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White House Mocks McCain's Brain Cancer; White House Chief of Staff Under Fire; Interview With Arizona Congressman Ruben Gallego; Pruitt's Pricey Dinner with Accused Cardinal Under Scrutiny; Rosenstein Attracts Trump's Ire. Aired 6-7p ET

Aired May 11, 2018 - 18:00   ET

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


[18:00:00]

WOLF BLITZER, CNN HOST: Happening now, breaking news: chief of controversy. White House Chief of Staff John Kelly walks back a description of President Trump as being embarrassed by the Russia investigation.

Coming after Mueller. The president's congressional allies take a new line of attack, as they try to shut down the special counsel's Russia probe.

Corporate mea culpas. Two giant companies that paid Michael Cohen hundreds of thousands of dollars now say hiring the president's personal lawyer was a mistake.

And lightning rod. Who's the seemingly mild-mannered deputy attorney general at the center of controversy and the focus of presidential fury?

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: Breaking news tonight: The White House chief of staff, John Kelly, is revising his description of President Trump, whom he initially said was embarrassed by the Russian investigation.

After that made headlines, Kelly told CNN he meant to say distracted.

That comes as the White House refuses to apologize for an aide's truly shocking joke about Senator John McCain.

We're going to talk about that, much more with Congressman Ruben Gallego of the Armed Services Committee. And our correspondents and analysts are also standing by.

First, let's go to our senior White House correspondent, Jeff Zeleny.

Jeff, you talked to Kelly about that remark. Tell us what he said.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: We did, Wolf. It was certainly striking, the comments from White House Chief of

staff John Kelly, who does very few interviews. He did tell NPR the president is somewhat embarrassed, in his words, about the Mueller investigation. He said every time world leaders come here to the White House, they want to talk about and that occupies us some of his attention.

But we caught up with John Kelly briefly in the Rose Garden of the White House. He said not embarrassed, but the president is distracted by the Russia investigation.

(BEGIN VIDEOTAPE)

ZELENY (voice-over): President Trump is either embarrassed or distracted by the Russia investigation hanging over the White House.

Tonight, that's the sentiment from White House Chief of Staff John Kelly, going where few aides to the president have gone before, saying the president is embarrassed by special counsel Robert Mueller's probe.

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: It may not be a cloud, but certainly the president is somewhat embarrassed, frankly, when world leaders come in. The first couple of minutes for every conversation might revolve around that kind of thing.

ZELENY: Kelly backtracked only hours after that NPR interview, telling CNN in the White House Rose Garden he meant to say the investigation into Russia collusion in the 2016 campaign was a distraction for the president, not an embarrassment.

KELLY: It's untrue. It's a witch-hunt, right? And it's a distraction, not too much, but it's unfair.

ZELENY: Meanwhile, an unseemly feud with Senator John McCain escalated a day after a White House aide spoke callously behind closed doors about McCain as he battles brain cancer, saying, "He's dying anyway."

QUESTION: Mr. President, does the White House owe Senator McCain an apology, sir?

ZELENY: At the daily briefing, Press Secretary Sarah Sanders said the aide, Kelly Sadler, still worked for the administration, but Sanders repeatedly declined to say more or why an apology wasn't warranted.

QUESTION: If you won't comment on the specific comment, what does the White House believe about Senator McCain? And is there a tone set from the top here where it is allowed for an aide to say he's dying anyway?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Certainly, there is not a tone set here. We have a respect for all Americans. And that is what we try to put forward in everything we do, both in word and in action.

QUESTION: Why not just apologize to Senator McCain? (CROSSTALK)

HUCKABEE SANDERS: Again, I'm not going to get into a back and forth because people want to create issues of leaked staff meetings.

ZELENY: The senator's daughter, Meghan McCain, sounded stunned that the staffer is still on the job.

MEGHAN MCCAIN, DAUGHTER OF JOHN MCCAIN: I don't understand what kind of environment you're working in when that would be acceptable, and then you can come to work the next day and still have a job. And that is all I have to say.

ZELENY: The Arizona Republican senator and decorated war hero has been among the president's biggest critics. This controversy started when he said he opposed the nomination of Gina Haspel to lead the CIA because of her history with the agency's interrogation tactics he believes are torture.

McCain's daughter address Sadler, a special assistant to the president, directly.

MCCAIN: Kelly, here's a little news flash. We're all dying. I'm dying.

(CROSSTALK)

MCCAIN: We're all dying. And I want to say that since my dad has been diagnosed in the past -- it's almost a year, July 19 -- I really feel like I understand the meaning of life. And it is not how you die. It's how you live.

(CHEERING AND APPLAUSE)

ZELENY: Cindy McCain had this to say on Twitter: "May I remind you, my husband has a family, seven children and five grandchildren."

All this Kelly's tough talk on immigration raised eyebrows. As a four-star Marine general, he once oversaw threats on the U.S. border as head of Southern Command.

