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Interview With Florida Congressman Ted Yoho; Trump Names Homeland Security Nominee; Obama Advising Trump?; Source: Trump Picks Third Retired General for Top Post; Trump's D.C. Hotel Draws Foreign Dignitaries. Aired 6-7p ET

Aired December 7, 2016 - 18:00   ET



WOLF BLITZER, CNN ANCHOR: Trump reaches into the world of pro wrestling to fill a key post aimed at helping small businesses in the United States thrive. Tonight, he's offering a timetable for another nomination that could be the most important one yet.

Time heals all wounds. Trump calls it an honor to be named person of the year by a magazine he once criticized, the president-elect revealing another change of heart about a former target of his attacks.

And room service. Foreign leaders of political insiders are flocking to Trump's new hotel just blocks from the White House. Are they expecting to get more than a luxury room and a good meal?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Tonight, the president-elect, who once shared doubts about America's generals, is turning to another high-ranking military veteran. A source telling CNN that Donald Trump has chosen retired Marine Corps General John Kelly to serve as homeland security secretary.

Also tonight, the transition team says Mr. Trump will nominate World Wrestling Entertainment co-founder Linda McMahon to head the Small Business Administration. She was a major Trump backer during the campaign, this as Mr. Trump says he may announce his choice for secretary of state next week, confirming that Mitt Romney still is in the running.

The president-elect revealing in a new interview that he's been consulting with President Obama on some of his potential appointments, saying he takes his recommendations very seriously.

I will talk about the transition with Congressman Ted Yoho. He's on the Foreign Affairs Committee. And our correspondents and analysts, they are also standing by, as we bring you full coverage of the day's top stories.

Up first, let's go to our national correspondent, Jason Carroll. He's over at Trump Tower in New York City with more on the transition.

Jason, what is the latest?

JASON CARROLL, CNN NATIONAL CORRESPONDENT: Well, Wolf, I can tell you that Trump has met with a number of people out here today at Trump Tower, including Oklahoma's attorney general, Scott Pruitt, widely seen as the man who could become the person to head up the EPA, much to the disappointment of many of his critic, who say he's too close to the fossil fuel industry.

Trump, for his point, though, relishing in the fact that he has once again made the cover of "TIME" magazine.


CARROLL (voice-over): President-elect Donald Trump is "TIME" magazine's person of the year.

DONALD TRUMP (R), PRESIDENT-ELECT: It's a great honor. It means a lot.

CARROLL: The caption, calling him president of the divided states of America, a moniker Trump told NBC News is not his fault.

TRUMP: I didn't divide them. They're divided now. I mean, there is a lot of division. And we're going to put it back together and we're going to have a country that's very well-healed.

CARROLL: Trump took that same message on the road Tuesday night at a so-called rally in North Carolina.

TRUMP: We will heal our divisions and unify our country. When Americans are unified, there is nothing we cannot do, nothing. No task is too great, no dream too large, no goal beyond our reach.

CARROLL: The president-elect's goal right now, piecing together his administration. CNN confirms Trump will name retired Marine General John Kelly, the former head of Southern Command, as his homeland security secretary. Today, he also named Iowa Governor Terry Branstad as his ambassador to China. One of the reasons? Branstad has a decades-long relationship with Chinese President Xi Jinping.

As for the secretary of state job, no decision yet, Trump saying Mitt Romney is still in the running and insists he isn't stringing the former rival along.

TRUMP: No. It's not about revenge. It's about what's good for the country. We had some tremendous difficulty together, and now I think we have come a long way.

CARROLL: Trump also wants Americans to start judging his actions now.

TRUMP: I hope I am judged from the time of the election, as opposed to from January 20, because the stock market has had a tremendous bounce. And people are seeing very good things for business in this country.

CARROLL: The president-elect calling out companies who he says are making bad deals for America, like Carrier and Boeing. Trump threatened Tuesday to cancel Boeing's deal to build a new Air Force One, tweeting in part that costs are out of control. Since then, Trump says he's talked to Boeing's CEO, and both agreed to work it out.

TRUMP: We're going to get the prices down. And if we don't get the prices down, we're not going to order them. We're going to stay with what we have.

CARROLL: Today, Trump also met with Chicago Mayor and former Obama White House Chief of Staff Rahm Emanuel.

RAHM EMANUEL (D), MAYOR OF CHICAGO: One, about White House operations and how to make that work. Second, we also discussed immigration.

CARROLL: Emanuel's former boss President Obama is also on Trump's call list, telling NBC News that he and the current president have talked several times, asked for his advice and takes his recommendations seriously.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: The president is responsive to requests and phone calls from the president-elect. He is certainly pleased that he can offer advice and assistance that may be useful to the incoming administration.



