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39 Killed, Manhunt Underway After Istanbul Attack; Trump on Breaches: It Could Be Somebody Else; Alabama Versus Clemson in Title Game Rematch; Kim Jong Un: N. Korea Close to Testing Ballistic Missile; Trump on Obama: "We Have a Very Good Relationship"; Queen Missing Church Service Due to "Heavy Cold". Aired 7-8a ET

Aired January 1, 2017 - 07:00   ET


[07:00:02] DON LEMON, CNN ANCHOR: It has to go back -- it goes back to Brooks Brothers.



UNIDENTIFIED FEMALE: Can't feel (INAUDIBLE) the fleur-de-lis because we're in New Orleans. How are you feeling, honey?




ANNOUNCER: This is CNN breaking news.

CHRISTI PAUL, CNN ANCHOR: So grateful to have your company as always. I'm Christi Paul.


We are starting with breaking news out of Turkey. Officials are looking for a gunman who shot and killed 39 people, wounded 69 in this deadly attack at an Istanbul nightclub.

PAUL: I want to show you the surveillance video now that they're looking at very closely. They're going to highlight the focus here. The gunman there, they believe, entering the club after 1:00 p.m. and a flash as he shoots. He actually killed a police officer who was on guard at that club before he went in firing indiscriminately at New Year's revelers who were still partying at the club. It's very popular with foreigners, we understand.

CNN's Sara Sidner is following the story in Istanbul. We're going to hear from her in a moment but let's hear first from Ian Lee.

(BEGIN VIDEOTAPE) UNIDENTIFIED MALE: I got shot in the (EXPLETIVE DELETED) leg, man. It's crazy. I don't know, I saw one person. They're shooting. I'm hiding.

IAN LEE, CNN CORRESPONDENT voice-over): More than 3 dozen killed, many more wounded in a nightclub attack early Sunday. The assailant opened fire during a New Year's celebration. The governor of Istanbul province saying the gunman entered the club and attacked innocent people, calling it a cruel, cold blooded act. Turkey is still recovering from a recent wave of terrorist attacks that left many citizens weary.

DR. AYKAN ERDEMIR, FORMER TURKISH PM: This attack is, of course, a horrible development but not shocking to many Turks who chose to stay inside this New Year's Eve.

LEE: Officials say the attacker shot and killed a police officer guarding the front gate. A security camera captured the moment the gunman dressed in dark clothing dashed into the nightclub as bullets ricochet in the street. More than a dozen of the dead are foreign nationals. There have been no claims of responsibility. The fate of the attacker also unclear.

Turkey faces numerous battles across different fronts. Not only has the Syrian conflict and refugee crisis spilled over, but they're battling ISIS and Kurdish militants. Both staged attacks in Turkey, which is still reeling from a bloody and failed military coup in July.


PAUL: All right. Sara Sidner is live from Istanbul this hour.

Sara, what do you know about the investigation and their search for this suspect at this point?

SARA SIDNER, CNN CORRESPONDENT: We heard from the deputy prime minister who talked about the fact that they will not let this suspect breathe in the New Year, giving the indication that they are in a serious manhunt to try to find what he said was just one attacker.

But we have heard other witnesses who said they thought they saw more than one attacker. But so far, officially, there's just one attacker. They're not sure if it's a him or a her, although that video makes it a little bit more clear, that surveillance video.

We know 39 people dead, 69 people injured. There are families at the hospital waiting on their loved ones. Some of those people are critical.

And so far, those people have been able to be identified, 16 of them, many of them are foreigners. They're not from here. And so, we're trying to get information as to what the nationalities are.

But this club is a place that was kind of an upscale place to be especially for the tourists. And it's right on the Bosphorus. It's a beautiful club. A lot of people going there for the view and for the fun, and it ended so tragically.

I do want to give you a quick idea of what's happened this second. They've opened this roadway that has been closed, the club about 300 feet up the street. In just a moment, we're going to go up and see how close we can get. The authorities allowing the media to get up towards the club where all of this happened.

But this city devastated by this. Time and again, they have dealt with attacks, especially in 2016, and to have this happen on the first day of 2017 has been really, really tough here.

PAUL: Sara, the reports we are hearing is that -- and the video that we've seen is that he -- the suspect shot a police officer who was standing guard outside that club. Do we know if that was the only security presence there last night?

SIDNER: Yes, they said that security presence and the whole city's security presence has been heightened just in general for fear of more attacks because there have been so many. But we're not sure the number of security officers that may have been outside or even inside of this club.

[07:05:04] Some of those details will be coming out. But, of course, you know, a lot of times, these clubs and these different areas don't want to tell you exactly what they do for security.

