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Trump Dictated Son's Misleading Statement on Meeting with Russian Lawyer; Scaramucci Out After Another West Wing Shake Up; Kelly Sends Message, Boots Scaramucci; Trump: "Market Could Hit All-Time (Again) Today. Aired 9-9:30a ET

Aired August 1, 2017 - 09:00   ET


[09:00:00] CHRIS CUOMO, CNN ANCHOR: If Scaramucci wasn't loyal, I don't know who is. And he's still gone.

ALISYN CAMEROTA, CNN ANCHOR: All right. Tune in tomorrow for more on that.

CUOMO: I hope not.


CUOMO: All right. "CNN NEWSROOM" with Poppy Harlow and John Berman pick up the ball.

JOHN BERMAN, CNN ANCHOR: Yes. Don't wait until tomorrow. Stay tuned right now.

CUOMO: That's right.

BERMAN: We've got a camera waiting to see -- seriously we got a camera waiting to see if Anthony Scaramucci shows up to work.


BERMAN: Because we don't know if he still even works anywhere near the White House.

All right. Guys, thanks so much. We got a lot going on so let's get to it.

HARLOW: Good morning, everyone. I'm Poppy Harlow.

BERMAN: And I'm John Berman in what would have been day 12 of the Anthony Scaramucci era and what is day two of the General John Kelly era. We are in day one of the "Can you take a memo" era.

A new controversy for this White House. The president accused of personally dictating a misleading statement about his son's meeting with a Russian lawyer. A meeting set up under the promise of delivering information from the Russian government damaging to Hillary Clinton.

The report from "The Washington Post" says the president orchestrated the first public explanation of that meeting. And it raises serious questions about whether he did it to mislead the press and the American people.

HARLOW: So far, though, this morning not a peep from the president on that story. No statements. Nada on Twitter.

Is General Kelly controlling the message from the West Wing on day two of his tenure as chief of staff? And Anthony Scaramucci out, is discipline the new order of the day?

Let's go to the White House where we find Joe Johns on his -- on a busy Tuesday morning.

Good morning.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Poppy. Sources familiar with the thinking of the president's legal team have said many times in the past that based on publicly available information there was no reason to think the president had any legal problems, even with the appointment of a special counsel.

The question now is whether that could be changing on the heels of this "Washington Post" report suggesting the president may have helped draft that misleading statement about the reasons for the meeting between Donald Trump Jr. and the Russian lawyer during the campaign.

Of course, not clear what the president knew or when he knew it. Now the word from the president's lawyers suggests nothing much has changed. This is from Jay Sekulow. He says, "The 'Washington Post' apart from being of no legal consequence, the characterizations are misinformed, inaccurate and not pertinent."

Meanwhile, the White House is hoping for an end to some of the palace intrigue with the entry now as chief of staff of General John Kelly. If anything is clear, based on his firing of the communications director, Anthony Scaramucci, after only 10 days on the job, it is that Kelly expects communications to go within the chain of command and a certain amount of discipline here at the White House.

It's already sent signals that all staff is expected to report to him. So attempts here to control what's going on at the White House, even though new communications director has not yet been named -- John and Poppy.

BERMAN: All right. Joe Johns for us at the White House this morning.

We want to talk more about "The Washington Post" story that Donald Trump, the president of the United States, personally dictated the first response to the meeting that Donald Trump. Jr. had with the Russian lawyer.

Joining us now CNN legal analyst Paul Callan.

Paul, we're going to rifle through some questions pretty quickly here. First and foremost, you know, the "Post" reports that the president dictated this misleading statement himself. But to be clear, it's not against the law to mislead the press or the American people. Is it? PAUL CALLAN, CNN LEGAL ANALYST: No, it's not. Presidents have been

doing it through American history. You know, this president, particularly seems to eat that publicity for lunch. And you know, I think by the end the day this is going to be the story about a dad protecting his son and the president being a warm wonderful person. That's kind of how he spins these stories in the opposite direction.