CARROLL: And a little bit more about Linda McMahon, the woman who will be heading up the Small Business Administration.

She's the former CEO of the WWE, wife of wrestling promoter Vince McMahon, ran for the U.S. Senate in Connecticut twice unsuccessfully. Trump says that he believes that she was instrumental in making the WWE what it is today, and he also believes she's going to be instrumental in helping small businesses across America -- Wolf.

BLITZER: All right, Jason, thanks very much, Jason Carroll in New York City.

Let's take a closer look now at how Donald Trump and his national security team are evolving, at least so far.

Let's bring in our chief national correspondent, Jim Sciutto.

Jim, what are you learning?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, Wolf, you're beginning to see patterns in the Trump administration based on these early nominations and selections.

One is certainly a predilection for generals, General Kelly the third general in the Cabinet, Michael Flynn national security adviser, James Mattis defense secretary, pending a waiver, and now this. And you have two other former military commanders, Scott Pruitt and Petraeus, under consideration for secretary of state.

But in terms of points of view, not really a pattern there. In fact, many of these selections, including the new ones, have points of view, public points of view that would seem to be in direct contradictions to the views and positions of Donald Trump.


SCIUTTO (voice-over): He toasted to friendship with China's president in 2012. And now Iowa Governor Terry Branstad is Donald Trump's nominee to be U.S. ambassador to Beijing.

The governor and President Xi Jinping have a long relationship. And under Branstad, Iowa's exports to China have grown exponentially.

LU KANG, CHINESE FOREIGN MINISTRY SPOKESMAN (through translator): Governor Branstad is an old friend of Chinese people.

SCIUTTO: But Branstad's friendly approach to Beijing contrasts sharply with president-elect Trump's vow to confront China on trade and national security. Trump's nominee to lead the Pentagon is retired Marine General James Mattis, pending a congressional waiver since he has not been out of uniform seven years, as required by law.

TRUMP: Mad Dog plays no games, right?

SCIUTTO: Like Trump, Mattis is hawkish on Iran.

GEN. JAMES MATTIS (RET.), FORMER COMMANDER, U.S. CENTRAL COMMAND: The Iranian regime, in my mind, is the single most enduring threat to stability and peace in the Middle East.

SCIUTTO: But while Trump has repeatedly praised Russia--

TRUMP: Wouldn't it be nice if we actually did get along with Russia?

SCIUTTO: -- and denied that Moscow interfered in the U.S. election, despite the assessment of the U.S. intelligence community, Mattis Russia and President Putin as a grave threat.

MATTIS: Putin goes to bed at night knowing he can break all the rules.

SCIUTTO: Trump's leading choices for secretary of state also have fundamentally different views of the Russia threat. Mitt Romney famously identified Moscow as America's leading foreign policy challenge during his own run for president in 2012.

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: I'm not going to wear ROSEN: -colored glasses when it comes to Russia or Mr. Putin.

SCIUTTO: Another possibly for State, ExxonMobil change and CEO Rex Tillerson, has close ties to Russian President Putin, signing a multibillion-dollar deal with Russia's state oil company in 2011 for exploration in the Arctic. Today, Trump said he's days away from a final decision on his top diplomat. TRUMP: I think fairly close. I think next week will be the time that

I announce it.

SCIUTTO: Trump's pick for homeland security, retired Army General John Kelly, and the president-elect are very much like-minded on another key international security issue, protecting the U.S. southern border, as Kelly testified before Congress in 2015.

GEN. JOHN KELLY (RET.), FORMER U.S. SOUTHERN COMMAND COMMANDER: If a terrorist or almost anyone wants to get into our country, they just pay the fare. No one checks their passports. They don't go through metal detectors.


SCIUTTO: General Kelly looks to the border as a potential entry point not just for terrorists, but certainly the drug trade as well. He identified U.S. demand for drugs as the primary cause, a primary cause for instability in Central and Latin America -- Wolf.

BLITZER: Jim Sciutto reporting for us, thank you.

Joining us now, Republican Congressman Ted Yoho of Florida. He's a member of the Foreign Affairs Committee.

Congressman, thanks very much for joining us.

REP. TED YOHO (R), FLORIDA: Sure, Wolf. Thanks for having me on again.

BLITZER: Do you believe, Congressman, that these military, these retired generals, that generals in effect should be in positions that are generally civilian posts? Is there any danger from your perspective to that?

YOHO: No, I don't think so. They're going to go through the vetting process. You take somebody like General Mattis, who is retired four years, he hasn't met the seven-year requirement, but he's a civilian.

