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Grand Jury Issues Subpoenas Related To Trump Tower Meeting; Mueller Crosses Trump's Red Line As Russia Investigation Follows The Money; Mueller Seizes On Trump's Finances And Possible Connections To Russia. Aired 7-8p ET

Aired August 3, 2017 - 19:00   ET


WOLF BLITZER, CNN ANCHOR: -- Reporting. Thanks very much.


BLITZER: Michelle Kosinski reporting. Thanks very much. That's it for me. Erin Burnett OUTFRONT starts right now.

ERIN BURNETT, CNN ANCHOR: OUTFRONT next, breaking news, Special Counsel Robert Mueller using a grand jury in the Russia investigation. Subpoenas now issued for people involved in the Donald Trump Jr. meeting with a Russian lawyer. And more breaking news this hour, our exclusive reporting, Mueller's investigation now seizing on Trump's possible financial ties to Russia and Trump's National Security Advisor letting Suzanne Rice keep her security clearance. Is he defying Trump? A lot of breaking news this hour, let's got OUTFRONT.

And good evening I'm Erin Burnett. OUTFRONT tonight breaking news, grand jury, Special Counsel Robert Mueller using a grand jury to investigate Russian meddling in the U.S. election. It's a sign Mueller's probe into the Trump campaign and Russia is ramping up. A grand jury is a major step because you cannot issue indictments without one, even though a grand jury in and of itself does not mean that indictments will necessarily come. Now here is president Trump's reaction to the grand jury breaking news just moments ago.


UNIDENTIFIED MALE: Mr. President, are you considering firing Robert Mueller? Will you hold a news conference again?


BURNETT: You see silence, ignoring all questions about the grand jury and Robert Mueller as he left the White House on his way to a rally in West Virginia tonight which will happen this hour. We are watching for any reaction. We'll bring it to you.

CNN also learning at this hour that the grand jury has issued subpoenas to people involved in that Trump tower meeting between Donald Trump Jr., Jared Kushner, Paul Manafort, a Russian lawyer and others. An attorney for president Trump, this is amazing saying, he's unaware of the grand jury and issuing a statement that reads in part, "Former FBI Director Jim Comey said three times the president is not under investigation and we have no reason to believe that has changed." And there is more breaking news.

The CNN exclusive report this hour finding federal investigators have seized specifically on President Trump's possible financial ties to Russia as one of the most fertile pads to moving the Russia investigation forward. Sources telling CNN, they're focusing on the possibility of financial crimes. And we're going to have much more on that very significant development in just a few moments.

I want to begin though by breaking this down. Let's get to the breaking news about the grand jury. Pam Brown has that for us. And Pam, obviously you've got a grand jury being used by Mueller, the grand jury subpoenas issued signaling this investigation is heating up.

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Right. It's a serious investigation. It shows that Robert Mueller Special Counsel is focused on this meeting that happened in Trump tower last June that we recently learned about. And we have learned Erin as you pointed out the Special Counsel is issued these grand jury subpoenas related to Donald Trump Junior's meeting at Trump tower. According to a person I spoke with familiar with the matter, the subpoenas that have been issued seek both documents and testimony from people involved in that meeting.

The subpoenas were issued in recent weeks and it shows a Special Counsel probe that began in May is entering a new phase of this investigation. We should point out the investigators were using a grand jury in Northern Virginia before the Special Counsel as CNN was first report. But this does tell us that that Mueller is doing things by the book, which is making sure a grand jury signs off on any records request and any testimony. It certainly is a step forward in the investigation, Erin.

BURNETT: All right. Pamela, thank you very much. And you're going to be back with us because --


BURNETT: -- our panelist has a lot of breaking news here on Paul Manafort, the developments on the collusion front and the financial crimes investigation. First, though, I want to talk about this grand jury significant development. Michael Zeldin is Robert Mueller's former special assistant the Department of Justice. Richard Painter is a former White House Ethics lawyer, George W. Bush, Gloria Borger is our Chief Political Analyst, and Chris Cillizza is our editor-at- large.

Michael, let me start with you just to try to understand the significance here. You know the legal side of it and of course you know Robert Mueller himself. He is now using a grand jury in the Russia investigation. What does this tell you about Mueller's probe?

MICHAEL ZELDIN, ROBERT MUELLER'S FORMER SPECIAL ASSISTANT, JUSTICE DEPARTMENT: That it's serious, that it's focused on the question of whether or not there's probable cause to believe that anyone subject to the grand jury's jurisdiction has committed a federal crime.

The grand jury exists for really one purpose, to indict people or to not indict people. And Mueller is proceeding both with the receipt of documentary evidence and oral testimony to determine that singular question, did anybody commit a federal crime and if so for what will they be indicted.

BURNETT: So Michael, let me just do a follow up here though because obviously if Mueller, when we think, if he didn't think that anything hit the bar of an indictment, he wouldn't bother going to a grand jury, right. I mean, we knew a grand jury was expected in the sense of if you're going to indict you have to have a grand jury to do so. But does the news of that he is actually decided that he's going to go to a grand jury mean that he himself Mueller has passed the threshold? Do you think he has something on the president, his campaign or someone in this administration?

