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Donald Trump Agrees to $25 Million Settlement of Lawsuits over Trump University; Donald Trump Picks a Group of Loyalist Hardliners to Join His Team. Aired 5-6p ET

Aired November 18, 2016 - 17:00   ET


[17:00:07] WOLF BLITZER, CNN HOST: Happening now, breaking news. Trump settles in what's being called a stunning reversal, the president-elect reaches a $25 million settlement of class action lawsuits over Trump University. Will it remove a cloud over the incoming administration or will it raise new questions about the president-elect's honesty?

The hard-liners. Donald Trump picks a group of loyalist hardliners to join his team. All three men are known for standing tough on issues from Islamic terror to immigration.

General Flynn, Trump's pick for national security advisor, is a retired army intelligence officer who was forced out of the Pentagon. But Michael Flynn's ties to Russia and his views on Muslims have some critics deeply concerned.

And mixed company. During the campaign, Trump promise his adult children would manage his business if he became president. Tonight there are growing concerns about potential conflicts of interest and what roles they will play in their father's administration.

I'm Wolf Blitzer. You are in the SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We are following breaking news. Officials just announced a $25 million settlement of the lawsuit over Trump University. The suits accused Trump University of deceptive business practices and making false claims, including that Trump handpicked the instructors. So far there's no comment from the president-elect.

Earlier today Trump filled three top spots in his administration. Democrats and other groups, they are already raising some red flags about Michael Flynn, trump's choice for national security advisor, as well as attorney general nominee Jeff Sessions and Trump's pick to run the CIA, Congressman Mike Pompeo.

Also tonight, new questions about potential conflicts of interest after Trump's daughter, Ivanka, sat in on her father's meeting with Japan's prime minister. Will there be trouble if Trump's adult children play significant roles in the administration? A member of the Trump transition executive committee, Congresswoman Marsha Blackburn of Tennessee, she is standing by to take our questions. And our correspondents and analysts and guests, they will have full coverage of the day's top stories.

Let's start with the breaking news. CNN's Phil Mattingly is over in Trump tower in New York City.

Phil, tell us more about the settlement of the Trump University lawsuits.

PHIL MATTINGLY, CNN CORRESPONDENT: Yes. Wolf, it's the one thing Donald Trump said repeatedly he would never do, settle, specifically on this series of lawsuits. But what decided to do today was to agree for the tune of $25 million to resolve fraud allegations in two different states, California and New York and for good reason. This puts to bet one of the more turbulent issues that he is faced not just during his presidential campaign, but throughout the latter course of his career. And also puts to bed the possibility that Trump himself would have to testify on the stand out in San Diego. Now that's gone, clearing the decks for a transition team that is hard at work making clear today that national security is the focus and adding a couple big picks to back that up.


UNIDENTIFIED MALE: Lock her up, lock her up.

MATTINGLY (voice-over): Loyalist, hard liners, now the core of president-elect Trump's national security team. The choices revealing the next administration's security posture. One defined not by a pragmatic move to the middle, but instead by a move deeply into conservative orthodoxy.

SEN. JEFF SESSIONS (R), ALABAMA: I told Donald Trump this isn't a campaign, this is a movement.

MATTINGLY: Jeff Sessions, a crucial voice inside Trump's team and his first Senate endorsement, now in line to be the next attorney general.

LT. GEN. MICHAEL FLYNN (RET.), TRUMP SENIOR ADVISOR: We need to bring back big-time leadership, and that's Donald Trump.

MATTINGLY: Michael Flynn, Trump's closest campaign military advisor and former head of the defense intelligence agency, his national security advisor. And congressman Mike Pompeo, a former army officer, member of the house intelligence committee and harsh critic of Hillary Clinton now in line to be CIA director. The picks provoking a chorus of cheers from top Capitol Hill Republicans.

SEN. TED CRUZ (R), TEXAS: Jeff Sessions will bring back integrity to the United States department of justice.

MATTINGLY: And near universal caution or outright concern from Democrats.

