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White House: 75 Percent of ISIS Fighters Dead; Source: Trump Concerned about Russian Hack; Trump Breaks Many White House Precedents; China Moving Weapons to South China Sea Islands. Aired 1:30-2p ET

Aired December 15, 2016 - 13:59   ET

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

[13:30:00] CHUCK HAGEL, FORMER SECRETARY OF DEFESNE: I gave a news conference at the Pentagon -- you might remember it -- about three years ago, when I was asked a question about ISIS. I said ISIS is a force we've never seen before. The sophistication of that force, their ability to use social media, their expertise, strategic tactical military, financing. They blend a cultural religious dynamic to this. It's kind of the poor guy at the bottom fighting the colonial powers and they use the religious conflict.

This is immensely complicated. We've got to understand that better than we do. I think to simplify it by body count, so on and so on, it trivializes the seriousness.

WOLF BLITZER, CNN HOST: Mr. Secretary, that you so much for coming in.

HAGEL: Thank you.

BLITZER: Thank you for your service as well.

HAGEL: Thank you.

BLITZER: Chuck Hagel, the former defense secretary of the United States.

Coming up, the Senate majority leader, Harry Reid, confirming reports, from his perspective, that the Russian president himself, Vladimir Putin, was directly involved in the U.S. presidential election hack.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, (D-NV), HOUSE MINORITY LEADER: I understand the answer is clearly yes. And his having been former head of the KGB, does that surprise you? And did it surprise anybody today when he denied it?

(END VIDEO CLIP)

BLITZER: We'll discuss that and a lot more with the ranking member of the House Intelligence Committee, standing by to join us.

(COMMERCIAL BREAK) [13:34:48] BLITZER: A Trump transition source says the president- elect is concerned about the intelligence community's findings that Russia engaged in hacking during the presidential election. He and his team are concerned the issue is being used to delegitimize his victory. In a tweet today, the president-elect claimed the White House only responded to the issue after Hillary Clinton lost the election. But in fact, the Obama administration identified Russia as the culprit in early october.

Democratic Congressman Adam Schiff of California is the ranking member of the House Intelligence Committee. He's here with me now.

What's your reaction to this tweet from President-elect Trump this morning, "If Russia or some other entity was hacking, why did the White House wait so long to act, why did they only complain after Hillary lost?"

REP. ADAM SCHIFF, (D), CALIFORNIA: You have to go through some verbal and mental gymnastics to make a statement like that, which, on the one hand, blames the Obama administration for not saying so, even though they did say so, but at the same time, president-elect continues to deny the Russians were involved. I don't know how you can both blame the president and still deny the Russians were involved. So frankly, it's not something I think you can say with a straight face. But if he tweets it, he doesn't have to say it with a straight face.

BLITZER: What role, based on everything you know, did Vladimir Putin himself play in this effort, this infiltration, if you will, the hacking of the DNC, John Podesta, the chairman of the Clinton campaign, and others?

SCHIFF: As you know, Wolf, in October, the director of National Intelligence and the secretary of Homeland Security issued a statement where they said not only Russia was hacking institutions and U.S. persons to interfere with the election, but due to the scope and sensitivity of what the Russians were doing, this had to come from the senior most levels of the Russian government. Just looking at that statement, knowing, as the ambassador has pointed out, just how higher hierarchic the Russian government is, there's only one decision maker, and that is Putin. Based on that very circumstantial evidence, it's pretty clear something of this magnitude had to go to the very top. You can't imagine, here in this country, for example, the president engaging in meddling in a foreign country or the U.S. doing it without the president's knowledge. We're an even more dispersed system of checks and balances here. In Russia, that would be unthinkable.

BLITZER: Is it just circumstantial evidence or is it direct evidence? I know you don't want to release classified sources and methods, information like that. But based on what you know, is it more than just circumstantial?

