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Politico Reports Pruitt Overstayed Lease at Lobbyists' Cheap Rental; Markets Tumble as Trump Threatens New Tariffs on China; Migrant Caravan Arrives in Puebla, Mexico. Aired 3:30-4p ET

Aired April 6, 2018 - 15:30   ET

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


[15:30:00] DANA BASH, CNN HOST: Welcome back. New information from our friend, Eliana Johnson over at politico, new information about EPA administrator Scott Pruitt. And I just have to read the headline. Says, Pruitt was the Kato Kaelin of Capitol Hill. Takes us back to the O.J. Simpson days but I think everybody gets a sense of what this was about. And in general, what this story says is that the EPA administrator overstayed his welcome and that the people who owned the condo or own the condo where Scott Pruitt was staying basically wouldn't leave. I want to turn now to Walter Schaub who is a CNN contributor and a former director of the Office of Government Ethics. She resigned from his post last year after clashing with the Trump White House. So, I just gave the headline. I know you read the story. Give us the meat of it.

WALTER SCHAUB, FORMER DIRECTOR, OFFICE OF GOVERNMENT ETHICS: One thing we know is that the lease itself says on its face that it's for 39 days. It was supposed to go from around February 20th to April 1st. But he stayed for months and months. What we're learning today is that the landlords wanted him out. The article even says that they were sending him copies of ads for places that he could rent, as though you had a kid who came home from college and was staying too long, and the parents are giving him a little nudge out the door. That's truly a bizarre story.

BASH: And is it also -- I mean, look, the context of this is that we're now getting the fact that the landlords wanted him out. But the reason we even care in the first place about this condo is because he rented a bedroom for $50 a night.

SCHAUB: Yes.

BASH: Which is, you know, for anybody who doesn't live in Washington, not exactly the going rate.

SCHAUB: Yes, I'll take that deal if anybody wants to offer it. But that's the problem. It's a lobbyist, who is giving him a room for $50 a night. Now one thing that's interesting to note is that the lease says he's only renting one room in a house. And so, I think it's fair to say the price would be lower for just one room in a house if the landlord could put somebody else in the other room. I mean, for all you know the other person could wind up being an ax murderer and you're not going to spend a lot of money to stay with unknown strangers. But there's also reporting that his daughter was the one staying in the other room. And once you fill both rooms like that, you're now taking up the entire place. And so, the question then becomes a factual one that maybe the inspector general would be able to answer if they conduct an investigation.

BASH: I'm glad you mentioned that. Because aside from the fact that it's obviously a noteworthy and clickable headline to say that Scott Pruitt, the EPA administrator is seen as Kato Kaelin by his landlord. But big picture from an ethics point of view, why does this matter?

SCHAUB: Why it matters is because there's a question of whether this was a gift. And then even aside from the gift question, you have a question a cabinet official potentially behaving badly. One of the principles of the ethics program is that federal employees will honor all of their just financial obligations. If he's freeloading off a landlord who wants him out, that's very weird behavior for a federal employee and doesn't reflect well on the government.

BASH: Before we wrap this up, obviously, this is one of many alleged ethics violations or questionable behaviors.

[15:35:00] We talked about renting a room from the energy lobbyist, raised two aide salaries after the White House declined the request, asked security to use sirens to cut through traffic -- which I can say is not usually what is afforded an EPA administrator. Reassigned staffer after they raised concerns about his spending. Requested 24/7 security on personal trips like rose bowl and Disneyland. Spent $120,000 on a Vatican trip. Hired 12 more agents and flies first class and military jets. Real briefly, I know you spoke with somebody over there this week. What did you learn?

SCHAUB: Well, you know, the context in which this is all coming is it's the appearance that administrator Pruitt thinks that federal service is for the perks. And that's what raised questions about whether he was receiving a gift by staying with this lobbyist for $50 a night. I met with the ethics official. We wound up talking for about an hour over coffee. And he feels very strongly that his analysis was correct because there was only the --

BASH: His analysis that he wasn't doing anything wrong?

SCHAUB: Yes, the analysis that he was paying market rate even though it was only $50, is based on the idea that he's only renting one room. So, what then becomes a factual question is whether the landlord knew, if it's true, that his daughter was staying in the other room and he basically had the whole place. Because then it becomes a lot harder to justify $50 a night for a two-bedroom condo. And that puts us back in the improper gift category if that were the case.

