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Putin: Russia won't Expel U.S. Diplomats after Sanctions; Trump Aide: Sanctions attempt to box in president-elect; Putin: Syria Ceasefire Agreement is Fragile. Aired 10-10:30a ET

Aired December 30, 2016 - 10:00   ET

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

[10:00:16]

MARTIN SAVIDGE, CNN ANCHOR: You can see "Now More Than Ever, the History of Chicago" this Sunday and yes I do know what time it is, 8:00 p.m. Eastern Time, only on CNN.

The next hour of CNN NEWSROOM begins right now.

Good morning everybody. I'm Martin Savidge in for Carol Costello. Thanks very much for joining me.

Let's get started. Hours after Russian officials, vowed retaliation against the U.S. for tough new sanctions over alleged hacking, President Vladimir Putin has decided not to strike back yet. Putin saying a short time ago that he won't take any action against the U.S. until he sees what policies President-elect Trump will enact. This all started when President Obama took unprecedented steps to punish Russia for alleged hacking, ordering 35 Russian diplomats to leave the U.S. within 72 hours. Two Russian compounds have been ordered closed. 4 individuals and 5 Russian organizations sanctioned. So far, what we are hearing from President-elect Trump, move on, saying, "It's time for our country to move on to bigger and better things." Our team is covering the diplomatic fallout from D.C. to Moscow. We begin with CNN senior international correspondent Matthew Chance in Moscow.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: What an astonishing display of political theater here in Moscow with the Russian Foreign Minister first appearing on state television, solemnly recommending the Kremlin expel 35 U.S. diplomats, a tit for tat response to the expulsion of 35 Russian diplomats announced a day before. The Kremlin says it was for Vladimir Putin to make the final decision, setting the stage for the Russian President to play Santa Claus and to make his unexpected announcement. "We won't expel anyone," he declared in the statement, "We won't create any problems for U.S. diplomats."

In fact, Putin went on to invite the children of U.S. diplomats in Moscow to Christmas and New Year's shows at the Kremlin and to wish President Obama and his family seasonal greetings. The restoration of U.S./Russian relations, he went on, will depend on the policies of Donald Trump who becomes President of the United States in under three weeks. Russian officials are hopeful that an incoming Trump administration will be more inclined to do a deal with Moscow over issues like sanctions, the war in Syria and the situation in Ukraine. Putin's refusal to respond to the latest U.S. sanctions and expulsions shows just how important the Kremlin sees that future relationship. Matthew Chance, CNN, Moscow.

SAVIDGE: Matthew, thank you very much. Putin's decision not to retaliate against the U.S. comes even as President Obama hints that the White House may not be done yet. CNN justice correspondent Evan Perez is following that story and he joins me now from Washington. Evan, what more could we see?

EVAN PEREZ, CNN CORRESPONDENT: Well, some of that stuff we won't see, the White House says right now, Martin. But the president is on his way out the door in three weeks. President Obama says, now is the time to order these extraordinary set of sanctions, he says it's in response not only to Russian meddling in the U.S. election but also because of months of harassment of U.S. diplomats in Russia. The U.S. is imposing sanctions against nine Russian individuals and entities that, includes the FSB, Russia's domestic security agency, the Russian military intelligence unit, the GRU. Both are believed to be behind hacks of mostly Democratic Party organizations. The U.S. is ordering 35 diplomats in New York and Washington out of the country by Sunday and in the next two hours shutting down two Russian-owned compounds, one in Maryland another one in New York. Here's Lisa Monaco talking to "The Leads" Jake Tapper, explaining exactly what was behind all of this.

(BEGIN VIDEO CLIP)

LISA MONACO, HOMELAND SECURITY AND CONTERTERRORISM ADVISOR: What these individuals were doing, were basically collecting intelligence. They were intelligence officers operating here and using these compounds, one in New York, one in Maryland, for intelligence collection purposes. And what we are saying today is in response to and in order to impose consequences for the Russian government's increasing harassment and aggression toward our personnel in Moscow. And of course, their malicious cyber activities interfering in an effort to interfere in our election process, we are imposing consequences.

