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Nadler Breaks with Pelosi Over Trump Impeachment Inquiry; A Judge Releases Trump's Attorney's Voicemail to Flynn's Lawyer; President Trump Faces Deadline Today to Impose Tariffs on Mexico. Aired 9-9:30a ET

Aired June 07, 2019 - 09:00   ET

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

[09:00:22] JIM SCIUTTO, CNN ANCHOR: Good morning, I'm Jim Sciutto in Washington. We begin this hour with breaking news.

A high stakes near-collision at sea. CNN has obtained exclusive video of a Russian destroyer very nearly colliding with the USS Chancellorsville, a guided missile cruiser. This in the Philippine Sea this morning. Russia says that the U.S. ship was at fault, but these and other images released by the U.S. Navy appear to show otherwise.

CNN's Barbara Starr is at the Pentagon, first to obtain these pictures.

What do we know this morning, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Jim. We're going to keep that video up so all of our viewers can look at it and see what is happening there. This video is very telling, according to the U.S. Navy, because it shows a wake of the water behind and on the side, if you will, of the Russian ship as it makes its approach to the U.S. Navy ship which is clearly in front of it. You see that wake. That is an indicator of the Russian ship moving at high speed.

There are other images that show it with that wake showing it made a steep turn towards the U.S. Navy warship. Now it came according to the Navy within 50 to 100 feet of the U.S. ship. You can look at this video and you can see the U.S. sailors can almost reach out and touch the deck of the Russian ship. That's how close this is. And remember both ships are moving in the water, nobody is standing still.

So the risk of miscalculation is significant. The risk of a collision according to the Navy was very significant because the U.S. Navy was trying to land helicopters on its deck at the time and to land a helicopter on a moving ship at sea you have to maintain a steady course, you can't make sudden maneuvers. But in fact, as this Russian ship approached the Navy had to put its engines into reverse full speed and try and back off as fast as they could they say to avoid a collision.

The Russians say they had the right of way, it was the Navy's fault. The Navy says, look at the video -- Jim.

SCIUTTO: And, Barbara, you make the point that the Navy very quickly releasing still images of this and now the video. That is no accident. That's with intent, right, to draw attention to this?

STARR: It is. But they feel that they have the images here to show the world the case that they are making. The U.S. Military feels that the Russians often engage in military propaganda, if you will, putting out statements about things, and the Navy, the Air Force, has to come back with what visual evidence it has to push back against the Russians. Remember, it was just yesterday that a Russian aircraft, according to the U.S. Military, made an unsafe pass at a U.S. aircraft over the Mediterranean. Last month U.S. Air Force F-22 fighters had to escort Russian planes as they intercepted them off the coast of Alaska.

The Russians have been engaging, there is no question, in, you know, pinging at the U.S. military operations, if you will, and the U.S. Military very much pushing back, very much making the case that the Russians in these instances are not following international maritime and air rules of the road, if you will. That there are very well established practices for operating safely at sea and in the air and they say the Russians are not doing that -- Jim.

SCIUTTO: These are dangerous near-collisions. Just takes one mistake and lives are at risk.

Barbara Starr, thanks very much.

Let's get some analysis now. Retired rear admiral and CNN military analyst John Kirby.

You look at this, Admiral Kirby, this is no accident. This is an intentional move by this Russian --

REAR ADM. JOHN KIRBY, CNN MILITARY AND DIPLOMATIC ANALYST: No question about it. I mean, you've got a ship in restricted maneuvering, the chances of recovering helicopters, there is a very limited amount of things she can do to maneuver in that case so clearly the Russian destroyer was making a run at her at a high rate of speed. Absolutely intentional.

And look, she would have known that the Chancellorsville was recovering helicopters because you could see it happening. She's flying visual indicators and I'm sure that the captain of the Chancellorsville was on bridge-to-bridge radio warning the Russian vessel what they were doing and to stay away.

SCIUTTO: That's a good point because they would have bridge-to-bridge communications.

KIRBY: Absolutely. Standard procedure for them to get on the radio and say hey, what are you doing? You know, we're in restrictive maneuvering, you need to stay away. I'm sure that that happened. So clearly this was a provocation.

The other thing that's interesting is the Russians were the first to talk about this. They put out a press statement before the U.S. Navy did, so clearly not only do they know what they were doing here, a provocation on purpose, but they wanted to message it for themselves. SCIUTTO: Now it happens at an interesting time. Well, interesting

place because this is East China Sea, Philippine Sea, this is off the coast of China.

KIRBY: Right.

[09:05:04] SCIUTTO: This is a Russian ship, but it happens as Russia and China are holding a high stakes meeting.

KIRBY: That's true. President Xi is meeting with President Putin as we speak. Clearly this sends a strong message I think to President Xi from Putin's perspective that hey, we're on your team, we're with you. We have seen the Russians and the Chinese cooperate increasingly now at will when it suits their interests. Just last year there was a big major exercise in the east of Russia which had never included the Chinese and the Russians invited them. All to send a message to the United States that we are interested in diminishing your influence in the region.

SCIUTTO: Now this is message sending, but is there also a military function to this? I mean, Barbara mentions when you have Russian bombers going into U.S. air space or Russian fighters scrambling to intercept U.S. airplanes over the Mediterranean, are they also testing reaction times, for instance? I mean, is there intel that you gain from these kind of interactions?

KIRBY: Absolutely. Anytime you get forces and assets of different countries together like that you can glean intelligence not just about capabilities, what these things can do, but also how the nation state itself is going to react. So I think there is message sending here, there's also -- they are testing to see what Trump will do, how he will react, how strongly he's going to move on this and the Russians are always interested in pushing the boundaries and the envelope.

