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Jared Kushner's Reports Cap Tumultuous Week for Trump; Trump Back in U.S. After Meeting With North Korean Leader; NYT: Trump Demanded Kushner Get Top-Secret Clearance; New Estimate Shows the U.S. Government Could Run Out of Cash to Pay Bills Around September if Debt Limit is not Raised; Interview with Kevin Hassett. Aired 9-9:30a ET

Aired March 1, 2019 - 09:00   ET

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


[09:00:31] POPPY HARLOW, CNN ANCHOR: All right. Good morning, everyone. Happy Friday. I'm Poppy Harlow. Jim Sciutto has the day off. He is flying back from his special coverage in Hanoi. Meantime, the president is back home from his no deal summit with Kim Jong-un only to face disturbing new questions about his stewardship of the nation's most sensitive intelligence.

Well, this morning "New York Times" and the "Washington Post" are both reporting that in May of last year the president personally ordered his then chief of staff John Kelly to give his son-in-law Jared Kushner a top security clearance. Kelly then overruled the persistent and longstanding objections of career White House security screeners and wrote about it in a memo. And months later, the president denied any of it ever happened. Listen.

(BEGIN VIDEO CLIP)

MAGGIE HABERMAN, NEW YORK TIMES WHITE HOUSE REPORTER: Did you tell General Kelly or anyone else in the White House to overrule security officials, the career veterans --

TRUMP: No, I don't think I have the authority to do that. I'm not sure I do.

HABERMAN: You do have the authority to do it.

TRUMP: But I wouldn't -- I wouldn't do it.

HABERMAN: You never --

TRUMP: Jared is a good -- I was never involved with his security.

(END VIDEO CLIP)

HARLOW: That's Maggie Haberman's interview with the president. The House Oversight Committee has been requesting specific documents and interviews relating to White House security clearances. For more than a month now and last night threatened to subpoena them if they don't come soon.

Also House Democrats are not done yet with Michael Cohen. After three straight days of testimony before three separate congressional committees, the president's former lawyer and confidant is coming back next Wednesday for more closed door Q&A with the House Intelligence panel.

So let's begin there, Joe Johns is at the White House this morning. You know, two reports, two separate papers, a lot of good reporters on these bylines here and the White House is not denying directly these reports about the president mandating that Kushner get the top secret security clearance.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Right. And nothing so far from the president indicating otherwise.

Look, there are a couple of questions raised by this "New York Times" reporting. The first is, what is it in Jared Kushner's background that has raised these issues in the first place? We've never gotten to what specifically that is. And even people on Capitol Hill have been asking. But there are some other questions as well including those memos to the file from John Kelly, Don McGahn, the White House counsel. What's that about? Contemporaneous recollections of events.

Still not clear. But perhaps the most important thing is the question of candor. The president himself has said he was going to leave this up to John Kelly, the then chief of staff. Of course Kelly says it was the president who ordered him to give the security clearance to Jared Kushner. And even Jared Kushner's wife has said, in fact, that it was the president who had nothing to do with this. Listen.

(BEGIN VIDEO CLIP)

IVANKA TRUMP, ADVISER TO THE PRESIDENT: The president had no involvement pertaining to my clearance or my husband's clearance.

(END VIDEO CLIP)

JOHNS: Pretty much a flat denial right there. The lawyer for Jared Kushner, Abby Lowell, very well known in Washington, has said essentially that there is nothing to see here. He put out a statement through his spokesman. Here's what it says.

"In 2018 White House and security clearance officials affirmed that Mr. Kushner's security clearance was handled in the regular process with no pressure from anyone. That was conveyed to the media at the time and news stories, if accurate, do not change what was affirmed at the time."

So as you know, House Democrats have been all over this issue for quite some time. Elijah Cummings, the chairman of the Reform and Oversight Committee, has said he might issue a subpoena if he doesn't get the information he needs.

Poppy, back to you.

HARLOW: Yes. That's right. Joe Johns at the White House, thanks so much.

Let's talk about this and what it could mean going forward. Sara Murray is with me, CNN political correspondent. Also Shawn Turner, our national security analyst and former director of communications U.S. National Intelligence.

Good morning to you both.

So, Shawn, happening this morning as happens every morning there at the White House, the president is getting the intelligence reports. Right? The Presidential Daily Briefing. And I'm interested in what you think those intelligence officials that deliver that are thinking right now, knowing this.

