, you've got money at this bank, you're using that money to make payroll and other things. When did you find out something was wrong?

ALISON GREENBERG, CEO, RUTH HEALTH, WHICH HAS MONEY IN SILICON VALLEY BANK: So, my co-founder, Audrey Wu, and I received an email from one of our seed investors. The email seemed cryptic. It was strange. It was urgent. It was not like the other emails he sends.

And we were in meetings, you know, we run a busy maternal health startup. We have so many concerns every day that this email just didn't make sense. So, a few hours later, I called the investor and I said, hey, what was this email about.

He was out of breath. Like, he had just run a marathon. And he said, take your money out of SVB, go into your account, take your money out as soon as possible.

And, you know, as a business owner, my co-founder and I constantly think about two things. We think about our team, the people we employ and their families and we think about our patients, the mothers and the families that we support and their families.

And so for us it was, do this now or else.

BURNETT: Okay. And this was what, yesterday, or the day before?

GREENBERG: This was yesterday between the hours of noon and 3:00 p.m.

BURNETT: Okay. Yesterday between the hours of noon and 3:00 p.m. you get this. So then you go -- and how does that happen, they actually give you the money? These are the three hours before the world fell apart. So what happened then?

GREENBERG: Well, we were incredibly lucky to have that news early from an investor. We didn't withdraw the money immediately. You know, we're conscientious business owners. We spoke to few other investors. We spoke to friends.

I mean, this is like calls going off the hook for the last 36 hours. When we felt confident that this was going to be a crisis, Audrey acted fast. And this is the kind of fear that actually incites focus. We withdrew the money through transfers and wires as soon as possible.

I mean, she was withdrawing small amounts, big amounts, just to not set off an AI that might limit our withdrawals. And we were able to remove -- this was not our only bank account, but we were able to remove the majority of the funds so that what was left when the website crashed was below the $250,000 FDIC.

BURNETT: So you have money there. And I know the FDIC -- obviously you had a lot more than that there. You were able to get that out. The amount that you have that's insured by the FDIC, the $250,000, your understanding is you're going to get that pretty much right away?

GREENBERG: What we're hearing is by Monday.

BURNETT: So, that -- I think that should give people calm, the FDIC, if you're under the limit, it gives you -- is holding strong on this.

So, "Barron's" is reporting that the CEO, Greg Becker, I just mentioned him, I know you weren't on that call, but he had that call, that he sold nearly $3.6 million in stock less than two weeks ago. That's obviously worth zero tonight.

I know you don't necessarily know the circumstances of that and I'm not trying to say it was nefarious. I'm just saying, what's your reaction when you hear that?

GREENBERG: My reaction is that this is so much bigger than a bank. I run a nationwide telehealth company. We serve, you know, prenatal and postpartum patients. I have friends in healthcare tech, in financial tech, in property tech. All of us see the impacts on human life.

And, so, for us, a call with the CEO of the bank is not our first priority. Our first priority is securing those funds and making sure we can meet payroll on the 15th. So, the human impact of this, I think, is something I cannot underscore enough.

And my heart goes out to so many business owners, not just startups but small business, agriculture, all the kinds of companies that bank with SVB where their founders and owners are struggling right now trying to make ends meet.

BURNETT: And so you fear and what you see -- we're not even talking about other banks. We're talking about SVB itself but that the impacts of this are significant.

GREENBERG: I mean, they will affect everyday Americans. They will not just affect CEOs like me. We have team members in Arkansas, North Carolina, Washington state, Minnesota. Those people would be affected, too, had we not gotten those funds out in time.

BURNETT: All right. And, of course, so many didn't.

All right. Alison, thank you very much sharing your story, telling us exactly what happened here in these just past hours. And you heard what she said, two hours yesterday, she spent a decision to pull all of your money out of a bank.

OUTFRONT now, Jim Bianco, president of Bianco Research, economic analyst.

Jim, when you hear Allison's story, it sort of brings this home of what this has been, a frenzied and frenetic and systemically, you know, terrifying for many, you know, 36, 48 hours.

JIM BIANCO, ECONOMIC ANALYST: It has been, and, unfortunately, when the financial system wobbles like this, it can be that quickly. No one was really somewhere, but most weren't really focused on Silicon Valley Bank maybe Monday or Tuesday of this week. And it really just comes out that quickly.

When we operate a financial system on confidence, confidence can be lost fast. And that's what we found out in the last 48 hours.

BURNETT: And, Jim, I'm thinking about what is to prevent something like this from happening next week. Right, what's to stop that and the kind of hypothetical answer was unclear.

