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Dow Tanks on Trade Fears and Arrest; Trump on Damage Control; North Carolina GOP Open to New Election; Mueller Poised to Reveal Secrets; Saudi-Funded Lobbyists Stayed at Trump Hotel; Wisconsin GOP Defiantly Strips Power. Aired 1-1:30p ET

Aired December 6, 2018 - 13:00   ET

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


[13:00:00] WOLF BLITZER, CNN ANCHOR: We are going to continue our special coverage.

In the meantime, Brianna Keilar picks it up right now.

BRIANNA KEILAR, CNN ANCHOR: Should we be hearing air?

UNIDENTIFIED MALE: No, no, they are fixing it. They are fixing it. They are fixing that.

KEILAR: Fixing what?

UNIDENTIFIED MALE: That.

KEILAR: The --

I'm Brianna Keilar, live from Washington.

Underway right now, he called himself the tariff man. Now President Trump on damage control as stocks plunge over his trade war and the arrest of an executive.

A slow motion crisis speeds up. Senators working to officially rebuke the president over his response to a murder.

Plus, what did Paul Manafort lie about? What did Michael Cohen reveal? Hear why Robert Mueller is close to spilling those secrets.

And Republicans didn't win, so now they're stripping the power of incoming Democrats. Will this power grab work?

But first, the Dow plunging right now. It is down at this point 435 points. Driving stocks lower is the arrest of a Chinese executive in Canada at the request of the United States. It's further fueling doubts over the U.S.-China trade truce.

CNN's Julia Chatterly is joining us right now.

This is another blood bath for the markets, Julia.

JULIA CHATTERLEY, CNN BUSINESS ANCHOR, "FIRST MOVE": Yes, it's a really tough day, Brianna. I mean you can add the losses that we're seeing here to the 3 percent more losses that we saw on Tuesday's session, too.

Why? This story, as you just mentioned, cuts right to the heart of the trade war between the United States and China. Let me explain because this is not some ordinary Chinese executive that we're talking about here. She's better known as Sabrina Meng. She's the face of one of the biggest Chinese tech companies out there, Huawei. It's often called the Apple of China.

She's also the daughter of the founder. So, you imagine this, Brianna, if we were here in the United States and we heard that the Chinese government had arrested an executive of Apple and she just happened to be the daughter of Steve Jobs. I mean there, would be outrageousness.

The timing here is also critical. Sabrina was arrested on Saturday, right during those critical trade talks, of course, at the G-20. Now, we don't have many details, but reports suggest that this company was being investigated by U.S. authorities for violating U.S. sanctions on Iran. So if that were the case, this could be a whopping gigantic coincidence.

But I think what the markets and what investors are telling us today is, they're not buying that and they think this is not a coincidence and how on earth does China negotiate a trade deal here under these kind of situations? I mean the politics here is really difficult.

KEILAR: Yes. And we're seeing the effects there in the stock markets.

Thank you so much, Julia Chatterley.

Now, President Trump is scrambling to contain the stock market selloff and reassure investors about his trade truce with China.

I want to bring in CNN White House correspondent Kaitlan Collins.

Kaitlan, how is the damage control going?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, the president was trying yesterday when the stock market was closed, in honor of the late President, George H.W. Bush, to shore up confidence that he did strike a successful deal with the Chinese president when they had that dinner in Argentina on Saturday during the G-20 Summit, which initially the president and his aides hailed that as this big success and said they had got these concrete commitments from the Chinese to change their markets and to essentially make it a better deal of the United States.

But, Brianna, in the days since then, we've seen that start to unravel. And the Chinese have not confirmed half of the things that the White House is saying that they agreed to during those talks. And we're seeing that play out, not only on the president's Twitter feed, but also behind the walls of the West Wing.

Now, President Trump started this week out on an optimistic note as far as the stock market goes with what he had been saying had happened during that discussion. But then, Brianna, as he started tweeting on Tuesday saying he was the tariff man and threatening to level more tariffs against China if those negotiations that they've agreed to work on over the next 90 days or so don't work out, that is when you saw those stocks started to sink.

