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NY Times: Trump Administration Taking on College Affirmative Action; North Korea Missile Within Miles of Passenger Jet Flight Path; Tillerson Rejects Money to Fight Russia Propaganda; Lawsuit: FOX News, White House Colluded on Seth Rich Story. Aired 1:30-2p ET

Aired August 02, 2017 - 13:30   ET

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

[13:30:00] WOLF BLITZER, CNN HOST: "The Times" says the Justice Department is recruiting lawyers to work on, quote, "investigations and possible litigation related to intentional race-based discrimination in college and university admissions."

Cornell William Brooks is a CNN contributor and former NAACP president.

Cornell, first, welcome to CNN. Glad you're part of our team right now.

CORNELL WILLIAM BROOKS, CNN CONTRIBUTOR: Good to be here.

BLITZER: A Justice Department official, speaking on background, off- the-record background, to CNN is pushing back on "The New York Times" story somewhat. He says it does not represent any change in department policy.

I know this is a subject close to your heart. This is the Civil Rights Division over at the Justice Department. What's your reaction?

BROOKS: It does seem to represent a change, in that, as a veteran of the Department of Justice, I worked in the Civil Rights Division, to have essentially the front office assume a set of responsibilities and then recruit attorneys from the department. In other words, this work is generally done by the education sites, point one. Point two, to suggest that we need to look at college admissions. You do not have college and university presidents talking about decrying discrimination in their offices of admission. We don't see a human cry in the streets in terms of discrimination in offices, college offices, of admission. This seems to be a bait, race-baiting if you will, meant to address the ideological concerns of the president's base. There's no basis for this at all.

BLITZER: You've seen some of the action cases that have been disputed where you have a white applicant with even better grades than an African-American applicant, the African-American is accepted, the white applicant is not accepted. How do you deal with that?

BROOKS: Let's look at this. The Supreme Court has spoken to this issue, recently, a year ago. And a conservative Supreme Court, with Elena Kagan recusing herself, decided with the principal of affirmative action, race being used as part of the admissions process, part of the criteria in the process. We don't see white applicants being discriminated against, categorically, globally. What we see are offices of admissions using race and ethnicity as part of an admissions process to develop a diverse campus and student body. That's what we have going on here. So the fact that you don't see university and college presidents asking for this, the fact that we have the university, universities and colleges being concerned about the chilling effect here. How then can colleges and universities prepare students to lead the country if they have campuses that do not look like the country.

BLITZER: That was the University of Texas at ought tin Austin, a 4-3 vote of upholding at least a limited amount of affirmative action, saying universities could go forward. Where do you see this going?

BROOKS: I'm concerned about it. And the reason I'm concerned about it is it sends a chilling message. We don't see any legal basis for it. The Supreme Court has spoken to this issue quite recently. There's no demand for it. But it sends a very chilling message to our colleges and universities across the country. So I don't see this as going in a positive direction. In fact, I see it going in a very dangerous direction. And the fact that we have a Justice Department is diverting resources from the real business of the department. That is to say, when you set up a special shop to represent victims that don't exist. In other words, you have an attorney general who is ignoring obvious discrimination in plain sight in favor of looking for nonexistent discrimination in every nook and cranny of society. Why then are we talking about discrimination that we don't see happening? Why is the Department of Justice not looking at discrimination at the ballot box in terms of voter suppression? Why isn't the Department of Justice not looking at discrimination we see in police departments across the country? That's real discrimination with real victims. On the other hand, what we have here are ideological victims that don't exist and that simply represent racial boogiemen and boogiewomen.

BLITZER: Cornell Brooks is our newest CNN contributor.

Cornell, welcome to CNN.

BROOKS: Good to be here.

[13:34:34] BLITZER: Good to have you. Appreciate it very much. Former NAACP president.

