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Flynn Pleads Guilty To Lying To FBI In Russia Probe, Sources Say Kushner Told Flynn To Contact Russian Officials; Flynn Guilty Plea Brings Russia Probe To Trump's Inner Circle. Aired 7-8p ET

Aired December 1, 2017 - 19:30   ET


[19:00:08] ERIN BURNETT, OUTFRONT HOST: OutFront next, the breaking news, Michael Flynn cooperating with Bob Mueller. His guilty plea bringing the Russia probe into Trump's center circle now in the cross hairs, the President son-in-law, Jarred Kushner. Plus, the White House tonight distancing itself from Flynn trying to tie him to President Obama but just so close for Trump and Flynn.

And more breaking news. Senators still working on last minute changes to the tax bill before a vote tonight. Do they even know what they're about to vote on? Let's go OutFront.

And good evening to all. I'm Erin Burnett. Welcome to our viewers in the United States and around the world. Tonight OutFront breaking news, Flynn flips, putting Jared Kushner in the cross hairs. President Trump's former National Security Adviser Michael Flynn pleading guilty today to lying to the FBI. He is now cooperating with Robert Mueller's Russia investigation.

Flynn now the most senior White House official that we know of cooperating with Mueller, and he is the fourth member of Trump's campaign to be charged as part of the Russia probe. Flynn's plea though is by far the most significant.

Documents from Flynn's plea hearing revealing that it quote, very senior member of Trump's transition team directed Flynn to reach out to foreign governments, including Russia's to find out where they stood on a U.N. Security Counsel resolution about Israeli settlements and to pressure them. This is a dig big deal because it's illegal for any one not representing the sitting President to do this, and sources familiar with the matter telling CNN that Kushner is that top transition official who directed Flynn to make those calls.

Flynn also admitting that he lied to investigators about his calls with the Russian ambassador, Sergey Kislyak, those calls focusing on U.S. sanctions on Russia. Court filings show that Flynn wasn't flying solo. He told multiple senior officials on the Trump transition team about those discussions with Kislyak. And that's where we are tonight.

The Russia investigation now inside Trump's inner circle and the looming question is what did Trump know? The White House trying to minimize today's news, one source saying it's a win for the White House and Trump's attorney Ty Cobb saying in his statement and I quote, "Nothing about the guilty plea or the charge implicates anyone other than Mr. Flynn." But Trump's relationship with Flynn was close and he defended him even after Flynn left the White House.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Michael Flynn, General Flynn is a wonderful man. I think he's been treated very, very unfairly by the media. Mike was doing his job. He was calling countries and his counterparts.

When I looked at the information, I said, I don't think he did anything wrong. If anything, he did something right.

He is, in my opinion, a very good person. I believe that it would be very unfair to hear from somebody who we don't even know and immediately run out and fire a general.


BURNETT: Could Flynn lead Mueller to the Oval office? Jim Sciutto begins ours coverage of this breaking story OutFront tonight. And Jim, obviously, huge developments on Michael Flynn and, of course, on Jared Kushner, raising serious questions about the inner circle and the President himself tonight.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Erin, the White House trying to portray Flynn in this as a freelancer here. But frankly, there's a lot of information in this statement of offense that belies that story. You have Flynn keeping senior members of the transition team informed to these conversations that he was having and then lied about and you have a senior member of that transition team instructing him to carry out some of these conversations he lied about. It was a very small transition team with the President at the top.

It would be interesting if all this happened without any of the President's knowledge and as you note, what is key here, Michael Flynn is now cooperating in this investigation.


SCIUTTO (voice-over): Tonight, the ongoing Russia investigation has reached President Trump's innermost circle. Trump's former National Security Adviser, Michael Flynn says that he is cooperating with the Special Counsel's probe into possible cooperation between the Trump campaign and the Russian government. Flynn pled guilty to repeatedly lying to the FBI, including making false statements about his December 2016 conversations with Russians then Ambassador to the U.S. Sergey Kislyak.

According to the statement of offense, Flynn lied when he told the FBI he did not discuss sanctions with Kislyak. On the same day that President Obama expelled Russian diplomats from the U.S. and boosted sanctions on Moscow in retaliation for Russia's meddling in the presidential election. Flynn also sought Russia's help during the transition to block a U.N. Security Counsel vote that the Obama administration was abstaining on.

The White House said late Friday morning, "Nothing about the guilty plea or the charge implicates anyone other than Mr. Flynn." However, court documents made clear that Flynn was not acting alone. According to prosecutors, Flynn communicated with senior members of the President's transition team about the conversations. And in at least one instance was directed by transition officials to reach out to Russia.

[19:05:10] Tonight, CNN has learned that the President's son-in-law, Jared Kushner, is the very senior member of the presidential transition team identified in today's court documents. Kushner directed Michael Flynn to contact the Russian ambassador and other countries regarding the U.N. Security Counsel vote on Israeli settlements, this according to sources familiar with the matter.

Flynn's guilty plea belies President Trump's repeated denials of any contacts or involvement between his campaign and Russia.

