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Trump: China 'Caught Red-Handed' Allowing Oil Into North Korea; Secretary of State: 'Russia Meddled in Our Election and Others'; Alabama Certifies Doug Jones Win Over Roy Moore. Aired 5-6p ET

Aired December 28, 2017 - 17:00   ET

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


BASH: ... "THE LEAD," I'm Dana Bash in for Jake Tapper. I turn you over to Brianna Keilar, in for Wolf Blitzer in THE SITUATION ROOM.

[17:00:12] BRIANNA KEILAR, CNN ANCHOR: Happening now, caught red- handed. President Trump accuses China of secretly selling oil to North Korea, saying China was caught red-handed and warning, there will never be a friendly solution if this continues. What led the president to tweet about such a sensitive issue while out playing golf?

No illusion. Secretary of State Rex Tillerson declares the U.S. has no illusions about Russia, saying Moscow meddled in the U.S. election, admitting the U.S. has a poor relationship with Putin's regime, and warning there cannot be business as usual. Why has President Trump refused to make the same case?

And more complaints. The Alabama election result is certified as officials reject Roy Moore's complaint alleging that voter fraud in the Senate race he lost to Democratic opponent Doug Jones took place. Fellow Republicans call his claims ridiculous and simply made up.

Wolf Blitzer off today. I'm Brianna Keilar. You are in THE SITUATION ROOM.

President Trump issues a stunning rebuke to China, saying it has been caught red-handed, allowing oil to go into North Korea, and that he's very disappointed. The president says such action would prevent a friendly solution to the crisis over Kim Jong-un's nuclear program. The tweet was sent during a golf outing, and it comes just weeks after the president touted his great relationship with China's leader.

Secretary of State Rex Tillerson raised eyebrows today when he wrote that a door to dialogue remains open with North Korea, but when he previously suggested that talks are possible, the White House has pushed back.

And just a short time ago, the president tweeted again, linking to a two-decade old video of himself calling for a tough stance against North Korea.

Tillerson also seemed to break with the president when he declared in a "New York Times" op-ed that Russia has meddled in the U.S. election and that the U.S. and Russia have a quote, "poor relationship." Tillerson added, "We have no illusions about the regime we are dealing with."

And Alabama today certified Democrat Doug Jones' victory over Republican Roy Moore in this month's special Senate election. Moore has refused to concede, and he filed a last-minute complaint alleging voter fraud, but Alabama's top election official, a Republican, scoffed at Moore's claims; and a judge dismissed his complaint.

I'll speak with Democratic Congressman Adam Smith, the ranking member of the Armed Services Committee; and our correspondents, specialists and guests are standing by with full coverage.

We do begin with the president sending a harsh new tweet about China and North Korea while out on the golf course in Florida.

Let's go straight to CNN's Ryan Nobles. He is in West Palm Beach. What have you learned, Ryan?

RYAN NOBLES, CNN CORRESPONDENT: Well, Brianna, we're still trying to figure out what exactly prompted the president to send this missive on his Twitter feed from his golf course this morning. The golf course that he was at for the third consecutive day.

But this is what the president had to say. And it is a pretty harsh criticism of China as it relates to North Korea. The president writing quote, "Caught red-handed. Very disappointed that China is allowing oil to go into North Korea. There will never be a friendly solution to the North Korea problem if this continues to happen."

And this seems to be an issue where both the president and his secretary of state are on the same page, something that hasn't always happened diplomatically. In that op-ed that you talked about earlier today, Brianna, in the "New York Times," Secretary Tillerson talked about China and its role as it relates to North Korea, and he said quote, "A central component of our North Korean strategy is persuading China to exert its decisive economic leverage on Pyongyang. China has supplies -- applied certain sanctions, but it can and should do more." That came from Secretary of State Rex Tillerson.

Now, as we said before, we don't know exactly what report the president is pointing to, but we do know that several South Korean outlets have reported seeing on satellite images Chinese vessels hooking up with North Korean vessels in an attempt to transfer oil from one to the other.

And also a Treasury Department report from November said that the Chinese were doing this as well as a way to get around these harsh sanctions that have been set down by the United Nations, but again, this seems to be an effort by the president to show that he is prepared to talk tough as it relates to North Korea.

Later on in the afternoon, he also posted another tweet. This time, it was a video of him on a "Meet the Press" appearance from several decades, where he said that one of the biggest threats in the world was the potential proliferation of nuclear weapons when it comes to North Korea. So Brianna, as the new year begins, this continues to be one of the

biggest foreign policy issues that this administration attempts to confront. And the tough talk continues from this White House. Brianna.

