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Russians Charge American Man with Spying; House Dems Plan to Serve as Check, Balance for Trump; Dems to Pass Bills to Reopen Government; New Congress Becomes Most Diverse in History; American Charged With Espionage By Russia; Interview With Connecticut Congressman Jim Himes; Democrats Take Control of House of Representatives. Aired 6-7p ET

Aired January 3, 2019 - 18:00   ET

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


[18:00:03]

WOLF BLITZER, CNN ANCHOR: Open discussion. Speaker Pelosi isn't ruling out the possibility that President Trump could be indicted while in office. She's leaving the door open to impeachment as well, as Democrats eagerly await Robert Mueller's final report.

And Kremlin spy blame. Russia formally charges an American with espionage, as a new report from Moscow claims Paul Whelan was arrested with classified information. The Putin regime ramping up the tensions, as President Trump remains silent about the case.

We want to welcome our viewers in the United States and around the world. I will Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following breaking news on the new Democratic controlled-House making history and making President Trump's life more uncomfortable and complicated.

Tonight, under Nancy Pelosi's leadership, Democrats are beginning their push for new investigations of the president. They just introduced legislation to protect Robert Mueller's probe as well, and the first and only female speaker holding the gavel again promising to strive for bipartisanship, while also refusing to rule out the indictment or the impeachment of Mr. Trump.

All this as a new chapter unfolds here in Washington. The gridlock continues, with the partial government shutdown now in its 13th day.

This hour, I will talk to a member of the new majority in the House, Democratic Congressman Jim Himes. And our correspondents and analysts are also standing by.

First, let's go to our senior congressional correspondent, Manu Raju.

Manu, Democrats, they are back in charge of the House and they are trying to hit the ground running. MANU RAJU, CNN SENIOR POLITICAL CORRESPONDENT: Yes, in just a couple of hours, the House Democratic majority plans to pass legislation that would reopen a part of the federal government that has been closed for nearly two weeks among this bitter standoff with President Trump over funding for his border wall.

But there's a problem, though, the Senate, still controlled by Republicans, who do not plan to move forward on that bill because of President Trump's opposition. But Democrats in the House planning to move forward on other fronts, including a very aggressive investigation of this administration and the president's policies, even as some on the left are pushing for impeachment, which the leadership on the Democratic side is trying to tamp down.

(BEGIN VIDEOTAPE)

REP. KEVIN MCCARTHY (R-CA), HOUSE MINORITY LEADER: And to the speaker of the House, Nancy Pelosi, I extend to you this gavel.

(CHEERING AND APPLAUSE)

RAJU (voice-over): With that, Nancy Pelosi officially took over as House speaker and the newly emboldened Democrats took charge in the House with plans to confront President Trump and his administration.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Two months ago, the American people smoke and demanded a new dawn.

RAJU: Goal number one, we open the government amid a bitter standoff with Trump, who is demanding billions for his border wall, despite the stiff opposition by the new House speaker and her powerful majority.

PELOSI: No, nothing for the wall.

RAJU: But Senate Republicans refuse to take up the bill because of Trump's opposition.

Goal number two, conduct what could be the most aggressive and expansive investigation of a sitting president on a wide array of his controversies. And already Pelosi facing pressure from her caucus to move forward and impeachment proceedings, especially once Robert Mueller's investigation concludes.

On the first day of the new Congress, one Democrat introducing articles of impeachment against the president.

REP. BRAD SHERMAN (D), CALIFORNIA: The road to impeachment is a long road, many miles. The standard is high crimes and misdemeanor, and he has committed the felony of obstruction of justice.

RAJU: Some influential Democrats are not ruling it out.

REP. ADAM SMITH (D), WASHINGTON: But it's something we are clearly going to have to investigate, whether or not that is the best path forward.

RAJU: Pelosi for now wants to keep the focus elsewhere, but telling NBC News she is not closing the door.

PELOSI: We shouldn't be impeaching for a political reason, and we shouldn't avoid impeachment for a political reason. So we will just have to see how it comes.

RAJU: Democrats have a laundry list of items they want to investigate.

The chairman of the House Oversight Committee tells CNN he wants to get to the bottom of the decision to put a controversial citizenship question on the U.S. census, suggesting Commerce Secretary Wilbur Ross misled Congress.

REP. ELIJAH CUMMINGS (D), MARYLAND: He has to answer for something that he said that I don't think was accurate, and what we're going do is be in search of the truth.

RAJU: Also, acting Attorney General Matt Whitaker could be forced to appear before the House Judiciary Committee this month to answer questions about his oversight of the Mueller investigation.

REP. JERROLD NADLER (D), NEW YORK: Still trying to get a date, and they are dragging their feet on a date. We will see what happens.

RAJU (on camera): Will you send a subpoena to him if he doesn't...

NADLER: If we have to.

RAJU (voice-over): For Pelosi, the challenge will be balancing demands from her base looking to take on the president and others eager for bipartisan accomplishments.

[18:05:07]

On the floor today, 15 Democrats revolted and opposed Pelosi's ascension to speaker, though she was elected with 220 votes four more than she needed. And now she represents the most diverse House in American history, with a record number of women and minorities sworn in.

In the Senate, the GOP added two more seats, now with a 53-47 majority and the ability to protect the president against their Democratic foes.

(END VIDEOTAPE)

RAJU: And Mitch McConnell took to the Senate floor today issuing a warning to Democrats, saying they could work on productive policies, in his view, or engage in presidential harassment, a line that we're going to hear over and over again from Republicans and this White House.

And also Mitch McConnell making it clear that he has, in his view, no role in this government shutdown fight. He said it's all about what the Democrats and the president can agree on to reopen the government, and tomorrow yet another meeting in the White House between the Hill leaders and the president about government funding, whether they can reopen a quarter of the government, but no signs of any progress or this is going to be another photo-op with a lot of bickering happening behind the scenes -- Wolf.

BLITZER: Yes, this clearly could go on for a while.

Manu, thank you very much.

As the Democrats flex their new political muscle tonight, President trump is trying to blame them for the government shutdown, but with a new twist. He says it's all about the 2020 election.

