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QUEST MEANS BUSINESS

Trump Defends First Month in Office; Trump Hits Out at News Media; Trump Says Fake News Media Won't Report Market Records

Aired February 16, 2017 - 16:00:00   ET

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


[16:00:00] RICHARD QUEST, CNN ANCHOR: The closing bell on Wall Street. It was a choppy day of trading. The Dow Jones industrial eking out a small

gain, as all comes to an end. But it was down earlier in the session and a moderate gavel with trading coming to an end. I'll update you on the

various market factors that moved. But we begin today with what has to be one of the most remarkable presidential press conferences that certainly

has been seen in recent political history. Twenty-eight days into the Trump presidency, and to some, the White House appears to be in chaos. But

not so for President Trump, as he told us a couple of hours ago. The president took to the podium and defended his administration, in a fiery,

and at times, it was a jaw-dropping news conference.

As I say, the like of which seasoned political watchers have never seen. His opening statement, itself, lasted almost 30 minutes. And began by

naming his new choice for the Labor Secretary, Alexander Acosta, the dean of the Florida International University Law School. But let's go now to

the White House, President Trump is signing a house resolution order, that some believe that scraps various protections for the coal industry. We're

waiting to see if he's going to speak. He looks like he is.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: Exciting day here. Thank you all for being here. It was very nice. Thank you, all of the wonderful politician, but

especially the -- thank you very much. This is our second bill signing this week, as we continue to work with the American people. This is house

resolution 38. And that will eliminate another terrible job-killing rule, saving many thousands of American jobs, especially in the mines, which I've

been promising you, the mines are -- have support from some of you folks right from the very beginning, and I won't forget it. I went to West

Virginia and I -- we had 17, 18,000 people that couldn't get into that big arena, right? You were a few of them.

But that was some -- that was some day and some night. I want to thank senate majority leader, Mitch McConnell, house speaker Paul Ryan, house

majority leader, Kevin McCarthy, house natural resources committee chairman, Rob Bishop. Thank you, rob. And representative Bill Johnson,

who worked very hard on this bill. And they really did. They worked very hard. This was a tough one. I also want to thank the great members of

congress who have joined us today. We have a lot of them. In eliminating this rule, I am continuing to keep my promise to the American people, to

get rid of wasteful regulations that do nothing, absolutely nothing but slow down the economy, hamstring companies, push jobs to other countries,

which is happening all over, although I must tell you, we've stopped it. You've seen all the factories, all the plants that are moving back.

They're going back to a lot of places. So, you know that, right, fellas? They're moving back fast. Ford, general motors, fiat. So many. Very

happy. Compliance costs for this rule would be over $50 million a year for the coal industry alone. And so necessary. I want to also thank the

incredible coal miners who are with us today. I think we can maybe thank them the most, right? You folks have put up with a lot. And you know, in

other countries, they love their coal. Over here, we haven't treated it with the respect it deserves. Even for defense, having that coal is a very

important thing for us, so I want to thank you all. This rule we're eliminating is a major threat to your jobs and we're going to get rid of

that threat immediately. We're going to fight for you like I promised I would in the campaign.

And you were very good to me and I'm going to be even better to you. I promise you that. And we're going to fight for also low-energy prices, for

all Americans. There's a spirit of optimism right across the country. It's going to continue to grow, as we sign more and more bills. We're

going to make our nation more than competitive. Not just competitive, we're going to be more than competitive. And we're going to win at many,

many industries. We're already starting back with the automobile industry. We had the airline industry in the other day. They have rules and

regulations up. By the time they get through it, it's nothing left, and they have to get rid of a lot of jobs. We had a great meeting, actually.

(END VIDEO CLIP)

QUEST: So, there we go, to leave the White House, as President Trump once again talking about -- this time, it's a regulation -- an executive order

he signed earlier that's now being put into force of law, the house resolution, which basically gets rid of some regulations about the

polluting of waters from coal mines. We'll talk about that in just a moment. The day's events, which have culminated, of course, in

extraordinary news conference in Washington, from start to finish, wherever we look, it was the news conference that we all witnessed today, was full

of dramatic exchanges.

[16:05:00] (BEGIN VIDEO CLIP)

TRUMP: I inherited a mess. It's a mess. At home and abroad. A mess. Jobs are pouring out of the country. You see what's going on with all of

the companies leaving our country. Going to Mexico and other places, low- pay, low wages. Mass instability overseas. No matter where you look, the middle east, a disaster. North Korea, we'll take care of it, folks. We're

going to take care of it all. I want to let you know, we inherited a mess. Hey, just so you understand, we had a totally divided country for eight

years, and long before that. In all fairness to president Obama, long before president Obama, we have had a very divided -- I didn't come along

and divide this country.