[17:05:02] Ryan Nobles near Mar-a-Lago in Florida, thank you so much for that.

I want to turn to CNN Pentagon correspondent Barbara Starr now.

So Barbara, what could the president's very blunt tweet mean for a region that is already on edge?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, when you look at this, Brianna, it's important to start with the fact that the center of the diplomacy front may well be trying to pressure China to act against North Korea.

China, of course, North Korea's major, if not only significant trading partner at this point. And shutting down that flow of oil and other goods and services would shut down North Korea's ability to earn currency to help it keep its weapons program going.

But pressuring China comes at a price, because the Chinese are very sensitive about this. They want to see stability in the region. They do not want to see the North Korean regime collapse. That is their worst-case scenario, for instability right on their doorstep.

So while everyone's looking for stability, especially as we come up on the Olympics in South Korea after the new year, it may be that the U.S. and the Chinese have a very different view of what that stability and what that diplomacy may look like in the coming weeks -- Brianna.

KEILAR: CNN's Barbara Starr. Thank you for that report.

And in another apparent break with the administration line, Secretary of State Tillerson stated flatly in his "New York Times" op-ed today that Russia has meddled in the U.S. election and that the U.S. has a poor relationship with Russia.

Let's go live now to Moscow and CNN senior international correspondent Fred Pleitgen. I wonder what the reaction is there, Fred.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it's some pretty harsh words coming from the Russians, Brianna. It was the spokeswoman for the foreign ministry, Maria Zakharova, she came out and she called the op-ed fake news, if you can believe that, and said that it was also confrontational, as well.

The Russians were accusing Secretary of State Tillerson of trying to drive a wedge, as she put it, between China and Russia, because they believe the U.S. thinks that both China and Russia are getting too powerful on the international stage.

Now the foreign ministry here also said that any sort of language of coercion, any language of power, any sort of economic influence that the U.S. would try to take would not work on the Russians and that this is something that the U.S. should have learned by now.

It was interesting. One point in that op-ed that was really focused on today was the fact that, while Secretary of State Tillerson said that the relations were poor, he does believe that there is one area where the two countries can corporate, and that that area would be trying to find a solution to the Syria crisis.

That's interesting, because we then later reached out to the Kremlin. We got ahold of the spokesman for Vladimir Putin, Dmitry Peskov, and he told us as far as the Kremlin is concerned, there are no relations between the U.S. and Russia as far as trying to solve the Syria crisis and no current efforts to try and come to terms with it.

So certainly, it seems as though, while you've heard some of those warm words between President Trump and Vladimir Putin over the past couple of weeks, if you look at the policies of these two administrations, it really doesn't look as though much headway is being made. In fact, a lot of the language that we've been seeing, especially over the course of this week, becoming more confrontational than it was before, Brianna.

KEILAR: No doubt. All right. Frederik Pleitgen in Moscow, thank you so much.

And joining me now to talk more all about this is the ranking member of the House Armed Services Committee, Democratic Congressman Adam Smith of Washington.

Congressman, thanks so much for being with us, especially during this holiday week. We do appreciate it.

REP. ADAM SMITH (D), WASHINGTON: No problem. Thanks, Brianna.

KEILAR: So in this op-ed in "The New York Times" today, Secretary of State Rex Tillerson writes, "On Russia, we have no illusions about the regime we are dealing with. The United States today has a poor relationship with a resurgent Russia that has invaded its neighbors Georgia and Ukraine in the last decade and undermined the sovereignty of western nations by meddling in our election and others."

It's much stronger rhetoric than we've heard from President Trump. What is your reaction to it?

SMITH: Well, I'm pleased to hear it. It's, I think, a very accurate assessment of what Russia has been trying to do. And look, overall, I agree, we are better off in a world where Russia and the U.S. gets along. I don't have any problem with trying to get there. It's just that Vladimir Putin is not interested in that right at the moment. He is interested in trying to undermine the west and, more broadly, to undermine representative democracy. And basically, he wants to make the world safe for autocratic dictatorships, in part to protect himself.

I mean, we've seen that just their -- the Russian government just took the primary challenger to Putin for president and won't allow him on the ballot. So he's trying to legitimize non-democratic governments by undermining democratic governments.

