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THE SITUATION ROOM

George Michael Remembered; Nuclear Fallout; Israel Lashes Out; NY Attorney General: Trump Foundation Can't Close Amid Probe; Interview with Senator Chris Coons of Delaware; Pop Music Icon George Michael Dead at Age 53; What are Trump's Plans for Nukes?. Aired 6-7p ET

Aired December 26, 2016 - 18:00   ET

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


[18:00:07]

JIM SCIUTTO, CNN ANCHOR: Happening now: lashing out. The Israeli prime minister defends his scathing criticism of President Obama. Tensions are escalating after the U.S. refused to veto an anti-Israel resolution at the U.N. Tonight, Israel claims it has evidence against the Obama administration that it says it's ready to hand over to Donald Trump.

Nuclear fallout. As the president-elect gets closer to Inauguration Day, there are growing questions whether he's preparing to launch a new nuclear arms race with Russia. There's new proof tonight that words can indeed be dangerous when nuclear weapons are in play.

Third term? President Obama suggests that if he had run against Donald Trump, he would have won. Is he dodging all blame for the Democrats' defeat? I will talk to the Obama insider who interviewed the president, CNN's own David Axelrod.

And pop icon. George Michael's impact on the music world is being remembered tonight after his shocking death at the age of just 53. This hour, the man and the hits that rocked the 1980s and beyond.

We want to welcome our viewers here in the United States and around the world. Wolf Blitzer is off. I'm Jim Sciutto, and you're in THE SITUATION ROOM.

Tonight, Israeli Prime Minister Benjamin Netanyahu is promising his country will not turn the other cheek after a stinging diplomatic slap by the United States and the United Nations. CNN has learned that Israel is suspending all working ties with 12 Security Council nations that voted for a U.N. resolution, condemning Israel's settlement activity in the occupied territories.

Netanyahu is fuming at President Obama after the U.S. abstained from the vote, refusing to use its veto power. The Israeli ambassador to the U.S. tells CNN that his country has evidence that the Obama administration led what he called a gang-up on Israel at the U.N. He says Israel will give that evidence to president-elect Trump.

Tonight, Donald Trump is disputing President Obama's new suggestion that he could have won a third term if he had been eligible to run. Trump posting a tweet just a short time ago saying, "No way." And in a new interview, Mr. Obama argues that Americans still support his vision for progressive change, despite Hillary Clinton's loss after she had largely embraced his own agenda.

We're also following a new complication for president-elect Trump and his promise to dissolve the Trump Foundation to avoid some conflicts of interest. New York's attorney general says Trump cannot legally do that until his office completes an investigation of that foundation. We will talk about all those stories and more with our correspondents, analysts and guests. They are standing by as we bring you full coverage of the day's top stories.

CNN's Oren Liebermann is standing by in Jerusalem.

First, though, to CNN's global affairs correspondent, Elise Labott, with more on Israel's angry response to that U.N. resolution.

Elise, what are your sources telling you tonight?

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: Jim, well, tonight, Israel is cutting working ties with countries who voted for the U.N. measure, suspending business with their embassies and refusing to meet with their ambassadors and ministers.

But Prime Minister Benjamin Netanyahu saved his strongest fury for the U.S., who he said led a shameful ambush against its closest ally.

(BEGIN VIDEOTAPE)

LABOTT (voice-over): Still fuming over Friday's U.N. vote declaring Israeli settlements illegal, Israel's Prime Minister Benjamin Netanyahu escalated his attacks against the Obama administration.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Friends don't take friends to the U.N. Security Council.

LABOTT: Summoning the U.S. ambassador and accusing President Obama and Secretary of State Kerry of orchestrating what he called a shameful ambush at the U.N., telling his Cabinet he has ironclad proof.

NETANYAHU (through translator): From the information we have, we have no doubt that the Obama administration initiated it, stood behind it, coordinated on the wording, and demanded that it be passed.

LABOTT: The White House denies that, calling the claim absurd.

UNIDENTIFIED MALE: We did not draft it. We did not put it forward.

LABOTT: The Obama administration maintains the U.N. vote was a last resort, after struggling for the past eight years to convince Israel to halt settlement construction on occupied lands the Palestinians claim for their state.

BEN RHODES, U.S. DEPUTY NATIONAL SECURITY ADVISER: For years, we have seen an acceleration in the growth of these settlements. And, frankly, if these current trends continue, the two-state solution is going to be impossible.

LABOTT: An adviser to Palestinian President Mahmoud Abbas agreed.

HUSAM ZOMLOT, SENIOR ADVISER TO MAHMOUD ABBAS: This is not a resolution against Israel. This is a resolution against Israel's expansion. The move was just to really save us and Israel and borrow time and craft our way towards the future.

LABOTT: But, for Israel, that future is uncertain. Officials now worry that with U.N. backing, Palestinians will push for sanctions, boycotts and take Israeli soldiers to the International Criminal Court.

