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Mueller Probes Trump's Business Dealings; Manafort Pleads Not Guilty; Trump Shames Attorney General; Mueller Works for Rosenstein; Hicks Admits to White Lies Kushner Security Clearance. Aired 12-12:30p ET

Aired February 28, 2018 - 12:00   ET

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

[12:00:00] JOHN KING, CNN ANCHOR: About pre-campaign Trump organization dealings in Russia.

And the president lashing out at Attorney General Jeff Sessions. Disgraceful is the new insult.

Plus, honoring America's pastor. A farewell tribute to Billy Graham at the United States Capitol.

And back to school at Marjory Stoneman Douglas High School. Students confront their fears, and some, their frustration.

(BEGIN VIDEO CLIP)

DAVID HOGG, SURVIVED FLORIDA SCHOOL MASSACRE: The thing that makes me the most mad is, even after two weeks, even after two weeks of all of this, not a single bill has been passed at the state or federal level. None of our glass is being replaced with bullet proof glass. None of our locks are being able to -- are being -- none of our locks that are being replaced are able to be locked from the inside. No legislative action has been taken. All we have now is more guns and more chances for things to go wrong.

So our politicians are cowards and they won't. They won't gather the strength even to stand up to the NRA, like Marco Rubio, Rick Scott, or Donald Trump. Or they won't stand up to the NRA and say, you don't own me anymore, and they rip off their shock collar.

(END VIDEO CLIP)

KING: Back to that story and that dramatic day in just a moment.

But we begin with the truth that is now beyond self-evident. When the Russia probe is making the president uncomfortable, he lashes out. And more often than not, attorney general of the United States is the presidential pinata.

This tweet sent at 9:34 a.m. Eastern this morning, why is AG Jeff Sessions asking the inspector general to investigate potentially massive FISA abuse? Will take forever. Has no prosecutorial power and already late with reports on Comey, et cetera. Isn't the IG an Obama guy? Why not use Justice Department lawyers? Disgraceful. Disgraceful, that's the new Trump label for the nation's top

prosecutor. That's today. Weak and beleaguered are insults lobbed at Jeff Sessions by the president already on the record.

The president's fairly predictable on this front. The other day he complained about you know who, and it was crystal clear he meant Sessions. It wasn't clear exactly why. Well, consider this banner CNN headline from last night. "Mueller probes Trump's Russia business deadlines prior to 2016 presidential campaign. Sources tell CNN, Mueller's team is asking about Trump organization Russia dealings, including efforts to build a Trump Tower in Moscow and the decision to bring the 2013 Miss Universe Pageant to Russia.

CNN's Shimon Prokupecz, part of our team working this reporting, he's with us with the latest.

Shimon, Bob Mueller just checking a box, or is this a serious line of inquiry?

SIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: No, it certainly -- we shouldn't discount anything that Bob Mueller and the FBI investigators that are working on that team are doing. This certainly could be that he's checking the box. But there's a reason here why he's asking that question. Keep in mind that there's still an ongoing counterintelligence investigation into what influence the Russians had on the president before he was the president, on Trump, the organization, on some of his business dealings. So all of this is potentially part of that.

As to whether anyone faces charges here in the U.S. as a result of that, we have no indication of it. But this is an important line of inquiry as the Mueller investigators try to really put together a case, perhaps, of what were the Russians exactly doing, what were other countries exactly doing to try and exploit, to try and influence some of the people around the president.

KING: And a line of inquiry we know the president doesn't like.

Another big issue, the former Trump campaign chairman, Paul Manafort, back in court today. He now has a trial date in September. He pled not guilty to some new charges, money laundering and bank fraud. His legal team has talked about getting their date in court. Is that hard and fast? Have they ruled out a potential plea deal here?

PROKUPECZ: Oh, no, they haven't ruled out anything. You know, certainly Manafort has put out a statement indicating that he intends to fight and that he's done nothing wrong. But the Gates' plea puts a lot of pressure on Manafort because Gates is providing information, not only about Manafort, but obviously other things he may know from the campaign, from his time that he spent with Manafort before the campaign. They've been friends, they've been business partners for quite some time.

