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ERIN BURNETT OUTFRONT

Docs Reveal Flynn Heard Campaign Officials Talk About WikiLeaks; U.S. Claims Iran is Carrying Hidden Missiles on Freighters. Aired on 7-8p ET

Aired May 16, 2019 - 19:00   ET

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


WOLF BLITZER, CNN ANCHOR: CNN SPECIAL REPORT: The Trump Family Business 9:00 pm Eastern only here on CNN. Thanks for watching. I'm Wolf Blitzer in the SITUATION ROOM. Erin Burnett OUTFRONT starts right now.

ERIN BURNETT, CNN ANCHOR: OUTFRONT next, President Trump reveals he made at least $434 million last year, but there is so much more we do not know about the President's finances. Why? What could he be hiding? Plus, breaking news, new details about Michael Flynn's cooperation with Mueller. Who left Flynn a voicemail about his cooperation with the Special Counsel? And the United States claims to have new evidence of Iran's aggression tonight. Where is the proof? Is this starting to look too much like a rock? Let's go out front.

And good evening. I'm Erin Burnett. OUTFRONT tonight, Trump cashes in. The President releasing his annual financial disclosure report. It gives a glimpse into the President's finances. But just that, a glimpse, it is far from a full picture tonight. What we've learned is that the President earned at least $434 million last year, what we don't learn is who paid him all that money and to whom does he owe money.

But one highlight in the report is this, the Trump International Hotel in Washington, D.C. made $40.8 million last year. That's more than last year. And it's money powered by lobbyists, and diplomats and business people, reportedly from countries including Saudi Arabia, Bahrain, Kuwait and Malaysia.

Trump minting money at the hotel, thanks in no small part to his presidency. He even admitted it under oath in a deposition when he was only a candidate for the White House. He was talking about how his rise in the polls, his wins in the primaries was helping that hotel specifically.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We've beaten a lot of people and I think people like that. So I think it'll be great for the building in question.

(END VIDEO CLIP)

BURNETT: Well, it's been great for that building. It's a building Trump visits frequently as President, as does his staff, a building that Trump blatantly promoted to the world.

(BEGIN VIDEO CLIP)

TRUMP: I have a great, great - the best, probably the best piece of land in Washington. One of the great pieces of land. The old post office and I'm very proud of it. It's a great building. We built it into a hotel. It's on Pennsylvania Avenue, right between the Capitol building and the White House, right smack in the middle.

(END VIDEO CLIP)

BURNETT: So who are the players paying up to get close to Team Trump? Well, we don't know and that's a problem. So the disclosure from that we just got is 88 pages. Only 88 pages. "Only," you say? "Yes," I reply. Compare that to Trump's taxes. These are two of the only images we have of Trumps returns. We'll show them.

This is from October of 2015. I think we can all agree that that is a whole heck of a lot more than 88 pages and that is why Americans still need to see the President's tax returns. Tomorrow is the deadline for the Trump administration to turn over six years of tax returns to Congress and tonight it seems clear the administration will defy yet another subpoena.

Pamela Brown is out front live outside the White House. Pamela, these 88 pages, if I were to show the other stacks, it would cover both of us all the way across the screen of just one year of tax returns to compare. Does the President really think releasing this financial disclosure will stop the call for his taxes?

PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: He's likely hoping so, Erin. He has repeatedly said that he believes financial disclosures are superior than tax returns. And it appears tonight, Erin, that the Treasury Department isn't budging on handing over those tax returns as of now.

Now, the President declined to answer questions today from the press, but there's no indication that these mandated disclosure forms out today will do anything to quell the calls for the President's tax returns amid the subpoena deadline tomorrow night from House Democrats for six years of the President's tax returns. The disclosure documents today saying that the, as you pointed out, made $479 million last year do not reveal as much about finances as a tax return.

First of all, it just has ranges. Tax returns, as you know, though in comparison includes granular details about income and asset valuations along with other information. So there is a difference there, but these fresh disclosures that Treasury Secretary Steve Mnuchin indicated yesterday actually, Erin, that he would likely resist the subpoena order for the Democrats saying, "I think you can guess basically how the Treasury Department will respond."

And personal lawyers for the President have argued that Congress is overreaching in its request, it hasn't shown a legislative purpose for asking for this six years of tax returns. But as you know and judge expressed skepticism of that argument earlier this week saying Congress doesn't necessarily need an explicit legislative purpose, Erin.

BURNETT: All right. Pamela, thank you very much. Out front now Democratic Congressman Dan Kildee who sits on the House Ways and Means Committee which, of course, requested those taxes. So let me ask you, Congressman, you've seen the disclosure form today, these 88 pages, what did you learn from it?

