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Pence: Flynn Told Me He Didn't Talk Sanctions; Trump Vows to Honor "One China" Policy; U.S., Japan Relationship in the Spotlight; Conway Apologizes to Trump After Ivanka Biz Pitch; Trump, Japanese PM Hold Joint News Conference. Aired 12:30-1p ET.

Aired February 10, 2017 - 12:30   ET

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

[12:30:02] LARRY KING, CNN ANCHOR: -- the vice president and the president and General Flynn for that matter now know what those intercepts found. And General Flynn is backing off.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yeah. I mean the choices seem to be either he lied to the vice president and any number of additional people, or he can't recall very sensitive conversation that he had with Russian officials. Either one of those is terrible, right, in a national security advisor. You know, under a normal circumstance and a normal administration, you would think that it might time of -- for General Flynn to want to spend more time with his family. But they think that is normal situation.

RYAN LIZZA, THE NEW YORKER: You know, there's one line that I can't remember seeing in a newspaper in a really long time in that Washington Post story. It said according to nine officials.

HENDERSON: Yeah.

LIZZA: They had nine current and previous administration officials telling them the account of what happened here. And it's a very crucial 24-hour period between when our sanctions in the Obama Administration went into effect. And when the Russian government, said, you know what, we're going to wait, we're not going to do anything. This is going to be known the reciprocity (ph) which is the normal -- they know happened. I'm going to wait for the incoming administration.

Flynn is talking to the ambassador in that 24-hour period.

KING: Yeah.

LIZZA: The idea that sanctions didn't come up, you know, would be very surprising.

HENDERSON: Right.

KING: But Russia not responding, it's kind of like Donald Trump not sending a tweet when somebody gets in his face, and so the question is, did they know something, where they told something by General Flynn? Adam Schiff who is the leading Democrat on the Intelligence Committee early today said, "If he did so, then he and other Administration officials misled the American people, his conduct would be all the more pernicious, and he should no longer serve in the administration or any other." That's a Democrat.

Listen here, here's Congressman Mike Brown a member of the Armed Services Committee, I believe he's a Republican on with Kate Balduan last hour.

(BEGIN VIDEO CLIP)

MIKE BROWN, ARMED SERVICES COMMITTEE: I think the first thing we'll do is get all the facts, and then if the facts lead us in the direction to say that we've been misled or that, there's been misinformation provided. He is an employee of the president. We would expect the president to take appropriate actions and if there needs to be discussions within Congress, that'll happen. But the president is in charge of his employees, and I think, I'm going to give him the benefit of the doubt on this.

(END VIDEO CLIP)

KING: Give him the benefit of the doubt on this but this is another issue. You have Republicans on the record raising questions about what's happening in the Trump White House.

MATT VISER, THE BOSTON GLOBE: It could also -- I mean, they were on this instances where the cover-up has worse the crime. You know, as you mentioned, it's sort of an obscure law, you know, what he was in, but lying, you know, and causing the vice president to lie, you know? It gets him in a lot more trouble internally with the White House. And also, to Mike Brown's point, this hits that issue of Russia that John McCain and Lindsey Graham, I mean, there's a lot of effort in Congress to hold the Trump administration accountable on Russia. So it gets him in a lot of trouble.

KING: And one of the questions is, were there inappropriate conversations between Trump associates and the Russian Government during the campaign. And now if you bring all this into it, you can be certain and -- John McCain has said very nice things about General Flynn. He has said very nice things like General Flynn saying he trusts him on the National Security Team. But on this broader issue of the Trump-Russia relationship, that's sort of there -- investigate of hawks were already out.

LAURA MECKLER, THE WALL STREET JOURNAL: Absolutely. And I think another point that we should think about here is that, well, President Trump might be inclined to keep him or maybe under -- he excuse this behavior. I'm sure the vice president right now is very angry about this.

KING: Right.

MECKLER: Because he is the guy who got -- who went out there and put his own credibility on the line. So, I'm kind of curious what that conversation is like and whether he is going to demand some serious repercussions or even his head. You know, we'll see. But -- KING: Let's move on to the, that I mentioned as a top. In the

conversation with the President Xi last night, Donald Trump, apparently the Chinese demanded this to have the phone call. He said that we will adhere to the "One China Policy", even though President Trump has made query, he has reservations about it. This is goes back to taking to congratulatory call from the President of Taiwan. They are in a transition of Donald Trump during the campaign. Said he was going to label China a currency manipulator on day one. He hasn't done that.

Is this a case where you had this, you know, outsider, different disruptive candidate Trump suddenly becoming more the establishment Trump or is this a play for something else?

LIZZA: I think this is, you know, completely stunning and utterly predictable, right?

HENDERSON: Yup.

