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Flynn Resigns Amid Firestorm over Russia Dealings; Interview with Congressman Adam Schiff of California. Aired 9-9:30a ET

Aired February 14, 2017 - 09:00   ET

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

[09:00:19] POPPY HARLOW, CNN ANCHOR: Good morning, everyone. I'm Poppy Harlow.

JOHN BERMAN, CNN ANCHOR: I'm John Berman. Great to see you this morning.

A stunning and confusing morning at the White House. This morning, we know that Michael Flynn is out as national security adviser. We know he talked about sanctions with the Russian ambassador during the transition. We know he then either lied about it, misled, or forgot to tell Mike Pence.

All of that is big news, just 25 days into the administration, but even bigger news might be what we do not know.

HARLOW: That's exactly right. Just to name a few things, we don't know if the President knew about the conversations with Russia when they happened. We don't know if or why the White House ignored an explicit warning that Russia could potentially blackmail its national security adviser. That warning came weeks ago.

So what happened between then and last night when Flynn finally resigned? Let's begin this morning with our chief political correspondent, Dana Bash. She is in Washington.

And, Dana, good morning to you.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Good morning.

HARLOW: There is so much to walk through this morning. Let's begin with all of the reporting you have on exactly how this all unraveled in the late hours last night.

BASH: Well, the headline from senior administration officials who I'm talking to is that they just realized, and the President finally realized, that the situation was untenable.

And the situation that they described as untenable was the idea that either the now former national security adviser didn't remember what he actually said in a conversation with the Russian ambassador, or he misled the Vice President on purpose.

And that either answer was not sustainable and was not OK for the President's national security adviser. And so that is why they said that it was time for Michael Flynn to go.

But to give more context to that explanation, it's probably best for our viewers, because there's a lot to unpack, to go back in time. And let's do that right now.

This whole thing started with December 29th when the Obama administration announced sanctions to punish Russia for meddling in the election.

Then on December 30th, surprisingly, Vladimir Putin said that there would be no response, which was very odd to most people who focus on Russia and how they react to things.

Now, in late December, intelligence officials turned up communications between Michael Flynn and the Russian ambassador.

Then fast forward to January 15th -- this was the key when I was talking about the Vice President being misinformed or misled -- the Vice President went on television and said that, as per his discussions with Michael Flynn, that Flynn didn't discuss anything having to do with the United States' decision to expel diplomats or impose a censure against Russia.

So then the Press Secretary for the new administration, Sean Spicer, backed that up. He said he spoke with Flynn also, and the topics included several things, not sanctions.

Then fast forward to about two weeks ago, the Justice Department, then the acting Attorney General, Sally Yates, warned the White House that Flynn could be blackmailed by Russia based on the conversation that they had.

And then February 8th, Flynn denied discussing sanctions with the Russian ambassador in a "Washington Post" interview. And if you then fast forward even more, a Flynn aide told CNN that he couldn't then rule out if sanctions were discussed. So he started to backtrack on his discussions.

Then the issue was starting this past weekend, guys. And the President of the United States, being asked about a "Washington Post" report, which kind of blew this whole thing open, saying that Flynn did, in fact, discuss the sanctions and that he probably did, knowing or not, mislead the President. And that's when we ended with the very late at night resignation last night by Michael Flynn.

BERMAN: You know, Dana, we're looking at that timeline, though, and, you know, it's like Watergate. There's this 18-minute gap in the tape. There's this bizarre two-week gap --

BASH: That's right.

BERMAN: -- when the White House was told by Sally Yates, the acting Attorney General, that there was this conversation, that Mike Flynn likely talked about sanctions and the Russians might blackmail him. That was at least two weeks ago.

BASH: That's right.

BERMAN: Has the White House given any explanation about what's gone on since those two weeks?

BASH: No. The answer is no. We don't know if the White House counsel, Don McGahn, who got that information, kept it from people -- if he kept it intentionally from the President so he would have deniability -- or if the President did know and decided that it wasn't enough of a problem to take Mike Flynn off of key and sensitive national security issues.

[09:05:19] I mean, he was in meetings with the national security council. He was in meetings on national security issues. He, of course, was involved in foreign visits and so forth, and not to mention phone calls that the President has made to foreign leaders.

So that is one of many very important unknowns here with regard to what the White House knew about Flynn's actions and when they knew it.

BERMAN: All right. Dana, don't go anywhere. We have a lot more to discuss.

