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White House Accuses FBI Of Ambushing Michael Flynn; Trump Foundation Shutting Down Amid Allegations It Functioned As Trump's Checkbook; Interview with Rep. Raul Grijalva (D), Arizona; Judge Orders Flynn To Stay Within 50 Miles Of Washington; Director And Actress Penny Marshall Dies at 75. Aired 7-8p ET

Aired December 18, 2018 - 19:00   ET


[19:00:00] WOLF BLITZER, CNN ANCHOR: "ERIN BURNETT OUTFRONT" starts right now.

ERIN BURNETT, CNN HOST: OUTFRONT next, the White House insisting the FBI ambushed Michael Flynn even as Flynn himself admits he lied. And drops all his attacks on the FBI.

Plus the Trump Foundation shut down amid allegations Trump used it as a personal piggy bank. Are the walls closing in?

And the outgoing Interior Secretary Ryan Zinke accuses sitting Congressman on Twitter of being a drunk. Congressman Raul Grijalva responds in his first television interview about that ugly attack. Let's go OUTFRONT.

Good evening, I'm Erin Burnett. OUTFRONT tonight, ambushed on a lie. The White House defending the President's former National Security Adviser, even as he admits that he lied knowingly to the FBI in the Russia investigation and yes, Michael Flynn knew it was a crime when he did it.

General Michael Flynn was in court today, walking back an earlier claim that he was sort of basically -- they we're saying tricked into lying by the FBI. Previously, Flynn's lawyers had suggested that he was questioned by FBI officials without a lawyer present and the officials never informed him that it was a crime to lie.

Now, keep in mind, Flynn was the President's National Security Adviser at the time, right. He's a general, former Director of the Defense Intelligence Agency, it's preposterous to think that he didn't know without being explicitly told that it's a crime to lie to the FBI, OK? That's just a joke and he readily admitted in court today, right, that that he knew that.

Now, when the judge asked whether FBI investigators had, quote, entrapped Flynn, specifically asked his lawyer changed his tune and was very clear, quote, no, Your Honor. No. No entrapment by the FBI. But that did not stop the President and the White House from pushing the false story that Flynn was entrapped. The President tweeting today in part, "Good luck today in court to General Michael Flynn".

And the White House Press Secretary Sarah Sanders also ignoring the fact that Flynn admitted he lied and admitted he wasn't entrapped. No, she said, for this White House, the narrative isn't about telling the truth. The narrative is yet again that the FBI did something wrong.


SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: We're arguing that he was certainly ambushed and that the FBI -- that we know had clear political bias.


BURNETT: This is absurd. Flynn himself said he was not ambushed by the FBI. Now, a reporter then followed up explicitly giving Sanders the opportunity to change her answer later today. Let me play that exchange.


UNIDENTIFIED MALE: Flynn said that he knew that it was illegal to lie to the FBI and he was ready to accept responsibility. This was all before agreeing to a delay in the sentencing. Given that, are you in a position now or would you like to revisit your comments earlier today that the FBI ambushed Flynn here.

SANDERS: No. We still firmly believe we don't have any reason to want to walk that back.


BURNETT: OK, so, let's be clear here. She's saying she does not care that Flynn lied, which, again, I just have to keep saying it, right, he admitted that he did. Something that President Trump himself, by the way, has publicly admitted General Michael Flynn did. The President of the United States has admitted it. So they're going back on that too. Here's Donald Trump.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Hillary Clinton lied many times to the FBI, nothing happened to her. Flynn lied, and they destroyed his life. I think it's a shame.


BURNETT: Flynn lied. It's a fact. And here's another fact. President Trump has an issue with the FBI. He doesn't have an issue with lying.


UNIDENTFIED MALE: Is he concerned that one of his top aides lied to the FBI and was working for a foreign government?

SANDERS: Not when it comes to things that have anything to do with the President. (END VIDEO CLIP)

BURNETT: So, if his top National Security Adviser lies to the FBI, the President of the United States is not concerned. That's what she just said. Maybe that's because lying is something that the President of the United States himself does. As his own lawyer admitted, just the other day, when discussing Michael Cohen.


RUDY GIULIANI, ATTORNEY FOR PRESIDENT TRUMP: He's changed his story four or five times.


GIULIANI: President is not under oath.


BURNETT: Kaitlan Collins is OUTFRONT tonight at the White House.

Kaitlan, clearly, the White House caught off guard by the Flynn hearing today, right? They thought that he was going to, I guess, keep going against the FBI. He didn't. They were not ready.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Yes. They definitely seemed to think that the judge in that case today was going to rebuke the FBI for the way it handled its interview with Flynn. But actually, Erin, quite the opposite happened in that courtroom today when the judge then instead had Michael Flynn restate that, yes, he lied to the FBI. Yes, he knew it was wrong. And yes, he accepted responsibility for that.

But as you saw, Sarah Sanders in that briefing room today, for the first time in weeks, stood by her statement that she believed Mike Flynn was ambushed by the FBI, even though Flynn's lawyers said he was not entrapped by the FBI.

Now, she also makes a few more interesting arguments talking about Mike Flynn, and his time in the White House. Saying it's acceptable for the President to refer to Michael Cohen as a rat because he's been dishonest and he's lied, even though Mike Flynn is someone who not only pleaded guilty to lying to the FBI as we've stated many times today but also to the Vice President, Mike Pence, to Reince Priebus, who at the time was the Chief of Staff, and to Sean Spicer, who was the Press Secretary and the White House put out in its statement that Mike Flynn had lied and that is why he was being fired.

