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Urkranian Ministry of Revenue Housed Secrety Boxing Gym, Luxury Spa; Ukraine Announces Armed Forces Full Combat Ready; Malaysian Government Releases First Official MH370 Report

Aired May 1, 2014 - 08:00:00   ET

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


AMARA WALKER, HOST: I'm Amara Walker at CNN. Welcome to News Stream where news and technology meet.

Pro-Russian protesters are out in force on May Day in Ukraine.

Controversial Toronto mayor Rob Ford says he's seeking help for alcohol abuse after a video allegedly shows him smoking crack cocaine again.

And remembering one Formula One's greatest drivers 20 years after the death Ayrton Senna.

First this hour to the tense standoff between Ukraine and Russia. Today, Kiev says it is expelling a Russian naval diplomat accused of spying for Moscow.

Now on this May Day, in the Ukrainian city of Donetsk, crowds have gathered to call for a referendum. The movement for independence in Russian-speaking regions is growing. And government buildings across towns and cities in the east remain occupied by pro-Russia groups. And that has Ukrainian troops stepping up training exercises.

The acting government says its armed forces are now on full combat readiness.

Let's get the view from eastern Ukraine now. Senior international correspondent Arwa Damon is in Donetsk where the large May Day demonstrations were held. Arwa, what's the latest.

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, they've only recently just ended. We saw the crowds marching through behind me at London Square where they started off these May Day parades a couple hours ago. At the head of it was one of the speakers addressing the crowd saying that for the last 23 years they have gathered under a slogan of peace, labor and May, but now because of the Kiev junta, as the government is being referred to here, they say that the government's actions have forced them to reach a stage where they are calling for a referendum. They are calling for a calling for a federal state.

One woman who we spoke to comparing the situation now to a year ago saying that a year ago things were calm. They did feel as if they were a unified nation. But again blaming the actions of the current government in Kiev for what is transpiring here for this desire, we're hearing expressed amongst the Pro-Russian camps to at the very least break away from the grip of Kiev.

Many out here viewing the government very young, but still viewing it as being corrupt and ineffective, wanting to really have more control over their own future, that is what they are telling us.

But of course all of this contributing to a ratcheting up of tensions with the acting president saying that the central government has effectively lost control over Donetsk and also Luhansk another key area in the eastern part of the country.

There, a few days ago, the pro-Russian camp taking over the main administrative building amongst other areas. When we were there, we saw the corridors inside where sandbags, fighting positions had been held up. All of this, it seems, part of an effort to ensure that that May 11 referendum is actually held.

One of the spokespeople we were talking to in Luhansk saying that they decided to seize the main administrative building after the local government failed to meet a deadline. They wanted that building, because they wanted access to the locations of polling sites and also because they wanted access to those voting lists.

WALKER: And as we watch video of those pro-Russian demonstrations...

DAMON: And if we turn the camera around actually you'll see that building has had the Ukrainian flag above it ever since we've been here. Reportedly, the owner had been asked by the pro-Russian camp to remove the Ukrainian flag. Now it seems as if masked men up there have done just that and replaced it. The Ukrainian flag being flown off the side of the building there.

And these are the kinds of actions that we're really seeing throughout the entire eastern region with the pro-Russian camp growing bolder by the day, taking over more territory, ensuring that they are the final authority in various areas across this part of the country.

WALKER: So, we're seeing pro-Russian protesters gain more control. And you have Kiev saying that the military is on full combat alert. But we had this anti-terrorist operation that took effect last week, the second phase, it seemed to have really been a failure. Why have Ukrainian security forces been having such a hard time getting a control on the situation?

DAMON: Well, there's a couple of reasons. First of all, there's their capabilities. The offensive that we have been seeing, or the so- called offensive has been incredibly feeble at best. We saw them last week taking brief control over a few of the barricades that the pro-Russian side had set up outside of the city of Slovyansk.

We do see their presence a bit more along the border areas outside of the city, but for now staying pretty well away.

The government in Kiev is also expressed its concerns about wanting to show a certain measure of restraint. Remember a lot of the areas where the pro-Russian camp is holed up in, they're in residential areas, they're in key locations in cities. Any sort of street to street warfare here would devastate this part of the country, would be devastating for the population as well.

But given that politics is the alternative to violence, it's been proven to be incredibly difficult to get all of the key players here at some sort of political negotiating table. We're hearing the Russian foreign minister now also calling for talks between Kiev and some of the pro-Russian camp leaders, but those have not materialized just yet.

So it's a very multi-layered complicated situation. No one wants to see it dissolve into any sort of warfare because of the sheer consequences of that. That would be absolutely unimaginable.

WALKER: Clearly those pro-Russian protesters feeling embolded as we just witnessed them raise the flag there.

Arwa Damon with the latest there in Donetsk. Arwa, many thanks to you on that report.

Well, let's take a look now at where pro-Russia separatists have been operating in recent days. As we've heard, gunmen have set up barricades around government building in the city of Luhansk. There are also reports pro-Russian separatists have seized the police department in the town of Horlivka. In nearby Slovyansk, a team of western military observers are still being held hostage by the self-declared Donetsk People's Republic. And in Donetsk itself, a peaceful protest was attacked by pro-Russian separatists on Monday.

Now back in the capital, official buildings have been under the charge of the interim government since the fall of Viktor Yanukovych, but there are still remnants of the previous administration, evidence of the extravagance of the former government is preserved inside Ukraine's tax office.