Let's bring in Jackie Kucinich. She's a CNN political analyst, Washington bureau chief of "The Daily Beast." Errol Louis, CNN political commentator, political anchor at Spectrum News. And David Rohde, CNN global affairs analyst and national security investigations editor of Reuters.

Errol, there's a lot to discuss, and let's try to break this down piece by piece. First of all, one key question is the conversation that General Flynn had with the Russian ambassador. Did then President-elect Trump know about it?

One of the reasons we ask is, you know, look on Twitter on December 30th.

HARLOW: Yes, let's pull that up.

BERMAN: After Russia did not respond to the sanctions, President- elect Trump said, "Great move on delay. I always knew he was very smart." He's talking about Vladimir Putin. So is it plausible that President-elect Trump did not know the nature of these conversations at the time?

ERROL LOUIS, POLITICAL ANCHOR, SPECTRUM NEWS N.Y. 1: Well, I always thought it was unbelievable, in a literal sense. Like, I simply could not believe that the President wouldn't know about these things, when he said on the plane the other day, oh, I'm looking into it, I don't know anything about it.

This is the best-informed person in the world. This is the person who gets the intelligence briefings every day, perhaps --

HARLOW: By the way, from Flynn.

LOUIS: Perhaps through Michael Flynn, which -- HARLOW: The intelligence briefings were from Michael Flynn.

LOUIS: Yes, but, I mean, that raises some sort of Hollywood type of questions. But Sally Yates -- there are independent reporting lines, right, through the Department of Justice. There are independent reporting lines through the Central Intelligence Agency.

There are people who can tell the President, at a minimum, this is a problem. There are political advisers whose job it is to do exactly that. Find out what's floating around in the bureaucracy and bring it to the President's attention.

So if he is uninformed, in some ways, that might be more devastating. But this is somebody, a President, who has, I think, always sort of played for time, always kind of left things a little bit fuzzy. As you say, the tweet shows that he was aware of the issue of whether or not Russia was going to respond to the sanctions. And clearly that is of immediate relevance to try and figure out who knew what when.

HARLOW: So let's listen to what the President said just on Friday. He was asked about this by reporters on Air Force One. Here's his answer.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I don't know about it. I haven't seen it. What report is that?

UNIDENTIFIED FEMALE: They're from "The Washington Post" --

TRUMP: I haven't seen it.

UNIDENTIFIED FEMALE: "The Washington Post" is reporting that he talked to the ambassador of Russia before you were inaugurated about sanctions, maybe trying to --

TRUMP: I haven't seen that. I'll look at that.

(END VIDEO CLIP)

HARLOW: OK. Probably the biggest issue going on in the White House at the time, and then in the subsequent appearances before reporters, no one asked him about the situation. Shockingly yesterday, some friendly media was called on.

Dana went through the timeline for us. Jackie, to you, you know, Don McGahn knew two, if not three, weeks ago about this. Is it plausible, in your mind, that it never made it to the desk of the President? Because Kellyanne Conway, on multiples shows this morning, you know, said, you know, I just can't answer that question. That's not why I'm here.

JACKIE KUCINICH, WASHINGTON BUREAU CHIEF, THE DAILY BEAST: I don't know that I can answer that question, Poppy. I mean, as Errol said, it does seem unbelievable, but, you know, perhaps, they were trying to shield him from this. We just don't know. But, you know where you're going to hear about this the most in the

next 24, 48 hours is Capitol Hill. Republicans are going to have to answer for this. Democrats are going to be crying for investigations. This is going to fuel a lot of their complaints that the Russia situation wasn't properly looked into.

So that is going to be chief among many, many, many questions that lawmakers are not only going to have to try to answer today but are going to have to try to dig into in the future.

BERMAN: Yes. Did Don McGahn, the White House counsel, sit on this information for two weeks? Because if he didn't sit on it, then other people in the White House knew and maybe they should've told the President.

HARLOW: But then if he did sit on it, isn't that a problem too? A huge problem?

BERMAN: It's loads of problems. And then, David Rohde, there's the Russia problem, right?

DAVID ROHDE, CNN GLOBAL AFFAIRS ANALYST: Yes. For Democrats, this is clearly a political opportunity. They can bring up this whole question about, were there contacts between the Trump campaign and Russia? There's still an active investigation going into three other people beyond this. Carter Page, who was a Russian adviser; Stone, who was, at least a supporter of Flynn's; and then Paul Manafort, the former campaign manager.

