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Clapper Pushes Back on Trump's Intel Claims; Ethics Official Blasts Trump's Conflicts Plan; Soon: Trump's Defense & CIA Picks Face Senate; Interview with Congressman Jim Jordan of Ohio. Aired 9-9:30a ET

Aired January 12, 2017 - 09:00   ET

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


WOLF BLITZER, CNN ANCHOR: Just minutes from now, retired U.S. Marine Crops General James Mattis makes his case to become the next defense secretary of the United States. The former combat Marine enjoys bipartisan support, but lawmakers would have to grant an exception to an existing law. Mattis has not been retired from the military the mandatory seven years in order to become eligible to serve as defense secretary.

[09:00:04] At the top of the hour, former presidential candidate Dr. Ben Carson also appears before a Senate committee. Trump's former rival is poised to lead the Department of Housing and Urban Development. He'll face questions over his lack of government experience and his own statement that he'd be a bad fit to lead a government agency.

Also at the top of the next hour, the Kansas Congressman Mike Pompeo will have to navigate a potential minefield as he's questioned about becoming the next Director of the Central Intelligence Agency. He'll be confronted with Trump's recent dismissal of the U.S. intelligence community while reassuring an agency that's already distrustful of outsiders.

President-elect Trump's latest attack on the intelligence community draws a direct response from the man who leads it, the Director of National Intelligence. Jaime Clapper says he personally called the President-elect to push back against his accusations that the intel agencies leaked embarrassing information to the news media, specifically claims that Russia has gathered compromising information on him. And while we don't know the details of what was said on that phone conversation, Clapper does release a rare statement that raises some eyebrows on its own.

Let's go to our Senior Washington Correspondent Jeff Zeleny who is joining us with details. Update our viewers, Jeff.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Wolf, an extraordinary phone call from James Clapper, the Director of National Intelligence to Donald Trump.

Now, Donald Trump pointed that out in a tweet this morning saying this, "James Clapper called me yesterday to denounce the false and fictitious report that was illegally circulated. Made up, phony facts. Too bad!" But, Wolf, that's not how intelligence officials are describing the

material. He did not say the facts were made up or phony. They are unverified, but the intelligence chief's thoughts were important enough to inform President Obama and President-elect Trump about. Now, Clapper released a statement late last night saying this. Let's take a look.

He said, "I emphasized that this document is not a U.S. intelligence community product, and that I do not believe the leaks came from within the I.C. The I.C.," or intelligence community, "has not made any judgment that the information in this document is reliable, and we did not rely upon it in any way for our conclusions." "However," he goes on to say, "part of our obligation is to ensure that policymakers are provided with the fullest possible picture of any matters that might affect national security."

So, Wolf, the bottom line is this. Clapper is trying to diffuse a feud between Trump and the intelligence agencies, which he'll, of course, head up in only eight days when he takes office. But Clapper's comment is the first confirmation by a government official that Trump's briefing documents did include information on the allegations against him by those Russian operatives, Wolf.

BLITZER: All right. Jeff, stand by. Dana Bash, it's a very significant moment when the Director of National Intelligence releases a public statement like, in effect confirming that, yes, they did brief the President-elect on these allegations that were leveled by at least someone in Russia, allegations that certainly have not been corroborated.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Absolutely. And that's something that we should underscore with several lines here, which is that that is what CNN reported. What CNN reported is what the Director of National Intelligence has now said on the record, that they briefed the President-elect on this information, not necessarily -- and gave him this information, I should say, with a clear understanding that this is something that he felt was important for the President-elect to know. "It is our obligation to ensure that policymakers are provide with the fullest possible picture of any matters that might affect national security."

So, I mean, all of these is extraordinary but the fact that the current DNI, Director of National Intelligence, felt the need to not just call the President-elect, which is not unusual, but for him to say this publicly kind of underscores what the reality is of this intelligence, and especially as we are about to go into the confirmation hearing for the next CIA Director. Obviously, not the same position as Clapper but part of the intelligence community.

