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CNN Exclusive: FBI Counterintel Investigating Ivanka Trump International Business Deal; White House On Whether Trump Wants To Fire Sessions; Stock Market Drops After Trump Announces Tariffs; Dow Sinks More than 400 Points After Trump Announces Tariffs. Aired 7-8p ET

Aired March 1, 2018 - 19:00   ET


[19:00:12] ERIN BURNETT, CNN ANCHOR: OutFront next, breaking news, Ivanka Trump under FBI investigation tonight. What was the first daughter's involvement in the financing for a key Trump hotel?

And more breaking news, the Dow plunging 420 points after Trump defies top advisers, announcing massive tariffs. Did he just force American car prices up and cost auto workers their jobs?

Plus, CNN learning that U.S is closer to war with North Korea. Has Kim Jong-Un crossed Trump's red line? Let's go OutFront.

Good evening, I'm Erin Burnett. OutFront tonight, the breaking news, White House in crisis. We have two major stories unfolding at this hour.

First, President Trump's daughter, and most influential adviser, Ivanka Trump is under FBI scrutiny tonight.

Sources telling CNN, the counterintelligence officials are looking into negotiations and financing involving the Trump International Hotel and Tower in Vancouver. The scrutiny from the FBI could stand in the way of the first daughter getting full security clearance.

The 69 stories skyscraper in question features a trademark spa, the Ivanka spa opening just today after President Trump took office and Ivanka was the key in the development of that building, meeting with the developer in the same board room that was featured in The Apprentice. And in 2014, there she is, talking about her vision for the $360 million venture.


INANKA TRUMP, SENIOR ADVISER TO THE PRESIDENT: We wanted the hotel to be very modern, very cool, but in a timeless way that's appropriate for our brand.


BURNETT: Tonight's news coming just after Ivanka's husband Jared Kushner saw his security clearance stripped, downgraded, essentially barring him from seeing intelligence at the highest levels of secrecy required for much of his job.

Also breaking tonight, the President's relationship with his attorney general. It's unbelievable what's happening here now. The White House today refusing to go on the record to confirm that the President actually is confidence Jeff Sessions.


UNIDENTIFIED FEMALE: The president want to get rid of attorney general?



BURNETT: Not that I know of? Sarah Sanders is not afraid to come out and say no. She wouldn't do it. Not an endorsement to say the very least.

We are told the President is furious that Sessions fought back against him yesterday after he attacked Sessions and just his Justice Department.

We have so much to get to tonight Kara Scannell is OutFront live in Washington, Pam Brown is at the White House.

And I want to start that with you Kara on the Ivanka Trump news that you are breaking. This deal, the Trump International Hotel and Tower in Vancouver now the subject of an FBI scrutiny investigation, what can you tell us?

KARA SCANNELL, CNN CORRESPONDENT: Well, Erin, we know the FBI counter intelligence division has been looking at this deal, the contacts and financing around it. But we know Ivanka Trump was point person on the deal. She worked very closely with the developer who is the son of one of the wealthiest families in Malaysia.

And when you are going through a security clearance, and background checks to work in the White House, any foreign contacts are going to be of interest and especially when you have a business that is as complicated as the Trump organization. So, that's one of the issues. And that may be a hurdle for Ivanka Trump and gaining her full security clearance.

Now, her lawyer is pushing back strongly against our story. And let me read you the statement that he has given us. He says, "CNN is wrong, that any hurdle, obstacle, concern, red flag or problem has been raised with respect to Ms. Trump or her clearance application. Nothing in the new White House policy has changed. Mrs. Trump to do the same work she has been doing since she joined the administration."

So, Erin, you can see they are pushing back pretty hard on this. But we do know the FBI counterintelligence is looking into this.

BURNETT: So obviously, that's the reporting and it's under scrutiny. Now, Kara, Ivanka, obviously, has been involved in a lot of business deals and all of them could be relevant to her security clearance. Why is this one specifically drawing interest from FBI investigators and could other deals as well?

SCANNELL: Well, we don't know exactly what is triggering interest in this particular deal. But we do know that the FBI is concerned about contacts that the Chinese have had with Jared Kushner, her husband, we reported last week that they were looking into conversations he had with prominent Chinese investors concerning one of his properties.

"The Washington Post" also reported that counterintelligence had warned Jared Kushner and Ivanka Trump about contacts that they had had with other Chinese officials. So, that that might be why this one deal is on their radar. And it is certainly possible that other deals to be under scrutiny as well.

The Trump Organization is very complicated. They do deals, this licensing and marketing arrangement with a lot of international investors, and a lot of their properties have luxury condos which involves a lot of foreign money coming in through that also.

BURNETT: Right. All right, thank you very much, Kara. And you brought to mind to remind everyone take a look at that New Yorker article, when (INAUDIBLE) and Ivanka Trump if you want to get a sense for Trump international deals and her role in them.