This country was seriously divided before I got here. We're going to work on it very hard. I don't have to tell you -- I don't want to be one of

these guys who say, yes, here's what we're going to do. I don't have to do that. I don't have to tell you what I'm going to do in North Korea -- wait

a minute! I don't have to tell you what I'm going to do in North Korea. And I don't have to tell you what I'm going to do with Iran. You know why?

Because they shouldn't know. And eventually, you guys are going to get tired of asking that question. The greatest thing I could do is shoot that

ship that's 30 miles offshore right out of the water. Everyone in this country is going to say, oh, it's so great. That's not great. That's not

great. I would love to be able to get along with Russia. I turn on the TV, open the newspapers, and I see stories of chaos. Chaos. Yet, it is

the exact opposite. This administration is running like a fine-tuned machine.

(END VIDEO CLIP)

QUEST: CNN's Sara Murray is at the White House. What to ask you, Sara? I mean, where to begin? What did you make of it?

SARA MURRAY, CNN POLITICS REPORTER: I know, it's a fine-tuned machine, so I don't know where you could possibly begin, Richard Quest. Now, let's

begin on policy. And I think Donald Trump said a lot of important news- making things on Russia here. He did say that to his knowledge, none of his former campaign advisers who were top advisers at the time, had contact

with Russia during the presidential campaign. Now, that's different, of course, from what these sources have told CNN. They said there was

constant contact during the campaign, between some top Trump campaign officials and Russian intelligence officers.

So, this is sort of the closest we've seen to a denial from president Trump on that. But you also saw him talking there, about provocations from other

nations, and in particular, we've seen three from Russia. We've seen them buzz a U.S. warship. We've seen them park a spy ship 30 miles off the

coast of Connecticut. And we've seen them launch a cruise mechanism. And president Trump essentially said, hopefully I won't have to do anything

about that, but if I do, I'm not going to tell you. So it is an indication that the president plans to keep up sort of this rosy diplomatic tone with

another nation that has been a foil of America in the past.

BALDWIN: And the very idea of having today's press conference, we're now hearing from Sean Spicer saying, it was President Trump's idea to do this.

MURRAY: We've heard from Sean Spicer. We've also heard from senior administration officials who acknowledge that this was president Trump's

idea. He wanted to get out there. Look, he is someone who believes he is his own best spokesperson. And he feels like he's under attack. He's been

getting hit about turmoil in his administration. He, of course, saw his labor secretary bow out because Republicans were not willing to take the

political heat to back this person up. He fired his national security adviser earlier this week, if you can believe it, all the same week. He

wanted to go out there and spar with the press and air his list of grievances in which he did in a press conference that lasted for over an

hour.

This is not the style people used to seeing from presidents in the east room. It is the style we are used to seeing from Donald Trump. I will

tell you, Richard, I saw him do this over and over again for nearly two years on the presidential campaign. This is where he feels in his element,

holding a press conference, defending himself, sparring with reporters. And I think we're going to see him in his element again this weekend when

he holds a campaign rally in Florida. That's right, a campaign rally. He hasn't even been in office for a month, but he's already going back on the

trail.

QUEST: Sara Murray at the White House, thank, Sara.

MURRAY: Thanks.

QUEST: Now, the news conference came as some areas of the media are becoming more and more critical of his administration. The "Time" magazine

cover story reads, nothing to see here. This is when in the same week as one army general, Raymond Thomas, the head of U.S. special operations, told

a military conference, the government is, in his words, in unbelievable turmoil. And Donald Trump didn't simply reject that, he insisted the

administration, as you heard, was running like a finely tuned machine.

[16:10:00] There has never been a presidency that's done so much in such a short period of time. And we haven't even started the big work.

CNN's senior political analyst, David Gergen, is with me now, from Cambridge, Massachusetts. The sort of question, David, that you'll rarely

get from me, open-ended, go with it where you will, what did you make of what we saw this afternoon?

DAVID GERGEN, CNN SENOR POLITICAL ANALYST: Richard, I'm afraid we have a situation now where a president is living in a different reality from the

reality that most journalists, professionals in Washington, intelligence officials, civil servants, the reality they see. He just sees a different

world. He believes it, apparently. It is -- you know, the news that he made today was minor, rather, in terms of, he denied he ever told Flynn to

make the call to the Russian ambassador. You know, he's -- we have just heard from Sara Murray about some other aspects of it. But the big picture

here, and what's disturbing to people is that there's a growing sense that we have a president who is out of control. That he's unhinged.

And we don't know where he is going. And no one knows what to do about it. Nobody can imagine that this is going to go on and on and on for four

years. Perhaps even longer, because his base seems to be holding. But there is -- he's not only trying to take on the establishment, to disrupt

the establishment, but he's attacking everybody in sight for what is happening. And then when he says -- and when there's chaos that's so

apparent to everybody inside the White House, and he comes out and says, we have a finely tuned machine, you know, you'd really hate to see one that

was broken down. It's unimaginable!

