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THE SITUATION ROOM

Trump Backing Off Campaign Stances; Interview with Rep. Adam Kinzinger; Who's Under Consideration in Trump Cabinet?; Trump on Business Conflicts: 'The Law is Totally on My Side"; Report: Trump Charity Admits to Violating IRS Rule; Terror Concerns, Tight Security Ahead of Holiday. Aired 5-6p ET

Aired November 22, 2016 - 17:00   ET

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


WOLF BLITZER, CNN HOST: Happening now, breaking news. Reverse course. Donald Trump drops his pledge to prosecute Hillary Clinton, saying it would be very divisive for the country. He now says he condemns and disavows far-right hate groups that have cheered his election win. Is Trump setting a new tone for his administration?

[17:00:24] Calling it cancer. New questions on the president-elect's pick for national security adviser after it's revealed that Michael Flynn called Islamism, quote, "a vicious cancer inside the body of 1.7 billion people, a cancer that he says must be excised.

School bus horror. The driver of a Tennessee bus is charged with five counts of homicide after allegedly driving at a high rate of speed and crashing the vehicle into a tree, killing five children.

And terror warning. Heading into the holidays, the U.S. warns its citizen about dangers abroad and after a terror arrest at home. Security is beefed up along the route of New York's Thanksgiving Day parade.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: The breaking news: after dodging and dissing the news media, Donald Trump enters the lion's den and sits down with "The New York Times." The president-elect backs off his pledge to prosecute Hillary Clinton, saying it would be very divisive for the country. An aide says Trump wants to help Hillary Clinton heal. After taking heat for his tepid response to neo-Nazis who cheered his victory, Trump now tells "The New York Times" he disavows and condemns them. And he says of his much-criticized chief strategist, Steve Bannon -- and I'm quoting him now -- "If I thought he was a racist or alt-right, I wouldn't even think about hiring him."

Amid growing concerns that Trump and his family are doing business deals abroad during his White House transition. The president-elect concedes that his brand is now hotter and says his Washington hotel is probably more valuable. He also insists the law's on his side, arguing that a president can't have a conflict of interest. He complains that, if it were up to some people, quote, "I would never ever see my daughter, Ivanka, again." And as Americans prepare for the holidays, security is beefed up along

the route of New York's Thanksgiving Day parade, a new arrest adding to the concerns of a vehicle attack along the lines of last summer's horrific attack in France.

I'll speak with a member of Trump's inner circle, Republican National Committee chief strategist Sean Spicer; and Republican congressman Adam Kinzinger, he'll also join us. Our correspondents, analysts and guests, they will have full coverage of the day's top stories.

Let's begin with Donald Trump breaking his media silence in an on- again, off-again, on-again meeting with "The New York Times." Let's start with our senior White House correspondent, Jim Acosta, who's joining us from New York.

Jim, Trump does a turnabout of sorts and now opposes prosecuting Hillary Clinton.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. Some very interesting answers. Donald Trump did leave New York for Thanksgiving and Florida without holding a news conference. But as you said, he did sit down with "The New York Times" and offered some answers revealing he may be leaving some of that red-meat rhetoric of the campaign behind him.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): Today Donald Trump met face-to-face with one of his favorite targets, "The New York Times," and the newspapers and reporters were live tweeting the highlights. To all of his supporters calling for Hillary Clinton to be jailed over her e-mails and the Clinton Foundation, Trump hinted he's leaning against pushing for any sort of prosecution, saying it would be very, very divisive for the country.

It's a reversal for Trump, who shattered presidential campaign norms by threatening to imprison his opponent repeatedly.

DONALD TRUMP (R), PRESIDENT-ELECT OF THE UNITED STATES: I am going to instruct my attorney general to get a special prosecutor to look into your situation because there has never be so many lies, so much deception.

ACOSTA: On his chief strategist, Steve Bannon, who's been accused of showcasing racist views on his Breitbart news site, Trump said it's very hard on Bannon. "I think he's having a hard time with it, because it's not him."

And Trump even moderated his stance on global warming, which he once called a hoax, telling "The Times," I think there is some connectivity between humans and climate change."

With his inauguration getting closer, the president-elect has no shortage of flames to put out: from a new revelation in "The Washington Post" that the Trump Foundation admitted to the IRS it was engaged in "self-dealing" and illegally misusing charitable donations; to the mounting conflicts posed by his business affairs overseas. Trump told "The Times," "In theory, I could run my business perfectly and then run the country perfectly. There's never been a case like this."

MICHAEL FLYNN, TRUMP NATIONAL SECURITY ADVISOR: We are facing another "-ism." Just like we faced Nazism.

ACOSTA: And there are questions about Michael Flynn, who's tapped to be Trump's national security adviser, after the retired general's comments on Islamism last August.

[17:05:09] FLYNN: This is Islamism, and it is a -- it is a vicious cancer inside the body of 1.7 billion people on this planet. And it has to be excised.

UNIDENTIFIED MALE: Dr. Carson! Dr. Carson!

ACOSTA: Trump also met with rival turned supporter Ben Carson and tweeted he is seriously considering the doctor to run Housing and Urban Development, even though a Carson adviser just last week said, "Dr. Carson doesn't think he's qualified to run a federal agency."

Trump is mostly trying to bypass the media since his election, revealing his upcoming agenda in this transition-produced video.

TRUMP: My agenda will be based on a simple core principle: putting America first.

ACOSTA: A top supporter's message to the press: get used to it.