And so that is going to be, at 10:00 a.m., one of the more fascinating confirmation hearings because he, Mike Pompeo, is going to be having to walk this line between people who he needs to earn the trust of, the intelligence officials, and the President who he also has to have the trust of.

BLITZER: It's going to be a very important moment to see how he walks that fine line. Mike Pompeo, a member of the House Intelligence Community, Republican from Kansas. But he's been nominated to become the next Director of the Central Intelligence Agency.

And, Gloria, this is a moment where Mike Pompeo will have to really shine if he's going to get confirmed. I assume he will get confirmed but he's going to have to walk that fine line between the criticism, and it's been pretty severe --

[09:05:09] GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right.

BLITZER: -- that the President-elect has leveled against the intelligence community, at the same time reassuring them that he'll be a good boss.

BORGER: I think every T.V. set at Langley is going to be turned on to this hearing because they want to know that the person who is going to be their new boss at the CIA is going to have their back. And even more than ever, they want to know that because this President-elect has been so critical of the intelligence agency.

And if I can just go back to this statement for one minute. What Clapper did not say and in reading between the lines here, I think there's been some question about why present this unverified information to the President-elect and to the President? If it's not verified, why do it? And my colleague, Evan, here might be able to answer this question better than I can.

I think it's because they want to say, look, these guys, you may not have had the greatest confidence that the Russians were hacking Hillary Clinton, but they were hacking Hillary Clinton. We know, yesterday, Donald Trump finally admitted that they were. But I think, perhaps, part of the motive here was to say to Donald Trump, you could be next. There are no bounds on who they will spy on, and by the way, we have this unverified information that shows they've got their eyes on you and you could be next and this is our job to protect you.

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: That's right. They're doing their jobs. And then, look, there is a bit of a feeling under siege over there right now, partly because they've never been in a place where the incoming, the next President, the next leader of the country is essentially attacking the people who he, basically, is going to be leading and who are going to be his eyes and ears in U.S. foreign policy and around the world.

And I think that's part of the issue here. The President-elect, yesterday, sent out a tweet in which he made a reference to Nazi Germany, and that just was not a good thing to do when you're about to take office in just over a week.

BASH: Comparing the intelligence community that he's going to, right, lead.

PEREZ: Exactly. Exactly.

BORGER: Yes, you're right. PEREZ: And, by the way, I mean, the problem here is that, you know,

this isn't just beginning this week. I think, you know, we know that the President-elect has been attacking the people in law enforcement, James Comey, the Director of FBI, going back to July when he didn't like the outcome of the FBI investigation into the Hillary Clinton e- mails.

And so that is a part of what he's -- there's a long history here. And I think, at some point, the President-elect has to sort of let go of all of that and invite these people to be his eyes and ears because that's what they are.

BORGER: And what Clapper is saying is, we want to give you this information because you need know what's out there about you, and don't worry, we have your back.

PEREZ: Right, exactly.

BORGER: We have your back.

PEREZ: Right, exactly.

BLITZER: But, Evan, you did a lot of excellent reporting with our team on this, and as Dana has pointed out and many other have pointed out, that Clapper, in effect, has confirmed what CNN's reporting was. It was very precise, very nuanced, very detailed. The document itself and all these allegations, it had been out there --

PEREZ: It had been out there.

BLITZER: -- for a long time, journalists --

BASH: Yes.

PEREZ: Exactly.

BASH: Yes.

BLITZER: -- political operatives, campaign officials, U.S. government officials. It was not --

BASH: Never reported but rumored.

PEREZ: Right.

BLITZER: Right. But it was --

BORGER: Because nobody could confirm it.

PEREZ: It was the worst kept secret in Washington. It really was.

BORGER: Yes.

PEREZ: And I think one of the things was, you know, these people would not be doing their jobs if they didn't tell the President-elect, look, this is the kind of thing that's been out there, the disinformation that is out there. This is the kind of thing that the Russians do, and you should know that it's out there. We don't know if it's true or whether any of this could ever be proven, but you should know this.