[19:05:03] Pamela Brown is OutFront at the White House. And Pamela today the other big story, the President ignoring questions about attorney general. But the reporting from you, he is clearly, clearly not happy with Jeff Sessions tonight.

PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, that's right. The public spat between the two men, Erin, and it seems to have reached to this boiling point with the president's tweet yesterday calling the attorney general disgraceful for having his inspector general rather than DOJ lawyers investigate alleged FISA abuses.

And for the first time the attorney general shot back with the strongly worded statement saying as long as he's the attorney general, that he will do his job with integrity under the law and the Constitution.

Now, we are told from sources that the president privately fumed in the Oval Office about the attorney general's statement yesterday that he has talked about wanting to replace him, but the president realizes that the reality is much tougher to get another attorney general confirmed. And so this public spat has been going on for months, ever since the Attorney General Jeff Sessions recused himself from the Russia probe. The president has been unhappy about that and he's really held this grudge against hip.

But today, Erin, the two men were in the same room at the opioid event and the president acknowledged Jeff Sessions saying that they were working together to bring lawsuits against drug makers, those that make opioids. And just last night in the wake of all this, the attorney general went out in Washington to dinner with two other top DOJ officials in what was widely seen as a showing of solidarity, showing of unity. And today, though, you saw they are at the press briefing. Sarah Sanders, the press secretary, far from certain in terms of Jeff Sessions' future. She would only say not that I know of when asked whether the president's plan to get rid of Jeff Sessions. So we'll just have to wait and see how the saga plays out, Erin.

BURNETT: All right. Pamela Brown, thank you very much. And I want to go OutFront now the Democratic Senator Chris Coons is on the foreign relations, judiciary, and appropriations committees. We'll view obviously in all of these stories and the vice chair of Senate Ethics Committee. Thank you very much, senator. I always appreciate your time.

I want to talk about Jeff Sessions and the news there in a moment. First though the breaking news Ivanka Trump under FBI scrutiny. Our security clearance still under review in part because counter intelligence officials of the FBI are looking at, at least of her international business deals, the Trump Hotel in Vancouver. Do you have any senses to why this particular deal or Ivanka Trump are under scrutiny?

SEN. CHRIS COONS, (D) JUDICIARY COMMITTEE: Erin, I don't know why this particular deal might have attracted FBI scrutiny. But I will just say, it is remarkable that we have a family like the Trumps who have such complex global business dealings that have subjected them to repeated scrutiny. And where President Trump has failed to be transparent with the American people to release his taxes, to make it possible for us to understand the business dealings that he and his immediate family members have been involved in, and I'm not surprised that this is among many of the complex foreign transactions that are being looked at in the course of a number of investigations.

BURNETT: Right. And, of course, obviously, you got wealthy foreign buyers buying into those hotels, whether doing so, you know, implicitly or explicitly to curry favor. These are very real questions and very important ones.

Jared Kushner of course has been stripped of his top security clearance. Senator as you know "The Washington Post" is reporting officials from at least four countries, Mexico, Israel, China and the UAE have talked about ways to use Kushner's financial difficulties, lack of experience to manipulate him. Should Jared Kushner, should Ivanka Trump be granted these top level security clearances at this point when it's been a year and they haven't been able to clear them?

COONS: Well, I think General Kelly did the right thing in downgrading Jared Kushner's security clearance given the wide range of unresolved issues and the repeated problems Jared has had with being fully transparent in the background check process that he's been going through in order to get his clearance.

He either forgot to disclose or misrepresented a number of meetings that he had with foreign officials. And recent reporting that suggests that Jared Kushner got $500 million in loans for a critical business deal that he was trying to advance after folks attended a White House meeting with him raises even more concerns about potential conflicts of interest.

It's important that we have in the presidency and in the White House and senior officials who are intimately involved in crafting the president's foreign policy, folks who are not just avoiding conflicts of interest, but who aren't creating constant appearances of conflict of interest.


COONS: The reporting you just referenced, Erin, suggests that some of our foreign allies and adversaries have taken note of this potential weakness.

BUTNETT: So, should Jared Kushner even be in this job because by the standard you're raising he is raising questions about?

COONS: He raises real concerns I think. I think General Kelly has made it clear that he's got concerns about whether Jared should be in the middle of some of the most important national secrets. And I don't see how it's possible for Jared to continue to carry forward the mission the president's given him to craft and to unveil a new Middle East piece plan if he doesn't have access to top secret information.

[19:10:15] BURNETT: Sarah Sanders you heard just -- I don't, you know, refuse to confirm that the president of the United States is confidence in his attorney general, not that I know of, no plans that she's aware of to get rid of him, that's as far she would go. You and I both know she's willing to go much farther. She obviously has a reason for not being willing to commit to that. Do you think the president is trying to get rid of Jeff Sessions (INAUDIBLE)?

