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Scaramucci Resigns, New Chief of Staff Wanted Him Out; CNN: Kelly Called Comey to Express Anger Over Firing. Aired 5-6p ET

Aired July 31, 2017 - 17:00   ET

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


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That's it. Handing it over to Wolf Blitzer. Thanks for watching.

[17:00:13] WOLF BLITZER, CNN ANCHOR: Happening now, breaking news. Scaramucci out. President Trump's controversial new communications director, Anthony Scaramucci, resigns after just 10 days on the job. We're learning new details of why he was asked to leave.

Kelly's anger. New White House chief of staff John Kelly was so upset with how President Trump fired James Comey that Kelly called Comey and said he was considering resigning. We have exclusive new reporting.

Show of force. The U.S. military responds to North Korea's latest rocket launch with a missile test of its own. Can the Kim regime's new weapons threaten U.S. cities, including Los Angeles and Chicago?

And expelled. Russian President Vladimir Putin makes a dramatic move, ordering hundreds of American diplomatic staffers to leave their posts in response to new U.S. sanctions. Is it a major setback for U.S. intelligence?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following breaking news. Anthony Scaramucci is now the latest Trump team casualty. Just hours after President Trump tweeted there is no chaos in the White House, Scaramucci resigned as communications director, a job he held for just 10 days. Sources tell CNN the new White House chief of staff, John Kelly, wanted him out.

Also, a CNN exclusive. Sources have revealed that Kelly was so angry at the way President Trump fired FBI Director James Comey, he told Comey he might resign from his position at the time as homeland security secretary.

Also breaking this hour, no comment from the White House on new sanctions against Russia for Moscow's election interference. A spokeswoman says President Trump intends to sign the bill but won't say when. Russian President Vladimir Putin is already retaliating, expelling hundreds of American diplomatic staff and planning to confiscate two properties owned by the United States.

And new tonight: President Trump is saying -- and I'm quoting him now -- "We will handle North Korea." That's in response to the Kim Jong- un regime's second launch of an intercontinental ballistic missile in less than a month and its most successful yet. Experts believe the missile had a potential range of some 6,000 miles, putting major U.S. cities within striking distance.

We're covering all of that and much more this hour with our guests, including Congressman Jim Himes of the House Intelligence Committee. And our correspondents and specialists are also standing by.

First, let's go straight for the very latest. This is a bombshell. Our senior White House correspondent, Jim Acosta, is working the story for us.

Jim, another major shake-up.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Wolf. Earlier this morning President Trump was insisting there was no White House chaos here in his White Wing, and of course, later on this afternoon, his administration once again plunged and descended into more staff turmoil as his recently hired and embattled communications director, Anthony Scaramucci, stepped aside.

Of course, Scaramucci has been in the headlines almost as much as the president has over the last 10 days, as he's been on the job as communications director, and that he's been trying to go after people that he perceived as rivals, like the former chief of staff, Reince Priebus, White House press secretary Sean Spicer, and the chief strategist over here at the White House, Steve Bannon.

And it appears, even though the president was trying to make things easier for his new chief of staff, John Kelly, to have some sort of control and order here at the White House, that he was very much disappointed, according to sources, and offended, even according to sources, by Scaramucci's comments to "The New Yorker," where he went on that profanity-laced rant, going after Reince Priebus, going after Steve Bannon.

Here's what White House incoming press secretary Sarah Huckabee Sanders said earlier today. She did say that Kelly is going to be the person at the top here just under the president. All staff will report to him, but also that Scaramucci's comments may have had something to do with his departure. Here's what she had to say.

(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: The president certainly felt that Anthony's comments were inappropriate for a person in that position, and he didn't want to burden General Kelly, also, with that line of succession. As I think we've made clear a few times over the course of the last couple of days to several of you individually, but General Kelly has the full authority to operate within the White House; and all staff will report to him.

(END VIDEO CLIP)

ACOSTA: Now, we should point out during that briefing that just wrapped up within the last hour, Wolf, Sarah Huckabee Sanders was asked how was it that the president could be offended by that kind of inappropriate language coming from Anthony Scaramucci when he has certainly engaged in that himself? As a matter of fact, it was the president's language as a candidate during the campaign that almost derailed his candidacy when he was caught on tape saying all sorts of things on "Access Hollywood."

