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Arizona GOP Senate Candidates Embrace Trump Ahead of Primary; Arizona Voters Hit Polls as State Mourns John McCain; Trump Meets Canadian Prime Minister to Hash Out a Deal on Trade; Stocks to Open Up Amid Trade Talks with Mexico; Hundreds of Fans Line Up to Pay their Respects to the Queen of Soul Aretha Franklin. Aired 9-9:30a ET

Aired August 28, 2018 - 09:00   ET

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

[09:00:00] ERICA HILL, CNN ANCHOR: -- where they will remain for the next five days of national mourning for John McCain whose lifetime of service to the country President Trump has said now that he does appreciate.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Our hearts and prayers are going to the family of Senator John McCain. We very much appreciate everything that Senator McCain has done for our country.

(END VIDEO CLIP)

HILL: On Capitol Hill meantime, some powerful House Republicans are grilling one of the Justice Department officials who President Trump accuses of rigging the special counsel probe. Also this morning, the on-again supposedly off-again nuclear standoff with North Korea may be on again? In a private letter Pyongyang warning the White House that denuclearization, and I quote here, "may fall apart."

A lot to get to on this Tuesday morning. Let's begin, though, at the White House. CNN's Athena Jones is there with the latest on the tributes to the fallen senator and also, Athena, I know you have some reporting on what took the president so long to issue that statement and to ask again that the flags be flown at half-staff.

ATHENA JONES, CNN NATIONAL CORRESPONDENT: Good morning, Erica. That's right. Our reporting is showing that there was a lot of discomfort here behind the scenes at the White House with the president's handling of all of this. It was one of the most remarkable things, you know, learning that even White House staffers were privately hoping the president would issue a fuller respectful statement honoring Senator McCain along with a proclamation declaring that the flag here at the White House should be lowered again to half- staff.

One person familiar with the internal deliberations says the chief of staff John Kelly and deputy chief of staff for communications Bill Shine urged -- strongly urged the president to release a more robust statement but he resisted. He felt that the television coverage of McCain's passing was over the top. As the day progressed, aides continued to press the president to at

least address the flag issue. This is what we were talking about yesterday, that flag had been raised again overnight from Sunday into Monday, raising a lot of eyebrows so these aides wanted to see the president at least issue a proclamation.

Well, that is where the American Legion comes in. The veterans group issued a strongly worded, very pointed statement urging the president to issue this proclamation to declare that the flag here should be at half-staff until the day of Senator McCain's internment.

Well, in the end that is what happened. And later in the day or later in the day, you saw the president released a fuller statement, talked a little bit about the logistics around the memorial services and the funeral. And also later speak on camera for the first time, this after ignoring at least five times chances to weigh in on McCain's legacy.

Now Republicans are saying -- Republican operators are saying this was an unforced error, the way it was handled defies logic. And speaking of Capitol Hill, on McCain's Senate desk you see a vase of white roses so people are -- continue to pay their respects to the senator up on Capitol Hill -- Erica.

HILL: Athena Jones with the latest for us from the White House. Athena, thank you.

House Republicans, meantime, grilling the Justice Department official whom President Trump has called a creep and a disgrace. Bruce Ohr is being interviewed in a closed door session with the House Judiciary and Oversight Committee about his connections to that Steele dossier and the ex-British spy who put it together.

CNN's justice correspondent Jessica Schneider joins us now with the latest from Washington.

Jessica, good morning.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Good morning, Erica. You know, Bruce Ohr, he's been a target of conservatives and the president for more than a year now. All of them have been demanding to know why Bruce Ohr, who's been with the Department of Justice for three decades, why he met multiple times with Christopher Steele. Of course Steele is the former British spy who compiled that dossier with damaging but unverified information on President Trump.

Lawmakers today no doubt also want to know more about the fact that Bruce Ohr's wife was working at Fusion GPS at the time. That's the firm that commissioned the dossier in part. Now the president has called for Ohr's removal from the DOJ. He's an attorney with the Department of Justice. He's been there for more than 30 years. But so far Ohr has only been demoted.

Now the president in recent weeks has also threatened to revoke Ohr's security clearance as the president of course has done with former National Security officials including John Brennan so this morning conservatives, they're getting their chance to go behind closed doors, to grill Bruce Ohr about his contacts with Christopher Steele, and they want to know whether or not that played any role in the Russia investigation.