So this, no doubt, will put pressure on Manafort perhaps. They have even a stronger case against Manafort now if -- with Gates cooperating. They are ready in the government -- the special prosecutor has a pretty strong case, several cases now against Manafort. And when you read those indictments, the level of detail that they have of information is stunning. So, yes, certainly this Gates thing puts a lot of pressure on Manafort.

KING: And we will track that, whether there are negotiations in the weeks ahead. If there is a September trial, not long before the midterm elections.

Shimon Prokupecz, appreciate the reporting.

With me in studio to share their reporting and their insights, CNN's Nia-Malika Henderson, Karoun Demirjian of "The Washington Post," CNN's Jeff Zeleny, and Mary Katharine Ham with "The Federalist."

For all the president's talk of being so unpredictable and how his unpredictability helps him, he is so predictable when there are bad headlines, or the thing I always like to say is, he knows more than we know. He's being warming up to the today's disgraceful for a couple of days. Something's been under his skin, and he lashes out at the attorney general, who, of course, recused himself, putting Rod Rosenstein in charge, which gets you Bob Mueller and the special counsel investigation. What else do we know about the president's, let's call it frustration? I think it's more than that.

[12:05:00] JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: I think it is more than frustration. Maybe another "f" word, I'm not sure, that we can't say on television. But, look, he's very furious at the attorney general. He makes that point clear.

If you're the attorney general, you wonder why you sort of endure this humiliation. I talked to someone who is friendly and supportive of Jeff Sessions, he said because he actually believes in the work he's doing at the Justice Department, the conservative work he's doing as attorney general. He is essentially, you know, trying to ignore this as much as he can.

But the underlying point here is, if Jeff Sessions was not the attorney general, if someone had -- if the attorney general had not recused himself from this investigation, he would be overseeing the Mueller probe here. He's not. And the frustration for the president is, it would be virtually impossible or very difficult to confirm a new attorney general. So that means he's just going to keep stewing and boiling over this.

But the question is, you know, is there anything Jeff Sessions could do short of resigning that would make the president happy? I don't think so.

KING: But that's the president's fault, not Jeff Sessions' fault.

ZELENY: Right.

KING: Jeff Sessions said he had to recuse himself because he had such a high profile role in the campaign, he couldn't oversee an investigation that had things to do with the campaign. The president gave him the job. A good lawyer could have told him, this is where we're going to head.

Help me with this one. This is where -- you know, we have to be careful in our business. But if you watch the president's mood and behavior build up over several days, then you see the new CNN reporting. There's other reporting as well about the Russia investigation. Then it's -- at least, you know, I think the White House won't like. We don't know where it ends, but we know it's going to places the White House doesn't like and he lashes out.

His attorneys have also been negotiating for weeks now about a possible interview with Bob Mueller. They know what Mueller's asking. We want to ask about this. Is that where this anger's coming from, the things that we don't know and the president does?

MARY KATHARINE HAM, SENIOR WRITER, "THE FEDERALIST": Well, I would also say it sort of ebbs and flows, right? He does lash out at the attorney general, but it never actually changes the fundamentals of the game. He's still in his job. The probe is still going on. And so that may be one of the reasons that Sessions just stays there because he's been through this several -- practice makes perfect. So he's doing that.

But as far as what the president knows, look, I do think he's certainly probably getting some wind of what is -- what is in the cards here, and it's bothering him. He's also, as has been note on this show before, he's better in a deposition than he is on Twitter. So that is something to keep in mind as well if he ends up going into that room.

KING: Right. But we do know from history that this is an area, Bob Mueller getting into the Miss Universe Pageant, plans that never turned out, never panned out, but negotiations about maybe building a Trump Tower in Moscow, other dealings back and forth. The president said he's never taken Russia money. We know Bob Mueller has financial investigators on his staff.