SCHIFF: All I can speak to, Wolf, is what the director has said, very publicly, in October. And what we know about how the Russian government operates. That's, unfortunately, all I can discuss.

BLITZER: The whole notion right now, what to do about this is a huge debate. If -- and I'm sure he's not asking you -- but if the president-elect were to ask you, Congressman, what should we do about it, what would you say?

SCHIFF: I would say we ought to be working with our partners in Europe to sanction the Russians for what they've done.

BLITZER: Additional sanctions?

SCHIFF: Additional sanctions, absolutely. Because they'll do it again. We should look at clandestine steps we can take to shoot a shot across the bow, to let Putin know there's a cost for this kind of meddling.

Donald Trump was clearly the beneficiary. I don't know he doesn't want to recognize that in the campaign. But he may be the target in the future. If he does cross Putin, as inevitably he'll have to, because the Russians have very different interests than we do, there's nothing that's going to stop the Russians from dumping things that are harmful to Donald Trump. So, he's got to realize that's a very real prospect. He ought to deal with it. He ought to work on establishing a deterrent.

He needs to work on re-establishing, I think, a faith in the intelligence community. They're going to work for him. They're going to need to know that they can confide in him the truth and that he'll be open to it. All of these things are going to be vital to his success.

BLITZER: Congressman Schiff, thanks for coming in.

SCHIFF: Thanks, Wolf.

BLITZER: Coming up, Donald Trump making one thing clear from cabinet appointments to news conference, the roles of his kids. The president-elect is breaking long-standing precedents and setting his own. What this may indicate about his policies, his incoming administration, that's next.

(COMMERCIAL BREAK)

[13:42:17] BLITZER: Today was supposed to be the day the President- elect Donald Trump put to rest all the talk about supposed conflicts of interest between his businesses, his family, and his presidency. Instead of holding his first formal news conference as president-elect and talking about how he's stepping away from the Trump empire, we're being told to wait, wait a little bit more, until next month, that's when he'll do it. He hasn't held a news conference, a full-scale news conference, by the way, since July. Just one of the many ways the president-elect is fulfilling his promise to be, shall we say, unconventional.

Joining us, CNN political analysts, Jackie Kucinich and David Gregory. Also with us, Jeff Mason, the White House correspondent with Reuters, and also the president of the White House Correspondents Association.

Guys, thanks very much. So yesterday, we saw meeting with the tech leaders. Three of Donald

Trump's adult children were all there. Listen to how some of his advisers are explaining that, because some are saying there's a potential conflict.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, SENIOR ADVISOR TO PRESIDENT-ELECT TRUMP: So Ivanka and Jared will make their own decision and announcement in due course. I think we would benefit tremendously by having them inside the administration. In fact, that could happen. Ivanka's incredibly committed to women in the workplace, women in the economy, women entrepreneurs.

SEAN SPICER, CHIEF STRATEGIST & COMMUNICAGTIONS DIRECTOR, RNC: Number one, the president, by law, can't have a conflict of interest. Number two is the reason you know about the children being involved are two things. One, they're on the website and they were publicly named as being part of the transition. And two, we brought the press in to show who was at the meeting. So, it's not like there's anything nefarious going on or sneaky or not transparent. We've been very clear about the role of his family.

(END VIDEO CLIP)

BLITZER: So what do you think?

JACKIE KUCNICH, CNN POLITICAL ANALYST: I think that we don't -- we haven't seen his tax returns, so we don't know where his -- where his money is. We don't know how much control. We know so much about Donald Trump. We don't know. Yes, thank you so much for the photo spread, but just by virtue of having his adult children in the room sends a message. Even if they step back after the fact, the message has been sent this is a conduit to Donald Trump, whether they like it or not.

BLITZER: He says, as president, he's not subject to conflict of interest rules by law. For example, he's exempt.

