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Early Start with John Berman and Zoraida Sambolin

Trump Allegedly Defies Objections Over Top Secret Security Clearance for Jared Kushner; North Korea Pushes Back on Trump's Summit Differences; Israel's Benjamin Netanyahu to be Charged in Graft Scandals; Pakistan to Release Captured Indian Pilot; Aired 4:30-5a ET

Aired March 01, 2019 - 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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[04:32:22] ALISON KOSIK, CNN ANCHOR: New controversy surrounding the president's son-in-law. How did Jared Kushner land a top secret security clearance?

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They wanted the sanctions lifted in their entirety.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: The president says he had to walk away. Now North Korea is pushing back on the sticking points.

KOSIK: Democrats in Congress not done with Michael Cohen yet. They think his dramatic testimony left a number of new leads to follow.

Welcome back to EARLY START. I'm Alison Kosik. Good morning.

BRIGGS: Good morning to you. Good morning, everyone. I'm Dave Briggs. 4:32 Eastern Time. Happy Friday.

We start with some major reporting from the "New York Times" that President Trump personally ordered a top secret security clearance for his son-in-law and senior adviser Jared Kushner. The "Times" says the president's command to then chief of staff John Kelly came last May, a day after the White House Counsel's Office urged him not to grant Kushner the clearance.

Here's the president just a few months before that.

(BEGIN VIDEO CLIP)

TRUMP: So that will be up to General Kelly. General Kelly respects Jared a lot and General Kelly will make that call. I won't make that call. I will let the general who is right here make that call.

(END VIDEO CLIP)

BRIGGS: The "Times" says the directive prompted two internal memos, one from Kelly on being ordered to grant the clearance. Here's what the president told the "Times" about a month ago.

(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. I know that he -- you know, just from reading I know that there was issues back and forth about security for numerous people actually. But I don't want to get involved in that stuff.

(END VIDEO CLIP)

BRIGGS: The president's daughter, Kushner's wife, was asked about it on ABC just last month.

(BEGIN VIDEO CLIP)

IVANKA TRUMP, ADVISER TO THE PRESIDENT: The president had no involvement pertaining to my clearance or my husband's clearance. There are literally close to a million people in the federal government who are in the pipeline to get their permanent clearance and are on temporary status.

UNIDENTIFIED REPORTER: So no special treatment?

I. TRUMP: No.

(END VIDEO CLIP)

BRIGGS: A spokesman for Kushner's lawyer disputes the report, "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.

[04:35:02] That was conveyed to the media at the time and new stories if accurate do not change what was affirmed at the time."

KOSIK: President Trump and the North Korean government now disagree about what caused the abrupt end to the Hanoi summit. According to Kim Jong-un's Foreign minister, North Korea was willing to permanently dismantle its uranium and plutonium production facilities at the Yongbyon nuclear site if the U.S. was willing to partially lift sanctions. Apparently that is not what President Trump heard.

(BEGIN VIDEO CLIP) TRUMP: Basically they wanted the sanctions lifted in their entirety and we couldn't do that.

(END VIDEO CLIP)

KOSIK: All right. Let's go to Hanoi and bring in CNN's Ivan Watson.

Let me get this straight here. So the two couldn't obviously agree on a deal and they can't agree what dissolved discussions in the first place.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, yes. I mean, both sides are expressing affection for each other and disappointment that they weren't able to bridge a gap, Alison, between their negotiating positions.

So it was a surprise appearance by North Korea's foreign minister last night here in Hanoi around midnight before some journalists where he said no, we didn't try to lift all the sanctions. We wanted five out of 11 sets of sanctions lifted and in exchange we would have permanently dismantled the nuclear enrichment facilities at the Yongbyon nuclear site. That's a sprawling site in North Korea.

Now a senior State Department official has responded briefing journalists saying that the president had asked for other sites involved in development of weapons of mass destruction to also be dismantled and that the North Koreans were not willing to go that far. So as a result, both sides ended up with, to paraphrase President Trump, a friendly walkaway with that lunch at the historic Metropole Hotel of snow fish and a banana toffee dessert, uneaten and the planned joint signing agreement ceremony unsigned, leaving both sides kind of again saying they like each other, they want to keep talking, but they were not able to make a deal.

