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Israel Strikes Back at Hamas; Graham Told McCain to Give Dossier to FBI; Avenatti Charged with Extortion; Purdue Pharma to Settle Lawsuit. Aired 9:30-10a ET

Aired March 26, 2019 - 09:30   ET



[09:31:56] JIM SCIUTTO, CNN ANCHOR: This morning, tensions are boiling along the Israel/Gaza border. A cease fire agreement there apparently over now. Israel launching a slew of counter attacks overnight. This after a rocket launched from Gaza struck a home just north of Tel Aviv.

Phil Black is near the Israel/Gaza border this morning.

Phil, I know it can at times be a dangerous place along there. What have you seen overnight?

PHIL BLACK, CNN CORRESPONDENT: So, Jim, it's been pretty violent through the night here. And that was the intention really. The Israeli prime minister, Benjamin Netanyahu, has arrived back in Israel from his shortened visit to the U.S. He went straight to the defense ministry where he has been reviewing the results of that campaign and looking to next steps.

Just moments ago, he addressed via satellite the AIPAC conference in the U.S. and declared that this was the biggest operation, the greatest use of force against Hamas since Israel and Hamas fought a war in 2014.

Now, dozens of targets were hit by Israel in Gaza through the night. It was an operation clearly designed to send a very powerful statement to Hamas and indeed to Israelis more generally as well.

We know from an Israeli government source that the Israeli prime minister initially rejected the list of targets provided by the Israeli defense force and said he wanted more substantial targets and he personally approved each of them. And so Israel struck key buildings connected to Hamas, including those relating to its military, internal security, intelligence and indeed even the office of the political leader of Hamas.

While all of that was going on, more than 60 short-range rockets were fired from Gaza into Israel in the surrounding territory. Fortunately, there were no casualties.

So, for now, after that very violent night, it is quite. The key question is, what happens next. Has Israel made its point? Because there is a political context to all of this, and that is parliamentary elections that are just two weeks away. Benjamin Netanyahu is fighting to stay in government. And he is aware that his opponents have been criticizing him significantly over the last 24 hours, essentially saying that this latest escalation is a result of the fact that Netanyahu has been too soft on Hamas in the recent past, Jim.

SCIUTTO: The political -- good to know the political implications. No question.

Phil Black, thanks very much.

President Trump has slammed the late Senator John McCain for passing the Steele dossier to the FBI. But now one of the president's closest allies says that, in fact, he was the one who told McCain to hand over the document. We'll have more.


[09:38:48] SCIUTTO: The Republican senator, Lindsey Graham, now says that it was he who advised his friend, the late John McCain, to give the Steele dossier to the FBI. Graham said that he told the president about it this past weekend. Why? He says he felt the need to defend McCain after President Trump made repeated attacks against the late senator. Trump blaming McCain for fanning the flames of the Russia investigation by forwarding the dossier.

Joining us now from Capitol Hill, Lauren Fox, CNN congressional reporter.

And, Lauren, quite a statement from Lindsey Graham, in part because lately he's been attacking the whole Russia investigation, including the Steele dossier's part or the part it played in the initiation of that investigation.

LAUREN FOX, CNN CONGRESSIONAL REPORTER: That's right, Jim, it was kind of a remarkable statement from Lindsey Graham yesterday. He admitting that he actually was the one who told his friend John McCain to turn this document over to the FBI. He said yesterday to my colleague Manu Raju, quote, I told the president it was not John McCain. I know because John McCain showed me the dossier and I told him the only thing I knew to do with it, it could be a bunch of garbage, it could be true, who knows, turn it over to somebody whose job it is to find these things out.

And, of course, that came after a week that the president had really attacked Senator McCain and some Republicans were coming to the aide of, you know, trying to convince the president to stop going forward with that. Now, Lindsey Graham, a close friend of the president's, but also a very close friend of the late Senator McCain. And he basically said he felt like it was his responsibility to tell the president, look, I directed Lindsey Graham to make this decision and you should stop attacking him for it.

[09:40:29] Of course, Lindsey Graham did not absolve some people on McCain's staff for what they might have done with that dossier, but he did try to convince the president this was not John McCain's fault.

SCIUTTO: Lauren Fox, good to have you on The Hill. Thank you.

Joining us now to discuss this further, Josh Dawsey. He's the White House reporter for "The Washington Post."

So, Josh, this was interesting. He gave a long on-camera briefing, Senator Graham. Did not talk about this. Then off camera made this comment in defense. Lindsey Graham's a cagey politician. Was that intentional to say -- well, to not say that on camera and to say it off camera to kind of get it out there softly?

JOSH DAWSEY, WHITE HOUSE REPORTER, "WASHINGTON POST": Well, Senator Graham, as you know, is in a difficult predicament. He's someone who talks to the president several times a week, is probably his closest ally or one of his closest allies in the Senate, has been advising him on foreign policy and a number of other issues.