RON DERMER, ISRAELI AMBASSADOR TO THE UNITED STATES: What this resolution just did is it gave the Palestinians ammunition in their diplomatic and legal war against Israel. And the United States not only didn't stop it. They were behind it.

[18:05:08]

LABOTT: Netanyahu now putting his hopes in president-elect Donald Trump, who condemned the U.N. vote this weekend on Twitter, saying it "will make it much harder to negotiate peace."

NETANYAHU: I look working with those friends and with the new administration when it takes office next month.

(END VIDEOTAPE)

LABOTT: And it isn't just the president-elect who opposes this vote, but members of Congress from both parties who had urged the Obama administration not to go through with it. And now leading Republicans like Senator Lindsey Graham say they will move to defund the U.N. unless the Security Council overturns this vote -- Jim.

SCIUTTO: Elise Labott here in Washington.

Now let's go live to Jerusalem and CNN correspondent Oren Liebermann.

So, how much of this is about Netanyahu trying to set up a new relationship with the incoming Trump administration?

OREN LIEBERMANN, CNN CORRESPONDENT: Jim, there's no doubt that's a significant portion of what's going on here. Prime Minister Benjamin Netanyahu has mentioned president-elect Donald Trump in almost every statement he's made since Friday, talking about how much he's looking forward to working with him.

And certainly Trump's pick for ambassador to Israel has to make Netanyahu very happy. His views, David Friedman's views, that is, the ambassador pick, much more closely aligned with Netanyahu. We have known this is a strained relation between Obama and Netanyahu and now we're seeing it fall apart very quickly in its final days. Jim, part of this is also local. Those who vote for Netanyahu are

certainly not fans of Obama and this is Netanyahu appealing to his own voters as well.

SCIUTTO: Oren, let me ask you this. The U.S. made it clear, as we saw in Elise's spot there, that the decision to abstain was not about Israel, it was about the settlements policy.

Talk us through so our viewers understand settlement growth and expansion. How much has it grown and accelerated particularly under Netanyahu's leadership?

LIEBERMANN: Let's go back specifically to 1993, the Oslo accords, the first major agreement between the Israelis and the Palestinians.

At the time, Yesha Council, which is the settlement council, tells us there were approximately 110,000 settlers. Fast-forward to present day, and this is just specifically the West Bank, not East Jerusalem, there are now four times that many settlers in the West Bank. That is what the Obama administration is referring to when they say this decision to abstain was all about settlements.

This resolution shows there's an international consensus that settlements are the problem. That is a process Israel disputes. Here's what Ron Dermer told Jake Tapper just a short time ago.

(BEGIN VIDEO CLIP)

DERMER: The prime minister of Israel did a freeze. He did a freeze for 10 months for the settlements and Palestinians did not come to the negotiating table.

This has not been about the settlements. What do the Palestinians want? What they want to do is to blame Israel for not negotiating, refuse to sit down and have discussions with us, and internationalize the conflict.

And for the last eight years, they have not been able to do that, because thankfully the president has stood up to those efforts in the Security Council. Now he gave the Palestinians exactly what they want. He gave them the ammunition for a political and diplomatic and legal war against Israel.

He gave them that ammunition by not vetoing the Security Council resolution.

(END VIDEO CLIP)

LIEBERMANN: Some of the harshest criticism we have seen from Obama directed at Netanyahu was just a couple of months ago in October, when the U.S. accused Israel of establishing a new settlement. Israel denied it was a new settlement, but there the criticism that we're seeing today was reversed.

There, Jim, it was the U.S. accusing Israel of breaking longstanding promises not to establish new settlements in the West Bank. SCIUTTO: Oren Liebermann in Jerusalem, thanks very much.

Certainly a lot to dissect with our guests, CNN political analyst and "Washington Post" columnist Josh Rogin, James Jeffrey, former U.S. ambassador to Iraq and Turkey, knows a lot about the region. And Alan Dershowitz, he's a professor emeritus at Harvard Law School.

If I could bring with you, professor Dershowitz, you said you agree with Donald Trump's position that the U.S. should not have -- vetoed this resolution. But, as you know, successive administrations, Republican and Democrat, have tried to get Israel to stop expanding settlements in the occupied territories, yet they've expanded.

Why do you oppose this resolution?

ALAN DERSHOWITZ, ATTORNEY: Well, if the resolution simply was opposed to expanded settlements on the West Bank, it would be controversial, but it wouldn't have gotten the kind of attention and outrage it's gotten in Israel.

This resolution says it is illegal, unlawful for Israel to control the Western Wall, the holiest place in Judaism, the access roads to Hebrew University, where Jews and Arabs study together, the access road to Hadassah Hospital, the Jewish Corridor, French Hill, and other areas in Jewish Jerusalem.

It was a stupidly drafted resolution. It could have avoided this conflict if it had just limited itself to what it says is its purpose, complaining about the expansion of the settlements. It ended up being a bait and switch. That is, the president and his advisers say this is about expansion of settlements. Then you read the text and it's all about the Western Wall, it's all about Jerusalem, it's about any changes post-'67.

