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Source: Kelly Made Clear He'd Resign At Trump's Request; White House Gripped By Tumult Over Abuse Allegations; Trump Defends Ex-Aide: "He Says He's Innocent"; Kelly, McGahn Facing Blame For Porter Fallout; Source: Trump Talking To Friends About Possible Kelly Replacements; Sources: Jared Kushner Among 30-40 Administration Official Working Without Full Security Clearances. Aired 7-8p ET

Aired February 9, 2018 - 19:00   ET


ERIN BURNETT, CNN HOST: "OutFront" next, President Trump's M.O. defend the accused, not the accuser. Why Trump's praise Rob Porter, says everything we need to know. And Chief of Staff John Kelly makes it clear to Trump he would resign over the Porter scandal. Are his days numbered? Plus, the number three at the Justice Department suddenly stepping down tonight, does this put Trump a step closer to taking out Bob Mueller? Let's go "OutFront".

Good evening tonight, I'm Erin Burnett. "OutFront" defending the indefensible. There's no point in paraphrasing this, just listen for yourself to the President today in the Oval Office. He's talking about Rob Porter, his close aide who resigned after allegations surfaced that he physically abused both his ex-wives and his ex- girlfriend, something senior members of the White House knew for months.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We wish him well. He worked very hard. I found out about it recently and I was surprised by it. But we certainly wish him well. It's obviously a tough time for him.


BURNETT: Tough time for him. Sure, no mention of the three hers. And the President continued.


TRUMP: He did a very good job when he was in the White House. And we hope he has a wonderful career and hopefully he will have a great career ahead of him.


BURNETT: So the President hopefully -- hopes for Porter a wonderful career. Again, nothing about the three women. And the President continued.

(BEGIN VIDEO CLIP) TRUMP: It was very sad when we heard about it. And certainly he's also very sad. Now, he also, as you probably know, he says he's innocent. And I think you have to remember that. He said very strongly yesterday that he's innocent. So you'll have to talk to him about that, but we absolutely wish him well.


BURNETT: So the President wants you to know that Porter strongly says he's innocent and that he's sad about Porter. No mention of the three women. It seems impossible to imagine.

I mean, what about this picture of Porter's first wife, Colbie? She says Porter did this to her according to "The Washington Post." Porter privately told people that this picture came when they were arguing over vase (ph) and she was somehow hit with the vase. And what about the words of Porter's second wife, Jennifer.


JENNIFER WILLOUGHBY, SECOND EX-WIFE OF FORMER WHITE HOUSE STAFF SECRETARY: I told them all of the details of my marriage, including verbal and emotional abuse and including the incident when he pulled me out of the shower. They were also made aware of the protective order that I signed in June of 2010.


BURNETT: No mention from the President of the United States that domestic abuse is abhorrent, that the victims here women are the women, three of them, including two ex-wives that he had before he was even 40. And what they suffered at the hands of Rob Porter, including the fact that one of them had filed a protective order against him. Or maybe the President should take a cue from Mike Pence who said this in an interview in Korea at the Olympics.


MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: There's no tolerance in this White House. No place in America for domestic abuse.


BURNETT: The problem is that this President, the victims are the attackers, the predators, and the assaulters. It just takes his own words. Here he is on Senate candidate Roy Moore after multiple women came forward to say he abused them as teens. One of them, you may remember, was only 14 years old.


TRUMP: He totally denies it. He says it didn't happen and, you know, you have to listen to him also.

(END VIDEO CLIP) BURNETT: Here he is on then Fox News Chairman Roger Ailes who was accused of sexual harassment by multiple women. The network force to pay massive settlement.


TRUMP: He's been a friend mine for a long time. And I can tell you that some of the women that are complaining, I know how much he's helped them.


BURNETT: Fox News and former anchor, Bill O'Reilly, also paid a massive settlement to multiple women after he was accused of sexual harassment. President Trump said, "I don't think Bill did anything wrong."

And of course when it comes to the President's own behavior, he bragged on tape about sexual assault, at least 16 women have come forward to tell their stories about him and he just says every single one of them is a liar.


TRUMP: These vicious claims about me of inappropriate conduct with women are totally and absolutely false. These claims are all fabricated. They are pure fiction and they are outright lies. These events never, ever happened.


BURNETT: Deny and defend, that's what President Trump does when it comes to abuse and assault by men of women.

Pamela Brown is "OutFront" live at the White House. And, Pamela, the White House in chaos tonight over these abuse allegations according to your reporting.

[19:05:02] PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right. It's been a week of confusion and division with internal strike finger pointing, a swirl of accusations.

And while John Kelly, the chief of staff, has been more publicly blame, facing more of the public blame, those inside the White House are also blaming top lawyer, President Trump's top lawyer, Don McGahn and raising the questions why he didn't do more earlier because we're told resources that Don McGahn actually found out about some of these accusations, January of 2017, when Rob Porter actually went to him and alerted him that his ex-wives may say some troubling things about their past relationship to the FBI.

And we're told that over the course of the year, Porter would inform McGahn and gave him more specifics about the allegations as it became clear that perhaps his security clearance wouldn't come through or hid a snag. And we're told, Erin, that the FBI actually turned over to the White House this past spring, some of their findings after interviewing the ex-wives which was brought to McGahn's attention and then Porter's ex girlfriend called Don McGahn over Thanksgiving telling him some of the allegations that she had experienced herself in terms of abuse and from the ex-wives.