One official from North Korea, a vice foreign minister, also telling journalists that Kim Jong-un is running out of patience and that the U.S. missed a once in a thousand year opportunity here.

KOSIK: Yes, but many expressing relief --

WATSON: Alison, Dave?

KOSIK: Many expressing relief that there wasn't a deal because of concerns that President Trump would have made too many concessions.

All right. Ivan Watson, thanks so much.

BRIGGS: All right. President Trump once again under fire from both Democrats and Republicans for taking the word of a brutal dictator over his own intelligence agencies. The president says when he met with Kim Jong-un in Hanoi he discussed the injuries suffered by American student Otto Warmbier while in North Korean custody. Injuries that proved fatal.

Here's how the president characterized the discussion.

(BEGIN VIDEO CLIP)

TRUMP: I don't believe that he would have allowed that to happen. Just wasn't to his advantage to allow that to happen. He felt very badly. But he knew the case very well, but he knew it later. He tells me that he didn't know about it and I will take him at his word.

(END VIDEO CLIP)

BRIGGS: Nikki Haley, the former U.S. ambassador to the U.N., disputing that claim on Twitter. She says, "Americans know the cruelty that was placed on Otto Warmbier by the North Korean regime. Our hearts are with the Warmbier family for their strength and courage. We will never forget Otto."

And this from Republican Senator Mitt Romney.

(BEGIN VIDEO CLIP)

SEN. MITT ROMNEY (R) UTAH: I think there is no question but that the government of North Korea has been responsible for a whole host of human rights abuses and atrocities. I've never heard somebody who did something wrong jump up and say, yes, I did it, I did it. Internationally they typically find blame someone else. So let's follow our intelligence community.

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BRIGGS: Here now the reaction from very influential conservative Ben Shapiro, tweeting, "F'ing pathetic."

KOSIK: Michael Cohen returning to Capitol Hill on March 6th to finish closed-door testimony to the House Intelligence Committee. Intel Chairman Adam Schiff announcing Cohen will come back next Wednesday after Trump's former lawyer and fixer finished part one of his testimony yesterday.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D), INTELLIGENCE COMMITTEE CHAIRMAN: Be able to shed light on a lot of issues that are very core to our investigation and we were able to drill down in great detail. None of the questions we had for him went unanswered.

(END VIDEO CLIP)

KOSIK: Schiff's announcement coming after Cohen's blockbuster appearance before the House Oversight Committee Wednesday. Under pointed questioning from Democrat Alexandria Ocasio-Cortez, Cohen claimed President Trump inflated and deflated his assets to suit his business needs, something that could amount to financial fraud.

(BEGIN VIDEO CLIP)

[04:40:08] REP. ALEXANDRIA OCASIO-CORTEZ (D), NEW YORK: To your knowledge did the president ever provide inflated assets to an insurance company? MICHAEL COHEN, FORMER TRUMP LAWYER AND FIXER: Yes.

OCASIO-CORTEZ: Who else knows that the president did this?

COHEN: Allen Weisselberg, Ron Lieberman, and Matthew Calamari.

OCASIO-CORTEZ: And where would the committee find more information on this? Do you think we need to review his financial statements and his tax returns in order to compare them?

COHEN: Yes, and you'd find it at the Trump Org.

(END VIDEO CLIP)

KOSIK: Allen Weisselberg's name came up over a dozen times at the hearing. He is the Trump Organization's CFO. He's among the Trump associates the Intel Committee says it plans to question.

BRIGGS: Cohen may also be facing a perjury problem. Two of the president's closest allies on the House Oversight Committee have referred Cohen to the Department of Justice for possible criminal prosecution. They claim to have evidence Cohen committed perjury and knowingly made false statements to lawmakers. Among the areas of Cohen's public testimony they want the Justice Department to investigate is this claim.

(BEGIN VIDEO CLIP)

COHEN: I was extremely proud to be personal attorney to the president of the United States of America. I did not want to go to the White House.

(END VIDEO CLIP)

BRIGGS: Now CNN has repeatedly reported to the contrary, that Cohen eagerly pursued and expected to get a job in the White House. Congressman Jim Jordan, who you saw there, and Congressman Mark Meadows point to court filings from federal prosecutors in Manhattan. The documents state Cohen privately told friends and colleagues including in seized text messages that he expected to be given a prominent role and title in the new administration. Cohen will soon start serving a prison sentence for previously lying to Congress.