And I think we need to keep that in mind. These are people that are civilians for the most part that served a long time in the military. And I think it sends a strong signal that we're serious about the people that we're putting in charge or that Donald Trump is picking to go through the vetting process. And I think this is a good thing.


BLITZER: Is the president-elect picking these generals because of his own lack of national security experience?

YOHO: You would have to ask him. I'm sure that plays into this.

But these are people that have strong reputations in the military careers that they served, and they will send a strong signal to the world that we have got some formidable leaders in different positions. And a lot of these guys have transitioned into the business world and they have been successful there.

So, again, I think this is a strong signal that this administration is showing their wisdom and getting the best that they can. And I respect him for that.

BLITZER: As you know, you point out, General Mattis, he needs a waiver from both houses of Congress because he hasn't been out of uniform for seven years to become secretary of defense. But now the Republicans want to tie that waiver to a critical House spending bill that could cause a government shutdown. It's got to be passed. Otherwise, there could be a government shutdown.

Is that fair to tie the waiver for serving as defense secretary to that critically important legislation?

YOHO: Well, I'm not going to talk about whether it's fair or not. It's a vehicle that we can.

And it's the last thing, one of the last things we are going to be able to vote on up here. And this is something that is imperative that if Mr. Trump has picked this person, in order to go to the next step, we have got to get that waiver.

So there will be some kind of vehicle that it will go in. There's a couple other bills that are going to come up, too. And they may attach that to that. So we will see how this plays out.

BLITZER: But are you OK with tying it to a critically important spending -- stopgap spending bill that has got to pass, otherwise, the government shuts down? From your perspective, as a lawmaker, is that OK?

YOHO: I think it's fine to go ahead and do that, because that's not going to be the poison pill that would kill that bill.

BLITZER: He's still got to be confirmed, the nomination, in the U.S. Senate, but the Republicans do have a majority in the Senate. He just needs a simple majority.

Let's talk about Russia for a moment. You're on the Foreign Affairs Committee. Donald Trump still doesn't believe that Russia interfered in the U.S. election.

But let me read to you -- this was a joint statement put out in October by the director of national intelligence and the secretary of homeland security -- quote -- "The U.S. intelligence community is confident that the Russian government directed the recent compromises of e-mails from U.S. persons and institutions, including from U.S. political organizations," referring to the Democratic National Committee.

It went on to say: "We believe, based on the scope and sensitivity of these efforts, that only Russia's senior most officials could have authorized these activities."

Why do you think Donald Trump, who gets these intelligence briefings, and they have told him the same thing in private that they said publicly, why does he still not believe that Russia was behind the DNC hacks in an attempt to influence the U.S. election?

YOHO: Again, I don't want to answer for Mr. Trump, but what I see is, it's a preliminary report. And I think once it's all done and it's all played out and the investigation has been done, you may see.

So, I'm not going to hang my hat saying it was Russia either. If you go back to when Sony got hacked, and everybody pointed to China or North Korea. And then there's the information saying, well, North Korea worked as a proxy for China. So we have to see how this plays out.

And I don't think I would hang my hat on Russia being the only one involved in this. There's groups out there like Anonymous and WikiLeaks and all these other things that hack into these.

BLITZER: Is it accurate what Donald Trump said in the interview with "TIME" magazine -- quote -- "I don't believe they interfered"? Is that accurate, from everything you know?

YOHO: I think that's true for Mr. Trump. And I'm not convinced they interfered either.

But you look at what Russia is doing, they are growing their empire. They want to grow the Russian mother country back. And that's because there's a vacuum or a void that's been created by the lack of leadership of the United States. And whenever there's a void, Mother Nature hates a void. A vacuum, that void will be filled up.

And you're seeing Russia do it. You're seeing China do it. You're evening Iran do that. And that comes from a lack of leadership. And that's why you see America so excited about putting these people in place of leadership. And that's why Mr. Trump is where he's at. He ran a heck of a campaign and just unboundless energy.

BLITZER: Because the intelligence community, the director of national intelligence, General Clapper, says there's no doubt. The U.S. intelligence community is confident that the Russian government directed the recent compromises, these hacking operations.

You don't necessarily accept that conclusion from the intelligence -- from the director of national intelligence? Is that what I'm hearing from you?

YOHO: Wolf, what I'm going to do is wait until I'm able to read an intelligence brief. I haven't been able to see one. So I'm going to hold my opinion until I see, because we have seen them being wrong on other things, too, it comes out down the road. So let's just hold off is my opinion.

