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THE SITUATION ROOM

Interview With Texas Congressman Joaquin Castro; Interview With Minnesota Senator Amy Klobuchar; White House Firestorm; NYT: CIA Duped by Russian Offering Trump Secrets; Pence: U.S. Willing to Talk to North Korea. Aired 6-7p ET

Aired February 12, 2018 - 18:00   ET

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


[18:00:03]

WOLF BLITZER, CNN ANCHOR: Why is the White House blaming the FBI?

Lack of transparency. Democrats try again to get their memo defending the FBI made public, this time working with the bureau to address concerns about classified material cited by President Trump. Why didn't he have the same concerns about the Republican memo attacking the FBI?

And willing to talk? After giving North Korea the cold shoulder at the Winter Olympics, Vice President Mike Pence raises the possibility of talks with the Kim Jong-un regime without preconditions. Is the Trump administration changing policy?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following breaking news.

The White House defending President Trump, saying he "takes domestic violence very seriously." Press Secretary Sarah Sanders faced a barrage of questions just a little while ago about the president's comments and tweet in support of former aide Rob Porter, who resigned after accusations of assault by his ex-wives became public.

This scandal has also revealed that Porter was one of dozens of White House staff working without a full security clearance. We will talk about the breaking news with Senator Amy Klobuchar. She's a member of the Judiciary Committee. And Joaquin Castro of the House Intelligence Committee.

And our correspondents and specialists are also standing by.

First, let's get the very latest from our chief White House correspondent, Jim Acosta.

Jim, yet another controversy dogging the West Wing.

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: That's right. It's not over yet. The White House is still in cleanup mode and still answering questions, Wolf, about how one of the top aides here, Rob Porter, could be allowed to work in the West Wing despite a background check that drudged up allegations of domestic abuse.

President Trump tried to look past all of that to tout his budget plans for the question, but the question remains, why won't President Trump publicly empathize with the victims?

(BEGIN VIDEOTAPE)

QUESTION: Mr. President, do you have a vetting problem?

ACOSTA (voice-over): President Trump avoided the question, punting to Press Secretary Sarah Sanders to try to defend that West Wing's handling of Rob Porter, a top aide whose history of alleged domestic abuse appears to have been covered up by the White House.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Above all, the president supports victims of domestic violence and believes everyone should be treated fairly and with due process.

ACOSTA: Sanders attempted to explain why the White House did not remove Porter from his crucial position handling sensitive documents for the president without a full security clearance.

CNN has learned dozens of White House staffers like Porter and even the president's son-in-law, Jared Kushner, are still going through the security clearance process. Edward Snowden, a former intelligence official who leaked classified material to the media, tweeted, "I got my clearance faster than half of this White House."

HUCKABEE SANDERS: Frankly, if you guys have such concern with classified information, there's plenty of it that's leaked out of the Hill, that's leaked out of other communities well beyond the White House walls.

ACOSTA: Asked why there are some staffers without full security clearances, Sanders pointed elsewhere.

HUCKABEE SANDERS: Again, that's a question that the FBI and other intelligence communities, they make that determination. That's not something that is decided by the White House.

ACOSTA: Publicly, the president still sounds like he is defending Porter, tweeting over the weekend: "People's lives are being shattered and destroyed by a mere allegation. Some are true and some are false. Some are old and some are new. There is no recovery for someone falsely accused. Life and career are gone. Is there no such thing any longer as due process?"

That's after he all but stood up for Porter Friday.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He said very strongly yesterday that he's innocent. So you will have to talk to him about that. ACOSTA (on camera): Why is he seemingly defending Mr. Porter

publicly? Is it because he has faced his own allegations? Is there some sensitivity there? Is that why that is?

HUCKABEE SANDERS: Look, as I just said, and I will repeat it again, the president and the entire administration take domestic violence very seriously and believe all allegations need to be investigated thoroughly.

QUESTION: But is there a tone-deafness there? Is there just being on the wrong side of things?

HUCKABEE SANDERS: I don't think the president being on, supporting due process for any allegation is not tone-deaf. I think it is allowing things to be investigated and a mere allegation not being the determining factor. He is not taking a side necessarily one way or the other.

ACOSTA (voice-over): The president's comments prompted one of Porter's accusers to slam Mr. Trump in "TIME" magazine, writing: "In light of the president's and the White House's continued dismissal of me and Colbie, I want to assure you my truth has not been diminished."

The White House is also embroiled in a fight over the president's decision to block the release of the memo from House Democrats defending the government's investigation into Trump campaign contacts with the Russians.

UNIDENTIFIED MALE: This report from the Democrats does not keep American lives safe.