So, there is a -- there is a sense -- I just can't describe the sense of both helplessness and people just being awestruck about what we have here,

we have never seen anything like this in the White House, in the historical memories of anyone alive today. I have had the privilege of working in

four White Houses. This is completely different, completely off any, you know, off -- it's so wholly different. It's almost, it's hard to describe,

but I must tell you, the bottom line is, I was in the White House during Watergate. I was a young aide, I ran the speech writing shop. And I was

really worried about the country then. I am much more worried about the country today than I was then.

QUEST: But when he said, for example, that the rollout of the immigration ban was perfect and actually, it was the bad decision of the court that was

causing the problems. You know, let's give him the benefit of the doubt and assume he's right. What is he seeing that nobody else is? Or what is

Bannon, what is Priebus, what is the White House seeing in the way that they are executing policy that the rest are not?

GERGEN: Well, they have these numbers about the hundreds of thousands of people who do come to the country safely, who are not part of -- were never

part of the conversation. So if you've got 130,000 arriving safely and 180 are held, they say, look, the system is working for us. This is just what

we wanted. But you know, it's the same thing as if, like 99 percent of your planes fly safely one day and a plane goes day and a pilot takes it

down through mistaken things and 25 or 50 or 100 people die, that is big news, it's a big thing. It's -- the big picture is not that all the planes

are flying, it is that if you have a string of planes going down, and what we've had in this administration is a string of fiascos, in the executive

order was one example. But, you know, we were promised after the courts ruled that they would have a response. The U.S. federal government, the

White House would have a response to the courts. They have not come up with a response. We were promised that they would have a bill to repeal

the Obamacare. Unfortunately, they haven't come up with that bill, but where is it? There's so many things like that going on, it's mind

boggling.

QUEST: David, we're going a bit longer with you, because it's so, so important. David, I want you to listen to perhaps one exchange that took

place there with peter alexander was the question. You'll know which one is coming up. It's the question about the electoral college votes. Have a

listen. And I need to know how you think this plays into a White House that is perhaps divorced from fact. Have a listen.

(BEGIN VIDEO CLIP)

[16:15:00] UNIDENTIFIED REPORTER: You said today that you had the biggest electoral margin since Ronald Reagan, with 304 or 306 electoral votes. In

fact, president Obama got 365 and -- President Obama, Yes -- and George H. W. Bush, 426. When he won as president. So why should Americans trust --

TRUMP: Well, no, I was told -- I was given that information, I don't know. I was just given -- we had a very, very big margin.

UNIDENTIFIED REPORTER: I guess my question is, why should Americans trust you when they accuse the information they're being receive of being fake

when you're providing information that --

TRUMP: Well, I don't want know. I was given that information. Actually, I've seen that information around. It was a very substantial victory. Do

you agree with that?

UNIDENTIFIED REPORTER: You're the president.

TRUMP: OK, good answer.

(END VIDEO CLIP)

QUEST: Now, David, bearing in mind that he lost the popular vote by 3 million, and in terms of the electoral college vote, it was the 45th out of

58, I believe, worst performances. What do you make of his ability, the president's ability to spin in such a way?

GERGEN: Well, I must say, I've worked for presidents before who had mistaken notions. Ronald Reagan would sometimes have mistaken notions.

But the staff could go in and talk to him and help him see why he misunderstood something. And then he would change. And he had no

reluctance to change once he understood the facts. And one keeps asking, where are the people around him who are the adults, who can help him see

reality? And I don't see that happening. And I must tell you, the more disturbing issue may be, Richard, they may be telling him, but he doesn't

believe them. He believes this other reality, and that's disturbing.

QUEST: So, assuming -- let's just put the words throughout. Assuming he's there for the next four years, barring happenstance mistake or worse, how

do -- how does this White House govern? What is the next step forward, David, to bring some form of order, do you believe?

GERGEN: Well, I seriously believe he needs to ask Jim Baker, who was the finest chief of staff in White House history, was chief of staff for

Reagan, but also treasury secretary and secretary of state and regarded as sort of an iconic figure today, wise man, Jim is in his early `80s, but I

do think they need him. They need him to go in there for two or three weeks and help figure this out and get some order in there. There are some

other people -- I've seen White Houses that were not well managed, and you can crack the whip and get them more in line, but there seems to be no

sense of hierarchy in the organization, either. That is, rather than five or six competing power centers. Though there's not -- there's nobody that

-- people normally report to the president through the chief of staff.