COONS: Well, the striking thing about the president and the Department of Justice is that President Trump seems to have never understood that this is not his personal legal team. The Department of Justice swears allegiance to the constitution and represents the people of the United States in court and advocates for the nation's interest not merely for the president's interests. And he has repeatedly picked fights with the attorney general, with the deputy --


COONS: -- attorney general, with the special counsel. Attorney General Jeff Sessions is correct that the right thing to do was to refer the matter that the president raised about surveillance to the inspector general, to the I.G. And the president is wrong to be criticizing the attorney general publicly and privately this way. And I am concerned that it could lead not only to the firing of attorney General Sessions but then to the undermining and eventual firing of special counsel Robert Mueller. We in the Senate should be taking stronger steps to protect the special counsel. 2 BURNETT: Which of course hasn't happened. But before we go, quickly, I mean if you were Jeff Sessions, would you take the abuse that your boss deals out regularly, you know, calling weak, Mr. Magoo (INAUDIBLE) very weak. Is Sessions right to stay and take it or should he quit?

COONS: It's unprecedented to have president so publicly abusing his attorney general. I can only guess that what attorney general Sessions is doing is staying to stand up for the independents of the department of justice and I respect his doing so if that's what's motivating him.

BURNETT: All right. Senator Coons thank you I appreciate your time tonight.

COONS: Thank you, Erin.

BURNETT: And next breaking news the White House on the verge of another major departure. It's hard to believe we're even saying this here. Sources telling us National Security Adviser H.R. McMaster could be gone by the end of the month.

Plus more turmoil of the heat over Jared Kushner is willing and dealing its getting hotter and hotter. Can he still hold a job at all in the White House?

And the stock market plunging today on the president's plan for massive tariffs. Trump's national security team, members of his own party, all angry.


[19:16:09] BURNETT: Breaking news, what could another major exit at the White House tonight? We are learning that the National Security Adviser H.R. McMaster is likely to leave the White House by the end of the month. This is according to an administration official telling CNN.

Tensions between the president and the three-star general has been escalating. Most recently the president ripped into McMaster over remarks he made regarding Russian interference in the election. McMaster saying it happened. The president obviously throwing mud in that. Sources say the president will ultimately make the final decision. If McMaster leaves it will leave the administration looking for a third national security adviser since the president took office.

Jim Sciutto is OutFront. Jim look, this is pretty stunning. It's not just the track record of this administration, but you're talking three national security advisers in just over a year. What are you learning about McMaster's likely exit?

JIM SCUITTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Erin, my colleague Barbara Starr and I were told that General McMaster could leave his position in the White House by the end of the month or in the near future, multiple sources telling CNN. In addition it is becoming more likely that the McMaster will not return to the military and possible four-star job there, but rather ultimately retire as a three-star general. Among the names being considered to replace McMaster are Safra Catz, she's a CEO of Oracle, a former member of the Trump transition team, John Bolton, former U.S. ambassador to the U.N. We've also been told that Stephen Biegun, the Vice President at the Ford Motor Company as well as the former senior staff member to kind of at least arise in the George W. Administration considered. Although, Ford is telling us that he has not spoken to the White House about his position.

The NSC spokesman Michael Anton has dismissed these reports using favorite phrase of the White House, fake news. We've reached out to the Pentagon Secretary Defense James Mattis' office they are referring all questions regarding such personnel back to the White House.

I should add that at least one senior military officer currently serving has been informally approached about whether he would be interested in the job. He has said no because of this officers believe that he could not fill what is essentially a political job while serving in uniform, that's according to a source familiar with the situation.

I should add this caution, and this is perhaps a smart one in the current goings on in the White House that President Trump will ultimately make the final decision here and these kinds of decisions could always change.

BURNETT: Right. Well and of course he want to call it fake news, so maybe he delays a little bit its all that they can say. I mean these are the games that he plays. All right. Jim Sciutto, thank you very much.

OutFront now CNN military analyst Major General James "Spider" Marks, former Assistant Secretary for Department of Homeland Security Juliette Kayyem and Former Advisor the Four Presidents David Gergen, thanks to all.

General Marks, obviously, this is a big development when you think about just the departures that we've had. You know, you look at Hope Hicks announcement last night, that H.R. McMaster could be gone by the end of the month. What's the significance of this? A third national security adviser we'd been talking about in about a year.

MAJ. GEN. JAMES "SPIDER" MARKS, CNN MILITARY ANALYST: Well, let's be frank, you know, organizations like this have turmoil in terms of personnel as a matter of routine. The challenge that we have with this is the context. And that is look what's happened over the course of last several months. Look what have -- the events that have occurred just in the last couple of days. And now you have the discussion that H.R. McMaster may be departing.

The concern that I have primarily is the continuity of what has really been in my mind. One of the solid aspects, and one of the solid policies that this administration has been able to advance, and that is globally trying to reassert American influence in a way that I think it's fair to say had withered over the course of the past few years. Now did we have some bumps in the road? Absolutely we did.

