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WORLD RIGHT NOW WITH HALA GORANI

President Trump Doesn't Necessarily Support a Two-State Solution; Reports Indicate Constant Contact Between High-Level Trump Advisers and Russia Before Election; Secy. Mattis Talks NATO; Kim Jong-un's Half Brother Murdered in Malaysia; Trump Praises Flynn as Firestorm Grows; Lithuanian Defense Minister Speak on NATO, Russia; Stepping into the Ring with a Muay Thai Legend. Aired 3-4p ET

Aired February 15, 2017 - 15:00   ET

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


[15:00:00] HALA GORANI, CNN ANCHOR: Tonight, fresh confusion from the White House. Two decades of Mid-East foreign policy upended. President

Trump says he doesn't necessarily support a two-state solution.

Also, the constant contact between high-level Trump advisers and suspected Russian operatives before the US election, we are live in Washington and

Moscow with the latest details and denials.

Plus, South Korea is calling it murder. Malaysia has a female suspect in custody. The latest on the death of the North Korean leader's half-

brother.

Hello, everyone. I'm Hala Gorani. We're live at CNN London. Thanks for being with us this Wednesday. This is the WORLD RIGHT NOW.

We start with this tonight. New revelations about the Trump campaign's connections with Russia and more fallout from the story that continues to

dominate the headlines, the resignation of the president's top intelligence advisor.

Now, Donald Trump appeared with Israeli Prime Minister Benjamin Netanyahu at the White House, but many questions still centered on Russia after

reports, several of Mr. Trump's high-level advisors were in constant communication with Russians during the campaign. One of those advisers was

Michael Flynn. He was forced out after not being truthful about his contacts with Russia's US ambassador. Today, President Trump had this to

say.

(BEGIN VIDEO CLIP)

DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES: Gen. 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 action, criminal act, and has 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.

(END VIDEO CLIP)

GORANI: So, still referring there to the campaign. We have live reports on this story tonight from the United States and also live in Russia.

White House reporter Stephen Collinson is in Washington and senior international correspondent Matthew Chance joins us from Moscow.

Stephen, I want to start with you. Now, Donald Trump essentially forced Michael Flynn to resign. Today, he's saying he was treated unfairly and

treated very, very badly. So, if he thinks that about the way his national security advisor was treated, why did he fire him?

STEPHEN COLLINSON, SENIOR REPORTER, CNN POLITICS: That's right, Hara. It's a bit of a mystery. It appears that what Donald Trump did today was

undo all of the work of his spokesman yesterday. We were told yesterday that Donald Trump had started over a period of several weeks to lose trust

and confidence in Gen. Flynn as his national security adviser. But, today, Donald Trump came out and said he was a wonderful man and have been

unfairly treated. So, which version of the White House truth do we want to accept?

I think what this shows is there are still huge unanswered questions that Donald Trump basically dodged in his news conference. The White House gave

questions to two US reporters from conservative media who didn't ask about this massive story that's developing, but there are massive questions that

need to be answered by Donald Trump.

Did he, for example, tell Gen. Flynn to raise the issues of sanctions in his calls with Russia's ambassador to the United States? Did he order his

campaign aides to go and talk during the campaign to the Russian government? What were those conversations about? These are questions that

are causing an intense deal of discomfort on Capitol Hill and even Republican senators are now coming out and saying, Congress needs to

investigate this.

GORANI: Right. There are certainly questions that we have no answers to right now. And, Matthew Chance in Moscow, our senior international

correspondent there, what has been the reaction of the Kremlin? They've denied and denied that any contact or any inappropriate contact has taken

place or had taken place during the campaign between the Trump team and Russians.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: They've denied it again now as well on a conference call just this morning with the Kremlin.

The spokesperson for Vladimir Putin told reporters not to pay any attention effectively to these reports, saying it's very difficult nowadays to

distinguish between fake news and real news, so repeating the phrase that has been used by Donald Trump so many times.

[15:05:15] The Russian media also is playing from the same song sheets as it were when it comes to the Russian reaction on this, basically saying

that the resignation of Michael Flynn, the constant flow of leaks that have been coming out of Washington are designed for one or two things.

First of all, of course, to undermine Donald Trump's presidency, but mainly from a Russian point of view, to prevent Donald Trump from achieving what

he said he would do in terms of United States' relationship with Russia. He wanted to thaw that relationship.

From the Russian point of view, both officials and the media, they're saying that all of these leaks are effectively being synchronized to make

sure that that thaw is not going to happen. There's vested interest in the United States, the Democrats, the Republicans, who are critics of Trump,

that do not want to see a thaw in the relationship with Russia, and that's how Russia is casting this, essentially a way of whipping up hysteria

against Russia.

GORANI: But, essentially, Stephen, the leaks are happening. It's undeniable. I mean, obviously, career bureaucrats in Washington

potentially not super-thrilled with the Trump administration. Why are there so many leaks in this story about the Flynn phone call, about the

fact the FBI spoke with Mike Flynn as well, and other things including, for instance, the contacts between the Trump administration or the Trump

campaign and Russians during the campaign?

