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Source: Bannon Won't Let McConnell "Off the Hook" On Moore; U.S. Troops Preparing for Unrest Over Trump's Jerusalem Decision; Trump Tax Plan Fails to Close Loophole for Super Rich. Aired on 7-8p ET

Aired December 5, 2017 - 19:00   ET


[19:00:03] WOLF BLITZER, CNN ANCHOR: Thanks very much. Be careful over there. That's it for me. Thanks very much for watching. "ERIN BURNETT OUTFRONT" starts right now.

ERIN BURNETT, OUTFRONT HOST: OutFront next, who knew what and when about Michael Flynn, his contacts with Russia? New details tonight raising questions about the Vice President. And new charges could be coming in the Russia probe. Who's the target? We'll tell you.

Plus, Steve Bannon about to speak live at a major Roy Moore rally, as Republicans flock to Moore's side. Is the party making an historical mistake? Let's go OutFront.

And good evening, I'm Erin Burnett. OutFront tonight, the breaking news. New charges may be coming in the Russia investigation. This is what a lawyer for the former Senior Adviser Rick Gates says. And this comes as White House Press Secretary Sarah Sanders tries to clean up Trump's tweet, saying he knew General Flynn lied to the FBI when he urged then-FBI Director Jim Comey to drop the investigation into Flynn.

The President's tweet raising serious questions about whether the President obstructed justice. Here's Sarah Sanders late today.


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Look, the President knew that he lied to the Vice President. That was the reason for his firing.


BURNETT: The problem is, that is not at all what the President tweeted four days ago when he fired off this tweet, "I had to fire General Flynn because he lied to the Vice President and the FBI." The White House has made it very clear. President Trump's tweets are, quote, official statements by the President of the United States. No matter who might draft, tweak, or actually type them.

In this case, lawyer John Dowd, the first person ever to take the blame for a presidential tweet. Trump's tweet and Sarah Sanders' explanation simply are not the same. They contradict each other. They also don't match CNN's reporting. A source telling CNN that White House Counsel Don McGahn told the President in January that Flynn misled the FBI and lied to Vice President Pence. All of these raising new questions about the Vice President. Pence ran the presidential transition team.

We know Pence was aware that Flynn had contacted Russia. But for a year now, Pence has insisted that he didn't know Flynn and the Russian Ambassador discussed U.S. sanctions against Russia.

Court filings unsealed last week indicate a wide circle of Trump advisers were aware of that. So how is it possible that the Vice President, Pence, the man in charge of the transition team, was one of the few who remained in the dark?

Sara Murray is OutFront tonight at the White House to begin our coverage. And Sara, obviously, these new charges coming. We're going to talk about that more in a moment with Jim Sciutto, but I want to ask you about the situation with the Vice President. It seems like a lot of people knew Pence was lied to.

SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: Well, that's right, Erin. And as you point out, it's a little confusing that Pence, who was then the head of the transition, would not have been one of these senior officials who was brought in the loop on Flynn's phone calls with then the Russian Ambassador Sergey Kislyak about these Russia sanctions.

But one thing that Pence's advisers have been insistent on since this story came out is that the Vice President had no knowledge that Flynn was having conversations with the then Russian Ambassador about sanctions. And in fact, that when Vice President Pence asked Flynn directly about this, that Flynn lied to him. Now, we know that this back and forth is ultimately what led to Flynn's ouster from the White House.

But it is more and more perplexing when you see these court filings, when you see that it was a larger circle than we initially expected, who were brought into the loop on this. Now, Pence world is insisting that the Vice President was focused at the time during the transition on staffing the government that he was spending a lot of time in Washington while the national security team was in New York, as well as trying to pack up his life in Indianapolis and move to Washington for the longer term. But it does have a lot of folks wondering how he could have been in such a prominent role and so far out of the loop.

BURNETT: So Sara, I mean, the White House Press Secretary today then asked, specifically about a pardon, whether the President would pardon Michael Flynn. And she did not rule this out.

MURRAY: She didn't rule it out. And the President himself has been asked on a number of occasions over the last few days whether he would consider pardoning Flynn, and he's dodged the question. It's a reasonable question, Erin.

We have seen the President out there publicly in the last few days expressing his sympathy for Flynn, saying this is something that has ruined Flynn's life, and perhaps even suggesting that it shouldn't have amounted to this much. And of course, we know that privately, at least according to James Comey, the former FBI director's testimony, he asked Comey to go easy on Flynn at the time. But still, no straight answer from the White House on whether this is something the President is considering.

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

And OutFront now, the former Press Secretary for Vice President Mike Pence, Marc Lotter. And Marc, thank you for being with me tonight.