[17:05:05] Meanwhile, over here at the White House, in terms of Anthony Scaramucci's departure and what it means moving forward, Wolf, once again they have the position of a White House communications director to fill. This will be, when it happens, the third or fourth person to fill that job, when they actually get to the point of putting somebody in that position.

And then another interesting thing that came up at the briefing today, Wolf, aside from the Scaramucci news, we should point out deputy press secretary, incoming press secretary Sarah Huckabee Sanders, she was asked about some of the comments that the president made last week at a law enforcement event, where the president talked about police officers being able to rough up police suspects. Sarah Huckabee Sanders said at the briefing today that the president was just joking about that.

I tried to ask, as Sarah Huckabee Sanders was leaving the room, how could the president of the United States joke about police brutality? She did not answer the question, Wolf.

BLITZER: So basically, what she's saying, though, on the chain of command, she's saying if Steve Bannon, Jared Kushner and other senior White House officials want to go speak, the president, in her words, all staff will report to him, meaning the new White House chief of staff, General Kelly. Is that right?

ACOSTA: She made that clear a couple of times during the briefing, Wolf. But that is going to be tested mightily, I would think, in the coming weeks, not only because Jared Kushner and Ivanka Trump are part of the president's family and have so-called, what they call walking -- walk-in privileges. An adviser or special assistant to the president can walk into the Oval Office without going through the chief of staff.

Obviously, this is something that Reince Priebus did not have control on when he was the chief of staff here at the White House, Wolf. Various officials could simply go around Reince Priebus and meet with the president without the chief of staff having any knowledge of that. Obviously, retired General Kelly wants to put a stop to that and have the staff report directly to him.

But as you know, even with Anthony Scaramucci stepping aside, there are still some officials here with some sharp elbows who might test that system. So we'll have to wait and see whether or not what we're hearing today is actually how it plays out in the weeks and months ahead. Because what we've seen so far, the president likes to talk to outside adviser, likes to talk to outside voices, people who don't necessarily go through the chief of staff, Wolf.

BLITZER: Very, very interesting. All right. Jim Acosta, thanks very much.

We're also learning exclusive details of a conversation between John Kelly and James Comey after Comey was fired as FBI director by President Trump.

Our justice correspondent, Pamela Brown, is working her sources for us.

Pamela, they tell you Kelly, who was then homeland security secretary, was angry about how the president handled Comey's firing?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: That's right, Wolf. We've learned that the incoming White House chief of staff, John Kelly, was so upset, so disgusted as one source put it, with the way President Trump handled the firing of FBI director James Comey that he called Comey shortly after he was terminated to say how angry he was, to express that. This is according to two sources familiar with the conversation between Kelly and Comey. And at the time, Kelly was secretary of homeland security.

The sources we spoke with, my colleague, Shimon Prokupecz and I, say that Comey was particularly upset by the way it all went down, by the way that Comey was treated, when he learned that he had been fired on the news rather than learning about it by the president, from the president.

And this call took place while Comey was traveling back from Los Angeles to Washington on May 9 after learning this news.

Now, Comey declined to comment to us about this story. The White House and the Department of Homeland Security did not comment -- Wolf.

BLITZER: I understand you're told that General Kelly went even further in that phone call?

BROWN: That's right. So he expressed his anger and he even, at one point, said that he was contemplating resigning from his position as secretary of homeland security in a showing of solidarity in the wake of Comey being fired. And we're told during this phone conversation that Comey responded by telling him not to resign, not to do anything.

Now, both sources caution that it was unclear how serious Kelly was about resigning, and of course, that never happened. And fast forward a few months later. Now he is the White House chief of staff.

For context, though, the sources said that Comey and Kelly are not particularly close friends, but they had a professional relationship and a deep mutual respect for each other. And bottom line, Kelly was upset by the way that Comey was treated by the president in this case, Wolf.

BROWN: Pamela Brown reporting for us. Pamela, thanks very much. Lots to discuss. Let's get a lot more on all of this. Democratic

Congressman Jim Himes of Connecticut is joining us. He's a member of the House Intelligence Committee.

Congressman, thanks for joining us.

REP. JIM HIMES (D), CONNECTICUT: Hello, Wolf.

BLITZER: Let's get to the breaking news first. What, only about 10 days on the job, communications director Anthony Scaramucci is out. What does this say to you about the influence of the president's new White House chief of staff, General John Kelly?

