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Bannon Out at National Security Council; Trump-Russia Probe Continues. Aired 4:30-5p ET

Aired April 5, 2017 - 16:30   ET



JAKE TAPPER, CNN ANCHOR: How serious are folks on the Hill taking the president's accusation that there was a crime?

MANU RAJU, CNN SENIOR POLITICAL CORRESPONDENT: Well, they don't really know what he is referring to, Jake.

And it's because those documents in which the president appears to be referring to have not been made available to many members of Congress. Really, only a handful have seen them, including the Republican chairman of the House Intelligence Committee, Devin Nunes, who raised questions about incidental collection of Trump contacts, Trump communications involving the transition period and then those potential unmasking of those identities.

Only Nunes and a handful of other intelligence leaders have seen I.

Now, just moments ago, Jake, I caught up with Devin Nunes. And I asked him point blank, did Susan Rice commit a crime? And he declined to comment, saying, I'm not going to talk about this any further. And other members on the House and Senate Intelligence Committee are waiting to see the documents.

So there's a lot of questions about what the president is actually referring to, Jake.

TAPPER: One of the people that has seen these documents showing people being unmasked internally within the intelligence community is Adam Schiff, a top Democrat on the House Intelligence Committee.

He says that the White House is fighting against releasing the intelligence more broadly. Why?

RAJU: Yes. That's the real question that has occurred over the last day or so. Yesterday, Schiff saying that he believed that, according to his conversation with President Trump, a private conversation, that he would actually make that intelligence available to the full House and Senate Intelligence Committee, but today Adam Schiff telling us, Jake, earlier that actually the White House staff is now resisting giving that to the full House and Senate Intelligence Committee.

And when we asked the White House for comment, they said they did not address Mr. Schiff's allegation, only saying that they were going to provide that information to the so-called Gang of Eight, which is of course the top leaders of Congress.

Now, Jake, this comes as other fights are emerging on the Intelligence Committee, including over whether the former Obama Justice official Sally Yates will be allowed to testify publicly about what she knew about Michael Flynn's former contacts with Russian officials.

Democrats, including Andre Carson, who sits on the House Intelligence Committee, raising concerns that Republicans are not letting her testify. Take a listen.


RAJU: Are Republicans resisting and allowing her to testify publicly?

REP. ANDRE CARSON (D), INDIANA: I think that there's a great deal of resistance. And amidst a great dissatisfaction amongst the American people, it is time to bring Sally Yates before the committee and before the people, so she can state her case.


RAJU: Jake, a Republican source on the committee telling me that they are open to having Yates and others come by and testify, but importantly they are not committing to a public hearing just yet. And that's what Democrats are demanding. We will see if that ever happens, Jake.

TAPPER: On the hill for us today, CNN's Manu Raju. Thanks so much.

Let bring in the political panel to talk about this.

So, Bill Kristol, let me start with you.

What do you make of President Trump saying that Susan Rice, he thinks, committed a crime? I know of no evidence that she committed a crime. And, of course, I'm not even sure, with all due respect to the president, that he's familiar with what unmasking is.

BILL KRISTOL, EDITOR, "THE WEEKLY STANDARD": What's so annoying about the whole Susan Rice unmasking controversy is, this is resolvable. This is facts. These are facts. There are documents. If an intelligence report came to Susan Rice, she said I would like to know who is that was, that's on paper.

It goes back to -- Tony knows about with this more recently, has dealt with this more recently than I have. If the documents go back to the National Security Agency, let's just say, the National Security Agency has a paper record of what they judge, it goes back.

We can find out. Well, we shouldn't perhaps see all these documents, but some number of members on the House and Senate Intelligence Committee, some impartial panel of distinguished former judges, attorneys general or whatever can sit down and in a day look at this and say, whoa, this is a little different from what she did, you know, for four years as national security adviser. Whoa, this does look like it might be political, or this was routine. I mean, this is -- why are people even saying things and speculating

and why is the president of the United States saying what he said?