BLITZER: And the reason that you and your team and CNN, that we reported this is, when they made a decision, the U.S. intelligence community's leadership, to formally brief President Obama and formally brief President-elect Trump on this, it was only at that point that we decided to report this.

PEREZ: Right. That is exactly right. And, Wolf, I think it's fair to say that the intelligence agency leaders certainly have been taken aback. They've been shocked at the reaction from the President-elect. This is not the way they thought this is going to go because, again, this is what you do with leadership in this country.

Members of Congress, if the FBI learns that there's somebody working to target them, the FBI goes and briefs them and says, hey, we think you should know that you're a target of this. That is standard operating procedure for the intelligence community, for the FBI to do. That's part of their job.

BORGER: And --

BLITZER: All right. Stand by. Everybody stand by for a moment because there are other important developments unfolding even as we speak while these confirmation hearings are about to begin this morning.

[09:10:01] Republicans are also making good on their pledge to try to scuttle Obamacare, the Affordable Care Act. Senate Republicans passed a budget resolution that includes the repeal of President Obama's signature health care law. Democrats are trying to save it. CNN's Sunlen Serfaty is up on Capitol Hill with the latest details.

Sunlen, tell our viewers what has happened now overnight.

SUNLEN SERFATY, CNN NATIONAL CORRESPONDENT: Well, Wolf, this is, in essence, the first tiny nail in the coffin for Obamacare because the wheels are now turning towards repeal, the Senate taking overnight a small but significant procedural step by approving this budget measure which will become the vehicle for dismantling Obamacare as Republicans are working to do.

And we saw a real flurry of speeches last night, the session lasting into the wee hours of the morning. Many protests from Democrats for what the Republicans are trying to do.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (D), VERMONT: Up to 30 million Americans will lose their health care with many thousands dying as a result.

SEN. SHERROD BROWN (D), OHIO: Ninety-five of children in America now have affordable comprehensive health insurance. Why would we want to move backwards? SEN. KIRSTEN GILLIBRAND (D), NEW YORK: Imagine becoming pregnant and

having your insurer drop your coverage because you no longer are economic.

(END VIDEO CLIP)

SERFATY: Now, this will now likely be taken up by the House on Friday that will continue to inch this moving forward on Capitol Hill. But very notably, although this repeal part is moving forward, it's the replacement part that is still a TBD. We still don't have one singular plan from the Republicans, a variety of options that they have. But certainly, Wolf, some pressure being ratcheted up by the President-elect in saying only yesterday that he wants the repeal and the replacement to happen almost simultaneously. Wolf.

BLITZER: Sunlen Serfaty up on Capitol Hill. Thank you for that update.

Meanwhile, there's been some new push back over Donald Trump's plan, and it's going forward, to try to avoid conflicts of interest by distancing himself from his business empire. The President-elect announced he will relinquish his leadership of the Trump Organization and place his holdings in a trust run by his two adult sons, but that he will not be selling any of his stake. A group of Democrats called that unacceptable and introduced a bill earlier this week that would require the President and the Vice President to fully divest their assets.

The Director of the Office of Government Ethics also called the President-elect's plan, quote, "wholly inadequate." Listen to this.

(BEGIN VIDEO CLIP)

WALTER SHAUB, DIRECTOR, UNITED STATES OFFICE OF GOVERNMENT ETHICS: The plan the President has announced doesn't meet the standards that the best of his nominees are meeting and that every President in the past four decades has met. He's going to be asking our men and women in uniform to risk their lives in conflicts around the world, so, no, I don't think divestiture is too high a price to pay to be President of the United States of America.

(END VIDEO CLIP)

BLITZER: All right. Let's bring back our panel. And, John King, you're with us as well. The President-elect of the United States, soon to be the President of the United States, says he's gone about as far as he's going to go, no more. Accept it.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: The key point you make is as far as he is going to go. Look, this is different for everybody. It's different for Donald Trump.

We should give him some grace in the sense that this is his life's work, this is his brand, his name. Travel the country, travel the world, the Trump name is in big gold letters for a reason. It's how he has built his business. He says he's giving it to his sons. He says there will be a trustee.