Let's just listen to the president. Remember, this is last July when "The New York Times" got wind that this was one of the things that Mueller was beginning to get interested in. The president said, no, that's a lie.

(BEGIN VIDEO CLIP)

QUESTION: Mueller was looking at your finances or your family's finances unrelated to Russia. Is that a red line?

QUESTION: Would that be a breach of what his actually charge is?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I would say yes. Yes, I would say yes.

(END VIDEO CLIP)

KING: That was the president saying that would be a line.

And here's what we know about business deals. November 2013, Miss Universe Pageant in Moscow. Just after that, the president tweeted out, Trump Tower Moscow is next. Trump signed a letter of intent in October 2015 for that. The deal collapsed, and according to the president's personal attorney, by January 2016, that's in the presidential campaign year, his team cut off negotiations and said, never mind, we're not going to do that.

The president says don't do this. Bob Mueller is obviously doing this.

KAROUN DEMIRJIAN, CONGRESSIONAL REPORTER, "THE WASHINGTON POST": Right.

KING: Rob Widen (ph), a Democratic senator, is saying that the Senate Committee investigating -- the Senate Intelligence Committee should do this as well. The Republican chairman, you're up there all the time, they've shown no interest in going there. But this is -- Bob Mueller is now -- it started with Russia meddling, possible Russia collusion, possible obstruction of justice, now Trump organization writ large?

DEMIRJIAN: Well, I mean, yes. I mean it -- look, Bob Mueller does not have to listen when Trump says don't go there. He doesn't have to say, oh, OK, sorry. I mean that's because he's running this probe.

And when you're talking about the foundations for what may have been the allegations leading to collusion, I mean, that -- those can't spring out of absolutely nowhere, right? So if the Trump organization, the Trump business side, builds these relationships over time, whether or not they actually result in profits or in actual, you know, constructions of Trump Towers in Moscow, it's people that you know.

And, as we know, politics is a lot based on, you know, personal relationships and international diplomacy. It's based on personal relationships. And that is what we have to get into when we're talking about, you know, did he capitalize on relationships that he had once he was actually in a campaign situation, once there was -- you know, he was president. And did others that he met, while he was in Russia, do -- trying to work these business deals that didn't work out, see something in him because they already had those relationships too.

So it's background for a person. And if you're investigating, you know, everything that goes into this person and what that person did, it's potentially legitimate to look at, you know, what he did before he actually filed his paperwork to become the president.

KING: Right. And it's important to note that as allies of the president -- understandably questions, has Bob Mueller now gone beyond his mandate. Is Bob Mueller out on a fishing expedition, that Bob Mueller can't do anything without checking in with Rod Rosenstein, appointed by Donald Trump, the deputy attorney general.

Listen to Ken Starr, who faced a lot of criticism back in the days when he was the special counsel in the Bill Clinton days when he got from Whitewater to Monica Lewinsky, saying, yes, Bob Mueller might be going outside his original mandate, but he has checks.

[12:10:04] (BEGIN VIDEO CLIP) KEN STARR, FORMER CLINTON INDEPENDENT COUNSEL: I think Bob Mueller is finding out information that is leading him back to the deputy attorney general. Let's remember one thing, Bob Mueller's not out on his own. He's an officer of the Justice Department. He is reporting to the deputy attorney general.

Under the regulations, Rod Rosenstein is a man of great honor and great -- just absolutely impeccable integrity, could say, don't go there.

(END VIDEO CLIP)

KING: That's what drives the president nuts. That for all the talk of this, you know, deep state or Mueller running rogue, these are Trump appointees who have to check everything Bob Mueller does.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yes, and will they, right? I mean I think the president there oftentimes has liked what Ken Starr said. I don't know how much comfort he'll find in the fact that it's up to Rod Rosenstein to sort of put the brakes on the Mueller investigation and how big the purview is and whether it goes beyond this red line that the president has talked about.

And, again, I mean there's sort of a parlor game in chatter always in Washington about the fate of not only Jeff Sessions, but Rod Rosenstein too. Does the president move to do something with him, to remove him from his post? So, you know, we'll see where this goes. The president clearly upset and stewing over all of this.