TAPPER: I think one of the reasons is to distract from the Russia controversy.

But, Tony, let me ask you. One of the things that I have heard from Republicans is, I don't know why the Trump administration is making a deal out of this, because all this suggests is there were intelligence reports where there was surveillance of foreigners and Trump people kept popping up on the surveillance.

Whether or not Susan Rice or anyone asked for those names to be changed internally from individual A to Mike Flynn, the issue is not -- it doesn't disprove what President Trump wants to distract from.


It actually goes back to the original wiretapping accusation that President Trump made against President Obama, which of course has been totally discredited. And it was very puzzling at the time too, because had there been surveillance ordered on Trump, it would have been pursuant to a court order.

And that would have required showing probable cause that either a crime had been committed or there was some involvement with foreign agents. So, why the president would want to draw attention to that has always been something of a mystery.


But, in this case, Susan Rice was doing her job. And understand how this works. Every day, senior national security officials in any administration get intelligence brought to them by the intelligence community.

The intelligence community decides what to show them, what they think is important. It's not something that you call for. And then in that daily take, as it's called, presumably, there are documents that show that there were conversations between people who were being listened to in one way or another that refer to an American citizen.

TAPPER: And Dr. Rice would have said, who is individual A? I want to know who that is.

BLINKEN: And that would be to give context to what she was reading, to make sure that she fully understood it.

But that request goes back to the intelligence community. They decide whether the person is unmasked or not, not Dr. Rice.


KRISTOL: Couldn't Susan Rice also task the intelligence community with, I want to know about going on about A, B or C? BLINKEN: Well, sure. She could.


KRISTOL: But, again, we could learn that. Right? This would all be on paper, I guess is the...

BLINKEN: It would be, but, again, at least in my experience, in the normal course of business, you would get something on a pretty regular basis that picked up incidentally, as we say, an American person.

And on some occasions, you would want to know who it is, just to understand the full context of the intelligence. That's perfectly normal, appropriate, legal.

TAPPER: Diane, let me ask you, because you talk to voters all the time.

There's a group that you talk to, to understand and try to figure out what they make of this. What are they making of all of this?


Well, the 400 or so people that I talk to on a weekly basis, I think you have got three groups. There's group one who are the Trump loyalists. And they think everything that the president does is perfect and Susan Rice is a villain and should be in jail.

There's another group that are the Clinton loyalists who think that this is an enormous problem. How dare the president do this? And they are pretty devastated and pessimistic.

There is a middle group that's emerging that I have called the estranged that are really, really disappointed in Trump and yet are disappointed in the Democratic Party.

TAPPER: You say they are emerging, so this is since the election, they have kind of broken free of Clinton and Trump loyalty and they are becoming their own group in the middle?

HESSAN: Yes, pretty much. I would say this group really started gelling in the aftermath of the failure of the Obamacare legislation.

And so when you look at where they are, the Democrats that are in there are saying, I don't like Trump and I don't like my party because it's the party of no, and there's no inspirational, clear message yet.

The Trump voters that are in there, I mean, we have got to think about who these people are. They didn't necessarily vote for Trump. They voted against high taxes, against government bureaucracy, against what they thought was unaffordable health care.

TAPPER: Against Hillary Clinton?

HESSAN: Against Hillary Clinton, for sure, and against this sense of giving entitlements to people who didn't work as hard as they do. And when Obamacare fell apart, the thing that drove them crazy was the

process, the notion that everything was rushed, lots of rookie mistakes, et cetera. So when they look at the Russian issue, they do tend to almost ignore it, because they are saying this is one more mess of lots of people disagreeing with each other, and I want my legislative agenda to move forward, and it looks like not much is going to happen other than through executive order and tweeting.

TAPPER: Which might also be part of the president's strategy, that it's a mess.

Everyone, stick around. We still have much more to talk about after the break, including Steve Bannon being removed from the National Security Council. Stay with us.