SHAWN TURNER, CNN NATIONAL SECURITY ANALYST: Yes, you know for a long time, Poppy, there was concern in the intelligence community over exactly how Jared Kushner got his security clearance. And to your point, one of the things that's really disturbing about this is this morning as you said, as individuals are receiving the Presidential Daily Briefing Jared Kushner has a top secret SEI clearance. That means a clearance that allows him to see secure compartment and information including the President's Daily Briefing.

[09:05:03] So for individuals who are delivering that briefing, this is the most sensitive, classified information that we have. The idea that Jared Kushner would be able to see this information considering all the background and concerns over why he could not receive a security clearance is quite disturbing.

And I have talked to people this morning who said that they really are shocked that this is the way he received his clearance.

HARLOW: Sara, we just heard Ivanka Trump, an adviser to the president as well as his daughter, say, you know, the president had nothing involved in my security clearance in that ABC interview a few weeks ago.

It is possible, isn't it, that she and perhaps even Jared Kushner didn't know this, right? That the president gave this order to John Kelly in a room where they weren't and never told them. Possible?

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Sure, I mean, I guess that's possible. I think that would mean, OK, that Ivanka Trump wasn't lying and maybe Jared Kushner's attorney wasn't lying but that then the president was lying. So in any way you square it, someone was lying about this situation, the way that this was done, assuming this "New York Times" report is accurate, which frankly, you know, if people were writing these contemporaneous memos at the time there is no reason to believe it's not accurate.

I mean, you can see right here in this timeline all the issues that Jared Kushner had to go through to get a security clearance. All of the different ways they mishandled the paperwork to begin with. The fact that his attorneys were out publicly in May of 2018 saying this is taken care of only to find out in July of 2018 that in fact there were still issues, and now we're finding out that these issues were so concerning to other folks who are in the White House.

HARLOW: Right. MURRAY: That they wrote memos at the time to document it. So, you

know, this was one of those things, Poppy, where you look back and then you just wonder what the White House thought they were going to accomplish by lying about this. And if they really thought that it was never going to get out there. That this was done over the objection of top people working in that administration.

HARLOW: And, Shawn, you know, there is also the risk of other countries, adversaries, you know, taking advantage of this. We'd known as early as last year that at least four countries had discussed ways that they could possibly manipulate Jared Kushner to their advantage. The "Washington post" talks about those discussions centering around any vulnerabilities with complex financial dealings, for example, and the countries we're talking about as the "Post" reported out, the UAE, China, Israel and Mexico. How significant?

TURNER: It's extremely significant, Poppy. I mean, look, this is -- a lot of people have said to me, you know, what's the big deal? The president has the authority to give Jared Kushner a security clearance. But here's the issue. We understand how our adversaries use information against individuals when security clearance when there is information that they can leverage.

HARLOW: Yes.

TURNER: So what we're doing is we're looking at Jared Kushner, someone who has clearly had business dealings in many of these countries and certainly a number of countries that were not on that list. And what we're doing as security officials is we're asking ourselves what are the risks here? I think more importantly what really concerns me is that a lot of these relationships were discovered by investigators. They were not disclosed by Jared Kushner or others in his sphere.

So when the FBI goes back and they sit down with Jared Kushner and they say we see you have these business dealings, we see you have these entanglements and connections and you did not disclose them, and then the president gives Jared Kushner a security clearance. Well, from a national security perspective that raises significant concerns about what our adversaries might do to leverage those security clearances because Jared Kushner is someone who's so close to the president.

HARLOW: Sara, just thinking back to what we played a moment ago, Maggie Haberman's really important, now even more important question to the president in that Oval Office interview about, you know, were you involved in these security clearances at all and his denial, there is an argument over his language with Kelly whether or not it was an order. But doesn't the fact that there even was a conversation about this matter?

I mean, on top of no denial from the White House this morning. They're just saying we don't talk about security clearances.

MURRAY: Yes. I mean, I do think it matters because we've now heard everyone say, you know, six different ways that there was no political intervention in this process. And now it's very clear from the "New York Times" story there was some kind of political intervention in the process. And President Trump is allowed to do that. He is allowed to give Jared Kushner the ability to look at top secret information. But I think the reason this looks so problematic is because they were -- they lack every kind of transparency about this.