[19:05:22] Yet instead, today, she stood by the President, wishing him good luck in court and said essentially they're going to wait to see what the outcome of his sentencing is. Now, she said she believed it was perfectly acceptable for the President to make positive comments about Mike Flynn as you heard her saying, to Josh Gerstein (ph) there in that briefing room. But she did not seem to go any forward and say -- she said they were waiting to see what the court determination was going to be. But, of course, Erin, Michael Flynn has already pleaded guilty to lying to the FBI, so the court's not making a determination about that. They're simply going to decide if he's sentenced to jail or not.

BURNETT: All right. Kaitlan, thank you very much.

And I want to go now to Harry Sandick, former Assistant U.S. Attorney for the Southern District, Carrie Cordero, Former Counsel to the U.S. Assistant Attorney General for National Security and John Avlon, Senior Political Analyst.

OK. Flynn lied, but so what? I mean, that seems to be the argument, right? But so what? The FBI is full of a bunch of bad guys.

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: I mean, it's so many different layers of absurd. As you just pointed out, they were going with the full court press argument this morning based on, you know, the FBI railroaded Flynn and they stuck with it after Flynn admitted that was all fan fiction. That was not rooted in reality because they're that invested in the talking points and the problem also is of course the President, tone comes from the top, he's sending mixed messages.

Sarah Sanders doesn't want to actually get in front of him and contradict the President, so she's put out there, sticking with like eight different kinds of falsehoods and moral equivalence in the face of something that's utterly absurd.

BURNETT: I mean, Harry, this pretty incredible.

HARRY SANDICK, FORMER ASSISTANT U.S. ATTORNEY SOUTHERN DISTRICT OF NEW YORK: Yes, it really is. I mean, Michael Flynn, he pled guilty. The judge essentially sort of gave him a way out, said, look, do you, you know, do you stand by your guilty plea, implicitly saying, because if you don't, we have a way of resolving this charge with a trial. And --

BURNETT: Right. But speak now or forever hold your silence moment, right?

SANDICK: Exactly. And he went through kind of a mini -- what I would call like a mini-plea allocution to lock in Flynn that he wasn't pressured. He wasn't badly treated and that he knew that what he was going was wrong. And then we see these other comments from the White House which seem almost designed to confuse people.

BURNETT: I mean, and it is confusing. You really have to think about this because it's so absurd, right? I mean, the person in the center of this says they didn't do it and, you know, Sarah Sanders and the President are saying, well, but you did. I mean, it makes no sense.

I mean, Carrie, Sarah Sanders was asked today to explain why she said Flynn's lie isn't concerning, right. We just played her saying, it's not a problem. It's not a problem. Let me play the follow-up.


SANDERS: We're disputing that any actions he engaged in had nothing to do with the President that just because maybe he did do those things, but that doesn't have anything to do with the President.


BURNETT: So, Carrie, again, she doesn't care that he lied, right? She's just saying, well, but it had nothing to do with Donald J. Trump, right? But the lies had everything to do with him. This was his top security adviser. This was about U.S. policy and Russia. And the whole point of the investigation is to find out what the President knew, right?

CARRIE CORDERO, FORMER COUNSEL TO THE U.S. ASSIST. ATTORNEY GENERAL FOR NATIONAL SECURITY: Look, this was the sitting National Security Adviser in a new administration who was interviewed by federal agents and lied to them, now has pleaded guilty to lying to them and has acknowledged in court that he knew he was lying when he did it. So, there is no question that Michael Flynn, for whatever reason, that I think we still don't understand, chose to lie to federal agents in that interview.

What I think has transpired in the last few days, though, is that his defense team made a decision to try to have it both ways. And in their pleading to the judge, they argued that, in part, yes, he pled guilty, but he also was perhaps not quite aware of the circumstances of the interview, maybe didn't understand that it was wrong to lie, and they inferred some things in that document.

The judge took them seriously, and so he ordered that the FBI release the written record, the written document, which is called the 302 of the FBI interview. So the judge actually was giving Michael Flynn and his defense team the benefit of the doubt, but those records, which were released yesterday, show that the FBI conducted themselves appropriately in the interview.

And so when the judge came into court today, he then had to call Michael Flynn out and say, well, which is it? Did you not understand what was going on in the interview? Or you know, is your plea actually legitimate? And so Michael Flynn had to acknowledge that, yes, he understood he lied and he did it knowingly.

BURNETT: And Harry, you know, I think on some level, just, you know, as a citizen, you watch it she say, OK, he's the National Security Adviser, but this is about Russia. He's lying to the FBI. He should know it's a crime to lie to the FBI.

[19:10:00] We don't need to know it's a crime to lie to the FBI. You know, you would hope that your, you know, I would hope my 5-year-old child knows that you don't lie, right? It's not whether it's a crime. It's whether it's right or wrong. And you're talking about a general --


BURNETT: -- a national security adviser, and now a President who doesn't seem to care at all.

SANDICK: Absolutely. And the judge, Judge Sullivan, who's known for, you know, speaking his mind, he really gave voice to the outrage that I think some people have felt over this situation. Pointing out that he also isn't being made to plead guilty and isn't being sentenced for violations relating to unregistered work as a foreign agent for the country of Turkey.

