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Barr Taps U.S. Attorney John Durham to Review Origins of Russia Probe; Rosenstein Calls James Comey a "Partisan Pundit"; Dow Set to Rebound After Monday's Massive Sell-Off; Mike Pompeo to Meet with Vladimir Putin Amid Tensions with Iran; Trump Warns Iran Over Reports of Sabotaged Ships. Aired 9-9:30a ET

Aired May 14, 2019 - 09:00   ET

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

[09:00:38] JIM SCIUTTO, CNN ANCHOR: A very good Tuesday morning to you. I'm Jim Sciutto. Poppy has the day off.

What happens this morning on the edge of the Black Sea in the southwest corner of Russia could begin to dial back tensions in the Persian Gulf 1,000 miles away. That at least is the hope anyway as Secretary of State Mike Pompeo meets with the Russian Foreign Minister Sergey Lavrov and prepares to meet with Russia's president, Vladimir Putin, about two hours from now.

Iran is believed to be high on the agenda along with Ukraine, North Korea, many other issues, Venezuela as well. Going in, Lavrov called the increasing threats and military moves by the U.S. in the Gulf a crisis of the Trump administration's own making.

We are also following the fallout from the growing U.S. trade war with China. A day after U.S. stock markets racked up their biggest losses in months, a partial rebound appears to be in the works when the opening bell sounds about half an hour from now. We're going to be watching the markets closely there. You see those green arrows pointing up.

But we begin with the search for common ground in Sochi. Is there any common ground?

CNN's Michelle Kosinski joining me now from the State Department with that.

Michelle, so many issues here with the U.S. and Russia, they're at loggerheads, really at opposite ends of the spectrum. What common ground does Secretary Pompeo, does the president, believe they can find here?

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Right. It is a very long list. And ahead of these meetings neither side sounds hugely optimistic. I mean, the State Department has put out all of the differences, and here are some things that we can work on, whether it's Syria or Venezuela or North Korea, but, yes, there are areas of common ground. For example, the U.S. would like Russia to help more in trying to pressure North Korea, trying to convince North Korea to change its tune and make sure that all sanctions are abided by, but, you know, I think top of the list is the U.S. would like to forge a new arms treaty with Russia.

After the U.S. said it wasn't going to be a part of the INF treaty anymore because Russia keeps violating it, that's top of the agenda. Forging a new nuclear treaty once the current one expires. Really there hasn't been much work on that. So those are some areas where there is absolutely discussion needed, but we hear from the Kremlin ahead of this meeting saying there is not exactly a lot that can be done at this level.

Real progress needs to happen at the highest level so surely they are going to be talking about the possibility that President Trump and President Putin meet in a matter of weeks' time in Japan on the sidelines of the G20. I think each side would like to see that happen. And each side would of course like to see some progress out of this.

When the State Department was asked what deliverables could come out of these meetings today the State Department said, well, taking the discussion to a higher level and just trying to find common ground -- Jim.

SCIUTTO: Well, yes. How did that work out with Kim Jong-un, right? You need to find the common ground first often.

Michelle Kosinski, thanks very much.

Right now Secretary of State Mike Pompeo meeting with Russia's Foreign minister, and just moments ago Pompeo called for the two countries to find, as Michelle was talking about there, some common ground. What is it?

(BEGIN VIDEO CLIP)

MIKE POMPEO, SECRETARY OF STATE: I'm here today because President Trump is committed to improving this relationship. As I think you said, we have differences. We each country will protect its own interests, look out for its own interests of its people, but it's not destined that we're adversaries on every issue.

(END VIDEO CLIP)

SCIUTTO: Let's speak with Matthew Chance, CNN's Matthew Chance. He is in Moscow with the latest.

A lot of talk there but certainly in the real world a lot of very difficult differences here. Does Russia see the potential for common ground and where exactly?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: He said he wants to find areas of common ground. And what secretary of State went on to say there is there are areas such as counterterrorism, such as arms control where there is a certain degree of overlap in the interests of both countries, and those could be areas where they could not be adversaries but instead find some kind of agreement with each other. But when you stack that up against the whole range of geopolitical

diplomatic issues where the United States and Russia are squarely at odds with each other.

[09:05:04] Whether it's Venezuela, where they are on opposite sides of the confrontation there, Syria where they're backing different sides of the conflict, North Korea of course, Russia is very close to North Korea, much more so than of course the United States, despite the efforts of President Trump. And now finally Iran, which is the hot issue of the moment. I mean, Russia and Iran have emerged as one of the big alliances over the past several years, they help -- Russia helps Iran economically and provides nuclear technology to Iran.