[19:05:03] ZELDIN: So not necessarily that he has crossed some Rubicon that says there is going to be a grand jury indictment. But rather he believes that there is sufficient evidence to warrant the inquiry of a grand jury to determine whether there should be an indictment. So for example, in my case --


ZELDIN: -- when I was independent council. We determined pretty early in the course of our investigation that there wasn't a crime at the end of the day for us. So we never convened a grand jury. We just did sworn their positions under oath and wrote our report. Mueller has passed that point and so, I think it is a little more serious for the people who are subjects and targets of this inquiry.

BURNETT: And Gloria, this is very significant because we know subpoenas have been issued for documents and testimony related specifically to that meeting in Trump tower, which of course the topic was supposed to be incriminating information about Hillary Clinton provided by the Russian government. We don't know whether there'll be additional subpoenas, but we do know that this meeting and those involved, Paul Manafort, Jared Kushner, Donald Trump Jr. are front and center.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right. They are front and center. But I would caution you, Erin, we don't know who's been subpoenaed and who hasn't. So we don't know that any of those people have been subpoenaed. I mean, you know, what we do know is that clearly this isn't going to be welcomed by the president.


BORGER: I actually spoke with Ty Cobb today, who's the president's lawyer inside the White House, not the White House counsel. And he makes the point that, you know, we're cooperating fully. We're going to continue to cooperate fully. And maybe this is a sign - I mean this is their point of view, putting a good spin on it, I would say. Maybe this is a sign that Mueller is moving quickly to get this over with. You know, the other side is maybe this is a sign that this is getting really serious. Yes.



BURNETT: -- which is the big question, of course, we just saw the president there refusing to take questions.


BURNETT: I mean he's going to be speaking at this rally. Let's see if he rushes back. That was going to be a crucial thing to watch this hour as he takes the stage.

Richard, I want to understand though and our viewers to understand, you know, this point that Gloria and Michael are making, right? Is this a big development in the sense of Mueller thinking he has something now, or is it a matter of process, right? Because we all know that was already a grand jury that was convened in Virginia before Mueller took over. And that grand jury issued subpoenas to Michael Flynn, right?

So there was a grand jury working on this overall that it issued subpoenas. Now we know there is a new, a different grand jury in Washington, D.C. doing this. So when you take that context, explain. Why the need for another grand jury?

RICHARD PAINTER, FORMER WHITE HOUSE ETHICS LAWYER FOR PRESIDENT GEORGE W. BUSH: Well, I think this is an expected development to convene a grand jury to investigate a broad range of matters arising out of this investigation. And that could include obstruction of justice and various crimes that have been committed since the beginning of the year, not just the underlying allegation of illegal collusion between the Russians and persons working for the Trump campaign.

This is a very serious matter, always has been. And I don't think it's at all unexpected that the special prosecutor would want to convey on the grand jury and focus on the Trump organization finances in whether they are ties to Russia and also on that meeting in the Trump tower and any other meetings of constituted definitely collusion with the Russians.

The question is whether there was illegal collusion with the Russians, whether the campaign finance all sort violated or whether the hacking of the computers. That's something that the Trump campaign people become an accessory after the fact or whether they lied about contacts with the Russians. We have a number of people who apparently lied --


PAINTER: -- in disclosure forms probably with the government about their contacts with the Russia.

BURNETT: Neither.

PAINTER: And that's a felony in and of it. Yes. BURNETT: Or admitted, right? I mean, Chris, what do you make of the development tonight, right? Obviously using the grand jury and this grand jury has already issued subpoenas.

CHRIS CILLIZZA, CNN POLITICS REPORTER & EDITOR-AT-LARGE: Well, it suggests -- I echo what everyone said which says it suggests that this was picking up and that it is moving at a relatively quick pace. Now, if you believe Ty Cobb, that's a good thing because Donald Trump will be exonerated. I'm most interested here, Erin, to see how Donald Trump reacts. Every indication is from the past. The past were look, he will be fuming about this. It is a --


CILLIZA: -- he is fixated on this investigation. We know that. He has said many times publicly he thinks to hoax, he think to witch hunt.

These suggest is broadening. It's not just going forward. It's also broadening, right. And I think that he has been very leery of that. Can anyone, John Kelly or anybody else, keep him -- I don't want to say quiet because I think that's impossible, but keep him somewhat on message. Can he let his lawyers speak for it? That will he go back at Mueller?

[19:10:03] Will he make a threat regarding Mueller and his future, because this is what he said he didn't think should happen. It is now happening.


CILLIZZA: Politically, we know what his instinct is. It's to attack. Legally he's in much more dicey cares territory which impulse, does he listen to?

BURNETT: And, you know, we're going to talk about these financial developments and Manafort in just a moment because they're very significant. Michael, let me ask you about the President's lawyer, though, since Chris just brought him up.

Ty Cobb wrote and I read part of his statement. Let me just say this again, be right, "Former FBI Director Jim Comey said three times the President is not under investigation and we have no reason to believe that has changed." They also said that they did not know about this grand jury until they saw it in the press which is another issue and a problematic one in terms of how this information leaked out.