Now, yesterday, President Trump was trying to say that he does believe President Xi is a man of his word and is going to live up to what they discussed on Saturday, but you just don't see that kind of confidence when you're speaking with officials here in the West Wing, Brianna. They say there's essentially a lot more uncertainty and they're not confident that China can change its structural market here over the next 90 days or so. And the only thing essentially that they are guaranteeing right now is that there is more uncertainty to come over the tensions between the U.S. and China over trade.

Brianna.

[13:05:01] KEILAR: And the markets hate uncertainty. That's what we're seeing.

Kaitlan Collins at the White House, thank you.

We're following new developments in a disputed congressional race plagued by allegations of fraud. The executive director of the North Carolina Republican Party says he's open to holding a new election if the fraud allegations are proven.

CNN's senior investigative correspondent Drew Griffin has been following this story for us.

Drew, tell us, what's the basis for the fraud claims in the race and what have you heard from the state GOP?

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Well, it's a bit of an about-face. In fact, it is an about-face from the state GOP executive director, who earlier this week was calling this just a bunch of Democratic ploy to actually overturn an election.

But right now it looks like these vote fraud allegations are significant, they are real, in North Carolina's ninth district race. Enough potentially absentee ballots were either thrown out or changed or harvested by one political activist that it could upset the actual difference between the Republican winner and Democratic loser, who are separated by just 905 votes.

Stunningly, we've been reporting on this all week. Last night, the head of the GOP in this state was watching our report and had this reaction.

(BEGIN VIDEO CLIP)

DALLAS WOODHOUSE, EXECUTIVE DIRECTOR, NORTH CAROLINA REPUBLICAN PARTY: I was watching it and I immediately went in and through up. I was very ill. I mean this has shaken us to the core. And we were as horrified by it as anybody. And, you know, the North Carolina Republican Party never has had a part in these operations, didn't fund them, didn't coordinate them, didn't operate them, didn't know about them, would never have condoned them. Clearly if what you reported is verified by the state board of

elections, there has to be a new election. And if the allegations as presented by the board of elections rise to a level of turning the outcome of this race or having substantial likelihood, there has to be a new election.

(END VIDEO CLIP)

GRIFFIN: That's a stunning change of events here, Brianna.

Just to keep in mind, the board of elections is still investigating the actual voter fraud, looking at a number of potential votes that may have been tampered with or tossed out. There is separately a criminal investigation that's been going on since the beginning of the year. Almost 12 months now looking at this political operative, his operation down in a county called Bladen County, and whether or not this was industrial sized vote tampering that maybe affected not just this past elections, but two elections before it.

Stunning developments here in North Carolina, Brianna.

KEILAR: They sure are. Drew Griffin, thank you for bringing them to us.

While U.S. senators and the White House try to get on the same page on Saudi Arabia, we are seeing some action against Russia. According to the Department of Defense, the U.S. military has conducted a, quote, extraordinary flight to reaffirm its commitment to Ukraine and other allies. It's a fight that comes, of course, after Russia seized Ukrainian ships and detained Ukrainian sailors in an area of the Black Sea called the Kerch Strait. Along with this flight, the U.S. might also send a warship into the area. The necessary preparations underway for that right now.

And speaking of Russian aggression, we could have a trove of new information from Robert Mueller's Russia investigation as soon as tomorrow. That is when he is scheduled to file memos on Trump's former campaign chairman, Paul Manafort, and also Trump's former personal attorney, Michael Cohen. All of which could tell us a lot more about what exactly Mueller knows and where or to whom his investigation is leading.

Also happening tomorrow, fired FBI Director James Comey is scheduled to appear for private depositions before the House Judiciary Committee. Comey has asked that his testimony be made public.

I want to go ahead now and bring in our political correspondent Sara Murray.

Sara, what could we learn from all of this?

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Well, Brianna, this whirlwind week in the Russia probe obviously continuing into Friday.

