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Clinton E-Mail Investigation; Speech to Wellesley Graduates; Russia Questions Build; Leaders Discuss Trade & Terrorism; Trump scolds NATO; Trump Meets with Merkel; Aired 1-1:30p ET

Aired May 26, 2017 - 13:00   ET

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

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WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 6:00 p.m. in London, 7:00 p.m. in Tripoli, Bolivia. Wherever you're watching from around the world, thanks very much for joining us.

Up first, President Trump talks terrorism, trade and much more with world leaders at the G7 Summit in Italy. The president is nearing the end of his first international trip since taking office. We've got a lot coming up on that, but I want to get to some breaking news right now.

CNN has learned this hour that the former FBI director, James Comey, was aware that a critical piece of information in the Hillary Clinton e-mail investigation was fake, created by Russian intelligence. They're -- that awareness is what led to Comey to act unilaterally when he publicly declared that the investigation was over last summer.

Our Chief Political Correspondent Dana Bash helped break this story for CNN. She is joining us. Dana, walk us through -- tell us what you and your team have learned.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Well, as you mentioned, CNN has learned that this is the key, that the FBI director James Comey, then FBI director, knew that a critical piece of Russian information related to the Hillary Clinton e-mail investigation was fake. But he felt that he needed to take action anyway because he was concerned that if the information became public, fake or not, it would undermine the investigation and the Justice Department itself.

Now, this is according to multiple sources talking to my colleague, Shimon Prokupecz, and myself. Now, it was because of these concerns that Comey decided to publicly declare that the Clinton probe was over last summer without consulting then Attorney General Loretta Lynch.

Now, you may remember that earlier this week, "The Washington Post" reported on this intelligence and the doubts about its credibility. But the fact that Comey felt that he had to act based on Russian disinformation is a stark example of how Russia interference really did impact the decision making at the highest levels of the U.S. government during the 2016 campaign.

Now, the Russian information at issue claimed to show that then Attorney General Lynch had been compromised in the Clinton investigation because of e-mails between the then DNC Chair Debbie Wasserman Schultz and a Clinton campaign operative, saying that Lynch would just make the FBI Clinton probe go away.

According to one government official in classified briefings, Comey told lawmakers that he was afraid that this information would, quote, "drop" and undermine the investigation. But Comey didn't tell lawmakers at the time that he doubted the accuracy of the information, even in a classified setting.

Now, according to one government official close to Comey, the FBI director felt that the validity of the information didn't matter because if it came public he had no way to discredit it without burning sources and methods, Wolf.

BLITZER: Now, you remember, in public, Comey gave the notion for breaking protocol and making this announcement last July because Bill Clinton had boarded the then Attorney General Loretta Lynch's plane which was inappropriate. That's why he decided to speak out.

BASH: That's right. I am told he didn't even mention that in classified settings on Capitol Hill. He didn't talk about the plane incident at all.

Instead, he told lawmakers that this Russian information was the primary reason he took that unusual step to announce the end of the Clinton probe himself.

BLITZER: It sounds, though, like the Russians were still successful in their operation, even though Comey knew this so-called memorandum was fake, he still acted as a result of it, at least in part.

BASH: That's right. Wolf, if you think about the chain of events that ended up -- this all ended up setting off. When Comey held his press conference in July of 2106, announcing no charges against Clinton, he also took the extraordinary, and many people say, inappropriate of calling Hillary Clinton extremely careless.

And Clinton aides are convinced that her reputation was damaged with voters in a way that she never recovered from, from that press conference. And, of course, and that press conference wouldn't have happened, likely happened, without Russian interference.

Also, in talking to many officials on Capitol Hill and elsewhere, dissemination of fake information is still a major issue. Multiple sources tell us that Russia is still, at this moment, trying to spread false information in order to cloud and confuse ongoing investigations, Wolf.

BLITZER: I want you to stand by.

I want to bring in our panel to further discuss what we've just heard. Our CNN Political Director David Chalian is with us. Our CNN Political Analyst David Gregory and our Legal Analyst, the former federal prosecutor, Laura Coates, is with us as well. You know, David Chalian, if you're a Democrat, your head is probably exploding right now getting a lot of this new information on what prompted the then FBI director to go ahead with that extraordinary news conference last July.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: And as Dana said, then a sort of cascading series of events that would cause those Democrats to, sort of, be banging their head on the table.