Two men were indicted yesterday in the eastern district of Virginia in federal court for a crime that Flynn was essentially a conspirator in and he's not being made to accept responsibility for that. He even said at one point, although he took it back after break, he said, is this treason, what Michael Flynn has done. And the judge, after the break, said, you know, I don't really know so much about treason. Let's take that off the table. But he really gave voice to the outrage that you should know better and what you did was wrong.

BURNETT: Right, right. I mean, you know, separate from other, it's a crime. There's also then this issue where the President of the United States, you know, he calls Michael Cohen a rat for speaking out about him. But to General Flynn today, it's good luck. I guess, partially because he thinks Flynn is going to slam the FBI, which Flynn then does not do. But, I mean, the difference in how he handled Michael Cohen, he called a rat, and Flynn, he congratulated, is so stark.

Sarah Sanders was asked about it. Let me play that, John.


UNIDENTIFIED MALE: Very quickly about Michael Flynn. He has cooperated with the Special Counsel's Office and met with them 19 times. Is there a particular reason why the President has not said that he is a rat the way that he has said that Michael Cohen is a rat for cooperating with prosecutors?

SANDERS: Look, we know Michael Cohen to be a liar on a number of fronts, and the President's opinion is extremely clear on that front. I don't see any reason to go beyond that comment at this point.


BURNETT: Of course in that George Stephanopoulos interview, you saw Rudy Giuliani admit, well, the President changed his story multiple times but it's not under oath.

AVLON: Right, not under oath.

BURNETT: So, yes. He's lied at least presumably three of the four times or, you know, we can do the math.

AVLON: But that's OK.

BURNETT: But that's OK because it's not under oath.

AVLON: Right. So, look, I mean, obviously, you've got this contradiction here that's just - that's obvious on its face. Why would the President go out of his way to attack Michael Cohen and go out of his way to defend General Flynn? Well, Cohen has deep personal knowledge into his finances. That could be a reason -- that is an irritant that gets to the personal level. Also, Cohen had been with him a long time.

Remember, Flynn, he told James Comey, allegedly, he's a good guy. Go easy on him. So, that's been pretty consistent.

BURNETT: Flynn was a very new entrant to your point to this inner circle though on Comey.

AVLON: Very new entrant. And so you got to wonder not only, you know, head of the defense intelligence agency, obviously he's aware of lying to FBI agents is not best procedure. But Donald Trump still has that impulse to defend him and not coincidentally perhaps over the weekend on Fox News, you had hosts that were praising the judge really kind of priming the pump of this narrative that the FBI had railroaded General Flynn. Then it all fell apart once the documents were released. Facts then to get in a way of partisan narratives.

We saw it again and you get a face plant in court. And they couldn't recope. They couldn't change their talking points fast enough.

BURNETT: I mean, Carrie, that's the thing. I mean, I think, you know, what I said earlier, from what happened today seems pretty clear, right? Trump has an issue with the FBI but he doesn't have an issue with lying. That is what we saw today.

CORDERO: Well, he lies all the time. But this issue of his -- he really is at war with his own Justice Department and with the FBI. And it's really, as a former Justice Department person who worked with the FBI for years, it's just so bizarre to see a President who is ostensibly in charge of the executive branch to constantly be undermining law enforcement.

He calls himself a law enforcement President, but really, he's constantly undermining law enforcement because the FBI is the lead federal law enforcement organization in the country. So, he's always undermining them. He is consistently siding with individuals who have been charged with federal crimes or in some cases have pleaded guilty to federal crimes. And it really just goes to his lack of respect for the justice system, lack of respect for the Justice Department, and for independent law enforcement.

BURNETT: All right. Thank you all very much.

And next, the Trump Foundation shutting down amid allegations that President Trump used his charity as a personal checkbook.

Plus, Democrats vowing to investigate the Trump administration when they take over. It's only, what, a couple weeks away. Tonight, a top Democrat revealing the probes that he is about to launch.

And the Department of Education rolling back an Obama policy that the intent was to protect minority students from untoward discipline. So, how is that making schools safer? (COMMERCIAL BREAK)

[19:18:43] BURNETT: New tonight, the Trump Foundation shutting down. President Trump agreeing to close down his personal charity amid allegations he used the foundation for personal and political gain. The charity, which according to its most recent tax return, has assets of a little more than $1.7 million, will distribute the money it has left to other charities. That will all be done under the supervision of the New York attorney general.

Kara Scannell is OUTFRONT. And Kara, obviously, the overall dollar amount here in the scheme of foundations is minuscule but this was a very big deal for Trump and this closing down is a huge blow.

KARA SCANNELL, CNN REPORTER: That's right, Erin. I mean, the organization, he had -- he used the foundation in various different ways and it was a flagship item for him to have his own foundation, his own name. But as we've seen from the allegations laid out in the New York attorney general suit, I mean, they were saying that he was using this.

They said there was a shocking pattern of illegality where he used this as a personal checkbook, paying off legal settlements involving Mar-a-Lago and one of his golf courses as well as spending $10,000 of the charity's money to buy a painting of himself that he then hung at Mar-a-Lago. Erin.

BURNETT: And that -- I mean all of those are important examples. That last one, I think, perhaps remains the most stunning. Kara, thank you so very much.

And I want to go to the Marc Lotter, Former Special Assistant to President Trump and a member of the 2020 Trump campaign advisory board, and Jen Psaki, Former Obama White House Communications Director.