HARLOW: But what's interesting is that it seem like, according to "The Washington Post" reporting, at least Jared Kushner, if not Don Jr.'s team, too, and Ivanka Trump, wanted to be more transparent, and wanted to come out with more than the president wanted to initially on this one. If not illegal, it does sort of raise Bob Mueller's antenna, right?

CALLAN: Yes. It raises his antenna and you should understand that in the past when there had been obstruction of justice indictments, sometimes press conference statements have been cited as part of the pattern of deception. However, at this point, we know Mueller's looking at everything but we don't have any firm evidence that he's focused on obstruction of justice by the president.

BERMAN: But that is where this could fall in and put the president or those around him perhaps at legal jeopardy here -- in legal jeopardy. The idea this is part of a pattern where you are trying to mislead people and perhaps mislead investigators.

And CNN is reporting for some time, Paul, about this answer, about this explanation that the White House and the lawyers provided and the president now personally dictated, is there are White House staffers who now feel like the special counsel is bearing down on them because of this.

[09:05:012] CALLAN: Well, I think they all should have something to be worried about. And I think it has the effect of freezing and paralyzing activity in the West Wing.

I was particularly concerned, John, when I saw that the lawyer, Sekulow. I mean, really openly --


CALLAN: He either openly lied and said the president didn't draft the statement or he was deceived by the president and of course when you're lying to your lawyer at that level, you're going to get yourself into trouble. And at some point, I think the president will get himself into trouble.

HARLOW: And Paul, you're talking about when Sekulow said earlier this month to Chuck Todd on "Meet the President" the president was not involved in drafting the statement, did not issue the statement. It came from Donald Trump Junior. His sort of secondary response to this "Washington Post" reporting this morning is apart from being of no consequence the characterizations are misinformed, inaccurate and not pertinent. Not in that statement is the word "wrong."

CALLAN: No. He doesn't admit that he was wrong. He doesn't admit -- as a matter of fact that's part of the statement you referred to. He accused the "New York Times" of being totally inaccurate in reporting that the -- you know, the president knew nothing about the drafting of the statement. So, you know, in the end, it's amazing that they get away with these sort of general statements, but Sekulow's statement today says nothing about the accuracy or what he knew and when he knew it.

HARLOW: Paul Callan, thank you, Counselor.

CALLAN: Thank you.

HARLOW: Let's talk now about all of this with our panel. CNN political analyst Alex Burns is here, politics and business reporter for the "Wall Street Journal," Shelby Holiday, joins us, and CNN's senior political analyst Mark Preston.

So, Alex, you just heard about the legal significance or, you know, perhaps it's not significant legally. We just don't know yet. What about the political significance?

ALEX BURNS, CNN POLITICAL ANALYST: Poppy, I think this is an extraordinarily dangerous moment for the White House because they're in the middle of this ongoing staff shake-up. Their relationship with really the rest of the Republican Party is as strained and uncertain as it has ever been.

So this is the first time that the Russia issue is really exploding like this at a moment when the White House doesn't necessarily have their traditional allies four square behind them. And it's obviously an enormous challenge for General Kelly as he starts in his first week. You mentioned a few minutes ago that we haven't yet seen the president on Twitter this morning.

HARLOW: Well, he tweeted about the stock market.

BURNS: Well, not --

HARLOW: Not on this.

BURNS: Not about this subject.


BURNS: If that continues that would be real. Oddly discipline.


BERMAN: You know, Mark Preston, there's the legal significance, the political significance, what about the moral significance here? Because it does seem as if the president's lawyer flat out made false statements if the "Washington Post" story is true. Let's listen to Jay Sekulow, his explanation about this memo from before.

(BEGIN VIDEO CLIP) JAY SEKULOW, MEMBER, PRESIDENT TRUMP'S LEGAL TEAM: The president was not -- did not draft the response. I do want to be clear the president was not involved in the drafting of the statement and did not issue the statement. I wasn't involved in the statement drafting at all. Nor was the president.