Let's start with what is going on with the Manafort memo. This is former Trump campaign chairman Paul Manafort. And, remember, the government sort of put out this bombshell saying that they believe that Manafort lied to them when he was supposed to be in the middle of cooperating with investigators. So in this filing on Friday, we're hoping to get a better sense of what exactly they believe Paul Manafort lied about. And, of course, we'll see if the government decides to sprinkle any bread crumbs in there about the intelligence that they've received from Manafort or, you know, a better sense of what investigations they are still looking into revolving around him.

Now, the other big deadline that's coming up on Friday is a memo involving Michael Cohen. This is going to be a sentencing memo. It's going to come from Mueller's team. But also the Southern District of New York. They're working together on this. This is the government's opportunity to respond to Michael Cohen, first of all, asking for no prison time, but also perhaps to give a sense of how cooperative Cohen has been. And the government's opportunity to say if he deserves prison time.

[13:10:08] Let's look at the last development for Friday. This is, of course, James Comey. He's providing this deposition behind closed doors, much to his chagrin, to the House Judiciary Committee. Now, Comey originally tried to fight this deposition. He tried to fight the subpoena. He decided to back down when he and the committee struck a deal saying he would do this deposition behind closed doors but both he and the committee have said the transcript would be made publicly available.

Now, Brianna, these things tend to last all day. I was talking to my Hill colleagues. They're expecting him to be there around 10:00 a.m. on Friday. They believe he will still be there as we're approaching dinner time.

KEILAR: All right, Sara Murray, thanks for your report.

So new questions today after reports that Saudi funded lobbyists spent big bucks, hundreds of thousands of dollars, at President Trump's hotel in D.C. According to "The Washington Post," in 2016, Saudi lobbyists offered U.S. military veterans free trips to Washington if they would lobby members of Congress against a law the Saudis opposed. "The Post" reports that the Saudis initially had them saying at a hotel in northern Virginia, and then after Trump was elected, they moved those rooms. They booked rooms instead at the Trump Hotel in D.C. for the rest of the trips. We're talking about 500 rooms, a cost of $270,000 here.

So let's discuss this and more with our guests. We have federal prosecutor Joseph Moreno and CNN political analyst Julie Hirschfeld Davis. She's a congressional correspondent for "The New York Times."

When you listen, Julie, to the Saudi lobbyists, they insist this was not about currying favor with President Trump. What do you say to that?

JULIE HIRSCHFELD DAVIS, CNN POLITICAL ANALYST: I say I'm skeptical about that. But I also say that it doesn't actually much matter because what you have here is kind of what critics of President Trump have said is the worst case scenario where you have a foreign government essentially in a position to potentially influence a sitting president by spending a lot of money at a business that he controls. And we know that President Trump decided early on, before he took office, that he wasn't going to step back from ownership of his company. And so it raises a lot of questions.

Regardless of whether they were or were not trying to curry favor with the president, did -- was that the result? And, you know, we've heard President Trump say many times that he did not have any business with the Saudis, this -- none of his policies toward Saudi Arabia had anything to do with potential personal gain for him, but this certainly raises questions about whether or not he could look and see, or his associates could look and see, that, in fact, he was getting quite a bit of money and support from the Saudi government.

KEILAR: It's such a conflict of interest. What do you see, Joseph, as the legal implications here?

JOSEPH MORENO, FORMER JUSTICE DEPARTMENT PROSECUTOR: Well, Brianna, this all stems from the emoluments clause of the Constitution, which has been described as our country's earliest anti-corruption provision, right? And what it says is that a sitting president cannot take cash or gifts or anything of value from a foreign government.

Now, the president would argue, and has argued in court, that should be read very narrowly to an explicit quid pro quo or something that goes directly to the president. The opposition has said, well, wait a minute, no, no, it should be anything that derives of value to the president. And since President Trump sits at the height of the Trump Organization, eventually any profits from his hotels and other business activities ultimately go to him and his family.

And court so far have held for that wider standard and allowed litigation to proceed. So it will be really interesting to see where this goes.