[18:05:00]

KELLY: The vast majority of people that move illegally into the United States are not bad people. They are not criminals. They are not MS-13.

But they're also not people that would easily assimilate into the United States. They are overwhelmingly rural people.

ZELENY: It came as the president's frustration with immigration boiled over this week, blasting Homeland Security Secretary Kirstjen Nielsen for not acting swiftly enough.

The exchange behind closed doors in a Cabinet meeting so heated, she threatened to resign, "The New York Times" reported. She denied it. (END VIDEOTAPE)

ZELENY: So, Wolf, in the Rose Garden, as we were speaking with John Kelly, I asked him again if Secretary Nielsen, who was his deputy here when -- when she was working at the White House, if she planned to resign, if she planned to step down. He said, no, she will stay in her position there.

Of course, she has a job he used to have the Homeland Security Department.

And, Wolf, one other note. If you were wondering why there was music in the interview with John Kelly there, it was after a day at an event on prescription drugs in the Rose Garden. The Marine band was playing. The chief of staff, John Kelly, was listening to that music.

And that's when we approached him for that brief interview, Wolf.

Also one note, it's his 68th birthday today -- Wolf.

BLITZER: All right, Jeff, glad you grabbed him up for that quick little interview. Thank you very much.

More breaking news we're following. Rudy Giuliani in a Florida courtroom today, but he wasn't there on behalf of President Trump.

Our national political reporter, M.J. Lee, has some details for us.

M.J., Giuliani says, what, he was working for a private client?

M.J. LEE, CNN NATIONAL POLITICS CORRESPONDENT: That's right.

It was just yesterday that Rudy Giuliani announced that he was resigning from his law firm, Greenberg Traurig, so that he could concentrate full time on representing President Trump.

So it was intriguing for us to learn today that he had showed up physically at a courthouse in Broward County in Florida. There's a picture of him there taken by an attorney who happened to be in the courtroom.

And it turns out we did some digging into court documents. This is for a defendant, a woman who was in a car crash in May of 2016, and she has been accused of purchasing auto insurance just 10 minutes after that car crash. And she's also accused of giving false information to the insurance company.

Now, the timing of all of this is so interesting, because, if you recall, it was announced back in April that Rudy Giuliani had joined President Trump's legal team. And as it turns out, according to these court documents, it was two weeks after that that Rudy Giuliani asked for permission, asked the court to join this case.

And that's of course because he's licensed to practice law in New York, but not in Florida, so he had to get special permission. Now, my colleague Dana Bash actually got him on the phone and asked him for comment, asked him what was going on here, why was he involved in all of this?

And Giuliani told Dana this is a private client and he did it as a favor. And he also said, "I am cleaning up my law business so I can focus on the president."

Now, we also connected with the lead Florida attorney for the defendant, and he's pretty happy about it, Wolf. He said that it's an honor to have a historical and political icon helping him on this case, and he also said that Giuliani got involved because he personally knows this woman and knows the family -- Wolf.

BLITZER: But how unusual, M.J., is this?

LEE: I mean, it certainly took us by surprise. We were not expecting Rudy Giuliani to suddenly turn up at a courthouse in Florida, especially given the news yesterday that he said he was resigning from this big law firm in New York City, so that he could concentrate full time on representing President Trump.

And, of course, these are on serious matters as well. He is going to be representing President Trump on matters related to special counsel Robert Mueller and his investigation. So the fact that he is taking some time, though, to be fair, he told Dana Bash earlier that he only spent 30 minutes or so in the courthouse.

Nevertheless, it was still unexpected to see him there and I think people in the courthouse, some of the folks we talked to were surprised as well. It was definitely unexpected.

BLITZER: It certainly was.

All right, M.J., thank you very much for that reporting.

Let's get some more on all of this.

Democratic Congressman Ruben Gallego of Arizona is joining us. He's a key help member of the House Armed Services Committee.

REP. RUBEN GALLEGO (D), ARIZONA: Hi, Wolf.

BLITZER: Thanks so much, Congressman.

Let me start with your reaction, quick reaction to comments from the White House chief of staff, John Kelly, on undocumented immigrants coming into the United States. Kelly says they aren't criminals, but they do have trouble, in his word, assimilating into modern society, they don't speak English, they come from rural environments.

What do you make of those remarks?

GALLEGO: Well, it kind of shows you how ignorant and essentially dumb Kelly is when it comes to immigration issues.

These are the same things that were said about his Irish ancestors back in the 1830s all the way to the 1860s, and probably beyond then. They have said that about every immigrant group that has come to this country.

And also I hope he would actually recognize the fact that so many of those immigrants that he so-called are uneducated actually ended up being Marines that served under him.

[18:10:00]

But this kind of just is the overall problem with this White House. They are clueless when it comes to immigration issues. They have no idea what they're doing. They largely run off conspiracy theories and whatever is found on FOX News.

And that's why we don't have a fix for DACA and immigration in general, because they just kind of talk to each other and really have no clue what they're doing or saying.

