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Deputy Attorney General Rod Rosenstein Defends Handling of Russia Probe; Christopher Wray: Russia Poses "Very Significant Counterintelligence Threat"; A Federal Judge Says a Coast Guard Lieutenant Accused of Terror Plot May Be Released Before His Trial. Aired 9-9:30a ET

Aired April 26, 2019 - 09:00   ET


[09:00:11] JIM SCIUTTO, CNN ANCHOR: Breaking news this hour, new signs of a growing and healthy American economy. I'm Jim Sciutto. Poppy has the day off today.

New numbers released just moments ago show 3.2 percent growth in the first quarter smashing the expectations.

Joining me now to discuss, CNN Business correspondent Alison Kosik, as well as Catherine Rampell, CNN political commentator and opinion columnist for the "Washington Post."

First to you, Alison, the numbers here, I mean, truly remarkable in that the government was shut down for most of the first third of this quarter.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, for about a third of the quarter, we saw the government shut down. Apparently it didn't have any impact on economic growth with economic growth showing a 3.2 percent increase for the first three months. January, February, March. In fact, this is the first -- this is the strongest showing for the start of a year in six years. We usually don't see first quarter growth this strong.

Why did we see it? It was powered by a strong business investment, an increase in U.S. exports, a decrease in imports, meaning we bought less from other countries. We also saw an increase in consumer spending as well. And this was really surprising because what we also saw was in the fourth quarter and then into the first part of the first quarter, we saw a big drop off of consumer spending but then it bounced back.

Retail sales numbers were strong in March. So we knew the consumer came back. But that was despite this historic government shutdown. But you have to remember, that productivity that we lost during that government shutdown, you can't get that back.

SCIUTTO: OK. Interest rates. How do they factor in? Because, of course, the president has been involved in a very public battle with the Federal Reserve, almost browbeating the Fed into changing its interest rate outlook to help sustain economic growth. Of course with political implications. A factor? KOSIK: Yes, I mean, all of this is a factor. I mean, you look at

sort of the roll back the calendar into December, the worst December that we've seen since the Great Depression. We saw financial markets, you know, really going into bear territory. And then we saw them bounce back, so what we saw was the confidence kind of disappear and then bounce back.

So when you see the Fed lowering interest rates, kind of greasing the skits for the economy to move forward, that creates more confidence because then you see businesses doing more investing, when interest rates are lower, and people who have portfolios who are invested in the stock market, they see their portfolios go up. That increases confidence, that helps them go out and spend money and help that consumer confidence.

SCIUTTO: Mortgage rates for you and me as well.

Catherine, listen, we're a year and a half out from an election year, but the economic cycle certainly has political implications. The president has not reacted to these numbers yet. I'm sure the tweet is coming soon.


SCIUTTO: These are good numbers for the Trump administration.

RAMPELL: I mean, I would say more generally they're good numbers for America. Right? We want a strong economy. There are some warning signs within this report, the headline number looks a lot stronger than the underlying numbers, as you pointed out. Inventory growth, a shrinking trade deficit. Those were among the bigger drivers of this and those are likely to be temporary.

So we might see a pullback next quarter which would be not as great for the economy, not as great for Trump's reelection chances, but yes, I mean, generally speaking, a strong economy helps the incumbent. So I would not be surprised if we see Trump going on TV and touting these numbers.

Of course, the extent to which he would brag about these numbers could be intentioned with his claims that the Fed is slowing down the economy and needs to cut rates.

SCIUTTO: One percent above -- I mean, how often do we see that much of an overshot of expectations?

KOSIK: Well, for the first quarter, expectations are usually much lower. For the first quarter of this year, it was around 2 percent, 2.1 percent.

SCIUTTO: 2.1 percent.

KOSIK: And we usually see a first quarter GDP lower than the other quarters because there's often weather, there's often, you know, a slowdown in consumer spending after everybody is kind of juiced up for the holidays. We're just not seeing that in this first quarter. We're seeing, you know, exports really powering this and the business investment and consumer spending.

RAMPELL: But we did see a moderation in consumer spending. We did see a moderation in business investment. Those are the things that are likely to have more forward looking implications, I would say, than again some of these more temporary factors --

KOSIK: Right. Especially --

RAMPELL: Like inventory buildup.