BASH: Walter Schaub, thank you so much for your insight and your expertise.

And up next, President Trump threatens China with a new $100 billion tariff plan and China says it will fight back at any cost. That could mean trouble for American farmers and maybe even the politicians who represent them. I'll be joined by one of those, Illinois congressman, Rodney Davis, next.

[15:40:00] (COMMERCIAL BREAK)

BASH: Welcome back. Turmoil on Wall Street with a week jobs report and a presidential threat to slap China with $100 billion in additional tariffs. The Dow now down around 563 points. It's a little bit better than it was, I don't know, about half an hour ago. But investors are clearly rattled by the talk of a trade war. China is hitting back where it hurts, a lot, soy beans. China was the United States and is the United States' largest buyer. It certainly was last year. And is now saying that they will make U.S. farmers pay a 25 percent tariff to sell those beans that they grow in this country to China.

Illinois is a state that makes soy beans. In fact, is the number one soy bean producer in the United States. Republican representative, Rodney Davis, is joining me now. Of course, he represents the state of Illinois. Congressman Davis, given the fact that your state is the biggest soy bean producer in the country, your district could really be affected by these new tariffs. How concerned are you?

REP RODNEY DAVIS (R), ILLINOIS: I'm extremely concerned, Dana. We've got to do what we can, put a lot of faith in agriculture secretary, Sonny Purdue. I'm glad that the White House has given him a lot of free reign to go around and figure out what's going to work, what's not going to work. But the biggest problem we have right now, though, clearly, is China. Let's not kid ourselves. China doesn't trade fair when it comes to agricultural products all the time and they certainly have not been trading fair when it comes to decimating our domestic steel industry.

BASH: And what about the president? Do you think he should continue to sabre rattle? He's threatened, again, $100 billion, as I mentioned, in new tariffs against China. That could hurt your constituents in a very big way.

DAVIS: Yes. I'm not a big fan of sabre rattling when it comes to global trade. I would rather see people sit down together and work out our differences. That's why I hoped that the administration gives Secretary Purdue and our negotiators the ability to take the weeks necessary to work with China, to figure out how we can get fair trade agreements. But Dana, I don't think it should surprise anyone that President Trump feels this way about trade with China. He was abundantly clear during the last election how he felt about unfair trade and the trade imbalance that we have with China. And now he's living up to his campaign promise.

BASH: Given that -- of course, you're right about that. He has been very clear for decades about how he feels about China and the trade imbalance. But you're talking about real people and real constituents there who could really be hurt by the ramifications of this.

DAVIS: Absolutely.

BASH: What is your message to the President right now?

DAVIS: My message to the President is let's make sure we be very careful that any retaliatory tariff does not affect Illinois agriculture or agriculture as a whole. But let's also realize that there were a lot of people in the domestic steel industry, many of them working in my district in central Illinois that lost their jobs over the years because China was dumping cheap, subsidized, foreign steel into our country and decimated 2,000 jobs at the Granite City Illinois U.S. Steel plant. The day after the president talked about addressing the steel imbalance with China, they announced they're hiring 500 workers back and reopening that plant. So, people outside of agriculture and in agriculture have been hit hard by unfair trade from China and I hope the President continues to force them to the table.

BASH: OK. But you said you want the President to be careful. Do you think he's being careful right now with his rhetoric?

DAVIS: Probably not as careful as I would like him to be. But let's take a step back. When he announced the steel tariffs, too, they were going to be a lot more robust than they ended up being when it comes to China right now.

[15:45:00] And I hope that the professionals within his administration, including my good friend, Sonny Purdue, I hope they have the ability to sit across the table from the Chinese and work out a deal, so it doesn't affect anyone, and we can get fair trade out of China.

BASH: And Congressman, finally, just a political question. CNN looks at your district and says it's likely Republican. Meaning you are likely to win re-election. But in all honesty, how concerned are you that if there say blue wave, as your Republican friend from the North, Scott Walker of Wisconsin warned of, that this very issue could hurt you and cause you and your fellow Republicans in these districts to lose your seat?

DAVIS: Well, I think it's something that everyone in Washington and everyone in Congress that represents the Midwest should be concerned about. That's why we want to work with the administration and urge them to do what it takes to address the unfair trade balance with China. But let's not do it at the sacrifice of agriculture. Not just in the Midwest but in our country. But elections are going to be elections, Dana. I've been told after winning a close race in 2012 that I wasn't going to come back after my first term. And I'm now on my third term. So, we'll talk about what it is that we're doing in Washington to make Washington work in a very challenging environment. And I am pretty confident that if that's the case, the voters will be able to send me back.