BURNETT: Look, the circle of people who knew about Flynn's contacts with the Russian Ambassador about sanctions specifically seems to be growing, right?

[19:05:03] According to the court filings we now have, Flynn spoke with senior members, plural, of the presidential transition team about those conversations with Kislyak about U.S. sanctions.

So he's saying senior members of the transition team. Pence was the head of the transition team. Was he really kept in the dark for nearly a year about what these conversations were about?

LOTTER: As we have been saying when this story first broke in The Washington Post back in February, that was when the Vice President first found out that he had been lied to by General Flynn. Remember, he spoke to General Flynn that weekend before he went on those two Sunday shows in mid-January before the inauguration, and asked him directly if he had those conversations about sanctions. The General told him he did not. And that's why the Vice President went out and said those things attributing them to General Flynn when he did those interviews.

And he did not find out until February. And then a few days later, the President took the necessary step of firing General Flynn, something that the Vice President supported.

BURNETT: So let me ask you, though, because if Flynn is saying that senior members, plural, of the presidential transition team knew about the calls and knew they were about sanctions and Pence is the head of the transition team and he did not know, what does this say to you, Marc, about the Vice President's standing, the respect with which he is treated. Whether he's even in the inner circle, if all these people knew and he wasn't among them?

LOTTER: Well, what I have to tell you, and I was involved in that transition and I was at the Vice President's side throughout the entire campaign in that transition, is what you had, you had a number of different groups of very talented people working in their areas of influence. The focus of the Vice President at that time during the transition --

BURNETT: But he knew about the calls. He knew about the calls. He just didn't know what they were about. He didn't know the problematic content within them.

LOTTER: Well, let's also question about whether that is problematic content. I think it's entirely appropriate for the incoming national security adviser to reach out around the world to our allies and to other countries to find their position on various issues as they're relating to world affairs. But remember --

BURNETT: Well then you're not saying it's a lie. You're saying it's an admission.

LOTTER: -- Three weeks away from the administration taking office. And I don't think anyone could be -- to think that we would arrive in office on January 20th at 12:01 p.m. and ask what's going on in the world.

BURNETT: But how can you say it doesn't matter if he didn't know and say he was so upset when he was lied to that he wanted him to be fired.

LOTTER: Well, no. What I'm saying is that he was lied to. What I'm also saying though is -- remember, in the transition, you had the national security team working through national security issues. You had a domestic policy team that was working through domestic policy issues. The Vice President at that time with a lot of the leadership were working on staffing the key Senate confirmable positions that were to be filled when we took office or the President took office two and a half to three weeks later.

BURNETT: All right. Marc, stay with me. I want to bring in Gloria Borger, our Chief Political Analyst and Richard Painter, White House Ethics Lawyer under President George W. Bush.

Richard, how significant do you think all of these is, that Flynn was told about the calls but not what they were about. He was angry enough that, you know, he felt obviously he was lied to. But you hear Marc saying that, you know, should -- didn't necessarily -- wasn't in a position to know everything about everything.

RICHARD PAINTER, FORMER W.H. ETHICS LAWYER FOR PRESIDENT GEORGE W. BUSH: Well, there are a lot of questions surrounding Vice President Pence that have to be answered. And I think we're going to have to get to that point at some time.

And it may be sooner rather than later because it's becoming increasingly obvious that President Trump is incapable of carrying forth the responsibilities of this office psychologically and that he also may very well have obstructed justice. So there could be grounds for his removal, impeachment and/or removal under the 25th amendment.

And at that point, we do have to get to a serious inquiry as to what Vice President Pence knew and when he knew it. It is possible that he was shut out by a number of people in the White House, Steve Bannon and others, and General Flynn, and just flat out lied to and shut out of the process. It's also possible that he knew more than he's letting on that he knew. And that's something we have to find out at some point in this investigation. But it's very clear that the President himself was aware of this lie at the time that he fired Director Comey from the FBI. And thus it's a very strong case that the President is guilty of obstruction of justice. And that's going to be our first matter of importance.

BURNETT: And Gloria, to this point, a person in Pence's orbit is telling CNN they are prepared and they are preparing right now for the Vice President to have to be interviewed by Bob Mueller's team.


BURNETT: This is obviously a crucial moment for the Vice President.

BORGER: Well, look --

BURNETT: Because it is now right in the cross hairs. What did he know, when did he know it?

BORGER: Exactly. And I think -- look, I think the question of that goes directly also to, you know, to the question of the President. If the President knew, as we reported, you know, somewhere in late January where his White House Counsel had been briefed by Sally Yates, and the President knew, and then Don McGahn goes in and tells the President what Sally Yates had told him, which was that Flynn had misled the FBI.

