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Trump-Russia Connections?; Interview With California Congressman Adam Schiff; Trump Meets With Netanyahu; Trump Labor Nominee Withdraws; North Korea: Missile Test a "Gift" to Late Leader. Aired 6-7p ET

Aired February 15, 2017 - 18:00   ET

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


[18:00:00]

WOLF BLITZER, CNN ANCHOR: Happening now: constant contact. Officials raise a disturbing red flag about President Trump's Russia connections. CNN has learned that top Trump advisers had frequent communications with suspected Russian operatives during the 2016 campaign. We're digging keeper on this story this hour.

Dodge and rage. Mr. Trump ignores CNN's questions about his campaign's Russia contact. Instead, he blames the media and others for the downfall of his national security adviser. If the president thinks Michael Flynn is such a wonderful man, why did he fire him?

Either one. The president tells the Israeli prime minister he doesn't care if there's a two-state or one-state solution to achieve Middle East peace. Has Mr. Trump abandoned a pillar of U.S. foreign policy?

And cooked. Fast-food CEO Andrew Puzder withdraws as labor secretary nominee, rather than be voted down by Republican defectors. We will take a closer look of Mr. Trump's first Cabinet defeat.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in the THE SITUATION ROOM.

We're following new developments in the widening crisis for the Trump administration over its contacts with Russia. President Trump speaking publicly for the first time about the resignation of national security Michael Flynn, at a news conference with the Israeli prime minister, the president called Flynn a wonderful man.

He blamed intelligence leaks in the news media for forcing out Flynn, even though aides say it was Mr. Trump who fired him. The president managed to ignore or avoid any tough questions about his Russia contacts, including stunning new revelations reported by CNN.

Official sources disclosing that high-level Trump advisers were in constant communication with suspected Russian operatives during the 2016 campaign.

Also tonight, the first Trump nominee to go down in flames. Fast-food CEO mogul Andrew Puzder withdrawing as the president's choice for labor secretary. The decision comes after Senate Republicans told the White House Puzder was losing support with four Republicans say they would vote no and as many as eight other GOP defections possible.

In the midst of this turmoil, President Trump threw new curve balls into the Middle East process. He directly and publicly asked Israeli Prime Minister Benjamin Netanyahu to hold back on building new settlements, but Mr. Trump backed off from decades of U.S. support for a two-state solution, saying he would be fine with whatever agreement the Israelis and the Palestinians could reach.

This hour, I will talk to with a former top foreign policy adviser to both Hillary Clinton and Joe Biden, Jake Sullivan. He's standing by live, along with our correspondents, analysts and other guests as we bring you full coverage of the day's top stories.

First, let's go to our senior White House correspondent, Jim Acosta, with more on the president's comments about Michael Flynn.

Jim, you were there at the news conference. Update our viewers.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, President Trump was defending his former National Security Adviser Michael Flynn as if he hadn't even fired him.

The president at the news conference with Israeli Prime Minister Benjamin Netanyahu blamed Flynn's departures on leaks from the government to the news media that the former national security adviser was discussing Russian sanctions with the Russian ambassador, something Flynn apparently lied about to the vice president.

But the president blamed the whole saga on forces outside the administration like the news media and those leaking the information out of the government. Here's what he had to say.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Michael Flynn, General Flynn is a wonderful man. I think he's been treated very, very unfairly by the media -- as I call it, the fake media, in many cases.

And I think it's really a sad thing that he was treated so badly. I think, in addition to that, from intelligence -- papers are being leaked, things are being leaked. It's criminal actions, criminal act, and it's been going on for a long time -- before me.

But now it's really going on, and people are trying to cover up for a terrible loss that the Democrats had under Hillary Clinton. I think it's very, very unfair what's happened to General Flynn, the

way he was treated, and the documents and papers that were illegally -- I stress that -- illegally leaked.

Very, very unfair.

(END VIDEO CLIP)

ACOSTA: Now, when reporters went back to White House Press Secretary Sean Spicer this afternoon about what was fake in those news reports, as the president said, on the Trump campaign's contacts with the Russians, Spicer only said, Wolf, he would get back to us. Nothing specific in terms of what he thought was fake in those reports, Wolf.

BLITZER: Hasn't gotten back to you, I take it, right?

ACOSTA: That's right, not at all.

BLITZER: You tried to get some more from the president at the end of the news conference in the East Room at the White House. How did that go?

ACOSTA: That's right.

[18:05:00]

When the news conference was over, Wolf, I tried to ask the president about the contacts some of his aides had with the Russians. There was sort of a moment of silence in the East Room of the White House as he and Prime Minister Netanyahu were leaving the room. You could tell he heard the question, but he did not respond.