BASH: Congressman, Rodney Davis, of Illinois, thank you so much for joining me today. Appreciate it.

And next, we're live in Mexico, where dozens of families are continuing their caravan toward the U.S. border. You're going to see real faces of immigrants President Trump has painted as a hoard of criminals, poised to storm the border.

But first, we want to check in with a CNN hero, marking an incredible milestone. Magnus MacFarlane-Barrow, who was honored at CNN's heroes event in 2010. His organization, Mary's Meals started by serving one free meal a day in schools.

(BEGIN VIDEO CLIP)

MAGNUS MACFARLANE-BARROW, FOUNDER, MARY'S MEALS: We started serving 200 children and it's beyond our wildest dreams that it would grow like this. Incredibly, recently, we served the 1 billionth meal since we began. It's a very humbling experience. But for us it's very much for the next child that's waiting. Really more than ever we feel this work of ours has just begun.

(END VIDEO CLIP)

BASH: And to nominate someone you know, go to CNNheroes.com.

[15:50:00] (COMMERCIAL BREAK)

BASH: Welcome back. Buses filled with Central Americans desperate for a better life are continuing to make their way through north of Mexico. No most will stop in Mexico City to try to get refugee status there. But organizers say about 200 migrants are determined to cross the U.S. border. President Trump says these so-called caravans are part of the reason he is deploying the National Guard to the border. I want to go to CNN's Leyla Santiago. In Leyla, you have been talking to these migrants, getting a sense of who they are. Doing incredible reporting. What are you hearing from them this hour?

LEYLA SANTIAGO, CNN CORRESPONDENT: OK. Well, a lot of them have just arrived after being on the bus for hours today here in Puebla. Let me just show you around what we're seeing right now. And then I'll kind of try to keep in it context so I can explain to you what exactly is happening.

You have children here that are playing games. Volunteers have come to make sure that they get a meal. That they have a place to stay. So right now, I am estimating based on my own math, of the people I have seen and have come, that we're looking at about 500 people here. And remember, 500 from what started, according to organizers at about 1,000, somewhere between 1,200, somewhere in there. So, you can see they have all the food set up for them as they have just arrived.

And this is the group that President Trump says is a dangerous caravan. This is the group that they say has dispersed. And yes, while this is 500 of the say, 1,000 or 1,200 that we originally saw, it is still very much a caravan that continues north. Let me speak to one person. He's from Honduras. [SPEAKING SPANISH] He's going to Tijuana. So, this is one of the folks that will actually staying in Mexico. Not trying on get to the U.S./Mexico border. But as I've spoken to a lot of people here, they're saying, yes, we are going to try to make it to the U.S./Mexico border. Whether there is a National Guard there or not. And I should keep this in context. And that this is a caravan that happens every single year. It's part of what they call the Via Crucis here. It's an annual march. Usually starts in big numbers and then sort of gets into a smaller crowd throughout, as they continue to go north. And so, the organizers here are saying that it's going to be about 200 people, they believe, will be seeking asylum in the U.S./Mexico border. But when that will be, well, we'll to have follow them to see -- Dana.

BASH: Leyla Santiago, thank you so much for that important, important reporting. Appreciate it.

[15:55:00] and I want to come back here to Washington. Because happening right now outside the White House, look at that crowd. A huge crowd lining up. We believe it is going to be to say goodbye, a farewell, to national security adviser, H.R. McMaster. Today is his last day in the White House and he is retiring from military service after 34 years. We're watching that to see if and when he comes out. We should also mention that his successor, John Bolton, is supposed the start on Monday. Stay with us.

(COMMERCIAL BREAK)

BASH: Welcome back. Day two of the Masters is in full swing and all eyes are on Tiger Woods. After shooting one over par Thursday, Tiger is struggling through his second round and is in danger of missing the cut. This is his first time back at the Masters in three years after recovering from injuries. Don't miss "CNN-Bleacher Reports Special" coverage of the big event. "ALL ACCESS AT AUGUSTA" airs tomorrow at 2:30 p.m. Eastern. I'll turn you over now to "THE LEAD" with Jake Tapper which starts right now.