Now, McGahn told people around him that he called the security personnel at the White House to alert them about what the ex girlfriend had said, but others inside the White House feel as though, perhaps, he could have done more and that his personal relationship with Porter, whether he was lawyer worked closely with McGahn on legal documents, overshadowed or crowded his judgment in handling the situation allowing him to stay on board. So it has certainly been a chaotic week here at the White House, to say the least, Erin.

BURNETT: And as your reporting -- well, if you're inside over the handling of this, there are growing questions tonight, Pam, about John Kelly's future. What are you hearing?

BROWN: That's right because we are told that the President has also been unhappy with how his chief of staff has handled everything this week. And we are told that John Kelly today actually told the President that if he wanted him to resign, that he would resign. Now, we're told that it wasn't a formal sort of resignation or saying that, "Look, I will do this." But it was more of just telling the President that, "If this is what you want from me, I will do this."

But sources tell us, Erin, that the President does not want his chief of staff, John Kelly, to resign. And apparently, this isn't the first time John Kelly has said this. Sources tell us that he has also said the same in the past and clearly nothing has happened, he's still in his job.

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

"OutFront" now, let's go to Mark Preston, our Senior Political Analyst, Eliana Johnson, National Political Reporter for Politico, and Tim Naftali, our Presidential Historian and former Director of Nixon Presidential Library.

Eliana, you've been doing a lot of reporting on this. The President defending Rob Porter, not uttering a single word about the ex-wives and the ex-girlfriend, all of whom have told the same sick and sad story.

ELIANA JOHNSON, NATIONAL POLITICAL REPORTER, POLITICO: I think for anybody who has been covering this President, his comments today should have been expected and not surprising in the least. This really fits a pattern for Donald Trump the way he responds when people around him or associated with him are accused of wrongdoing.

We saw him respond in precisely the same way when Roy Moore, the Republican Senate candidate in Alabama, was accused of inappropriate sexual behavior and even molestation of younger women. He said essentially that while the allegations were troubling, Roy Moore was maintaining his innocence.

And behind closed doors during the campaign when Steve Bannon had then campaign chairman was -- when reports surfaced that when Bannon was married decades ago, he had been accused of domestic violence. Trump made light of it behind closed doors referring to Bannon has "Bam Bam" and when donors expressed their concern that Trump was associated with somebody like this Trump said, "Oh, you know, Bam Bam locked away in a room 24 hours a day, 23 hours a day. He's nobody to worry about."

So I think we have seen a reluctance by this President to take allegations of wrongdoing of various sorts by the people close to him seriously. That being said, he has seethed at the people close to him in private because of the negative coverage he and those around him have gotten in the news media. So it's not that he doesn't take the allegations seriously. He does when he gets bad press, but he has real reluctance to distance himself from people publicly.

BURNETT: I mean, Mark, it is stunning, you know, as Eliana said, this is the pattern and it fits the pattern. And yet to hear him come out today and say the things he said, he totally denies it. "We're sad. I wish him a great career," and not mentioned a single thing about what these women went through, somehow it is still stunning.

[19:10:07] MARK PRESTON, CNN SENIOR POLITICAL ANALYST: It is stunning. And I got to tell you, I've given up a long time ago trying to understand why the President is incapable or unwilling to show empathy, specifically when it comes to a subject similar to this, whether it is domestic violence or whether it's sexual assault.

But it also does call into question his political and his messaging strategy. Remember, when Donald Trump ran for President, he talked about how he's the greatest salesman, how he's the greatest messenger. Well, any mediocre political consultant or messaging consultant would tell you that even if you didn't believe these, even if you didn't believe these women, Erin, that you would still come out and show some empathy. That's the smartest thing to do.

Unless, and this is a very big unless, unless Rob Porter knows something that the President doesn't want him to speak about and he's trying to show him some loyalty. Now, we don't have anything to prove that that is the case, but you have to wonder the proximity of Rob Porter to Donald Trump over the past year certainly he knows some secrets.

BURNETT: Tim, that's actually an important question.


BURNETT: Is that in this case something that you have to consider? I mean, considering Rob Porter who, again, did not have full security clearance but had his interim security clearance so he had access to absolutely everything, every piece of paper that went to the President's desk, all this private meetings, all of this interactions, Rob Porter knows.

NAFTALI: Well and he's been there since the beginning of 2017. You know, what's so disappointing and distressing is that our best Presidents appealed to our better angels of our nature and they understand that the White House is a symbol of entire country.

And why this President once again when given the opportunity to set a nice and powerful ethical standard refuses to do it? Well, at this point we should never -- we can't expect him to do it. We can't expect him to do it. He's had so many chances to expect it now would be foolish.

BURNETT: Yes. I mean -- but Eliana, the other reality of it is, of course, in a sense he can't, because if he does, then he's opening the door to his own tape where he admitted to sexual assault being true and the 16 women who've accused him. He always takes the side of the accused when it comes to these men. I mean, every single time.