Let's go to our White House correspondent, Kaitlan Collins.

Kaitlan, the president made a very obvious attempt tonight to try to steal some of Nancy Pelosi's thunder. Tell us what happened.

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, that's certainly how most people would read that.

The president made his first real appearance at the White House press room briefing -- press Briefing Room podium today, something that he's only stepped into the Briefing Room once before, never addressing reporters, as he did today, in what the White House initially billed as a press briefing with the press secretary, Sarah Sanders, even though the president and the press secretary did not take any questions from reporters.

Now, Wolf, this comes as the president allies here in Washington are essentially telling him to remain firm on his demands for funding for his border wall. The president senior aides are certainly not counseling him to take any of these Democratic proposals to reopen the government. And even his allies on Capitol Hill, including Senator Lindsey Graham, are encouraging him to hold firm until he gets a better deal.

(BEGIN VIDEOTAPE)

COLLINS (voice-over): The blame game for who owns the government shutdown continues to shift tonight, with President Trump now faulting the politics of the upcoming 2020 presidential election, claiming Democrats are going all out on the desperately needed wall and border security so they can win, that despite White House officials telling reporters last night Nancy Pelosi wanted to keep the government shut down so she could win enough votes to become House speaker, even though she ran unchallenged.

The president aides now trying to place the blame squarely on Democrats.

KELLYANNE CONWAY, TRUMP SENIOR ADVISER: But he doesn't own the shutdown any longer.

COLLINS: Despite Trump saying this in front of the cameras in the Oval Office last month:

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I will take the mantle. I will be the one to shut it down. I'm not going to blame you for it.

COLLINS: Late today, in yet another attempt to change the narrative, the president made a surprise appearance in the Briefing Room, surrounded by members of the union that represents Border Patrol agents, Trump once again saying a wall is needed, but refusing to answer questions from reporters about the shutdown.

(on camera): The point of the Briefing Room is to take questions.

(voice-over): Sources telling CNN Trump doesn't want to lose face with his base by caving on his signature campaign promise to build a wall, though what that wall will look like is now an open question.

CONWAY: If you listened to him yesterday, he clarified that. He said that you can call it whatever you want. In other words, we need border security. It may include a wall. It may include steel slats.

COLLINS: Democrats, still enjoying their newfound power, are vowing not to give up any ground.

PELOSI: This is the Trump shutdown through and through.

COLLINS: But before even being officially elected today, Pelosi throwing a punch, suggesting in an interview with NBC News that a sitting president can be indicted.

PELOSI: That is not the law. Everything indicates that a president can be indicted after he is no longer president of the United States.

QUESTION: What about a sitting president?

PELOSI: Well, a sitting president, when he's no longer president of the United States.

QUESTION: A president who is in office. Could Robert Mueller come back and say, I am seeking an indictment?

PELOSI: I think that that is an open discussion. I think that is an open discussion in terms of the law.

COLLINS: That wasn't her only jab. Pelosi also not denying telling members of her caucus that the wall is a -- quote -- "manhood issue" for Trump.

PELOSI: I wish that my members had not repeated that outside the room. But there's no justification for this wall. It is not the way to protect our border.

COLLINS: CNN is told the White House has formally invited congressional leaders back for further talks Friday. But expectations for a quick fix remain low after talks went nowhere this week.

[18:10:00]

CONWAY: Nancy Pelosi can ignore. Yesterday, they just ignored and interrupted, and was frankly -- and were frankly just very rude and dismissive of our secretary of homeland security.

COLLINS: White House officials telling CNN they're strapping him for a lengthy shut down, with one aide adding, "We could be here a while."

(END VIDEOTAPE)

COLLINS: Now, Wolf, just to give you an indication of how far apart we really are with these negotiations between the White House and Democrats, CNN is now told by two sources who were in the room for that meeting with the president and congressional leaders here at the White House yesterday that, at the beginning, President Trump and Chuck Schumer were going back and forth arguing.

And, at one point, the president reached into his jacket pocket, pulled out a letter that he recently received from the Kim -- from the North Korean dictator, Kim Jong-un, and flung it at Chuck Schumer and said, "Here, read this."

Chuck Schumer started reading the about-a-page-long letter from Kim Jong-un, and that is when the president told the Department of Homeland Security secretary she could start her briefing that she was supposed to give on the border.

Now, she started, but she didn't get far, Wolf, because Chuck Schumer interrupted. He put down the letter. And he asked Nancy Pelosi to go ahead with the Democratic proposals to reopen the government, something that the president has said he is opposed to.

Now, Wolf, that episode, while a little bit strange, does little to do away with the notion that we are nowhere close to reopening the government -- Wolf.

BLITZER: Yes, I suspect you're right. We will see what happens tomorrow.

Kaitlan Collins, thank you very much.

Also this hour, we're following breaking news in the Russia investigation. And it involves in case in which a Russian company claims Robert Mueller's team collected a nude selfie as part of a search for evidence.

Let's bring in our crime and justice reporter, Shimon Prokupecz.

Shimon, you have been following this case. Are there any new indications that they're still trying to investigate this Russian troll farm?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE CORRESPONDENT: Yes.

I mean, it's these documents that get filed by the Mueller team that usually give us some clues as to what's going on and where things stand in this investigation. And this company that was under -- that is under indictment by the Mueller team, they have American lawyers. They're being represented here in the United States. They're asking for more information from the Mueller team. And,

today, in a filing, Mueller's team is saying, no, we can't give you any more right now because these are matters that are still under investigation by a grand jury.

So what this is telling us is that even though we think parts of this investigation may be over, certainly, this part of the social media, the Russians and what they were doing with social media is still very much alive.

And the other important thing here is that this indicates to us, based on some of the names that were in this court filing, other attorneys at the Department of Justice, the National Security Division, that this investigation could live well beyond Mueller, even when Mueller is done, that there may still be ongoing criminal investigations with the National Security Division of what the Russians were doing with social media, and may still very much be doing today.