The paperwork is controlled through the chief of staff's office. Sword imposed by the chief of staff. If you don't want to get in line and work

with the system, you get fired. And I see nothing, none of that here with Reince Priebus. I don't know whether he's not been empowered or doesn't

have the capacity, but whatever it is, they need to give the chief of staff a lot more authority and let minimum run it. But beyond that, there has to

be, you know, I once asked a famous historian, who wrote a lot about Lincoln, what's the most important thing a president needs. And he says, a

friend. A friend. Someone who can talk to him straight. You know, look him in the eye and say, this isn't working, here's what the reality is.

You have to change. You have to at least grasp reality. You can have differences with people. That's no problem. But you can't not -- you

can't see reality totally differently from what everybody else is seeing. And I think it's going to really hamper his governing and I think it's

going to cause a lot of countries overseas and around the world to be rattled and continue being rattled, because they're never sure what's

happening next. And it's going to hurt the economy. At the end of the day, this is going to be bad for the international economy.

QUEST: David, I can see from the look in your face tonight, it pains you to talk in such terms.

GERGEN: It does.

QUEST: Having been a sort of -- so close to the top of power. Thank you, sir. We'll obviously require you in the next days and weeks ahead. As

always, thank you, sir.

GERGEN: I can't wait to talk to you again, sir.

QUEST: The one thing's for certain on this program, we'll always give David Gergen plenty of time to give us the inside views.

So we're going to turn to the stock market after the break. So far, it has been doing extremely well. Record after record after record, the president

claims he's not getting the credit he deserves. It was up another record, but look at the way the market performed. Paul La Monica after the break.

[16:20:00] (COMMERCIAL BREAK) QUEST: Now, we have called it the Trump bump, the Trump rally. And the president says he's not getting the credit he deserves for a string of

records on Wall Street.

(BEGIN VIDEO CLIP)

TRUMP: Doing really well. The fake news media doesn't like talking about the economy. I never see anything about the stock market, sets new records

every day, Chris. I never see that. But I think the people understand it.

(END VIDEO CLIP)

QUEST: Now, the S&P is up nearly 4 percent since the election. It's the biggest gain for a new president since the 1960s. On Twitter, the

president even hinted there was more to come, when the president said, stock market hits new high with longest winning streak in decades, great

level of confidence and optimism, even before the tax plan rollout. So, it seems like investors are looking past White House infighting and the

fallout from the immigration ban Today the Dow eked out a tiny gain, up seven points, but an impressive gain considering, just watch, by the way,

this is where the news conference starts. So the Dow does fall, just in the middle of the news conference. It stays down afterwards.

And then it rallies up towards the afternoon, ending up with just small losses for the S&P. Let's talk about the Trump economy. The president

repeated his promise to bring jobs back to the U.S. Stephen Moore is CNN's senior economic analyst, he joins me from Columbia, South Carolina. You

were obviously listening to the news conference. A tour de force. The reality, though, of course, is that there is still a long way to go between

promise and action. Between actually starting the process of governing. What do you expect next from the administration?

STEPHEN MOORE, CNN SENIOR ECONOMIC ANALYST: Well, first of all, I do think there is an anticipation effect among investors and businesses that good

things are coming. And I think that's partly the explanation for what you, I think, correctly described as a Trump bounce. I talk to investors and

businessmen and women all the time. They're feeling much more upbeat about the future. If you look at today's "Wall Street journal," front page,

about how consumer confidence goes up, small business confidence is up, business investment, factory orders were up substantially in January. So I

think there's something very real going on here. And I think partly, it's a result of the anticipating good policies to come, and also, I think that

the kind of stopping of bad things from happening, a lot of the regulations and taxes that happened in the previous administration.

QUEST: Now, OK, without getting into the details, because you and I will talk hopefully many more times in the days, weeks and months --

MOORE: I hope so, too.

[16:25:00] QUEST: But would you agree that if there is a level of disorganization, what some would call chaos, and turmoil, in other words,

that that then threatens the ability to get these policies in, then that market confidence, that consumer confidence, will be swept away?

MOORE: Well, look, I just listened to your interview with David Gergen, and I didn't agree with a lot -- I did not agree with a lot of what he

said. I mean, look, it's been a bad week for the president with respect that his labor secretary designate, having to resign and Flynn resigning,

so on and so on, and the immigration order has not gone well. But if you look at the -- there's an alternative world out there, when you look at the

public approval ratings of Trump, they've actually been increasing. So, the way that the American people think about Trump right now versus the way

that the media portrays him, I think there is a big divide there. Now, your central point, though, Richard, I do agree with. If there is a

perception among investors that there's chaos in the White House, there's turmoil, that they're not being able to get things done, I think the tax

cut is critically important. They've put that on hold and that's causing some market jitters right now. So, to the answer to your question is, yes,

if he can't get this stuff done and if there's turmoil, then you could see that stock market start to turn south.

