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Early Start with John Berman and Zoraida Sambolin

Flynn Lied to FBI About Interactions with Russia; What Will Trump Accept?; Stocks Take Another Dive; Moonves Won't Get $120 Million Severance; Netflix Hires Former ABC President. Aired 4:30-5a ET

Aired December 18, 2018 - 04:30   ET

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

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[04:31:00] MICHAEL FLYNN, FORMER NATIONAL SECURITY ADVISOR: Lock her up. That's right. Yes, that's right. Lock her up.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: Lock him up? Michael Flynn will be sentenced today for lying to the FBI. First, the special counsel releasing Flynn's interview with the FBI.

CHRISTINE ROMANS, CNN ANCHOR: Deal or no deal? No one knows. Even Republicans in the dark about what the president will accept four days and counting to a shutdown.

BRIGGS: Stocks at their lowest levels in more than a year. What the numbers signal for the economy in the year ahead.

ROMANS: And the message in the #MeToo era. Former CBS chief Les Moonves won't see a dollar of his $120 million severance.

Welcome back to EARLY START, everybody. I'm Christine Romans.

BRIGGS: I'm Dave Briggs.

Just reading about the most successful people start their day at 4:00 a.m. So, you are in luck, folks. That's according to research.

ROMANS: Good morning.

BRIGGS: We could find out today what compelled Michael Flynn to lie to the FBI. The former national security adviser is set to be sentenced his morning for lying about his contacts with the Russian ambassador during the presidential transition and following a judge's order at the 11th hour, special counsel Robert Mueller has released a memo giving details of the FBI interview where Flynn lied.

ROMANS: Flynn allies, including the president, latched on to the fact that Flynn was interviewed by FBI agent Peter Strzok. Of course, Peter Strzok was later fired over anti-Trump texts. Flynn allies suggest he was tricked into lying because he did not have a lawyer with him. But the memo containing FBI agents' questions and Flynn's answers debunks that claim.

White House correspondent Kaitlan Collins has more from Washington.

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KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, Dave and Christine, Mike Flynn is set to be sentenced in a D.C. federal court today. And we know that the special counsel Robert Mueller has recommended little-to-no jail time for Mike Flynn.

But where this gets interesting is the day before the sentencing, the special counsel released a memo detailing the notes that the FBI agents took after they interviewed Mike Flynn at the White House when he was still the national security adviser in his office when he lied to them about his interactions with the Russian ambassador during the transition period. They only asked about him about his conversations with Sergei Kislyak about an upcoming U.N. vote on the Israeli settlements, but also he discussed the expulsion of these Russian intelligence officers in response to Russian interference in the election by the Obama administration. And he had asked Russians to mute their reaction to that because the Trump administration would be coming into his office in a matter of days.

Now, what we were seeing from the memo released by the special counsel really goes to show the level of detail in these questions that were largely yes or no questions that Mike Flynn said no to when, in fact, he had discussed these things with the Russian ambassador. It just adds to the level of drama the day that Michael Flynn is going to be sentenced, as well as two being sentenced for their work in Turkey lobbying as well. And so, there's a lot of drama surrounding the sentence as people await to see what it is he's going to be sentenced to -- Dave and Christine.

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BRIGGS: All right. Kaitlan Collins, thanks.

A new report prepared for the Senate who Russian operatives aggressively targeted the top threat to Donald Trump's presidency, special counsel Robert Mueller. They did it by setting up fake accounts on Facebook, Twitter, Instagram and other sites, and they used derision and disparagement, create the narrative that the Russia probe was nonsense and that Mueller and former FBI Director James Comey were corrupt.

ROMANS: The Russian influence campaign also targeted African- Americans as part of the broader effort to suppress voter turnout among Democrats. The report goes on to say, well, other ethnic and religious groups were the focus of one or two Facebook pages or Instagram accounts, the black community was targeted extensively with dozens of them.

BRIGGS: James Comey's disputes with President Trump are nothing new, but now, the former FBI director is targeting the entire Republican Party for refusing to stand up to the commander in chief.

[04:35:01] Comey strongly defended the FBI's conduct Monday after a second round of closed door questioning by Congress.

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JAMES COMEY, FORMER FBI DIRECTOR: The president of the United States is lying about the FBI and attacking the FBI and attacking the rule of law in this country. Republicans used to understand that the actions of a president matter, the words of a president matter, the rule of law matters and the truth matters. Where are those Republicans today?

At some point, someone has to stand up in the fair of fear of FOX News, fear of their base, fear of mean tweets, stand up for the values of the country and not slink away into retirement.