I think the challenge going forward, number one, you hear the head of Office of Government Ethics. Republicans are saying he's an Obama appointee, that he's being more partisan than he should be here.

This is different. This hasn't happened in the last four decades. We haven't had a successful businessman run for President. They have been politicians in the last 40 years, and so we're in a different world.

And if Mr. Trump has decided this is as far as he's going to go, he has to be aware, because he's a smart man, that every day of his administration, every action he takes, whether it's raising or opposing the minimum wage, whether it's about wages and business regulation, or whether it's about he travels to some country where he owns properties, he is going to face this scrutiny. Welcome to the new administration.

BORGER: And without divestiture, he's making money off of his company. Maybe not right now but he will. And I think that's going to continue to hang over his head. Even though his sons are now running the company, he hasn't divested himself. And I think that's what the Office of Government Ethics is so concerned about.

BLITZER: David Fahrenthold is with us, the political reporter for "The Washington Post" who's done a lot of reporting on this. Did he go further than you anticipated? Because you've been following this particular part of the story for a long time.

DAVID FAHRENTHOLD, REPORTER, THE WASHINGTON POST: No, I didn't have much higher hopes than this. This is a decision from Donald Trump about how he wants to spend his time and his political capital as President. He had a chance to get this stuff off the board in a way that would give him some freedom to pursue governmental policy initiatives that he wants. Instead, he wants to spend, apparently, time litigating -- literally litigating and politically litigating -- the limits of his conflicts of interest by choosing in a way that will leave him so enmeshed in the decisions and in the profits of his business.

[09:15:06] BLITZER: He argues and his lawyers argue that legally, he doesn't have to do anything else. He's gone as far as he has -- he didn't even have to do what he's doing right now. He made the point I could continue to run my business at the same time be the president of the United States.

You heard him make that point.

FAHRENTHOLD: Two points there. One, conflicts of interest laws, most conflict of interest laws don't apply to the president legally. But the presidents follow them because they don't want the hassle to fight over conflicts of interest all time. Trump has chosen to do that.

The other thing is the Constitution specifically bans what are called emoluments, payments by foreign governments to the president of the United States. Trump is trying to get around that, by saying, well, if I sell a for again government a hotel or a rent a ballroom, they are just paying me for service and they're getting fair market value. But that's a decision to fight over what fair market value means.

What if the government of Pakistan wants to pay $20,000 for one night at a hotel room? They're still getting a hotel room, but are they getting more than -- less than fair market value. He wants to litigate that, apparently.

BLITZER: He said any profits his hotel, for example, make from foreign governments, renting rooms or whatever, the profits he says will go to U.S. taxpayers.

FAHRENTHOLD: I spent a lot of time last year about Donald Trump's gift to charity and his promises to charity and a frequent promise Trump would make set up a new business like Trump University, Trump water, his book "The Art of the Deal", was that he would give the money he made as profits to charity. I found that often he didn't comply with that. The question was often messier than it sounds. What constitutes profits?

BASH: But that's the key points when you mentioned the word "hassle" which sums this all up. We are all and pretty much every reporter in this town are going to be following up on whether or not when foreign official stays a couple of blocks from here at his hotel, whether that money was donated to the Treasury.

We don't even know because I was on a call yesterday with his, with his attorneys about how they are even going to comply with that and even whether that's going to be reported in a public way. Those are answers we don't know yet.

But the hassle thing is so key because as you were saying -- yes, he's complying with the law. The law is different for presidents. But every single thing that he does is going to be scrutinized and he doesn't -- we saw yesterday, he doesn't like to be scrutinized even though we were reporting things that are 100 percent true, but he's got to get used to it if he doesn't want to draw that line.

BLITZER: John, very quickly.

KING: To David's point, though, it's the history. Because of his history of falling short of those promises or at least in the documented reporting, because of his style, his bravado, the country might have to have this conversation to encourage more people to run for public office, so we don't have career politicians. It would be nice if more people from the business community with street experience came into our politics, but because Trump is Trump and Democrats are opposed to Trump, and because of his history of not following through on the promises, as David so well-documented, that's why this is, the volume of this contentious debate is much higher.

