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White House in Chaos; Did President Trump Commit Obstruction of Justice?; Officials: Trump Will Not Push Moving Israel Embassy; Interview with Congressmen Lee Zeldin of New York. Aired 4-4:30p ET

Aired May 17, 2017 - 16:00   ET


ANNOUNCER: This is CNN breaking news.

JAKE TAPPER, CNN ANCHOR: Welcome to THE LEAD. I'm Jake Tapper.

We are going to begin this afternoon with some breaking news in our money lead. You're going to look right now at live pictures as we await the closing bell on Wall Street, the Dow plunging more than 300 points today, as controversy and uncertainty continues to swirl around the Trump administration.

CNN's Cristina Alesci joins me now.

Cristina, what do experts say is spooking the markets?

CRISTINA ALESCI, CNN CORRESPONDENT: Well, it looks like Jim Comey's excellent record-keeping is actually what has got investors nervous today.

We're down on the Dow 376 points right now. This has been declining all day, and the major indices across the board, the Dow, the S&P, the Nasdaq, we're closing right now. You're hearing the closing bell -- 369, that is quite a drop, Jake. That is a big, dramatic move.


I mean, just to put this into context, though, we're still up on the year. If you look at the Dow, the S&P and Nasdaq, major indices, we're up on the S&P and Dow about 4 to 5 percent, and on the Nasdaq, we're up about 13 -- 12 -- 13 percent. I haven't done the math on these numbers that just happened.

But that's the general context, so we're not in freak-out mode yet, but there is a general nervousness around the fact that President Trump may not be able to execute on this very aggressive legislative agenda that he put forth, including tax cuts.

Tax reform has been top of mind with all of the CEOs that I speak to on a daily basis. They want to get their tax bill down. They say they can put that money into hiring people, into making investments, and that will in turn boost economic growth, but you saw a lot of skepticism today, especially in the financial sector, bank stocks particularly hard-hit, because people think they won't get that economic growth that the president has been and his administration has been talking -- Jake. TAPPER: All right, Cristina Alesci for us, thank you so much.

President Trump spoke to the U.S. Coast Guard Academy's graduating class of 2017 earlier today, where the commander in chief complained about how unfair the world and especially the media have been to him.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No politician in history -- and I say this with great surety -- has been treated worse or more unfairly. You can't let them get you down. You can't let the critics and the naysayers get in the way of your dreams.


TAPPER: Let us forget for one moment that the service members in the audience about to put their lives on the line protecting our coasts might not actually feel that bad about a politician who has been criticized in some sharply worded editorials.

Let us focus instead on why the president is where he is. It is not because of anyone in particular being unfair to him or bad staffing or poor communications or an aggressive media.

It's because of things the president has said and things the president has done. Case in point, former FBI Director James Comey, whom the president fired one week ago today, Comey wants to tell his story, a source close to him tells me. Comey wants you to hear it in an open, not a closed, congressional hearing.

And as of now, it's not clear where wand when that might happen, though the Senate Intelligence Committee and the House Oversight Committee have invited him to do so. Comey, the source tells me, kept detailed memos, ones he wrote contemporaneously, especially of encounters with President Trump -- quote -- "particularly the ones that made him feel uneasy," the source tells me.

That would include a memo that Comey wrote after a February 14 meeting in the Oval Office with President Trump who, after saying goodbye to the vice president and attorney general, told Comey -- quote -- "I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go" -- unquote, according to the memo. That's according to the source who has seen the memo.

This was one day after Flynn had resigned for lying to the vice president about the content of his conversations with Russian Ambassador Sergey Kislyak. And of course it is in the midst of this FBI investigation into possible collusion.

Now, the president told Comey that Flynn had not done anything wrong. And Comey became, according to the source, concerned that the president was trying to stop the investigation. The source goes on to say that Comey hopes the president's threat that he has recordings of their conversations is true. Comey would love them released. He only wrote the memos to corroborate these uneasy situations with the president, but the source says, tapes would be even better.

House Speaker Paul Ryan today said that Congress needs the facts, but also had a question for Director Comey.


REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: It is obvious there are some people out there who want to harm the president, but we have an obligation to carry out our oversight regardless of which party is in the White House.

