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Trump & GOP Allies Vow to Pursue Those Behind Russia Probe; Pentagon Authorizes $1 Billion for Border Protections; Trump Administration Wants Entire Affordable Care Act Struck Down; Michael Avenatti Accused of Trying to Extort Nike; Duke to Pay $112 Million to Settle Research Misconduct Case. Aired 6-6:30a ET

Aired March 26, 2019 - 06:00   ET

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

(BEGIN VIDEOTAPE)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: There are a lot of people that have done harm to our country. Those people will certainly be looked at.

[05:59:06] REP. ADAM SCHIFF (D-CA), CHAIRMAN, INTELLIGENCE COMMITTEE: Our investigation has always focused on is the president compromised? And that work has to go on.

UNIDENTIFIED MALE: It is imperative Mr. Barr make the full report public.

SEN. JOHN KENNEDY (R), LOUISIANA: It is over. If you care about our country, it's time to move on.

UNIDENTIFIED FEMALE: The Trump administration calling for the complete repeal of the Affordable Care Act.

UNIDENTIFIED MALE: The Democrats have been given a gift. They should turn to that now.

UNIDENTIFIED MALE: We're focused on lowering health care costs, protecting people with pre-existing conditions.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

JOHN BERMAN, CNN ANCHOR: Welcome to our viewers in the United States and all around the world. This is NEW DAY. It's Tuesday, March 26, 6 a.m. here in New York.

And you know, overnight we learned that the Justice Department has not yet released the full Mueller report. But it has taken action to completely strike down Obamacare, which could abruptly end health coverage for millions of Americans. Much more on that in just a moment.

But first, Senate Majority Leader Mitch McConnell blocked efforts by Democrats to pass a resolution calling for the Mueller report to be made public. McConnell says the attorney general has promised to do it and should not be rushed.

In the House, Democratic chairmen set an April 2 deadline to receive the full report.

The president is launching a political offensive to capitalize on what is known from the report. He's attacking people who have questioned his motives as treasonous people who are guilty of evil deeds and should be investigated themselves. Still, in a bit of change of tone, the president says Mueller himself acted honorably.

ALISYN CAMEROTA, CNN ANCHOR: So breaking overnight, in a dramatic reversal, the Trump administration says the entire Affordable Care Act should be struck down. This move could affect millions of Americans who rely on Obamacare for health insurance; and it would also eliminate protections for pre-existing conditions.

Also new this morning, the Pentagon notifying Congress that it has authorized the transfer of $1 billion to build 57 miles of fencing on the border with Mexico. The nation's top military officials are on Capitol Hill today, where they are sure to face questions about that.

So let's begin all of our news with CNN's Jessica Schneider. She is live in Washington with our top story -- Jessica.

JESSICA SCHNEIDER, CNN CORRESPONDENT: Good morning, Alisyn.

Well, the president is playing up the special counsel's findings as a big win. But instead of looking forward in the wake of Mueller's conclusion, President Trump is now vowing payback against his political rivals.

(BEGIN VIDEOTAPE)

TRUMP: There are a lot of people out there that have done some very, very evil things, very bad things, I would say treasonous things against our country. Those people will certainly be looked at.

SCHNEIDER (voice-over): President Trump and his allies on the offensive after being cleared of conspiracy with Russia by Special Counsel Robert Mueller. With half a dozen aides and advisers telling CNN the president plans to use the results to attack his perceived political enemies.

TRUMP: We can never let this happen to another president again.

SCHNEIDER: The top Republicans in the House and White House counselor Kellyanne Conway calling for the resignation of the head of the House Intelligence Committee, Adam Schiff.

KELLYANNE CONWAY, COUNSELOR TO DONALD TRUMP: He's been on every TV show 50 times a day for practically the last two years, promising Americans that this president would either be impeached or indicted.

UNIDENTIFIED MALE: But Kellyanne, he's a politician. That's what --

SCHNEIDER: But Schiff pledging to continue his investigation into the president's conduct and dismissing criticism.

SCHIFF: More than used to attacks by my GOP colleagues, and I would expect nothing less.

SCHNEIDER: Senate Judiciary Chairman Lindsey Graham vowing to investigate allegations of anti-Trump bias at the Justice Department and the FBI, and calling for a new special counsel probe.