[18:05:01]

ACOSTA: Democrats say Americans have a right to read their memo after the White House quickly declassified the memo from House Intelligence Committee Chairman Nunes.

REP. JERROLD NADLER (D), NEW YORK: I think it is worth showing that you can't believe anything these people put out.

ACOSTA: Those issues are crowding out the president's message of the week, rebuilding the nation's infrastructure, all while he's calling for big increases in government spending as part of his proposed budget for next year.

Under the president's plan, the deficit would soar by $7 trillion over the next decade while spending more on border security, including a wall, and cutting domestic programs like Medicare. The president wants to see big jump on spending on the nation's nuclear arsenal.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Frankly, we have to do it because others are doing it. If they stop, we will stop. But they're not stopping. So, if they're not going to stop, we are going to be so far ahead of everybody else in nuclear like you have never seen before.

ACOSTA: The president is seeking cuts in Medicare despite promising to protect the program during the campaign.

TRUMP: Save Medicare, Medicaid and Social Security.

We are going to protect your Social Security and Medicare.

Save your Social Security and your Medicare.

(END VIDEOTAPE)

ACOSTA: Now, as for the press secretary, Sarah Sanders, pointing to the FBI as why there are some staffers working here without full security clearances, it's important to note the FBI says it is up to the White House to act on information that comes out of background checks.

Also, Sarah Sanders simply would not say whether the White House counsel Don McGahn knew about Porter's past at some point last year. And she went to say that McGahn's standing at the White House has not changed. That's along with the White House chief of staff, John Kelly, and the communications director, Hope Hicks.

Wolf, they are all appearing to be safe in their jobs for now -- Wolf.

BLITZER: Key words, for now. Let's see what happens.

Thanks very much, Jim Acosta, over at the White House.

Let's get some more on the breaking news.

Joining us, our justice correspondent, Evan Perez.

Evan, walk us through the process. The FBI does the background checks for senior officials who want access to classified information. And then what did they do with that information?

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: Well, they do the background check information, Wolf. They do the investigation. They present their findings to the White House, the White House Counsel's Office, the White House Security Office.

They make a final decision as to whose investigation shows they are allowed to get a security clearance, it allows them to have access to classified information. What Sarah Sanders says during the press briefing just makes absolutely no sense, because that's not the FBI's job to determine the final determination of who gets a security clearance.

They do the work. They do the background investigative work and then it is up to the White House. Again, the president is the one decides in the end really who is on his team, who is on his staff at the White House. He has the ultimate decision-making power on security clearance and on classification obviously.

And it is up to him. The FBI is not the president. Donald Trump is the president. Look, the FBI addressed this very question a couple days ago and we asked them. And here's a statement they provided. You can put it on the screen. It says: "The FBI does not grant, deny

or otherwise adjudicate security clearances for individuals on behalf of these agencies, nor does it make any security clearance recommendations. After the FBI has completed a background investigation, it provides the information to the agency adjudicator authority, who determines whether to grant or deny the security clearance."

In the case, Wolf, in the case of Rob Porter, the FBI found this information as part of its investigation. They handed over that information to Don McGahn and the White House's Counsel Office and the White House Security Office. And they made the decision that they wanted Rob Porter not only to remain in office, but he even got a promotion in the middle of all of this.

BLITZER: They wanted him to handle the most sensitive information, bringing documents, the presidential daily brief, for example, to the president of the United States, even though he didn't have full security clearance.

PEREZ: Right. And he's not alone. Jared Kushner is one of those dozens of people Jim Acosta just referred to who have not yet received their final permanent security clearance.

And, again, that's the president's decision. He makes a decision as to who he wants there handling this information.

BLITZER: If you haven't gotten those security clearances, the full security clearances in a year, you are probably not going to get them, but they're still on the job. And that's a sensitive issue right there.

All right. Evan, Thank you very much. Evan Perez is our justice correspondent.

Let's get some more on all of this.

Democratic Congressman Joaquin Castro of Texas is joining us. He's a member of the Intelligence and Foreign Affairs Committees.

Congressman, thanks for joining us.

REP. JOAQUIN CASTRO (D), TEXAS: Thank you for having me, Wolf.

BLITZER: So when the White House says it is the FBI that has allowed these White House staffers to continue working with classified information, even though they don't have full security clearances, that is clearly not true.

The FBI gives the information, but the White House then must decide whether or not these individuals can continue to work there.

CASTRO: No, that's right.

And, as Evan said, it is the ultimately president's decision and it's the White House's decision to hire somebody. The president made the point about due process. That due process is called a hiring process.