COLLINSON: I think one of the reasons, Hala, is this is such a sensational story, the thought that a presidential candidate and his campaign was

constantly in touch with Moscow which many people here view as the sworn US enemy during a campaign in which Russia appears to have interfered in the

election to benefit Trump. I mean, that is a sensational and unusual story. That's one of the reasons this is coming out. But you're right,

there is a lot of discomfort with Donald Trump, shall we say, in the sort of career bureaucracy in agencies like the FBI and the CIA.

We saw Donald Trump - he may be getting a little bit of payback now. We saw Donald Trump in his transition be highly critical of the CIA. He said

that some of the leaks that were coming out were tantamount to the atmosphere in Nazi Germany. And it's often said in Washington that you

don't want to get on the wrong side of the spooks, the spy community because you'll pay for it. So, that's, I think, one of the reason this

stuff is coming out.

But another reason is Donald Trump is not answering any of these questions, so this story continues to grow, the cloud of suspicion around the White

House keeps growing, and it's really dominating almost all of his administration.

And it's remarkable, three a half weeks into an administration, this is happening. This is not some administration that has been in office for

years and has been sort of clouded by scandal over that time. It's a very, very strange and unusual moment, I think, in American politics and in

Washington.

GORANI: Stephen Collinson, thanks very much. Matthew Chance as well, live in Moscow. Thanks to both of you. Mr. Trump also making use today for

dialing back Washington's long-standing commitment to Palestinian statehood. He did ask Israel's prime minister to hold back on settlement

construction in the West Bank. But when asked if he's ready to give up on the two-state solution and would consider different ideas, including

annexation - essentially a one state solution - here's what Donald Trump said.

(BEGIN VIDEO CLIP)

TRUMP: So, 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. I thought for a while that two-state looked like it may be the easier of the two, but honestly if Bibi and if the

Palestinians - if Israel and the Palestinians are happy, I'm happy with the one they like the best.

(END VIDEO CLIP)

GORANI: Well, let's bring in Oren Liebermann in Jerusalem for more. So, the two-state solution, this notion, I mean, it's been in UN resolutions

since the 70s. It was embraced by Arab countries since the 80s. It's been standard US foreign policy for decades and decades. And in one statement

at that joint news conference, before the two men even met, Trump says this. Do you think this was a surprise to Benjamin Netanyahu?

OREN LIEBERMANN, CNN CORRESPONDENT: Not really. I think he's had good coordination with President Donald Trump and he certainly heard the

statement about the new Trump administration not "insisting on a two-state solution."

Trump's statement was essentially non-committal. He said he'll take whatever both sides are happy with. Well, there's no question what the

Palestinians are happy with. They're calling on a two-state solution, Israeli state next to a Palestinian state. They say that's the only

option.

[15:10:06] It's not just the Palestinians, as you pointed out. It's the Arab world, it's virtually the international consensus that a two-state

solution is the only way forward. Here, not after this press conference, but after yesterday's - senior White House officials saying that the White

House doesn't insist on a two-state solution. Here's what PLO executive committee member Hanan Ashrawi said. She said, "if US president Donald

Trump is trying to create alternative realities, then he should spell out what the options are. A one-state solution would require equal rights and

citizenship for all unless he's advocating an apartheid state."

Now, notably, when the same question - essentially the same question was posed to Prime Minister Benjamin Netanyahu, do you still support a two-

state solution as he committed to in his Bar Ilan speech where he set forward his vision for an Israeli state and a Palestinian state. He dodged

the question. He said he's not concerned with the, "label of a two-state solution," but he wants to talk about the substance. He refused to commit

once again to a two-state solution, completely backing away.

Well, that was a cause for celebration among Israel's right wing who are absolutely celebrating this press conference between Trump and Netanyahu.

The far-right Ministry of Education said, after 24 years, the Palestinian flag has been taken down and replaced with an Israeli flag. Other members

of Netanyahu government have said, the era of a Palestinian state is over.

So, no firm statements here, but that very much seems the direction that Netanyahu is moving.

GORANI: It's just going to be interesting. I mean, you still have the Palestinians. Whether it's one state or two state, you still have to find

a solution eventually. One of the issues with the two states is you have settlement building on land that - those who support this two-state

solution, especially in the international committee, believes should be Palestinian land.

Now, Donald Trump did have this to say to Benjamin Netanyahu about settlements today at the White House. Let's listen.

(BEGIN VIDEO CLIP)

TRUMP: I'd like to see you hold back on settlements for a little bit. We'll work something out, but I would like to see a deal be made. I think

a deal will be made 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, PRIME MINISTER OF ISRAEL: That's smart.

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

NETANYAHU: That's the art of the deal.

(END VIDEO CLIP)

GORANI: It was a bit uncomfortable there toward the end with the sort of Benjamin Netanyahu laughing and calling it the art of the deal. Now,

obviously, previous presidents have said that settlement building isn't helpful in the West Bank. In this particular case, what could the reaction

be, do you think?

LIEBERMANN: Well, I think there'll be a furious reaction from Palestinians who haven't put out an official response yet as to what would happen here

and the fact that Netanyahu - I'm sorry, Trump essentially said settlements aren't helpful, but certainly didn't condemn them in the language we've

heard from the international community and from previous US administrations. It also doesn't sound like Trump will really levy any

punishment against Netanyahu if he continues settlement construction.