The other thing they, of course, had was surveillance video, which is certainly helping police try to figure out who this person is. But this has been an absolutely devastating first day of 2016 -- guys.

PAUL: No doubt about it. Sara Sidner, we appreciate it so much. Thank you.

Let's bring in CNN national security analyst Juliette Kayyem, who's with us now.

Juliette, we know that Kurdish separatist groups have claimed responsibility in the past six months for at least one, the twin suicide blasts at the Istanbul stadium. We know that ISIS is there as well. Does the fact that no one has claimed responsibility yet tell you

anything about who may be behind this?

JULIETTE KAYYEM, CNN NATIONAL SECURITY ANALYST: It doesn't say a lot, but it does give some suggestion that this might be an ISIS-inspired attack. The reason why is ISIS often does not take credit for attacks in Turkey. And if you just look at what happened, a Friday night, a soft target, a club, people partying, young people, an international group, those are targets that have always been ones that ISIS favors as we've seen in Paris and Brussels and elsewhere. And so, I think the leading theory for the Turks at this stage would have to be that this was at least an ISIS-inspired attack.

PAUL: I think some people listening to you might have caught something by surprise. Help us understand why ISIS would not claim responsibility for attacks in Turkey when they so often claim responsibility elsewhere?

KAYYEM: Well, for one, look, ISIS is not some centralized organization anymore. So, they're trying to inspire people all around the world to do certain things. So, often as we've seen in these cases, there is a delay between what they know, ISIS, some centralized group and what occurs.

But also, given the politics of Turkey, what they -- and given the fact that Turkey also has an internal terrorist threat, the Kurds, ISIS is sometimes at least in the case of Turkey more than willing to allow there to be some speculation about who target -- who caused the terrorist attack in Turkey, knowing that Turkey's leadership response is going to be as we've seen in the past, greater centralization of power, greater undermining of dissent, focus on journalists and those who might be opposing Erdogan and other leadership in Turkey.

PAUL: So, when we look at the relationship between U.S. and ISIS, the U.S. -- or the U.S. and Turkey, the U.S. has said this is an atrocity. Is there anything the U.S. can do to help Turkey?

KAYYEM: Well, so, this is an interesting time in U.S./Turkish relations. As we've seen in the last couple of months, Turkey has sort of started to look elsewhere, in particular to Russia for some of its alliances. We saw that just earlier this week, with the Turkish/Russian cease-fire brokered over Syria. We don't know if it will hold.

And also even just last week with the death of -- the killing of the Russian diplomat in Turkey, it did not cause a major friction. In fact, one could argue the two countries were closer aligned. But nonetheless, the U.S. is a strong supporter of Turkey. It is in between. It is the east and the west. And we continue to support Turkey in all sorts of ways, not just militarily but law enforcement and intelligence and, of course, their refugee being on the border with Syria at this stage.

PAUL: Uh-huh. All right. Juliette Kayyem, thank you so much for the insight. Appreciate you being here.

KAYYEM: Thank you.

BLACKWELL: All right. When we come back, President-elect Donald Trump again casting doubt about allegations Russia was behind hackers meddling in the U.S. elections. We'll have his comments, next.


[07:11:41] PAUL: Happy 2017. If you are out and about celebrating, you might have missed what was happening in cities across the U.S. as they rang in 2017. Well, here you go.


UNIDENTIFIED FEMALE: Six, five, four, three, two, one. Happy New Year, everybody!


PAUL: Now you know where that is.


PAUL: One New York City, of course.

BLACKWELL: Times Square.

PAUL: Uh-huh. Get picture kissing in Times Square.

BLACKWELL: That's why you go, right?

PAUL: Exactly. I hope they're taping it so they can see they made it on the national news not just in somebody's camera.

BLACKWELL: Well, let's hope they make it in 2018. That's the first hope. Will you be kissing the same person next year?

PAUL: That will make for a whole other picture.

Let's look at Dallas.


PAUL: The version of "Auld Lang Syne."

BLACKWELL: I call it the oots (ph). All the great music the comes out of Dallas and that's what you go in? I don't know.

All right. Well, the West Coast, let's go to Seattle. This is the Space Needle.

PAUL: That is beautiful.

BLACKWELL: Happy New Year, everybody.

PAUL: No doubt about it. Happy New Year to you.

Do you know what? The pope is talking about happy New Year delivering his New Year's day mass, and his message, peace. As the Vatican is marking today as the world day of peace in case you didn't know, and the pope also took a couple of moments there to pray for those who have been killed in the Istanbul nightclub overnight.

BLACKWELL: All right. Back here state side, we know the malware found on the computer of a Vermont utility company is the same code that was allegedly used by Russians to hack the Democratic National Committee.