REP. DEBBIE WASSERMAN SCHULTZ, FORMER DNC CHAIRWOMAN: It's really getting more and more disturbing and clear that Donald Trump is not trying to bring the country together with the moves he is making right out of the gate. MATTINGLY: For Trump, an unquestionable ramp`-up of the pace of his

transition. The so-called landing teams of advisers and transition team staff arriving at the justice, defense and state departments today. And the quickened pace expected to continue in the days ahead. While Trump heads out of New York City to his golf course in Bedminster, New Jersey, the meetings with top candidates will follow.

2012 nominee and harsh Trump critic, Mitt Romney and potential education secretary pick Michelle Rhee and potential secretary of defense pick James Mattis all scheduled for Saturday sitdowns with the president-elect. The Romney meeting by far the most notable with the like of comments like these during the campaign.

[17:05:08] MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: Donald Trump is a phony, a fraud, a con man, a fake. His promises are as worthless as a degree from Trump University.

MATTINGLY: Some questioning whether Trump's sitdowns are simply head picks to soothe critics who say he is not reaching out. Trump's team says this is the new reality.

SEAN SPICER, RNC CHIEF STRATEGIST AND COMMUNICATIONS DIRECTOR: The president-elect wants the best and the brightest. He is going to meet with people who supported him, people who didn't support him, Republicans, Democrats, Independents, but most of all these conversations start off as just that, a conversation to discuss people's ideas and thoughts and get their opinions.


MATTINGLY: And Wolf, as we all know, everybody is trying to read the tea leaves right now. Get a sense of who are actual candidates and who is just there for advice. And tomorrow, no question about it, all eyes are going to be on Mitt Romney. But sources inside the transition team tell me keep a very close eye on James Mattis, on Michelle Rhee and also (INAUDIBLE), a billionaire, big time Republican donor who is big in education circle, a potential candidate for education secretary as well-- Wolf.

BLITZER: Thanks very much, Phil Mattingly over at Trump tower.

And Trump's choice for national security advisor caps a remarkable comeback for retired lieutenant general Michael Flynn. He was forced out of a top intelligence job back in 2014, reportedly criticized for his management style.

Our global affairs correspondent Elise Labott is here, also some questions about Flynn's connections to Russia, if you will. What have you learned?


Well, General Mike Flynn is being hailed as a skilled intelligence officer by fighting terrorism but his views on Islam and Russia along with his temperament are raising questions about the man who could have the last word on how president Trump should respond in the situation room.


FLYNN: This was not an election, this was a revolution.

LABOTT (voice-over): As Donald Trump's national security advisor, Michael Flynn will be at the table for every major defense and foreign policy decision by the president. Retired three-star general who helped dismantle extremist networks in Afghanistan, Flynn is known as a skilled intelligence officer, even though he was forced out from the Pentagon as head of the defense intelligence agency for his combative management style.

GEN. MICHAEL HAYDEN (RET.), FORMER CIA DIRECTOR: Really bright, incredibly hard working. I do think most of his life experience has been at the tactical level, where he has incredibly successful.

LABOTT: On the campaign trail Flynn was a vocal critic of Hillary Clinton's private email server and the Clinton foundation foreign dealings.

FLYNN: We do not need a reckless president who believes that she is above the law.

LABOTT: But two former government officials with direct knowledge tell CNN, while in Afghanistan Flynn was informally reprimanded but no wrongdoing was found for his handling of classified intelligence, including the improper sharing of Intel with Pakistan regarding terror network networks. Flynn has told CNN about the incident, it is not true, not even close.

And even as he was at Trump's side for classified briefings, documents show Flynn was running a company that was lobbying on behalf of foreign clients, including a Dutch firm owned by a Turkish businessman. Though the company said Flynn had no contact with the Turkish government.

Flynn stunned colleagues when the registered Democrat joined the Trump campaign and traveled to Russia where he was paid to sit alongside President Vladimir Putin at this gala for the Kremlin run propaganda channel RT.

FLYNN: There is no relationship with Putin and there is no relationship with Russia that we must have.

LABOTT: Flynn's views of Islam have made him a lightning rod tweeting earlier this year fear of Muslims is rational. And I dare Arab and Persian leaders to step up to the plate and declare their Islamic ideology sick.

FLYNN: Islam is a political ideology. It is a political ideology. It definitely hides behind this notion of it being a religion.