Let's remember, in the first weeks of the Trump administration, he's approved 6,500 new settlement homes. That's an astounding number. We

haven't seen numbers like that in years.

Now, they did both reference essentially a regional solution, something that involves the moderate Arab states in the region, but it's difficult to

believe that they would be on board if there is no Palestinian state as part of this regional solution.

There has been some talk that Trump and Netanyahu could reach an agreement on the settlement blocks. Those are areas in the West Bank that are

largely concentrated Israeli settlements with very few, if any, Palestinian villages. That could be an option for these two, but without the details,

without more conversations and learning more about what these two talk about, it's difficult to say what, if any, agreement they'll come to on

settlements and on so many other issues.

GORANI: And we know that he's going to task his son-in-law, Jared Kushner, to try to come up with a solution. In fact, he was sitting in the front

row today at this news conference. Thanks very much, Oren Liebermann, as always, live in Jerusalem.

Well, Mr. Trump is trying to carry on as if it's business as usual, but there's no denying the extraordinary upheaval in his administration. Let's

bring in CNN political commentator David Swerdlick. He's an editor at "The Washington Post."

Three-and-a-half weeks in, David, and here we are. We're talking about the resignation of the national security advisor for a phone call he had with

the US - with the, I should say, Russian ambassador where he discussed sanctions.

We also have the reporting that there was constant communication between the Trump campaign and Russians during the race and now we're hearing from

Donald Trump about this two-state solution that perhaps he's not 100 percent wedded to, which is upending decades of American foreign policy

positions.

Let's first start with the Russian connection. How damaging is it to the Trump administration?

[15:15:00] DAVID SWERDLICK, CNN POLITICAL COMMENTATOR: Hala, I think it's very damaging. Throughout the campaign, throughout the transition and now,

President Trump and President Trump's team have allowed themselves to appear very, very soft on Russia.

What the reason behind that is, I think, we're still finding out, but because of that, all of these stories that have been reported out by my

colleagues at "The Post," at "The New York Times," at CNN et cetera have fed into a narrative that President Trump has not approached Russia the

same as he approaches other countries, both adversaries and allies.

The idea that he has said that President Obama was soft on Russia, that President Obama had some kind of problem dealing with Putin, and yet in the

last three days we've seen Russian planes overfly a US destroyer in the Black Sea, that Russians - although they deny it - may have launched a

ballistic missile that that there's a Russian spy ship off the East Coast of the United States and there's been no response from the Trump

administration, and yet the national security advisor Gen. Flynn resigned over contacts with Russia has really just set the entire situation into

upheaval and chaos, as you said.

GORANI: But now, there is a question out there, Donald Trump today asked about Flynn, said he was treated very badly, treated very unfairly, and

this is the day after it was said he was forced to resign over the content of the phone call that he had with the Russian ambassador a few months ago

before Donald Trump's inauguration. So, if he thinks that about him, why didn't he keep him onboard?

SWERDLICK: Exactly, Hala. If Gen. Flynn was treated unfairly, President Trump, he is the commander-in-chief, he's the head of the government, he

could have kept Flynn on if he wanted to. The White House could have even - would have been an extraordinary step, but they could've even clarified,

made public exactly what was said in transcripts of conversations between Gen. Flynn and the Russian ambassador to the United States. That would've

been a highly unusual move, but they did have that option and they didn't.

I think it's fair for President Trump to come at the leakers. You would have expected a similar response from the Obama administration or the Bush

or the Clinton administration, right, this idea that leakers are inside. But I don't think it's fair when Trump goes on in that clip that you played

at the top of your hour to say that this is all part of the Democrats' sour grapes of the election. We are three months out from that and everyone has

acknowledged that President Trump was rightfully sworn in as president of the United States. This is about national security.

GORANI: Then also, the question is will we get to the bottom of this, right, because it's growing because we don't really - we're not getting new

details about what was said? And then there is the reporting - CNN's reporting about the communication between Trump operatives during the

campaign and Russians as well. We're not exactly sure maybe what was said there as well. Will there be an investigation, after all the Republicans

do control both houses of Congress? So, will we get to the bottom of this?

SWERDLICK: I do think there will be an investigation, Hala. My colleagues earlier today reported that Sen. Mitch McConnell, the Senate Majority

Leader, has indicated that the Senate will have hearings. Two senators, one Democrat and one Republican, on the Senate Intelligence Committee, Sen.

Richard Burr from North Carolina, a Republican, who's sort of a Republicans' Republican, and Sen. Mark Warner, a relatively moderate or

conservative Democrat from Virginia, have said that they believe that it is appropriate to move forward with hearings that take a broader view of the

interaction between the Trump circle and the Russian government as well as the particulars of Gen. Flynn's conversations.

Again, I think this is a situation where because of this narrative that has built up around Trump and Russia and Trump and Putin - President Putin, I

do think that you have members of Congress on Capitol Hill feeling like they have to look into this a little bit further.

