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Access to the Mueller Report; McConnell Says Case Closed; FBI Chief Knocks Down Term Spying; Mike Pompeo Cancels Meeting; Trump Startles Businesses with Tariff Threats. Aired 1-1:30p ET

Aired May 7, 2019 - 13:00   ET

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


[13:00:00] JOHN KING, CNN ANCHOR: Election say for president, just say, maybe, down the road, somewhere. We shall see. It's an interesting choice. It's a fascinating choice, actually, especially she'll get some advice from her father, you can count on that.

Phil Mattingly live on The Hill. Appreciate it.

Thanks for joining us on INSIDE POLITICS. See you back here this time tomorrow.

Don't go anywhere. A busy news day. Brianna Keilar starts right now. Have a good day.

BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar, live from CNN's Washington headquarters.

Underway right now, a fast moving war of words. Democrats pouncing on Mitch McConnell's insistence that the Mueller report is a closed case, but the Republican leader left out one key word.

Where in the world is Mike Pompeo. The secretary of state standing up Germany's Angela Merkel to take a mysterious trip as tensions with Iran escalate.

Plus, the attorney general sparked a firestorm by saying the FBI spied on the Trump campaign, but now the actual head of the FBI knocking down that theory.

And, we're freaked, the words of American business owners startled by the president's threats against China as the tone suddenly changes in trade talks.

Up first, deadlines and defiance. President Trump ignoring demands by congressional Democrats for access to witnesses and to documents. House Speaker Nancy Pelosi says the president is trying to provoke Democrats.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA): Don't tell anybody I told you this. Trump -- I'll use his name, OK. Trump is goading us to impeach him. That's what he's doing. Every single day he's just like taunting, taunting, taunting, because he knows that it would be very divisive in the country, but he doesn't really care. He just wants to solidify his base.

We can't impeach him for political reasons and we can't not impeach him for political reasons.

(END VIDEO CLIP)

KEILAR: In the meantime, House Judiciary Committee Chairman Jerry Nadler's staff was meeting with Justice Department officials to try and reach an agreement on congressional access to the Mueller report. This is an effort to avoid a contempt of Congress vote against Attorney General William Barr, which is set for tomorrow. Barr is refusing to hand over the un-redacted version of the Mueller report and the underlying evidence.

CNN political analyst and "Washington Post" congressional reporter Rachael Bade is on Capitol Hill for us.

Does it look like they will reach an agreement on this, Rachael?

RACHAEL BADE, CNN POLITICAL ANALYST: I'm very skeptical on that, but even if they do, I would expect it would just be a delay of this inevitable contempt citation.

Look, last week the Justice Department, in a letter to the committee, said that their requesting for the full un-redacted Mueller report was not, quote, legitimate oversight. And so there's a fundamental disagreement between the Justice Department and House Democrats about whether or not the House should be sort of re-litigating all these findings that Mueller put out a few weeks ago. And so the House wants to bring in all these people, these witnesses. They want to go through these documents, look at the underlying evidence and sort of hash out this question of whether the president obstructed justice since Mueller did not make a decision on that. But the DOJ says that that would be basically bad for the country, and they don't want them to do that.

So even if they reached some sort of accord, it's going to be at most a delay of this inevitable contempt citation, I would say.

KEILAR: And the former counsel for the White House, Don McGahn, is -- he also faced a deadline today to turn over documents or to face a contempt of Congress vote. Where do things stand on that one?

BADE: So the White House has signaled that they're going to be asserting executive privilege and basically barring Don McGahn from complying with this congressional subpoena. And, you know, it's interesting because a lot of lawyers are telling me that they basically waived executive privilege when they allowed McGahn to testify before Mueller for the Russia investigation. As you know, McGahn was one of the central witnesses on obstruction of justice, potential obstruction of justice, when it came to the president's actions.

And so, you know, Democrats are going to argue that the White House waived executive privilege. The White House is going to say, no, we didn't. And ultimately, like all of these legal battles, it's going to end up in the court, and probably again with another contempt citation.

We're not there yet, but, you know, give it a couple of weeks and everything's going to be locked up in the courts.

KEILAR: All right, Rachael Bade, thank you for that update from Capitol Hill.

It's time to move on. That is the message delivered today by Senate Majority Leader Mitch McConnell on the Mueller investigation.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY): This investigation went on for two years. It's finally over. Many Americans were waiting to see how their elected officials would respond.

Would we finally be able to move on from partisan paralysis and breathless conspiracy theorizing, or would we remain consumed by unhinged partisanship and keep dividing ourselves to the point that Putin and his agents need only stand on the sidelines and watch us as their job is actually done for them. Regrettably the answer is pretty obvious.