LABOTT: CNN's k-file found Flynn routinely retweeted unfounded conspiracy theories and promotes users tweeting anti-Semitic messages. He came under fire this summer for quoting an anti-Semitic message linked to a CNN video. The corrupt democratic machine will do and say anything to get #neverHillary into power. He later wrote, retweeting a tweet that read not anymore, Jews.

He quickly apologized calling it a mistake. But after Flynn's announcement, former Ku Klux Klan leader David Duke cited the tweet as evidence Flynn quote "knows that the Saudis, ISIS and the Jewish neo cons are the real enemies." Calling him a great pick. Democrats on Capitol Hill say they are very concerned about Trump's choice.

REP. ADAM SCHIFF (D), INTELLIGENCE COMMITTEE: On a lot of policy matters, his views rally scare me, frankly. He has a difficult time differentiating between the entire faith of Islam and those who pervert it like al-Qaeda and ISIS.


LABOTT: And the top Democrat on the house oversight committee Elijah Cummings is seeking more information from the transition team about potential conflict of interest surrounding General Flynn's business activities. Some former colleagues while praising Flynn's intelligence skill, say he will need to tone down some of his combative style in order to be an honest broker among all the agencies to ensure the president gets input from his whole national security team, Wolf.

[17:10:19] BLITZER: All right, Elise, thanks very much. Elise Labott reporting for us.

Joining us now is a member of the Trump transition team, Republican congresswoman Marcia Blackburn of Tennessee. She is on the executive committee.

Congresswoman, thanks very much for being with us.

REP. MARCIA BLACKBURN (R), TENNESSEE: Good to be with you, Wolf. Thanks.

BLITZER: So let's talk a little about General Flynn. He is going to be the national security advisor at the White House. He does not need Senate confirmation. Are you at all concerned about what you just heard in Elise Labott's report that he was lax in supposedly dealing with classified example, for example, when he was in Afghanistan?

BLACKBURN: Wolf, he has given the explanation on those dealings and the information share that was carried out. And I have confidence in general Flynn. He is considered to be a brilliant mind. He has a clear understanding of cyber and cyber security needs. He has a clear understanding of what transpires in the virtual space. He knows who our enemies are. And I have the confidence that he is going to give president-elect Trump good advice. As the NSA, he is going to give consistent and good advice. People want to make certain that we are kept safe.

And I have got to tell you, I really appreciate that Mr. Trump has gone about looking at these national security positions first because those were at the top of the heap, if you will, in concerns of the people as they looked at this election cycle. And what I'm picking up from my email and communications with my constituents, and we have a major military post in my district, people are really quite pleased with the announcements that have been made today.

BLITZER: He did tweet that -- one tweet this year, fear of Muslims, he said, is rational. There we put it on the screen. Fear of Muslims is rational. Please forward this to others. The truth fears no questions. Is fear of Muslims rational?

BLACKBURN: I'm not going to get into discussing any tweets that have been me or were made. I'm going to put that aside. I think when you look at the aggregate of general Flynn's experience and what he brings to the table, what he has faced as a man in uniform, how he was willing to always defend this country and the brilliant mind that he brings to the table, I think that that serves him well.

As he enters a position to advise the president on our threats and known threats, developing threats, looking at terrorism, how it is spreading, how it has metastasize, finding these terrorist cell he is going to be a stalwart member of that national security team.

BLITZER: I think, congresswoman, you can agree you can't lump in all Muslims. There are Muslim extremists, there are Muslim terrorists, but you can't say fear of Muslims in general, that that is rational. Because there are a lot -- most Muslims are decent, hard-working wonderful people.

BLACKBURN: You are correct on that. And we all know that generalizations have a tendency to get individuals into trouble. And I'll just -- I will leave it at that.

BLITZER: Let's talk about another issue that's come up, his connections with Russia. He made frequent appearances on Russian state media, the propaganda arm of Putin RT. He was photographed as you know sitting next to president Putin at one of their big galas exactly a year ago. He was paid to make a speech there. Is that a problem, you think?

BLACKBURN: He has disclosed that. It was something that was done through a business arrangement and that is not something that causes me a tremendous amount of concern because of the disclosure that was made there. Now, I have not seen a transcript of the speech. I have not had the opportunity to read and review that, but I appreciate the fact that that was disclosed and that he brought it forward early. I am certain that Mr. Trump and those that are doing the vetting close to him have reviewed all of that information and do not see that as something that is problematic.