[19:10:16] It took -- it took a long time, more than a couple weeks, I believe, to fire him, only after it was discovered that in fact he had lied. He had lied when the Vice President called him up, as Marc is saying, and said tell me what you talked about. Did you talk about sanctions? Flynn lied to the Vice President. And that was the reason they gave.

The question I think is, would they have fired him if that story had not come out in The Washington Post? You know, you had a national security adviser at that point who probably would not be able to get clearance. Think about that. So they have an issue on their hands.

I think there is a question. Did they bring Mike Pence into that fold or not? Was he doing the human resources part of the transition?


BORGER: Yes, he was. So, you know, those questions need to be answered. You heard Marc's, you know, Marc's reasons for why the Vice President wouldn't know. I'm sure Mueller wants to, you know, hear the explanations himself.

LOTTER: And I would also point out real quickly here that there is reporting right now on where there were -- where one of your -- a group of your reporters talked to seven different transition officials that were all saying that the Vice President did not know he was lied to by General Flynn. And that was where this was headed. BURNETT: So let me ask you, Marc. The Atlantic magazine today reporting that Pence sent Trump a letter. And he sent him a letter after the Access Hollywood tape. And in that letter, he said he needed time to decide whether he could remain on the ticket. Again, this is a report in The Atlantic magazine. To your knowledge, is that true, Marc?

LOTTER: It's absolutely 100 percent false. I was with the Vice President during that time on the campaign. The Vice President put out a statement the day after the Access Hollywood tapes came out, but then what was not reported is that he also went to Newport, Rhode Island that Saturday night for a major fund-raiser.

He wished the President well on his -- on the debate on Sunday. He was back on the campaign trail on Monday, as scheduled. And actually, he spoke to Chris and Alisyn on CNN's New Day on October 10th and actually denied any kind of speculation that he even considered leaving the ticket. So, this has been a story that's been shopped around for a very long time that is absolutely untrue.

BURNETT: All right, thank you very much. And I appreciate all of your time tonight.

And next, the breaking news, more charges could be coming in the Special Counsel's Russia probe. New details from federal prosecutors breaking this hour.

Plus, Steve Bannon about to speak at a Roy Moore rally. This is Republicans get back on Moore's bandwagon.

And breaking news, U.S. troops standing by for potential unrest after Trump's expected announcement to declare Jerusalem, the capital of Israel.


[19:16:36] Breaking news. The attorney for a former Trump campaign official saying tonight that more charges could be coming. Rick Gates is already under house arrest after pleading not guilty to money laundering and failing to register as a foreign agent. Tonight his attorney warning another shoe may drop in the Russia investigation. Jim Sciutto has been reporting on this, and the possibility of more charges.

And now I want to go to Democratic Congressman Ted Lieu of California, who is a member of the House Judiciary Committee. And Congressman, I appreciate your time. Rick Gates' attorney is saying it is possible new charges could be coming in the Russia investigation related to his client. What's your reaction?

REP. TED LIEU (D), JUDICIARY COMMITTEE: Thank you, Erin, for that question. I'm a former prosecutor, and it's not unusual to add additional charges if you get additional evidence of misconduct. But I think what may be happening is Special Counsel Mueller may be trying to send a message by saying, look, if you cooperate with me, I'm going to give you the same treatment I gave George Papadopoulos and Michael Flynn. Just do one count. If you don't cooperate with me, then I'm going to charge everything I can against you.

BURNETT: So what happens from here then? I guess this depends on what Rick Gates would be able to give up on others.

LIEU: So we'll know soon whether there is additional new charges brought against Rick Gates. And he has a choice. He can continue to plead not guilty or he can say I want to cooperate in exchange for a lighter series of charges.

BURNETT: So the President's good friend, the Newsmax CEO Chris Ruddy, spoke to CNN. He says that right now, Bob Mueller is overstepping. And he is overstepping his authority. Here's what Chris Ruddy said.


CHRIS RUDDY, FRIEND OF PRESIDENT TRUMP: I think there's a lot of evidence that they have been moving beyond the original jurisdiction, which was looking at collusion.


BURNETT: Is Mueller going beyond his jurisdiction?

LIEU: No, not at all. And if you look at the actual indictments and actual guilty pleas, even those on the far right cannot challenge the integrity of those indictments. Robert Mueller, I think, is being professional. Keep in mind he's a Vietnam veteran, bronze star. Served in both Republican and Democratic administrations. He's as solid as they can get, and I think he's doing everything correctly.