[18:10:00]

It's all about the nine-mile-wide area that separates the Palestinian state and potential terrorism from Tel Aviv. That poses an existential threat to Israel.

(CROSSTALK)

SCIUTTO: Just for a moment, because I want to get a different view of the situation on the ground, because, to be fair, Ambassador Jeffrey, there's been a lot of talk about the settlements specifically around Jerusalem.

But the fact is, if you look at the map of the West Bank, settlements have expanded in a number of places, like inkblots almost on a map here. What is your view? Was the resolution justified from the U.S. perspective?

JAMES JEFFREY, FORMER U.S. AMBASSADOR TO IRAQ: No, not under those circumstances.

The settlements have been a problem. Successive administrations have spoken out against them. But we have never gone as far as we went this week in allowing a U.N. resolution to go through for exactly the reasons that professor Dershowitz said. This makes illegal much of the Israeli negotiating position.

But, Jim, the other thing it does is, it's a part of a pattern with Egypt, Saudi Arabia, Turkey, the Syrian resistance, to some degree the people fighting ISIS in Iraq, of this administration abandoning or not supporting our allies. They make mistakes, these allies, but they need support. We have been walking away from them all across the Middle East.

SCIUTTO: Let me ask you a question, and I'm aware of that criticism. I talk to folks in the Middle East and Asia and Europe, Eastern Europe, and on a number of issues, they have felt abandoned. They have felt abandoned. They felt that there's been weak leadership from the U.S.

But on this particular issue of the settlements here, successive Democratic and Republican administrations have allowed resolutions to go through by abstaining that have criticized Israel's settlement policy.

You're saying this is a departure because it specifically used the word illegal in the language?

JEFFREY: The strength of it was particularly noteworthy, as we just heard. The other thing is, our U.N. ambassador, Samantha Power, spent most of her explanation or vote of the abstention explaining why the U.N. is exactly the wrong institution to be dealing with anything on Israel.

(CROSSTALK)

JEFFREY: That's the problem we have here, and that's why people are so enraged in Israel.

(CROSSTALK)

DERSHOWITZ: I have always suspected that her original speech was a veto speech, and she changed some parts of it at the last minute.

If you read the entire speech, it sounds to me like it was a speech designed to veto, and then she was told at the last minute, no, we're pulling the plug and we're not vetoing. Read the speech carefully. I think you will see that.

SCIUTTO: Josh, let me -- explain the timing and if you can the politics behind this. What is your view and what are lawmakers telling you the goal of the Obama administration was doing this weeks away from the Inauguration Day, when a president is coming in who has at least said publicly he's going to have a different approach to Israel than Obama?

JOSH ROGIN, CNN POLITICAL ANALYST: Right. The timing is not a coincidence. Over a year ago, the Obama administration, President Obama himself

asked his staffers to come up with a list of possible things they could do on their way out the door on the Israeli-Palestinian conflict. This was one of them. There were other ones, sanctions on companies that do business in the West Bank, setting out the parameters for a two-state solution according to their vision.

And they chose this one as an intentional sign to send a message. So it calls into question this claim that they were just innocent bystanders along for the ride. That's not supported by the facts.

When the U.S. decides to abstain from a vote, that's a very calculated, especially in the administration, planned-out thing. The problem is that now that they are going out the door, there's no follow-up. Right? It can't be part of a strategy to pressure Israel to do A, B, and C, because they're not going to be there.

So it really is a parting shot and whatever fallout there is going to be, they are not going to be around to deal with it.

SCIUTTO: Ambassador Jeffrey, you have been involved in difficult negotiations through your diplomatic life.

Does this arguably make it more difficult for -- particularly even -- I asked Maen Areikat, the Palestinian representative here a short time ago -- particularly for the Palestinian side? Is there a danger of kind of a Trump backlash, administration backlash to this?

JEFFREY: The diplomatic fallout is extraordinary.

First of all, it will make it harder for the Palestinians to, as they must in any agreement going back three administrations, make territorial swaps, because now all of this Israeli-held territory is by U.N. decree illegal.

Moving abroad, it has hurt Israel's relations with Egypt, where it's conducting join operations in the Sinai. And it even hurts relations with Russia, where it has to deconflict air operations over Syria. This is a disaster from whatever point on the compass you look at.

SCIUTTO: Alan Dershowitz, three weeks from now , when President Trump has his hand on the Bible, he is inaugurated as president of the United States, he's surrounded himself with some people who have a particularly hard line, or at least harder than the Obama administration, on Israel. How does this play out?

DERSHOWITZ: Well, first of all, Obama purposefully tried to tie the hands of his successor, which is utterly undemocratic during a lame- duck period.

It will make it much harder for Trump to bring about a negotiated peace, because the Palestinians, as was said, have no incentive to do it. Look, this is not policy. This is pique. This is a president who is angry and is trying to get even.

