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John Kelly Expected to Resign Soon; Mueller to Outline Accusations Against Paul Manafort, Michael Cohen; Mueller to Make Sentencing Recommendation for Michael Cohen; U.S. Adds 155,000 Jobs; New Reports Suggests Acting FBI Director McCabe Opened Obstruction of Justice Probe on Trump After Comey's Firing Before Mueller's Appointment; Markets Rattled By Arrest of Chinese Tech Executive; Kevin Hart Steps Down as Oscar Host Over Past Anti-Gay Tweets; Mueller to Reveal New Details Today on Manafort and Cohen; Trump Lashes Out Ahead of Mueller Details on Manafort and Cohen; Huawei Executive's Arrest Raises Fears Over Trade War. Aired 9-9:30a ET

Aired December 7, 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] JIM SCIUTTO, CNN ANCHOR: Already the news is coming fast and furious. Emphasis on furious. That would be the president on a tear this morning against the special counsel ahead of two hugely significant revelations today.

Today, any time now, Mueller is due to teleport why he accused the president's former campaign chairman, Paul Manafort, of violating a plea agreement requiring him to cooperate., and I quote, fully, truthfully, completely and forthrightly.

What exactly did Manafort allegedly lie about? Was it worth risking life in prison for him?

POPPY HARLOW, CNN ANCHOR: On the flipside, and I do mean flip, Mueller is due to recommend a sentence today for Michael Cohen, the president's former lawyer and fixer who of course pleaded guilty to bank fraud, tax evasion, campaign finance violations, and just last week admitted to lying to Congress, quote, "out of loyalty to Individual One." Individual One being the president.

Now Cohen says he shouldn't spend a day in prison because of all this cooperation. We'll see whether the Special Counsel Bob Mueller agrees with that and whether and how any of this brings the probe closer to the president.

Already it is triggering a barrage from the president that could only be read as a prebuttal. And we may hear these attacks repeated on camera later this hour. That is because the president will leave the White House in just minutes for a day trip to Missouri and he may stop and take questions from reporters.

SCIUTTO: Keep in mind he does this with intent to undermine confidence in the special counsel's investigation. He's been doing it for months. This is just the latest attack. But as the president goes today, will he take John Kelly, his long suffering chief of staff with him? Sources tell CNN this news this morning with the world's longest awaited termination is now imminent, and that's where we begin this hour.

CNN's Abby Phillip is at the White House.

Abby, you know, his departure has been rumored for some time, but it looks like it is now imminent, John Kelly.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right, Jim. It does seem that every few weeks there are rumors that John Kelly might be leaving the White House. But now sources are telling our Kaitlan Collins that within the White House, John Kelly's resignation is expected to be imminent within the next few days. That's in part because the situation with President Trump has deteriorated dramatically in the last couple of days.

It has become untenable for both men who have been working now with each other for 17 months. John Kelly's power here in the West Wing has been waning for quite some time. But even in spite of that, remember a couple of months ago President Trump said he asked Kelly to stay on through 2020. Now it appears that's not happening at all, and the president is preparing for a transition to a new chief of staff.

Now, despite that, we are hearing that no decisions, no concrete decisions have been made about exactly who will replace Kelly. One of the leading contenders is Vice President Mike Pence's chief of staff Nick Ayers, who is someone who's been around this White House for some time now and has been rumored to be angling for this job.

President Trump likes Ayers, likes his political mindset. And as he's looking toward his re-election is interested in perhaps elevating him to that position. But of course there are a lot of detractors to Nick Ayers here in the building, and this drama continues to unfold. But we are waiting John Kelly's potential departure from the West Wing. Not only that but several other officials within the administration, perhaps could be seeing some turnover.

We're waiting an announcement on the U.N. ambassador, on a new attorney general, and of course, as you just mentioned, President Trump has spent the morning lashing out at the Mueller investigation, anticipating these filings coming later today and also some testimony from James Comey on Capitol Hill. So there is quite a bit going on here this morning here at the White House -- Jim and Poppy.

HARLOW: No slow Friday morning.