KOSIK: Especially as we see the benefits of the Trump tax cuts really kick in.


KOSIK: Really drop off, I mean. You're not going to see the economy as juiced up otherwise.

SCIUTTO: As always watch the trend, right?

KOSIK: Right. Yes.

SCIUTTO: And see how those --

KOSIK: Yes. The numbers are volatile. Yes.

SCIUTTO: Catherine, Alison, thanks very much. Always good to have you both on.

Any minute now, President Trump due to step out of the White House for a speech at an NRA event in Indianapolis. He usually stops to take a few questions on the South Lawn. Wouldn't be surprised, particularly with these economic numbers out.

There will certainly be questions on his newest competition in 2020 whom he described overnight as, and I quote, "not the brightest light bulb" whom aides say that Mr. Trump is genuinely worried about as a threat to his reelection.

His name, of course, Joe Biden. And perhaps proving that he is the Democrats' frontrunner, within hours of jumping into the race, the former seven-term senator and two-term vice president also came under fire from his fellow Democratic contenders.

[09:05:08] Bernie Sanders slammed Biden's decision to fundraise at the home of a Comcast executive on day one. Elizabeth Warren, also in this pack, reprised an old attack on Biden's past support for credit card companies.

CNN's Arlette Saenz joins me now. Arlette, you've been covering Biden for some time. I understand we're going to hear from Biden this morning as well, his first television interview as a 2020 candidate.

ARLETTE SAENZ, CNN POLITICAL REPORTER: That's right, Jim. In just a few hours, Joe Biden is going to be making an appearance on "The View." Of course, he has a very close personal relationship with Meghan McCain that has been forged over the years, as her father battled brain cancer, the same type of cancer that Biden's own son Beau Biden passed away from in 2015.

But yesterday right out of the gate, you heard Joe Biden try to focus this campaign as a rebuke of President Trump. Specifically pointing to those clashes in Charlottesville, and the president's response say at there are very fine people on both sides. Biden framed this campaign as a battle for the soul of the nation and warned that if Trump is re-elected, that the nation's character will fundamentally be at stake.

Now yesterday, we saw him in his home state -- hometown of Delaware. He rode the train up there and then grabbed some pizza with some folks. And then last night, I was actually at a fundraiser in Philadelphia where Biden was trying to raise money in that first critical 24-hour period, and I want to read you a quote from last night. Biden was telling the crowd that he was very excited to be in this race, and then made this promise to always be honest and always say what he means.

And he referenced this little kind of joke that he makes about himself sometimes. He said, "No one ever doubts I mean what I say. Sometimes I say all that I mean. But I make no apologies, none."

Now we're going to be waiting over the course of next few hours to see how much money Joe Biden raised in that first 24-hour period and we'll see what the campaign tells us about that -- Jim.

SCIUTTO: And perhaps drawing a contrast with President Trump as well, talking about truth telling there.

Listen, it was an eventful 24 hours for the former vice president, including some controversies, Anita Hill among them. Tell us how the campaign is reacting to that.

SAENZ: Well, we learned of a phone call that took place between the former vice president and Anita Hill. You'll remember that he chaired the Senate Judiciary Committee back in 1991 when Anita Hill testified and accused the Supreme Court nominee at the time, Clarence Thomas, of sexual harassment.

And yesterday, our colleague Brianna Keilar asked the deputy campaign manager if the two of them had in fact spoke and that's when we found out that Biden did recently speak with Anita Hill, and later, a spokesperson told me that the former vice president expressed regret for what she endured during that hearing. But then Anita Hill gave an interview to "The New York Times" where she described her feelings on the interview.

And I want to read you a quote from that. She said, "I cannot be satisfied by simply saying I'm sorry for what happened to you. I will be satisfied when I know there is real change and real accountability and real purpose." Anita Hill said that she is not prepared to support Biden unless he acknowledges his actions during that hearing. Maybe on "The View" we could potentially hear from Biden a little bit more if the hosts decide to press him on that topic. But we've also learned about another phone call that he had just

yesterday with the mother of Heather Heyer. I wanted you to listen to Susan Bro and what she had to say about him using Charlottesville in his announcement.


