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Source: FBI Tried To Serve Bannon With Grand Jury Subpoena; Source: Bannon To Talk Openly To Mueller's Team; House GOP Pushes Immigration-Free Funding Bill; John Kelly Meeting Hispanic Caucus on Immigration; FBI Tried to Serve Steve Bannon with Grand Jury Subpoena. Aired 9-9:30a ET

Aired January 17, 2018 - 09:00   ET

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

[09:00:12] POPPY HARLOW, CNN ANCHOR: Good morning, everyone. Top of the hour. A lot of news to get to. I'm Poppy Harlow.

JOHN BERMAN, CNN ANCHOR: I'm John Berman.

So what could possibly go wrong? That is the question of the day with the government set to run out of money in 63 hours with some 800,000 people brought to this country through no fault of their own, wondering if they will be told to leave, and with the U.S. Cabinet secretary saying she doesn't know if Norway is predominantly white.

Raise your hands if those sound for like good ingredients for a deal cocktail. House leadership not so sure this morning. They're pushing a temporary deal to keep the government funded but delaying any discussion on immigration. Key Republican members are saying they don't know if they have the votes and, meanwhile, Democrats are not so sure how far they want to push back. Would they suffer from a shutdown?

HARLOW: All of that and all they can agree on is that they don't like what former White House chief strategist Steve Bannon is telling them. They like what he refuses to tell them even less but the news that Bannon will tell the special counsel everything is raising all sorts of new possibilities this morning.

Bannon spent 10 hours before the House Intelligence Committee yesterday but would not talk about anything pertaining to his time in the White House or his time on the Trump transition team. This at the direction of the White House apparently.

And CNN has also just learned that the FBI went to Bannon's home last week, tried to issue him a subpoena to appear before the grand jury in the Russia probe. Bannon referred those agents to his attorney.

We'll have much more on that breaking news in just a moment. First though, let's go to Capitol Hill, our Sunlen Serfaty is watching the clock and watching the potential shutdown -- Sunlen.

SUNLEN SERFATY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Poppy. A lot of moving parts here. As of this morning House Republican leadership have put forward a new spending plan, a short-term spending plan. They briefed their conference on it last night. Here's what we know about this new spending plan. First, it does not

address DACA, which, of course, many Democrats wanted included in this spending bill. It extends spending until February 16th and include as six-year extension of Children's Health Insurance Program bill, funding that Democrats wanted to see in here. It delays three key Obamacare taxes and Republicans in the House here are essentially trying to push forward without Democrat support, push forward just with Republicans and that's where the big wildcard in all of this is.

Those conservatives in the House, members of the House Freedom Caucus emerging from late night meeting on the Hill last night saying that they're essentially not so sure they can get behind this.

There are a lot of moving parts of this today. We will see the White House chief of staff John Kelly up here on the Hill. He'll be briefing the Congressional Hispanic Caucus. The House Republican leaders right now are meeting behind closed doors trying to gauge the interest in their caucus. Can they get behind this? And then we will hear from leadership in the next hour.

Of course a lot of focus right now, John and Poppy, on, can the House Republicans get behind this short-term spending plan to get it passed before the midnight Friday deadline but of course this feat is a very steep climb in the Senate, too. But a lot of things specifically put into this bill to woo Senate Democrats.

BERMAN: Sunlen, as you know here, it is mathematically possibly to pass the House without Democratic votes.

HARLOW: But not the Senate.

BERMAN: It defies the laws of physics and math to pass it in the Senate without Democratic votes. What are Democrats saying?

SERFATY: That's right. Republicans in the Senate need 60 votes. That means they need at least nine Democrats to come on board depending on how many Republicans vote for this plan. And we have been trying to gauge the interest of Senate Democrats. Of course Republican leaders tried to woo Democrats, especially those red-state Democrats who are in tough re-election races, they don't want to get blamed for the shutdown, trying to woo them with of course that CHIP funding thrown in there.

We've heard from a few, Senator Manchin, he said I want to vote to keep the government open. Senator Booker said he will vote against it if it doesn't include DACA. This of course does not include DACA. Congressman Angus King, he said I'm just tired of voting for CRs and that's a sense that many people on Capitol Hill share, that this is just another kick the can down the road stop-gap measure.

HARLOW: Sunlen, on the Hill, keep watching the clock, keep watching the debate for us. Thank you very much.