BLITZER: And apparently he was sort of trying to soften some of the rather harsh rhetoric from the president of the United States about immigrants being criminals, rapists. You remember all that kind of talk.

Was this, from your perspective...

GALLEGO: Well, he failed.

BLITZER: You're a Marine, he's a Marine. Was it simply a poor choice of words, or do you think this reflects his genuine beliefs?

GALLEGO: No, this reflects his genuine belief.

We actually have had conversations with -- when he was Secretary Kelly as part of the Congressional Hispanic Caucus, as part of my job as a member of Congress. And he's pretty clueless when it comes to immigration issues and how the border works and how immigration law works in general.

So this is not surprising at all. He has said some pretty bad things, in my opinion, to members of the Congressional Hispanic Caucus that were really tone-deaf. So this does not surprise me whatsoever. And it doesn't surprise me why the White House can't get anything done on DACA, because they can't really do anything internally because they can't even figure out what the hell is going on -- heck is going on. I apologize.

BLITZER: The White House also trying to explain a cruel joke allegedly made by Kelly Sadler, a White House aide, about your fellow Arizonan, Senator John McCain.

She made a joke about him dying. Sarah Sanders refused today to offer any substantial comments on the matter during the press briefing.

Do you believe, first of all, that Sadler should lose her job?

GALLEGO: She should not only be fired, but if she had any dignity, she would resign right away. But at the same time, this whole administration is one big

administration that has zero dignity or respect both for other politicians or just the American public in general.

When you have a president that doesn't apologize for creating a conspiracy theory about the first black president being born in a foreign country, who doesn't apologize for publicly talking about sexually harassing women, for basically making up lies about immigrants and God knows how many other Americans, this is the type of standard that his own staff are taking.

So I'm not surprised. This administration has zero morals when it comes to actually holding up the dignity of the White House, and the staff is basically following the lead of the president.

BLITZER: What does it tell you about the culture, the tone over at the White House that Sadler felt comfortable even making this joke?

GALLEGO: Well, it's because this all really stems from the top.

It tells you that you have an administration that does not understand the dignity that comes with the office, the responsibility. And you have an administration and you have leadership in that West Wing that essentially allows this type of talk to happen all the time, and the fact that actually they did this and said this about an American hero is disgusting.

But you shouldn't be saying this about any type of American that is going through such a tough situation right now. But, again, they take their cues from the president. We have never heard the president apologize for some of the awful things that he's said, so I'm not surprised that Sadler somehow thinks this is acceptable type of rhetoric.

BLITZER: We certainly want to send only our best wishes to Senator McCain.

Let's turn to the upcoming summit next month, June 12, in Singapore between President Trump and Kim Jong-un of North Korea. The White House sounded rather optimistic about all of that today, emphasizing the goal is full nuclearization of the Korean Peninsula.

Do you believe that's realistic?

(CROSSTALK)

BLITZER: Full denuclearization, I should say.

(CROSSTALK)

GALLEGO: Yes.

I don't believe it's realistic. I hope it happens, though. I think any good American wants to see a good outcome that comes out of the Korean Peninsula. What we have seen traditionally is the Koreans try to get a lot of something for nothing in return. I think they're going to offer to stop the nuclear tests, even though

they don't really need to do any more nuclear tests. Their nuclear test site has been destroyed because of their own testing. And at the end of the day, I think a lot of work has already been done by the South Koreans, to give them credit.

At the same time, the president, I think, is coming to these negotiations a little too anxious, already talking about Nobel Peace Prizes and all these types of accolades, when we need to focus on getting down to the brass tacks sort of issues.

So I'm hopeful, but I have seen how North Korea has acted in the past. And I think the president right now is not actually entering this in the best negotiating possible -- negotiating scenario possible.

BLITZER: Congressman Gallego, thanks so much for joining us.

GALLEGO: Thank you.

BLITZER: We will have more on the breaking news coming up, Rudy Giuliani working on an insurance fraud case after saying he was going to focus solely on President Trump and the Russia investigation.

And are embarrassment and distraction behind the president's anger toward the special counsel?

(COMMERCIAL BREAK)

[18:19:22]

BLITZER: More now on the breaking news.

President Trump's new attorney Rudy Giuliani in a Florida courtroom today representing a private client one day after saying his sole focus is on the special counsel's Russia investigation and representing the president.

Let's get some more from our specialist and analysts.

And, Joey Jackson, you're a legal analyst.

What does this say to you that he's down in Florida all of a sudden working on some unrelated case after his law firm, Greenberg Traurig, severs all ties with him, he severs ties with them, both of them pointing out he has got to work full time for the president?

JOEY JACKSON, CNN LEGAL ANALYST: Wolf, it's disturbing for the following reason.

Listen, I don't begrudge any attorney, whether it's Rudy Giuliani or anyone else, from working on whatever case they please, whatever client hires them. That's their right.