BLITZER: All right. Congresswoman, we have more question other issues coming up. I want to give you a chance to respond to all of them. Let's take a quick break and resume this conversation in a quick moment. Thank you.


(COMMERCIAL BREAK) [17:19:04] BLITZER: We are back with a member of president-elect Donald Trump's transition team, Congresswoman Marsha Blackburn of Tennessee.

And there is breaking news tonight. Donald Trump has agreed to pay $25 million to settle three lawsuits alleging fraud against Trump University. We are going to bring you the latest on that in just a moment.

First I want to get some more on Trump's announcement for some new picks in his upcoming administration. Today's list includes Republican congressman Mike Pompeo of Kansas. He will become the director of the central intelligence agency if confirmed by the Senate. He is a member of the house intelligence committee.

I want to bring in our senior political reporter, Manu Raju.

Manu, there has been some controversies involving the congressman Pompeo's record, some of the things he said about Muslims, about President Obama. What are you hearing?

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Yes, that's right. Democrats, Wolf, are bound to scrutinize some of those past statements and some of Pompeo's own hardline views on national security. But Pompeo is also winning praise from many Republicans who say he has impeccable credentials for the post.


[17:20:05] RAJU (voice-over): Kansas congressman Mike Pompeo, a staunch conservative, now in line to lead the CIA. A Harvard law grad who was first in his class at west point, Pompeo quickly gained the trust of GOP leaders after his 2010 election.

UNIDENTIFIED MALE: You have testified here this morning --

RAJU: Holding influential posts on the house intelligence committee and the panel investigating the 2012 Benghazi attacks. But Pompeo, not satisfied with the findings of the GOP-led investigation, issuing a separate report, laying the blame on Benghazi at the feet of Hillary Clinton and Barack Obama.

REP. MIKE POMPEO (R), INTELLIGENCE COMMITTEE: This was a failure at the most senior levels of our government and one that I hope the recommendations this committee presents will help making sure that something like this never happens again.

RAJU: Pompeo has called for more sweeping terror surveillance. He wants to keep open the detention center at Guantanamo Bay. He has criticized Obama for rolling back tough interrogation tactics, like waterboarding. And he was a staunch critic of FBI director James Comey and his investigation of Clinton.

POMPEO: Director Comey screwed this up from the get-go by announcing on July 5th that he wasn't going to indict a woman who had materially mishandled classified information. RAJU: And Pompeo issued some tough statements about Islam, even

accusing its religious leaders of turning a blind eye to extremists.

POMPEO: Silence has made these Islamic leaders across America potentially complicit in these acts.

RAJU: In 2015, Pompeo agreeing with the conservative talk radio host that Obama was sympathetic to terrorists.

POMPEO: Every policy of this administration has treed America as if we are the problem.

RAJU: But Pompeo has also shown a willingness to take on his own party. In 2014, engaging in a bitter primary to save his seat. And earlier this year, threatening to challenge Kansas Republican senator Jerry Moran. But Senate Republicans convinced him to stay out of the race, after they hired a former FBI investigator to dig up dirt about Pompeo's past.

In the presidential primary, Pompeo did not side with Trump, backing Florida Senator Marco Rubio instead.

POMPEO: He is the one man who is ready to be commander in chief on day one.

RAJU: And now that he's en selected as Trump's CIA director, Pompeo is winning praise among some key figures in the foreign policy establishment.

HAYDEN: When I saw the choice, I was heartened. I think this is a serious man who takes these questions seriously.


RAJU: And Wolf, unlike the other two choices Trump announced today, Pompeo is not a Trump loyalist. Even though he didn't endorse Trump after he secure the nomination, he really didn't campaign for Trump other than appearing as a surrogate for Mike Pence during the VP debate. And he only spoke with the president-elect's team periodically about national security issues. They did meet. Trump and him did meet earlier this week in New York. And Wolf, it's quite clear that Pompeo's views closely align with Trump's.

BLITZER: It is significant I think. I spoke with Congressman Adam Schiff of California earlier today, the ranking Democrat on the house intelligence committee and he was very effusive in his praise of Pompeo saying this man is qualified.