[19:20:06] All right, Jen, now, you have this closing down, right? You've got that this is part of many investigations going on into this President, right, which include other payments to Stormy Daniels, inauguration committee, transition team, all of this part of Russia but obviously this charity is beyond that. What's the significance of this?

JEN PSAKI, FORMER WHITE HOUSE COMMUNICATIONS DIRECTOR UNDER PRESS OBAMA: Look, I think the first question most people are asking is what on earth is wrong with these people? It's not shocking, because we've seen all of that illegal activity that you mentioned, Erin, and of course there are a number of investigations about other Trump entities that are under way. But, this isn't just illegal, it's immoral.

And that is significant because, it speaks to his character. And it also speaks to, this isn't just a Trump entity, this is involving his family, and I think it's a lesson to his family members that if they're complicit, at minimum, there are going to be consequences. So this is closing in more around Trump and I think his reaction tells you how impactful that is.

BURNETT: And let's just be clear here. That it's still ongoing, pursuing here, Marc --


BURNETT: -- the attorney general, that whether the kids and Donald Trump himself will be banned from forever serving on a philanthropic board, right? That's what they're pushing for and that's still yet to be resolved or adjudicated. How do you explain this though, Marc, right? Like buying a painting to hang at Mar-a-Lago, paying those legal bills.

This is a foundation that was supposed to be Donald Trump's foundation, the guy who says he's a billionaire; it has $1.7 million left. Hasn't given anything away since 2008, according to the Washington Post. The biggest donation ever was $264,000 to Central Park in 1989.

MARC LOTTER, FORMER SPECIAL ASSISTANT TO PRESIDENT TRUMP: Well, and obviously, I don't speak for the Trump Foundation or this organization, but the lawyer that was representing the foundation today pointed out since its founding, it's giving away $9 million total, including over $8 million of Donald Trump's money personally that he contributed to foundation.

And he's actually been trying to shut down this foundation since he was elected president. He announced that he intended to fold it after the election in 2016. It's actually been held open by -- because of the New York Attorney General's Office. And they've held this open. That money has not been able to be distributed and now it can be and we can put a wrap on this.

BURNETT: So -- But, I mean, back to these issues, I mean, it doesn't make sense, right, the last donation was 10 years ago. It was only $264,000 buying paintings from Mar-a-Lago. I mean, would you admit that doesn't sound good?

LOTTER: Well, I don't know -- I don't know the situations that are around those. I know one of those donations was to refurbish a fountain in a publicly owned park. Now, the park, yes, was right outside of one the -- one of Mr. Trump's buildings but it was still --

BURNETT: That's the Central Park donation --

LOTTER: -- but it was still a park and a philanthropic reason for the donations to do it. So, I'm not a lawyer. I can't tell you if that is, you know, completely above board on that, but we've all got a bunch of investigations going on right now. I mean, the Clinton Foundation is still under investigation for improper reporting and for commingling of money. This is -- these large foundations have a lot of --

BURNETT: I understand but, you know, that what frustrates me about this line of argument and -- it's just, OK, but, he's President of the United States. That's why we're talking about him. So, it's frustrating when still the response is, oh, but Hillary Clinton. OK. So, what?

LOTTER: Well, what --

BURNETT: I'm not saying that you should or shouldn't look into her. Go ahead and do it but why the equivalence with the President of the United States?

LOTTER: What we're seeing is a double standard in terms of how justice is applied and how it's looked at and yes, he is President of the United States, which is why he sought to shut down the foundation shortly after being elected. It was only kept open because the New York Attorney General's Office required that it stay open through their entire investigation. So, again, we're looking at things from a -- he's trying to shut this down, get that money out the door.


PSAKI: Look, I think the problem here for Trump supporters, including Marc and others, is there are so many examples in here that are just stunning. I mean, the one that I just opened my -- not opened my eyes, none of it's really shocking but it should be is the one about the veterans organization that there was a fund-raiser for and half the money seemed to be skimmed off the top.

I mean, these are specific examples that are offensive to everyday Americans, because people contribute across the country to foundations and philanthropies and they expect their money, is going to go where they -- where is intended to. So, the problem here is this speaks to who Trump is as a person, and I think there's more tale to this as we know because the investigation is ongoing.

BURNETT: Right. And obviously, the New York attorney general wants to bar the kids from being on other boards and as I said, that is obviously still going through the process.

LOTTER: That bothers me a little bit. Not because of -- specifically, but the Trump children have done a lot of good work over the years, supporting various causes. Ivanka Trump, specifically helping in with cystic fibrosis, children's charities, habitat for humanity. If they are not allowed -- they can't right now, obviously, they have other jobs and other requirements.

But if they're forbidden from being able to help a lot of these charities, I think a lot of these charities in future years could suffer and the causes that they support, because we're politicizing everything even the ability, the future ability of someone like Ivanka Trump to help raise money to help children's charities.

[19:25:09] BURNETT: I think taking money and giving it to what you say you're going to give it to, and not coming it off the top if that's what we're really talking about here, is not politicizing.

LOTTER: We're talking about in the future, though, and let's remember the majority of this money comes from Donald Trump and the Trump organization, so it was their money. They did raise some money in other areas. I think, again, $8.5 million, right, the quarter of million dollars of Mr. Trump's money, $9 million in total donations since it was first founded.

But if we're going to talk about prohibiting people who could reach out and help raise money for causes that many people support because of partisan affiliation that, I think, is a problem for those charitable organizations years to come.