GORANI: And a quick question there on what Donald Trump said about the two-state solution. I mean, it is such a departure from what we've heard

from many, many presidents before him. Was this planned? I mean, did he - does the White House have a Mid-East policy if he says on the one hand

this, on the other hand that, we'll see?

SWERDLICK: Hala, I don't know if it's planned, but I'm going to go out there and say, look, this sounds - when I hear what President Trump said at

the joint press conference today, it sounds to me like someone who doesn't have a deep familiarity with the issue.

Look, I think there's some overstatement at times about President Trump's lack of government experience, but in this case the answer that he gave

just does not reflect someone who has thought deeply about Israel-Palestine relations, number one.

And number two, when you say on the one hand that you are OK either way with a one state or two-state solution, but then in that same press

conference say that, yes, you want to encourage Israel to ease up on settlements in the West Bank, those two statements don't really seem to go

hand-in-hand.

[15:20:01] So, whether or not it was planned, I don't know, but I do think that President Trump and his administration need to get their hands around

how they're going to approach the Israel/Palestinian issue. This is not a new thing. This is something that's been going on for years, as you know,

as your viewers know, and they have to play catch-up, not the other way around.

GORANI: David Swerdlick of "The Washington Post," thanks very much for joining us. Appreciate talking to this evening.

Lot more to come. The US defense secretary is in Europe meeting his NATO counterparts and he came with a warning. Hear what he had to say to his

NATO partners.

Plus, major developments. In a brazen killing, the latest on the sudden death of the North Korean leader's half-brother. A suspect is in custody.

(COMMERCIAL BREAK)

GORANI: An ocean away from the political drama in Washington, the new American defense secretary is trying to reassure America's NATO allies.

President Trump's comments on the military alliance have gone back and forth, but speaking with his fellow defense ministers in Brussels, James

Mattis described NATO as a bedrock of US policy.

(BEGIN VIDEO CLIP)

JAMES MATTIS, SECRETARY OF DEFENSE OF THE UNITED STATES: The alliance remains a fundamental bedrock for the United States and for all the trans-

Atlantic community bonded as we are together. As President Trump has stated, he has strong support for NATO.

(END VIDEO CLIP)

GORANI: But it wasn't all smooth sailing. Mattis also came with a warning. He told his counterparts that the US could "moderate its

commitment to the alliance if other NATO nations didn't increase their defense spending."

Let's go live to Brussels. CNN's Erin McLaughlin is there. Now, moderating commitment, what exactly does that mean? Is it a threat?

ERIN MCLAUGHLIN, CNN INTERNATIONAL CORRESPONDENT: It's a very good question, Hala. Secretary Mattis made those remarks behind closed doors.

A read out of the remarks was provided to the press. He didn't seem to elaborate on what he meant by moderate. It didn't seem to be a sort of

overt ultimatum, and it was very clear though that he got his message across that NATO allies need to be spending more.

He used some emotive language as well saying, "No longer can the American taxpayer carry a disproportionate share of the defense of Western values.

Americans cannot care more for your children's security than you do."

Now, this really comes down to a pledge that was made by NATO allies in 2014. NATO allies pledging to spend some 2% of their GDP on defense

spending. Only five of the 28 NATO allies currently meeting that threshold. The Americans want that to change.

In the closing remarks, Secretary Mattis saying that he was going to lay out a plan that he would expect the allies to approve this year that would

include markers for the non-compliant NATO allies to meet that threshold.

[15:25:10] The plan seemed to be broadly supported by the NATO Secretary General as well as other defense ministers at NATO today. However, it must

be said, spending 2% on defense is easier said than done. Some saying, there are certain political situations in these allies that might prevent

them from agreeing to do that.

Also, for example, in the case of Germany, spending 2% of your budget on defense would amount to billions of dollars in spending and it's difficult

to do that in a quick manner. But what Secretary Mattis seems to be saying, enough of the excuses. He's pointing to the changing political

landscape in the United States, saying that NATO allies simply need to be doing more. Hala?

GORANI: All right. Erin McLaughlin, thanks very much. We'll have more on this NATO meeting later in the show.

Lithuania's defense minister joined me today for more about his country's neighbor, Russia. There are some jitters there in that part of the world

about what Russia might have planned. That's coming up in about 20 minutes.

A half-brother of a notorious dictator, a brazen murder carried out in a busy airport terminal. It sounds like a far-fetched movie plot, but

officials now say that is exactly what happened to the half-brother of North Korean leader Kim Jong-un. And while one woman is in custody, there

are many questions yet to be answered.

Saima Mohsin has our story from Kuala Lumpur.

(BEGIN VIDEOTAPE)

SAIMA MOHSIN, CNN INTERNATIONAL CORRESPONDENT (voice-over): A mysterious murder right out of the pages of an old-school spy novel. The target Kim

Jong-nam, half-brother of North Korea's notorious dictator, Kim Jong-un.

It's here at Kuala Lumpur International Airport's Terminal 2 where Kim Jong-nam is believed to have been due to board a plane to Macau when, in a

bold attack in full public view, he was murdered by poison. That's according to South Korean intelligence officials who also say the primary

suspects were two Asian women caught on CCTV fleeing by taxis.

