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The Situation Room

President Donald Trump Sending Out A Flurry Of Tweets On The Shutdown, Taking Shots At The Democrats; Democrats Are Pursuing A Strategy To Reopen The Government While Denying The President What He Wants; Alleged Russian Spy Maria Butina, Pleaded Guilty To Conspiring To Influence Policy Toward Russia During The Election Campaign; Strange Message That Was Sent Out By The U.S. Strategic Command; Paul Manafort Was Pressured By Russian Associates To Pay Back Heavy Debt; Elizabeth Warren Announces She's Exploring A Presidential Run; Official New Year's Forecast For New York City At Midnight, 48 Degrees; Aired 5-6p ET

Aired December 31, 2018 - 17:00   ET

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

[17:00:17] BRIANNA KEILAR, CNN ANCHOR: Happening now, New Year's shutdown. With much of the government shutdown all around him, President Trump is a White House shut in this New Year's Eve, tweeting like fireworks as he battles Democrats over his border wall.

Accused of spying. Russia arrests an American citizen in Moscow, accusing him of espionage. Is that a move to retaliate after an alleged Russian spy pleads guilty to trying to influence U.S. policy during the election campaign?

Warren's run. Elizabeth Warren announces an exploratory committee for a Presidential run, but at the same time, she is in all the way, she says. Could she be the Democrat to take on President Trump?

And securing Times Square. Thousands of police, assault units and bomb-sniffing dogs will be working to keep New Year's Eve revelers safe in New York's Times Square. For the first time, a drone will provide eyes in the sky.

Wolf Blitzer is off. I'm Brianna Keilar. This is the SITUATION ROOM Special Report.

It's New Year's Eve, and day ten of the government shutdown. President Trump is again home alone for the holiday. He began his celebration with a twitter tirade, contradicting his outgoing chief of staff by saying he never abandoned the idea of a concrete border wall. Calling the southern border an open wound and saying Democrats should come back from vacation and fix it. Democrats are planning votes to reopen the government without offering new funding for a wall.

The President also suggests he should be hailed as a national hero for his stance on Syria, attacking what he calls failed generals who have criticized his troop pullout. I will be speaking with Democratic congressman, Ruben Gallego of the arms services committee. And our correspondents, specialists are standing by with full coverage.

We do begin at the White House, and with CNN's Jessica Dean. No movement, Jessica, on this shutdown standoff.

JESSICA DEAN, CNN CORRESPONDENT: No. No movement from here at the White House, Brianna. As you mentioned, President Trump here at the White House after cancelling those New Year's Eve plans to go down to Mar-a-Lago. His wife and their son down in Florida tonight, but he, as an aide says, is in the oval office today.

We certainly haven't seen much of him, but we have heard a lot from him on twitter. That's been his primary mode of communication throughout these past several days, as he talks about the shutdown. And one thing is certainly clear, he is digging in on the wall and the money that he wants to fund it.

(BEGIN VIDEOTAPE)

DEAN (voice-over): Ten days into the partial government shutdown. Sources involved with negotiations say President Trump is privately telling lawmakers and officials, he will not sign a bill with only $1.3 billion for border security, the current Democratic offer.

Today, the President sending out a flurry of tweets on the shutdown, taking shots at the Democrats saying quote "I'm in the oval office. Democrats, come back from vacation now and give us the votes necessary for border security, including the wall."

But Democrats appear equally dug in, taking control of the House on Thursday, they plan to vote on a package that maintains the $1.3 billion for border security, but no wall funding. Still, following a two-hour lunch with the President on Sunday, Senator Lindsey Graham remained optimistic a compromise could be reached in the next few days.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: The President didn't commit, but I think he is very open-minded.

DEAN: Meantime, new details about the administration's attempted rebranding of the Trump wall. Outgoing chief of staff, John Kelly, telling the "Los Angeles Times" quote "to be honest, it's not a wall." He went on, explaining, the President still says "wall," oftentimes, frankly, he will say barrier or fencing. Now he is tended toward steel slats. But we left a solid, concrete wall early on in the administration when we asked people what they need and had where they needed it.

The comments led Trump to fire back, tweeting, an all-concrete wall was never abandoned, as has been reported by the media. Some areas will be all concrete, but the experts at border patrol prefer a wall that is see-through. Thereby making it possible to see what is happening on both sides. Makes sense to me.

