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Trump Takes a Victory Lap Over Russia Hoax; Chicago Mayor Demands Smollett Pay $130K for Investigation Costs; Chicago Mayor, Trump Blast Dismissal of Smollett Charges; Trump Disavows Special Olympics Cuts After DeVos Defends Them; DeVos Reverses Course After Trump Orders Special Olympics Funding; New Details Emerge on Death of a 5th Grader After Fight at School; Cook County State's Attorney's Office: Prosecutor Kim Foxx Never Formally Recused Herself. Aired 9- 9:30a ET

Aired March 29, 2019 - 09:00   ET

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

[09:00:04] JIM SCIUTTO, CNN ANCHOR: A good Friday morning to you. I'm Jim Sciutto in New York.

Listen to this news, it's important. Stunning new details uncovered in the deadly crash of the Ethiopian Airlines jet. According to the "Wall Street Journal," preliminary findings show that a stall prevention feature automatically activated before that 737 MAX 8 jet crashed in Ethiopia. Now that is to believe the same sensor that likely brought down a Lion Air flight last October in Indonesia with the same Boeing aircraft. These findings are based on the data retrieved from Ethiopian Flight 302's black boxes.

CNN's Robyn Kriel joins me now from Addis Ababa, Ethiopia.

Robyn, this is a big deal. This of course had been the theory that both planes had similar issues. And now it appears that the initial evidence confirms that.

ROBYN KRIEL, CNN CORRESPONDENT: Well, indeed, Jim. And you can just imagine those terrifying moments for those pilots who would have been battling to try to trim the plane up, to keep the nose up and that MCAS system, if indeed as this report states, was faulty, likely trying to pull the nose down as it thought that its censor fault. But really a double-edged sword for Boeing because while it is good news that if there wasn't anything else wrong with this flight, it is very, very bad news that not one, Jim, but two planes as a result of this faulty system have now crashed, and another 157 people killed in the flight.

It happened here in -- just south of Addis Ababa, on the 10th of March, 35 different nations affected from America who lost eight lives, British, French, Kenyan and Ethiopian themselves.

The Ethiopian Airlines, Jim, have been in a high-level meeting with government officials. We understand they have not commented ever since the "Wall Street Journal" broke the news of this article. However, we have been speaking to them throughout the last two weeks and they have told us widely about the fact that the Boeing 737 that simulator that they had that we toured that in their manual there was nothing about the MCAS system. They also -- you know, we're quick to point out that their pilots trained extensively and have trained extensively on that simulator as well as six other simulators that they have there.

A terrible time here in Ethiopia. Ethiopian Airlines is really the crown jewel of this country. And basically the crown jewel of Africa. Enormous number of people travel on it across this continent.

SCIUTTO: Well, it has to be difficult news for those families to receive. Should more have been done before the second crash?

Robyn Kriel, thanks very much.

Let's speak now to David Soucie. He is a former FAA safety inspector. Also a CNN safety analyst, and he wrote "Malaysian Airlines Flight 370: Why It Disappeared and Why It's Only a Matter of Time Before This Happens Again."

David, it's always good to have you on to help walk us through this. So this is alarming on the face of it. Because prior to the second crash of the Ethiopian Airlines jet it had already been established that the MCAS system, this anti-stall system was a factor in the first crash. And now to be fair, and I have spoken to Boeing about this, Boeing did issue a directive. A sort of flight safety procedure for pilots prior to the second crash. But is it fair to say that that step was not sufficient to prevent the second crash?

DAVID SOUCIE, CNN SAFETY ANALYST: Yes, Jim, that's true. I mean, if indeed this is the same cause of the accident which, by the way, as an accident investigator is one of my worst nightmares to have to go to the same accident twice. Have to go to the first accident, look at that and then go to the second accident, see that it could have been prevented but wasn't. So just that side note.

I want to make sure people understand how just devastating this is for everyone involved and the families. But back to the issue is that, to have knowingly said, yes, we're going to do this but to have taken action, I think Boeing in the knowledge that was available to them at the time they believe and many others believe that they took appropriate action to try to prevent it. But obviously that didn't work.