But let me just ask you this, Michael. Is it possible that the President could be under investigation at this time and they wouldn't know, or do you think that that's just not possible?

ZELDIN: So Comey tells the President that he's not under investigation for now a really long time ago.

BURNETT: Right. ZELDIN: And so, these things have, you know, lifelines that are very different from when Comey said that. And so, we don't know whether the President is under investigation or not under investigation.

BURNETT: Just to interject the one quick second, just to everybody to know. For example, when Comey said that, that was well before anybody knew including investigators about the meeting in Trump tower. So continue, but I'm just making the point, it was a long time ago.

ZELDIN: And it was before he got fired and thereby opened up the possibility of an obstruction of justice inquiry. So, I don't think that you can really put much value in the notion that long ago he wasn't under investigation for collusion.

As to whether or not Ty Cobb and the White House knew that the grand jury had been convened. Well grand juries are supposed to be, you know, secret bodies that operate.


ZELDIN: Except when they want to seek public information and then they reach out to it. So, it may well be that the President himself and the White House hasn't been reached out to yet for documentation. And it may be that Kushner lawyers knew, Manafort lawyers knew, Don Jr. Lawyers knew, but the President's lawyer saying, we didn't know. And that may be misleading and technically correct or just completely correct and not misleading. But it doesn't have much import.

BURNETT: All right. All of you staying with me, because we have the next big segment here on breaking news, our exclusive reporting. And this is that Special Counsel Robert Mueller is crossing Trump's red line. He was very clear about it.

Now tonight, the President's finances on a possible Russia connection, a big step in the investigation specifics, so we've got the details, next. Plus Trump's National Security Advisor letting Suzanne Rice keep her security clearance. The former Director of National Intelligence, James Clapper, weighs in.

And the President's conversation with a foreign leader leaked in its entirety. His explanation for winning over New Hampshire voters, because it is a quote, "Drug-Infested Den."


[19:16:41] BURNETT: Welcome back, we're following the breaking news, Special Counsel Robert Mueller using a grand jury in the Russia investigation. This is CNN learns Mueller's team specifically has seized on President Trump's possible financial ties to Russia as one of the most fertile avenues for moving the investigation forward. This specifically crosses what President Trump himself said would be a red line.


MICHAEL S. SCHMIDT, CORRESPONDENT, NEW YORK TIMES: If Mueller was looking at your finances and your family's finances, unrelated to Russia, is that a red line?

MAGGIE HABERMAN, CNN POLITICAL ANALYST.: Would that be a breach of what his actual charge is?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I would say yes. Yes. I would say yes.


BURNETT: Pamela Brown and Shimon Prokupecz broke of the story, along with Evan Perez. They're OUTFRONT. And Shimon, let me start with you. What have you learned about Mueller seizing on Trump and financial ties to Russia?

SHIMON PROKUPECZ, CNN COVERS LAW ENFORCEMENT: Well, hey, Erin, yes. So the FBI and Mueller have reviewed financial records related to the Trump organization. The President himself as well as family members and his campaign associates were told investigators have come through the list of Shell companies and buyers of Trump real estate properties, including tenants of Trump Tower. And they have found some sort of eyebrow raising, kind of, interesting connections to Russians.

And Erin, we are also told that they have examined the backgrounds of Russian business associates connected to Trump dating back to as far as the 2013 Miss Universe pageant in Moscow.

BURNETT: All right. So, you say, eyebrow raising, I mean, that gets everybody's curiosity up. I mean, Pam, you're also learning more about the focus on people like former campaign chairman Paul Manafort. And you have some pretty significant developments on OUTFRONT.

BROWN: Right. And speaking of eyebrow raising, we have learned -- our team has learned that investigators became more suspicious with last year when they turned up intercept the communications at that U.S intelligence agency's collected among suspected Russian operatives discussing their efforts to work with Paul Manafort who as you know served as campaign chairman for three months.

And they're talking about an effort to coordinate information that could damage Hillary Clinton's election prospect. So, the official we had spoken with have said, and the suspected operatives, Erin, relayed what they claim were conversations they were having with Manafort encouraging help from the Russian.

We should point out that Russians may have been exaggerating or even lying. And Manafort spokesperson has denied that his client has colluded with the Russians. But the focus now for investigators is whether Manafort was involved in money laundering or tax violations in his business dealings with pro-Russia parties and Ukraine. Manafort has not been accused of any wrongdoing. Erin.

BURNETT: All right. Of course at that time that's where it is. They're looking into it. I mean, Shimon, Investigators are looking at a lot of financial records. And to the point where the President said, it's a red line to look at this. Some of these records as you and Pamela had been reporting, go back to years before Trump was actually even running for president of the United States. So the question is, could someone connected to Trump be charged with something unrelated to the campaign from that long ago?

PROKUPECZ: Yes. Absolutely they can. And, you know, people close to him like his sons and some other folks who work for him in his campaign and maybe people we don't even know about. People we're not even aware, whose names have not been out there, who may have worked for the organization or may have been involved in other business dealings with the Trump organization.