[19:05:09] REP. DAN KILDEE (D-MI): Well, I haven't had a chance to go through them thoroughly, but what we know is that they paint a picture but not anything close to a complete picture of the President's finances and the specific question it clearly does not answer. The specific question that we're looking at is whether or not the IRS properly enforces tax law on the President of the United States.

We can't glean from these records anything on that question and so that's the purpose that we've sought - for which we have sought these returns and that's why we continue to press.

BURNETT: So I want to play something for you, Congressman, that the President has said, about this specific form, the public financial disclosure report in the past. Here he is.

(BEGIN VIDEO CLIP)

TRUMP: People don't understand tax returns. Now, I did do a filing of over a hundred pages. You get far more from that than you could ever get from a tax return.

(END VIDEO CLIP)

BURNETT: Far more from that than you could ever get from a tax return. Obviously, when you just look at the raw information, 88 pages versus a thousand probably at least in the one year that we showed a picture of. But what do you say to him?

KILDEE: Well, the President will say anything to defuse any criticism or deflect us from looking behind the curtain. This doesn't make any sense what he says. We are looking specifically at whether or not he is somehow evading tax law or whether the IRS is not properly enforcing law, maybe as a result of his direction.

But it's a bit condescending for the President to say that we wouldn't be able to understand the tax returns. Let me assure you, Mr. President, we'll figure it out.

BURNETT: So I mentioned, Congressman, in THE LEAD the Trump International Hotel in Washington. We actually went online tonight to check if we wanted to check in and book a hotel room tonight. There was one available, it was at $695 online compared to the Four Seasons in Washington which was 500. Is the President benefiting from his office or is his hotel that much better than the Four Seasons?

KILDEE: I've never been in either one of them, so I really can't answer that question with any expertise but I will say the president seems to seek to benefit himself in every way possible. This has been the entire story of his career. The fact that he continues to substantially control his business enterprises, while serving as president of the United States is a precedent that is just unbelievable that has been broken and doesn't create more outrage.

But I think we have to assume that the President will do whatever he can using every resource, including public resources to benefit himself. This has been his history.

BURNETT: So your Chairman, obviously, Richard Neal has subpoenaed six years of the President's personal and business tax returns last week. You were just referring to the fact that you could figure it out if you got them and tomorrow is the deadline for the Treasury Secretary to comply with the subpoena. He's made it pretty clear that he's going to defy it. Here's what he said yesterday.

(BEGIN VIDEO CLIP)

STEVEN MNUCHIN, UNITED STATES SECRETARY OF THE TREASURY: We will comply with the timing of it. I think you can pretty much guess how we're going to but we haven't made the decision.

(END VIDEO CLIP)

BURNETT: Do you expect you're going to get anything from him?

KILDEE: Well, I think ultimately we will, whether or not they want to comply with the law is the decision that they obviously are making. I disagree with the decision that they're making. I think it's a terrible precedent that they would contradict plane letter law that says they are obligated to deliver these returns.

It's not up to them to decide when Congress is acting on the legitimate public interest. They don't get to dictate to us the subject matter of our work.

BURNETT: How long do you think it'll take you to get them though?

KILDEE: I think it'll probably end up being up to a court to make that determination, but I've talked to the chairman about this. He is not going to turn away on this. We are going to pursue this using every tool available to us. So I don't think simply denying this request is going to be enough. They're going to have to answer to a court ultimately.

BURNETT: All right. Thank you very much. I appreciate your time, Congressman.

KILDEE: Thank you.

BURNETT: And out right now, Russ Buettner, Investigative Reporter for The New York Times who has done a lot of reporting and seen more of the President's taxes than anyone else in your investigations. OK, so you've been through this. What stands out to you?

RUSS BUETTNER, INVESTIGATIVE REPORTER, THE NEW YORK TIMES: What stands out is that it wasn't a great year for the president, his overall revenues. This is just revenues, not profits ... BURNETT: Right.

BUETTNER: ... were down about 4 percent. Some of the properties had substantial declines, the golf courses overall seem kind of flat. I mean, there are a couple of places where he had substantial income coming in that is just sort of disappeared, some of the hotels that have gone away.

BURNETT: So it seems that the Trump International Hotel in Washington which I highlighted for a reason, because it is a place if you do want to be seen and noticed by the administration, it's the place you go. That's the hotel that stands out. That's the strong performer.

BURNETT: Well, it's remarkable. It's up about 1 percent staying tough at about $40 million, but that's not a big jump for someone who has devoted so much attention to it and for the Republican Party having sent lobbyists or lobbyists who want to be there, people want to curry favor the President going there. It's not a huge jump, but 1 percent is still a substantial amount of money.

[19:10:10] BURNETT: What do you think about that room rate that I just asked the Congressman about $695, if you were to just go online and book it tonight versus $500 at the Four Seasons which is obviously an incredibly nice hotel in Washington, D.C.? Is there a Trump premium?