And look, I know there's a lot of stuff that goes into this, obviously, given what's going on with President Trump and his campaign and what the Russians did to try and help him, but this is not about that. This is about what the secretary of state said. We have got to counter Russian aggression to protect our country, and to protect our values as a representative democracy. We can't ignore what they're doing.

[17:10:04] KEILAR: We know Putin is preparing for U.S. sanctions that the administration is supposed to put into effect by the end of January. Last week, we saw the administration also greenlit the sale of lethal arms to Ukraine.

Do you think that we're seeing this rhetoric that you find encouraging coming from Rex Tillerson playing out more in policy than some of the softer rhetoric we've seen from President Trump?

SMITH: Yes, I mean, it's a fascinating dynamic. I mean, I've only been through three presidents, despite being in Congress for 21 years. But this is the most unusual thing I've ever seen, where you have a president who seems to be conducting one policy towards a major international player, in this case Russia, and then a secretary of defense, secretary of state, even the national security advisor, who seemed to be playing out an entirely different one. I will say, a much more appropriate one.

Look, Putin has a zero-sum game here. He thinks that what's bad for us is good for him. Until we change that equation, we have got to counter his efforts. Basically, we've got to raise the cost of his meddling. And arming Ukraine raises the cost. If we counter his efforts to meddle in our elections, it raises the cost; it undermines how much it helps him. That is what ultimately will change his behavior and what we need.

And so I am encouraged by these steps from the administration. I just hope that the president doesn't counter them or undermine them in the days ahead.

KEILAR: Let's talk about North Korea now. The president tweeting today, "Caught red-handed. Very disappointed that China is allowing oil to go into North Korea. There will never be a friendly solution to the North Korea problem if this continues to happen."

You are the ranking member of the House Armed Services Committee. We actually did not know conclusively that China may be allowing oil in -- to go towards North Korea. Is that happening? Is this something that he is confirming?

SMITH: Yes, look. I mean there's two very important points about this. And I'll make the second one first, which isn't about China which is more important.

Strategic patience with North Korea may be a frustrating policy. We may see, as North Korea continues to develop new weapons and try to come up with some way to stop them. I think economic sanctions are perfectly appropriate, but what we want to avoid is a war on the Korean Peninsula and, certainly, a nuclear war.

Tough rhetoric is fine, but any sort of preemptive or preventive strike on our part to go after North Korea -- so when the president says this is going to end in conflict of something -- if China doesn't do something, it worries me greatly, because it doesn't have to, No. 1.

No. 2 China's position on this has been clear for years. I've been hearing forever, "Oh, China's the key to North Korea. China's the key to North Korea." They're not. Because for China, North Korea is too big to fail.

Yes, if China wanted to, they could bring North Korea to their knees. They are responsible, I think, for some 90 percent of North Korea's energy. But China doesn't want to, because they don't want North Korea to collapse, for two reasons. No. 1, they don't want a united Korea that is allied with the U.S. on their border. No. 2, they don't want chaos in North Korea that will spill over into China, primarily in the person of millions of refugees, and absolute chaos in a nuclear power right next door to them.

China is not going to cripple North Korea, because I don't think it's in their best interests. I guess the only thing that's surprising is that the president would say he's disappointed. I mean, this policy point has been obvious to people following North Korea for years.

KEILAR: But he has made a lot of his policy around pressuring China to do something. And just back to these ships. So the Treasury Department -- and we knew this -- says that some of the ships in the picture are North Korean, but are the other ships there Chinese ships?

SMITH: I don't know. But one thing we do know, China does an enormous amount of business with North Korea. They have for some time. There have been sanctions, certainly, that have been raised by the U.N. and others, but China is not going to stop doing business with North Korea. I don't care how many times President Xi goes to Mar-a-Lago for dinner, how much he bonds with President Trump. It's all about interests. And Chinese interests are the ones that I stated, and they are obvious.

Now we to want work with China to try to, you know, contain North Korea as best as we can, but thinking that China's going to bring the hammer down and cripple North Korea, totally misunderstands what China's interests are in this -- in this particular conflict.

KEILAR: A senior administration official, Congressman, is telling CNN that the Trump administration has decided to be more quiet, more discreet -- that's a quote from this official -- about speaking publicly about U.S. military exercises with Korea and Japan. Military exercises that have been a response to the actions that North Korea has taken with its nuclear program.