[18:20:04]

But what it's about is deception of the American people again. He's severed from the firm, but he's working for a private client there.

What's the deal with all the distortion, the distraction, dishonesty? Just be honest about it and own up to the fact that you're with the firm. The fact is, is that I'm sure the firm was embarrassed and mortified by the rollout of his defense of the president.

And perhaps if he was spending more time interviewing his client, as the president, the rollout of that issue, and less time dealing with insurance defense, he would have been conversant with the facts and have been able to articulate the facts and articulate the president's defense.

So work with who you want, do what you want, but don't say, I'm separated from the company, it's only a favor. Just be honest about it. Say you're still with them, and allow your law firm to own up to the fact that you're still there. So, that's the problem I have with it.

BLITZER: Phil Mudd, is Rudy Giuliani helping or hurting the president?

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: I think in one respect, at least initially, he was helping.

That is, I thought he was clearing the decks. The president lied about a bunch of stuff. You can lie to the media, you can't lie to the special counsel. What Giuliani did initially was to say, look, let's get all the lies out the window and say, yes, he knew that they were paying a porn star.

At this point, though, I think he's starting to hurt, and partly he's starting to hurt because his relationship, I believe, with the president has to be degraded. There is no way this president, who loves the media, likes seeing Rudy Giuliani, the only man who likes a camera more than the president, taking all this airtime.

At some point, he has got to step back -- that is, the president -- and say, this guy is stealing my thunder, I have got to get rid of him.

BLITZER: Samantha Vinograd, what do you think?

SAMANTHA VINOGRAD, CNN NATIONAL SECURITY ANALYST: I agree with Phil.

I think that Giuliani obviously likes to be in front of the media. The president likes to be in front of the media. And the bottom line is that we are all so caught up in these improvs that we see every night on television that we're losing site of the real issues that we should be talking on, talking about, like Russia's attack on our country, for example.

We're getting so lost in these media shows that we're losing the forest for the trees, I think.

BLITZER: Rebecca? REBECCA BERG, CNN POLITICAL ANALYST: Well, I would argue -- Phil brings up this point that maybe the president will get sick of Rudy being on television, that maybe he's leaning in too much to his new role.

But the president likes having these vocal advocates on his behalf on TV, and Rudy Giuliani is someone he trusts, someone he views as a loyalist. Those are important qualities to President Trump. And we have seen him continue to back people who may be overstep or say too much if he feels that they are on his team, are on his side.

And remember they're also similar men. They're both older, they're both New Yorkers. They have a lot in common. That also makes a difference.

(CROSSTALK)

BLITZER: Let's get to another issue.

Joey Jackson, I want you to listen to what the White House chief of staff, John Kelly, told NPR news about how the president feels about this overall Russia probe. Listen to this.

(BEGIN AUDIO CLIP)

KELLY: It may not be a cloud, but certainly the president is somewhat embarrassed, frankly, when world leaders come in. The first couple of minutes for every conversation might revolve around that kind of thing.

(END AUDIO CLIP)

BLITZER: He said he was embarrassed, later said that he was -- the president was distracted. What do you think?

JACKSON: What's it going to be? Is he embarrassed? Is he distracted?

Obviously, it's an embarrassment, because it takes him off-message, not that he needs any help, based upon his lack of discipline by getting off-message.

But, of course, it's a huge annoyance to his presidency, but it may very well be an annoyance that was brought out by his own doing and his administration's own doing. We don't know all the connections yet.

But, obviously, I think it's a distraction to everyone. And at some point, there will be a leveling with the American people, there will be a conversation where we can all find out specifically what occurred.

When that will happen, we don't know. When the report will be released, we don't know. How many more indictments there will be, if any, we don't know. But obviously it has to be a huge cloud centering around him. And just one final point, Wolf. On the issue of Giuliani, I do get and agree that they're similar people, he's similar to the president, they're all friends. But at some point, friend or no friend, if somebody isn't aiding your cause and adding value to what you're doing, they have to be let go.

And I'm one who followed Giuliani, Southern District attorney, I'm a New Yorker, mayor of New York. He was always sharp, swift, to the point. But based upon what he's doing, it's just terrible for this president all the way around.

BLITZER: Well, let me get Phil Mudd to weigh in.

Go ahead, Phil.

MUDD: Look, the bottom line here on Rudy Giuliani, just for a second, he's Scaramucci without the hair.

The guy is going to get dumped because he's not doing the president favors. On this issue of what's going on in the White House about the chief of staff, I don't think the president is embarrassed. I think it's bigger than that.

The president worked the New York media for decades like a violin creating a fake personality, a fake business behind this idea that he was a terrific guy and a terrific businessman. And the New York media bought it.

What Mueller is doing day by day, month by month is degrading decades of Trump persuading himself that he has a fable of a life, that he's a great guy. And Mueller is killing that in ways that the New York media could never do.