But were -- have we've been able to reach a point where we are now on the peninsula where many Korean peninsula where many --


MARKS: -- would say, look we're on the verge of potentially having a war, but at the same time we have North Korean now that are raising their hands saying we'd like to have some talks. So I think there're advances, how do we make that transition to make it smoothly. That's the question.

[19:20:12] BURNETT: And yet David to this point about smoothly, you're talking about three national security adviser in the year, a president who has been feuding with his national security adviser. You know, CNN reported me he was on the brink of letting McMaster go last fall and decided not to do it only because he thought he would look bad doing it within the first technical year of his term.

He's had disdain for McMaster just in February when McMaster blamed Russians for hacking election, Trump took to Twitter to humiliate him, saying quote "General McMaster forgot to say that the results of the 2016 election were not impacted or changed by the Russians and that the only collusion was between Russians and crooked aides the DNC and the Dems." That was part of his tweet.

I mean David, with this context, what do you make of the fact that the president could be at this point right now?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: General Marks is right that it is routine to have people coming and going including from the national security post. But what is unprecedented is unraveling we seem to be watching coming from this White House and from this administration. Just, you know, within hours after Hope Hicks has announced her resignation, we have the -- we just reported on Jeff Sessions may be leaving -- now we have understanding that McMaster may be leaving.

There are rumors swirling that Kelly could follow him out the door. There are rumors about Gary Cohen leaving. And if you look at all that we -- I don't know of any administration which has ever had that much turmoil and that much sort of, you know, falling of the pillars of the government, you know, in question.

Now, to be sure, I think as Jim Sciutto said, this could change. The president could -- you know, or some weeks ago we all thought Secretary of State Tillerson would be gone by now. He seems to be more solidly in place than he was before.


GERGEN: So it could change. But I think we are seeing something that's very fundamental to governance and that is an unraveling. It includes the president's daughter Ivanka Trump and now Jared.

I don't think -- I think Jared has no place in the White House if he can't have top secret clearance. And he would be better off himself if he stepped back from it and go and worked with his companies and get them back on better footing. You now, there is a lot here that goes to the fundamental capacity of this White House to govern.

BURNETT: Juliette, on this point, the Trump administration has lost about 34% of its "A team" according to Brookings in year one, that's one in three. OK. Now just so everyone can understand when General Marks and David used the word unprecedented this is why, perhaps. And for Obama in year one it was 9%. For George Bush in year one it was 6%. Reagan was the only one close even close at 17, 34%.

Juliette, the question is can the president afford to lose McMaster? In light of the reporting Jim was just sharing that perhaps some of the -- an effort to reach out to possible replacement has been rebuffed?

JULIETTE KAYYEM, FORMER ASSISTANT SECRETARY DEPARTMENT OF HOMELAND SECURITY: In my mind, there's no question McMaster is going to be gone because we've seen this story before where there starts to be the rumors, and then they deny it, and then someone is gone. I think the reason isn't just simply that he's gone head to head with President Trump. It's what he's gone head to head about.

And that's about Russia. This is the area that Donald Trump will not take -- you know, will not allow others to sort of, you know, lead the talking points which McMaster clearly did when he spoke about Russians clear influence in the election. So, in my mind this is, you know, we're just -- we've done this dance before. McMaster is going to be gone and someone else will be come in.

And then from the perspective of two different parties, this means a lot, no just the White House. The other agencies and civil servants who work in these agencies, who work the with the national security staff, this is very hard to get around. This is chaos at the top level and it's a public chaos.

That's the difference. It's public chaos. The other is international community, and I don't just mean our enemies, North Korea. I think about the Canadians all the time, Mexico all the time, but, you know, the Great Britain all the time. They are looking at this and they are thinking there's nothing is holding, you know, we're unraveling. And that's a reflection of the United States. Not a reflection simply of Donald Trump's governance standards.

BURNETT: And David Gergen, you mentioned that you don't think that Jared Kushner can serve in the White House without his top security clearance in any capacity. What do you make of the reporting tonight from our Kara Scannell that Ivanka Trump is under FBI scrutiny for her -- and her security clearance has not gone through, which has been almost a year since she joined the White House. What do you make of that?

GERGEN: Well, the larger lesson is that you cannot turn the White House into a family business and we've never seen that before either. And a lot of people warned against it, you know, tons of people warned against it before it started. So they're going to have inevitable conflicts of interest. And here we are. And both individuals I'm sure they're angry. I'm sure they feel put upon that people are out to get them. [19:25:09] But you cannot take a very complex business relationship with you into the White House and not begin to find conflicts business relationship with you into the White House and not begin to find conflict of interest. Especially when you are trying to help are your companies or you're having private conversations with --


GERGEN: -- key people and suddenly there's money coming in the door. That creates suspicions.

BURNETT: Yes. All right. Thank you all very much. I mean the sort of --

GERGEN: Thank you.