Abby Phillip, don't go anywhere for a host of reasons. Thank you very much.

Let's get more on all of this, and Kelly's pending White House departure. CNN's senior political analyst John Avlon is with us.

Good morning, John. This has been the sort of longest impending resignation that we have seen in a long time. But --

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Since Jeff Sessions.

HARLOW: OK. Yes. There you go. Look, I mean, in November, so last month, the president said on FOX News that he is still supportive of Kelly, that he does a great job on certain things. Other things are not his strength. There was that moment in May. Let's remind people of that. Let's play it between the two.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I want to just tell you something. General Kelly is doing a fantastic job. There has been such false reporting about our relationship. We have a great relationship. He's doing a great job as chief of staff. I could not be more happy, so I just want to tell you that. "The New York Times" has falsely reported. They have said things that are absolutely false. So I just want to tell you that.

And General, you may have something to say.

JOHN KELLY, CHIEF OF STAFF: I would just say it's an absolute privilege to work for a president that has gotten the economy going.

[09:05:04] We're about to have a breakthrough I believe on North Korea. The jobs report today, I mean, everything is going phenomenally well.

(END VIDEO CLIP)

HARLOW: OK. So that was May, John. That was after NBC News was reporting that Kelly called the president an idiot. Sources told CNN that Kelly had privately called the president unhinged. They made that very clear show of unity. Now what?

AVLON: That's right. The president saying it's all fake news, false reporting. Apparently not. Look, John Kelly brought a degree of professionalism to the West Wing after Reince Priebus. As a general, someone who the president generally respects. He likes people with military brass. But there are certainly a lot of bad blood. He fired a lot of folks who've had their knives out for him since day one. From everyone, from Corey Lewandowski to Anthony Scaramucci, and others. But the president, you know, months ago said he is going to stay on through '20.

HARLOW: Right.

AVLON: That was a big deal. And it was even after the Bob Woodward book which quoted Kelly as calling the president idiot, saying the West Wing was crazy town and it was the worst job he ever had. But we were all led to believe this was all fake news. Turns out it was real reporting and it looks like John Kelly finally may be heading for the exits.

SCIUTTO: John Avlon, we often have talked in this administration. Do you remember when Kelly joined the administration? His appointment was welcomed as a moderating voice for this president.

HARLOW: Right.

SCIUTTO: And we've seen over the course of the last several weeks the departures or the decline of some of those moderating voices, Nikki Haley being one. John Kelly here. The relationship between the president and Defense Secretary James Mattis supposedly reportedly not as close as it has been.

Who remains in this White House and is telling the president things he doesn't want to hear, trying to control some of his worst instincts? Who remains?

AVLON: That's the key question because that access of adults you referred to, and I'd add H.R. McMaster to that, worth notable, were not simply yessing the president to death. They didn't -- weren't there to be sycophants. They were there to give him accurate information and then execute his orders. And that's what John Kelly has tried to do.

It really leaves Mattis at the Pentagon, and it really is a question then of who takes that role.

HARLOW: Right.

AVLON: Who fills Kelly's shoes? Is it someone who is a real apparatchik who's just a strong Trumpers who's never going to contest?

HARLOW: Well, so what -- just on that point, what does it mean if it is Nick Ayers?

AVLON: Well, what's fascinating about Nick Ayers is, A, he's a Pence guy. He's really an establishment figure, a political operator, someone well known on Capitol Hill, not without enemies. That would be not of Washington. But a Georgia political operative that could make sense on paper, at least, in terms of unifying the vice president's staff with the White House and preparing for a presidential campaign. But is he a policy guy? Is he a government guy? Not so much. And there's always the danger that the early trial balloons and these stages are almost designed to get shot down.

SCIUTTO: Yes.

AVLON: So you form a maximum peril for that possibility.

SCIUTTO: You know, John, on the Mattis point there, we had a test of that just recently on the Khashoggi evidence, right?

HARLOW: Yes.

SCIUTTO: And you saw Mattis line up with the president and Pompeo, you know, which seemed to be contradicted very soon after by the CIA director's testimony.