So it seems that this is by no means over anytime soon, and certainly this part of the investigation.

BLITZER: Yes, there's a number of mysterious investigations under way right now. And they could go on, as you point out, for quite a while.

Shimon, thank you very much.

Joining us now, a key member of the new Democratic majority in the House, Congressman Jim Himes. He serves on the Intelligence Committee.

Congressman, thanks so much for joining us.

And I quickly want to start with the comments from your new leader, the House speaker, Nancy Pelosi. She says it's an open discussion as to whether a sitting president can be indicted. You have urged Democrats to be cautious with their new powers.

Are you concerned, Congressman, that the speaker is opening up the door to the indictment of a sitting president?

REP. JIM HIMES (D), CONNECTICUT: Hi, Wolf.

No, I'm not. As you point out, the speaker said it was an open discussion. It is, in fact, from the standpoint of legal experts, an open discussion. It's never been tested. The Justice Department has one view, that the sitting president cannot be indicted. Surprise, surprise.

But there are the legal scholars with other opinions. The important thing -- Wolf, you asked, am I concerned? Look, what are we doing right now? Right now, we are moving a bill -- well, a rules package, first of all, to open up government, to make sure every member of Congress has 72 hours at least to review bills, rules that prohibit members of Congress from serving on corporate boards.

And, very soon, we will be passing a piece of legislation that will reopen the government. And I want to mention, Wolf, that this piece of legislation, this continuing resolution, is precisely the resolution that passed unanimously in the United States Senate two weeks ago. And so we will pass that in the House. We will send it back to the Senate.

We will see if Republican senators are where they were two weeks ago, or whether they're going to go the direction they have said they're going to go, which is, gosh, we're not passing anything that President Trump won't approve.

Now, it's been a while since I was in high school civics, but my understanding was that the Congress of the United States is supposed to be a check and a balance on the president. And the idea that the United States Senate should only act on legislation that the president has pre-approved has our country in a pretty disappointing place.

[18:15:00]

BLITZER: Your Democratic colleague Adam Smith also wants to wait to see the Mueller report. But he also says it's not too soon to be talking about impeachment.

Do you think this is something that House Democrats should be discussing to make sure everyone is on the same page about what would trigger impeachment proceedings in the House Judiciary Committee?

HIMES: Wolf, in my opinion, it's a little early for us to be talking about that meaningfully.

Again, we have got work to do in terms of reestablishing a House of Representatives with integrity, with due process, with what we call regular order, meaning actually committees get to examine stuff. And we have got to reopen the government.

And then, look, I come from the Northeast, where I'm really hopeful we move on very quickly to saying yes to President Trump on what he said he wanted to do with respect to a major investment in our infrastructure.

So, look, at some point, the Constitution provides for impeachment of a president who has committed high crimes and misdemeanors. There is certainly evidence pointing in that direction, but that's an enormous and awesome -- literally, awesome thing that the Congress should do.

So, I want to make sure that we know for sure that there is standing and that there is a basis to do that before we take the country through that.

BLITZER: Another one of your Democratic colleagues, Congressman Brad Sherman of California, introduced articles of impeachment today.

If you think that's counterproductive, shouldn't your party at least have a serious conversation on this issue?

HIMES: Well, Wolf, at least in the Democratic Caucus, the leadership doesn't control each and every member. Most people around here have their own independent ways of thinking and are going to kind of do what they think is right.

So I'm not sure that this had the blessing of anybody in leadership. In fact, I'm pretty sure that it didn't. I saw that Mr. Sherman introduced those articles. Look, you're going to see that kind of stuff.

But what you really need to watch is what gets passed on the floor of the House of Representatives. And I will tell you that, right now, we are still a good, long way from in any serious way considering articles of impeachment.

BLITZER: Democrats are introducing a bill to protect Robert Mueller. Is that an exercise, though, in futility?

HIMES: I don't think so. You know, I think it needs to be there ready to go. I was very disappointed, obviously, that the Senate very narrowly chose not to protect Robert Mueller.

And, again, a lot of Republican senators said, well, gosh, I don't think President Trump is going to -- is going to fire Mueller. Well, look, if you don't think he is, then this is an irrelevant exercise, but it ought to be there. This is an area that is so important, that we shouldn't leave it to chance.

So, again, I think that's important legislation. I don't actually think the president is likely to fire Bob Mueller. With the markets behaving the way they are, with the secretary of defense leaving, with the attorney general up in the air, I don't think this White House needs yet more chaos right in the middle of a government shutdown.

So it's an important piece of legislation to pass, but I suspect the president's advisers would tell him, sir, we don't need yet this car wreck on top of all the other fires we're trying to put out right now.

BLITZER: Speaker Pelosi did what was widely expected. She named Adam Schiff of California the new chairman of your committee, the House Intelligence Committee. What

are your top priorities in the immediate days and weeks ahead?

HIMES: Well, I think, Wolf, our two top priorities need to be to get back into the business of providing oversight to the intelligence community.

The intelligence community is a massive operation. Americans pay $80 billion or so a year for this operation. It is a spectacular operation. But it also operates in a lethal world. It operates in a world of surveillance, where you really have to be looking over their shoulder and making sure that what the intelligence community does is consistent with American values.

And so we have got to get back to that. And a big part of that, of course, is bringing the committee back together. Sadly, Chairman Nunes, when he chaired that committee, as you know, for about two years, used that committee to be a defense committee of President Donald Trump. And that split the committee very badly. I think it caused the committee to lose a lot of trust from the intelligence community. And we have got to rebuild that trust and get back to the business of providing oversight to the intelligence community.

BLITZER: Do you yet know, Congressman, who the first witness you're going to call to appear before your committee?

HIMES: No, I don't, Wolf. And I suspect you're sort of asking whether we sort of resume the Russia investigation.

And I will tell you that there's a long list of follow-ups that we had before the Republicans ended the investigation prematurely, phone calls we want to know about, records that we'd like to see, really missing gaps with big questions.

I do suspect we're going to start the process of looking at some of those things that needed to be looked at. But I think, generally, we're going to wait to see what special counsel Mueller comes up with before we act in any big way with respect to sort of restarting an investigation.