And I should point out my colleague Sara Murray also tried a few moments later in the Oval Office. But, again, there was no response from the president.

Wolf, it's been difficult to get answers to these questions in recent days. At the last three news conferences, the president has mainly called on conservative news outlets. That is a major break from tradition here at the White House, where, in the past, as you know, Wolf, wire services like the Associated Press, newspapers, and TV networks were typically called on for questions.

That has not been the practice here in this new administration.

BLITZER: Jim, the president was also tweeting this morning about all this new Russia reporting from CNN and other news organizations. Tell our viewers about that.

ACOSTA: Right. You can see the president is taking no responsibility for any of this. He's blaming the press. We can put these up on the screen, tweeting today: "Information is being illegally given to the failing 'New York Times and 'Washington Post' by the intelligence community. NSA and FBI? Just like Russia."

In the next one, "This Russian connection non-sense is merely an attempt to cover-up the many mistakes made in Hillary Clinton's losing campaign."

Wolf, a couple of things here. One thing you note, in that first tweet, he seems to be going after the NSA and the FBI, this after he tried to mend fences and repair relations with the intelligence community at his first comments at the CIA right before -- or right after, I should say, after his inauguration.

The president is obviously frustrated with the leaks, Wolf. But up until this point, we should point out the president and other top officials here have not said what if anything is going to be done to stop the leaking, any actions that might be taken from the administration. They're just not saying at this point.

But, Wolf, we should point out his chief strategist, Steve Bannon, was also venting some frustrations behind the scenes here at the White House earlier this afternoon. There were some reporters gathered outside Sean Spicer's office. I was among them. And at one point, Bannon walked past us and referred to us as the opposition party as we were standing outside the press secretary's office -- Wolf.

BLITZER: Yes. The president earlier compared the intelligence community to Nazi Germany. Now he's making comparisons to Russia, clearly irritating -- maybe he should go out to the NSA headquarters in Fort Meade, Maryland, or FBI headquarters here in Washington and speak to those who are involved in doing the job they're doing.

Jim Acosta, thanks very much.

Tonight, some top Democrats are escalating their demands for an independent investigation into the Trump team's contacts with Russia. This after CNN's reporting extensive communication between top Trump advisers and the Russians during the presidential campaign.

Let's bring in our justice correspondent, Pamela Brown.

What's the latest?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Wolf, we're learning the security clearance for President Trump's former embattled National Security Adviser Michael Flynn has been suspended pending review of any wrongdoing.

This as investigators scrutinize the communication Flynn and other Trump aides had with Russians during the campaign.

(BEGIN VIDEOTAPE)

BROWN (voice-over): During his presidential campaign, high-level advisers close to Donald Trump maintained constant communication with Russians known to U.S. intelligence, multiple sources tell CNN.

The sources, current and former law enforcement intelligence and administration officials, say the frequency of the conversations and proximity to Trump of those involved raised a red flag with U.S. intelligence and law enforcement. The timing, as it became clear to investigators that Russia was seeking to undermine the U.S. elections by hacking e-mails of Democratic institutions, added to the alarm.

And CNN is told that then president-elect Trump and then President Barack Obama were briefed on concerns about the extensive communications in January, Trump in January denying any knowledge of contacts with the Russians.

QUESTION: Did you or anyone in your campaign have any contact with Russia leading up or during the campaign? Nothing at all?

BROWN: Yesterday, White House Press Secretary Sean Spicer denied there was any contact.

QUESTION: Can you still say definitively that nobody on the Trump campaign, not even General Flynn, had any contact with the Russians before the election?

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: My understanding is that what General Flynn has now expressed is that during the transition period -- well, we were very clear that during the transition period he did speak with the ambassador.

QUESTION: I'm talking about during the campaign.

SPICER: I don't have any -- there is nothing that would conclude me that anything different has changed with respect to that time period.

BROWN: Officials say the communications were intercepted during routine intelligence collection targeting Russians known to U.S. intelligence.

And among those who regularly communicated with Russian nationals, then campaign chairman Paul Manafort, and Michael Flynn, who resigned his post as Trump's national security adviser Monday night after news reports about a call with Russia's ambassador regarding U.S. sanctions.

Manafort denied the claims in an interview with CNN, calling the allegations "boggling," saying: "That is not 100 percent true, at least as far as me. I don't remember talking to any Russian officials ever, certainly during the time we're talking about."

(END VIDEOTAPE)

[18:10:12]

BROWN: And the FBI and the U.S. intelligence agencies continue to try to determine what the motive for the communications were between people close to Trump and Russians.