HIMES: Well, I'm not at all surprised. Look, Kelly in and Scaramucci out is nothing but good for this White House and for the country. You know, Mr. Scaramucci showed on about day three that he was all about himself, that he was welling to -- willing to step well beyond the bounds of anything acceptable in the, you know, most powerful building in the land.

[17:10:11] And, you know, John Kelly, you know, a Marine, well- respected. He -- if anyone can bring order to what has been a chaotic White House operation, I would expect it would be a four-star Marine. I think he's respected around town, around Washington. I think he's going to be respected within the White House and, hopefully, he will tame some of the crazy that has prevailed there in the last couple of months.

BLITZER: I also hope you'll react, congressman, to the other news we're reporting this hour that the new White House chief of staff, John Kelly, was so upset with how President Trump handled the firing of the FBI director, James Comey, that Kelly called Comey afterward and said he was also considering resigning. This according to sources familiar with the conversation between Kelly and Comey. What does that tell you?

HIMES: Well, I had two reactions to that. My first reaction was that, you know, John Kelly is, by all accounts -- I don't know him terribly well -- a man of honor and a man of dignity. And of course, whatever you think of Jim Comey, and people have plenty opinions about Jim Comey, the way he was treated by the president, and I don't care who you are or how you think about different political parties, was simply unacceptable for a man who's been a hell of a patriot, ran the FBI well, had a lot of respect within the FBI.

So I thought to myself, you know, not surprising. That's the -- act of an honorable man. What sort of caught my eye was the fact that that story came out today. And we know President Trump, one of his quirks is that anything related to Mueller or the FBI or the Russia investigation just makes his head explode. And so I wonder if this is not a sort of uncomfortable moment. And it doesn't make me happy, because I am keeping my fingers crossed that General Kelly will impose some order and establish a good relationship with the president. I suspect that that story really doesn't help.

BLITZER: Yes, and all of us remember that Comey was informed that he was out as the FBI director by walking past a TV while he was out in Los Angeles. Nobody had apparently bothered to inform him before the news media learned about it. At the time, that was very irritating not only to him but clearly to others.

Let's get some other issues out there. Reaction, first of all, right now as a reaction to the Russia sanctions bill. The Russia president, Vladimir Putin, now says he will make the U.S. reduce its embassy and consulate staff in Russia by 775 people, including diplomatic personnel. How much of a blow is this to the U.S.?

HIMES: Well, you know, it's not a -- it's not a good thing. It's a little unclear what he means by 755. You know, a lot of employees at the embassy are actually Russia citizens who work in the embassy who now will be out of work. You know, obviously, if some of those people are intelligence people in the country, that will conceivably compromise our ability to know what's going on within Russia.

So I wouldn't call this a good thing in a very narrow sense, but look, it is -- I am very pleased that the Congress, over the objections of the White House, has made it very clear that Russian behavior is unacceptable and will be met with serious sanction.

You know, as you know, this was a veto-proof vote in both houses of the Congress. The president was sort of dragged kicking and screaming into it. I think he owned it when it was all over.

But you know, this leads to the next thing that must happen if we are going to counter Putin in a serious way. We are waiting for the president to join, from his most powerful of bully pulpits, to join the chorus of Americans, and by which I mean pretty much every other American in Washington and outside of it, in saying that we will not tolerate another Russian hack on our election or the kind of behavior the Russian shows abroad. We need the president to engage on that issue.

BLITZER: The White House says they're -- officials there, they're reviewing their options. Those are the words of the White House press secretary on when the president will actually sign the sanctions legislation overwhelmingly approved in the House, 419 to three in the House; 98-2 in the senate. What do you make of that?

HIMES: Again, big picture, I'm very, very happy that we have finally come up with a, you know, government response to the hacking into Russian behavior.

And look, we may get into a tit for tat where, you know, we're imposing sanctions on each other. We win that particular poker match because, again, remember, Russia is a country that is playing from profound economic weakness. The economy of Russia is half the size of the economy of California. Their military doesn't begin to hold a candle to the United States military.

You know, this is why they like to play in the cyber realm and messing around with elections, because, you know, if it comes to head to head confrontation either economically, sanctions or military, it ends very, very badly for Russia. BLITZER: There are a lot of other developments we need to discuss. I

have to take a quick break, Congressman. We'll resume our conversation right after this.