[18:10:03]

When they knew about this information, they should have never hired this person, much less promoted somebody who had these allegations of abuse hanging over his head.

BLITZER: Do you believe the White House chief of staff, John Kelly, and the White House counsel, Don McGahn, are owning up to their role in this? And did they do the right thing by allowing this individual and others, maybe as many as 30 or 40, to continue working there without permanent security clearances?

CASTRO: I think they are abusing the security clearance process and in doing so they're endangering our national country.

I think they're being very irresponsible over at the White House.

BLITZER: Should they resign?

CASTRO: That's a decision for the president to make, but I do know that they're playing fast and loose with who they're giving out basically temporary credentials to on security clearances.

BLITZER: What action, if any, should be taken now, now that we know that Jared Kushner and dozen of other Trump administration staffers haven't been able to obtain permanent security clearances?

CASTRO: Well, whoever is in a role that requires a security clearance and cannot be granted a permanent one should be out of that role.

They should have to leave that role. And they shouldn't have any access to that level of classified information.

BLITZER: What, if anything, can Congress do about this?

CASTRO: That's a great question. I think congress should investigate it and look into what role we can play in fixing this for the White House, if they obviously can't fix their own mess.

BLITZER: Over the weekend, the president tweeted this. And let me put it on the screen.

"The Democrats sent a very political and long response memo which they knew, because of sources and methods and more, would have to be heavily redacted, where upon they would blame the White House for lack of transparency. Told them to redo and send back in proper form."

You have read the memo. Does it compromise, the Democratic response memo, does it compromise what are called sources and methods?

CASTRO: No.

We were very careful in how we drafted it. And we also invited the Department of Justice and FBI to work with us in making sure that no sources and method and no classified information was compromised. But the whole thing here has been a big distraction. Basically, you have Devin Nunes who is doing the president's bidding who is running a parallel-track investigation to distract that the real work of the committee, which is to get to the bottom of why Russia interfered with our 2016 elections and whether any Americans, including anybody in Donald Trump's circle, helped them do it.

BLITZER: What did the FBI and the Department of Justice say when you showed them that 10-page Democratic memo?

CASTRO: Well, we have basically seen their public statements on it. But as I understand, those issues are being worked through now.

BLITZER: Since the president sent the memo back saying, fix it. Now that Adam Schiff, the ranking Democrat on your working, he is working with the FBI to try to clean up the language a bit? Is that right?

CASTRO: I understand that the committee has been in contact with them. I don't know how far along they are in the process.

We are going to obviously get back to Washington tomorrow and I will have a better sense at that time.

BLITZER: Was the memo, the Democratic memo, the Schiff memo, as it is called, deliberately drafted in such a way, as White House officials are alleging, in order to create this problem, that you guys, the Democrats, you wanted to include sensitive classified information there so there would be, so that the president would be forced to say you can't release it?

CASTRO: No, not at all. In fact, this was never our idea.

For most of us, we thought that neither memo should be released. There shouldn't be a Republican or a Democratic memo, most of all because Americans are not able to see the source material behind what these memos are based on.

But once the Republicans released a false and inaccurate and political document, we took it upon ourselves to then correct the record. And that's what you will see, Americans will eventually see, hopefully in a form that's not completely basically illegible because it's so heavily redacted.

But that's what they will see in the Democratic memo.

BLITZER: Do you believe the president will eventually release the Democratic memo?

CASTRO: I don't know, Wolf. I hope that he does.

But, look, this is a president that basically in many ways is beyond shame. He is a president who plays politics at every turn. So I can't say for sure that the president will release it. I hope that he will.

BLITZER: A different issue, but I want your quick reaction. You're a member of the Intelligence Committee.

You saw "The New York Times"' report that the CIA seems to have been doomed by a Russian offering what were described stolen NSA cyber- tools and compromising information at the same time in President Trump. What concerns does this report raise for you?

CASTRO: Well, obviously, a lot of that is classified, so I can't expound on it too much. But I hope that Congress, including the Intelligence Committee, will have an opportunity to hear from the CIA and all of the intelligence agencies that were involved in what happened.

[18:15:10]

I know that the agency has said that part of the account of them purchasing Trump information was fictional. So, I look forward to an explanation from them about what happened.

BLITZER: Congressman Joaquin Castro of Texas, thanks so much for joining us.

CASTRO: Thank you.

BLITZER: We will have more on the breaking news.

The Trump team doing serious damage control right now, as President Trump supports a former aide accused of assaulting his two ex-wives. Why hasn't the president said anything publicly, though, about the alleged victims?

And the White House blames security clearance delays on the FBI and intelligence agencies. We will talk about that and more with Senator Amy Klobuchar of the Judiciary Committee. She's standing by live.