Meantime, the president's chief of staff is on Capitol Hill right now for talks that could -- well, we'll see what happens with these talks.

BERMAN: Yes.

HARLOW: It's a tough meeting I would say right now with the Congressional Hispanic Caucus on immigration reform and how that all ties into a spending deal.

Our Abby Phillip is at the White House with more.

So look, this is sort of -- I don't know what this is. An olive branch from Chief of Staff Kelly after he is the one that apparently told the president, look, this isn't going to play well with your base to make this deal that Graham and Durbin brought you?

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right. It's really unclear what he's hoping to accomplish today but, you know, you've got to keep in mind that all along a lot of Democrats had said that the person standing in the way of a deal at the White House has been Stephen Miller, but we know that John Kelly has actually been tasked with this immigration deal.

[09:05:06] And as you mentioned, he was one of the voices saying to the president last week, this is not a good deal for you and asking him to reject the Graham-Durbin proposals. So this is an opportunity potentially for John Kelly to restore some trust in this relationship.

Earlier last week, it seemed very much like Democrats believed that President Trump wanted to get there, that was willing to sign something that they came up with. That has since broken down. Kelly's talks today could be pretty crucial to that.

At the seam time, President Trump is expected to be on the Hill for a ceremony honoring Bob Dole. Now the White House tells me this morning that he's not actually expected to have any formal meetings around immigration or around the spending issue but it is possible he's on the hill, all the players that are necessary to deal with this issue are going to be there as well and at the same time the White House is also trying to argue that it's the president who's leading the charge on immigration, not his staffers. And that includes John Kelly.

HARLOW: Yes.

BERMAN: All right. Abby Phillip for us at the White House. Abby, thanks so much.

Here now, CNN contributor Bianna Golodryga, CNN political analyst Alex Burns and Washington bureau chief for the "Chicago Sun-Times," Lynn Sweet.

Alex, first to you, political peril for everyone right now inside this deal. You know, Republicans trying to push this stop-gap measure and fund the government for a little bit, don't deal with immigration right now. The Freedom Caucus goes, yes, I'm not sure you have the votes here. What's at risk for the Republicans?

ALEX BURNS, CNN POLITICAL ANALYST: Well, for the Republicans, the biggest risk of all, there are a whole bunch of subsidiary risks in this negotiation but the biggest risk of all is that they have become seen as a party that, with total control of government, can't keep the lights on.

HARLOW: Can't keep it open.

BURNS: Right. But the immigration issue is hugely fraught for them with respect to the midterm elections. If there's a rebellion on the right about spending, that could be enormously messy both in terms of this specific debate but then the longer term struggles that they will have to enact an agenda this year. But if they in January of their second year in power can't simply fund the government, that's a fiasco.

HARLOW: But when it gets to the Senate, as John rightly pointed out, the physics or math or whatever you want to call it, it doesn't work there if they don't get at least eight. If they can have nine Democrats on both in the Senate, Bianna.

But what about the Democrats in swing states? What about Joe Manchin in West Virginia who said he's going to sign a spending bill, you know, essentially even if it doesn't have DACA. And Claire McCaskill who told "The Times" this week we shouldn't draw a line in the sand. That's how negotiations blow up.

What about them?

BIANNA GOLODRYGA, CNN CONTRIBUTOR: Well, I think that divide is going to be even more highlighted following the sort of creative solution that some Republicans have come up with overnight. To include CHIP funding, to cut some of the taxes from the health care bill. The CHIP funding actually would be a budget surplus, the CBO reported. So that would be a net plus for Republicans but obviously funding for nine million American children to reinstate their insurance is something that both Democrats and Republicans have been pushing for.

So Republicans sort of putting the ball in Democrats' court that you really want to shut the government down over those 9 million children who you've been arguing for over the past six months. Of course other Democrats saying we're not budging unless the Dreamers are included in any final bill, too. I think we are moving much closer to a government shutdown than we even thought a week ago.

BERMAN: Yes, the discomfort is spread all around. I think that's what's crucial to know here.