LAURA INGRAHAM, RADIO TALK SHOW HOST: Donald Trump is going to make his own way with the press, and he's probably going to do a lot of those videos, I would imagine, where it's straight to the American people; go around the press.

(END VIDEOTAPE)

ACOSTA: Now, a source familiar with transition discussions tells me that Mitt Romney is seriously considering joining Donald Trump's administration as secretary of state. The source says that Romney is very likely having these discussions right now with family members, who often serve as his closest advisers. But this source cautions a decision is not expected until after the holiday weekend -- Wolf.

BLITZER: All right. We're going to be speaking to Sean Spicer, one of his -- one of Donald Trump's top advisers. That's coming up in a little while. Jim Acosta, thanks very much. We'll get his reaction to all these developments.

But right now I want to speak with Republican Congressman Adam Kinzinger of Illinois. He served in both Iraq and Afghanistan. He now serves in the House Energy and Commerce Committee. Congressman, thanks very much for joining us.

REP. ADAM KINZINGER (R), ILLINOIS: You bet, Wolf. Thanks for having me. BLITZER: Well, let me get your reaction to this latest news. A

source familiar with transition discussions saying Mitt Romney is, quote, "seriously considering the possibility of serving as secretary of state. Your reaction?

KINZINGER: I'd be ecstatic when I heard his name thrown out there. I said, you know, I can't think of, really, anybody better qualified. There's a lot of good -- well-qualified people. I've heard a lot of names thrown around. But Mitt would be great. It would send a strong message to the party. It would send a really strong message to the country that Donald Trump is interested in uniting.

And then, just mechanically, look, Mitt Romney is tough as nails, but he knows how to negotiate, and he's the kind of statesman that we would need out, dealing with these really difficult issues around the world.

So I hope Mitt Romney, if it's his choice, I hope he takes it. If Donald Trump is still deciding, I hope Donald Trump picks Mitt. I think it would be fantastic for this country.

BLITZER: So you would be assured about the president-elect if he picked someone like Mitt Romney to be his secretary of state?

KINZINGER: I would. And, you know, as we've talked about many times in the past. One of my big concerns was always on the issue of foreign policy and the role of Russia and some of those other issues.

Mitt understands, I think, in a very clear way how the world works, understand what Americans' strength is, understands you don't have to use military power all the time but sometimes economic force, sometimes using the energy as a soft weapon and using incentives as the right way to bring freedom to the world and, frankly, be an example of self-governance to billions that don't have it. It's a very reassuring pick if that's a case.

And like I said since, frankly, the day he gave his victory speech, Donald Trump, I've been very reassured by his tone, and I'm excited to get to work in January when he's sworn in.

BLITZER: And you speak as someone who was highly critical of him during the campaign.

Very quickly, General Mattis becoming defense secretary, would that please you?

KINZINGER: I'd love that. General Mattis, look, you know, the great thing about General Mattis is he says it like it is. He says what he means and means what he says.

He's also, again, not one of these people that's going to use the military force just because. He understands how this all works and the depth of American foreign policy. And his troops loved him. I mean, this is something that's -- it's like a General McArthur kind of thing. His troops that worked for him, I've talked to a lot of them. They said that this guy would have walked into hell for them. And that's the kind of leader that we need in the secretary of defense position. So I'd love it if it's Mattis, and hopefully, he gets there.

BLITZER: If that happens with the secretary of state, secretary of defense, looks like you'll be totally on board with Donald Trump, the president-elect of the United States.

How concerned are you, Congressman, though, about Donald Trump apparently still involved in running his businesses and the children are running the company while still playing a major role in his transition. Today Trump told "The New York Times," and I'm quoting him now -- the law is totally on my side. The president can't have a conflict of interest. Now. how problematic is that point of view, if you think that it is?

KINZINGER: Well, I think that it can be problematic. I think, you know, look, when you're president of the United States, you have to have one focus, and that's being the president of the United States. You don't have to opportunity to think about anything else but what you have to do that morning, what you have to do in the long term and how to lead this country through very difficult times.

17:10:08] And hopefully, through this transition, President-elect Trump realizes that, you know, this is a beyond full-time job. It's probably basically two or three full-time jobs.

And look, I'm going to give him the benefit of the doubt on the transition. This is -- we're two weeks into this, basically. This is a man that has no political experience that's coming to grips with the reality of the presidency.

I don't have a problem with his children running the business. I mean, it's -- the name is Trump. And I think it's very American to pass your business onto your children.

But I think in terms of building a firewall, that's going to be very essentially, and so we'll see over the next couple of months what happens there. But for now, I think it's early, and I think Donald Trump is going to come to realize that he's not going have time for anything but running America.

BLITZER: Do you feel confident in retired Lieutenant General Michael Flynn's ability to be the top national security adviser in the White House, based on statements he's made earlier this year about Islam and Muslims?

KINZINGER: I have concerns with the General Flynn a little bit. Some of them are, you know, appearing next to Vladimir Putin on Russian television. Things along that line.

I do, as a national security adviser, that is completely, obviously, up to the president-elect to determine who he wants by his side.

In terms of the Islam statement, look, I have said many times that I think radical Islam is a cancer. And if the general meant like it's a cancer among 1.7 billion people, well, look, it is. You have tens of thousands of people that would walk into a nursery school and blow themselves up.