[17:15:01] And so now they're going to be more discreet about them. It's supposed to give U.S. diplomats more leeway in ongoing sensitive talks. That's what we're told. What do you think about this decision? SMITH: Well, I think it's perfectly OK to talk with North Korea. I

don't have any enormous amount of optimism about how that's going to come out, because North Korea -- and this is what our intelligence agencies have told us -- North Korea is a rational actor. They think they need ballistic missiles and nuclear weapons to protect themselves. They are absolutely convinced that we will invade and destroy them if they don't have the ability to defend themselves.

But at the same time, what we have to make clear to them is, OK, we're going to try and stop you from doing that through economic sanctions, but, even if we can't stop you from doing that, our military might, combined with our allies in the region, is so great that, if North Korea were to use any of these weapons in any way against us or our allies, their regime would cease to exist. We need to make that point crystal clear.

And I don't mind if the president or others are very strong in their rhetoric, telling North Korea, "You better not attack us."

Again, what I fear is the notion that somehow we think we have to strike North Korea first, or worse, there's a miscalculation. We think North Korea's going to hit us; North Korea thinks we're going to hit them. So one side or the other says, "Well, we may as well go ahead and be the first to launch."

That's where the diplomacy comes in. That's where open dialogue comes in so that we do not stumble into a catastrophic war, potentially a catastrophic nuclear war. And that's where, quite frankly, I trust Rex Tillerson and Jim Mattis a heck of a lot more than I trust President Trump to have a rational conversation to avoid those miscalculations that could lead to a devastating war.

KEILAR: All right. Congressman Adam Smith, stick around, because we have more to talk about, including an election year that will be upon us here in just a few days.

(COMMERCIAL BREAK)

[17:21:03] KEILAR: Democrat Doug Jones is now the official Senator- elect from Alabama, despite a last-minute legal challenge and claims of fraud from Republican Roy Moore. A judge threw out Moore's challenge, and fellow Republicans call his claims made up and ridiculous.

We're talking with Congressman Adam Smith of Washington, but first, let's go live to CNN's Diane Gallagher. She is in Alabama.

Bring us up to date. A lot of developments today, Diane.

DIANE GALLAGHER, CNN CORRESPONDENT: That's right, Brianna. And you know, it is official. It is certified, but Roy Moore still may have a little bit of a chance if he wants to continue making some noise. It would be expensive noise, but if Roy Moore wants to fund his own recount, he can do that. Again, it will be expensive. And the clock is ticking. He has 48 hours from the exact moment that they certified the election. (BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Broke every record in the history of the state for a special election.

GALLAGHER (voice-over): Tonight, Doug Jones officially certified by the state of Alabama to be its next U.S. senator.

JOHN MERRILL (R), ALABAMA SECRETARY OF STATE: This election has been conducted with the utmost integrity, that it's been safe, secure, it's been credible.

GALLAGHER: In spite of a final hail Mary from the Roy Moore campaign, alleging potential voter fraud.

JANET PORTER, MOORE CAMPAIGN SPOKESWOMAN: This election was fraudulent, and what we need to do is ask the secretary of state to do his job and to investigate this.

GALLAGHER: Moore's refused to concede to Jones after losing the election earlier this month by more than 20,000 votes.

ROY MOORE (R), FORMER ALABAMA SENATE CANDIDATE: When the vote is this close, then it's not over.

GALLAGHER: But most Republicans, including the president, have called for Moore to concede.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: As far as Roy Moore, yes, it's certainly -- I would certainly say he should.

GALLAGHER: And the state of Alabama says those voter fraud accusations just aren't true.

MERRILL: People are entitled to their own opinion, but they're not entitled to their own facts.

GALLAGHER: Moore calling to delay certification until there is a thorough investigation and for a new special election. But minutes before the state certification, a circuit court judge denied Moore's complaint.

The complaint alleges out-of-state residents had been allowed to vote and that election fraud experts concluded that fraud had taken place. One of those experts is Richard Charnin, who has blogged about JFK conspiracy theories and the murder of DNC staffer Seth Rich. And Moore is questioning the high voter turnout in Jefferson County, where a large percentage of the population is black, calling it highly unusual.

The Alabama secretary of state says many voter fraud complaints have already been dismissed.

MERRILL: More than 60 of those have already been fully adjudicated and dismissed, but we have several that are still active, and we'll continue to investigate those until they are fully adjudicated. KEILAR: Doug Jones' campaign released a statement saying, quote,

"This desperate attempt by Roy Moore to subvert the will of the people will not succeed. The election is over; it's time to move on."