JOHNSON: It's interesting. This is an area in which Trump is consistent and he gives the same defense that he defends others in the same way he defended himself, where for those who have accused him of sexual harassment or sexual assault, he has dismissed the claims out of hand. And he does seem to do precisely the same for everybody around him. He's extremely consistent with that.

And there does seem to be, I'm not sure how conscious it is on the President's part, but a concern that if he says something like, you know, women deserve to be heard, or expresses empathy for the women in these cases, that he's going to open the door to questions about the women who have accused him of impropriety.

BURNETT: I mean, which is in so many ways shocking. I mean, Mark, let me ask you about, you know, the Vice President obviously came out and said what the President should have said. The Vice President, I have no doubt he believes what he says, but he's also a very smart guy and he thinks before he speaks.

And in the interview, he repeated what Raj Shah, the deputy press secretary, said on the podium yesterday when Raj Shah said that the White House had made mistakes. And then there was a lot of reporting. The President was really angry that Raj Shah made that admission. And yet, listen to Mike Pence and compare it to Raj Shah. Raj Shah is first.


RAJ SHAH, WHITE HOUSE PRINCIPAL DEPUTY PRESS SECRETARY: I think it's fair to say that, you know, we all could have done better over the last few hours or last few days in dealing with the situation.

PENCE: I think the White House has acknowledged that they could have handled it better.


BURNETT: Mark, did he do that knowing that the President was livid that Raj Shah made that admission, or is the Vice President that out of the loop? PRESTON: No. I mean, look as you said he is very smart. He is right out of central casting for our President. As you said, he thinks before he speaks. He's very careful about what he says. And even as we have see him very loyal to the President, in this case he doesn't necessarily need to be loyal to the President because we're talking about a third party right now that the President has decided to defend.

Now, Vice President Pence has come under a lot of criticism for his defense with Donald Trump. But it's been about the defense of Donald Trump not about folks that Donald Trump is defending. But also if you go back to what he said, Vice President Pence really did distance himself, didn't he, when he said they, the White House, even acknowledged that they didn't handle it correctly. Meaning, I had nothing to do with it.

BURNETT: Right. There is no we in there. There was no we. It was a they.


BURNETT: You know, one of those things as you point out, a man who knows his words, not said slightly and not said without thought. Thank you all very much.

And next the breaking news, John Kelly making clear to the President he will resign if the President wants him to. So what is Trump thinking tonight?

[19:15:10] And more breaking news, a sudden resignation at the highest levels of the Justice Department and it could matter a whole a lot for Bob Mueller and the Russian probe.

And the clock ticking on the President, will he approve the release of the Democrats response to the Nunes memo? Where is the Democrat's memo?


BURNETT: Breaking news, John Kelly making it clear to President Trump he'll resign if that's what the President wants. And a source telling CNN, Trump is talking to friends about possible replacements for Kelly.

Our Gloria Borger reporting Trump has called around the people, including House Freedom Caucus Chair Mark Meadows, House Majority Leader Kevin McCarthy, Budget Director Mick Mulvaney, all as possible replacements. Source tells us his Chief Economic Advisor Gary Cohn and the CIA Director Mike Pompeo would also be on the list.

Trump offered the job, apparently to long time friend and chairman of Trump's inaugural committee, Tom Barrack. We can tell you Barrack said no.

"OutFront" now, former adviser to four presidents, including Nixon and Clinton, David Gergen, and former Army Commanding General for Europe and the Seventh Army Lieutenant General Mark Hertling who conducted multiple operations with General Kelly in Iraq and you know him very well from those times under a great deal of pressure.

David, the question is here, is the writing on the wall for John Kelly?

[19:20:08] DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: Yes, it is. The very fact that within a few hours of all of this exploding in the White House we have a story now from the White House that White House aides are saying that General Kelly gave a false account of what happened at a staff meeting. People are very disturbed. They leaked that out. They -- it sends a clear message that John -- General Kelly may be heading for the door and there are some people pushing him in that direction on the staff.

BURNETT: Let me just ask you a follow up that, David, because we are learning that in a staff meeting today, Kelly pushed the narrative that some who are in the meeting, you know, they said it was -- appeared to them to be very untrue about when he learned about the allegations against Rob Porter and what he did about them.

You know, Kelly, claimed that he took immediate action and enforced the resignation essentially of Porter. What does it say to you that people are willing there who work for him to come out and leak it and say he's not telling the truth?

GERGEN: I think that it says that there is a rebellion going on within. And that it must have the blessing of either Ivanka or Jared or someone for people to start doing this. You know, there has been story for some time that Ivanka wanted him -- General Kelly out. You know, so those surfacing outside, General Kelly coming there was a blessing. But he has crossed swords with a number of people inside and he said some things initially that caused the President some real trouble.

I mean, one of the most disturbing things about this, of course, is what really bothers the President is not that people around him have been assaulting women, it is that he is getting bad publicity, so it's appalling.

BURNETT: Well, and it's clear that the abuse doesn't bother him, right, as he's wishing Porter well and a great career and saying how sad he feels for him and all of those things.

I mean, General, we know General Kelly knew about the abuse allegations for months and obviously didn't act on them until it broke in the media. He strongly defended Porter when the "Daily Mail" first broke the story. You know General Kelly. Is this the man that you knew and served with?