KIM BYUNG-KEE, SOUTH KOREA INTELLIGENCE COMMITTEE (via translator): Malaysian investigation authorities are tracking them down and it looks

like they have not escaped the country yet.

MOHSIN (voice-over): One airport official told me the airport has thousands of CCTV cameras, footage that Malaysia police say was key to the

arrest of a 28-year-old female suspect at the airport holding Vietnamese travel documents. They gave no further details on the arrest, and so far

authorities have said little about the attack itself.

An official told CNN, after the alleged attack, Kim was taken to this medical center where staff was willing to disclose further information to

me. Kim was then sent to the nearest hospital. He died en route.

The South Korean intelligence official says Kim was headed home to the Chinese territory of Macau where he's lived on and off with his family for

the past decade. A gambling hub, he was spotted dining at one of the city's ritzy hotels just over a week ago.

Once tipped by North Korea watchers as a possible future leader, Kim reportedly fell out with his father, Kim Jong-il, after getting caught

using a forged visa to try to visit Tokyo Disneyland in 2001. He told a Japanese journalist he'd never met his half-brother and didn't think he

would succeed as North Korea's leader.

KIM JONG-NAM, HALF BROTHER OF KIM JONG-UN (via translator): Personally, I oppose the hereditary succession for three generations.

MOHSIN (voice-over): Outside the morgue in Kuala Lumpur, a car with a North Korean flag and diplomatic plate has been parked all day as

investigators wait for details of an autopsy.

Saima Mohsin, CNN, Kuala Lumpur, Malaysia.

(END VIDEOTAPE)

GORANI: Well, inside North Korea, a government source tells CNN the country's recent missile launch was "a birthday gift" for former leader Kim

Jong-il. The land-based missile flew further than any previous North Korean test. The launch is one of the first international challenges for

Donald Trump.

CNN's reporter inside North Korea hit the streets of Pyongyang accompanied by a government minder as always to ask citizens what they thought of

Donald Trump. Listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (via translator): We have no illusion about President Trump. We don't care who is in power, but we will try to take the course

of self-development.

UNIDENTIFIED MALE (via translator): I don't think we expect big things from the new Trump administration. We know that every single

administration previously worked constantly against the DPRK.

(END VIDEO CLIP)

GORANI: Well, still ahead on the WORLD RIGHT NOW, how the fallout over Michael Flynn's ouster could impact US foreign policy in Russia. And we'll

also talk about what Donald Trump said about settlements. Aaron David Miller is my guest next.

[15:30:00] Stay with us.

(COMMERCIAL BREAK)

GORANI: Welcome back. Some remarkable statements by President Trump dialing back Washington's commitment to Palestinian statehood. At a

conference with the Israeli Prime Minister Netanyahu, he said he would be happy with either a one or a two-state solution.

America's Defense Secretary is in Brussels reaffirming his country's support for NATO, but James Mattis had a warning, saying the U.S. would,

quote, moderate its commitment if other nations fail to contribute their fair share.

And he may not be a household name internationally, but not good news for Secretary Trump's -- I should say, President Trump's pick for Labor

Secretary. The hearing for the Labor Secretary pick may be cancelled as sources describe Andrew Puzder's nomination as beyond repair. He's the

owner of two fast food restaurant chains, and he faces increasing opposition.

A source close to Puzder now tells CNN, he has cancelled his preparations for the hearings. So it's not looking good for that hearing in terms of it

going ahead.

U.S. President Donald Trump is praising his former national security adviser, calling Michael Flynn a wonderful man who's been treated very

unfairly by the media. This, despite the fact that Mr. Trump himself demanded Flynn's resignation. The President clearly wants to move in, but

the firestorm over Flynn isn't over yet.

Let's look more closely at the political fallout for the President and how it could take shape. CNN Senior Political Analyst David Gergen joins me

now from the Harvard Kennedy School in Boston. He has advised a number of presidents, including Bill Clinton, Ronald Reagan, and Richard Nixon.

David, thanks for being with us. How serious is this issue for the Trump administration? This issue with Flynn's phone calls with the Russian

ambassador, the connection, or the contacts between the Trump campaign and Russians during the presidential race, how serious is it for the

administration?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: It's extremely serious, extremely serious for the administration and serious for the country. I

wouldn't say, as some do, that the President is in crisis. I wouldn't call this another Watergate.

I was in the White House during Watergate and there are some parallels, but this is not as serious as Watergate. But there is an awful lot of smoke.

We don't know how much fire there is.

And underneath all of this, investigations may find things that are scandalous. We don't know all the facts. And we have a White House that,

to put it charitably, is casual with the truth. So that we don't know from one day to the next whether they're telling us the truth or whether they've

got some exaggerated sense of the truth or whether they're just blatantly lying to us. And it's hard to get to the bottom of this.

[15:35:13] We know that Washington is gripped with this. Increasingly, the country is gripped with it.

Because if you're conspiring with the Russians during a campaign, and the reporting now is very solid -- CNN as well as "The New York Times" and "The

Washington Post" -- that members of the Trump team had repeated contacts with Russian officials during the campaign, with allegations floating

around -- they have been for some time -- that the Russians were trying to throw the election of Donald Trump, that's pretty serious business.