[13:05:01] It seems to me, what's going on here is that when "The Washington Post" story broke the other day, there was this notion that Jim Comey was duped.

And I -- and I think what is -- what McCabe, as Dana's reporting has -- telling folks the Hill and others, is to, sort of, clean up that notion, no, no, no, he knew.

Can I ask you a question? I don't even know that you may know the answer. Timeline wise, did he know -- I know that -- because the Justice Department got the memo or the intelligence in March, right? Did Comey know, at the time, it was fake when he gave the press conference?

BASH: We have been told that he knew pretty much -- that the FBI knew pretty much right away --

CHALIAN: In real time.

BASH: -- that it wasn't -- that it wasn't true.

Now, these briefings I talk about, classified briefings on Capitol Hill, this was a few months ago, when he was trying to explain, sort of ex-post-facto to what happened.

CHALIAN: Right. Sort of an autopsy.

BASH: Exactly.

CHALIAN: Yes.

BLITZER: The problem, David Gregory, though, is even though the FBI Director James Comey, at the time, knew it was a fake memorandum, what he feared was it would be released. That a lot of people out there would automatically believe there was a conspiracy going on between the then Attorney General Loretta Lynch and Debbie Wasserman Schultz, then head of the DNC, the Democratic National Committee, and Clinton campaign operatives.

DAVID GREGORY, CNN POLITICAL ANALYST: You know, I think to take the larger view here. Jim Comey, based on everything that we've heard through reporting, ours and others, and what he has said, was trying to contain a situation that was getting out of control.

So, this thing is playing itself out. Remember what's happening at that time. You've got a candidate, candidate Trump, saying the fix is in. That the government is conspiring to let Hillary Clinton off the hook.

So, this kind of thing drops, as Dana reports. Then, all of a sudden, the FBI is in a position, wait, you're not prosecuting and you have all this information even though it's fake information?

Comey, at all points, is reaching a conclusion which is nobody would bring any criminal charges to Hillary Clinton or people around her. This is -- this is -- does not rise to that level.

But he's trying to control the politics because he has FBI agents who work for him. He's got conservatives on the Hill who want to see her prosecuted. Who go back to the Petraeus case on his handling of classified information, which is far different because that was far in -- it was intentional, and think that there was -- that there was unfairness here.

So, he's trying to manage all of this and realizes, ultimately, that he can't by coming out publicly and saying that nobody would have ever charged her but, at the same time, she was reckless. This thing was just too big to contain.

And it shows, as Dana said, just how successful the Russians were at pushing on open doors of cynicism and disbelief among Americans about Hillary Clinton, our institutions and our electoral system.

CHALIAN: Jim Comey also had an American electorate that he wanted to have faith in what the result finally was. So, when --

GREGORY: Exactly.

CHALIAN: -- (INAUDIBLE) all those factions, he also just wanted everyone when the information became public to have full faith in the investigation --

GREGORY: That's important.

CHALIAN: -- that took place.

GREGORY: That's very important.

BLITZER: Laura, I'm anxious for your analysis as a former federal prosecutor.

LAURA COATES, CNN LEGAL ANALYST: Well, the role of the FBI is not to be the defensive politician who's safeguarding the integrity of democracy. The role is to be unseen and proactive investigator.

And so, all of his endeavors to try to preserve the integrity of the FBI really undermined it. Because while he took the role that he did, and I was critical back then of the very vocalization that he had and, essentially, tar and feathering in the public square, and then try and usurp the role of a public prosecutor.

The reason you can't do that and the reason he shouldn't have been responsive is because you have to allow the investigation to go and run parallel and ultimately end at the desk of the people who decide the issue.

In his intention and maybe they were pure, maybe they were ego based. Who knows. But his intentions missed the mark because what it did is show that even when it comes to knowingly fake news you have to address, you -- he felt the need to try to put in the public an investigation that was yet not closed or should not have been in the public eye.

GREGORY: And you're 100 percent right. And we don't -- it could be ego, it could have been good intentions. It could have been both.