(COMMERCIAL BREAK)

BLITZER: Experts are now saying that the latest ballistic missile tested by North Korea could have is a range of more than 6,000 miles, putting cities including Los Angeles, Denver and Chicago within striking range for the Kim regime. We're back with democratic congressman Jim Himes of Connecticut. Congressman, the president said today that he would, quote, handle North Korea. I'd like you to respond to that comment. Is he handling this crisis?

HIMES: Well, that doesn't give me a great deal of comfort, first of all, because I have no idea what it means. But also, you know, having just watched the health care debacle over the last couple of weeks or, you know, you name it, any other legislative initiatives, that gives me a little bit of pause. To be fair here, this is a very hard problem in which there are no particularly good solutions. There's no right answer here.

[17:20:03] I think the president is right is singling out China as really the player that holds the cards in this negotiation. And I'm not sure Twitter is quite the way to do it, but really pushing China while we, you know, make sure we've got the military presence in the region that we want to have, and, you know, making sure they engage with the North Koreans. I think that's really the only way to go here.

BLITZER: China is -- you can push China all you want, but they're pushing back right now. They're clearly not doing what the president of the United States is tweeting about, what the United States is trying to pressure China into doing. How serious, Congressman, is this North Korean threat right now to the U.S. mainland?

HIMES: It's very serious; it's very serious. I think it's probably still improbable that they could assemble a missile, load it with a miniaturized nuclear weapon that would actually go off over the United States. But I mean, you know, again, maybe they can.

And in national security, if there is some chance that they can, you have to assume that they can.

And so, you know, it's a very, very serious issue, and you know, again, back to the Chinese. They obviously are very concerned about, you know, stopping the flow of energy and food in such a way that they destabilize the North Korean regime. The last thing the Chinese want is chaos on the Korean Peninsula. That is obviously an economic and a military challenge to them.

So I do think we have ways of pressuring them. For example, you know, they are annoyed to no end that we have installed what's known as a THAAD missile defense on the Korean Peninsula. They worry that we can use that missile to sort of, in the radars associated to see what they're doing. We can continue to ratchet up the pressure, make it uncomfortable for

them in a way that they are -- you know, pull a little harder on the leash that they have over North Korea.

But yes, this is a very scary moment. And back to John Kelly, Wolf, which we -- who we were just talking about. I've got to tell you, I'm no fan of this White House or this administration, but knowing that John Kelly is in the room, as opposed to somebody like Reince Priebus or -- or Anthony Scaramucci, when the president is considering how to handle North Korea, gives me a lot more confidence than I would have had yesterday.

BLITZER: I've heard that from a whole bunch of people. All right. Thanks very much, Congressman Jim Himes of Connecticut. Thanks for joining us.

HIMES: Thank you, Wolf.

BLITZER: Coming up, more on the breaking news. The White House communications director, Anthony Scaramucci, resigns after less than two weeks on the job.

And later Vladimir Putin's revenge for the latest U.S. sanctions. He's ordering hundreds of diplomats, technical staffers out of the U.S. diplomatic missions in Russia. It's liable to have a big impact on U.S. intelligence gathering. We have new information for you.

(COMMERCIAL BREAK)

[17:27:09] BLITZER: We're following breaking news. The White House communications director, Anthony Scaramucci, resigning today. A White House statement says he wanted to give the new White House chief of staff, John Kelly, a clean slate. Other sources tell CNN that Kelly was sworn in this morning, had no confidence in Scaramucci, and that President Trump had soured on him, as well.

Let's get some insight from our specialists. And Nia-Malika Henderson, only, what, 10 days on the job or so, Scaramucci is now out. What does that say to you about the influence on the president by the new chief of staff, John Kelly?

NIA-MALIKA HENDERSON, CNN POLITICAL CORRESPONDENT: That's pretty immediate, right? I mean, we talk about Scaramucci being on the job for 10 days. Kelly on the job for just a couple of hours at this point, and now Scaramucci, who had said he was reporting to the president, is out. So I think his influence, obviously, extends to the uppermost, you know, kind of regions of this White House, uppermost staff.

And we heard from Sarah Huckabee Sanders today that everyone is going to report to him, and that includes Ivanka; that includes Jared Kushner. That includes Kellyanne Conway, who was a little coy about that earlier today. He's certainly going to be much more powerful than we saw from Reince Priebus.

And I think it also suggests that discipline is going to be very important in this White House. There are so many stories and so many sort of lingering kind of story lines from this White House. Priebus was one of them, right? He was up, he was down, he was up and he was down. And on day one you've got Kelly coming in and saying, "Enough," and the president obviously agreed.