(COMMERCIAL BREAK)

[18:20:25]

BLITZER: The breaking news, tonight the White House is blaming the FBI for a lack of permanent security clearances for dozens of White House AIDS who handle classified information.

They include the former staff secretary Rob Porter, who resigned amid allegations of assault by his two ex-wives.

Let's get some more with Democratic Senator Amy Klobuchar of Minnesota. She's a member of the Judiciary Committee.

Senator, thanks for joining us.

SEN. AMY KLOBUCHAR (D), MINNESOTA: Thanks, Wolf.

BLITZER: The White House says it is the FBI's responsibility that so many staffers at the White House are working without permanent security clearances. Do you believe that's accurate? KLOBUCHAR: I have a hard time believing that, because talking to

Obama officials the in the past, they were able to expedite those clearances so that they could get done in a number of months.

I look at judges, U.S. attorneys in Minnesota. They have tended to get done, including under both the Obama and Trump administration, in a number of months from the FBI.

There is clearly a backlog. And I know Senator Flake has been talking about this. We need to look at that in Judiciary. But there is also a clear fact, from what I have seen in my years here, is that certain clearances, when they work at the top level of the government, are expedited.

So I find it just hard to believe that someone who had access to the president in that way and to very classified information wouldn't have a security check and that you wouldn't want them to have one, so that they would be able to better do their jobs.

BLITZER: Yes. The FBI clearly does all the background checks. And when there is a senior aide to the president, like Rob Porter, who was the staff secretary, or the president's son-in-law, Jared Kushner, they can indeed and they always do expedite the background checks.

But, clearly, Porter never got full permanent security clearances. And Jared Kushner and dozens of others, they don't still have those security clearances as well. The FBI provides the reasons why they're not getting them. It is then up to the White House to decide whether to keep these individuals and the White House decided to keep them.

KLOBUCHAR: That appears to me what has happened here. I do not know every detail, Wolf.

But I do know that nominees for judges in Minnesota seem to get done in three to four months. So I think you can expedite people depending on what the job is. And I would think top-level people at the White House could be expedited.

BLITZER: Twelve of your Senate colleagues, Senator, have written to the White House chief of staff, John Kelly, and the White House counsel, Don McGahn, asking about their handling of the allegations of domestic abuse by the former White House staff secretary, Rob Porter, and the security clearance, permanent security clearance still denied.

Do you share their concerns? I have read the letter. It is a very specific letter. They want specific answers.

KLOBUCHAR: Well, I do share their concerns.

And we're working on this through the Judiciary Committee. But, again, when you have someone with those series of allegations, I think there's a reason that there was not the security clearance that was granted.

BLITZER: Do you believe John Kelly should resign? And what about the counsel, Don McGahn? KLOBUCHAR: Again, John Kelly offered his resignation, as far as I

know, and that's something that he the president will have to work through. But for me, I just don't like chaos in government.

I like things that get done, whether it is the Republicans or the Democrats. And we have major issues before us right now, including this dreamer issue that has been pending, as you know, for months, since the president basically withdrew the Obama way of handling the dreamers.

And now Congress has to come together and make a decision and it would be very good to have a functioning White House at that time. And that's just one example of kind of the repercussions when you have all this chaos.

BLITZER: Democrats in the House, they're trying to release a memo countering the allegations in what is called the Nunes memo of impropriety allegedly over at the FBI.

Is that Democratic memo from your perspective necessary to correct the record on the FISA, the Foreign Surveillance Intelligence Act, process and possible bias over at the FBI?

KLOBUCHAR: Well, I want to see the memo. And I understand they're going back to work with the FBI.

Unlike the Nunes memo, Congressman Schiff did give this memo to the FBI ahead of time. And so to me it sounds like they're simply seeing how they can release it with Making sure they redact whatever classified information.

But to your point, I actually think it's great to have this response, but the Nunes memo itself contained enough nuggets to question what was I guess the partisan hypothesis of it.

[18:25:00]

And to me, the biggest thing in that memo is the fact that they pointed out that this investigation by the FBI began long before the dossier was an issue. It began when one of the Trump advisers, Papadopoulos, met with an Australian diplomat in a London bar and revealed to that diplomat that he knew the Russians had dirt on a presidential campaign. That would be Hillary Clinton's.

Rightfully so, the Australians reported to it our intelligence and then that investigation by the FBI was launched in July. And that's right there in the Nunes memo, making reference to it. So, again, while it will be good to see the other memo, and I will sure at some point it will be released after the FBI works on it with Congressman Schiff, but to me, the memo itself, the Nunes memo, contained enough information to disprove their allegations that somehow the FBI was doing something wrong here.

