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Early Start with John Berman and Zoraida Sambolin

Trump Defends Attorney General; Republicans Battle Over Obamacare; U.S. Tracking Down Hundreds of AQAP Leads; Trump's Defense Budget Hike Ends Message Overseas. Aired 4:30-5a ET

Aired March 03, 2017 - 04:30   ET

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

[04:30:02] CHRISTINE ROMANS, CNN ANCHOR: President Trump with a staunch defense of Attorney General Jeff Sessions, after Sessions recused himself from election-related investigations. So, who will oversee the probe into Trump campaign contacts with Russia?

Good morning, everyone. Welcome back to EARLY START. I'm Christine Romans.

DAVE BRIGGS, CNN ANCHOR: I'm Dave Briggs. It is 4:30 in the East.

And Tom Hanks got the White House press pool an espresso, Christine.

ROMANS: Did you see that?

BRIGGS: Why can't we get one?

ROMANS: Tom Hanks supporting America's journalism. Love it.

BRIGGS: Those reporters are not up before 4:30, we are.

Breaking overnight, though, President Trump stepping forward with a forceful defense of Attorney General Jeff Sessions just hours after Sessions recused himself from any investigations into Mr. Trump's presidential campaign. The move comes amid growing calls by Democrats for the attorney general to resign over revelations Sessions met with the Russian ambassador at the same time he was serving as a Trump campaign surrogate, then failed to disclose that at his Senate hearing.

Sessions recusing himself at a news conference just two hours after the president said he should not do so, Sessions denied any wrongdoing saying that he told senators he never spoke with Russian officials about the Trump campaign.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, U.S. ATTORNEY GENERAL: I was taken aback a little bit about this brand-new information, this allegation that surrogates -- and I had been called a surrogate for Donald Trump -- had been meeting continuously with Russian officials, and that's what struck me very hard and that's what I focused my answer on. And retrospect, I should have slowed down and said, but I did meet one Russian official a couple of times. That would be the ambassador.

(END VIDEO CLIP)

ROMANS: All right. Sessions telling reporters he plans to mention his meeting with the Russian ambassador in a statement to supplement his congressional testimony. So, essentially, he's going to amend that testimony with this statement after the fact.

And potentially, new trouble for the attorney general, campaign finance records show Sessions' trip to the Republican convention, that's where he met the ambassador, the Russian ambassador, well, that trip was paid for with Sessions' campaign funds, not with his Senate funds and that appears to undercut Sessions' argument he met with the ambassador in his capacity as a senator rather than a Trump campaign surrogate.

We've reached to Sessions office for comment.

Even with all this controversy, the President Trump just standing by his attorney general, standing solidly behind his attorney general.

More now from CNN's Jeff Zeleny at the White House.

(BEGIN VIDEOTAPE)

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, President Trump hoped to end the week on a high note, carrying that momentum from his speech to Congress earlier in the week. But he is ending on anything but. He is under fire here at the White House all over allegations of links to Russia yet again. We saw yesterday, Attorney General Jeff Sessions recusing himself from any campaign investigation involving Russia. Congress is fully involved in an investigation, the intelligence committees both the House and the Senate.

Now, President Trump is flying down to his resort in Mar-a-Lago later today. He's going to take a bit of a weekend off, try and think about some of these things. He'll be having a Republican fund-raiser there this evening as well. But, boy, he is standing by his Attorney General Jeff Sessions.

But take a look at this statement he released last night. Very interesting language in here. It says this, "Jeff Sessions is an honest man. He did not say anything wrong. He could have stated his response more accurately, but it was clearly not intentional.

This whole narrative is a way of saving face for Democrats losing an election that everyone thought they were supposed to win. The Democrats are overplaying their hand. They lost the election," he says, "and now they have lost their grip on reality. The real story is all of the illegal leaks of classified and other information. It is a total witch hunt."

A witch hunt perhaps, but a bipartisan one at that. Republicans on Capitol Hill in Congress are concerned about this. They say they will investigate and get to the bottom of this. So, as the Trump administration heads into the end of another week

here, there are certainly more questions being raised about Moscow and they are not just about from Democrats, from Republicans as well. That's what Donald Trump is facing as he heads off to Florida later today -- Christine and Dave.

(END VIDEOTAPE)

BRIGGS: Thank you, Jeff.

So, with the attorney general recused, what happens next? For now, Acting Deputy Attorney General Dana Boente will oversee any investigations or prosecutions related to the Trump campaign. But Boente may ultimately choose to appoint a special prosecutor to conduct a probe. For that, Boente must find three conditions have been met, that a criminal investigation is warranted, that the current probe presents a conflict of interest, and that an outside investigator is in the public interest. In other words, don't hold your breath.