RAJU: Yes. And he is getting praise from across the board because of his credentials even if he does harbor some of those more conservative views. People believe he is a serious legislator and a person who could do a good job at the CIA.

BLITZER: All right. Thanks very much, Manu Raju reporting.

We are back with Republican congresswoman Marsha Blackburn of Tennessee.

You know Congressman Mike Pompeo but you just heard what he said after that Boston terror bombing, suggesting that Islamic faith leaders could be complicit in those attacks. Do you agree with him on that?

BLACKBURN: Wolf, I don't know the context within which that whole statement fit, but I do know this. There are so many leaders in our country from both sides of the aisle that called on moderate Muslims to move forward and to help us as we sought to rout out those who were couching themselves inside mosques or maybe who were in some way affiliated that were seeking in some way to do harm. And the moderate Muslims could be very helpful in that regard.

You have Muslim friends, I have Muslim friends. We know that there are many in this country who do feel like that we need to work together to find a way that they are going to be productive and helpful so that the extremists are not able to establish terrorist cells and harm our communities, our cities, our schools and our citizens.

BLITZER: Let's switch to the other breaking story that's happening this hour, Donald Trump agreeing to pay $25 million to settle three lawsuits against Trump University. As you know during the campaign he often said he never settles. Why do you think he did it this time?

[17:25:05] BLACKBURN: In my opinion, and I have not talked to Mr. Trump or his -- any of his advisers today about this issue, but my thinking would be that this is a point where he is needing to divest himself of some of the responsibilities and the loose ends, if you will. You know, when you begin to make a transition in life, whether it is an exit from a business or if you are retiring or you are moving to a new career field, you go through a period of time where you kind of clear the desk. And you prepare to make that exit and that transition. And my thought would be this was a way just to get that item, unfinished business, if you will, off the desk.

And I would imagine that as he extracts himself from his businesses and moves to reshaping his life and making that move down to D.C. that you are going to see him go through a series of transactions that will curtail or end or wind up different business agreements or affiliations and allow him to move with a clean slate and ready to put his total and complete focus on his goal, which is to make America great again, safe again and one again.

BLITZER: I just want to read the statement we just got from Ellen Garner (ph) the executive vice president and the general counsel of the Trump organization on this settlement of the Trump University lawsuits.

We are pleased to announce the complete resolution of all litigation involving Trump University. While we have no doubt that Trump University would have prevailed atrial based on the merits of this case, resolution of these matters allows president-elect Trump to devote his full attention to the important issues facing our great nation. That statement from the Trump organization.

All right, congresswoman, thanks so much for joining us.

BLACKBURN: Good to be with you, Wolf. Thank you.

BLITZER: Marcia Blackburn of Tennessee.

Coming up, will the new CIA director help Donald Trump keep his promise to bring back waterboarding and other enhanced interrogation tactics as they are called against suspected terrorists.

And later, new concerns about potential conflicts of interest after the businesswoman Ivanka Trump sits in on her father's meeting with Japan's prime minister.


[17:30:00] WOLF BLITZER, CNN: We're getting more information on this hour's breaking news. Donald Trump's attorney, now say the President- elect admits no liability despite the just announced $25 million settlement of the three class action lawsuits against Trump University. An attorney for the plaintiffs says all Trump University students will be able to get at least half of their tuition back, and in some cases, all of their tuition back. We're following President- elect Trump's announcement of three controversial choices at the same time for top spots in his new administration.

Senator Jeff Sessions of Alabama is Donald Trump's choice for Attorney General. Retired Lieutenant General Michael Flynn will be the National Security Adviser at the White House. And republican Congressman Mike Pompeo, a member of the intelligence committee, is Trump's pick to become the Director of the CIA. I want to get the insights of former republican Congressman Mike Rogers. He once chaired the House Intelligence Committee and is a CNN contributor. Congressman, you were on the Trump transition National Security team until you left it this week. Were these three under serious consideration when you were directly involved?

MIKE ROGERS, CNN NATIONAL SECURITY COMMENTATOR AND FORMER CONGRESSMAN OF MICHIGAN: Yes. Well, two were under very serious consideration and one was on the list, so I think all of these three had at least some or partial vetting leading up to the President-elect -- being put elect's desk for a decision.