BERMAN: "The Washington Post" says he was, Mark. And if he was, then Jay Sekulow lied to Chris Cuomo and Chuck Todd and to the American people who were listening.

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Right. And then you can probably put it on a list of -- I like to use the word lies. Other people say misstatements or fibs or what have you. We've seen in the first six months of this presidency, the problem right now, though, is that for the president's base, OK, morally, they don't hear necessarily that we are seeing lies like this.

They think that we as the main stream media are going after them. They think that the Republican Party, the establishment doesn't like Donald Trump so they're not going to support him. At some point, though, I do think there's going to be a deterioration when they realize that the president's not able to deliver on his promises because he can't deliver by himself.

He needs the Republican Congress to help him and he does need the support of the American people. When the deterioration gets to the point where these people are not seeing results, that's when he's in a lot of trouble.

HOLIDAY: I also think the timing of the story is important, though, because you cannot ignore the fact that there's some high level people at the White House just left. I don't know who the "Washington Post's" sources are but I would imagine that General Kelly goes into President Trump's office today and says this is why we're cleaning things up.

No more leaks, no more back stabbing in this White House. No more staff against staff. I think General Kelly does have a tall task ahead of him but he is known for -- his job description will essentially be to manage people, to set the strategy and then execute the vision. And these are things he's been doing in the military for 40 years.

I have just spoke to General James (INAUDIBLE) who served in the Obama White House. He said it was difficult as a general to go into a White House where he did not participate in the campaign. He was not in the trenches with all the political people, so to speak. It's a tough nut to crack but he said that if General Kelly has the authority he has no doubt he'll be successful in this sort of setting order, lining people up.

BERMAN: Look --

HOLLIDAY: Getting things straightened up. Leaks, everyone says, are the biggest problem.

BERMAN: That could help with the messaging and the leaking but it won't change the fact in his case if the president did in fact dictate the story.

HARLOW: Right.

BERMAN: You know, General Kelly, that's not a messaging issue. That's just a flat-out perhaps legal issue.

HARLOW: You know who this story looks pretty good for? Jared Kushner. Did that -- I mean, look at all of the -- look at how many times in it says that he and his team wanted to be fully transparent, et cetera, et cetera?

[09:10:11] BURNS: Sure. I think people can read into that.


BURNS: But I think Jared Kushner and Ivanka Trump have been very, very careful about protecting their reputations throughout the Trump White House experience. That's not distinctive to the story that we've seen pretty regularly that when the president announces a policy that would be, you know, received poorly by their friends back in Manhattan, that pretty quickly you hear that they were totally not on board with that policy to begin with.

I do think that one the things that you're starting to see now, and the "Post" story does reflect it, to the extent that the president himself is responsible for mistakes in the White House, that's also the degree to which the staff is not responsible for those mistakes, right? And a lot of us who've said for some time, especially folks who were intimately involved in that campaign. Ultimately, the president is his own communications director, his own chief strategist, his own chief of staff at least up to this point.

HOLLIDAY: However, he is, including people in his White House and getting them involved in this mess. So that could be legally problematic for a lot of people in his orbit named in this "Washington Post" story. They were privy to this misinformation --

BERMAN: And we've been hearing from weeks from staffers concerned about their proximity to the drafting of this initial answer.

HARLOW: Right.

BERMAN: Mark Preston, if not for, you know, dictation-gate, as no one is call it this morning.

PRESTON: You are.

HARLOW: Now they will.

BERMAN: Except sort of not really right then. One of the big stories will be Jeff Flake.


BERMAN: You know, the Republicans senator from Arizona who wrote this essay basically calling out himself.


BERMAN: And members of the Republican Party for not standing up to the president. One of the things he wrote was, you know, unnerving silence in the face of an erratic executive branch is an abdication and those in possessions of leadership bear particular responsibility.