DEMIRJIAN: Kind of like Mary Katharine was saying before, though, this is a well-practiced dance.

HENDERSON: Right. Yes.

DEMIRJIAN: This is -- everybody kind of knows the role they're going to play. For anybody to actually say, oh, for Rosenstein or Sessions to change the playbook completely and say they're just going to be loyal to Trump would be very surprising. For Trump to rip up their employment contracts and ask them to go would also be very surprising.

KING: And it's be risky.

HAM: Well and it's also --

DEMIRJIAN: Yes.

HAM: It seems important for the actual fundamentals of the game here that he does lash out at Sessions repeatedly and not Rosenstein.

KING: Right.

HAM: Who is the guy who would be the one who would make the difference and change the game.

KING: What do we make, quickly, of the Hope Hicks testimony yesterday? She would not answer questions, the substantive questions, about her work in the administration, which is what they want to ask about. You were the middleman in this Trump -- in this Air Force One meeting. The president of the United States, his son, to try to spin the meeting at Trump Tower with the Russians who promised dirt on Hillary Clinton.

She won't answer those questions. She's claiming a privilege without asserting a privilege. And she also acknowledged, according to sources familiar with the meeting, that, yes, sure, sometimes she tells, quote, white lies, on behalf of the president. But she says she hasn't lined about anything substantive.

Look, we should give grace to anybody who works for Donald Trump because he veers from the truth so often, they have to choice often but to say things that are not true because he takes them there. But are Republicans going to regret this? If there's a Democratic administration and that administration is under investigation and the administration decides it can assert a privilege without asserting a privilege, just saying, don't ask the questions because we don't want to answer them without actually coming forward and making a legal argument that you have the right to do so?

ZELENY: I think they could regret it. But the reality is, the story here and now is something that Hope Hicks -- you know, she was -- was in there for a very long time yesterday.

KING: Nine hours.

DEMIRJIAN: Nine hours, yes.

ZELENY: It sounds like she did fairly well. The white lie thing, she's the communications director of the White House. White lie, what does that mean? Is that in her -- in her position? I mean it's still a lie. It's still a lie.

KING: Forgive me for putting you on the spot, but do you believe anything they say?

HAM: Right.

ZELENY: So, I mean, the credibility, to me, it's a major question here, but --

KING: To me it's like a -- there credibility has been in tatters from largest inauguration crowd in history. So --

ZELENY: Exactly. And many more.

DEMIRJIAN: I was going to say, there's nobody in that communications job that has not told at least a white lie in this administration. But I think they're really (INAUDIBLE) --

HAM: Or in any administration, I would add.

KING: Yes, you're correct.

DEMIRJIAN: Yes, yes, that's true. But I think the really critical thing for Republicans on The Hill at

least right now is that they've got this moment of truth with Steve Bannon even more so than Hope Hicks, which is, are they just going to kind of let the administration run roughshod over them because they will pay for that down the line because future administrations, Democrat or Republican, will take a line. The executive does not like oversight from Congress. It's not a happy sort of a comfortable thing.

And they -- the line that they could draw between Bannon and Hicks is that Hicks did show some willingness in the second half of that interview to talk about the transition period. What they want to know from her is if she helped draft that statement about the Donald Trump Jr. meeting. But if they're going to draw the line of, you can't invoke executive privilege or a maybe in the future executive privilege, when you weren't in the White House, at least that's a clean line where Republicans can draw it. But then then the question is, will they actually issue this contempt citation for Bannon or will they just kind of say, oops, no, and maybe lose some of their credibility for the subpoenas in the future.

KING: Give an inch, the lawyers will take a mile.

DEMIRJIAN: Yes.

KING: You can be sure of that.

We'll take a quick break. But before we go to break, some blunt advice here and listen. This is a former U.S. top cybersecurity official talking to the Trump administration here a day after, remember just yesterday, Admiral Mike Rogers says he has been not been told -- not been ordered by the president to counter, to fight back against Russia's meddling.