What do you say to that?

BIANCO: Yeah, it could -- it could happen again because, again, we're operating on confidence. But I also think that one of the other bigger issues that the entire banking system has been facing is, as the Federal Reserve has been raising rates and now some short-term interest rates are near 5 percent, banks largely have not been raising the interest rate they pay on their checking account or savings account. They're still around half a percent.

Investors are waking up and saying I should just move my money to a brokerage account and buy a money market mutual fund or buy a treasury bill directly. I could get 5 percent versus half a percent. Banks are hemorrhaging money because that shift has finally started to take place.

A simple fix for them is for them to raise the interest rate that they're giving their customers. The problem is, that cuts into their profitability. So they don't want to give away their profitability. They have to find that fine line.

I think that the problem with the Silicon Valley Bank, and Silvergate, which was another bank that failed earlier this week and some of the others, they were too slow to act on this. They were too worried about their profitability, and their customers felt not necessarily in fear but more cheated. And I'm going to go somewhere elsewhere my money's treated better, and now that is really in full flight.

And the banking system has to figure out a way to reverse that. And the simple answer is you're going to have to reduce your profitability a little bit by raising your deposit rates.

BURNETT: Right. Of course everyone starts suddenly doing that on Monday. That also creates its own fear. It's a delicate moment, I suppose, all in together. All right. Thank you very much, Jim. I appreciate your time.

And next, live pictures of Ron DeSantis, he is right now in Iowa rallying support ahead of his expected 2024 presidential bid. Tonight, he is promising that he will have more culture wars.

(BEGIN VIDEO CLIP)

GOV. RON DESANTIS (R), FLORIDA: There's no drama in our administration. They basically just sit back and say, okay, what's the governor going to do next?

(END VIDEO CLIP)

BURNETT: Plus, a growing number of states are now considering laws that target drag shows. This crackdown is now leading to death threats.

(COMMERCIAL BREAK)

[19:31:25]

BURNETT: Ron DeSantis just wrapping up a second event today in Iowa, the biggest sign that the Florida governor is -- seems pretty clear he's running for president -- of course, hasn't yet announced.

This as the White House takes on DeSantis, slamming for his favorite phrase, quote, Florida is where woke goes to die.

(BEGIN VIDEO CLIP)

KARINE JEAN-PIERRE, WHITE HOUSE PRESS SECRETARY: When Republicans, extreme Republicans, these MAGA Republicans don't agree with an issue or with policy, they don't bring forth something that's going to either have a good-faith conversation. They go to this conversation of woke. But that is not actually policy. What that turns into is hate.

(END VIDEO CLIP)

BURNETT: Jeff Zeleny is OUTFRONT in Des Moines covering DeSantis.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT (voice-over): Florida Governor Ron DeSantis on his maiden voyage to Iowa.

GOV. RON DESANTIS (R), FLORIDA: I bring greetings from the free state of Florida.

ZELENY: Riding a wave of lofty expectations to the state that opens the Republican presidential contest in less than a year. People lined up to catch a glimpse of the governor, who technically is promoting his book.

DESANTIS: This is the number one best-selling nonfiction book in the country. ZELENY: But actually is testing the White House bid that he intends

to make official by summer.

UNIDENTIFIED FEMALE: Welcome to Iowa. This is your first trip.

ZELENY: DeSantis has told advisers he will wait until the Florida legislative session ends so he can campaign to an even bolder agenda, one that is delighting supporters and alarming critics.

DESANTIS: I always tell my legislators, you watch Iowa, watch these -- do not let them get ahead of this on any of this stuff. So we've got our legislature in session now, so buckle up, the next 60 days should be fun in Florida.

ZELENY: He's stoking the culture wars in schools.

DESANTIS: We're also leading on ensuring that our school system is focusing on educating our kids, not indoctrinating our kids.

ZELENY: And beyond.

DESANTIS: We've got to fight if we see it in medicine or the universities or the corporations. You can't just say, let it go. Because then we're going to be living under an oppressive woke-ocracy.

ZELENY: Holding up his record is a blueprint for a national platform and presenting himself as a doer, not a talker.

DESANTIS: A leader is not captive to polls. We don't have palace intrigue, we don't have any drama. It's just execution every single day.

I'll build the wall myself. I'll do it. Just let me at 'em. We'll get it done.

DESANTIS: That was a subtle yet unmistakable distinction with Donald Trump who visits Iowa on Monday. The 2024 Republican campaign is intensifying, with former South Carolina Governor Nikki Haley urging Iowa voters to keep an open mind.