(on camera): In your view has the President lied about what communications his team had with Russia?

UNIDENTIFIED MALE: Well, abundantly and frequently and in just about every way, but most significant in denying that this happened saying it's a hoax.

SCIUTTO (voice-over): After the court proceeding, Flynn went immediately to the home of his son, Michael Flynn Jr.


SCUITTO: The legal fate of his son still key. We reported recently that Michael Flynn Sr. was increasingly concerned about the legal jeopardy that his son might face. His son was very involved in his business dealings overseas and does business dealings until his subject to this investigation. He was not mentioned in any of the charges today, but there's this question, is Michael Flynn's cooperation? Did he do some of this to protect his son? Very possible, Erin.

BURNETT: Certainly. It certainly seems then. His son, of course, tweeting today, nothing is more important than family certainly adding to that implication that the father did it to protect his son. Thank you so much Jim.

SCUITTO: Thank you.

BURNETT: And now, I want to go to Jim Acosta at the White House. And obviously, Jim, a lot there in the President's state of mind, top of the list.


BURNETT: What are you sources telling you?

ACOSTA: That's right Erin. We're talking to a lot of sources over here at the White House and they're telling us that this investigation is starting to wear on people over here at the White House. That people inside the West Wing are worried about where this investigation is going to go next.

I did talk to a senior White House official this afternoon who said that there is no anxiety inside the White House as to what Michael Flynn might be telling investigators, but at the same time, this official went on to say and I thought this was interesting, that it was not just Jared Kushner who was involved in directing Michael Flynn to talk to the Russian ambassador at the time, Sergey Kislyak, that this was, quote, a fulsome discussion that included the entire group."

So it sounds like from what this senior White House official told me earlier today that there were multiple officials involved in that decision to have Michael Flynn talk to the Russian ambassador. At the same time, the senior White House official tried to shift the blame a little bit by saying that the Obama administration had authorized Michael Flynn's conversation with the Russian ambassador.

I talked today a number of former Obama administration officials this evening. They are range in responses from laughable to lies and so on. And so, they're pushing back pretty hard on any kind of implication that the Obama administration signed-off on the Trump White House or the Trump transition team sending Michael Flynn to talk to Sergey Kislyak at the same time today as to how the President's mental state is.

He is apparently feeling sorry for Michael Flynn tonight. I'm told by one senior White House official and that he's thinking about Michael Flynn and his family tonight, Erin.

BURNETT: All right. Thank you very much, Jim Acosta.

And OutFront now former Federal prosecutor, Renato Mariotti, a Democratic candidate for attorney general in Illinois, our Chief Political Correspondent Gloria Borger, and former Nixon White House Counsel, John Dean.

John, let me start with you. Flynn pleading guilty, it turns out Jared Kushner was the person who directed him to call the Russian ambassador and other international leaders, trying to lobby them to do the opposite thing at the U.N. Then the Obama administration want them to do while President Obama was president of the United States. What is the bottom line tonight, John?

JOHN DEAN, FORMER NIXON WHITE HOUSE COUNSEL: Well, this is a big deal. This is a very serious witness with insider knowledge going right to the President of the United States. We don't know if it's just Kushner that obviously is involved. It looks like there are more of a conspiracy here than just isolated incidents. They have not named that in any of the documents but they're -- it's implicit in what's happening.

You know, I don't know where this is going to go. We don't know how it's going to unfold. But one point I'd like to make is if you look at Watergate, if you look at Iran-Contra, if you look at Lewinsky affair, a lot of the criminal activity is pure blundering and not necessarily carefully considered or thought out actions.

BURNETT: Right. But when you say conspiracy, I just want to understand how you mean the word. Conspiracy amongst people in the Trump campaign --

DEAN: Well, a conspiracy is --

BURNETT: -- or between people in the Trump campaign and let's say, a foreign government, i.e., Russia.

DEAN: I'm thinking you know, it can be a conspiracy to obstruct justice such as two or more people agreeing to give a false story or to not report on their SF-86 forms, all their contacts.

[19:10:05] DEAN: All these things can't be a coincidence yet they seem to be happening consistently across the board with this White House. So, that suggests a conspiracy.

BURNETT: And, of course, we know Jared Kushner did not put the facts on that form of his meetings and he didn't do it when he edited it the first time, he didn't do when he edited it the second time and he ostensibly may be finished when he did it the third time.

Renato, sources are confirming to CNN that Mueller's team met with Kushner earlier this month. And they asked about Flynn. Now you've got Flynn cooperating and saying look, Jared Kushner is the one who directed me to do this. It's pretty clear. If Jared Kushner was not 100 percent forthright in those interviews with Bob Mueller's team, this could become the biggest story of all, right?

RENATO MARIOTTI, FORMER FEDERAL PROSECUTOR: Well, absolutely. It would certainly be the next step off up the chain. And that's really what federal prosecutors try to do, Erin. You know, they work up the chain. The chain trying to get as close to the top as possible. And that would be the next step.