PAUL: That information is now confirmed by the Department of Homeland Security. It was found after the DHS sent out an alert to utilities nationwide. But they say the hack may not have been intended to shut down power. The company says there was never any danger of their grid being compromised.

In fact, here's the general manager of Burlington Electric in Vermont.


NEALE LUNDERVILLE, GENERAL MANAGER, BURLINGTON ELECTRIC: We found an I.P. address that is tied back to some of the recent malicious cyber activity that was communicating with one of our computers.

Let me be very clear, that computer was not connected to our grid control systems. Our grid was not penetrated. It was not breached. And we have no indication of compromise with any of our systems or any of our customer data. But what we did is when we saw that traffic we immediately isolated the machine, pulled it off the network, alerted federal authorities and began to work with them so we can help trace that back to further their investigation.


PAUL: Well, Donald Trump is still casting doubt on the idea that Russia may be behind those election hacks.

BLACKWELL: This time from his annual new year's event in Mar-a-Lago, his resort in Florida. As he does every year, Trump said good-bye to one year, hello to the next at his estate this year with 800 paying attendees.

And the president-elect took a few questions from the press. He talked about the transition, his doubts also about the intelligence pointing to Russia being behind the recent hacks.


DONALD TRUMP (R), PRESIDENT-ELECT: I just want them to be sure because it's a pretty serious charge. I want them to be sure.

[07:15:01] And if you look at the weapons of mass destruction, that was a disaster and they were wrong.

And so, I want them to be sure. I think it's unfair if they don't know, and I know a lot about hacking and hacking is a very hard thing to prove. So, it could be somebody else.


BLACKWELL: All right. Joining us now to talk about the latest information on the alleged Russian malware and the president-elect's response, Jeff Beatty. He's a former CIA counterterrorism officer and is now a professor of national security studies at the University of New Haven.

Jeff, good morning to you.

JEFF BEATTY, NATIONAL SECURITY CONSULTANT: Good morning, Victor. Happy New Year to you.

BLACKWELL: Happy New Year to you. First, what do you make of the president-elect saying I also know

things that other people don't know, so they can't be sure of the situation?

BEATTY: Well, it's kind of funny. It sounds a little bit like things that Donald Rumsfeld might have said -- the known knowns, the known unknowns and the unknown unknowns. So, I don't know what the president-elect knows.

I do think that it's wise when we've seen in the past intelligence failures like the one he referred to about claiming there are weapons of mass destruction as a justification to go into Iraq in 2003, I think it's wise to be sure. I'm sure he'll be kept abreast of developments and will be able to refine any level of certainty regarding the perpetrators for this act.

BLACKWELL: You know, after the announcement of sanctions against Russia this week, I know you spoke with one of our producers and suggested that it's time now possibly for an anti-meddling deal governing cyber operations between several nations. Give us an idea, what would that look like?

BEATTY: Well, you know, we have the Geneva Conventions that have been right behind things that happened in real world. Put in place by signatory countries. And the most recent one, 196 countries. And they deal with things that arise in the international arena, mostly around armed conflict.

But there appears to be a concern as the cyber threat has evolved faster than nation's ability to cope with it or to manage it. There seems to be a concern that there should be some things like with other weapons, chemical weapons or nuclear weapons, where there's this balance and agreement of not to use the weapons. So, there's probably a time right now for the United States to take a lead, and this is something, if I were, you know, advising, as part of the president- elect's National Security Council team, you know, this is an opportunity to maybe get out in front and lead an international effort to put together a treaty.

U.S. has had some discussions with China bilaterally, for example, that do talk to infrastructure like the electoral (AUDIO GAP) we mentioned, but there obviously now is a need to do more. And so, I think the time is right for that.

But there's one caveat to that, Victor, and if I may, that caveat is, you know, the United States has tremendous capability and your users and I know CNN reported on this in the past.


BEATTY: A virus called Stuxnet. There's others out there like Flame, where fantastic amounts of information are gathered that benefit countries like the United States. I'm not attributing those two to the United States, but they're probably state sponsored.

So, when we do a treaty, we want to make sure that we don't negate our capabilities to conduct this type of cyber reconnaissance of potential foes in the future.


BEATTY: So, you got to be careful on how you craft that.

BLACKWELL: You don't want to tie the hands of the intelligence community.

Very quickly before I let you go, what you mentioned may be what the counterterrorism advisor to the incoming president, Tom Bossert, may go after. Let me put up for you his quote from the announcement of his taking the position that "we must work towards a cyber doctrine that reflects the wisdom of free markets, private competition, and the important but limited role of government, in establishing and enforcing the rule of law, honoring the rights of personal property, the benefits of free and fair trade and the fundamental principles of liberty."