BURNETT: The President's lawyer, John Dowd, as you know, obviously, has been commenting in recent days due to the President's tweet about what he knew about General Flynn. He says that the President cannot obstruct justice because he is the President, because he is the ultimate law enforcement officer in the United States of America. What's your response to that?

LIEU: The central lesson of Watergate is that no one is above the law, not even the President. That's what the American people believe. That's what we've always believed.

And keep in mind, there are no words in the constitution that says the President cannot be found guilty of obstruction of justice. Richard Nixon tried a line that if a president does it, it's not illegal. That did not work out well for him.

BURNETT: And are you clear at this point that that's where we are? Do you think that we are over that line? Any nuance left to you?

LIEU: Let's just take a step back and think how shocking it is now that the White House has to go to this line of saying the President is above the law. Because for a very long time, they were denying anything bad was happening. And now given all the facts, I think they realize they're in serious hot water.

Keep in mind, John Dowd also, I think, has to be removed because by saying that he wrote that tweet for Donald Trump, which I'm not sure that that's true. But he's sticking to that story, he now becomes a witness in any obstruction of justice case, so he needs to leave the legal team.

[19:20:10] BURNET: So, obviously, part of this, at least that tweet comes down to when the President knew General Flynn lied, and to whom, right? To Vice President Pence, to the FBI, obviously in the past, he said it was because Flynn lied to Mike Pence about his contacts with the Russian Ambassador.

Over the weekend, of course, that tweet said he also knew about lying to the FBI. I want to play a question today that was asked of Press Secretary Sarah Sanders specifically about what the President knew when he knew it.


UNIDENTIFIED FEMALE: I'm asking for a date. When did he find out? Was it when the announcement was made Friday? Was it prior to that?

SANDERS: Again, I'm not aware of the specifics. But I would refer you to John Dowd for that specific question. I would actually refer you to John Dowd on that specific question since it's a legal matter.


BURNETT: Congressman, why do you think that after a tweet which was very specific, which a lawyer was involved in by his own admission, now the White House will not say when Flynn knew Trump lied to the FBI?

LIEU: Because the White House knows that if the state of mind of Donald Trump was that Michael Flynn lied to the FBI and that later he tries to get FBI Director James Comey to drop the case against Michael Flynn, that's classic obstruction of justice. And I think that's why you see John Dowd going to this line now that the President can't obstruct justice. And that is nowhere in the constitution, and it was rejected by the American people in Watergate.

BURNETT: Congressman, in your view from your investigation right now, does this go to obstruction of justice for the President or does it go to something else? And by that, I'm referring specifically to collusion by the President of the United States with the Russians. Or do you think this is truly going to be about the cover-up crime and not an underlying crime itself?

LIEU: Well, we definitely have obstruction of justice because the President has admitted it on national TV. Earlier in the year, he went on TV and said the one thing that John Dowd would have told him never to say, which is that he fired Comey because of the Russia investigation. That's obstruction of justice.

And now we have other issues surrounding this tweet. In terms of collusion, I think we need to let Robert Mueller's investigation and the congressional investigations run their course. But certainly, reporting today that Donald Trump Jr. asked for dirt on Hillary Clinton's foundation, that's more evidence of Trump campaign officials trying to solicit information from a foreign power. That's collusion.

BURNETT: All right. Congressman, I appreciate your time. Congressman Lieu tonight.

LIEU: Thank you, Erin.

BURNETT: And OutFront next, the breaking news. Roy Moore campaign event is about to start. And the guest of honor who is going to be right there, as you see on your screen in Fairhope, Alabama, is Steve Bannon. The guest of honor.

And worldwide concern tonight about violence. Trump's high-stakes call to recognize Jerusalem as the capital of Israel. It is expected just hours from now.


[19:27:10] BURNETT: Breaking news. Roy Moore rally getting under way in Alabama. Former White House Adviser Steve Bannon is the guest of honor. He will be speaking soon.

Bannon expected to slam Mitch McConnell despite McConnell completely flip-flopping, changing his tone on Moore and going from saying there's no way he should be in the Senate to saying the people of Alabama should decide. McConnell's flip-flop is not alone. A lot of the GOP is now backing Moore, who they once said was, you know, an anathema. The Republican National Committee is, you know, they said they weren't going to fund the campaign, and now, guess what. They're funding it again.

One Republican who is bucking the trend, Arizona Senator Jeff Flake, a vocal Trump critic. He tweeted a $100 check that he and his wife are donating to Moore's opponent, the Democrat Doug Jones. But the tweet he wrote, simply, as you see, "Country over party."

Kaitlan Collins is OutFront. Obviously, a big rally here, Kaitlan. Judge Moore has the support of the President, the RNC is back. Bannon's speech tonight being described as fire breathing. And I know it starts any moment where you are.