TAPPER: Welcome back.

My political roundtable who is here with me again.

Bill Kristol, let me start with you on the news that Stephen Bannon, the president's chief strategist at the White House, has been removed from official membership in the National Security Council. What's going on?

KRISTOL: I think some of the reporting suggests that the president's son-in-law, Jared Kushner, wasn't getting along with Bannon and thought he was doing some damage to his father-in-law and urged that Bannon kind of be relegated to a lower profile. That may be true. I can't tell. Kushner seems quite powerful.

But to me, this is a story about H.R. McMaster, the national security adviser, who now clearly has control of the National Security Council, who is bringing in pretty mainstream Republicans and some actually bipartisan senior directors into that body.

I think he's taking charge gradually, very quietly of foreign policy to the degree he can. If the Trump administration ends non- disastrously, I believe historians will look back and say that the day that H.R. McMaster replaced Mike Flynn was a huge moment. He went from having a national security adviser who is problematic in all kinds of ways to a really experienced and savvy professional who is used to assuming responsibility as a general in the Army and who has really stepped up on this case, I think.

TAPPER: On the subject of foreign policy, let's turn to Syria, if we can.

Tony, you were a deputy secretary of state during John Kerry's term as secretary of state. Obviously, Bashar al-Assad is the one responsible for the actions committed by Bashar al-Assad, but there has been criticism leveled at the Obama administration. One tweet from 2014 from the State Department from John Kerry noted in

2014: "Today, the last 8 percent of declared chemical weapons were removed from Syria. Great work done by all involved."

Apparently, Assad was hiding some chemical weapons still.

BLINKEN: Well, two things.

The vast bulk of the chemical weapons munitions were removed and destroyed. The vast bulk of the infrastructure that Syria had was destroyed. And, as a result, Syria no longer represented a strategic threat to countries in the region with chemical weapons.

And, God forbid, if that stuff was still there today, as horrific as what we have seen is today, imagine how much worse it could be if all of that stuff was still floating around Syria.

But there were some residual chemical weapons that were left that we were trying to account for. Mostly what's happened in the intervening years is they used chlorine as a weapon which is not --

[16:45:19] JAKE TAPPER, CNN THE LEAD ANCHOR: Not on the list.

BLINKEN: It's not on the list although it's used as a weapon is banned. But what we saw in this most recent attack appears to be something well beyond chlorine. It appears to be a nerve agent. Russia needs to own this. The administration needs to put Russia on the spot. It's Assad's guarantor, there should be a very tough Security Council resolution, make the Russians veto it. Second, we should condition any counterterrorism cooperation with Russia on them grounding Assad's air force, getting him back to the table and having a real cease-fire at the very least. I'm also hearing rumblings that the administration is actually contemplating some kind of use of force in Syria against Assad. That would be an interesting development.

TAPPER: What does the public make of all of this? There - I always sense that there is a lot of outrage among types of people that are sitting around this table, including me. And a lot of people in the public who are upset about it but nobody really wants there to be military action because they are exhausted after 20 years of war in which men and women were killed abroad in Afghanistan and Iraq.

DIANE HESSAN, C SPACE FOUNDER AND CHAIRWOMAN: Yes. Well, you know, the public is appalled over all of this. I mean, you don't have to read a lot of newspapers to have a negative reaction to what's going on with those children. I think people are watching this a lot, unlike some of the other issues, like the ultimate reality show. And, you know, for people who admire Donald Trump, you know, it's baseball season, and David Ogilvy once said don't bunt, swing for the fences. And I think people who admire Trump feel that he doesn't bunt, that he's clear and bold in his decisions and what he does, so those people are very nervous because they know he doesn't want to look like a pushover. That's not his style. So what does he do? How does he finesse this, and how does he do something - I mean, this is not a situation in which things can go wrong and he can blame someone else. TAPPER: Let's hope he - let's hope he chooses wisely whatever it is.