The reason is inconclusive, we're told. One concern has been whether Trump associates were coordinating with Russian intelligence operatives over the release of damaging information about the Hillary Clinton campaign.

As one source told me, if that were the case, then that would escalate things. But again there is nothing to prove that at this stage in the ongoing investigation, Wolf.

BLITZER: That certainly would be a major part of this investigation.

Pamela Brown reporting, thank you very much.

Now to President Trumps' talks with Israeli Prime Minister Benjamin Netanyahu and his precedent-breaking approach to the Middle East process.

Our global affairs correspondent, Elise Labott, is joining us from the State Department.

Elise, the president made some surprising comments about what's called a two-state solution.

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: That's right, Wolf.

President Trump greeted Prime Minister Netanyahu with military honors, a warm embrace and a chummy tone, but not a blank check. And when it came to negotiating what he called the ultimate deal, President Trump said that decades of U.S. policy is not a given.

(BEGIN VIDEOTAPE)

LABOTT (voice-over): President Trump made a remarkable break in decades of U.S. policy, backing away from the two-state solution that would give Palestinians their own state.

TRUMP: I'm looking at two-state, and one-state and I like the one that both parties like. I'm very happy with the one that both parties like. I can live with either one.

LABOTT: Still, Trump insisted that he was committed to a peace deal.

TRUMP: We'll be working on it very, very diligently. Very important to me also -- something we want to do. But it is the parties themselves who must directly negotiate such an agreement. We'll be beside them; we'll be working with them.

LABOTT: And he made clear he wasn't giving Netanyahu a blank check.

TRUMP: As with any successful negotiation, both sides will have to make compromises. You know that, right?

LABOTT: And with a playful tone warned Netanyahu to stop settlement expansion in the West Bank that has grown exponentially since Trump took office.

TRUMP: As far as settlements, I'd like to see you hold back on settlements for a little bit. We'll work something out.

LABOTT: Referring to "other players" at the peace table, the president wants to enlist Arab states who share Israel's concern about Iran to help close the deal.

TRUMP: And I think we're going to make a deal. It might be a bigger and better deal than people in this room even understand. That's a possibility. So let's see what we do.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: Let's try it.

TRUMP: Doesn't sound too optimistic, but he's a good negotiator.

(LAUGHTER)

Netanyahu That's the art of a deal. LABOTT: Netanyahu embraced Trump's tough message to the Palestinians.

TRUMP: I think the Palestinians have to get rid of some of that hate that they're taught from a very young age. They're taught tremendous hate.

LABOTT: And he lavished praise on Trump's negotiating skills and courage, as well as his son-in-law, Jared Kushner, Trump's close adviser who he tapped his own personal peace enjoy.

NETANYAHU: Can I reveal, Jared, how long we've known you?

(LAUGHTER)

Netanyahu Well, he was never small. He was always big. He was always tall. But I've known the President and I've known his family and his team

for a long time, and there is no greater supporter of the Jewish people and the Jewish state than President Donald Trump.

(END VIDEOTAPE)

LABOTT: Really buttering President Trump up there.

Diplomats and experts say that President Trump may have wavered on the two-state solution to help Prime Minister Netanyahu, who is having political issues at home, that this may not be a given as they go forward on the peace process, Wolf.

And also they note the Palestinians have a vote in this too and they are highly unlikely to accept a peace deal that doesn't lead to their own independent state. Now, the Palestinians had a chance to talk about all this with the U.S. We understand CIA Director Mike Pompeo was in Ramallah last night and he met with Palestinian President Abbas, where, among things, they discussed the peace process -- Wolf.

BLITZER: Very interesting, indeed. All right, Elise, thanks very much, Elise Labott reporting.

Let's turn back to the Trump camp's constant contacts with Russian officials during the campaign.

We're joined by Jake Sullivan, former top foreign policy adviser to Hillary Clinton and also advised then Vice President Joe Biden.

Jake, thanks very much for coming in.

JAKE SULLIVAN, FORMER ADVISER TO HILLARY CLINTON: Glad to be here.

BLITZER: Constant contact between Trump's officials during the campaign, Russian intelligence officials. What could this mean?

[18:15:03]

SULLIVAN: It's deeply alarming. What it means at a minimum is that this is totally unusual to have

campaign officials, senior people close to Trump in contact with senior people in the Russian government or around the Russian government.

I think we need to have a full and fair bipartisan investigation to get to the bottom of what they were talking about, what the content of those communications were and whether or not there was any collusion or coordination between the campaign and the Russian government.

BLITZER: Here's the response from the president.

He tweeted this earlier today -- quote -- "This Russian connection non-sense is merely an attempt to cover-up the many mistakes made in Hillary Clinton's losing campaign."

