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Early Start with John Berman and Zoraida Sambolin

Major Russia Probe Developments Expected; Democrat Dan McCready Rescinds Concession; Planned to Rein in President Even Before Special Counsel Appointment; House Race in North Carolina Under Scrutiny; U.S.-China Trade Turmoil Expands Over Huawei Exec Arrest; Aired 4:30- 5a ET

Aired December 07, 2018 - 04:30   ET

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


[04:30:05] CHRISTINE ROMANS, CNN ANCHOR: New revelations expected today in the Mueller investigation. What else does the special counsel know about the Trump campaign and Russia?

DAVE BRIGGS, CNN ANCHOR: And the president about to name a new U.N. ambassador. Questions surround the choice of a former cable news host.

ROMANS: Breaking overnight, two former Major League Baseball players killed in a car accident.

BRIGGS: And a stunning announcement out of Hollywood. Kevin Hart says he's stepping down as host of the Oscars. The search begins anew.

Welcome back to EARLY START. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It is 30 minutes past the hour this Friday morning. A very --

BRIGGS: Happy Friday, my friend.

ROMANS: I know. A very busy, busy Friday ahead.

BRIGGS: It's been a long one.

ROMANS: It has. Very busy day for developments in the special counsel's Russia investigation. Closed-door testimony from former FBI director James Comey just the opening act.

We're also expecting two major court filings by Robert Mueller's team involving former Trump campaign chairman Paul Manafort and former Trump lawyer Michael Cohen. The filings may reveal significant new details about Mueller's probe of possible Russian collusion.

Our Sara Murray has more from Washington.

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Good morning, Christine and Dave. It's already been a wild week in the Russia investigation and that frenzied pace continues today. To start this morning, we are going to see former FBI director James Comey up on Capitol Hill. He'll be providing testimony, but he'll be doing it behind closed doors for House Republicans. He and the committee struck a deal that he would provide this testimony as long as they release the transcripts soon after he does this deposition.

Now that's just part one of the news. We are also expecting to get from Mueller's team a filing to explain what exactly happened with former Trump campaign chairman Paul Manafort. Remember the government dropped a bombshell. They said initially that Paul Manafort was agreeing to cooperate. Then they alleged that he lied when he was supposed to be cooperating.

This filing should give us some more details about what went wrong but we'll wait to see how much of it is actually revealed and how much remains redacted.

The other big filing we're going to be waiting on today is what is going on with Michael Cohen's sentencing. This is a filing that's going to be coming from Special Counsel Robert Mueller's team but also from the Southern District of New York. They're working together on this.

Now Michael Cohen has asked for no prison time, so this is an opportunity for the government to respond to that request as to whether they think he should serve time in prison, and also potentially to lay out the extent of Michael Cohen's cooperation. So plenty, plenty brewing on this Friday.

Back to you, guys.

BRIGGS: Boy, there is. Thank you, Sara.

In the days after President Trump fired FBI director James Comey, the Department of Justice began a Trump obstruction of justice probe. This was before Special Counsel Robert Mueller's investigation. Two sources telling CNN Deputy Attorney General Rod Rosenstein and top FBI officials viewed Trump as a leader who needed to be reined in.

CNN's Pamela Brown explains.

PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, good morning, Dave and Christine. CNN has learned in the hectic eight days after President Donald Trump fired FBI director James Comey, Deputy Attorney General Rod Rosenstein and top FBI officials viewed Trump as a leader who needed to be reined in. And they discussed a range of options ultimately then asking FBI director Andrew McCabe took the extraordinary step of opening an obstruction of justice investigation even before Special Counsel Robert Mueller was appointed.

These sources said it was an idea that the FBI had previously considered, but the probe wasn't opened until after Comey was fired and before Mueller was appointed. Now the justification went beyond Trump's firing of Comey according to these sources, and it included the president's conversations with Comey in the Oval Office asking him to drop the investigation into his former National Security adviser Michael Flynn.