So there's no proof of this -- let's be fair here -- but, clearly, the Democrats are going to bring this up and this isn't what the President wants to be talking about, four weeks into his presidency.

[09:09:57] HARLOW: And to your point, President Obama's deputy national security adviser, Ben Rhodes put it on Twitter this morning -- I want to get your assessment on whether this is fair or not -- "When campaign chairman and the NSA both resign over Russia ties, there is more. Manafort and Flynn had nothing in common except Russia and Trump."

David, I mean, what credence? Is that just politics or is there something there?

ROHDE: I think there are politics, but there are active investigations going on into these three people by the FBI. John McCain has, you know, raised this issue. He's not going to let the Russia issue die.

And, again, you know, all American intelligence agencies agreed that the Russians intervened in this election to, at least, undermine it, and it most, you know, favored Donald Trump. And we have repeated contacts between Russia and supporters of Trump.

BERMAN: Dana, you know, based on your reporting, what's going on right now in the White House this morning? Because we've seen Kellyanne Conway out there today saying, she has no explanation or doesn't have an answer for what happened from two weeks ago with Don McGahn.

HARLOW: Actually, yesterday, she said the President has complete confidence.

BERMAN: And there's that, too. There's that too.

HARLOW: Like, 12 hours ago.

BERMAN: So this morning, what are they trying to do? Do they have a strategy to move past this over the next several hours?

BASH: It's unclear. I mean, that's the honest answer. It's unclear. It seems to me that the first thing that they want to do, which is the first thing that they should do, is get a new national security adviser and hope that that helps to change the narrative, helps to change the discussion into, will this White House and will the very important national security council find somebody who will give leadership and not just to that part of the White House but to the President's foreign policy in general?

But, you know, you have to imagine that they are understanding that these questions are going to come up. I mean, I've been asking them, haven't gotten any answers yet, the key one, did Don McGahn, the White House counsel, tell anybody? Did he tell everybody? And if so, what happened with that information?

I mean, those are key questions that you can bet that they are trying to figure out how to answer. And it is possible that because of the, frankly, the chaos within the White House, that people who should know the answers to these questions don't.

HARLOW: So let's just take a walk back in history -- a little bit further than you took us, Dana -- and let's just have everyone listen to what Michael Flynn said at the RNC. A huge supporter and very loyal to Trump throughout. Here is what he said about Hillary Clinton and national security issues, calling her careless.

(BEGIN VIDEO CLIP)

LT. GEN. MICHAEL FLYNN (RET.), FORMER UNITED STATES NATIONAL SECURITY ADVISOR: She put our nation's security at extremely high risks with her careless use of a private e-mail server.

(END VIDEO CLIP)

HARLOW: OK. Errol, let's set aside the irony of that statement for a moment and talk about whether or not you believe there is a national security risk that could have spanned, at least, those three weeks when Russia would have known that it had leverage over Michael Flynn.

LOUIS: Well, I mean, I think the definition of a risk is exactly that, when information goes missing, when clearly there is someone who could be compromised, when there's an obvious need to sort of close ranks and figure out what's going on and come clean with the public and within the administration. And none of those things seemed to have happened. And, again, the missing piece in all of this is, why, when he's going

to tweet about, you know, Nordstrom's or Hollywood stars or the media or anything else, how is it that this President has never managed to criticize Russia or its leader? It really makes the whole thing sort of very fraught, and you start to wonder what is going on here and who is driving the ship and in what direction and for what reason?

BERMAN: Quickly, last point, to Jackie Kucinich. Remember, Michael Flynn was incredibly close to Donald Trump as a candidate and President-elect and President. It's hard to know where his foreign policy ends and President Trump's begin.

And when he was criticized, the President, for not taking the daily briefings during the transition, his excuse was that Michael Flynn is briefing me every day. So there isn't much space, you know, between these two men.

KUCINICH: It's true, but loyalty only goes so far. And I do think the fact that he did lie to or misstate the facts, at a minimum, to Vice President Mike Pence was his undoing. And Mike Pence went out and defended him. And Mike Pence is, reportedly, very upset about this.

You can't undermine the Vice President like that, in general, but also when you're someone who's so critical to the administration.

HARLOW: Yes. All right, Dana Bash, great reporting as always. Jackie Kucinich, Errol Louis, David Rohde, we appreciate it.