QUEST: I understand the principle of disruption and I understand the significance of the first hundred days and you get on with it before

inertia prevents it. But do you believe that this White House is not concentrating on getting a few things done well, tax reform, deregulation,

maybe even losing TPP, and instead, has overloaded a system a that simply is just going to grind to a halt?

MOORE: It's a great question. And on the one hand, I do think, Donald, like you mentioned, regulation. Trump has already done a lot with

regulation. Some of his executive orders, rolling back things. I wholly applaud what he did today with respect to call. We have more coal than any

other country in the world. We have 500 years' worth of coal. We have tens of thousands of workers in the coal mining industry. And we can bring

those jobs back to those coal miners. I don't think there's any doubt, if we get word of some of those regulations. So, let's give Trump some credit

for the things that he's done right out of the gate.

But I do think, front and center, Richard, is that tax cut. That's what investors want to see. That's what employers and businesses want to see.

Right now, it doesn't -- I don't know where it stands, frankly. We haven't seen any movement on it now for the first three or four weeks of this

administration. I want to see him much more aggressively on that, much the same way president Obama, that he passed his big stimulus plan. I would

like to see some big, legislative achievement out of Donald Trump, as quickly as possible.

QUEST: Stephen, come back. Once we see that plan, you'll be right there, we'll need your help to defend it. Thank you, sir.

MOORE: OK, Richard! Take care. Have a great day.

QUEST: I do promise you, whatever happens during the course of this administration over the next week, days, months, whatever it might be, even

hours, we're going to bring you the sort of voices like David Gergen and Stephen Moore. You may not agree with them, but I promise you you're going

to be better informed after hearing them.

Donald Trump fired his national security adviser, Michael Flynn, on Tuesday. He's defending Flynn's actions. How can you say he should have

gone, but at the same time, he shouldn't have -- he should have done what he did? We'll talk about that after the break. It's QUEST MEANS BUSINESS,

live from New York.

[16:30:00] (COMMERCIAL BREAK)

QUEST: I'm Richard Quest. There's more "QUEST MEANS BUSINESS" in just a moment, where we'll have all the details of the day. But you are watching

CNN, and on this network, I promise you, the news always comes first.

A short time ago, the President of the United States wrapped up a wild and wide-ranging news conference, introduced his new pick for labor secretary,

and promised to launch a new executive order on immigration next week. He got feisty with the media, slamming stories unfavorable to the

administration as fake news.

Officials say at least 60 people were killed in a suicide attack at an ancient shrine in Pakistan. 250 were hurt. Reports say the attacker set

off an explosives vest during a crowded ritual. Is affiliates claimed responsibility in a phone call to CNN.

ISIS is claiming responsibility for a car bomb explosion that killed at least 51 people in Baghdad. It happened at a car dealership in the

southwestern part of the city. It's the second bombing this weekend targeting a predominantly Shiite neighborhood in the capital.

U.S. Secretary of State, Rex Tillerson, held his first face-to-face meeting with his Russian foreign minister counterpart, Sergey Lavrov. Mr.

Tillerson says the two officials discussed a range of issues. He's specifically called on Russia to halt the Minsk agreement to cool tensions

in eastern Ukraine. And he laid out how the Trump administration plans to approach U.S.-Russia relations.

(BEGIN VIDEO CLIP)

REX TILLERSON, U.S. SECRETARY OF STATE: The United States will consider working with Russia, when we can find areas of practical cooperation that

will benefit the American people. Where we do not see eye to eye, the United States will stand up for the interest and values of America and her

allies.

(END VIDEO CLIP)

QUEST: The Dow had a choppy day, ended up eight points. The S&P and NASDAQ were lower. The S&P is up 4 percent since the election. Paul La

Monica is with me. Paul, I need to understand, bearing in mind the context of today's political shenanigans or political news conference from the

president, how much more leeway is this market going to give the administration?

PAUL R. LA MONICA, CNN MONEY CORRESPONDENT: At some point, we need to see a real plan from the Trump administration about what stimulus is going to

look like, and tax cuts. Right now, I think the sad reality is that Wall Street may not like many people in the press as much as others in America.

And they're just sitting back laughing, eating popcorn, and enjoying what is admittedly entertaining, at our expense, unfortunately. But there's

nothing that he has done to jeopardize confidence in the administration's eventual plans for stimulus. And we've seen earnings have been pretty

decent, too. So, corporate America is just kind of chugging along. Their guidance hasn't been all that bad, either.

QUEST: But this rally, not fully, but is largely predicated on deregulation, on corporate tax rollbacks. Also, on the sustainability of a

low-inflation, moderate interest rate environment, which may be starting to unwind.