The President also brought the Obamas into his border wall fight. Tweeting, President and Mrs. Obama built, has a ten-foot wall around their D.C. mansion compound. I agree, totally necessary for their safety and security. The U.S. needs the same thing, slightly larger version. The U.S. secret service did erect a barrier gate in front of the

Obamas' home before they moved in. The house is located on a residential street in Washington, D.C.

And he also brought the deaths of two migrant children at the border into the fight, blaming their deaths on Democrats, tweeting, any deaths of children or others at the border are strictly the fault of the Democrats and their pathetic immigration policies that allow people to make the long trek, thinking they can enter our country illegally. They can't. If we had a wall, they wouldn't even try.

As Trump seems unmoved on the money he needs for the border wall, his decision to remove U.S. troops from Syria may be slowing down. Senator Graham telling reporters, the President agreed to reevaluate in order to find the best way to move forward with the withdrawal.

[17:05:33] GRAHAM: I think we are slowing things down in a smart way, but the goal has always been the same. To be able to leave Syria, make sure ISIS never comes back. Our partners are taken care of, and Iran is contained. And I think that's possible. It's going to take a little longer than everybody thought. But hopefully we can get there.

(END VIDEOTAPE)

DEAN: The President also tweeting about Syria, saying he plans to slowly bring back the troops while continuing to fight ISIS. And he says, Brianna, this is what he always promised to do when he was on the campaign trail. He's just making good on that promise.

KEILAR: All right, Jessica Dean at the White House, thank you.

Now Democrats are pursuing a strategy to reopen the government while denying the President what he wants.

Let's bring in CNN congressional correspondent, Phil Mattingly. Is this going to work?

PHIL MATTINGLY, CNN CORRESPONDENT: If your baseline is reopening the government, the short answer is probably not. Right now it's been made very clear, Democrats, once they take power in the House on Thursday, speaker-to-be Nancy Pelosi always made clear, she was going to pass something right off the bat that would reopen the government.

What Democrats have decided to do is basically six of the unfunded agencies at this moment would be passed in a bipartisan way with Senate appropriation bill. The seventh, the department of homeland security, which obviously the most contentious part, because that's where the wall would go. That would be passed at the continuing resolution level. So current fund-raising up until February 8th.

Here's the catch. Senate Republican leader Mitch McConnell, the majority leader, has made clear. He is not going to put anything on the floor that the President doesn't support. What do these bills not have? They do not have any extra money for a border wall. They don't have money for a border wall, period. And that means that even though House Democrats are going to move forward on something, this is not the answer. So long as the President maintains his current position.

And Brianna, everybody I'm talking to on Capitol Hill has made clear, someone is going to have to blink at this point in time. Democrats have made clear, they feel very comfortable in their current position, and I would just point you to the President's twitter account. If you don't think he is comfortable in his.

So the big question becomes, what is the way out at this point in time? This likely isn't it. It's probably going to take another couple of days, maybe even weeks, as well. But more than anything else, it's going to take somebody saying I have to give up, basically, at this point. And nobody is there yet. So ten days right now could go 12, could go 14. I'm told weeks is a real possibility at this point.

KEILAR: Weeks. That is stunning. Phil Mattingly, thank you so much.

Russia has detained a U.S. citizen in Moscow, accusing him of spying. And this comes after alleged Russian spy Maria Butina, pleaded guilty to conspiring to influence policy toward Russia during the election campaign.

CNN's Brian Todd is here with that.

So what are you learning? Is there a connection here?

BRIAN TODD, CNN CORRESPONDENT: Brianna, neither U.S. officials nor the Russians are saying tonight that there is a connection. But former CIA officers we spoke with say there very likely is a connection.

Now Vladimir Putin has denied he would ever retaliate in kind. But we are told Putin has been furious over the Maria Butina case.

(BEGIN VIDEOTAPE)

TODD (voice-over): Tonight, Vladimir Putin's security services could have a key bargaining chip in their ongoing spy operations against the U.S. Russia's federal security service, the FSB, says it has detained an American citizen in Moscow quote "while carrying out an active espionage."

The Kremlin identifies him as Paul Nicholas Whelan.

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

TODD: But tonight there's virtually no other information available about him. And the Russians aren't being any more specific on what they accuse Whelan for doing.