[19:25:01] You know, keep in mind, these financial ties could be connected, you know, or sort of extended from what -- let's say years ago could be connected to what's happening now, you know. And sort of like the soil may have been fertilize back then. You know, Russian money, debts, loans could be part of the same larger web. And that's what they're trying to untangle now, Erin.

BURNETT: Which is obviously a crucial question. So Pam, what more are you learning about Mueller's team, right? It is now a substantial team.


BURNETT: And what does the new developments in terms of the team, tell you about the status of the investigation?

BROWN: Well, I can tell you, Erin, our team is told that Mueller has quietly gathered a team of more than three dozen attorneys, investigators and other staff in a nondescript office in Washington. And officials were familiar with this probe. Describe it as a small U.S. attorney's office that has been convened with FBI agents, prosecutors assigned the separate groups looking into various aspects of this expanding investigation.

And these include groups of investigators and lawyers focussed separately on Russian collusion and obstruction of justice as well as the investigations focussed on Paul Manafort and former National Security Advisor, Michael Flynn.

And, so, this is sort of how it set up within this office. And some of the investigators have been pulled from field offices across the country to join Mueller's team in Washington. Others have left high paying jobs at law firms. And many of these investigators have backgrounds in investigating fraud and financial crimes. There are 16 attorneys assigned to the probe according to the spokesperson for Mueller, Erin.

BURNETT: All right, thank you, both, so much, Pamela and Shimon, breaking so much of this news tonight, of course, along with our colleague, Evan Perez. My panel is back with me.

Michael, look, you hear this reporting, right? You got three dozen lawyers. You have -- they're now looking at financial ties that go back years, specifically financial ties between Russia and President Trump, and that this is the most, you know, as they say, fertile avenue that they have to pursue. What does this say to you?

ZELDIN: Well, so it does imply that there is a financial crimes, money laundering-styled investigation ongoing. We had a hint of this a little while ago when we saw that the congressional committees had subpoenaed the financial crimes enforcement network, FinCEN, the treasury bureau that keeps records of all suspicious activity reports filed by banks. And so we knew that this was an area that was going to be of interest to Congress and therefore an interest to Mueller.


ZELDIN: We know, too, that there is what is called a geographic targeting order which is -- that which is targeted at financial transactions for high net worth real estate purchases in New York. And Manafort's behavior, purchasing real estate in New York through limited liability corporations which hide the beneficial owner of the money and the source of money is also a profound issue for Manafort that we knew was forthcoming through the FinCEN subpoena.

So we knew for a long time that this was going to happen and it is part of Mueller's mandate.


ZELDIN: The mandate says matters that arise out of the investigation. And this surely arises out of it especially if it provides a motive for understanding why the Trump ecosystem is behaving the way it has.

BURNETT: OK. So you make a case for why it does. But Gloria, we have heard the president. You just heard him there, in the introduction, say this is a red line. So then what?

BORGER: Right.

BURNETT: I mean is it -- we -- and clearly, Bob Mueller has crossed Donald Trump's red line. So then what is Donald Trump going to do?

BORGER: Right. And you know, in that interview with the New York Times on July 20th, he said, no, I think that's a violation.


BORGER: You know. This is about Russia. This is about the hacking or the alleged hacking. And I think we don't know what Donald Trump's reaction is going to be. We do know that on Capitol Hill, for example, there is a bipartisan group of members of Congress who want to figure out a way to make sure that Mueller remains as Special Counsel one way or another.

And I would argue that the president's attorneys, who have said publically, we want to cooperate with the Special Counsel, we intend to do everything we can to cooperate with the Special Counsel, want to do that.

And I think, you know, the question is what is the president going to think and what -- after today's news.


BORGER: And, you know, he has already been told by everybody that firing this Special Counsel or even talking about it would be a terrible idea. So, you know, as Chris Cillizza was saying earlier, this is a real challenge for everybody around him, including his new chief of staff, to make sure that he doesn't overreact to today's news.

BURNETT: Right. And, of course, we are waiting. As I said, he's going to be speaking at this rally in a moment. If he does address this, we, of course are going to share it with you. We'll see if his team can keep him on message and on track.

Chris, look, we also know that federal investigators are looking specifically at some of these Russian business associates connected to Trump, right?


BURNETT: To figure out whether there was a quid pro quo, right? Some loan that is being repaid, was then being repaid right in the form of some kind of assistance, right, during the election.

[19:25:07] Just remember, it was the Russian real estate mogul, Aras Agalarov, who helped Trump bring that Miss Universe pageant in Moscow. Here they are.


BURNETT: It was the Agalarov family who helped arranged that controversial Trump tower meeting that supposedly was, you know, dirt from the Russian government about Hillary Clinton. They're central to this investigation.

But the question is, Chris, Mueller's team, how are they going to get anything from them? These guys are Russian.

CILLIZA: That's right.

BURNETT: Their documents are Russian, their information is Russian. It's a black hole as far as the Special Counsel is concerned.

CILLIZA: That's a very good point. I would say, not being a lawyer, I would never want to hear what Pam Brown said, if I was in any way, shape or form connected to these 36 staff --


CILLIZA: -- on Bob Mueller's team. I mean, that's 16 lawyers. I don't want 16 lawyers involved in my life ever.