[18:15:02] There's no other way of explaining why the president would allow this

kind of overwrought resolution that doesn't speak only to the expanded settlements, but speaks to the heart of Jewish Jerusalem. It is a revenge, not a policy.

And it is part of Obama's legacy. He is going to go down in history as one of the best domestic presidents and one of the worst foreign policy president in the history of the United States. When you think about Syria, opening up to Russia, the Iran deal, and now this culminates it. One of the worst foreign policy presidents in American history.

Shame on him for doing this on the way out.

SCIUTTO: Ambassador Jeffrey, that's a pretty bold criticism of President Obama. Do you agree with that assessment?

JEFFREY: I wouldn't have gone quite so far, although I almost did a few minutes ago.

The basic thing is to reiterate, don't do anything in the last few weeks of an administration. The last time we did anything big, it was going into Somalia in 1991, and look how that turned out. This is going to turn out exactly as bad.

SCIUTTO: Politics in Washington, Josh Rogin, you know are already divisive.

ROGIN: Right.

This is just the beginning, because when the new Congress comes in, they're going to be active on this. This is the first order of business. They're going to try to defund the U.N., they're going to try to take away aid from the Palestinian Authority. It will be a big fight. So this is a mess that the Trump administration will have to deal with one way or the other.

DERSHOWITZ: It's Obama's mess.

SCIUTTO: Josh Rogin, Ambassador Jeffrey, Alan Dershowitz, thank you very much for joining us today.

Coming up, could President Obama have won a third term against Donald Trump, as he claimed today? Stand by to hear the president's remarks and Trump's response as Democrats debate who is to blame for their election defeat.

(COMMERCIAL BREAK)

[18:20:01]

SCIUTTO: Tonight, Donald Trump says there is no way that President Obama could have beaten him if Mr. Obama had been eligible to run for a third term. Lot of ifs there.

The president is claiming that his message of hope and change could still win elections despite the Democrats' defeat, surprise defeat in November. The president spoke with his former adviser CNN senior political analyst David Axelrod, and we will talk to him in a moment.

But, first, let go to CNN's Athena Jones. She's covering the president in Hawaii tonight.

Some striking remarks there by the president, and even a dig perhaps at Hillary Clinton.

ATHENA JONES, CNN CORRESPONDENT: An interesting conversation. You heard a very honest, relaxed, contemplative President Obama.

He's speaking to an old friend, someone he's known for more than two decades. One of the things I thought was most interesting about what he had to say during that nearly hour-long sit-down for "The Axes Files" podcast is that he still believes in that vision he laid out back in 2004 that key to the Democratic National Convention that put him on the map.

He still believes there's not a red United States of America or a blue United States of America, there should be a United States of America. He believes that unity is possible, that it's not a fantasy. And he suggested that if he could have run again, he would have won. Take a listen.

(BEGIN AUDIO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: In the wake of the election and Trump winning, a lot of people have suggested that somehow it really was a fantasy.

What I would argue is, is that the culture actually did shift, that the majority does buy into the notion of a one America that is tolerant and diverse. I am confident in this vision because I'm confident that, if I -- if I had run again and articulated it, I think I could have mobilized a majority of the American people to rally behind it.

(END AUDIO CLIP)

JONES: He also went on, as you noted, Jim, to deliver an implicit criticism of Hillary Clinton's run.

He had a lot of good things to say about her run for the White House, but he said that Democrats need to do a better job of connecting with voters everywhere on a visceral level, factory workers, farmers, people living outside urban centers, and also white voters in the South. Here's more on what he had to say on that.

(BEGIN AUDIO CLIP)

OBAMA: If we can't find some way to break through what is a complicated history in the South and start winning races there and winning back Southern white voters without betraying our commitment to civil rights and diversity, if we can't do those things, then we can win elections, but we will see the same kinds of patterns that we saw during my presidency, a progressive president, but a gridlocked Congress that can't move an agenda for us.

(END AUDIO CLIP)

JONES: And in what should be a surprise to no one, we heard president-elect Trump weigh in on Twitter saying: "President Obama said he thinks he would have won against me. He should say that, but I say no way. Jobs leaving, ISIS, Obamacare, et cetera."

So Trump trying to have a conversation with the president via social media, Jim.

SCIUTTO: Not the first or the last time. Thank you very much, Athena Jones. She's in Hawaii with the president.

Now let's bring in CNN senior political analyst David Axelrod. He's the man who sat down with the president there.

Really, David, a fascinating interview, a deep-thinking interview, but also a bit of news in there. Did you hear President Obama blaming Hillary Clinton, at least in part, for the party's loss in 2016?

DAVID AXELROD, CNN SENIOR POLITICAL COMMENTATOR: Well, as Athena suggested, Jim, he was very, very careful about how he raised this subject. He was clear that he was proud of Hillary Clinton, thought she had done a great job under tough circumstances. Thought she had been treated unfairly by the news media.