We also have to be critical of Attorney General Lynch who took herself out of this game. And she is the decider. And she felt that she couldn't or wouldn't and that's a huge -- I think a huge area where she's vulnerable to criticism as well as him, even though you're 100 percent right on it.

COATES: Let's be clear. I mean, having been (INAUDIBLE) attorney, what she said was not that she would turn a blind eye to the integrity of the career prosecutors. Her statement was she would defer to the recommendation of her career prosecutors and ultimately the FBI underlining their investigation.

That happens every day on most cases. She or right now Jeff Sessions is not going to be the one to decide every single case. They must defer to the ones who are nonpartisan, who are not political appointees.

GREGORY: And if the FBI wasn't going to charge this, --

COATES: Right.

GREGORY: -- they should just shut up and not be in it.

COATES: But still -- but you're right. But yet, she does have some responsibility, and perhaps would happen in the time rack (ph).

But ultimately speaking, it still, even with that moment, was not the FBI director's role to then give a full press conference about the intentions of something he could not control.

BLITZER: Why couldn't -- Dana, who couldn't Comey simply have said, hey, there's a fake memorandum that out there. We know it's the Russians who are circulating this. It's phony. It's fake. Forget about it. It has nothing to do with this investigation.

[13:10:13] He didn't even tell, I understand, members of Congress behind closed doors that he knew that this memoranda was fake.

BASH: That's exactly right. Sources who I've talked to say that the information was, again just a few months ago, given to Congress about this Russian intelligence but not that it was fake. That's mind boggling.

I don't know the answer to that. Maybe he was not sure that even though it was classified setting with key members of Congress that it wouldn't get out.

Because to answer the first part of your question, what Shimon is told is that there was a lot of concern about protecting sources and methods. And that if the U.S. government let it be known that they knew that this was a fake document or fake piece of intelligence from the Russians, then the Russians would figure out where they got it from.

GREGORY: But don't we know another part of this answer, which is what Comey has said, was he wanted to blow the whistle on the Russians in the course of the campaign and he claims, I forget whether he said this publicly or whether this is through reporting, that the administration -- the Obama administration did not want to do that because they didn't want to put their thumb on the scale and make it seem they can they were trying to sway the election.

So, there's a lot of people trying to put their arms around this thing, managing it, except Donald Trump who was out there saying, hey, the fix is in and it's a big conspiracy. And you --

BLITZER: Except, in early October, the Obama administration did put out a statement saying the Russians were --

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CHALIAN: -- earlier in the summer.

BLITZER: Earlier they did but by October 8th, I think that memorandum signed by Jay Johnson, the Secretary of Homeland Security --

BASH: Right.

BLITZER: -- and the director of National Intelligence at the time, they issued that public statement, accusing the Russians of intervening.

I want to quickly, David Chalian, play a little sound. This is Hillary Clinton delivering some of her commencement address at her alma mater, Wellesley college up in new England. And she drew a parallel to what happened back when she was delivering her graduation commencement address, back in 1969, and what she suspects might be going on right now. Listen to this.

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HILLARY CLINTON (D), FORMER PRESIDENT NOMINEE: If any of you are nervous about what you'll be walking into when you leave the campus, I know that feeling. We were furious about the past presidential election of a man whose presidency would eventually end in disgrace with his impeachment for obstruction of justice.

(END VIDEO CLIP)

BLITZER: Then she went one step further and she said, back at that time, that president, she was referring to Nixon, fired the man who was in charge of the investigation. CHALIAN: She would know these facts, right, because she served on the

-- as a staffer on the Watergate Committee after her --

BASH: To make this even more interesting.

CHALIAN: -- college days. Of course, Nixon, just to get the factual record right, wasn't impeached. It was the threat of impeachment that --

BLITZER: He was about to be impeached. That's when he offered his letter of resignation.

CHALIAN: He was about to be impeached. Exactly.

But watching that entire speech, which was a fiery, feisty takedown of Trump, without calling him out by name. It just seems now, we've seen multiple Hillary Clinton appearances and speeches, Wolf, since the election where she just doesn't give a heck about anything anymore. Who, this woman that used to be the most scripted, afraid of her shadow, consultant laden, weighing in her mind, say this, say that, how will it be perceived?