You have been talking to them about what we're going to hear. What can we expect?

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Yes, that's right. We're certainly expecting a fiery speech here tonight, Erin, from Steve Bannon. As you know, that former White House Chief Strategist has not only been one of the longest backers of Roy Moore in this race, but also one of the most ardent. He stuck by him despite those multiple sexual assault allegations made against Roy Moore, much like the way he stuck by Donald Trump during the presidential election last year when multiple women accused him of sexual assault.

Now tonight, we're told by people close to Bannon that we can expect him to be breathing fire in this barn behind me here in Fairhope, Alabama. And he's not only going to go after people like Roy Moore's opponent, Democrat Doug Jones, labeling him a progressive radical, but also going against the establishment Republicans who have changed their tune on Roy Moore in recent days.

We're told that one of his targets will be Senate Majority Leading Mitch McConnell who previously said that Moore should step aside in this race. But as you saw on Sunday, he backed down off that criticism and said it should be up to the people of Alabama to decide.

So we're certainly expecting Steve Bannon here tonight to remind the voters of Alabama that he believes the reason those establishment Republicans are changing their tune on Roy Moore is because the voters of Alabama stuck by him, Erin.

BURNETT: All right. Thank you very much, Kaitlan, who was there.

Obviously, as we await for that to begin, Margaret Hoover, former George W. Bush White House staff and veteran of two presidential campaigns, and Tom Bates, who was on the editorial board for, largest committee group in Alabama. So Tom, obviously with this rally about to begin, tell us, Steve Bannon, who is going to be there and breathing fire and has been an ardent, passionate, and consistent supporter of Roy Moore, how significant is he?

TOM BATES, AL.COM EDITORIAL BOARD MEMBER: Well, Bannon speaks right to Roy Moore's base. He fires them up. And I think his job is to get the turnout out of that base.

But I think the election, Erin, is going to be decided by a pretty small slice of Republicans who are trying to figure out whether or not to vote and whether or not they can vote for a Democrat. And I don't think Bannon speaks to them.

ERIN BURNETT, CNN ANCHOR: Right, and that's obviously what this does come down to. I want to talk about turnout in a minute. But, Margaret, I mean, first of all, it's stunning the lack of conviction from people who came out with such statements of conviction about what they could or could not tolerate. Now, all of a sudden, you know, as if they never said it.

MARGARET HOOVER, CNN POLITICAL COMMENTATOR: Yes, it's deeply disappointing and frankly embarrassing as a Republican to see this kind of total lack of spine and moral courage on the Republican Party. But sadly, Erin, it's not the first time we have seen this kind of lack of moral courage in the Republican Party around sexual harassment allegations. I mean, just about this time last year, the Republican Party fled from Donald Trump's candidacy at the allegations and the frankly tape from Billy Bush, and then everybody got back on board.

So, you know, the question of where is the line, where is the moral clarity, where is the moral courage, seems to have devolved to total moral tribalism in the Republican Party.

BURNETT: I mean, it is amazing, even the RNC. They come and say they can't fund him. Then all of a sudden, I don't know what else to say, Tom. I mean, is it just that a whole bunch of polls came out that looked like he was doing OK, so all of a sudden, Mitch McConnell and the RNC say, maybe no one will notice with we come back in and start supporting him again? BATES: You know, I'm really not sure what Mitch McConnell is thinking

in this case. And we're not seeing a real profile in courage there, clearly not. And this election, we have always felt, was about principle over party. The thing I would say, too, even before the accusations came out about Roy Moore. He simply was not qualified to be a U.S. senator.

And I don't believe his values actually represent what the majority of folks in Alabama think. But the pull for party is so strong here, and apparently McConnell and others are simply getting on board.

BURNETT: Margaret?

HOOVER: But what's interesting, I have seen some private polling in Alabama, and I know you can attest to this, the Republicans that you speak of that are undecided, that don't know if they can pull the lever for a Democrat have another option. There are Republicans, Richard Shelby, the other sitting senator from Alabama, said he wrote in a Republican alternative.

Now, if that throws it to Doug Jones, many of them can live with themselves for not having voted for a Republican -- or not having voted for the Democrat, voted for a Republican, and can live with an honorable, decent man, who by the way, isn't a hard-core liberal but he's a Democrat. That's one way that, as I see the Alabama electorate, there are maybe 6 percent undecided. They're Republicans, they lean Republican. In Massachusetts, they would be hard core right wingers, and in Alabama, they're centrist Republicans.

And they may very well get to that place where they end up writing in a candidate and throwing it to Doug Jones.