PRESTON: So a couple of things. One is Jeff Flake is up for reelection in 2018 which is going to potentially set up a battle between Donald Trump if he tries to back somebody to primary Jeff Flake. But by doing so he will then create -- basically go to war with Mitch McConnell and Senate Republicans which will then go to the whole idea of the deterioration of help with Congress.

But Jeff Flake and President Trump have never got along. Jeff Flake doesn't like his immigration policy. Jeff Flake doesn't like how Donald Trump carries himself in office. That is no surprise up to now. But I do think that this is a -- this is something that I think we should applaud actually Jeff Flake for doing because it's very difficult to go out and criticize your own president when he's someone of your own party. And, you know, for Jeff Flake, you know, kudos for him if he feels this way.

HARLOW: You know, it wasn't just him criticizing the president. I mean, the headline is our party is in denial about this president. And he talks about answers that he gave, answers we get far too many of on this show, frankly, that are what he calls monumental dodges, saying, I'm not going to spend all my time addressing the president's tweets.

Alex, is this opening a door for more in the party to be more vocal on these things or closing the door in the ability for them to say, I'm not going to weigh in on those tweets when we know those tweets are policy?

BURNS: It's certainly setting a pretty high bar for the rest of the party and for Jeff Flake himself. I was actually in Arizona last week and one of the things the Republicans there talk about including Republicans who are supportive of Jeff Flake is that he's just not a terribly well known figure in this state and he's sort of operated in the shadow of John McCain.

And so as he's preparing to run for reelection, to go out and write this book without telling his staff, without telling his political advisers, and essentially stake his entire public reputation on this idea of challenging this president, he's going to have to do an awful lot to live up to that over the next year and a half.

HOLLIDAY: But it also comes again to the backdrop of Congress increasingly standing up to the president as a whole. We saw them pass the sanctions bill. President Trump does not want to sign it. He will probably have to. If he doesn't, it would be overridden. Look, Congress -- and you know, you heard John McCain's speech on the

floor the other night and the health care bill failed. They are standing up to the president more and more every day. Not in a way that a lot of Republicans would like to see. I've been to town halls where Republicans are really angry at their congressman, at their senator because they're not standing up to the president as much as they could be.

But yes, it's a step in a direction where it seems to be a trend. We will see more and more congressmen standing up to the president whether it's legislative issues or legal issues.

PRESTON: Right. And to the point, though, of Shelby and Alex are saying, he does have cover, though, because John McCain, you know, is arguably, you know, the biggest critic we've seen of President Trump so to speak. So he does have a little cover from John McCain in this.


BERMAN: And as of 9:14 this morning the president has not written anything about Jeff Flake on Twitter. The that in and of itself may show just how much power John Kelly has in this White House right now.

All right, guys. Alex, Shelby, Mark Preston, thank you all very, very much.

We have new details about the rise and fall of Anthony Scaramucci and new details of the so far just rise of General John Kelly. So how far does his power in the White House go? All the president's men and women answer to him but does the president's Twitter?

HARLOW: That's a great question.

CNN also has exclusive details about a conversation between now Chief of Staff Kelly and fired FBI director James Comey just after he was ousted. Intriguing to say the least.


And, a nation in turmoil: this morning opposition leaders pulled from their homes in Venezuela as the United States launches new action. The question, though, is it enough?



UNIDENTIFIED MALE: (Inaudible) incoming Chief of Staff John Kelly and when he heard that Reince Priebus laughed for the first time in 18 months.

UNIDENTIFIED MALE: This is an a little awkward when scaramucci called an Uber to pick him up at the White House, Sean Spicer was (inaudible).

UNIDENTIFIED MALE: His going away party can surf what's left of his welcome cake.

UNIDENTIFIED MALE: That can change congratulations to congratulator.