(END VIDEO CLIP)

BRIGGS: Last night, White House Press Secretary Sarah Sanders tweeted: Republicans should stand up to Comey. She said the president did the country a service by firing Comey and, quote, exposing him for the shameless fraud he is.

ROMANS: All right. Another ugly day for stocks. All the major averages are now lower for the year and facing their worst year in a decade. The damage report is the Dow fell another 508 points, the S&P lost 2.1 percent. The Nasdaq fell 2.3 percent.

This is the worst quarter for stocks since 2008. Think of that, the depths of the financial crisis. This is shaping up to be the only negative year in a decade, a shock for stock market investors who are used to winning. The S&P has had double digit returns in the seven of the past nine years.

The key now, the Fed tomorrow. The central bank is widely expected to raise interest rates. What will Jerome Powell, the Fed chief, say about hikes next year and whether the economy can withstand more of them?

All right. As the stock market was tumbling, the president said he would release a second round of benefit payments to farmers hurt by tariffs. This is after China resumed buying U.S. soybeans last week. Soybean growers have been especially hit hard by the trade war. China stopped buying U.S. soybeans in July in retaliation for tariffs.

The new order from China won't make up the business for the farmers lost this year. The farm bureau has estimated exports to China are down 97 percent. A lot of farmers are in Iowa. Just yesterday morning, a new CNN/Des Moines Register poll shows Iowa Republicans still support the president, 2/3 say they would vote to reelect Mr. Trump if the election were held today.

BRIGGS: OK. Lawmakers in D.C. very much in the dark about any plan to avoid a government shutdown.

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SEN. JOHN KENNEDY (R), LOUSIANA: If the White House has a plan, they are keeping it to themselves. (END VIDEO CLIP)

BRIGGS: That is Republican Senator John Kennedy of Louisiana. We are now less than four days away from this partial shutdown. It seems nobody on Capitol Hill knows what Mr. Trump is thinking.

The president dug himself a hole when he said he would own the shutdown over funding for his border wall. Now, some Republicans are trying to dig him out.

Here is Phil Mattingly.

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PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Christine and Dave, as the clock ticks down towards that Friday deadline, there is currently no way to bridge the gap, at least the congressional officials are aware of, between where the president stands, requesting $5 billion for the border wall and where Democrats stand, which is they are not going to give him that $5 billion.

Now, what I have been told, guys, behind the scenes is staff on the Republican side have worked up several options that the president can take as a way out of this jam. They include short-term continuing resolutions, basically freezing the current funding for the unfunded portions of the government for two weeks, three weeks, maybe in four weeks time, basically just get past the holidays and get to the time when the Democrats retake in the House. And yet, at this point, congressional Republicans have not been given any signal, one way or the other, whether he would accept it or reject it. That leaves things where it is right now, which is basically everybody in a holding pattern.

There is some question among Republicans I'm talking to whether or not the president wants any path forward himself at all. What Senate Appropriations Chairman Richard Shelby told me earlier today is perhaps the president doesn't want a solution. In other words, perhaps the president wants a shutdown. He has claimed as such up to this point.

Republican leaders are working behind the scenes, trying to prevent that. Will they find a path forward? Well, at this point, Friday is the deadline. As I said, there is still no plan -- guys.

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ROMANS: All right, Phil Mattingly.

Still no plan. You are talking about hundreds of thousands of federal employees in the event of a shutdown who need to be deemed essential and continued to work. Their pay will be withheld until the shutdown is over or other federal employees will be placed on furlough. That means you go home without pay. Congress could other that they'd be paid retroactively after the shutdown, but that is not guaranteed.

BRIGGS: The TSA has agreed to dial back its controversial passenger monitoring program. The quiet skies program monitors American travelers who are not on any terror watch lists. Marshalls will continue to follow and monitor anyone that identifies a person of interest, but they aren't changing the threshold for reporting what they observe.

[04:40:03] So, if a traveler does nothing notable, the marshal will not send in an after-action report. The new policy could mean the program will be less invasive and potentially less observant. The Boston Globe first reported that change.

ROMANS: A White House backed criminal justice reform legislation has cleared a major hurdle in the Senate. Lawmakers breaking a filibuster on broad bipartisan, 82 to 12 vote. The bill is supported by President Trump and pushed by Jared Kushner which reforms sentencing in U.S. prisons. Debate on amendments is expected later this week. But supporters claimed some amendments by conservative Republicans are designed to kill the bill or water it down. So, stay tuned.

BRIGGS: One year in prison and some assigned TV viewing for a Missouri man who killed hundreds of deer. Wait until you hear what the judge is making him watch behind bars.