KOSIK: U.S. economic growth slowed slightly at the end of 2018 but not nearly as much as some economists had feared. U.S. Growth Domestic Product grew at 2.6 percent in the fourth quarter. That's slower than the previous three months but with unemployment close to a 50-year low, consumer spending was strong.

Business investment was even stronger rising by 6.2 percent. That helped to support overall growth. With solid growth in the fourth quarter, the economy grew 2.9 percent for the entire year, that just misses the Trump administration's goal of 3 percent. It actually makes it the strongest year of economic growth, though, since 2018.

Economists are still cautious about the pace of growth going forward as the economy maxes out on available workers and the effects of last year's tax cuts and government spending. All of that wearing off. There is also concern that Chinese and European economies, that could wind up slowing even more and dragging down U.S. growth. So still lots of headwinds to contend with.

BRIGGS: Well, let's hope they get a Brexit deal, right? Because that could really drag things down as well.

KOSIK: Yes.

BRIGGS: It looks like a no deal.

KOSIK: For the E.U. Yes.

BRIGGS: Ahead, a potential blow to Benjamin Netanyahu's re-election bid. The Israeli prime minister facing indictment on corruption charges. A live report from Jerusalem is next.

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[04:47:17] KOSIK: A serious blow to Benjamin Netanyahu's chances for re-election in April after Israel's attorney general announces the prime minister will be indicted. Accusations of bribery and breach of trust stemming from three separate corruption investigations. Netanyahu says the impending charges are political while his main challenger is calling on him to resign.

CNN's Oren Liebermann joins us now live from Jerusalem with the latest.

So Netanyahu going after his fifth term in office, How will exactly -- how will this impact his reelection especially if these charges stick?

OREN LIEBERMANN, CNN CORRESPONDENT: Well, this will make it much more difficult for Prime Minister Benjamin Netanyahu as he seeks a fifth term in office. And those elections just over five weeks away at this point. That has been one of Netanyahu's main criticisms here that he doesn't have a chance to have his hearing where he'll present his side before the elections so all the voters have is this statement from the attorney general. Netanyahu has called this statement -- this announcement of an intent to indict politically motivated. He's called it a witch hunt driven by the media and the left to topple his right-wing government at any cost.

So what was the big announcement? Netanyahu's attorney general here, the country's attorney general, that is, saying that he intends to indict the prime minister on charges of bribery and breach of trust in the biggest case facing the prime minister as well as charges of breach of trust each in two separate smaller cases.

So we'll have to wait to see what election polls and the latest round of polling shows at this point, but Netanyahu facing a serious blow here. Before this announcement, it looked like he had a very good chance of putting together a government of winning that fifth term in office. But he is in a very tight race here against his former chief of staff and it doesn't take a very big shift here in the election polls.

Even a shift of one or two seats to give the advantage to that challenger. And that's what everybody will be keeping an eye on.

Alison, crucially he has the support of key right-wing coalition partners, but if they see the election polls shifting even a little bit, they may withdraw that support and that could be a very serious blow to the prime minister as he seeks not only a fifth term in office, but seeks the chance to become the longest serve prime minister in the country's history.

KOSIK: That is certainly an election all eyes will be on, Oren Liebermann, thanks so much.

BRIGGS: President Trump declaring American backed forces have retaken 100 percent of the ISIS-held territory in Syria, a claim that shocked regional allies and troops on the ground. The president made the remark to U.S. troops at Joint Base Elmendorf, Richardson, in Alaska on his return home from Hanoi.

(BEGIN VIDEO CLIP)

TRUMP: We just took over -- you know, you kept hearing it was 90 percent, 92 percent, the caliphate in Syria. Now it is 100 percent. We just took over 100 percent caliphate.

[04:50:04] That means the area, the land we just have 100 percent. So that's good. We did that in a much shorter period of time than it was supposed to be.

(END VIDEO CLIP)

BRIGGS: An official with the Syrian Democratic Forces tells CNN's Ben Wedeman the fighting with ISIS is, quote, "ongoing in Syria," and they were surprised by Trump's statement and multiple U.S. officials tell CNN's Barbara Starr that civilians still remain in the last region of Syria still under ISIS control.