BLITZER: We clearly have no idea when he's going to come up with his report. Could be soon, maybe not so soon. No one clearly knows.

On the whole issue of a government shutdown, the partial shutdown that's under way right now, approaching two weeks, your party is in power in the House.

Do you see a way out of this shutdown without some significant compromise on the issue of funding a border wall? Are you going to have to give the president at least some money for that?

[18:20:00]

HIMES: Well, lots of Democrats are willing to give the president money for border security.

And I said that -- I say that because we all voted -- at least on the Senate side -- in favor of a bill back in 2013 which had billions of dollars in border security. And, of course, we spend a lot of money on border security.

What we're not willing to do is to go with an idea that nobody thought was a good idea, a wall from sea to shining sea. Nobody ever mentioned that. So, now all of a sudden, Donald Trump, who, by the way, is not a security genius, says this is a good idea.

And, of course, the 30 percent of the American public who hangs on his every word and is not critical thinks that it's a good idea.

Look, the president points at Israel. I watched his tweets the other day. He points at Israel. I have been along the Israeli border. And, yes, there is a wall in highly populated, dense areas around the West Bank, but up along the border with Syria, up along the border with Lebanon, down in the Negev, down in the Sinai, you have got fences, you have got technology, and you have got men with guns.

That's what we have got. So the American people need to realize that, number one, the president is using a tool that no government officials should use. That is saying, if I don't get my way, I'm shutting down the government, and I'm going -- taking my ball and going home, to promote a policy, which is just a stupid policy.

And, again, I say that with some authority, because I have been here for 10 years, and nobody has ever said that building a massive 30-foot wall for thousands of miles through the wilderness makes any sense.

Donald Trump believes that. And unless the American people go to him and say, hey, we have got better places to spend our money, he's going to stay where he is.

But, look, the question of a political responsibility for this -- I know you talk about the blame game. There is no blame game here. The president two weeks ago said, "I will take full responsibility for the shutdown."

Now, of course, he's changed his mind on that. But he could end this tomorrow by listening to security experts and spending money in ways that will actually keep this country safe.

BLITZER: But the bottom line is, the Democratic Party, the Democratic majority in the House, you're not going to back down?

HIMES: We are not going to fund a wall. We might fund repairs to walls that currently exist. We might fund better fences. We might fund technology and drones and more vehicles, so the Border Patrol can patrol the wilderness.

The things that we have been doing, we're in favor with. But we can't go -- look, what if Donald Trump had run on giving every American a diploma from Trump University? Just because he wants it doesn't mean it's a good idea.

And that's why, of course, we have a Congress to say, hey, we will work with you on border security, but you can't just make up a crazy idea that security experts know isn't going to work and expect us to fund it.

BLITZER: Before I let you go, Congressman, I know one of your goals for this new Congress is to push forward your bipartisan legislation. It's called the Reclamation of the War Powers Act.

Explain what this bill would actually do.

HIMES: Yes, Wolf, I have been working on this for a long time, and it has only partial relevance to Donald Trump, who, quite frankly, I don't want going around starting wars without doing what the Constitution says he must do, which is consult the Congress of the United States.

This goes back to my dissatisfaction, frankly, with the Obama presidency, when I woke up one morning to discover that we were in war -- we were at war in Libya. Again, the Constitution leaves no room for interpretation here. It is the job of the Congress, of the representatives of the people, to decide when we're going to send our young people to possibly die on our behalf.

That is not a decision that should be made by one man or one woman sitting in an Oval Office. And so I am going to keep pushing to make sure we go back to the constitutional idea that our forefathers had, that that most consequential decision that the government makes should be made by the representatives of the people.

BLITZER: But do you believe the president would actually sign this kind of legislation into law, even if it were to pass the House and the Senate?

HIMES: I don't -- this isn't going to get done with any president in office. There's a long history there -- it goes back decades -- where president, for reasons that we can all understand, don't want their power circumscribed.

And, by the way, we say, look, if we're attacked, if you need to act very quickly, you have got room to act very quickly. But no president is going to agree, in fact, no president has agreed to actually doing what the Constitution says should be done, which is going to the Congress to ask for permission to put our young men and women into harm's way.

BLITZER: Congressman Jim Himes, thanks so much for joining us.

HIMES: Thank you, Wolf.

BLITZER: The breaking news continues next. We're going to take a closer look at what Democrats might do with their new power here in Washington, now that they control the House of Representatives.

Plus, a Michigan man formally charged by Russia with spying, and now there's a new report about alleged evidence that Moscow may use against him.

(COMMERCIAL BREAK)

[18:29:20]

BLITZER: We have breaking news out of Russia tonight.

The Kremlin is ramping up its allegation that an American held in Moscow is a spy. A Russian new site is reporting that Paul Whelan was arrested with a flash drive containing classified information, this shortly after Whelan was formally charged with espionage.

Let's go to our senior international correspondent, Matthew Chance. He's joining us live from Moscow.

Matthew, how much do we really know about these charges and whether they could be a setup?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I mean, there's no shortage of people, Wolf, as you know, who will say that they are a setup.

But the truth is, at the moment, we just don't know enough about them substantially to make that assessment. We're learning more, though. Tonight, we spoke to the Russian lawyer who's been assigned to defend Paul Whelan here in Moscow. He's visited his client in prison, assessed his condition, and, of course, confirmed those very serious charges against him.

(BEGIN VIDEOTAPE)

CHANCE (voice-over): It's at this former KGB prison in a suburb of Moscow that Paul Whelan, now formally charged with espionage, is being held.

[18:30:10] His Russian defense lawyer told CNN his detention is unwarranted. But he says he has now been granted access to the former U.S. Marine, whose mood he describes as cheerful with no depression. It's the first public indication we've had of how Whelan is holding up behind bars.

"The only thing is a problem with hygiene items," the lawyer said, "such as a razor, shaving foam, toothbrush, toothpaste, underwear. Paul asked for these items, and investigators will ask the prison administration to supply them."