You know, I -- so -- look, each speaks to the fact that this is a high powered team that is looking at a lot of different things. It's also why, by the way, politicians of all stripes hate special counsels and special prosecutors because their mandate, in politician's mind, is far too broad.


CILLIZA: And there's real danger there, I think, especially given what we know of how the Trump inner circle has handled themselves. I mean the one that we have the most transparency on, Erin, is that July meeting in 2016.

BURNETT: That's right.

CILLIZA: And the Don Trump, Jr. statement that Donald Trump was involved in, having to retell it, well, how many people were there? What did it involve?


CILLIZA: That should not give anyone involved in this a whole lot of confidence there in terms of their ability to just honestly tell what the situation is indeed down rated.

BURNETT: Which is a fair point. Richard, let me ask you, though. If that's what -- and of course there could be other subpoenas issued that we're not aware of at this time and I want to be clear to say that. But we know that there have been subpoenas issued related to that meeting.

So I guess the bottom line question is if that's all they have, is that enough? Because, you know, everyone involved, so that meeting actually didn't pan out to be anything like it was advertised to be.

PAINTER: Well, it depends. We're going to have to find out the facts, what happened at that meeting and other meetings as well. There is significant exposure here for collusion or coordination and violation of campaign finance laws. There is exposure if the Trump campaign, people knew about the hacked e-mail and we're talking with the Russians about what to do with it.

And most important, they're making their situation a lot worse by lying about the contacts with the Russians and engaging in obstruction of justice and a cover up. And it could end up being that this investigation, like a lot of other ones, ends up prosecuting people mostly for lying and obstruction of justice and not so much for underlying conduct with respect to the Russians.

We don't know at this point. But certainly, the president and everyone in the White House ought to just say absolutely nothing about the Russia investigation. And that's a policy we had in the Bush White House. We would not comment in any ongoing investigations. And I'm shocked to the extent that they comment about it, tweet about it and then talk about firing the independent prosecutor.

BURNETT: Sounds good (ph). Yes. All right, thank you all very much. I appreciate it.

UNIDENTIFIED MALE: Yes. BURNETT: And our breaking news coverage continues. Next, is Donald Trump's National Security Advisor defying the president tonight? Former director of National Intelligence who was in the center of the intelligence assessment about Russian hacking, James Clapper, is my guest.

And Trump blames America's quote, all time low relationship with Russia on Congress. A top senator weighs in.


[19:32:02] ERIN BURNETT, CNN HOST: Breaking news tonight: grand jury, a major development in special counsel Robert Mueller's Russia investigation. Mueller now using a grand jury as part of his probe into whether there was collusion between Russia and members of the Trump campaign. And the grand jury already issuing subpoenas for documents and testimony from people involved in the meeting at Trump Tower between Donald Trump Jr., a Russian lawyer, and others.

OUTFRONT now, the man who led the intelligence community assessment on Russian interference in the election, the former director of national intelligence under President Obama, retired Lieutenant General James Clapper.

And I appreciate your time, General. And we're very eager to have your input here.

So, let me start with the grand jury. We know it's a required step if there are to be indictments, but it doesn't obviously necessarily indicate there will be. But you can't have an indictment without a grand jury. You say that means there is a there there?

JAMES CLAPPER, FORMER DIRECTOR OF NATIONAL INTELLIGENCE: Well, it certainly indicate -- it looks that way. And I don't find surprising this development given this long period which the special counsel has been at work and I also read into it when he -- when Bob Mueller hired more staff that there is there there, but I can't -- I can't say anything more than that. But it is not a surprising development.

BURNETT: So you see a there there. You just pointed out Robert Mueller increasing the size of his staff which, obviously -- I mean, we're now looking at three dozen people.

Is there anything, General, to the criticism that Mueller is dead set on finding something, right? Because he has all these people and all this time. He'd look like a complete failure if he didn't. So, he's sort of going to find something because he needs to find something.

Is there anything to that criticism or you think it's unfair?

CLAPPER: I -- I don't think so. Knowing Bob Mueller as I do, and he was -- you know, he became FBI director about the same time I became director of what's now NGA. I have known him and worked with him.

And if in the end he determines there is no there there, he'll make that call. I have no doubt about that. And conversely, if there is a there there -- overused this phrase a little bit -- he'll also make that call.

So, I have absolutely no doubt about his integrity, particularly in a matter as sensitive as this.

BURNETT: We're also reporting, of course, General, that Mueller's team is investigating President Trump's possible financial ties to Russia and going back, obviously, before the election. They view it as one of the most promising paths in the investigation.

My question for you, and obviously you were involved -- you know, leader of the intelligence assessment about Russian hacking, do you think this investigation is going to come down to the money, following the money?

CLAPPER: Well, I do think that -- in fact, my understanding is back in the summer of '16, that this all started with questions about financial dealings of Trump associates. That's how this all began. So, it appears to have come, again, with what's been out in the media, sort of come full circle now.

[19:35:05] But I don't see how you exclude or insulate financial dealings here from the investigation.

BURNETT: So, you know, looking into finances as you know is something the president has said would be a red line and I want to play what he said right now.