He's someone who's working this bill for some time. But Vladimir Putin is already pulling out of agreements with the U.S., namely one on nuclear security.

So, how confident are you that he would enter another one?

BEATTY: You know, time will tell is the answer to that. But you mentioned Vladimir Putin, and you've got to be careful in this realm. You know, he made great claims in 2011 that his own election was attacked as less than fully legitimate and he pointed the finger at Hillary Clinton.

You know, Vladimir Putin is not somebody like Moammar Gadhafi that you could destabilize with impunity because he has tools. He has tools to strike back. So, it'll be interesting.

But actually, the pick for homeland security is a great one, and it needs to be a priority so that what we have in place amongst nations is caught up to with what the reality on the ground is out there.

[07:20:04] BLACKWELL: All right. Former CIA counter terrorism officer, Jeff Beatty, thanks so much for being with us. Happy New Year to you.

BEATTY: Happy New Year. Thank you.


PAUL: Well, it was the New Year's Eve showdown on the gridiron. Andy Scholes has some news from there.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: (AUDIO GAP) 2017, but the national championship game, that's staying the same. Alabama and Clemson heading for a rematch. We're going to hear from both teams after the break.

(COMMERCIAL BREAK) BLACKWELL: Second verse same as the first. Alabama versus Clemson for the second straight year for college football's national championship.

PAUL: Andy Scholes had the tough task of watching football yesterday.

BLACKWELL: How did he make it?

PAUL: I don't know how he did it.

SCHOLES: I was at the Peach Bowl here in Atlanta yesterday, guys.

PAUL: Yes.

SCHOLES: You know, the game was close early on. Three-point game in the second quarter but it felt like Alabama was up by 30. The Huskies offense couldn't get anything going against Alabama's defense.

The play of the game came from linebacker Ryan Anderson. He's going to pick off Jake Browning. He tosses him right to the ground on the way to the end zone.

Check out the stat, Alabama, they scored 11 touchdowns on defense this year, only allowed 15. Pretty unbelievable. That score there made it 17-7 at the half. Bo Scarbrough put this game in the fourth quarter with the 68-yard touchdown run. Alabama win 24-7.

I caught up with some of the players after the game, asked them how to feels to be heading back to the national title.


TIM WILLIAMS, ALABAMA LINEBACKER: It's feeling great, you know what I'm saying? We trust in the process. This Alabama football, man, we stand away, baby.

SCHOLES: After a performance like this, how confident are you guys heading to Tampa?

JONATHAN ALLEN, ALABAMA DEFENSIVE END: Confident but we're not cocky. We understand that whoever we'll play is going to have a tremendous offense, good defense, and it's going to be a fourth quarter battle.

RYAN ANDERSON, ALABAMA LINEBACKER: We're confident, man. I mean, you've go to be confident in your work.

ALLEN: It feels good. It feels good. I mean, this is what you work for. So, to have it pay off is a tremendous blessing. But you know we're not finished. So, we're not satisfied.


SCHOLES: Alabama taking on the winner between number two Clemson and number three Ohio State. But this is not much of a game. Tigers absolutely dominating the Buckeyes. Clemson quarterback Deshaun Watson threw for 259 yards and a touchdown adding 57 yards and two scores on the ground. Clemson shutting out Ohio State, 31-0.

The Buckeyes don't even show up. It's the first time they've been shut out in a bowl game since the 1920 Rose Bowl.

Coy Wire was there and he spoke with the winners after the game.


[07:25:00] DESHAUN WATSON, CLEMSON QUARTERBACK: We are one of the best teams in the country. We want another opportunity to go play for the Nati. We just came out and played ball, played Clemson football.

BEN BOULWARE, CLEMSON LINEBACKR: Clemson is back. Another year, back in the Nati, we're back for revenge, we're back for redemption. We're coming for Alabama. Look for this game in the past year.

COY WIRE, CNN SPORTS CORRESPONDENT: Are you going to be dancing on New Year's Eve?

DABO SWINNEY, CLEMSON HEAD COACH: Let me tell you, they call this the Fiesta Bowl, right?

WIRE: That's right.

SWINNEY: I think that means party, celebration. There's going to be a fiesta in Arizona tonight, I promise you that.


WIRE: So, for the second straight year, it's going to be Alabama against Clemson for the national championship game next Monday night in Tampa. Top ranked Alabama, they open up as a touchdown favorite in Las Vegas.

I learned something, national championship, you can say Nati.

PAUL: Now you know --

WIRE: I'll use that next week.