I don't necessarily think he was saying it's a cancer in everybody within that 1.7 billion people. But you know, look, we have to defeat this. And so, in terms of General Flynn, I'm going come into this with an open mind and understand that the president has the ability to put people he trusts around him.

BLITZER: When you look at some of these people who might be involved in the administration, let's say, from General Flynn; maybe Mitt Romney. How do you think Trump reaches a coherent foreign policy with advisers Flyn and Romney, are on different world views, presumably?

KINZINGER: Well, I think this is where it's smart of a president to do. You put people with different views around you, and then you take that information and make the best decisions.

You know, some of the trouble of past presidents, and I would argue to an extent even President Obama has gotten himself into is surrounding yourself with people that have your exact same worldview. And in that, everybody's world view, even mine to some extent, has errors. You just don't necessarily know where those errors are.

And in putting people around you that have different views, maybe allow you to see the errors that you have in some cases or the strengths that you believe in, or to adopt from different views. So I think surrounding yourself with people that have counter narratives is actually really good, and it leaves it to President-elect Trump to be the decision maker, because he knows it at the end of the day the decisions rest on him.

BLITZER: The president-elect met yesterday over at Trump Tower with Democratic Congressman Tulsi Gabbard of Hawaii, a veteran like yourself. Do you think that it would be smart for Trump to include Tulsi Gabbard and maybe other Democrats in key national security positions?

KINZINGER: This one is difficult for me, because I'm friends with Tulsi. I know her well. But I vehemently disagree with her world view. In fact, the statements I heard her make about the Assad regime were actually some of the same statements she made when I was debating her on this very network a couple of weeks before we began bombing ISIS, where she was arguing against bombing ISIS.

So look, I think she's a great person. I get along with her well, and -- but I totally disagree with her world view. And I think, in a position like I've heard her floated for, for you know, the U.N. or something like that, she would be the wrong choice. And frankly, I think she'd have a really hard time getting confirmation through the Senate.

BLITZER: I need you to stand by, Congressman. There's more to discuss. Also, after reversing course on some key issues, where does Donald Trump stand as he puts together a new administration? I'll also speak with a key Trump insider, Sean Spicer. He'll be standing by.

(COMMERCIAL BREAK)

[17:18:30] BLITZER: Our breaking news: after some sharp condemnations of the news media, Donald Trump actually sits down today with "The New York Times." He condemns neo-Nazis, white supremacists, says his business interests do not represent a conflict of interest, indicates he does not favor investigating or prosecuting Hillary Clinton or Bill Clinton, for that matter.

Joining us now, a member of Donald Trump's inner circle. Adam Kinzinger, who's still with us. He's not a member of Donald Trump's inner circle, but maybe you will be after you're enjoying some of these potential announcements that he's making. The member of Donald Trump's inner circle who will be joining us shortly is Sean Spicer, chief strategist, communications director for the Republican National Committee.

You're a combat veteran. You served in Iraq and Afghanistan. Let's talk a little bit about what Donald Trump has told "The New York Times" today. He actually seems to have changed his mind, Congressman, when it comes to the usefulness of waterboarding, enhanced interrogation, torture as some call it, after his conversation with retired Marine General James Mattis.

He said this. "He said" -- referring to General Mattis -- "'I've never found it to be useful.' He said" -- he added that Mr. Mattis found more valuable -- more value in building trust and rewarding cooperation with terror suspects. Quote, "Give me a pack of cigarettes and a couple of beers, and I'll do better." Trump said, "I was impressed by that answer." And Trump said torture is not going to make the kind of difference that he originally might have thought.

[17:20:03] So he seems to be reversing his position on waterboarding, enhanced interrogation. What's your reaction to that?

KINZINGER: I think it's good. I mean, look, I think, you know, surrounding yourself with people that have been there and understand. Look, I've been, you know, through various sea-air, survive, evade or resistance, escape kinds of training, and I will tell you the ones that were most effective on me, you know, where you're more likely to break are those ones where somebody builds a rapport, and you find yourself trusting somebody.

And in fact, the greatest spy for the Germans, or the greatest interrogator for the Germans in World War II actually became best friends with a bunch of American aviators that were captured and actually got the most intelligence of basically any interrogator in the world. And so that is most effective.

Now, I've always said that you can't ban outright the use of enhanced interrogation technique, because you never know what you never know. There always could be a moment when you have an imminent terrorist attack happening or something along that line in which a president may have to make that awful decision.

But I think in general to default to that or to say that it's something that we're going to use regularly is not the answer. And all I have to do is listen to Senator John McCain, who basically says the same thing, and he's been through it. He understands.

BLITZER: And you'll be happy to know, in that same "New York Times" interview, he spent an hour answer answering reporters' questions from "The New York Times." He said General Mattis, in his words, is being, quote, "seriously, seriously considered to become the next secretary of defense." Quote, "I think it's time, maybe, for a general. "

All right. Congressman Adam Kinzinger of Illinois, thanks very much for joining us.

KINZINGER: You bet, Wolf. Thanks a lot.

BLITZER: Let's get some insight from our correspondents and our political experts. David Chalian, what do you think? He seems to be having a change of mind, a change of heart on some pretty sensitive issues.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Yes, he seems to be moving from campaign mode to governing mode with the keen awareness that he didn't win every single vote in this last election. So, you know, he's certainly one of the most polarizing president-elects that we've seen at this stage, a few weeks after the presidency. And I think he's aware of that.