AVLON: Yes.

SCIUTTO: John, always good to have you on. Helps us boil these things down.

Let's get now because, again, another story we're covering today. D.C. federal courthouse, our own Jessica Schneider is there waiting for the latest peek, we're going to get into Robert Mueller's investigation into Paul Manafort, how he has broken this cooperation agreement.

What do we expect to see today, Jessica, and when?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: That is the question, Jim, here. Another day, another waiting game. We're waiting for two key filings, one here out of D.C. district court. The one here related to Paul Manafort. The special counsel's team must detail to the judge exactly how they believe that Paul Manafort lied and what he lied about during these plea talks.

Remember, it was at the beginning of last week when the special counsel's team revealed that they believe that Paul Manafort had lied about multiple subjects over several different meetings, but in that past two weeks we've all been led to wonder what exactly did Paul Manafort lie about. And of course the question here will be in these filings. Will the special counsel reveal what he lied about? Will we be able to see it? Or will it be redacted?

And the key question being, did Paul Manafort lie about anything to do with the Trump campaign, with the president himself who at the time was the candidate? Did he lie about anything possibly related to any possible collusion between the Trump campaign and Russia or were these lies, instead, about Paul Manafort's business and trysts in Ukraine? Remember, he faced that trial in Virginia related to that and was convicted on eight counts.

Of course If Paul Manafort lied about the Trump campaign, about any possible collusion with Russia, that could have huge implications and could reverberate all around a Washington that's already on edge.

[09:10:02] So we're waiting to find out. This filing could drop at any moment. It has to be filed before midnight. And interestingly, Jim and Poppy, the special counsel has said that some of this, at least, will be made public. It remains to be seen, though, how much could be redacted and how much we might actually see about how Paul Manafort lied -- guys.

SCIUTTO: Could come any minute now. We're going to be right on top of it.

Jessica Schneider, thanks very much.

HARLOW: All right, Jess. Thank you.

Our Shimon Prokupecz is with us now.

Shimon, look, you're waiting to hear a lot today, as we all are. And one big question is on Michael Cohen. The sentencing memo is going to come and it's going to outline a lot more on just how helpful Michael Cohen was to the special counsel, how much he cooperated and what that will mean in terms of leniency, in terms of what prosecutors are recommending to the judge here on the sentence. What can you tell us?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Yes, that's exactly right. Look, you know, the attorney for Michael Cohen already did his filings. That came last Friday at 11:30 at night.

HARLOW: Right.

PROKUPECZ: Where he called Michael Cohen's cooperation specifically in the special counsel's investigation significant. The key here is going to be how the prosecutors, how the Mueller team describes his cooperation. Was it significant? What exactly has he provided? We're not like -- you know, it's unlikely that we're going to know everything because there is still this ongoing investigation and much like what we saw in the Michael Flynn filing there is probably going to be redactions.

But the key thing here is will they at least give us some idea, that is the special counsel, about how Michael Cohen has been cooperating. And the other thing to keep in mind here, there is also a bigger investigation going on with the U.S. attorney's office here in New York, the Southern District of New York, which can perhaps ensnare, you know, a lot more people, including the Trump Organization.

He is cooperating in that investigation, Michael Cohen is. And we also could hear some of that -- what that -- some of that cooperation entails. So there is a lot we can hear.

HARLOW: Yes.

PROKUPECZ: But -- you know, I think it is important for people to keep in mind there are still many aspects of this investigation that are ongoing that we're not going to know about for quite some time.

HARLOW: Yes. '

PROKUPECZ: Most important for Michael Cohen, obviously, is jail time. How much jail time will the special counsel's office tell the judge they want him to serve? His lawyer, Michael Cohen's lawyer says he shouldn't serve any jail time.

HARLOW: Right.

PROKUPECZ: His cooperation here is important. He's been helpful and he's going to continue to be helpful to the U.S. attorney's office, to the FBI. You know, if they need him, he's going to keep working with them.