(BEGIN VIDEO CLIP)

RICHARD CLARKE, FORMER CYBERSECURITY ADVISER TO PRESIDENT BUSH: It's highly unusual that after all the facts that we now know that the White House is doing nothing. The first thing I would do is take that Internet research agency in St. Petersburg and knock it offline. I would fry every computer in the building just to make a point. And we can do that. We can do that and it wouldn't be difficult to do.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[12:18:52] KING: Welcome back.

A quick update on something we just talked about. The attorney general of the United States, the subject of a presidential attack tweet today, our Ted Barrett on Capitol Hill just caught up to Jeff Sessions and asked him if he wanted to comment about that tweet. He said, quote, not commenting. Ted asked him if he talked to the president about it. The attorney general said, thank you and moved on. So we will move on. Jared Kushner is not having a good week. And it's only Wednesday. The

president's son-in-law and senior adviser now roaming the halls of the White House without his top secret security clearance. His access was downgraded last week by Chief of Staff John Kelly. Kushner's having trouble getting a permanent security clearance, and new reporting in "The Washington Post" today exposes one of the reasons.

U.S. intelligence services tracked officials in at least four countries discussing whether it might be possible to influence Kushner's official work because of his family business arrangements and financial woes. Those countries include Mexico, Israel, and the United Arab Emirates and China. The White House line, family first.

(BEGIN VIDEO CLIP)

RAJ SHAH, WHITE HOUSE PRINCIPAL DEPUTY PRESS SECRETARY: He has full confidence in Jared Kushner's ability to do his job, to address the issues of Israel-Palestinian peace, to also address the issue of U.S.- Mexico relations. So, you know, he's doing a great job on behalf of the president, and he's going to continue in his role.

(END VIDEO CLIP)

[12:20:06] KING: It is remarkable. And let's be fair to Mr. Kushner, there is zero evidence on the table that he's done anything wrong. But then officials in other countries are getting caught, captured, conversations and other intelligence gathering saying, wait a minute, this guy's family business has a problem. Is there some way, as we do business with him, we can leverage that? That's the idea?

DEMIRJIAN: Yes, I mean, the concern is vulnerabilities, right? The concern isn't actually, oh, you did something wrong that you should have been dragged into court four years ago and the FBI just happens to find it. It's -- you don't get the clearance if there are reasons that you might be compromised and other people -- you know, and several countries that are -- have varying relationships with the United States seeing Kushner as a potential -- a potential point of leverage is a problem.

The other fact of this is that I can see that the White House is clearly defending him, but if he has a downgraded security clearance, it's actually rather difficult to solve Middle East peace if you're not privy to, you know, intelligence that might be relevant to actually working those diplomatic negotiations. So this is the latest difficult spot for the president because he brought his children into this administration. And it's very difficult for him to let those children go. But the children are bringing him serious problems when it comes to how well they can do their jobs.

KING: To that point, I want to get back to the substance of Jared Kushner's job in a minute. But to that, this is a recurring Paton Place (ph) drama that they said when Reince Priebus left, maybe it would end then and his team. When Steve Bannon left, maybe it would end then. It never ends.

This is in Axios today. Javanka, which is Jared and Ivanka, and Kelly are locked in a death match. Two enter, only one survives.

I'm sorry, whatever side you're on in the Javanka versus John Kelly, or even if you believe it's just fiction and a soap opera, it is not productive to any workplace environment where this happens every day, if not by the hour.

ZELENY: It does, indeed. The -- I think that's a bit hyperbolic there. I am told that, a, this did not come as a surprise to Jared Kushner. He has known about this since Friday. It was news yesterday. But he has settled into the idea that he is going to have a slightly trimmed back portfolio, if you will.

He was on Capitol Hill yesterday when this story broke. He was working on prison reform. He is going to, in the words of someone who supports him and is friendly to him, who told me this morning that he's going to stay on and do his job. If he would leave now, he would prove his critics right. So he, I'm told, is going to stay in his position.