BLITZER: What does it tell you, Phil, about the role, the new role that the new White House chief of staff is going to be playing?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Not much. For the first 24 hours, the signal is good. Clearly, what happened here had nothing to do with what Scaramucci said last week. If you look at this, Kelly must have said, "This guy has to go. We've got to have a chain of command if you want discipline in the White House."

But look, you're talking about changing a man who, after 71 of life, has not been a disciplinarian. I can't believe over time that this means Jared Kushner can't walk in, Steve Bannon can't walk in. And we haven't talked about, spoken about the more important issue. If you think there's turbulence within the White House, think about things like transgender policy.

The bet book on the situation room. I'm going to tell you, within 90 days, there will not be a transgender policy, because the Pentagon's going to say no. Think about Iran policy. The State Department has differences, a lack of discipline with the White House. Think about other issues: Russia where we obviously see a difference between the administration in the White House, and administration officials outside the White House. I don't think we'll see discipline. First 24 hours, good. Next year, I don't think it's going to happen.

BLITZER: You're skeptical.

MUDD: I'm skeptical.

BLITZER: Obviously. Mark, press secretary -- the White House press secretary, Sarah Huckabee Sanders, today said all staff, in her words, all staff will report to him, and as you heard, the senior staff who had a direct line to the president no longer do. Do you buy that?

MARK PRESTON, CNN POLITICAL ANALYST: I do in many ways. I'm not sure if Jim Kelly would actually accept this position if he wasn't able to have full operational control of the staff.

As Phil says, he's never going to have any control over the president. He's going to continue to do what he wants to do.

But I do think that, if General Kelly can bring a little bit of order, a little bit of sanity, a little bit of structure to the White House right now, that could go a very long way.

Now, the really big question is, does Ivanka Trump need to clear any meeting she has with her father, you know, with General Kelly? I suspect not, but I do believe the likes of Jared Kushner, when he's working on behalf of the president, will probably keep General Kelly, you know, in the loop, so to speak, and we're told from our reporting from our colleagues that, in fact, they were supportive of this move. BLITZER: You know, Bianna, I want to put up on the screen some of the

people who have been removed. If you take a look, you see Michael Flynn, the former national security adviser. We could go on and read them all. But you can take a look yourself. Most recently, Reince Priebus, the White House chief of staff; Sean Spicer, the White House press secretary; now Anthony Scaramucci.

Did it take a general, a retired Marine Corps general to get rid of Scaramucci, even though they immediately didn't get rid of him after that outrageous interview in "The New Yorker" magazine with Ryan Lizza?

BIANNA GOLODRYGA, YAHOO! NEWS: Well, there is some reporting that General Kelly said that the only way he would take this job was that if Scaramucci would leave, and subsequently, you saw over the weekend some salacious gossip come out about Scaramucci that involved his family and events that happened a week or so ago, and mysteriously, all of a sudden, it starts coming out over the weekend.

I do agree with Mark in the sense that, unlike Reince Priebus, General Kelly doesn't need this job. And I think if he puts his foot down, given his past, if he, in fact, is overridden by what he's promised or is not delivered on what he's promised, then I think he could very well walk.

I think it also bears to question some of the decision-making of Jared Kushner and Ivanka Trump. Because from all reporting, it was -- they were the ones that brought in Scaramucci just a couple of weeks ago. They were the ones that wanted Comey fired. So we're sort of seeing this backlash right now. One has to question how they're feeling.

BLITZER: We're now hearing, by the way, that they -- Jared Kushner, Ivanka Trump, they are supportive of this decision to see Scaramucci go. Do you think, Nia, part of Scaramucci's problem was he was getting too much of the spotlight, and the president didn't like that?

NIA-MALIKA HENDERSON, CNN POLITICAL CORRESPONDENT: And he totally craved the spotlight. If you remember that first press conference where he was standing behind the podium there. He was called away from the stage several times, you know, "Your time is up here," but he wouldn't leave. He wanted to take as many questions as he could.

And what I heard from Republicans and people close to the White House was this idea that, if he ever got on the cover of "TIME" magazine, that would be a problem, right? That this president wouldn't like someone who was outshining him, and in this way, outshining him in a terrible way. I mean, getting these horrible headlines. "The New Yorker" story, for instance, and Bianca [SIC] mentioned the salacious stories that were coming out from "Page 6" over the past week, and none of that was good.