And at the same time, John McCain was one of his closest friends. He said his best friend in life. And the president keeps attacking McCain relentlessly. He's done it for seven months now, I guess, after his death. And Lindsey Graham and Mitch McConnell and others have repeatedly pleaded with the president to say, can you please stop, and he won't do it. And none of their rebukes have worked.

So I think -- I think Lindsey Graham is trying to convince the president, hey, Senator John McCain isn't maybe as bad a guy as you think he is. But those efforts have gone nowhere so far, Jim.

SCIUTTO: Yes. No, not at all.

And this is happening, it's interesting, as Graham is vowing, using his new chairmanship on the Senate Judiciary Committee, to investigate the start of the Russia probe, including the role that the Steele dossier played in it.

DAWSEY: Right. Well, Senator Graham has now said he will be the most ferocious bulldog on the Republican side of kind of investigating the investigators. President Trump has told his legal team and the allies on The Hill that he wants to see his foes investigated, he wants to see these people who -- who he, in his mind, precipitated this long investigation kind of brought to justice. There's no desire from the White House to just kind of move on and turn the page. There is a sense of vengeance in the air if you talk to people in the White House.

And Lindsey Graham is playing a key role in that, Jim.


DAWSEY: I mean he is going to be the person who would summon many of these people to The Hill to testify. He'll put out subpoenas, could drive a lot of the scrutiny. And how much he goes through with that remains to be seen. But, as you know, he's up for re-election in South Carolina, which is a deeply red state that loves President Trump. So, putting himself close to the president is not a bad strategy in any way.

SCIUTTO: Yes. Yes, a sense of vengeance in the air. You definitely sense that.

On another topic, the Mueller report, of course out, or at least the summary is out. Now the question of how much the public will see and Mitch McConnell blocking an effort by Democrats in the Senate to make it public. What are the chances that he changes tact on this?

DAWSEY: Well, our understanding, Jim, is no one in the White House has seen the report yet. Rudy Giuliani hasn't. The president's lawyers. The president has said publicly that he wants it out, but Attorney General Bill Barr and others at DOJ are looking through grand jury material, privileged material. It's really unclear how much of it they will be willing to release. It will certainly be followed by Democrats. You already saw a letter yesterday from many committee chairmen asking for the report to be released publicly.

The president now says he wants to see the report released. But to be clear, he is not aware of everything that's in it. And you would imagine that the White House would want -- in fact his lawyers have told me they would want a briefing before it was released publicly.

SCIUTTO: Yes. And McConnell says that he did this now -- he blocked it now to give the special counsel and the DOJ more time to complete their review. I mean, and keep in mind that on the other side, in the House, 422-0.

DAWSEY: Right.

SCIUTTO: All the Republicans included voted to release this.

Can McConnell continue to stand in the way after he gives the DOJ some time?

DAWSEY: Well, it depends on where his conference is. And McConnell is a man who, by all accounts of his allies and people who watch him closely, who follows the lead of his conference. If members of his conference want it released, then -- and they feel like that it needs to be done, you could see him moving a little bit here.

The public sentiment on this is overwhelmingly in favor of releasing the report, you know. This investigation went on and on for almost two years and the public has said by and large, in a number of public polls, that they want to see it. McConnell is not a man who was always influenced by public polls. He's more influenced by the inside politics of his caucus.

But the sentiment looks overwhelmingly there will be a heavy push to make this report public.

SCIUTTO: Yes, you might say there's never been a poll he likes, Mitch McConnell. He makes a lot of decisions against the polls.

Josh Dawsey, thanks very much. [09:44:55] This morning, attorney Michael Avenatti is free on bond after being charged with trying to extort millions of dollars from Nike. What he is saying about the charges.


SCIUTTO: The celebrity attorney Michael Avenatti is now saying that he is confident he will be, quote, fully exonerated after federal prosecutors here in New York charged him with trying to extort $20 million -- you heard that right -- from Nike. At the time those charges were filed in Manhattan on Monday, prosecutors in Los Angeles charged him there with wire and bank fraud.

CNN reporter Kara Scannell joins me now.

So, Kara, Avenatti is out on bail now. Tell us exactly what he's accused of doing, how to extort this money from Nike.

[09:50:00] KARA SCANNELL, CNN REPORTER: Yes, Jim, it's a real stunning development for Michael Avenatti here. He's being charged on both coasts, by New York prosecutors with attempting to extort more than $20 million from Nike, and on the west coast prosecutors in Los Angeles have charged him with wire fraud and bank fraud for embezzling more than a million dollars from one of his clients to pay his personal expenses and also for using phony tax returns to get $4 million in loans from a bank.

But the action yesterday took place in New York where prosecutors and FBI agents arrested Avenatti on the streets of Manhattan as part of what they said was an old fashioned shake down. Prosecutors say that Avenatti and an unnamed coconspirator threatened Nike saying that they would disclose damaging information about misconduct by Nike employees on the eve of the company's corporate earnings potentially wiping billions of dollars from the company's market cap if they weren't hired to conduct an internal investigation and paid more than $25 million.