HARLOW: Some funny men of late night having some fun on part of Anthony Scaramucci's 11-day tenure as White House communications director. The president's new chief of staff on day two, John Kelly, sending quite a message during his first day -- first few hours really on the job.

A source familiar with the shake-up tells CNN Scaramucci was, quote, "grandstanding" and quote, "with the president you end up in the cheap seats in center field when you do that."

[09:20:04] JOHN BERMAN, CNN ANCHOR: All right, let's discuss. Joining us now, Trent Duffy, former deputy White House press secretary for George W. Bush, and Chris Whipple, the author of "The Gatekeepers, How The White House Chiefs Of Staff Defined Every Presidency."

Chris Whipple, you literally wrote the book on chiefs of staff, not chief of staffs, which is something completely different. But Chris, let me ask you this. You know, the first day on the job, John Kelly forces out Anthony Scaramucci. Everyone now answers to General John Kelly. How would you assess his first 24 hours?

CHRIS WHIPPLE, AUTHOR, "THE GATEKEEPERS": Well, that's an encouraging first step. It was really a no-brainer. A guy like Scaramucci, walking cartoon, never should have been within 100 miles of a functioning White House. That's the minimal first step.

But now comes the really hard part, and the hard part is trying first of all to make sure that everybody reports through him to Donald Trump, and secondly, and more importantly, he's got to try to find a way to discipline Donald Trump himself, which is needless to say, the tallest order manageable.

You know, he's got to try to find a way to harness this Twitter account that makes it almost impossible for him to go earn effectively. So, it's a really, really tall challenge.

HARLOW: You know, Trent, you said whenever a spokesman or woman becomes a story that's never good for a White House, right. However, our reporting is that after, you know, these multiple half-an-hour sort of rambling interviews Scaramucci did last week.

Even after the "New Yorker" Ryan Lizza's reporting dropped that the president actually liked it, was happy with it, and then he went out to dinner with Scaramucci over the weekend and Kelly. So, something changed. Something soured him. Is it all on Kelly, do you think?

WHIPPLE: Well -- I'm sorry.

HARLOW: Trent?

TRENT DUFFY, FORMER DEPUTY WHITE HOUSE PRESS SECRETARY: No. I'm saying I think it's more than just General Kelly. I think we've also learned that the president's daughter and his son-in-law also soured on Scaramucci.

But that's not reflective of how the White House should operate and I think General Kelly has brought in that level of seriousness and adult supervision that was really, really necessary.

Anytime he spoke he becomes a bigger story than the president, it's a problem. While the president may have been entertained by Scaramucci's comments, he soon realized it was taking away from his ability to drive his agenda the other story talking about all day is Russia.

And until and unless the president gets out of the Russia obsession he won't be able to reset his communications operation. They're trying to do a tax reform and I think that's a very positive thing.

They need to get back on that and get back on the legislative track and move away from obsessing about Russia with everything because He's just feeding the beast.

BERMAN: I will say this, you know, so far, this morning the president has not said anything or written anything about the "Washington Post" story and (inaudible) oversight. He may not have gotten around to it yet and it may be coming in force but it hasn't happened.

So, look, maybe, this is part of the new John Kelly era. We are going to have to wait and see for sure. You know, Chris, you do note that generals, you know, military officials in the past, it doesn't always necessarily work as a perfect fit for the political chief of staff role. Why?

WHIPPLE: No. In fact, the only president we have -- the last general service White House chief was Alexander Hague under Gerald Ford after Richard Nixon resigned. He lasted a little bit more than a month.

So, the precedent here is not encouraging. But having said that, let me just say that I think there's something that Kelly could do that would serve Donald Trump, serve the country, and serve his place in history.

And it would be very simple thing to do, perhaps, and that is to tell the staff, look, we are going to aggressively defend the president's agenda, advance it, but we are going to do something else too, we're going to tell the truth.

I think that would be an enormous step in not only advancing the Trump cause, and the cause of the country, but it would also, you know I think help the morale within the White House.