BOB BAER, CNN INTELLIGENCE AND SECURITY ANALYST: I think this is a tit for tat. Our relations with Russia are going downhill very quickly. We have been identifying Russian spies. We have arrested Butina. Putin is furious about it.

TODD: Maria Butina, the accused Russian spy who just struck a plea deal, is still in jail in the U.S. and is cooperating with federal prosecutors. U.S. officials have suggested in court papers that Butina was specifically tasked by her Russian handlers with infiltrating conservative political groups in America, such as the NRA. Putin recently complained publicly about her case, denying any knowledge of Butina.

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): No one knows anything about her at all. The only thing anyone knows about her, is that she worked at the federation council for one of the deputies. That's it.

TODD: As for Paul Whelan, former CIA officer bob Bear says he thinks it's unlikely that Whalen works for the U.S. government, which we says doesn't usually send spies to Moscow unless they are under diplomatic cover.

Whalen, he says, could have simply been working for a private company and was conveniently rounded up. Baer says it's possible the Russians will hold Whelan until Butina's case is resolved and she returns to Russia. But he says Putin is under a great deal of pressure inside Russia, and may want more for the American than just Maria Butina.

[17:10:05] BAER: A lot of the oligarchs are being sanctioned by the United States. They want those sanctions off. They want relief. We are going to have to sit somebody down at the KGB, ask what they want to make this go away. But frankly, the guy is a hostage. And it's up to the Russians how long they want to hold him and whether it's serving Putin's interests.

TODD: Putin recently said he would not arrest any quote innocent people for any kind of spy swap.

(END VIDEOTAPE)

TODD: Now, so far U.S. officials either have very little information on Paul Whelan or simply don't want to say much. A state department spokesman telling CNN, they are aware of the Americans' detention and have requested access. Right now, there is no indication of when and whether the kremlin is going to grant that access - Brianna.

KEILAR: Brian Todd, thank you so much.

Now President Trump wasn't the only one tweeting today. There has been a rather strange message that was sent out by the U.S. strategic command, which controls the launch of U.S. nuclear weapons.

Let's turn to CNN pentagon correspondent Barbara Starr on this.

This is something that had us going. Is this real?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: That's right, Brianna. And it is real.

The U.S. military says all they were trying to do is remind everyone in the world that 24/7, the U.S. military is always ready to respond if needed. But get a load of this. It's New Year's Eve. Everyone is looking for a very peaceful, happy holiday. And here's what the U.S. strategic command decided to tweet. And let me quote and then we'll show you the video.

But first, they say, Times Square tradition rings in the New Year by dropping the big ball. If ever needed, we are ready to drop something much bigger. Watch to the end.

Well, watch the video that they posted with this. This is a b-2 bomber, nuclear-capable, but in this video, it is dropping in a test firing, two of the biggest bombs the U.S. military has, 30,000-pound bombs in this weapons test that was recently conducted. And now attached to this message, saying, if ever needed, we are ready to drop something much bigger than the Times Square ball.

Awkward, peculiar, up to everyone to decide what they think about this. Generally understood that the U.S. military is ready 24/7. But they are sending this message out at a time when we're seeing tonight the transition between secretary Mattis and the new acting secretary, Pat Shanahan, when the Russians are testing hypersonic weapons. When the North Korean situation is unresolved. When the Chinese are moving ahead, expanding their weapons arsenal. Peculiar timing, perhaps, to say the least - Brianna.

KEILAR: Indeed. Barbara Starr at the Pentagon.

And joining me now is Democratic congressman, Ruben Gallego of Arizona. He is a member of the armed services committee. He is also an Iraq combat veteran.

Congressman, thanks so much for being with us.

REP. RUBEN GALLEGO (D), ARMED SERVICES COMMITTEE: Thank you.

KEILAR: So we have a lot to discuss. First, that tweet, I saw you raising your eyebrows. What did you think about that?

GALLEGO: I think it's very tacky. You know, power whisperers especially comes into (INAUDIBLE) foreign security. We don't need to be acting this way. This is how a small country would act, not the world's most powerful country in the world.

KEILAR: Is it the timing of it? Is it making light of something so serious?

GALLEGO: I don't know what they are trying to say. But it's really unprofessional. And whoever did that should really be reprimanded.