NIKKI HALEY (R), PRESIDENTIAL CANDIDATE: Whatever the polls tell you today, that is not where the polls are going to be a year from now.

ZELENY: But for many Republicans, the Florida governor stands as a beacon of hope for those who admire Trump but are eager to move on.

UNIDENTIFIED FEMALE: I would love to have him as our next president.

ZELENY: Becky Gresback (ph) was among those eager to see DeSantis close up.

UNIDENTIFIED FEMALE: President Trump has been an amazing president, but he alienates too many people with what he says. And I think Governor DeSantis is doing a good job at appealing to Americans.

(END VIDEOTAPE) ZELENY (on camera): Now, the Florida governor just finished shaking hands here and left the room. And, Erin, I can tell you Republicans had high expectations coming into this day, and they are leaving it having those expectations met. One Republican voter here who said they're looking for a change described the Florida governor as very impressive, a straight shooter.

Of course, this is probably the easiest trip he will take to Iowa. He had no arrows coming his direction. He's heading to Nevada tomorrow, another early-voting state.

Of course, this is all before he announces that he's going to run. But I am told that is expected to come in May or early June -- Erin.

BURNETT: All right, thank you very much, Jeff.

And let's go now to Stephanie Grisham, former Trump press secretary, worked on Mitt Romney's presidential campaign as well. Along with Karen Finney, the former communications director for the DNC.

So, Stephanie, DeSantis is making the Iowa debut today, heading as you heard Jeff say to Nevada, Jeff Zeleny say. You're in Kansas, deep red state. You've been talking to a lot of voter there's about Trump and DeSantis. What are you hearing there?

STEPHANIE GRISHAM, FORMER TRUMP WHITE HOUSE PRESS SECRETARY: You know, it's almost verbatim what the woman that Jeff interviewed just a second ago said. When I first got here, it was not just deep red Kansas, it was Trump country. And I'm hearing over and over again people telling me they still like Trump, they still -- they love the things he did in office.

But exactly what she said, we need a new face for the Republican Party, somebody who's not as divisive, doesn't have the never-ending dishonesty, corruption, legal battles following him all the time.

BURNETT: And, of course, Karen, you know, DeSantis has had no problem being divisive on cultural issues, woke issues, as he's been appealing more to the GOP base at this point. Today, he had his push for tennis super star Novak Djokovic to be allowed to play in the Miami Open. He's been pushing for that. Djokovic currently is not allowed to play because he's not vaccinated against COVID-19.

So here's what DeSantis had to say about that.

(BEGIN VIDEO CLIP)

DESANTIS: They are trying to keep Djokovic, the great tennis player, out of our country because of the shot. They say if you come in on an airplane, you can't -- so I wrote Joe Biden and a letter and I said, please stop with this antiscientific nonsense, drop this mandate. If Djokovic wants to meet us in the Bahamas, we'll get him over here by boat, get him to the state of Florida so he can compete.

(END VIDEO CLIP) BURNETT: And, Karen, on this one, it's more broadly appealing in some sense than some of the other cultural issues he hits on. I say that because less than 20 percent of adults have gotten their booster shot, their most recent one. And 65 percent of all Americans support lifting all COVID restrictions, and, of course, if you were an American and unvaccinated, you're allowed to do whatever you want. So this is an inconsistent policy when it comes to Djokovic.

All that being said, do you think this is a winning issue for DeSantis or not?

KAREN FINNEY, CNN POLITICAL COMMENTATOR: Well, I think this particular gimmick was very effective because it gave him an opportunity to both criticize Joe Biden and push back on the attack that he received from Donald Trump about COVID, and to sort of push his, you know, COVID agenda, his drop all the mandates agenda. So I think from a tactical perspective, that was effective.

But, look, I think, overall, most people don't think that politics in sports, in this instance, should really mix. And I think most folks probably wouldn't want to be exposed to somebody unless they knew that they were negative, COVID-negative. So, we'll see. Again, the restrictions are going to lifting, I think, Americans' attitudes and our culture is going to be shifting around this one, too.

BURNETT: So, Stephanie, here's the thing we hear from a lot of people who know DeSantis. They say that he can be reserved and dry, a former Republican congressman called him that. Others who know him, it's very consistent.

But he has been making a point now about talking about his family, about his wife specifically, Casey, and her battle with breast cancer. He showed today two pictures he took from his inauguration in 2019, and in 2023 obviously between the two she had breast cancer, and he's been talking about that. Here he is.

(BEGIN VIDEO CLIP)

DESANTIS: She got diagnosed with breast cancer in October of 2021. And she went through all of that, and really it was tough, but she handled it remarkably. And on my second inauguration day, we did a picture, we created frames side by side so you see 2019, 2023.