Moore's complaint also brings up allegations he had relationships with teenaged girls while he was in his 30s and several others accusing him of assault. Moore denied those accusations throughout his campaign.

MOORE: These allegations are completely false. I did not date underaged women. I did not molest anyone.

GALLAGHER: But today, he released an affidavit he signed of a polygraph test he says he took after the election over the allegations made against him. Moore states, quote, "The results of the examination reflected I did not know, nor had I ever had any sexual contact with these individuals."

(END VIDEOTAPE)

GALLAGHER: And so it's important to note there, Brianna, that Roy Moore signed that affidavit saying that he took that polygraph test, but there was nothing in the motion that included any sort of paperwork whatsoever from the polygraph administrator.

Roy Moore has not officially conceded, but Brianna, he did issue a statement after the election was certified. At the end of it, he said, "I have no regrets. To God be the glory."

KEILAR: All right. CNN's Diane Gallagher with a very interesting report there. Still ongoing out of Alabama.

And we're back now with Democratic Congressman Adam Smith of Washington.

So, you heard that report, and you're well aware that Doug Jones has been certified today as the senator-elect from Alabama. He's going to be sworn in on January 3 to the Senate. Does this win indicate to you a chance or maybe just a hope that there's going to be a blue wave next year?

[17:25:13] SMITH: Clearly. I think that, combined with the results we saw in the Virginia and New Jersey off-year elections show that Democrats are motivated to get out and vote. And also, I think winning an election like this adds to that motivation, because it proves to people that they can be successful.

And whatever one may -- may think of President Trump, certainly after the election, there was a great deal of despair amongst Democrats and progressives. And that despair has not been mitigated by the president's actions since elected. But I think that despair very quickly turned into action, and what winning an election like the one that Doug Jones won in Alabama does, is it just adds fuel.

You know, it's like my son plays soccer, I'm sorry, but when you score a goal, it motivates you. You know you can win and it tends to be a real momentum factor. And I think that's the case here. In addition to the fact that President Trump is the most unpopular

president during the first year in office that we've had since we've been doing polls. He simply has not been able to get above 40 percent. A lot of it is his policies. A lot is the way he talks about people and the things that he does, but it gives us an opportunity. And what Democrats have to do is we have to present an agenda, particularly an economic agenda, that shows the American people that we have a better way.

KEILAR: But if -- let me ask you about that, because if the economy continues to do better and this tax plan, which obviously is very unpopular right now, but could gain in popularity; and the president's numbers when it comes to the economy could be in a better place as we get closer to the midterm election. Couldn't that temper some of this enthusiasm for Democratic candidates that you've seen in these off- year elections?

SMITH: Well, I don't think it would temper the enthusiasm amongst Democrats. It would make it a little bit more difficult, certainly.

But look, in the first year, I mean most economists will tell you that any economic impact is come from prior policies. And the tax cut was just passed a week ago. Other than that, the president has implemented no major legislative policies in 2017. So whatever economic numbers that we see are reflective of policies that came before, that came under the Obama administration.

And the one thing missing from all of this has been sort of the middle class and the working poor seeing a significant benefit in their wages. And a tax cut that goes primarily to corporations in the wealthy isn't going to change that. That's why this tax cut is the most unpopular tax cut that I can remember in history, ever passed. The people look at it and say, "This is going to people who don't need it. This is going to people who already have money and aren't spending it, aren't investing it."

So I think this gives us an opportunity, in addition to the unpopularity and the success that we've had in the elections of 2017.

KEILAR: Yes.

SMITH: You know, we have a tax cut which is their -- not just their signature issue, their only issue; and it's very unpopular.

KEILAR: All right, Congressman Adam Smith, thank you so much for joining us and a very happy new year to you.

SMITH: You as well.

KEILAR: Coming up, more on Roy Moore's strange challenge and what the arrival of Democrat Doug Jones will mean in the U.S. Senate.

And as we head into the new year, our experts will look at what lies ahead in the special counsel with Russia investigation. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

[17:32:40] BRIANNA KEILAR, CNN ANCHOR: This afternoon in Alabama, state officials certified Democrat Doug Jones' victory in this month's special election for the U.S. Senate. Republican Roy Moore filed a last-minute complaint alleging voter fraud, but a judge dismissed the complaint.

I want to bring in our political and legal specialist to talk about this.