MICHAEL SCHMIDT, NEW YORK TIMES: Mueller was looking at your finances and your family's finances, unrelated to Russia. Is that a red line?

MAGGIE HABERMAN, NEW YORK TIMES: Would that be a breach of what his actual charge is?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I would say yes. I would say yes.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I think that the president, the point he's trying to make is that the clear purpose of the Russia investigation is to review Russia's meddling in the election and that that should be the focus of the investigation, nothing beyond that.


BURNETT: Mueller tonight clearly, General, crossing that line. Do you think President Trump may now try to fire Mueller as special counsel?

CLAPPER: Well, first, I'm not sure how someone who is under potential investigation draws red lines and says that certain aspects are out of bounds. I don't know how that work and I do -- I'm sorry?

BURNETT: No. I said fair.

CLAPPER: I'm sorry? I didn't hear you.

BURNETT: No, I said that's a fair point. I'm sorry. Go ahead.

CLAPPER: Well, that's all I was going to say about it is -- now, whether this leads to firing of or an attempt to fire Bob Mueller, I think that would be a very dangerous thing to do. I think this would create a real constitutional crisis. This would be Watergate in slow motion, which I also lived through. And I do -- I do note the bipartisan effort in the Congress to protect the special counsel and his operation from exactly that because I think that would actually create an even worse situation.

BURNETT: So, a source tells CNN tonight something I think that could be very important. Certainly indicates that people on Trump's very inner circle are not doing what Trump would want. The national security advisor, H.R. McMaster, sent his predecessor Susan Rice a letter, General, and in that letter, he said she maintains full security clearance. And, of course, you know, this comes in the context the thing the president has said, all kinds of -- you know, he said derogatory things about her and whether she unmasked Trump associates unfairly, inappropriately and with political motivations. You know, he said she could have committed a time. That's what the president of the United States said.

So, how big of a deal is it that Trump's own national security advisor would basically take him on on this, saying her security clearance is good?

CLAPPER: Well, good on General McMaster, who's a great soldier, and he's done exactly the right thing here. There's no -- there's no criminal activity connected with unmasking, and I should explain that the nexus, the start of unmasking is a valid foreign intelligence target. And when a valid foreign intelligence target is observed engaging with a U.S. person, it is perfectly appropriate, in fact, I would argue, irresponsible not to understand the significance and the context. And the only way you can do that is to know who it is.

So, I did unmaskings during my six and a half years as DNI. Susan did as well. And it was not done for political purposes whatsoever. I didn't do it on that basis, nor did she.

And it's done very judiciously, I'd also add. Certainly, I tried to be that way when I requested unmaskings during my time as DNI.

So, what then national security adviser, General McMaster, did was in my view entirely appropriate.

BURNETT: Before you go, General, I want to ask you about some leaked transcripts. This specifically related to President Trump's phone calls with the leaders of Mexico and Australia. Now, we have found out through a leaked transcript that President Trump pleaded with Mexico's president to stop saying Mexico would never pay for his wall. We've also seen from the transcripts that the president had a heated exchange with the leader of Australia about refugees coming to the United States. He told him that his call with Putin was more pleasant. Now, Tommy Vietor, who, of course, the former spokesman for President

Obama's National Security Council -- and I know you know him -- today tweeted I would have lost my mind if transcripts of Obama's calls to foreign leaders leaked. He wouldn't have sounded so dumb, but still it's absurd.

Now, putting aside the unnecessary personal slam in that tweet, at least as far as I see, does Vietor have a point, that it is wrong for anyone to be leaking these transcripts?

CLAPPER: Yes, it is. I think it's a terrible thing that these got leaked. Certainly during -- my experience with him and I got to read such transcripts of such conversations during my time as DNI, and they were treated as very, very sensitive documents.

[19:40:12] There were all kinds of special watermarks placed on these transcripts.

And this is -- this is not a good thing. It is really bad. And it just shouldn't happen.

BURNETT: All right. Well, I appreciate your time, Director Clapper. Thank you so much for being with us. We look forward to seeing you again soon.

CLAPPER: Thanks, Erin. Thanks for having me.

BURNETT: And next, Trump throws Congress under the bus -- under the bus over Russia. A top Democrat on the Foreign Relations Committee is OUTFRONT.

And, another self-inflicted wound. Donald Trump says he won New Hampshire votes because a drug infested den. Will he apologize?


BURNETT: Breaking news, President Trump just moments ago speaking about the investigation into Russian meddling in the U.S. election, responding for the first time to anything Russia after news of the grand jury probe. Here he is.


TRUMP: The reason why Democrats only talk about the totally made up Russia story is because they have no message, no agenda.


BURNETT: It comes as CNN learns tonight that special counsel Bob Mueller is using a grand jury. That grand jury has issued subpoenas related to the Donald Trump Jr. meeting with Russians at Trump Tower.

[19:45:02] Those subpoenas seek documents and testimony.

At the same time, sources tell CNN tonight that investigators are looking specifically at financial ties between President Trump and Russia. That is a red line the president said Mueller can't cross.

OUTFRONT now, the Democratic Senator Ben Cardin from Maryland, also the ranking member of the Senate Committee on Foreign Relations.