And Erica, it really is likely to get pretty heated. We saw Bruce Ohr going into the committee room. We're not going to see what happens inside. It is closed doors. But we might hear later today what exactly unfolded there -- Erica.

HILL: We will look for that.

Also the "Wall Street Journal" this morning reporting that lawyers for former Trump campaign chairman Paul Manafort were apparently talking about a plea deal with prosecutors for his second trial while the jury was deliberating his first trial. This deal fell through.

Do we know anything about why?

SCHNEIDER: Well, apparently those plea deals, the talks at least, really just stalled and it's possibly because Special Counsel Robert Mueller raised some issues to Manafort's defense team, presumably those were issues that Manafort didn't want to discuss or really disclose.

[09:05:07] Now the "Wall Street Journal," they didn't discover what exactly those issues were that made those -- that made that possible plea deal anyway fall through but it really is significant that these talks were even happening since Paul Manafort has long held steadfast that he is innocent saying he won't work on a deal with prosecutors but really the reality here is that with one conviction on eight counts in Virginia that happened one week ago, we have that D.C. trial coming up in just a few weeks where prosecutors say they have three times the evidence.

All that means the pressure might really be on for Manafort to strike a deal here and avoid even more prison time if he's convicted. So today there is a pre-trial hearing in D.C. Manafort himself, though, will not be there. He's waived his right to attend any of these pretrial hearings. And the reason is, he said that the amount of time and effort it takes to get from the jail in Alexandria, where he's been held and locked up for all this time, he says it's just too much work to get to the courthouse.

So, Erica, the next time we'll see Paul Manafort will presumably be at his trial in Washington, D.C. And that's of course if it even goes forward. Who knows, maybe a plea deal could possibly happen in the next few weeks -- Erica.

HILL: Jessica Schneider with the latest for us. Jessica, thank you.

Joining me now, Caroline Polisi, federal and white collar criminal defense attorney, and Josh Campbell, CNN law enforcement analyst and former FBI supervisory special agent.

And Caroline, I want to start with you. So as we pick up on this "Wall Street Journal" reporting here, two of the things that really stand out. Number one, that these discussions were happening before there was a conviction. The jury was still deliberating in that trial, and number two that apparently the special counsel raised some questions.

I mean, just what are your thoughts on those and what could they have maybe seen as issues?

CAROLINA POLISI, FEDERAL AND WHITE COLLAR CRIMINAL DEFENSE ATTORNEY: Right. Well, I'm particularly interested in the timing of these negotiations because as we all know that jury deliberation was a real nail biter. They deliberated -- apparently these talks took place over the course of those four days so the question is, who initiated those talks? If it were -- maybe it was the government. Maybe they were nervous about their case moving forward.

You know, the longer the jury deliberations there's more and more speculation that maybe there would be an acquittal, so maybe the government came to him and said hey, this would be the time to, you know, come to the table now but it sounds like he wasn't willing to fully cooperate. That's been Manafort's issue the whole time.

You know, when you enter a cooperation deal with the government, you have to be 100 percent truthful on everything. You don't get to pick and choose the areas in which you cooperate on. So it sounds like even though the recording isn't crystal clear, it sound like maybe he wasn't willing to come clean on every aspect of his involvement.

HILL: Right. And that could be a deal breaker.

POLISI: Yes.

HILL: If one would like to use that expression.

Josh, as we look at what's happening right now behind closed doors. Trey Gowdy actually said to FOX News yesterday we're going to get to the bottom of what he did, why he did it, who he did in concert with, and whether he had the permission of the supervisors of the Department of Justice.

So here's what we know from reporting, our own reporting that Bruce Ohr and Christopher Steele did meet. The "New York Times" saying almost a dozen times but that the FBI was aware of that, and that after each meeting he essentially debriefed the FBI. Is there anything in what we know that appears to not be kosher here, Josh?

JOSH CAMPBELL, CNN LAW ENFORCEMENT ANALYST: So I think there are a lot of questions that have to be answered but we have to remember that they're just that, they're questions. But what we've seen from the president of the United States, what we've seen from people like Trey Gowdy is they're not so much interested in the witness actually answering the questions. They're interested in propping their own answers in order to paint this narrative.