You know, they decided they were going to come out there publicly and say that Jared Kushner's security clearance was approved back in May of 2018. But now they're saying, you know, we don't talk about this. We're not going to talk about any of the potential issues or conflicts that may have arisen during his background check. We're not going to talk about the process that was actually gone through in order to get him this kind of clearance.

HARLOW: Right.

MURRAY: And I think, as Shawn points out, that will make people feel uncomfortable. We don't know what the issue was that was holding this up for so long. And you know, unless Elijah Cummings gets his way and actually subpoenas these documents we may never get a good indication of what the sort of hang-up was in Kushner's background.

HARLOW: All right. Thank you. Important reporting, Sara, we appreciate it. Shawn Turner, nice to have you as well.

Three days on the Hill. Apparently not enough. We've now learned Michael Cohen is going to be back testifying again next week on Capitol Hill.

[09:10:04] After seven hours of closed door testimony yesterday before the House Intelligence Committee he'll return to that committee on Wednesday.

With us now is Manu Raju, our senior congressional correspondent. Why? I mean, clearly they have more questions.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes. They do. They want to know specifically about the White House's involvement in editing that statement that Michael Cohen initially gave back in 2017 to that same congressional committee, the House Intelligence Committee, that he later admitted to lying to about the pursuit of the Trump Tower Moscow project.

At the time he downplayed that. He says the president then candidate Trump wasn't really involved and talks ended in January 2016. Well, Cohen alleged publicly that -- actually that the White House attorneys or attorneys close to the president edited that statement. That's something that the attorneys themselves have denied.

We expect that the Cohen attorneys will provide more documents showing the edits that occurred in the initial statement. The also, the Democrats in particular, interested in hearing more about conversations that occurred with Michael Cohen and the president particularly around the time of the raid of Michael Cohen's properties, what more can he disclose about that. In his public setting he said he couldn't disclose a lot of those details because it was still under investigation from the Southern District of New York.

So they're going to try to get some of those answers behind closed doors, the question is, how much can he ultimately reveal? But yes, this will be the fourth time he's coming up to Capitol Hill before he heads to prison in the spring -- Poppy.

HARLOW: OK. Also, a name many people don't know, but a really interesting character, if you will, Felix Sater, and intertwined in a lot of these deals including the Trump Moscow -- Trump Tower proposal, it's Felix Sater. He's going to be testifying in two weeks, right?

RAJU: Yes. On March 14th before the House Intelligence Committee in an open setting which is very rare for this committee for witnesses in the Russia investigation. He's a Russian-born businessman who worked with the president, then businessman Trump over a couple of different projects. He also appeared at book events together with him. Trump himself in 2013 distanced himself from Felix Sater saying he didn't know him particularly well.

That was in a deposition. So expect that to be a line of questioning. But a major line of questioning of course will be Sater's role in the Trump Tower Moscow project. He had extensive conversations with Michael Cohen. He also at one point offered a penthouse -- suggested offering a penthouse to Vladimir Putin as part of the project as a way to sweeten the deal of sorts.

So all of that will be a focus. A sign that they really want to focus -- the House Democrats do -- about the president's finances and any ties he has to Russia. Business dealings with Russia. That's one reason why it will be in a public setting in March -- Poppy.

HARLOW: All right. Really interesting.

Manu, thanks very much.

Back in the U.S., after walking away from the talks with North Korea and back to slamming his former lawyer Michael Cohen, the president this morning, the setbacks mounting for him this week. How does it play out politically?

Also Pakistan expected to release an Indian pilot after he was shot down over Kashmir. The gesture, will it ease growing tensions? India just saying Pakistan is doing us no favor with this. We are on it.

And lucky number 13. Relatively unknown maybe on a national stage, Democratic governor of Washington state Jay Ainsley jumping in to the 2020 race for the presidency. Will his focus on climate change set him apart from the pack?

(COMMERCIAL BREAK)

[09:15:00] POPPY HARLOW, HOST, NEWSROOM: All right, President Trump might have known he was in for a bit of a rocky week with Michael Cohen's scheduled to spend most of it on Capitol Hill. But he had the summit with North Korea's leader Kim Jong-un and a potential breakthrough to divert the world's attention. Except that fell apart, and then Cohen is coming back for more

testimony next week. And now the president reportedly has been caught in a dangerous lie about his son-in-law and the nation's most sensitive secrets. His answer so far is to lambaste Michael Cohen and Democrats in an early morning series of tweets.