SEN. LINDSEY GRAHAM (R-SC), CHAIRMAN, JUDICIARY COMMITTEE: By any reasonable standard, Mr. Mueller thoroughly investigated the Trump campaign. You cannot say that about the other side of the story.

SCHNEIDER: The president's lawyer, Rudy Giuliani, criticizing Mueller for declining to exonerate the president on obstruction of justice, despite not charging him.

RUDY GIULIANI, LAWYER FOR DONALD TRUMP: This is a cheap shot. He is exonerating him, in the next two paragraphs. The next two paragraphs say not sufficient evidence.

UNIDENTIFIED MALE: Right.

GIULIANI: And no obstructive conduct.

SCHNEIDER: Meanwhile, six House Democratic committee chairmen demanding Barr release the full Mueller report and underlying evidence and documents by next Tuesday.

SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: There is no good reason not to make the report public.

SCHNEIDER: President Trump insisting he's not opposed to the report being publicly released.

TRUMP: That's up to the attorney general, but it wouldn't bother me at all.

SCHNEIDER: But Senate Majority Leader Mitch McConnell blocking a second effort from Minority Leader Chuck Schumer to put it to a vote in the Senate. The bill passed unanimously in the House. House Speaker Nancy Pelosi sidestepping questions about Mueller's report.

UNIDENTIFIED MALE: Are you ready to say that there was no collusion between the Trump campaign and Russia, in light of the Mueller finding?

UNIDENTIFIED FEMALE: Does this exonerate the president?

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I think the Mueller report was clear, the president is not exonerated.

(END VIDEOTAPE)

SCHNEIDER: So the question is where do Democrats go from here? Well, sources are telling CNN that Speaker Pelosi is telling her leadership team the caucus should shift their focus to their agenda and their message away from the Mueller probe and Russian election interference. Pelosi viewing those issues, really, as a distraction from their agenda, and as such, Speaker Pelosi will be unveiling a health care plan a little bit later today -- Alisyn.

CAMEROTA: All right. Jessica, thank you very much for that.

Speaking of health care, breaking news overnight. In a dramatic reversal, the Trump administration now trying to get all of Obamacare struck down.

In a new federal appeals court ruling, the Justice Department says it agrees with a federal judge's ruling in Texas that invalidated the Affordable Care Act. The move would put health care for millions of people in jeopardy. It would also remove protections for people with pre-existing conditions.

This is different than what happened under Attorney General Jeff Sessions. Then, the Justice Department argued that the part of the law that protects those with pre-existing conditions could not be defended, but the rest of the law could stand.

BERMAN: This is a big move. We'll talk much more about that in a little bit.

[06:05:03] But also breaking overnight, we learned about the first movement of new dollars to begin barrier construction on the southern border. A transfer of $1 billion has been authorized by the Defense Department. Congress was notified overnight. Senate Democrats not happy at all.

CNN's Barbara Starr live at the Pentagon with the breaking details. What exactly is this money, and what will it do?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, John.

Overnight, in fact, as you said, acting Defense Secretary Patrick Shanahan notified Congress he was authorizing the transfer of up to $1 billion in military funds to go towards border construction, fencing, improved roads, all aimed, he says, at trying to have better control over drug smuggling routes.

This is in support of the Department of Homeland Security. One billion dollars, mainly coming right now from unspent military pension-type funds, military pay that is not being spent. They call it reprogramming. He's basically transferring it to an account that will make it available for this border wall project.

Now, Senate Democrats already objecting very strongly, saying that the Pentagon should have come to the Congress for approval to do all of this, and concerned about the next step, which is, they believe, that the Pentagon will now move towards canceling some construction projects in a number of states in order to fund further efforts on the border.

Look, it's not surprising that congressional members object when any money in their states might be cut. But now Shanahan on Capitol Hill later this morning, certainly facing a lot of questions and having to explain all of this -- Alisyn.

CAMEROTA: All right. Barbara, thank you very much for the preview of all of that.

Joining us now to discuss all of today's news, we have CNN senior political analyst John Avlon.

John, let's start with the release of the Mueller report. That passed unanimously in the House. Republicans and Democrats want that. Why did Mitch McConnell block it in the Senate?