BLITZER: Who was the one who was just on the list?

ROGERS: Well, Sessions was clearly on the list and was actually part of the transition. General Flynn was always under the consideration, given his role, and he played a bigger role up in New York. And Mike Pompeo was on the list to be - you know, there was a whole list of names for a series of positions, and he certainly was on that list.

BLITZER: How much -- how much vetting usually goes for -- has been done on these three going forward?

ROGERS: Well, the normal process in this would be if they didn't want to talk to somebody, meaning before the election, if you didn't want to, you know, have any leaks that somebody may or may not be under consideration or in this case, may be under consideration, they would do what's called a public vetting. So, all the information that could be

generated publicly, they had attorneys that would sit down and go through that information to see if there were any glaring problems that might be disqualifying to -- for the president to select that particular individual.

So, they all have that. And then I think once the decision gets a little more serious and the election happened, now there's a little more seriousness to it and you would have a more -- a deeper vetting, if you will, of these individuals.

BLITZER: General Flynn was forced out of his position as Director of the Defense Intelligence Agency after two years, and his record with classified information at least by some of his associates there, was called into question. Do you think he's trusted -- he's trustworthy enough to be the president's National Security Adviser?

[17:34:50] ROGERS: Well, you know, the most important thing about the National Security Adviser job, I think, Wolf, is they have to have a relationship with the president. It's the most important place. So, all the intelligence is flying through at the president's office there, and the National Security Adviser is the one that kind of coordinates that. And then, they -- he brings in the players from around the community to make big policy decisions or big policy recommendations to the President of the United States on national security issues.

So, that trust factor is going to be important. I think he has to have that relationship. Is this tactical -- he's a tactical intelligence guy by training and experience. And I think America should give the guy a chance. I know it's early and everybody wants to lob knives and javelins and everything they can throw, chairs, anything they can get their hands on, but I think the president has to have the opportunity to have the folks in his cabinet and around him that he knows, and that he trusts to do the kind of work that he wants to get done.

So, I understand the loyal opposition thing, and I get it, and I think that's an important part of our process. But I argue, it's so early, one and a half weeks in, give the guy a chance, I think.

BLITZER: As you know, President Obama ended the CIA's Enhanced Interrogation Program, waterboarding issues, stuff like that, saying it actually did damage to America's standing in the world. Do you believe that Congressman Pompeo, who's now designated to become the CIA Director, and the President-elect for that matter, Donald Trump, do you think they will reverse that, bring back waterboarding?

ROGERS: You know, there is what's called an Enhanced Interrogation list that's still is available to the President of the United States. Waterboarding is not one of them, it's not on that list. And it has to be approved by the President of the United States on those other items. And so, I don't think they're going to take the time, the effort or the energy to go through and have to change the law in order to allow waterboarding. Because if you recall a few ago, they moved the interrogation to the army training manual, basically, for techniques. And so, waterboarding isn't there.

So, they'd have to change the law. I have a feeling they'll get in, they'll see what their options are, they'll see what the challenges are, and they'll take it from there. I do think that the president will make a good decision based on what the law is, and he'll know that as president. And sometimes on the campaign trail, you don't have access to that level of information. When he gets it, I think he'll make the right decision when it comes to waterboarding, which is probably not worth the time to go through the hassle of trying to change the law to do it.

There are other things that you can do, including having the opportunity to actually interrogate somebody. Remember toward the end, the Obama administration ramped up their -- the kinetic strike capability in taking people -- killing people basically rather capturing them. I think you're going to see a change there, because once you get the opportunity to interview these people, that's when you get some of the best information you can. And there's lots of good techniques that don't include waterboarding to get that information.

BLITZER: Mike Rogers, thanks very much for joining us.

ROGERS: Thanks, wolf.

BLITZER: Coming up, new concerns about potential conflicts of interest after Ivanka Trump joins her father's meeting with the Japanese Prime Minister.


[17:40:00] BLITZER: This hour's "BREAKING NEWS," a $25 million settlement in the class action lawsuits against Trump University. An attorney for the plaintiffs said everyone who enrolled will be able to get at least half of their tuition back. A Trump attorney says the President-elect admits no liability.