(END VIDEO CLIP)

PEREZ: Now, the president is also declassifying intelligence on Russian cyber activity to help cybersecurity professionals here and -- in the United States and abroad, identify, detect and disrupt cyberattacks from Russia, Martin.

SAVIDGE: Evan Perez, all right, the view from Washington. Thank you. And that announcement of sanctions against Russia is prompting a swift response from President-elect Donald Trump. He's issuing a statement saying, "It is time for our country to move on to bigger and better things. Nevertheless, in the interest of our country and its great people, I will meet with leaders of the Intelligence Community next week in order to be updated on the facts of this situation." CNN's Jessica Schneider now joins me. And Jessica, some key

[10:05:16] members of Trump's staff were also speaking out. What are they saying? JESSICA SCHNEIDER, CNN CORRESPONDENT: Yes, we know, Martin, Trump's top advisers, they're reacting with a combination of doubt and even their own accusations. Top adviser, Kellyanne Conway, saying the sanctions seem largely symbolic and she continues to cast questions on the Intelligence Community and its conclusion that the Russians hacked into political committees in the midst of the election. Then Conway even went on to accuse President Obama of playing politics in this whole situation.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, SENIOR ADVISER TO TRUMP TRANSITION TEAM: Even those who are sympathetic to President Obama on most issues are saying that part of the reason he did this today was to, "box in" President-elect Trump. That would be very unfortunate if that were the motive, if politics were the motivating factor here but we can't help but think that that's often true.

(END VIDEO CLIP)

SCHNEIDER: And Trump's chief of staff speaking out too, repeating his request for more information from the Intelligence Community.

(BEGIN VIDEO CLIP)

REINCE PRIEBUS, INCOMING WHITE HOUSE CHIEF OF STAFF: We agree that foreign governments shouldn't be hacking American institutions, period. So, it's not like we condone the hacking of institutions, and entities and businesses in America, of course not. It's wrong and it's something that we don't agree with. However, it would be nice if we could get to a place where the Intelligence Community as a -- in unison, can tell us what it is that has been going on and what the investigation was and what it's led to.

(END VIDEO CLIP)

SCHNEIDER: Reince Priebus also says it is up to the president-elect to decide if he will roll back those sanctions instituted by the current White House. Priebus saying that Trump will be talking to his leadership at the defense and State Department before making any decisions and of course, as we heard Donald Trump himself says he will meet with the Intelligence Community next week. Martin?

SAVIDGE: An interesting mix of ideas all coming together. Jessica Schneider, thank you very much for that. With me now to discuss this is Bobby Gosch, editor in chief at the "Hindustan Times" and Steve Hall is the former CIA operations officer who ran managed Russian operations for 30 years. Steve, let me start with you. Vladimir Putin, himself, says that Russia won't expel anyone in response to these sanctions. He's also said that the Russian sanctions will depend on, apparently, what Trump is going to do. What do you make of all of this?

STEVE HALL, FORMER CIA /RUSSIAN OPERATIONS: Well, this is an incredibly astute move by Vladimir Putin and it's a tremendous political gift to Donald Trump. What does it allow the president-elect to say? It allows him to say look, I was right all along about this, the Russians are really people that we can get along with, I do want to strike out on a new relationship with Putin and the current administration was wrong, over reactive and perhaps even child-like and the Russians are taking the high road and as I have always said, we need to engage with them. -- This is a real great thing for Donald Trump to be able to start his presidency with.

SAVIDGE: Bobby, do you think also that this was a surprise for the Obama administration, maybe even for President-elect Trump?

BOBBY GOSCH, EDITOR IN CHIEF "HINDUSTAN TIMES": I think it's certainly a surprise. I'm not so sure it's a gift. You have to beware of Putin bearing gifts because it puts Trump in an interesting position. He has to decide pretty soon after he becomes president, does he play along with Putin and withdraw -- the sanctions that Obama imposed and explain to the Republican Party, to the Senate and the House, to the American people, why he's doing that, or does he go along with those sanctions and find some other way a few months down the line -- to get his reset with Putin going. I'm not sure this is a clear gift from Putin. It is very clever of him. It makes him look like the bigger guy, that he's not responding too hastily, he's willing to give the Americans the benefit of the doubt. That's certainly how he's communicating it at home to his fellow Russians.