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Because, while Republicans should say they're vindicated and therefore should have no problem, there actually has been a lot of obstacles.

Look, part of it's political. He wanted to push back on Chuck Schumer. Part of it's saying he wants to give Barr enough time. Barr's said he'll release the report with appropriate redactions. But the House vote's not subtle. Nothing passes 420-0 in America. And so, with Mitch McConnell following up on Lindsey Graham, essentially putting the Heisman on the release, you've got to wonder what are they worried about?

CAMEROTA: When the president says there are bad people who did this, or treasonous, what's he talking about, and what's he going to do about that?

AVLON: I think this is a theme you're going to start to see increasingly from both conservative media and the president's campaign, the so-called move to investigate the investigators. This is going to be a major theme, because negative partisanship is the glue that holds together the Trump coalition. And because he wants to essentially say, "No collusion on my side. You're the real colluder." So a riff he's hit over and over again.

Of course, it is banana republic rhetoric to go after your opponents, to call them evil, to call them treasonous. And -- but it's part and parcel with the president who, on the one hand, was vindicated by this report, at least partially, but is increasingly vindictive about it.

CAMEROTA: I get that this is rhetoric. But really, what does this mean? He's going to go after the FBI? He's going to go after Adam Schiff? What is going to happen here?

AVLON: Well, there are -- there are constraints on what can be done. I mean, certainly within a special counsel statute.

But Lindsey Graham can hold hearings. He's indicated an interest in doing so. The Justice Department could open old investigations or reopen investigations into his political opponents, into the FBI. Clearly, it's a presidential priority. How much will the Department of Justice be willing to compromise its independence and integrity to follow the president's political lead and do his dirty work?

CAMEROTA: OK. Let's talk about the Affordable Care Act. So the Department of Justice now says that it agrees with this judge in Texas that the entire thing should be struck down.

How is it politically astute to strike down the pre-existing conditions, which was so popular, I mean, you know, in a bipartisan way?

AVLON: Remember in the 2018 campaign, all the Republicans campaigning on pre-existing collections? Heck, I'm old enough to remember this year's State of the Union, when President Trump talked about how it was a priority to protect pre-existing conditions. Guess what? Not so much, people.

CAMEROTA: How does it make sense politically?

AVLON: It's about a politics that's being dominated by the base.

Look, Obamacare has gotten increasingly popular. Disapproval is around a third of the country. This is a bit of a hail Mary. They're signing onto this Texas judge's report that goes back to December, but it's an indication of where Barr is. Very ideological, perhaps more so, even, than Jeff Sessions.

And it goes against a lot of the promises, not only the will of the people in terms of broad popularity, but the promises they've made. It's an act of policy arson. And then they'll call the fire department and ask for a fix that's more in line with what they'd like ideologically.

CAMEROTA: All right. Thank you for explaining all that, John Avlon -- John.

BERMAN: All right. Attorney Michael Avenatti free on bond this morning after federal prosecutors in New York charged him with trying to extort more than $20 million from Nike. The former lawyer for Stormy Daniels is also facing separate charges in California.

CNN's Kara Scannell live in Washington with the details here. Michael Avenatti faces quite a number of charges.

[06:10:04] KARA SCANNELL, CNN CORRESPONDENT: That's right, John. A stunning fall for Michael Avenatti, announced -- facing criminal charges on both coasts that were announced within just moments of each other yesterday.

In New York, Avenatti is charged with attempting to extort more than $20 million from Nike; and in Los Angeles he's charged with bank and wire fraud for trying to embezzle over $1 million from one client to pay his personal expenses and for using phony tax returns to try to obtain more than $4 million in loans.

Now, in New York, that case unfolded rather quickly. Just over the past week, Avenatti and an unnamed co-conspirator had met with Nike's attorneys, threatening to release damaging information about Nike on the eve of their earnings -- earnings conference call and the NCAA March Madness tournament, potentially knocking billions of dollars off of Nike's market cap. Now, Avenatti and the unnamed co-conspirator said they would do that

unless Nike hired them to conduct an internal investigation and paying them more than $20 million.