Now here what we see is an attempt to denigrate and smear a 30-year career veteran at the Department of Justice. Now full disclosure I worked in the FBI while all this is going down. I didn't know Bruce Ohr, so I don't him, all intense and purposes everything I've heard that he's, you know, a very distinguished person. People who worked with him, they speak very highly of him. But let's look at what we're dealing with.

This is someone who had a previous relationship with Christopher Steele throughout the course of his work, you know, previously, Ohr was working on Russian organized crime and obviously Steele was an MI- 6 agent, so he knew him. So if there was anyone to sit down with this person who was coming to the FBI to say I have incriminating information that you should know about it, it makes complete sense that you would have someone that already had preexisting relationship.

HILL: Right.

CAMPBELL: I think what they're trying to do is cloud the issue with his wife and say well, because she worked for Fusion GPS, that means that his motives must have been sinister. I think that's actually insulting to women that, you know, the president and his allies can't distinguish husbands from their wives. We saw that with Andrew McCain at the FBI.

But I think this is a continued pattern. Are there important questions to be answered? Yes. We'll get to the bottom of that but I think it's disgraceful what they're doing to this person's career.

HILL: Based on your time at the FBI what is standard operating proceed here? Right? So yes, we know that he told the FBI based on the reporting that the FBI knew he was debriefing them afterwards but if he worked for the DOJ, I mean, are the requirements, the rules and regulations basically the same? That that would need to be disclosed to your superiors so that everybody was in concert?

(CROSSTALK)

CAMPBELL: Absolutely. You would want to know that information but if you think about it, again, if you have someone that's providing you information and someone from the Department of Justice says, hey, I know this person, you can use that person as a conduit to sit down and gather information.

[09:10:03] I know this from working sources, Caroline knows this as well. The people who come to the government with information and much of the time they have an agenda. So if you look at Christopher Steele, he made no bones about his disdain for Donald Trump and actually was -- you know, in his judgment sounding the alarm that this is so important, so critical we have to get to the bottom of it. And that's why his actual frustration manifested itself into him actually providing that information to the press because he didn't think the government was doing enough.

So obviously he had an agenda. But it's insulting to the Department of Justice and insulting to the FBI to think that they couldn't decipher that and sift through that and say what's true, what's fact, what's opinion, and I think Bruce Ohr was an important part of that.

HILL: All right, Caroline, real quickly to you. I do just want to get your take on this. Rudy Giuliani saying that they still haven't heard back from Mueller, that they sent a letter, as we know, it was only five or six pages, he says that the Mueller team says they're still going over it. Anything we should read into this? Because this is about the president sitting down for an interview or not.

POLISI: No, I think this whole thing is just political theater. I said it before. I don't think the president is going to sit down for an interview. I don't think it's in his interest quite frankly to sit down for an interview. I think this is Giuliani just dragging this out one more time. I don't think anything -- it means anything.

HILL: Caroline, Josh, appreciate it, thank you both for joining us.

It is a major primary day and in Arizona a fierce Republican battle is on to fill Senator Jeff Flake's seat. We'll take a look at what's at stake.

Plus, North Korea with a stark warning. Denuclearization talks may fall apart. This morning what we're learning about a secret letter that was sent to Secretary Mike Pompeo.

Plus, showing more than just a little respect. The line wrapping around the block. People on hand to pay their respects to the Queen of Soul, Aretha Franklin. Some have been in line since Sunday night. We will take you there live.

(COMMERCIAL BREAK)

[09:15:00] ERICA HILL, HOST, NEWSROOM: This morning, voters in Arizona and Florida are heading to the polls, and place is one of the last big primary days before the November mid-term. In Arizona, the race is on to replace outgoing senator and vocal Trump critic Jeff Flake.

The three candidates vying for the GOP nomination are far from the mold of Senator Flake or Senator John McCain. They have publicly embraced President Trump, which has been a mostly winning formula so far for Republican primary candidates in 2018.

Joining me now, Cnn's Nick Watt who is in Scottsdale, Arizona for us this morning, with the latest, Nick, good morning.

NICK WATT, CNN CORRESPONDENT: Good morning, Erica. Well, the polls have just opened at 6:00 a.m. this morning in what one local news site called on the Republican side anyway a Trump hug-fest. We've got three candidates, the first is Sheriff Joe Arpaio who is probably the outlier.