He's calling this a cover-up because your campaign, the Hillary Clinton campaign, lost. Respond to that.

SULLIVAN: Well, November 8 is now three months ago.

The election is over. The Clinton team did lose the election. Trump won. He's now the president. And now the buck stops with him. And it's not the Clinton campaign or anyone around Clinton who is bringing these reports forward.

It's the U.S. intelligence community, ostensibly because they're deeply concerned about how irregular, how unusual it would be for senior officials in the Trump campaign to be talking to the Russians amidst all of what we know about what the Russians did to put the thumb on the scale in this election for Donald.

BLITZER: But do you have any real information about the nature of those conversations between Trump officials and Russian intelligence officials during the campaigns? Do you have any inside information on what they were talking about?

SULLIVAN: No, of course I don't have inside information.

But the fact that these questions have been raised about what the content of those communications were suggests the need, the desperate need for a full, open, public, bipartisan set of hearings for us to get to the bottom of this, because Mike Flynn and Paul Manafort and Donald Trump himself should be answering these questions.

BLITZER: You were the national security adviser to Hillary Clinton during the campaign. Did you ever reach out to Russian officials during the course of the campaign?

SULLIVAN: I didn't speak to Russian officials during the campaign.

BLITZER: Did anybody from your campaign reach out and speak to Russian officials, as far as you know?

SULLIVAN: As far as I know, there is no one on our campaign team who spoke with Russian officials during the campaign. BLITZER: Would it have been inappropriate for you to do? You assumed

she was going to win. You assumed she was going to be the president of the United States. Why not speak with officials from the Russian government and maybe set the stage for some better dialogue if in fact she became president-elect and then president?

SULLIVAN: It wouldn't be inappropriate for there to be one contact, a courtesy call, a conversation.

I met with and discussed many issues with many different ambassadors. But I would meet with them a single time. Maybe I would have a second conversation. That was it. And what Trump and Trump's officials seem to have done instead here was have regular contact with them over the course of the campaign. That's what's so unusual about this.

BLITZER: And when you had these meetings with foreign officials, ambassadors, or others, would it be normal to then report to the State Department and say, hey, I had these meetings, just so you know?

SULLIVAN: Yes, in general, you would make sure that the government understood what you were doing, so that there was not any possibility of misunderstandings or crossed signals. And we made a regular practice of doing that.

BLITZER: You want a full-scale investigation to determine what exactly happened in these communications, in these contacts.

Let me read to you what Senator Rand Paul said about that. "I just don't think it's useful to be doing investigation after investigation particularly of your own party. We will never even get started with doing the things we need to do like repealing Obamacare if we're spending our whole time having Republicans investigate Republicans. I think it makes no sense."

When you hear that, remembering all the investigations of Hillary Clinton and her e-mail server and Benghazi, what's your reaction?

SULLIVAN: This shouldn't be about point-scoring. It shouldn't be about comparing it to Benghazi or e-mails.

What it should be about is national security of the United States of America. It's not about Republicans or Democrats. It's about the fact that a hostile foreign power, Russia, interfered in our election to generate their preferred result, Donald Trump's victory.

And now we know that there were high-level communications between the Trump campaign and the Russian government. Getting to the bottom of that is a fundamental issue of national security and one of the highest priorities that both parties should have in the weeks ahead.

BLITZER: I want you to stand by. There is more to discuss.

Once again, we're getting more information. Just ahead, I will also speak with a top Democrat on the House Intelligence Committee, what he's learning about the contact between the Trump campaign and the Russians. Congressman Adam Schiff, he is standing by. And a controversy that brought down the president's nominee to become

the labor secretary of the United States, so what happens now that Andrew Puzder has dropped out?

(COMMERCIAL BREAK)

[18:24:02]

BLITZER: We're following new developments on the Trump camp's contacts with Russia. Multiple official sources now telling CNN that high-level Trump aides were in constant communication with suspected Russian intelligence operatives during the course of the presidential campaign.

We're joined now by the top Democrat on the House Intelligence Committee, Congressman Adam Schiff.

Congressman, thanks for joining us.

REP. ADAM SCHIFF (D), CALIFORNIA: Good to be with you, Wolf.

BLITZER: What do you know about these conversations between Donald Trump's aides during the course of the campaign and high-level Russian intelligence operatives?

SCHIFF: This is going to be a key part of our investigation in the House Intelligence Committee.

There is a lot to look at in terms of the Russian influence operations. We are going to look at what the FBI's response was. We're going to look at how they used paid media and trolls.

But we're also going to look at the issue of collusion. Were there contacts between Trump campaign officials? And I can't confirm or deny those reports.