KOSIK: All right. A cheaper version of the Tesla Model 3 is finally available, but it comes at a cost. CNN Business is next.

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[04:55:07] BRIGGS: 4:54 Eastern Time. Pakistan has promised to release an Indian fighter pilot today as a gesture for peace. The pilot captured after his jet was down in a dog fight between Indian and Pakistani warplanes.

As of now both countries remain on high alert. Pakistan says four civilians were killed by Indian gunfire across the so-called line of control that splits the contested Kashmir region.

International diplomatic editor Nic Robertson live in Abu Dhabi where both Indian and Pakistani foreign ministers was supposed to be attend the conference. But did they, Nic? NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: You know, therein

lies the clue to, is this really going to restore a good relationship between the two countries when this Indian fighter pilot is handed back over, expected to happen in the next hour or so at the land border between India and Pakistan. And the clue is that the Pakistani foreign minister didn't show up here for what is a major conference of Islamic nations.

This is the organization of Islamic cooperation. India was invited and we've just heard the Indian foreign minister speaking today, didn't mention Pakistan directly, did say that there was no space or should be no space for terrorist organizations to be harbored or to operate from -- this was an international issue, this wasn't an issue about a specific religion, but Pakistan's foreign minister didn't come here for the meeting because India was invited.

So that gives you an idea of just what the tensions that still underlie the situation here. So although this fighter pilot will be handed back over or what is expected to be handed back over, I think we're still a long way from the tensions on this current rise ratcheting down. This is what is seen broadly as a positive step, a step towards reconciliation at the moment. But those underlying tensions, Kashmir, the line of control, the confrontation going on there, we understand more civilians were injured overnight in continued shelling there.

So this issue is not going away. But watch the space for the Indian fighter jet to be handed over in the next hour or so.

BRIGGS: Two nuclear powers on the brink, easily the most underplayed story given the wild week here at home.

Nic Robertson, thank you, sir.

KOSIK: OK. Let's get a check on CNN Business this morning. Global markets, they're mostly higher as trading kicks off the month of March. The Nikkei closed up 1 percent, the Shanghai Composite was in the green closing 2 percent higher and the Hang Seng up over half a percent.

European markets, I'm seeing green arrows there, The DAX up over 1 percent,. The FTSE and CAC up close to 1 percent. On Wall Street, we are seeing green arrows as well even after the economy posted solid growth for the fourth quarter of 2018, U.S. markets closed lower on Thursday. The Dow fell 69 points. The S&P 500 and the Nasdaq also declined slightly, but all three of the major averages still finishing February on a positive note.

The Dow increased close to 4 percent, the S&P 500 finished up 3 percent and the Nasdaq ended up a little over 3 percent.

Tesla has been promising a pared down version of its Model 3 for more than a year. Drum roll please. Tesla announced Thursday the cheaper version is finally available, it will cost customers $35,000. But CEO Elon Musk said Tesla will have closed stores and lay off workers in order to make it financially sustainable to produce the cheaper car. Musk told reporters the Model 3 is excruciatingly difficult to make at

the reduced price. The cheapest Model 3 on sale before the announcement was $42,900. Tesla declined to say how many of its stores will close or how many jobs will be affected. Musk said a small number of stores in high traffic locations will remain open as galleries and information centers, an opportunity for you to just kind of sit and hang out in the car.

GAP and Old Navy are splitting up. GAP announced plans to separate Old Navy from GAP, Banana Republic and Athleta and create two publicly traded companies. The stores had been trending in opposite directions for years. Old Navy has thrived in recent years. Sales at stores over at least a year grew 3 percent in 2018. Meantime the GAP has struggled. Its sales fell 5 percent last year. Banana Republic has been closing stores which has helped improve overall sales.

GAP said it will close 230 GAP stores over the next two years as part of its plan to revitalize the GAP brand. The closures will affect specialty GAP stores which include mall-based stores.

You know, in this retail environment, it's all about being able to adapt to the latest change in tastes.

BRIGGS: Yes.

KOSIK: And being able to sort of adapt and then change to what the consumer wants.

BRIGGS: Right. And malls on the decline to say the least.

KOSIK: Absolutely.

BRIGGS: EARLY START continues right now.

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