Look, one of his positions has not changed. And that is the president's son-in-law.

KING: Right.

ZELENY: So we can talk all day long about top -- you know, he has a security clearance, which is very important, no question, but he is still a person who has the most access to the president of virtually anyone else in that building. So it's up to the president to see sort of what his future is here.

So I think that as we are seeing some visits from some Middle East officials and envoys coming up in March, what role will Jared Kushner play in that directly? He's not out of this by any means.

KING: Right. And on the specifics of the Middle East, I would say this, that, yes, he probably would help him if there were negotiations, to have access to the most sensitive intelligence.

ZELENY: But there aren't (ph).

KING: There's no process.

HAM: NO.

KING: There is zero process.

DEMIRJIAN: Right.

KING: There was no process when Trump came into power. It's not Jared Kushner's fault that there's not one now. He's certainly part of it. But there -- there is no process. And so some of that is, I think, overblown in the sense that --

ZELENY: Indeed.

KING: If you can get the Palestinians and the Israelis at the table, then it would become an issue. I'm not waiting. HAM: Yes, I think of all the tea leaves we read on the sort of palace intrigue, this seems more clearly sort of a Kelly assertion of power than almost anything we've seen. And that Kushner seems willing to sort of take this down from him. Look, if you can't get a security clearance, you shouldn't get it and you shouldn't be working on that.

The president can sort of make calls on what is classified and what is not. And on one hand, I don't want being an international businessman to keep you -- or woman to keep you from being able to work in high levels of government. I don't think it should work that way. On the other hand, this is the price that the Trump family pays, and the Kushner family, for not having a clearer, ethical line about what is business and what is government. And if you make that line very, very, very clear when you start this process, then there's less chance that you're vulnerable to these things.

HENDERSON: And it's certainly embarrassing, right, for Kushner, in some ways embarrassing for Ivanka Trump too. Here they have these very highfaluting roles in the White House as the result of nepotism and here they're getting this massive pushback. And essentially -- I mean I think if you're just an average Joe looking at this, I mean one of the readings is that Jared Kushner can't necessarily be trusted, right? I mean that's essentially what the takeaway is. And here is the president putting him in this role. We'll see in practice what this actually means. It seems to be hard to actually police in the goings on of this White House, which is very chaotic. If the -- if the president wants him in these meetings where they're discussing highly sensitive information, hard to see him getting kicked out of these meetings or not being invited in. But, my goodness, I mean, for Jared Kushner and Ivanka Trump, very much in tune to their brand and burnishing their brand. And this is certainly a blow to their brands.

KING: (INAUDIBLE) and to your point, a not so average Joe, Bob Mueller, is looking into these. And to the point Karoun made earlier, it's not so much the actions of people around Trump. That's one thing he's looking at. It's, are they somehow susceptible to people trying to influence them. So it works both ways. We focus often, did they do anything. There's another side of it, are they open to being coerced or influenced and the like. And we'll see where this one goes.

[12:25:11] Up next, we shift gears to something very important. MSD strong. Those were the words inside the hallways of Marjory Stoneman Douglas High School as classes resumed today. Students made an emotional return.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

FRED GUTTENBERG, DAUGHTER WAS KILLED IN SCHOOL SHOOTING: Bittersweet. My son walks in here without his sister. My daughter's friends walk in there -- they used to always walk in with my daughter. And I just saw them all before and hugged them, and they're walking in there without her.

ANTHONY POLLACK, DAUGHTER WAS KILLED IN SCHOOL SHOOTING: I don't want anyone ever to go through what I have to go through. Every day I wake up and I -- I hear her in my voice -- in my head.

(END VIDEO CLIP)

[12:30:01] KING: Emotional words there from the fathers of Jaime Guttenberg and Meadow Pollack, two of the 17 victims of the Parkland, Florida, school shooting. Today, students and teachers who survived that massacre two weeks ago returning to calls. This is what it looked like inside the school.