So, you know, Kushner was asked about subjects that would touch on what Flynn you know, had discussed with him and if he was -- like you said, if he was not forthright, he could be facing very similar charges to what Flynn has pled to, which is lying to the FBI and that is a crime. And of course, you know, I think, you know, we heard just, you know, in the intro here from some of the reporters about how, you know, what is in this agreement is about lying to the FBI, but we don't know.

And if I was in the White House or one of the lawyers representing the White House, I would be nervous about what isn't in this agreement because I think it's fairly safe to say that Mr. Flynn had to provide quite a bit to Robert Mueller in order to get this good of a deal.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Right. I mean, Erin, that's the key here. That's the key here. What is in this, what we are talking about all day today is not all that Bob Mueller and his team know. They know a lot more about Flynn and his interactions. This is what he has pled to. And but they could either be hanging something more over his head or he could have already told them whatever he knows. We don't, you know, we don't know. But what we do know is that there is a lot more to this story. And the -- what we know in the statement of offenses here is that what Flynn has admitted to is with the knowledge or direction of people in the White House.

So the tentacles now are starting to spread. I mean, he has told them, I didn't do any of this on my own. We checked in. I checked in. With a very senior administration official or a senior administration official.

So, you know, to John's point about conspiracy here, you know, it is expanding. It is expanding. And the question that we don't have answered is why?



BURNETT: And John, to this point, this investigation at its heart to the American people is about whether Donald Trump or anyone in his inner circle collaborated, coordinated, conspired with the Russian government, right? That is what this is about. The President of the United States has repeatedly and aggressively denied it. Here he is.


TRUMP: There is no collusion between me and my campaign and the Russians.

The entire thing has been a witch-hunt and there is no collusion between certainly myself and my campaign. But I can always speak for myself and the Russians. Zero.

There was no collusion, I can tell you that. Everybody's seen that.


BURNETT: Do you feel comfortable with that at this point, John Dean, or no?

DEAN: Well, it's hard to accept given their behavior. If there was no collusion, why didn't he say to all of his aides, I want you to march down to the grand jury and tell these people there's no collusion and do it under oath. He's just done the opposite at every turn, for example, he said let's get rid of this investigation everywhere he can go. He doesn't want people testifying.

So his actions are the exact opposite of what one who is innocent would do. That's the troubling thing and that's one of the reasons this is a fascinating investigation.

BURNETT: All of you are going to stay with me because you're going to be back in just a moment. We have more breaking news. The White House today trying to link Flynn to President Obama. Does anyone really buy that? Plus why is a U.N resolution on Israeli settlements and Jared Kushner's involvement behind the scenes really now becoming central to the Russia probe?

Plus more breaking news, senators working against the clock. Last minute changes to the tax bill. A just added sweetener for the super wealthy. And, I mean, the wealthiest, wealthiest billionaires in this country. Massive handout. Sparking outrage tonight.


[19:18:38] BURNETT: We're continuing to follow the breaking news, President Trump's former National Security Adviser, Michael Flynn, pleading guilty to lying to the FBI about his contacts with Russian officials. And we are learning new details of the agreement. It includes cooperating now. Flynn cooperating with federal, state, local investigators. And this is crucial, because Flynn is the link between Russia and Trump's inner circle and possibly the President himself. His cooperation is the key.

OutFront now, our Crime and Justice Reporter, Shimon Prokupecz. And Shimon, what more can you tell us about this agreement which when you read it, has so many crucial details.

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Yes. It certainly does, Erin. And you hate it, you know, exactly right here. This is key here in this investigation.

And this agreement that Flynn had to enter into that he had to agree to basically means the government owns him now. He has to provide information on a ruling basis. Whenever they come to him, he will have to provide information.

They may have questions during the investigations that come up that they need answered and they will call him. And he will not -- they will not need to go through his lawyer. They could call him directly now and he will have to provide the information to him.

And eventually his cooperation and how helpful he is will ultimately help him in the sentence that he receives. They would eventually write a letter to the judge detailing some of his cooperation in hopes or leniency. But this really means that the government has him.

[19:20:03] He really is in their sort of control. He will have to cooperate in other investigations perhaps. And the other question is going to be whether or not this now means he has to go before Congress, before investigators on the Hill. Because as we know, they've been trying to question him and he's asked for immunity before doing so. So that maybe another avenue here where we will see him, but all, you know, important that the Special Counsel, the FBI, Mueller's team has full control over Michael Flynn now.

BURNETT: All right, thank you very much, Shimon. Can't overstate the importance of that. The White House tonight trying to distance itself from Michael Flynn and they're trying pretty hard. Make no mistake, though, Flynn and President Trump were close. They were very close. They spent a lot of time together. The President considered him to be a friend and they were fiercely loyal to one another.

Tom Foreman is OutFront.


MICHAEL FLYNN, FORMER NATIONAL SECURITY ADVISER: The next President of the United States right here.

TOM FOREMAN (voice-over): On the campaign trail, Michael Flynn seemed a true fan of Donald Trump and the admiration mutual as the candidate courted vote from the military community.