And I'm sure we're going to go on to hear from Mr. Comey about why, if this happens as he allegedly describes, why he didn't take action at the time.


TAPPER: I asked the source close to Comey, why did he not take action at the time after the president asked him to let the Flynn investigation go?

The source said -- quote -- "Because it wasn't a very successful effort by the president and Comey thought he had pushed back on it. Living with this president is about standing up and pushing back. Comey was very sensitive to how difficult this was going to be to work with this president. He also thought he could do it" -- unquote.

At the same Coast Guard event today, President Trump was given a ceremonial saber and Homeland Security Chief John Kelly was caught on open mike recommending its best use.




TAPPER: "Use that on the press," Kelly said.

I might recommend that anyone be careful when using a saber like that one, especially anyone who has a propensity for self-inflicted wounds.

For more on this fast-moving story, CNN's Jessica Schneider joins me now live.

And, Jessica, it does look as though we all may be hearing from Director Comey directly in pretty short order.



You know, Jake, lawmakers are clamoring to get James Comey on Capitol Hill to speak publicly in an open hearing. And if James Comey accepts the invitations, we could hear from the fired FBI director as soon as next week.


SCHNEIDER (voice-over): Sources tell CNN the former FBI director documented his February 14 meeting with President Trump detailing the president's plea this way: "I hope you can see your way clear to letting this go, to letting Flynn go. He's a good guy. I hope you can let this go."

The president's alleged request to shut down the investigation of Michael Flynn came just one day after General Flynn was fired as national security adviser, and sources say Comey documented several of his interactions with the president, particularly the ones that made Comey uneasy.

It is well-known inside the Justice Department that Comey had a penchant for keeping records. E-mails leaked to "The New York Times" in 2009 show Comey wrote to then Attorney General Alberto Gonzales four years earlier arguing that torture tactics were a bad idea and that Justice officials would regret being pushed by the George W. Bush White House to approve them.

Last week, when President Trump suggested there might be tapes of his January 27 meeting with James Comey, the former communications director for Obama Attorney General Eric Holder tweeted this: "One thing I learned at the DOJ about Comey, he leaves a protective paper trail whenever he deems something inappropriate happened. Stay tuned."

Now lawmakers want to see what Comey wrote down. Republican and Democratic leaders on the Senate Judiciary Committee are formally asking the FBI to provide all memos relating to Comey's interactions with his superiors in both the Trump and Obama administrations.

Plus, they want White House counsel Don McGahn to hand over all White House records that show when Comey discussed either the Russia investigation or the Clinton e-mail server investigation with administration officials or the president himself.

The Senate Intelligence Committee is also joining those calls for documents and asking Comey to testify publicly.

SEN. MARK WARNER (D), VIRGINIA: I think we're going to have to take this sequentially. Let's see if the memos exist. Let's see if they are accurate. Let's hear the testimony from former Director Comey. He deserves to tell his story to the American people.

SCHNEIDER: House Oversight Chair Jason Chaffetz tweeted this afternoon that he wants Comey to testify next Wednesday. The last time Comey went before Congress earlier this month, he was specifically asked about interference from the Trump administration.

SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: Would you tell this committee if there is a lack of cooperation on the part of the White House?

JAMES COMEY, FBI DIRECTOR: I won't commit to that.

SCHNEIDER: Now questions are emerging about whether Attorney General Jeff Sessions and Deputy A.G. Rod Rosenstein knew about Comey's memos when they recommended firing the FBI director. Rosenstein is scheduled to brief senators behind closed doors tomorrow.


SCHNEIDER: And the president is meeting with four FBI director candidates this afternoon at the White House.

On that list, the former Democrat-turned-independent-Senator-from- Connecticut Joe Lieberman and two other names that haven't been mentioned before today, Frank Keating, the former Republican governor of Oklahoma, also a former FBI agent, and Robert McFeely, a career FBI agent who once led the criminal and cyber-branch and retired in 2014.

The president will also meet today with Andrew McCabe, who is currently acting director of the FBI. And, Jake, we do know that Attorney General Jeff Sessions has in fact spoken with all four of these candidates -- Jake.

TAPPER: All right, Jessica Schneider, thank you so much.

The White House just breaking their silence on the reported Comey memo for the first time. What did Sean Spicer have to say about what Comey claims in that memo?