KEILAR: Let's talk about the shutdown. Democrats are planning to vote on Thursday, as you know, on funding bills. From the start of this, they're really going to go nowhere in the end. So what is the end game? Where is the next step and the one after that?

GALLEGO: Well, our end game is always been to be the responsible party and keep government open. And that's why we actually struck a deal with the Republicans and the senators. They have got 100 percent support from the Senate. About 99 percent of members of Congress and then was rejected by this President when a couple right wing pundits decided they did not like the deal.

At the end of the deal, we are going to bring border security money to the fold and fund government. Now, what we're not going to do is support a irresponsible use of money for a border wall that is not needed, specifically because the President has not truly used the money we already allocated in the last funding.

KEILAR: So you are putting up votes on funding bills that aren't going to be taken up by the Senate. So does that mean doing something, clearly sending a message, but in the end not getting something accomplished. Does that mean that you as Democrats are very comfortable with where you are? You are not going to blink in this?

GALLEGO: I think the most important thing we are comfortable with, we know that we are standing in the right position for this country. We are going to do the best we can to open portions of the government that we think we could find some consensus in. Just because we can't come to an agreement when it comes to homeland security funding, does not mean we have to keep the rest of government closed. Hopefully, Senator McConnell agrees with us and hopefully Donald Trump -- President Trump agrees with us also, so we can continue negotiating. I think this stance we are taking is deeply irresponsible.

KEILAR: You also serve on the armed services committee. After announcing a full withdrawal of troops from Syria, the President is now saying this quote. "We are slowly sending our troops back home to be with their families, while at the same time fighting ISIS remnants." Are you encouraged by what seems to be a modifying of the time line, even if the total withdrawal stands?

[17:15:13] GALLEGO: Well, I think what we should do is actually have a proper authorization of use of military force in Syria, so we can actually project what our goals are to both our enemies and the citizens of the United States. I have actually have been for a withdrawal of our troops from Syria. I would have done it in a manner that is more consistent and predictable and working with our allies and protecting them at the same time.

But the best way to do it for all sides, whether it's the President's position or whether it's a war hawk like Lindsey Graham, is for us to actually have an authorized use of military force, a real one. One that clearly defines what our goals are. Not exactly what we have right now, which really has been, I think, a total mistreatment of the 2003 authorized use of military force. And I think that's why you are having a lot of confusion both from the President and from the Senate.

KEILAR: Doesn't seem to be a series, a chorus of calls, for that, though.

GALLEGO: Well, there should be. And I certainly will be leading that in the house. And I think there's going to be a lot of senators, both Democrats and Republicans, that will be doing that. And I think we should have done it under Obama. We didn't. And we should continue pushing that under here, President Trump.

KEILAR: I want to ask you about a video that CNN just obtained. I do want to warn our viewers, this is tough to watch. This is upsetting. It shows staffers at an Arizona facility pushing and dragging migrant children, and the company that ran this facility, Southwest Key, it's the largest provider of shelters for migrant children in the country.

We knew that this had happened, that bad behavior had happened. We knew this back in October. But this video is new. I wonder, what's your reaction to this? Also, this seems to, I think, increase awareness and more concern. But also the idea of this is what we have now seen. There are other things, perhaps, that are unseen.

GALLEGO: Well, I think this plays to a couple of things that are important. Number one, we need to have oversight. Especially the way that DHS and the President have been rushing the separation of families and separation of children from their parents. We, as government, are the acting parents. And if we have a cavalier attitude, such as John Kelly, when he was asked first time that they are going to be separated or something of that nature or the President's current attitude, where he is trying to lay blame on everyone but himself, we need to have oversight both for us in Congress, the Senate, the President, as well as local officials.

And what finally actually happened here, local journalists that got hold of this video and forced the Maricopa County sheriff to actually file charges. And it's unfortunate that's what we had to do. But that is a really good example of true checks on something that is probably going a lot of times across this country.

KEILAR: All right. Congressman Gallego, thank you so much. Really appreciate you being with us. Happy new year to you, as well.

GALLEGO: Thank you. You too.

KEILAR: Up next, Paul Manafort reportedly came under heavy pressure from Russian associates, including a former spy. The payback, heavy debts. Could this have affected his actions while he was Trump campaign chairman?

But first, we are tracking some celebrations around the world. Take a look at how the New Year rolled in just moments ago in Athens, Greece.