(END VIDEO CLIP)

[13:05:12] KEILAR: Democrats, of course, don't see it that way. Here's the Senate Minority Leader Chuck Schumer.

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER (D-NY): So our leader says, let's move on. It's sort of like Richard Nixon saying let's move on at the height of the investigation of his wrongdoing. Of course he wants to move on. He wants to cover up. He wants to silence on one of the most serious issues we face, whether a foreign power can manipulate our elections, the well spring of our democracy.

He doesn't want to the move on. He wants to run away.

SEN. ELIZABETH WARREN (D-MA), PRESIDENTIAL CANDIDATE: Will Congress do its job and fulfill its constitutional duty to serve as a check on the president? The answer from the majority leader and his Republican colleagues is, no. Case closed, case closed, they cry. Instead of reading the words of the special counsel's report, they just want to circle the wagons around this president. Instead of protecting the Constitution, they want to protect the president.

(END VIDEO CLIP)

KEILAR: Now, McConnell also criticized the Obama administration, blaming them for Russian interference in the 2016 election.

(BEGIN VIDEO CLIP)

MCCONNELL: Maybe stronger leadership would have left the Kremlin less emboldened. Maybe tampering with our democracy wouldn't have seemed so very tempting. Instead, the previous administration sent the Kremlin the signal they could get away with almost anything.

(END VIDEO CLIP)

KEILAR: Chris Cillizza joining us now.

And, Chris, President Obama, to be sure, was cautious about being vocal that unprecedented Russian interference was happening in the election. He was afraid that doing so would look like he was trying to help Clinton. But McConnell wasn't exactly part of the solution when it comes to that.

CHRIS CILLIZZA, CNN POLITICS REPORTER: No.

KEILAR: And also he didn't even mention obstruction when he spoke today on the Senate floor.

CILLIZZA: Yes, that's exactly right.

Look, the not collusion piece is borne out in the Mueller report. No provable collusion. The obstruction piece, I think, is very much still an open question.

And just one more piece of context before we jump into this meeting, Brianna. Remember that during the 2016 campaign, we were already dealing with an active investigation into Hillary Clinton and the e- mails. I mean we already had so much going on. Obama's wariness does make, I think, some sense in the context.

But let's talk about McConnell here. OK, in September of 2016, there is a briefing that we only know about in retrospect in which a number of people, Department of Homeland Security Secretary Jeh Johnson, James Comey, the former at the time FBI director, they come to Capitol Hill and meet with top leaders, including Mitch McConnell, on this concern about Russia.

Now, what happens in that meeting? Well, we know, again from CNN's reporting and others, McConnell actively questions the underlying intelligence that suggests Russian interference in the election. Now, a reminder, the -- the counterintelligence operation begins in July of 2016, Brianna, so it's not -- we're not two years on, right? This was the early stage of it. McConnell questions that and says, anything that is stated comes out publically here is going to look partisan, and he opposes it. But he doesn't just do that.

Let's go to the next slide. He also blocks the must fulsome statement that could be given about this. There were some in the room, including administration officials, who wanted to say, Russia is doing this, they need to stop. A public statement with this -- with the force of all top congressional leaders and the White House behind it.

McConnell blocks that most aggressive statement, putting it on Russia, and instead congressional leaders issue a statement basically telling election officials in every state to be wary of the sort of broad- based threats. Now, the next month the Obama administration comes out in October and says, look, there's a threat from Russia happening. But for Mitch McConnell -- and Donald Trump does this too -- to put

all of this on the Obama administration and say, well, we were advocating for this all to come out at the point -- at that moment, it misses what our reporting suggests was happening at that point with Mitch McConnell being at least something of a hurdle to the desire to inform the public on all this.

Brianna, back to you.

KEILAR: Yes, certainly did. And as you mentioned, that October statement, I think it happened the same day as the "Access Hollywood" tape and the dump of Podesta e-mails. So it didn't quite push through either.

Chris Cillizza, thank you so much.

CILLIZZA: Thank you.

KEILAR: It's very important to know all of these facts about this as we look into this.

FBI Director Christopher Wray pushing back against claims of spying on the Trump campaign. Attorney General Bill Barr used this term during a hearing last month. Today, Wray told a Senate panel he disagrees with Barr's characterization.

(BEGIN VIDEO CLIP)

CHRISTOPHER WRAY, FBI DIRECTOR: Well, that's not the term I would use.

