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CNN: Another Trump Attorney Involved In Stormy Daniels Case; Toys "R" Us To Close Or Sell All U.S. Stores; President Trump Says He Made Up Facts in Trudeau Meeting; White House Considering EPA's Scott Pruitt for Next Attorney General. Aired 9-9:30a ET

Aired March 15, 2018 - 09:00   ET

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

[09:00:18]

JOHN BERMAN, CNN ANCHOR: All right. Good morning, everyone. John Berman here.

Overnight, the president hit the dishonesty trifecta. He didn't just lie to the Canadian prime minister, he admitted to lying and even bragged about lying. So if you bet on all three, you win. A trade deficit with Canada that doesn't actually exist. According to "The Washington Post" a fundraiser -- at a fundraiser last night the president boasted that he made up facts while meeting Canadian Prime Minister Justin Trudeau.

And as you let that sink in for a moment, back at the White House top staffers are reportedly starting betting pools on who will be fired next with sources telling CNN that Attorney General Jeff Sessions is likely at the top of the list.

All of this as new documents show that the Trump Organization was more involved in the porn star payoff than previously reported.

Let's start with CNN's Abby Phillip live for us at the White House this morning. The president bragging about some interesting things, Abby.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right, John. We have actually heard this story before. The president has said in the past that he's insisted that Canada has a trade deficit with the United States even though Canada doesn't. But what he did last night at this fundraiser according to a source who was in the room who confirmed it to CNN was that he acknowledged that he had actually no idea at the time.

This is what he said. "I didn't even know, I had no idea. I just said, you're wrong. You know why? Because we're so stupid. And I thought they were smart. I said, you're wrong, Justin. He said, nope, we have no trade deficit. I said, well, in that case I feel differently. I said, but I don't believe it. I send one of our guys out, his guy, my guy, they went out. I said check because I can't believe it."

The president clearly, even after he had been confronted by Trudeau over this issue, believed that he was right even though his own trade representative office says that Canada has a trade surplus with us. But he also went further and talked about the relationship with South Korea and Japan. And he criticized them on trade which he's been doing publicly. That he suggested that our trade relationship and our military relationship could be linked.

This is what he said according to "The Washington Post" who obtained that audio. "We have a very big trade deficit with them and we protect them. We lose money on trade and we lose money on the military. We have right now 32,000 soldiers between North and South Korea. Let's see what happens."

So the president is making these comments actually at a time when the South Koreans have representatives in Washington to talk about this upcoming meeting with Kim Jong-un. And those comments seem to link trade and an ongoing long-term relationship the U.S. has had with South Korea on security in the demilitarized zone between the North and the South, the president suggesting that could be at risk.

All of these comments really coming as a surprise to folks who are in that room and will come as a surprise to our allies indicating how serious President Trump is about this issue of trade. Later today at the White House, the prime minister of Ireland is going to be here within the next hour meeting with President Trump just in time for St. Patrick's Day -- John.

BERMAN: All right. Abby Phillip at the White House for us. Abby, thank you very much.

This morning the president is said to be itching to get rid of what he considers dead weight in a Cabinet that he once called the finest group of people ever assembled. But like so much else he has been itching to do over the past 14 months, this may not be so easy. And this morning there is new exclusive CNN reporting on a new possible name to replace the attorney general and new possible reservations from Congress on all of this.

CNN's Jeremy Diamond covering all this, part of the team that is breaking this story. And Scott Pruitt heading up the EPA now being floated as maybe the next, at least, acting attorney general.

JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: Well, that's right, John. You'll remember of course that it's been nearly a year now since Attorney General Jeff Sessions recused himself from the Russia investigation. And since then he has endured taunting and ridicule from the president. The president who has not dropped his anger at that recusal. And so that has led to discussions at the White House, we're told according to one source about what would happen if the president fired Attorney General Jeff Sessions.