They were simply following what was a very important story. And that is that Russia was trying to influence the American election. BLITZER: Yes, you're right. James Comey, the then FBI director, he

started that Russia investigation in July of 2016 after that initial information came forward, came to them.

The president, as you know, maybe you don't know, I'll tell you if you don't know, he spoke today on the phone with the Russian President Putin. The CIA director has warned that the Russians will once again try to target the 2018 midterm elections that are coming up.

Do you think the president should actually impose the sanctions that you guys in the Senate passed 98-2, 419-3 in the House? He signed it into law reluctantly. He knew a veto would be overridden. Or do you think there is something that is stopping -- do you think that would stop the Russians from interfering again?

And why isn't he implementing, going ahead with new sanctions to deal with this?

KLOBUCHAR: So, the next selection is 266 days away, Wolf.

And even Rex Tillerson, the head of the CIA, Mike Pompeo, they have made it very clear that they believe the Russians are going to try this again. So, of course, we should impose the sanctions. Otherwise, Russia, in the words of James Clapper, is empowered and will do it again, not to mention other countries.

Secondly, they should pass the bill that I have with Senator Lankford, a bipartisan bill, which puts what is really 3 percent of one aircraft carrier, 300 some million dollars into helping our states to strengthen their election infrastructure.

One time, it was one party, one candidate. The next time, it will be another. We know they tried to hack 21 states. I don't know why we wouldn't want to protect ourselves from this new form of cyber- warfare, which is attacking our very freedom to vote, our election infrastructure.

I gave a speech on that today and joined former Obama Homeland Security Secretary Jeh Johnson, who said the same thing. This is part of our critical infrastructure. When we have this omnibus bill coming up, we're asking our friends across the aisle there to include some funding to protect election infrastructure.

BLITZER: Well, Senator, you passed the legislation bipartisan overwhelmingly back in August of last year. It is now February. There's nothing happened. The president is delaying imposing any fresh sanctions as a result. Still considering.

It is one thing to give a speech. But what if anything can you do about it?

KLOBUCHAR: Well, I think, first of all, we can help -- one, we can keep pushing the White House to put the sanctions in place. That has to happen.

But, secondly, we can protect ourselves. They have hacked us over and over again. And us doing nothing and just talking about other military solutions, when we one in front of us, which is to protect our elections. And it also means protecting ourselves from propaganda.

And that means making sure big social media companies are abiding by the same rules that we have for print and radio and TV. And that is that you have disclaimers. You have to disclose the ads. That's the Honest Ads Act that I have also authored.

So I think we need the protect ourselves from the Russian propaganda and ads and then we also have to really support our election infrastructure in the states. States are doing it themselves. Homeland Security is helping some.

But we know that we have at least 10 states that don't even have backup paper ballots if they're hacked. This is a bipartisan bill. Congressman Meadows, the head of the Freedom Caucus, is sponsoring a version of it in the House.

So, there is bipartisan support. But time is ticking, and we have to get this done.

BLITZER: The key question, it's a question we keep asking. The president remains silent personally. His aides, his top national security aides, they speak out. He doesn't on this sensitive issue.

Senator Klobuchar, thanks so much for joining us.

KLOBUCHAR: Thank you, Wolf.

BLITZER: There's more breaking news that we're following, the White House defending President Trump, saying he takes domestic violence very seriously. So, why can't the president say that himself?

And Vice President Pence raising the possibility of direct talks with North Korea before it fully gives up its nuclear weapons. Is the Trump administration changing policy toward Kim Jong-un?

(COMMERCIAL BREAK)

[18:35:03] BLITZER: We're following breaking news. The White House is now blaming the FBI and the intelligence agencies for the fact that dozens of members of the Trump team still lack full permanent security clearances, including top adviser and presidential son-in-law Jared Kushner.

Let's get more from our analysts and our specialists. And Phil Mudd, watch this moment from today's press briefing at the White House.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Why are high-level aides allowed to work with classified information without permanent security clearance?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Once again, that's a question that the FBI and other intelligence communities, they make that determination. That's not something that's decided by the White House. It's the same way that it has been.

(END VIDEO CLIP)

BLITZER: All right, Phil. You worked at the CIA. You worked at the FBI. Is it true, what she said?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Well, can we actually ask the right question? Which would be, if you're 13 months into the administration, why haven't they issued the clearances? I can give you a couple of reasons why clearances are delayed. No. 1, you're lazy. You don't do your paperwork or you don't do the background that you paid for it. For example, financial records, information about friends and family you may have overseas, in countries that are concern to the United States, places like Iran, Lebanon, North Korea.

