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THE LEAD WITH JAKE TAPPER

New Attorney General Candidate Emerges; Texas Celebrates President George H.W. Bush; Stocks Drop Following Arrest of Chinese Executive; "Miami Herald" Editorial Board Calls for Labor Secretary's Resignation Over Plea Deal With Accused People; Interview with Democratic Congresswoman Debbie Wasserman Schultz of Florida. Aired 4- 4:30p ET

Aired December 6, 2018 - 16:00   ET

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


[16:00:10]

ANNOUNCER: This is CNN breaking news.

JAKE TAPPER, CNN ANCHOR: Welcome to THE LEAD. I'm Jake Tapper.

And we begin with some breaking news in our politics lead.

President Trump appears to be close to nominating a new U.S. attorney general. Sources tell CNN that William Barr, who is a well-known conservative lawyer who previously ran the Justice Department under the late President George H.W. Bush, is emerging as a consensus candidate within the Trump administration.

And the announcement could be made in the coming days. This is especially interesting because of what Barr has said about the Russia investigation.

CNN's Laura Jarrett is at the Justice Department.

And, Laura, tell us what Barr has had to say about the Mueller investigation, the Russia probe.

LAURA JARRETT, CNN JUSTICE CORRESPONDENT: Well, Jake, in the past, he has expressed a great deal of confidence in Mueller. He was actually Mueller's boss at the Justice Department back in the early 1990s.

He said Mueller will devolve in a so-called witch-hunt, but he's also expressed a bit of disappointment about the fact that some members of Mueller's teams have donated political donations to Democrats in the past. And he said this to "The Washington Post," Jake.

"In my view, prosecutors who make political contributions are identifying fairly strongly with a political party." He goes on to say, "I would I have liked to have him see more balance on this group," of course echoing sentiments from President Trump there, who has expressed major disappointment in Mueller's team as being so- called angry Democrats, despite the fact that Mueller himself is a lifelong Republican. And I want to also point out that Barr has also expressed plenty about former FBI Director James Comey, about the fact that he was widely planned for flouting DOJ protocols, getting out ahead of the Attorney General Loretta Lynch at the time when it came to the Hillary Clinton e-mail probe.

And on Comey, he says this, Jake -- quote -- "I think it's quite understandable that the administration would not want an FBI director who did not recognize established limits on his powers. It is telling that none of the president's critics are challenging the decision on the merits," so defending the firing of Comey there, Jake.

TAPPER: All right, so he aligns with President Trump on a number of these issues, and I think he's also said some things suggesting that Hillary Clinton and Bill Clinton should be investigated more when it comes to the Uranium One deal.

Now, there is a nomination of Bill Barr, and he goes before the Senate, I would be expect that he would be asked about when he was attorney general last time for George H.W. Bush how and what his role was on signing off on pardons that Bush Sr. issued for some Reagan officials for Iran-Contra.

People are very concerned about pardons that President Trump might issue.

JARRETT: Certainly, that's been one of the pieces of Bill Barr's tenure that has come under close scrutiny. He's not backed away from it. He said he supported broad pardons for those Reagan administration officials.

But, of course, given President Trump's penchant for pardons and all of the talk about pardons in the Mueller probe, that will be highly scrutinized in what is sure to be an ugly confirmation battle for Bill Barr or anybody else who serves as attorney general.

But already, Jake, bipartisan support for Bill Barr today. Pat Leahy, top Democrat on the Senate Judiciary Committee, telling our Ted Barrett on Capitol Hill that this is somebody who would be supported by both Democrats and Republicans.

TAPPER: All right. Laura Jarrett, thank you so much, Laura Jarrett at the Justice Department there.

In our money lead, the Dow closing down just 78 points, making a big recovery. At one point today, the Dow was down more than 700 points, continuing a volatile week over fears that despite President Trump's reassurances there's no actual three-month truce between the U.S. and China in this trade war.

And the situation has been exacerbated by the arrest of a Chinese executive in Canada at the request of the U.S. government. She is the daughter of the founder of the tech giant.

To explain this, Huawei is to China kind of like what Apple is to the United States, Huawei the second larger manufacturer of smartphones in the world. Apple is the third.

Now, this assuredly upset what is already this ugly trade situation. The U.S. Commerce Department announced today that the U.S. trade deficit increased to a 10-year high and a record trade shortfall with China.

Despite this bad trade news and uncertainty about whether the president has a clear strategy, Mr. Trump has been trying to project confidence about what he claims is progress on trade with the Chinese.