[18:25:01]

I think this is bigger than just embarrassment. I think Trump is being sort of threatened by Mueller because his whole life myth he built in New York is dying.

BLITZER: The White House chief of staff, Sam, says that the Russia probe hampers the president's ability to deal with world leaders.

VINOGRAD: I actually agree with that, but for reasons different than what the White House says. Not because it's a witch-hunt.

But every day that the investigation goes on and every time the president tweets about it or the White House says that it's a witch- hunt, they're messaging to world leaders the easiest way to get under the president's skin and to stoke his paranoia about what's going on.

And so I think the president is obviously distracted. And if you're an enemy of the United States right now or you're Russia, your bots and trolls are working overtime trying to stoke this paranoia and share messages about the fact that this investigation is political and out to get the president.

BLITZER: Do you buy this explanation from Kelly, not embarrassed, distracted?

BERG: Well, it's a little disingenuous from the White House, Wolf, when you have a president, President Trump, who holds his own skills in such high esteem.

He believes he is the best at everything, that he knows everything he needs to be president, that negotiating is easy for him, that being president, frankly, is easy for him. And so for the White House then to say that this investigation is a distraction for him and taking away from his ability to do his job doesn't really add up.

BLITZER: All right, just ahead, we've got a lot more to discuss.

The White House not -- repeat -- not apologizing for an aide's crude comment about Senator McCain dying. Is President Trump setting the tone for his staffers?

And two major corporations now say it was a mistake to funnel money to President Trump's longtime personal lawyer, Michael Cohen. What is the White House saying about this?

(COMMERCIAL BREAK)

BLITZER: Two major companies are now expressing regret for paying hundreds of thousands of dollars to President Trump's longtime personal lawyer, Michael Cohen, in hopes of getting influence and access to the administration.

[18:31:36] Joey Jackson, let me get your thoughts on what we're seeing from AT&T which, by the way, is trying to purchase CNN's parent company of Time Warner, and Novartis, this huge Swiss-based pharmaceutical company. They insist it was a big mistake, but it was nothing illegal. What do you think?

JACKSON: Well, on the issue of illegality, certainly, there is nothing illegal about it. You know, you pay for access for understanding who someone is, for getting close to that person, for potentially influencing policy that could represent thousands and thousands -- or millions, rather, of dollars.

But you know, I'm a little confused, Wolf. Is the apology based upon the fact that they were caught and the fact is that Michael Cohen is now entangled in all of these criminal accusations? Is that the apology? Or are they genuinely -- what are they apologizing for? Or that they approached him in the first instance? Had this not come out, I don't think we'd hear any apology; no one would be upset. No one would be ashamed.

But since now everyone knows, and you're worried about the bottom line, which is money, "I'm so, so sorry." It's disingenuous.

BLITZER: What do you think, Phil?

MUDD: I love Joey. I completely agree with what he says. The issue here, and I think there's one interesting characteristic of this, because getting pay for play, that is pay for access in Washington, is as old as prostitution. I mean, it's the business of D.C. Power is money, and people get paid a lot for access to power.

The interesting piece here is the people who typically provide access have long histories in Washington, because they have access to politicians who've been around for decades. Trump obviously had -- President Trump obviously had not been around for decades, so companies had to go to people they didn't know, entities they didn't know. Enter Michael Cohen.

And then you find out that those people who don't have long histories, long pedigrees in Washington are not draining the swamp. They're pumping in the pond scum. I mean, that's what happened here. The companies didn't know who to go to, so they had to go to somebody like this; and they got what they paid for.

BLITZER: You know, it's interesting, Rebecca. The White House press secretary, Sarah Sanders, she said today that what all this shows is that they're trying to clean the swamp, because even though there was this effort to work with AT&T from Michael Cohen, it didn't work. The president and the Justice Department strongly opposed this purchase of -- of Time Warner.

BERG: Well, it's some good spin, Wolf, but it's just that. It's spin, because just because Michael Cohen was not good at his job, good at the job that AT&T hired him for, that does not mean that the swamp has been drained. It does not mean that he did not accept that money in hopes that he would be able to influence the president. It's just as swampy as it ever was. It's exactly the same.

BLITZER: Here's what I wonder about, Sam. I want to get your thoughts, because you're an expert in this area. If Michael Cohen got $1.2 million from this Swiss-based Novartis, this huge pharmaceutical company, he's representing a foreign entity, under U.S. law doesn't he have to register as a foreign agent with the Justice Department or the Foreign Agents Registration Act?

SAMANTHA VINOGRAD, CNN LEGAL AND NATIONAL SECURITY ANALYST: I think we have to wait and see, because what FARA or Foreign Agent Registration Act implications come down to is exactly what you're doing on behalf of a foreign company; how much time you're spending; who you're really speaking with on a daily or weekly basis.

So I think that the Justice Department and others will be looking into that. And in the interim, to everybody else's point here, it's very clear that these companies were just going to someone that they thought had access, like companies have done under every other administration, and will probably -- illegal acts under FARA or otherwise, if they come out, the White House will try to distance themselves even further from Cohen.