That's next.



TAPPER: Welcome back to THE LEAD.

Staying with politics now, and pressure mounting at the White House, as multiple controversies surround President Trump. Today, the president called out the media and the world as he addressed graduates at the Coast Guard Academy in Connecticut, but, privately, he's confronted with a host of issues, the latest reports that he urged former FBI Director James Comey to shut down the investigation into Michael Flynn, before that, claims the president shared highly classified information with the Russians, and, before that, of course, fallout over abruptly firing the FBI director, which he said he was decided to do while thinking about the FBI probe of his campaign.

CNN's Jim Acosta shows us now how the White House is trying to manage this crisis -- or these crises, rather -- behind the scene.


TRUMP: You will find that things are not always fair.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): It was not your ordinary commencement speech. As President Trump delivered remarks to graduates at the U.S. Coast Guard Academy, it became clear...

TRUMP: Look at the way I have been treated lately, especially by the media.

ACOSTA: ... the speech was all about him.

TRUMP: no politician in history -- and I say this with great surety -- has been treated worse or more unfairly. You can't let them get you down. You can't let the critics and the naysayers get in the way of your dreams.

The people understand what I'm doing, and that's the most important thing. I didn't get elected to serve the Washington media or special interests.

ACOSTA: The defiant remarks to the Coast Guard graduates hardly sounded like a president lost at sea, more like a commander in chief gearing up for battle. Consider what Homeland Security Secretary John Kelly said to the president after he was presented with a ceremonial saber.

KELLY: Use that on the press, sir.

ACOSTA: But the real fight for the president is with former FBI Director James Comey. The White House is rejecting Comey's allegation stated in a memo that the president urged the FBI director to shut down the investigation into former National Security Adviser Michael Flynn.

[16:15:05] Since the last days of the campaign, the president has shifted in his assessments of Comey.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It took a lot of guts. I really disagreed with him. I was not his fan, but I'll tell you what? What he did, he brought back his reputation.

ACOSTA: From praising his reopening of the Hillary Clinton e-mail probe just days before the election, to his interview with NBC News last week, when he admitted the Russia investigation was on his mind when he fired Comey.

TRUMP: Look, he's a showboat, he's a grandstander. The FBI has been in turmoil.

ACOSTA: The president's son Donald Jr. is lending his support on Twitter. He re-tweeted a comment that hoping Comey cuts Flynn some slack is not close to obstruction with one word, truth.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: If Jim wants to be heard, Jim will be heard.

ACOSTA: New Jersey Governor Chris Christie appeared to blame the president's recent woes on his White House staff.

CHRISTIE: Listen, I've been -- I think I've said a number of times publicly before, that I think the president has been underserved by his staff.

ACOSTA: But at this point, it seems no staff shake-up will quite the calls for a special prosecutor.

SEN. BERNIE SANDERS (I), VERMONT: Clearly, where we are now is in my view we need a special prosecutor to conduct an independent investigation to determine whether or not there was collusion. Clearly, we need to make the tapes, if there were recordings done at the White House between Trump and Comey, public.


ACOSTA: And some breaking news coming in just at this moment, Jake. We're told by White House officials that the president has decided on this upcoming foreign trip where he'll be going overseas to Saudi Arabia, Israel, Italy and Brussels, that he's not going to for now move the U.S. embassy in Israel to Jerusalem. That is something that he has been talking about for some time.

It was sort of a campaign promise that he had made time and again, but for now, the White House says he is not going to be ordering the moving of that embassy from Tel Aviv to Jerusalem, but we're cautioned by White House officials, senior administration officials, that this decision is not a permanent up, but certainly one that will ease tensions as he heads to the Middle East later on this week -- Jake.

TAPPER: All right. Jim Acosta at the White House for us, thanks so much.

The Republican Party finding itself in a tough spot. Will members on Capitol Hill be forced to choose between their legislative agenda and President Trump? A Republican member of the House Foreign Affairs Committee will weigh in live, next.


[16:21:23] TAPPER: Welcome back to THE LEAD.

The latest bombshell out of the White House is putting Republicans in Congress in a difficult spot, support the president and try to get their agenda passed, or draw the line at President Trump's request to his FBI director.