TRUMP: We have tremendous military support. Unbelievable military support. And having as you know, General Flynn here and having so many of the generals that are said. In fact, we have -- where is General Flynn. He's around here somewhere.

FOREMAN (voice-over): Flynn was once a member of Barack Obama's team and a top military intelligence officer. Then he fell out of favor. He was fired. And by the summer of 2015, he had done an odd about face and began talking to Republican candidates. And when he met Donald Trump, "I knew he was going to be President of the United States."

FLYNN: For Donald J. Trump to be the next President of the United States.

FOREMAN (voice-over): Flynn began advising the campaign in early 2016. By the time of the Republican convention that summer, he was leading the chance against Democrat Hillary Clinton.

FLYNN: Lock her up. That's right.

UNIDENTIFIED SPEAKER (in unison): Lock her up. Lock her up.

FLYNN: If I did a tenth, a tenth of what she did, I would be in jail today.

FOREMAN (voice-over): On Twitter, Trump praised Flynn's book on how to defeat radical Islam. In 10 days after winning the election in November, he chose Flynn as his National Security Adviser. Flynn took the job in January after the inauguration.

KELLYANNE CONWAY, WHITE HOUSE COUNSELOR: Yes, General Flynn does enjoy the full confidence of the President.

FOREMAN (voice-over): Then it all unraveled. Flynn admitted he misled the Trump team about his Russian communications.

SEAN SPICER, FORMER WHITE HOUSE PRESS SECRETARY: At some point, that trust eroded to a point where the President did not feel comfortable. FOREMAN (voice-over): Still, even as Flynn was given the boot and the Russian investigation swirled, the President seemed reluctant to let him go.

TRUMP: When I looked at the information, I said, I don't think he did anything wrong. If anything, he did something right.


FOREMAN: None of this proves in any way proves the President was tied to anything secretive or nefarious in dealings with the Russians, but it does shows that he and Michael Flynn were close no matter how much the President's team now tries to deny it. Erin?

BURNETT: All right. Thank you very much, Tom.

Renato, Gloria and John, all back with me. Renato, no question that they were close. And that obviously could be extremely significant here, given his lawyer pointed out. This was a very small transition team and the President is a micro manager.

MARIOTTI: Well, absolutely. And, you know, if we believe former FBI Director James Comey, he had actually been asked by the President of the United States to drop an investigation because Michael Flynn is a good guy. And so, you know, honestly if I was in Flynn's legal team, I would have been seeking a pardon.

And, you know, I think one of the more interesting things about today's events is for one or two reasons, there's no pardon coming. And one reason is that either the President and his team feels that politically they cannot pardon Flynn and his son or there are state charges, which cannot be pardoned by a president. They have to be pardoned by a governor.

So, for one of those two reasons, Flynn felt like he was backed up against the wall and he had to take a deal with Mueller which, as your reporter said, puts Mueller in the driver's seat.

BURNETT: And to that point, John, Mueller in the driver's seat, but some people, at the White House says look, you get a guilty plea online to the FBI, with Flynn, with Papadopoulos, you have charges on Manafort and Gates on things that predated the campaign. If this is the best you got, you don't have very much.

And then others say look, you know, if the best you can get is violating the Logan Act, right, which is, you know, you can't lobby on this Israeli settlement thing when you're not yet the president, that's against the law. Sure it's against the law. It's an obscure law. It's 218 years old. No one has ever been charged or prosecute under it before. Is this really the best that they have, John?

DEAN: Well, to obstruct justice, you don't really need an underlying offense. You can obstruct justice just for an investigation, that's trying to get justice.

[19:25:05] As for the Logan Act, it is 218 years old, but it has been cited in a number of judicial opinions. In fact, in 1995, there was a look at it by Congress as to whether to repeal it or leave it on the books. They decided to leave it on the books. So that's a good law.

BORGER: You know, Erin --

BURNETT: But do you think they'll prosecute under it or do you think that it's leverage for them to get more? You know, we will, but give us something bigger.

DEAN: I think it's leverage at this point. It's a tool that can be used as it is being used.

BORGER: You know, I don't think this is all they have. I think they have an awful lot on Flynn. But they choose to use this because maybe they have something more hanging over his head or this is part of the deal.

But I think if I were inside the White House right now, I'd be trying very hard not to upset Michael Flynn. Because Michael Flynn is owned a wholly owned subsidiary now of the Special Counsel. And he's got to testify truthfully and forthrightly about all of his communications.

I guarantee you, they have all of his devices. They have all of his e-mails, and all of his conversations. And so now, they will be picking his brain for quite some time. And so, I think that if I'm Donald Trump or if I'm other people in the White House and I spoke with someone today who has spoken with a few people at the White House who said look, you know, we understand that this is a very big deal.

The President was close to Michael Flynn. Jared Kushner was very close to Michael Flynn. Those were tight relationships. Because they -- Flynn was the first person with brass on his shoulders to endorse the President, and also because they agreed with each other on a lot of policy issues.

And so, I think that everyone who was inside that inner circle, everyone who, you know, was a visitor to Mar-a-Lago is probably now trying to think back what did I talked to Flynn about.


