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GOP Drops Ethics Rule Change After Trump Criticism; Interview with Rep. Adam Schiff; Republicans in Control as New Congress Sworn In; Schumer to Trump: U.S. Can't Afford a Twitter Presidency; Convicted Felon Appears on Stage with Trump; Ivanka Trump Settles on New D.C. Home. Aired 5-6p ET

Aired January 3, 2017 - 17:00   ET


[17:00:11] WOLF BLITZER, CNN ANCHOR: Happening now, about face. After a critical tweet from President-elect Trump, House Republicans reverse a move to gut a congressional ethics watchdog. But on the first day of the new Congress, Republicans are ready to get to work on Trump's agenda. Can Democrats do anything about it?

Back on the Hill. CNN has learned that despite the extraordinarily bitter election campaign, Bill and Hillary Clinton will attend Donald Trump's inauguration. So will George W. Bush, who refused to support Trump.

Pushback. The Kremlin says it had nothing to do with the election cyberattacks in the United States, and the WikiLeaks founder agrees. But as intelligence agencies wrap up a full review, the Obama administration says the evidence is, quote, "rock solid."

And new neighbors. Close enough to borrow a cup of sugar, not far from the homes of the Obamas and the Clintons, could this -- could this be the swanky new House where Ivanka Trump and her family will be living here in Washington?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

On the first day of the new GOP-controlled Congress, Donald Trump may have let fellow Republicans know who will be calling the shots. After a critical tweet from the president-elect, the House GOP quickly dropped a move to gut an independent ethics office. Newly sworn-in Republicans are eager to start working on Trump's to-do list and undo key elements of President Obama's legacy.

While both sides say they hope for common ground, Democrats warn they will hold their ground and hold Trump's feet to the fire.

In one bipartisan move, a group of senators is pushing for more sanctions against Russia. Officials say the intelligence community's review of election related cyberattacks may be ready this week. And Trump will be briefed by the intelligence chiefs.

While the president-elect has repeatedly raised doubts about Russia's role in the hacking, the State Department says the information is rock solid.

And Ivanka Trump and her family may soon be living in the same neighborhood as the Obamas, just a couple minutes' walk from the soon- to-be former president. She may also be able to call Bill and Hillary Clinton neighbors.

I'll speak with Congressman Adam Schiff. He's the senior Democrat on the Intelligence Committee. And our correspondents, and analysts and guests, they are all standing by with full coverage of the day's top stories.

Let's start with the president-elect, who criticized fellow Republicans even as they were celebrating their control of the new Congress.

CNN senior White House correspondent Jim Acosta is joining us from New York. Jim, is Donald Trump letting congressional Republicans know who's the boss?

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, he certainly did that today. Donald Trump bucked his own party today after Republicans in Congress were poised to weaken the process for dealing with ethics violations on Capitol Hill. The president-elect blasted that move. As one of his top aides told me, lawmakers should not try anything that gets in the way of Trump's pledge to drain the swamp in Washington.


ACOSTA (voice-over): This was not draining the swamp. On the very first day of the new Congress, Republicans in the House were set to pass a proposal to gut the Office of Congressional Ethics, the independent watchdog that investigates allegations of wrongdoing on Capitol Hill.

The plan, which would have placed ethics probes under the control of lawmakers, was yanked. Republicans suddenly reversed course after an outcry from Democrats and public watchdogs, not to mention pressure from President-elect Donald Trump who tweeted, "Bad idea. All that Congress has to work on," Trump tweeted, "do they really have to make the weakening of the independent ethics watchdog, as unfair as it may be, their No. 1 act and priority?"

Trump's tweet seemed to undercut one of his top advisors, Kellyanne Conway, who cautioned she hadn't discussed the matter with the president-elect but sounded warm to the proposal.

KELLYANNE CONWAY, TRUMP SENIOR ADVISOR: Many of these people, members and their staffers who have been under investigation, have complained about their due process rights being violated and being compromised.

ACOSTA: But Democrats were already pouncing.

REP. STEVE ISRAEL (D), NEW YORK: You know, they said they would drain the swamp. They've just -- they're distributing free swimming passes in the swamp by this change in the regulations. ACOSTA: Trump is also going against much of his party on trade, again

threatening high tariffs on U.S. companies that shift jobs to other countries.

Today's target, auto giant GM. Trump tweeted, "General Motors is sending Mexican-made model of Chevy Cruze to U.S. car dealers tax-free across border. Make in USA or pay big border tax!"

SEAN SPICER, INCOMING WHITE HOUSE PRESS SECRETARY (via phone): He doesn't want companies in the United States to leave this country and then sell back to the U.S., leaving the American worker behind.