And so I think what you're hearing in his language, it's -- I don't think we're seeing some radical shift or some new Donald Trump. I think we have to learn -- we know who Donald Trump is. But I do think we're seeing someone who is dealing with the weight of governing beyond the showmanship of politicking and campaigning.

BLITZER: And this news about Mitt Romney, who was interviewed the other day; apparently really would like to be secretary of the state. And a source familiar with the transition discussion says Mitt Romney is seriously considering the possibility of serving as secretary of state.

S.E. Cupp, what do you think?

S.E. CUPP, CNN POLITICAL COMMENTATOR: Yes, that's welcome news. Mitt Romney is a sober-minded conservative, who was actually -- despite their friction should be a natural ally. They were both businessmen. They come from the business world.

So I would actually -- if they could put that sort of personal stuff aside, I would imagine they can see things very similarly. But it's just -- it is remarkable to see Trump drop off these former positions like he's dropping off luggage at one of his hotels. Just, you know, from waterboarding to prosecuting the Clintons.

I mean, this is stuff people like me said he's never going to do, either because he can't -- Geneva Convention -- in the case of torture. Or because he doesn't have the will to prosecute his friend, Hillary Clinton.

It's just remarkable, though, the speed at which he has just sort of dropped these off. CHALIAN: Remember, we've seen -- on the prosecuting Hillary Clinton,

we've seen him -- this is the second time we've seen him change this.

CUPP: Yes.

CHALIAN: It started out, we were at the convention where the supporters were chanting, "Lock her up," and around that time, he was tamping it down, saying, "No. No. No. Let's get to the voting booth; let's win this election."

Then he was leading the chant. Now he's back to say, "No, no, no."

BROWNSTEIN: And the process, Ron Brownstein, of doing this, saying that he is not going to prosecute Hillary Clinton, saying now maybe waterboarding is necessarily a good idea after his conversations with General Mattis. You know, he's -- and maybe bringing Mitt Romney into the cabinet as secretary of state. Some of that key base of his, they're going to be sorely disappointed, aren't they?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Well, look, he's picking his fights, right? I mean, he -- as David, said he is am extremely polarizing winner. He's probably going to lose the popular vote by more than anyone who's ever won the presidency in our history. So he is starting on, you know, kind of unsteady ground. And I think they are being smart in trying to pick their battles.

But you cannot really go overboard. I mean, he did appoint Steven Bannon to his senior advisor position in the White House. He did appoint Jeff Sessions as attorney general. He did say that, on the first day, one of the things he wants to do is undue President Obama's clean energy regulations, which kind of undercuts what he was saying today about maybe rethinking leaving the Paris Climate Agreement. If you simply already repeal the mechanism by which you would meet our obligations, it's not clear what staying in it would mean.

So, you know, I do think that there is kind of a shrewdness here and kind of understanding that you cannot fight every battle that he laid out as a candidate. But I think it's -- we're a long way from kind of a sense that he is steering his presidency in a way that will be acceptable to a much broader range of the public that resisted him on election day.

BLITZER: Richard Quest, in the interview with "The New York Times," Trump said the president can't have a conflict of interest when it comes to the his business dealings. How does he navigate this very sensitive issue?

RICHARD QUEST, CNN CORRESPONDENT: Well, he was being strictly legally accurate when he said that, because the government ethics law don't apply to the president. So he was being on point.

However, of course, he also went on to say he could see a situation where, you know, he could sign the checks and still be president. But he still hasn't come up with a workable transition from his existing business environment to the children or to his children or to anybody else that will pass normal muster when it comes to conflict of interest.

Ethics experts say simply not going to be possible. So you're left with one of two things. You either sort of accept the unacceptable with conflict or he does have to divest himself of his assets, and that he doesn't seem likely to do.

BLITZER: That's not simple to do. He's got a lot of investments. He simply can't go out and start selling everything.

And Richard Quest, for the first time ever the Dow Jones today, the Dow Jones Industrial Average ended above 19,000. That's a record. That's a record high. Investors clearly are very confident right now, or at least right now, as far as what they see the economy doing, maybe as a result of Donald Trump.

QUEST: Absolutely Wolf. They are focusing on the lower taxes, the greater infrastructure spending, the expansionary fiscal policy. Growth going beyond 2 percent; possibly 3, hopefully 4 in Donald Trump's world.

They are not focusing on the trade war as a result of the TPP or indeed, Wolf, an imbalance of trade, a disruption of trade as a result of the policy. At the moment, the market is very much focused on the shorter term of expansion.

BLITZER: David Chalian, the conflicts or the potential conflicts of interest, though, a lot of focus on that right now. Does it bring a serious problem to the next president of the United States?

CHALIAN: I don't think it brings a serious political problem, although we did see in our most recent poll that people think he has not gone -- the majority of Americans say he has not far enough in separating.

I do think it is a problem for his own ability to convince people on government that he has to work with, legislators on the Hill, that he's doing things for the right reasons and not for any business reason. I do think just being in the room, he's going to need to assuage people's concerns that Ivanka, his daughter, who he says is in charge of the business, is on the phone with foreign leaders. That -- he gets benefit out of this deal that he's trying to land, even though he says over and over again, "I don't care about that any more. I care about the country."

I thought his words today, and as Richard Quest said, the totally according to the law, it sounded Nixonian when he said that there is no conflict of interest for the president.

BLITZER: I'm anxious for your thoughts, S.E.

CUPP: I think, ironically, one of the biggest complaints Republicans had in this election was the Clinton family's constant intermingling of the official with the profitable. And not being able to sort of see through all of that and be transparent about that. And having members of their family in official -- official capacity.