Now sources say the FBI would only take such dramatic action if officials suspected a crime had been committed. But we are told Rosenstein and other senior FBI officials also had deep concerns about Trump's behavior and thought he needed to be checked according to these sources.

Now, as they considered various options relating to the president in the hours, the days following Comey's firing, McCabe and Rosenstein held a flurry of meetings to discuss the situation and that was when this decision was made for the FBI to open up the case into Trump. The "Washington Post" was first to reference the probe pre-Mueller. But these new details about the genesis of the obstruction case into Trump that became a key element of the Mueller probe shed light on the chaotic week following Comey's firing and the scramble to decide how best to respond.

They also helped to explain the origins of the Mueller investigation that has stretched across 19 months, consumed Trump's presidency and is building toward a dramatic day of courtroom filings Friday.

Now source within the Justice Department strongly disputed Rosenstein sought to curb the president, emphasizing that his conversations with McCabe was simply about talking through ways to conduct this investigation. The source saying he never said anything like that, and a spokeswoman for McCabe did not provide comment for this story -- Dave and Christine.

ROMANS: All right, Pamela. Thank you so much for that.

Sometime today, President Trump is expected to name State Department spokeswoman Heather Nauert as his new ambassador to the United Nations.

[04:35:06] The former FOX News host is relatively inexperienced at international diplomacy setting the stage for a potentially tough Senate confirmation. She would replace the outspoken current ambassador Nikki Haley who reportedly sparred with other administration officials.

Two other top officials, Secretary of State Mike Pompeo and National Security adviser John Bolton, are currently pushing to downgrade the U.N. ambassador job so that it is no longer a Cabinet-level position.

BRIGGS: All right. The latest on election fraud allegations. A CNN review of absentee ballot envelopes has revealed irregularities with witness signatures in a second North Carolina county. The discovery comes as Democrats Dan McCready withdraws his concession in a congressional race where investigators were already probing allegations of election fraud in another county.

CNN's Drew Griffin has the latest from Raleigh.

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: Christine and Dave, major developments again in the validity of the election in the Congressional District 9 here in North Carolina. The loser in this race, the Democrat, Dan McCready, has now rescinded his concession. He no longer thinks he lost. He did lose by 905 votes. He's wondering if those 905 votes are now valid because of all the vote fraud allegations, and the other big development is our own review, CNN's review which shows it's expanded, alleged vote fraud, into two counties.

The review of absentee mail-in ballot signatures in Robeson County near Bladen County shows dozens of these absentee ballots were witnessed by just four people, all four people associated with the same ring that's involved in now a criminal investigation in Bladen County, the state of North Carolina. The Board of Elections here investigating whether or not hundreds of absentee ballots were illegally stuffed in favor of the Republican candidate and potentially more than a thousand absentee ballots potentially in favor of the Democrat were thrown out.

So suppress the vote of the Democrats. All of these throwing the validity of this election in doubt and it looks more and more like this is heading toward a reelection -- Christine, Dave.

ROMANS: All right, Drew. Thank you for staying on top of that for us.

Make that a plus 40 for House Democrats in the midterm elections. On Thursday Republican Representative David Valadao officially conceded to Democratic challenger T.J. Cox in California's 21st. CNN and other news outlets had initially called the race for the incumbent. So right now the balance of power in the House looks like this, 235 seats for Democrats, 199 seats for Republicans and, of course, that North Carolina race remains to be called.

BRIGGS: A new consensus candidate to replace Jeff Sessions as attorney general is emerging this morning. 68-year-old Bill Barr was once attorney general in the early '90s during the H.W. Bush administration. Lawmakers from both parties speak highly of Barr. They say it would be easier to confirm in this current highly polarized politically environment. Barr would be Robert Mueller's boss.

Barr would be Robert Mueller's boss. He's gone on record expressing confidence in the special counsel who worked under him during Barr's earlier stint as AG. Barr has said Mueller's investigation would not devolve into a, quote, "witch-hunt," though he also expressed disappointment at the news some members of Mueller's team had donated to Democratic candidates.