BLITZER: You're, like, frowning, but go ahead.

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Well, I'm just listening to the conversation about how the new general is going to change the Oval Office, and I'm remembering the conversation about Rex Tillerson, discipline on foreign policy; about General Mattis over at the Pentagon, who is routinely embarrassed by the White House, as I mentioned earlier on transgender policy. Not even consultation with the joint chiefs on gender policy in the military? You look at embarrassment across the administration with General McMaster as national security advisor. When he came in, he's going to bring discipline. And we've been at this seven months, and now we say the new guy is going to bring in discipline. I just -- I don't know how we -- I don't understand it.

GOLODRYGA: No, no. And I agree with Phil. I'm not saying he's going to bring discipline. I'm saying that there is a higher chance that he will step down himself without having been humiliated the way his predecessor has.

MUDD: That's a good point.

BLITZER: You know, Mark, what does it say to you about the staying power of some other White House officials, Kellyanne Conway, Steve Bannon, both of them have had their share of criticism?

PRESTON: Right, survivors, though. I mean, they've survived, you know, this long.

You know, a close ally of General Kelly was texting me during all of this over the past couple of hours and said, "Here's the deal, you know, with General Kelly." No B.S., a very serious person, and then the next line was, "What's going to happen to Bannon?"

Now, we know that Steve Bannon right now is going to stay in the White House. I mean, there doesn't seem to be any changes on that, and he certainly survived, you know, the Reince Priebus firing. But going forward, what role does Steve Bannon see himself playing in the White House? Because I'm fairly certain a four-star general is not going to succumb to anyone such as Steve Bannon or anybody else in that Oval Office.

You know, another thing just very quickly. I was told on Friday from a close confidante of Anthony Scaramucci that they were going to overhaul the RNC. They were going to go in there. They were going to take it over. They were going to cut contracts with current Republican consultants, because they were all holdovers from Reince Priebus. Someone sent me a note today and said, "Guess what? That's probably not going to happen now," breathing a sigh of relief because Scaramucci is now gone.

[17:35:06] And Scaramucci over the weekend, I should add, tweeted out that he had a very nice conversation with the RNC chairwoman, McDaniel.

BLITZER: All right. Everybody stand by. There's a lot more we need to discuss. We're getting more information coming into THE SITUATION ROOM right now. We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Back to our specialists. Nia, the president on Friday when he was speaking to law enforcement, he raised a lot of eyebrows when he said this. Let me play the clip.

(BEGIN VIDEO CLIP)

[17:40:06] DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: And when you see these towns, and when you see these thugs being thrown into the back of a paddy-wagon, you just see them thrown in, rough, I said, "Please don't be too nice." Like when you guys put somebody in the car, and you're protecting their head, you know, the way you put their hand over them, like don't hit their head, and they've just killed somebody, don't hit their head? I said, "You can take the hand away, OK?"

(END VIDEO CLIP)

BLITZER: The president was immediately criticized for saying that by law enforcement authorities. Today the White House press secretary, Sarah Huckabee Sanders, Nia, said the president was simply joking when he told police to be rough on these suspects.

HENDERSON: Yes, and as you said, you had police departments from all over the country essentially say this was inappropriate. Here they are, trying to work on relationships they have with different communities, so they didn't see it as funny at all.

And it's hard to see it as funny in the era of Black Lives Matter, in weeks after a woman in Minneapolis -- and I understand the police are still investigating that -- was shot, the Australian woman, the woman who was shot and killed by police officers. So it, I think, hit a wrong note, and rightfully so, with a lot of people.

BLITZER: You heard the clip. Do you think he was joking?

MUDD: I don't think he was. Look, does this president not understand he's speaking to children? He is not only the commander in chief; he sets the tone in chief. The message to children is make fun of women, make fun of Hispanics and tell the people that I've worked with, law enforcement, that it's OK to rough somebody up after we've had case after case in the age of smartphones, in the age of video cameras and everybody has had case after case of shootings of black kids? That's the message the president wants to -- he forgets that there's children that listen. What are you supposed to tell a kid?

I'd tell my nieces and nephews, don't watch, because he's going to say something in appropriate, maybe offensive.

BLITZER: Yes. And the Boy Scouts.

MUDD: Yes.

BLITZER: The Boy Scouts had to issue an apology, as well, after his speech to that jamboree.