BURNETT: -- definitional. And the company has your name on, it doesn't matter whether you are technically running it or not. People are going to give you money or bail you out or do all kinds of offers to try to curry favor with U.S. It's just the way it is. Thanks all of you.

And next the stock market plunging today. President sparking the fall because essentially do the first (INAUDIBLE) what could be a major trade war with massive tariffs and his own party is angry. And optics, terrible for Jared Kushner. We've got new reporting tonight on exactly what he's doing with his family business and possible benefits from his day job at the White House.


BURNETT: New tonight the Dow plunging more than 400 points after President Trump announced massive tariffs on steel and aluminum imports in a hastily arranged meeting at the White House.





TRUMP: It'll be 25% for steel. It'll be 10% for aluminum. And it'll be for a long period of time.


BURNETT: Very clear. Now the market plunging because the 25% charge on steel just as an example a tariff there.

According to economic analysis and what's happened in the past would mean steel prices would go up for things like cars in America. And, of course, other countries are likely retaliate which would help American exports. The bottom line is the tariffs usually means two things, rising prices

in America and American job losses which is a terrible combination. And that is why the president is standing very lonely on this issue.

His secretary of state, Rex Tillerson, secretary of defense, Jim Mattis, national security adviser, H.R. McMaster, and his director of the National Economic Council, Gary Cohn, are all against Trump's tariff. Speaker Paul Ryan came out against them. Mike Lee, the senator from Utah, said the tariffs are, quote, a huge job-killing tax hike on American consumers. 2Orrin Hatch, Republican, saying, quote, I don't believe in tariffs. They don't work well. Secondly, it creates tariff wars. And I just don't thin that's the way to go.

And I could go on and on. And don't need to go to Democrats. Stick with people who support this president, they hate it.

OUTFRONT now, former adviser to the Trump campaign, Steve Cortes. He's been in West Wing meetings the past few days, including today. And national affairs correspondent for "The Nation", Joan Walsh.

Thanks to both.

Joan, you're closest to me, I'll start with you.


BURNETT: Sources say members of the White House were caught off-guard by this announcement today and they expect it to happen. It was a hastily arranged meeting. The White House, of course, denies it, says it is not at all the case.

WALSH: Right.

BURNETT: Here is Sarah Sanders.


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: This is something, again, that the president has been talking about for a long time. It's not a surprise. And we are going to continue doing what we can to protect American workers.


BURNETT: Not a surprise. You buy it?

WALSH: Come on. Of course not. He's been talking about it for a long time, that's true. But the meeting was not on the agenda. We would have known about the meeting being on the agenda. He took everyone by surprise. He took his own administration by surprise, as you showed.

And I think he's taking the world by surprise and maybe himself, because he's been crusading against Chinese steel, but number one importer is Canada. Canada, a great partner, a great ally, a great trading partner, they are outraged. Chinese don't even rank in the top five steel imports to this country.

So, it's sort of -- it's this cockamamie, you know, shoot first, aim later. I felt like it was meant to sort of distract from the other crazy headlines, but I don't know that he has the presence of mind to actually plan to do that. But it's nutty.

BURNETT: He's gone against -- I mean, going against all of his experts on this issue and his allies in Congress.

STEVE CORTES, CNN POLITICAL COMMENTATOR: Well, I wouldn't say all. But, by the way, I think this is important.

BURNETT: Peter Navarro obviously on his side, this one.

CORTES: Well, I'm on his side.

WALSH: On this one, too.

CORTES: Listen, here's the thing, when the president spoke -- by the way, consumer confidence just hit 17 year high. That's not unrelated to what President Trump is doing in terms of taxes, in terms of trade, in terms of regulation. Part of what he described when he ran for president, part of what he described in his inauguration, he was roundly mocked for this was American carnage, and he talked about the carnage of what globalism has done to the American worker and he vowed to protect the American worker against unfair trade deals.

China has been taking us to the cleaners for decades.

WALSH: But this doesn't hurt China, Steve. This barely hurts, China.

CORTES: And president said enough. Our trade deals are going to be fair. We demand reciprocity, we demand fairness. And, by the way, stop stealing our intellectual property.

OK, on these terms -- here's the thing, Joan, even if this specific deal isn't China centered, the point is President Trump is telling the world, America will no longer be the willing victim in terrible trade deals because the American worker has suffered terribly.

WALSH: We also need to notice that Donald Trump used a lot of Chinese steel in his own buildings. So the time to stand up for the Chinese might have been when he was still in the building business. Right now, he's sending a big tough message to some of our greatest allies.

And I think it's so interesting, you are such a loyal guy, you are great. But you come in here and want to talk about all the leading economic indicators. We are never here talking about them because the president is constantly stepping on his own message.

BURNETT: To this point, I want to talk about Gary Cohn, he's against -- he's very much against these tariffs and has been a voice of political moderation, more traditional GOP policies in the White House. He lost, OK, and he lost big on this, Steve, there's no question about it. You were with him today. He's a former CEO of Goldman Sachs. He's seen by some as perhaps the

last and loudest voice tempering Trump's behavior on issues like this. "Politico" is reporting this could be the final straw.