But he did say that he thought that the campaign, perhaps the candidate, took too much for granted and played things cautious because of the polling, because of some of the things that Donald Trump had said and done that they felt had made him vulnerable, and perhaps neglected some key parts of the country as a result of it and wound up on the losing end, even though she won the election in the popular vote by three million votes.

SCIUTTO: Let me ask you this, because there's a lot of blame going around and a lot of blame being assigned, but not necessarily accepted, as we look at this race. If you look at President Obama, certainly he won two big elections, no question. But if you look at the Democratic Party lawsuits since 2009 in the Senate, in the House, in the statehouses, in the state legislatures, which will be enormously important as we come up to the 2020 census, when you have redistricting at stake, did the president accept any of his own responsibility for the loss and for the tough position Democrats are in today?

[18:25:05]

AXELROD: Well, I raised it with it.

And, Jim, I have some standing on this, because I was in the White House for the first two years of the Obama administration and intimately involved with the DNC and political figures around the country.

And I think it's fair commentary. And what the president said was, yes, we connected with these voters and campaigns, but once in the White House, with all that was on our plate, he suggested again implicitly perhaps there was some neglect there.

But he also said that Democrats have to find a way to reach these voters and penetrate the filter of a Rush Limbaugh and some of the right-wing talk radio, Internet sites and so on, which he says has distorted the message as well. So he said that's a project that Democrats have to work on, along with working harder on electing people at the statehouse level.

SCIUTTO: Donald Trump, as Athena mentioned, delivered his review via tweet. Let's just remind our viewers what he said about the president's claim. "President Obama says he thinks he would have won against me. He should say that, but I say no way! Jobs leaving, ISIS, Obamacare, et cetera."

Is that a fair criticism? Does he have a point?

AXELROD: Well, I think, you know, this is great bar stool talk.

It's like would Marciano have beaten Muhammad Ali, that kind of thing. But there are certain metrics that we can look at. The president is leaving the office with a very high approval rating, akin to Bill Clinton and Ronald Reagan.

And there was a poll that Bloomberg did after the election that suggested he would have beaten Trump by 12 points. Now, that's not a campaign, and you don't know what will happen.

But the president's point was that his point of view, and that's a more progressive, tolerant, one America kind of outlook, has a majority constituency in the country. But he did say, as Athena mentioned, if the Democratic Party doesn't solve its problems, the Democratic Party could regain the presidency, but still face gridlock in Congress because of its inability to penetrate small towns and rural areas.

He said that has to be a focus moving forward.

SCIUTTO: And he said he would want to be involved in it perhaps through his presidential library.

David Axelrod, thank you very much for walking us through it all.

AXELROD: Jim, good to be with you. Thank you.

SCIUTTO: Coming up just ahead, the question that's making much of the world extremely nervous now. Is president-elect Donald Trump opening the door alarmingly to a nuclear arms race with Russia? We will take a closer look at Trump's back-and-forth with Vladimir Putin and what it could mean for America, for the world's security.

(COMMERCIAL BREAK)

SCIUTTO: Tonight, Donald Trump is just 25 days away from getting control of America's massive nuclear arsenal and the so-called nuclear football, which is used to authorize a nuclear attack. And there are many unanswered questions about his plans for America's nuclear weapons.

[18:31:51] Our Pentagon correspondent, Barbara Starr, is on that story for us. Barbara Starr, I don't think I can underestimate this. It's a serious issue. There are very real concerns now about a nuclear arms race with Russia.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: There are, indeed, Jim. Look at where the U.S. has come from. Back in the height of the Cold War in the 1960s, the U.S. had some 30,000 nuclear weapons. Now today, it's down to about 7,000.

The question is, does Donald Trump really want to reverse that trend?

(BEGIN VIDEOTAPE)

STARR (voice-over): Less than a month before he takes command of the U.S. nuclear arsenal, the world still is not sure what President-elect Donald Trump meant with his tweet, "The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes."

A Trump administration move to expand the nuclear arsenal would be a stunning and unprecedented reversal of both Democratic and Republican foreign policy, largely set by Ronald Reagan.

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: A nuclear war cannot be won and must never be fought. The only value in our two nations possessing nuclear weapons is to make sure they will never be used. But then, would it not be better to do away with them entirely?

STARR: Reagan overcame his own opposition to arms control, sat down with Mikhail Gorbachev, and negotiated nuclear arms limits. But Trump doubled down, commenting to a TV morning anchor in a dramatic statement, delivered in a surreal, festive setting.

UNIDENTIFIED FEMALE: He told me on the phone, "Let it be an arms race, because we will outmatch them at every pass and outlast them all."

EVELYN FARKAS, FORMER DEPUTY ASSISTANT SECRETARY OF DEFENSE: Any time any president talks about a nuclear arms race, it should be alarming for the whole world, because the last thing we need are more nuclear weapons, more fissile material out there.

STARR: Vladimir Putin already signaling he won't bankrupt his economy on a nuclear race.