BLITZER: Everybody, stand by. Everybody, stand by. There's important news coming in.

All right. This just in, a transition of power alert. President- elect Trump has named the former New York City Mayor Rudy Giuliani to lend his expertise on cyber security. The transition team citing Giuliani's experience in law enforcement and security in the private- sector.

Rudy Giuliani will get this role in leading the fight against cyber attacks against the United States.

Abby Phillip, you are our CNN political contributor. Rudy Giuliani, one of the most loyal supporters of Donald Trump, we know he wanted to be secretary of state. He's now going to be in charge of fighting these cyber attacks.

ABBY PHILLIP, CNN POLITICAL ANALYST: And this is something that Rudy Giuliani actually has a little bit of history with. People have been wondering for weeks what would happen him to. Had he been left out in the cold. He said he had not been.

So, it's important to note that Trump isn't sideling his most loyal supporters and by putting Rudy Giuliani in charge of this cyber security team, he's putting Giuliani in charge of one of the most charged issues of his incoming presidency. This is literally the biggest thing that's hanging over Donald Trump's head. What is he going to do about this idea that many foreign governments, Russia in particular, are hacking and trying to destabilize this country?

He's putting his, perhaps, biggest loyalist in the role of advising him on that front and I think it's pretty telling where he's going to go here.

KING: What was third prize?

(LAUGHTER)

BORGER: Wait a minute, I'm waiting for the job for Chris Christie, though. We still haven't heard about that.

BASH: But the other thing, I don't know, we should check this. I don't think this requires confirmation which was a huge hurdle for nominating him and rewarding him for the loyalty that he did show Donald Trump.

BLITZER: We all do speak with U.S. defense officials, intelligence officials. Their nightmare scenario is an enemy of the United States, whether Russia, North Korea, Iran, China, dealing with power grids and really grinding this country to a halt.

[09:20:05] Deeply worried about that.

PEREZ: I think it does. It goes back to the conflict questions we were just talking about. Giuliani runs a company. He runs a company, a consulting company that's got its hands in a lot of places, legal and other places.

And so, my question is he going to step aside from that company. I haven't seen the announcement fully yet and the description of --

(CROSSTALK) KING: The company gives cyber security advice to corporate firms --

PEREZ: Right, exactly. It's a very lucrative line of work right now.

BORGER: And he may not have to leave the company. I mean, we're going to see whether he will or not. The key thing on this conflicts of interest question and maybe it's regarding Rudy Giuliani as well, I was talking to somebody who has known Trump for many, many years and he said, look, the way Donald Trump looks at this as a businessman is different from the way you people in Washington look at this. We all look at this about potential conflicts of interest.

He looks at it and says, is it legal or is it illegal? I will not do anything illegal. It is legal for Donald Trump not to divest himself of his profits from his businesses because he's president of the United States.

And so, that is the standard that he is using and it is not the standard that is used in Washington.

BLITZER: All right. Everybody, stand by. There's a lot more coming in opinion we have important hearings that are about to begin as well.

And there's a new development involving the battle over the border wall. President-elect Trump says he'll force, force Mexico to reimburse the United States. But Mexico's president has a very different view. We have new information.

Stay with us. Our special coverage continues right after this.

And a major day up here on capitol hill. Three of President-elect Donald Trump's nominees will appear for a round of confirmation hearings. They begin only moments from now. Retired General James Mattis will make his case to become the next defense secretary.

Special coverage once again continues. You're looking at live coverage from the Senate Armed Services Committee.

We'll be right back.

(COMMERCIAL BREAK)

[09:25:16] BLITZER: Critical day ahead now for the men Donald Trump wants to serve on his national security team. In just minutes, retired U.S. Marine Corps General James Mattis will face members of the Senate Armed Services Committee in his bid to become the next secretary of defense.