It was at this upscale hotel in central Moscow, the five-star Metropol, where Whelan was staying when he was detained. There's still been no official explanation of the circumstances except that he was, quote, "caught spying" by the FSB, Russian's main counter- espionage agency.

But now, one private Russian news agency, Rosbalt, says an intelligence source is saying Whelan was arrested in his room at the Metropol, five minutes after he accepted a flash drive with a list of employees working at a classified security agency.

The report also makes reference to Whelan's presence on Russian social media. Rosbalt's source says the security consultant "sought out Russian Internet users, tracked and selected in advance by American intelligence."

CNN can't independently verify the report, and the unnamed intelligence source may have an incentive to build this narrative around the arrest. But if Whelan is convicted of this, true or not, he faces up to 20 years in a Russian jail.

That's plenty of time to be swapped for this woman, Maria Butina, a Russian gun activist now facing a prison sentence of her own in the United States, after pleading guilty to conspiracy. Prosecutors accused her of infiltrating U.S. conservative groups on behalf of the Russian state. She's been cooperating with U.S. investigators.

STEVEN HALL, RETIRED CIA CHIEF OF RUSSIA OPERATIONS: What is happening here is Vladimir Putin is using this American citizen, Mr. Whelan, hopes to use him, anyway, as leverage, probably to try to get Butina out of the United States as soon as possible. CHANCE: There are other possibilities for a prisoner swap, too, like

Viktor Bout, the notorious Russian arms trafficker dubbed the Merchant of Death, currently languishing in a U.S. jail. Or Konstantin Yaroshenko, convicted in 2011 on conspiring to import cocaine to the United States. Russia's foreign ministry says Bout and Yaroshenko are hostages in Washington.

Now Russia may have an American bargaining chip with which to trade.

(END VIDEOTAPE)

CHANCE: Wolf, in the meantime, Whelan's lawyer says he has applied for bail, and he believes that Whelan's family members will be allowed to visit him in the prison in Moscow. But he warns the Russian legal system can be slow, and it may be up to six months, he says, before this case goes the trial.

Back to you.

BLITZER: All right. Lots going on. Matthew Chance in Moscow, thanks very much.

Let's bring in our analysts and our experts. And Phil Mudd, you're an expert in this area. You used to work in the CIA. What's your sense of what's going on right now?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: You don't need to be an expert. This is a set-up.

Look, if you've got the Americans where -- you look at the change in the U.S. Congress, and the Russians are following the change in U.S. Congress. Relationship with the Russians is getting more and more chilly.

You also look at the American law enforcement apparatus of arresting Russians in this country. If you're the Russians looking at what the Americans are doing, I don't think this individual is a serious player in the espionage game, but this individual is a pawn.

You arrest him, and the message to the Americans is, "Hey, No. 1, if you're going to arrest our people, if you're going to impose sanctions on us, we'll retaliate. And No. 2, if you have our people, this is a potential trade." This is not a serious spy game. This is a political, diplomatic game.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Would you have hired him as a spy?

MUDD: Hell no. Did you look at his background?

BORGER: Yes, yes.

MUDD: Not in my lifetime. I don't want to -- I don't want to judge the individual, but if you want to go on Google and look at the individual's background, you're going to see indications that anybody in my business would look at and say, "No way on God's green earth I'm bringing this guy into the security service with a top-secret clearance."

BLITZER: He was discharged from the U.S. Marine Corps for larceny charge.

MUDD: I didn't say it, Wolf. You did. But I'm not hiring that person. No how, no way.

BLITZER: In fact, he had bad conduct that he was discharged.

MUDD: It's not just that. If you're looking at this person, one of the questions you have during a security process is how trust -- trustworthy is this person? Can I bring them on and ensure, if I put them into a different environment they won't make a mistake?

The second question you have is, is there anything in the background that makes this person vulnerable to an approach from a foreign service? And the background you described wouldn't bring him in.

[18:35:08] BLITZER: Laura, I'm anxious to get your thoughts from a legal perspective right now. Prisoner swap. Is that what we're anticipating?

LAURA COATES, CNN LEGAL ANALYST: I think so. And again, think about this. He may not fit the bill for somebody who'd be an espionage- esque candidate for hire. But in terms of somebody who fit the bill for somebody to swap with one of the other more nefarious people that were named, absolutely.

How often have you seen Vladimir Putin weigh in on a U.S. district court case about a small-time criminal or alleged criminal like Maria Butina? Well, he weighed in. Talked about her being a poor girl, who was so traumatized. And they even had the representatives saying, well, if she was being held as a hostage and used and even abused in an American prison.

They were laying the foundation at that point in time to suggest that there was some reason to have a swap in the future of somebody perhaps more important to them.

I think this is an example of, well, unfortunately for this American citizen, not having access to the right to counsel or the Constitution, he'll have all these things in front of him in Russia; has no idea about bail, whether he can actually get it.

And you have Putin trying to do a shell game to say, "I want my own people back." And if Maria Butina really is so insignificant, well, it must shock everyone that there would be this play to have a swap in the future.

BLITZER: We've just been told, David, that the new speaker of the House, Nancy Pelosi, is about to have a news conference. We're going to have live coverage of that. She's going to come to that microphone, answer reporters' questions. This is a historic day here in Washington.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: My God. No doubt about it. First of all, this is the first time in my lifetime that I've seen a

former speaker stick around for a chance to regain the speaker's gavel. That is what Nancy Pelosi did today, the first woman and only woman to do so, obviously. So it's history on that front alone.

But what is so interesting about today also is that all the pomp and circumstance of the 116th Congress coming together; and yet the exact thing that Americans hate about Washington, the gridlock, is on display in this shutdown.

They're not -- so they all took the oath of office today, but there's no governing going on because of this partial government shutdown. And I'm sure that is why Nancy Pelosi is coming to the microphones tonight, because she is trying now to pass a way in which the Democrats propose opening up the government, even though she knows full well Senate Republicans and the president are not on board. But she wants to move that hot potato over to their court.