[18:35:05] BLITZER: Do you want to weigh in on that, Joey?

JACKSON: Well, you know, the fact is -- is that the mere fact that you're accepting money from a foreign entity, in and of itself, doesn't necessarily trigger a declaration of you have to register now. And so, you know, to Sam's point, it depends upon the precise activities that are involved. The extent of the involvement, specifically what're doing for the companies? Are you actually an agent of the government.

So, you know, again, I'm with Sam in terms of let's take a wait and see.

BLITZER: On a different issue, I just want, Phil Mudd, to get your thoughts on that rather crude joke about John McCain dying we heard from the White House staffer. The White House refusing to apologize or really say anything about that. What do you make of that?

MUDD: I mean, give me a break. We went through a campaign where the president makes fun of a fellow candidate's face, where the president makes fun of people with disabilities, where the president makes fun of the Hispanic -- Hispanic heritage of a judge, and we want the tone of the White House to be respectful to a senator who the president himself has denigrated after he served -- that is, Senator McCain served -- our country?

The story here isn't a staffer. The story is a tone that was set from the campaign and a tone that says we expected, for generations, decency from the White House, where we could tell a seven-year-old, "Look at President Kennedy. Look at President Reagan. Look at President Bush. Look at President Obama. And beyond a politician, you can find a decent man." We can't say that anymore. That's the story.

BLITZER: What do you think about Kelly, the White House chief of staff, Phil, saying that, "You know what? These undocumented immigrants coming from rural areas, they can't speak English, they really have no business. It would be really difficult for them to assimilate here in the United States." What do you think about that?

MUDD: Yes, it would be difficult for them to assimilate, like the Italians, like the Chinese, like the Japanese, like the Vietnamese, like the Mexicans, like the Guatemalans, like the Hondurans, like every generation that's been here since the Puritans and the generation after them that got rich and white (ph), said the people coming after us are dirty, and they shouldn't be here. The story of this country.

Did he miss first grade through eighth grade? Because every history book I read said poor people came here from places we didn't like. We made fun of them, and they did fine.

That's my generation, that's yours and that's his.

BLITZER: All right. Good point.

Everybody, stand by. There's more we need to cover, including the deputy attorney general, Rod Rosenstein. He went from a presidential favorite to a Trump target.

Plus new details of EPA chief Scott Pruitt's pricey dinner with a top Vatican official accused of sexual abuse.

(COMMERCIAL BREAK) [18:42;12] BLITZER: He's the frequent target of President Trump's fury and frustration with the Russia investigation, as well as a target for the president's allies in Congress. Our chief political analyst, Gloria Borger, takes a closer look at the deputy attorney general, Rod Rosenstein.

(BEGIN VIDEOTAPE)

BORGER (voice-over): If the president is your boss, this is not what you want to hear when he's asked if he'll fire you.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: You figure that one out.

BORGER: Trump was dissing his own deputy attorney general, Rod Rosenstein, for whom every day can be a near-death experience, as a frustrated president lashes out at the Russia investigation.

TRUMP: The entire thing has been a witch-hunt, and there is no collusion.

BORGER: Rosenstein became the man in charge once the attorney general recused himself. So he's the one who hired the special counsel, which leaves him as the man in the middle, between Trump and any move to fire Robert Mueller, a precarious place.

Oddly enough, Rod Rosenstein started out as a teacher's pet.

TRUMP: He's highly respected, very good guy, very smart guy. The Democrats like him; the Republicans like him.

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: This guy is a man of upstanding character and, essentially, the gold standard at the Department of Justice.

BORGER: Rosenstein's stock rose even higher when after, just two weeks on the job, he wrote a now-infamous memo at the request of the president, lambasting FBI Director James Comey for mishandling the Clinton e-mail investigation.

ANDY WHITE, ROSENSTEIN FRIEND AND FORMER COLLEAGUE: If the president asks you to -- to "Look at this and give me your thoughts," you can't say no.

BORGER (on camera): So he writes the memo.

WHITE: Writes the memo.

BORGER: And then?

WHITE: All hell breaks loose.

BORGER (voice-over): The president loved it, almost as much as he hated Comey. So much, in fact, that he received it, released it, and fired Comey, all on the same day last May.

ANNOUNCER: This is CNN breaking news.

BLITZER: All right, we have major breaking news.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: The president of the United States has terminated the director of the FBI, James Comey.

BORGER: Josh Campbell, a close Comey aide, was with him in Los Angeles when Comey learned, watching CNN, that he had been fired.

JOSH CAMPBELL, CNN LAW ENFORCEMENT ANALYST: They said, "We have a letter from the president that was dropped off at the visitor's center at FBI Headquarters."

BORGER (on camera): Visitor's center?

CAMPBELL: Visitor's center. "Indicating you've been fired." They said, "There's something else. There's something attached to this letter. There's a lengthy explanation from the deputy attorney general, laying out a case against you."