OK. So, David, despite this challenge from Roy Moore, Alabama certified the election results and we should say the secretary of state is a Republican who sort of -- really laughed in a way when I earlier spoke to him about Roy Moore's challenge. But --

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Not just a Republican. He supported Roy Moore. Yes.

KEILAR: That's right. And he's dismissed this whole idea of voter fraud. I mean, he just thinks it's ridiculous. So Doug Jones is going to be sworn in next week, January 3rd, and the balance of power has just shifted by one seat. How much, though, is one seat really going to change the state of play in the Senate?

CHALIAN: It actually makes a really big difference because what is still an enormously difficult task for the Democrats because they're defending so much turf and there's very little opportunity for offense, it got within a reach. It got within play.

The Senate before at 52-48 was that much further apart for the Democrats from getting and now they need two seats, yes. They have to run the board and defend every single one of their vulnerable incumbents and they have to find a way to convert two seats that Republicans currently have. Maybe Nevada, Arizona, as their two best targets that, maybe Tennessee comes online as a race, we'll see.

But what was an out of play Senate, where it was really all about the House, with this shift became a Senate landscape that is now very much in play.

KEILAR: It was difficult before. Now it's even tougher, Chris.

CHRIS CILLIZZA, CNN POLITICS REPORTER: Yes, I mean, what you have is, to David's point, 26 Democratic seats are up in 2018. That includes Al Franken's seat. We expect him to resign early in the new year. There's only eight Republicans. Six of those are in tough states including Tennessee. Two, Arizona and Nevada, more competitive.

No one would look at that map, even today, and say oh, you know, Democrats, they're going to get it. But to David's point, we're talking about small margins here. If what we saw in 2017 which could be -- end of 2017, Virginia governor's race, larger than expected margin for Ralph Northam, Alabama Senate race, Doug Jones won, if you see that turnout disparity, Democrats more enthusiastic and Republicans less so, it's possible Democrats win in places like North Dakota where they have to defend a seat and on Montana where they have to defend a seat, West Virginia.

[17:35:10] And they win in Arizona and Nevada, and because the margin is that much smaller, it's a possibility. I would say it's a 20 percent, 15 percent -- 15 percent possibility, but it's a possibility in a way that if you asked us -- if Roy Moore was about to be sworn into for the Senate, I think we'd say it's -- you know, it's less than 5 percent chance.

KEILAR: All of this is happening, Susan, as this cloud of the Russia investigation is hanging over Donald Trump, as we're going into this midterm election year. The special counsel has been very discreet. You might say remarkably so, but also perhaps it's something to be expected. Do we have a sense of where they're going in the new year?

SUSAN HENNESSY, CNN NATIONAL SECURITY AND LEGAL ANALYST: I mean, the one thing we can say for sure is that Trump's defense team that had represented that it might be -- the special counsel might be wrapped up by the end of the year, that's looking like it's not accurate. Sure, it's certainly going to stretch into 2018. There are some reports that Paul Manafort and Robert Gates may be facing new charges. Might generate new charges in the form of superseding indictments. We'll see if that --

KEILAR: Rick Gates. Rick Gates, right?

HENNESSY: Rick Gates. Might generate new charges in the form of superceding indictments. We'll see where that goes. One thing to keep in mind is, you know, Mueller has built a really, really impressive legal team including lawyers that are sort of financial crimes experts, that are investigating all kinds of things that we actually haven't seen any indication of what have they're turning up, what they're focused on. So there's a lots of activity that we know has to be happening, but there's not even a whisper of them in the public at least not yet.

KEILAR: So we'd love to talk to you about the Russia investigation, but we noticed something that is not the Russia investigation, caught your eye on Twitter today after Donald Trump's first tweet of the day when he said, "Vanity Fair which looks like it is on its last leg is bending over backwards and apologizing for the minor hit they took at crooked H. Anna Wintour who was all set to be ambassador to Court of St. James in a big fundraiser for CH is beside herself in grief and begging for forgiveness."

First off, I do want to lobby to go back to 140 characters. I just want to keep saying that. But --

CILLIZZA: Crooked H.

KEILAR: We know what it is but still taking advantage of the abbreviation. You reacted to this.

HENNESSY: Yes, so look, how long are we going to have to pretend that this is normal? I mean, it's bizarre, it's confused. It's undignified for the president of the United States and frankly it raises questions about kind of Trump's mental fitness and what he's talking about here. And you really have to ask yourself, then when later he tweets what appears to be sensitive intelligence information about North Korea and China, you know, is he speaking as the, you know, fully informed commander-in-chief of the United States military or is he your crazy uncle at the dinner table just kind of spouting things off?