(VIDEO CLIP PLAYING)

(COMMERCIAL BREAK)

[17:22:47] KEILAR: Paul Manafort was reportedly pressured by Russian associates to pay back heavy debt. Millions of dollars, while serving as chairman of the Trump campaign. "Time" magazine cites a former Russian intelligence agent is saying he put the squeeze on Manafort. And this comes as Manafort awaits sentencing for financial convictions and for broken plea agreement with special counsel Robert Mueller.

We have CNN justice correspondent, Jessica Schneider, joining us now.

Was Manafort compromised? That's the question. He was certainly vulnerable to it. JESSICA SCHNEIDER, CNN CORRESPONDENT: Right. And that's probably the

key question here that Mueller's team is now investigating, especially because of all the timing in this, Brianna. It raises serious questions about how much leverage the Russians may have had over Paul Manafort. At the same time that he was running Donald Trump's campaign in the summer of 2016.

So "Time" magazine reports that Manafort was in touch with former Russian intelligence officer Victor Boyarkin at the height of the Presidential campaign. Now Boyarkin was trying to collect on the reported $19 million that Manafort owed Russian billionaire Oleg Deripaska. Now Deripaska has closed ties to the Kremlin and Vladimir Putin. And he was even sanctioned earlier this year by the U.S.

So this is what Boyarkin told "Time" magazine. He said this. He said he owed us a lot of money, meaning Manafort, and he was offering ways to pay it back. I came down on him hard.

Now, one of the ways that Manafort reportedly offered to pay up, well, "Time" magazine says Manafort offered Deripaska through another middleman, Konstantin Kilimnik, private briefings about the Presidential race in an effort to quote "get whole." Now, Boyarkin has acknowledged to "Time" magazine that he has been approached by Mueller's team as they investigate any possible collusion between the Trump campaign and Russia.

And while Boyarkin could have some light to shed, because, of course, Manafort ran the campaign at the same time he was in touch with these Russians, Boyarkin is actually telling "Time" magazine this about Mueller's team. He says quote 'I told them to go dig a ditch."

So Brianna, Boyarkin not playing nice with the special counsel's team. The special counsel though meanwhile not commenting about this. Neither is Paul Manafort. But definitely some interesting questions there about what that connections was and if there is any leverage.

[17:25:00] KEILAR: Yes. And what does $19 million worth of access look like? But there's a lot going on. It is a mystery case in Mueller's Russia probe. It has been challenged all the way up to the Supreme Court.

SCHNEIDER: Right. That is exactly right. So this is that mystery secret case here. It involves a -- few details have been revealed on this, except that an unnamed foreign government-owned company been found in contempt for not complying with a grand jury subpoena related to the special counsel's investigation. So this unknown company, they've been fighting every step of the way. And while the two D.C. federal courts have said now that the company must hand over information about its commercial activity in relation to this criminal investigation, the company has asked the Supreme Court to stop the citation they got for not complying. It's a citation where they would actually be fined for every day they were in violation of this.

Now, two days before Christmas, the chief justice, John Roberts, he actually gave that mystery company a reprieve. He issued a temporary pause on that daily fine, and now it's up to the full Supreme Court. They are poised to step in to decide if that contempt order will continue to be put on hold or if the company must start paying up for refusing to comply with the subpoena.

So all of this has been done in secret. All of the filings under seal. And so the next step is, Brianna, and the question is, will the Supreme Court actually side with the company in this or will they come down on Mueller's side? It's up to five justices to decide what happens next, because this initial decision by chief justice John Roberts was just the first step in this.

KEILAR: Is there any indication of which way they will go? We shouldn't read into this pause, necessarily, right?

SCHNEIDER: Exactly. I mean, John Roberts, the chief justice, he had to read these papers. So there was something in it that maybe gave him pause to put this citation on pause. So who knows how the full Supreme Court will act when they all get together. Five justices need to agree, what happens next. It's likely we won't see anything until after New Year's. So that will be on Wednesday. But any minute now, the full Supreme Court could come down with something.

KEILAR: All right, Jess. Thank you so much for that report.

Coming up, Elizabeth Warren announces she's exploring a Presidential run. But at the same time, she says she's in the fight all the way. So which is it?

This is a THE SITUATION ROOM Special Report.