And Lynn Sweet, there was or is a bipartisan proposal out there, right? The gang of six has put something out. And will give us the details at some point today. But the number two in the Senate, John Cornyn, this morning preemptively said just no dice. He said the Gang of Six deal to fix DACA will not get a vote in the House or the Senate because the president will not sign it. Let's go back to the drawing board, he says. \

The president said bring me a bipartisan deal, I'll sign it. This is a bipartisan deal and now they're not even going to talk about it on the floor of either the House or the Senate. What message does that say? LYNN SWEET, WASHINGTON BUREAU CHIEF, "CHICAGO SUN-TIMES": Well,

investigators chose that there is a stalemate right now, and not what Trump said in terms of trying to help the process along just collapsed, dissolved, didn't happen. So where are we at now? There are potential other gangs to come up. The point is, this group led by Lindsey Graham and Senator Dick Durbin is the only bipartisan Senate group that has emerged. So I say to Cornyn, put together, you know, where is the other groups that could bring in Democrats?

It's not hard to count to 60, John and Poppy. That's what it takes to get something through the Senate. So form your own coalition, make a deal, do other negotiations. Just telling somebody to go back to the drawing board isn't as good as saying, I'm going to go -- I'm going to create the group.

So whether or not you agree with the things in the Durbin-Graham Gang of Six isn't as much of the plight is it as it could be a starting point to discussion. The Senate has done this in the past six years ago. They did have a comprehensive, even harder immigration package. So the idea that, well, I don't like this particular package doesn't seem to me the spirit of true negotiation which is what the Senate is wrestling with right now but of everything else we're talking about, remember this.

If the Senate leader Mitch McConnell doesn't want to call a measure, even if it's the result of bipartisan negotiations it won't get a vote.

[09:10:08] HARLOW: Attorney General Jeff Sessions talked about immigration last night on FOX News with Tucker Carlson. Listen to this part which is quite telling I think about where the administration stands at this point.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, ATTORNEY GENERAL: What good does it do to bring in somebody who is illiterate in their own country, has no skills and is going to struggle in our country and not be successful?

The president is right on the lottery. That's ridiculous. How absurd is that for a policy for a great nation?

(END VIDEO CLIP)

HARLOW: So, I mean, Bianna, that tells us a lot, doesn't it, about where this administration stands on who should come to this country, who shouldn't? Was he talking -- was he saying that Haitians and people from those African nations have no skills? I don't know at this point.

GOLODRYGA: Well, you're talking to someone who was brought to this country from a predominantly white country, I'll say that, but my parents who were highly educated in the former Soviet Union did not know a word of English. They came here and learned English as well so I don't know what his point is by saying illiterate because a lot of people who come to this country -- HARLOW: Yes.

GOLODRYGA: Are they expected now to learn English before they come here?

HARLOW: And he's saying they'll fail. Those people will fail. They won't be successful. There's so many success stories.

GOLODRYGA: Yes. Like my parents and millions of others in the country. But I think this goes back to the president himself. Aside from this being extraordinary debate over whether house or hole or an administration official not knowing whether Norway is predominantly white or not, it goes back to this president at least not coming out with his own agenda, with his own policy. It's sort of being planned around him by both parties.

The president we saw in that extraordinary hour-long session has said just bring me a plan and I'll take the blame for it. As Lindsey Graham said, what happened to that guy? Because he hasn't been heard from, at least publicly, over the past few days and I think a lot of people are confused about what his specific policy, what his ideology is when it comes to immigration.

BERMAN: I want to ask one sort of, you know, side bar question here that shows us the political environment that we're in right now, which is that in Wisconsin overnight, a lot of people missed this, there was a special election for a Senate seat, a Senate seat, a state Senate seat that had been in Republican hands for some 16 years. Democrats won it going away.

The Republican governor of Wisconsin last night, Scott Walker, actually sent this out. "Senate district special election win by a Democrat is a wake-up call for Republicans in Wisconsin," and he doesn't mean just Wisconsin.

BURNS: Absolutely. I think that's an alarm bell for Republicans really in the Midwest and sort of the Trump belt, if you can call it that generally, that that was a district. This was not some seat that has wobbled back and forth or that voted for, you know, Mitt Romney in 2012 and Hillary Clinton in 2016. This is Trump country. It was Romney country before that. It was Bush country before that, right?

So this is a place where Republicans ought to do well. One of the big questions for the 2018 elections has been, will Democrats just gain ground in these sort of educated, more centrist suburbs, or will they make up ground in this sort of rural and industrial parts of the country where the president did really well? And last night they did -- they did exactly that.

So for Scott Walker to come out and say -- he is both a very successful governor and a very canny political strategist, that's a voice that Republicans nationally are going to listen to.