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[04:45:07] BRIGGS: Accusations of sexual harassment and assault costing former CBS chairman Les Moonves $120 million. The CBS board of directors says Moonves will not receive any severance pay. The board concluded it had ample reason to fire Moonves back in September based on findings from two law firms it hired to investigate the allegations. An attorney for Moonves, once one of the most powerful men in entertainment, calls the conclusions baseless, says Moonves denies the sex was non consensual. The lawyer did not signal any move that Moonves would take to fight this action.

ROMANS: All right. The Catholic Church abuse scandal could be widening once again. Law enforcement from as many as 45 states looking for help from Pennsylvania as they pursue alleged misconduct by Catholic priests. A landmark Pennsylvania grand jury investigation this year found 300 predator priests abused at least 1,000 victims over six decades. The Pennsylvania attorney general tells "USA Today", state authorities have been joining forces since August, prompting search warrant applications, the grand jury subpoenas.

Fourteen state attorneys general have launched separate clergy abuse inquiries. Meanwhile, the Justice Department is working on its own broader review.

BRIGGS: Jesuit provinces in Maryland and the Midwest has released at least 84 clergy members credibly accused of sexually abusing minors. Earlier in this month, Jesuit provinces in the west and central southern provinces released a similar list. Between the four, more than 230 priests accused dating back to the 1950s.

Experts who tracked clergy abuse say the Jesuits admitted dozens of priests who should be on the list which were omitted in the northeast. And plans to release the list of clergy next month. ROMANS: All right. A congressional delegation will not be allowed to

speak with border patrol agents in New Mexico where 7-year-old Jakelin Caal Maquin entered the country with her father earlier this month. The little girl then died in U.S. custody after developing a fever and seizures. The Department of Homeland Security says the agents will speak to the agencies inspector general conducting the investigation. Attorneys for the family of the Guatemalan girl are expected to seek an independent review.

BRIGGS: A Missouri man convicted of poaching hundreds of deer has been ordered to watch "Bambi" as part of his sentence. The judge attaching that mandatory monthly viewings of Walt Disney movie for David Barry Jr. during his year-long jail sentence.

Prosecutors call it one of the largest poaching cases in state history and said the deer were killed for their heads. Bodies were left behind. Spoiler alert from the 1942 film, Bambi's mother was killed by hunters off screen. The young roams the woods unable to find her.

ROMANS: All right. An extremely close call caught on video. Retired police officer swoops in and rescues a toddler wandering in the middle of a southern California street. Former Officer Darryl Pang spotted the unsupervised child stepping on to the busy thoroughfare in Tustin. He made a quick U-turn, and then as Pang inches his car closer, the boy bounced his ball in traffic and chased after it, that's when Pang jumped out of his car, motioned others to stop, picked the boy up in the middle of the street.

It wasn't until after the boy was safe that someone showed up to retrieve the child.

Glad he's safe.

BRIGGS: Wow.

Bah humbug. The UPS store admitting to a Christmas spirit fail with a tweet that earned widespread backlash. The shipping franchise tweeted Sunday if your child addressed a letter to the North Pole, you can leave it with us. We do shredding.

UPS said it was all in fun, but taken in a negative way. No kidding. The tweet was gone by Monday. A number of people compared UPS to Scrooge and the Grinch. Some even suggested they would pick somebody else, Santa to deliver their holiday packages.

ROMANS: You don't mess with this spirit of Christmas.

BRIGGS: No doubt about that.

ROMANS: Netflix says it will spend $8 billion on content next year. Now, major acquisition behind the scenes can make that happen. CNN business is next.

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[04:54:00] ROMANS: Honey, I shrunk the tech. Researchers in Massachusetts Institute of Technology inventing the method to shrink objects to nano scale using basic lab equipment. They can take any simple structure and reduce it to 1/1,000 of its original size.

Now, the miniaturizing technology is called implosion fabrication. It can't shrink the kids, but it does have plenty of real world uses. Scientists, for example, are looking ways to add tiny robotic article particles to cancer drugs that can seek out only the cancer cells. MIT says the technology could be used to develop even smaller nano chip electronics. It's very cool.

BRIGGS: OK, it turns out it was legendary "Saturday Night Live" producer Lorne Michaels who kept Pete Davidson on the sidelines of the show following an Instagram post where Davidson appeared suicidal. "The New York Post" says his sketches were dropped earlier in the evening Saturday to give Davidson a break. Michaels has pledged to do all he can, including sending Davidson to get help.