Now, Nike's attorneys, when Avenatti came to them just last week, brought it to the attention of the prosecutors in Manhattan. They began recording both Avenatti on video and audio and that culminated in the arrest yesterday on the streets, Jim.

Now, Avenatti was arrested around 12:30 yesterday. He was presented in court last night. He was released on $300,000 bond with limited travel and has had his passports removed and he cannot be in any contact with the unnamed coconspirator mentioned in the court filings.


SCIUTTO: I mean that's some pretty amazing corporate blackmail there, or attempted corporate blackmail.

So you mentioned the unnamed coconspirator in the SDNY. That's the New York criminal complaint. But we know that was Mark Geragos, a prominent lawyer as well. SCANNELL: Yes, that's right, Jim. A source familiar with the

investigation told CNN that the unnamed coconspirator in the indictment is Mark Geragos. He is a well-known attorney who represents a lot of celebrities. He also was a CNN contributor, but as of yesterday he is no longer one.

Now, he has not been charged with any wrongdoing in this complaint, and he has not responded to CNN's request for comment.


SCIUTTO: Kara Scannell, good to have you on the story. Thank you.

A major pharmaceutical company is accused of aggressively marketing opioids and helping fuel the nationwide prescription drug epidemic, the deadly one that's now settled a historic lawsuit. It's big. The details coming up.


[09:56:37] SCIUTTO: A massive drug company is now settling an historic lawsuit. Purdue Pharma and the state of Oklahoma have now reached an agreement after the state sued the drug maker. Allegedly the company aggressively marketing OxyContin, fueling the drug epidemic in the state.

Dr. Sanjay Gupta, our chief medical correspondent, has been following the opioid crisis for some time now.

And, Sanjay, this is one of 1,600 states and communities around the country suing Purdue Pharma. Is this going to be a model for other settlements?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: That is the big question. And I think the answer may be yes. I mean this is the first settlement now and, you know, a lot of people have been paying attention to this, Jim. Oklahoma, you know, filing this lawsuit. There's been a settlement reached. We're going to get some details on that this afternoon. But the real question is, what about these other, you know, more than a thousand other lawsuits from states and various cities.

Oklahoma, you know, they had more prescriptions written for some of these opioids than there were citizens in the entire state, just to give you an idea. This -- what this lawsuit really resolves around, Jim, though, is the deceptive marketing. The question was, had -- did Purdue overstate the benefits of their medications and understate the risks? This is a settlement, so we're not going to hear, obviously, from Purdue as part of this. But that's really the allegation and the concerns.

And that really centers around most of these lawsuits around the country, overstating benefits and then calling addiction more of a pseudo-addiction, that addiction wasn't real, that it was a pseudo- addiction. And I think that that's what's, you know, been the subject of all these discussions now. SCIUTTO: Yes, the details of this are just fascinating, downplaying

the risks, overplaying how hard it would be to get addicted to these drugs.


SCIUTTO: Purdue Pharma facing all these lawsuits. There's talk of bankruptcy now.

GUPTA: Yes, I mean, I think one of the things that, you know, has come up was a company that's, you know, made billions and billions of dollars on these drugs now potentially filing for chapter 11 bankruptcy. Part of that could be a strategic move, which I guess helps them consolidate all these various lawsuits, as well.

The settlement, I should point out, Jim, makes it so that, you know, we're not going to hear from Purdue Pharma. If this settlement goes through, we're not going to hear an admission of this overstating of benefits and understating of risks. We're not going to hear from the Sackler family sort of at the center of Purdue Pharma. So that's obviously one of the objectives I imagine for the settlement.

There are two other pharmaceutical companies, as you know, Jim, involved as well, Johnson & Johnson and Teva Pharmaceuticals. Those lawsuits may still proceed. I mean we don't know of any settlements or agreements with those two companies yet. That was scheduled, those hearings to begin, May 28th. So a lot of people keeping an eye on that as well, Jim.

SCIUTTO: Yes, it's amazing. So many of these settlements, whether it's pharmaceutical companies or banks as well, right, you -- you settle but you don't admit guilt.

GUPTA: We don't hear anything. That's right.

SCIUTTO: Dr. Sanjay Gupta, thanks for staying on top of it.

GUPTA: You got it, Jim. Thank you.

SCIUTTO: A very good Tuesday morning to you. I'm Jim Sciutto in New York. Poppy has the week off.

[09:59:46] In a stunning reversal, the Trump administration now says that the entire Affordable Care Act, Obamacare, should be struck down, in the process, possibly eliminating the health care coverage of millions, 52 million Americans. The Justice Department had previously argued that portions of President Obama's signature health care law should stand, but it now says it agrees with a federal judge in Texas.