SCIUTTO: Yes. And to be clear, and again, some of this requires putting in layman's terms. But what Boeing did and did -- what it did after the first crash, it issued guidance to operators for a procedure to respond to something like this. The FAA put out an air worthiness directive so that all pilots would therefore know about this. What it did not do, though, in that time period was upgrade the software. Change the software to prevent this from happening which is something they're working on now.

Is what they did sufficient? Clearly was not sufficient to prevent the second crash. But was it sufficient for what they knew at the time?

SOUCIE: I believe in past precedent. If you look at what they've done before when things are available and then not available as far as information to the pilots.

[09:05:08] It has been successful before. So to think that at that time making that decision, you know, no one can be in their shoes again at this point other than they did ground the aircraft now. So I think that it was in their minds at the time sufficient. Was it in my mind at the time sufficient? I'd have to say, yes, it was, too, because I was part of that thinking about it, talking with Boeing about it.

And thinking that, yes, I think that that's an appropriate measure to take to try to prevent another accident. But clearly all the information wasn't available. There were other failures, other possibilities that are just highly improbable to think that it would happen again like the AOA sensor failure again.

SCIUTTO: But let me ask you this, David Soucie. What about the FAA's role here? Because you of course worked for them before. You have deep experience. The FAA was behind a number of other countries that acted very quickly after the second crash. Finally came around. Why didn't the FAA err on the side of caution after the first crash to encourage bigger -- more aggressive steps? And does it make you question the strength of the FAA's oversight?

SOUCIE: It really does. Well, maybe not the strength because they certainly have the power to do this. They are powerful enough to do it. What it does bring into question is the judgment of the organization. Is the organization prepared to respond to these kind of immediate hazards and risks that endanger people's lives? Are they ready to say, hey, we think that there's a problem. We're going to err, like you said, on the side of safety and ground the aircraft and not let this happen until someone -- instead of someone proving to us that they need to be grounded,

SCIUTTO: Yes.

SOUCIE: Shift that paradigm. Prove to us that it doesn't need to be grounded, that it does need to continue to fly.

SCIUTTO: Yes.

SOUCIE: And that's the attitude shift that needs to occur in the regulatory agency.

SCIUTTO: Absolutely. Yes. No question. And God knows the company shouldn't be able to self-police on this. A lot of families. They deserve a lot of explanations here.

David Soucie, thanks very much. We're going to stay on top of the story.

In other news this morning it is yet another setback for President Trump's attempt to roll back and repeal Obamacare. Last night a federal court blocked a rule by this administration to try to get around standards put in place by the Affordable Care Act which of course was passed by Congress and is therefore law. It comes a day after a federal district court judge blocked the

administration's efforts to allow states to impose work requirements on Medicaid recipients. Now the president says a handful of Republican senators will come up with a completely new healthcare plan.

Joining us now live from the Justice Department, CNN justice correspondent Jessica Schneider.

That's a tall order as you know because Republicans spent eight years trying to do it. Didn't quite come up with a plan. Couldn't pass it. The president saying in a few months they're going to do it and with Democrats controlling the House.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Yes, that's the president's pledge at least. We'll see what happens in the months to come. But, you know, in the court, they are fighting Obamacare in the court because they haven't been able to come up with anything in Congress. So there really have been these handful of setbacks for the administration over the past week when it comes to their efforts to put these Obamacare roadblocks into place.

So last night a federal judge right here in D.C. struck down this rule from the Labor Department that really expanded so-called association health plans for small businesses. Now this was a rule that on its face made it easier for small businesses and those who were self- employed to band together to buy health insurance. But in the end the judge ruled that it really was a way to allow participants to avoid certain Obamacare regulations.

Now this was a rule that was finalized last June after an executive order from the president. Now the Justice Department after the judge struck this rule down reacted to it saying that the administration will continue to fight for sole proprietors and small businesses so that they can have the freedom to band together to obtain more affordable quality healthcare coverage.

And of course this was on top of that federal district court ruling on Wednesday that blocked the administration's efforts to impose work requirements for Medicaid recipients. So really the administration facing some tough setbacks in court, but, Jim, that of course was after it announced Monday that it will back litigation to strike down the Affordable Care Act in its entirety.

That representing a major shift for the Justice Department. So we're now seeing the administration take these fights to the courts. So far this week with these two rulings, though, they've unsuccessful to really run this end game around Obamacare -- Jim.