LT. GENERAL MARK HERTLING, CONDUCTED OPERATIONS WITH GEN. KELLY IN IRAQ: Well, I met him in Iraq, Erin, and we conducted multiple operations together because we had a common boundary between the west and the north. So I knew him from a tactical and operational standpoint and I always saw him as a good commander. But truthfully, some of the actions that had occurred over the last couple of days tell me that he's missed something because good commanders don't do the kinds of things that he's done over the last couple of days and I'll give you an example of that.

You know, whenever you have one of your -- the members of your team being accused of something or having something going wrong and you don't have the full facts, you don't put in a whole hearted defense, you kind of back away. In fact we're trained to do that, to let the legal system go through.

So the comments about Porter's character and his integrity and his -- you know, he may have been a high performer and a great individual in terms of his daily duties in the White House. But when something like this comes up and evidently, John Kelly knew about this for a very long time, you start to back away. And you question and you actually do a little bit of investigation yourself as the commander, or in this case the chief of staff, to find out what the heck is going on. This seems extremely strange to me.

BURNETT: All right. And of course, I mean, one of the most basic things about domestic abuse is it is by definition not visible in almost -- in so many cases to anybody who is not in the relationship, right? You don't know someone's character outside in a way that he seemed to so quickly jump to.


BURNETT: You know, David, if Kelly goes, it's going to be the latest departure in the White House. We have seen a modern record for turnover in the first year of the Trump White House, more than a third of the White House staffs are gone. Whether fired or resigned, I mean just look at this on screen. That's twice Reagan, it is more than three times Clinton, it's nearly four times Obama, even more than H.W. and George W. Bush. What does this tell you?

GERGEN: Well, I mean, working for this President seems to be like riding a bucking bronco. You can only stay up on for so long before you get bucked off by just the circumstances. It is a volatile place. We know that they came in with very little experience. He didn't get the top people early on for his White House, that one would normally recruit because somebody had opposed him during the campaign they didn't like him because they were against him. And I think it's been a circus since then, which I just can't tell you.

I just have never seen a White House with so many people around a President who have been accused at one point or another of being violent toward women or harassing women. I've never seen a White House that got information about a top person on their team. One of the most trusted people in the White House that he had -- that there was a dark side in which he was accused, there were credible reports that the investigators, the FBI and others had gotten about his past.

[19:25:09] And to sit on that, I don't know any legal counsel who would have sat on that. They would have immediately had red flags go up and say we've got to know more about this. I don't know of any chief of staff who would sit there and not have done something more. I don't understand. There is something about the culture in this White House that deserves examination because it's not right.

BURNETT: That's deeply broken. I mean, General -- yes, go ahead, General.

HERTLING: There is an old expression, those of us who study leadership says that the organization takes on the personality of the leader, the personality of the commander. In this case, I think there are certainly some issues with character across the board. We've seen that during the campaign and even during the first year with the President and I think that's unfortunately affecting some of the people in terms of what they are doing because it's what they think they are allowed to do.

And it's represented in this most recent case in terms of what is happening with security clearances. As a guy who has worked with security clearances and having people within my organization required to have security clearances for the protection of the country and defending our nation, it's appalling what's going on --


BURNETT: Yes, 30 to 40 to give (INAUDIBLE) number, 30 to 40 White House officials do not have them right now. They're operating on interim as Rob Porter was.

HERTLING: And it is bubbling up with Porter, but this has been going on for a long time. And many of us have watched this saying, "What the heck is going on?" And people that don't have security clearances or have the interims are doing major engagements with allies, which require them to read intelligence. You don't go into the meeting with the Israelis or the Saudis without having some type of classified information at the highest level, the top secret SCI.

So some of the folks who don't have security clearances are going into those meetings, either they're reading it without authority or they're not reading it at all, which is even more damaging, so all of this concerns anybody that's interested in national security.

BURNETT: And let me just -- to make the point, obviously there could be many people involved with those talks, but one of whose leading those talks, Jared Kushner, does not have full security clearance. It's been over a year and he is still operating on an interim.

David, before we go, you know the Porter family. What can you tell us?

GERGEN: I do. Well, first of all, our major concern should be of course with the women, the victims here and I'm glad you've been emphasizing that. It is also deeply saddening to see what is happening to the Porter family. Roger Porter was the top domestic adviser in the White House.

BURNETT: That's Rob's father.


GERGEN: He's been a friend. Roger is the father. And he's a wonderful man. He's been a friend for years, over 40 years. He and his wife, Ann, were deans or what we used to be called masters of one of the houses here at Harvard. He's very popular professor. He went to (INAUDIBLE). He was Woodrow scholar himself. He was very proud of his son and I'm sure he did not understand this. I don't know.

And the son has had a remarkable record as well. They were one of the only two father son teams in history who won Woodrow scholarships. And so there is something here that's obviously -- there is a dark side that we don't understand. It's so sad. It's crushingly sad.

Roger, the father, you know, lost his wife, Ann, to cancer just a few months ago and now they have this, it's -- I just can't tell you. He's such -- Roger is such an outstanding person. This must be crushingly sad for him.

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

HERTLING: Thank you.

BURNETT: And next the breaking news, the third in command of the Justice Department suddenly gone tonight. What does it mean for the Russia investigation? And Kim Jong-un sister not showing away from Vice President Pence at all. Look at this.