ROMANS: All right. The main event today in business. The November jobs report due out at 8:30 a.m. Eastern Time. The forecast is for a surge of 200,000 new jobs thanks to increased hiring as retailers anticipate a robust Christmas shopping season. The unemployment rate forecast remain at 3.7 percent, a 49-year low and average hourly earnings of 3.1 percent from the same month last year.

America's employers have added an average of 215,000 jobs per month over the past year. Wages have been slowly creeping higher as the economy has soaked up nearly all available workers, prompting businesses to offer higher salaries, better benefits and more perks. The big question from investors, will this help stem the current market slide? But a solid jobs report the White House are sure to continue to tap the fundamentals of the economy despite what has been volatility in the stock market.

BRIGGS: Breaking overnight, two former Major League Baseball players killed in a car crash in Venezuela. Authorities say Luis Valbuena and Jose Castillo died on a car accident after a game Thursday night in the Venezuelan Professional League. A third player in the vehicle survived the crash. Valbuena played 11 seasons in the Majors with five teams including his last two with the Angels who released him back in August. Castillo played in the Majors from 2004 to 2008, the majority of that time with the Pittsburgh Pirates.

ROMANS: Stunning news from Hollywood. Comedian Kevin Hart is stepping down now as the host of the 2019 Oscars just two days after the Academy announced he was their choice. At issue are past angry anti-gay homophobic comments made by Hart.

[04:40:05] He says the Academy gave him an ultimatum demanding he apologized and he passed. Hart later posted this statement on Twitter, saying, quote, "I have made the choice to step down from hosting this year's Oscars because -- this is because I do not want to be a distraction on a night that should be celebrated by so many amazing talented artists. I sincerely apologize to the LGBTQ community for my insensitive words from the past. I'm sorry that I hurt people. I'm evolving and want to continue to do so. My goal is to bring people together, not tear apart. Much love and appreciation to the Academy. I hope we can meet again."

BRIGGS: All right. Things are getting back to normal here after some real drama around midnight here at CNN in New York. A bomb threat forced the evacuation of our building for about 90 minutes. A law enforcement source says the caller who phoned in the threat claimed there were five devices in our building here on Columbus Circle. Employees vacated, the NYPD team swept the building. They declared all clear around midnight.

Our show being produced at the time.

ROMANS: Yes.

BRIGGS: By a talented staff who had to leave that building.

ROMANS: Thanks, everybody. Thanks for all the hard work.

All right, 41 minutes past the hour. Chinese tech executive's arrest opens up a new front in President Trump's trade war. We're live in Beijing, next.

BRIGGS: And roads turn to rivers. More on the storm that swamped parts of California.

(COMMERCIAL BREAK)

[04:45:36] BRIGGS: The conflict between the United States and China over trade and technology is expanding today. Beijing angered by the arrest of a top executive of Chinese tech giant Huawei at the request of the U.S. government. And that has investors worldwide rattled.

CNN's Matt Rivers live in Beijing, just about 6:00 p.m. there. Matt, where are headed here?

MATT RIVERS, CNN CORRESPONDENT: That's a great question. It really depends on really a hearing later on today where Meng Wanzhou, the CFO of Huawei, was arrested. She's going to have bail hearing in Canada around 1:00 p.m. And then we'll see where it goes from there. But we do know that the United States wants to extradite her to the Eastern District of New York to face unspecified charges.

And this is not happening in a vacuum. There is a trade war, you'll remember, going on between the United States and China. And what Beijing is trying to figure out is, is this arrest politically motivated and did the White House know about it when Xi Jinping and President Trump sat down just a few days ago in Buenos Aires during the G20. If you hear White House advisers speak about it as Peter Navarro, White House economic adviser, did last night to Erin Burnett, President Trump didn't know about this arrest beforehand.