BORGER: When did we say it? Did he talk to the President about certain things?

BURNETT: And Gloria, what about Jared Kushner? How far does the President's loyalty to him go because now, he is in the cross hairs, right? He is the one who told Flynn to do this stuff and he is the one who could be facing perjury charges if he hasn't been honest about everything.

BORGER: Well, you know, look, the President is loyal above all else to his family. I wouldn't say the President's a particularly loyal guy. Ask Rudy Giuliani, Chris Christie, ask, you know, ask a bunch of people. Maybe even Jeff Sessions, right?

But the question is I think that, you know, the President has to protect himself and the presidency. But I believe that Jared Kushner has to tell the truth, as does everyone else. And look, Jared's people, with whom I've spoken, will say that there's no their there, you know. And that he didn't direct Flynn to do anything.

This was sort of a small, you know, this was a small group of people who were talking about --

BURNETT: Well, it sounds like they're trying to throw everyone else under the bus including the President, actually. That is what it sounds like, right?

BORGER: I think this has a long way. I think this has a long way to play out.

BURNETT: Renato, quickly.

MARIOTTI: Sure. I think what's important is not what's here. I think the Special Counsel has a lot more information. And if I was in the White House, what I'd be concerned about is what's not here.

BURNETT: All right. And that, obviously, is the crucial bottom line. Thanks to all of you.

And next, breaking news. The Senate's about to vote on a tax bill, but guess what? They're still writing it, so people haven't even been able to read it. In fact, last minute things are being added in. There's like 479 pages of amendments and on page 38 of them. Wait until you hear about this handout for some of the richest billionaires in this country.

And more breaking news. Will today's revelations about Jared Kushner cause trouble for him with the House and Senate investigators? We will speak to one of those investigators this hour.




[19:32:47] ERIN BURNETT, CNN HOST: Welcome back to our viewers in the United States and around the world.

Breaking news: the Senate debating its tax reform bill at this hour and it's actually been rewritten. They're not going to vote tonight, but it's not yet written. It's obviously hundreds and hundreds and hundreds of pages long. Senate Majority Leader Mitch McConnell says he's got the votes to pass

it, even with Senator Bob Corker voting no. Corker's concerned the bill is going to cause the deficit to rise.

Manu Raju is on Capitol Hill.

Manu, here we are, they're going get a vote tonight. They've got these hundreds of pages of amendments and nobody's going to have to time to read.

What's going on?

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Well, behind the scene, they've been trying to finalize the legislative language. They've actually been providing this proposal to the official congressional scorekeepers, to make sure that it does not exceed -- conflict with the Senate budget rules, but they're also trying to win over some key holdouts, which they did all day long, winning over people like Susan Collins of Maine by including changes, a $10,000 state and local tax. Winning over Jeff Flake of Arizona, but also making assurances that they're trying to find a permanent solution separately on the issue of the DREAMers. And winning over people like Ron Johnson, over the changes to how small businesses are taking care of.

But still, Erin, a lot of concern, particularly from Democrats about the fact that there is no legislative language released yet.

Sherrod Brown of Ohio, one of those Democrats, raising concerns earlier today. Here's what he said.


SEN. SHERROD BROWN (D), OHIO: Nobody knows what's in it. They should be ashamed of themselves they are willing to pass a bill this big with nobody reading, with nobody really knowing what's in it.


RAJU: Now, Republicans argue that look, the broad parameters of this bill has been known for weeks, allowing the amendments have been out publicly. So, people should have a chance to digest them.

Still, though, a lot of the details we will not know until the Senate votes, probably later tonight, and could go into early morning hours. We'll have to see.

But, Erin, this is the fourth step in the legislative process. They have the votes to pass it tonight, probably in a 51-49 party line vote with one senator, Bob Corker, defecting. But then they got to conference with the House and this back through both chambers, still a lot of work to be done before it gets to the president's desk, Erin.

BURNETT: All right. Thank you very much, Manu Raju.

And, of course, broad outlines may have been known for a while, but when it comes to tax policy, it's not about broad lines, it's about the details and it's about the loopholes that they said they wanted to get rid of and, of course, are not being gotten rid off.

[19:35:07] OUTFRONT now, Stephen Moore, former senior economic adviser to the Trump campaign, informal adviser to the White House on tax policy, and Gene Sperling, former director of the National Economic Council under Presidents Obama and Clinton.

All right. You both have debated the overall part of this here, is it going to spur growth? Are companies going to use this money to help workers?

I want to get in the details tonight. I want talk to these 479 pages of amendments that are being all written up right now and edited and changed.

Steve, Democratic Senator Dirk Durbin tweeted this afternoon, trying to review the tax scam. OK, there's this political language. But he points out, they're making handwritten changes to brand new text as we speak. Can anyone else read this? And you see all of these handwritten changes.

Look, this is a problem, Steve. They're pushing 479 pages of amendments through. I mean, no one's going to be able to read this before voting. Is that OK?