Also tonight, Donald Trump is filling out three key roles, in his upcoming administration. Let's discuss all of this and more with our political experts. Mark Preston, on the Trump University issue, agreeing to pay $25 million to settle these lawsuits, back in February, Trump said he doesn't settle lawsuits. He tweeted at the time, "Trump University has a 98 percent approval rating. I could have settled but won't out of principle." Your reaction.

MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: He had to settle. I mean, the fact of the matter is he's now President of the United States, he's the leader of the free world. Could you imagine him being deposed in this case, which he was going to have to testify in this case. $25 million really is a small sum to pay, I think, for Donald Trump to try to get this behind him. Will this be a story? Yes, and it will be a story for a few more days, and then, I think, it's going to go away.

BLITZER: Remember the feud that he had with Judge Curiel who was in charge of these lawsuits out in California. The Indiana-born Mexican- American Judge, who Trump really went after.

PRESTON: It wasn't just - it wasn't just the Trump University story, it was the side story where he went after this judge because of his Mexican heritage. So, yes, he needed to get this behind him. $25 million for someone as wealthy as he is, small price to pay.

BLITZER: The appointments, the announcements he made of these three key slots today over the past 24 hours, what do these appointments, Jackie, say to you?

JACKIE KUCINICH, WASHINGTON BUREAU CHIEF FOR THE DAILY BEAST: Well, these are all hardliners, and these are people who have backed Donald Trump pretty much from the very beginning and have really been behind him and have been, you know, putting his message out there. Jeff Sessions was the first senator to endorse him. Michael Flynn has been a constant fixture on the campaign trail. Pompeo first endorsed Rubio but he's been with Trump for a while, so it's seems like he's rewarding loyalists. He's bringing other people in, maybe some of his opponents in the past, to talk, but the loyalists are what are getting the plum positions right now.

BLITZER: We'll see if any of those others that he's bringing in to have these conversations like Nikki Haley or Ted Cruz, tomorrow, Mitt Romney if he actually wind up with anything or are just giving some opinions to the President-elect. Do you think Pompeo, he will need confirmation, senate confirmation, Sessions will need senator confirmation, do you think either of them will have any problem?

[17:45:01] MANU RAJU, CNN SENIOR POLITICAL REPORTER: I think Sessions' hearings could get contentious, and it's unusual be given that it's a senator and typically in such a (INAUDIBLE) body. Usually, they just, you know, they shuttle all of these senators right through the confirmation process. But Sessions' views on immigration and civil rights is -- have already prompted a lot of concern from democrats. Chuck Schumer, the senate minority leader saying the statement that while he's a gym buddy of Jeff Sessions', he's going to be - this will raise a lot of concerns about his past record and something they're going to scrutinize closely. But that doesn't mean that he will be stopped. He's almost certainly going to be confirmed.

The republicans, of course, have the majority, the democrats will remove the filibuster for executive branch nominees. That means only 51 senators need -- are needed to confirm. Executive branch nominees are 52, republicans will likely going to sit in the senate next year, and already some - and you can bet, some democrats are going to vote for Sessions and Pompeo as well. So, I think Trump will win.

BLITZER: They only need 50 senators since the Vice President of the - of the United States is going to be the republican. He's the president of the senate, he breaks that tie.

RAJU: Yeah. And the only other thing come - that could come up, you never know what happens in a confirmation hearing. Things can come up in the past that we just have no idea about and that could blow up everything. But assuming that doesn't happen, Trump should get his people. PRESTON: You know, just on that, too, they're going to try to damage Sessions, right, to try to scare -

BLITZER: The democrats?

PRESTON: Democrats will, but allow him through. Just, you know, just to make a point not only for their base, but for the fact of trying to get things done.

BLITZER: All right. Guys, stick around. And to our viewers, please be sure to check out the first ever book from CNN Politics. It's entitled "UNPRECEDENTED: The Election That Changed Everything." It's in stores December 6th. You can pre-order your copy right now. Pre- order it at

Coming up, do Donald Trump's children pose a conflict of interest potentially for the incoming administration? The President-elect is facing questions and criticism after his daughter sat in on the meeting the President-elect had with the Japanese Prime Minister. We're going to bring you the latest.