PSAKI: I think Marc this has nothing to do with partisan affiliation. This has to do with the way they illegally and immorally managed a foundation, a charitable organization. And it speaks to how concerned the judge is that the recommendation is they not even serve on a philanthropic board. We'll see what happens but that's a pretty significant recommendation. At the same time, this group of people is running the government. So, that's concerning too.

BURNETT: All right, thank you both very much. And next, Trump administration about to throw out an Obama policy which was supposed to protect minority kids. Why?

And one top Democrat called for Ryan Zinke to resign, and Zinke slammed him for being a drunk.

Tonight, the Congressman Raul Grijalva responds right here OUTFRONT.


[19:30:01] BURNETT: Tonight, new investigations of Donald J. Trump. A top Democrat revealing the first investigations he's ready to launch on the Trump administration, when his party takes over the House.

Congressman Elijah Cummings, the incoming chair of the powerful Oversight Committee, telling "The New York Times" magazine his very first priorities will include looking at heads of federal agencies using government owned aircraft for personal travel and payments the Trump Organization has received from foreign governments and the list is going to go on and on, adding to already to more than a dozen active investigations.

Another target for Democrats: Ryan Zinke, who has just resigned as head of the Interior Department. The likely incoming chair of the National Resources Committee, Democratic Congressman Raul Grijalva is not ruling out investigating Zinke.

There's been a feud between the two, and it turned deeply personal and ugly in recent weeks after Grijalva wrote a "USA Today" op-ed calling for Zinke to step down, Zinke took it all the way to the mat going aggressively personal on Twitter, writing: It's hard for him to think straight from the bottom of the bottle.

This is coming from a man who used nearly $50,000 in tax dollars as hush money to cover up his drunken and hostile behavior. He should resign and pay back the taxpayer for the hush money and the tens of thousands of dollars he forced my department to spend investigating unfounded allegations.

I want to make it clear, Zinke then ended up stepping down.

Congressman Grijalva is OUTFRONT. This is his first television interview since that tweet and Zinke's resignation.

And, Congressman, look, that's an ugly thing to have to read. Zinke's announced he's out, right?


BURNETT: He's announced he's out. You had called publicly for him to step down. Are you satisfied with where things are now pertaining Zinke?

GRIJALVA: No. I don't think anybody is. I think his resignation or his -- or Trump's decision to ask him to resign whichever -- whichever it is, it's the administration's decision that Zinke should leave, and he should. He's under active investigations and inquiries. The Halliburton land deal back in his home state is still an issue that needs to be -- is being investigated. So, the --

BURNETT: So you're going to continue with investigations into Zinke even though he's gone when you take over? Is that the plan?

GRIJALVA: Well, the plan is there's decisions have been made regarding the interior that made up of one function, always about energy extraction and all the rules, monuments were shrunk, all these decisions made, and the belief of many people under severe conflict of interest, both inside interior with Zinke and with other people that are part of the -- his administration.

So, nothing really changes. Those decisions were made. We're going to be seeking some balance, bring conservation and science back into the equation, and that's going to be the effort and that's going to require, on occasion, that we dig a lot deeper than just the surface material that we get from Interior.

BURNETT: I just want to be clear here. You know, "The Hill" is reporting that you have been cleared, by the way, in any wrong doing in that settlement with the female staffer that Zinke refers to in his tweet. Is that your understanding as well, House Committee on Ethics has cleared you?

GRIJALVA: Yes, they notified us a couple days ago and we're relieved that we don't -- that's part of the issue we don't have to deal with over and over again because the allegations that were made and the allegations that continue to be made, they've been part of my election area, my midterm elections, and Zinke used them as well. And the point being that, you know, they're all fraudulent. They're not true. And the settlement was part of compensation for an employee that was asked to leave, period.

BURNETT: So, they've cleared you. You've been informed on that. Let's talk about the rest of it. He brings that up in the tweet.

And then, like I said, it's an ugly tweet. But this is the world we live in now. He says, of you, Zinke, it's hard for him to think straight from the bottom of the barrel and refers to that payment, which, as hush money to cover up drunken and hostile behavior.

When you saw that, Congressman, what did you think?

GRIJALVA: Honestly, my first reaction was to push back immediately and to defend myself. But the fact of the matter is, this has been a -- an M.O. for this administration, beginning with Trump, that if you're cornered, you can't respond to the points that I have made out, asking for the resignation, then you lash out at the individual. You begin to demean, deflect, whatever you can do.

And so my decision is I'm not going to jump in the sty and wrestle with Zinke or this administration. We're going to do our job. It's going to be methodical, it's going to be urgent, but it's going to be professional.

BURNETT: Do you think that he would have said this about anybody else or was there something specific to you that made him willing to come out and say something so personal and so demeaning?

GRIJALVA: Well, the fact that it appeared in the press. I think "The Washington Times" was the paper that covered this whole thing. And the fact that it had been used as a point of attack in the past, I think that became a logical way to approach me and to try to deal with the very serious questions about what's going on in interior and my asking him to resign. So, that was why he lashed out and it was unfortunate, but we move on.

BURNETT: And you said you have nothing to say to him in that respect? You're just going to -- that, you are going to move on from?

GRIJALVA: Yes, because I think he's got serious problems that he has to deal with in terms of the investigations, in terms of the oversight our committee's going to do. You know, the issue is interior. The issue is conservation. The issue is science.