ERIN BURNETT, ANCHOR, CNN: Breaking news, the third ranking official at the Justice Department tonight resigning. Rachel Brand has only been on the job for nine months. She is next in line to run the Russia investigation if Rod Rosenstein leaves or is fired, hence, she's crucial.

Evan Perez is out front and Evan, we know the President obviously has had a lot of criticism with Rosenstein's handling of the Russia investigation. You know, recently asking whether Rosenstein was even on my team. people have said, "Well if Rosenstein goes away, Brand would take over."

So, her departing is a big deal, isn't it?

EVAN PEREZ, JUSTICE CORRESPONDENT, CNN: It is a big deal. As you mentioned, Erin, she would be next in line if, as you mentioned, the President does go through with the decision to fire Rod Rosenstein or forces him to resign, Rachel Brand is actually leaving for a top legal job at Walmart and we are told by people who are close to her that this is a job that pays in the millions of dollars and she considered it essentially a once in a lifetime opportunity.

But, look, there is no secret that there is a lot of dysfunction going on in this Administration. There is a lot of positions under Rachel Brand. She's the number three official -- the Associate Attorney General, a lot of jobs underneath her that are not filled with permanent people who have been appointed by the President. So, she's really carrying a heavy load at the Justice Department. She's very well considered. She has got a good reputation of somebody who has a lot of experience in national security law, but the question of what would happen if Rosenstein gets fired or if he is forced to resign has been hanging over her head because she doesn't have a lot of experience on handling criminal cases.

So, if Rod Rosenstein were to go, she was going to be next in line. Now that she's going to leave in the next few weeks, we are told by the Justice Department, the next person in line is Noel Francisco who is the Solicitor General. There's another problem with him in that he was a former partner at Jones Day law firm, and that's a law firm that is handling a lot of the legal work for the Trump campaign.

So, if he becomes next in line to oversee the Mueller investigation, the Russia investigation, Erin, he might have to recuse himself, again, because his former partners at Jones Day are doing work for the Trump campaign.

BURNETT: All right, thank you very much, Evan. And it's a significant development. Let's go out front to Democratic Congressman, Eric Swalwell who sits on the Intelligence and Judiciary Committees. Congressman, thanks for your time.

This news obviously breaking tonight. Are you worried about Rachel Brand's resignation and what it could mean for Bob Mueller's investigation?

ERIC SWALWELL, REPRESENTATIVE, CALIFORNIA, DEMOCRAT: Good evening, Erin from Phoenix, Arizona. I am with Congressman Gallego. We're in a millennial outreach tour, but this news is concerning. She does have a very good reputation at the Justice Department. We want as much structure in place around this investigation, and I hope that she would be willing to talk if there was anything she had seen that was concerning, as far as pressure being placed on the Department by the President or Jeff Sessions, but the best thing we can do in Congress is to cement Bob Mueller's role by putting in place the bipartisan legislation that would require a judicial oversight of any potential firing at his investigation.

BURNETT: Congressman, tonight, we are also awaiting the release of your Democratic memo from the Intelligence Committee which rebuts the Nunes memo. The Nunes memo of course alleged FBI abuses of surveillance authority to spy on the Trump campaign at the highest levels of the FBI.

The Democratic memo now in the President's hand and I don't know if you heard because I know you are on this tour, when he was asked today -- the President was asked today when it will be released, here's how he responded.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It's going to be released soon. We are going to release a letter soon.


BURNETT: We're going to release a letter soon. It's going to be released soon. Any idea when?

SWALWELL: Well, it should be released soon and free from any political edits. It looks like he's playing games with this memo. Most people want us to just move on with our investigation. We haven't heard from any witnesses in this investigation for over a month now. And, remember, Erin, that just in the last two weeks, CIA Director Mike Pompeo and Secretary of State Rex Tillerson have warned that the Russians are still interfering in our democracy.

So, we would be wise to get back to work and do all we can to protect this upcoming November midterm election.

BURNETT: So, you know, after the President said the memo would be leased soon, you say he's playing games. I just want to share this with you. The White House then put a statement out hours after he said that which reads in part, "The President this afternoon met with the director of the FBI, Principal Associate Deputy Attorney General, White House counsel's office to discuss the memo from the House Permanent Select Committee on Intelligence and received their input." Here's the operative line, Congressman. "The President is weighing his options and will respond soon."

Well, he said it's going to be released soon. They say he's weighing his options. Are they trying to back off it? Is it possible they may not release it?

SWALWELL: Well, it certainly looks like he's showing discretion that he wasn't willing to show and the Republicans weren't willing to show when they released their memo which was having the DOJ and the FBI closely look at it. I do think it's telling, Erin, that they have not publicly expressed any objections to the memo as they did with the Republican's memo, and I think that goes to the facts that we've put in it very carefully to bolster the seriousness of this investigation.

If he doesn't release it, then of course, it comes back to the House of Representatives and we could vote as a whole House to put it out. The public should see it, but the public really wants us to get back to our investigation.

BURNETT: Right, well, of course your committee did vote unanimously eventually to release it, so one would hope that that vote in the House would proceed, but hopefully the President will release it as did he the Republican memo.