LA MONICA: Yes, I think it's going to be difficult, if not impossible for inflation to remain this low for that much longer, especially if president

Trump decides to finally officially unveil that $1 trillion infrastructure plan that he talked about a lot during the campaign. And we know that the

fed is raising rates, but probably doesn't want to get too crazy with rate hikes, because the last thing that Janet Yellen wants is to be on the stray

end of a Trump tweet, accusing her of trying to jeopardize his presidency.

QUEST: How fragile is this market, from what you're hearing?

LA MONICA: I don't think it is that fragile. I think the strange thing, again, is that there's a lot of hope, there's a lot of hype. And that is a

problem, because we had that in 1999, we had that in 2007. I'm not suggesting we're at bubble levels just yet, but most people I speak to

still seem to be more encouraged by what Trump will eventually do than by all the crazy things that he actually says.

[16:35:00] QUEST: Good to see you, sir.

LA MONICA: Thank you.

QUEST: The newsletter I talk about this in today's QUEST MEANS BUSINESS newsletter. CNNmoney.co CNNmoney.com/quest to subscribe. Is the Trump

rally all bets off? Get the details of the day when the new market closes in time for Asia's open. Donald Trump says the former national security

adviser, Michael Flynn, was not wrong when he spoke to the Russians about sanctions. The president didn't instruct Flynn to do so, but he says he

would have, if Flynn hasn't on his own.

(BEGIN VIDEO CLIP)

TRUMP: Mike was doing his job. He was calling countries and his counterparts. So it certainly would have been OK with me if he did it. I

would have directed him to do it if I thought he wasn't doing it. I didn't direct him, but I would have directed him, because that's his job.

(END VIDEO CLIP)

QUEST: Michelle Kosinski is at the state department in Washington. This is interesting, Michelle. Because now we have the president saying, look,

I didn't have any detailed dealings with the Russians, to the best of my knowledge, none of my team did before the election, but he should have

spoken about sanctions, and if he hadn't, I would have asked him to.

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: It was surprising. The White House through the press secretary has said similar. I mean, Sean

Spicer has said, it's not the talk about the sanctions that was a problem. It was the lying. But this is the first time that the press has been able

to nail down president Trump in a room and ask him these questions directly. It was surprising to hear him say that. I think it was more

surprising, though, to hear him respond to the questions about the conversations that allegedly some people associated with the Trump campaign

had with Russian intelligence before the election. He didn't deny or he couldn't deny that anybody had those conversations. He just said that he

didn't, and nobody he knew did.

QUEST: So where does it go from here? Now that the president said, I didn't know anything about it, and as far as I'm aware, nobody else knew

anything about it, what is the next move that, if you like, takes it just from a he said/she said?

KOSINSKI: I think the investigations. That's where everybody's eyes are. Because what's come out so far have been leaks from sources. They've

certainly been interesting in making headlines around the world, but they raise so many questions. One thing we haven't heard is what exactly were

those conversations about? There have been names named in the press. Those people have come out and denied they had those conversations. There

are questions about, if they were speaking to Russian intelligence operatives, would they have known, say, maybe in the business world, if

those people were operatives? I mean, there are so many questions out there. So to see those investigations come out, to see if congress will

finally address this in an investigation of their own, and there's been, you know, some saying, yes, this is going to be an investigation, others

saying, you know, Republican leadership saying, it should be the leaks that are investigated, not the contact with Russian intelligence. Americans are

looking to see what solid information will come out of this.

QUEST: OK. But, I can understand the need to want the information. But from your experience in Washington, Michelle, are we likely to get it? I

mean, are we talking about big Watergate, Iran Contra-style hearings, with all members of the senate or the house sitting there in a large room, and

somebody sitting there, Michael Phillip, or whoever it might be saying, on the advice of counsel, I plead the fifth amendment?

KOSINSKI: It is possible. With Republicans being in control of the house and senate, you have to get to the point where an investigation like that

can happen. The intelligence community and law enforcement, the FBI, they're looking into this the Trump administration says they're going to

have somebody outside come and investigate those agencies. They're changing people. So how much of that comes to light is a question as well,

but I always believe that the truth will out. Doesn't always take, you know, the frame of time that you would want it to. Sometimes it takes much

longer, sometimes it goes past existing administrations, but especially the climate right now, if things following the general course, the process of

government investigations don't go the way people with knowledge feel that it should go, they're going to go to the media. Those sources will get

that information out.

[16:40:00] Maybe that's optimistic, but I like to think that that's the outcome, when government investigations are stymied or aren't going to go

the way some within those communities who have actually done the work and seen the conversations feel that they should go.

QUEST: Michelle, grateful to have you with us tonight for the honest assessment of what's happening in Washington in the state department.

Thank you. As we continue tonight, there's just so many tentacles to that hour and a half long news conference, but the core at the end of the day

will be what most people will remember will be the attack on the media, and indeed, the dishonest media, as it was called Brian Stelter is next.