BORGER: It was like living in alternate universes today. Because you had Nancy Pelosi give a very gracious speech, talk about bipartisanship, quoting Ronald Reagan, talking about George H.W. Bush.

In the meantime, in the other universe, there is a shutdown, and it doesn't look like it's going to end any time soon. And Nancy Pelosi right now is probably going to come out and say why it isn't going to end.

You saw the president today come into the press room, you know, with ICE people saying, you know, "We support" -- or former ICE people -- "We support the president."

And so they're -- you know, they're each kind of digging in. So you don't know which world you're living in today in Washington.

BLITZER: Laura, listen to what Nancy Pelosi said this morning on NBC. Listen to this exchange.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: We have to wait and see what happens with the Mueller report. We shouldn't be impeaching for a political reason, and we shouldn't avoid impeachment for a political reason. So we'll just have to see how it comes.

SAVANNAH GUTHRIE, NBC NEWS: Do you believe the special counsel should honor and observe the guidance a sitting president cannot be indicted?

PELOSI: I do not think that that is conclusive. No, I do not.

GUTHRIE: A president who is in office. Could Robert Mueller come back and say, "I'm seeking an indictment?"

PELOSI: I think that that is an open discussion. I think that is an open discussion in terms of the law.

(END VIDEO CLIP) BLITZER: What do you think of her position?

COATES: She's absolutely right. It's an open discussion.

You're talk about an advisory opinion that's issued about whether there was the amenability of a sitting president being indicted. This is a position, not as settled law by the Supreme Court of the United States or, actually, a constitutional barrier to be able to indict a sitting president. What it is, is an opinion, largely based around the presumption that a president would be inconvenienced and America would be inconvenienced by having a president detract from his duties as a private executive to sit for a trial.

Now having said that, that is not at all what the Constitution has perhaps envisioned about their true and breadth of the experience.

But Robert Mueller is in a different position. Under his actual mandate, he is supposed to be bound by the regulations that are there in the Department of Justice.

What he could do is say, you know, "That opinion you issued talked great deal about the inconvenience of actually prosecuting, in a trial, a president. But you have a very, very brief statement about whether you can actually indict somebody, given the fact that, if they leave office or get a second term, you could have limitation period when it says they will never be held accountable. Could you explain to me further whether or not you really want there not to be an indictability factor here?

He could ask that question and still abide by his term in office and also ask the very obvious question of, "Well, why would an opinion by DOJ constitute standing law?"

[18:40:07] CHALIAN: To whom would he ask that question, Matthew Whitaker?

COATES: He would ask -- that's the problem.

BLITZER: Who's the acting attorney general.

CHALIAN: The acting attorney general.

COATES: Actually, it would be the Office of Legal Counsel, who issued the opinion, and say, "Excuse me. What do you really mean by here?"

But still, you're right. It would go back to, essentially, the buck stopping at somebody who already thinks that Mueller is way out of bounds.

BORGER: But the president's lawyers have said that Mueller has assured them privately -- and we haven't heard from Mueller on this -- but the president's attorneys are saying that Mueller has assured them that he would abide by the Office of Legal Counsel and that he would not indict a sitting president. So that they believe -- and they have said this publicly many times -- that this is off the table as far as Mueller is concerned. BLITZER: Phil, what do you think?

MUDD: This is not a legal issue. This is a political issue. She's got a problem. And that is if you -- her answers, I thought, in that interview, were right on.

BLITZER: Nancy Pelosi.

MUDD: Nancy Pelosi. We followed the rule of law. Let's see what the special counsel says.

But she's got insurgents on the left who are saying, "We want to bring investigations every which way until Sunday." I think the challenge she's going to have. And I think this is what the Democrats are going to potentially fall prey to, is "Do I move forward and say I want good government, or do I move forward and say I'm going to attack the president at every turn?" And I think, if they try to do that, that will hurt the Democrats.

CHALIAN: I think she was keenly aware of that political challenge in those answers. I think that's why she left open the possibility, when you're talking about impeachment, or just saying it's an open discussion, to allow those insurgents, as you call them, but allow that force on the left in her party, who really just want to get Trump, to hear something from her that says, OK, she's open to this. While allowing the rest of the country, perhaps, who's not so eager to jump into Impeachment River, hear she's not jumping down that road yet. She played that pretty deftly in that interview.

BLITZER: How divided is the Democratic Party right now on this specific issue of impeachment?

BORGER: Very. Well, they're very -- I think they're very divided. I mean, you know, Congressman Sherman today was introducing a resolution, you know, impeach the president.

And Nancy Pelosi doesn't want to do that. She wants to show the American people that the Democrats stand for something other than hating Donald Trump. And it's -- she's right about that, to be honest.

And so she's got to walk this fine line between the real progressives in her party, who are like, "We need to impeach the president tomorrow," versus people like herself, who are saying, "We need to prove that we can get something done. But I'm not going to take this off the table either."

And she was deft. She has thought about it. She's got to figure out a way to navigate this, and I think that's exactly what she's trying to do.

It may become more and more difficult, you know, but I believe that there are many fights to go before you -- before you even get to that notion. Because we don't know what's in the Mueller report, and we don't know if we're going to see all of the Mueller report.

COATES: And that's what's so important about the idea, the chicken and the egg game.

BORGER: Yes.

COATES: Because certainly, Nancy Pelosi has different questions to answer about impeachment if there are indictments or you do reach a situation of, can you indict a sitting president or name him as an unindicted co-conspirator or somebody who's not even in the Oval Office at all? Exactly. You can have that.

I think that she's playing the game of what the American people want, which is why would you come this far to only come this far? Robert Mueller and his investigation. And until the American people, I think, are satisfied by the notion of whether there is a criminal element here, not be satisfied by the legislative action that they would take about impeachment.

CHALIAN: And I do --

BLITZER: Go ahead.

CHALIAN: I was just going to say that what I think you see in Nancy Pelosi right now, yes, she wants the govern. Yes, she went out there and said she wanted to reach across the aisle when she could.