Senator, you know, the president, when he left for this rally, he had just gotten news that Bob Mueller was using a grand jury to look at him. He had just gotten news of subpoenas. And he said nothing on his way to that -- the rally and now obviously you just heard his comments.

What's the reaction?

SEN. BEN CARDIN (D-MD), RANKING MEMBER, FOREIGN RELATIONS COMMITTEE: Well, Erin, first of all, what Mr. Mueller is doing is extremely important. He needs his independence and support. And I am confident that both Democrats and Republicans in Congress are going to make sure that investigation goes and wherever it leads.

So, we've got to ensure the independence of Mr. Mueller. He cannot be intimidated by the president saying the red line, or that Mr. Mueller's job could be in jeopardy. He needs to be supported and let's see where that investigation leads.

BURNETT: Senator, what do you make of the development that Mueller is using a grand jury?

CARDIN: Well, it is a serious issue. You use a grand jury in order to get as much information as you possibly can, the subpoenas powers, et cetera. If there are circumstances that require the grand jury to take action, it will take action. It shows that he has all the tools he needs in order to hold people accountable who may have violated our laws.

BURNETT: So, the other big development tonight, you know, we're reporting here at CNN that Mueller's team are focused on financial ties between President Trump, his associates and Russia. They are looking at ties that can go back years before the actual election to see whether there was any sort of link between what happened then and what's happening now.

This is specifically something the president told Mueller not to do. He said it was a red line and I want to play part of his comments again for you, Senator.


SCHMIDT: Mueller was looking at your finances and your family's finances, unrelated to Russia. Is that a red line?

HABERMAN: Would that be a breach of what his actual charge is?

TRUMP: I would say yes. I would say yes.

Over the years, I've looked at maybe doing a deal in Russia, but I never did one, you know? Other than I held the Miss Universe there eight, nine years. (END AUDIO CLIP)

BURNETT: Senator, at this point, do you think there is something there or are we reaching a point where there isn't that much there and it is becoming a bit of a witch hunt?

CARDIN: Well, obviously, we don't know because the president, as a candidate, never released his tax returns. He has still refused to do what every other president has done, and that is to divest of any conflicts when he became president, as required under our Constitution. So we just don't know.

But the president doesn't set red lines. The investigators are required to go where the facts lead. So, we'll see. You know, obviously, President Trump has not shared with the American people potential conflicts either during the campaign or as president.

BURNETT: So, Senator, I want to play for you something the president just said a moment ago at this rally. And, by the way, he's now being specific about Russians and the campaign. And here is what he just said a moment ago in West Virginia.


TRUMP: There were no Russians in our campaign. There never were. We didn't win because of Russia. We won because of you, that I can tell you.


BURNETT: Do you believe him, senator? Do you think he would be saying those things if he knew that they were lies?

CARDIN: Well, we do know -- we do know that there are many contacts between Russian officials and representatives of the Trump campaign. We also know about the meeting that took place last summer in which members of the Trump family, Mr. Trump Jr. was present at. So, we do know there were contacts made during the course of the campaign with representatives of the Trump campaign.

We don't know the details of all those contacts. We don't know whether this was Russia's efforts in order to try to get more information to intercede in our elections, whether there was any collusion or not. That's what Mr. Mueller's investigating.

But, no, I'm not going to just take the president at his word that there is no contacts they made with Russia.

BURNETT: All right. Senator Cardin, I appreciate your time. And thank you.

CARDIN: Thank you.

BURNETT: And next, the president taking serious heat tonight because he said he won New Hampshire because it is a, quote, drug infested den. (COMMERCIAL BREAK)

[19:53:27] BURNETT: Breaking tonight: a drug infested den, that is how President Trump described the state of New Hampshire in a January phone call according to a transcript published in the "Washington Post" today. And tonight, the White House not refuting that comment.

According to "The Post", President Trump told Mexico's president, and I quote: I won New Hampshire because New Hampshire is a drug infested den.

Asked about this on Air Force One tonight on the way to West Virginia, White House Deputy Press Secretary Lindsey Walters did not deny the authenticity of the story. She said that the president was, quote, talking about the opioid epidemic up there which has affected a lot of lives in New Hampshire. I can tell you that is an important focus of his.

OUTFRONT now, Brian Lanza, former deputy communications director for the Trump campaign, and political commentator, Maria Cardona, a Democratic strategist.

So, Brian, let me start with you. Will the president apologize? Look, the governor of New Hampshire, Governor Sununu, has asked that he do so, a Republican. Will he apologize?

BRIAN LANZA: I would say this, I think we should slow down with this information, get your comment that the administration didn't refute it. But the question was asked directly of Lindsay Walters, are you going to comment on it, and she said she's not going to comment on leaked information.

So, I get the language play, but these transcripts have not been authenticated and verified. And so, if we're going to have this hypothetical discussion whether Trump said this or not, of course, it was a bad comment, if in fact he said. But there's nothing to authenticate that this has actually taken place.

BURNETT: OK. The only point I want to make about that, though, of course, is that this White House said there is no issue refuting something when they said they didn't happen. They call it fake news.