(COMMERCIAL BREAK)

QUEST: Now some news. The warrant to arrest the head of Samsung group has been approved according to Reuters. It's part of an investigation into

corruption allegations that have already led to the impeachment of the South Korean president. Our correspondent in Seoul is Paula Hancocks. She

joins me on the line now. Paula, just give me an initial reaction. To arrest the head of Samsung is quite earth shattering within South Korea.

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, that's right, Richard. Samsung is South Korea. It's the biggest company, it's the most

significant brand that we have around the world. And now you have him in detention. What prosecutors have done. They believe they have enough

evidence against him that he needs to be put into detention. Either they have convinced the judge that he's a flight risk or he may try to tamper

with evidence or there's a pressing need for him to be in detention. It doesn't mean that the judge believes he's guilty. It just means that he

believes that he needs to be kept in detention while this investigation is ongoing. Now, prosecutors tried this last month, as well. They tried to

have him arrested, the judge said, but there simply wasn't enough evidence. This is a different judge they have gone in front of, and clearly, they

believe that they have extra evidence that he should be detained. Richard?

QUEST: So, in this regard, Paula, obviously, this is -- the arrest warrant is one because of a fear of flight or otherwise. Obviously, there will

have to be a trial in the longer term, on the merits of any allegations of corruption.

HANCOCKS: That's right. What prosecutors have said is that they believe there has been corruption at the top of Samsung. They believe that there

has been about $36 million, they say, given to foundations that were run by a close confidant of the president.

[16:45:00] This lady who's at the heart of this ever-widening corruption scandal here in South Korea. And prosecutors allege that Samsung has given

this money so that they could have approval for a very controversial merger of two affiliates, to make sure that he could consolidate his grip on

power. Of course, these are allegations at this point. Samsung denies any wrongdoing. Jay Y. Lee denies any wrongdoing.

QUEST: Paula Hancocks in Seoul, South Korea, thank you. Now, with me is Brian Stelter. Good evening, Brian. Before we actually hear from you,

let's talk about what we're going to talk about. The president says the leaks are real, the news is fake. Have a listen to what the president

said.

(BEGIN VIDEO CLIP)

TRUMP: I'm actually having a very good time, OK? But they'll take this news conference -- don't forget, that's the way I won. I used to give you

a news conference every time I made a speech, that was every day. That's how I won! I won with news conferences and probably speeches. I certainly

didn't win with people listening to you people. But I'm having a good time. Tomorrow they will say, Donald Trump rants and raves at the press

conference, I'm not ranting and raving, I'm just telling you, you're dishonest people.

(END VIDEO CLIP)

QUEST: I've spoken to David Gergen and Michelle Kosinski, you're our senior media correspondent, what did you make of today?

BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: The president is deflecting, distracting, trying to make the story the media and the leaks,

but I don't think that's exceed. We saw tough questioning from a variety of correspondents in this press conference, the first time we've seen that

in Trump's presidency. He made a lot of news, whether he intended to, or not. And his attempts to distract and say, it's all about illegal leaking

and it's all about you all beating up on me, I don't think, ultimately, succeeded. His voters, his base -- really not his voters, his loyalists

may have loved it. But for the rest of the country, as Jake Tapper said, there were times during this that felt unhinged. And when we see that, it

speaks for itself. I hope the whole country sees the press conference.

QUEST: Except, as I -- others have said on this program tonight -- not you personally, but you generically, you are disliked.

STELTER: And so are you, Mr. Quest.

QUEST: Yes!

STELTER: According to various surveys of trust in the United States, media trust is very low. The president pointed it out during the press

conference, but the president's trust levels are also low. He may be throwing stones at a glass house. You look at most of the polling for his

approval ratings, he's at 40 percent, 39 percent according to pew. He cherry picked a poll today. He said, oh, well, the Rasmussen poll had me

at 55 percent. That is an outlier, it leans Republican. In most polls, he's underwater and this kind of press conference is not going to help him.

QUEST: And perhaps the most interesting question I thought of the whole thing was the one about the electoral college.

STELTER: Yes, me too.

QUEST: It was Peter Alexander from NBC. Who asked about the electoral college and what Trump had said. And jump just said, this is information

I've been told.

STELTER: Another example of taking convenient information, kind of like that Rasmussen poll, but in this case, inaccurate information. President

Obama had higher electoral college numbers, so did Clinton And George H. W. Bush. That was easily fact checkable. And to peter alexander's

credit, he picked up his phone, looked it up during the press conference and asked rump about it. The question, I think, was crucial. Peter

alexander said, why should the public trust you? It's not about journalists in the room, American journalists or journalists in other

country who are trying to question the public, it's about the public watching the press conference. Why should they trust what Trump is saying.

He didn't have an answer to the question.