BURNETT: I mean, and, Tom, what's your perception here of the voter turnout? The national focus on this, obviously, has been immense and overwhelming. What kind of turnout are we going to see in Alabama?

BATES: You know, typically, the turnout for an off-cycle election like this would be really low. And in fact, recently, we're seeing some polls that show us it may be even lower than we had originally expected. So, I think it will be low.

Here's what I'm hoping for, that the business community in Alabama that's been very quiet, deafening silence up until now, comes out because, you know, there may be risk in speaking out at this point, but this will not be good for the state. And it's unfortunate because this is really a great place to live and work. That's a beautiful place to visit. We had real momentum, and Moore is going to set things back.

BURNETT: The question, I guess, I have Margaret, is will he, if he wins and he goes in the Senate, to people eventually forget. He gives them a reliable Republican vote, and the sad reality is everyone moves on.

HOOVER: Yes, if you watched Roy Moore for the last decade, right, and you have any idea of who this guy is, he's not somebody who is just a quiet, reliable vote in the United States Senate. This is a man who believes that 9/11 was the fault of America for being a less Christian nation, that the bible should have supremacy over the U.S. Constitution. That president Obama was not born in the United States. That homosexual conduct should be illegal.

This is not a quiet man who is going to sit in the corner of the United States Senate and just be a reliable yes vote. And, by the way, he's got Steve Bannon. He's going to be throwing bombs at Mitch McConnell the whole way.

This is not a team player. This is a problem for the Republican Party. This is a problem for Mitch McConnell. This is a problem every way you slice it.

It's better for the Republican Party and for the country that this man not serve in the United States Senate.

BURNETT: And, Tom, what happens to the women who have so bravely and courageously come out and spoken the truth, if he wins, put their names on it.

[19:35:02] BATES: You know, that's the saddest thing, because you know, you see a group of voters who say I don't believe the allegations. OK, fine. But those that do and are still choosing to vote for Moore, including the governor here -- I mean, it's terribly upsetting. And you know, we verified, there's no reason not to believe these women that took great courage to speak up.

BURNETT: It certainly did. And as everyone who has said, even including people like Mitch McConnell days ago, a week ago.

HOOVER: He believed them.

BURNETT: He believed them, I guess until he decided he didn't or it's fine.

HOOVER: It's all transactional politics and where is the moral virtue if it's all about a transaction. It's just about getting a deal done. It's unbelievable. It's embarrassing to be a Republican.

BURNETT: All right. Thank you both so very much.

And next, the breaking news, we're hours away from a major announcement from the president of the United States. And this one, it's as big as it gets because it's about Jerusalem and making it the capital of Israel. U.S. embassies and consulates around the world now on high alert for violence.

And Donald Trump trying to silence a woman who says he kissed and touched her against her will ten years ago. His attorney asking a judge to dismiss a lawsuit against the president.


[19:40:02] BURNETT: Breaking news. U.S. troops on the ready tonight, bracing for violence just hours away from President Trump's expected announcement that the United States will recognize Jerusalem as the capital of Israel. Trump also expected to signal his intention to move the U.S. embassy from Tel Aviv to Jerusalem. It's a major step. The State Department warning of violence, and Palestinian leaders calling for three days of rage.

Barbara Starr is out front at the Pentagon.

And, Barbara, troops are preparing tonight for violence.


That's right. But it's going to be, if it happens, a very narrowly focused mission for them. What we do know is that a number of marines who are specially trained in embassy security have been moved to so- called forward positions, to areas where there is concern that these are countries where violence could break out. We're not being told the areas because of those security concerns. But these are specially trained Marine Corps teams that supplement security at U.S. embassies.

They would be used to work inside the fence line, if you will, to protect the embassy, to protect personnel, and if they have to protect U.S. military installations or other diplomatic installations in these countries if they are called in. That is a very limited, that is the legal mission for them.

Don't expect to see them out on the street. They won't be there. It will be the responsibility of host countries to essentially protect out on the street, but inside that fence line, at embassies and in U.S. installations, Marines will be ready if they are needed on this very narrowly focused mission -- Erin.

BURNETT: Thank you very much, Barbara.

I want to go now to the former State Department adviser on the Arab/Israeli peace process, Aaron David Miller.

Aaron, this is something then-candidate Trump promised, as many Republican candidates have promised to do during the campaign, but obviously, this has never happened before. So you wrote recently in an op-ed for CNN, Jerusalem has long been a tinder box waiting for a match.

Could this decision, tomorrow's decision from President Trump be that?