CNN's Abby Philip is at the White House for us right now.

And, Abby, an administration official says there's a plan for the U.S. to seek extradition of this Chinese executive.

ABBY PHILLIP, CNN POLITICAL ANALYST: That's right, Jake.

Amid all the turmoil on Wall Street, the administration is saying that they plan to extradite this Huawei executive to the United States, and some in the administration believe that this arrest can be used as leverage in negotiations on trade with China.

(BEGIN VIDEOTAPE)

PHILLIP (voice-over): As global markets spiral over fears that a trade war is on the horizon, President Trump only adding to the turmoil.

[16:05:00]

Trump, who regularly takes credit for the soaring stock market, now silent as markets fall in the wake of a handshake deal with China that days later remains short on concrete details.

After hailing the agreement as an incredible deal...

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It's an incredible deal. It goes down certainly -- if it happens, it goes down as one of the largest deals ever made.

PHILLIP: ... President Trump now changing his tune on China, voicing concern that it might not materialize, tweeting: "We are either going have a real deal with China or no deal at all, at which point we will be charging major tariffs against Chinese product being shipped into the United States."

Days after Trump's three-hour meeting with China's President Xi Jinping in Argentina, the Chinese have yet to confirm some of the key promises the president claims China made, to lower or eliminate auto tariffs and immediately purchase American agricultural products.

Administration aides also struggling to clean up the mess.

LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: The president expects, and I think he's right, he's going to get it, they will take their car tariffs down to zero. STEVEN MNUCHIN, U.S. TREASURY SECRETARY: I'm taking President Xi at

his word and his commitment to President Trump, but they have to deliver on this.

PHILLIP: All this as the U.S.' trade dispute with China takes a dangerous turn. Canadian officials revealing Wednesday the U.S. requested the arrest and extradition of a top Chinese tech official, Huawei's chief financial officer, Meng Wanzhou.

The provocative move that could be described as the equivalent of arresting the head of Apple's family member came just as President Trump was sitting at a dinner table in Buenos Aires with China's president on Saturday.

While details about the charges she might face remain scarce, Trump's National Security Adviser John Bolton says the company has long been accused of being a national security risk to the United States.

JOHN BOLTON, U.S. NATIONAL SECURITY ADVISER: We have had enormous concerning for years about -- in this country about the practice of Chinese firms to use stolen American intellectual property, so not respecting this particular arrest, but Huawei is one company we have been concerned about.

(END VIDEOTAPE)

PHILLIP: And Bolton did say that he did know that this arrest was happening on Saturday, but he would not say whether President Trump did as well, but clearly a high-stakes situation is unfolding right now as both sides try to sort out these trade disputes. In the meantime, it seems the global economy is hanging in the balance -- Jake.

TAPPER: All right, Abby Philip at the White House for us.

Let's talk about it with our experts.

First of all, let's start with the fact that on December 1, the CFO with Huawei, this woman who is the daughter of the CEO, was arrested. That's the same day that President Trump was meeting with President Xi.

We don't know if President Trump knew it. Now we have some administration officials saying that this could be used as part of the trade negotiations.

Does that seem odd to you? Does it seem unusual?

BILL KRISTOL, EDITOR, "THE WEEKLY STANDARD": Maybe it's good news. Maybe they actually are doing the right thing, arresting someone who deserves to be arrested, and it's not being done for political reasons or whatever.

So in that respect I guess I'm heartened by this, and it sounds like the arrest is legit.

(CROSSTALK)

TAPPER: She was violating sanctions against Iran.

KRISTOL: Yes. And they're pretty -- Huawei is a pretty notorious company anyway.

I would point out China's incidentally holding American citizens who are not guilty of anything right now, relatives of people are from -- they are Chinese descent and relatives people from China who are accused of things.

So maybe it's not a bad thing diplomatically to do. I would separate bad -- what I think are foolish trade policies and other policies towards China which may be questionable. This strikes me as being -- until we know more -- maybe a reasonable thing.

AMANDA CARPENTER, CNN POLITICAL COMMENTATOR: I do feel like there used to be an anchor on CNBC who ran "The Kudlow Report" who would say that markets don't like abrupt escalations in economic and trade policy.

TAPPER: I remember him.

CARPENTER: Yes, he works at the White House right now. And his name is Larry Kudlow.

This feels vengeful. Yes, maybe she deserves to be arrested, but the timing is certainly suspicious. And if we're using the law enforcement arm to enforce trade policies, I think we're in new territory.