ROMANS: So, another option is being floated by Senate Democrats reviving the old independent counsel law under which the attorney general asks a three-panel judge -- a three-judge panel rather to appoint an independent counsel.

[04:35:01] That law was put in place after Watergate and allowed to lapse after -- remember this -- Ken Starr's lengthy probe of President Clinton.

House Speaker Paul Ryan says the idea of passing a new independent counsel law, though, is going nowhere.

BRIGGS: We've also learned more high-level Trump aides and now former aides also met with the Russian ambassador. The president's son-in- law and top advisor Jared Kushner and former National Security Advisor Michael Flynn sat down with Sergey Kislyak at Trump Tower in December. Senior administration official describes the meeting as, quote, "inconsequential hello."

Flynn was later fired for misleading Vice President Pence about their earlier discussions. And J.D. Gordon, a national security advisor to the Trump campaign, admitting he met with the Russian ambassador during the GOP convention in Cleveland in July, along with advisors Carter Page and Walid Phares. Gordon claims there was no discussion of colluding with Russia to help Trump win.

ROMANS: All right. This morning, we are learning about a possible missed opportunity for the young Trump administration to avoid some of these repeated accusations of ethical lapses. It turns out the transition team canceled an ethics training session for the White House staff days before the president took office. Documents obtained by CNN reveal the General Services Administration planned to help cabinet nominees and employees work through their confirmation hearings and work effectively with Congress and other federal agencies. But that training was scrapped by the incoming Trump administration. The Trump administration claims to have saved cost, the White House counsel's office handled ethics training for the staff.

All right. Infighting erupting in the Republican Party over the fate of Obamacare. Senator Rand Paul calling out fellow Republicans in the House demanding to see their bill to repeal and replace the Affordable Care Act. The Kentucky senator believes House Republicans are deliberately keeping the measure under lock and key.

We get more this morning from CNN's Phil Mattingly on Capitol Hill.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Dave and Christine, just the week before, House Republicans are planning to launch their legislative effort to finally repeal and replace the Affordable Care Act, something they've been campaigning on for years and years, the whole process devolved into a game of hide and seek. Seriously.

So, Senator Rand Paul is very opposed to what House Republican leadership wants to do, discovered that members of one of the House committees that's considering this bill were going to meet behind closed doors to review draft language. He decided he wanted to review it as well.

He's not on the committee. He's not even from the chamber. That didn't stop him.

Here's what he had to say.

SEN. RAND PAUL (R), KENTUCKY: When I came here, I introduced a bill called Read the Bill. Read the Bills Act. When I say that in public speaking, people laugh because they're embarrassed it would actually not read the bills up here. But if this is given to us, we don't know if this is a thousand pages, we don't know if it's 1,500 pages. We know that we're not given access to read it and I think that's a problem.

MATTINGLY: Now, guys, one minor problem here. Senator Paul went to the wrong room. The bill wasn't there at all. The staff that was there wasn't related to the committee.

But his point was still made. When you talk to House Republican leaders, they were very frustrated with what they called was a stunt, but they also recognized this is bad optics. These are the types of things they accuse Democrats of doing back in 2009, 2010. Hiding the bill, keeping the language not just from members, but also from voters.

That's a problem going forward and there are no shortage of problems as we head into really kind of the serious portions of this legislative debate. For now, just a stunt. It didn't look good to cameras. Going forward could be potential major problems, as this process really kicks into high gear -- Dave and Christine.

(END VIDEOTAPE)

ROMANS: I think at one point wasn't he like bringing his copy machine with him?

BRIGGS: Rolling roving copy machine. But there is, Christine, bipartisan support for political stunts. House Minority Whip Steny Hoyer took to Facebook, Facebook Live, in fact, leading friends on the search of Capitol Hill for the bill and had a conversation with the bust of Abe Lincoln talking to it about the Republican Party and how it would feel about this.

So, look, stunts, they go both ways on Capitol Hill.

ROMANS: And sources tell CNN Abraham Lincoln had no comment on what was going on yesterday.

BRIGGS: No tweets, either, from Abe Lincoln .

ROMANS: He hasn't tweeted in a long time. Abe hasn't.

All right. Thirty-nine minutes past the hour.

BRIGGS: Vice President Pence used his private e-mail account while serving as governor of Indiana, at times discussing sensitive issues and even matters of Homeland Security. That's according to a story in "The Indianapolis Star", which reports Pence's personal account was hacked last summer. Pence's office insists he fully complied with Indiana law. Current Indiana Governor Eric Holcomb has released 29 pages of e-mails from Pence's personal AOL account. He is refusing to release a number of others, claiming they are either confidential or too sensitive to be seen by the public.

[04:40:00] Pence has repeatedly bashed Hillary Clinton for her use of private server while secretary of state.