ACOSTA: Problem is GM says Trump is wrong, adding in a statement, all Chevrolet Cruze sedans sold in the U.S. are built in G.M.'s assembly plant in Lordstown, Ohio. GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S."

[17:05:04] But aides argued they're getting results, pointing to Ford's decision to scrap plans to build a new plant in Mexico after candidate Trump warned of consequences.

TRUMP: We'll be calling the executives at Ford or whatever the company is and we'll tell them very nicely that if they want to move their factory or their plant to another country, they will have to pay a 35 percent tax when they sell their cars or their product back into the United States.

ACOSTA: Still, Trump and the GOP are on the same page when it comes to opposing President Obama's plans to pare down the number of detainees at Guantanamo, with the president-elect tweeting, "There should be no further releases from GITMO. These are extremely dangerous people and should not be allowed back onto the battlefield."

The White House snapped back Trump's tweet will have no impact on the current administration's plans.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: No, it will not. He'll have an opportunity to implement the policy for -- that he believes is most effective when he takes office on January 20.


ACOSTA: Now, as for January 20, CNN has confirmed Hillary and Bill Clinton will both attend Trump's inauguration, as will former president George W. Bush and Laura Bush.

As for Trump's cabinet, a source close to the transition tells me former California governor or lieutenant governor, I should say, Abel Maldonado, is a frontrunner for agriculture secretary. Wolf, he would be the first Latino to join Trump's cabinet, some much-needed diversity according to people inside and outside this Trump transition team, Wolf.

BLITZER: All right, Jim, thank you. Jim Acosta reporting.

The changing of the guard is well underway here in Washington. Republicans are eager to push their agenda. Democrats say they'll try to hold the line.

Let's go to our senior Washington correspondent, Jeff Zeleny. He's up on Capitol Hill right now.

Jeff, after a very bitter campaign, is there any serious talk right now of compromise?

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Wolf, the vitriol of that campaign has subsided somewhat. But amid all the pomp and circumstance here today on the opening day of the 115th Congress, talk of compromise was in very short supply. As Republicans were eager to point out, elections do indeed have consequences.


REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: Do you solemnly swear...

ZELENY (voice-over): The new Republican order is taking shape tonight in Washington. For the first time in a decade, Republicans set to control the House, Senate and White House.

SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: We know that the coming days are going to require hard work and cooperation from both sides.

ZELENY: Mitch McConnell of Kentucky becoming Senate majority leader as the 115th Congress opened for business. Paul Ryan of Wisconsin easily reelected speaker of the House.

RYAN: In the heat of the kind of campaign we had, you start to wonder, will the tempers ever cool? Will the system still hold? Does our old rich tradition still have that magic? Well, it turns out it does. In the end, they all dissolve in the silent and peaceful transfer of power.

In just 17 days Donald Trump will join them as president, completing the GOP's ascension to power. The optimistic applause echoing across the Capitol will soon give way to the challenges of governing, with Republicans facing the burden of delivering on the change voters demanded. For making good on their pledge to repeal and replace Obamacare to passing tax reform and easing government regulations, Republicans are crafting a bold agenda. Speaker Ryan called it a once-in-a-lifetime opportunity.

RYAN: The people have given us unified government. And it wasn't because they were feeling generous. It was because they want results. How could we live with ourselves if we let them down?

ZELENY: Out of power, Democrats say they will find common ground when they agree and hold their ground when they do not. In the House, Republicans now have a majority of 241 to 194. Yet in the Senate, Republicans still need Democrats, with Republicans holding 52 seats and Democrats 48. Most pieces of legislation need 60 votes to pass.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: When you lose an election like this, you can't flinch. You can't blink. You have to look it right in the eye, analyze it, learn from it. ZELENY: New York Senator Chuck Schumer is the new Democratic leader.

He told CNN's Dana Bash Democrats won't be the obstructionists Republicans were to Obama.

SCHUMER: Ninety, 95 percent of the time, we'll be holding his feet to the fire and holding him accountable. But we're Democrats. We're not going to just oppose things to oppose them.

ZELENY: The Trump cabinet will be one early test. Secretary of state nominee Rex Tillerson and defense secretary nominee retired General James Mattis visiting Capitol Hill today, preparing for their confirmation hearings.

In a day of pomp and pageantry, the new Congress came with one old touch.


ZELENY: Vice President Joe Biden, in his formal role presiding over the Senate, swearing in one final class of senators. It's one of his last official acts after 44 years in Washington.

BIDEN: Tell them in 14 days, when I'm no longer vice-president, tell them to still say hi to me.


[17:10:07] ZELENY: And, of course, the next president, vice-president Indiana Governor Mike Pence, will be on Capitol Hill tomorrow talking with Republicans about their agenda going forward. Wolf, he is going to play a critical role in the Trump administration by getting this agenda through.