SCIUTTO: Yes. They tried a long time. No success.

Jessica Schneider, thanks very much.

Joining me now to discuss this and the president's first rally since the Mueller report was finished, he was talking about it a lot last night, CNN legal analyst Elie Honig, a former federal and state prosecutor, and CNN senior political analyst Ron Brownstein, senior editor at "The Atlantic."

Ron, let me begin first on healthcare if I can here because this surprised even Republicans. I spoke to a Republican senator yesterday.

[09:10:02] He said it surprised him. Now the president says that four or five senators are working on this dream replacement plan.

Is that a realistic option in the next several months to come up with something that's going to pass?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Yes -- well, no. That's (INAUDIBLE). And first of all, Jim, I mean, the president has already put his stamp on an alternative to Obamacare in their budget just a few weeks ago. They proposed repealing the ACA and replacing it with the block grant proposal that Lindsey Graham and Bill Cassidy offered during the end of the original repeal debate in 2017.

And they also proposed in the administration's budget to convert the underlying Medicaid program into a block grant, and then cut them both, Medicaid and the ACA by $775 billion over the next decade which of course would lead to loss of coverage for millions, perhaps tens of millions of people who are now currently have coverage as well as ending the protections for preexisting conditions.

That is all in the president's budget. It is striking that he is kind of asking them now to come up with something from scratch as if they did not already endorse a course of action. But all of this I think really kind of underscores one point that I believe that whatever Democrats come up with on their own healthcare proposal, and there is a lot of debate on the Democratic side, the president's desire -- continuing desire to repeal the ACA is going to be the healthcare proposal that has the most impact on the 2020 election.

It certainly was the key issue from a policy point of view for Democrats in 2018.

SCIUTTO: Yes. It's a funny path to take considering it was a key issue and a winning issue for Democrats in the midterms.

BROWNSTEIN: Yes.

SCIUTTO: Let's speak now about the Mueller report where it stands. And Elie Honig, the president, and you saw this at the rally, certainly wants to move on from this and says that he's been exonerated.

We learned yesterday the actual Mueller report is more than 300 pages.

ELIE HONIG, CNN LEGAL ANALYST: Yes.

SCIUTTO: We also know that in that report there's going to be evidence of obstruction of justice because Mueller said, he said he saw some evidence granted on both sides but he saw some evidence, and because of the language on collusion said did not establish collusion as opposed to saying there was absolutely no evidence of anything. Does this mean that if we get to see the full Mueller report we're going to see evidence of possible or alleged wrongdoing we didn't know about?

HONIG: I think that's a virtual certainty. And I think the longer that William Barr sits on this and fights it and resists, the more that the public sentiment is going to build. It was already strong. Right? We saw the reporting that something over 80 percent of the public wants and expects to see the full Mueller report. Remember, it was about a week ago we had that 420-0 vote in the House to disclose the whole thing. The battleground now -- first of all, yesterday's revelation that the report is over 300 pages.

SCIUTTO: Yes.

HONIG: We've seen 1 percent of that.

SCIUTTO: Yes.

HONIG: If that --

SCIUTTO: Four hundred words.

HONIG: Yes. I mean, I think people respond to that. People understand. You can't trust just a summary. You need to see the actual material. And we're going to see battles now over grand jury materials and executive privilege. So what that means is if and when we do see this report are we going to see the whole report or is it going to be riddled with holes?

SCIUTTO: Yes. Yes. Ron Brownstein, so that's a legal perspective.

BROWNSTEIN: Yes.

SCIUTTO: Reasonable. There is the politics of this, right. And you talked to a lot of folks. I talked to a lot of folks.

BROWNSTEIN: Yes.

SCIUTTO: They have run out of patience. Even folks who believed that the president committed criminal wrongdoing here. For Democrats, the president said last night the collusion illusion is over. As a practical matter, as a political matter for Democrats, is he right?

BROWNSTEIN: Well, look, I mean, Mueller ended his investigation without indicting anyone directly on the question of conspiring with Russia. And that I think is an outside limit on what Democrats can hope for in the underlying report. If and when, you know, the public sees the whole thing. But keeping it private, I would argue, is a very mixed bag at best for the administration.