It provides diplomatic support for it. They are both sort of burdened by U.S.-led sanctions on their economy and they're both fundamentally opposed to Western power, to American power in particular. That's driven them closer together.

It's very difficult to see when you look at all those various points of conflict where any common interest is going to be found between these two countries.

SCIUTTO: I mean, arms control, didn't Russia just come out of a major arms control agreement? It's just -- it's mind-boggling.

Matthew Chance, thanks very much.

Pompeo's trip comes amid escalating tensions specifically with Iran. This morning we've learned the U.S. suspects that Iran is behind an attack on two Saudi oil tankers as well as two other ships damaged near the Persian Gulf over the weekend, though no official conclusion has been reached in the investigation. President Trump has warned Tehran they will have a, quote, "bad problem," in his words, if they played any role in these attacks.

CNN's Nic Robertson a live in Fujairah, in the United Arab Emirates there.

What are countries in the region saying about these attacks and are they also pointing the finger at Iran?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, the Iranians are pointing their finger at everyone else. The Foreign minister said it wasn't us, their ambassador today told CNN -- ambassador to Washington today told CNN it wasn't them. They wanted a large scale investigation. But I think when you're standing here in the Emirates the suspicion, is, and this is what we're understanding from officials, that the intelligence they've been gathering in this area recently is that the Iranians or their proxies were possibly considering threatening some of the maritime traffic here and that's something that seems to be backed up by the assessments that they shared with the United States. And the United States understanding of the situation as well.

Is there concrete proof? Are we any closer to having concrete proof? It doesn't appear to be. We're told that Emirate investigators are working on the ships. We're told that the U.S. Navy is assisting them so there should be some kind of forensics analysis of the type of explosives used that, again, perhaps may lead nowhere.

The Emirates are saying that these -- that the tankers were probably hit by a missile or a rocket, but I've got to say from what I've seen of it and what I've heard from experts who have examined the damage, they are not convinced that it's rockets, they think it may be, for example, mines, limpet mines, placed on the edge of ships. So, you know, we're -- we're seemed to be nowhere near a conclusion on this, on the mechanism or who was behind it -- Jim.

SCIUTTO: Nic Robertson, key questions there, thanks very much.

Let's discuss the big picture now with Jill Dougherty. She is the former CNN Moscow bureau chief, global fellow for the Woodrow Wilson Center, has covered Russia for years now.

Jill, I wonder if we could just start big picture here because you have Secretary of State Mike Pompeo saying just moments ago that the president wants to find common ground with Russia. I was just sort of writing down a list on the back of an envelope here of all the issues U.S. and Russia are at odds with on Iran, Venezuela, election interference, continuing election interference by Russia, Syria.

Russia has put weapons in space targeting U.S. space assets, arms control, Russia just pulled out of a major missile treaty. What is the common ground that the Trump administration thinks is there?

JILL DOUGHERTY, CNN CONTRIBUTOR: You know, I feel, Jim, that, number one, it's good they're talking because both sides say they want to do it, they really aren't talking for the most part. So this is good news. Now what can they actually agree on? You know, I think they can both agree on the fact that the Mueller investigation is over and as the president sees it and also as president Putin sees it that's the end of the story.

You know, essentially they won, they feel, and so they can go on to try to repair this relationship. When you get into the details of what they'll be discussing, you're right, I mean, on almost everything. It's a very difficult picture. Witness Iran, I mean, Russia absolutely is saying that the United States created this chaos, created this instability in the Middle East with Iran.

And other issues, you know, don't forget Ukraine, that's another issue on which they don't agree, but in the long run President Trump wants a, what, you know, meeting with the Russian president. For the Russian president that is good internationally and it's also good domestically. I think sometimes, Jim, you know, we forget how important it is for Putin and his time in power to really look good to his own people.

[09:10:04] And if it looks like the American president or at this point it's the secretary of State is coming to Russia, coming to Sochi to meet with President Putin and the Foreign minister, that's good news because the Americans are coming to them. SCIUTTO: Yes. But that's all window dressing, right? I mean, what

does the Mueller report have to do with the fact that Russia still occupies territory in Ukraine? Chopped off a piece of a country in Europe. Or that Russia is still backing Bashar al-Assad in Syria against U.S. forces or that Russia is still in the Iranian nuclear deal. The U.S. has withdrawn. It doesn't change any of those circumstances. You know, is this a dream world or is this a real world?

DOUGHERTY: I don't think it's a dream world, but, I mean, we're really stuck with the policy that the administration has right now, which is essentially sanctions and more sanctions and more punishment and more sanctions. And that sometimes is valid, that should be done and previous presidents have done it, but eventually I think you have to kind of figure out, are those sanctions doing what the United States wants them to do? They have damaged the Russian economy, there is no question, but is Putin out of Crimea? No.