VLADIMIR PUTIN, PRESIDENT OF RUSSIA (through translator): If someone accelerates and speeds up the arms race, it will not be us. I would say that we will never, if we are in an arms race, we will never spend too much.

STARR: But Putin is moving ahead. NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: The Russians in the last

few years have increased the capacity -- the capability of their systems dramatically.

STARR: It's not known if Trump has been briefed and if he believes the U.S. intelligence assessment that Russia is testing and possibly getting ready to field a new nuclear-capable ground-launched missile, a potential violation of a 1987 treaty negotiated by Reagan and Gorbachev.

FARKAS: Under President Putin, the Russians have violated that agreement. They have not admitted it, and they have not yet, to our knowledge, fielded those weapons. But once they do, that will be an immediate threat to our European allies and probably, on President Trump's watch, he'll have to do something about it.

(END VIDEOTAPE)

STARR: And make no mistake: the Europeans are nervous about that prospect. North Korea could be getting ready for another underground nuclear test. And just today, India test-fired an intercontinental ballistic missile -- Jim.

[18:35:15] SCIUTTO: Barbara Starr, it's alarming to hear. Thanks very much.

Let's bring in a member of the Senate Foreign Relations Committee, Democratic -- Democratic Senator Chris Coons. Senator Coons, thanks very much and happy holidays to you and your family.

SEN. CHRIS COONS (D), DELAWARE: Thank you, Jim.

SCIUTTO: So let me ask you this: this is not the first time that Donald Trump has tweeted on an issue of national or international, really, importance. Do you take this as a serious statement of a policy position, that Donald Trump may order an expansion of America's nuclear arsenal?

COONS: Well, Jim, this is a very troubling trend that seems to continue. Obviously, Donald Trump was, in part, successful in the presidential campaign, because millions of Americans liked the way that he uses Twitter to talk directly to them, to sort of shake things up and to be a different sort of political leader.

But less than a month from now, he's going to be the president of the United States. And I think this is a very troubling trend. He should not be launching us into a whole new debate about growing our nuclear arsenal with just 140 characters at a time. This is a big departure from policy, going back to Ronald Reagan, of pursuing reduction in the total number of nuclear weapons and in promoting nonproliferation.

When we face such real problems around the world, from North Korea to Russia's aggression to stabilizing things in the Middle East, I don't know why Donald Trump would pick this fight when there's no immediate or pressing need for us to address it in the next couple of weeks. I'm hopeful that once he becomes president he'll put the phone down and stop causing these international incidents with unguided tweets.

SCIUTTO: Let me ask you this, Senator Coons, and I want to throw this graphic up on the air, because it references a point you said. The U.S. arsenal going back to the Cuban missile crisis and how it's come down from, really, tens of thousands, just above 30,000 at the peak there. And as you note, through Republican and Democratic administrations, through Nixon, Carter, Reagan, serious reductions there down to a fraction of where they were.

The question is, are you concerned about Russian moves that Barbara Starr referenced there to perhaps violate some of these treaties, the possible deployment and development of a new mobile-launched missile? Is that a real concern from the U.S. perspective?

COONS: Yes, I think one of the challenges that President-elect Trump will face right away is Russian aggression. Russia has engaged in a whole series of aggressive actions that push up against the boundaries or violate the boundaries of different treaty commitments, not least of which is their invasion and annexation of Crimea.

And so I do think that Trump is going to have to demonstrate his ability to stand up to Putin; and that may be a part of what he's predicting with this tweet, is that he is willing to do so. But there are so many other ways in which, in the course of his campaign, he's made troublingly positive statements about Putin. So I don't know what to make of this.

I do think that the United States retains a very large and lethal nuclear arsenal, the 7,000 warheads we have today. We have in place a plan to modernize them and to keep them strong and capable of delivering a knockout blow to any enemy who might seek to take us out with a nuclear first strike.

So I don't have any concerns about our nuclear capabilities, and I frankly am not at all clear on what President-elect Trump is suggesting or what his intentions are, with this series of tweets saying that we need a new nuclear arms race.

SCIUTTO: And clearly, others aren't entirely clear. We had a disturbing recent example of misinformation or misunderstanding leading to threats of a nuclear war, a fake news article erroneously quoting a nuclear threat from a former Israeli defense minister. That caught the attention of the Pakistani defense minister, who responded on his Twitter account as if that was a real threat.

How concerned are you that these 140-character statements of potential policy, at least, could spin out of control in a theater like that, India/Pakistan, North Korea, et cetera?

COONS: I'm very concerned about that, Jim. You know, one of the first international issues that President-elect Trump wandered into in his early days after the election was the status of Taiwan and the potentially harmful impact on U.S.-China relations of his taking a call from the president of Taiwan.