ROMANS: All right. The Trump administration could make a major break from U.S. trade policy and is taking direct aim at China. A new paper from the U.S. trade representatives states that the U.S. should not be bound by the World Trade Organization's rules on trade disputes. That is a seismic shift from past administrations.

In recent decades, the 164 countries in the agreement have resolved disputes through WTO panels. The Obama administration used it to file cases against China. That led to tariffs on Chinese steel imposed last year. But President Trump has long accused China of not playing fair on trade, a stance he reiterated in his address to Congress

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And we've lost 60,000 factories since China joined the World Trade Organization in 2001. Our trade deficit in goods with the world, last year was nearly $800 billion.

(END VIDEO CLIP)

ROMANS: This is the question since China joined the World Trade Organization in 2001, it's basically become the world's factory floor. Experts and the Chinese government argued that globalization, the recession and automation have also contributed to the decline of U.S. factories. That is -- that would be -- it would end up in court. No question if the U.S. just ignored the WTO. You're tied up in court over that for sure.

BRIGGS: Trade policy under the microscope under this administration.

The U.S. taking action against al Qaeda based on intelligence recovered in that deadly raid in Yemen. Who are they tracking? And where? More from the Pentagon, next.

(COMMERCIAL BREAK)

[04:45:57] BRIGGS: The U.S. taking action for the first time based on intelligence recovered in the January raid in Yemen that killed a Navy SEAL. Sources telling CNN the U.S. is now looking to track and locate hundreds of people with ties to al Qaeda. Those contacts are part of the recovered intelligence some of these people are believed to be in the West, though not in the United States.

CNN's Barbara Starr with more now from the Pentagon.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Dave, Christine, U.S. officials are insisting to CNN that they did get valuable intelligence from that raid back in January that killed the U.S. Navy SEAL and led to the death of several civilians on the ground. None of them can be absolutely verified because the intelligence is classified. But officials say that they are now taking action to monitor, look for hundreds of contacts that they got on some of the data, the laptops, the cell phones that they seized.

They believe they have names and contact information for people in the West who may be sympathizers to al Qaeda in Yemen, may even be working to plot and plan new attacks. So, they are taking action. They are trying to track all of that down.

At the same time, they got intelligence that is leading them to more information about al Qaeda's safe havens in Yemen. That may lead them to more raids. They have information, they say, about recruiting, targeting, all of the activities of al Qaeda and even information about its explosive manufacturing.

And, of course, it is al Qaeda in Yemen that has been perfecting non- metallic bombs, the kinds of bombs that can make it past airport security. This is a group that very much wants to get a bomb on board a U.S. airliner -- Dave, Christine.

(END VIDEOTAPE)

ROMANS: All right, Barbara Starr, thank you for that, Barbara.

Also in Yemen, U.S. warplanes carrying out 20 airstrikes overnight against al Qaeda in the Arabian Peninsula. We are told U.S. forces hit multiple locations, targeting militants, equipment, infrastructure, heavy weapons systems and fighting positions. A U.S. defense official says the attacks were not linked to the intelligence obtained in January. They had been planned for sometime.

Clearly, there's been some recent activity and interest in what's going on in Yemen.

BRIGGS: Yeah.

ROMANS: All right. The mystery that broke the Internet earlier this week is resolved. Amazon giving an explanation for those outages at some of the most popular sites on the Internet. I mean, we did survive, by the way, a slow internet. But here's the hint: this was not a computer glitch. We're going to get a check on CNN money next.

BRIGGS: This is news to me.

(COMMERCIAL BREAK)

[04:52:56] BRIGGS: President Trump's call for another $54 billion in defense spending is reverberating far beyond U.S. borders. One unintended side effect being felt in Russia. $54 billion would be only a 10 percent spike for the Pentagon, but it's more than the entire defense budget in Moscow. Now, generals there are using Trump's move to ask the Kremlin for more cash.

CNN's international diplomatic editor Nic Robertson live for us in Moscow.

Good morning, Nic. This is just another reminder of how our defense spending dwarves that of other competing countries.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Absolutely. Perhaps unintended consequences. It is being described here as by military analysts as a sort of arms race, not that Russia particularly feels it is necessarily in an arms race with the United States, but you had here the Defense Minister Sergei Shoygu speaking to parliamentarians just last week, saying that the army, the military needs more money. For the past few years, it's been going through a massive overhaul, a massive refit, new tanks, new aircraft, new cruise missiles, all that sort of weaponry is being renewed and upgraded.

What he was asking for, what the defense minister was asking for was a $200 billion increase in what the finance ministry is willing to pay for at the moment. He wants a total of $400 billion to spend over the next few years for the military. But he also let slip a very key and important detail that until now has been, if you will, secret.