SUSAN BRO, MOTHER OF HEATHER HEYER: I guess I'm not surprised. It seems like Charlottesville has been a defining moment for a lot of people. I don't think we've seen him in town. I don't think he's ever been here or maybe he has in the past. I don't know. It was just sort of a feeling of, well, here we go again.


SAENZ: That moment in Charlottesville driving so much of the vice president's message in the first 24 hours of the campaign. I expect to hear more of that from him in the coming days -- Jim.

SCIUTTO: Arlette Saenz, on the campaign, thanks very much.

Let's speak now to Molly Ball from "TIME" magazine and Astead Herndon from "The Washington Post." Both are CNN political analysts.

Molly, we've been waiting for weeks for Biden to join the race. Presumably he's in now. Rate his first 27 hours in.

MOLLY BALL, CNN POLITICAL ANALYST: I am going to give it a wait and see, I guess. I don't think we're going to know whether this went well for him until we start to see how Democratic primary voters are actually reacting. And until we see whether he's hitting those fundraising targets that he himself has said are so important to show firepower, to show viability in the race. He has very much an above- the-fray strategy and he wants to come on strong and look like a frontrunner.

[09:10:02] But I think at the risk of this being a bit of a cop-out of an answer, we're not going to know until some of those numbers come in and until we start getting reactions from the actual voter base how successful he's been in projecting himself into that role.

I think there's two possible scenarios here, right?


BALL: One is that his frontrunner status was all based on name I.D. and as soon as he starts getting out there and people actually experienced him in person, the air goes out of the balloon. The other is the opposite, that that was his floor and he keeps going up and up as Democratic voters like what they see.


BALL: We just don't know at this point.

SCIUTTO: Listen, it's a marathon, not a sprint, and many months from now, we probably won't remember these 24 hours.

Astead, Warren and Sanders, they both went after Biden very quickly here. Do those early attacks from his Democratic primary opponents confirm that he's the effective Democratic frontrunner here, he's the man to beat?

ASTEAD HERNDON, CNN POLITICAL ANALYST: Well, I think it means two things. I think that Senator Warren and Senator Sanders are comfortable going after Joe Biden, partly because of that frontrunner status. We've seen the Democratic field largely abstain from attacking each other directly and clearly. That rule does not apply to the former vice president. But I also think he represents a different type of Democrat that those two candidates in particular are trying to run against.

Their whole kind of ethos, the message of their campaign, is about a new progressive Democrat that's free of so-called corporate interests and ties to Wall Street. So when the former vice president starts his campaign with a fundraiser at the head of Comcast, that's red meat for them. That's what their whole campaign is about, that Democrats for too long have been tied to those interests and for too long that has stopped come in the way of progress and the kind of avatar for that in this race at least will be the former vice president.

SCIUTTO: Right, they're trying to draw distinctions there to help appeal to certain voters in that Democratic primary field.

Molly, the president as well, zeroing his attention on Biden. CNN's reporting that in private, the president has been asking a lot of questions about him. That he sees him as his most difficult challenger, particularly in those swing states such as Pennsylvania. How big a worry is a Biden candidacy for Trump?

BALL: You know, we've been hearing literally for years from the president and his campaign advisers that Biden was the candidate who worried them most. If anything, that may have encouraged him, right? Even the Republicans think that Biden is the most electable candidate, that certainly gives him a good rationale for running.

You know, the president isn't necessarily being very strategic here. He runs the risk of elevating Biden among the Democratic electorate by ratifying the frame that Biden has put on the race which is that it's him versus Trump. That he doesn't really have to engage with the rest of the Democratic candidates because he has his sights set on Trump, he has his sights set on the general election.

That was his message in his introductory video. And I think the more he can make this as sort of mano-a-mano, the better he looks.

SCIUTTO: Right. Final question, Astead, the commonality between the issues Biden has faced both prior to his announcement and in the last 24 hours is really women, right? The Anita Hill question, how she was treated in those hearings, Clarence Thomas in 1991, but also these questions about women who felt uncomfortable with him in personal situations, physical space, et cetera. How big a concern is that for him in the Democratic race right now, particularly when you have a very diverse field with a lot of women in that race?

HERNDON: It's certainly a concern. I mean, the vice president has tried to put these issues kind of behind him by reaching out to Anita Hill, by making the statements that are carefully worded, kind of apology adjacent statements but don't actually admit direct fault. And that shows a sign he wants to -- he wants to kind of have it both ways.