SAVIDGE: It almost seems a twist on the Michelle Obama line, "when they go low, we go high." Let me ask you this Bobby, Kellyanne Conway suggests that President Obama's actions are essentially boxing Mr. Trump in. Would you agree with that?

GOSCH: It's hard not to see it that way from her point of view and certainly, there's politics involved in the timing. We have known that the Russians have been interfering in American companies and American institutions for a very long time and certainly in the American political system for several months. The timing of this, three months -- three weeks before the president is out the door, has -- you have to account for a certain amount of politicking going on.

It does seem like it's designed to force at least Donald Trump to make hard decisions early on vis a vis the Russians, to state his position openly and plainly where he stands on this relationship. So yes, I think there was plenty of provocation on the Russian side. There's plenty of reason for this action. Well, the timing of this action, certainly political.

SAVIDGE: Steve, I find it interesting that of course Donald Trump has said, we need to move on, but he also now says that he's

[10:10:16] going to attend Intel briefings. And I'm wondering, does this suggest that he is having perhaps a change of mind or is at least willing to listen to an argument?

HALL: Well, I can say that I think it's going to be a series of difficult meetings initially with the president-elect, because he's already cast significant aspersions on - not just the Intelligence Community but -- that intelligence officers have been working very hard to collect the past couple of months. So, whether or not it's actually him reaching out and trying to reconsider things, I don't know. But I do know -- it's going to be difficult, certainly at the working level inside of CIA. You're going to get people who are going to say look, you know, my family and I have been in very difficult situations trying to collect this information and yet the president- elect seems not to be taking it seriously.

I think it's also worth remembering what Vladimir Putin is all about here. None of what he has said, his decision not to reciprocate which the Russians almost always do in cases like this in terms of expelling Americans and doing other things against the U.S. mission in Moscow and Russia, is we can't forget that that doesn't you know, annul the fact that he was indeed trying to get into the U.S. election system, that he did indeed Annex Crimea, did -- continues to support separatists in Ukraine.

Those are things that Putin would like the incoming administration and indeed, the west, to perhaps you know, not think about so much as we strike out on some sort of new relationship with Russia. Remember, Trump is not the first person who has said we need to really start getting along with Russia. Barack Obama said the same thing, as did his predecessors. This is something that Putin is very, very good at and the Russians count on new presidents taking this tack.

SAVIDGE: Yes, the famous reset. Bobby, let me ask you this. This action of kicking 35 suspected spies out of the country, the sanctions and closing down some offices, it's almost like, it's very traditional. It seems hardly inspired kind of retaliation. I'm wondering, do you think that was really the wisest move?

GOSCH: Well, that is why it seems so symbolic. Now, what we don't know, and the White House has suggested that there are things going on that they cannot tell us about, it's their retaliatory interference into Russian computer systems, that's not something obviously any White House is going to talk about openly. There are sanctions within sanctions that are in place.

More interesting to me than simply tossing out a bunch of diplomats which as you point out, seems very retro, very 1970s, is the sanctions that have been placed on the leadership of Russian intelligence agencies. That, if they can - if those screws can be tightened, then that creates, that boxes them into a certain place but that depends on Donald Trump following through on these sanctions which is far from certain that he will.

SAVIDGE: That's exactly right. And we will find out in just a few weeks. Bobby Gosch, Steve Hall, thank you both.

Coming up, he's got three weeks left in the White House and President Obama is in a lot or an all-out sprint, I should say, to the finish line. How a string of last minute moves will impact the next president, which is next.

(COMMERCIAL BREAK)

[10:16:53] SAVIDGE: With just three weeks until he turns the White House over to Donald Trump, President Obama seems to be making pretty fast dash for the finish line but not before enacting a series of moves that could have an impact on how Trump carries out his role as president. Among those, the sanctions against Russia, abstaining from the U.N. vote on Israeli settlements and then making a push to boost Obamacare enrollment.