STEPHEN MOORE, CNN SENIOR ECONOMIC ANALYST: Well, what's going on right now, Erin, is something called vote-a-rama. Where all of these amendments -- and, by the way, it was Democrats who insisted on hours and hours of debate. And I think it's a good thing. There will be a lot of Democratic amendments, so, there'll be a lot of Republican amendments.

By the way, one of the most important amendments that has been approved that you just mentioned and I think it's very significant, is to reduce the tax rate on the small businesses, because I think I said on your show a couple of nights ago that one of the problems I have with the bill was that the cuts were larger for the corporations than the 28 million --

BURNETT: The expansion of the pass-throughs is what you're talking about, right.


BURNETT: OK. So, Gene, let's talk about that. Page 38 of the 479 pages -- there's something in here that's deeply, deeply troubling. And I know, Steve, that you will agree with me on part of this, but you might not agree with the positive part.


BURNETT: OK. This is a huge tax break, Gene, for billionaires, billionaire, private equity managers. There's no question about it. That is what this is for.

These guys are not only going to get to keep their carried interest loophole, which is a nasty thing which should have gone away a long time ago, I know you both agree on that. They are now going to get the pass-through. So they're going to go from paying 40 percent down to paying less than 30 percent, on their income.

This is according to the analysis of Victor Fleischer, economist at the University of San Diego. Steve Schwartzman is going to benefit. He's worth $12.3 billion. Henry Kravis is going to benefit from this. He's worth $5.2 billion.

These guys are getting a massive, massive tax break in a last minute amendment on page 38 -- Gene.

GENE SPERLING, FORMER NATIONAL ECONOMIC COUNCIL DIRECTOR UNDER OBAMA & CLINTON: Erin, you're so right to hit this. Remember when Donald Trump said carried interest was like getting away with murder --


SPERLING: -- hedge fund, private equity getting a lower rate. Then, they create basically a loophole on steroids. The pass-through rate, what Steve and others like to say is for small businesses -- yes, it could benefit some small businesses a little, but the big cost comes through it helping passive investors well off, Wall Street investors who get to pay, who aren't running the businesses, who get to pay a way lower rate.

That was bad enough. That's why this pass-through rate goes 50 percent to the top 1 percent and what Professor Victor Fleischer saw in there and what Senator Merkley is hitting on the floor right now is now they've added a provision that says if you're a publicly traded partnership like Blackstone, the largest Wall Street financial companies who already get carried interest, now you would get this low rate that even small businesses who might be accountants or do other financial services wouldn't happen.

If this is right, it is the most scandalous thing in what is already the most reckless, rushed, desperate bill I've ever seen in my life.

BURNETT: So, Steve, Gene makes a good point, OK? If you believe this rate should apply to these people. It's not going to apply to private law firms, it's not going to apply to accountants, none of those. It's going to apply to publicly traded partnerships.

So, that means Steve Schwartzman and Henry Kravis. That is Blackstone and KKR, both publicly traded partnerships, $12 billion for one guy, $5 billion for another. This is the money people are paying them to do their job.

I mean, seriously, Steve, do you actually think, do you support these guys getting this tax break because that is where the money is going to go?

MOORE: No, I don't, I don't. You know, I agree with the both of on this. It sounds like an outrage.

I mean, look, what we want to do, where Gene and I disagree, I think this bill will be good for the economy. It will lead to more investment in this country and more jobs. But, look, we want to help the real employers out there, the people who are hiring, you know, 50 or 100 workers and expand their businesses.

Now, I'm not an expert on how all these private equity firms work. But, you know, the way you describe it, it doesn't seem fair and I think that's a loophole that should be closed.

BURNETT: But, Steve, my question to you is, how can they?


BURNETT: You know, right now, we can raise awareness of this. But 479 pages, I mean, I don't know what other (INAUDIBLE) are in there and it's all been edited as we speak. But this is how these things get through.

MOORE: But you know what --

BURNETT: And they get through for the rich and powerful that a specific senator says they want to defend, right, because they donate to the campaign.

[19:40:05] This is how the stuff gets in there.

MOORE: That's true. And you know what? It has to be taken out. I mean, the whole idea of this is try to get rid of the loopholes and the tax system, not to add to them.

But I would simply submit to you that I think they are going to pass this bill later tonight. I think that's a good thing, but then it will go to a House-Senate conference, and I'll make holy hell out of this. I think it's outrageous, frankly. And those kinds of things have to be removed from the bill.

So, there will be plenty of time for people to go through the bill. It's going to be b a week to ten days to two weeks before this thing actually passes, and, you know, it's a big bill, you're talking about a massive tax code that is being rewritten here, but I think and hope that there will time for those kinds of things to be removed.

BURNETT: And, Steve, I know, obviously, you're informally advising the White House. I mean, this is something you're going to talk to the president about? I mean, this is -- look, he's made a stand on carried interest. That's still in there, and now, there's this, too.

MOORE: I will, but I want to make sure -- I'm not an expert on this. So, I want to make sure I've got my facts straight and I want to make sure that, you know, look, Gene is more of an expert on these things maybe that I am, in terms of how these private equity firms work. But, you know, what you say is true and I think it's an outrage, and I'll work to get it removed.