Look, there are lots of person that have different colloquial phrases. I believe that the FBI is engaged in investigative activity and part of investigative activity includes surveillance activity of different shapes and sizes. And to me the key question is making sure that it's done by the book.

(END VIDEO CLIP)

[13:10:05] KEILAR: Josh Campbell is a former FBI supervisory special agent and a CNN law enforcement analyst, and he's with us now from Los Angeles.

So, Josh, what does it say to you that Wray is rejecting Barr's use of the term spying. He knows -- he knows what he's doing here.

JOSH CAMPBELL, CNN LAW ENFORCEMENT ANALYST: Yes, let me take you inside the room at FBI headquarters when an FBI director plans to speak to the public. The staff will gather questions that the director is likely to be asked, and then they hash it out with the executive as far as, you know, what's going to be your response. So they knew that this question was coming. This has driven the news cycle once we were all stunned to hear the attorney general double and then triple down on that word. The fact that the director is actually coming out and answering it in the way he did I think is telling because I think he's speaking on behalf of most of the people inside the FBI and indeed the Justice Department when he talks about FBI investigative activity as -- surveillance, exactly what we would expect, and not spying.

I think the attorney general is very much on an island in this case. Again, I don't know if it's necessarily a rebuke when the director just speaks the truth and says this is, you know, how we operate. But, again, although the attorney general may be adopting the White House phraseology, describing this as spying, I think if you were to ask most people inside the Justice Department, would they describe surveillance as spying, they look at you like you're from another planet.

KEILAR: Yes, they think it's so pejorative.

And then -- and then the other issue that the attorney general has brought up is whether the -- as he calls it spying, as Wray would call it surveillance, whether it was properly predicated, right, the basis for what that surveillance was. So he was actually asked about whether he knew of any of this improper surveillance in the 2016 presidential campaigns, and he said, quote, I don't think I personally have any evidence of that sort.

What do you make of that answer?

CAMPBELL: Well, here, too, I credit the Director Wray comments more than I would the attorney general, and not for qualitative reasons, but simply for quantitative reasons. He's been on the job much longer than Barr, some, you know, over a year and a half, and so presumably he would have already, you know, started to dig into this issue to get to the bottom of an issue that has, again, been at top of mind for the White House. And the fact that he's coming out and saying, look, I haven't seen anything I think is telling.

That said, the FBI should prepare for a political firestorm because this isn't going away.

KEILAR: All right, Josh Campbell, thank you.

As the U.S. moves an aircraft carrier strike group and bomber task force to the Middle East in response to aggressive actions by Iran, the secretary of state abruptly cancelled a trip to see Germany's Angela Merkel in a mysterious change of plans. So, where is Mike Pompeo going instead?

Plus, the Dow falling again as the U.S. gets ready to slap new tariffs on China. Some business owners say they're, quote, freaked out.

And I'll speak with a student who confronted Mayor Pete Buttigieg about his lack of support among black voters.

(BEGIN VIDEO CLIP)

MAYOR PETE BUTTIGIEG (D), PRESIDENTIAL CANDIDATE: My deeper answer is, I need help.

(END VIDEO CLIP)

(COMMERCIAL BREAK) [13:17:42] KEILAR: It's an unexpected and puzzling turn of events. Secretary of State Mike Pompeo abruptly cancelled his trip to Germany just hours before he was scheduled to meet with Chancellor Angela Merkel, a very important meeting. The State Department cited pressing issues as the reason. And reporters traveling with the secretary have not been told where they are going and they have been informed they may not be able to report the destination until after they have left the destination.

So let's get some perspective on this. We have retired Rear Admiral John Kirby with us.

You were a State Department spokesman, as well as a Pentagon press secretary. What would rise to the level -- and put it in context how big of a deal it is to cancel a meeting with Angela Merkel -- what would rise to this level?

REAR ADMIRAL JOHN KIRBY (RET.), CNN MILITARY AND DIPLOMATIC ANALYST: It would have to be something of such an urgent and significant national security interest that -- to warrant cancelling a meeting of that -- a, you know meeting with Chancellor Merkel is a big deal. She has a very busy schedule and because Germany is such a close ally so I'm guessing it's something of such significance to our own national security that would warrant this, and I'm sure the Germans understand that.

KEILAR: So one of the -- I think this is where a lot of eyes are trained -- is that you have escalating tensions in the Gulf, right? You have -- in response to what two U.S. officials said was a very specific threat from Iran.

KIRBY: Right.

KEILAR: National Security Adviser John Bolton announced the deployment of the USS Abraham Lincoln carrier strike group, as well as a bomber task force to the Middle East.

Could that have any -- would that rise to the level of something that might require Secretary Pompeo's urgent attention?