And I think that's what Donald Trump is. And I think that fits into his personality, too. It's like, you know what? I'm going to believe what I'm going to believe and he moves forward and he makes a decision based on the knowledge that he has. And it seems to have served him pretty well. BLITZER: Yes. Well, I do agree, there have been occasions where the U.S. intelligence community has been wrong, especially on weapons of mass destruction, stockpiles in Iraq that many of us remember very vividly back in 2003.

YOHO: Right.


BLITZER: Do you agree with Republican Senator Lindsey Graham, who told CNN's Manu Raju today that the U.S. -- that he wants to investigate Russia's role in the elections and in Syria? He says Russia is one of the most destabilizing influences on the world stage. That's Lindsey Graham. Do you support Lindsey Graham leading a new investigation?

YOHO: I don't know if we need an investigation. I think what we need to do is move forward from here, set a clear, concise foreign policy, make strong relationships with these other countries.

We're not going to solve the problem in the Middle East by ourselves. We have had a long time to try to solve that. It goes back to the Carter administration, when they set their agenda for the Middle East, their Middle East agenda. And we have not seen that come to fruition.

We have to have a reset on this. I don't know if you need to investigate Russia. I think we need to start from this point forward and move forward with strong diplomacy, but you can't do that if you have got a country that's bleeding to death on our debt, and you have got a military that's dropping behind on readiness.

Those are the things that will help our diplomacy. And that's what I see Mr. Trump doing. When you see the investor from Japan saying they're going to put $50 billion into this country, or Donald Trump calling executives of corporations, keeping those corporations here to create American jobs, keeping those families here, and it has an effect here in the homeland and down to the dinner table.

Those kids are going to know their parents are working. That's the effect that I see with Donald Trump. And I heard you in the beginning of this about Donald Trump has destabilized America. I disagree, and I know it wasn't you saying that, but it was recorded.

America was destabilized. It was split up. And it was because of policies -- I'm not just going to blame this administration with President Obama. We can go back to the beginning of the terrorist attack on 9/11. And so we have to have strong policy, but we're only going to get peace through strength, and that's what I see starting to emerge with the Trump administration.

BLITZER: Yes, no, I didn't say Donald Trump destabilized America, but it was "TIME" magazine who named him person of the year.


YOHO: Good call. BLITZER: And person of the year, the subheadline on the cover of

"TIME" magazine, they said Donald Trump, president of the divided states of America. He pointed out he didn't divide, he's inherited the divided states of America. I just want to be precise on that.

YOHO: You were, and I misspoke. And I apologize.

BLITZER: All right, don't apologize. But I want you to stick around, Congressman.

We have more to discuss. We're getting new information. We will resume this conversation in just a couple moments.

YOHO: Thank you.



BLITZER: We're back with a key Republican on the House Foreign Affairs Committee, Congressman Ted Yoho.

We're getting some new developments in the Trump transition.

First of all, Congressman, do you support Mitt Romney for secretary of state?

YOHO: You know, he certainly is a credible businessman. He's been out there in the public.

I think he could represent us well, and this is something, again, that Mr. Trump's transition team, I think he spent a tremendous amount of time vetting him. And the thing I like about what he's doing is, he's got people that were rivals that he's bringing together to the table. And I think that's just a good oversight on chief executive, you know, to have counterviews, so that you can bounce those ideas off of each other.

And I think that forms for better policy, instead of having a yes man there all the time. I think it will play out. He's got several people in line there, but Mr. Romney is somebody that's well known around the world and respected.

BLITZER: Well, you're on the Foreign Affairs Committee. Would you support him?

YOHO: I'm in the House, not the Senate, so I don't get to vote.

But I would have to see what the field is. If he was the one that was at the top and that's the one they wanted, yes, I would.

BLITZER: So if he's nominated to be secretary of state, even though only the Senate has to confirm that nomination, the House has no role in that, but you would tell your Senate friends go ahead and confirm him; is that what I'm hearing?

YOHO: Pretty much, yes. Yes. I would say yes.


Let's talk about the incoming Senate minority leader of the other house. I'm talking about Chuck Schumer of New York. He indicated to "The Washington Post" today that Democrats will not work with Republicans to negotiate and pass a replacement for Obamacare once the Republicans vote to repeal it.

Let me read to you what he said. "If they repeal without a replacement, they will own it. Democrats will not then step up to the plate and come up with a half-baked solution that we will partially own. It's all theirs."

It's a pretty rough, tough statement. Do you see that happening?

YOHO: No, I don't. It's rhetoric. He can say that. He can try to block it.