[18:25:00]

But I can tell you this is something that is very much of interest and has to be investigated. I think that's really one of the most serious allegations to surface since the elections.

BLITZER: Do you believe that now President Trump, then candidate Trump, knew about these conversations?

SCHIFF: Well, here is the thing. And I was saying this at the time of the campaign. President -- now President Trump, then-candidate Trump, called openly for the Russians to hack Hillary Clinton's e-mail server.

So, he did this quite overtly. The question is, was he also doing this covertly through surrogates? And that is something that we will have to investigate. But what is really shocking at one level is, he was asking for this quite openly.

BLITZER: Do you believe he actually directed his national security adviser, the fired Michael Flynn, to tell the Russians that a Trump administration would roll back the sanctions imposed by then-President Obama, including the expulsion of 35 Russian diplomats, shutting down locations that the Russians have here in the United States, among other sanctions?

SCHIFF: I don't know is the answer.

But it certainly wouldn't surprise me. This is consistent with the president's view of things and view of Russia, his desire to do away with any impediment to our relationship.

But, also, if you take him at his words today, that he thinks Mike Flynn is a wonderful man and that he's been mistreated, that also suggests that he was acting appropriately, he was acting at least if not the direct wishes of the president, certainly aligned with what the president wanted to see happen.

So it wouldn't surprise me if he or others in the administration had Flynn do this. It would be exceptional for Flynn to be acting as a complete free or rogue agent, having those conversations, making these implicit suggestions that they would ease sanctions.

And, of course, the Russians appear to have acted on Flynn's suggestions. They didn't respond. They didn't retaliate, very out of character for Russia. And, of course, that begs the question, was this based on a deliberate policy coming out of the White House?

BLITZER: Are there transcripts or recordings, as far as you know and what you can share with us, of these conversations that Trump officials had with Russian officials during the course of the campaign?

SCHIFF: We're going to ask for these.

And I expect that we will be provided them. We're going to have to get the cooperation of the FBI if we're going to be able to do this investigation. But, also, members of the gang of eight are given period counterintelligence briefings when they involve U.S. persons.

And, obviously, this is a very important counterintelligence investigation that involved a very important U.S. person. So, I would fully expect, if there are transcripts, that Congress will get them.

BLITZER: When we say there were constant communications going on during the course of the campaign between Trump officials and Russian officials, do you have a sense of how often they were communicating? What does that mean, constant communication?

SCHIFF: I can't speak to anything in the investigation at this point. I can only comment on the public allegations.

So, certainly, if there were high-level contacts between top Trump surrogates with Russia at a time where Russia is hacking and dumping documents, at a time when candidate Trump is calling for Russia to hack Hillary Clinton's e-mail server and saying they will be rewarded by the press if they do, it would be surprising if you had top-level surrogates in conversation with the Russians if they weren't discussing this.

After all, their candidate was calling for this.

BLITZER: The transcript of the conversation that Michael Flynn had with the Russian ambassador in Washington that's caused this uproar, have you had access to that, because you're a member of what they call that gang of eight?

SCHIFF: I have not yet.

We are requesting this. And I fully expect that the gang of eight will have full access to this. We should in order to do our jobs. But I would like to see that shared with the intelligence communities.

Ultimately, I would like to see it shared with the American people. This administration misled the American people about those private conversations. The vice president of the United States went out, unknowingly, I think, but misled the American people. And I think that people have a right to see exactly what the truth is.

BLITZER: The whole notion -- we spoke earlier in the week, you also raised the possibility that in addition to the actual phone conversations that Flynn had with the Russian ambassador there may have been encrypted communications.

What can you tell us about that?

SCHIFF: Well, I don't know there were encrypted communications.

But we do know, if we can rely on it, Sean Spicer said that, in fact, in addition to the phone calls, General Flynn also texted the Russian ambassador.

We ought to look at all those communications, whether they're encrypted or not. Certainly, if there were any encrypted communications -- and, again, I don't know that there were -- but that would tell us something about his consciousness of wrongdoing.

After all, he's communicating with the Russians. He's not trying to conceal it from the Russians. So, the question is, who was he trying to conceal it with, if those platforms were used?

[18:30:05] BLITZER: Looking back before the election on November 8, should the FBI have disclosed to the American public that there were these contacts going on?

SCHIFF: Well, I think that the FBI should have disclosed. Indeed, the administration should have disclosed the Russian hacking earlier than they did. And as you recall, Senator Feinstein and I were pushing for that.

BLITZER: They did in early October. I think it was October 8. They did that. The election was a month later.

SCHIFF: Yes. They did -- I think it may have been the 7th.

BLITZER: Yes.