QUEST: When we start hearing people use words like "wild," "unhinged," "disorganized," "chaos," "turmoil," from your contacts in other news

organizations, respected news organizations, "The Washington Post," "The New York Times," "The Journal," you can pick any others that you like to,

ABC, NBC, CBS, are they having serious, difficult debates at the top of the editorial matter, as we are here, about how this gets covered?

STELTER: They are. They're fascinating debates. And we're seeing the results on television and in print. Whether it's "the New York Times"

using the word "lie." whether it's CBS Anchor Scott Pelley saying Donald Trump has been divorced from reality at times. Fox News Anchor Shep Smith

saying, what we're watching every day is crazy. You have a lot of opinion people hosts all over the place, Sean Hannity, Rush Limbaugh defending the

president and beating up on the media. But the real journalists who are covering this story --

QUEST: The managing editors and editors in chief --

STELTER: They've never seen a story like this. And it does require different language and different coverage.

QUEST: We're grateful you're here to help us understand. Thank you, sir.

If you're in Venezuela and fancy watching our Spanish channel right now, you'll have to head to YouTube, which is probably where you're watching.

Authorities in Caracas have forced CNN in Espanol off the air. Why? We'll tell you.

[16:50:00] (COMMERCIAL BREAK)

QUEST: The Venezuelan government is forcing cable providers to take CNN's Spanish news channel off the air in the country. And it's accusing the

network of inciting religious, racial, and political hatred. The government took the action against CNN in Espanol just days after it aired

an investigation into the alleged issuing of fake Venezuelan passports and visas. Paula Newton joins me now. You've obviously got the reaction from

our bosses at CNN about this. What -- how do they justify taking us off the air?

PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: Because they say that the report was not true. That we are imperialist puppets of the American

administration, take your pick. You kind of get the tenor of that. Look, you just had a robust conversation with Brian Stelter about the media.

This is a country where, you know, in Venezuela, where people live in fear of actually telling the truth of what is going on. And CNN in Espanol for

many years, 20, two decades, has provided a good insight into what was going on, not just in Venezuela, but in the region. CNN now broadcasting

free on the internet. And social media has been filled with people tuning into CNN Espanol on the media saying -- on the internet saying, look, we're

still watching.

QUEST: But, look, hang on, CNN in Espanol has been reporting the ugly side of the Maduro administration for some time, for a long time, in fact. Why

-- what broke this?

NEWTON: Two things that we believe. One is a CNN in Espanol had a special report on a source from the Venezuelan government, saying that the

Venezuelan government was issuing passports, perhaps to terrorists, for money, from its embassy in Iraq. It was a well-researched, well-documented

investigation that lasted an entire year. CNN stands by that reporting, absolutely 100 percent. Also, though, Secretary Mnuchin, treasury

secretary, one of his first acts, he declared the vice president of the country a foreign narcotics kingpin. So, before the Maduro government,

this is all of a piece. Get to CNN, get to the Americans. We also want to tell you one more thing before we go. Donald Trump had dinner with Marco

Rubio. He pushed for the release of a political prisoner, Leopoldo Lopez in Venezuela. Again, the Venezuelan government coming back and saying, do

not interfere in our business and using it as a piece of propaganda for their own government.

QUEST: Finally, you got one sentence to basically reaffirm what I know you're going to say, which is, anybody who has any doubts about our

commitment to continue broadcasting in Spanish to Venezuela, in my mode that we can, what do you say? What does CNN say?

NEWTON: Our correspondent there has been there for many years, she is Venezuelan, she's incredibly brave to be there. Wherever I do into

Venezuela, and I've be there on a working journalist visa, and they've granted me that, we ask for the government to speak to us every time we're

there. We're trying to cover the entire story when we're there.

[16:55:00] We want the government to speak to us, we want an interview with President Maduro --

QUEST: We're not going away.

NEWTON: Never! I'm going back to the embassy in two weeks to get another visa.

QUEST: Good. We'll have a "Profitable Moment" after the break.

(COMMERCIAL BREAK)

QUEST: Tonight's "Profitable Moment: when David Gergen, Michelle Kosinski, Stephen Moore and Brian Stealth, all the correspondents that we

brought you tonight are talking in such apocalyptic terms about what's happening in the United States government, then you have to sit up and take

notice. We're no longer really talking about the policies and whether they are right wing or left wing, the right policies or wrong policies. No.

It's far worse in a sense. Today in Washington and elsewhere people are talking about process, the ability, the turmoil, the chaos and confusion

and what is actually taking place within the process-making of the U.S. government. It's early days to be sure, but when you hear such clarion

call warnings, you have to take them seriously. That's QUEST MEANS BUSINESS tore tonight. I'm Richard Quest in New York. Whatever you're up

to in the hours ahead. I hope it's profitable.

END