But this is something that's going to fail on its own. People are losing their insurance. People can't afford to go to the doctor because of the deductibles. And I hear it every day in our district offices. We hear it up here. And this is around the nation. You look at how many of the co-ops have failed. This is a failed program that will collapse. The Democrats own it right now.

But we don't need the replacement. What you need to do is repeal 100 percent of it with a transition period within the next two years and have policies that are in place that allow the insurances to be sold across state lines, that allow insurance companies to come out with new policies. And you want these things now. And it's going to -- it will be a smooth transition.

The goal of the Republicans is to make sure nobody goes without insurance. There will be coverage for preexisting conditions. Children can always already stay on their parents' health insurance until the age of 26 prior to Obamacare.


So, fixes are going to be done in there. And it's going to be a good thing. It will be a lot better. And I guarantee you, you're going to see your premiums go down. You will be able to keep your doctor and your insurance company.

BLITZER: I will check that, but I think kids could only stay on their parents; plan until the age of 26 as a result of the Affordable Care Act. But we will double-check that to make sure that that is right.

And the 20 million people who now have health insurance who didn't have it before, what is going to happen to them?

YOHO: You're going to see a transition.

And if you go back to prior to Obamacare, 15 percent of the people in this country didn't have insurance for various reasons. That was 35,000. The 20,000 or 20 million or 35 million -- the 20 million they say now have insurance because of Obamacare, that's a misconception, because a lot of those people got kicked off of their other plans because of Obamacare.

People like Blue Cross -- mine got canceled in the private sector, so I had to go on it. So, they got picked up in Medicaid or Medicare. So, they're playing with the numbers here.

There's not that many people that have insurance today that didn't have it because of Obamacare. Granted, there's people out there that got coverage, but I have got a lot more people calling me saying, please get rid of this, from schoolteachers to housewives.

And it's a bad policy and it will go away. And Chuck Schumer, he can be an obstructionist. Keep in mind how they got it in. It was 100 percent Democrats in 2009 on Christmas Eve without any Republican support. And they have owned this. And he can play hardball, but he might want to look at the results of the last election.

There will be another election in two years, and he will own that attitude.

BLITZER: Congressman Ted Yoho of Florida, thanks so much for joining us.

YOHO: You betcha.

BLITZER: Just ahead, we will have more on the president-elect's latest Cabinet picks. Did President Obama's advice make any difference?

Stay with us.


BLITZER: Tonight, we're learning that President-elect Trump is ready to add a third retired U.S. military general to his inner circle.

[18:31:34] Let's discuss this and more with our political panel. And Ana, I want to start with you. John Kelly, the former head of the U.S. military's Southern Command. You know General Kelly. He's being nominated, not officially yet, but he will be as the secretary of homeland security. What do you think about him? What can you tell our viewers?

ANA NAVARRO, CNN POLITICAL COMMENTATOR: Look, I knew there are some people that have issues with the number of generals that are getting appointed. I've got to tell you that both Mattis and Kelly are just incredibly qualified.

I've known John Kelly, saw him up close in Miami, where SouthCom is headquartered. This is a tested, proven leader with energy, has served this country, has sacrificed for this country his entire life, lost a son in Iraq, is a true Marine. He is experienced; he's a leader. He's exactly what you want in charge of DHS. I can tell you, I feel safer knowing that John Kelly is the guy that's

going to be heading our homeland security. He's incredibly qualified. He's not political. He's not an ideologue. This guy is a professional server of our country's interests.

BLITZER: He's a Gold Star dad. His son, Second Lieutenant--

NAVARRO: His wife -- his wife, Karen, is -- his son Robert--

BLITZER: Robert Kelly, he was killed in Afghanistan, in fierce fighting in Afghanistan, not in Iraq. But a lot of us remember the speech that he delivered in memory of his son.

NAVARRO: And his wife -- his wife, Karen, has made it her life's work since then to help Gold Star families. She raises funds; she's active all over the country. They're just -- both of them are incredible people. I'm so thankful to them that they continue the service of their country.

BLITZER: The criticism he's getting, though, the president-elect, David, is too many generals are coming into sensitive national security--


BLITZER: -- homeland security positions. You've heard the criticism. What do you think?

SWERDLICK: Most of these generals come in with strong reputations. I think the reputation for General Flynn has been a little more mixed in recent weeks and months.

You know, but the thing is that, you know, we ran a piece in the Sunday "Washington Post," talking about just this issue and the idea that, you know, the writers, Phil Carter and Loren Schulman, were a little skeptical of this idea of this much reliance so early on former military people.