And Scott Pruitt is currently the name being discussed inside the White House as a potential replacement. Why? He's another Cabinet member and could be named acting attorney general without Senate confirmation. If he were to be actually named attorney general, nominated to that position, he would then need to endure Senate confirmation. But it is just one part of a broad shakeup that the president has previewed in recent days. We heard him talk about the need to get rid of dead weight as you

mentioned earlier. And already we're seeing some of the headwinds that he's beginning to face as he looks towards that broader shakeup. Two of the nominees that he's already put forward to the Senate this week, Mike Pompeo for the State Department and Gina Haspel for CIA director.

[09:05:08] Both of those are already facing some uphill battles on Capitol Hill, especially Gina Haspel who oversaw part of the CIA's torture and rendition program during her time previously at the CIA. And Senate Republicans are already warning the president and the White House that they're already overloaded with a backlog of nominations that they have to deal with. And they are not eager to see several more Cabinet level members put before the Senate for confirmation.

And all of this is not just the only talk of shakeup. There is also talk of shakeup inside the West Wing where General John Kelly, the White House chief of staff, is rumored to potentially be leaving within the next few months. H.R. McMaster, the National Security adviser, he is also -- his departure is also expected to be imminent. And that has led to low morale inside the West Wing, John.

Several of the White House officials who I speak with on a daily basis are concerned and they feel left in the dark really as we've seen this series of resignations and firings in the last few weeks. And so there's really a lot of uncertainty there. The White House, however, saying that there's no shakeup unless, of course, there is one and then we'll know -- John.

BERMAN: That clears things up.

Jeremy Diamond for us in Washington. Jeremy, thanks so much.

Joining me now CNN senior political analysts Mark Preston and Ron Brownstein, and White House correspondent for Reuters, Ayesha Rascoe.

Guys, I feel like the bragging about lying to the Canadian prime minister thing needs to be dissected just a little bit.

So, Mark Preston, I want to start with you because you're up here with me in New York. I want to ask you a couple of yes-no, questions. Very simply, the president should have known that there is no trade deficit with Canada. Yes or no?

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Yes.

BERMAN: The fact that he does not know reflects poorly on him. Yes or no?

PRESTON: In my mind, yes.

BERMAN: The president should know. The president should know there's --

PRESTON: Well, especially since you're trying to go after the president -- excuse me, especially since you're now trying to go to war with both your neighbors in Mexico and Canada, you should at least know what the details are.

BERMAN: And when you brag.

PRESTON: Right.

BERMAN: About not knowing, brag about lying.

PRESTON: Right.

BERMAN: What message does that send?

PRESTON: So a couple of things. One is, I'm actually -- I don't find it egregious that he lied to the prime minister in the sense that we know this now. The idea that we think that he's not going to lie would be more of a story at this point. What is egregious I think is that he decided to go out and broadcast this to a very large room and a very large venue. That in itself is disrespectful. That in itself is reckless. And that in itself could hurt him in the future.

BERMAN: It's interesting, Ayesha, you know, you hear Mark Preston, you're talking about the fact that the president's relationship with honesty and dishonesty is well known. But that's grading on a curve. Isn't it? Right? Because we wouldn't treated most presidents like this. Most presidents that we've had, most politicians, most business leaders, when they lie, it's a big deal.

You could almost hear his supporter say, well, this is real estate negotiating. This is how you go make a deal. How do you think the world will see this, Ayesha?

AYESHA RASCOE, WHITE HOUSE CORRESPONDENT, REUTERS: Well, I think if you call it negotiations, I don't know how smart it is to reveal all of your tactics. Now the Canadians are going to have to deal with this. This could be something that they feel that they have to respond to. Nobody likes to be lied to or embarrassed. And so I think that's the issue.

The Canadians have to answer to their people and their politics and they have to look like they're standing up for themselves. So this could make it more difficult when it comes to NAFTA and those negotiations.

BERMAN: Ron Brownstein, you were jumping in. You wanted to be part of this. Go ahead.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: No, I'm going to disagree a little with Mark in the sense that we in the media may expect this, but world leaders I think do not expect or tolerate being lied to deliberately by the leader of another nation. And I do think, if you kind of look at what the president said at this fundraiser, on the one hand it points you toward a further policy dispute schism in the Republican Party over trade, which he is clearly angling for a fight with more of our trading partners from South Korea and also continues to be very skeptical of NAFTA.