HARLOW: Yes. And just to remind people, if we see the president sort of continue on this distancing himself from Michael Cohen, Shimon, it was Michael Cohen standing up in federal court just last week saying that he lied to Congress out of loyalty to Individual One, that of course being the president.

All right, Shimon. Stick around for us on that.

We do have breaking news on the economy. Brand new jobs numbers out. U.S. job creation weaker than expected. Still a sign of a pretty strong labor market, Jim.

SCIUTTO: Let's go to our chief business and economics correspondent Christine Romans. So the economists were expecting 190,000 jobs. This one came in significantly below that.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, about 155, 000 net new jobs. But look, you're on track this year for almost 2.3 million jobs. You take the broader view, about 2.3 million jobs created so far this year. That's already better than last year, and it's on track to beat 2016, which is a very good year for job creation. So one reason why you might see 150 and not the 200 that some have been expecting is because at 3.7 percent unemployment, that very low unemployment rate, it very well could be not that companies aren't hiring as much but that they can't find the workers. This is what you call full employment.

So it will be interesting in the coming months to tease that out and see if we are just such a strong, tight job market right now that you can't really be adding 200,000 plus workers every month without bringing in more workers from someplace else.

Where was the hiring, guys? This is really key here. Business information services up 32,000 jobs. You also saw in health care 32,000 jobs. That has been a steady performer. Make no mistake, health care in this country, hospitals and outpatient services and all the hospital facilities and health care facilities we see are a huge driver in the economy and manufacturing. 27,000 jobs created there.

One manufacturing trade group saying that its investment in metals, in aluminum and in steel facilities that are firing back up again because of the president's tariffs on overseas, that that is helping that particular part of the economy. Certainly something the White House would like to hear, guys.

HARLOW: Yes. Absolutely. All right. Christine Romans, thank you so, so much. We appreciate it.

As you can see, a lot of news going on this Friday morning. On top of it, a new CNN report sheds light on those hectic days after President Trump fired FBI director James Comey. We've now learned then acting FBI head Andy McCabe opened an obstruction of justice investigation even before the special counsel was appointed.

SCIUTTO: Plus, markets bracing after a wild Thursday. Investors on edge after the arrest of a top Chinese tech executives as the U.S.- China trade truce hanging in the balance.

And comedian Kevin Hart quits Oscars after --

[09:15:00] POPPY HARLOW, CO-HOST, NEWSROOM: Investigation even before the special counsel was appointed.

JIM SCIUTTO, CO-HOST, NEWSROOM: Plus, markets bracing after a wild Thursday, investors on edge after the arrest of a top Chinese tech executive. Is the U.S.-China trade truce hanging in the balance? And comedian Kevin Hart quits the Oscars after facing outcry over homophobic messages he had tweeted in the past.

(COMMERCIAL BREAK) SCIUTTO: This morning, Cnn has learned that in the days after James

Comey was fired by the president, deputy Attorney General Rod Rosenstein and top FBI officials viewed President Trump as a leader who needed to be reined in.

HARLOW: That ultimately then led then acting FBI Director Andrew McCabe to open an obstruction of justice investigation before Robert Mueller was brought on. With us now, Cnn analyst, former FBI special agent Asha Rangappa, John Avlon also back with us for the politics of it.

[09:20:00] Asha, let's talk about the legal significance of what we've learned from Pam Brown's reporting overnight that Andy McCabe, a foe of the president, clearly, the president has been very critical of him. But he was then acting FBI director, opened an obstruction investigation before Mueller was brought on.

ASHA RANGAPPA, CNN LEGAL & NATIONAL SECURITY ANALYST: Yes, this doesn't surprise me at all. It's important to remember that the special counsel didn't open these investigations, and they're not only legitimate because there is a special counsel. The special counsel stepped into existing investigations, including the Russia investigation and the obstruction investigation because the Attorney General was recused and there was a conflict of interest with the deputy Attorney General.

Those are the grounds for appointing a special counsel. When McCabe opened the investigation, the question is, was there a reasonable factual basis to believe that a violation of federal law had occurred? And at that point, what you had was Comey's memos that there had been some problematic conversations and then the firing of James Comey.