Now, the House is voting right now at this hour on the first vote of this new Congress, and that will include the rules package. That does not include that ethics bill that was so controversial earlier this morning.

Wolf, one other note: President Obama also will be on Capitol Hill tomorrow, trying to give some parting words to Democrats about how to fight back against the repeal of Obamacare and other rulings and laws he has passed in his eight years here in Washington -- Wolf.

BLITZER: Another busy day tomorrow Up on Capitol Hill. Jeff Zeleny, thank you.

Democrats are warning they'll try to work with Donald Trump but will focus on trying to hold him accountable. Joining us now, Congressman Adam Schiff of California, the senior Democrat of the House intelligence committee.

Congressman, thanks for joining us.

REP. ADAM SCHIFF (D), CALIFORNIA: Good to be with you, Wolf. BLITZER: So, react to this about-face move by Republicans today on

the whole ethics panel. Does President-elect Trump deserve credit for convincing his fellow Republicans in the House of Representatives to drop that plan to gut the ethics plan -- the ethics panel?

SCHIFF: Well, ironically, you have a tweet from a president-elect coming into office with probably some of the most profound conflicts of interest himself, that propelled a change in the GOP plan in term of the ethics rules.

And I think all you need to know about what this Congress is going to look like took place in the first five minutes, with a dead-of-the- night rules change, the first product of the abuse of unified authority by the Republicans, pushed back by a president-elect through a tweet, and a president-elect himself with these profound conflicts. I think you're going to see a lot of internal divisions between GOP members, between the GOP and the Trump administration, let alone between Democrats and Republicans.

BLITZER: The new Senate minority leader, Chuck Schumer, the top Democrat in the Senate, he told our Dana Bash today he's open to making a deal with President-elect Trump, if it's something Democrats can get behind. Are you with him, with Chuck Schumer on this?

SCHIFF: Absolutely. You know, for example, the president-elect is serious about a major infrastructure build. The country could certainly use it.

If, on the other hand, what he has in mind is a package of tax cuts for people engaged -- you know, construction executives that are doing things they're already planning, that's not going to stimulate the economy. That's not going to have Democratic support. But there should be things where we can find common ground that are in the country's best interests; and in those areas we should absolutely work together.

BLITZER: Like where? Give me an example or two.

SCHIFF: Well, I really think infrastructure is one of them. By the same token -- and this is not something we're in common ground with the administration -- where Democrats and Republicans and Congress can find common ground on stronger sanctions against Russia. We should work together across the party aisles and send that bill to the president.

So, I think both with our colleagues in Congress when we find common ground, in common with the administration when he proposes something that makes sense, Democrats ought to look for opportunities to make progress.

BLITZER: The president, as you heard, he'll be going to Capitol Hill tomorrow to meet with Democrats to try to come up with a strategy to defend Obamacare, the affordable healthcare law. What parts of Obamacare do you think Democrats realistically have a chance of keeping? SCHIFF: I think we have a chance of keeping a lot of Obamacare.

Republicans are about to find out that making a hollow campaign promise is one thing. It may be enough to get you votes, but having to deliver on it, having to fulfill what Donald Trump said when he said, "We're going to have great health care, and people are going to pay less for it. Believe me." Well, we're about to find out whether he can be believed.

My guess is Republicans are going to have a lot of trouble coming up with something that makes sure that people with preexisting conditions can hold onto their health care, that millions of people that have been added to the healthcare roles through the expansion of Medicaid can keep their healthcare. It's going to be very hard for them to do that without, frankly, reinventing the same thing that Obamacare represents and calling it something new.

So, we'll see what they come up with, but I think they're going to find it very difficult without casting millions of people off their healthcare insurance.

BLITZER: All right. Congressman, stand by. There are new developments emerging right now on the Russian hacking of the Democratic national committee and Hillary Clinton's campaign chairman. We're getting new information about a briefing That's coming up. We're going to discuss this and more right after a quick break.


[17:18:33] BLITZER: We're talking with Congressman Adam Schiff, the top Democrat of the House Intelligence Committee.

Stand by, Congressman. We're getting some new information on the investigation into the election cyberattacks which U.S. intelligence is blaming on Russia. Our justice correspondent, Pamela Brown, is here in THE SITUATION ROOM.

Pamela, what are you learning?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, Wolf, tonight we are learning that intelligence chiefs are planning to brief President- elect Trump as early as this Friday on the findings of the comprehensive review about Russian and the election hacks.


BROWN (voice-over): Tonight, CNN has learned President-elect Trump will soon be briefed by leaders of the U.S. intelligence community, including chief spy James Clapper and CIA director John Brennan, on the unprecedented interference of the U.S. election system. The high- profile briefing will come after months of Trump publicly challenging the intelligence community's assessment Russia is to blame.