BURNETT: Well, Gene, I know, of course, has read the analysis by Professor Fleischer, which is whom I'm citing.

Gene, let me give you the final word. SPERLING: Well, Erin, first of all, everybody at home is probably

wondering why would people be rushing like crazy, why would there be special interest provisions. If you're wondering that, you're not like uninformed. That's the right question, it is scandalous the pace this is going through.

And what you should know is whether this provisions fixed or not. Their overall pass-through rate that they say is for small business is going to be the Accountant's Full Employment Act. It's going help the most well-off people, to use their accountants to pay the lower rate. It's exactly what tax simplification was supposed to be against. It's tilted towards top 1 percent and people may not understand it by the time this passes, but they will understand it in time for them to cast their votes in 2018.

MOORE: Well, Gene, just don't forget, about 60 percent of our jobs in this country are created by those small businesses and, you know, they're really looking forward to this tax cut. A lot of them think they can expand their businesses and hire more workers as a result.

SPERLING: Then let's help those and not have to be --

BURNETT: But the majority -- are already at the lower rate. That's the point. So, the people who benefit from getting the benefit is going to be the people who have the higher rate, i.e., the rich people.

So -- all right. Thank you both very much. I appreciate your time.

And next, more on the breaking news. The Flynn guilty plea, what a U.N. resolution on Israeli settlements has to do with the Russia investigation. Why Kushner is so key to this now.

And Trump's history with the p-word. What he once told a reporter about a young socialite at Mar-a-Lago. This is now coming to light.


[19:46:53] BURNETT: Breaking news: CNN has learned that Jared Kushner is the high level transition official who directed the former national security adviser, Michael Flynn, to contact the Russian ambassador. Flynn pleaded guilty to lying about the FBI about his contacts with then Russian ambassador Sergey Kislyak, becoming the fourth Trump campaign official to be charged, the first to have served inside the White House, the second to plead guilty.

Flynn has agreed to a plea deal and is cooperating with special counsel Robert Mueller, raising new questions tonight about who will be charged next. Congressman Denny Heck is OUTFRONT. He's a member of the House Intelligence Committee, conducting its Russia investigation. Congressman, I appreciate your time. What's you reaction to Flynn's guilty plea today?

REP. DENNY HECK (D), INTELLIGENCE COMMITTEE: It's epic. I don't think there's any exaggerating it. In a town that runs on spin, there's no way to make hyperbole out of this. It speaks for itself. We are now down to one thin membrane at most between this plea deal between General Flynn and Director Mueller and the president of the United States.

BURNETT: That's a pretty -- I mean, that's the major statement to make, one thin membrane away. I mean, do you believe at this point that this could go to the Oval Office?

HECK: It's already at the Oval Office. General Flynn served as the national security advisor. It's one of the most sensitive and important positions in the entire federal government. So, it's already been at the White House.

BURNETT: We are learning about Jared Kushner. We're learning he's the senior level transition official who actually directed Flynn to make contact with the Russian ambassador. As you know, you know, his associates are trying to say oh, it was a small group. Others were involved, trying to imply that he was not alone in doing this.

But what do you think happens to Jared Kushner?

HECK: Well, the thing I'd really like to see happen to Jared Kushner is that he get back before the House Select Committee on Intelligence because I'm like to ask follow up questions. So, the fact of the matter is, way back in March, when we asked General Flynn to come before the intelligence community, he asked for immunity, it was denied. And at the time, his lawyer said he's got a story to tell and he really wants to tell it.

Well, now, he's in a position to tell it.

BURNETT: So, do you have any indication from him as to whether he will do that in light of his cooperation with Bob Mueller?

HECK: Sure, I think it's written all over the plea bargain deal. The truth of the matter is, Erin, I think if you were to drive down 1300 Pennsylvania Avenue tonight about 3:00 a.m., you'd probably see a lot of lights on.

BURNETT: How much farther do you think this goes, Congressman? You know, there are some who say look, we're almost at the end. That the biggest charge they have on Flynn is lying to the FBI about a call to the Russian ambassador that we already knew he lied about, that's not that bad.

They say --

HECK: Erin, wait a minute. It's a felony.

BURNETT: So, make a case.

HECK: He's a felon. He's a felon, punishable by up to five years in jail. Please don't say it's not that big a deal. He is now an admitted felon.

BURNETT: Yes. HECK: So, there are two things about investigations that are timeless

and universal. Number one is, it's the cover up that will get you not the underlying crime and the second is, follow the money. We have yet to go down that trail, but I suspect this is the beginning of that.

BURNETT: Do you have concern though that to the American people, if it is the cover-up and there is no crime, no collusion with the Russians, that that will be very difficult to sell to an already extremely divided American public?

HECK: Prima facie, there has been collusion. It's hiding in plain sight, whether it's all the way back to that June meeting in Trump Tower with Don Jr. and the Russian national representative, or right up until today and the indication that General Flynn was directed to make contact with the Russian ambassador and engage in what was illegal activity.