BUETTNER: It's hard to say. I don't know what the rates are and all of these kinds of things, it doesn't seem to be that they're outperforming their competitors very much. Our reporters today spoke to some industry analysts who said actually their hotels in Chicago and in Hawaii are underperforming. So how it fits in the mix in Washington, D.C. is not really correct.

BURNETT: Right. Of course, there you have the lobbyists, and the diplomats and a whole another set of interests perhaps than people staying in other hotels. You were part of a team that obviously has reported the most information we've seen on the President's taxes thus far. Explain why what we got today is not enough?

BUETTNER: Well, again, it's just revenue, so you can tell his companies brought in about $435 million dollars, but you don't know whether his expenses are $700 million a year, which means he's in deep trouble or they are $300 million a year which means he's doing maybe OK. You can't tell from this also whether or not he's paying any taxes.

The President throughout his business career has found a way to lose enough money, to not pay any tax --

BURNETT: And you also can't tell whether it's the Trump International Hotel or a golf club who is paying all of these millions of dollars, so you don't know whether it's some wealthy individual or an oligarch, you have no idea.

BUETTNER: That's absolutely right. You can't tell anything about where the money is actually coming from here. He could have sources of income that are not on this that would be funneled into these that you might see on a tax return.

BURNETT: As well, right, and taxes could show that which is important as to why we need those. Thank you so much, Russ. I appreciate it. And we're going to have so much more in this topic tomorrow in my new documentary, a CNN SPECIAL REPORT on The Trump Family Business. That is debuting tomorrow at 9:00 Eastern.

Meantime next, New York Mayor Bill de Blasio says he's running for president and wow does the President Trump love it. This is the reception that de Blasio meantime is getting from his hometown.

(BEGIN VIDEO CLIP)

CROWD: Liar. Liar. Liar.

(END VIDEO CLIP)

Why is he running in that field of 23? Plus, Trump rolls out his new immigration plan, even a top Republican says it's never going to become law. One of the people who wrote it is out front. And breaking news, new documents just released show the President's former National Security Adviser Michael Flynn heard campaign officials talking about WikiLeaks. What does this prove?

(COMMERCIAL BREAK)

[19:16:13] BURNETT: New tonight, de Blasio makes 23. New York City Mayor Bill de Blasio is the latest Democrat to enter the race for 2020 and yes there are 23 running for 20. He is not getting a warm welcome, at least, in his hometown. This is what protesters shouted as he sat down for his first interview after announcing he's running.

(BEGIN VIDEO CLIP)

CROWD: Liar. Liar. Liar.

(END VIDEO CLIP)

BURNETT: Another sign, de Blasio is the only Democratic candidate with a negative net favorability rating according to a recent Monmouth University poll. So why is de Blasio running and it begs the larger question, do we really need 23 Democratic candidates out there on the list? Out front now National Affairs Correspondent for The Nation, Joan Walsh, and former DNC Communications Director, Maria Cardona.

Joan, I mean it's like you look at this we the American people have what, 23, and then you've got Weld, and you've got Trump, 25. We got a lot of people running for president.

JOAN WALSH, NATIONAL AFFAIRS CORRESPONDENT, THE NATION: We do.

BURNETT: OK. So why is Bill de Blasio running? What is his path to victory?

WALSH: It does not exist. I'm sorry if I'm the first one to tell him that, but it doesn't exist. I mean I give Mayor de Blasio a lot of credit for the pre-K initiative. We have pre-kindergarten, universal pre-kindergarten in the city and that is terrific. It should be nationwide, so there's the credit.

I don't know what he's doing. Our housing authority is a mess. We still have a lot of problems. He seems to be bored with his job quite honestly and there's no path for him. I think he wants to be a movement builder, but Bernie is out there. We have plenty of candidates on the left. There's just not a lane for him and sad as it may be, we've never elected a Mayor president.

BURNETT: So Maria, I showed the poll, he's got a net negative favorability rating according to a recent poll. And look, there's one person who's super thrilled that he's jumping in the race, that is the President. He just spent 36 two seconds and assuming he did it in one take of his time on Air Force One to put out a little video about the Mayor and here's a little clip.

(BEGIN VIDEO CLIP)

TRUMP: I just heard that the worst mayor in the history of New York City and without question the worst mayor in the United States is now running for president. It will never happen. It'd be better off if you get back to New York City and did your job for the little time you have left.

(END VIDEO CLIP)

BURNETT: Look, I couldn't even run it all. He spent so much time, Maria. OK, how much does it matter that he's not liked in New York? There's a lot of people in this field that nobody's heard of outside their small zone and they're all looking for that broader recognition.

MARIA CARDONA, FORMER DNC COMMUNICATIONS DIRECTOR: Right. That's true and actually what's interesting is that if you look at Trump bashing de Blasio for not being liked in New York which is what he did in one of his tweets, is Donald Trump like the New York?

WALSH: No.