So it's just kind of remarkable again that Trump is facing the same set of circumstances and really isn't trying to walk out of it.

BLITZER: Yes, go ahead, Ron.

BROWNSTEIN: Yes, it's easy to imagine the counterfactual, right? If Hillary Clinton had won the election and had met, during the first week after the presidency -- after being elected president, with senior donors to the Clinton Foundation the way that Donald Trump met with business partners in India; or if Chelsea Clinton had sat in on a meeting the way that Ivanka Trump did -- it's easy to imagine that Jason Chaffetz's head would be exploding live on THE SITUATION ROOM right now.

And so, you know, the question is whether Republicans are doing Donald Trump any favors by not raising questions. Because while these are essentially annoyances at this point, if you kind of move down this road without any effective check, the odds, I think, are really high that you're going to get into a bigger problem that's can't be as easily swept aside at some point over the course of a four-year presidency.

So I think whoever is the White House counsel is going to have their work cut out for them and trying to establish some meaningful lines that will protect the president, perhaps, from his own instincts, as displayed in that "New York Times" interview.

BLITZER: Yes, Richard Quest, quickly on this, because I know that you've looked into this. This whole notion of Nigel Ferrar, Donald Trump recommending maybe the U.K. should send him to Washington as the next ambassador to the United States. That's causing quite a little stir out there, isn't it?

QUEST: Yes it has indeed. The British prime minister says that it's not going to happen. The foreign secretary says the U.K. already has a good ambassador in Washington. But it's mischief making to even suggest that Nigel Ferrar is the nemesis of the prime minister. It's the equivalent of the British asking for Jeb Bush, Marco Rubio, Mitt Romney, Hillary -- the lot of them to all be appointed in the Trump cabinet. It's not going to happen, and the British will be viewing this with some concern.

[18:30:03] BLITZER: It is, David Chalian, pretty extraordinary for a president-elect of the United States to start tweeting, making recommendations to maybe the closest ally the United States has, the U.K., after Canada -- I know our Canadian viewers are always sensitive to that. Recommending who they should name as an ambassador to Washington.

CHALIAN: Right. I mean, obviously, that is one of the primary prerogatives of any government, is to choose who to send as their representative. But I think we have to get used to saying the word "extraordinary" when discussing the Trump transition and the Trump presidency.

BROWNSTEIN: Real quick Wolf, I mean, the thing about it is that it's not only just doing it to begin with. Nigel Farage, the analogy, Richard, might not be Jeb Bush. It might actually be closer to David Duke. In that sense, given UKIP and its position in the British political environment is an environment that was headed and ran, and I think it's even more extraordinary to make that suggestion.

BLITZER: S.E., you want to weigh in on this point?

CUPP: Well, I think we're going to have to get used to Donald Trump especially using social media to put out into the world his every fleeting impulse, and without that filter of wondering, "Is this appropriate? Is this usual?"

BLITZER: Everybody stand by. Sean Spicer, top adviser now to the president-elect of the United States, the chief strategist of the Republican National Committee, he's standing by live. We'll continue this conversation right after a quick break.

(COMMERCIAL BREAK)

[17:36:13] BLITZER: And joining us now, a key member of Donald Trump's inner circle, Sean Spicer. He's the chief strategist, the communications director for the Republican National Committee.

Sean, thanks very much for joining us.

SEAN SPICER, CHIEF STRATEGIST/COMMUNICATIONS DIRECTOR: Thanks, Wolf. I appreciate it.

BLITZER: Today the president-elect told "The New York Times," this lengthy interview he just granted them, and I'm quoting him now, he said, "The law is totally on my side. The president can't have a conflict of interest." What did he mean by that?

SPICER: Well, he meant that the law is very clear; and they actually carve out the president of the United States, so that that can't actually ever exist.

Now what it means is that, for all of the talk, he is going above and beyond what the law requires in a way that he's going to make sure that there's a wall between his business and the -- and the way he governs. But I think what he wanted to make clear to that is that the law has been clear. The way it was set up and done so to ensure that the president of the United States was never able to be legally in a conflict of interest. And he was answering that question correctly and legally.

BLITZER: So what kind of wall is he talking about? His adult children going to be in charge of the business. He's going to be talking to them, obviously. So what are you suggesting that wall will look like?

SPICER: Well, there's two things. No. 1, back as far as the first debate, he's been very open and very clear about how much he loves his family, how important his business is and how he'd be set up. He was very clear: "I'm going to run for president. I'm going to leave the business to the kids."

So this has been something that the American people have known exactly where he stood from day one.

No. 2, over the next 60 days, as he prepares to transition to become the next president of the United States, he's going to work with the lawyers and the legal team to make sure that every "I" is dotted and every "T" is crossed to ensure that there's every proper procedure is followed and taken care of to allow that transition to take place so that he -- you know, from being a successful businessman to being a successful president.

BLITZER: So why is his daughter, Ivanka Trump, involved in meetings, phone calls with foreign leaders during this transition process?

SPICER: He's not president of the United States yet. So...

BLITZER: He is president-elect of the United States.

SPICER: I understand, but in some of these cases, they're very casual meetings. So he's talked about the role of his family. He thinks they're extremely important. He's -- again, this isn't -- somehow the idea that this is news is interesting, because he's been clear since day one that he -- he values the opinion of his family. He loves their opinions and thoughts and values on this part of the decision- making process. So the idea that suddenly something that he has been talking about for a year and a half is news, is quite interesting.