(BEGIN VIDEO CLIP)

PETER NAVARRO, ASSISTANT TO THE PRESIDENT FOR TRADE AND MANUFACTURING POLICY: The president was unaware of it going into that dinner, as were all members of the team. And look, I think what's interesting to observe here is that the fact of the matter is, the reason why we're having such trouble with China is they do stuff like this all the time. They lie, they cheat, they steal, they force technology transfer. So on any given day, there have been actions taken against China over the course of the administration.

(END VIDEO CLIP)

BRIGGS: That's a look, in China, generally speaking at the upper echelons of government, there's a relation that generally in the U.S. there's a split between the judiciary and diplomatic activity. And so the Chinese might be willing to forgive this, perhaps, if Donald Trump really didn't know. But if the Chinese determine that President Trump knew about this going into the dinner with Xi Jinping and didn't disclose that, it could make these negotiations over trade that much harder.

These negotiations were going to be brutally difficult to begin with. Add in this arrest and they don't get any easier.

BRIGGS: As always, should be an interesting market open in a few hours.

Matt Rivers live for us in Beijing. Thanks.

ROMANS: We want to know more about what those charges are you know.

BRIGGS: Indeed.

ROMANS: Is it around sanction dodging? What exactly is it that the United States is so upset about.

BRIGGS: Yes. Certainly needs some more information there. All right. The Trump administration reversing an Obama-era coal

emissions rule just days after a U.S. government report warned aggressive action is needed to curb greenhouse gases. The rule change lifts a mandate that new coal plants use costly carbon captured technology. EPA officials claimed their Obama-era predecessors knew the technology was unproven.

It's unlikely the change will lead to new coal plants sprouting across the country, though, simply because natural gas and other power sources are cheaper, but environmental groups are calling the proposed change an act of die hard climate denial.

ROMANS: The "New York Times" reports President Trump was employing undocumented immigrants at his New Jersey golf club at the same he was vilifying them and pushing hardlined immigration policies. Two women speaking on the record told the "Times" they entered the U.S. illegally and got work at Trump National Golf Club using phony papers.

The women say managers at the club knew they were working illegally and helped them avoid detection. A Trump Organization spokeswoman says the company has tens of thousands of employees and strict hiring practices. The "Times" notes there is no evidence the president or Trump Organization executives knew about the women's immigration status.

BRIGGS: Former president George H.W. Bush now in his final resting place at his presidential library at Texas A&M University.

"Hail to the Chief" played as America's 41st president was carried off his funeral train in College Station. You can see the Bush family looking on with hands over hearts. The Navy also performed its largest ever 21 aircraft Missing Man Formation flyover. During the funeral services a powerful tribute delivered by James Baker, President Bush's secretary of state, chief of staff and best friend.

(BEGIN VIDEO CLIP)

JAMES BAKER, FORMER SECRETARY OF STATE TO PRESIDENT GEORGE H.W. BUSH: I've always been proud that George Bush used to describe our relationship as one of big brother and little brother. He used to say that one of the things he liked best about me was that I would always tell him what I thought, even when I knew he didn't want to hear it.

[04:50:07] Then we would have a spirited discussion about that issue. But he had a very effective way of letting me know when the discussion was over.

(LAUGHTER)

BAKER: He would look at me and he'd say, Baker, if you're so smart, why am I president and you're not?

(LAUGHTER)

BAKER: He was a leader and he knew it.

(END VIDEO CLIP)

ROMANS: I really love those remembrances.

BRIGGS: Yes. We'd all be so lucky to have a best friend like James Baker for life.

ROMANS: Yes.

BRIGGS: I'll tell you what.

ROMANS: All right. 50 minutes past the hour. MoviePass wants to win back some angry customers. The movie subscription service has announced a new pricing structure that goes into effect in January.

We'll get a check on CNN Business next.

(COMMERCIAL BREAK)

[04:55:35] BRIGGS: Check out that scene from Burbank, California. The sloping road turning into a raging river by record-breaking rain. Downpours snarled traffic and spurred evacuations in areas already hit hard by those wildfires. Mudslides also hitting some areas. One even forced the closure of the Pacific Coast Highway and surrounding roads in and around Malibu.