But it's a reminder that the principle issue of Donald Trump's presidency for most Americans is his fitness to be president. I mean, that is the core issue. Elements and the agenda are very controversial, particularly the effort to repeal the ACA. But for most Americans the core issue is whether this is someone who is showing that he should be president.

You know, don't forget. About a fifth to a quarter of the voters who voted for him said they were uncertain he had the temperament and experience to succeed as president. They were willing to give him a chance. And almost everything that has happened over these 15 months and is now accelerating I think is doing more to deepen than dissolve their doubts. And that above all I think is the challenge Republicans face in the midterm.

BERMAN: You know, Ayesha, besides the honesty factor with, you know, Justin Trudeau, there's also the issue of South Korea where the president actually made an important policy statement.

[09:10:01]He suggested that if trade issues don't go well with South Korea, you know, he would consider pulling U.S. troops from the peninsula. It is something he campaigned on. But the timing now when he is about to meet perhaps in the next couple of months with Kim Jong-un of North Korea, it really I think has a different tenor.

Is this likely to impact somehow these discussions or at least the relationship with the South?

RASCOE: Well, I think that's the question because at this point, you need to have a united front with the South Koreans when you're going into or when you're going to be talking with North Korea. You have to have a united front between South Korea and the U.S. and so if you're making these threats that you could pull troops out of South Korea, which seems highly unlikely, but if you're making those threats, that's actually what North Korea would want.

North Korea would love that. So it's kind of like how are you going to keep up this pressure campaign when it seems like you're dividing with the very ally that you would need to keep that up against North Korea.

BERMAN: So, Mark Preston, back to you here. We hear from Jeremy Diamond about this new notion that well, maybe the president would slide Scott Pruitt over from the EPA to the Justice Department. That would certainly outrage progressives and Democrats who do not like Scott Pruitt's record on the environment. The aviation industry might like it, right? Because Scott Pruitt likes expensive travel as far as we know.

This would be hugely controversial. Should we be treating this, though, with a grain of salt because it has to do with this issue of replacing Jeff Sessions which has been going on for month and months?

PRESTON: Well, a couple of things. One is, I think two or three weeks ago I would say yes, but I do think, as each day goes by right now, that President Trump gets to the point where he just doesn't care. So the idea -- the reason why Jeff Sessions, as we all know, has been

able to survive this long, John, is because of the whole Mueller investigation. Otherwise, if that Mueller investigation wasn't there, then Jeff Sessions would be gone. If this was some other reason. But in some ways President Trump has been handcuffed up to this point. But he's freewheeling now. So I could see him actually doing it.

BERMAN: You know, look, the Mueller investigation is the reason why the president wants to get rid of Jeff Sessions.

PRESTON: Correct.

BERMAN: But it's also the reason why he can't get rid of Jeff Sessions.

PRESTON: Can't get rid of him.

BERMAN: You know, someone could write a cap story about that.

Ron Brownstein, this is all happening now this week in the post- Pennsylvania 18 world. Right?

BROWNSTEIN: Yes.

BERMAN: And I think that's significant where Republicans have to look at their future through this different prism. Things may not look as rosy if they look rosy on Tuesday, but they look worse now for them.

Does this affect the way that they treat what the president does in terms of his Cabinet? Would they ever put up a fight? Look, they want to slide -- Pompeo is going to be up for confirmation, same thing with the CIA. Do Republicans really fight this? Would they fight it more now?

BROWNSTEIN: Yes. Incredibly so far the answer is no. I mean, the reaction of Republicans on Capitol Hill to the results in Pennsylvania which really are striking, we're talking about a district the president won by 20 points, Romney won by 17 points, where Democrats did not even put up a candidate in the last two House races. Their reaction was from Paul Ryan who has just lashed the House majority to the Trump ship, it was, well, the president made it better. He helped close the gap at the end.

Look, if you look at Pennsylvania, you saw two things. You saw some erosion of the Republican strength among the white working class voters who have been the foundation of Trump's coalition and which have been the missing piece so far for Democrats, even as they've won in places like Alabama and Virginia. They have not shown the kind of progress that Conor Lamb did in places like Westmoreland and Washington counties which are much more blue collar.