Congressmen Lee Zeldin, Republican of New York, joins me now.

Congressman, thanks so much for joining us. We appreciate it.

If the Comey memo exists as sources say it does, are you inclined to believe the former FBI director, or are you inclined to believe the White House denial?

REP. LEE ZELDIN (R), NEW YORK: Well, I don't really -- I can't think of any reason to question James Comey's honesty. He is -- his long history of service to our country, a man of high integrity. So, I wouldn't question that at all. I mean, I haven't agreed with all of the decisions and the handling of

the 2016 case, but I look forward to reading the memo, and I wouldn't just assume that what I'm reading is false by any means.

TAPPER: So, let me ask you a question because that's interesting. The White House is denying it. We've heard a lot of things from the White House that have turned out not to be true, some of them contradicted by President Trump himself. Do you have full confidence in President Trump right now?

ZELDIN: Yes, I do. You know, there are a whole lot of wins that, unfortunately, are not getting talked about. There have been a lot of bills that have rolled back regulations passed by Congress, signed by the president with regards to the -- the Syrian air strike, limited air strike targeting, infrastructure, not people, giving General Nicholson additional resource in Afghanistan, I'm just giving three examples and I can think of others.

But what happens is with these distractions, you know, here we are, the two of us are talking about James Comey memo as opposed to the good stuff that's happening as well.

TAPPER: Why do you think president Trump fired James Comey?

ZELDIN: Well, all I know is the reasons that were publicly released. I'm not aware of any additional facts, but what was released as far as the reason was related to the handling of the investigation last year.

I mean, you know, Maxine Waters, a colleague of mine from the other side of the aisle, she said if Hillary Clinton had fired Comey, that would have been OK but because it's President Trump it's not. You know, the fact is 2016 did cause a breach of trust between the American people and the FBI, which is unfortunate and really needs to get repaired regardless of who is going to win last November's election.

TAPPER: Your point about Democratic hypocrisy on this matter is well taken, but I think it's also fair to say, President Trump doesn't agree with the idea that Hillary Clinton was treated unfairly. The only complaint he's had about James Comey and Hillary Clinton is that she wasn't criminally charged and he ultimately said that he was going to fire Comey regardless of the Rosenstein memo from the Justice Department, and he said when he made the decision to fire Comey he did so thinking about the Russia probe and how unfair it was.

Does that concern you at all?

ZELDIN: Well, I mean, I think it's important to be crystal clear as to exactly why really important decisions like this are being made. I -- you know, I read the memo that was considered, that was submitted to the president, that was used and has been referenced. I read the stories and the quotes that have been made in the days since the decision was made, and you kind of -- you try to add up what you know to form a conclusion. But, you know, there really shouldn't be so much speculation about what we don't know. [16:25:02] So, you know, I think that in the hours, just the hours

after the announcement and the days, that there's been a confusing message that has been brought out as far as the exact reasoning. And that doesn't help the situation.

TAPPER: Congressman Lee Zeldin, I share your desire, the next time we're talking, it's about foreign policy and legislative issues. Thanks so much for your time. I appreciate your time.

ZELDIN: You got it. Thanks, Jake.

TAPPER: He says Republicans would already have impeached Hillary Clinton if she did a fraction of what President Trump is accused of doing. So, what does he think Congress needs to do with President Trump?

The ranking member of the House Oversight and Government Reform Committee, Congressman Elijah Cummings of Maryland, joins us next. Stay with us.


TAPPER: Welcome back.

Continuing with politics, and Republicans very slow to openly say what they really think of all the drama going on at 1600 Pennsylvania Avenue. Instead, Republican members saying they want to know more. Some are now even siding with Democrats, however, in calling for an independent commission or special prosecutor to take over the Russia- related investigations.

CNN's Manu Raju joins me now on Capitol Hill.

Manu, Republicans are trying to focus on their own agendas, the legislation they want to pass, but the distractions at the White House are not helping.

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Yes. No question about it. Concerns are growing that this endless string of controversy continues to distract from what they are trying to do on Capitol Hill. Even Trump loyalists are asking the White House to get things back on track, and this comes as Republicans are demanding more answers to their questions and as well as some Republicans say they will not -- they do not trust President Trump's handling of classified intelligence.