One of the things they pointed out was this idea that, you know, Trump during the campaign had expressed this admiration for the military, talking over and over again about General Patton, General MacArthur and sometimes in the same speeches would talk about the fact that he knew more than the generals about how to run national security. So it's an interesting dynamic.

BLITZER: How to run ISIS -- how to defeat ISIS specifically.

Gloria, you know, it's interesting. In the interview he gave to "The Today Show" today, he phoned in after he was -- it was announced that he would be Person of the Year on "TIME" magazine's cover. He had this to say about the conversations he's been having with President Obama.

(BEGIN VIDEO CLIP) DONALD TRUMP (R), PRESIDENT-ELECT OF THE UNITED STATES: I have asked him what he would think of this one or that one. I've asked him what he thinks are the biggest problems of the country, what are some of the greatest assets going forward. And we have a very good dialogue.

And I must tell you, you know, I never met him before this, and I never spoke to him before this. I really -- I do like him. I love getting his ideas. I would say that, yes, I take his recommendations very seriously, and there are some people that I will be appointing, and in one case have appointed where he thought very highly of that person.


BLITZER: Very interesting. Remember, during the campaign, and for years earlier, he was very critical of the president, the whole birther issue that came out.

BORGER: He tried to delegitimize him, Wolf.

BLITZER: I mean, and now he is so effusive in his praise.

[18:35:07] BORGER: Of all the crazy bromances we have seen during this campaign -- and we saw a lot of them -- this, to me, is the most remarkable one. And I must say, more power to both of these guys. Actually, power to President Obama for reaching out and treating him the way he was treated by George W. Bush, showing Donald Trump the respect he deserves as the president-elect of this country. And I think that goes a long way for Donald Trump. If you treat him with respect, he will treat you with respect.

But this is also about the president's legacy. He understands that, if he can guide Donald Trump in any way to preserve his legacy, he will. I bet they've been talking about DREAMers, for example.

The one thing that I'm curious about is this generals. The number of generals that we've been talking about. Because I remember dealing with this administration and the president himself talking about -- questions about the over influence of generals, for example, when he was considering the surge, when he was considering a policy in Iraq and Afghanistan. He would talk to his advisers and say, "You know what? You can't let the generals have too much influence over you when you are making these kinds of decisions."

And so here we have Donald Trump, and I believe that President Obama believes that Mattis is wonderful. I would guarantee you that. And Kelly probably, as well. But I think that -- I'm wondering if he's trying to curb that enthusiasm a little bit for appointing so many generals in his administration.

NAVARRO: It really is -- you know, I don't know how much of it is because they're generals or how much it's because they are leaders. When you become a four-star general--

BORGER: Right. NAVARRO: -- when you are the commander, you are a leader. You've got troops under you. These are people who have shown their leadership when it matters, when there's guns pointed at you.

For me, I love the idea of Kelly being there, because he is in inclusive; because he knows that a black Marine and a brown Marine and a white Marine bleed the same and die the same.

BORGER: Right, he does.

NAVARRO: He brings particular sensitivity to the western hemisphere. He knows the problems with drugs. He knows the problem with human trafficking. I think he's a tremendous choice. But I think we've got to be careful; not all generals are the same.

BORGER: No, and I know it's a theoretical issue.

NAVARRO: You can't put Mattis or Kelly in the same category you put Michael Flynn.

BORGER: Right. And I think that -- that President Obama would feel the same way you do about that. And I think that as a theoretical issue, that has been something that this president thought about a lot, which is what is the right balance between civilian input and military input.

BLITZER: All right. Everyone, stand by. There's more to discuss. Just ahead, why are foreign dignitaries and political insiders all of a sudden showing up at the new Trump Hotel here in Washington, D.C.? Tonight new controversy and some questions about a potential conflict of interest.


[18:24:46] BLITZER: We're back with our political team. Tonight, Donald Trump's new D.C. hotel is getting busier as his inauguration gets closer. And questions about possible conflicts of interest are intensifying.

Let's bring in our global affairs correspondent Elise Labott. She's over at the Trump Hotel, that's just down the street from the White House. Elise, what's going on there right now?

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, Wolf, today there was a big reception by the Bahrainians, their national day. And one ambassador told me they thought this was going to be the beginning, that it's a great way to make brownie points with the next administration. Your foreign leader visits the White House and they ask where you're staying, and you can say, "The Trump Hotel."

But while this hotel is drawing in a lot of customers, it's also creating a lot of controversy.


LABOTT (voice-over): Donald Trump's new five-star hotel in the historic old post office, just steps from the White House, is the place to be for Washington insiders looking to make inroads with the president-elect.

UNIDENTIFIED FEMALE: I think the hotel is beautiful.