On the one hand, it is allowing them to control the narrative at the outset and say, look, you know, we've been exonerated here even though the special counsel went out of his way to say he did not do that, on obstruction of justice. But when you look at the initial reaction and public opinion, both the CNN poll and the CBS poll showing only a small -- 40 percent, 43 percent in CNN and 34 percent in CBS, saying that it exonerated the president.

The fact is this is not moving public opinion. I mean, the public just does not buy the assumption that they should, in fact, come to a conclusion from a few words out of -- what is now evidence to be a 300-page report. If they in fact want to lift the cloud over the White House in public opinion, I would argue they have as much incentive to put it out, as Democrats have, to desire it to be put out.

SCIUTTO: But, you know, it's interesting the president's lawyers, Elie Honig, in the wake of all of this, the reporting has been -- a number of outlets -- that they considered it a great victory. That they prevented the president from having a live interview with Robert Mueller. They fought that and they won. Because they were worried he was going to commit perjury. That kind of, you know, thrown up obstacles, roadblocks thing worked on that. Maybe it works on this.

[09:15:06] HONIG: Yes, it's a question of legal tactics versus political tactics, right? I think they succeeded, I think it was a great victory for them to keep him out of Robert Mueller's interview room. But this is a different picture now. The subpoena and all that back and forth and sort of a technical legal issue that I don't know how much that resonates with the general public.

But when we're talking about a report that's sitting there, that everyone knows exists, that we are not being allowed to see, people are not going to tolerate that. I mean, think by an analogy of the Ken Starr report. What if --

SCIUTTO: Yes --

HONIG: That report had gone to Janet Reno and she sat --

SCIUTTO: Yes --

HONIG: And she said, I have this report --

SCIUTTO: Yes --

HONIG: It's the Ken Starr report, you can't see it, but here is my four-page distillation of it --

SCIUTTO: Yes --

HONIG: And by the way, I'm concluding no obstruction.

SCIUTTO: Yes --

HONIG: That would not have flown at all if this really --

SCIUTTO: If principles survived in Washington, maybe, but --

HONIG: Yes --

SCIUTTO: We both know where that went. Ron, Elie, Ron, thanks very much, Elie is going to stay with us, we've got some follow-up questions for him. Other news we're following this morning, Chicago demanding that Jussie Smollett pay up. The city now asking for $130,000 for the cost of the investigation.

This as the office for the top prosecutor in Chicago says that Kim Foxx did not formally recuse herself from the probe. That's key because she was communicating with members of Smollett's family.

Plus, is the funding fight over the Special Olympics really over? The president says he has, quote, "overridden his people to block $18 million in proposed cuts." And hundreds gather during a vigil for a 5th grader who died after a fight in her elementary school. We're getting more details about what happened there, there she is, stay with us.

[09:20:00] (COMMERCIAL BREAK)

SCIUTTO: There are new details unfolding this morning in the Jussie Smollett case. Now, the Cook County state's attorney's office says that its top prosecutor Kim Foxx did not actually, formally recuse herself from the investigation. That's key because she -- well, had some text messages with members of Smollett's family in the midst of this.

Instead, she separated herself from decision-making out of an abundance of caution, not quite the same thing as recusal. Meanwhile, the Illinois Prosecutors Bar Association says the manner in which the Smollett case was dismissed was abnormal and unfamiliar to those who practice law across the entire state.

CNN correspondent Ryan Young is following these developments. Ryan, I mean, you know, from the beginning, an embarrassing episode for a whole host of folks in Chicago. What's happening here and what's going to happen next?

RYAN YOUNG, CNN NATIONAL CORRESPONDENT: Yes, absolutely. I think some of this is just sort of playing out now in front of all of us and sort of -- we have to sort of pick up the pieces to figure out what's going to happen next. First things first when you deal with that recusal, not recusal.

Basically, they're saying they provided the oversight to the second person in charge here, and that, that person was handling the case out of abundance of caution. Well, when you go from there, everything was sort of being played out in the public to such a point where now everybody was wondering why would you make -- whether it's called a deal, whether you had this discretion.

Why didn't that happen in the public eye as well. They've been trying to explain that over and over again. But if you take that out of the consideration, just think about this, those 16 counts disappeared. People are upset about it, both the mayor and the president of the United States started talking about the idea that they want to see Jussie pay for something.