You know, let's talk about some of the major issues facing the president right now, Bianna. Russia, the Russian president Putin announcing, what, 755 people who work at the U.S. embassy in Russia, the consulates in Russia, by September 1, they're gone. They can't work there. Two U.S. compounds will be shut down. This is even before the president goes ahead and signs the sanctions legislation into law. Your reaction?

GOLODRYGA: Yes, and Putin obviously showing a little bit of benevolence. The Kremlin is saying, a spokesperson saying, "We're giving them a month to leave," unlike what President Obama did where we gave the diplomats only 72 hours to pack up and leave.

A couple of points: one, something like this, a retaliatory measure, was to some degree expected by the U.S. Remember, there was some surprise that Russia didn't respond immediately. Then, of course, we found out about General Flynn having the conversation with Sergey Kislyak saying, "Don't worry. We'll take care of this."

But when you look at these numbers, I think a lot of people were surprised. Wait, we have that many people, so many Americans working in Russia? Well, a great deal of them happen to be Russians. And these are people who are taxi drivers, who make the coffee, who are the secretaries who, once again, Putin is retaliating by hurting his own people. And it obviously also slows down the visa application program for any Russians who want to come to the U.S., Putin wanting to once again cause friction so that Russians will not be focused on what's happening at home but abroad.

BLITZER: You remember, Mark, that President Obama ordered 35 Russian diplomats expelled, those two compounds in Maryland and out on Long Island shut down. Seven hundred fifty-five, that's a bigger number, clearly, as far as the number of people who are going to be affected by this latest development.

PRESTON: Yes, no doubt. And I think Putin is looking at these sanctions from an economic standpoint and realizing that this is going to be very hurtful to him.

But the fact is, I mean, Bianna is absolutely right. We expected something to happen. Putin could not sit and stand and allow this measure to be signed into law by President Trump here in the United States and not take some kind of retaliatory action.

The bottom line is that we're in the middle of this chess game right now, and people are moving pieces all around the board. This won't be the last we hear of it, although I don't think we're heading down any kind of road right now that, you know, could be dangerous, you know, in some kind of a face-off between the U.S. and Russia at this point.

GOLODRYGA: And Wolf, if I could just quickly add, because something extraordinary came out today, in addition to the president's back being against the wall with the veto-proof sanctions. The Pentagon announcing a plan they have to arm the Ukrainians.

So to one extent you have the president, whose hands are tied, and you have Putin, who may have actually overplayed his hand, because the last thing he wants is to see any sort of U.S. involvement in Ukraine. President Obama was pressured by many Republicans, including Senator John McCain, to arm the Ukrainians. That never happened. So interesting to see the Pentagon come out now with its own plan. BLITZER: Phil, how do you see it?

MUDD: I think when we looked at the election meddling over time, we thought that this would mean that the Russians would get their guy in the White House; and picking up on what we were just talking about, I think we're realizing that backfired.

By the president's association with Putin, people, including the Congress, are saying we can't get too close to the Russians, and if you take a single step, we're going to impose our own sanctions.

I also think looking at today the president has a three-foot putt. He owns a bunch of golf courses. He ought to know it's very easy for the commander-in-chief. Putin expects us to put out tweet that says, wow, this is a bad day for America.

Can't even manage to do that because he's too busy firing a lounge lizard and sending that guy back to New York? I mean, that's -- three-foot putt, put a tweet out and say we don't like this and move on.

WOLF BLITZER, CNN HOST: He's been silent so far since Putin made that announcement.

NIA MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: He has been silent and so much focus on what this president will do, what his relationship is with Putin, and then this retaliation from Putin because of the sanctions.

BLITZER: Everybody stay with us -- go ahead, (inaudible).

UNIDENTIFIED FEMALE: He attacks members of his own party on Twitter all the time and can't seem to respond to Putin issuing this retaliatory measure against Americans.

BLITZER: We'll see what he says when he signs that legislation. He hasn't signed it yet.

Coming up, we'll have more on the breaking news. Anthony Scaramucci resigning as the White House communications director.

Also coming up, Vladimir Putin's revenge. He's ordering hundreds of people to leave U.S. diplomatic missions in Russia. Up next, a closer look at how that's liable to hurt U.S. intelligence gathering.

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[17:50:54]

BLITZER: We're following the breaking news, the White House Communications Director Anthony Scaramucci resigning today. Also breaking, the White House Press Secretary Sarah Huckabee Sanders avoiding questions about when President Trump will sign the newly passed sanctions against Russia.