BLACKWELL: Don't overdo it, though. Don't overdo Nati. I feel like (INAUDIBLE) really quickly.

PAUL: I think you're right.

Thank you so much, Andy.

We have to take a serious turn here because there is a nuclear threat from North Korea this morning.

BLACKWELL: The country's leader says they are close to developing new weapons and has tough words for the United States.


PAUL: Good to see you on this first day of 2017. I'm Christi Paul. BLACKWELL: I'm Victor Blackwell. Good morning to you.


UNIDENTIFIED MALE: I've got shot in the (EXPLETIVE DELETED) leg, man. These crazy people came in shooting it up. I don't know. I saw one person. They're shooting. I'm hiding.


BLACKWELL: Yes, he has no idea what's going on there. Just a bit of the melee outside of this nightclub massacre in Turkey.

Officials looking for the shooter. He shot and killed at least 39 people, wounded 69. This was at a nightclub in Istanbul.

PAUL: There's an important piece in this investigation we want to show you here. Take a look at this surveillance video as they're going to highlight the focus. That they believe is the gunman entering the club.

This happened after 1:00 a.m. and then a flash you're going to see there. That's as he shoots a police officer. That police officer died. He did so before firing indiscriminately at New Year's revelers who were still partying at the club.

This is a club popular with foreigners. The U.S. did release a statement condemning the, quote, "atrocity".

BLACKWELL: North Korea's leader is close to test launching a missile capable of carrying nuclear warheads. In a New Year's Day speech, Kim Jong-un said the nation needs to protect itself against threats from the U.S.


KIM JONG JUN, NORTH KOREAN LEADER (through translator): We have successfully conducted our first hydrogen bomb test, tests for various of striking means and the test for nuclear warhead to cope against a vicious threats for nuclear war by the imperialists.


[07:30:12] PAUL: North Korea carried out two nuclear tests in 2016. A high profile defector from North Korea says Kim Jong-un is determined to develop nuclear weapons by the end of the year.

BLACKWELL: President-elect Donald Trump continues his New Year's tradition by ringing in one year and saying good-bye to the last at Mar-A-Lago estate. He was joined by 800 paying attendees. On the sold out guest list, Sylvester Stallone, also, Fabio, and the Trump family, the sons and daughters there.

The president-elect took time for questions from the press. He talked about the transition and his doubts about Russian hacking allegations and whether he feels President Obama is trying to undermine him with recent political moves.


TRUMP: Well, I spoke to him yesterday. He's been very nice on the phone. We have a very good relationship.

Look, we have to protect Israel. Israel to me is very, very important. We have to protect Israel. And I disagree with what he's done on Israel.

I listened to Secretary Kerry's speech. I think it's very unfair to Israel what happened.


BLACKWELL: All right. Maybe a little tough to hear there.

Joining me to talk about the transition and the president-elect's response to those allegations of Russian hacking, Errol Louis, CNN political commentator and political anchor for Spectrum News, and Lynn Sweet, the Washington bureau chief for "The Chicago Sun-Times".

Good morning to both of you.

Errol, I want to start with you. What do you make of Donald Trump's characterization of his relationship with President Obama? He's not going as far as his adviser Kellyanne Conway saying that the president is trying to box him in.

ERROL LOUIS, CNN POLITICAL COMMENTATOR: Well, that's right. When he said very nice, he's referring to I think their personal relationship. Do they speak well on the phone, do they get along, that sort of a thing.

But make no mistake about it -- the transition while going smoothly really is kind of a hostile takeover of a federal bureaucracy that the Obama administration is trying its best to sort of make sure legacy items are protected. So, there are a number of appointments that are being rushed through. There are a number of accelerated hiring, not at the senior level but the mid-level and downward in the civil service, to make sure that some of what he wanted to see go forward is going to be in place. And Donald Trump will have to go to some effort to dismantle it.

So, yes, they will be personally friendly. He'll be two of six people in the world who have ever been president of the United States, but beyond that we really should keep an eye of what's going on at the mid-levels, because it's not quite so friendly down at that level.

BLACKWELL: Lynn, the president-elect made some news last night, maybe he didn't want to. But I think the bigger headline was when he talked about the sanctions against Russia and the continued allegations that they were involved or tried to interfere in the U.S. election.

Here's what the president-elect said.


TRUMP: And I know a lot about hacking and hacking is a very hard thing to prove. So, it could be somebody else. And I also know things that other people don't know and so they cannot be sure of this situation.

REPORTER: What do you know that other people don't know?

TRUMP: You'll find out on Tuesday or Wednesday.


BLACKWELL: You'll find out on Tuesday or Wednesday what the president-elect says that he knows that other people don't know. When you heard that, when you read it, what went through your mind?