DAVID GREGORY, CNN POLITICAL ANALYST: There are nepotism laws and there are questions about what the business interests are of the Trump family and what the business of the country is as president of the United States. That's what he needs to take great pains to resolve. I'm concerned that he doesn't -- is not yet showing enough respect for the institution of the presidency to make sure there's a real separation there.

I think Kellyanne Conway is probably right. Jared Kushner and Ivanka Trump are probably very valuable advisers to a President Trump, would add a lot of value, but there's also conflicts.

I'm sorry, this was a candidate who spent all of his time bashing Hillary Clinton because of the Clinton Foundation and the proximity of former President Clinton to that foundation and, thus, to the White House. He has an obligation to deal with these conflicts and not brush them aside that, well, as long as we're transparent. There's so much we don't know. It's not all transparent. We don't know about his business holdings. We don't know about his financial entanglements because we haven't seen his tax returns.

[13:45:27] BLITZER: I was very intrigued yesterday -- I'm sure, Jeff, you were. All of us were -- when Reince Priebus, chairman of the National Committee, said get ready, they're going to be big changes, maybe no daily briefings, maybe not assigned seats.

You're the president of the White House Correspondents Association. Have you been in touch about this?

JEFF MASON, WHITE HOUSE CORRESPONDENT, REUTERS & PRESIDENT, WHITE HOUSE CORRESPONDENTS ASSOCIATION: We're definitely in touch. One thing I wanted to do is correct some factual errors. Mr. Priebus mentioned or suggested it was the Obama White House that had assigned seats in the briefing room, and that's just not the case. People who worked at the White House know those seats have been assigned, in fact, since 1981, when they were first installed.

BLITZER: 1993, when I was CNN's White House correspondents, I had an assigned seat there ---

MASON: Sure. Of course.

BLITZER: -- during the Clinton administration.

David Gregory, you had an assigned seat as well.

GREGORY: Yes.

MASON: So that's been White House tradition for years, many decades. And there are other traditions. Yes, the Trump administration has the right to make some changes if it wants to. Every administration that comes in makes a few changes here or there. But there are reasons for a lot of the press corps' traditions. The idea of a daily briefing is not just for the press. It's an opportunity for the White House to get out its message and it's our opportunity to ask questions about the news of the day. I suspect they'll have a lot of news coming on January 20th.

GREGORY: Look, the reality is you have to expect someone who's unconventional in dealing with the media and dealing with the public directly, as Donald Trump is, is going to want to shake things up. I think in the role you're in and those of us who covered the White House, you want to impress upon Reince Priebus and others in the administration, look, it's important to have a well-informed White House press corps doing its job. It's good for the public, it's good for the president and the presidency. I think, you know, you want to continue to advocate for that, so that people who are covering the presidency know as much about his thinking and about the administration's policies. As you all know, not every day is news made at these briefings, but it still keeps us in the rhythm of the decision making and some of the thinking.

BLITZER: Yeah, they can make changes and I'm sure they presumably will. Remember when those daily briefings, there were no cameras allowed. Then they changed it so cameras could show the American public and the world, for that matter, what the press secretary was saying.

Speaking of the press secretary, Jackie, listen to what Josh Earnest said about this today.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOSUE PRESSS SECREARY: As an American, I'm concerned about that. I do think this -- the interaction that takes place in here on a daily basis is one that's good for our democracy. It is valuable. It's instrumental to holding people in power accountable for their actions, accountable for their statements, and accountable for their promises.

(END VIDEO CLIP)

BLITZER: Brian Stelter interviewed him yesterday, our media correspondent, and that's what he said.

So, go ahead, what's your reaction.

KUCNICH: Accountable for their "no comments" a lot. But that said, I agree, it is important. We've seen Candidate Trump chafe, even coming into this, remember, the press pool, they initially were ditching their protective pool, the reporters who are there to record history, to record if the president is alive essentially, is how it started. It will be interesting to see if they tweak around the edges --

(CROSSTALK)

BLITZER: Have you worked that out with the press pool? Hopefully, you have, right?