And so you know this really is not a question that the American people should have to be asking themselves about their president.

CHALIAN: It does reveal a sense of Donald Trump's character because, you know, the history between the outgoing editor of "Vanity Fair" Graydon Carter and Donald Trump is long. It is decades long and it's not a pretty one. This is no love lost between these two individuals. And what it just informed us about the president is that this is somebody who can't let go of anything.

CILLIZZA: No. That's right.

CHALIAN: Especially if it relates to what he perceives as a one-time slight. And that is it. Like that is a grudge he is going to hold forever, whether he is the sitting leader of the free world or whether he's a real estate developer in Manhattan, means no difference to him. He gets to still hold the grudge.

CILLIZZA: I do -- first of all, that's exactly -- I think you basically -- if you want to understand Donald Trump's purview, it's people for him and people against him. There's no other -- there's no gray area. To Susan's point, though, the rage you said Trump's first tweet of the day. And I mean, look, the reality is there's always more than one, more than a couple, the range from sort of the just New York impresario, real estate guy who's like oh, I read this in page six to North Korea.

It's one thing when he's just a -- not just, but a wealthy real estate guy, it's different when you're also the president of the United States and you're doing and saying things that the wealthy real estate guy, private citizen said, and then also you're dealing with North Korea and China and Russia. That's always been I think the concern with Trump. There's certainly no evidence that you're ever going to get one, more serious end of trump, I guess, without the other. There isn't any -- there is one Trump. There is no Trump 2.0.

KEILAR: And we have --

CHALIAN: We've got that range on the golf course.

(LAUGHTER)

CILLIZZA: Well, he tweets at the golf course.

KEILAR: We have to get a break in. More on Russia after a quick break.

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[17:44:09] KEILAR: And we are back now with our political and legal specialists. And, you know, as we head into 2018, one of the no doubt most interesting, most significant stories of the year is going to be the Russia investigation.

So, Susan, I wonder with Michael Flynn, the former NSA's cooperation with the special counsel, we clearly don't know exactly what he has told them, perhaps we could have some educated speculation on that, but also just how important is the fact that he cooperated?

HENNESSY: Right, so there -- you know, Mike Flynn clearly got a pretty sweet plea deal. There are sort of two explanations for that. One is that he's offering lots and lots of really important cooperation. The other is that those were the most serious charges that Mueller thought he could actually prove in court. Either way, Mike Flynn's story is going to be incredibly consequential for the president. Think about the things that's in Flynn's head.

He knows whether or not President Trump or a senior official told him to make representations about sanctions to Ambassador Kislyak.

[17:45:05] He knows whether or not Trump or a senior official directed him to lie to the FBI and he potentially knows whether or not Trump knew that he had lied to the FBI at the time that he had that very consequential conversation with James Comey.

Now maybe his story is helpful to the president, right? It's going to exonerate his role and maybe it's harmful, but sort of -- by either set of facts, the things that Mike Flynn knows really is going to be critical to where that investigation goes moving forward.

KEILAR: Do we have any idea, David, how long this investigation is going to last?

CHALIAN: I mean, we don't is the answer, but you can talk to a lot of lawyers and legal experts as many of our colleagues have done to get a sense of how these things have played out in the past. And what seems clear is, you're just talking about Mike Flynn's cooperation came on board right around Thanksgiving. So it would certainly seem that we're nowhere near the end of this process as Trump's attorneys, as much as they wish that was the case and they're indicating that, it seems without a doubt that this is going to at least be weeks, if not a few more months into 2018.

CILLIZZA: Yes, we know it's not going to wrap any time soon. And I think what -- the question going forward, one is the Mike Flynn question, what does he know? What is he saying? What does it mean for --

KEILAR: We'll find out, but we don't know. It's going to be fascinating.

CILLIZZA: The other, how does Donald Trump handle this? Because to David's point, his lawyers and people close to him have made it -- made a point of saying, hey, boss, almost done. Everything's going to be cool. If it's not, if it goes on, even if Trump is ultimately exonerated, if it goes on and on and on, we know he does not deal well with that sort of thing when he is told one thing, has a set of expectations --

KEILAR: Does anyone -- does anyone deal well when if you wonder if we're almost there yet and someone tells you yes and then you're not?

(CROSSTALK)

CILLIZZA: Right. My children --

KEILAR: No one deals well with that.