LIZZA: Are entire China -- The whole -- The only reason we have -- relationship with China is because we agreed to the "One China Policy". So the fact that they're saying literally, you know, we're not talking to you unless you reiterate is completely predictable, any Diplomat would have told Trump that in the beginning.

KING: Right.

LIZZA: But, what is stunning is that he either, because of his advisors, or because he got this -- his own instinct went public and said that he was going to use the "One China Policy" as a bargaining chip for all sorts of other issues, and now he has had to be -- he's had to completely throw that aside.

HENDERSON: Yeah. And at that time some people think, "Oh, well maybe, you know this is Trump being crazy like a fox. And maybe this is some great brilliant strategy. Turns out that they basically had to go hat in hand to the Chinese leader, write a letter and say, you know, Happy New Year. And then after being, you know, given the silent treatment, at least according to the "New York Times" for weeks and weeks and weeks, you know, you think about other things that he has done.

[12:35:12] Mexico paying for the wall, how has that worked out for you? At some point, you know, Trump said this White House is going to be sick of winning. I don't think they're there yet in terms of being sick of winning.

KING: Three weeks in, a number of setbacks. We'll see three weeks, it's little early to start writing a report cards.

So let's talk about the conversation that's going on right now. During the campaign, at one point, candidate Trump did suggest that the United States was being taken by Japan in trade deals, in the security arrangement, and maybe it was time for the United States to pull back and let Japan and South Korea worry about North Korea. Even if they decided to go the nuclear route, which was, you know, blasphemy for a candidate to say that. He talked about us getting ripped off in trade deals with Japan. Now you have Prime Minister Abe in the oval office. I think very smart on his part came over during the transition to build their relationship going to Mar-a-Lago to spend the weekend with the president.

Again, this is more traditional. This is more getting back in the establishment. This is a key ally relationship, right?

VISER: Trump also during the campaign ridiculed Caroline Kennedy, the ambassador to Japan, saying that she had been wined and dined by Abe. You know, he's a killer. And this weekend he's wining and dining with Abe. So, you know, I mean there is this aspect of him being willing.

I mean, Abe was very smart, and, you know, did came to Trump Tower. He brought him a golf club. You know, there was a golden golf club that was, you know, $3,000 or something. So, now Trump is, you know, starting to come around on the personal level, which I think you hear a lot about Trump in connecting with people on a personal level. It's very smart of the Japanese Prime Minister, who probably wants to think about TPP and think about some of the other policies.

MECKLER: Yeah. There is a lot on the line because of TPP, the Trans- Pacific Partnership, which Abe had a lot invested in that multilateral trade deal, as did the United States under Obama, and that has now officially off the table. And so he would like to see perhaps a bilateral trade agreement. If there's a lot, at stake for him economically --

KING: Economically, the security relationship as well. We're going to see the two leaders at the top of the hour about 20 minutes from now. So stay right here, we'll have special coverage of that.

Up next, Ivanka Trump is losing an enthusiastic marketing voice, or if the Trump White House would put it, the counselor has been counseled.

(COMMERCIAL BREAK)

[12:41:19] KING: Welcome back. It's pretty clear the view with the White House is, no big deal.

(BEGIN VIDEO CLIP)

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: Kellyanne has been counseled, and that's all we're going to go with. She's been counseled on that subject, and that's it.

(END VIDEO CLIP)

KING: That's it. That's it. You heard it right there that's it. An issue Kellyanne Conway's T.V. interview pitch from the White House briefing room where folks said go on-line and buy Ivanka Trump's clothing line.

CNN has told, Conway apologize to the President yesterday. But that don't do it again from the boss is, is that the last word? A House oversight committee sent a letter to the White House yesterday asking how he plan to handle a clear violation of federal ethics rules. Conway doesn't sound all that worried.

(BEGIN VIDEO CLIP)

KELLYANE CONWAY, COUNSELOR TO THE PRESIDENT: Where is that letter and we are reviewing that internally. I'm just really happy that I spent awful a lot of time with the President of the United States this afternoon and that he supports me 100 percent.

(END VIDEO CLIP)

KING: Well and I guess that's it. He supports the one --

HENDERSON: Awful -- yeah.

KING: In some ways, this is silly. In an interview pitching Ivanka Trump's clothing line, except she's sitting in the White House briefing room. She's a federal employee. She's paid for by the people watching this at home, taxpayers, and it is a clear violation of ethics rules. Should it be? Shouldn't it be? You can have that debate but it is. It is a clear violation of the ethics rules.

So, what happens now? Does the administration have to sanction her, suspend her, do something out or suggest she was counseled, although from our reporting the President didn't like that term.