Up next, as tensions rise with North Korea, the United States successfully tests a ballistic missile. Meanwhile, Senator Lindsey Graham says a war with that rogue nation is, in his words, "inevitable." Former ambassador to the United Nations, Bill Richard, is standing by live. He will weigh in on all of this and more right after a quick break.

(COMMERCIAL BREAK)

BLITZER: This just in to CNN. The Pentagon says two United States servicemembers were killed today in Afghanistan. They were traveling in a NATO convoy in Kandahar when it was attacked. The NATO contingent is part of what's called Operation Resolute Support. The deaths of the servicemembers comes as the White House considers a new policy for American troops in Afghanistan, a policy that the Pentagon promised to reveal in mid-July, has not yet revealed that new policy.

We're also learning more about what could have been an unintended but very real consequence of North Korea's missile test last week. The intercontinental ballistic missile test came down off the coast of Japan. But there was an Air France passenger plane with about 300 people on board in the area as well, just about 60 miles away. A normal path for some airlines, takes them only about 10 miles from where that North Korean ballistic missile splashed down. With no advance warning from North Korea on these launches, officials fear that passenger planes potentially could be accidently hit.

Here with us. the former ambassador to the United Nations, Bill Richardson, who's been to North Korea 8 times.

Ambassador, thanks so much for joining us.

[13:40:29] BILL RICHARDSON, FORMER U.S. AMBASSADOR TO THE U.N.: Once with you.

BLITZER: Once with me. That's was back in 2010.

You called this most recent ICMB, intercontinental ballistic missile, tested by North Korea a game changer because it went as far as it did. How does this right now raise the stakes?

RICHARDSON: It raises the stakes enormously. It's the highest level of tension I have ever seen the peninsula. The problem is not just the instability that it's caused, but the technology advances of Kim Jong-Un, the fact that China refuses to help us put pressure on Kim Jong-Un, the fact that South Korea seems to be going in a different direction, policy wise, than the United States, some divisions. So I'm worried about what we're doing.

BLITZER: They're clearly accelerating their capability. The U.S. launched an intercontinental ballistic missile out in California. That North Korean missile, by the way, went about 620 miles. The U.S. ICBM went over 4,000 miles. Went down in the western Pacific. Is that a showing to North Korea, basically saying to the North Korean regime, don't mess with the U.S.?

RICHARDSON: It is a show of force, and I think it's necessary. But at the same time, you mentioned that incident with the Air France plane. A miscalculation of some kind, a U.S. plane over North Korean air space, shot by the North, the danger is very strong, because Kim Jong-Un appears to want to, at all costs, develop this missile capability. The good news is something I saw today, the secretary of state saying they're ready for talks with North Korea.

(CROSSTALK)

BLITZER: Yesterday, Rex Tillerson, the secretary of state, he was reaching out to Pyongyang, North Korea. Listen to this.

(BEGIN VIDEO CLIP) REX TILLERSON, SECRETARY OF STATE: We're trying to convey to the North Koreans, we are not your enemy, we are not a threat, but you're representing an unacceptable threat to us and we have to respond. And we hope, at some point, they will begin to understand that and that we would like to sit and have a dialogue with them about the future.

(END VIDEO CLIP)

BLITZER: You have dealt with the North Koreans. Will they respond positively to that kind of outreach by the U.S. secretary of state?

RICHARDSON: There's a possibility they might respond positively because it's an offer of dialogue without preconditions. In the past, we have said, we're not going to talk to the North Koreans because we reward bad behavior, they have to stop some of their missile and nuclear activities. It seems that the secretary of state said, no, we're ready to talk. I think it should be at his level. Meet the North Korean foreign minister -- who we met on that trip. He is now the foreign minister, Reid. Maybe at some Asian conference and have a dialogue and see if there can be some kind of an understanding and accommodation. Diplomacy is not giving in. Talking to somebody is not giving in. I like the talk about dialogue as opposed to, well, we're going to have a pre-emptive military strike, we're going to increase exercises with the South Koreans. I think diplomacy is the way out of this mess.