KIRBY: Yes, I can see a scenario where this diversion of his trip has something to do with the threat to our forces in the region, as well as perhaps maybe the threat to some of our allies and partners in the region, as well as that intelligence that led us to this conclusion. So I can see a connection here somewhere, where it would have to do with this -- not just the movement of these forces and maybe assuaging concerns of regional partners about what they're there to do, but also the intelligence and the threat that is based on that.

KEILAR: Wherever he's going, we may not know until he leaves as well.

KIRBY: Exactly.

KEILAR: All right, thank you so much, John Kirby.

KIRBY: You bet. [13:19:47] KEILAR: President Trump's trade war with China is heating up, and that is, quote, freaking out many American business owners. I'm going to talk to one who is worried he'll be affected, next.

(COMMERCIAL BREAK)

KEILAR: The Dow falling around 500 points right now as trade talks between the U.S. and China look like they are falling apart. Some American business owners say they're, quote, freaked out after President Trump threatened to raise the tariff rate on $200 billion of Chinese imports. This increase would go from 10 percent to 25 percent, and it's set to take effect on Friday. And companies were just given five days' notice.

[13:25:03] President Trump is trying to put more pressure on Beijing after trade talks hit a wall, but as of now representatives from the U.S. and China are still set to hold a key meeting this week, and people close to the negotiations say that if these talks go well, that tariff increase may not happen.

So, in the meantime, businesses, like Phil Page's, who is joining me now, are caught in the middle of this.

Phil, you are the CEO of Cap America. You're a huge supplier of promotional head ware, ball caps, et cetera, based in Missouri. I'm sure a lot of people out there, if they have some sort of promotional ball cup, it probably came from your company.

Tell us about the situation that you're in because you've already order millions of dollars of product from China, and you did that factoring in the 10 percent tariff. It could now go to 25 percent. What would that mean for you?

PHIL PAGE, CEO, CAP AMERICA: Well, if it goes to 25 percent on Friday, there was no time to react to this thing. We've got over $4 million worth of goods either on order or in transit here. And that's going to equate to a $600,000 hit to -- expense to us that we did not anticipate. So I mean it -- it really just hit us right -- right in the gut.

KEILAR: And what will that mean for your company? What will that mean for the people at your company? How do you absorb that kind of cost?

PAGE: We will absorb this initial cost, and we had already anticipated raising our prices at the beginning of the year with the tariff. But this changes the game. I mean this will -- this will probably be a slow burn as we go through inventory that we have and then the additional more expensive inventory will have either raise our prices and hopefully that will not hurt our demand. But if it does, we employ 300 people in a small town in southern Missouri. And one of the last things we want to do is to have to lay these people off. I mean this is affecting real people in the heartland of America.

KEILAR: So we're talking about an increase -- a 10 percent increase then going up to 25 percent. That is 2.5 times what you anticipated paying in tariffs, and you got five days to factor this in or really not -- not five days. It's not enough time to factor it in, as you're saying.

In your 30-plus years in business, have you -- have you ever encountered anything like this?

PAGE: I've never seen anything that the government has done that has an immediate impact on bills. I mean normally if there's policy changes, I mean, there's time to react to them. But this one, there's no time to react. I mean it's going to be an additional expense that we did not anticipate.

And I can sympathize with President Trump trying to get some of these countries like China to behave more fairly to us in trade negotiations, but it's like he's taking a sledgehammer trying to fix a Swiss watch. It's -- this is -- this is a very brutal approach to trade negotiation.

KEILAR: The president, as you're aware, you referenced it, he talked about this before. He threatened this before the new year, then that deadline slid a few months as the U.S. negotiated with China. So this idea had been out there, and because of that, Treasury Secretary Steve Mnuchin says businesses and executives were given enough notice that this could happen. What do you say to that?

PAGE: Well, I heard on Friday from the president that the trade talks were going very well and then on Sunday we see that he tweet that they're not. It's very difficult to know how to react in this business environment when there's so many changes going back and forth.

KEILAR: All right, Phil Page, we really appreciate you joining us from Missouri. Thank you.

PAGE: Thank you for having me.

KEILAR: Now 2020 Democratic hopeful Pete Buttigieg is having trouble courting black voters, and now he's asking for help on winning over this key voting bloc. We're going to talk to the student whose question prompted the Democratic candidate to make that plea.

Plus, a new act of defiance from the White House. Officials now telling former White House Counsel Don McGahn to withhold key documents from congressional Democrat. Will he be held in contempt? We'll talk about that.

(COMMERCIAL BREAK)

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