MECKLER: Well, I think that the fact that Congressman Chaffetz is asking for an investigation list, thus give this some logs. So, this will continue to go. It can't just go away. It's going to continue. And I don't know that she's necessarily on her way out or anything like that. I don't think there's going to be any long-term repercussions for her.

But I do think that this speaks to a larger issue of what's going on here. I mean, let's go back to why was she talking about Nordstrom and talking about Ivanka Trump's products in the first place? It is because the President had tweeted that morning admonishing Nordstrom for dropping her line, which is kind of a bizarre thing in the first place to think that he -- of course, has become standard operating fair around here.

KING: So, it's violating government ethics rules makes you in the good spotlight of the boss, then its worth doing?

HENDERSON: I mean, yeah. I mean he would -- he was basically sort of setting the terms of talking about Ivanka Trump's line via Twitter. So -- and then she made very clear -- she reminded viewers there that she had spent an awful lot of time with the President in whatever meeting. And, you know, I don't know if he was counseling her or what, at that point.

But, yeah, I mean, I think the question for the --

KING: Was that for the audience on television or no, was that for Sean Spicer's? Spent an awful a lot of time with the president.

HENDERSON: I think it is both, but I think you're right. But I mean, I think sort of for the Chaffetz thing, it is interesting that he is choosing to do this, and he signed at the bipartisan. You know, request, but is this all there is? I mean, of all of the problems that this administration poses in terms of conflict of interest. But the fact that they have settled on this is -- I think in some ways cover for not doing the other thing.

KING: And remember, they said during the campaign, everything Hillary Clinton did was some sort of a pay for play or everything was crooked, everything was about gaming the system, everything was about bending the system, or abusing the system.

HENDERSON: Slush fund --

KING: For your own benefit. And now you have people who can roll their eyes. So let's have this. Listen Chris Collins, he's a Republican Congressman from New York. He's been a Trump supporter from the very beginning. Here's his take.

(BEGIN VIDEO CLIP)

REP. CHRIS COLLINS (R), NEW YORK: I saw that interview. That was call it a little bit of frustration, but she was smiling, she was laughing, she was speaking about herself to be, you know, she's going to go buy some of the jewelry or other items. It was -- it's been somebody's making a mountain out of a mole hill here. If -- I would say get a life.

(END VIDEO CLIP)

KING: Well, we have rules for a reason. I mean the Congressman itself is in this controversy in the whole time price confirmation about whether he has given stock tips to members of Congress there. You know, we have rules for a reason, and if you are the candidate and say you can drain the swamp.

[12:45:13] I'm sorry Congressman, get a life doesn't do it. These rules matter even on trivial things.

LIZZA: It's a clear violation. Chaffetz, the head of the oversight committee and we saw on that town hall earlier in this show. The first time he sent a letter with his Democratic colleague to the White House -- into the Office of Government Ethics saying, I want you to recommend a disciplinary action for Kellyanne Conway. That's a big deal. So the President just at the end of the day going to have to make a decision whether he's going to do anything.

Now, this is not a federal crime. She's not going to the jail, but Reince Priebus or the President is going to have to decide. And I have a piece at new yorker.com posting about this and some of the drama that happened yesterday. I will say, this -- all the different factions that we read and write about all kicked into gear over this one. And what's Spicer and Kellyanne Conway and the President, they were not all on the same page with that remark that Spicer said at the podium yesterday, saying she was counseled.

And by the end of the day, the President put out a statement to the A.P. saying he stood by Kellyanne. So judging by that, I don't think she's in any great danger of disciplinary action.

KING: One example of three very interesting early weeks in the Trump White House and the competing factions in power centers. Everybody stay, we'll be right back. The President of the United States meeting with the Japanese Prime Minister in news conference coming up just a few minutes. Don't go anywhere.

(COMMERCIAL BREAK)

[12:50:07] KING: We're just moments away, you see a live picture of the White House there, President Trump meeting with Prime Minister Shinzo Abe of Japan, the two leaders about to have a press conference at the top of the hour. No doubt, the President will be asked about the travel ban, a big court decision yesterday, a setback for the administration.

Perhaps, he will be asked about this controversy, about his national security advisor who has said -- there's the room right there, the East Room where the two leaders will speak. Who has said in the past he did not discuss the issue of Russian sanctions on a post-election call with Russia's ambassador, now that is in doubt because of intercepted U.S. Intelligence calls.

Quickly to the table, hey, Ryan Lizza, do you have a question for the President today, what would it be?

LIZZA: You know what? This is the issue that I have been concentrating on. I would ask what did he think of what Kellyanne did yesterday and will there be any disciplinary action?

KING: On the disciplinary action against his aid Kellyanne Conway, that's one. There are a number of other issues too. This is the second time the President of the United States has had a news conference at the White House.