Thanks one and all for being here. We appreciate it. Coming up, peace in the middle east. U.S. relations with China, LGBT rights, climate changes, just some of the things on Jared Kushner's plate at the White House, but the real estate project that put the President's son-in-law on the map, well, that's in deep trouble. Is Kushner really ready to take on the world? Stay with us.


[16:50:00] TAPPER: Now it's time for the "MONEY LEAD". Welcome back. Fresh off a trip to Iraq, Jared Kushner is back in Washington, D.C. as President Trump's Secretary of, well, everything. The Senior Adviser son-in-law with no prior diplomatic or government experience has a long to-do list. Not only is he working to broker a peace deal in the Middle East, he's also working on improving ties with China, improving ties with Mexico. Don't forget he's also supposed to be innovating the government. Meanwhile, the real estate project that put Kushner on the map, well, that's bleeding debt. Let's bring in CNN Money Correspondent Cristina Alesci. Cristina, what's the fate of this project, what's going on?

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: Well, the building has been struggling to make debt payments is essentially what's going on. More context here, Jake. This deal was Jared's entrance into Prime Manhattan real estate. Before it, the family made smaller-scale investments. For example, condos in New Jersey. But Jared overpaid for this Fifth Avenue address, and now the family is trying to find a way to turn the deal around.


ALESCI: 666 Fifth Avenue, a prime piece of New York City's skyline. Just six blocks from Central Park. Jared Kushner decided to make it his trophy in 2007.

HITEN SAMTANI, THEREALDEAL.COM MANAGING EDITOR: This was the deal that put Jared on the map. I think every dynasty wants to own a piece of Manhattan.

ALESCI: To get the seller's attention, Kushner offered a big price, $1.8 billion, a record at the time. And the 26-year-old CEO of Kushner Companies borrowed aggressively to get the deal done.

ALEXANDER GOLDFARB, SANDLER O'NEILL INVESTMENT BANK ASSOCIATE DIRECTOR IN RESEARCH GROUP: They paid a peak price. Prices for real estate were especially inflated at the time.

ALESCI: Those prices tanked shortly after the purchase as the financial crisis set in. The entire deal was a miscalculation.

SAMTANI: They had absolutely paid too much at the time. He bought at the very top of the market. So then, the market turned, you're not going to get the rent appreciation that you're probably projecting in '07. ALESCI: To raise cash, the Kushners sold off some of the building's

retail space and later had to bring in a partner. Ten years later the building is struggling to cover its debt payments. This analysis by a firm that tracks bank lending shows the building's revenue has declined since the purchase.

GOLDFARB: It's old office space, right? It was built long ago. It's not exactly what new tenants want.

ALESCI: Earlier this month, a potential savior emerged. Chinese insurer Anbang considered an investment that could have helped the Kushners rescue Jared's ill-timed investment. But the deal fell apart.

SAMTANI: Now they are left with a massive hole to fill. They're trying to redevelop the buildings as luxury condos at a time when luxury condos are having a lot of trouble. If it goes well for him, he's dodged a bullet, if he doesn't, he might lose the building and it might reflect badly on the family.

ALESCI: After the deal with the Chinese company fell through, the Kushners told us that they were talking to other bidders but they wouldn't say who. And analysts aren't counting the Kushners out.

GOLDFARB: There's a lot of money that wants into New York and that will pay prices that some people will view as, wow, that's unreal.

ALESCI: Jared Kushner sold his stake in the building to avoid the obvious conflict of interest. The family, after all, might have to take foreign money to make the deal profitable. But Kushner's proximity to power might also help attract that money.

[16:55:02] SAMTANI: You have someone connected to the President, right? That could bring in lenders, that could bring in foreign partner that might be interested in getting an audience with Trump.


ALESCI: Well, the Kushners, Jake, say that revenue has fallen off intentionally because they plan to redevelop the building so the family is trying to empty out the space. But the original plan in 2007 was to make money off the building shortly after the purchase. The family certainly didn't expect to be losing money for ten years on this property.