BLITZER: Because in one of those debates, he said that there -- there would be some strict guidelines, if you will, if he became president of the United States.

A quick question on Ivanka Trump. Did she -- did she just listen in on that phone conversation with the leader of Argentina, or was she part of the conversation?

SPICER: I actually don't know the details of that.

BLITZER: Let's talk about some other confusion now that's emerging. During the campaign he pledged to prosecute Hillary Clinton. Today he said he wouldn't do that; he's taking it off the table. He doesn't want to, quote, "hurt the Clintons," and prosecuting Hillary Clinton, he said in his words in this "New York Times" interview, would be very divisive for the country. Do you want to clarify what he intends to do?

SPICER: Yes, I'll be very clear. He put out a video yesterday; talked about five executive actions he's going to...

BLITZER: No, no, no, what he intends to do, if anything, about Hillary Clinton?

SPICER: Well, no, I'm answering the question. I think right now he recognizes that he was elected, first and foremost, to bring back jobs and change the way Washington works. And that's what, you know, he started to lay out yesterday, with this video that he put out about his -- the first executive actions. And I think he's going to further lay out where his legislative priorities are. But he realizes the country is in deep trouble. He wants to help us

grow the jobs, restore the border, repeal Obamacare, institute a better healthcare system that's affordable and allows greater choice.

So he realizes the magnitude of what's at hand; the number of appointments that he has to make, the number of people that he has to get ready to transition to government. He's had over 60 meetings so far.

[17:40:00] And I think he looked at that in terms of the priority of where that sat and the relationship that he has with the Clintons and said, "Right now, the focus is on the country, creating jobs, creating a better healthcare system, restoring a strong border and a better immigration system in this country. And so when you look at the level of priorities and the amount of work to be done, he just made it very clear that that's...

BLITZER: So I just want to be precise, Sean. So all the chanting at the rallies, "Lock her up, lock her up," when he suggested he would name a special prosecutor, when he said she belongs in jail, all of that is now gone? That was just talk then, during the campaign? Now he's going to focus in on these economic issues? Is that what you're saying?

SPICER: Well, what I'm saying is he didn't rule it out in "The New York Times." He made it very clear that it wasn't a priority and that his priority was he didn't want to hurt the Clintons in any way, but he wanted to focus on making the country better and helping lift people up and making -- creating the jobs and securing our border.

So it's a question of priorities right now and a question of intent. He is now the president-elect. His goal is to make sure that every American gets lifted up from one coast to another.

BLITZER: In the same "New York Times" interview, he denounced white supremacists. He denounced the neo-Nazis who support him, said -- and I'm quoting him now -- "It's not a group I want to energize, and if they are energized, I want to look into it and find out why." Specific words.

Tell us -- tell us a little bit more. Should he go out and deliver a speech specifically denouncing these neo-Nazis, these white supremacists, saying if they think...?

SPICER: Well, look, he is -- every tweet...

BLITZER: I'm just asking...

SPICER: I get it.

BLITZER: ... should he go out there and deliver a specific speech and make that abundantly clear he doesn't want these people's support, and he condemns them?

SPICER: When is it going to be enough? He has condemned everyone that's come out and supported him, every group that's supported him. At some point, you've got to take, you know, his position and go and move on.

But over and over again, somebody will come out and say, "I support Donald Trump." He has to denounce them. Someone tweets. He has to refute the tweet. At what point is his position clear?

He has said that he refutes that; that's not the kind of movement that he wants to support or be energized by him. That's not the kind of people that he wants to be associated with. And so I don't know how many more times Donald Trump can make his position clear, but it's been crystal clear for a long time. And over and over and over again with every tweet, utterance, you know, you name it, Facebook post, he has to have somehow responded to it. He has made his position clear. It's time that we accept that position and move on. Because that's not his focus. His focus is on...

BLITZER: Why do you think, Sean, these neo-Nazi groups, these white supremacist groups that we saw them here in Washington over the weekend; you saw the video. Why do you think they still support him?

SPICER: I don't know. That's really not my focus, figuring out why certain groups support him. He won the election with tens of millions of people. I haven't sat down and figured out why certain groups, you know, supported him or didn't. He won the election. His focus is on making the country better.

But at some point, take his word as what it is. But to continue to ask him over and over again to denounce the same people, the same words, the same groups over and over again is getting a bit preposterous. His focus, his words is uniting this country, moving us forward, creating jobs. I don't know how many times he can talk about that.

But he is continually asked, on this and other areas, to repeat his position over and over again, and it seems a bit silly, because that's not what his focus is.

BLITZER: Because he does it in response to questions, you're right. And's very tough in response to questions. But he doesn't do it, necessarily, on his own initiative. For example, he hits the news media when he thinks there's a story that's unfair. He tweets when he's outraged about something in the media, "Hamilton," what happened at the Broadway musical "Hamilton." But he doesn't seem to go out of his way to express his outrage over people hailing him with Nazi salutes. Why doesn't he do that more dramatically, if you will, and make it clear he wants no part of these people?

SPICER: Because I think it's asked and answered, Wolf. You've asked me eight -- eight times the same question. I told you what his position is. That's -- because that's not his focus. His focus is making this country better for all Americans, creating a better country, creating a better education system for all Americans, rebuilding our inner cities. That's what his focus is.