So Avenatti was arrested yesterday afternoon in New York on his way to meet with Nike's attorneys for their final meeting before he was going to go public. He was arrested. He was released last night on $300,000 bond. And as he was leaving court, he told reporters he expected to be fully exonerated.

(BEGIN VIDEO CLIP)

MICHAEL AVENATTI, ATTORNEY: I have fought against the powerful; powerful people, and powerful corporations. I will never stop fighting that good fight.

(END VIDEO CLIP)

SCANNELL: Now, the unnamed co-conspirator in the indictment, CNN has learned, is celebrity lawyer Mark Geragos. Geragos was a contributor to CNN until yesterday. He has not been charged with any wrongdoing, and he did not return our calls for comment -- John.

BERMAN: All right. Kara Scannell for us in Washington, thanks very much.

Joining me now is CNN legal analyst Elie Honig. He's a former assistant U.S. attorney for the Southern District of New York here, an active place, to say the least.

Elie, I want to break this up into two pieces, if I can. One, you think the greater legal jeopardy that Avenatti faces is from California, these bank fraud charges. There's a paper trail here. Why are they problematic?

ELIE HONIG, CNN LEGAL ANALYST: Yes. It's really hard to defend a paper case. There's two aspects to the California case. There's a straightforward bank fraud angle. He did what a lot of people do when they're living way beyond their means. He inflated his assets to get bank loans that he could not otherwise have gotten. Here, he got over $4 million in bank loans. You hardly need a witness other than a couple of bank employees and some documents to prove that case.

And the other part of the California case is even -- even worse for him. He stole over a million dollars from one of his clients. Client got a settlement, Avenatti was supposed to, of course, distribute that settlement, all to his client, minus his fee. But Avenatti pocketed the whole thing.

And again, you call the client as a witness. That's the victim. You show some financial records, and that's that.

BERMAN: Allegedly. That's the case --

HONIG: All allegedly. BERMAN: -- the prosecutors will make. Now, let's talk about what

looks, on its face, to be the -- at least more sensational charges here in New York, that Avenatti tried to extort money from Nike.

I know what a lot of people like me want to know here is where is the line? Where is the line between tough lawyering -- "I'm going to get every possible cent I can get from my client" -- and extortion?

HONIG: It's a great question, and that's exactly why this case is actually defensible for Avenatti. I'm not saying his conduct is defensible in the normal everyday sense, but legally, it's defensible.

I sort of came up doing easy extortion cases. Someone threatens to hurt someone, to beat someone up, to break their -- break windows unless they get paid. That's easy.

This is difficult, because the defense will be that these are hard- knuckled business legal negotiation tactics. "Yes, I went in there with a high monetary demand. Yes, I put pressure on them. What do you think lawyers do in the real world?" And where is the line? This is one of these areas where the law is not particularly helpful, and sometimes you go to law school and you have these moments of that's the law, but it's wrongful.

The key question here is, was it a wrongful demand? And did he use wrongful means? What does that mean? You're going to be arguing it to a jury.

BERMAN: Is it that asking for money for your client is one thing. But asking for money for yourself, you have to hire me as a lawyer to conduct an investigation?

HONIG: Yes had, that's the better part of the case for the prosecution.

The part about the client, Avenatti will say, "Look, my client had a contract claim. Maybe my demands were outrageous." But then when Avenatti says, "And you have to hire me for tens of millions of dollars to do an internal investigation," which I think even in the tapes, Avenatti kind of acknowledges, "You're just going to be paying me." That's where it is going to get tough for him.

BERMAN: All right. Tough times ahead, perhaps, for Avenatti.

HONIG: March Madness.

BERMAN: All right. Elie Honig, thanks very much.

CAMEROTA: All right. Now to this story. Duke University will pay the U.S. government more than $112 million to settle allegations that it falsified research in order to get and keep millions of dollars' worth of federal grants.

CNN's Martin Savidge is live in Atlanta with more. What's this about, Martin?

MARTIN SAVIDGE, CNN CORRESPONDENT: Good morning, Alisyn.

Essentially here, the federal government is accusing this private prestigious college of allegations of a huge cheating scandal. Cheating not by its students, but by former members of its staff to improperly obtain millions of dollars in federal grant money.