TAPPER: And Cristina, is there any new deal to rescue this building or to make the building at least remotely profitable?

ALESCI: Yes. I'm hearing that there is a new deal in the works but it certainly will not be as richly valued as the Chinese deal that I mentioned during the piece. That deal, we're talking, would have value the building between $9 billion and $12 billion. That means the Kushners would have had to sell at $9,000 a square foot in New York City, Jake. It's expensive here, but that would be just an incredible record, so a new deal probably will not bring them that kind of cash.

TAPPER: Cristina Alesci, thank you so much.

ALESCI: Of course.


UNIDENTIFIED FEMALE: He served on four combat tours in Vietnam.





TAPPER: Honoring gold star spouses in our "BURIED LEAD" now. That's what we call our stories not getting enough attention. And today we're honoring those women you just saw and thousands of other wives and husbands of fallen service members on this gold star spouses' day. Lots of politicians are out there tweeting and speechifying about how much they appreciate the sacrifices of these men and women, but we spoke with a couple of widows who say talk is cheap. They need the government to fix a long-standing problem with their benefits which are due to run out soon if congress does not act.


OLIVIA HARDT, GOLD STAR SPOUSE: He just wanted me to be taken care of.

TAPPER: Olivia Hardt's husband, Army Sergeant Josh Mitchell Hardt died in 2009 during a fire fight with the Taliban in Afghanistan.

HARDT: He wanted me to live a good life for myself. So he just wanted me to be happy wherever I was.

TAPPER: Right now, an estimated 70,000 military widows and widowers are facing financial battles that their loved ones never intended them to fight.

ROSALIE HORTON, SOCIETY OF MILITARY WIDOWS LEGISLATIVE CHAIR: I had to buy a car based on what car can I sleep in?

TAPPER: Rosalie Horton's husband, Army Major Robert Horton served as a Military Hospital administrator and died of cancer in 1999 while still serving his country. Both widows rely on the military benefits their husbands worked for. But now, a portion of those benefits will expire unless congress votes to fund them again next year.

HORTON: Then it means deciding what I go without.

TAPPER: Compensation for military widows and widowers comes from both the V.A. and from the Department of Defense. But the Department of Defense also enforces a so-called "widows tax", which means some of those benefits cancel each other out, leaving less than anyone expected. HORTON: Even though they're separate and distinct purposes, for every

dollar that we receive from the V.A., DOD takes away $1. And we are the only federal annuitants that have their benefits offset.

TAPPER: Nine years ago, congress sought to offset this so-called widow's tax with a stop-gap measure called the Special Survivor Indemnity Allowance or SSIA. It helps widows or widowers with up to $310 a month.

HORTON: $310 in my house means food or it means heat in the middle of winter.

HARDT: It's actually something that pays for my rent.

TAPPER: However, that stop-gap funding from 2008 will expire next May 2018 unless more funding can be allocated within the next authorization act. Will the Pentagon pay that money? They gave us no comment when asked about the fate of these funds. For many of these widows and widowers, some of whom live paycheck to paycheck, the anxiety about these benefits is distressing, and they wonder why it's even on the table.

HORTON: This isn't about luxuries. This is about having the ability to meet basic needs.

HARDT: For me and all the other surviving spouses it feels - I guess it just feels like are we really valued?

TAPPER: They wonder why must surviving widows and widowers who already gave so much to this country be left to wonder what sacrifice they will have to make for it, next.

HORTON: Our husbands served blood and died. They're just - it shouldn't be an issue of where's the money?


TAPPER: That's it for THE LEAD, I'm Jake Tapper. Turning you over to Wolf Blitzer in "THE SITUATION ROOM."

WOLF BLITZER, CNN THE SITUATION ROOM HOST: Happening now, breaking news, lines crossed. Expressing horror at the chemical attack in Syria. President Trump says the gassing of children crossed a lot of lines.