He, again, is trying to project that image that this is the Joe Biden who does not apologize, who says what he means, who stands for while at the same time trying to adapt to the new Democratic Party where some of these questions are getting looked at anew. But this might be a real electoral concern.

Let's remember that part of the path for Joe Biden goes through African-American voters that may have a fond feeling about him post the Obama presidency. And if those voters are swayed but the images of the Anita Hill or the feeling that maybe the president -- the former vice president doing things like the crime bill and the like is not taking responsibility for his actions and other Democratic candidates can put that message in front of those voters and chip away at that support, then the path for Joe Biden becomes a lot more narrow.

SCIUTTO: Right. We'll see.

HERNDON: And so this is going to be something that he has to look at not only with women or people of color and there will be a question like Molly said whether that name recognition is something that is fixed or has the ability to erode.

SCIUTTO: Right. Apology adjacent. Did you just coin that? I want to give credit where credit is due?


HERNDON: I'll take it.

SCIUTTO: I'm going to credit you. Apology adjacent.

Molly Ball, Astead Herndon of "The New York Times," thanks very much.

BALL: Thank you.


SCIUTTO: Still to come, acting deputy Attorney General Rod Rosenstein speaking out, defending his handling of the Russia investigation, at the same time, taking some swipes at the Obama administration's handling of Russian interference. We're going to dig into that next.

Plus, prosecutors say that a coast guard lieutenant planned to kill prominent journalists including those working at this network and Democratic politicians and Supreme Court justices. So how could this accused white supremacist be set free? And did North Korea give the United States a $2 million medical bill

as a condition for the release of the American prisoner, Otto Warmbier? We'll have more on that coming up.


SCIUTTO: Deputy Attorney General Rod Rosenstein slamming critics and defending the Justice Department's handling of the Mueller investigation. During an event Thursday evening, Rosenstein also took shots at the Obama administration for how it handled information about Russian hacking efforts during the campaign.

[09:20:00] CNN Justice reporter Laura Jarrett joins me now from the Justice Department. Laura, a strong defense of his own handling, taking some shots at the Obama administration, quoting President Trump. Interesting comments from the outgoing deputy Attorney General.

LAURA JARRETT, CNN JUSTICE REPORTER: Yes, Jim, it was really Rosenstein unleashed. It was an event honoring his 30-year career at the Justice Department. By the Armenian Bar Association, and he spent the better part of 25 minutes certainly getting things off his chest for the past two years on handling of the Mueller investigation in particular, a vigorous defense of his own oversight of that probe. Take a listen to what he said on that issue.


ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL: I did pledge to do it right, and to take it to the appropriate conclusion. I did not promise to report all results to the public because as my fellow U.S. attorneys know well, grand jury investigations are ex-party proceedings. It's not our job to render conclusive factual findings. We just decide whether it's appropriate to file criminal charges.


JARRETT: Obviously, making a reference there to special counsel Robert Mueller's report, which did not reach a conclusion on obstruction of justice, an issue that has been hotly debated since the report came out last week.

He also went on to really throw James Comey; the former FBI director under the bus for revealing the counterintelligence investigation into President Trump and the campaign in the early days of 2016, saying the Obama administration didn't tell the full story.

And then on a personal note, he also talked about stories that he referenced when he got emotional and so-called angry. And he said, heck yes, wouldn't you? And then finally, he talked about his own expression at the Barr press conference last week when he looked sort of deadpan, and he said, can you imagine if I didn't look deadpan.

Of course, a lot of speculation about when Rosenstein will finally leave as the number two at the department, no firm date on that, but sometime next month, Jim. SCIUTTO: Laura Jarrett, thanks very much for a reaction. Let's speak now to former director of Communications for the U.S. National Intelligence, Shawn Turner, where of course worked under director of National Intelligence James Clapper. Shawn, always good to have you on.


SCIUTTO: So react, if you can, to his criticism of the Obama administration for not going more public with its findings on Russian interference prior to the 2016 election. It's my own reporting that there was actually a debate inside the administration as to how public to go. Do you think that's fair criticism?