SCHIFF: In early October, they did make that disclosure. Whether she should have gone beyond that to disclose anything more, they probably wanted to make sure that they were on firm ground with whatever they shared with the American people. So every line of that statement was carefully parsed to make sure they could back it up. And I think that's the right call.

BLITZER: Should the FBI director, James Comey, though, have told the American people what was going on in these communications between Trump officials and Russian intelligence operatives?

SCHIFF: I think Director Comey should have joined that statement of attribution. After all, the FBI is one of the key agencies that makes attribution. So it was notable that he left his name off that. And I don't think we've ever had a satisfactory answer about why he did so. particularly when he was so willing to speak about the Clinton investigation.

BLITZER: One final question, the tweet that he did this morning, @RealDonaldTrump. This is the president of the United States: "Information is being illegally given to the failing 'New York Times' and 'Washington Post' by the intelligence community (NSA and FBI?)" -- question mark -- "just like Russia."

When you saw that, what was your reaction?

SCHIFF: Well, you know, it -- my reaction is he's picking another fight with the intelligence community. He doesn't enough problems with, I think the lack of confidence in the commander in chief at this point. So this is undoing any effort he mad, as ill-fated it was, when he visited the CIA.

But also that he would now compare with Russia, this country he has such adoration for, apparently, is an odd comparison to make. So a lot to unravel if that single tweet, but it probably says a lot more about this president than it does about any of the facts.

BLITZER: Better than comparing it to Nazi Germany, the intelligence community, which he did earlier.

SCHIFF: It's all relative.

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

SCHIFF: Thanks, Wolf.

BLITZER: More on the Trump campaign's contacts with Russia during the election year coming up. Also, a new setback for the president. His labor secretary drops out. What could it mean for other cabinet picks still fighting to win confirmation?

(COMMERCIAL BREAK)

[18:37:14] BLITZER: Tonight CNN has learned that Michael Flynn's access to classified information has been suspended pending a review of his contacts with Russia. This after his ouster as the national security adviser to the president.

President Trump now publicly praising the man he fired, blaming leaks by the intelligence community and the media for Flynn's downfall.

Let's bring in our political team. And David Chalian, what is it, because the other day Sean Spicer said he was fired because the president lost confidence, trust in him. Today the president said he blamed the news media, the intelligence community for doing this to this wonderful man.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Yes. I think we got real insight into the president's thinking on Flynn today in a way that we did not yesterday from Sean Spicer, who clearly was trying to clean up a problem for the administration, saying that he lost the trust, resignation asked for and accepted.

Today we learned this really wasn't a big problem for Donald Trump. He didn't think the Flynn thing was a huge problem. He thought the reporting of it, the exposure of it to the public became a political problem, but he clearly didn't think what he actually did by lying to the vice president was a problem.

BLITZER: David Swerdlick, he tweeted out this morning some mixed messages. He tweeted, quote, "The fake news media is going crazy with this -- with their conspiracy theories and blind hatred. MSNBC -- MSNBC and CNN are unwatchable. 'FOX & Friends' is great."

And hours later, he tweeted this. "The real scandal here is that classified information is illegally given out by," quote, "'intelligence' like candy. Very un-American."

Does he have a coherent strategy right now in dealing with this very, very sensitive issue?

DAVID SWERDLICK, ASSISTANT EDITOR, "THE WASHINGTON POST": I wouldn't call it coherent, Wolf. I'd say the through line for Trump is that he always, as he says, counterpunches. I, for one, am glad to be associated with two news organizations, CNN and the "Washington Post," that the president calls unwatchable, because to me that signals that we're kind of doing our job. Right?

In terms of the -- him saying that the leaks are illegal and a problem, I think it will be determined whether those are violations of the Espionage Act. But you can almost imagine, I think, other administrations, maybe not in these words, but pushing back on the idea of leakers. Obama, Clinton, Bush. Presidential -- White Houses don't like leaks.

BLITZER: The statements coming out of the White House, statements coming from the president seem to suggest he doesn't have a straight story, a consistent story, at least not yet.

REBECCA BERG, CNN POLITICAL ANALYST: Right, well, criticizing the media for Donald Trump is also muscle -- it's almost like muscle memory at this point for him. He just does it sort of reflexively, no matter what the situation is.

But it does seem like the administration is starting to push this idea of leaks being a problem. Actually, the intelligence community actively working to undermine this administration. Sean Spicer mentioned it in his briefing today, as well, in addition to the president's tweets on this.