TRUMP: It could be somebody else. And I also know things that other people don't know and, so, they cannot be sure.

It could be Russia, but it could also be China, could also be lots of other people. It also could be somebody sitting on their bed that weighs 400 pounds, OK?

Maybe there is no hacking, but they always blame Russia. And the reason they blame Russia, because they think they're trying to tarnish me with Russia.

BROWN: President Obama ordered the full review last month, to look at the cyber intrusions impacting U.S. elections, going back to 2008. And specifically the hack against the Democratic Party during the 2016 election.

[17:20:02] Expected in the public version of the report: newly de- classified information laying out the evidence supporting the intelligence community's assessment that the Russian government is the perpetrator.

JOHN KIRBY, STATE DEPARTMENT SPOKESMAN: President Obama and this administration is 100 percent certain in the role that Russia played in trying to sow doubt and confusion and getting involved, through the cyber domain, into our electoral process. The information is there, and it's rock solid.

BROWN: Tonight U.S. officials tell CNN companies across the country have detected I.P. addresses and malware that could be connected to Russian hackers, though it's unclear if they penetrated the networks.

The discovery comes after the FBI and DHS put out this report last week naming the Russian hacking operation "Grizzly Steppe" and warning companies what to be on the lookout for.

The intelligence community has also traced the hack back to specific keyboards with the Cyrillic text, an alphabet used by Russians. Adding to U.S. intelligence officials' confidence Russia carried out the hack.

Today Russia dismissed that evidence, a Kremlin spokesman saying, "Cyrillic characters can be used everywhere. Once again, I reject any possibility that official Russia can be involved in any way."


BROWN: And tonight a group of bipartisan senators is preparing a bill that would offer additional sanctions against Russia. Meantime, officials say a declassified version of that comprehensive report will likely be released to the public after this week -- Wolf.

BLITZER: Look forward to reading that report. Thanks very much, Pamela Brown, for that reporting.

We're back with Congressman Adam Schiff of California, the senior Democrat on the House Intelligence Committee.

Congressman, as you just heard the intelligence committee wrapping up this new review of the election hacks it will soon brief, as early as this Friday, President-elect Trump. What are you hearing about this review. Is there more concrete evidence in it proving beyond a shadow of a doubt that the Russian government is behind the hacking? SCHIFF: I think it's been known, Wolf, for quite some time that the

Russians were behind the hacking; and there was very high confidence in that assessment.

Over the weeks and months, I think we've continued to gather further intelligence that cements that assessment, and I imagine what the intelligence community is doing, among other things, right now, is trying to figure out how much of this can they make public without compromising sources and methods? How should they conduct that briefing of the president-elect to convince him to stop saying that they don't know what they're doing, to stop denigrating the intelligence community?

I think we'll find out. Is the president-elect someone who has the character to admit when they're wrong? Or is he nonetheless, in the face of these facts, in the face of that intelligence, going to continue to maintain that we have no idea who is responsible?

BLITZER: U.S. officials, as you just heard, are telling CNN companies across the country have now detected I.P. addresses that could be connected to Russian hackers, but will this new evidence that is presumably going to emerge directly link all of this to President Putin?

SCHIFF: Well, you know, part of what's going to be, I think, important to determine is when did they find the evidence of the code or the origin, the I.P. addresses that have now been made public by the U.S. intelligence community.

Are these people who are now spoofing or trying to masquerade as Russian intel? Or were these things that were detected earlier that we can now go back and say that the Russians were involved in this? This is part of the problem when you do go public. That is, it makes it easier now for the Russians to hide. It also makes it easier for others to create mischief, but you know, I think forensically, there's a lots of ways to track down when and where the Russians have been.

BLITZER: As you know, back on October 7, the head of the director of national intelligence, the secretary of homeland security said only Russia's senior most officials could have authorized these activities. Does that mean Putin?

SCHIFF: I think it means Putin. The president was asked this during his press conference. I think he quite artfully said, look, it's hard to imagine that you had people in Russia, in the Russian government, in the Kremlin who were freelancing when it came to interfering in the democratic affairs of the United States. That would be, I think, unthinkable in the Russian, the hierarchy in a system where Putin essentially controls everything. So basically, when you're pointing at senior levels of the Kremlin, you're really pointing at Putin himself.

BLITZER: WikiLeaks founder Julian Assange reiterated today that WikiLeaks -- WikiLeaks source was not the Russian government. Do you find he's lying? SCHIFF: I don't find him credible in any way. I never have. I

certainly don't now. And I think this only impugns his credibility more.