HARLOW: All right. And Lynn, finally to you. Look, there are those on the Republican side, like Lindsey Graham, who are pleading what it appears to one person at this point in time. Lindsey Graham, listen to this, pleading with the president.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: This has turned into an S- show and we need to get back to being a great country.

(END VIDEO CLIP)

HARLOW: So, I mean, it seems like, Lynn, he's talking to the president there. Get back to what you were. Where's the guy that I was golfing with?

SWEET: Absolutely. And that is why Lindsey Graham has not confirmed directly what the vulgar expression was that the president did because he needs to maintain a channel of communication with President Trump. And in that hearing, Lindsey Graham also tried to reassure the hundreds of thousands of Dreamers that things would turn out OK, which I thought was putting a lot on the line given how difficult now this short-term path ahead is and with that looming March deadline where the protections they have go away.

HARLOW: Lynn sweet, Bianna, Alex, thank you all very much.

So breaking news this morning as we mentioned at the top, we now know that FBI agents attempted to serve Steve Bannon with a subpoena last week to appear before special prosecutor Bob Mueller's grand jury. A source familiar with the situation says Bannon said wait, referred it to his attorney. We've also learned that the former White House chief strategist says he will speak openly when he meets with the grand jury.

BERMAN: Obviously Bannon created a whole lot of waves yesterday when he refused to answer certain questions claiming privilege behind closed doors.

Dana Bash is with us now to give us her reporting on the situation with Steve.

Dana, what have you learned?

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Well, first let's just start where you did, which is the fact that the FBI, we're told, did go to Steve Bannon's house to give him a subpoena. The understanding that we have is that the FBI didn't realize at the time that he had a lawyer and that's why Bannon's response was I have a lawyer, let me connect you to.

Still, it's quite dramatic, the notion of Steve Bannon, who has obviously been very much in the news for all of his comments to the author, Michael Wolff, about the whole idea of what he thinks happened and didn't happen with the president and his staff.

Beyond that, the other noteworthy fact that I was told about is that despite the fact that Steve Bannon refused to answer many, many questions from lawmakers yesterday when he was behind closed doors for almost ten hours, he is going to answer all questions that are asked by Robert Mueller's team.

And I'm told that that is something that Bannon's lawyer informed lawmakers of when they were having the back and forth about executive privilege during all those hours yesterday, that they were not very thrilled, as you can imagine with this information that Bannon's lawyer was giving them.

Which is, he's not going to answer your questions, but he will answer Mueller's questions and that reason is because Bannon and his lawyer are clearly adhering to what the White House has asked them to do, which is to invoke what they see is executive privilege.

And that obviously is only governed by the executive branch and legislative branch. It is not governed by a criminal investigation, which is what the special counsel's investigation is all about.

POPPY HARLOW, CNN ANCHOR: Dana Bash, good reporting. Thank you very much for breaking that for us. We appreciate it. We have a lot to dig into in this fast-evolving Bannon story. Our legal experts are standing by.

We're also minutes away from a key Republican senator taking to the Senate floor for a speech to criticize the president, making it even more notable, the comparison he made from the president to Joseph Stalin.

JOHN BERMAN, CNN ANCHOR: And the chair of the House Freedom Caucus says Republican leaders don't have the votes to avoid a shutdown. We will talk to a member of that caucus to see where he stands.

(COMMERCIAL BREAK)

[09:21:24]

HARLOW: Breaking news this morning, we now know the former White House chief strategist, Steve Bannon, was face-to-face last week with FBI agents. A source familiar with this situation tells us that agents tried to subpoena Bannon at his home to appear before Bob Mueller's grand jury on the Russia probe. Bannon referred them to his attorney. Bottom line, Bannon has been subpoenaed.

BERMAN: Indeed, that is the bottom line. It's a big one. Joining us now, CNN legal and national security analyst, Asha Rangappa, Michael Zeldin, a CNN legal analyst and Robert Mueller's former special assistant at the Department of Justice.

Michael to you, you know, being served by FBI agents with a subpoena is no small thing and the decision to do it is made I think with no small effect. What is the special counsel after here?

MICHAEL ZELDIN, CNN LEGAL ANALYST: Well, he's sending Bannon a message that he wants him in the grand jury and wants him to be forthright, truthful and fulsome in his answers.