But it also reinforced this unmistakable signal of the recoil against President Trump particularly around the way he is conducting himself as president in the white collar suburbs like northern Virginia, like those in Alabama and those outside of Pittsburgh, which were the key to Lamb's victory. And the signal that voters there want more constraint on the president could not be more unmistakable.

And yet, House Republicans led by Paul Ryan are moving in the opposite direction toward sending a very I think an unambiguous message that a Republican majority House will not perform any kind of meaningful oversight or constraint on the president. So they are rolling the dice by latching themselves more tightly to him even as the waves are getting bigger.

BERMAN: We got a number of Cabinet officials up on Capitol Hill this morning. We will see what kind of treatment they receive in light of all this from Congress. That should be very interesting.

Mark Preston, Ron Brownstein, Ayesha Rascoe, great to have you with us. Appreciate it.

BROWNSTEIN: You too.

RASCOE: Thanks.

BERMAN: A porn star payoff and deepening ties to the Trump Organization. New documents obtained by CNN suggest just that. We're on it.

Plus this is getting pretty ugly. This morning Russia says it is retaliating against Britain for expelling Russian diplomats over the poisoning of an ex-spy. We are live outside 10 Downing Street.

And minutes after the nation's top diplomat was fired -- yes, fired -- on Twitter, U.S. diplomats across the globe were told not to re-tweet how he was let go. This morning we are hearing they are flat-out confused.

(COMMERCIAL BREAK)

BERMAN: This morning new details suggest a growing connection between the Trump Organization and the deal to pay off an adult film star. Documents obtained by CNN show a Trump Organization lawyer worked to block Stormy Daniels from talking about her alleged affair with President Trump. This after the president's personal lawyer claiming no one in the organization was involved in the deal.

CNN's M.J. Lee joins us now. Curiouser and curiouser.

M.J. LEE, CNN NATIONAL POLITICS REPORTER: Yes. These new documents that were obtained by CNN last night appear to show an even deeper link between the Trump Organization and the entire Stormy Daniels saga. These documents are dated February 22nd of this year. They name Jill Martin as representing EC LLC.

[09:20:01] John, remember, EC LLC is Essential Consultant, the company that Michael Cohen set up in 2016 to make this payoff to Stormy Daniels of $130,000. Now who is Jill Martin? Her title is vice president and assistant general counsel at the Trump Organization.

You might remember that she spoke on behalf of Candidate Trump during the 2016 election. This would make her the second employee at the Trump Organization who now has a direct involvement in the Stormy Daniels related legal matters.

Now Jill Martin did put out a statement and I also talked to her on the phone yesterday. She insists that she did this in her private capacity and with the exception of herself, the Trump Organization is not involved in Stormy Daniels' related matters.

But it certainly raises questions about Michael Cohen's previous statements that he acted entirely on his own. There are two other things that I want to quickly mention, first of all, Stormy Daniels' lawyer, Michael Avenatti, is now saying that there might be other women who are considering taking legal action against President Trump.

We don't know who these women are, but we will try to find out what he is talking about. The second thing is that we have a new friend of Stormy Daniels now speaking out. He says that during 2006 and 2007, the time period when Stormy Daniels had this alleged affair with Trump.

He listened in on private phone calls that Stormy had with Trump and he said he would call all the time, and that man can talk about nothing for hours. This, of course, as the White House has insisted that this affair never took place between Trump and Stormy Daniels.

BERMAN: All right. M.J. Lee, thank you very much. Very interesting.

Let's discuss with CNN contributor, former White House ethics czar, Ambassador Norm Eisen. Also, a long-time lawyer and that is the capacity I would like to speak here with you, Counselor.

You know, Jill Martin's LinkedIn page says she is vice president and assistant general counsel for the Trump Organization, business address listed as the Trump National Golf Club. Yet she says that when she was involved here she was working in her personal capacity. Is that even such a thing? Is that an important distinction here?

NORM EISEN, CNN CONTRIBUTOR: John, thanks for having me back. You know, unfortunately, from the president on down, including those around him, we can't believe what they say. It's silly to think that a lawyer for the Trump Organization, the papers have the name Trump on the address, John.