BLITZER: Donald Trump is warning President Obama on another key subject not to release more prisoners from Guantanamo Bay, from the prison there, tweeting -- let me read it to you -- "There should be no further releases from GITMO. These are extremely dangerous people and should not be allowed back onto the battlefield."

[17:25:07] Is he trying to tell President Obama what to do?

SCHIFF: He is trying to tell the president what to do, but he's also making a political statement. I think he knows well he's not going to dictate the president's actions during these last couple weeks.

I hope that, when he gets the intelligence briefings, he'll come to understand that Guantanamo continues to be a recruiting tool of jihadis. That, in fact, we can keep these terrorists that need to be detained, we can detain them in maximum-security prisons as we have done other terrorists.

I hope he'll listen to those briefings. I hope they'll leave their mark. But I have to say, given what the president-elect has been saying up until now, I don't have a great deal of confidence.

BLITZER: He also tweeted this about North Korea yesterday. Quote, "North Korea just stated that it is in the final stages of developing a nuclear weapon capable of reaching parts of the United States. It won't happen!" exclamation point.

Do you think this kind of rhetoric in a tweet, potentially, could provoke the North Korean leader Kim Jong-un?

SCHIFF: Well, I think the Korean leader needs very little provocation. He's a dangerous, belligerent erratic leader. But nonetheless, the president-elect shouldn't be using his Twitter account to talk about ICBMs, nuclear arsenals. In fact, I think the adults on his team need to take the Twitter account away from Dad. This is just not the way to be conducting major foreign policy decisions. And I think it will get him in trouble if he persists this way.

BLITZER: Congressman Adam Schiff, thanks very much for joining us.

SCHIFF: Thanks, Wolf.

BLITZER: Coming up, is this swanky house in an exclusive area of Washington, D.C., the future home of Ivanka Trump and her husband Jared Kushner? Stand by. We have new details.


BLITZER: The new Congress convened today here in Washington. Already Donald Trump has forced House Republicans to reverse course. The GOP leadership backed off from a plan to gut the independent Office of Congressional Ethics after Trump criticized the move on Twitter earlier in the morning. And I'm quoting the president-elect now: "With all that Congress has to work on, do they really have to make the weakening of the independent ethics watchdog, as unfair as it may be, their No. 1 act and priority? Focus on tax reform, health care and so many other things of far greater importance," close quote.

[17:31:20] Let's bring in our political experts. Let me start with the former congressman, Mike Rogers. React to this. What does it tell you about the president-elect, soon-to-be president's relationship, his attitude towards House Republicans?

MIKE ROGERS, CNN COMMENTATOR: Well, I think he fired the first shot today. And probably rightly so. Doing this in a rules package which -- in order to change it, you'd have to do it in a rules package. There was no advanced notice. I'm going to guarantee you there's a lot of members of Congress didn't even realize they were going there in this rules package change.

So what he did is probably caught on to what he was hearing in some rebellious members of Congress who were saying this is a bad idea. And by the way, even the speaker thought it was a bad idea to put it in the rules package to move forward. So I think he took advantage of it to his own political...

BLITZER: He and Kevin McCarthy, the majority leader, S.E., they did think it was a bad idea, but they were overruled by the other Republicans. But then this morning the speaker issued a statement defending it, saying, "You know what? We could live with this. We're going to work with it."

And then very quickly, they abandoned it, because of -- presumably in part, let's say, because of Trump's tweet.

S.E. CUPP, CNN POLITICAL COMMENTATOR: A couple things. I talked to the speaker's office today; and they said that that statement was not defending the measure. It was explaining it. It was explaining how it came to be.

BLITZER; Certainly sounded like a defense to me.

CUPP: Look, I think you could make the argument that some members saw Trump's tweet and said, "Why are we going to bat for this when the president-elect doesn't even want it? We're supportive of Trump."

But you could also say that they were listening to the media maelstrom over this that happened very early this morning, their constituents, and they decided, completely independently of Donald Trump, to go back on this.

And as Chairman Rogers points out, Paul Ryan, Kevin McCarthy made this very clear last night, their opposition to this. They presented alternatives. They were overruled. They're not dictators. They couldn't force their members to do -- to do what they wanted.

So, I think this happened the way it should. Members reacted to constituents and the way that this whole thing got sold in the press, and they changed their minds.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Those things are all connected, though, right? Because I think Donald Trump was also reacting to the media maelstrom. And I think that the constituents were calling, maybe because Donald Trump tweeted; and that helped up the constituent phone calls. So all the things, I think, were playing together.

BLITZER: And he had #DTS, drain the swamp. That's been a big issue for him, drain the swamp. And this action overnight by House Republicans didn't sound like they were draining the swamp.