Or the second issue you might want to look at is you find something when you're doing the background investigation that gives you cause for concern.

Let me give you kinds of stuff that we used to get at the CIA. Some of it was serious. Financial irregularities. You didn't pay your taxes. Spousal abuse. We saw this quite frequently. And then you get into lesser issues. We found a lot of people who had shoplifting issues.

So my question to her would be, if those security agencies are so slow in trying to do something that should be relatively easy for the FBI and the CIA to support the president, that is to give somebody security clearances. Why haven't you come one the information allows them to provide the clearances? Are you, A, lazy, or B, are you providing information that has led them to question whether the candidates that they're reviewing from the White House, really qualified for clearances. It's not that hard.

BLITZER: You know, Matthew Rosenberg, you're a national security expert. The FBI doesn't grant the security clearances. They provide information. It's up to the agency to decide what to do with it. I'll read a statement from the FBI: "The FBI does not grant, deny or otherwise adjudicate security clearances for individuals on behalf of these agencies. Nor does it make any security clearance recommendations. After the FBI has completed the background investigation, it provides the information to the agency adjudicator authority, who determines whether to grant or deny the security clearance."

So what Sarah Sanders said is simply not true. They get background information, but it's up to the White House to decide. And the White House clearly, after more than a year, decided these guys are not qualified to get permanent security clearances.

UNIDENTIFIED MALE: Well, you know, there's another alternative here. They may just say, "We don't want to make a decision."

If they make a decision that's positive, that's a record. They've created a record. You said this guy could have a clearance. Or if they say no, that's going to be a problem, if he ever gets clearance in the future: "Well, there's a problem with this guy."

They could just sit on this and let them have interim clearances indefinitely, and nobody makes any decision, and there's no records. You don't to have account for what happened. And you don't get held to account if it turns out you did give a clearance to somebody who had anything from a spousal abuse to a foreign contact. Or even, as Phil said, the shoplifting issues.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: And that may have been what happened. I mean, it's conceivable that they were just sitting on this and decided not to adjudicate it, you know, one way or another because nobody knew. Nobody knew.

LAURA JARRETT, CNN JUSTICE CORRESPONDENT: And plausible deniability, of course, is -- can be leveraged in future elections, et cetera, et cetera. And of course, we had that with Michael Flynn, the fact that past president had issued or authorized security clearance, and it was held against the past administrations. So perhaps they thought past was prologue, and they wouldn't going to repeat this, you know, pseudo mistake.

BLITZER: And Gloria, you've done some reporting on Jared Kushner. He hasn't gotten full-time permanent security clearances. We know in his initial application, he left off a whole bunch of foreign contacts.

BORGER: He left it blank.

BLITZER: Yes, he didn't report any of that. And there are other -- there have been other problems, meetings that he's had with Russians, for example. He's a senior adviser. He deals with Saudi Arabia. He deals with the Middle East, with Israel, sensitive issues and presumably, he reads that presidential daily brief, which is top secret.

BORGER: Well, you know, I don't know if he does read the PDB. But I will tell that you that, you know, this is a question. A lot of people are asking about Jared Kushner. Because Jared, you know, is somebody who is very involved in these sensitive issues.

And multiple times, I did the first story on it back in April. So that's a while ago. Multiple times he has had to update his -- his forms, and this is something his -- the transition took responsibility for and his lawyer said, you know, "We corrected it immediately." Then they had to correct it again. He refreshed his memory again.

[18:40:10] And so you know, the question is, is there any reason that these other clearances haven't gone through? And is it -- is it in any way related to Jared Kushner? Not getting his full clearance? We don't know the answer to that, and I don't know that we'll ever be able to get it.

BLITZER: It's pretty amazing, Phil, when you think about it, that the staff secretary presents the presidential daily brief to the president, reviews all these sensitive documents, doesn't have full security clearances. MUDD: It is. And let's make this real for a moment. Let me go back

to Jared Kushner, who's been appointed by the president to be sort of the point person on Middle East peace.

Let's look at a couple of specific issues. When you're dealing with Middle East peace, you're dealing with the Jordanians, the Israelis, the Egyptians and others. What if there are communications, for example intercepts with these officials? What if there are human- sourced reports from these officials that are classified, and they would be? Even State Department conversations with these officials would be classified.

Just going back to the couple -- past couple of days. There have been Israeli air strikes, highly sensitive as you know, on Syrian positions where we would have intelligence already. For example, satellite photographs of what the Israelis had picked. We might have intercepts of what the Syrians have said. You want to tell me somebody who's responsible for peace in the Middle East isn't allowed to have access to information like that? To me, the real-world implications are he doesn't know.