And the next month, a farewell address, just a few days before Trump's inauguration. So, here to discuss all of this, David Catanese, he's senior politics writer for "U.S. News and World Report" and David Swerdlick, CNN political commentator and assistant editor for "The Washington Post." Nice to see you both David, thank you. David Catanese, let me start with you. Russia sanctions, Trump says it's time to move on. Putin says that for now at least he's not going to kick diplomats out of Russia. So, what about this kind of odd turn of events here? What do you make of that?

DAVID CATANESE, SENIOR POLITICS WRITER "U.S. NEWS & WORLD REPORT": Well, I think the first thing that's interesting is that you have two foreign leaders that are of strategic interest to United States, Benjamin Netanyahu of Israel and Vladimir Putin of Russia, who are both looking forward to the new administration of President-elect Donald Trump. Now, I think it's impossible for us to sit here and say what Donald Trump is going to do when he's inaugurated in 20 some days. We have all looked like fools before in trying to predict that. But I think we could safely assume that he is going to try to reach out to both of these countries and try to form alliances with them in the way that President Obama has not.

And I think -- the big question is going to be really, does this Russian hacking overwhelm the rest of Trump's agenda? It has been a big part of the post-election conversation, how much it affected the election. I think going forward the big question is, does he strike back and repeal these sanctions Obama just put in place and does he have any support on Capitol Hill for it. Because remember, this is an issue where he is really diametrically opposed to members of his own party.

SAVIDGE: Right. Right and I had the very same thought that you got these two world leaders to come out in support of Donald Trump. David Swerdlick, it's not just U.S. tensions with Russia of course that's already been highlighted by the other David, it's also the way forward in the Middle East after the U.S. allowed a U.N. resolution condemning Israeli settlements in East Jerusalem and the West Bank. So, I'm wondering though, you know, President Trump has said, hey look, don't worry, things are going to be better when I'm in office but he can't overturn that resolution. So, how much of the talk that the president- elect has made can he really follow through on?

DAVID SWERDLICK, CNN POLITICAL COMMENTATOR AND ASSISTANT EDITOR "THE WASHINGTON POST": Well, I think he can follow through in a couple of ways. I agree with David that President Trump is going to try to turn the page, reach out to Netanyahu, reach out to Putin, try to at least, initially establish more friendly relations, at least, on the surface with these two countries and with some other countries. I take a slightly different view of what Obama has done. I think Obama actually reached out to a great degree with both Russia and Israel or to their regimes in the early days of his administration, but things definitely soured more on a personal front with Netanyahu and then more over issues with Putin.

[10:20:16] And now President Obama is sort of unleashed because he only has three weeks left, he's about to leave office and he is taking some of these moves. In terms of that resolution, President Trump won't be able to overturn it but the United States is still the big dog in the U.N. Security Council and President Trump will be the commander in chief at that point. And so, he will be able to turn things in a different direction if he so chooses, no question.

SAVIDGE: Yes, he can, including moving the embassy. David Catanese, on the domestic front, Trump has vowed that he's going to repeal and replace Obamacare as one of the first acts. But he also says that he's open to keeping two of the law's most popular parts, that's forcing insurers to cover pre-existing conditions and allowing kids to stay on their parents' plans until their mid-20s. So, this is the president's signature initiative. Could it largely be then that the Obamacare remains in place despite all the rhetoric from Trump and fellow Republicans to get rid of it?

CATANESE: Republicans are going to have to move on trying to repeal Obamacare. This is what they have been campaigning on, really, since 2010. This has been a six-year campaign against Obamacare. And I think if they don't do anything on it, they are going to have hell to pay with their base. And this is something that obviously President-elect Donald Trump talked about throughout his campaign, too. Here's unity with the Republican Party, establishment Republican Party, and Donald Trump.

The problem comes in exactly what you talked about, what they replace it with. And that's why I don't think it's going to happen as quickly as possible. You know, you have Senate Majority Leader Mitch McConnell saying, we want to do this in the first week right when we get back but now you have some members going back to their districts saying well, what are we going to replace this with and how will we pay for it, should we get rid of all the taxes that pay for the coverage.