LYNN SWEET, WASHINGTON BUREAU CHIEF, CHICAGO SUN-TIMES: Well, a few things. At first I thought, well, maybe he heard in some briefing something that's so classified he can't tell people, but then we're going to find out about it in a few days. So, it can't be -- can't be top secret.

The call of a president is one of the toughest parts of the job. You have to be able to assess the information to make the call. Somebody hacked. If you don't believe it was Russia, then looking to the future, how will -- you know, figure out how will you develop the faith in intelligence to say who did?

The failure of the intelligence community in the Iraq weapons of mass destruction fiasco I think is something that you can't always use to be forever skeptical. The Department of Homeland Security and the FBI did put out a joint report that is public. It has some technical information in there way beyond my understanding with codes of I.P. addresses, et cetera, that they say show a unique Russian fingerprint. Presumably there's deeper information underneath that.

So, the call of the -- of the president to figure out what you believe is right to determine your course of action is what I want to see unfold in the early days of the Trump administration to see how he navigates in an imperfect world what might not always be perfect information.

[07:35:04] BLACKWELL: Errol, during the campaign then-candidate Trump said that there would be a news conference about Melania Trump's immigration status and that never happened. There was supposed to be a news conference about his business dealings. That's been postponed to later this month.

Will he have to come out after this high profile conflict over Russia within the party and between Republican and Democrats, have to come out and say something new on Tuesday or Wednesday?

LOUIS: I wouldn't be surprised if we heard nothing at all on Tuesday or Wednesday, or if the can was kicked down the road a little bit more. I mean, we can add revelations about his taxes that have been promised for over a year now that we are probably never going to see. This -- by the way, those things are linked because we don't know what

kind of political or financial ties this president-elect has to the Russian government or to Russian business interests. We've got to, I think, sort of be careful not to just kind of play along with this sort of ambiguity that he plays along, because just to re-emphasize what Lynn said, the job of commander in chief, you know, is to make hard, hard choices based on imperfect information.

And for the president-elect to say, well, nobody's really sure -- yes, OK, we understand you can't be 100 percent sure. We're not going to get a videotape of Russians hacking into U.S. electoral systems, but the reality is we expect and the job requires that hard decisions be made based on whatever information is available which, in turn, raises this question of why not go to the briefings, you know? It's really important that we get this stuff right and I think that's going to be sort of a push and pull in a conversation that we have going on right up to the inauguration.

BLACKWELL: Errol, I want to pull a phrase out of what you said and what Lynn said, this cloud of ambiguity and go to an exchange over the president of Taiwan. Reporter asked if the president-elect would meet with her, and I want you to listen to this exchange back and forth.


REPORTER: If the president of Taiwan stops by here, will you meet with her?

TRUMP: Stops by here? I have not heard that's going to happen.

REPORTER: There's some discussion of her stopping --

TRUMP: In the United States or in Palm Beach?

REPORTER: In the United States later --

TRUMP: Nobody has ever mentioned it. First I've heard -- well, I'm not meeting anybody until after January 20th because it's a little bit inappropriate from a protocol standpoint. Well, we'll see. We'll see.


BLACKWELL: All right. So in this exchange there are a few things where the reporter asked would you meet with her? He then says, if he stops by here, well, the president of Taiwan -- president is a woman. And then he says I'm not meeting with anybody until after January 20th because it's a little inappropriate from a protocol standpoint, but he's already met with the prime minister of Japan as president-elect.

Put those things aside, Lynn. What does this mean for China potentially when the president-elect leaves potentially a meeting of the president of Taiwan to a "we'll see"?

SWEET: Well, I think China already knows about the phone call that Trump had and if one of Trump's M.O. is to leave everybody guessing, he is marvelously achieved that. And we will be saying "we'll see" a lot I think in the coming early days of the Trump administration because not only don't we know, we don't know who the ambassador to China is going to be from the U.S. That will tell us something else about the intentions of Trump.

So there is just so many parts of this when it comes to big, complicated relationship with China, not only regional interests like the relationship with Taiwan, but perhaps we'll see if Trump puts on the front burner trade deals that impact China.

BLACKWELL: All right. Lynn Sweet, Errol Louis, good to have you both this morning. Happy New Year.

SWEET: Happy New Year.

LOUIS: Happy New Year.


PAUL: Well, Queen Elizabeth is missing another key public event today because of her health. Buckingham palace says she's skipping church today because she's still recovering from a, quote, "heavy cold". Remember, that also prompted her to miss Christmas services for the first time in decades, last week.

CNN correspondent Phil Black is live for us in London.