BURNETT: All right. Congressman Heck, I appreciate your time. Thank you very much.

HECK: You're welcome.

BURNETT: And next, Trump and the "P" word. You know he said it on the Access Hollywood tape. We are now learning about another time he used it when talking about a woman at Mar-a-Lago. The reporter who heard it years ago is my guest.


[19:55:11] BURNETT: Tonight, President Trump accused of making another crude comment about women as he tries to claim the infamous "Access Hollywood" tape, the same one he apologized for, is a fake. He was telling "The New York Times" in a report that he told people in his inner circle, "The New York times" saying, that he's questioning whether it's his voice on that tape.

But now, we know who used that word again, the comment coming in 2000 during a trip to Mar-a-Lago while he was being interviewed for a profile in the now-defunct "Maximum Golf" magazine. Trump reportedly saying, quote, there's nothing like first rate "P."

I interviewed Michael Corcoran, the reporter who wrote that profile on Trump and I began by asking about how and when Trump made that comment.


MICHAEL CORCORAN, REPORTER WHO PROFILED TRUMP: Yes. So, the context was, we just finished playing golf. I was on assignment, writing a profile of him. We just finished playing golf. We were sitting around on the sort of outdoor patio area, eating area at the golf club.

And an attractive young woman walked by, and he sort of, you know, just general to the people at the table said, you know, sort of sighed and said, there's just nothing in the world like first rate -- p-word I guess we're saying right now.

BURNETT: So, were you -- what was your reaction?

CORCORAN: I certainly wasn't surprised. At that point, I had spent about 36 hours with him. You know, there's a lot of jabbing each other back and forth, you know, him calling me one name, I would call him another name, that sort of stuff. And, you know, the vulgarity was flowing pretty freely, so I wasn't shocked.

BURNETT: You weren't shocked. OK, then, here's the thing. The magazine that you were writing for was "Maximum Golf" magazine, and the goal was to be edgy, part of it. So when you wrote the article, at the end of the article, you put this quote in there.


BURNETT: OK? Now, some people would say that wouldn't be in "Golf" magazine. In the magazine you're writing for, that was sort of -- so you did put in there, but it was not published.

CORCORAN: That's correct.

BURNETT: In fact, it was changed, although the quote marks remained, too, there is nothing in the world like first class talent.

CORCORAN: That's correct. Yes.

BURNETT: A few questions from this. First, why? Why was it changed? Who changed it?

CORCORAN: So, it would have been changed by the editor-in-chief of the magazine. So, at the time, I was like writing a book, doing some teaching and just writing magazine articles. And so, I had an assigning editor.

He would have had to fight with the editor in chief about it, the assigning editor, a guy named Joe Bartman (ph). I think they had a bit of a set to about it. Joe was very upset about it. His boss, I guess, bigfooted him and made him change it.

BURNETT: OK. So, let's just be clear about a couple of things. So, Joe is confirmed that this happened.


BURNETT: This is what you were told. He corroborated it. The editor in chief is at "Smithsonian Magazine", he has not commented.

CORCORAN: That's what I understand.

BURNETT: So, explain to me, they literally kept the quotes around it, but that's not what he said. So that was just a false thing that somebody changed it to.

CORCORAN: Yes, changed the context of it and everything. BURNETT: All right. So, you know, the "p" word is very important

because according to "The New York Times," he's telling people that might not be my voice on the tape because I don't use that word. Now, first of all, as I was going to make sure, we're not debating it's his voice, because it is, as he has acknowledged that it is, as "Access Hollywood" has said that it is. He said it on that tape in fact twice.

He also said that a woman said it about Ted Cruz during the campaign. It is a word we've heard him use multiple times. Here he is.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You know what she said? Shout it out because -- you're not allowed to say, and I never expect to hear that from you again, she said, I never expect to hear that from you again. She said he's a (EXPLETIVE DELETED). That's terrible.

BILLY BUSH: Sheesh, your girl's hot as (EXPLETIVE DELETED) in the purple. Whoa!

CROWD: Whoa, whoa, whoa!

BUSH: Yes, the Donald has scored.

Whoa, my man.

UNIDENTIFIED MALE: Wait, you've got to look.

TRUMP: I'm automatically attracted to beautiful women. I just start kissing them. It's like a magnet. When you're a star, they let you do it. You can do anything.

BUSH: Whatever you want.

TRUMP: Grab them by the (EXPLETIVE DELETED). You can do anything.


BURNETT: It's clearly a word he uses, and you heard him use it in a casual conversation with a group.

CORCORAN: Yes, yes. And again, it didn't shock me in any way to hear him say it.

BURNETT: So when you hear now that "The New York Times" is saying it, that I would not use those words, what's your reaction?

CORCORAN: It's craziness. He struck me then, and still does, as just a sort of massively insecure braggart who, you know, will say whatever pops into his head to make himself feel good, to make himself seem cool to anybody who's listening.

BURNETT: All right. Well, thank you very much. I appreciate it.



BURNETT: And thanks to all of you for watching. Have a safe weekend.

Anderson's next.