And after all she went through -- and I'm not just saying this because I'm the husband. You guys look yourself. She's prettier in 2023 than she was in 20 -- I don't know how you pull that off -- but I can just tell you I'm a lucky guy.

(END VIDEO CLIP)

BURNETT: Now, Stephanie, is that handling of that situation something that resonates with people or not?

GRISHAM: Oh, I think definitely. First of all, I noticed him earlier today. He was very conversational, and he wasn't wearing a tie at one point. So I think he's showing his strength in that way, but also he can be casual.

With regard to Casey, I think it's very much showing that they're a team. I think it's very obvious that she is invested in his success and that they are going to do this together.

I had the opportunity to work with her when I was working for Melania Trump.

[19:40:04]

And she was always very loving about her husband, talked openly about him. You can tell she'll be a big part of being on the campaign trail if and when he does announce. And I think that will be a big help to boost him and boost him as a family man regular guy.

BURNETT: All right. Well, we'll have to continue this conversation because obviously this is going to be a crucial part of this campaign, as it seems at this point. Thank you both very much.

And, next, what's behind the sudden spike of new bills targeting drag events? Well, look at this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don't even want to imagine a life where I can't be the person that I worked so hard to finally figure out who I am. .

(END VIDEO CLIP)

BURNETT: Plus, the president of a group of little-known Pacific islands is now taking on the juggernaut, China's Xi Jinping, accusing China of bribery and threats. You'll see why.

(COMMERCIAL BREAK)

BURNETT: Tonight, West Virginia asking the Supreme Court to uphold a state law that bars transgender women and girls from playing public school sports. It's the latest escalation in a broad crackdown on LGBTQ rights. It comes as nearly 20 states, most of them GOP led but not all, consider laws to restrict drag shows. Potential consequence of violating some of these laws if they pass, felony charges.

Lucy Kafanov is OUTFRONT.

(BEGIN VIDEOTAPE)

TIMOTHY SHERWOOD, DRAG PERFORMER: Drag actually saved my life.

LUCY KAFANOV, CNN CORRESPONDENT (voice-over): For Timothy Sherwood, drag is more than just a job.

SHERWOOD: I feel beautiful. I feel ethereal, I feel colorful, I feel bright.

KAFANOV: He left a teaching career in Dallas to perform full time as Kylee O'Hara Fatale. SHERWOOD: Kylee showed me who my true voice was.

KAFANOV: But that voice could soon be silenced in Texas, which is considering at least four bills seeking to restrict drag performances.

SHERWOOD: If these bills become law, my entire livelihood is at risk. I don't even want to imagine a life where I can't be the person that I worked so hard to finally figure out who I am, to fully have all that just ripped away, it would be soul crushing.

STATE REP. BRYAN SLATON (R-TX): Grown men dancing in their underwear in front of children asking for money.

KAFANOV: Texas State Representative Bryan Slaton says the bills are designed to protect minors.

SLATON: I think it's important to protect children from any adult that wants to sexualize them. Right now, the only group of people that's trying to sexualize children are the drag performances.

KAFANOV: Drag has become a target amongst conservatives, with shows and even literacy events like drag queen story hour sparking protests and targeted attacks from right-wing extremist groups in some states.

DRAG PERFORMER: The book is called "Love the World" --

KAFANOV: Texas is just one of at least 18 states seeking to restrict drag. The rights groups say it's part of a broader attack on the queer community.

UNIDENTIFIED FEMALE: We're seeing states across this country in a race to the bottom in terms of attacking LGBTQ+ folks. Over 400 bills attacking our community have been introduced. And it's only March of this year.

KAFANOV: Many of the proposed bills would make it illegal for an establishment to host a drag show unless it's classified as a sexually oriented business.

ANDERSON: If somebody came in and said today you're a sexually- oriented business, that would be it.

KAFANOV: You'd have to close your doors.

ANDERSON: You'd have to close your doors, yeah, there's no way.

KAFANOV: Jay Anderson runs a distillery and grill near Fort Worth, Texas.

His business has already taken a hit when an attempt to host a family friendly drag brunch featuring his son as a performer resulted in protests.

UNIDENTIFIED MALE: I'm here to support people that don't indoctrinate and groom little 8-year-old kids.

ANDERSON: This map tracks basically all the death threats that we received.

DRAG PERFORMER: Thank you guys again.

ANDERSON: This drag show causes me to close my business, and I lose all the money I put into it, but I save one kid who didn't kill himself? I don't care.