LABOTT: Today, diplomats and U.S. officials descended on the hotel for Bahrain's national day of celebration. And Tuesday night, the Heritage Foundation, a conservative think tank with ties to the transition, invited their donors to the hotel to hear from Vice- President-elect Mike Pence.

GOV. MIKE PENCE (R-IN), VICE-PRESIDENT-ELECT OF THE UNITED STATES: I often tell people that, you know, other than a whole lot of zeros, Donald Trump and I have a lot in common. A lot.

LABOTT: Sales were soft when the property opened in December, despite promotion by the candidate himself.

TRUMP: This is the most coveted piece of real estate in Washington, D.C., the best location.

LABOTT: But that all changed after election night. Just days later, diplomats packed a ballroom to hear a sales pitch. A special promotion through the Arab Chamber of Commerce boasts, quote, "a new level of luxury in D.C. with unparalleled service."

The aggressive marketing is paying off. The hotel is almost fully booked for holiday parties and sold out for inaugural weekend. Trump even pointing to its prime location on his visit to Capitol Hill.

But it's not without controversy. Next week, the embassy of Azerbaijan is hosting a joint Hanukkah party with a collection of American Jewish groups. The organizers cited the hotel's kosher food, location and availability, telling CNN, quote, It was done purely on a pragmatic basis that had nothing to do with Trump himself. But others are objecting.

ANN TOBACK, WORKMEN'S CIRCLE: They say the party is a celebration of religious freedom and diversity. And when you compare that to the messages that have come from the Trump campaign for the last years, that is exactly opposite of what we have been hearing.

LABOTT: Some diplomats admit spending money at Trump's hotel is an easy, friendly gesture to the new president. Others commend the hotel's impeccable service and discounted promotional rates.

But critics worry foreign governments and special interest groups will patronize the hotel to curry favor with the president-elect. A clause in the U.S. Constitution warns, quote, "No person holding any office can profit from any foreign government."

RICHARD PAINTER, FORMER WHITE HOUSE ETHICS LAWYER: The president of the United States is not an in-keeper, and certainly not for foreign diplomats. And in order to be an effective president, he is going to have to make this change over to being president. LABOTT: Trump's conflict of interests aren't just with who is staying

in the hotel. He may be in violation of the hotel's 60-year lease, which stipulates, quote, "No elected official shall be admitted to any part of the lease."


LABOTT: And we're supposed to hear from Donald Trump in the next few weeks about how he is going to transfer his businesses, including the hotel, to his family before he takes office. But, Wolf, the controversy is not limited to this Washington hotel. LeBron James of the Cleveland Cavaliers and some of his teammates said they are not planning to stay at their scheduled accommodations at the Trump Hotel in Soho when they come this week to New York to play the New York Knicks -- Wolf.

WOLF BLITZER, CNN ANCHOR: Elise Labott, reporting for us. Elise, thanks very, very much.

So, Gloria, what do you think? On December 15th, Trump is going to have a news conference to explain how he's separating himself from ALL his personal businesses.

How important is it that he convinces the American public that he personally is not going to profit from any decision he makes as president?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: I think it's important. The American people want to know you're working on their behalf, not on anybody else's behalf. And I think if you look at the polling recently, six in 10 Americans believe that what he's talked about so far, that is giving the business to the kids, really doesn't go far enough.

We're going have to see what he does. And I think in his own self- interest, he has to do it. Otherwise, every decision he makes, whether it's with a foreign leader. You know, this is an international business here, is going to be second guessed about whether that was because the Trump Organization has business there or because this is in the best interest of the United States.

He understands that it's an issue of optics, as he put it. But I also think it really goes beyond that, and some people have suggested, and it's not a bad idea, to put somebody inside the White House who works for the White House counsel, whose sole job it is to monitor these potential conflicts, and make sure that there aren't any, an independent kind of a monitor. That might be some -- a good idea.

BLITZER: Ana, it is unprecedented, the potential here. How do you see it?

ANA NAVARRO, CNN POLITICAL COMMENATOR: It's very difficult, right?


NAVARRO: Because it's tangible assets that bear his name, even if he gives it to the kids, it's still called the Trump Hotel. Everybody knows what the Trump Hotels are, where the Trump properties are. So, everybody knows a way to curry favor.

I think it's very important that he try to put up a firewall between him and the kids. Do try to have a real divestment.

This is an issue that can dog him his entire administration. And Republicans are in a hard spot, because they focused like a laser on Hillary Clinton's corruption, Hillary Clinton's conflicts of interest. So, now, they can't pretend they don't see these glaring conflicts of interests. For the good of the Republican Congress, for the good of the Trump administration, he better figure out a way early to try to cut these conflicts, at least, at least improve the perception right now.