MASON: We've spent a lot of time on that issue. There's been a lot of progress. You're referring to a couple of times the president- elect either went out to dinner or to Washington without bringing a pool along, and that has been largely rectified. We're not on his plane. They've said that's not going to happen during the transition. But that issue should be solved on January 20th when we have Air Force One.

GREGORY: Can I just say, a little bit of a soap box here. Changes are fine. You have to respect that. You're advocating for the things that the press corps want.

But let's remember, the White House is the people's house. Abraham Lincoln, when he began there, a member the public could just walk into the House and press their case to get a job if they wanted to get a job at the post office in their hometown. Obviously, things change, things evolve.

It's important for the press corps, whether you like us or not, to be able to be a disruptive influence in the people's house where the president does business. We should be able to ask questions. We should be able to interrupt meetings at a time when we're brought in to say, we have a question about the news of the day. That is the function of the White House press corps.

[11:50:5r7] BLITZER: I think we all agree on that.

(LAUGHTER)

Guys, thanks very much.

Coming up, uncertainty in the South China Sea as evidence now surfaces that China may be moving major weaponry into the area. What does the U.S. plan to do about it? That's next.

(COMMERCIAL BREAK)

BLITZER: There's new evidence right now the Chinese military buildup in the South China Sea, the findings, drawn from the Asia Maritime Transparency Initiative, appear to contradict China's promise not to militarize the area. Here's a closer look at Hughes Reef (ph), one of China's smallest man-made islands. Those squares highlight hexagon- shaped platforms believed to hold anti-aircraft guns. They appear on all seven islands China built in the area.

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

Update our viewers. Explain why this is so important.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: In May of last year, it was detected they had runways to accommodate every military aircraft in the Chinese arsenal. A few months ago, it was seen by U.S. satellites that they were putting in reinforced hangars, which you would only do for military aircraft. And now there are signs that they're putting weapons there. So, it continues this path towards militarization. It makes them the unsinkable aircraft carriers that the military is talking about with an immediate threat to U.S. ships and warplanes in the area. But a longer-term expression of the Chinese military power.

BLITZER: What, if anything can be done about this, because clearly U.S. officials are concerned and regional allies are concerned as well.

SCIUTTO: No question. To this point, what the U.S. has done is strong words, but also sailed U.S. warships and flown U.S. planes, including surveillance planes, like the one we were on, over and around those islands, to say, this is international airspace and international waters and we'll continue flying, like they are. The fact is, though, those steps have not changed. China continues to do exactly this. So, next steps -- I mean, you could have economic sanctions that could hurt the U.S. You could have other diplomatic measures, but this administration hasn't figured that out,35 and the new administration is not expressed the new way they'll approach this.

[13:55:37] BLITZER: But they're tougher, the new administration, on China than they are on Russia.

SCIUTTO: They say so. The question is, how do they follow that up at this point and how do they do it in a point that gets China to pull back? It's not clear at this point.

BLITZER: Is there any indication at all what the Trump administration will do?

SCIUTTO: They've taken one step, which is to say they might be closer to Taiwan. That's a very sensitive issue for China. And I just noted that since Donald Trump took the call from the Taiwanese president, you've had nuclear bombers fly around that area. You've had votes against the U.S. in the U.N. Security Council. Now you've had these weapons on the islands.

BLITZER: Disturbing development, indeed. We'll stay on top of it.

Jim Sciutto ---

SCIUTTO: Thank you.

BLITZER: -- appreciate it very much.

That's it for me. Thanks very much for watching. I'll be back 5:00 p.m. in "The Situation Room."

The news continues right here on CNN after a quick break.

(COMMERCIAL BREAK)

[14:00:07] BROOKE BALDWIN, CNN ANCHOR: Top of the hour. I'm Brooke Baldwin. Thank you for being with me.

Any moment now, we will hear from the U.S. Secretary of State John Kerry.