(COMMERCIAL BREAK)

[17:31:57] KEILAR: 2019 is about to begin with the same stalemate that 2018 is closing with. Leaving part of the federal government shut down.

I want to dig deeper now with our correspondents and analysts. And Phil Mattingly, to you first.

So we are in day ten of a government shutdown. There doesn't seem to be a hurry on either side to get this finished, right? There's no end in sight. House Democrats have votes for Thursday. But they are not going to go anywhere, ultimately, because we don't expect the Republican Senate to take up their bill. So what's the end game?

PHIL MATTINGLY, CNN CORRESPONDENT: So preface for the fact that there are staffers in both sides on both chambers that could figure a way out of this very quickly. They've got a lot of experience with this. They know how to thread the needle. They just aren't necessarily being allowed to do that. Right now.

The better kind of way to looking at this is, historically through shutdowns and you have covered them, I have covered them, Pamela has covered them, is the party that feels the most pain, the party that gets bludgeoned, the party that realizes there's no way out is often the party that gives in. And that's the way that these end. And so the question becomes, who ends up feeling the most pain and

when do they give in? I think the think - the wild card here that I picked up from a lot of staff who have been through this is they don't know if the President is the one who is going to feel all the pain here, will he ever feel it, right? He is the wild card because the President wants this fight. He believes the fight is extremely important for his base. He has pledged that this fight was coming for a long period of time. And so even Republican lawmakers on Capitol Hill who weren't too keen on this right now, if the President feels like this is a fight that he can continue to win for his base, for the people that he cares about, then maybe he never gives in. If he never gives in, there is an open question as to how this actually ends.

KEILAR: And the whole point of this, the issue here is the fight over his border wall, over President Trump's border wall. But his outgoing chief of staff, John Kelly, as you are familiar, Pam, told the "L.A. Times," to be honest, it's not a wall. The President still says wall. Oftentimes frankly, he will say barrier or fencing. Now he is tended towards steel slats. But we left a solid, concrete wall early on in the administration when we asked people what they needed and where they needed it.

Now the President fired back on twitter. Because even if it's not exactly the wall he wants to use that word, right? And he said in an all concrete wall has never been an abandoned, as reported by the media. Even though they are just reporting what Kelly said.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: I mean, first and foremost - right. We should note that John Kelly said this On the Record to the media. And it's not the first time there has been this public disconnect between John Kelly and the President. You will recall last year when John Kelly went on I believe FOX News and said the President's views were evolving on immigration and the President shot back at that and was upset.

The President is sensitive about anything having to do with the wall and any perception that it could be off the table because he knows it's a buzz word for his base. He needs the base to believe that he is behind building this wall. And the term seems to evolve each week. I mean, you know, with steel slats seems to be the latest term.

Kellyanne Conway was on "STATE OF THE UNION" yesterday though saying border security, not just the wall. I mean, the messaging from the White House is muddled when it comes to this issue. And none of this answers the question of what the President is willing to sign when it comes to funding for the wall and border security.

[17:35:00] KEILAR: Sam Vinograd and Joey Jackson, I want to ask you about Paul Manafort. Because this report out in "Time" magazine that while he was campaign chairman for the Trump campaign, was potentially vulnerable to external pressure. He was being pressured by a former Russian associate, sort of a middleman, between him and an oligarch to pay back millions and millions of dollars.

So Joey, to you first, what does it mean for the Russia investigation as a whole? JOEY JACKSON, CNN LEGAL ANALYST: You know, Brianna, it's so

significant and here's why. You know, people talk about, oh, why is collusion relevant and why are we looking at Russia? There's a thing in law called a conflict of interest, right. And the reality is this. Why does it matter whether Trump was talking about a tower in January versus whether he was the presumptive nominee? It's reported what you just spoke of, which is the issue of Manafort, maybe other things are unreported as it relates to people who may be potentially compromised. And at the end of the day, do you want your policy -- there's multiple ways to attack our democracy. We saw it in the elections and the hacking and everything else in terms of turning the elections upside down.

But there's another way. And that's to get to the policymakers. Those people who are in office who are ultimately holed office, are you affecting their decision making? Is the decision making predicated purely on America's interest or is it predicated upon they owe me something? They are beholden to me. And as a result of being beholden to someone, it influences what you do. And clearly, our policy interests and Russia's policy interests are divergent, right.