CHALIAN: It was completely off-brand for Donald Trump. He did the "drain the swamp" rallying cry throughout the campaign. I actually think there's even been an uptick from him on this particular point in the post-election phase. In his rallies, his thank-you tour around the country, he made this a real centerpiece. So having something like this was just completely off-kilter from how he wanted to roll out of the gate.

BLITZER: Dana -- go ahead.

CUPP: Can we -- can we just point out, Donald Trump didn't come out in his tweet and say, "Let's remove Speaker Ryan." He didn't come out with his usual sort of, you know, machismo and vengeance. He just made his opinion clear, and I think it was echoing a lot of what the members were already thinking and what the public was thinking.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Just the opposite of that. What I find so fascinating is that the speaker and the majority leader who were very wary of Donald Trump to be their nominee in the first place, never mind president, found not only a friend and a partner in the White House, but somebody who can help them finally with their rank and file.

CUPP: That's right.

BASH: Certainly, I'm sure the calls to constituents -- from constituents were a big part of this, but you remember being in those meetings when President Obama was in the White House, and the leadership was trying desperately to control the rank and file. And there was no way they could do it; and that's why John Boehner is no longer speaker.

Now all of a sudden, they have somebody who -- won very well in all of their districts who's saying, "Excuse me, don't do this." And they're like, "OK."

[17:35:10] ROGERS: Well, the one interesting thing, though, is this really wasn't the rank and file backed ventures that were pushing this initiative. These were members who had been around a while. These were some members who were...

BASH: Good point.

ROGERS: ... chairmen. This was the split between that younger Paul Ryan faction saying, "Hey, we need to do things a little better," and some other folks who said, "This is a problem." And by the way, there are some real issues with the committee.

BASH: There are.

ROGERS: But the way they handled it was so poor, when that tweet came out, it just ramped it up. And people said, "Hey."

BLITZER: Chairman of the House Judiciary Committee pushed for it. He was the one who was leading that fight for it. He got himself...

ROGERS: By the way, he has some great points on how to fix it. That got lost in the entire debate, by the way they handled it.

BLITZER: All right. Everybody stay with us. There's a lot more coming up. We'll take a quick break. We'll be right back.



BLITZER: We're back with our correspondents and our political experts.

Dana, you had a fascinating interview today with Chuck Schumer, the new Democratic leader, the minority leader in the U.S. Senate. Let me play a clip. He knows Donald Trump from his days in New York with Trump. Watch this.


BASH: I've known you for a long time. You love a deal, not unlike the president-elect. I find that hard to believe that you don't want to make...

[17:40:05] SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: Well, here's the problem. The Republicans in the Senate and the House have been run by a hard-right group, an almost Tea Party group. And they are so far way...

BASH: But now they've got a dealmaker in the White House just like you.

SCHUMER: Look, we're going to look at the specifics of what is proposed. And on the overwhelming bunch of them, particularly given who he's chosen as his cabinet people, we're going to have to oppose him, because we just disagree in principle.

Of course I'd like to make a deal. You know, if we could get together on immigration and have a path to citizenship, just as I was happy to work with John McCain and Lindsey Graham, I'll be happy to work with Donald Trump. But he hasn't even talked -- come close to talking about that, so we're going to end up opposing him on those issues.

(END VIDEO CLIP) BLITZER: Later in the day, in his speech of the Senate, first speech as the minority leader, he said the United States cannot afford a Twitter presidency. It's a nice little swipe over there at Donald Trump. What was your bottom line? Can these two guys work together?

BASH: Yes, oh, yes. Look, he can't admit it in public right now, and I believe him; it's not like they're, you know, best friends. I mean, he said, "We never had a meal together." But they've known each other for decades.

He didn't say that it was wrong when I told him that Trump talks about the fact that he believes that he was one of, if not the first, one of the first donors to a Chuck Schumer campaign back in the '80s or even before that. And he has continued to do that.

I mean, Chuck Schumer called him up when he was at the head of the Democratic senatorial campaign committee, running it, trying to get Democratic senators elected, doing a fund-raiser, saying, "Can we do it at Mar-a-Lago?" He said yes. So they of course have run into each other.

They're very different in most ways, but they are similar in that they have the same kind of brash get-things-done, street-smart New Yorker sensibility.

CHALIAN: We call that New York charm.

BASH: We call that New York charm, absolutely. Just like New Jersey charm.

But -- but he's in a very tough spot. He wanted to walk into the building today, the majority leader getting ready to work with President Clinton. He's neither of those things; he has neither of those things. He is now suddenly in the -- he's opposition leader. And he said to me, "Look, it's not as fun, but it's much more important." And it's true.

BLITZER: Mike Rogers, Trump is going to be briefed by the director of national intelligence, the head of the CIA. Do you think they will finally convince him that Russia is, in fact, responsible for the cyberattacks?