One more question about your committee though because you talked about it's been a month since you've heard from witnesses. Look, at the very least, I think the public can see there is some serious problems on the committee, and two sources are now telling CNN just on these just to give everyone a mental image, things are so tense that Republican staff is thinking about installing a physical barrier -- a physical barrier to separate Republicans and Democrat aides.

Has it really gotten that bad?

SWALWELL: It has. I hate to see it that way. I don't think the committee is irredeemable, Erin, I went to the committee because I saw it's work after I worked on Capitol Hill as a September 11 intern and I saw the committee come together then to solve that crisis and put reforms in place, and I have always thought of that committee as a place you go for bipartisanship, and I think we can go back to that place, but just not with Devin Nunes as the chairman.

He has caused serious damage, and I think it's time to have new leadership there, so we can do the important work of protecting our democracy the next time Americans go to vote.

BURNETT: You know, a moment ago, I was talking to General Mark Hertling who had served with General Kelly in Iraq and he was talking about the situation in the White House with Rob Porter and how the White House had known about the allegations and not done anything about them. He was raising the point of what a deep, deep concern he has for the fact that 30 to 40 White House officials and political appointees in the Trump Administration are operating right now, with full security clearances at the level of security to which they applied, but all interim.

None of the -- 30 to 40 have not gotten approval for a full security clearance and that includes Jared Kushner who has been going to Saudi Arabia and going to Israel and leading all of these talks. How big of a problem is this?

SWALWELL: It's a big problem and it reflects the poor judgment of the person whose name is on the door there. That's Donald Trump. It's not just Jared Kushner. Remember, Michael Flynn also was a part of the White House and they didn't seem to have any concerns about his prior relationships with Russia.

My colleague Shawn Maloney from New York is looking into this. He was a former Bill Clinton staff secretary. He understands uniquely this problem and he has referred an inquiry over to the Oversight Committee in Congress to look at what we can do to make sure that we don't have any compromise hands on the intelligence that is going through the White House.

BURNETT: All right, thank you very much, Congressman. I appreciate your time tonight.

SWALWELL: Of course. My pleasure. Thanks, Erin.

BURNETT: All right, next, the worst week on Wall Street since Trump took office. Are his tax cuts to blame? And the GOP's conspiracy theories about the FBI, are they actually changing voters' minds about the highest law enforcement institution in the land?


UNIDENTIFIED MALE: Do you think that the FBI has a political bias in this case?

UNIDENTIFIED MALE: I believe, yes.


BURNETT: All right. Breaking news. We can tell you the President of the United States has decided not to release the Democratic memo, the rebuttal to the Nunes memo which alleged abuse at the highest levels of the FBI. He says that there are changes that need to be made. He is sending it back to the committee. Let's go to Jim Acosta for the breaking news at the White House.

Jim, obviously this is going to shock a lot of people.

JIM ACOSTA, CORRESPONDENT, CNN: It is going to shock a lot of people, but probably not everybody here in Washington, Erin. That's right. Looking at this letter that was sent back to the House Intelligence Committee, the Democrats from Don McGahn, the White House counsel says, and this is I think the key sentence here, "Although the President is inclined to declassify the February 5th memorandum, that's the Schiff memo, the Democratic version of the memo, because the memorandum contains numerous properly classified and especially sensitive passages, he is unable to do so at this time.

However, given the public interest and transparency in these unprecedented circumstances, the President has directed that Justice Department personnel be available to give technical assistance to the committee. And so, what they are saying here, Erin, in all of that Washington bureaucratic gobbling gook is that the President has decided at this time, he is not going to declassify that memo.

According to a White House release along with this letter, it says something has been sent back to the House Intelligence Committee that was not given to us, obviously, and that is a classified version that's been sent back to the Committee that they can now go over to determine you know, whether or not they are agreeable to the changes that are being sought by the FBI, by the Justice Department.

We should note, as you probably heard earlier today and have reported earlier today, Erin, the FBI Director, a Justice Department official and the White House counsel all met with the President about this earlier today. So, this is the outcome of that decision. The President is not releasing the Schiff memo at this time, which was of course going to be this ten-page response to the Nunes memo, which we were told was essentially released without many corrections or changes, basically uncorrected and unredacted.

And so, this is a pretty big development and I think that you've just touched off a pretty big debate that's going to be unfolding over the next several days over this. Democrats are not going to be happy, obviously, Erin.

BURNETT: That is for sure. All right, Jim, thank you very much. As Jim gets more information as the story breaks, let's go back to Congressman Eric Swalwell who was able to stay with us. All right, Congressman, your response, the President is not releasing the memo as the Democrats on your Committee submitted it to him. SWALWELL: Erin, it looks like more obstructive behavior from the

President. Now, I will say, I am going to wait and see if the Department does come brief us when we return to Washington on Tuesday.

We did ask them to take a look at it. This was something the Republicans did not ask the Department of Justice to do. But as I mentioned earlier, they have not publicly objected at all to the release of our memo, and so if they do have objections, I think we should look at them and determine whether or not, in the context of what's already been released, we should allow the full memo to go out. But if these are just political edits, then I expect Devin Nunes to stand on the House floor and ask his colleagues to do what he asked us in the Committee which is to release the memo to the public. That would be consistent.