So, now, you have Hope Hicks going. You have the report McMaster could be gone soon. You have -- who knows --

WALSH: He wants Sessions gone.

BURNETT: Gary Cohn could be leaving. How important is Gary Cohn?

CORTES: Listen, I think he's important. But at the same time, you know, I saw in your last segment, Erin, there was a lot of talk about unraveling, right, that phrase was used I think five or six times at least in the last. You know what is not unraveling, American economy. Consumer confidence.

You know who is unraveling? ISIS. OK? That's what I want to talk about.

In terms of the administration, is it in chaos, no, I don't think so at all. I'll tell you this, I was in the West Wing yesterday, West Wing today, there is incredible confidence, like the American people have confidence, in what we are doing for this country, in cutting taxes, in cutting regulation, and growth, and optimism.

[19:35:07] BURNETT: So, let me play for you then, because Anthony Scaramucci spent time there too.

And he now came on this morning.

CORTES: A bit of time.

BURNETT: Yes, a bit of time, but he's back and forth all the time with the president. OK. He is saying the opposite of what you're saying. Here's what he said this morning.


ANTHONY SCARAMUCCI, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR: Morale is terrible. The reason why the morale is terrible is that the rule by fear and intimidation does not work in a civilian environment.


BURNETT: It's a slam of John Kelly. But that's his comment about -- you are saying there is confidence.

WALSH: Everyone is reporting that morale is low.

BURENTT: So one of you guys is totally out of the loop.

CORTES: One of us is nuts, obviously, right?

WALSH: Hundreds of thousands of dollars in legal bills.

CORTES: Anthony is a friend of mine. He's dead wrong on this, OK?

General Kelly is an amazing leader. He's had an amazing career. He's doing an incredible job in the White House right now.

Here's the thing, in New York newsrooms, in the Acela corridor between New York and Washington, there is much consternation. Out there in America, get away from Washington, get to Wichita, get to Washington state, out there in America, confidence is growing. Things are going great. People are getting more money in their pay home checks. People are taking risks on new businesses, business formation, small business optimism is at all-time high.

BURNETT: So who do you believe Steve or the Mooch?

WALSH: It's hard to believe either. Steve is sitting here. I guess I believe the Mooch. Obviously, he has a conflict of interest. He hates Kelly. He knows he's gone because of Kelly. So that does impeach him to some extent, right? Look at where his comments are.

BURNETT: Yes, fair.

WALSH: On the other hand, everybody is reporting about chaos and morale. We can see chaos. We can see what's going on with Jeff Sessions. We haven't mentioned the names Jared and Ivanka in this segment with Ivanka's new investigation into her Vancouver deal and Jared having raised $500 million from countries and companies that came to visit him when he had this job. These people don't belong in the White House either.

BURNETT: All right. Well, thank you very much. You mention that. We are going to be talking about that in a moment important story tonight. Did Jared Kushner's company land mega loan after key meetings at the White House? If so, it's a stunning story of corruption. New details ahead.

And California law enforcement agents are knocking on doors looking for guns and, well, it's catching some people completely by surprise.


REPORTER: How do you feel right now?




[19:40:51] BURNETT: Breaking news, the FBI investigating one of Ivanka Trump's business deals. Sources telling CNN that U.S. counterintelligence officials at the FBI are scrutinizing the negotiations and financing surrounding the Trump International Hotel and Tower in Vancouver. FBI probe could be a hurdle to Ivanka Trump getting full security clearance which she is working in the White House without. This is the White House who's defending her husband, Jared Kushner,

after it was revealed his family businesses scored half a billion dollars, hold on, half a billion dollars in loans, after Jared Kushner sat down with company heads for White House meetings. It's almost like you have to stop and think for a second about the huge significance of that statement.

Cristina Alesci is OUTFRONT with the report.


CRISTINA ALESCI, CNN CORRESPONDENT (voice-over): This Chicago skyscraper is majority owned by Jared Kushner and his family. Mortgage documents show a fund link to New York City private powerhouse Apollo Global Management provided them with $184 million mortgage for the building. Apollo was founded by Josh Harris.

Months earlier, that same executive was in talks with the White House about an advisory role, according to a source with knowledge of the discussions. Jared stepped down as CEO of his family's business Kushner companies since going to Washington. But questions of conflicts still persist.

Also at the White House, Jared met with Citibank CEO Michael Corbat last year, around the same time Citibank made $325 million loan to Kushner companies and its partners. Spokespeople for both Apollo and Citibank said their executives were not involved in granting those loans.

NOAH BOOKBINDER, EXECUTIVE DIRECTOR, CITIZENS FOR RESPONSIBILITY & ETHICS IN WASHINGTON: You also have to worry about whether he has an incentive to use his official power, to use the power of the White House to help people that he has business relations with.