CARDONA: I don't think so. And the other thing is that it's also rich for Donald Trump to say that de Blasio will never be president when that is what so many people said about Donald Trump when Donald Trump announced. Now, that's not to say that I think it's going to be easy for de Blasio or that he has a path. I agree with Joan, I don't think he has one.

But look, it is so early, it is still wide open, conventional wisdom is out the window. If people want to look into a crystal ball, it doesn't exist. We have seen this already. What we prognosticate today could very well happen, could very well not happen.

BURNETT: And I mean it is amazing to me and it is one of my biggest frustrations with our country is that part of the reason nobody works together or does anything is people are always running for office. And Joan, this is the 23th person Democrat into the race. The field could get even bigger. The Georgia gubernatorial candidate Stacey Abrams, everyone remembers her, here's what she said today.

(BEGIN VIDEO CLIP)

[19:20:14] STACEY ABRAMS, PRESIDENTIAL CANDIDATE: I'm watching to see what happens. I do believe I can enter the conversation as late as the fall and still have a real chance to win.

(END VIDEO CLIP)

BURNETT: OK. Four years ago Donald Trump wasn't even in the race. Let's remember, that was in June. Now everyone is saying, "Oh, there's already 23 people in. It's too late to announce." I mean is she right you could get in that late and do we just have too many people running for people in this country to even learn they are --

WALSH: Look, it's a wonderful country. Everybody has the right to run. I love Stacey Abrams. I covered her campaign. I am second to no one. In my admiration for her, I would rather she not run.

I think she would have made a great senator. I think she will make an excellent governor. I think she should run again in three more years. She's got a terrific voter organization that she's founded, Erin. I would love to see her continue that work and give Brian Kemp another run.

BURNETT: So Maria, here's one of the questions I have, a lot of these 23 people, some of them may be running just to get experience or they may be running to get broader name recognition, other career ambitions. Fine. Some of them are running because they can really win.

A lot of them are probably running because they think who knows what really is going to happen with Joe Biden. He comes and he took all of the oxygen out of the room, is it going to last or not? The House Minority Leader Kevin McCarthy today said something really interesting about Joe Biden today. Here he is.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Do you agree with the president's tweet that Vice President Biden will be the Democratic nominee?

REP. KEVIN MCCARTHY (R-CA): No. I think Biden, no disrespect, is the Jeb Bush of this cycle.

(END VIDEO CLIP)

BURNETT: Maria?

CARDONA: This is what is so great about what we're about to see in our primary process, Erin. We don't know. It could be, but it could also be that Joe Biden ends up being the nominee. Look, here's what I'll say, what everyone should understand is that it could be frustrating to many Democrats that we have 23, possibly 24, Stacey Abrams jumps in. But as soon as that happens, as soon as the debates start and as soon

as fundraising becomes a real issue, this field will start to winnow itself down pretty quickly because if Americans see that you are in this either for vanity or for your own profile development, they're not going to like that. Your poll numbers are not going to go up. Your infrastructure is going to be non-existent and you're not really going to be able to have a presidential campaign.

And so that's why I think that people need to be focused on the candidates who are raising grassroots money, who have an infrastructure in all the states, who will have ballot access, which is another important thing. So there's a lot of factors that go into a real campaign.

BURNETT: Joan, do you think a lot of people running are betting that there's just an unknown with Joe Biden as to whether he's Jeb Bush, as to whether, who knows, everyone is in love with him now on the Democratic side, but then they remember things they didn't like about him. The guy has lost a lot of times before. They go, "Oh, maybe there's a reason for that." I mean things can change.

WALSH: Things can definitely change. I will say though, Erin, Jeb Bush was topping out much lower. He barely led the field. In 2015, he was ahead --

BURNETT: Joe Biden is much stronger.

WALSH: Yes, Joe Biden is so much stronger than Jeb Bush ever was. It doesn't mean he can't fall, but the comparison is not apt.

BURNETT: That's a very good point. OK. Thank you both very much. And next, a top executive at Walmart warns Trump's trade war will lead to higher prices. That's the Chief Financial Officer of Walmart, the biggest retailer in the country. But the President's White House Council of Economic Advisers Chairman says he's dead wrong, Kevin Hassett is next. Plus, breaking news, a judge ordering the release of a voicemail to Michael Flynn from someone connected to team Trump about his cooperation with Bob Mueller.

(COMMERCIAL BREAK)

[19:28:22] BURNETT: Tonight, President Trump unveiling his new immigration plan and he says everyone in the world will want to copy it. Here he is.

(BEGIN VIDEO CLIP)

TRUMP: If adopted, our plan will transform America's immigration system into the pride of our nation and the envy of the modern world.