[06:15:04] It kind of goes like this. Every year Duke University gets millions for research, from say, the EPA and also from National Institutes of Health.

However, from 2006 to 2018, the federal government says one of the researchers lied on the applications and, not only that, basically made up the data with follow-up research. So in essence, they got the money improperly. They were violating what's called the False Claims Act.

So now the university has agreed to pay that $112.5 million back. As a result, it's also a huge hit on its prestige.

And the man who reported all this, the whistle-blower, he's going to get close to $34 million here.

Now, again, these are allegations. But essentially what it shows is that cheaters never prosper, but apparently, those who report them can do quite handsomely.

Duke University has issued a statement. It basically said it never should have had this problem. It will do better in the future -- John.

BERMAN: Cheaters never prosper. From your lips, Martin Savidge. Thank you.

CAMEROTA: I've got to find something to report immediately.

BERMAN: Yes, I know. Watch out. That's all I can say.

All right. Up next, is your health care in jeopardy because of a new decision from the Trump administration? A reversal from the Justice Department, now wanting to strike down Obamacare in its entirety now.

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(BEGIN VIDEO CLIP)

SCHIFF: Our investigation has always focused on counterintelligence issues. That is, is the president or anyone around him compromised in some way? That work has to go on.

(END VIDEO CLIP)

CAMEROTA: All right. House Intelligence Committee Chair Adam Schiff says he will push forward with his probe into Trump's financial dealings, including those with Russians. But some Republican lawmakers are calling for Schiff to resign after he repeatedly said that there was collusion, which Robert Mueller's investigation found no evidence of.

Joining us now to discuss this and more, we have Jennifer Rodgers, Elie Honig, both former federal prosecutors, and John Avlon, CNN senior political analyst. Great to see all of you.

Elie, is he talking about looking into collusion? Or is he talking about all of the other things, all of the other stuff that cropped up in terms of the Emoluments Clause and the president's financial dealings and all that stuff, is that what he's looking into? Or is he still going to stick with collusion?

HONIG: It sounds like both. And I'm not a political adviser. But if I was, I think I would tell him, let's -- you know, you still have an important oversight function. You are still Congress. That's your constitutional duty. And so anything that has a good basis, a good predication, go for it, right? And investigate it. There is an important investigative function there.

But I think the collusion stuff at least needs to rest for a little bit, right? Fresh off what we've seen in the Barr letter, I don't know how politically wise it is to keep going down that same road, especially at this moment.

BERMAN: I will say, though, that one of the things that was in the Barr letter that we were not fully aware of was the multiple outreaches from the Russians to people connected with President Trump. And that's exactly squarely within the area in the purview of the Intelligence Committee. I mean, they are most interested in possible foreign influence attempts by foreign countries to infiltrate. And I would think that's certainly fair game, yes?

JENNIFER RODGERS, CNN LEGAL ANALYST: Yes. And you know, we don't know how the counter-intel side of this has ended either. Apparently, there's going to be a briefing to the Gang of Eight. And so from that, they'll have to take whatever steps they need to take to try to figure out whether we have a problem on that side of things, even though legally, there will be no criminal case on Russian collusion.

BERMAN: And the word, you know, we throw around, it determined there was no collusion. Specifically -- and I think people are going to need to be careful with this, and we're going to mess it up, everyone's going to mess it up going forward -- is that there was no evidence, not enough evidence to prosecute.

AVLON: Correct.

RODGERS: Right.

BERMAN: On coordination or conspiracy.

RODGERS: Yes. Coordination or conspiracy. And the coordination is important, because conspiracy, of course, is the legal term. There's a very high bar for getting to beyond a reasonable doubt on the criminal conspiracy.

But saying that there's not enough to show coordination, I think demonstrates that there really wasn't even close to enough evidence there. So that's good news for the president.

CAMEROTA: But John, does this take the wind out of the other -- some of the other investigations that the committees are going to do in terms of looking into the security clearances, looking into the e- mail, the use of private e-mail, for public business, all of that stuff? Does some of this take the wind out of it, because now the president feels so vindicated and keeps going after Adam Schiff and others?

AVLON: I think those Democrats who are hoping for total vindication for their position from Bob Mueller obviously are disappointed, and the political winds have changed to that extent.