AARON DAVID MILLER, FORMER STATE DEPARTMENT ADVISER ON ARAB-ISRAELI PEACE PROCESS: Sure. It could provoke violence, demonstrations, particularly in a contained area between Israelis and Palestinians. And usually when Jerusalem becomes an issue, the issue migrates to the overlapping space, the Haram al-Sharif Temple Mount, 1990, 1996, 2000, recently this year, Erin, 2017, over metal detectors.

So, any efforts to change the status quo, even in a fraction, can certainly lead to the potential of violence. Whether or not it's inevitable, how bad it will be, whether it will be a mass uprising, all these things are impossible to say. BURNETT: Wait, and what about the reporting that embassies and

consulates are on high alert for violence? Obviously, not just there, but elsewhere across the Middle East is obviously the implication.

MILLER: I mean, any Islamic jihadi group, Hamas, radicals, the Iranians, clearly, if you wanted to manufacture an issue in the laboratory that was bound to energize and mobilize grievances and passions and hatreds -- well, Jerusalem is your best bet. No question about it.

Look, the embassy, our embassy should be in West Jerusalem. There's no question about it. Israel is one of the few countries, not the only, but one of the few countries in the world where the U.S. does not maintain its embassy in the preferred capital of the host country. The problem is, without context, with gaps on the issues so wide, with the trust between Israelis and Palestinians so deep, at a time when the president of the United States is pursuing his ultimate deal, this move is ill-advised, ill-conceived, and frankly, ill-timed.

I'm still trying to figure out what the logic is behind the move. Is it attached to a particular strategy? This -- it's mystifying. I suspect not.

I think the president of the United States made a campaign commitment. He's willful on this issue. And he wants to be the first American president to basically do something that everybody told him he should not, would not, and could not do. And he's going to do it tomorrow.

BURNETT: For those reasons, as you said.

All right, thank you very much, Aaron.

MILLER: You're welcome, Erin.

BURNETT: And next, the president's lawyer says he's too busy being president to face a defamation lawsuit. The woman who says she was groped by him ten years ago is fighting back tonight.

And Trump breaks a major campaign promise on taxes. The people who are cheering are the richest of the very rich. One of them just threw Trump a private fund-raiser over the weekend. We're going to tell you all about it.


BURNETT: New tonight, President Trump trying to silence an accuser. Today, the president's lawyer said the president is too busy, too important to face a defamation lawsuit from a woman who said the president groped her about a decade ago.

But some of Zervos' lawyers are pushing back, saying the case would not be an inconvenient, even offering to take the president's deposition between golf rounds.

Athena Jones is OUTFRONT.


GLORIA ALLRED, ZERVOS' ATTORNEY: We don't think that any man is above the law, including the president of the United States.

ATHENA JONES, CNN CORRESPONDENT (voice-over): It's a case that could have huge ramifications for President Trump. A New York judge hearing oral arguments today on whether a defamation suit against the president brought by former "Apprentice" contestant Summer Zervos can move forward.

DONALD TRUMP: And when you're a star, they let you do it. You can do anything.

BILLY BUSH: Whatever you want.

TRUMP: Grab them by the (EXPLETIVE DELETED).

JONES: It was a release of 2016 of the now infamous 2005 "Access Hollywood" tape that prompted Zervos to come forward. Zervos went public with her allegations the following week.

SUMMER ZERVOS, TRUMP ACCUSER: He then grabbed my shoulder and began kissing me again very aggressively and placed his hand on my breast.

JONES: Trump vigorously denied her claims and the allegations of several other women on the campaign trail and on Twitter. Including this retweet with a picture of Zervos.

Trump quickly apologized for his conduct after the "Access Hollywood" tape surfaced during the presidential campaign.

TRUMP: I said it, I was wrong, and I apologize.

JONES: But more recently has questioned the authenticity of it. A claim Billy Bush, who lost his job after the release of the "Access" tape flat-out rejected on CBS' "Late Show" with Stephen Colbert.

[19:50:07] BUSH: I would also like to say, that's not me on the bus. You don't get to say that because I was there.

Twenty women don't get together and say, hey, you know what would be really fun? Let's take down a powerful guy together, ha-ha. No, they don't.

JONES: Summer Zervos is demanding that Trump apologize or retract his statements and pay damages to be decided by the court.

But Trump's attorneys say the case is politically motivated, her allegations are false, and Trump's statements defending himself are protected political speech. They say the president is too busy and important and want the case dismissed or at the very least, postponed, until Trump's presidency is over.


BURNETT: So, Athena, this is obviously crucial. How significant, if the judge rules this case can go ahead.

JONES: Well, it would be pretty significant. You would have a sitting president having to answer to these charges in a state court and ongoing court case. He could be called on to testify and it's also possible that the president's past sexual history and past conduct could be deemed relevant. And so, we could hear from some of Trump's other accusers. And we're talking about a dozen women.