(END VIDEO CLIP)

BURNETT: Out front now, one of the architects of the new immigration plan, Kevin Hassett, who is the Chairman of the White House Council of Economic Advisers. Chairman, thanks for your time. So I want to get to the, I guess, the heart of it here, the reception to this so far on Capitol Hill. DACA, obviously, is one of the biggest issues out there in immigration. The plan doesn't appear to touch that, so Democrats - yesterday, Senator Merkley said, "No way, not even going to think about it."

When Republican Senator Lindsey Graham was asked about the difference between his new immigration plan and yours he said and I, quote, senator Graham, "The White House's plan is not designed to become law. This -" Lindsey's law, "- is designed to become law." Is he right? Your plan is not designed to become law?

[19:29:28] KEVIN HASSETT, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: No, that's incorrect. In fact we have a whole bill and lots of details that'll be coming out shortly. But the fact is that what we've done is we've taken what we think are the things that we all ought to agree about. We've looked at best practices around the world. We've copied them, change something from the Canadian system or the Australian system or the New Zealand system or the Japanese system to better fit the U.S. economy.

But we've ended up with a bill that has many similarities to the 2013 bill that was supported by Elizabeth Warren, and Bernie Sanders and Amy Klobuchar. And so really I know there are a lot of pillars for immigration reform. But this one I think is really transformational in a positive way, in particular by bringing high skilled people into the country.

You know, the academic literature suggests that drives up wages for lower skilled people. So, this is something that really progressives ought to support and embrace.

BURNETT: So, you're telling me more details are come out, but is it true that DACA is not in it? Do you -- and have you talked to Democrats even willing to consider a discussion about an immigration plan which does not include it?

HASSETT: Right. So, what we did is we started with two pillars. And there is the pillar of border security which I know has lots of bipartisan support at times. But then there's the pillar that I most worked on, which is to study the best merit-based systems all around the world and to create a best in class proposal for the U.S.

And, you know, our estimate at CEA which I think is not going to be that controversial is if we're going to adopt this bill, that it would increase GDP growth by about a couple of tenths per year.

BURNETT: So, have you talked to a Democrat who is willing to talk to you about a bill without DACA?

HASSETT: So, you know, I'm the economist and les affairs person. But I can say that the economic content of this I presented on Tuesday to the Republican senators at their lunch and we got lots of positive feedback. And yesterday, I met with a bunch of House members, Republican House members to go over the details with them.

But I'm sure absolutely you're right that in the end, if you look at the details of this, it's a bill that will increase GDP, increase tax revenue by maybe half a trillion dollars over 10 years because we bring in higher skilled people and drive up wages for low skilled people.

But I want to make one last point, which is if you're a kid in Kenya right now or any country, Malaysia, and you want to go to the U.S., then unless you have a family member here, you're out of luck.

BURNETT: You minimize (ph) that, all right.

HASSETT: And so, what to do is create a system where you can go online and you can type in stuff about yourself and then figure out what you need to do to qualify for a visa in the U.S.

BURNETT: OK. So --

HASSETT: So I think it makes us the land of opportunity again.

BURNETT: OK. So, on that, though, the president says that the plan requires future immigrants learn English and pass a civics exam, right? You have to be able to speak English.

Now, that may surprise some people but under the current system, immigrants are already required to pass a naturalization test, which requires them --

HASSETT: That's right. I think --

(CROSSTALK)

BURNETT: -- to take an English and civics tests.

HASSETT: That's correct.

BURNETT: So, how is your plan different than what we already have?

HASSETT: Well, I think that the civics test part is something they're moving to the front of the process. And the -- the English language criteria is something the academic literature suggest that whatever country you're talking about, the immigrants into that country that speak the language, that they do a lot better, they're more successful. And the 2013 plan that was supported by all those Democrats I mentioned had an English language test as well.

(CROSSTALK)

BURNETT: So, you're moving that to the beginning of the process is what you're saying.

HASSETT: This is the beginning of the process, that's fair.

BURNETT: Right, OK, as opposed to at the end when you're at the naturalization. You would have had many years to learn it, before you even start. OK.

(CROSSTALK)

HASSETT: Oh, there's that, too.

But also this proposal -- also this proposal I think you should think of as the beginning of a process. That it's a lot of stuff that should gather support from, you know, all people who study it and look at the literature and think how it will affect the lives of ordinary Americans.

BURNETT: I also want to ask you about tariffs. Today, Walmart's chief financial officer said higher tariffs could mean higher prices at Walmart. And he said, and here's the summary: increased tariffs led to increased prices we believe for our customers.

Obviously, Walmart is the biggest retailer in the United States. According to the conservative leaning Tax Foundation, the tariffs imposed by your administration so far will eliminate nearly 162,000 full-time equivalent jobs. They say it's essentially $72 billion worth of new taxes on Americans. That's a big deal.

Do you really support these tariffs?