And it goes to the heart of what a democracy is about and whether a foreign country is, and the country Russia, interfering with an American election,

with the outcome of that election, we need to know the answers to that. And that's what Washington is gripped with now, how are we going to get the

answers?

GORANI: Right. And that's the question. Because Democrats, of course, want an investigation. Even some Republicans say this needs to be looked

into. Will we get the answers?

GERGEN: I'm not sure. You know, for a long time, we thought we would know what was in Donald Trump's tax returns. We still don't. He's refused to

release them, unlike any presidential candidate in the last 40 years. There is much there we might learn, potentially, about financial

relationships with the Russians, but they're hidden away.

I do think they're going to be open congressional hearings, and I do think that some people would be put under oath. And it's more likely, when

somebody is under oath and they could go to jail if they lie, it's more likely we'll get the truth.

But, you know, there's such a thing in the United States called executive privilege. And that is a White House aide, if the President invokes

executive privilege, doesn't have to testify before Congress about what happened in the White House. So we don't know where this is all going.

But I can tell you, it's not stopping here. The Israeli story today, for example, is an important story. You know, the President is saying, well,

you know, for the first time in my memory, American president is backing away from a two-state solution to the Israeli-Palestinian story.

So that's a big story, but it's not a diversion. And I think the country is fixated now on, what the hell happened here? When you lose your

national security adviser in, essentially, 24 days, and he's been talking to the Russians and he resigns over that, there's something serious going

on. We got a lot of smoke. How big is the fire?

GORANI: You have so much experience in many White Houses over decades. I mean, some people have described what's going on with the Trump

administration as chaotic. Would you use that adjective?

GERGEN: I think that every new administration, to be fair, is inexperienced and stumbles early on. And sometimes, stumbles can be

important.

John F. Kennedy, in his first 100 days, had the Bay of Pigs, which didn't really rock his administration. And other presidents have had troubles.

But this extends far beyond anything I've seen before in the last 45 years. You know, I --

GORANI: In what way?

GERGEN: -- first went into the White House back in 1971. Well, it's much more chaotic. It is run by a team of people who are extremely

inexperienced in government, but they're also great tensions and power centers competing with each other.

So the last two days, you know, one major person at the White House has announced X is the truth. And now, somebody else said, no, it was Y. And

that's happened two days in a row.

GORANI: Yes.

GERGEN: So you don't know --

GORANI: But it's happening --

GERGEN: They're clearly --

GORANI: -- from the President's --

GERGEN: They don't have their act together.

GORANI: -- own mouth -- from the President's own mouth. I mean --

GERGEN: I mean, you got what's coming was coming out of the President's own --

GORANI: -- on just one day --

GERGEN: Well --

GORANI: I was going to say, one day, he forces the resignation of his national security adviser. And the next day, he says he's a great man

who's been treated very unfairly. So it's quite confusing, then why did you dismiss him if you think he's a great man?

GERGEN: Totally correct.

GORANI: I mean, those types of things confuse many people. Yes.

GERGEN: I agree. But they've been shedding crocodile tears over the fact that General Flynn lied to their Vice President, you know.

And what a terrible thing to do to your Vice President? He has to go. Flynn has to go. And yet, this same White House knew for two weeks that

Pence had been lied to and never told him. You know, they kept him out of the loop intentionally for two weeks.

GORANI: Yes.

GERGEN: And only when it surfaced, you know, by something in the newspapers did they have to come clean to him. So the back and forth, you

know, on this is very confusing to people. You know, he does have a strong base -- you have to say that -- and they're sticking with him.

And the only other thing I think is the upside, the silver lining to the whole Flynn episode, is that the United States is likely to get a new

national security adviser who will be better respected, better anchored. You know, that's more trustworthy, not playing footsie with the Russians,

doesn't have all these conspiracy theories.

[15:40:01] In other words, I think we will have, in the national security team now, a third person. We have two heavy weights already at Defense and

at State. If we get a third one in there, I think the world will, over time, breathe more easily.

But in the meantime, getting to the bottom of this, you know, this whole set of episodes around Flynn, around the Russian contacts during the

campaign with the Trump team, is really important and really serious.

GORANI: All right. David Gergen, as always, a pleasure. Thanks for joining us.

GERGEN: Thanks.

GORANI: And you can check out our Facebook page, facebook.com/halagoranicnn. We'll be right back. Stay with us.

(COMMERCIAL BREAK)

GORANI: All right. Let's talk more about what Donald Trump, the U.S. President, said about the two-state solution. In fact, he said that

whether it's a one-state or a two-state solution, he doesn't really care which one. He only likes the one that is supported by both parties.

Let's go to Aaron David Miller. He's our CNN global affairs analyst. He's also the president for New Initiatives and a distinguished scholar at the

Woodrow Wilson International Center.

What did you make, Aaron, I mean, after decades of observing, of being involved directly in these negotiations, and then a U.S. President says,

eh, one, two-state, doesn't really matter, whatever works?