So I get that you guys don't want to ask the same question over and over again and make them denounce it eight ways until Sunday. But it's not what he wants to talk about. He's focused on making this country better, on lifting people up.

And again, you're right; it's the news media over and over and over again asking the same question. But I don't know how many times he has to answer that question, and you figuring out the way and the fashion that he should do it next. I mean, if he goes out and gives a speech, then should he, you know, write it in the sky, in an airplane? I mean, at what point is it enough? I don't know, but I think he's been clear, and it's time to move on.

BLITZER: I think what the -- a lot of people would like to see is a formal statement similar to...

SPICER: No, they wouldn't.

BLITZER: Wait a minute; wait a minute. He did a -- he did a two-and- a-half-minute video yesterday outlining his economic plans for the first 100 days.

[17:45:00] Why not simply do another YouTube video like that, and say, look -- and directly address those people and say, "You know what, you're not part of my team. I don't want your support. I hate what you're doing," and end it once and for all. Take the initiative instead of simply reacting when a reporter asks him a question.

SPICER: Because I think Donald Trump has done a pretty good job of communicating an effective message to the American people. And while I respect and appreciate your ideas at what we should do, I think that Donald Trump has done a phenomenal job on his own in figuring out how to effectively communicate what the American people really want right now. And they voted on November 8th pretty unanimously in that favor.

BLITZER: Well, unanimously, I don't know about unanimously, but certainly he is the President-elect of the United States and he won the Electoral College.

SPICER: It's a pretty high electoral votes, yes.

BLITZER: Yes, yes. And that's all that matters. A quick question, in "The New York Times" interview today -- I'm assume you were over there -- with him he said that his son-in-law, Jared Kushner, could play a key role in negotiating an Israeli-Palestinian peace agreement. Talk a little about that. Would he be a special Middle East envoy?

SPICER: Well, let's go back to what the question was. The question was, what role do you think that Jared Kushner's going to play? And is it going to be formal? And he was very clear that he didn't see him playing a formal role, but there are really areas, particularly in the Middle East and Israel, that Jared is passionate about and has a lot of expertise in. And he said, you know, he might be able to play a role in this specified areas.

Again, no role has been specified. Nothing's been formalized. He was asked a hypothetical question. He made it clear that Jared wasn't looking for a particular formal role. But that his expertise in certain areas might come in helpful as he tries to make the world and the country a better place. BLITZER: The ranking member of the House Oversight Committee, the

Democrat Congressman Elijah Cummings, who is going to be joining us, by the way, in the next hour, he just sent a letter inquiring about the Trump Foundation.

It reads, in part -- and let me read it to you -- "I am writing to request additional information on the apparent admission of Donald J. Trump Foundation to multiple instances in which the organization appears to have violated the legal prohibition against using charitable funds to benefit its leader, their family members, or other disqualified individuals, commonly known as self-dealing."

I want your reaction to that letter, that statement, that Elijah Cummings just released.

SPICER: I think it's ironic and rich that Elijah Cummings suddenly cares about foundations and their activities after ignoring all of the concerns with the Clinton Foundation for the last several years. He's new found interest in foundations and how they operate is somewhat interesting. The Trump Foundation will continue to apply, abide, by all the laws in New York. As you've seen, they had some issues that the New York Attorney General brought up. They resolved those issues. But it will continue to operate in full accordance with the law.

BLITZER: One final question on the incoming national security adviser to the President, retired Lieutenant General Michael Flynn, he said this about Islamism. And I will put it up on the screen. Actually, I have the sound bite. This is what he said back in the summer. Listen to this.

(BEGIN VIDEO CLIP)

LT. GEN. MICHAEL FLYNN (Ret), NATIONAL SECURITY ADVISER TO PRESIDENT- ELECT DONALD TRUMP: We are facing another ism, just like we faced Nazism and fascism and imperialism and communism. This is Islamism. And it is vicious cancer inside the body of 1.7 billion people on this planet. And it has to be excised.

(END VIDEO CLIP)

BLITZER: Is that appropriate?

SPICER: Well, number one, I think that it's appropriate to recognize that we're facing radical Islamic terrorism. We've got a threat that's coming after us here in this country that wants to destroy us. And I think that General Flynn understands that threat probably better than anybody because of his previous post as the head of DIA and other intelligence agencies. And he wants to confront it and keep America safe, number one.

Number two, at the end of the day, every single one of the people that Donald Trump appoints is here to carry out his vision and carry out his thoughts on what things are. So General Flynn is uniquely qualified to carry that out. It's not about what he wants or what he things. It's about what Donald Trump thinks. And Donald Trump wants to confront that Islamic radical terrorism head on and keep this country safe.

BLITZER: Because General Flynn, as you know, also tweeted -- and I will put it up -- he said, "Fear of Muslims is rational." He's going to be dealing with a lot of Muslim leaders, King Abdullah of Jordan, for example, a great friend of the United States, is a Muslim. When he makes statements like that, "Fear of Muslims is rational," isn't he potentially alienating some of the closest friends the U.S. has in the Middle East people who the United States needs to fight ISIS, for example, Al Qaeda?

SPICER: I think President-elect Trump has full confidence in General Flynn's diplomatic abilities as well as his understanding of the intelligence landscape and will do a fine job as his national security adviser.

BLITZER: But he said in that tweet, "Fear of Muslims is rational. Please forward this to others. The truth fears no questions." And that's the kind of statement that clearly alienates so many people. He said it, he himself said, there are 1.7 billion Muslims here in the United States, indeed around the world. And I'm sure you agree, almost all of them are wonderful, decent, hardworking people. And he seems to be casting this wide net.