Phil, happy New Year to you for one. Secondly, do we have any indication just how ill she really is?

PHIL BLACK, CNN CORRESPONDENT: Christi, it's obviously serious. She's a 90-year-old woman and she's been out of public view for something close to two weeks now. The words that are constantly used to describe it are heavy and lingering, this particular cold.

But at the same time, her advisors at Buckingham palace today are going out of their way to tell journalists that she is doing okay. It's something of a concerted effort, I think, to ensure that there isn't an information vacuum when it comes to the queen's health at the moment, trying to head off any speculation that this can be more serious than it is.

So, we're being assured that she is up and about.

[07:40:00] She is working, they say. They talk about her taking and receiving boxes. These are boxes of official government documents, briefing papers and so forth that she goes through and reads in her official capacity as Britain's head of state.

So, she's still on top of all of that. But today, she didn't go to church as she would normally do. That's not a decision she would take very lightly. She is the head of the Church of England. Remember, she takes that very seriously.

But the decision is taken because it's pretty chilly out there, just above freezing. If this is a lingering cold as we are repeatedly told, it is -- they want her to get over it as quickly as possible.

But she's doing OK. That's the message that's coming through. And Buckingham Palace seems to want to be very sure that people are not overly worried about the 90-year-old monarch's health at the moment, Christi.

PAUL: And she hasn't been sent to the hospital so that tells us that it's controllable, whatever it is. Do we know when her next public event is, when she's expected to be seen?

BLACKWELL: No, not at the moment. The time at the estate over Christmas and New Year's, personal time, family time. But the family does make these appearances at the local chapel for these church services on Christmas and New Year Day.

You're right. This is another point that Buckingham Palace is making, she's still in residence, which means she hasn't been moved. She hasn't been taken anywhere else for more serious, intense medical treatment of that kind.

But it appears that the priority now is rest but she is, as I say, doing OK and fulfilling other official duties.

PAUL: So glad to hear that.

Hey, Phil, happy New Year to you. Happy 2017.

BLACKWELL: You, too, Christi.

PAUL: Thank you so much.

I want to show you some live pictures right now out of London. That little guy and girl. Probably girl. Yes, the pink hat should give it away, right?

These are more than 8,000 performers around the world and taking part in London's New Year's Day parade as you see. Folks look different than what we see here.

BLACKWELL: Little bit.

PAUL: Just a little bit. The theme is blockbuster movie. "Jurassic Park" they're featuring. There are some dinosaurs there. That's "Wizard of Oz" there as you can tell. There's a "Ghostbusters" float, and the (INAUDIBLE)

BLACKWELL: It is a little Rose Bowly.


BLACKWELL: Little Rose Bowly.

PAUL: That's a good characterization.

BLACKWELL: I just made up that adjective.

PAUL: That's all right. My 7-year-old does the same thing. Making up words. It's all good.

BLACKWELL: Now, you compared me to a 7-year-old. Happy New Year to you, too.


BLACKWELL: All right. A serious thing here now. Still to come, we got parents of missing journalist Austin Tice. They're holding on to hope their son is still alive. How they believe President-elect Trump might help bring him home. We have their story, that's next.


PAUL: Well, Austin Tice is believed to be the only American journalist still missing in Syria. He disappeared four years ago while he was reporting there.

BLACKWELL: Austin's parents have not talked with him since his kidnapping, and they have not had any contact with the captors. But new information from the U.S. government has given them hope their son is still alive.

CNN's Brian Stelter asks them about the information and how they think the incoming administration might help them get their son back.


BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: Hey, Victor. The coming new year brings new hope for the family of Austin Tice. He is the only American journalist believed to be missing in Syria. He's been missing for more than four years.

Recently, the United States government came out and said it has high confidence that Tice is still alive even though he disappeared back in August of 2012 and there's been no known communication from anyone who may have captured him or may be holding him.

This case has been a mystery and agonizing ordeal for Marc and Debra Tice. Those are Austin's parents who live in Texas who have been working behind the scenes trying to figure out where their son is, what happened to him, and who could be holding him in Syria.

At first, they say the Obama administration was not supportive enough, was not communicative enough, but in the past couple of years they say that has improved and they now have hopes the Trump administration will be equally supportive of their efforts to figure out what happened to Austin and where he is now.

Here's part of what they told me about their experience.

DEBRA TICE, AUSTIN TICE'S MOTHER: We've had credible report ever since Austin was taken that he is alive and so we've hung on to those messages without doubt -- without any doubt.

MARC TICE, AUSTIN TICE'S FATHER: His captors have not reached out to us. You know, we don't have any way of, you know, completing this solution to bring him home because only -- only half of the equation is working here, and that half is, you know, the efforts that we've done, the efforts of the United States government and all those people and organizations that have been supporting us.