Elsewhere, 25 million people understand a flash flood watch as a strong storm moves bringing ice and snow from the southern plains. The Appalachians.

Here's meteorologist Derek Van Dam.

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, Christine and Dave. We are on the verge of a significant multi-day winter weather event stretching from Texas all the way to the Carolinas, lasting from today right through the end of the weekend. The radar doesn't look like much now, but believe me, as the storm picks up steam over the next 12 to 24 hours, we will see heavy rain over the spread much of central and eastern Texas, parts of Louisiana into Arkansas with over 10 million Americans that are in some sort of winter weather advisory.

Now I'm focusing my attention on western North Carolina, in the Appalachians. This is where we're expecting historic heavy snowfall to take place Sunday night into Monday. Look at how the storm evolves over this region. By the way, if you're located in Atlanta, we believe temperatures will stay just above freezing, so not a snow event for you. Maybe a few snowflakes early Monday morning. But (INAUDIBLE) compared to what they're going to experience just to your north and east. Places like Asheville, the potential exists to break records here for all-time snow events. Now we're forecasting over 15 inches across this region.

Back to you.

ROMANS: All right. Thank you so much.

Let's get a check on CNN Business this morning. Global stock markets are higher, finally ending a string of bad days over trade war worries, stabilizing now around the world after yesterday's news of the arrest of the Huawei CFO. On December 1st, that's the very same day the president, President Trump and the Chinese president met at the G20.

In Asia, Asian market higher there. The Hang Seng just falling a little bit, but European stock markets have opened up about a percent, as well. But on Wall Street, we'll have some futures here and they are lower, suggesting at this hour a triple-digit decline for the Dow Jones Industrial Average.

Look, the Dow fell as much as 785 points at its worst on Thursday then made this epic comeback to close down 79 points. The Nasdaq eked out a small gain just under half a percent, recovering from trade war fears. The S&P 500 also rebounded ending the day down just about .2 percent. The main event today -- let's look forward now because the main event today in business is that jobs report. It's due out at 8:30 a.m. Eastern Time. It's expected to show robust hiring and an unemployment remaining near a 49-year low.

Sears chairman Eddie Lambert wants to buy stores and assets to keep the company alive. His hedge fund ESL Investment is offering $4.6 billion for about 500 Sears and K-mart stores, as well as the company's other assets. ESL said its plan would save 50,000 jobs. Sears employed 68,000 people when it filed for bankruptcy back in October. Lambert gave up his role as CEO the day of the bankruptcy filing, but he remains the chairman. A federal bankruptcy court judge would have to approve the plan before Sears could be purchased by ESL. A spokesperson for Sears declined to comment on the bid.

MoviePass wants to win back angry customers. The movie subscription service announced a new -- another new pricing structure on Thursday and it's dependant on geography and the kinds of movies you want to watch.

Starting in January, MoviePass will offer three plans. They're called and red carpet. And not every customer will be charged the same monthly fee for each plan. MoviePass says the price for each chair will vary by zone, with the highest level costing as much as $25 in some markets.

It's been a rough year for MoviePass. It upset a lot of its original members by tweaking and changing the terms of its service several times. You know, I interviewed the CEO, you know, recently and he kept saying no, we're not going to change things. We have found the pattern and the strategy and the formula. Looks like they're taking the formula.

BRIGGS: They'd have to figure they're going to tailor it for different markets.

ROMANS: Yes.

BRIGGS: We saw a movie the other day, "Mary Poppins Returns."

ROMANS: I know. BRIGGS: Fantastic movie. Highly recommended by this guy, anyway.

EARLY START continues right now.

ROMANS: New revelations expected today in the Mueller investigation. What else does the special counsel know about Russia?

BRIGGS: And President Trump about to name a new U.N. ambassador. Questions surround the choice of a former cable news host.

ROMANS: Breaking overnight two former major leaser baseball players killed in a car accident.

BRIGGS: And a stunning announcement out of Hollywood. Kevin Hart --