[18:40:07] And we're actually starting to hear Republicans on Capitol Hill talk about this issue, which could show that this has some legs, politically and legislatively speaking. Senator Chuck Grassley mentioned this in a call with Iowa reporters today. Said he was very concerned and found it scary that the U.S. intelligence communities looks like they might be trying to undermine the government, undermine the president. So this is something that we're going to be hearing, I think, much more about from Republicans and the White House.

BLITZER: And it's a scary moment right now in U.S.-Russian relations. There's a Russian spy ship, what, 30 miles off the coast of Connecticut right now. The Russians fired a banned ballistic missile, in violation of a longstanding arms treaty with the United States. The assumption is they are testing this new American president.

CHALIAN: Well, I think there's no doubt about that. And you've heard this new American president speak about the Russian relationship. He has declared through the campaign, the transition and now that he wanted to take a different approach. He wanted to approach Putin with open arms, and he's not sure it will work, he says. But it may. And he wanted to try something very different.

So yes, Russia is testing us; and I think Donald Trump is trying to figure out how he can alter U.S.-Russia relations to his benefit.

BERG: But it's worth noting they were also testing the Obama administration in the waning days of the Obama administration. Buzzing our jets, all sorts of provocative actions toward the Obama administration. And as many Republicans pointed out at the time, Obama didn't take much action either to respond.

SWERDLICK: Russians buzzed one of our destroyers Friday in the Black Sea.

BLITZER: At the news conference with the Israeli prime minister, Benjamin Netanyahu, at the White House today, an Israeli journalist asked the president, the president of the United States, to talk about the recent rise in anti-Semitism, especially during the course of the campaign, a very significant issue. Listen to how the president responded to that question about increased anti-Semitism in the United States.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Since the election campaign and even after your victory, we've seen a sharp rise in anti-Semitic -- anti-Semitic incident across the United States. And I wonder what do you say to those among the Jewish community in the states and in Israel and maybe around the world who believe and feel that your administration is playing with xenophobia and maybe racist tones?

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: Well, I just want to say that we are, you know, very honored by the victory that we had, 306 Electoral College votes. We were not supposed to crack 220. You know that, right? There was no way to 221. But then they said there's no way to 270. And there's tremendous enthusiasm out there.

I will say that we are going to have peace in this country. We are going to stop crime in this country. We are going to do everything within our power to stop long-simmering racism and every other thing that's going on. A lot of bad things have been taking place over a long period of time. I think one of the reasons I won the election is we have a very, very divided nation. Very divided. And hopefully, I'll be able to do something about that.

(END VIDEO CLIP)

BLITZER: This should have been a pretty easy question for the president to answer about anti-Semitism. But you saw that whole statement about what happened in the election. He's getting a lot of heat for that.

SWERDLICK: Yes, as well he should. Look, the most charitable way to look at it is that maybe he was sort of filibustering until a more appropriate answer came to mind. A little later on, after the clip that you played, Wolf, he mentioned that his daughter and his son-in- law are Jewish. Still not a great response to a question about anti- Semitism, overt anti-Semitism in society. But it seemed like he was sort of fishing his way to an answer.

President Trump, I think, is comfortable with certain types of questions on certain types of issues. There are other types of issues where, both as a first-time politician and also as someone who has not found the right language, the right note on issues of identity and ethnicity, I think he really struggles with these questions.

CHALIAN: Wolf -- sorry -- I think you should listen carefully to the end of that clip that you just played, which is when he talked about what a divided nation we are. And he said that he thought that division was part of why he won the election. He says he wants to do something about it. We don't know what that is. We know he talked about it on election night, at his victory party, that he wanted to be the president for everyone and heal some of these divisions.

But if you think that the division in the country is one of the things that got you elected to the office, why -- what is the motivation to heal those divisions, if you see that as a part of your electoral success?

BLITZER: And the prime minister of Israel, Benjamin Netanyahu, later came to the president's strong defense and insisting he was not an enemy or opponent of the Jewish people or of Israel. It was a strong statement Netanyahu made.

Guys, stand by. Up next, a key Trump cabinet pick withdraws. So what sank his nomination? (COMMERCIAL BREAK)

[18:45:00] WOLF BLITZER, CNN ANCHOR: It was a strong statement that Netanyahu made. Guys, stand by.

Up next, a key Trump cabinet pick withdraws. So, what sacked his nomination?

(COMMERCIAL BREAK)

BLITZER: There's more developing news this hour.

President Trump's nominee for labor secretary has withdrawn.

Our senior congressional reporter, Manu Raju, is up on Capitol Hill for us.

Manu, the fast food CEO Andrew Puzder lost critical Republican support.

[18:50:03] Update us.

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Yes, that's right, Wolf.