AARON DAVID MILLER, VICE PRESIDENT FOR NEW INITIATIVES, WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS: I mean, they're caught, I think,

between the desire to break conventions and be radically different than anything the Obama administration does on one hand, and the notion that

campaigning isn't governing, which tends to pull them back towards the center.

So at the same time, you have the President of the United States describing options for the Israeli-Palestinian conflict, you know, as if you're

ordering off of a Chinese menu, option one or option two. You also have that little nudge or push back on the issue of Israeli settlement activity

as well.

So they're caught, I think, without much of an awareness of what direction to take. Now, we know, the Prime Minister said it, that we ought to

explore, quote/unquote, "new avenues," talked about the Arab states.

The President validated that. So it's clear they're going to try to involve the Arab states as cover, basically, to try to do some kind of

Israeli-Palestinian deal. That's going a highly fraught challenge, I'm afraid.

GORANI: And he talked a lot about it in terms of deals. I mean, it sounded a little bit like a business negotiation. We're going to do good

deal. We're going to make, you know, a great deal, better than anyone perhaps even thinks that we can.

And ultimately, nobody has really succeeded. I mean, the closest were sort of 1993 with Bill Clinton. There we had some sort of solution that we felt

was going to lead to a situation that would lead to a peaceful two-state situation. That didn't work, though.

MILLER: No --

[15:45:00] GORANI: So perhaps we do need a fresh approach.

MILLER: Well, I think a fresh approach is fine as long as you understand, at the core is the reality that you've got to look at -- look, this is a

conflict. It's not a morality play that pits the forces of goodness on one hand against the forces of darkness on the other. Although, that's way

some Israelis and some Palestinians see it.

You've got to at least address the basic needs and requirements of each side. I would argue, Hala, the two-state solution is probably the least

bad outcome. And right now, there's absolutely no way that either Benjamin Netanyahu or Mahmoud Abbas or key Arab states, or the United States for

that matter, are willing to make the kinds of decisions to help create a serious negotiation to produce that.

So, yes, look at new approaches, but keep in mind certain realities that need to be addressed. A one-state solution is a catastrophe. You've got

to figure out a way to separate, I would argue, through negotiations, and create sovereignty on the Palestinian side that doesn't threaten Israeli

security.

Now, is that possible? That requires leadership. And I'm telling you, you know, I look at Washington, I look at Jerusalem, I look at Ramallah. I'm

sorry, I just don't see the kinds of leaders required to make those decisions.

GORANI: All right. By the way, I just want to update our viewers, we're getting an urgent here that Michael Flynn, the former national security

adviser, his security clearance has been suspended pending review.

That's what the Defense Intelligence Agency spokesperson has told CNN just a few minutes ago, and that this is considered a normal administrative

step. But this is really the latest chapter in a scandal here, 3 1/2 weeks into Trump administration. What do you make of it?

MILLER: What I make of it is that the NSC is clearly not ready for prime time, and it's going require an enormous amount of investigation. FBI,

with help from the national security agency and, probably, from Congress, to put together the tick tock on what actually happened.

The practical manifestations are clear. You have an NSC that's not ready for prime time in the event we really were drawn into a crisis. And you

have a major diversion and distraction, which cuts to the core of the competency and clarity of thinking of the administration.

And every administration goes through this to some degree. But I'll tell you, I worked for R's and D's. I voted for R's and D's. I've never seen

anything quite like this.

For the good of the country, I hope it settles down, so that every time there's a CNN breaking news alert, you know, it doesn't create a sense of

panic that the country is falling apart.

GORANI: Yes.

MILLER: But it's a wild roller coaster ride. And for the good of the republic, they really have to level it out.

GORANI: Yes. It's interesting for journalists being in breaking news mode every hour of every single day of the week. Aaron David Miller --

MILLER: I've never seen anything like it. Never seen anything like it, Hala.

GORANI: That is very true. Aaron David Miller, as always, a pleasure. Thanks for being with us.

MILLER: Thank you.

GORANI: Let's get back to a story we brought you earlier, that NATO meeting in Brussels topping the agenda concern about Russia. And one small

country pushing for a tough stance is Lithuania, the Baltic state that borders Russia and used to be part of the Soviet Union, reluctantly.

I spoke to the country's Defense Minister, Raimundas Karoblis. I began by asking him how much the military situation and the war games that Russia is

mounting on its border are concerning Lithuanians. Listen.

(BEGIN VIDEOTAPE)

RAIMUNDAS KAROBLIS, MINISTER OF NATIONAL DEFENSE, REPUBLIC OF LITHUANIA: We believe in NATO, and we think that this guarantees these commitments

will be implemented. Yes, securitization is quite tense, and we have some kind of uncertainty, but we, Lithuania, has never had such number of allies

and such number of guarantees as we have.

And on addition to that, of course, we are still preparing ourselves. We're increasing our military capabilities, defense capabilities, so

modernization of our own forces, et cetera. So we're also preparing for defense ourselves.

GORANI: As much as you prepare yourself, can you defend yourself against Russia?

KAROBLIS: Yes. Well, of course, we will defend ourselves as necessary, but we very much understand that we will have the help also from our

allies, these troops which are already on the ground. So Americans intels to enhance our presence (ph). Germans, Belgians soldiers, they are saying

that they are not only for deterrence here but also for defense.