HARLOW: So then why, Asha, knowing now that Bannon was subpoenaed before he met yesterday for 10 hours with members of the House Intelligence Committee, why did he do this dance with them because our reporting is that he will be fulsome in his answers to Mueller's team, tell him everything that he can to utilize executive privilege so why dance with Congress on it?

ASHA RANGAPPA, CNN LEGAL AND NATIONAL SECURITY ANALYST: Well, as you know, Poppy, a lot of times these Congressional hearings are kabuki theater. There's a lot of performative aspect and messages being sent. So, there could have been some aspect of that to be able to say that he's kind of resisting this.

As Michael said, once he gets into the grand jury none of those, quote/unquote, "privileges" are going to hold any water. He's going to have to answer all of those questions and they will be recorded by a court reporter.

BERMAN: We are told that Steve Bannon will tell the special counsel everything. What we don't know is what "everything" is, right? We don't know that at all. We don't what Bannon has to say.

HARLOW: You can glean from the book, I suppose.

BERMAN: Some things. But he says the book is exaggerated and hyperbole. You know, Michael, he's served with the subpoena to appear before the grand jury. However, it's possible that he could work out a deal to speak voluntarily before investigators from the Special Counsel's Office. What's the difference, grand jury and investigators?

ZELDIN: If he's under oath, there's actually no difference. His testimony will be recorded. He will be subject to prosecution for lying if he lies. The only difference potentially is if they struck a negotiated deal that allowed Bannon's lawyer to be in the interview room because the lawyer cannot attend a grand jury setting.

HARLOW: So, guys, let's talk about the sort of extraordinary 10 hours that played out yesterday with Bannon in front of the House Intelligence Committee. Asha, the scope of privilege, you have Representative Jim Himes on the committee, who was on with Anderson last night saying that he was sort of stunned and appalled by the fact that Bannon tried to use privilege, the scope of privilege to pertain the conversations that he had in the White House with people other than the president. Does that hold legal water?

RANGAPPA: The -- no. You know, the White House has kind of made up this very broad privilege that seems to extend from the beginning of time until when people leave the White House and that's just not how executive privilege works.

The executive privilege is held by the executive. The president needs to actually assert it and once they do that for whatever communications they are, typically, Congress and the executive branch will work, you know, how they are going to manage that.

And none of this has happened and, also, he wasn't president during the transition or during the campaign and so this is a very broad assertion that is strange. [09:25:06] BERMAN: Yes. It's the threat of exerting executive privilege too, which we've seen during this whole time with Jeff Sessions and others. They are not actually exerting pressure, but lawyers and people testifying and saying they may down the line.

HARLOW: In the future so I can't answer that.

BERMAN: So, I'm just going to be quiet here. Michael Zeldin, to you, this moment, right, in the middle of this 10-hour testimony yesterday, Steve Bannon's lawyer calls the White House --

HARLOW: Bizarre.

BERMAN: The White House then tells them not to talk. Is this the way things are normally done?

ZELDIN: Well, no. That really smacks of a gag order rather than the assertion of executive privilege. Executive privilege typically is a much more surgical application. They asked you for a specific question, asked a specific question about a specific topic and you determined that that is privileged because it involves policy decision making between yourself and the president or between senior staff that's going to be reported to the president.

Not a broadbased I'm just not going to answer any question during the period of transition in the White House, post the White House with people who are not even in the White House at the time of the assertion. So, it was really a spurious assertion of privilege.

HARLOW: So, there is a chance that he could be held in contempt of Congress, Asha. That Bannon could be held, but what does that actually mean? I mean, they don't have the power to throw him in jail. What does it mean then for him? What are the consequences?

RANGAPPA: Well, essentially, if they want to enforce the subpoena and make him answer, he continues to assert these. The contours of that will be litigated and that's typically something that you want to avoid. The executive and legislative branches really don't want courts to delineate where their power starts and ends.

And, you know, it's just going down this whole road that we might go down if Mueller subpoenas the president to testify if he wants that and the president doesn't comply, we're just getting into a whole new spigot.

BERMAN: I think it is one way to describe it. Asha Rangappa, Michael Zeldin, great to have you with us. Thank you so much.

All right. In just a few minutes, a Republican senator will go to the Senate floor with a speech incredibly critical of the sitting Republican president. Again, when you compare a U.S. president or use a U.S. president's name in the same sentence as Joseph Stalin, that's a thing.

(COMMERCIAL BREAK)