TURNER: Well, look, I do think there is a fair criticism there, but I think it's also difficult to be critical when you weren't in that situation. When we found out in the intelligence community that Russia was taking these kind of more extensive and more detailed actions to interfere in our election, the Obama administration had a tough decision to make.

You're getting all this information, and it's unlike anything we'd ever seen before. And as the former president has said himself, you know, there was this question of whether or not you go to the public with this information and appear to be putting your thumb on the scale in favor of Hillary Clinton.

Or whether or not, you continue to monitor the situation to determine whether or not, this is a much larger and ongoing campaign. And there was a period of time, undoubtedly, in which those debates were happening inside the Obama administration.

And now, that said, there came a period of time as well when the president determined that he needed to take action, and he needed to deal directly with Vladimir Putin and the Russians. And as you've reported and others, he certainly did that through direct communication with the Russians.

SCIUTTO: Rosenstein took another shot, not at the Obama administration, but at James Comey on a couple of fronts. One, for briefing Congress that a counterintelligence investigation was under way. I'm curious if you believe the FBI director has a duty to inform Congress of that. But it seems that in that criticism, he was also implying that Comey and others in the Obama administration at the time were leaking information about this out there unduly.

TURNER: Yes --

SCIUTTO: What's your response to that?

TURNER: Yes, first of all, on your first point, James Comey absolutely had a responsibility to let members of Congress know that this investigation was under way. Look, we're talking about a candidate for the presidency of the United States. We're talking about a serious counterintelligence issue that possibly

involved American citizens who were working on the campaign. So, you simply could not have conducted that investigation and kept it private without letting members of Congress know.

Now, I do think that, you know, there's some room for criticizing Jim Comey for some of the decisions he made. Certainly, Rod Rosenstein worked with him on a daily basis, and so he knows the inside baseball. But with regard to leaks of information, you know, it's just unclear where that information comes from. And it's always easy to talk about where we think it comes from, but we just really don't know.

SCIUTTO: Yes, and you can imagine the outrage had Comey not let Congress know --

TURNER: Absolutely --

[09:25:00] SCIUTTO: You kind of want -- you can't win. I want to ask you, because just this morning, the director of the FBI, the current director of course, Christopher Wray, he was asked about Robert Mueller's characterization of Russian interference in the 2016 election. I'm going to play his comments and get your reaction.


UNIDENTIFIED MALE: Special counsel Mr. Mueller, who described Russian interference in the 2016 election used his phrase "sweeping and systematic." Is that a view you subscribe to?

CHRISTOPHER WRAY, DIRECTOR, FBI: Well, I think everybody has their own adjectives. I do think that Russia poses a very significant counterintelligence threat certainly in the cyber arena. Certainly what we call the malign foreign influence territory. Certainly in their presence of intelligence officers in this country. So in a lot of ways, yes.


SCIUTTO: Agreeing, it's sweeping --

TURNER: Yes --

SCIUTTO: How damaging is it that those are words and a characterization the president won't and has not used?

TURNER: Look, I think it's extremely damaging, and it is consistent with kind of what we've seen out of this president in the past, but I got to say, Jim, I'm concerned about even our most senior national security officials not being even more forthcoming and using, you know, stronger language with regards to the threat from Russia.

You know, I still -- I'm still very close to many of my former colleagues in the intelligence community, certainly those who helped protect the 2018 midterm elections, and who are working on 2020. And I will tell you that when they talk about the challenge that they're facing, and the threat from Russia, and not just from Russia, but from potentially other countries, it is sweeping. It is significant.

And it is a major challenge that we are trying every day to figure out how to deal with. So I want to hear our national security officials and the president, and the president's national security team, talking about this in ways that clearly communicate to the American people that this is a serious issue, that it is a national security threat, and that they are prioritizing this to make sure --


TURNER: That our elections are safe.

SCIUTTO: Yes, one thing Republicans and Democrats in national security have agreed telling me is that, this needs a whole of government response, which requires leadership from the top.

TURNER: Absolutely --

SCIUTTO: Shawn Turner, thanks very much.

TURNER: Thanks, Jim.

SCIUTTO: A judge -- and this is almost unbelievable, may release a coast guard officer accused of plotting a domestic terror attack. The conditions of that release, the implications. Why will he be set free? That's coming up.