He, you remember was famously pardoned by President Trump last Summer. As I say, the outlier, although he calls the polling Mickey Mouse and stacked. The next candidate is a former state Senator Kelli Ward who is running this kind of the anti-McCain, she actually ran against him in the 2016 primary.

And she's actually come under a little fire for suggesting that the McCain family announcement about withdrawing treatment from the senator, she suggested that may have been timed to hurt her campaign, she's since walked that back, apologized and suggested that it was in fact a fake news media narrative.

And then we have the probably frontrunner is Martha McSally who is a former combat pilot and Congresswoman. And interestingly, you know, she's also embracing Trump during this primary campaign, but she won't say whether she voted for him in 2016 and when that "Access Hollywood" tape came out, she was very scathing of him.

Right now, she is really pushing the fact that she has voted with him in Congress 97 percent of the time. Now, the Democrats, they really need this, and their candidate is probably going to be the congresswoman Kyrsten Sinema. She's running against one other candidate who hasn't really gained much traction, and she's also a consensual left-handed.

So, the issue here is though, Arizona hasn't voted in a Democrat since 1988, that might change this time, we'll see, it's going to be a close race according to everything that we're hearing. Back to you, Erica.

HILL: Nick Watt, thank you very much. Joining me now, Cnn's political analyst, "New York Times" correspondent Jonathan Martin. Jonathan, good to have you with us -- oh, there you are, now we have you. As we look at all this, you know, you wrote about this along with Maggie Haberman in the "Times".

And if we look at what's happening in Arizona, you know, Nick just laid out for us a little bit of what we've seen with Martha McSally and sort of changing positions, a different narrative on her part going from --

JONATHAN MARTIN, NEW YORK TIMES: Yes --

HILL: As you write about sort of asking the president to just lay low --

MARTIN: Right --

HILL: To now saying, hey, can you -- can you publicly hug me, too?

MARTIN: Yes, it kind of shows the evolution of the mainstream of the Republican Party from one of, you know, sort of Trump skepticism, unease, trying to come on gingerly, handle the president to recognizing that he is, you know, really beloved by at least the primary voters in the party, and that they've got to link themselves to him in order to survive these primaries.

And you know, Maggie Haberman and I write today that, you know, a few weeks ago, McSally and some of her allies were trying to get the president to endorse her outright, to effectively end the primary because this really has become Trump's party and he does bless these candidates in primaries, they tend to go on to win.

But just real fast, Erica, the question though is in a state like Arizona which is red-leaning, but you know, demographically is changing and it's becoming -- HILL: Yes --

MARTIN: More competitive politically, the question is, does embracing the president in the primary then create a risk for you in the general election when you've got a much broader electorate that is far less enamored with this president.

HILL: Which is sort of the great unknown obviously at this point.

MARTIN: Right.

HILL: It's also fascinating as we're looking at all of this that, you know, no one there is really -- certainly not in the Jeff Flake mold or in the John McCain mold.

[09:20:00] MARTIN: Right --

HILL: And while that is still a big question as you point out, moving forward, what that could mean in the general --

MARTIN: Yes --

HILL: At least in this case it's further proof really of how these divisive candidates, not just President Trump, but these candidates are the ones that are really gaining traction.

MARTIN: Yes, I -- you know, McSally is the establishment favorite in the race, but to, you know, remain viable and win the primary, she's had to sort of move not just stylistically to embrace the president more, but on substance too, having to kind of move toward a much more hard-line immigration position.

And you know, immigration is kind of wrapped up with President Trump and it really has become the kind of defining issue for the Republican Party and the Trump era. I was in Arizona a few times this year, and I can tell you that is the number one issue on the minds of primary voters in the Republican Party.

They're --

HILL: Right --

MARTIN: Deeply uneasy about immigration across the southern border of the U.S. And so the candidates to survive these primaries are having to try to accommodate that by shifting towards a much more restrictionist position.

And Erica, it's vastly different from where the party was 10, 12 years ago --

HILL: Right --

MARTIN: Where you had certainly some elements of restrictionism, but you also had the president of the United States at the time, George W. Bush, as the leading voice for a much more inclusive, moderate stance on immigration. HILL: Jonathan Martin, always appreciate it, thank you.