[04:55:00] The comic has been open about his struggle with border line personality disorder. The hope is he'll be back on the show that returns in January.

ROMANS: The Women's Tennis Association is changing rules to face penalties for players who take leave for pregnancy. Players returning from pregnancy will now benefit from the special ranking up to three years so they do not get bumped from the previous seeds. The WTA says the rule is designed to support players, while maintaining a high standard of competition.

Serena Williams who has won 23 grand slam singles titles was unseeded this year when she returned to the court after the birth of her daughter. The pregnancy penalty.

BRIGGS: Yes, well done. Little long overdue.

All right. Who could forget this from the 1990s?

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BRIGGS: Actor Alfonso Ribeiro, probably best known as Carlton from "Fresh Prince of Bel Air." now suing the creators of "Fortnite" for featuring a signature Carlton dance without his permission. Judge for yourself, it's pretty obvious. The lawsuit claims Epic Games has unfairly profited by selling the dance as an in-game purchase under the name Fresh. Ribeiro also suing the makers of NBA 2K for similar reasons.

Young rapper Russell Horning better known as Backpack Kid also suing Epic over his use of his signature dance. No comment from Epic Games.

What is your personal favorite "Fortnite" dance, Romans?

ROMANS: I like the pickle.

BRIGGS: The Floss.

ROMANS: It is funny to watch kids on the sidelines. I've seen coaches try to tell kids no more Flossing.

BRIGGS: The sideline is one thing. I've seen it on the field during a baseball game.

ROMANS: All right. These are tough times for the president, but help is on the way if you believe Jimmy Kimmel.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Are you feeling depressed? Experiencing mood swings?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I am proud to shutdown the government.

UNIDENTIFIED FEMALE: Incoherent?

Becoming absent minded and forgetful?

Now there is hope. Foxycontin. It's Fox News in a pill. Foxycontin delivers a powerful dose of propaganda directly to your brain, erasing reality and replacing it with knowledge that everything you are doing is great again.

Do not take Foxycontin if you have access to nuclear codes. Side effects include paranoia, Twitter meltdowns, misspellings and inexplicable love for Jared Kushner.

(END VIDEO CLIP)

ROMANS: Oh wow, Jimmy Kimmel. That's wow. All I'll say.

Let's get a check of CNN Business. Stocks around the world following Wall Street lower. Tokyo, Shanghai and Hong Kong all closing lower. European markets are also down to start the day. Frankfurt has just turned higher.

What will stem the bleeding on Wall Street? Well, futures in the U.S. are higher right now by triple digits. So, we'll see if there is a bounce back from the brutal day, another brutal day.

The Dow down 508 points. S&P lost more than 2 percent. That is the lowest level of the year for the major stock averages. Nasdaq down 2.3 percent.

This is the worst quarter for stocks since 2008, the financial crisis. It is shaping up to be the only negative year in a decade. Look at that.

The key now is the Fed. The central bank is widely expected tomorrow to raise interest rates. Privately and publicly, the president has been blaming the Fed for the stock market turmoil here.

Corporate America celebrated the first full year under the new tax law by rolling out a record setting $1 trillion of stock buy back. That set the record of $781 billion set in 2015. The buyback boom has been fueled by strong economic growth. Since the president signed the tax cut bill a year ago, the stock market is down from that moment last December.

The Dow since the tax cut law signed down 5 percent. The S&P down more than 5 percent. Nasdaq down 3 percent.

Opponents of buybacks argue the companies would serve the economy better by sharing more profits of employees, investing in plants and in the future.

Channing Dungey, the woman who led ABC Entertainment for three years, has landed at Netflix. She stepped down last month as president of ABC Entertainment and will join the streaming services in February in his newly created role of vice president of original content. The hire comes as Netflix is preparing to compete with Disney's streaming service. It launches next year.

She was the first African-American to head programming in a major broadcast network. She will work on both settings strategic direction for streamers original content. She will also work with Higher Ground Productions, the production company of the former president and first lady, Barack and Michelle Obama.

Netflix said last year that it will spend as much as $8 billion on shows and movies in 2018. Folks, there are so many choices on content, so many choices on direct to consumer, so many amazing things happening in the next few years. I think it is all good for the consumer.

BRIGGS: It is a fascinating time for content.

EARLY START continues right now.

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(BEGIN VIDEO CLIP)

FLYNN: Lock her up. That's right. Yes, that's right. Lock her up.

(END VIDEO CLIP)

BRIGGS: Lock him up? Michael Flynn will be sentenced today for lying to the FBI. First, the special counsel releasing Flynn's interview with the bureau.

ROMANS: Deal or no deal?