And then on top of that, the mayor goes forward with the idea that he wants Jussie Smollett to pay back to the city $130,000. In fact, listen to this sound from an impassioned mayor.

(BEGIN VIDEO CLIP)

MAYOR RAHM EMANUEL, CHICAGO, ILLINOIS: Given that he doesn't feel any sense of contrition and remorse, my recommendation is when he writes the check in the memo section, he can put the words "I'm accountable for the hoax".

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He said he was attacked by maga country, do you ever hear that one?

(BOOING)

Maga country. Maybe the only time I've ever agreed with the mayor of Chicago.

(END VIDEO CLIP)

YOUNG: Jim, you and I have been talking about this for quite some time. Maybe the two people who helped fill in all the blanks in this case are the Olson Darrell brothers, their attorney was on Don Lemon's show last night and basically said this whole thing was a publicity stunt to start with.

So the idea of white face or any of the things that Smollett's team were talking about yesterday, she found that to be quite crazy and it felt like the reason why this kind of came to an end is because the Olson Darrell brothers felt so bad about all the publicity the case was getting. So more twists and turns, Jim, every single day, it --

SCIUTTO: Yes --

YOUNG: Seems like something new.

SCIUTTO: Yes, every one of them embarrassing as well. Ryan Young, thanks very much. Elie Honig back to join me again. So, you know, it feels there's like a make-up attempt here, right? You know, the mayor saying, well, OK, we didn't charge him so let's make him pay for the investigation.

I mean, if he went through the legal process, is this a -- is this a, you know, legitimate way to punish --

HONIG: No --

SCIUTTO: Someone?

HONIG: This is a stunt. Sending somebody a bill for the cost of the investigation is not a thing that exists in our laws or procedures. The way it works is, if and when somebody gets convicted, and Jussie Smollett, think whatever you will of him, his story has not been convicted of anything, then the court can impose restitution or fines or forfeiture.

But sending him a bill for $130,000 --

SCIUTTO: Yes --

HONIG: That's a political stunt straight up.

SCIUTTO: OK, so, the other political stunt is of course the president getting involved in this --

HONIG: Yes --

SCIUTTO: It's red meat for his supporters here. So set that aside what he says at the rallies. But he appears to be pushing the Justice Department to do its own investigation here.

HONIG: Yes --

SCIUTTO: Do they have potential to charge him on federal law?

HONIG: So two things, yes, there are potential federal hooks here. This could be a federally chargeable mail fraud or wire fraud. If there is a scheme to defraud, a hoax basically, and the purpose is to get money from somebody else, and here, one of the theories is Smollett was trying to get more salary out of "Fox" or the show "Empire", and they used some sort of interstate wire, meaning any text, any phone call, it's very easy to get that.

That is a federal crime. And federal crimes like that do get charged. So, to me, it's quite possible that if the Feds investigate this, there could be federal charges against Smollett and the two brothers. That said, this notion of the president sort of deploying the Department of Justice --

SCIUTTO: Yes --

[09:25:00] HONIG: To chase down things that he finds personally or politically objectionable, I think it's really problematic. And it seems he may be emboldened to do that. DOJ needs to be left alone --

SCIUTTO: Absolutely --

HONIG: And separate.

SCIUTTO: He's been doing it for two years --

HONIG: Yes --

SCIUTTO: Got off the hook on obstruction of justice, it's safe to say he's going to keep it up.

HONIG: Well, and I wonder if he's emboldened now.

SCIUTTO: Yes, if I had to bet money, I would.

HONIG: Yes --

SCIUTTO: Elie Honig, thanks very much. Betsy DeVos about to speak in just moments, just hours after her boss seemed to throw her under the bus over proposed budget cuts to Special Olympics funding. Will she address the controversy? We're going to stay on top of it and we will bring it to you.

(COMMERCIAL BREAK)

SCIUTTO: Moments from now, Education Secretary Betsy DeVos speaks at an event as she looks to move past, if she can, the controversy over proposed cuts to, of all things, the Special Olympics. DeVos sparked backlash as she spent days defending a plan to slash nearly $18 million in federal funds from the Olympics.

The Education Secretary is now reversing course after the president publicly disavowed the move and ordered the special Olympics get the money.