There's even such a thing as her working in her personal versus her official capacity. You know, practicing law, I did it for quarter of a century, it's not like driving a cab where you turn the meter on and off. She is a lawyer for the Trump Organization, and it's more evidence that Trump is involved in this, and that laws may have been broken.

BERMAN: OK, because my next question to you is the so what question. So what that she works -- from a legal standpoint, start there. So what that she works for the Trump Organization.

EISEN: Here are the legal issues here. There's a set of campaign finance laws that may have been violated. If this $130,000 payment to Stormy that was facilitated by another Trump lawyer, Mr. Cohen, was, in fact, intended to benefit the campaign. And there's another set of laws, John. President Trump filed personal financial disclosures, supposed to describe his assets and liabilities. He didn't say anything about an interest in this EC LLC and this agreement with Stormy about perhaps owing Mr. Cohen money.

This is more proof that Trump was the beneficiary of this agreement. Come on. It's silly to think Mr. Cohen would take $130,000 out of his own equity line and didn't expect to benefit Trump or be paid back. There are serious legal issues here. This is more evidence of their seriousness.

BERMAN: All right. Let's talk more about the division between the legal and the political here because what Stormy Daniels, Stefanie Clifford, and her lawyer, Michael Avenatti, are doing is interesting. I'm not sure they're asking for much from a legal standpoint.

They're just trying to get rid of this non-disclosure agreement which they seem to be walking all over and jumping up and down all over anyway. So, what are they doing politically here?

He seems to be pressing political buttons to get more and more information about this relationship out there. Is this really all just politics now?

EISEN: Well, it's a mix of politics and law, and, of course, those are the most interesting cases historically over the years when it comes to the presidency. There is a legal core to it. The president was the beneficiary of this agreement.

Clearly, that's why the campaign finance law and personal financial disclosure law may have been violated. The president was the beneficiary, but he didn't sign it. So, you know, whenever that's the core of the legal part of it.

Now, when you have a vulnerable defendant like the president is to try to get out of this action which is what the plaintiff, Ms. Daniels' lawyer want to do, you'll use all tools. They do have a big political tool because every day there's a new fact, a new story. The story won't go away. It's making things very uncomfortable for the president. So, it's a hybrid of law and politics.

BERMAN: Ambassador Norm Eisen, great to have you with us. Thank you very, very much.

EISEN: Thanks, John.

BERMAN: The U.S. backing the British, blaming Russia for an ex-spy's poisoning. The tensions between the U.K. and the Kremlin reaching new levels.

And we are just moments away from the opening bell. Toys "R" Us announcing it will close its doors.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Are you a Toys "R" Us kid, John?

BERMAN: Who doesn't?

ROMANS: I know, 70 years, this is an iconic brand, and it just could not get out from under a load of debt, could not restructure to become relevant in the era of competition from Walmart, Target and Amazon.

So, we now have the official word, there will be liquidation of Toys "R" Us. It will close of sell all of its stores, 33,000 Americans working at those stores. So, it's a real sad day for those folks. This company has not turned a profit since 2012.

Since then it's lost more than $2.5 billion. So, this is the end of that era of going to one big store just for toys. What analysts tell us, this could be hard on the toy industry in particular. Maybe 10 percent to 15 percent of all toys sales will go away, won't recover here.

Consumers are acting differently, too. Kids use iPads and phones and a lot of technology, not necessarily the plastic toys of yours. Analysts say 10 percent to 15 percent of all toy sales will be lost forever. So, no more Toys "R" Us kids.

BERMAN: What do the markets make of all of this?

ROMANS: Well, you know, the markets are looking at other things. They are looking at trade wars and the worry of trade wars, they are looking at inflation. So, I see things pretty flat right now. We've had three down days in a row. We'll see if they make it four or whether they can try to recover here a little bit.

Yesterday was kind of a tough day. Boeing had a hard day yesterday. Even as the president was at a Boeing facility, Boeing was down on worries of a trade war. That's become the proxy for, will there be trouble on the trade front, watch those big multinationals. We'll have the opening bell right after the break.