This -- In the last six months, we keep seeing her in a way where she just doesn't seem to care about the perception of her remarks as much as she once did and feels emboldened to make these arguments against the president.

BLITZER: You know, it's interesting because what does she have to lose, Dana? Because she wants to speak out. She's not running for anything anymore. I suspect she's not going to be running for anything anymore. If she wants to speak out, she can speak out.

BASH: No question about it. And, look, this was, obviously, she was in her ultimate comfort zone, giving a speech to Wellesley graduates, 40 plus years after she gave a speech to Wellesley graduate when she was one of her own.

And so, it was very fiery, very tough, she knew her audience would just lap it up which she did. And I think this fact that she made those parallels was something that she couldn't -- she -- how could she not do that, given the experience that she had and where she is right now?

GREGORY: You know, that speech 40 plus years ago was so notable for its idealism. It's actually very sad to see, you know, on the other end of it that she, Hillary Clinton, is in a place of so much cynicism because I think a lot of younger people probably feeling that way. And we can't lose hope in the system, nor should she lose hope.

And I think, in the course of all of this, you know, abandoned. She's also got to take some responsibility for where she fell short and I know that that's coming. We have to wait for the books.

BLITZER: We're going to have more on this speech.

All right, guys. Everybody stand by. A lot more coming up. [13:15:02] Still ahead, new details in the investigation into this week's deadly attack in Manchester, England. British authorities are now working to contain the terror network that they believe was behind the suicide bombing.

Plus, we'll have more on Hillary Clinton's commencement speech to Wellesley grads. She called out the president on several issues, including his budget proposals, the Russia investigation and a whole lot more.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), FORMER PRESIDENTIAL CANDIDATE: In the years to come, there will be trolls galore. They may even call you a nasty woman.

(END VIDEO CLIP)

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BLITZER: President Trump's first international trip since taking office now winding down. The president and world leaders, they're meeting at the G-7 Summit in Italy right now, but the trip has not provided the escape from the Russia controversy that the administration hoped it would.

Our senior White House correspondent, Jeff Zeleny, is joining us now live from Sicily.

Jeff, the administration was asked earlier about whether sanctions imposed against Russia for election meddling will continue. The president's top economic adviser said right now we don't have a position. So what is Gary Cohn saying to clarify the administration's position?

[13:20:04] JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, that was so interesting when he said that yesterday. It certainly raised eyebrows. But just a few moments ago, in a briefing with reporters here in Sicily, Gary Cohn sort of changed his statement and he said very bluntly. He said this, Wolf. He said, "we're not lowering our sanctions with Russia. If anything, we would probably look to get tougher on Russia. The president wants to continue to keep those sanctions in place."

So, Wolf, that was the president's top economic adviser saying something that we've not really heard from the president at all along this entire week. That's talk about Russia. He clearly wants to avoid the controversy that's happening back in Washington. But by doing so, he's raising questions about if he's willing to get tough on the Russian president. Of course, though, that is a central sort of unspoken question in the hallways here in the meetings and other things, what Donald Trump's view of Russia is and is he willing to get tough with President Putin.

Wolf. BLITZER: The G-7 Summit in Sicily, where you are right now, follows the president's speech to NATO allies where he scolded members for not meeting their financial obligations. One analyst described the speech as diplomatically inept at best and deliberately insulting at worst. So how is the message being received among the U.S. allies?

ZELENY: Wolf, in one respect it was not a surprise because the president, of course, has made these comments before. But it was a surprise that he was doing it in that moment, in this dedication to a 9/11 type of memorial at the new NATO headquarters in Brussels. There really were some jaws sort of dropping because of this.

But the - the challenge here is that shows the advisers inside the White House their disagreements here. This is the Steve Bannon view, the America first view of this White House here. So some leaders certainly were not that thrilled by that.

But, Wolf, we're getting new word just a short time ago that the president is going to have a one-on-one meeting with the German chancellor here this evening, Angela Merkel. He will be talking, of course, face-to-face for the first time on this meeting. So he is doing a lot of meetings on the sideline here and you have to wonder if he's doing some, you know, much more of a charm offensive in person in these meetings because after yesterday many people here think he needs it.