BLITZER: South Korea, the new government of South Korea clearly wants some diplomacy at the same time. They have been reaching out to North Korea, as well.

But I want you to listen to Lindsey Graham, the Republican Senator from South Carolina. He's been speaking out very, very strongly on the threat from North Korea.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, (R), SOUTH CAROLINA: It's up to President Trump to deliver a very firm, unequivocal message to North Korea and China. And Secretary Tillerson's job is to find a diplomatic solution. I would suggest what he said about North Korea was, at best, unartful.

KATE BOLDUAN, CNN ANCHOR: At best. What is it at worst?

GRAHAM: I think it gives mixed messages and they continue to believe we're not serious.

(CROSSTALK)

GRAHAM: I know what a military attack would look like in North Korea. It would be horrible. It would be devastating. And at the end of the day, that may be the only option left to protect the American homeland.

(END VIDEO CLIP)

BLITZER: You're reaction? RICHARDSON: I don't agree with Senator Graham, although, I have great respect for him. I think the secretary of state, this is the latest policy. We're ready to have a dialogue. I think talk about a pre- emptive strike, war is inevitable, is not helpful because it inflames tensions. I think we have to continue to work with China. Although, in the end, I don't think China will help us with pressure on North Korea. We need to get on the same page as South Korea, because they're our neighbor and we're tied together. But there's 25 million South Koreans at the DMZ. There's 30,000 American troops in South Korea, 50,000 in Japan. We don't want a "war is inevitable" kind of discussion. We want diplomacy, dialogue, some kind of understanding.

[13:45:26] BLITZER: You're clearly with Rex Tillerson on this as opposed to Lindsey Graham.

RICHARDSON: I am.

BLITZER: All right.

RICHARDSON: I think Tillerson did the right thing.

BLITZER: Bill Richardson, the former U.S. ambassador to the U.N., thanks for joining us as usual.

Up next, it's not common to see a cabinet secretary turn down money for his own department, but five months into the job, Rex Tillerson is now sitting on $80 million that's meant to fight terrorist propaganda and Russian disinformation. We have new information for you right after the break.

(COMMERCIAL BREAK)

BLITZER: A whopping $80 million currently sitting around unused by the U.S. State Department. This, according to a new report in "Politico." Congress allocated the money to go toward fighting ISIS propaganda and Russian disinformation but Secretary of State Rex Tillerson refuses to touch it. The reason? He reportedly doesn't want to upset Moscow.

Let's bring in our global affairs correspondent, Elise Labott, who's joining us.

You've been reporting on this. What are you hearing?

[13:50:14] ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, Wolf, what I'm hearing is that, you know, State Department officials telling me this was slightly mischaracterized. It's true that this sum, $80 million, is sitting both in the Pentagon -- $60 million in the Pentagon, $20 million at the State Department -- for use to counter Russian and anti-ISIS propaganda. What state officials are telling me is that they're not happy with the proposals that have been sent to them from this office, the Global Engagement Center, which is, you know, has been created to combat some of these propaganda efforts by ISIS and other groups around the world, so they are trying to work through proposals. And what they say is secretary -- one of Secretary Tillerson's aides told me that they don't want to throw good money after bad. And when I spoke to Congress staffers on the Hill, they say, look, we don't want to throw good money after bad, but Congress appropriated this money, we want to see that it's spent.

BLITZER: See if it is spent.

All right, thanks very much, Elise, for that update.

Up next, an explosive new lawsuit that accuses FOX News, a Republican donor, and the White House of working together to push a false story to the masses. We're going to speak with one of the lawyers at the center of the case. That's next.

(COMMERCIAL BREAK)

[13:55:38] BLITZER: Explosive claims and a complicated lawsuit. New details on the bizarre story involving murdered DNC staffer Seth Rich, FOX News and possibly the Trump administration. Ed Butowsky, a wealthy Republican donor, is speaking out. He told CNN the lawsuit is just an attempt by Ron Wheeler, the FOX contributor filing the lawsuit, to make money.