BLITZER: Yes, it's extraordinary, Laura, when you think about it, that officials dealing with these most sensitive issues really don't have full-time security clearances.

JARRETT: Well, they certainly don't in reality by paper. But they certainly are getting access from the president of the United States.

Remember, he is the one who decides whether something is going to be declassified. He's the person who can decide whether or not somebody sees it. And if it gets into the White House's hands, you don't have the same control over who is going to have access to the information.

So what is most astounding to people is that somebody in this very sensitive position would not be in a position to ever get a security clearance, but for the whim of the president of the United States. We can't rely on national security being at the pleasure of the president. Can we?

BLITZER: Well, if the president wants Jared Kushner sitting in the White House and have access to classified information, he'll stay in the White House and have access to classified information.

Everybody, stand by. There's a new effort under way by Democrats to get that -- their memo defending the FBI made public after they were blocked by President Trump.

(COMMERCIAL BREAK)

[18:47:08] WOLF BLITZER, CNN HOST: We're back with our analysts and specialists.

And, Matthew Rosenberg, you have an amazing story in "The New York Times" about how the CIA was working a Russian who supposedly had information about Donald Trump but also information about the National Security Agency that the U.S. government desperately wanted and they paid him a ton of money.

MATTHEW ROSENBERG, NATIONAL SECURITY CORRESPONDENT, THE NEW YORK TIMES: So, it's a weird one. You know, you have these National Security Agency hacking tools that went missing. And early last year, they're desperate to try and just figure out what's gone missing? This Russian appears and says, well, I can tell you everything we got.

There was an American intermediary. There's private businessman who's kind of handling negotiations. The CIA actually seemed reluctant throughout the entire process. At some point, a hundred grand was exchanged, given to the Russians.

BLITZER: They originally wanted -- he originally wanted $10 million.

ROSENBERG: He wanted $10 million.

BLITZER: Got it down to one million.

ROSENBERG: Yes.

BLITZER: They gave him $100,000.

BLITZER: You know, you have these months of negotiations, the NSA is sending tweets out, its coded messages. The Russian in the end turns with a bunch of what he claimed was compromising information on the president. The Americans -- the intelligence community said, no, thank you, we want no part of this.

So, that information is now sitting in Europe. It has never been assessed. It's never been looked. The American intermediary, the businessman, has it. You know, we don't know what's in there. We don't know if it's real or fake. And in the end, this Russian is going to disappear.

BLITZER: Phil Mudd, you used to work in the CIA. Take us inside an operation like this.

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: There's half that isn't weird. If you want information on devils, Wolf, you don't deal with angels, you deal with dirt bags. We dealt in my counterterrorism work every day with people you call in the intelligence business, walk-ins, someone who comes in to an official U.S. government facility and says, I have really interesting information. Ninety-nine percent of them nuts, are people who want money. One percent of them in our business, walk-ins, were some of the best informants we ever had.

So, in this case, we have somebody who walks in and may have a weird story, you're going to talk to them. The question I would have is, who paid the money?

I do not believe the CIA paid this guy 100 grand. Maybe the intermediary did for one simple reason, you can cut a paycheck for $100,000 but you've got to go through a validation and corroboration process beforehand. Intelligence means, I've got to validate that he is who he says he is. And on the corroboration part, even if he is who he says he is, I got

to determine whether the information he's providing is accurate. You can give him 100 grand, but not before you figure out whether he is a liar, Wolf.

BLITZER: Where 100 grand, Matthew, come from?

ROSENBERG: So, we were told it came from an indirect source. That didn't come straight from the CIA, but rather indirectly, that there was a payment that was reimbursed. There was some kind of complicated tab, but there was some kind of bona fides provided by this Russian, that they dealt with him before. They knew who he was, and that throughout the kind of spring and summer, he had provided some information to give him confidence and this was meant as a down payment. The deal was supposed to be a million dollars.

BLITZER: It sounds to me like a John le Carre novel in the works.

ROSENBERG: They told me about this.

BLITZER: Gloria, is the Democratic memo rebutting the Devin Nunes memo going to be made public at some point?

[18:50:02] GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Good question, Wolf. Look, I think you have Adam Schiff who is going to meet with the FBI about this either today or tomorrow. He's made it clear he wants this memo out. The president is on the record -- I believe the White House saying, yes, sure, we'll release it.

So, I think, you know, Schiff is going to try to get this out. I think at this point, it would be very difficult after Schiff goes back to the FBI for the president to then say, nah, we're not going to do it. Having said that, of course, Donald Trump can do anything.