Asked about why the president hasn't even commented on Vladimir Putin's retaliation for the sanction, Sanders said, and I'm quoting her now, "We're reviewing our options."

The Russian president ordered drastic cuts in the number of U.S. diplomats and technical staff inside Russia. CNN's Brian Todd has more on the cuts. Brian, I'm told that these cuts could hurt, what, U.S. intelligence gathering?

BRIAN TODD, CNN CORRESPONDENT: They could indeed, Wolf. Some of the people cult will likely be local Russian employees of the U.S. embassy and consulates. But some could be Americans and among those could be U.S. intelligence assets who would be tough to replace.

(BEGIN VIDEOTAPE)

TODD (voice-over): Vladimir Putin hits back, retaliating for U.S. sanctions on Russia.

VLADIMIR PUTIN, PRESIDENT OF RUSSIA (through translator): I thought it was time for us to show that we will not leave this without an answer.

TODD: Putin announces U.S. diplomatic missions in Russia will be cut by 755 people, a huge chunk of the staffs at the U.S. embassy and consulates. The kremlin also plans to confiscate two properties operated by the U.S. government in Russia, a storage facility in Moscow and a country house outside the city.

Tonight, veteran spies warn if American diplomats have to leave Russia, intelligence assets could be lost.

ERIC O'NEILL, FORMER FBI COUNTERINTELLIGENCE OFFICER: You hide the spies, the CIA spies, case officers within the people who do their day job. So, if you only have so many people that are allowed in the embassy, that means it's going to necessarily reduce the amount of people that you can use to gather intelligence, and that's a problem.

TODD: Intelligence experts say it's an open secret that many Americans working under the title of diplomats in Russia and their Russian counterparts in the U.S. are spies. Former CIA Case Officer John Sipher worked in Moscow.

JOHN SIPHER, FORMER CIA CASE OFFICER IN MOSCOW: U.S. case officers, intelligence officers in Moscow were strategic assets meant to meet strategic Russian sources. Whether it's a short meeting or whether there's other means to exchange information be it technical means or what have you.

TODD: Experts say the scenes depicted in popular spy shows like "The Americans" with dead drops, clandestine meetings and fake identities are not that far off from real life.

O'NEILL: Dead drops and signal sites and brush passes and clandestine meets, spies still use those because they work. But more and more we're seeing a massive transition from the old spy methods to cyber espionage.

TODD: It's always been a dangerous game in Moscow. UNIDENTIFIED FEMALE: The KGB owned the city, and they followed everyone everywhere.

TODD: Martha Peterson was a covert CIA officer in Moscow in the '70s. Featured in the CNN original series "Declassified," she recounted how her cover was blown during a dead drop, she was arrested and interrogated all night then kicked out of the country.

MARTHA PETERSON, FOREMR CIA SPY IN MOSCOW (voice-over): They put the dead drop down in the middle of the table on a piece of prop, a newspaper. They then began the interrogation. The chief interrogator was a very angry middle-aged man.

TODD: Sipher says an American spy in Russia has to always assume they are being monitored.

SIPHER: If I got up at 2:00 in the morning and walked outside there would be a team of people there to follow me everywhere and then they would have people to listen to the tapes of all my discussions in my house, watch videos of that. They would interview everybody I came in contact with.

(END VIDEOTAPE)

TODD: Intelligence veterans say the Russians have a couple of distinct advantages over the U.S. in spy craft. They say the Russians have many more spies here in America than the U.S. has in Russia and they say the Russians often recruit regular Russian business people and travelers to spy for them. People like Russian commercial pilots, bankers, journalists, U.S. spy agencies, they say, do not use those tactics -- Wolf.

BLITZER: You know, Brian, those two houses in the United States operated by the Russians which the Obama administration shut down in December.

[17:55:04] One on Long Island, one outside of Washington in Maryland, were those used by the Russians for spying? And if they were, why didn't the U.S. shut those down years ago?

TODD: Wolf, we are told those houses were likely used indeed for spying. They were not shut down. They were a good avenue for U.S. counter intelligence to spy on Russian operatives to monitor them as they came and went from those houses. They were pretty valuable.

BLITZER: Spy stories. Brian Todd, thanks very, very much.

Breaking news coming up next, the White House communications Director Anthony Scaramucci is out after ten tumultuous days on the job. We're learning new details of this latest Trump team shake up.

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