KRISTOL: No, no. But Iran -- just I don't know.

But presumably the Treasury Department does Iran sanctions, the Justice Department executed this. I don't think they're all in some kind of -- these are career people.

(CROSSTALK)

TAPPER: Not necessarily in cahoots, but it does seem like the markets are very uncertain of how much strategy is going on here and whether or not President Trump, his word can be relied upon when he says he and President Xi came to an understanding.

JENNICE FUENTES, DEMOCRATIC STRATEGIST: And it's about the timing really of it. I think the timing is very inopportune.

And if we had a comprehensive, logical economic policy, then maybe all of this would make sense. But markets are reacting to the uncertainty of what is economic policy of this administration.

The president would tweet and the markets react. She is not just anyone. Let's just not forget who she is. It's almost like if Steve Jobs was running Apple and his daughter had been arrested in China.

Of course it's going to have consequences to the market. Her father, who is a very obscure person, used to be the People's Revolutionary Army. He is somebody. So there's going to be consequences.

[16:10:03]

And I don't even think we have seen the middle of this problem yet.

TAPPER: And, Karine, one of the things going on here is, this is obviously well beyond our 401(k)s or the stock market. There are real people out there, a lot of people in the Farm Belt, for example, who are hurting because of this trade war.

CNN spoke with more than 50 farmers, producers and agriculture experts in five different states ahead of the midterms, finding that some of the deep ties to Trump were fraying over these trade policies.

Monte Peterson (ph), a North Dakota who voted for Trump, told CNN: "I'm wondering about that vote," saying that his regret really hinges on the way these trade negotiations turn out, because he questions the method by which we're negotiating trade right now.

KARINE JEAN-PIERRE, DEMOCRATIC STRATEGIST: And they have every right to be concerned.

I mean, we're talking about people who supported Donald Trump, as you were reading. We're talking about Ohio, Iowa and North Dakota. And it's incredibly problematic. Farmers are going to be getting the blunt end of this. And they are.

They're seeing this right now in real time. Look, our economy and in particular the stock market, they thrive on stability, and we're not seeing that right now. Donald Trump is doing everything the opposite of stability. And it's through his erratic behavior, his tweets, his lack of comprehensive policy.

And it is incredibly problematic. And so it's going to be -- it's scary to see because he's using his Twitter, the tirade that he's doing on Twitter to fight a trade war? And that's just -- it's not going to work.

(CROSSTALK)

KRISTOL: ... the politics of this, a group I'm involved in, Defending Democracy Together, did some polling in Iowa and New

Hampshire to see what opportunities there might be for a primary challenge to Trump, which is uphill now, but less than possible than people think.

In Iowa, somewhat to our surprise -- we tested a bunch of issues -- trade was a big actual voting issue among Republicans who had supported Trump, some of them, certainly supported him in the general election, some of them in the caucuses, and who are saying, gee, as you said earlier, these tariffs, it's not some hypothetical thing or it's an indirect effect on our 401(k). They are looking and saying, geez.

And these aren't just China-related tariffs. These are tariffs against -- this is the craziest part of it -- half of them are against our allies, not against China.

(CROSSTALK)

CARPENTER: And you know who was an Iowa last weekend talking to farmers? Amy Klobuchar.

And I think they are ready to make hay of this. And Trump is not going to get a free pass. And all of these Democrats are going to the farm states. That will be a key argument.

TAPPER: And we talk about how the market likes stability, which is true.

President Trump in the last few days has written 13 tweets about China and trade policy since Monday. That seems to suggest that he understands that there are people out there who are worried about this. He's trying to reassure them. That's been the tone and tenor of the tweets.

I don't know that it's been working, though. I don't know that tweeting is the way to get markets or people whose soybean farms are going bankrupt now to reassure them.

FUENTES: Hey, I don't think his tweets are working any better than his economic policy and his tax reform.

I think there are incentives, for instance, in there that make it possible for GM and other companies to actually go elsewhere and not stay in this country. So much for his promise that not one job will leave this country. Correct?

And I think, again, experience matters, but inexperience matters even more. And if you have an economic policy based on tweets and inexperience in terms of setting economic policy, we all pay the price. It's not only the 401(k)s. It's those farmers. It's the people in GM. It's the people in Ohio, Michigan. It's everywhere.

TAPPER: Bourbon, blue jeans.

FUENTES: His base.

TAPPER: Everyone, stick around. We have a lot more to talk about.

New calls for one of President Trump's Cabinet members to resign over a decades-old deal that he brokered as a U.S. attorney.