BURNET: So how are you going to figure it out? So, there is the letter from Don McGahn, the White House counsel to Devin Nunes. Okay, and then they also attached a letter to the White House counsel, Don McGahn which is signed by Rod Rosenstein, the Deputy Attorney General and Christopher Wray, Director of the FBI and in this two-paragraph letter, Congressman, they say that they are attaching a version of the 10-page memo that you had submitted that identifies in highlighted text, "Information, the release of which would present concerns about the protection of intelligence sources and methods ongoing investigations, and then they continue to say, "We have further identified in red boxes the subset of such information for which national security or law enforcement concerns are especially significant." Does this make you think, "All right, this is real, and you all gave them something that was going to compromise national security as opposed to political edits," because this letter comes from Rod Rosenstein and Chris Wray?

SWALWELL: That's right. So, if these are edits that would protect national security secrets, again we don't want it to go to the public that's why we asked the Department to look at our memo first and so it's important for the Department to come in and explain to the full Committee what their concerns are and then the Committee will have to ultimately decide.

But we also told the Department of Justice that we want them to look at this in the full context that the President and the House Republicans have already put out a misleading memo. And so, the only way to correct the record, to make sure that the FBI's reputation is not unfairly tainted is to give the American people the full picture.

And so, if we can put out a memo that does that and addresses these concerns, we should do that. But again, I'm skeptical of most things the President says, because he is consistently inconsistent and consistently obstructive. So, let's see and have them come in and brief us on Tuesday.

BURNETT: All right. So, the bottom line is you are disappointed, but not going to yet jump to the conclusion that this is a political obstructive move by the President until you hear from Chris Wray and Rod Rosenstein? SWALWELL: That's right. I trust the professionals at the Department

of Justice and the FBI. I don't the President. So, until I hear from them, I don't want to, you know, jump to any conclusions just yet.

BURNETT: All right, well, Congressman, thank you very much for your time. Obviously, very significant development tonight.

SWALWELL: Of course, my pleasure.

BURNETT: Maybe not surprising to some, but this was a ten-page memo that had been sitting out there for days and people expected that the President would go along with the unanimous view of that Committee that had already voted to release it.

All right, more breaking news, we are now learning a second White House aide is resigning over domestic abuse allegations and we have that story that's breaking right after this.

And the worst weekend Wall Street since Trump took office. Are his tax cuts to blame?

Breaking news. Another wild day for stocks. The Dow closing higher by 330 points. The swing though was 1,000 points. At one point, it was down 500, up 500. I mean, pretty stunning and it was the worst week overall for the Dow since President Trump took office. The Dow posted the two biggest point drops in history in this week alone.

Out front now, Stephen Moore, the former Senior Economic Adviser to the Trump Campaign and informal adviser to the White House now on tax policy. Also, with me, Robert Reich, former US Labor Secretary for President Bill Clinton and the author of the new book coming called, "The Common Good." Thanks to both as always.

Robert, are Trump's policies to blame for what we are seeing in the market?

ROBERT REICH, FORMER US LABOR SECRETARY FOR PRESIDENT BILL CLINTON: Erin, they certainly are taking a toll in terms of the market getting very jittery about the possibility of inflation. You know, tax cuts and also spending, additional spending -- $300 billion, that is fine when the economy has a lot of room to grow.

I mean, when your House is cold, you want to put some logs on the fire, but when you don't have -- when unemployment is down to 4.1 percent; very, very low, when the economy is doing very, very well, you don't want to put more logs on the fire because you could burn the house down.

And that's what's getting the markets very, very jittery. They worry about inflation. They worry about the Federal Reserve Board is going to raise interest rates and that is going to really reduce stock values.

BURNETT: Because usually, Steve, you give a tax cut and then you do a spending bill, the greatest in size since Barack Obama put one in in the great recession. You do that when you are in a bad recession. But right now, we are at the opposite end of the cycle.

STEPHEN MOORE, THE FORMER SENIOR ECONOMIC ADVISER TO THE TRUMP CAMPAIGN: So, well, first of all thank you, Robert Reich for finally admitting that we have a great economy under Trump. We do have a great economy. It is booming right now and all of the kind of real indicators in the economy, whether it is corporate profits, whether it is employment, whether it is investment spending by businesses are just off the charts right now.

And now, I would make the case that that didn't happen by accident and happened in no small part because of the tax cut. Now is Donald Trump responsible for the reduction in the stock market? This was a bad week, no question about it, you know, Erin and Bob, I will let you know, Trump take the blame for the reduction in the stock market over the last two weeks (inaudible)...


BURNETT: He has taken the credit for every gain, yes...

MOORE: Well, no, but I am just saying, look, my point is it is the Trump economy right now. There is no question about it. This isn't the Obama economy. Obama is not the one responsible for the big boom and he is not responsible for the fact that the stock market has fallen. Look, I am still very bullish on the United States. I think this is a good time to buy stocks after this you know, correction.

I was on your show a few weeks ago, saying I thought the market might be getting a little bit ahead of itself. And one final quick point, I agree with Robert Reich. I thought that the spending bill that passed yesterday was shameful. I think Republicans should be embarrassed about it. We talked about it the other night on your show, Erin, and I think Republicans are going to have to you know, be responsible for that.