It is certainly not something Russian generals have talked about publicly, and that is about the information warfare forces, which is a new part of the Russian military that was started just about three or four years ago in 2013, a strategic move to develop a cyber forces division that can hack, control, that can develop false, fake news stories. So, the military asking for more money.

[04:55:02] They see the move in the United States increase the defense budget as a way to get that and also letting out of the bag their secret cyber warfare unit that they are developing and using.

BRIGGS: Hopefully, we start to hear about our own cyber warfare plan. Nic, thank you.

ROMANS: All right. Lawyers for detained DREAMer are fighting the deportation clock. Twenty-two-year-old Daniella Vargas could be deported as early as today. Lawyers have been preparing special documents, including statements by people who know her and hope she will be granted a hearing instead of immediate deportation.

OK, she was arrested Wednesday after sharing her story during a news conference. Even though she reapplied for DACA status, which is delayed deportation status after last month after letting it lapse in November.

BRIGGS: A new vandalism attack on a Jewish cemetery, this time in Rochester, New York. This is the third incident of its kind in the last two weeks. Governor Andrew Cuomo ordering a hate crime task force to investigate the spike in crimes targeting Jewish organizations across New York state. The Anti-Defamation League is offering a $5,000 reward for information about the case.

According to the ADL, more than 120 Jewish community centers across the country have been hit with bomb threats and vandalism. Let's hope the president's words the other night start to resonate across this country. We shall see.

BRIGGS: Winter weather making a return appearance this weekend, but it's only a cameo.

Meteorologist Pedram Javaheri with the forecast.

(BEGIN VIDEOTAPE)

PEDRAM JAVAHERI, AMS METEOROLOGIST: Good Friday morning, Dave and Christine.

You know, this winter has been so short lived. Pattern changes a couple days across the Northeast. The cold air certainly begins to filter in. That in itself is going to be short lived as well.

But you take a look 25 to almost 30 degrees below where we stood this time yesterday around portions of the Northeast. In fact, high temps yesterday in New York City, 64 today we're aiming for 38 degrees. Same story out of Washington, same story from places in Raleigh where they will give way to the 50s.

But dramatic change from the 70 degree reading we saw in Central Park on Wednesday, that is a May 20th normal temperature. We're back into January-like temperatures with a 28 in store this Saturday. In fact, you think about it, only three times so far in 2017 have we failed to get to the freezing mark, nine times we've exceeded 60 degrees so far in the past couple of months.

We do have that cold air in place on Saturday. Again, look what happens Sunday into Monday, wants to exit the picture here and certainly see a warming trend beyond that. The perspective for Saturday morning's lows, how about a 12 in Boston, 18 in New York City, and the forecast this afternoon again takes us up into the mid 30s around the Northeast.

(END VIDEOTAPE)

ROMANS: All right, Pedram. Maybe go skiing. I don't know.

BRIGGS: Yes.

Let's get a check on CNN Money Stream this morning. Incredible demand for shares of Snapchat sent the stock soaring during Wall Street debut. The IPO is priced at $17 a share, is it surged to $24 a share but it opened for trading at 11:19 a.m.

One analyst tells us that there were 30 million trading hands in the first minute of trading. Right now, Snap has a market value of nearly $35 billion. Its IPO was only one of the bright spots yesterday. Stocks pulled back basically, and we could see more losses at the opening today as well.

The U.S. stock futures and global markets are trading lower right now after what's been an incredible post-election rally.

Shares of Caterpillar tanking 5 percent after federal investigators raided its office. The company says it is cooperating. Officials declined to provide details regarding this search warrant.

The IRS has previously accused Caterpillar of owing $2 billion in back taxes that it believes Caterpillar shifted to a Swiss subsidiary. Caterpillar denies that allegation, says it is vigorously contesting the IRS on this issue. The stock had popped recently on the president's call for big spending on infrastructure.

And finally on this Friday, reminder as you head to work, typos have consequences. Amazon says the incident that made some popular web sites inaccessible this week was a result of human error. Yes, a person broke the Internet. An employee on the web services team was working on the billing system. The person meant to take a small number of servers off line but incorrectly entered a command and removed a much larger set of servers.

That caused file sharing issues for companies like Slack and many others. It also hit development platform Get Sub, scheduling site Trello and the mobile payment system Venmo, plus news organizations couldn't publish stories. Amazon owns 40 percent of the Cloud services market so when it goes down, it takes a whole lot of companies with it.

BRIGGS: That is some power in the hands of --

ROMANS: What is so interesting, people like oh, my God, what's happening? The internet is slow. What am I going to do?

BRIGGS: People were losing their minds. My Twitter won't reload.

EARLY START continues right now.

(MUSIC) ROMANS: President Trump standing by his attorney general hours. It came hours after Jeff Sessions says he would recuse himself from matters regarding the election.