[17:50:16] SPICER: Well, I mean, I think we probably have to be much more careful in making sure that we're clear that it's radical Islamic terrorists and it is a sect within that. But I think -- and so, as far as making sure that, going forward, we're much more clear as to who we have to be fearful of is probably important. But we need to understand that we shouldn't, you know, be so concerned with political correctness as much as making sure that this country is safe, and that we understand the threats that we face and take them head on.

BLITZER: Yes. He should have been more precise instead of saying, "Fear of Muslims is rational." He should have said, "Fear of radical Islamic terrorists is rational." That would have been a more precise way of phrasing it.

But we'll continue these conversations, Sean, I'm sure many times down the road. Thanks very much for joining us, and I hope you have a wonderful Thanksgiving.

SPICER: Thank you, too, Wolf. Be safe.

BLITZER: Thank you. And heading into the holidays, the United States is now its warning citizens about dangers abroad. And after a terror arrest at home, security is now beefed up for landmark event in New York City.

Brian Todd is taking a closer look into all of these for us. What are you learning, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight, we are learning of extraordinary measures being taken to protect the Macy's Thanksgiving Day Parade. It comes after the arrest of an ISIS supporter in New York, and after the terror group called on followers to stage truck attacks and told them how to do it. (BEGIN VIDEOTAPE)

TODD (voice-over): Tonight, New York police and counterterror officials taking extra security measures along the route of the Macy's Thanksgiving Day Parade. Thousands of officers will be on the streets, snipers on roof tops. Dozens of large trucks filled with sand will be along the route.

Officials say they have this attack on their minds. The horrific truck attack in Nice, France, last summer during the Bastille Day Celebration, which killed more than 80 people.

MAYOR BILL DE BLASIO, NEW YORK CITY, NEW YORK: The Nice attack, we didn't need anything else to clue us in that the Nice attack was an indicator of something we had to make adjustments because of and changes. That's why the sand trucks are there. And you will not see vehicles crossing the route of the parade.

TODD (voice-over): Law enforcement officials say there is no specific credible threat to the Macy's Thanksgiving Day Parade. But recent warnings and arrests are chilling. U.S. officials say 37-year-old Mohammed Naji, arrested early Monday in Brooklyn, had ideas for a spectacular attack on Times Square.

Tonight, Naji is accused by prosecutors of providing material support to ISIS. His attorney denies the allegation. Naji's desire to attack officials say, fueled by Nice. According to a criminal complaint, Naji told a confidential informant, quote, "If there is a truck, I mean a garbage truck, and one drives it there to Times Square and crushes them, Times Square Day."

PAUL CRUICKSHANK, CNN TERRORISM ANALYST: ISIS has one message for its followers in the West and one message only. Kill as many people as you can. It sees truck attacks as was carried out in Nice as a very practical way of doing this.

TODD (voice-over): An ISIS magazine has laid out a how-to for conducting a truck attack like the one in Nice. Under a picture of Macy's Parade, a caption, "An excellent target." Law enforcement officials tell CNN they don't believe Mohammed Naji had any specific plot in the works, but experts warn about an ever present lone wolf threat.

PHILIP MUDD, CNN CONTERTERRORISM ANALYST: You're hoping that when they radicalize a hundred people, a thousand people, 5,000, who never even have to travel to Syria, if you misfire with those guys, you got a problem. So it's not the one off. It's whether you miss any of them over the course of years.

TODD (voice-over): Americans also being warned tonight about terrorism abroad during the holidays. The State Department warning Americans to be careful at holiday festivals in Europe. Recent arrests in France, according to French media, thwarted a potential attack at a Christmas market in the city of Strasbourg.

DAVID INSERRA, POLICY ANALYST, THE HERITAGE FOUNDATION: People are going to areas which we can't fully secure. We can't make sure every single, you know, bus station, every single train station is fully secured.

(END VIDEOTAPE)

TODD: Terrorism experts say what makes Thanksgiving and the other holidays more enticing target for ISIS this year is the fact that the terror group is losing ground on the battlefield and its leaders are more apt to tell potential recruits, don't come here where we're losing, stay home and attack. Wolf.

BLITZER: Brian, but this suspect in New York, he did try to actually join ISIS in the Middle East. Is that right?

TODD: According to federal prosecutors, Wolf, he did. They said that Mohammed Naji first traveled to Yemen in March of last year, and he tried five times to get into ISIS controlled territory. When he couldn't do that, he returned to New York in September of last year, according to officials, and then became fixated on possibly attacking Times Square.

BLITZER: Brian Todd reporting for us. Brian, good report. Thank you.

Coming up, Donald Trump drops his pledge to prosecute Hillary Clinton, saying it would be very divisive for the country and he condemns and disavows the same hate groups that have cheered his election win. Is Donald Trump setting a new tone for his incoming administration?

(COMMERCIAL BREAK)

[17:59:31] BLITZER: Happening now. Breaking news. Change of heart. President-elect Trump appears to change course on some of the most controversial positions he took during the campaign, including investigating Hillary Clinton. What is he now saying about his controversial adviser Steve Bannon and neo-Nazis hailing his election?

Not conflicted. Trump addresses questions about conflicts of interest between the Oval Office and his global business dealings, telling "The New York Times" that, in theory, he could run both perfectly. Where will he draw the line between businessman and President?