BORGER: Was he surprised at Rosenstein?

CAMPBELL: He was very surprised at Rod Rosenstein. And again, not that they were chummy or friends, or you would know what to expect. Because none of this was telegraphed.

BORGER: Do you think he knew that it was going to be used by the president as the rationale, publicly, for firing James Comey?

[18:45:08] WHITE: Well, I think he had to know it was going to be used in some degree. I don't think that he realized that the president was going to put greyhound bus tracks on his back with that memo. I don't think he realized it was going to be used in that way.

ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL: My memo truthfully reflects my views. I'm not in a position to comment on anybody else. So, from my perspective, Senator, that memo is about what it's about. I do not know what was in anybody else's mind.

BORGER (voice-over): But in Comey world, Rosenstein is seen as a Trump collaborator, not an independent actor.

(on camera): So what's the motive?

CAMPBELL: I think the motive is to keep his job.

BORGER: What's Rosenstein's rep now?

CAMPBELL: There's conflict there. He's someone people are suspicious of but in these interesting times people are looking to him and thinking he might be the last best hope that we have to ensure that Bob Mueller is allowed to do his job which is a strange place to be in.

BORGER (voice-over): Rosenstein is 53, married, with two teenaged daughters. WHITE: He's a dad. His world has changed a lot because of this.

ROSENSTEIN: My younger daughter was 14 at the time when she heard I was going to become deputy, she asked me a very important question. She said, dad, does this mean you get your picture in the paper?

(LAUGHTER)

And I said no.

(LAUGHTER)

BORGER: But he keeps his own counsel even with his friends.

WHITE: With Rod, you scratch the surface and you get more surface. But that's him, he is inscrutable publicly. Professionally, he is devastatingly effective. He's methodical, he's thorough.

BORGER: A career Justice Department official with a Harvard law pedigree. A former U.S. attorney from Maryland for a dozen years, a Republican appointed by George W. Bush.

JAMES TRUSTY, ROSENSTEIN FRIEND AND FORMER COLLEAGUE: He's been presiding over a small district that was bringing every case you would imagine from materiel support of terrorism to public corruption to MS- 13 to corrupt jails where almost all the guards get indicted. I mean, he's been aggressive and hasn't shied away from the political spotlight when it comes to prosecutorial decisions.

BORGER: He was confirmed for his current job last April, 94-6, but the shine wore off after the Mueller appointment, and then Rosenstein further enraged Trump by not stopping the Michael Cohen raid.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: So, I just heard that they broke into the office of one of my personal attorneys. A good man. And it's a disgraceful situation.

BORGER: And increasingly tenuous for Rosenstein.

SALLY YATES, FORMER DEPUTY ATTORNEY GENERAL: No one is above the law, even the president.

BORGER: Obama appointee Sally Yates is a former deputy attorney general fired by Trump last year.

YATES: The president can't fire a prosecutor because he's mad that he authorized a search warrant of his lawyer's home and office.

BORGER (on camera): He could be mad about it.

YATES: Sure. He could be mad about it, as long as he's not trying to influence his conduct.

BORGER (voice-over): At a recent meeting with the president, Rosenstein himself volunteer that the Cohen raid did not put Trump in any legal jeopardy, but the president remained furious. TRUMP: I'm very disappointed in my Justice Department but because of

the fact that it's going on -- and I think you'll understand this, I have decided I won't be involved. I may change my mind at some point because what's going on is a disgrace.

RUDY GIULIANI, PRESIDENT TRUMP'S ATTORNEY: I believe that Attorney General Sessions, my good friend, and Rosenstein who I don't know, they believe they should in the interest of justice end this investigation.

WHITE: If he asked Rod to fire Mr. Mueller, Rod would resign, that's my guess because it's untenable at that point. You have a president who's not respecting the process, not respecting the Constitution. He won't do it.

BORGER (on camera): He won't?

WHITE: No.

YATES: It would be a red line for the president to fire Bob Mueller. But it should equally be crossing a red line if he were to fire Rosenstein as well.

BORGER: And what red line is that?

YATES: Well, it's a red line in terms of totally turning the rule of law on its head.

BORGER (voice-over): Some Republicans would see it as a step in the right direction, calling Rosenstein conflicted because he wrote the Comey memo. They also fume he won't provide his unredacted internal memo detailing the scope of the Mueller investigation. The president himself again threatening: At some point, I will have no choice but to use the powers granted to the presidency and get involved.

UNIDENTIFIED MALE: Are you afraid of President Trump firing you?

ROSENSTEIN: No, I'm not, Congressman.

TRUSTY: Rod is, he's like shockingly fatalistic.

ROSENSTEIN: There have been people who have been making threats privately and publicly against me for quite some time.

[18:50:06] And I think they should understand by now, the Department of Justice is not going to extorted.