And the issue is our jurisdiction and protecting the many interests that we have, including Indian country. So, that's the job I had, and Zinke was an impediment to that. He's gone, but I don't think the culture in the place has changed so much these last two years that we have to go after that culture too.

BURNETT: And does his tweet in any way make you more likely to want to continue this or go after him even more.

GRIJALVA: On a personal level?


GRIJALVA: No, no. I mean, what's the point? You reach that conclusion. He's gone, but his decisions and how he reached those decisions, I still believe are open for public review and public scrutiny.

BURNETT: All right. Congressman Grijalva, I appreciate your time. Thank you.

GRIJALVA: Thank you a lot. BURNETT: Next, why is the Trump administration about to end an Obama

policy that was supposed to protect minority students? And does it have anything to do with preventing school shootings, as they say?

Plus, breaking news, a judge just issuing another order for Michael Flynn, literally during this hour. We're going to tell you about this development. It has to do with his passport.


[19:40:34] BURNETT: New tonight, the Trump administration set to roll back an Obama-era policy. OK, so what was the policy? Under President Obama, they had a policy to protect minority students from being unfairly punished. So, in schools, right?

And the Trump administration says that policy has led to schools avoiding punishment for potentially violent students. So, they're saying in the guise of protecting minorities for being unfairly punished, I guess, there's been more violence in schools. That's what the Trump administration is saying. It's from a commission that was formed after the parkland, Florida, school shooting earlier this year.

OUTFRONT now, Van Jones, former adviser to President Obama and host of "THE VAN HONES SHOW", and Stephen Moore, a former senior adviser to the Trump campaign and author of "Trumponomics."

Van, OK, so the basic thing here, right, is there's this policy that says that over time, it's a fact, right, we see minority kids punished, disciplined much more than nonminority kids. So they try to change that.

VAN JONES, FORMER SPECIAL ADVISER TO PRESIDENT TRUMP: For doing the exact same things. In other words, you have a situation, people say, well, these minority kids are terrible. No, you've seen study after study where, you know, a black kid throws an eraser, he gets thrown out of school. A white kid throws an eraser, he's been precocious and that's the problem.

And so, what you have is a school to prison pipeline where kids doing the same behaviors, the black kids and Latino kids wind up getting disproportionately hurt and so, Obama gave good guidance to figure out, hey, listen, we want to keep schools safe but let's do it in a fair way. It's ironic to me that this whole commission was set up to deal with mass shootings. There has not been a single African- American or Latino kid doing a mass shooting and yet somehow they get their protections stripped away but we're not talking about guns.

So, this is a very, very screwy thing that's happening here. It's very unfortunate. The protection from the school to prison pipeline taken away, even though black and Latino kids are not the ones responsible for the mass shootings.


STEPHEN MOORE, INFORMAL WHITE HOUSE ADVISER: I wonder if there's any American who really believes that the problem with our government schools today is that there's too little discipline. I mean, Van, I got to say, I'm disappointed in you.

I have great respect for you but the problem is you know, I've been to a lot of these public inner city high schools in places like Detroit or my hometown of Chicago or Washington, D.C., and you go into these schools and you see the utter chaos that goes on. The shouting and shoving and swearing and fighting in the halls and then you go down the street to the Catholic high school that's really a block away, and you can hear a pin drop in those schools and there's learning going on.

The issue for minorities, Van, as you know, is that these kids are not learning. We're -- it's almost like educational --


BURNETT: Steve, what about Van's point? Can I just jump in here because I want to show, because there's this policy went into place in 2014. And the Trump administration wants to roll it back. They explicitly are doing so in the context of investigating Parkland, right, a school shooting and they're saying, we'll get less violence, OK, if we do this.

So, we went back and looked, shootings since 2014, school shootings, right, when Obama put the policy in place. All but one of the shooters or alleged shooters are white. So you tell me how changing the minority discipline issue is going to stop school shootings.

MOORE: Maybe not school shooting, but you know, I have been to some of these schools.


JONES: You've had your turn. You've had your turn. I get a chance to respond, Steve.

MOORE: I have been to those schools and I have seen kids beaten up by other black students. These are blacks fighting other students and --


JONES: If you want to take your time to attack black people, go ahead but I want to talk about the actual issue. You want to take your time to talk about these schools, but here's the problem that we have.

We have kids who are going to schools that do have big problems, and what's happening is we're making those problems worse by pushing kids out of the schools into the prison system when some of those kids could and should be saved and we actually work harder to save the white kids who get in trouble than the black kids and that's wrong. These are two separate issues.

MOORE: I agree with that. You're right about that.

JONES: These are two separate issues. We have some dysfunctional schools and I tell you what, you're not going to beat me in a competition about who's cared about more of those schools, who's been to more of them. We got problems. But here's the problem.

MOORE: Nothing has changed.

JONES: Here's the deal. What we're doing, we used that as the excuse to then go and make it worse and that's wrong. And if we want -- you and I can sit down and come up with a plan right now that will make those schools better and none of those plans would say that we want a disproportionate impact for black kids.

[19:45:03] I know you wouldn't agree with that.

MOORE: Of course not. No, but what I am saying is a fundamental problem of so many minority schools and inner city schools and whether -- I'm not talking about necessarily blacks but Hispanics, Asian, is that there is little or no discipline.

JONES: Little or no money? Little or no support?