Our Phil Black has this exclusive report.

(BEGIN VIDEOTAPE)

PHIL BLACK, CNN INTERNATIONAL CORRESPONDNET: Ukraine's ministry of revenue building looks pretty average from the outside, but within spokesman Viktor Kasachuk (ph) tells me these locked and sealed doors hide compelling evidence of excess and corruption. It's a pretty impressive boxing gym. Kasachuk (ph) says it's much more. He tells me tax workers used to think it was a secret jail, they'd hear yelling through the door. He says that's because bare knuckled fighters clashed in this ring for the entertainment of government VIPs.

An extraordinary story, impossible to verify. But what we see through the next door is also pretty amazing -- our tax office tour enters a pleasure lounge. There's a big jacuzzi with a complicated control panel.

UNIDENTIFIED MALE: Oh. Oh, super. Good.

(END VIDEOTAPE)

WALKER: We have some breaking news now. Malaysia has just released its preliminary report on missing flight 370. Let's get more analysis now from our partner network CNN USA.

(SIMULCAST WITH CNN USA)

(COMMERCIAL BREAK)

WALKER: Welcome back to News Stream.

Malaysian officials have just released a preliminary report on missing Malaysia Airlines flight 370. It contains a safety recommendation for real-time tracking of commercial flights. But it also shows that officials failed to immediately notice that thep lane had gone off radar and did not activate an official rescue operation for four hours. There was that four hour gap and we still don't know why nothing was done.

Now meanwhile, a source with the Australian defense force says a five day pause in the underwater search is likely and that's because the Ocean Shield vessel needs to return to port for refueling.

And Malaysia Airlines has announced it is closing support centers for relatives of passengers by May 7. Families in Beijing have been told that their briefings at the Lido Hotel will stop effective tomorrow.

Let's go now live to Beijing. David McKenzie is near the Lido Hotel.

David I want to first ask you since this preliminary report just came out has this report reached the families yet?

DAVID MCKENZIE, CNN INTERANTIONAL CORRESPONDENT: Well, the report would have reached the families in some way, but really the major news for families tonight, given the fact that the report doesn't necessarily get them any closer to finding out what happened to their family members, would be that they're closing the assistance center here at the hotel which is down the street behind me and they are at least saying that in the next few days they hope that the family members will leave and return home.

There were very emotional scenes inside that meeting. They didn't allow our cameras inside. Those scenes included family members kneeling and wailing and saying to the assembled security forces of the Chinese government that they want to find their loved ones, and can they help them.

Certainly a lot of scene of despair when the news came out that the search again has entered a new phase.

This wouldn't be new news for the family, but certainly there's a sense that a chapter has closed and very emotional scenes certainly here tonight in Beijing.

WALKER: David, it's been 54 days and the search has turned up nothing. The search under water is wrapping up and it's entering this new phase, as you say. What's the sentiment with the families? Are they still holding on to hope of anything at this point?

MCKENZIE: Well, I haven't heard really any of the family members directly say they hope their loved ones are alive in recent days certainly. And that I think is significant. They do believe after so much time, the likelihood of any hope is extremely small, but they are still trying to get some kind of closure at this point.

There have been many very specific technical questions asked by the family of the technical committee that was here in recent days in Beijing to try and figure out perhaps if there was some kind of mistake made by the Inmarsat satellite company, which effectively has given us the best indication of where the plane might have ended up.

But for the families, their main concern tonight is that they're going to lose the support, the leverage they feel, potentially, if they have to leave this hotel and go back home.

WALKER: Yeah, quite an emotional day as we'd imagine as Malaysian authorities announcing that they are closing that family support center and those daily briefings where they've been getting some bits of information will now come to an end.

David McKenzie there live in Beijing. David, thank you for that report.

Well, let's get more now on this official report on a missing flight - - Malaysian flight MH370. Let's tune in now to CNN USA.

(SIMULCAST WITH CNN USA)

WALKER: CNN USA talk about this first official report that was released by Malaysian authorities. We will take a break and we'll be back with more.

(COMMERCIAL BREAK)

WALKER: I'm Amara Walker at CNN Center. You're watching News Stream. And these are your world headlines.

Russian President Vladimir Putin discussed the escalating conflict in eastern Ukraine with German Chancellor Angela Merkel today. The Kremlin says the two leaders spoke by phone. It says Mrs. Merkel asked Mr. Putin to help free a team of observers being held by pro-Russian militants. The Russian president said Kiev should withdraw troops from the east to reduce tensions.

In Turkey, maybe protesters turned out an attempt to defy an order from Prime Minister Recep Tayyip Erdogan to stay away from Istanbul's Taksim Square. Police fired tear gas and water cannons at demonstrators marching toward the square. It was the epicenter of nationwide protests last year.

Sinn Fein Leader Gerry Adams has been arrested in Belfast, Northern Ireland in connection with the murder of a woman 40 years ago. He denies any involvement in the abduction and murder of Jean McConville. She reportedly was killed by the IRA because they believed she was a spy for the British army. Adams, who has long been associated with the IRA surrendered himself for questioning.

And now we want to go back to our main story this hour. Malaysia has just released its preliminary report on missing flight 370. Let's get more analysis now from our partner network CNN USA.

(SIMULCAST WITH CNN USA)

END