ALESCI: A Kushner company spokesperson said there was nothing inappropriate and stories like these attempt to make insinuating things that exist to disparage the financial institutions and the companies involved.

Just last week, CNN reported that special counsel Robert Mueller is inquiring about Kushner approaching foreign investors during the transition, including a Chinese insurance company, and a Qatari investor for the family's biggest bet, 666, 5th Avenue. The building hasn't generated enough profit to cover its debts.

HITEN SAMTANI, EXECUTIVE DIRECTOR, DIGITAL THE REAL DEAL: $1.8 billion was record price for Manhattan skyscraper. It was a highly, highly leveraged deal, which means the income in the building wasn't even close to covering what they would have to pay in interest. So, it was a deal that a lot of people say was doomed from the start.

ALESCI: About $1.2 billion in debt on the tower comes due next year. But sources say that negotiations with lenders and new sources of capital need to start soon. Kushner companies confirmed it's in talks to buyout partner in the project but the question remains, how will they pay for it? When asked by CNN, they declined to comment.

SAMTANI: They are always looking for loans and construction loans, and development loans and acquisition loans. So, I would say it's an active business.

ALESCI: Kushner companies also needs to find investors for a development in Jersey City. The company scuttled a plan to use a government program that would help foreigner get U.S. visas in exchange for investment after Jared's sister was reportedly referencing him during a presentation in China.

Another deal raising questions, "The New York Times" reported that Kushner's companies received $30 million from one of Israel's largest financial institutions just before Jared's first diplomatic trip to the country.

Last week, "The Washington Post" reported officials from at least four countries, Mexico, Israel, China and the United Arab Emirates discussed ways they could manipulate Jared because of his family's finances. The constant search for capital, which is normal for any real estate firm, casts a cloud over Jared's White House role, because like his father-in-law, he has refused to fully divest from his holdings.


ALESCI: Erin, bottom line is that Jared Kushner and his family had complex holdings all throughout the United States.

[19:45:03] And I remember sources telling me early in the transition that Jared Kushner and his advisers were essentially trying to reassure U.S. government ethics watchdogs and agencies that these deals would not be a problem because they are static deals, long-term, and boring, and these examples show anything but. And this leaves Jared open to potential conflicts and vulnerabilities so long he's in the White House and possibly beyond that.

BURNETT: All right. Thank you very much, Cristina. That report, I mean, it's just pretty incredible when you think about it.

"Washington Post" columnist and CNN political commentator Catherine Rampell is with me now.

I mean, when Cristina is laying that out half billion dollars in loans after meeting with people at the White House. Hard to wrap your mind around that that actually even happen. How bad is this?

CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: Oh, it's terrible. And what's especially terrible is that we don't know the terms of those loans. And you were in financial journalism for a long time, you know, it's easy to hide things in complicated arrangement like this. You know, what is the right interest rate that should have been charged on these loans? If the right interest rates, you know, let's say the prevailing rate is 4 percent, they charged 2 percent, that's $100 million loan, that's a $2 million bribe, right? I mean, we don't know what these terms are. And what's the right rate given that, you know, this company might be willing about to default as well?

So, there is a lot of ways that you could have hidden a bribe in these kinds of arrangements which is exactly why, A, we should know the terms. But, B, more importantly he should have divested to begin with.

BURNETT: Well, as Cristina points out, as you're mentioning, he didn't divest. So, if you don't divest, and you know the company is raising money, how can you, as a person of integrity and strong business person, as Jared Kushner apparently is, how could you take the meeting?

RAMPELL: Look, on the one hand we are told that Jared is some wunderkind who was wise behind his years and deserves to all these incredibly challenging things in his portfolio like peace in Israel, and trade with China and the opioid crisis and whatever else. And on the other hand, we're supposed to believe that he's hapless rube who doesn't know anything about politics or the appearance of a conflict of interest.

BURNETT: And innocent.

RAMPELL: He's innocent.

You know, you can't have it both ways. Either he's sophisticated and he should have known better or he's completely hapless and he shouldn't have. So, neither one looks good for him.

BURNETT: No, neither one -- neither one looks good. And again just to emphasize, this comes as his security clearance is in question. He's been stripped at the top level.

All right. Thank you very much, Catherine. And welcome as a contributor.

RAMPELL: Thank you.

BURNETT: And next, while Washington does nothing to combat gun violence, California, one of the biggest economies in the world has decided to do things its own way. Wait until you see what they are doing to seize guns.

And the president sees comparison between Jeff Sessions and the bumbling Mr. Magoo. Really?


[19:51:45] BURNETT: Breaking news: the White House delaying the rollout of President Trump's gun and safety proposals, following yesterday's chaotic meeting with lawmakers. The source telling CNN the meeting turned everything upside down because the president took positions that were different than those his aides had planned to roll out. So, obviously, that's a big fracas. But some states aren't waiting for Trump.

Stephanie Elam is OUTFRONT.