There's lots of places in the world, and India and Pakistan is one of them, where we've got hostile nations on a hair trigger. And I think interjecting ourselves in them with tweets from our president-elect is just not wise; it's not good policy. And I hope that he's going to be taking more of the advice of the career professionals in the Department of Defense, Department of State, the intelligence community, and approaching these very complex issues in a more measured way.

The example you just cited, Jim, where a fake news article prompted this very belligerent response from Pakistan is a reminder that there's now lots of places in the world where we face the potential of a nuclear exchange. And I think that calls for our leadership to be more measured and more thoughtful, not more misguided.

[18:40:17] SCIUTTO: It's not a threat of the past.

Senator Coons, please stay there. We have new information coming on, on questions of Donald Trump's conflicts of interest, his foundation.

We'll be back with the senator just after this.

(COMMERCIAL BREAK)

SCIUTTO: Welcome back. And we're back with Democratic Senator Chris Coons, and the latest on Donald Trump's scramble to figure out the future of his businesses before he takes the oath as president as president.

Senator, please stand by. I want to check in first with our chief political correspondent, Dana Bash.

President-elect certainly getting pushback, strong pushback on his promise to dismantle the Trump Foundation, plus questions about other conflicts of interest.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Nothing, it seems, is ever simple, especially these days with politics. Particularly with this issue, because the Trump Foundation was a political problem for him during the campaign. Questions about how it raised the charitable money and how they spent it.

(BEGIN VIDEOTAPE)

BASH (voice-over): The president-elect's team is frantically trying to figure out what to do about his vast business interests, even Trump-owned properties like Mari-a-Lago, where he's staying for the holidays.

But they're off to a tough start.

DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES: Boy, it's a little bit of a dance.

[18:45:00] BASH: A Christmas Eve transition announcement about shuttering the Trump charitable foundation hit a roadblock. The New York attorney general, who is investigating the foundation's alleged violations, said through a spokeswoman, "The Trump foundation is still until investigation by this office and cannot legally dissolve until that investigation is complete."

A "Washington Post" investigation found the foundation spend $258,000 to settle legal problems unrelated to the charity, and separately bought an immense portrait of Mr. Trump.

A former GOP White House ethics attorney said dissolving the foundation could take time.

RICHARD PAINTER, FORMER WHITE HOUSE ETHICS ATTORNEY: You need to make sure the foundation is completely independent of the for-profit business enterprises. You cannot have self-dealing in foundations. And I don't know whether the rules were violated here or not.

BASH: Regardless of the investigation, ceasing operations on the Trump Foundation is hardly a heavy lift. Trump has donated since 2008, and it has no paid staff.

The real question is how Trump will separate himself from the for- profit Trump organization, a worldwide empire, including Trump Golf, International Realty, Trump Winery and Trump Hotels.

The law does not require a president to divest himself from business interests, but potential conflicts abound. People could try to influence the president by staying at his hotels, for example.

And the most difficult hurdle could be the Emoluments Clause of the U.S. Constitution, which specifically prevents elected officials from accepting any present or money from foreign government or leaders.

PAINTER: There are a whole lot of problems that I think President Trump could deal with by selling off is business interests, or giving it over to a trustee in a blind trust, so the trustee can figure out how to dispose of these properties and he can focus on being president.

BASH: A press conference intended to detail how Trump will sort of this out was scheduled for two weeks ago, but that was delayed under January to give them more time.

(END VIDEOTAPE)

BASH: Now, an attorney for the Trump Organization tells CNN it is continuing to re-evaluate various transactions, trying to take measures to comply with all conflict laws. But ethics experts say the only ironclad way to do that, to separate the Trump administration from the Trump businesses is to put it in a blind trust.

But the president-elect, Jim, he's resisting. Instead, sources say he's leading towards finding a way to let his two eldest sons run it -- Jim.

JIM SCIUTTO, CNN ANCHOR: And his sons who will be advising him, it seems, on many decisions. Dana Bash, thanks very much.

I want to go back to Senator Chris Coons on this. So, let's look at the practical if we can. Of course, Republicans

have majorities in both houses of Congress. Will Congress hold Trump accountable on these conflicts of interest?

SEN. CHRIS COONS (D), FOREIGN RELATIONS COMMITTEE: Well, Jim, given just how much time and attention Donald Trump paid in the course of the campaign to attacking Hillary Clinton for what he alleged were conflicts of interest in the Clinton Foundation, it's my hope that Donald Trump will live up to those same standards and resolve ethics problems with the Trump Foundation and the very real potential for conflicts of interest with the Trump Organization going forward.

I do think that you'll see both Republicans and Democrats in the Congress stepping up to call for President-elect Trump to make it clear that he's acting in the best interest of the American people, and not in the best interest of the Trump Organization. And some of the very real challenges that you just laid out, that Dana just laid out in that piece, will make it quite difficult for him to do so, unless he does sever his ties to the Trump Organization.

SCIUTTO: So, let me ask you this, you could conceivably have, as you said, bipartisan calls for him to divest himself. But what power, what leverage, legal leverage, can they tell Trump to do this, or just ask him to do this as president?