And then a live look at the train carrying President Bush's casket to its final resting place, just moments away from arriving at Texas A&M University in College Station, home to 41's presidential library.

Stay with us.

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[16:17:53] TAPPER: Welcome back to THE LEAD. In our politics lead, one of the largest newspapers in Florida is calling for Labor Secretary Alex Acosta to resign. This because of accusations that the Trump cabinet official back when he was a U.S. attorney in Florida gave a sweetheart deal to an incredibly powerful, incredibly wealthy accused pedophile.

"The Miami Herald" editorial board today wrote, quote: Acosta is now damaged goods. He should realize it and move on. He does not deserve to be in the halls of powers. He abused his power so tragically.

CNN's Rene Marsh caught up with Acosta this week to try to get an answer from him, a straight answer, as to why he was willing to make that deal.

(BEGIN VIDEOTAPE)

RENE MARSH, CNN GOVERNMENT REGULATION CORRESPONDENT (voice-over): This week, Labor Secretary Alex Acosta is still avoiding questions about the lenient plea deal he helped broker for multi-millionaire and alleged serial pedophile Jeffrey Epstein.

(on camera): Secretary Acosta, Rene Marsh with CNN. I want to ask you about the Jeffrey Epstein --

ALEX ACOSTA, LABOR SECRETARY: As of today --

MARSH (voice-over): As a Florida U.S. attorney in 2007, Acosta helped orchestrate a deal with Epstein's legal team just as the FBI was investigating years of alleged sexual abuse. Acosta's agreement stopped the investigation in its tracks and helped Epstein avoid federal criminal charges. Now, bipartisan scrutiny into Acosta is building on Capitol Hill.

Republican Senator Ben Sasse has asked the Justice Department inspector general to investigate a, quote, epic miscarriage of justice. Florida Congresswoman Debbie Wasserman Schultz sent a similar letter signed by 15 other Democratic House members.

LAURA COATES, FORMER FEDERAL PROSECUTOR: If the bare minimum was only reached or sought after, that's a huge problem and a crisis for justice.

MARSH: Epstein's alleged victims were not notified until the deal was done. And in the end, he faced just two state misdemeanor charges and about a year in jail.

COATES: Somebody silenced them before they had a chance to speak out. That is antithetical to justice.

MARSH: A federal investigation discovered 36 underage victims. Several told "The Miami Herald" they were paid to recruit girls to perform sexual favors, including lewd massages and in some cases sex at his Palm Beach mansion.

[16:20:05] MIKE FISTEN, INVESTIGATOR FOR ALLEGED VICTIMS: They will have a steady flow all day long of girls coming in there. They were pimps. I mean, there's no other way to put it. They were pimps for him.

MARSH: Courtney Wild told "The Miami Herald" she was one of those girls.

COURTNEY WILD, SUING FEDERAL GOVERNMENT AFTER ALLEGED ABUSE: I started going him when I was like 14, 15, 14 turning 15. By the time I was 16, I brought him up to 75 girls.

MARSH: In a 2011 letter to reporters, Acosta argued the deal was the best he could get given Epstein's army of lawyers.

(END VIDEOTAPE)

MARSH: Well, by 2011 letter from Acosta, it also provides more insight into why he helped broker that plea deal. In it he said, and I'm quoting: Some may feel that the prosecution should have been tougher. He added that evidence that has come out to light since 2007 may encourage that view. Had these additional statements and evidence been known, the outcome may have been different. But they were not known to us at the time.

Jake, it really does, based on that, beg the question why didn't he allow the investigation to run its course before striking that plea deal? That's usually how this all works.

And, Jake, just one more point, this week in South Florida, there was a civil suit. We were expecting to hear from the victims. The first time they were going to take to the stand and hear their stories. Acosta, of course, would have faced more scrutiny, but in a last- minute move the case was settled silencing those victims just once again.

TAPPER: All right, Rene Marsh.

Joining me now is Democratic Congresswoman Debbie Wasserman Schultz of Florida who wrote that letter to the Justice Department, demanding that their inspector general look into how this plea deal happened.

First of all, I'd like to get your response to what Alex Acosta said. He said basically, the deal that they got he was U.S. attorney, that was the best deal that he could get at the time and facts that have come out since then are ones he didn't know.

What's your response?