HASSETT: Right. Well, I support the process which is trying to move China to the table to get a trade deal that's fair for American firms and ends a lot of practices that involved like intellectual property theft and so on, and forced technology transfer that, you know, we have looked at estimates that suggest that 1 percent to 3 percent of GDP is being sucked out of the U.S. because of the practices.

And so, there is a lot of room for improvement in this space. And, you know, as far as the price effect, don't forget that if we are buying something from a Chinese firm that we put a tariff on, then if you don't want to buy from China, then you could buy it from a U.S. firm or from a firm from many other countries.

And so, if you look at what's happening to inflation in the U.S. --

BURNETT: You could at a higher price.

HASSETT: No, but look at what's happened to inflation in the U.S., it's actually decelerated because we quite tactically when we decided what to put tariffs, put tariffs on things where there were close substitutes. You know, these are not stupid tariffs. These are tariffs that were very well designed to minimally impact --

BURNETT: So, why --

HASSETT: -- U.S. consumers and put maximal pressure on China.

BURNETT: Wouldn't the CFO of Walmart know what he is talking about?

I mean, I don't think the CFO of Walmart -- all I'm saying -- is go out and say prices are going to go up, unless he looked at and knew they were going to go up.

HASSETT: If you go into Walmart and you walk up and down the aisles, which I very often do, especially in the summertime, then -- because we are at lacrosse tournaments and always looking for something we forgot, right? You go up and down the aisles, there's a million of things and, of course, there are going to be some products that don't have close substitutes but a lot do.

And then, in the end, it's empirical question which is dominating. And if you look at inflation in the U.S., it's been decelerating. And so, I don't think you could say that the tariffs could cause the spike.

BURNETT: But you think he's got it wrong.

HASSETT: Yes --

BURNETT: OK, so the president --

HASSETT: Yes, it's not in the data what he is saying.

[19:35:01] Not in the aggregate data for sure.

BURNETT: OK, I just think it's significant. I just want to highlight that you take issue with what he is saying.

HASSETT: It's fair, yes.

BURNETT: All right. Well, I appreciate your time. Chairman, thank you.

HASSETT: Thanks, Erin.

BURNETT: And next, breaking news, new documents show Michael Flynn heard Trump campaign officials discussing whether to reach out to WikiLeaks after WikiLeaks released the stolen Clinton campaign emails.

Plus, the U.S. claims new evidence of Iran saber-rattling military build up against America. So where is the proof?

(COMMERCIAL BREAK)

BURNETT: Breaking news, just unsealed documents revealing new details about Robert Mueller's obstruction of justice and collusion probe. The documents that we have now reveal people link to the Trump administration in Congress contacted Flynn to influence his cooperation with the Russia investigation. Flynn even shared with Mueller a voice mail from an unnamed official.

Well, that obviously is interesting. Well, who it could be?

OUTFRONT now, former prosecutor Jack Weiss.

So, Jack, we got a voicemail left from someone if from in the Trump administration, a member of Congress. It's unclear at this point who it is. How significant is this development?

[19:40:00] JACK WEISS, FORMER FEDERAL PROSECUTOR: Well, what's really significant is that there are multiple reach-outs to Flynn from, according to this memo, both the administration and people connected to Congress. BURNETT: Multiple.

WEISS: Multiple. There's one voice mail but there are multiple individuals. And some are outreaches to Flynn, some to his lawyers. So, I suspect Congress is going to subpoena Flynn. He is going to have to testify and tell us -- and name names for the first time.

BURNETT: And it also means there are at least -- there are tapes.

WEISS: Yes, tapes is something the case lacked, right? It's always been words on a page. Remember the impact of "Access Hollywood," just the tactile, that impact of seeing someone, listening to someone. If we get a live tape, I think it will be a big deal.

BURNETT: All right. So, when you speak about that tape, obviously, around that tape was when WikiLeaks was putting out a whole lot of information to hurt Hillary Clinton, to help Donald Trump. The documents we now is have unredacted show Flynn told the special counsel he was among a select few who heard statements among even senior campaign officials about WikiLeaks and the memo says this, Michael Flynn recalled conversation with senior campaign officials after the release of the Podesta emails during which the prospect of reaching out to WikiLeaks was discussed.

Just to be clear. Paul Manafort is gone at this point. So, you have people discussing whether it reach out to WikiLeaks on the eve of the -- you know, right after the pee tape in the eve of the election, senior campaign officials.

WEISS: Yes, it's collusion, right? That's what this is. It's the last weeks of October 2016. It's one Hail Mary pass after another. And people are even talking at that point of, hey, does anyone have a line into WikiLeaks? Maybe we should contact them, even after they released the Podesta emails.

BURNETT: And just when it says, you know, senior campaign officials, plural. Again I point owl Paul Manafort is not there anymore. So, your senior campaign officials at that time are Don Jr., Jared Kushner, Donald Trump Sr., Kellyanne Conway whose name hasn't come up in any of this. But I'm listing these are the senior people around.