COONS: Well, three things. First, there is a clause in the Constitution which has not been applied fairly frequently, but that is relevant to this particular case. As you know, there's been real questions raised about the new Trump hotel on Pennsylvania Avenue in Washington, D.C., and whether or not it violates a clause in the contact with the GSA, with the government entity that leased it to the Trump organization for it to still be in his control when he becomes president.

Second, I do think that there's going to be lots of public calls for a resolution of these conflicts of interest so that it's clear what decisions the president-elect is making.

And then, third, there's recently been some dust-up, some challenges with suggestions that foreign governments and their diplomats are already changing which hotels they're booking, which facilities they're working with for the short term and long term in order to try and curry favor with the future Trump administration.

[18:50:05] SCIUTTO: Finally --

COONS: I think all of these factors in conversation --

SCIUTTO: Will make a difference.

COONS: This will be a distraction. And Republicans -- Republicans in Congress, Jim, want to move ahead with their legislative agenda. They don't want this to be a constant source of distraction. So, I do think they'll join with us in pressing for the president-elect once he is president to clarify these issues.

SCIUTTO: Finally, just quickly, can the Democrats do it on their own, without Republican backing?

COONS: I think it'd be very difficult for us to get any legislatively done in Congress without Republican support, but I frankly think the amount of public outcry on this issue in the weeks and months ahead, if Donald Trump really does fail to do anything to drain the swamp, as he promised in his election, will be enough to motivate some Republicans to join us.

SCIUTTO: Senator Coons, happy holidays to you and your family. Thanks for coming on today.

COONS: Thank you, Jim. Happy holidays to you.

And just ahead, the shocking death of pop star, George Michael, and the musical memories he leaves behind.

(COMMERCIAL BREAK)

SCIUTTO: Well, tonight, fans are remembering pop music superstar, George Michael, as an icon of the 1980s and beyond. The British singer died on Christmas day after reportedly suffering heart failure. He was just 53 years old.

[18:55:02] CNN's George Howell has a look back at Michael's tremendous career and the controversy, as well, that surrounded his life and his music.

(BEGIN VIDEOTAPE)

(MUSIC)

GEORGE HOWELL, CNN CORRESPONDENT (voice-over): It's the song that has the world dancing, the hit "Wake Me Up Before You Go, Go." It was 1984 and they were the British duo known was Wham!

They had several top ten hits together, but really, it was George Michael with that statement t-shirt. Those moves that quickly took the spotlight, sealing his fame with this chart-topping song, "Careless Whisper."

(MUSIC)

HOWELL: Michaels split from band mate, Andrew Ridgeley, in 1986 and launched his own solo career, never looking back but headed straight into his first big culture clash.

The year was 1987. George Michael looking the confident rock star, in a provocative video with an equally provocative title. The song's lyrics were can considered by some to push the envelope. The legendary Casey Kasem refused to say the title of the song on his American Top 40 radio show and some pop radio stations wouldn't even play the song until after dark.

Michael's lyrics speaking directly about sex bumped heads with not just conservatives who thought he'd gone too far, but with a Hollywood desperate to bring attention to the AIDS epidemic and the need for safe sex. Michael would later say his lyrics were misunderstood.

By the late 1980s, George Michael was a bona fide superstar. Garnering awards, hanging out with celebrities and royalty, and delivering more hits. Like "Father Figure" and "One More Try." And there was the hit song, "Monkey."

In the 1980s, George Michael saw the height of his success. It can be said the 1990s weren't quite as kind. Fewer smash hits and then this, April 7th, 1998, Michael was arrested by an undercover male officer charged with engaging in a lewd act in a park in Beverly Hills, California.

It took no time for his arrest to become an international headline. On CNN, not long after the arrest, Michael confirmed what had long been rumored. He was gay.

GEORGE MICHAEL, POP MUSIC ICON: I want people to know that I have not been exposed as a gay man in any way that I feel -- I don't feel any shame for -- I feel stupid and I feel reckless and weak for having allowed my sexuality to be exposed this way, but I don't feel any shame whatsoever. Neither do I think I should.

HOWELL: In the years to come, there were more scuffles with the law, drug-related arrests, and a nasty car accident in 2010.

Michael was found to be driving under the influence of cannabis and went to jail.

In 2011, he fell ill with a severe case of pneumonia and had to cancel his European tour.

But there was always the music. "Symphonica", his creative masterpiece, with full orchestra. A critical success.

George Michael once said, "I still believe that music is one of the greatest gifts that God gave to man." Lucky for us, he left us plenty of it.

(MUSIC)

HOWELL: George Michael dead at the age of 53 years old.

George Howell, CNN, Atlanta.

(END VIDEOTAPE)

SCIUTO: Our thoughts with his friends and family tonight.

Thanks very much for watching. I'm Jim Sciutto. I'll be back on "AC360" in about an hour.

"ERIN BURNETT OUTFRONT," she starts right now.