Let's talk about this, Errol Louis is here, political anchor for "Spectrum News", David Urban joins me, former senior adviser to the Trump campaign in 2016 and former adviser on the second go-around, good morning to you both. David, let me begin with you --

DAVID URBAN, FORMER SENIOR ADVISER TO TRUMP 2016 CAMPAIGN: Hello, Poppy --

HARLOW: What's the high point for the president this week?

URBAN: So Poppy, listen, I think the high point is the fact that they continue to have negotiations on the Korean Peninsula. I think if you look back to where we started this all at the beginning of this presidency, there are missiles being lobbed across, you know, the sea of Japan across some of our allies.

And it was a very frightening place in the South China sea, and now, we haven't had a missile test or a nuclear test for over 400 days. That's a very positive thing. I don't think people recall --

HARLOW: So --

URBAN: You know, everybody felt we're at the precipice --

HARLOW: Yes --

URBAN: At war in the Korean Peninsula and we're far from that to this point.

HARLOW: Except the fact that if you look at the independent analysis like what was done by Stanford University in the last year, you know, North Korea has amassed even more fissile material to build between five to seven more nuclear weapons. There's that. But Errol, I mean, to David's point, the president didn't sign or agree to a bad deal. Is that a win?

ERROL LOUIS, SPECTRUM NEWS: That's right, look, a day without nuclear war is a good day, right?

HARLOW: There you go --

LOUIS: A day in which at least conversation is going on is a good day. Well, the clear sort of result that you're supposed to do this at the lower levels and then have the summit, not the other way around. OK, he's kind of doing it his way, it's a little bit in reverse, they had a summit that failed.

Now, the teams will have to get together and continue some serious talks about what kind of sanctions, what kind of dialing back of the nuclear program we're going to see. And all of that is to the good. But I think there's a difference between having a good week and having an acceptable week.

I think he had more of an acceptable week --

HARLOW: Got you --

LOUIS: In the sense that, he's still making some kind of progress, again, the talk -- and completely on it, it wasn't a complete catastrophe.

[09:20:00] HARLOW: Right.

LOUIS: And even on Capitol Hill, his Republican allies stuck up for the president.

HARLOW: Yes.

LOUIS: And as ludicrous as it seemed at times, they didn't ask a single probing question about what the president's former attorney was saying, they instead just attacked him and they did the president's bidding. That's a good thing for Donald Trump --

HARLOW: I wonder if they did though in those closed-door sessions --

LOUIS: Yes, and --

HARLOW: With Michael Cohen. Yet, David, weigh in on that, but I also want you --

URBAN: And Poppy, just -- I was just going to say -- you're sure --

HARLOW: Go for it. Go for it.

URBAN: I was going to say, as Errol points out, and you know, the State Department and Secretary Pompeo, Steve Biegun, the special envoy for North Korea, they have been working, they have been tilting the field there, working with the North Koreans, trying to get to an agreement before the president went.

It's not like he was just in the neighborhood and decided to drop in. The State Department had been putting --

HARLOW: No --

URBAN: A lot of work into this --

HARLOW: I get it --

URBAN: You know, it didn't -- it didn't bear fruit. But --

HARLOW: David --

URBAN: As Errol points out, they're going to continue to talk.

HARLOW: They haven't. Pompeo had gone a number of times, there's a little criticism of Biegun people saying he should have had more sub before the president went in there. But I hear you, let me ask you though, about something else. Even those who do not see this summit as a failure, supporters of the president, David, they all seem to be pretty unanimously appalled that the president has taken the word of an autocratic leader once again when it comes to the death of the American citizen Otto Warmbier and his condition when --

URBAN: Sure --

HARLOW: He came back from North Korea. Are you appalled?

URBAN: Yes, so listen, that's incredibly regrettable. The North Korean regime, whether Kim Jong-un knew about it, the fact remains that a young American student was captured, was kidnapped and murdered by a dictatorial regime in North Korea.

And I think the president should have -- should have put it, kind of slammed his fist down onto the table on that one and said, look, we're going to hold people accountable and we're going to push to find an answer here. So I do think he should have been much stronger on that point.

HARLOW: OK, on the reporting this morning from the "Times" and the "Washington Post", Errol, the president's denial that he got involved at all in this security clearance issue with Jared Kushner, despite now contemporaneous memo we've learned from his former White House Chief of Staff John Kelly, should any president bigfoot security professionals ever when it comes to this?