WEISS: I feel like you're done at this list. This was not a big organization. They were expecting to lose. And they were expecting to throw another Hail Mary at that point.

BURNETT: All right. Thank you very much, Jack.

And next, the U.S. claims to have new evidence of Iranian aggression. How will Trump respond tonight?

(BEGIN VIDEO CLIP)

REPORTER: Mr. President, are we going to war with Iran?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I hope not.

(END VIDEO CLIP)

BURENTT: And CNN special series "Champions for Change". I meet back up with a pastor that I met after Superstorm Sandy, how he rebuilt and is stronger for it.

(BEGIN VIDEO CLIP)

PASTOR J.D. WILLIAMS, ST. JOHN BAPTIST CHURCH: This church has now been resurrected from the ashes. And there is life here.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[19:46:32] BURNETT: Tonight, the U.S. claims to have multiple images showing Iran using commercial freighters to move missiles in the Persian Gulf. This is as a steady drum beat of warnings about Iran continue. U.S. officials also claim to have photographs of missiles on small boats in the region that were put onboard by Iranian paramilitary forces. The U.S. are moving aircraft carrier strike group into the region and ordered partial evacuation of the embassy in Iraq, citing a high risk for violence and kidnapping amid the tension.

OUTFRONT now, our counterterror analyst, Phil Mudd, former FBI senior intelligence adviser, former CIA counterterror official.

So, Phil, I want to stress -- we here at CNN have not reviewed this recent intelligence. The U.S. hasn't provided any of this evidence. They say they have it but it hasn't been put out there yet.

You worked at the CIA for many years, including in the lead up to the Iraq war. Is history repeating itself here?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Yes. Let's be clear -- we had clear intelligence on Saudi Arabia, the murder of a journalist. The administration has an interest in developing relationship with Saudi Arabia, what did we say? Intelligence, eh, not so much.

BURNETT: Prince says he is upset. Just leave it alone.

MUDD: We had pretty good, actually excellent intelligence on Russian interference with an election. What did we say? For policy reasons we want to improve relations with the Russians. The intelligence now --

BURNETT: Says he didn't do it.

MUDD: We have a government we want to demonize. The president said, let's tear up the nuclear agreement, and all of a sudden, intelligence is on CNN.

I smell a rat, Erin. Look, there is different questions about intelligence. Should the policy guys be concerned here? Of course they should.

Should the public be concerned? I'm skeptical. Show me some money. I haven't seen it yet.

BURNETT: OK, yes, because, I mean, it is a drum beat, right? It's commercial freighters, pictures of some fully assembling on a dhow. That's not a tanker. That is a dhow.

MUDD: You're not shooting a short range ballistic missile off a commercial freighter. I mean, no, that's not happening.

BURNETT: OK. Yet they keep putting this intelligence out there. And we know for example, the national security adviser John Bolton is extremely hawkish about Iran, right? His op-ed of bomb Iran. But President Trump has sent mixed messages this week.

OK. Here he is.

(BEGIN VIDEO CLIP)

REPORTER: Mr. President, are we going to war with Iran?

TRUMP: I hope not.

REPORTER: Are you planning to send 120,000 troops to the Middle East in response to Iran?

TRUMP: I think it's fake news, OK?

Now, would I do that? Absolutely. But we have not planned for that. Hopefully, we're not going to have to plan for that. If we did that, we'd send a hell of a lot more troops than that.

(END VIDEO CLIP)

BURNETT: OK. How dangerous is this?

MUDD: I think it's dangerous in terms of miscalculation. If you're the Iranians and you don't have much contact with the Americans, how do you interpret what the president is saying? How do you interpret it when you look at North Korea, for example, and he goes to the U.N. and then says this is little rocket man and then says we're going to negotiate?

In terms of an Iranian threat, let me give you a metric to think about. Does the Iranian government have a ballistic missile program that's going to reach Chicago and do they have an active nuclear program?

Now, we say we love the North Koreans, they have missile programs that they have directed across the Pacific Ocean. They can't strike America. They said, we hate the Americans, we have the nuclear programs.

We have the Iranians who the U.N. has said they are in compliance on international norms on nuclear and they're not doing anything. You figure it out, Erin, I think it's not that complicated.

BURNETT: All right. Thank you very much, Phil. MUDD: Thank you.

BURNETT: And next, CNN's special series, "Champions for Change".

I meet up with a pastor I met after Superstorm Sandy about how he found the strength to rebuild.

(COMMERCIAL BREAK)

[19:54:36] BURNETT: This week, we've been bringing you stories of remarkable people who are making lasting impact around the world. We call the series "Champions for Change," and it's really been a chance for us to go back and visit change makers that we've met in the past and are still out there making a difference.