MOORE: How can any kid learn. The problem isn't -- school shootings is a horrible thing but the fact that these kids have to go to school --


BURNETT: But, Steve, let's be clear. The Trump administration is rolling this back as part of a parkland -- hold on. They set up this commission in the wake of Parkland, a mass school shooting. They're coming out and saying, roll back the discipline changes under the Obama administration because you're going to get less violence.

It's a school shooting report. The clear thing is you're going to get fewer school shootings. That is part of what doesn't add up here.

MOORE: But the only -- we're not just talking about shootings. We're talking about kids getting beaten up in schools.

JONES: Hold on.

MOORE: And parents can't send their kids to school because they're worried --

JONES: I think he misunderstands.

MOORE: I talk to black parents all the time who say that, Van. I'm afraid to send my kid to school --

JONES: I've met a black parent. I am a black parent so maybe if you say something about that -- Steve, I think we're, as usual, left and right talking past each other, not hearing each other.

Let me take a shot at this.


JONES: There may be a need to tweak some of these Obama-era policies. I don't know. But what I do know is that the problem they're trying to solve is real. It's not a choice between you either have no discipline and these schools are terrible or you let African-American kids be disproportionately punish.

Somewhere in the middle is the right answer and we've gone from one thing to another and we still haven't addressed mass shootings and I don't think that's good.


MOORE: My only point, though -- I'm in favor of being very tough on kids who are problems in terms of discipline, whether they're white, whether they're Asian or Hispanic.

JONES: On a fair basis --


BURENTT: The problem is -- I think the problem is, and you've got to be able to acknowledge this, Steve, when a black kid does something and a white kid does the same thing, sometimes it is seen differently, OK? It's seen through the prism of who they are and where they're coming from. People are not trying to be explicitly racist but you can get implicitly racist outcomes. I mean, that can happen.

MOORE: I think this commission just wants good schools where people, where kids, whether they're black or white or Hispanic can feel safe in the schools. And right now, they can't in a lot of them.

BURNETT: OK, before we go, Van, I want to ask you about something really significant that's happening which also touches on the issue of race and more broadly than that. That is the Senate majority leader, Mitch McConnell. He is now going to have a criminal justice reform bill, this bill that you have put heart and soul into. It's going to come tonight.

JONES: Tonight.

BURNETT: This -- you walked out here on this set and you said, we are winning. This is something that -- how significant do you think this is? By the way, one of your partners in working on this was Jared Kushner.

JONES: Jared Kushner. His father went to prison and he fought on this hard.

This is history. This is history. Right now, you're witnessing history on the floor of the U.S. Senate. This is a Christmas miracle under way where for the first time in a generation, Republicans and Democrats are arm-in-arm tonight saying, we are sending too many people to prison. They're coming out bitter and not better. We want to make a tremendous difference.

I want to say Hakim Jeffries on the left, Jared Kushner and Donald Trump on the right have brought together a coalition like I've never seen. You've got literally the National Association of Manufacturers, Fox News, and Sean Hannity on the same page with Nancy Pelosi, Cory Booker, the ACLU, Cut 50, something is -- beautiful is happening.

And it's not that you have to see it to believe it. You have to believe it to see it. It's happening right now. People coming together in America to help the people who have nothing. And it's amazing and I'm happy about it.


MOORE: This is something you and I can agree on. It's a great day for America. This is such an awesome issue to give, whether they're minority or white kid a second chance in life. It's awesome.

BURNETT: It's something, bipartisanship we haven't seen on an issue we're not seeing progress on and we should all celebrate.

Thank you both very much.

I want to get to breaking news. Just coming in right now, this is about Michael Flynn. A judge is ordering Flynn surrender his passport. Trump's former national security adviser, who has pleaded guilty to lying to the FBI in the Russia probe, was also ordered to stay within 50 miles of Washington, D.C.

Shimon Prokupecz is OUTFRONT.

And, Shimon, what more are you learning as this is coming now in light of this delayed sentencing?

SHIMON PROKUPECZ, CNN CRIME & JUSTICE REPORTER: It's certainly bizarre, Erin, and quite honestly, I don't think this day could get any worse for Michael Flynn. Look, he's been a free man for over a year now, not being monitored by the court, his travel not being monitored. He's had his passport.

So, certainly, something has changed and it could be that the judge now sees the likelihood that Michael Flynn is going to face some prison time and therefore could be a flight risk and as a result, is now asking for his passport and wants to monitor his travel.

This doesn't happen so late in the game. Remember, it's been over a year now that Michael Flynn has pleaded guilty. And then, all of a sudden, today, given what happened, the judge now, late in the day, saying, hey, I want your passport and I want to limit your travel.

[19:50:06] This is coming from the judge. In cases like this, usually, you see these kinds of requests by prosecutors. That's not the case here.

So, it's a little different, a little odd, but given perhaps everything that occurred today, the judge is concerned and therefore wants to monitor him a little closer.

BURNETT: It's perplexing.

OK. Thank you very much, Shimon. I want to get to another top story here as we're hours away from a

major decision on the interest rates, which is as the markets in the United States are on track for the worst December since the Great Depression, Jerome Powell set to announce the decision tomorrow in the face of an onslaught of criticism from President Trump in recent weeks.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think the rate's too high. I think we have much more of a Fed problem than a problem with anyone else.

Our biggest threat is the Fed, because the Fed is raising rates too fast.

I think the Fed is making a mistake. They're so tight. I think the Fed has gone crazy.