HARLOW: Truth is a powerful thing. Chris, you've also said that this is mission impossible, right for Kelly? I mean, why?

WHIPPLE: Well, look, it's the most dysfunctional White House in modern history. It's a White House that can't do anything right so far over six months, and as we all know the first six months are absolutely crucial.

And (inaudible) momentum hasn't been able to issue executive orders that are enforceable. It can't pass legislation. It can't prioritize the president's agenda. It can't anybody on the same page. Will all of that suddenly change because you've got a general in h the White House? We'll see.

BERMAN: You know, Trent, we just learned that the Attorney General Jeff Sessions is going to hold some big news conference on Friday about leaks on various investigations that may or may not be happening into leaks. In your experience, you know, are leaks a cause or a symptom of a problem or White House organizational issue?

DUFFY: Look, you cannot stop White House officials or any administration officials from talking to reporters. It's just not going to happen.

[09:25:03] I think there's a difference between leaks about meetings and hearsay and who's up and who's down at the White House versus leaks of classified information, which is a serious national security issue.

I think that's what the attorney general should be focusing on. Going back to the broader narrative here is that the White House has been totally distracted by things that it claims it doesn't want coverage of and all it does is feed that.

They've got to get back on a tract of policy, communications and driving legislative agenda. It's only six months in. My colleague here, Mr. Whipple, has written about chiefs of staff. We have to remember the Clinton White House with just as much turmoil in their first six months.

I remember a front page "Washington Post" story of the White House advance team taking Marine One, the president's helicopter to Congressional Country Club to play a round of golf. It's only six months in.

The president still has three and a half years of his agenda. That's a lot of time. He can regain momentum, put in place a team that can get things done to make America great again.

WHIPPLE: I have to say to coin a phrase that the Clinton White House was a well-oiled machine compared to the first six months of this administration. As far as leaks are concerned, the truth is leaks are inevitable.

National security leaks are obviously unfortunate and can be dangerous, but I think the way you minimize leaks is pretty simple. You tell the truth and run a functional competent White House staff that engenders loyalty instead of fear. That's how you do it. You don't do it by strapping people up to polygraphs or trying to intimidate.

BERMAN: That was a good advice for the White House and also for kids by the way. HARLOW: I think across the board. Chris Whipple, Trent Duffy, thank you for the truthful reminder.

Twenty-two thousand never before seen Dow territory, will we see it today? Maybe.

BERMAN: All right, Alison Kosik here to give us a sense of what's going on before the opening bell -- Alison.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning. So the turmoil in Washington not affecting stocks. We are seeing the Dow come off of a really strong month in July. Yet, another record high, it's 30th of the year, and that streak could continue today.

We could see the Dow hit that milestone of 22,000. In fact, all of the major indexes have a great month of July, and they've had a great year. You look year-to-date, the Dow and S&P up more than 10 percent.

The Nasdaq up almost 18 percent. You can credit strong corporate earnings. Corporate earnings are beating expectations in the second quarter as they did in the first. Expected 11 percent rise in the second quarter after a 15 percent rise in the first.

On the radar today, Apple. Apple reporting after the bell -- this is the most valuable company in the world. We are really keeping an eye on Apple because Apple can move the markets depending on how its earnings report goes. Apple is not only in the Dow, it's in the S&P 500. It's also in the Nasdaq.

HARLOW: Good to own Apple.

BERMAN: One of the things the president has written this morning is the mainstream media doesn't pay attention to the stock market. We do it every morning.

HARLOW: We do it every day right around this time on this show.

BERMAN: We'll come back if it breaks 22,000. I'm sure we'll be talking about it in the next half an hour. All right, Alison, thanks so much.

HARLOW: Still to come, the location of two Venezuelan opposition leaders unknown this morning after they were ousted from their homes in the middle of the night. We'll have a live report from Caracas next.