KAFANOV: Some critics say that bills are too broad and could target transgender people by defining drag as the act of appearing in public in a gender different than the one assigned at birth.

DAHLIA KNOWLES, MUSICIAN: The problem is that a lot of the public, especially in Republican states isn't able to make the distinction between what a drag queen in and what a trans woman. Because I'm trans and can be perceived as a drag queen in a public space, what does that mean for my gigs?

KAFANOV: Dahlia Knowles is a Dallas-based pop singer who performs Lorelei K. She worries the broadly-written legislation would categorize her as a drag performer simply because she's a transgender woman.

KNOWLES: I'm not impersonating a gender, this is my gender. The idea that I have to perform at sexually-oriented businesses whenever my act isn't sexually oriented. It's just, like, absurd.

KAFANOV: So it's not just about drag?

KNOWLES: No. This is just the tip of the iceberg. They're trying to eradicate transgender people from the public eye. It's not a debate whether or not I exist. I do exist. Like, I'm here, and the message that I'm receiving is that I'm not wanted here.

KAFANOV: Lucy Kafanov, CNN, Denver.

(END VIDEOTAPE)

BURNETT: And next, fear tonight of another lockdown in China, and not because of COVID. A new video in tonight of the four Americans taken just before the kidnapping in Mexico.

(COMMERCIAL BREAK)

[19:52:58]

BURNETT: Tonight, the president of Micronesia, a group of small Pacific islands, standing up to China.

In a scathing 13-page letter, President David Panuelo says China is preparing to invade Taiwan and goes on to say, quote: One of the reasons that China's political warfare is successful in so many arenas is that we are bribed to be complicit, and bribed to be silent.

Selina Wang is OUTFRONT in Beijing.

And, Selina, these are incredibly strong words from the leader of small nation, right, who's standing up to this Chinese juggernaut. How is China responding?

SELINA WANG, CNN INTERNATIONAL CORRESPONDENT: Yeah, Erin, this was an explosive letter, and China responded by dismissing it as summaries and accusations. The foreign ministry said they've always respected how Micronesia chooses its own development.

Now, Micronesia's President David Panuelo, he also revealed that he had considered switching diplomatic recognition to Taipei. Now, Panuelo's term in office is set to expire in just a couple of months. He's been the president since 2019, and this is not the first time he's spoken out before on China's growing influence.

And the context of this letter is increasing fears from regional powers about exactly that, military strategists see the Pacific islands location as this key connector between the U.S. territory of Guam and Australia and both the U.S. and Australia are concerned about China's more assertive, increasingly assertive and aggressive posture in the South China Sea as it's been extending its reach further west into Pacific waters, including towards Micronesia.

And meanwhile, the island nations themselves, they don't want to be upon this greater power struggle. China has become a key trading partner for their economies, and has backed some major projects in some of those countries including highways in Papua New Guinea and bridges in Fiji.

BURNETT: It is pretty interesting to se that, he's leaving power. What does this signal and the fact that he would call it out and put it out there for all these other countries around the world? There's also growing concern of another lockdown in China where you currently are today, but not because of COVID?

[19:55:08]

WANG: Well, this time, Erin, it's for the flu. So the Chinese city of Xi'an has published an emergency response plan that says if community spread reaches an acute level, officials can use lockdowns, school, and business closures. Now, no surprise that this has led to significant backlash on Chinese social media. I mean, it's only been a few months since China dropped zero COVID, and Xi'an, which is a city of around 13 million people, it went through a brutal lockdown in 2021.

But it is important to mention that this emergency plan, it's not unusual for local governments to lay out plans like this to handle flu strains, and plans like this have been made before even before the COVID pandemic. Those fears on social media, they really reflect the trauma that so many went through during years of restrictions and it's a reminder that they could lose their freedoms again in the name of health and safety -- Erin.

BURNETT: Yeah, all right. Selina, thank you very much, live from Beijing.

And next, more arrests in connection to the kidnapping of four Americans. (COMMERCIAL BREAK)

BURNETT: And finally tonight, new video of the four Americans taken in Mexico just hours before they were kidnapped. The video shows the four shortly after crossing the border. We believe this video was taken around 9:18 a.m. at 11:45 a.m. on that disturbing video that you've seen the cartel confronts the Americans and begins shooting. We believe this video was taken around 9:18 a.m. at 11:45 a.m. on that disturbing video that you've seen the cartel confronts the Americans and begins shooting.

Two Americans died during the kidnapping, and tonight Mexican authorities announced they've arrested five more people in connection with the deadly kidnapping.

Thanks for joining us.

"AC360" starts now.