KEILAR: Let's talk about the death of "Washington Post" journalist Jamal Khashoggi. You have senators who say -- bipartisan I should say, there's no doubt when they look at the intel that the crown prince of Saudi Arabia was behind this. So you have senators working on legislation. They're trying to hold Saudi Arabia accountable. Listen to what Republican Senator Bob Corker says.

(BEGIN VIDEO CLIP)

SEN. BOB CORKER (R), TENNESSEE: But to use that as a reason that we're not going to say anything about this is just -- it's un-American. That's not what -- that's not what we do as America. We -- you know, when we provide aid to other countries, we do so because we want to see good things happen in those countries. We espouse American values all around the world. And to say they, well, no, they're going to buy some arms from us so, you know, it's OK to kill a journalist sends exactly the wrong message about who we are as a country. And that's why you're seeing bipartisan support for somehow speaking to this.

(END VIDEO CLIP) KEILAR: It's extraordinary the rhetoric that we're seeing against President Trump, even from senators who have been in his corner before.

DAVIS: Well, that's true. I mean Bob Corker has not been one who's been shy about criticizing President Trump. But other Republicans --

KEILAR: Sure. Lindsey Graham. Yes.

DAVIS: Lindsey Graham as well. But after that briefing that they got this week from Gina Haspel, the CIA director, people came out of that room you could see visibly having shifted to a posture of, well, we'll have to see what we hear, to there is no way that the president's reaction to this is justified or is enough. And they, the Senate, felt that they had to do something more. And that's why we're seeing all the negotiations about potentially having votes on the legislation having to do with the war in Yemen, having to do with other ways of curving Saudi influence.

[13:15:08] And now the House members are potentially going to be getting the same briefing next week. It's very difficult to imagine a scenario given the information they now have that where they don't affirmatively try to put some additional curbs on Saudi Arabia since they now know that the Trump administration simply is not willing to do that.

KEILAR: And they'll come up against the White House as they do that.

We're heard Sara Murray reporting just a short time ago, Joseph, about what we are going to be seeing here tomorrow, a sentencing memo from Michael Cohen, the president's ex-personal lawyer, a brief on how Paul Manafort, the president's former campaign chairman breached his plea deal with the special counsel. A lot of details we haven't heard before. What do you think all of this will tell us?

MORENO: Well, a lot's coming to a head, right, in the same week. And it's not a coincidence.

The feedback I got from earlier this week with -- which was Michael Flynn's sentencing memo, which was heavily redacted, was disappointment that people felt there was so much redacted, so much information we don't know. I'll take a bit of a contrarian view there. I think we learned a lot from that memo in terms of the various strands of the investigation and the fact that Michael Flynn gave a lot of cooperation.

So we should look at tomorrow's filings with a similar eye. Don't expect it's going to lay everything on the table. It can't. Bob Mueller has more work to do and he can't publically reveal everything he's doing.

But I think if we look carefully, we will get similar clues as to where the investigation is going, who's involve, what value Michael Cohen has providing, what value Paul Manafort was supposed to provide and perhaps didn't, and maybe even a sense of when this will all wrap up. KEILAR: With some redactions, no doubt, as we saw in the other

sentencing memo yesterday of Michael Flynn. So, we'll see. Thank you so much, Joseph. Julie, appreciate it.

Democrats are crying foul after Republicans in Wisconsin passed a bill that limits income Democrats' power.

And for those who are banking on a presidential pardon, they better keep their eye on the Supreme Court today. We're going to tell you why.

And stocks are tanking. The Dow down nearly 500 points.

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[13:21:21] KEILAR: In Wisconsin, Republicans may have lost the election, but they are leaving with a win against Democrats. The lame duck session of the GOP-led legislature passed a range of bills aimed at diminishing the power of the state's incoming governor and attorney general, both of whom happen to be Democrats.

And to discuss this I'm joined by CNN political commentator and host of CNN's "S.E. CUPP UNFILTERED," S.E. Cupp herself with us here.

S.E. CUPP, CNN POLITICAL COMMENTATOR: Hi.

KEILAR: So when you watched this happening in Wisconsin, what's your -- what's your thought?