But she is also keenly aware now she is the top Democrat in the country. Becoming speaker of the House, there is going to be a field of two dozen Democrats seeking the Democratic presidential nomination. As they sort that out, she is the embodiment now of Trump opposition. And so she's keenly aware of potential overreach on that and wants to do the -- the governing piece of this to show the American people that there is validation in why they gave the Democrats the majority.

That's why this shutdown stuff is just not a slam dunk for her either. She's got to work here with Donald Trump. Because the American people do think she has responsibility in the majority now.

But she also is fully aware that everything she is now is the very symbol of the resistance to Donald Trump.

BLITZER: Because a lot of us covered the impeachment of then- president Bill Clinton remember that, as the impeachment process in the House and later in the Senate -- he was not convicted. He was impeached in the House, not convicted in the Senate. As it went on, his job approval numbers -- and you remember this -- actually went up.

BORGER: Well, you know, and that's -- I, before Christmas, actually, spoke with a friend of Donald Trump's, who said to me that's what Donald Trump believes. He believes that he can use the Democrats as a foil. He likes having enemies; he likes the fight. And he -- you know, he doesn't feel this would be bad for him. He feels that, in a way, if the Democrats overreach -- and he's not wrong about it -- if the Democrats overreach, and he can fight them on this, it's -- it's good for him with his base.

BLITZER: Lots of new faces, Phil. I want to get your thoughts on this and the Democratic majority in the House of Representatives. [18:45:01] Congresswoman Ilhan Omar of Minnesota, the first Somali- American, one of two Muslim women now for the first time representatives in the House of Representatives. Watch what she said with her father at her side. A very emotional moment.

Watch this.

(BEGIN VIDEO CLIP)

REP. ILHAN OMAR (D), INCOMING MINNESOTA REPRESENTATIVE: As we exited our place, we realized that him and I had not returned on that same airport since the day we first landed here as refugees. It's a very -- really overwhelming and emotional time for us. I don't think, as my dad said, he had high hopes for us about the opportunities we had when we came to this country --

(END VIDEO CLIP)

BLITZER: Pelosi has just walked out. Let's listen to her.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Good evening.

We're here with House Democratic leader, Mr. Hoyer, our distinguished chair of the Appropriations Committee, Nita Lowey, and our chair of the government -- Homeland Security Subcommittee of the Appropriations Committee, Congresswoman Lucille Roybal-Allard. OK. Mr. Clyburn had something, not here yet.

We -- as you are aware, we have -- we are diligent, diligent and persistent in trying to open up government. As I said today on the floor, we will take ideas, good ideas, from where ever they come, including the idea of the appropriations bills passed by the Republicans in the United States Senate. They passed six bills, four of them on the floor with over 90 votes, two of them in committee unanimously and those six bills cover eight agencies -- departments of government that could be opened just by the stroke of the pen of the president of the United States.

Separate from that, we are sending what the Senate sent -- also passed which is a bill to extend, to have a continued resolution until February 8th, taking their exact date from the Senate. That would cover homeland security and give us the weeks needed to negotiate an agreement to open up government in that department.

Again, we have taken word for word. And I'm going to yield in a moment after Mr. Hoyer to our distinguished chair of the Appropriations Committee to demonstrate how purely Republican senatorial -- these measures were.

So, we have separated out, their two votes. One on the eight departments of government that could be open now to meet the needs of the American people, to meet the needs of the American people, to protect our borders and to protect our workers. And again, the other bill is mostly about protecting our borders.

So, in that spirit, I want to yield to our distinguished Democratic leader of the House, Mr. Hoyer, to talk about the need for us to open up government.

REP. STENY HOYER (D-MD), MAJORITY LEADER: Thank you very much. Congratulations on your re-election.

We're here late tonight, later than you would usually expect the Congress to be here on opening day. People obviously have things to do. They have family in town. But we are here because we sense the urgency of opening up the people's government so that they can be served by the agencies of government on which they rely, and so that 800,000 people who have been put at risk, who are worrying about whether they will get paycheck next week, worried about whether they will be able to pay a mortgage, whether they're going to be able to pay car payment or a child's school payment, that's why we're here, to open up government.

And why -- what have we done? As the speaker just indicated, we have taken six bills that the Senate has passed almost unanimously, passed unanimously out of their committee. Republicans and Democrats joined together so we have agreement on these six bills.

There's not -- nobody is arguing about the six bills. They are not arguing at the White House. They're not arguing here. We have agreement.

One would surely think that if we passed that, as I expect we're going to do, that the Senate would pass it and send it to the president and he would sign it because there's no disagreement. Now, there is a disagreement on the homeland security bill. So, we have said, OK, we haven't reached agreement but we're going to provide some more time so we can sit down as adults hopefully, as rational, reasonable common sense people and come to an agreement on something we all agree with.

[18:50:06] The objective of keeping Americans safe, keeping our country safe and keeping our borders secure is not debate. The only thing that's in debate are the means. We don't agree with the president's proposal. We don't think it's proper, or most effective, efficient means to keep our country safe.

So, we're saying, OK, we'll do what Senator McConnell did. We'll give us until February 8th, approximately four weeks to come together and discuss this issue without shutting down government, without putting 800,000 people at risk, without inconveniency and putting at risk millions and millions of Americans who rely on the operations of government.

So, we're hopefully going to pass that bill today as well and I hope that Senator McConnell will put it on the floor. I hope the senators will put it on the floor and send it to the president. The president asked us to come down and meet tomorrow at 10:30 and we will do that. We'll have a discussion. At 11:30. Excuse me, 11:30.

(INAUDIBLE)

(LAUGHTER)

HOYER: This is going to be the news, I'm sure. The fact of the matter is we'll go down there. We'll talk. And Chair Lowey and Chair Lucille Roybal-Allard are reasonable people, and we'll try to come to an agreement on which we can all agree.

But holding 800,000 people hostage, holding the people's government hostage, is not what they expect. Not what they want. So hopefully, Senator McConnell will put that bill on the floor tonight or tomorrow, send it to the president and we will open up the people's government and then continue to do the people's business.