But, yes, it was extremely comforting and --

D. TICE: Uplifting.

M. TICE: -- uplifting to hear and for the Office of the Special Presidential Envoy and the United States government to say that their assessment is he's alive. We have every reason to believe he's reasonably well and so, you know, we continue to, you know, press that there's every reason to do everything possible -- keep doing everything possible to bring him home.

STELTER: On a personal level, an almost unimaginable ordeal for these parents. On a political level, just one of many examples of the challenges that one administration is handing off to the next presidential administration. These parents, hopeful and confident that the incoming Trump administration will work hard behind the scenes trying to return their son to the United States.

Victor, back to you.


BLACKWELL: All right. Brian, thank you so much for that update.

President-elect Donald Trump finding an unlikely following in Iraq. Some people there admire him and his vision so much -- look at this, one man's named his restaurant after him. Another now has a baby Trump. We'll share their stories, next.


[07:51:57] PAUL: Well, some say it was the hostile rhetoric about Muslims from Donald Trump during the campaign. So, he may not be an obvious hero, let's say, to a lot of Iraqis.

BLACKWELL: Yes. But in the country's Kurdistan region, the U.S. president-elect has an unlikely fan base.

CNN's Ben Wedeman explains for us.


BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): At 3 weeks old, little Trump isn't bothered by his pesky brother, Rashid. Yes, you heard right, this is baby Trump. Trump Hassan Jamil (ph) to precise, born in Iraqi Kurdistan.

His father Hassan (ph), a Peshmerga fighter on leave, explains what's in a name.

"I called him Trump he says because Trump is charismatic and has clear policies. That's why he won the election." Nadiar Sawiti (ph) heard Trump say he was a big fan of Kurdish forces calling the U.S. to arm them in their fight against ISIS. In his honor, Nadiar named his recently opened fish restaurant after the Donald, and even designed the catchy logo.

In Iraq's murky waters, Trump is inspired some here to hope he'll also make Kurdistan great again.

(on camera): This fish is your standard carp, the way it's cooked is called Masgouf here in Iraq. It is bigly popular and this is a catch. Fit for a president.

(voice-over): There's no flip flopping here. It takes just 45 minutes for the carp, a bottom feeder to go from the tank to cutting board to grill to plate. No time wasted.

"What I admire about Trump's personality", Nadiar says, "is that he's decisive. He's tough. And hopefully with that toughness, we'll finish off ISIS.

Nadiar shrugs off as mere campaign rhetoric Trump's pledge to cast a wide net banning all Muslims from entering the United States, even wants to open a branch of his restaurant near the White House if Trump will invite him in, that is. Here's one man ready to serve the incoming administration.

Ben Wedeman, CNN, Dahod (ph), northern Iraq.


PAUL: All righty. When we come back, in case, you missed it, best moments from our New Year's Eve coverage.






[07:57:32] PAUL: Look, we don't want you to wake up and miss something. So, we have some of the most memorable moments from CNN's coverage last night.


UNIDENTIFIED FEMALE: Anderson. Anderson.


Happy New Year.

UNIDENTIFIED FEMALE: Hey, Anderson, this is Megan Mullaly (ph) and Nick Operman (ph) here. We just want to wish you a happy new year and wanted to extend an invitation to you to join us in our bed.





DON LEMON, CNN ANCHOR: Don't get blood on the jacket. It goes back to brooks brothers.




UNIDENTIFIED FEMALE: Can't feel (INAUDIBLE) the fleur-de-lis because we're in New Orleans. How are you feeling, honey?




PAUL: There you have it. I wonder how -- I wonder how he's feeling this morning with that ear, one Mr. Don Lemon.

BLACKWELL: Don't forget tonight, stay with CNN, "Now More Than Ever: The History of the band Chicago". Not touching that. Airs 8:00 p.m. Eastern, right here on CNN.

Do not miss it.

And something else we will not miss --


Christi's birthday.

PAUL: Wait. Do I see Victor doing the birthday dance?

BLACKWELL: No, no, it's your birthday.

PAUL: I know, but do you it.

Thank you.

BLACKWELL: Happy birthday.

PAUL: I love this team. Thank to you my team. We can't do it without any of you.

And thank you for watching. Thank you for remembering

BLACKWELL: You're welcome.

PAUL: We're wishing you big blessings in 2017, people. Big blessing. Thanks for hanging with us.

BLACKWELL: I'm going to double down on that. I wish you those two.

Thanks for starting our morning with us. "INSIDE POLITICS" with John King starts right now.

But let's hold on this music if we can until the show starts.