If it's necessary, they are also declaring that they are prepared to fight. But we very much expect that it will not happen.

[15:50:01] GORANI: Russia has deployed, for instance, cruise missiles. Some in the America are saying this goes against the Cold War era treaty.

Do you know where these missile batteries have been deployed, and do you believe they threaten your country?

KAROBLIS: Yes, they could threaten. And in case of full-fledged conflict, yes, it could be really, really dangerous in this situation. Yes, Russians

are increasing their capabilities in the Kaliningrad enclave, but also in big Russia.

But, yes, immediate threat would be in the situation if we do not have boots on the ground, so if we do not have allies in the Baltic countries.

Now, we have allies.

GORANI: Some people would look at this situation and say, is that increase in NATO troop presence perhaps heightening tensions rather than cooling the

situation?

KAROBLIS: I would not agree. With the U.S., many times already, we are speaking about that. Compare the number of increase of troops by Russia on

the borders and the Kaliningrad and in Baltics and Poland, these figures are absolutely incomparable.

It's very clear that, from NATO, it is a deterrent and the possible defense. From Russian side, yes, some threats for offense. And that's

basically --

GORANI: You actually happen to agree with Donald Trump on NATO spending, that members should spend 2 percent of their GDP. Your country is about to

hit that on defense spending.

What if a country doesn't pay its 2 percent then? There was some suggestion during the campaign from Donald Trump that maybe they shouldn't

be protected by other NATO allies. Do you agree with that?

KAROBLIS: Well, those countries, first of all, which have the major risk from the security point or the military point of view, they already are

moving fast. And it's one of today's proposal of Mr. Mattis was, maybe one of the solutions is that NATO member states would have the action plan and

time tables how to reach this target. And from that, we could have a discussion that maybe it's the way how to reach this goal.

(END VIDEOTAPE)

GORANI: The Defense Minister of Lithuania.

Some news just in to CNN, Donald Trump's choice for Labor Secretary said he does not want to proceed with the nomination. Andrew Puzder was supposed

to have a confirmation hearing tomorrow. Now, sources say he doesn't want to go forward if there's no viable path to confirmation, he says. He's

faced major opposition from Democrats, in part, over his labor policies.

We'll be right back.

(COMMERCIAL BREAK)

GORANI: We'll have more of our top news in a moment, but here, something else. Muay Thai. You may know that it's an ancient sport that,

apparently, has a very bright future on track to becoming an Olympic event one day.

With that, here's CNN's Saima Mohsin.

(BEGIN VIDEOTAPE)

SAIMA MOHSIN, CNN CORRESPONDENT (voice-over): It's an ancient sport. Both brutal and beautiful in its traditions.

Muay Thai is known as the art of eight limbs. Fighters use their entire bodies to win the ring.

MANACHAI YOKKAO SAENCHAI GYM (through translator): Sawasdee krap, I am Manachai Yokkao Saenchai Gym.

SINGDAM KIATMOO9 (through translator): Sawasdee krap, I am Singdam Kiatmoo9.

[15:55:05] SAENCHAI PK SAENCHAI MUAYTHAIGYM (through translator): Sawasdee krap, I am Saenchai PK Saenchai MuayThaiGym. I have been fighting for over

20 years. My signature move, which is well known around the world is, "Mah Deed Ka Lok."

MOHSIN (voice-over): Fans of the sport consider Saenchai a living legend. Claiming close to 300 career wins, including titles in six different weight

classes.

For the last year, Saenchai has been teaching at this gym in central Bangkok. People travel from around the world for a private session. It

costs $225 for an hour with the master.

STEFANIA PICELLI, EVENTS PROMOTER, YOKKAO: What I want to do is to try to give the people the same feeling I have about the tradition, the culture of

Thai people. It's not just a sport. It's the whole life of some people.

MOHSIN (voice-over): Half-Thai and half Italian, Stefania Picelli spearheads new product designs, sales distribution, and fight promotion for

Yokkao. The brand is younger and smaller than competitors, Fairtex and Twins, but it punches above its weight on social media.

Picelli hopes they'll do more than just sell gear. She wants to make Muay Thai global. Its next big challenge will be conquering the lucrative U.S.

market where it's trying to secure more distributors.

PICELLI: We have a lot of good partners around the world. Every time we sign an agreement with a gym or a distributor, we tell them that important

thing is that you try to develop Muay Thai in your country.

MOHSIN (voice-over): Yokkao may be small, but in the world of Muay Thai, that means it shouldn't be under estimated. Just ask Saenchai.

SAENCHAI: I'm small but I can win, you know. Every technique is really, really good, you know. I'm small. I can kick big guy like this and I win,

K.O.

I'm really happy, you know. Muay Thai, I think I want to train because I am small and win to a big guy.

(END VIDEOTAPE)

GORANI: Saima Mohsin reporting. I'll see you same time, same place tomorrow.

I'm Hala Gorani. Thanks for watching. "QUEST MEANS BUSINESS" is next.

(COMMERCIAL BREAK)

END