Coming up for us, a ranking member of the House Intelligence Committee, Congressman Adam Schiff, not mincing words just moments ago on Twitter, tweeting, "Here's what's bothering me. Flynn's lie about Russia didn't bring him down. Exposure of lie did. The White House knew weeks ago and did nothing. Why?"

We'll talk about that with the Congressman next.

(COMMERCIAL BREAK)

[09:18:58] JOHN BERMAN, CNN ANCHOR: General Michael Flynn has resigned as national security adviser. Does that mean the controversy is over?

No way says Democratic Congressman Adam Schiff of California. He is on the intelligence committee. Moments ago, he wrote this, "Here's what's bothering me. Flynn's lie about Russia didn't bring him down. Exposure of lie did. White House knew weeks ago and did nothing. Why?"

POPPY HARLOW, CNN ANCHOR: Congressman Schiff, as John said, ranking member of the House Intelligence Committee. He joins us now from Capitol Hill.

A lot to get to this morning, nice to have you on the program.

Given the fact that you sit on the Intel Committee, given that you have intelligence briefing that we do not have is there any indication the president knew -- first off, that the president knew before he took office that Michael Flynn was having these conversations about sanctions with the Russian ambassador?

REP. ADAM SCHIFF (D), CALIFORNIA: Well, I can't go into the contents of the investigation, but I don't think we have anywhere near the answers to those kinds of questions yet. Our investigation is really just getting under way.

But these are the questions.

[09:20:00] How long did this relationship between Flynn and the Russian ambassador or others affiliated with the Kremlin go on? How much of this was waiting to the president? How much of it was condoned by the president?

You know, what I find so troubling here is that the White House knew about the fact that Flynn had lied, knew that the vice president had then repeated the falsehood to the American people, and for Kellyanne Conway to say he is only stepping down because he misled the president, no, the whole country was misled and they were OK with that as long as the public didn't know. That is deeply troubling.

To me, it is inconceivable that the White House counsel upon being briefed by the Justice Department would keep that information to himself. He must have shared that with others in the administration, and it's also very implausible that those others in the administration, if they were having discussions about removing Flynn, would not have discussed this with the president.

BERMAN: So, what the congressman is talking about here is that, two weeks ago, Sally Yates, who was then acting attorney general, told the White House counsel Don McGahn that there were concerns about this conversation --

HARLOW: With the support of other intelligence said.

BERMAN: With the support of intelligence and apparently the transcript of the conversation, that was given to the White House counsel two weeks ago. Then on Friday, Congressman, President Trump was asked about all of this, and this is how he responded on Air Force One. Let's listen briefly.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I haven't seen it. What report is that?

REPORTER: "The Washington Post" is reporting that he talked to the ambassador of Russia before you were inaugurated about sanctions --

TRUMP: I haven't seen that. I'll look into that.

(END VIDEO CLIP)

BERMAN: In case you couldn't hear it, Congressman, what the president said was, I haven't heard about that and I will look into it. That was Friday, you know, more than two weeks after his White House counsel was informed of it.

Do you think the president was being straight with the American people right there?

SCHIFF: I think that's so unlikely. The fact is this is a voracious consumer of the news, as much as he bad mouths it, he knew what the controversy was that was swirling around. The question is, how much did he know of what Sally Yates communicated to the White House counsel? I believe he probably had to know that as well. If he didn't, that says something about if important national security information is being kept from the president.

But given this inexplicable fondness to Putin, his unwillingness to criticize anything the Russians do, it certainly begs the question of whether Flynn was doing exactly what the president wanted, whether he was doing it with the president's knowledge, with the president's approval. It is, you know, it's entirely plausible they could have discussed it after they learned that President Trump was going to impose sanctions, and felt they were being boxed in, and that they were going to reach out to the Russians immediately saying don't react, we'll take care of this.

So, there are tons of questions here. We need a thorough investigation. I would like to see in addition to what we are doing in the intelligence committee, because we have limited resources, an independent commission look at all of the questions because they are of such great significance to the whole country.

HARLOW: Let's remember, the day after Flynn had that conversation with the Russian ambassador, the president then tweeted this right before taking office, "Great move on delay by V. Putin, I always knew he was very smart", meaning reacting to the shock that Russia did not counterpunch the U.S. when the U.S. imposed more sanctions under President Obama.

You said something to Wolf Blitzer on this network yesterday that we want to learn more about, and that is that you said that you have seen reports that General Flynn may have used encrypted communications with the Russians, and are you talking about media reports or intelligence reports?