BURNETT: OUTFRONT, Fed analyst Jim Bianco.

Jim, the Fed is obviously -- I think we have to -- it's a sacrosanct thing. It's supposed to be completely independent, equivalent to the Supreme Court, right? The entire world market revolves of the Fed, interest rates, everywhere on this planet. And yet, President Trump has been, you know, sort of shunned that. He slammed the Fed nonstop for raising interest rates.

I just play a few examples. Jim, on top of that, four tweets in the past few weeks criticizing the Fed. I put them up on the screen.

Does this concern you?

JIM BIANCO, PRESIDENT, BIANCO RESEARCH: It doesn't concern me, because the fed is supposed to be independent. It's been set up in a way that it is independent. Each Federal Reserve governor has a 14- year term, they're staggered every two years.

The Federal Reserve chairman is to a four-year term. Technically, the president can remove them, but it's very difficult. No president has tried. Trump hasn't said it.

Also, presidents going all the way back to Lyndon Johnson have criticized the Fed. Now, They didn't have Twitter. They weren't as bombastic as Trump, but this is not new to have a president criticized the Federal Reserve. They have a very important role in the economy, and some people want to chime in on it, including the president.

BURNETT: Right. And now, of course, as you point out, bombastic. I mean, he's done it in an onslaught of the way. Now, I like how you point out the terms are long, it's to prevent exactly the sort of intervention.

Of course, the president, though, has also made it personal about Jerome Powell, right? His own pick to lead the Fed, Jim, right?

He told "Reuters", quote: I think he's trying to do what he thinks is best. I disagree with him. I think he's being far too aggressive, far too aggressive, actually far too aggressive, referring to Powell raising rates.

Then Trump tells "The Washington Post," quote: So far, I'm not even happy with my selection of Jay, which obviously could be perceived as a threat. You point out it's hard to remove him.

But is Trump putting the Fed chief in an impossible position, Jim, when it comes to the perception of what happens tomorrow?


BURNETT: You know, if he doesn't raise interest rates, he looks like he's bowing to Trump's pressure. So, he raises them to show his independent and could hurt the overall economy. These are now conversations we're having.

BIANCO: Right, and I hope that that's not the case. I'll use what we talked about with the Supreme Court. Look, every day, there is a protest in front of the Supreme Court. We trust that the nine jurists are going to do what they think is right and not persuade by it.

The same thing with the Federal Reserve. They are criticized not only by the Federal Reserve, but by Wall Street, by Main Street, by labor groups, by business groups all the time. So, this is not new for them.

They need to push all of that aside and make whatever they think is the right decision. Now, if they can't do it because of some mean tweets, let's be honest, we have to get somebody to run the Federal Reserve who can. This is part of the job. It's an important job, and you need to be able to withstand some kind of criticism.

So, I don't have problem with him criticizing. I would if he wanted to act on it, like removing Powell.

BURNETT: All right. Thank you very much, Jim. I appreciate that context and perspective.

BIANCO: Thank you.

BURNETT: And next, she was everyone's favorite tough-talking tomboy playing Laverne in "Laverne and Shirley." We remember the life of Penny Marshall. L


[19:57:29] BURNETT: Tonight, Hollywood is mourning the passing of Penny Marshall, a trailblazing TV star and Hollywood director known for being tough as nails and endlessly funny.

Stephanie Elam is OUTFRONT.


PENNY MARSHALL, ACTRESS: That's right, tomorrow, Laverne DeFazio starts living.

STEPHANIE ELAM, CNN CORRESPONDENT (voice-over): As an actress, Penny Marshall was one half a funny girl duo "Laverne & Shirley".

P. MARSHALL: Once in our life we should have --

UNIDENTIFIED FEMALE: You mean done the deed?

P. MARSHALL: We die now, we saved it for nothing.

ELAM: The "Happy Days" spin-off became a hit of its own in the late '70s. Marshall garnered three Golden Globe nomination for her role as tough talking tomboy Laverne.

P. MARSHALL: She would not put up with crap. She'd hit you and she was a realist.

ELAM: That spirit proved more useful behind the cameras, as Marshall went on to direct her own TV episodes and feature films. Marshall's 1988 comedy "Big" starring Tom Hanks became the first female-directed film to gross more than $100 million at the U.S. box office.

Two years later, she directed the drama "Awakenings", about a group of catatonic patients. It received three Oscar nods, including best film.

Her next project, "A League of Their Own" was a box office home run.

P. MARSHALL: No girl wanted to write it. They don't like baseball.

ELAM: Marshall's depiction of an all-female baseball league during World War II was listed on the National Film Registry in 2012.

Through the years, Marshall credited her success to her brother, legendary director, producer Garry Marshall.

P. MARSHALL: I wouldn't have a career if it wasn't for my brother. Let's be honest. He's the one that pointed me in this direction. He got me parts.

ELAM: The playful relationship on display during a cameo for the 1993 Halloween fantasy "Hocus Pocus."


P. MARSHALL: Wait until you see what I call you.

ELAM: In her 2012 memoir, "My Mother Was Nuts", Marshall recounted her upbringing in the Bronx. She recalled two failed marriages, motherhood at 19, and a bout with lung cancer, challenges she overcame with an unassuming sense of humor.

P. MARSHALL: I tried to make people laugh. I moved them in some places. My legacy is I hope I gave you some enjoyment.


BURNETT: And thanks so much to all of you for joining us.

"AC360" begins right now.