MARTIN: Thank you, Erica.

HILL: High-stakes trade negotiations at the White House today as the president appears to be on the verge of nixing NAFTA. President Trump plans to meet with the Canadian Foreign Minister to try to hammer out a new deal on trade. This comes after President Trump already agreed to a preliminary deal with Mexico.

The big question, where does that deal leave Canada? Well, Canada says it should know by the end of the week. Right now, stocks are expected to open slightly higher after news of that preliminary deal between the U.S. and Mexico. Investors will be keeping a close eye on what the trade developments could mean for the U.S. and its other relationships in particular, China.

Still to come, saying good-bye to the queen of soul. Hundreds of fans, some lined up for days, paying their respects to Aretha Franklin.

[09:25:00] (COMMERCIAL BREAK)

HILL: That picture that you see on your screen, that is a line that goes around the block in Detroit this morning. Fans are there to pay their final respects to the queen of soul. Today is the first public viewing for Aretha Franklin, it opened at 9:00 a.m. this morning.

Some fans though began lining up Sunday night. Our Ryan Young is at the Charles H. Wright Museum of African-American history. And Ryan, what are you hearing from folks who have come out to pay their respects?

RYAN YOUNG, CNN NATIONAL CORRESPONDENT: Yes, Erica, you can really feel the love here in this crowd. People have been wanting to show their respect to Aretha Franklin. You look at this crowd here that stretches all the way back with the first person in line who got here really early, they had come all the way from Las Vegas.

And then you see the spirit of people as they want to make sure they pay their respects to Aretha. And Allison(ph), you've seen so many people here over the last few hours. What has it been like to, first of all, get in line and be with people who love Aretha?

UNIDENTIFIED FEMALE: Well, I'm overwhelmed at this point, I'm almost speechless, she was so beautiful. She was a beautiful person, beautiful singer, outstanding, and I really enjoyed this crowd this morning. We had a good time out here singing all her old songs and just waiting patiently until the doors open.

YOUNG: Now, you walked inside, you were one of the first to go in there. And I talked to people, they say she looked beautiful on the inside --

UNIDENTIFIED FEMALE: Oh, it was amazing, beautiful. She had her legs crossed with her red on and her nails red and she just looks absolutely gorgeous.

YOUNG: Can you show us the posters that we have also provided?

UNIDENTIFIED FEMALE: These posters, I guess?

YOUNG: Yes, so you see people are collecting these as well. So Erica, you can feel the love from the crowd, people coming from all across the country, they've been performing in line, and not only have they been standing in line and of course, everybody sort of paused when the gold casket went by.

I want to show you something else as well. Over here, there's the pink Cadillac, and that is something that had stood out to a lot of people, that pink Cadillac, because of course, you remember that music, but this is all been sort of orchestrated so far to a point where fans said they wanted to be able to come out and pay their respects to Aretha Franklin.

That's something they wanted to do, but he says they've been waiting for days to be able to do this -- you see this young lady here who --

UNIDENTIFIED FEMALE: From New Orleans.

YOUNG: Came from New Orleans. Why -- what brought you here for Aretha?

UNIDENTIFIED FEMALE: Well, you know what? I understand the soul. They -- I'm from the music business, my dad was sort of like a Berry Gordy, Joe Jones of New Orleans. He was making music with the Dixie Cups at the same time that Aretha was making music, so they were music colleagues I guess, you would say.

YOUNG: What did you love about her?

UNIDENTIFIED FEMALE: The fact that I dance jazz funerals in New Orleans, they call me the dance queen of New Orleans. To understand Aretha is to understand your soul, and if you have an anointing as I do, as she did, that is unstoppable.

YOUNG: What has the power been like in this crowd?

UNIDENTIFIED FEMALE: The crowd understands that she had the soul. The respect was just the word that explained she knew what human kind was about.

YOUNG: Perfect, thank you so much. So this is all going to start on a few days, so of course, we have the wake again tomorrow, then you have a concert on Thursday and then the funeral on Friday, so you have all those things sort of wrapped together, not only Steve Wonder, but Bill Clinton, all those folks are expected to be here.

So you can tell there's a lot of love, a lot of passion for Aretha Franklin.