Wolf.

BLITZER: Yes, I wonder if he's going to respond to what she said about not building walls. We know he wants to build a wall between the U.S. and Mexico.

ZELENY: Right.

BLITZER: Jeff Zeleny, thank you very much.

As the president wraps up his first overseas trip, let's take a step back and assessed how he handled it, at least so far. I'm joined by our military and diplomatic analyst, retired Rear Admiral John Kirby, and global affairs correspondent Elise Labott.

I asked both of you last week before the trip started to give me some thoughts about what you thought were the biggest challenges facing the president.

John, you told us that staying strategic, staying on message, staying engaged were his three big challenges. How did he do?

REAR ADMIRAL JOHN KIRBY (RET.), CNN MILITARY & DIPLOMATIC ANALYST: Mixed. I think on strategic, look, he had a strong, unifying message about terrorism in Riyadh. He was able to stay out of the details in the peace process in Israel. But that unifying message came by about - by vilifying Iran. Right when they were having an election, electing - re-electing a moderate president. And then his - the way he has couched terrorism has been in starkly militaristic ways. He - no talk about the social, economic and political factors that go into radicalization. So I think he's mixed there.

On message, yes, he was very disciplined. I think he gets an "a" for staying on message. I would have liked to have seen him do a press conference. I think that was a mistake. Yes, there's risk there, but I think - I think that would have been useful on his first trip.

And then staying engaged, look, I go back to what I said earlier. I think he fell flat on this. He had a chance in Brussels to show American commitment and leadership to multilateral institutions and he didn't do that. Instead, he arranged them and complained and nagged about defense spending. It was a chance to show the United States as the big nation we are. Instead he made us look cheap and small.

BLITZER: You said, Elise, that his three big objectives, in your opinion, strengthen U.S. ties with Sunni Arabs, raise more Arab and Muslim support to fight terrorism, restart the peace process between the Israelis and the Palestinians. How did he do?

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, I think on the first two, as John said, he did pretty well. He had that message of re-engaging the Sunni and Gulf Arabs who really felt abandoned during the Obama administration. I mean that was a real good set of days for him not only with the Saudi leaders, but with Gulf leaders and that speech to the Arab and Muslim world. I think he got good marks for that. And also with terrorism I think he had a unifying message that, you know, he was not at war with Islam, but that, you know, Islamic and Arab leaders had to take more of the responsibility of shutting out those who are, you know, exploiting their religion. And I think on the Israeli peace process, you know, both sides were really excited about his visit. You never saw an Israeli prime minister so giddy about a U.S. presidential visit. But - and also he visited the Palestinian territories, which I think was significant. But both sides were looking for him to say and do certain things. You didn't see any announcement on the movement of the embassy. You didn't see anything on a two state solution. So I think there people were looking for a little bit more.

[13:25:17] BLITZER: You think there's really any movement on that Israeli/Palestinian peace process?

KIRBY: No, I don't. No, I don't. There's no political will right now to move that process forward. I think he's trying to reset the process, which is fine. But there's no political will. Look, there's belief in Israel that Netanyahu is vulnerable here. He needs his base. I don't think he moves on anything right now.

BLITZER: Let's see if they can do something there. They're trying. They're working behind the scenes.

LABOTT: Seeing how complicated it is.

BLITZER: And they're - what they're trying to do is get the Sunni Arabs on board -

LABOTT: Right.

BLITZER: To help out and they're making a point that the Saudis, the Emiratis, the Qataris, maybe they can help out if -

KIRBY: But he has couched this terrorism fight now in starkly Sunni versus Shia terms.

BLITZER: Right.

KIRBY: And that's probably a mistake going forward.

BLITZER: Only Sunni Arabs were invited to Saudi Arabia for that summit.

LABOTT: Right.

BLITZER: The Shiite leaders, including the Shiite prime minister of Iraq, was deliberately not invited to that summit in Riyadh.

KIRBY: Exactly.

BLITZER: All right, guys, thanks very much.

Coming up, we're following new details in the investigation into this week's deadly attack in Manchester, England, including a conversation between the bomber and his brother. We have new information. We'll be right back.

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