(BEGIN VIDEO CLIP)

ED BUTOWSKY, GOP DONOR: This was tongue-in-cheek talking just texting, wasn't serious because Rod Wheeler was always looking for a job because he has no money. And by the way, this lawsuit is all about Rod Wheeler trying to get money.

(END VIDEO CLIP)

BLITZER: The lawsuit accuses Butowsky of working with the White House on a false and eventually retracted FOX News story about the murder of the young DNC staffer. Butowsky denies the claim.

Doug Wigdor is an attorney for Rod Wheeler. He's joining us from New York.

Doug, thanks very much for joining us.

DOUGLAS WIGDOR, ATTORNEY FOR ROD WHEELER: Thank you, Wolf.

BLITZER: What's your response to what we just heard from Butowsky?

WIGDOR: Well, you know, I watched that interview last evening with your colleague, Chris Cuomo, and actually was highly entertaining because much of what he said made absolutely no sense. You know, take, for instance, the text message that he sent to Rod Wheeler. He said that the president read the article, he wanted it out immediately, and now he's trying to say that that text was somehow a joke. I mean, this was not a laughing matter. This was a text message. There was no emoji at the end, no smiley face. It wasn't a joke. Ed Butowsky, as he said in his text, was in conversations with the White House, with the president. He was -- actually brought Rod Wheeler to the White House to meet with Sean Spicer. Sean Spicer admits that. And what we see, actually, is that Sean Spicer says the meeting had no agenda. They just sort of arrived at the White House, and they had no agenda. That makes no sense. And then yesterday, we saw the spokesperson for President Trump say that, well, it's not really that abnormal for the spokesperson to speak to a member of the press, which might be true, but don't forget that Rod Wheeler and Ed Butowsky weren't writing this article. Malia Zimmerman of FOX News was.

BLITZER: Let me get some of the news out there. You've suggested, I believe, that as part of the lawsuit, you wanted to depose both President Trump and the former press secretary, Sean Spicer. First of all, do you think that's realistic? Do you think that might happen?

WIGDOR: We're going to treat this case the way we treat any other case. We're going to seek to take testimony in terms of getting documents that might be relevant and then we're going to seek to take depositions. And the president might, through his counsel, try and get a protective order, might say he's too busy. He finds time to play over 20 rounds of golf. Hopefully, he'll find time to sit down with me and answer questions.

BLITZER: What would you hope to gain from that?

WIGDOR: It's part of the bigger picture here. What you see is the motivation for ultimately defaming Rod Wheeler in the May 16th article. Why did they want to attribute quotes to him that weren't true? As we set forth in the complaint, the reason for that was because the White House in conjunction with FOX wanted to steer the narrative away from the Russian hacking scandal and steer that towards Seth Rich, which is really a tragedy. I feel -- my heart really goes out for the Rich family for being part of this.

BLITZER: What do you say to the allegation that your client is broke and he's simply seeking money?

WIGDOR: That's just not true. I mean, what he was hired to do was to do an investigation into the murder of Seth Rich. He wanted to do that. Unfortunately, he was used as a pawn in this case by Ed Butowsky and FOX News. He was used as a pawn, again, to steer away the narrative. And that's all documented, not only in text messages, but also in voice recordings. The case is strong. And not only with a statement made in the May 16th article false, but you also have Ed Butowsky and Malia Zimmerman admitting that those quotations were false.

BLITZER: What kind of damages are you seeking?

WIGDOR: Well, we're going to seek damages for Rod Wheeler's reputation. Because of what happened, there were many, many articles criticizing him that blamed him for this article when it wasn't his fault, so we're going to ask a jury to award what they believe is reasonable to repair and restore his damages.

BLITZER: All right. Douglas Wigdor, thanks so much for joining us.

That's it for me. I'll be back 5:00 p.m. Eastern in "THE SITUTAITON ROOM."

The news continues right now.