And so it matters, of course, to the Russia investigation. It matters as it relates to Mueller's report. It matters as it relates to whether it's only Manafort or with someone else compromised. But it's a big deal.

KEILAR: Sam, what do you think?

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: Well, I think that Paul Manafort was the best thing that might have happened to the Russia intelligence services. What bribery points did he not have at this juncture? He apparently needed money. He needed support in other ways. And every kind of manipulation point that foreign spies typically look for so they can manipulate assets, Paul Manafort represented. He made their jobs pretty easy for them.

And the outstanding question, really, is how nobody on the Trump campaign either knew or cared that Paul Manafort was so vulnerable to manipulation. He was an open book in terms of allowing himself to be malleable for counterintelligence purposes.

KEILAR: All right, guys. Stand by for me. We have a lot more to discuss. And we'll be back in just a moment.

(COMMERCIAL BREAK)

[17:42:02] KEILAR: Democratic senator, Elizabeth Warren from Massachusetts is taking the first step toward a likely White House run in 2020, by forming an exploratory committee. So it is a big day, all of you, for Elizabeth Warren, as we have all been watching.

Let's take a look, though, at how the President is responding.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Elizabeth Warren will be the first. She did very badly in proving that she was of Indian heritage. That didn't work out too well. I think you have more than she does, and maybe I do too, and I have nothing. So, you know, we will see how she does. I wish her well. I hope she does well. I would love to run against her.

UNIDENTIFIED MALE: She says she's in the fight all the way, Mr. President. Do you really think she believes she can win?

TRUMP: Are well, that I don't know. You would have to ask her psychiatrist.

(END VIDEO CLIP)

KEILAR: I want to see what you all have to say about this, starting with you, Joey Jackson. What's your reaction?

JACKSON: My reaction is that the President never ceases his insults, his attacks. It's most unfortunate. It's time to raise the tenor, right, in this country and may 2019 be that way. Elizabeth Warren certainly is a viable force. She has a voice in the party. There are other people who are in the party, as well. We have what has been called an embarrassment of riches. And so best of luck to her. But I don't think she should continue to be demeaned by this President and continually demeans her, name calls and everyone else. It's just most unfortunate.

KEILAR: Sam, I wonder, as someone who observes international relations, when you see President Trump questioning really her authenticity, whether she has native American heritage, even still, as she has proven that she does with the DNA test, it seems like this is -- it's a trick we have seen before in some foreign elections, questioning the authenticity, questioning if people say if they are who they say they are. What do you think?

VINOGRAD: I don't think President Trump is really in a position to be questioning anybody pretending to be something that they are not or their qualifications for office at this point. The macro point here is that he will go low and all the rest of us hopefully will continue to go high.

Senator Warren and whomever else throws their hat in the ring will hopefully run as part of an election that we would hope to see in another country, where candidates debate each other on their policy views, rather than attacking them and bullying them from the podium and from the campaign trail itself.

KEILAR: But his using, Phil, a racial slur when he calls her Pocahontas, you know. He is using that pejoratively, is something that took hold. She had to address this. So it's something that's working. He may be going low on this, but she has to respond. She's had to respond to it.

MATTINGLY: Yes. I think one, this was the most predictable thing - predictable response from the President you could imagine. I remember private meetings with Senate Democrats in the White House where he would bring this up totally out of the blue when she wasn't in the meeting. And I remember talking to democratic senators scratching their heads, like, why is this coming up? Why is this an issue?

So they knew this was going to happen. I think what I'm most interested -- kind of to Sam's point, is what's the response going to be? They knew this was coming. How is Senator Warren planning to respond? And how will Democrats respond in general? There is always the debate of do you get in a fight with him, do you have a full-blown fight, a Marco Rubio-esque fight, if you want to harken back to 2016 or do you try to ignore it? What's the most effective way? We'll see it with a lot of candidates. Elizabeth Warren is first out of the gate and we will see how it returns.

[17:45:13] KEILAR: What do you think, Pam, as you this reaction is from President Trump?

BROWN: Well, you know, it's interesting. We are getting a little bit of a preview, no surprise, of some of the insults that are going to come from Trump to the contenders in 2020.