And at the top of next hour, Kansas Congressman Mike Pompeo, Donald Trump's nominee to head the CIA, will appear before the Senate Intelligence Committee, amid tensions between the president-elect and the U.S. intelligence community.

Let's go to our Pentagon correspondent Barbara Starr who is standing by.

Set the scene for General Mattis confirmation hearing that's about to begin. Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Wolf. Look for Jim Mattis to be questioned by the committee about his views about when to send American forces into war.

Mattis has a very clear view on this. He's expressed it many times in the past. Only send U.S. troops if you have a goal and a strategy to carry it out. He's very skeptical of just sending troops off into far away places to conduct combat without those goals and strategies.

He's a very hard-liner on Iran. He believes Iran is a serious threat in the Middle East.

But I think what will be most interesting throughout the day is his views on Russia, once again Russia. Mattis is very skeptical of Vladimir Putin. He's on the record with that.

Look at this. He comes to the Pentagon with his chairman of the joint chiefs, General Dunford, a fellow marine, someone he's known for decades also skeptical about Vladimir Putin and Russia. General Dunford has called Russia a threat.

And Dan Coats, the former senator that Trump has nominated to be director of national intelligence, also a skeptic on Russia. So skeptical, the Russians have banned him from coming back into their country with those sanctions in place that Coats supported.

So, what you have are three key potential members of Donald Trump's national security team perhaps not on the same page as the president- elect about their views on Russia and Vladimir Putin.

Later this morning, Mike Pompeo up to be CIA director amongst this firestorm that we're seeing. Pompeo will have his work cut-out for him. A very delicate line if he's confirmed. He must be able to support his rank-and-file in the intelligence community, but not go so far that Donald Trump doesn't keep him comfortably in his inner circle -- Wolf.

BLITZER: Barbara Starr at the Pentagon, thanks very much.

I want to bring in a special guest right now, Republican Congressman Jim Jordan of Ohio, is a member of the House Judiciary and Oversight Committees and a strong supporter of Donald Trump. He supported him during the campaign.

Congressman thanks very much for joining us.

REP. JIM JORDAN (R), OHIO: Good be with you.

BLITZER: So, what do you anticipate, Congressman? Mike Pompeo, a friend of yours, fellow Republican congressman, member of the House Intelligence Committee, how will he walk that delicate line? Donald Trump has been very critical of the U.S. intelligence community. He wants to lead the CIA. How is he going to be able to do that?

JORDAN: Well, I start from this premise. Mike Pompeo is immensely qualified for this position. Here's a guy with West Point grad, Harvard Law School, editor of the Law Review, on the intel committee.

I had the privilege of serving with Mike a couple of years on the Benghazi committee. Outstanding -- he's a guy that led the fight in the House against the Iran deal, this terrible, you know, deal that was made with this, largest state sponsor of terror.

So, Mike Pompeo, I think, is totally qualified and right kind of guy to do this job. He'll do fine in the hearings.

BLITZER: If he's asked by a Democratic member of the committee or maybe even a Republican to react to Donald Trump's tweet yesterday and I'll read to it you, "Intelligence agencies should never have allowed this fake news to leak into the public one last shot at me. Are we living in Nazi Germany?"

If he's asked to comment on that, how is he going to finesse that?

JORDAN: Well, I mean, I'll let Mike handle that, but what I know is look none of this has been proven to be accurate, even you guys who have reported said we don't know if this is accurate or not. What do we know is we're getting a briefing tomorrow. At 9:15, the House of Representatives getting a briefing from the intelligence committee. I'm going to go to that briefing and I'm going to listen to what they've say and then I can have a better sense of what actually may or may not have happened.

What I do know and I think what Congressman Pompeo knows is Donald Trump won this election fair and square. There's no indication whatsoever that voting machines in Ohio or Michigan or Wisconsin or Pennsylvania, the key states that won it for Donald Trump, no indication that there was any tampering or stuffing of ballots. He won this election fair and square.

And what we have to focus on, in my opinion, is doing what we were elected to do. And we know what those key issues are, Obamacare, securing the border, all those key things.