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: That's what investigations are for. It's in the job description of a United States attorney general to fully investigate and fully prosecute a case like this in which you had Jeffrey Epstein who was a serial sexual abuser, a serial sexual trafficker and essentially a pedophile who was trafficking dozens of girls who would likely if the case had been fully prosecuted potentially gotten a life sentence, and what he did was he cut a sweetheart deal to protect him because he was afraid of Jeffrey Epstein's high-powered legal team? Thirteen months in county jail, was able to go to work six days a week in his office and no justice or even notification to these victims? It's disgusting. It was a dereliction of duty, and now, he is the

secretary of labor in charge partially for child labor laws and protecting people who -- working people.

TAPPER: So, Democrats just recaptured the House. What are you going to do about it? You now have power, and your colleagues have power. What are you going to do about Epstein and what are you going do about Acosta?

SCHULTZ: Well, first and foremost, we need an answer from the Department of Justice about whether their inspector general is going to take up the investigation. I'm glad that Senator Ben Sasse is also demanding answers.

TAPPER: Republican from Nebraska.

SCHULTZ: Yes, and is a chair of key oversight committee on the Senate Judiciary Committee.

It's absolutely critical that they take this on themselves. They have to get to the bottom of how this sweetheart deal was cut. There are dozens of girls who have never had the opportunity to be able to be heard, to be able to have their day in court and this was in violation of a Victims' Crime Rights Act. How the U.S. attorney --

TAPPER: Not notifying the girls about the deal.

SCHULTZ: Not notifying the girls, no notification and now, the civil suit that was just settled, again, gives them no opportunity to have this case publicly aired and for accountability to be ensued.

TAPPER: Now, the suspicion a lot of people had is that Jeffrey Epstein got away with this because he was unbelievably wealthy and unbelievably well-connected, initially by the way, even though he was friends with Donald Trump, initially a Democratic donor. He has a lot of powerful friends and the suspicion is a lot of those friends leaned on different politicians when this happened, when this settlement happened because they didn't want testimony. They don't want those girls testifying about all the different men that came to the parties.

Are you ready for all the names to come out because they might be some contributors? They might be some high-profile, not just Republicans, but Democrats. It might be -- who knows who went to those disgusting parties.

SCHULTZ: Exactly, this investigation --

TAPPER: You don't care.

SCHULTZ: I do not care. I have a 15-year-old daughter. It could have been her or any one of our teenage girls. They were middle school aged girls who he trafficked and sexually abused and shopped to his wealthy friends to have sex with. It's outrageous.

And Alex Acosta was the U.S. attorney and instead of being willing to take on his so-called high-powered legal team, he cowered in the corner and threw the towel in and waved the white flag as soon as he could and gave him 13 months in county jail and a slap on the wrist for two misdemeanors when he trafficked dozens of girls sexually, young girls, it's outrageous.

[16:25:12] TAPPER: I don't disagree with you.

"The Miami Herald" is out with a new op-ed, calling for Acosta to resign as labor secretary. It says, quote --

SCHULTZ: And thanks to "The Miami Herald" --

TAPPER: Well, yes.

SCHULTZ: -- because without this kind of investigative reporting, we would not -- never know --

TAPPER: Absolutely.

We're recommending that Acosta resign his current position for allowing a rich, powerful, politically connected man to avoid justice and get off easy, and also for having no qualms about denying all the women victimized by Epstein the justice they had every right to expect.

Do you agree? Does Acosta need to resign?

SCHULTZ: I'll tell you, initially, I want the office of inspector general and DOJ to get to the bottom of this. I want this fully investigated and when it is fully investigated, we need all the fact to come out. We need the victims to get essentially their de facto day in court and we need to make sure that we can hold Alex Acosta accountable, and if that leads to his -- effectively to his resignation, that's exactly what should happen.

TAPPER: OK. So, you're not calling for him to resign right now, but --

SCHULTZ: I want to make sure that this OIG investigation is made a priority, taken up immediately, and I want to work with Senator Sasse to ensure that that happens and we get answers as soon as possible because, you know, what I don't want to have happen is we immediately default to resignation and then all of this gets swept under the rug and the girls who were victims here never actually get any justice.

TAPPER: OK. Well, stay in touch with us because we've been covering the story as soon as "The Miami Herald" broke that incredibly powerful story.

SCHULTZ: Thank you for --

TAPPER: Thanks so much for coming in. Really appreciate it, Congresswoman Debbie Wasserman Schultz of Florida.

New details from court files dropping tomorrow about the president's former fixer and his former campaign chair. So what does Robert Mueller know? Then, we'll take a live look at the train taking President Bush to his

final journey to his final resting place at his presidential library.

Stay with us.

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