ROGERS: I hope so. You don't have that level of intelligence commitment to a position without having some substantial information. I very rarely see the intelligence community rally around an issue where they all believe.

Now, at the same time, there are some holes in the story they presented publicly that they're going to have to fill. I think if they do that and present it in a very thorough way -- and they have give an up-brief, I think, about how the Russians operate -- they are very aggressive spies all across the world, including the United States, both in collection with people as well as cyber. I think if they lay out that case on Friday, at least it might change the tone.

He's allowed -- the president-elect is allowed to have his position on trying to do something with Russia, just as every other president has done. I think that's good. This public fight between Obama and the president-elect on if it was or if it wasn't and the level of discussion, it's really quite troubling to me.

A lot of this should have happened behind closed doors, including, by the way, the president of the United States, Barack Obama, should have never laid out a case like this and then talked about the things he was going to do. I thought all of that was not only unnecessary; I thought it was a little dangerous. It sets up the next president in an already -- starts out in a little bit of a hole, no matter what his...

BLITZER: You're a former chairman of the House Intelligence Committee, too.

S.E., why do you -- why do you think Donald Trump is so reluctant to acknowledge what the leaders of the U.S. intelligence community and the FBI have now asserted?

CUPP: Look, the obvious answer is that he's got a relationship with Russia that he wants to kind of protect.

But I think this is kind of par for the course of Donald Trump, undermining these institutions that the American public have largely sort of given some credibility to, like the intelligence community, for example. He said early on he might not even listen to them. Them as a body. It was remarkable.

And, so, I think it's very much in his nature to keep undermining these institutions so that the executive, the office that he now holds, has the most sort of consolidated power. So, it's very much in his personality.

BLITZER: David, he keeps saying they got it wrong on weapons of mass destruction. He brings that up all the time.

CHALIAN: I don't think it's necessarily a bad idea to not just blindly accept what the intel community says as pure fact. We have seen in the past that there are some mistakes. So I think there's probably some reception and understanding among the people across the country as to Donald Trump questioning it.

[17:45:00] I think, as the chairman was saying, though, when you speak with such a unified voice that they're speaking on this issue, it seems to me Donald Trump is going to find some way to acknowledge that and still question in the future that we're not going to buy intelligence wholesale, that he's going to want to press and prod and challenge.

BLITZER: Nothing wrong with pressing and prodding the intelligence community to make sure they have it right because while they do it, you can confirm there's some great stuff and they have had great successes, a lot of that very, very quiet. There's been some major failures over the years as well.

BASH: Right. ROGERS: Yes.

BLITZER: All right. Stand by, everybody.

Coming up, questions are being asked about a man who appeared on stage with Donald Trump at a New Year's Eve party. Why was Trump with a convicted felon? And could this be Ivanka Trump's new home when she and her husband and family move here to Washington?


BLITZER: Tonight, questions are being asked about a man who appeared on stage with President-elect Donald Trump during a New Year's Eve party. The man is a convicted felon. Let's bring in our national correspondent, Miguel Marquez.

Miguel, what are you learning?

[17:50:00] MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT: Wolf, we know that Trump and Joey "No Socks" Cinque have known each other for many years. The big question is, how was it that a convicted felon has such direct access to the President-elect?


MARQUEZ (voice-over): That's Joseph Cinque, a.k.a. Joey No Socks, convicted of a felony in 1989 for art theft, celebrating next to the President-elect on New Year's Eve.

DONALD TRUMP, PRESIDENT-ELECT OF THE UNITED STATES: Well, thank you very much. It's great honor.

MARQUEZ (voice-over): Cinque's current lawyer insists the art was legally owned by Cinque but the New York Supreme Court says Joey "No Socks" Cinque pled guilty and his conviction still stands. He was given a conditional discharge and served no jail time.

Trump and Cinque go way back with Cinque helming the American Academy of Hospitality Sciences, an organization that, over the years, Trump has been listed as ambassador extraordinaire. His children served as honorary trustees on the board, and the current board is made up of several Trump friends and business associates.

In 2009, Trump was given award by Cinque, one of many hotel awards his organization has bestowed on Trump's properties over the years.

DAVID CAY JOHNSTON, AUTHOR, "THE MAKING OF DONALD TRUMP": It has no meaning whatsoever, but Donald Trump proudly hangs at least 19 awards in his golf courses. You'll notice they're signed not just by Joey "No Socks." They're also signed by Donald J. Trump as chairman of the board.

MARQUEZ (voice-over): Yes, Trump's signature is on some of the awards. It's like Trump giving himself an award.

TRUMP: I'd especially like to congratulate and thank Joe Cinque, the head of the academy, for the unbelievable job that he does. There's nobody like him. He's a special guy. There's just nobody close.