REICH: Erin, can I just make one correction to the record and that is the expansion, the good economy really has been an expansion that started years ago. It started under Obama. It's a continuation of that good economy. I mean, for Steve Moore to say that this is Trump's doing is ridiculous.

I mean, all of the gains, all of the stock market gains in anticipation of that tax cut have been eliminated. I mean, there has been no actual impact of Donald Trump on this economy and on this expansion that started -- actually started in 2009.

BURNETT: All right. Here is the thing, you know, we all...


MOORE: So, what about all of the...

BURNETT: Hold on.

MOORE: ... bonuses, all the spending by those companies. I mean that didn't happen by accident. We have four million workers who have gotten bonuses...


REICH: Steve, those bonuses -- wait, wait, wait. Steve Moore, those bonuses were very tiny. There is now a lot of stock buybacks and even despite those...


MOORE: Eighteen hundred dollars is a lot of money.

REICH: ... stock buybacks, you get a stock market that is really lagging and is very volatile right now.

BURNETT: I want to play for you all something. You know, Rand Paul shut the government down last night, quixotic, but I would say very true and genuine reason which is that Republicans have been complete hypocrites on spending, as you point out, Steve.

But I want to ask about where this is coming from; whether it is coming from Republicans or whether it is coming from the top where the leadership is because here is the President bragging and bragging and bragging about debt and how wonderful it is. Here he is.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I am the king of debt. I am great with debt. Nobody knows debt better than me.

I am the king of debt. I do love debt. I love debt. I love playing with it.


BURNETT: His companies have declared bankruptcies four times. Should Americans be concerned that he has the same attitude, Steve about running the country, as sort of, "Who cares. Run it up. Someone else will pay the bill."

MOORE: Well, look, I mean he was awfully a successful businessman. It wasn't by accident that he became a billionaire. I think that's one of the things that people admire about him.

On this debt issue, Erin, I mean, I am of the opinion, I don't know if Robert Reich shares this opinion, you know borrowing is appropriate. It depends on what you are borrowing the money for. If you are borrowing the money to make our economy more prosperous, to put more people to work, look, I still think there is room for more employment in this country, Bob. I think that workers need wage increases, so I like a tight labor market.

I don't think borrowing to make America a more prosperous place is necessarily a bad thing or even maybe borrowing from infrastructure spending that is going to be -- have a big payoff in the long term.

REICH: Well, I think that kind of borrowing actually, this is one point where Steve, you and I agree. I think that kind of borrowing is important and is justifiable if you are going to build the economy with that kind of borrowing.

The problem is, and here is where we get to the crux of the issue. We are not building the economy. We are investing that borrowing in health care, in education, in job retraining, in roads and bridges and infrastructure. No, I mean, that tax cut is going to -- is being used basically for stock buybacks, for executive salaries. It is not something that is growing the economy and yet, Republicans for years, Erin, have been saying, "Deficits are bad. Debts are bad." Suddenly, they don't seem to care.

BURNETT: That is true and I know Steve agrees with that hypocrisy. Ryan Paul is pointing it out. You are pointing it out. There is no other word for it. It's huge hypocrisy on the part of a lot of Republicans and two of the biggest ones, McConnell and Ryan...

MOORE: The Democrats didn't have a problem with all of this spending either. I mean...

BURNETT: No, but they didn't before.


BURNETTE: I am saying, you call someone out for being a hypocrite when you say one thing and then say another, in this case, Republicans and Democrats have been consistently for spending, so it's a different issue. But I want to -- before each of you go, we have some breaking news right now. I want to get your reaction to.

Another White House official resigning tonight after accusations of domestic abuse. This is according to the Washington Post. Speechwriter, David Sorensen's ex-wife claims he was violent and emotionally abusive during their marriage. He vehemently denies the allegations and says he was the victim of domestic violence. This of course comes two days after another administration official, Rob Porter as we all now know laughed after his two ex-wives and live-in ex-girlfriend said he abused them.

Steve, your reaction?

MOORE: It's just sad. I mean, I have a lot of friends over at the White House. I knew Porter a little bit, you know, and didn't know anything about this and it's a sad thing and you know, I don't even know what to say about it.

How do you really screen for that kind of thing? I mean, does the Justice Department know about these things? But there should be a screening for it, so we have the best people in the White House.

BURNETT: Well, and of course to the extent there is a screening for it. It's security clearance and 30 to 40 people in the White House in the Trump Administration don't have it yet. They are operating under interim security clearance that included Rob Porter and it includes Jared Kushner, Bob. REICH: You know, Erin, Donald Trump ran as a businessman who would

whip the White House into shape, whip the government into shape and we have you know, I don't want to -- this is a very sad story and I don't want to politicize this particular story, but it is part of a pattern of a White House. You know, this people are there. They are on temporary clearances. They are fired. They are hired. Fired again.

I mean, you have a White House that is absolutely in chaos.

BURNETT: All right, thank you both very much. I appreciate your time tonight.

MOORE: Thank you.

REICH; Thanks.

BURNETT: And thanks very much to all of you for joining us. Have a great weekend. AC 360 begins right now.

ANDERSON COOPER, ANCHOR, CNN: Good evening. More now on the news that broke just minutes ago in the controversial and sure to be erupting even as we speak over the Russian investigation and two competing memos about key parts of it from the House --