[19:55:00] The president has known to do that about a "Sports Illustrated" comment that we have not reported on. They're quick to do that, right?

LANZA: Is that really --

BURNETT: They're saying it's a national security issue --


LANZA: Don't you have the burden -- is that the standard they didn't say yes or no? I mean, isn't the preponderance, isn't the burden on the media to actually verify these things before they actually sell it to the American public as fact? BURNETT: I'm not going to make this an argument about that, but I

will say this, "The Washington Post" is a world-class news organization --

LANZA: Absolutely.

BURNETT: -- with world class standards, as do CNN.

LANZA: Some of the best reporters out there.

BURNETT: That's right. And they are saying that it happened.

LANZA: But they do get it wrong quite often.

BURNETT: The White House is not refuting it. So you can argue whether it was said or not or you could --

LANZA: Look, I'm comfortable having -- yes --


BURNETT: -- they have not denied. Should he apologize for saying such a thing?

LANZA: Hypothetically speaking, if it took place, he should. We have no reason to believe these transcripts are actually accurate. They haven't been verified. They haven't been authenticated.

BURNETT: OK, that's an absurd thing to say. But again, I'm not going to argue about that anymore.

I'm simply going to say, I guess, Maria, the way you'll hear this is that Brian is saying if he said it, that he should apologize.

MARIA CARDONA, DEMOCRATIC STRATEGIST: Well, I'm glad that Brian believes that if he said it, he should apologize. Of course he said it. The majority of the people in this country understand that he said it. This is exactly how the president talks.

But more than that, Erin, this is so incredibly offensive which is why you have New Hampshire leaders, both Republicans, and Democrats, lashing out at the president, telling him that it is so incredibly offensive that he would talk about that -- about a state in the country to a foreign leader about an epidemic that is making millions of families suffer, where families have actually lost loved ones to it, and he's talking about it in a very political manner, because of something that just affects his image.

By the way, he didn't win New Hampshire. People in New Hampshire were smart about picking the person that they knew would actually represent them, with dignity and would actually help them deal with their issues, and it was not President Trump.

BURNETT: So, let me get at, Brian, part of the reason why this is offensive to people. It's not just a horrible thing to say, it's also because it goes completely against what the president said, right? During the campaign, right, town halls, all kinds of focus, special opioid commission, and even now making all these comments, that's so important to him, right, that it matters, and that's a genuine feeling. We had a father on the show whose son died of a heroin overdose. The president during the campaign spoke to that father.

They had an interaction and here's some of what the president said.


TRUMP: In all fairness to your son, it's a tough thing. Some very, very strong people have not been able to get off it. So, we have to work with people to get off it. And the biggest thing we can do, in honor of your son, actually, and the people that did have problems, big problems, we have to be able to stop it.

I know what you went through. Here is a great father, I can see it. Your son is proud of you. Your son is proud of you.


BURNETT: I mean, look, it's an emotional thing to say, Brian, and I think that's why people would hear that he would refer to it as a drug-infested den is deeply problematic, right? It shows what he really thinks and what he says are not the same thing.

LANZA: I would say this, I myself have lost a cared family member to the poison of heroin. And part of the reason that I was drawn to the Trump campaign and got involved is I actually believed he was speaking truth on the matter. Politicians have ignored this issue.

And it's deeply emotional and it's a very personal issue for me. And that's why, you know, I'm going to give the president the benefit of the doubt on these comments. You know, I'm not here to tell you that he didn't say them. I'm not going to tell you to say he did. If he did say this, it is absolutely wrong that he said this. And I agree with the governor of New Hampshire.

But I haven't seen -- you know, I want to see real facts. And I think that's just the problem we have here.

BURNETT: Brian, let me just ask you the question, though.

LANZA: Please.

BURNETT: Because you say this is personal to you.

LANZA: Oh --

BURNETT: And obviously it is, right? And it matters. That's why you were drawn to the campaign.

LANZA: One of the reasons.

BURNETT: If he said he let you down, does it make you feel differently about his character, one thing to you the public, and another on the phone with a world leader? LANZA: I would say this, my interactions with then-candidate Trump

and President Trump have been nothing but compassionate with him on this issue. So, I find it hard to believe that we're being so flippant to attribute something that hasn't been verified. I think it's extremely unfair but these are the rules we play by.

If he did say something like this, it is a deeply personal issue, I'm deeply hurt by it. But I don't think that he did. I'm going to give him the benefit of the doubt. Now, if it's --


BURNETT: I'm just going to say I think in this case you're putting your head under the blankets on this one.

LANZA: I just like to report on the news, the facts.

BURNETT: But I'm not going to keep arguing that, because we only have a few seconds left. Maria, I'll give you the final word.

CARDONA: So, I think it goes way past his ridiculous and horrific hypocrisy on it, which you just laid out. But it goes to his actual core values and what he has proposed. He hasn't proposed anything. And in Obamacare that he wants to repeal, it would hurt everybody who's suffering from this.

BURNETT: All right. I appreciate both of you taking your time very much. Thank you.

LANZA: Thank you.

BURNETT: And thank you for taking a personal thought.

And thanks to all of you for joining us. Anderson is next.