STEPHANIE ELAM, CNN CORRESPONDENT (voice-over): More than 6,000 rounds of ammunition, three semi-automatic weapons, a shotgun and a pistol.

UNIDENTIFIED MALE: One of the assault weapons was fixed with a bump stock.

ELAM: Bump stocks like what Las Vegas mass shooter used to mimic automatic firing were banned in California in 1990. Altogether, it's an arsenal of 57-year-old Timothy Pope is not allowed to have.

TIMOTHY POPE, L.ISTED IN APPS DATABASE: I forgot they're even here really.

ELAM: He was previously convicted of possessing a destructive device, a felony.

(on camera): Do you remember being notified and told that you can't have guns anymore?

POPE: Yes, in the court.

ELAM: How do you feel right now?

POPE: Stupid.

ELAM (voice-over): This bust coming at the end of the daily mission for these California Department of Justice agents who door knocked targeted homes in search of weapons in the wrong hands.

XAVIER BECERRA, CALIFORNIA ATTORNEY GENERAL: Only in California do we have a law that permits us to seize these weapons.

ELAM: It's the only system of its kind in the nation. The Armed Prohibitive Person System or APPS, flags those who previously registered firearms both were later deemed unfit to own a gun after a felony conviction, violent misdemeanor, domestic violence restraining order were found to be mentally unstable.

Using the APPS data, agents visit Pope who now likely faces a new set of felony charges, including the position of so-called ghost guns, homemade weapons free of serial numbers officials used to track guns.

TONY LADELL, CALIFORNIA DOJ: You imagine these guns if got in the wrong hands through a burglary.

ELAM: California's Department of Justice has recovered 18,000 firearms since the program began. More than 10,000 people are on the list statewide. As the countries again embroiled in the gun control debate, some point out that APPS would not have caught the mss shooters in San Bernardino and Isle Vista, California. (on camera): There are people out there who say with all the

shootings that we have seen across the country, that none of this, that the APPS program would not have stopped that. What do you say to that?

UNIDENTIFIED MALE: I say it's impossible for us to measure the success of this operation, because nobody knows whether or not one of the guns we seized would have been the next mass shooting.

ELAM: Another concern for Second Amendment advocates, how well the database is kept up to date.

UNIDENTIFIED MALE: The people who are prohibited are appropriately notified and given ample opportunity to get rid of the firearms and ammunition so that they're not in further violation of the law.

ELAM: But after a night like this, these officers believe APPS is a good place to start and that other states should follow California's lead.


ELAM: And, Erin, this was not their only success of the night, on their second stop, they discovered a hand gun under the mattress on a man on probation. After they arrested the man you saw in the piece here, the agents were back circling back to arrest him.

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

And next, Jeanne Moos on Attorney General Jeff Sessions, the man the president of the United States reportedly calls Mr. Magoo.


[19:57:45] BURNETT: It's throwback Thursday, and a beloved, decades- old cartoon character is making a comeback all because of Donald Trump.

Here's Jeanne Moos.


JEANNE MOOS, CNN NATIONAL CORRESPONDENT: The president once said he was proud to call Jeff Sessions attorney general now calls him Mr. Magoo.

According to "The Washington Post," President Trump privately refers to Sessions as the bumbling cartoon character so nearsighted he mistakes a mounted moose for a man. Cue the split screens, they're now all over the Internet. Someone imagine Mr. Magoo himself saying turn on the tweeter, baby, I'm trending.

Someone else is saying both the president and the attorney general by having Magoo declare I will not be compared to that nincompoop by that nincompoop.

President Trump, you're dating yourself. Mr. Magoo was created in 1949. Millennials are saying, Magoo who?

The original Magoo was created by left-leaning animators, ripping on conservatism in the era of Hollywood black listing.

President Trump is catching flak for using the childish nickname. Our cartoon president, read one comment. From comedians, yes, I would laugh. From a president, well, that's not leadership.

Comedians like Stephen Colbert.

STEPHEN COLBERT, COMEDIAN: Please welcome, Attorney General Jeff Sessions.

MOOS: He had resist Sessions, a resemblance to the Keebler elf, so Colbert does a recurring Keebler cookie bit imitating Sessions.

COLBERT: To the quick, to the quick I say! To my delicious fudgy center.

MOOS: And "SNL's" Kate McKinnon plays him like a possum like creature.

KATE MCKINNON AS JEFF SESSIONS: Oh, no, Ive dropped my loofah. Don't worry, my trusty little tail is going to get it.

MOOS: Sure, Mitch McConnell has been compared to a turtle for years.

JON STEWART, COMEDIAN: You carry your house around on your back.

MOOS: But at least he doesn't have the president on his back, calling him names.

Jeanne Moos, CNN.

MCKINNON: I'm not elf on the shelf. I'm Jeff Sessions.

MOOS: New York.


BURNETT: And thanks for joining us. We'll see you back tomorrow night.

"AC360" with Anderson begins right now.