But I think Schiff really wants this released and he's going to try and do whatever he can if the FBI has additional questions to get it done.

BLITZER: Laura, going to get your quick reaction. The other day, we learned that Rachel Brand, the number three at the Justice Department was leaving for the private sector. She would have been in charge of the Mueller investigation if Rod Rosenstein, the number two, had been fired.

LAURA COATES, CNN LEGAL ANALYST: And that's precisely what she feared. She did a cost-benefit analysis and found out there are writings on the wall and it may not be worth it. To be the target of the president's venom, to be the target of the president's wrath, to have the agency that's going to be overseeing the investigation always be tarnished, their credibility undermined. Not the most ideal platform to say I like this opportunity.

But, you know, she's had a choice to go to the private sector. She's now with Walmart, I believe it is. That was her choice to do so.

BORGER: A great job. COATES: What you're seeing now is that the chips are starting to

fall. And who is going to be left holding the bag, the same person that was already bipartisan supported, Rod Rosenstein, at this point in time. And he is qualified by all accounts up to this point. So, we'll see what happens next.

BLITZER: Yes, she's general counsel of Walmart.

COATES: Well, Arkansas, Washington, D.C., I guess.

BLITZER: She'll be making a lot more money.

BORGER: Pretty good job.

BLITZER: All right, guys. Everybody, stand by. There's more news we're following.

The Vice President Mike Pence makes a surprise statement about North Korea as he heads home from the Winter Olympics.

(COMMERCIAL BREAK)

[18:56:40] BLITZER: Vice President Mike Pence has opened the door to direct talks with North Korea.

Let's go to our Pentagon correspondent Barbara Starr. She's working the story for us.

Barbara, the whole world is now taking note of the vice president's remarks.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good evening, Wolf.

That's right. Even if there is however a change in diplomatic tone, would Donald Trump ever be ready to trust Kim Jong-un?

(BEGIN VIDEOTAPE)

STARR (voice-over): North Korea's propaganda at full blast.

Robotic Olympic cheerleaders grabbed attention. But it was Kim Jong- un's powerful and silent sisters at the games, now back home, that the U.S. has to consider a major player in North Korea's obvious diplomatic ploy.

On his way home, Vice President Mike Pence said economic pressure remains in place but also raised at least the possibility of U.S. talks with North Korea before Kim Jong-un fully gives up his weapons, telling "The Washington Post" his message: if you want to talk, we'll talk.

BILL RICHARDSON, FORMER U.S. AMBASSADOR TO U.N.: If it's correct, it's a breakthrough because our previous position was, there have to be concessions on the nuclear side before we sit down with North Korea. It's a concession that basically says we are ready to talk without pre-conditions. STARR: Secretary of State Rex Tillerson emphasizing the ball is in

North Korea's court.

REX TILLERSON, U.S. SECRETARY OF STATE: We're going to need to hash some discussions that precede any form of negotiation, to determine whether the parties are, in fact, ready to engage in something this meaningful in order for us to then put together the construct of a negotiation. So, we'll just have to wait and see.

STARR: For North Korea, it's about the need for cash.

GORDON CHANG, AUTHOR, "NUCLEAR SHOWDOWN": What the North Koreans want with the Olympics is to get some relief from sanctions because they're not only the U.S. sanctions but they're the U.N. ones as well.

STARR: Pence did make clear that talks depend on a move towards denuclearization. Just as President Trump indicated he might be willing to deal with other nuclear nation on weapons arsenals.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Frankly, I'd like to get rid of a lot of them. And if they want to do that, we'll go along with them.

STARR: Defense Secretary James Mattis skeptical about Kim.

JAMES MATTIS, U.S. DEFENSE SECRETARY: It's too early for me to tell what he'll do because in the midst of all this, he ran a military parade that highlighted his ballistic missiles.

STARR: In the hours after that parade, U.S. spy satellite swung into action, tracking where those missiles went and looking for any signs of preparation for future missile launches.

(END VIDEOTAPE)

STARR: And if it's come to U.S. military action against North Korea, the Pentagon has plenty of firepower to carry it out. They are developing a new stealth bomber and a new 30,000 pound bomb that could get to North Korea's buried underground weapon sites -- Wolf.

BLITZER: But the pre-conditions, Barbara, for talks are something North Korea almost certainly would never agree to, right?

STARR: Well, there's absolutely no indication that they are giving up their weapons program. And indeed, just a few days ago, the CIA director said he is very concerned they could be just months away from being able to put a warhead on a missile that some day could reach the United States, Wolf.

BLITZER: All right. Barbara, thank you. Barbara Starr over at the Pentagon.

That's it for me. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.