[17:50:00] BLITZER: Donald Trump is coming to Washington promising to "drain the swamp." But the involvement of Trump's children in his White House transition, as well as his business dealings that may be blurring the lines somewhat between public service, private profit. Brian Todd is working the story for us. Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, we're seeing more alarm bells being raised tonight, because it seems that the potential government portfolios of Trump's children, especially his daughter Ivanka, only seem to be expanding. Ethics lawyers, other experts openly questioning tonight if Trump and his children can achieve any separation from his business empire.


DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES: Our government will be honest, ethical, and responsive.

TODD: When Donald Trump is in the White House, he plans to hand off his business holdings to his children, but there are growing signs of potential conflicts of interest. Trump's daughter, Ivanka joined him in his meeting with Japan's Prime Minister.

MATTHEW SANDERSON, POLITICAL LAW ATTORNEY: And what it looks like is he may be forming less of a team of rivals and more of a team of relatives, and that's a problem.

TODD: Like any business, Trump's empire is affected by policies set by the government. But with his children playing key roles in his transition team, choosing the country's top policymakers, critics say it's problematic.

DREW HARWELL, BUSINESS REPORTER AT THE WASHINGTON POST: It's incredible. I mean, there are conflicts at every turn. Trump has said that there will be a wall between, you know, his kids and his business interests and his public ambitions. There's no wall that we're seeing right now.

TODD: The Trump transition team says it will make sure all rules and regulations are followed, and Trump's business organization says this is how it plans to handle the ethical dilemma.

MICHAEL COHEN, TRUMP ORGANIZATION ATTORNEY: It's going to be placed into a blind trust.

TODD: But experts say your own children are not what most lawyers would call a blind trust.

SANDERSON: And it's not credible to say that it's a blind trust, because in an actual blind trust, he would divest himself all of the interests that he holds. He would sell off his properties that he owns, and he would put the proceeds into a trust that's run by an independent third party.

TODD: Trump himself has shown uncertainty.

TRUMP: Well, I don't know, if it's a blind trust if Ivanka, Don and Eric run it, but - is that a blind trust? I don't know.

TODD: One of Trump's top supporters offers this assurance.

RUDY GUILIANI, FORMER NEW YORK CITY MAYOR: They'll have to be a wall between them with regard to government matters.

TODD: Also complicated, the case of Trump's son-in-law, Jared Kushner, who's playing a trusted role in the Trump transition team. He runs a newspaper and a billion dollar real estate company. Could Trump give a top post to his own son-in-law.

SANDERSON: It may be legally questionable and politically perilous for him to choose someone close to him and the number one qualification being that they're related to Donald Trump.

TODD: Why doesn't Trump just turn his entire business empire over to an outside third-party trustee?

MICHAEL D'ANTONIO, AUTHOR OF THE TRUTH ABOUT TRUMP BOOK: Donald trusts no one more than he trusts, Ivanka, Donald, Jr., and Eric. But the problem that Donald has is that he doesn't trust very many people.


TODD: Now, one glaring physical example of President-elect Trump's potential conflicts of interest is here, just a few blocks away from the White House, the Trump International Hotel. Trump Hotels is the tenant and once he's president, Trump is also going to be the land lord, since this property is rented from the federal government. Trump will have the power to hire and fire the head of the General Services Administration, the GSA, which oversees this property, and he could conceivably, in effect, be in a position to negotiate the rent for this place with himself. Neither the Trump transition team nor the Trump organization have commented on that. The GSA told CNN, it's going to work to address any potential conflicts of interests with this building. Wolf?

[17:55:00] BLITZER: Interesting. All right. Brian, thanks very much. Brian Todd reporting.

Coming up, Donald Trump begins filling jobs in his cabinet, national security team, will hard line loyalists from his campaign really be able to keep Trump's promise to "drain the swamp?"


BLITZER: Happening now, "BREAKING NEWS," Bannon speaks. Donald Trump's controversial Chief Strategist, Steve Bannon, fires back at accusations he's a white nationalist, and he details Trump's plan to win over minority voters. Why does Bannon believe Trump's policies will endure for decades?

Trump settles, Donald Trump agrees to settle lawsuits against Trump University for $25 million. The deal will keep Trump from having to testify in court as he assumes the presidency. Will then the controversy over his embattled school? Key picks, Trump moves to fill top positions in his upcoming administration -