But what's interesting here is Elizabeth Warren is going to need to figure out, to your point Brianna, about how to respond to the President, because her response to the Pocahontas comments didn't really go over well when she released the DNA test results. That wasn't really viewed as a win. And, you know, some would argue it was damaging to her. And so it will be interesting to see how she and other potential contenders handle this, because, as you point out, Marco Rubio tried to get down in the mud with him, as well. And it didn't work out so well for him, either.

KEILAR: I wonder, there are a number of times where President Trump, then candidate Trump, has done something and you look and say, that's not going over well. But it did go over well with a certain slice of a very important part of the electorate for him. Could it be the same with the Elizabeth Warren, that even if her response on the DNA wasn't that great overall, it seemed, but she may be speaking? What's your sense of if she's really speaking to part of the Democratic base?

MATTINGLY: I don't think we know. Look, there's very clearly parts of the democratic base that want a bare-knuckle brawl. There is no question about that. But I think the beauty of what's going to happen in the course of the next couple of months and years, we are actually going to see. There's going to be a number of candidates who will try a number of different strategies, and I see you smiling, but you and I both know well, making predictions at this point in time about what might work and -- there's just a lot of time left. And so, I think a lot of people are going to be trying different things. One is going to work, at least to get through the primary. That will tell you what the best response is for Democrats. And then you'll have to see if it's the best response overall.

KEILAR: We all just wish we were psychic. We just want to know.

MATTINGLY: Just a ball.

KEILAR: Thank you, all of you. I appreciate it.

JACKSON: Happy New Year! KEILAR: Happy new year to all of you.

JACKSON: Thank you.

KEILAR: Tight security and a soggy forecast. We are going to go live to Times Square to check on New Year's Eve preparations there.

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[17:51:57] KEILAR: The New Year is now just over six hours away here on the east coast. New York City is gearing up for its big celebration.

Let's bring in CNN national correspondent Miguel Marquez.

And Miguel, you are there with a bunch of committed people. And I know authorities are doing everything they can to make sure they stay safe. What are you seeing?

MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT: Yes, this is exactly the situation.

So there are tens of thousands of people. That's the main event down that way and this is the reason police are here, to protect all of the people who are here. It is a massive, massive effort. You can see on every corner here the number of police officers. Literally, this is 7th avenue where it comes together with Broadway and all the way up 7th, you know, even tens of thousands or more. They are expecting as many as two million into the area although the rain may keep some away.

The rain has already quashed one plan of police, which was to have drones up for the first time this year. But because of the weather conditions, they are not able to do it. If others do fly drones though, they do have anti-drone technology that they should be able to use, but they have police agencies, over 50 police agencies represented here, hundreds and hundreds of police officers and agents, even police officers embedded into area hotels to prevent anything from happening from any of those places. So just a massive effort for what should be a wet but great 2019 -- Brianna.

KEILAR: All right, Miguel, we will be watching. Thank you for that report.

And all of those people, they're in for a soggy night unfortunately as you heard Miguel saying.

Let's bring in CNN meteorologist Jennifer Gray with the forecast.

It has been a rainy wait, we can see it behind him, for the crowd there in Times Square. What ahead for them?

JENNIFER GRAY, CNN METEOROLOGIST: Oh, yes, the bearer of bad news here, we are going to see that rain continue. And it will probably still will be raining when the clock strikes midnight. So they are in for the long haul. We could get a break here or there, but I'm not counting on it. I think it will be steady rain throughout the rest of the evening. And that rain extends all the way back to the Ohio River valley and down to the gulf coast. So even places like New Orleans has had rain. .

But I think it is going to clear out for them, unlike places like New York where it is going to stick around. D.C. and Philadelphia will get a couple of breaks. It is actually moving into the Boston area, so their night will end with rain as well.

Here let's go forward in time and you can see the rain just sticking around. It is really not fast to go anywhere at all. It is going to stay in D.C., Philly, New York by the time the clock strikes midnight. And so, here is the official New Year's forecast for New York City at midnight, 48 degrees. It will feel like 45 and we will have steady rain. So it looks like it will be a long night for the folks in Times Square.

KEILAR: Let's think of it as a metaphorical cleansing, Jennifer Gray.

GRAY: Yes, better days ahead.

KEILAR: Thank you so much. Happy new year to you.

GRAY: You too.

Coming up, with the government shutdown in its tenth day President Trump is home alone in the White House this New Year's Eve. He has been firing off tweets as he battles Democrats over his border wall.

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