SCHIFF: I haven't seen intelligence about this, and I want to be very clear. No, there have been comments about this in the media, and I think this is an allegation that ought to be pursued, and we ought to find out just what kind of communications Flynn had with the Russian ambassador.

We know from Sean Spicer that he was texting the Russian ambassador, was this using open communications or encrypted communications? If they were, in fact, encrypted, you have to ask, who was he trying to conceal these conversations from? Obviously, he wasn't trying to conceal them from the Russians and that may show some consciousness of wrongdoing here. BERMAN: So, Congressman, let's cross the T's here. So, what if the

general did have encrypted conversations during the campaign and what if the president did know after the White House counsel was informed about these conversations, what then?

SCHIFF: Of course, the most serious allegation is that there was a form of collusion between the Trump campaign and the Kremlin while the Kremlin was engaged in illegal operations in the United States to influence our election. If that's true, of course, there were multiple laws broken and that is I think the most serious --

[09:25:00] BERMAN: Have you seen any evidence? That's a serious allegation. Have you seen any evidence of that at this point?

SCHIFF: Well, you know, I can't go into the investigation yet, but the investigation is still at a very early stage. Essentially, at this point, we are still in the process of gathering documents from the intelligence community that underlay the intelligence community's assessment, the public version of which you've read. We receive the more detailed classified version in the Gang of Eight, received an even more detailed the report.

But -- so we are in the very early stages. But we do have to look at the whole range of Russian active measures. We cannot wall-off any potential source of investigation or inquiry, and, you know, to the chairman of the intelligence committee, to his credit, is willing to pursue the facts where they lead, that's exactly what we're going to have to do.

I'd like to see us do that jointly with the Senate, that it doesn't make much sense to me to be doing this independently of each other, and more than anything I think we would benefit from an independent commission. But these allegations have to be looked into, and as well as the more salacious allegations if there's compromising material that could be used to blackmail the president. That needs to be investigated as well. We just have to follow the facts wherever they lead.

BERMAN: We should note that CNN, you know, has not been able to corroborate any of those salacious allegations in that dossier you are talking about. Let's just be clear about that.

Congressman Adam Schiff of California, thanks so much for being with us. Appreciate it.

SCHIFF: Thank you.

BERMAN: All right. Moments away now from the hoping bell, Wall Street no doubt watching this and much more. We have seen many days of record highs.

Will there be another?

Joined by the star of "EARLY START", Christine Romans.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Good morning you two.

Well, the futures down a little bit right now, so, it could be a pause here. But overall, it's been a big run for stocks. I wanted to show you the last three months of the stock market and really show you how well you performed here.

You have got the NASDAQ up almost 10 percent over the past three months. The S&P 500, the Dow 30 up strongly. And when you look within the Dow even more recently, you can see where the enthusiasm is.

It's in the banks because of cutting regulations and slashing some of those protections that would after the financial crisis. You know, the Caterpillar shares, Apple shares on fire here. It's a combination of what they hope the Trump administration will do. Cutting regulations, cutting taxes, but also just euphoria you hear about how strong the economy is.

HARLOW: Is it a Trump rally still or is it -- I mean, a lot of people giving it to the Fed, but that's not as sexy, I suppose?

ROMANS: There are a lot of people who are arguing about whether this would be happening with or without Donald Trump as president.

HARLOW: And there's an idea that economists are arguing about whether or not the economy is actually stronger than the GDP is showing, that maybe there's kind of a fire burning in the economy that we have underappreciated here. What I can tell you, though, a lot of corporate executives are upbeat and they think a Trump presidency, what they've heard from this president so far will be great for their bottom line.

This is about profit, by the way. I mean, the stock market measures who rich companies and shareholders will be, remember. And so, they're pretty optimistic about that.

There is turmoil over the travel ban. There is turmoil over Michael Flynn and all of this, you know, what is happening behind closed doors at the White House and why its spilling out into the public, they are concerned about that. But tax cuts and regulation cuts, those are things they think are going to happen and they like that.

HARLOW: Christine, thank you.

ROMANS: You are welcome.

HARLOW: All right. Still to come for us, who will fill the place of Michael Flynn as the president's national security adviser? There are three names in the running, one seems to be in the lead. We will look at the career military officers now on that short list.

BERMAN: And Republican leaders trying to wrangle enough votes to push through the president's pick for labor secretary, but running into some trouble. Four Republicans on the fence.

(COMMERCIAL BREAK)