I first met Pastor J.D. Williams in 2012, right after Superstorm Sandy crushed the East Coast. His church in Far Rockaway, New York, was on the brink of total destruction.

[19:55:01] He was overwhelmed, but Pastor Williams vowed to never give up.

And today, almost seven years after the storm, he is still preaching faith and perseverance.

(BEGIN VIDEOTAPE)

WILLIAMS: How many of you are going through a storm right now?

BURNETT (voice-over): For the parishioners of St. John Baptist Church, Sunday is a day to give thanks.

WILLIAMS: Look down on the floor and pretend that's where your storm is.

BURNETT: For Pastor J.D. Williams, there is much to be thankful for.

WILLIAMS: Sandy took the life out of this church, and now we come here. This church has now been resurrected from the ashes and there is life here.

BURNETT: Almost seven years ago, Superstorm Sandy ripped the community of Far Rockaway, New York, just outside Manhattan, and left a path of destruction up and down the East Coast. The storm killed more than 100 people, causing billions in damages.

BARACK OBAMA, FORMER PRESIDENT: This is a serious and big storm.

WILLIAMS: I remember tragedy and darkness and despair. That's what I remember.

BURNETT: More than 200 houses of worship were under water. St. John Baptist Church, less than half a mile from the ocean, was among the hardest hit.

WILLIAMS: A lot was destroyed, this unit. BURNETT: I first met pastor here at St. Johns in 2012, just days

after Sandy hit.

WILLIAMS: We need help. And I don't know even where to begin with all that we need. It's just overwhelming right now.

BURNETT: Before the storm, roughly 20 percent of Rockaway peninsula's population was living below the poverty level, struggling with unemployment and a lack of housing.

INEZ COLE, ST. JOHN BAPTIST CHURCH: Everything that we had was destroyed. Every thought through my head is, how are we going to survive this? But we didn't give up.

BURNETT (on camera): I remember coming here and seeing a place that had been destroyed.

(voice-over): Hundreds of parishioners, young and old, have always relied on St. John's for the basics, food, clothing, day care, transportation, and now, that was gone.

WILLIAMS: Everything that's in the church on the lower level was under six feet of water.

BURNETT: Juanice Pryce cared for children at the church for more than a decade.

JUANICE PRYCE, FORMER DAYCARE DIRECTOR: It was devastating to see all of the church we put in, the equipment, the toy, the books. The books --

BURNETT: Destroyed?

PRYCE: Destroyed. It made me feel so sad, but I always had the hope we would open it up again.

WILLIAMS: All this was a day care.

BURNETT: Pastor Williams vowed to rebuild, only he had a big problem. There was no money from FEMA for places of worship at all?

WILLIAMS: No money for places of worship.

BURNETT: How did it feel when you found that out?

WILLIAMS: I felt a sense of abandonment, forsaken.

BURNETT (on camera): Many places were destroyed like St. John Baptist Church.

(voice-over): But as soon as we aired the story in 2012, Pastor Williams says that feeling of abandonment began to change.

WILLIAMS: You are blessed, because through that interview, people across the country started sending donations to the church.

BURNETT (on camera): People could see one story about one place and raise their hand and reach out. And they made a difference.

(voice-over): The difference between 2012 and today is striking.

(on camera): I remember walking in here and sort of gasping because of how awful it looked.

WILLIAMS: Yes. Yes. It was just an absolute disaster.

BURNETT: It looks wonderful now, though. You really have changed it.

WILLIAMS: You wouldn't know that this was the same room.

BURNETT: No, you would not.

WILLIAMS: At all.

BURNETT (voice-over): The entire first floor has been rebuilt.

(on camera): So that everything in here is new.

(voice-over): A new boiler and hot water system, a new baptistry.

WILLIAMS: This is now the baptistry.

BURNETT: The church is providing math and reading tutoring for kids on the weekends.

WILLIAMS: I think we're up to 25, 30 students.

BURNETT: A church once again helping fill a gap in its community. But one thing is still missing, the day care.

(on camera): There is still a need?

PRYCE: There's still a need, yes.

BURNETT: Do people in the congregation ask you?

PRYCE: Yes. They come in with children. Where is the day care? When is the day care going to open? We can only say we're working on it.

WILLIAMS: Joy will come in the morning.

BURNETT (voice-over): There is a lot to be done, but the church was saved.

COLE: We cried a lot. We shed a lot of tears, because it was our home. But we celebrate now because we see the victory.

BURNETT: And for Pastor Williams, that is the key.

(on camera): Tragedy and triumph.

WILLIAMS: Each time we face a tragedy, we've experienced thereafter a triumph. (END VIDEOTAPE)

BURNETT: And you can see much more of our champions for change series. It's on Saturday night. You can watch all of them, all invigorating and inspirational stories. Don't miss our hour-long special. It is at 8:00 Eastern.

Thanks for watching. Anderson starts now.