CILLIZZA: No, yesterday.

KEILAR: I'm a grown person and I also do not deal, particularly well with that.

All right, Chris Cillizza, David Chalian, thank you so much. Susan Hennessy, we really appreciate it.

And coming up, President Trump takes to Twitter to accuse China of secretly helping North Korea.

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[17:51:28] KEILAR: Tonight we're looking into the mysterious appearance of dozens of small ships that apparently come from North Korea. Most carry passengers when they wash up on Japanese shores but are those passengers refugees fleeing Kim Jong-un or are their intentions more devious?

CNN's Brian Todd has been looking into the concern raised by these so- called ghost ships.

What are you learning about the people they carry, Brian?

BRIAN TODD, CNN CORRESPONDENT: Brianna, we're learning these are terrified, ill-equipped fishermen doing the bidding of a desperate regime. Japan reports they have found almost 100 boats this year and 25 bodies coming ashore on Japanese beaches. One reason for the increase, Kim Jong-un's regime is pressuring these men to sell fish on the black market for cash.

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TODD (voice-over): A mysterious wooden boat washes up on a desolate Japanese beach. Inside a grisly discovery. Eight skeletons. Japanese officials strongly suspect they were North Koreans.

CHRISTIAN WHITON, FORMER STATE DEPARTMENT SENIOR ADVISER ON ASIA: They don't have great navigation capabilities and equipment and lost their way.

TODD: This boat, with lights rigged up, reportedly to attract squid, was found recently with several desperate North Koreans survivors on board. On some vessels, the Japanese coast guard has found survivors alive but emaciated lying among the dead. A spike in the number of so-called ghost ships washing ashore in

Japan, dozens just in the past month, has analyst concerned about increasingly dire conditions under Kim Jong-un.

MARCUS NOLAND, EXECUTIVE VICE PRESIDENT AND DIRECTOR OF STUDIES AT PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS: That's a reflection of growing desperation in the North Korea economy.

TODD: U.N. sanctions over Kim's nuclear and missile programs are pinching North Korea's economy. They prohibit the government from selling seafood to other countries, so experts say the regime pressures fishermen to sell their catch on the black market.

NOLAND: They're having to rendezvous with foreign vessels in international waters and essentially sell their catches on the high seas so it can be relabeled as Japanese or Chinese or Singaporean fish.

TODD: That means going further and further out to sea on poorly equipped boats, manned by some people who analysts say are likely not even fisherman by trade.

ROBERT KING, FORMER U.S. SPECIAL ENVOY FOR NORTH KOREA HUMAN RIGHTS: They are probably inexperienced people who are going out and the result is they're having difficulty when they get out there.

TODD: In recent days, Japanese authorities have discovered that one boat had come ashore on a Japanese island that was uninhabited, deserted except for a small shelter, which officials say desperate North Koreans ransacked.

SHUSAKU YOSHIDA, CARETAKER OF ISLAND SHELTER (through translator): Almost everything that was worth any money was gone from doorknobs to door hinges, anything worth anything. And appliances have disappeared.

TODD: The North Korean fishermen are more than willing to risk starvation and death, experts say, because of the almost unattainable quotas they're given by Kim's regime.

(On camera): How much pressure were these fishermen have been under to produce more and more and more?

KING: The pressure is incredible in terms of that. They're sent out. If they are not -- if they don't catch what they're supposed to, if they're behind, if they lose control of the boat, they will be punished.

(END VIDEOTAPE)

TODD: Japanese officials say at least some of the surviving North Korean fishermen were slated to be returned back to North Korea at their own request. Why? Analysts say some of them probably feel that because they don't speak the language very well, they would struggle living in Japan. But others may fear retaliation against their families by the regime if they apply for asylum and defect-- Brianna. KEILAR: Brian Todd, thank you for that.

And coming up, President Trump accuses China of secretly allowing oil into North Korea, saying China was caught red-handed and warning there will never be a friendly solution if this continues. Why would the president tweet about such a sensitive issue while out playing golf?

[17:55:04]

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KEILAR: Happening now, teed off. In the midst of a golf outing, the president lashes out at China in a tweet warning Beijing against secret oil sales to North Korea. Tonight administration officials say they can't explain the tweet or the source of Mr. Trump's information.

Poor relationships. Secretary of State Rex Tillerson says he has no illusions about the threat from a resurgent Russia in op-ed that strikes a tougher tone than we hear from the president.