Actually, earlier today and last night, top Republicans urged the White House to withdraw the Puzder nomination because of this dwindling support among Republicans. Four firm Republican nos, I am told, were likely to come out against Andrew Puzder. In addition, there were concerns that he could lose up to a dozen more Republicans if this nomination were to move forward.

Now, the reasons, there were a number of reasons his liabilities continued to pile up, from his views on immigration that were a little bit too moderate for some of the conservatives, but also some liabilities in the past. His failure to pay taxes on that -- on an undocumented immigrant that he hired as a household employee, as well as allegations of domestic abuse from a divorce some three decades ago.

Now, those allegations started to get some light here in the Senate, when senators reviewed a tape of his ex-wife who appeared on "The Oprah Winfrey Show" three decades ago in disguise, to discuss those domestic abuse allegations. We have that tape.

Here's what she said.

(BEGIN VIDEO CLIP)

LISA FIERSTEIN, ANDREW PUZDER'S EX-WIFE: The most frightening thing was leaving, because once I made that break and once I made it public, and remember my ex-husband was a public figure. Everyone knew him and knew what he was doing. And once I made that public, he vowed revenge. He said, I will see you in court. This will never be over. You will pay for this.

(END VIDEO CLIP)

RAJU: Now, it's important to note, Wolf, that Lisa Fierstein, his ex- wife, has withdrawn those domestic abuse allegations decades ago. And she actually sent a letter to the senators saying she regretted appearing on "The Oprah Winfrey Show," saying she wouldn't have done that if she were to do it again today, saying she only did it for a, quote, "free trip to Chicago."

So, those were efforts to try to quell the criticism, but still, there were a lot of things piling up that made Republicans at the end of the day decide it was too much to support the nominee -- Wolf.

BLITZER: Manu Raju up on the Hill -- thanks very much.

Coming up, a CNN exclusive: Inside North Korea. New details on the timing of a missile launch that's testing President Trump.

(COMMERCIAL BREAK)

[18:56:37] BLITZER: Right now, North Korea is celebrating its newest ballistic missile test, calling it a gift to the country's late leader, Kim Jong-Il. We're learning more about the timing of the launch and we have an exclusive report from CNN's Will Ripley, the only Western broadcast journalist reporting from inside North Korea.

We should note that Will is traveling with North Korean minders and must be careful about what he reports.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT (voice-over): North Korea has no religious holidays, but make no mistake, this is a time of worship.

On the 75th birthday week of late leader Kim Jong-Il, tens of thousands flocked to one of Pyongyang's most sacred sites. They come to honor two men whose legacies towers over every aspect of life in this highly militarized nation -- the men who led North Korea into the nuclear age.

A government source tells CNN, it's no coincidence that North Korean leader Kim Jong-un chose this week to test the latest weapon in his growing arsenal. A ballistic missile and newly developed mobile launcher. North Korea says it's capable of a nuclear surprise attack on key U.S. allies and military installations.

And it seems to play well with the people. We're very proud of our military achievements, says this retiree. Now we have nothing to be afraid of in the world. These men have lived under three decades of Kim family leadership. All their lives, their government has warned them, they're under the constant threat of invasion by what they call the hostile United States. They've seen North Korea's arsenal grow, along with its alienation from the outside world.

(on camera): Do you worry that these tests are isolating your country and leading to more economic hardship? (voice-over): "We've always lived under sanctions," he says. "We

were under sanctions yesterday and today. We're not worried."

(on camera): The North Korean weapons program began under the late leader Kim Il-Sung and Kim Jong-Il. But it has really accelerated under the current leader Kim Jong-un. Just in the last year alone, he has ordered two nuclear tests and launched more than 20 missiles and is promising more to come.

(voice-over): Everyone we meet on the streets of Pyongyang offers only praise for their leader's military-first policies.

"As long as we have our great marshal, Kim Jong-un, and we believe in him, we're not afraid of anything," says this city employee.

We're allowed to approach anyone we want, all give the same answer.

In this closed society, nearly all information comes from state- controlled media.

JOSEPH BERMUDEZ, 38 NORTH SENIOR ANALYST: This is the reason why you would sacrifice. This is why you don't have the highest quality of food. You have to work extra hours.

RIPLEY: Joseph Bermudez, senior analyst with 38 North, says missile launches and nuclear tests allow the young leader to project power and ensure survival.

BERMUDEZ: North Korea is in this for the long term.

RIPLEY: He says Kim's ultimate goal, to make it simply too dangerous for any foreign country to threaten his nation's existence.

Will Ripley, CNN, Pyongyang, North Korea.

(END VIDEOTAPE)

BLITZER: Will, thanks very much. That's it for me. Thanks for watching.

"ERIN BURNETT OUTFRONT" starts right now.