And also to point out Democrats are about to put forward a very public P.R. initiative on this. They're going to go into districts and try to highlight the 20 million people that have gained coverage since Obamacare's inception, putting pressure on some of these Republicans in swing districts and swing states to say hey, maybe we shouldn't go this far.

So it's going to -- have to be very surgical how President-elect Trump does this and working with Congress on how they do it and I don't think they have it exactly figured out just yet.

SAVIDGE: It is a huge challenge but there are also a great many Republicans that do want to see something change. David Swerdlick, next month, Obama is, I guess set to give a farewell speech, one that's likely going to tout many of the items on this list. Do you think he's going to mention Trump in those remarks and how does he mention that?

SWERDLICK: Yes, so I have to think that through a little bit. But I guess I would say one, President Obama, what we know especially from his remarks earlier in the week saying that he would have won re- election, it's that he thinks he did a good job. Most of his supporters and most Democrats still think he did a good job even if his party's nominee, Secretary Clinton, didn't win the election. And so, I think, we will see him tout what he sees as his successes. He's had quite a number of them. He's also had a few things that he would probably have to fairly characterize as either failures or things he didn't get done off his to do list.

In terms of President Trump though, I think what he will say is what he started saying at the beginning of the transition was that big picture, we have a system which involves a peaceful orderly transfer of power and he's handing the reins to President-elect Trump. And that even though he opposed him vigorously in the campaign and certainly these two don't agree on issues, I think he will wind up after this period of weeks, where he and Trump were disagreeing on a lot of these issues, the U.N., environment, you know, some of these other things, that he will kind of try and wind it down. And say that look, you know, we're moving forward and that he - you know, wants to thank the American people. It's not the time and the place, you know, days before the inauguration, to you know try and take a parting shot on an issue here or there like Obamacare.

SAVIDGE: And it seems unlike the president himself. David Catanese and David Swerdlick, thank you very much.

Still to come, major cities across the globe ramping up security, all getting ready for New Year's Eve celebrations, how is your city preparing? We'll have the details ahead.

(COMMERCIAL BREAK)

[10:28:00] SAVIDGE: It's being called a fragile deal by Russian President Vladimir Putin but a new ceasefire is holding in Syria despite reports of minor clashes. The truce was brokered by Russia and Turkey, leaving the U.S. out of the diplomatic equation. CNN's Mohammed Lila is live in Istanbul, Turkey with more.

MOHAMMED LILA, CNN INTERNATIONAL CORRESPONDENT: Good morning, Martin. Well, so far it looks like so good. Now just in the last hour, we have gotten some reports of sporadic clashes taking place in different parts of the country, but none of the groups involved in brokering the ceasefire meaning Russia, Turkey, Syria or Iran, have come out and said that these clashes constitute a violation of the ceasefire. We know that for example, ISIS and groups that are linked to al Qaeda are not covered under the ceasefire. So, we always expected there would be fighting against those groups on the ground. But so far, once again, the ceasefire is fragile and it seems to be holding.

You mentioned how this truce was brokered. The ceasefire was brokered between Turkey and Russia. Well, the whole plan is that if this holds about a month from now, they're going to hold long-lasting peace negotiations in Kazakhstan between Turkey, Russia, Syria and Iran and of course, the Kremlin yesterday inviting President-elect Donald Trump to have a seat at the table if that's something that the United States decides to do because so far, they haven't been invited to this process at all. Another interesting point as it relates to the U.S. elections and the aftermath, Syria's President Bashar al-Assad yesterday gave an interview where he was asked specifically about the role that President-elect Donald Trump could play in Syria and his answer was quite interesting. He said, "If there are good relations between these two great powers," meaning the United States and Russia, "most of the world, including small countries like Syria, will be the beneficiary. Mr. Trump said, during his campaign, that his priority is fighting terrorism, and we believe that this is the beginning of the solution, if he can implement what he announced." So clearly, some guarded optimism there from Syria's leader, Bashar al-Assad, hopeful that perhaps Donald Trump might have a role to play in establishing some sort of ceasefire and some sort of peace agreement in Syria. And finally, Martin, putting an end to this bloody war that's -- been waged now for almost six years.

SAVIDGE: That would be such a welcome benefit. Mohammad Lila --