So that would have been sufficient to open an obstruction investigation into which Mueller later stepped in to oversee.

SCIUTTO: Yes, John Avlon, you have a different issue now, right? In that the president has fired his Attorney General in part or large part because he had recused himself in the investigation. He now has Matthew Whitaker in that position, someone who is a frequent and vocal critic of the special counsel.

Do we know -- would we know if the new acting Attorney General has already taken steps to rein in Mueller and the special counsel probe?

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: We do not know yet. It's the subject of course, much speculation. We do know that earlier on, that the president seemed to have gotten a head's up about certain actions that were taken and indictments, particularly I think Michael Cohen's pleading guilty.

He was informed of it ahead of time, but we don't know the extent to which Matt Whitaker has involved himself. Theoretically, he now oversees that investigation. But the Mueller probe and certainly the documents we've seen today and expect later today have continued.

And we will take time to find out how involved he's been if at all. But it also raises the question of the administration floating a new Attorney General, someone who had actually been a previous Attorney General for Bush 41 to try to remove some of the controversy around Whitaker's appointment.

Because technically, the rule of chain of command, that should have been Rod Rosenstein. So someone who has not been a Senate-confirmed has never been in this position for this amount of time.

HARLOW: Right, and of course Barr has been Senate-confirmed, but he's also been critical of certain aspects of the Mueller probe. John, before -- let me get you on this, just the political play here of one of the president's newest tweets this morning that fascinates me.

I won't read at all, but I'll paraphrase for you here. He's saying that, you know, Rudy Giuliani; his personal lawyer is crafting a counter report to the Mueller probe and the Mueller report that 87 pages of it, John, are already done, and he said we can't finish it until, you know, Mueller is done with his work.

Politically, John, what's the play here? That they would feel the need to write a report responding that it's already 87 pages long, and that they've started doing so before the Mueller report is done.

AVLON: Well, this has been reported that basically --

HARLOW: Yes --

AVLON: They want to offer their counter factor, the alternative facts to whatever the Mueller report comes down with. Then this was actually dismissed in an interview that Rudy gave last night. And that's what the president is trying to correct --

HARLOW: Correct --

AVLON: Offering this specific number 87. But what that reporting showed is there's actually a high degree of chaos in the White House when it comes to their plan, their strategy to respond to the Mueller report, which might be characterized as a known unknown.

One quote from an unnamed White House source in the article that jumped out to me, this is like Jesus takes the wheel, but scarier. That's an indication of real chaos, not strategy, shall we say inside the White House waiting for this report to drop.

SCIUTTO: Asha, just before we go, you have this day, revelations coming on both Manafort and Cohen, revelations that will possibly affect this president or involve this president, and he has gone on another one of these tweet storms, attacking the Mueller probe. Are those tweets relevant to the special counsel as he looks at the question of obstruction of justice?

RANGAPPA: I think that his tweets overtime can establish, particularly when they have attacked people who are in a position to have power over the investigation. You know, can establish a certain motive for wanting this investigation to go away.

I think it's important to understand that --

HARLOW: Yes --

RANGAPPA: No individual tweet is going to be obstruction. But it is painting a picture that I think Mueller will --

SCIUTTO: Yes --

RANGAPPA: Take note of.

SCIUTTO: Asha, just a note, we have live pictures there of the former FBI Director James Comey arriving on Capitol Hill where he will be testifying behind closed doors, a testimony requested, demanded I should say by House Republicans.

[09:25:00] And we will keep you apprised of what we hear from there.

HARLOW: Yes --

SCIUTTO: Rangappa Asha and John Avlon, thanks very much as always. We are just moments away from Wall Street's opening bell. Are U.S.- China trade talks in jeopardy after the arrest of a high-profile Chinese tech executive? We're going to ask one of President Trump's top trade and economic advisors, that will be live coming right up.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Director Comey, would you take some questions from reporters. Director Comey, you stand by --

(END VIDEO CLIP)

(COMMERCIAL BREAK)