WHITE: He's a career public servant. He's a career prosecutor. Whatever President Trump wants to say, frankly, can only make his reputation go up.

BORGER (on camera): Even if he gets fired.

WHITE: Especially if he gets fired.

(END VIDEOTAPE) BLITZER: Gloria Borger is joining us right now.

Gloria, excellent piece. At least in the last few days, the president has been relatively quiet about the Justice Department. What does this bode for Rod Rosenstein?

BORGER: Well, you know, right now, he's preoccupied with foreign policy, as we know, with the Iran deal, with North Korea. He's also got a new legal team, Wolf, that he's put in place. He's got a few new lawyers and they're clearly telling him the same thing that his former lawyers were telling him, which is leave Rod Rosenstein alone right now, leave Jeff Sessions alone right now. Congress, Republicans in Congress are fighting with him.

Let members of Congress have this fight with him. We don't want you to get involved. However, Wolf, you know with this president, it's very unpredictable.

BLITZER: Very unpredictable. Everybody wonders every day what's going to happen.

BORGER: Especially Rosenstein.

BLITZER: Yes, I'm sure he does. Gloria, good work.

BORGER: Thank you.

BLITZER: Thank you.

Just ahead, why did the head of the EPA share an expensive meal with a cardinal accused of sex abuse who's also a climate change denier?

(COMMERCIAL BREAK)

[18:56:06] BLITZER: There are new questions tonight about EPA administrator, Scott Pruitt, and a pricey dinner he had with a Vatican official accused of sexual abuse.

CNN's Sara Ganim is joining us right now.

Sara, is the White House commenting on this?

SARA GANIM, CNN CORRESPONDENT: Wolf, the president said today he has confidence in his EPA administrator, but it's not clear if he was aware of this latest scandal involving Scott Pruitt, a previously undisclosed dinner in Rome with a top Vatican official under investigation for child sexual abuse.

(BEGIN VIDEOTAPE)

GANIM (voice-over): Documents uncovered by "The New York Times" reveal EPA administrator Scott Pruitt dined with a controversial Vatican figure, along with over a dozen other church leaders at a five star restaurant during his trip to Italy last year. Even though his public schedule says he was simply having a private dinner with staff.

CARDINAL GEORGE PELL, VATICAN TREASURER: Sometimes the very learned and clever can be brilliantly foolish.

GANIM: The guest of honor, according to the documents, was a known climate denier, Vatican treasurer, Cardinal George Pell.

PELL: Are there any long-term benefits from the schemes to combat global warming, apart from extra text revenues for government?

GANIM: Pell is also the highest ranking member of the Catholic Church to be charged with child sex abuse. Decades of allegations are now going to court in Australia, where Pell was an archbishop. Pell has pleaded not guilty and while the dinner took place before he was formally charged, he was under investigation when he dined with Pruitt.

The EPA won't say why Pell was kept off the public schedule. In a statement to CNN, the agency says on June 9th, 2017, Administrator Pruitt had dinner with over a dozen leaders from the Holy See, and on June 29th, 2017, Cardinal Pell was charged. But the document specifically says the dinner was with Pell, even noting it would take a day before the cardinal's birthday.

This trip is already under scrutiny for its $120,000 price tag and reporting that it was organized by an activist friend of Pruitt's. His justification --

SCOTT PRUITT, EPA ADMINISTRATOR: The trip to Italy was a G-7 trip, a week after the Paris decision.

(END VIDEOTAPE)

GANIM: Wolf, the EPA claims Scott Pruitt did not know that Cardinal Pell was coming to the dinner. However, that does seem to be contradicted by these documents. Tonight, the EPA still has not said who paid for the cardinal's dinner, only that Scott Pruitt paid for his own meal.

BLITZER: Seems like there are more issues that come up with this Pruitt matter almost every day. Is there any sense as to how much longer this is going on?

GANIM: Daily. And it does seems to be a divide with the White House, inside the White House, between the president and senior staff. Some of whom have told us they would like to see him go, the president hanging on and showing his full support, Wolf.

BLITZER: Sara Ganim, reporting for us, thanks very much.

Important note to our viewers. We're going to have much more on the many controversies dogging Scott Pruitt. CNN's Drew Griffin investigates in a special report. Pruitt under fire, the battle at the EPA. That's tonight at 9:20 p.m. Eastern, only here on CNN, 9:20 p.m. Eastern.

Finally tonight, this important note: we want to say thank you -- thank you to a CNN SITUATION ROOM original. After nearly 13 years working with our team, our supervising producer Vaughn Sterling is leaving Washington. He's leaving our staff. There you see him right there.

Give us a big smile.

But he's staying in the CNN family fortunately. Vaughn is going to help launch CNN's newest program, "CUOMO PRIMETIME". We're sending him, his wife, Robin, their daughter, Violet, off with all of our very, very best wishes. He's telling me to wrap up because the end of our show.

Vaughn, good look to you. Good luck to the family. We love you. Only, only the best.

Thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.