But it doesn't change their basic responsibilities in areas where they can and should investigate. They're fundamentally differentiated from what Robert Mueller may have been looking into.

And that's why, you know, if he focuses politically, to Elie's point, on the things that seem to be their unique purview, particularly the financial aspect of things; a hearing later this week on money laundering questions around the Trump Organization that may involve Russia. Don't confuse that with collusion. It's separate. It's legitimate. It may answer questions about whether folks are compromised in the orbit. That should continue.

But politically, I think Democrats do need to be careful about beating the dead horse of collusion, because that's been proven conclusively, apparently, by the Mueller investigation not to have occurred, at least at a prosecutorial level.

BERMAN: And we have evidence that the Democrats know they have to be careful. They canceled public hearings they were going to have with Felix Sater over this. Now, they may get to him eventually, but you do not cancel those hearings today or tomorrow unless you are concerned about how it looks right now. So that was a clear political decision.

In the political sphere, Elie, I am fascinated by William Barr. Bill Barr in 48 hours has had a busy time, right? On the one hand, he's written this four-page memo. On the other hand, his Justice Department has moved, basically, to strike down Obamacare in its entirety; signing on and making clear that they approve of this Texas federal district judge who said Obamacare needs to go away immediately in this appeal. That's a big step.

HONIG: Yes. This is a big legal change. It's a change of course within an administration.

Look, it's normal when the entire administration changes for DOJ to change its position. But here, we're still within the same administration. The prior position that the Trump DOJ had taken was "This one piece may need to come out of the law, but the whole law, the entirety of the ACA can still stand without it."

And now the position is, "If this piece comes out, and it should, it should all collapse." So that's an enormous sea change. And I think it's really quite unusual for DOJ.

[06:25:04] CAMEROTA: Here's what Obamacare covers: 52 million people with pre-existing conditions, Jen. Twenty-seven percent of nonelderly adults have pre-existing conditions. And so legally, can those just -- can coverage just be stripped away from people?

RODGERS: Well, it depends. That's what we're going to find out.

I mean, one thing that's going to be interesting to watch is that, in the course of filing briefs, taking positions, when Jeff Sessions was the attorney general, they took positions, right, they took positions on what was legal, what was illegal, what was supported, what wasn't.

And now to say, "We disagree now. We think these cases don't say what we said they say," that's very hard to do. So it will be interesting to see how they try to thread that needle legally in their filings they're going to make now.

But ultimately, it will be up to, probably, the Supreme Court again to decide on these issues of severability.

AVLON: Those people -- that's a lot of collateral damage for a political and ideological fight, particularly when it contradicts the position that Republicans took during the campaign, over and over saying, "We want to protect pre-existing conditions, despite opposition to Obamacare."

This February 5, State of the Union, the president saying loudly, "I will protect people with pre-existing conditions." That apparent -- statement is apparently not operative anymore.

BERMAN: If you want to hear it say it --

AVLON: Yes.

BERMAN: -- he said it a couple of months before in Rochester, Minnesota, as well. Let's just listen to that.

(BEGIN VIDEO CLIP)

TRUMP: We will always protect Americans with pre-existing conditions. We're going to take care of them.

(END VIDEO CLIP)

BERMAN: No. Not if this appeals court in New Orleans sides with the administration, at least not for a time. I mean, if they were to strike it down, and the Supreme Court would agree, and that's by no means certain -- I mean, I know there are legal hurdles to go here -- but if that were to happen, there is nothing to replace it with.

AVLON: That's correct. And look, they have been trying to dismantle Obamacare by administrative action, because they failed to do so in the legislature, with John McCain's vote, which the president is still very sore about and brings up all the time. But they've been constantly trying to move the pieces so, like Jenga,

it all falls apart. This is a big move to go with the Texas court. It's a position the came out in -- the decision came out in December. They're just getting to it now, but it really is a form of policy arson.

CAMEROTA: John, Jen, Elie, thank you.

BERMAN: All right. Sandy Hook and Parkland grieving again. These communities that have already dealt with unimaginable pain now shaken by several deaths by suicide. This is really troubling. We're going to talk about it and talk about ways that people can deal with this and move forward, next.

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