I'll yield to the chair of the Appropriations Committee, Nita Lowey of New York.

REP. NITA LOWEY (D-NY), HOUSE APPROPRIATIONS CHAIRWOMAN: The message is very simple. This is the first time in history that a government has been shutdown while our new electeds have assumed responsibility.

I want to say that again because this is the first time in history that there has been a shut down of government as we welcome new leaders and we want to work together to govern responsibly. As we came up with this plan, we didn't dream up a plan from the right, the left, the center. We just sat together and said there are six bills that were passed by the Senate, some by the full Senate, some by the committees, but it was unanimous.

So, we thought if we want to open government, and not have a shutdown, let's take that bill, those six bills, pass them here and then give everybody a month to work on differences in the Homeland Security bill. This isn't very complicated. We can all talk and give you details.

But I want to emphasize again we got together, we met with our leadership and said how do we keep this government open to serve the people? Eight hundred thousand federal workers, people on the border. Many industries now that depend on federal employees. This is irrational.

So today is an exciting day. We have elected a new great first woman speaker of the United States of America. Let's open the government and let's get to work, because we have a plan that makes sense.

And I'm hoping upon reconsideration it will make sense to the president of the United States unless he just wants to keep tweeting and wants the government closed. But you can't be a leader of this great nation and continue to shut the government down.

BLITZER: There you have the Democratic leadership, the new Democratic leadership of the House of Representatives with their proposal to end this partial government shutdown. Even as they were speaking, the new Speaker Nancy Pelosi and the other leaders, the White House is already reacting.

DAVID CHALIAN, CNN POLITICAL DIRECTOR: The White House is making clear the bills they are talking about passing tonight are going nowhere. I'll read the final version what they call statement of administration policy. If either HR-21, the bills that they were talking about were presented to the president, his advisers would recommend that he would veto this bill.

This is what you call a veto threat. This is the official administration policy now that the president should veto these bills should they come to his desk.

[18:55:01] So, while it may be pretty smart politics for the Democrats on day one to say, hey, we're doing something to try and open up the government, they are doing it knowing full well that they still have to negotiate their way out of this because this is going nowhere.

BLITZER: But it's true what the Democrats just said, Gloria, what they are about to pass on the floor of the House of Representatives was passed almost unanimously by Democrats and Republicans in the Senate a couple of weeks ago.

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, that's why it's good politics, because they are saying exactly that. Why wouldn't you sign on to this because you already passed it? The reason they won't sign it is because what's not there? Which is funding for the border wall. And they know that.

So, they are just going back and forth a little bit before anybody gets serious and they -- I think they all understand that. There's a meeting tomorrow. I don't know whether that's going to be serious or not. We'll just -- we'll just have to see.

But I do think there is, as David was pointing out earlier, there's danger for everybody in all of this because what happens with these shutdowns is everybody says a pox on all your houses, like you all look like idiots here. Just get this over with. The president believes, however, that his base will cheer him on because he's standing firm on one of his biggest campaign promises, which is the border wall and the Democrats are saying, you know, no, you're not. So, how do we get out of this?

There are compromises floated about Dreamers, right? But we've seen that movie before. And that hasn't occurred either, that kind of compromise. I just don't know at this point what they end up doing.

BLITZER: They are arguing over, what, three or four, five billion dollars right now. But take a look what the U.S. Treasury Department has just announced since President Trump took office on January 20th, 2017, that is $2 trillion in increased national debt. In January 2017, it was $19.9 trillion it's gone up $2 trillion over the past two years. It's now almost $22 trillion this national debt which will be a burden on our children and grandchildren for a long time to come servicing that debt with interest.

CHALIAN: And I'm old enough to remember when the Republican Party was the party that was committed to bringing this down. And this explosion of the debt has happened under a Republican president, the debt, Donald Trump. And so, I think that number is astonishing to look at.

I think it also speaks to how far the Republican Party has moved. Remember it was Republicans that controlled Washington for the last two years when this number exploded.

BLITZER: Fiscal restraint. Whatever happened to fiscal restraint?

BORGER: Tax cuts. Tax cuts.

I mean, you know, the tax cut is a large part of this. And one of the president's economic advisers was asked today, are you concerned about this and he said yes? The president has asked 5 percent across the board cuts largely from most budgets. Well, that's not going to do it.

And the Republican Party is now the party of big spending. And you look at somebody like Paul Ryan who just left Congress, who is somebody who was a fiscal conservative and who was in favor and had a large role in getting these tax cuts passed and the legacy now is this incredible deficit. I'm old enough to remember that under Bill Clinton who got in a lot of trouble with Democrats for it under Bill Clinton, they had a budget that was in balance.

BLITZER: We're just learning, Phil, that Adam Schiff, the new chairman of the house intelligence committee told one of our reporters up on Capitol Hill, they are getting ready to send all transcripts of all interviews they did in the Russia probe over to Mueller.

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Why? Why? The question I would have if I were a Democrat moving into Congress whether it's those transcripts or whether it's the budget, are you going to look back and tell the American people are job is to fight? Are you going to look forward and say this is what we do for America?

Do they trust the Mueller investigation? In that case, I'd say, we're going to slow down the congressional investigation and let Mueller continue. Or do they sit there, as we saw in the past three hours -- three hours in, and I need a spa day already and sit there and say we'll fight as long as this day goes on, we're going to fight the president, instead of saying we know what the solution is. We have to give a little, they have to give a little.

BLITZER: But Mueller clearly asked for these official transcripts.

LAURA COATES, FORMER FEDERAL PROSECUTOR: I think it's a good thing. Even though the government is shutdown, Mueller is funded under separate appropriations. Somebody should be working. If the person overseeing if there was collusion and somebody hurting our democracy. If Congress can help with that, so be it.

BLITZER: Yes, this is only just beginning. We thought 2018 was a lively year, as far as the news business is concerned. I think it's fair to say and I've been saying it for a while, it's only just beginning.

CHALIAN: We ain't seen nothing yet.

We'll be working hard. Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM.

"ERIN BURNETT OUTFRONT" starts right now.