LOUIS: Clearly, there is a substantive danger to it. I think politically, it's fascinating to me that he's got all of these top aides, it reminds me of what happened when he spoke to James Comey. People come out of meetings with the president and feel like they have to write something down and take notes about it.

His Chief of Staff, his White House counsel, his former FBI director, people are being very clear that they're getting instructions from him directly or indirectly that really trouble them. And in this case, we don't know what substantively there might be there.

Joe Johnson reported a few minutes ago --

HARLOW: Yes --

LOUIS: I think was exactly right. Why is it that the FBI -- why is it that they keep saying, this man can't have top security clearance?

HARLOW: I -- it's a good question, I don't know the answer to that, David Urban, but what I do know is that right now --

URBAN: Sure --

HARLOW: Jared Kushner is at a -- what seems to be a really critical point in Mid East peace negotiations.

URBAN: Right, and so --

HARLOW: And that makes all of this an even more important question, right?

URBAN: Right, and it's been well reported that the president clearly has the authority to do this. No one is -- no one is certain of what's in the memos that put it in the file on the personnel file by then Chief of Staff General Kelly or White House counsel Don McGahn.

So we don't know exactly what it says, so to classify those as somehow alarming memos, we don't know, they could just be simple, you know, HR housekeeping things. And just to be very clear about clearance here, there are two specific pieces to a security clearance that I believe Jared was applying for.

And there is a TS portion, a top secret portion which is done by the FBI and kind of handled inside the White House. And then there's the SCI portion, the special compartmentalized portion which is handled by the folks at Langley and the CIA. So we don't know exactly what portion he was declined for during this entire episode.

He could have been declined for the SCI portion and that's -- and the president said, well, let's just give the TS, make sure he has a TS because he needs that to do his work. So until everybody knows the facts, I would just tell everyone to just exhale and just -- you know, I think America is still safe with Jared Kushner having a TS secret clearance.

HARLOW: David Urban, nice to have you, Errol Louis, thank you both, we'll have you both back soon.

URBAN: Thanks, Poppy.

HARLOW: All right, do you care about the U.S. debt? You should. It is now $22 trillion, and in just months might not -- the Treasury might not have the cash to pay our bills. Up next, the chairman of the Council of Economic advisors Kevin Hassett joins me on that and a lot more.

[09:25:00] (COMMERCIAL BREAK)

HARLOW: Twenty two trillion dollars and counting, that is our national debt, folks. It is a startling and dangerous number, and starting tomorrow, the debt ceiling kicks back in. That means the government could run out of cash to pay its bills by the Fall if that limit is not increased, and that would mean a slew of negative repercussions for all of us.

Joining me now, White House economic adviser, Kevin Hassett, Chairman of the Council of Economic Advisors. See, not that much snow, Kevin. I'm glad you were --

KEVIN HASSETT, CHAIRMAN, COUNCIL OF ECONOMIC ADVISORS: Yes --

HARLOW: Able to make it through --

HASSETT: But cold enough that I had to put my jacket on or my coat on. I mean, I feel a little embarrassed in front of a Minnesota person dressing so warm -- HARLOW: There --

HASSETT: And it's in the 30s, right?

HARLOW: Yes, you should be, exactly --

HASSETT: Yes --

HARLOW: That is darn near tropical. On a more serious note, thank you for being --

HASSETT: Yes --

HARLOW: Here, Kevin --

HASSETT: Of course, yes --

HARLOW: On the debt ceiling issue, I mean, they've got until September 30th. Are you expecting another protracted fight in Congress over raising the debt ceiling, especially because you've got you know, former deficit hawk Mick Mulvaney now in there as chief of staff.

HASSETT: Well, you know, I'm not the legendary strategist, I'm just, you know, the lowly economist in the White House. I can tell you that if you look back at previous debt limit debates that they've always sort of worked out in the end, but it sometimes, you know, they've dissolved into brinksmanship.

HARLOW: Yes --

HASSETT: I think everybody hopes that we can work together and make a positive --

HARLOW: Yes --

HASSETT: Deal and that it won't come to that. But you know, the end game as you mentioned really far off. So while there's --

HARLOW: Yes --

HASSETT: It's almost like the whistle blows in March and then the race lasts and into the early fall --

HARLOW: Yes --

HASSETT: Because of all the special measures the government can take.