CUPP: Look, I'm a Republican, right? I love Scott Walker. But this is the height of anti-democracy. It's non-democracy, right? Republicans lost every statewide election in Wisconsin and even though the governor's race was very close, Scott Walker lost by 1.2 percent, you know, republicans were sent a message by voters in Wisconsin. And so for Republicans to sort of greedily try to hoard whatever power they have for the next month, not just -- not just to protect legacy legislation, that happens, you know, on both sides of the aisle, but to future-proof -- to future-proof against, you know, Democrats using the power that voters gave them in November. It's just really disappointing and I think pretty dangerous.

KEILAR: What does it do to a legacy of representative government in Wisconsin? What's the effect on history even?

CUPP: Well, I think people are looking at Wisconsin. It's happening in Michigan too. It happened earlier in North Carolina. And they think, well, what's the point of my vote? Why bother vote for policies, for legislation, in fact, that was actual on ballots? What's the point? And then what's the point of winning if a bunch of lawmakers who are on their way out are going to sort of circle the wagons, undo it and make it so the new guy that I voted for can't actually use the power that he was given? I just think it makes a lot of voters frustrate and it really undermines the idea of Democracy and Democratic elections to begin with. And that's -- that's not what we need right now. We need -- we need less of that. We need more trust in Democratic institutions now more than ever. KEILAR: And so I imagine you have the same concern when you're looking

at North Carolina.

CUPP: Yes.

KEILAR: We mentioned just a short time ago our coverage of alleged election fraud in North Carolina's ninth congressional district has prompted the executive director of the state's Republican Party to say he's open to a new election in this disputed House race. He actually said, S.E., he say the reporting and he threw up.

CUPP: I saw that, yes.

KEILAR: And he said that if this is true, there has to be a new election. What do you think about this trend?

CUPP: Well, the good news is that it's being taken seriously.

KEILAR: Yes.

CUPP: You know, because I haven't heard anything from Scott Walker in Wisconsin saying, no, no, no, don't do this, we shouldn't be doing this.

So the good news is, is that still in some corners this is being taken seriously and not sort of just turned a blind eye, as it has been in other -- in other places. We should take voter fraud seriously, whether Republicans or Democrats, we should take it very serious. There's voter integrity that's protecting votes. Then there's voter access. That is things like voter ID law. All of it should matter because all of it is why we get to go out and exercise our right to vote and why that should all be protected.

KEILAR: Did you see Kirstin Gillibrand's controversial tweet, I'm assuming, right?

So she says this, the future is female, intersectional, powered by our belief in one another. Then in -- OK. Your groan. Your audible groan.

[13:25:07] But Marco Rubio fired back. He said our future is American. Groan again. Explain your groan.

CUPP: Well, look, she's run into this before. I don't know if you remember earlier in the year, she said something like, if it had been Lehman sisters instead of Lehman Brothers, maybe the economy wouldn't have collapsed. She was mocked for that too.

She seems to have this really dumbed down version of what feminism should sound like. And all it is, in her mind, is that women are better than men. And that's so passe. It was, you know, thrown out with bra burning.

But it's also just -- it's not a national message. And we know that she has presidential ambitions. You can run an empowering campaign for women without excluding men. And I happened to think if you polled a vast majority of people in this country, they do not know what intersectionality is, nor do they care, nor do they think it's relevant.

I think this was a processed pander, you know, to the far left flank of her party in an attempt to sort of prove her progressiveness bonafides (ph) going into maybe a 2020 election. But it didn't -- it didn't really ring true.

KEILAR: All right, S.E. Cupp, thanks so much. We really appreciate your point of view on all of this.

CUPP: Thanks, Bri.

KEILAR: And be sure to check out S.E.'s great show, "S.E. CUPP UNFILTERED." You can catch that Saturday night at 6:00 Eastern.

The president's pardon power and Paul Manafort's future in question today as the Supreme Court hears new arguments over double jeopardy. We will explain.

And live pictures of the hearse carrying the late President George H.W. Bush. The casket and the Bush family will board the Bush 4141 for a final journey to College Station, Texas, to Texas A&M University and the Bush Library there.

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