MARQUEZ (voice-over): In 2008, they shared a stage at the Miss Universe contest, Trump calling him "Joe."

TRUMP: By the way, Joe is probably one of the most important men in the hotel industry.

MARQUEZ (voice-over): And at last year's Mar-a-Lago New Year's Eve celebration.

TRUMP: Thank you very much, Joe. The American Academy is an amazing place.

MARQUEZ (voice-over): Again, the President-elect front and center with Joey "No Socks" Cinque. Last May, Trump told the "Associated Press" he didn't know Cinque well and wasn't aware of his conviction.

JOHNSTON: Let's assume Donald Trump doesn't know who this guy is. Wow. Donald Trump is so unaware and doesn't have people around him to warn him that you are standing next to a convicted felon who credibly claimed to have a relationship with John Gotti? That's astonishing.

MARQUEZ (voice-over): David Cay Johnston, for 30 years, covered Trump's rough and tumble rise, mostly for "The New York Times." His new book, "The Making of Donald Trump" pulls no punches.

JOHNSTON: Here's, in my mind, the most fundamental aspect of this. You've been elected to the most powerful office in the world. All sorts of people want to cozy up to you, and there are all sorts of opportunities for people to make money off of some relationship with you. Why would you connect yourself in public with a convicted felon?


MARQUEZ: Now, the Secret Service says it is their job to protect the President-elect and the President physically. The agency does not control who was on the guest list, referring CNN to the Trump transition team who declined to comment on the relationship between Trump and Cinque. We also reached out to Cinque himself and he did not return our calls, Wolf.

BLITZER: Miguel Marquez reporting. Thank you.

CNN also has learned Ivanka Trump and husband, Jared Kushner, picked a new home here in Washington, D.C. CNN's Brian Todd has been working his sources.

Brian, what do you know about their choice?

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, tonight a D.C. realtor confirms to CNN that he helped Ivanka Trump and Jared Kushner find a property in Washington. He could not confirm the location or whether it was a purchase or a rental. Now, "Washingtonian" magazine, citing real estate sources, reports the house is in Washington's upscale Kalorama neighborhood, not far from the house where President and Mrs. Obama will live when they leave the White House. According to real estate listings online, the house was recently

renovated. You're seeing some images of it here. It has six bedrooms, 5 1/2 baths, five wood burning fireplaces, and a large entry foyer that leads to equally big living room and dining rooms. That kitchen you see there, it's called a gourmet chef's kitchen.

This house is in one of the most storied neighborhoods in Washington. Woodrow Wilson lived in this neighborhood. Hillary Clinton owns a house nearby. This house was sold last month for $5.5 million according to real estate listings online. It is not clear, though, who the buyer is.

We have called and e-mailed the realtor and we have tried to contact the couple who were listed as the owners as of October according to a deed that we obtained. We have not heard back from any of those people.

BLITZER: So if Ivanka Trump and Jared Kushner, her husband, and her family, move in, the Secret Service, presumably, they're going to have to take charge and do some renovations of their own?

[17:54:54] TODD: Right. We talked about renovations. The Secret Service is going to have their own renovations. Wolf, a former Secret Service officer who I spoke to back in May, when President and Mrs. Obama made arrangements to move into that particular house that they're going to move into in that same neighborhood, he said the doors to the President's house would have to be converted to being bulletproof.

He said there would have to be ballistic panes placed in the glass behind the windows, and Secret Service officers would be posted all the time outside of the President's house once he moves in there. You can expect the same kind of arrangements for Ivanka Trump and Jared Kushner if they're going to move into a house nearby there.

BLITZER: Yes. And that neighborhood is a fancy neighborhood here in Washington.

TODD: Sure.

BLITZER: The President of the United States, President Obama and his family --

TODD: That's right.

BLITZER: -- they're renting a home right in that neighborhood. And Hillary and Bill Clinton have a home in that neighborhood as well. So they're going to have --

TODD: All within a few blocks of each other.

BLITZER: They're going to have good neighbors. All right. Thanks very much for that report, Brian Todd.

Coming up, after a scolding tweet from President-elect Trump on this, the first day of the new Congress, House Republicans drop a move to gut an independent ethics watchdog.

And investigators have fingerprints and a selfie video of the Istanbul massacre suspect but is time running out to catch him?


BLITZER: Happening now, reverse course. House Republicans quickly drop plans to strip power from an independent ethics watchdog after Donald Trump tweets his disapproval. What does it bode for the rest of the GOP's aggressive Congressional agenda?

Russia proof. CNN has learned that the final classified comprehensive report on cyber attacks targeting the U.S. election is expected to be finished within days. The WikiLeaks founder denies Russia supplied stolen e-mails while Trump continue --