SCIUTTO: No.

DOUGHERTY: And he's not going to be leaving. And are they really out of Ukraine? No, they are not. So on all of these issues this is why I think it is important that they talk because eventually the United States really is going to have to -- and I think the U.S. will have to take the initiative to really think what is in U.S. interest, what do we think is in the Russian interest, where can we work together, where can't we?

Obviously there are things we can't. But ultimately, you know, you have to go beyond sanctions to a policy that is more comprehensive.

SCIUTTO: Yes. Well, the Trump administration has weakened those sanctions and Russia is still in Ukraine. So it's -- and it's still interfering in U.S. elections. So it's hard to see what the calculus is from the U.S. perspective.

Jill Dougherty, thanks very much.

Still to come, investigating the investigators. Attorney General Bill Barr has tapped a federal prosecutor to look into the origins of the Russia probe.

Plus, now the president says that U.S. farmers will benefit the most from the trade war with China. Really? Numbers don't seem to back that up.

And he's a Democrat running a red state. Montana Governor Steve Bullock bringing the number of 2020 candidates to 22. Does he have a shot?

(COMMERCIAL BREAK)

[09:15:00] JIM SCIUTTO, HOST, NEWSROOM: U.S. Attorney John Durham has now been asked to investigate corruption under Republican and Democratic administrations. And now, the Attorney General Bill Barr has tapped him to look into the surveillance that started the initial Russia probe.

Durham will review whether intelligence collection involving the Trump campaign was, quote, "lawful and appropriate". This will be now the third separate probe into the early days of the Russia investigation. CNN Justice reporter Laura Jarrett joins me now live from the Justice Department.

Laura, the FBI Director Chris Wray was asked about this, he testified before Congress that he is aware of no evidence, showing illegal activity by the FBI in the early days of this investigation. So what is the attorney looking into here?

LAURA JARRETT, CNN JUSTICE REPORTER: Well, it's a great question, John, obviously Wray has tried to distance himself a little bit from that on the controversial spying claims, but Barr is taking it seriously and we're now learning that he's tapped this top federal prosecutor in Connecticut, U.S. Attorney John Durham who has worked under both Republican and Democratic administrations, sort of a veteran federal prosecutor.

And I'm told by a source familiar with this effort that he's actually been working on this for weeks. Now, the precise concern that has animated this for Barr still remains unclear, but as you pointed out, the fact that he's now brought on this prosecutor does suggest that this is a significant effort, Barr is serious about this and of course will become a welcome talking point for the president who has been talking about spying for the better half of two years.

SCIUTTO: So we've seen a public spat over this boiling out as the former deputy AG Rod Rosenstein talking about the beginnings of these probes yesterday, but also responding to the former FBI Director James Comey in quite harsh public terms.

JARRETT: That's one way to put it, he certainly has some things he wants to get off his chest about former FBI Director James Comey. You know, the men have a sort of a tortured history, given Rosenstein's role in writing that memo that was used as the pretext to fire Comey initially.

And Comey hit back in an op-ed last month essentially calling into question Rosenstein's integrity, suggesting he had been compromised by the president. Take a listen to Rosenstein last night.

(BEGIN VIDEO CLIP)

ROD ROSENSTEIN, FORMER DEPUTY ATTORNEY GENERAL, UNITED STATES: But now the former director seems to be acting as a partisan pundit, selling books and earning speaking fees while speculating about the strength of my character and the fate of my immortal soul. I kid you not. That is disappointing.

(END VIDEO CLIP)

JARRETT: Well, in response, Comey told CNN, I wish him the best.

SCIUTTO: That is the ultimate non-response response. Laura Jarrett --

JARRETT: Exactly --

SCIUTTO: Thanks very much.

JARRETT: Thanks, Jim.

SCIUTTO: Joining me now to talk about what's going on exactly in the Justice Department, other issues, CNN legal analyst Shan Wu, also former federal prosecutor himself. Is this good for the Department of Justice, for the FBI, to have this public spat between only recently former senior U.S. law enforcement officials?

SHAN WU, FORMER FEDERAL PROSECUTOR: Absolutely not. I mean, it really hurts the kind of integrity and the gravitas of the department including the FBI, and it's really unfortunate that that's happening. I find Rosenstein's criticism a little bit hypocritical, given his little tour of Bartlett's(ph) greatest quotations even before he left, trying to wrap himself in comparisons to historical figures.

And so he's basically just engaging in kind of a spat, as you put it, with Comey, and it really hurts the department's reputation and it really doesn't shed any light on anything at this point.