BURNETT: Wow, which would obviously be incredibly significant and put all of this right back in the forefront, again.

JONES: Absolutely.

BURNETT: Athena, thank you so very much. A crucial development to watch.

And next, Trump says, again, his tax plan is good for the middle class. But what he is not telling you is that the people it's really good for are the ultra, ultra-wealthy.


[19:55:21] BURNETT: New tonight, the House and Senate steps closer to passing an historic tax bill, which includes major giveaways to a very, very, very small group of people. The ultra, ultra-rich, paid for by a lot of other people.

A new Quinnipiac poll shows just 29 percent of Americans approve of Trump's tax bill. Trump, though, still touting it as a win for the middle class.


TRUMP: I view it more than anything else as, it's a tremendous bill for jobs and for the middle class. And I think people see that and they're seeing it more and more. And the more they learn about it, the more popular it becomes. And I think the end result will be even better.


BURNETT: But make no mistake, the plan is good for billionaires, including a very specific group of them, in part because of a broken campaign promise by President Trump.

Jason Carroll is OUTFRONT.


JASON CARROLL, CNN NATIONAL CORRESPONDENT (voice-over): Protesters against the GOP tax plan taunting President Trump as he attended private fund-raisers in New York City Saturday.

One of them at the Park Avenue Upper East Side address and home of Steven Schwarzman, friend and business adviser, who hosted an invite- only $100,000-a-head fund-raiser for Trump. The attendees included hedge fund king, Steve Cohen, who like Schwarzman, plan to profit from the president breaking this campaign promise on tax reform.

TRUMP: We're getting rid of carried interest provisions.

We are, as an example, getting rid of carried interest, which is the darling of Wall Street.

I would take carried interest out and I would let people that are making hundreds of millions of dollars a year pay some tax, because right now, they're paying very little tax, and I think it's outrageous.

CARROLL: Some tax analysts say Schwarzman is a key example of the people Trump was talking about. The carried interest loophole that Trump once spoke out against allows carried interest managers like Schwarzman to pay just a 20 percent rate on their cut of profits made by investing other people's money, instead of the nearly 40 percent rate for anyone in the top tax bracket.

The House and Senate kept that loophole in place, and tax experts say only the ultra-rich will continue to benefit from it.

The ultra-rich that then candidate Trump railed against in this 2015 interview, with Erin Burnett.

TRUMP: When you have a hedge fund guy who's making $200 million a year and he's got this huge loss against it, which isn't a real loss. He's got this huge loss against his income and he's paying a very low rate of tax, it's not fair.

CARROLL: Schwarzman is founder and CEO of Blackstone Group, one of the largest asset management companies in the country. "Forbes" lists Schwarzman's personal net worth at $12.4 billion. His financial ascent began after he left Lehman Brothers in the mid-1980s, and headed into the then new and risky world of private equity.

He has been a Trump supporter and was key in helping to form the president's now-defunct Business Advisory Council.

TRUMP: Steve called me up the day after the election, might have been the same night, and said, I would like to put together a group of world-class leaders, and that's what he's done. So, good job, Steve.

CARROLL: In 2010, Schwarzman was criticized for comparing then- President Obama to the Nazis after Obama proposed closing that carried interest loophole.

STEVE ROSENTHAL, SENIOR FELLOW, URBAN-BROOKNGS TAX POLICY CENTER: Mr. Schwarzman were notorious for comparing President Obama's attempt to close the carried interest loophole to Hitler's invasion of Poland. Mr. Schwarzman later apologized, but there's a mindset of certain well-to-do people, that they are making the wealth in this country and through their efforts with, the rest of us benefit.

CARROLL: A spokesman for Blackstone claims there's no financial windfall for Schwarzman under the tax proposals because he lives in a high-tax state. Under the new plan, residents of states, such as New York or California, will no longer be able to deduct as much in state taxes.

The spokesman tells CNN Steve Schwarzman and the vast majority of Blackstone's U.S. employees will pay significantly higher personal taxes under this bill than they do today: Given this legislation would mean a tax increase for Steve Schwartzman and most of Blackstone's U.S. employees, it's clear that the premise of your story is completely.


CARROLL: And it should be noted, we repeatedly asked for a statement regarding how Schwarzman might be affected by not closing that carried interest loophole. That was not addressed, as you can see there in the statement that we ended up getting from Blackstone. That specific point, not addressed.

BURNETT: No, which is a crucial point. The president breaking that campaign promise and a loophole, which is absurd, even to Steve Moore. His adviser has pointed out, it's absurd.

All right. Thanks very much, Jason.

And let's hand it off now to "AC360."