Theresa May, the British Prime Minister visited as well with another leader. He's taking some questions during the poll opportunity so you don't want to go anywhere. Our special coverage continues in just a moment with Wolf Blitzer here on CNN. Thanks for watching "Inside Politics." See you Sunday morning, 8:00 a.m.

(COMMERCIAL BREAK)

[12:55:08] WOLF BLITZER, CNN ANCHOR: Hello. I'm Wolf Blitzer. It's almost 1:00 p.m. here in Washington, 3:00 a.m. Saturday in Tokyo, wherever you are watching from around the world, thanks very much for joining us.

We begin with breaking news, President Trump and Japanese Prime Minister Shinzo Abe about to hold a joint news conference over at the East Room of the White House. You're looking at a live picture coming in right now. The President and the prime minister, they will make opening statements, and then take reporters' questions.

We're going to bring that to you live. Stay tuned.

The two leaders met earlier in the Oval Office. This is the second time President Trump has hosted a world leader over at the White House. The first was the British Prime Minister Theresa May. After their joint news conference, the President and the Japanese Prime Minister, they will have a working lunch, and then the two leaders and their wives will head to the President's Mar-a-Lago resort in Palm Beach, Florida. Our reporters and analysts are standing by with insight and analysis.

Let's bring in three of our correspondents for a preview, our Senior White House Correspondent Jeff Zeleny, our Justice Correspondent Pamela Brown, and CNN International Correspondent Will Ripley who's joining us from Tokyo.

Jeff, give us a preview of this news conference. What are some of the key issues, President Trump, Prime Minister Abe will focus on?

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, within just a few minutes or so, President Trump is going to be holding his second meeting here at the White House in the East Room of the White House with a foreign leader. And we saw those pictures just a short time ago with the Prime Minister Shinzo Abe in the Oval Office.

Now, this is the second time they have met. Right after the election, the Prime Minister paid a visit to New York City to meet with the President-elect. But here, Wolf, is the first time they're able to talk about such issues, security, of course, on the agenda, job creation, so many issues here with Japan. But it is a opening series here of a weekend of hospitality.

The President is going to travel down to Florida to Mar-a-Lago with the Prime Minister and his wife as well. So the beginning here of what they hope will be a strong relationship, Wolf, there's so many real issues are on the agenda.

BLITZER: One issue on the agenda for the President certainly is the Federal Appeals Court ruling that keeps his travel ban on hold at least for now. Are we getting any indication from officials where you are over at the White House, what the White House -- what the administration will do next and when?

ZELENY: Wolf, I am told that they are still considering their options here. Of course, the President will be asked about this here at the news conference. The White House Press Secretary Sean Spicer said they are considering if they will do a new executive order. That's one thing being considered. He tells me that it's not been fully decided at this point. A lawsuit is one option as well.

But, look, for some action before the end of the business day here on this, Wolf, but the President certainly not happy with the ruling yesterday. He wants to keep his executive order or the spirit of it in place. But right now, I'm told that they are still figuring out exactly how to do that legally. Wolf? BLITZER: All right. Stand by. Pamela, what about the option of the Trump administration simply drafting another executive order, forget about the first one. How would that work?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, that is certainly a possibility that we're told the Trump administration is contemplating as they try to figure out the next step. And so, what the administration could do is basically clarify what wasn't in the initial executive order, which is the fact that it wouldn't apply to green cardholders.

As you recall, there is a lot of confusion about that initially and then the administration came out and said it doesn't apply to green cardholders. But people have said those against the executive order has said it needs to be more explicit, it needs to be in writing. And so that could be something they do, is clarify that and make the travel ban more narrowly tailored. And so, presumably, if they do that, that would supersede the executive order that is now being challenged in the courts, which would essentially make the lawsuits on the point.

What's interesting, though, is that the judges in the Ninth Circuit rejected the Department of Justice temporary compromise to have the travel ban only apply to people overseas who have never stepped foot in the United States because the DOJ argued those people don't have constitutional rights. However, the judges in the Ninth Circuit said even that could be problematic because it could harm citizens in the U.S. who would want non-citizens to come visit them here.

So, there's a lot that the administration has to weigh and factor in as they figure out what to do next. Wolf?

BLITZER: Will Ripley in Tokyo for us. Will, President Trump has set off alarm bells during the campaign in Tokyo, especially where you are when he suggested allies like Japan might be better off developing their own nuclear weapons instead of depending on the United States. So, these security concerns in terms of this bilateral relationship, they are powerful right now very important. Talk a little bit about that.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Well, those nuclear remarks horrified a lot of people here in Japan which still has many living survivors of Hiroshima and Nagasaki. The relationship the security alliance within the United States, it has been critical in keeping stability in this heavily militarized part of the world for 70 years, Wolf.