[09:20:00] SCIUTTO: Yes, and we'll all see if there's another book contract out there, wouldn't be the first and won't be the last to former administration official to write one in any administration. So let's talk about Barr's step here. So the Attorney General has appointed a very respected U.S. attorney who was appointed in the past by Janet Reno during the Clinton administration, by Eric Holder in the Obama administration.

Now, he's going to examine whether the law was broken in the opening of the Russia investigation. You know, when only last week, the FBI Director Chris Wray testified he saw -- he is aware of no evidence of illegal activity. What's happening here? Is this Barr doing the president's bidding here or are there substantial questions to be answered?

WU: It certainly looks like it's simply Barr doing the president's bidding. I mean, in terms of what we have seen publicly, there is no basis to open up yet another investigation about the origins of Mueller.

The results speak for themselves, there were convictions, there were guilty pleas and more importantly, we have seen nothing to suggest other than the points that the president's backers make, that there is something wrong with that initial commencement of the investigation.

So it really seems that Barr is just continuing to do what the president wants him to do. I mean, the bright side is, you know, the prosecutor is experienced and has not appeared to have any partisanship in the past. It might ultimately be a little bit of a backfiring on the president, maybe kind of disappointing if it ends up reinforcing the reasons that they opened it. SCIUTTO: Let me ask you about something else because we have a

congressional subpoena out of the president's son, Donald Trump Jr. in the Senate from a Republican-led committee, the Senate Intelligence Committee chaired by Senator Burr. Now two GOP senators are saying that the president's son should just take the Fifth before Congress.

What's happening here and what is the damage? I mean, Congress by the constitution has the right to issue subpoenas and it holds the executive branch to account. What's happening here? Is this undermining the constitution?

WU: I don't know if it's undermining the constitution. It's still within the construct of the mechanisms that are supposed to be working. I don't think Don Jr. should take his legal advice from the members of Congress. And also, you know, if I were advising him as his lawyer, I would point out that taking the Fifth is not a magical shield against everything.

I mean, it's not impossible that they could grant him limited criminal immunity, and that would pierce his Fifth amendment assertion. Now, that's complicated as we saw in reencounter(ph), once you start getting into that, there are a lot of questions on how do you keep the immunized testimony separate from later evidence which cause problems in the reencounter(ph).

But it's possible to do that, so that in and of itself is not a great shield for him, but they also seems like legally, that's the only possible defense he has to resist the subpoena.

SCIUTTO: Fine, legally, but a committee chaired by a Republican believes there is cause to question the president's son, which would seem to indicate that though, the president has claimed everything is settled now that the Mueller report is out, that it's not.

There are questions of whether Don Jr. told the truth before the committee, and there are also legitimate questions to ask him about his interest in accepting foreign help --

WU: Yes --

SCIUTTO: To win the 2016 presidential election. I just feel for folks at home, how does it matter to them that Republicans are lining up here and saying, you could just say no. You could just take the Fifth, you don't have to answer these questions or even show up.

WU: Yes, I think it hurts the legitimacy of Congress that they have their own members taking that position. And obviously, Congress is political, but it's such an obvious partisan position that they don't want him to testify anymore because they're afraid of what might come out.

That they're actually offering him legal defenses, legal advice not to do it in such a public forum. That's -- yes, it's pretty unprecedented and it's really just quite transparent, too.

SCIUTTO: Yes, I mean, we could grow numb to these developments, but they matter --

WU: Right --

SCIUTTO: They matter to the way the country functions, we can't lose sight of that. Shan Wu --

WU: Absolutely --

SCIUTTO: Thanks very much.

WU: Thanks Jim.

SCIUTTO: We are just moments away from the opening bell on Wall Street. It was an ugly day yesterday, but green arrows there. Stocks look set to rebound a little bit, though the U.S. and China are still in the midst of a growing trade war.

[09:25:00] (COMMERCIAL BREAK)

SCIUTTO: We are just moments away about a minute from the opening bell on Wall Street. Stock futures appear to be climbing their way back a little bit from yesterday's huge losses. Monday, Wall Street suffered its biggest one day drop since January, after China said it would raise tariffs on $60 billion in U.S. made goods. Alison Kosik with me now.

So looks like a little bit of a bounce back today --

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes --

SCIUTTO: Where are U.S. investors now as this trade war worsens?

KOSIK: You know, at this point, I think you're seeing investors really cautious, I think you're seeing investors not settling on the fact that we're seeing these green arrows this morning, don't get too comfortable because anything can happen. Investors are really watching the headlines, they're watching the tweets coming from President Trump.

Case in point, President Trump went on a huge tweet storm this morning, ten tweets at about three hours. One of them was interesting, it was the last one that he tweeted, pushing the Fed yet again to cut interest rates.

(BELL RINGING)

Investors don't like this when the president gets involved in this.

END