BLITZER: Well, the Republicans say they will have adequate oversight. Trey Gowdy, a Republican congressman on the Oversight Committee, he said that today. Jason Chaffetz, chairman of that committee, told me that yesterday. Do you think they will do that?

DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: Well, they're saying the right things, Wolf. I'm not so sure about that, at least in the short term. Look, imagine back to January of 2009, if there had been the Obama hotel on Pennsylvania Avenue, how the Republicans in Congress may have reacted of diplomats, inauguration guests were staying there. My guess is that they would have criticized that.

I think that congressional Republicans, if it turns -- the issue turns against them, may in fact start looking into this more closely. But right now, they are more worried about challenges from the right than from the left.

[18:50:05] And right now, their base likes --

BLITZER: People are going to be watching all of this very, very closely, guys. Thanks very, very much.

We have much more news coming up right after a quick break.


BLITZER: Tonight, President Obama looks back at the successes and struggles of his eight years in office at a CNN special report.

[18:55:01] Just weeks before he leaves the White House, the president sat down with Fareed Zakaria.

Take a look.


FAREED ZAKARIA, CNN HOST, "FAREED ZAKARIA GPS": Let me ask you if it's possible in your position to be completely honest and say the rise of the Islamic State surprised you. It took you by surprise. It took the administration by surprise. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The ability of ISIL to

initiate major land offenses, that was not on my intelligence radar screen.

ZAKARIA (voice-over): Everyone was stunned that a few thousand militants swept through Iraq and Syria, sowing fear in the region and the world.

UNIDENTIFIED MALE: We will chop off the heads of the Americans. Chop off the heads of the French. Chop off the heads of whoever you may bring.

ZAKARIA: They created a caliphate ruled by strict Sharia law, meting out punishments in the most barbaric ways imaginable.


BLITZER: Fareed is joining us now.

Fareed, very honest disclosure from the president that he was caught off guard by the rise of ISIS.

What else did he tell you about the fight against ISIS and his broader view in the fight against terror?

ZAKARIA: Wolf, he's really tried the fight terror in with his broader view which he articulated yesterday in that speech, which is this is not an existential threat. This is not like German tanks marching through Europe in the late 1930s. It is not like a Soviet threat or global phenomenon.

This is an isolated band of thugs and we should treat them as such. We should try and capture, kill them. Keep them on the run, but don't sacrifice our liberties. Don't, you know, don't run scared.

He talks about how he really wanted to draw down in Afghanistan and Iraq because he thought we were over extended there. We were over invested in the Middle East. And he -- and I think there was a considerable success that we described in bringing those troops down from about 175,000 down to 15,000. Yet pushing al Qaeda and now ISIS through special operations bombing and drones.

But then, of course, you have the reality that when America withdraws, it does create more power vacuums and ISIS did step into that vacuum. As he says, they were all caught off guard about that. So, we deal with the messiness of some of it.

But Obama to the end feels very strongly the discipline that you need is to not keep sending American troops every time there is a problem around the world.

BLITZER: You also have a chance Fareed to speak with the president about personal issues, about race for example, about his hardest moments in the Oval Office. What else can we expect to see in tonight's documentary? ZAKARIA: Well, we start with race, because it seemed to me and I said

this to him, that the first line of Barack Obama's biography is not going to be something he did but who he is, the first African-American president.

And yet, as I said to him, you are biracial. In fact, you are half white and you were raised by three white people. You know, a mother and two grandparents who are Scotch Irish. How did he feel about that?

And he goes into some length and depth about what, you know, how he sees being black in America. And we take you through how he tries to navigate each of the crises, racial crises that take place during his president, the shootings, the Trayvon Martin affair. And in each case, he has this dilemma. He has to be post-racial enough to appeal to the whole country. That's what I think so many people in America loved about him.

And yet, he has to recognize, he's a symbol for black America. He's somebody there they have invested enormous emotion and energy in. And he's constantly navigating the two poles. You know, you see in the first crisis he faces which is the one with Henry Louis Gates, the Harvard professor who gets arrested outside his own house, trying to get into his on house. And Obama realizes that everything he says is going to be judged by these two lenses. Is he being -- is he the president who just happens to be black and is he also this unique leader of African-Americans?

BLITZER: Fareed, thanks very much for this report. We're going to be looking forward to it later tonight. Fareed's special report, "The Legacy of Barack Obama" will air later tonight 9:00 p.m. Eastern and Pacific, only here on CNN.

And that's it for me. Thanks very much for watching.

I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.