SCIUTTO: Absolutely.

KIRBY: Just to see how much they can get away with.

SCIUTTO: Yes.

KIRBY: And they won't recoil unless they're slapped back. So it's going to be really interesting to see how the U.S. government as a whole, not just the Navy, reacts to this.

SCIUTTO: Well, what should the response be? I mean, because -- as you served at the Pentagon and State Department, China and Russia often tested these bounds both on the air and on the surface. What is the correct response? I mean, is it to fly or sail U.S. warships close to Chinese or Russian warships or fly U.S. aircraft close to Russian or Chinese aircraft?

KIRBY: So I'd say three things, one, the Navy is doing exactly the right thing, the Pentagon is doing the right thing, release this video so you can make it clear what really happened. I think pursuing or at least discussing a formal demarche through the State Department of the Russian government with the -- SCIUTTO: Diplomatic communication based --

KIRBY: It gets it on the record. And number three, and this gets to your question, Jim, to not diminish the U.S. military presence in these parts of the world. These are international waters. This happened near the Senakaku Islands which of course the Chinese and the Japanese are still disputing over. It's important for the U.S. Military to maintain a presence out there, particularly in international air space and international waters to show that we do stand for freedom of navigation and that the United States' presence and military force is not going to go away.

SCIUTTO: I was on a spot plane over the South China Sea, those manmade islands.

KIRBY: Yes, you were.

SCIUTTO: Which is part of this message sending.

KIRBY: That's right.

SCIUTTO: Admiral John Kirby, thanks very much. Always good to have you on.

Listen, folks, we've talked about this before on this broadcast, I have written a book about exactly this. I call it "The Shadow War." It is Russia and China as Admiral Kirby was saying, pushing the limits here, seeing how far they can go with military aggression, territorial aggression, pushing the envelope, seeing what the U.S. response is. And the sad fact is, and I speak to loads of current and former officials here is that they have gotten the better of us for years now. The question is, will the U.S. pushback.

That's "The Shadow War." It's available anywhere you want to buy it. Amazon included.

There is more breaking news this morning, here at home. The U.S. economy added only 75,000 jobs in May, that is well below experts' forecast and it is happening as the president is threatening to impose new tariffs on Mexico which would have economic impacts as well. That's what U.S. companies are warning.

Joining me now, chief business correspondent Christine Romans.

What strikes me about these numbers well below forecast for this month, but they are also downgrading growth from the previous two months as well.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes, very good -- very good eye there because you have 75,000 net new jobs in May and in the prior two months which had been strong the government shaves 75,000 off of those as well. I mean, when you look at this trend really, 2018 was awesome, about 223,000 net new jobs a month, so consider that. This year you're averaging about 164,000 a month and then look at May, it's half of that. So something happened there with business confidence, something

happened there that stalled hiring. Now the jobless rate stayed steady there at 3.6 percent. That is a generational low. So that's an important number to put in perspective. You had slower hiring, much lower hiring in the month but the jobless rate here stayed steady. So we'll watch that.

In terms of sectors, really it was across the board. Not the robust hiring we've gotten so used to in past years. Business about 33,000, healthcare a little lighter than normal, and construction only 4,000. I think manufacturing only had 3,000. So what you see there is a slowdown in that part of the economy.

What could be at play here? One thing economists are saying this morning, Jim, is that quite frankly some of these industries, especially small business, might be running out of well qualified workers. They can't find the workers. There still are more open jobs in America than there are people searching for those jobs. The second and the big, big headline here is Trump's tariff wars could be denting confidence at this point.

[09:10:06] And that's really important to see how that lagging effect on the market bears out over the summer is -- are the trade wars denting confidence in companies who are going to hire less until they figure out what their cost structure is going to be with Trump's multiple trade wars?

SCIUTTO: Christine, stay with us.

I want to also want to bring in CNN global economic analyst, Rana Faroohar, she's global business columnist, also associate editor at the "Financial Times."

Rana, it's interesting. So you start to connect the dots here because there have been some other warning signs in recent months, for instance, even when job figures were strong. Christine and I have talked about how manufacturing numbers were low there, there are questions about waning business investment. As an economist when you piece these together do you see warning signs of a slowing economy?

RANA FAROOHAR, CNN GLOBAL ECONOMIC ANALYST: Absolutely. And I think that there's two things at play here, one is what Christine mentioned. The May numbers are absolutely being affected by the trade war. I mean, when I go around and talk to CEOs May was really when the rubber hit the road. This is when they said, OK, this trade war isn't going away, it's for real, it's getting hotter and it's going to affect a broader range of products. So almost everyone I know is rethinking their supply chain.

But I think that there's another issue at play and that's the way in which technology is affecting the economy. I mean, on the one hand bringing in software, automating things, it increases productivity but it also cuts workers. And if you don't have workers that are skilled up enough to be able to use new technologies, then you've got a real mismatch in the labor market. Now I think that that's at play here in some of this long-term job growth dampening. SCIUTTO: Christine, it is about the trade war to some degree, but

also we're 10 years into an economic expansion here are we not?

ROMANS: Yes.

SCIUTTO: So is it about the economic expansion getting long in the tooth but also -- and also the diminishing of the effects from the tax cut.

ROMANS: That's such a good question because an economist earlier this morning told me, you know, the sun doesn't shine forever, right. But, you know, a bull market and a big expansion doesn't die of old age either. There is a reason, there is always a reason, a catalyst that kills a bull market and kills an expansion. What's that catalyst going to be. I mean, the Fed has said that, you know, it's watching all of these events, trade war events, and will act appropriately.

What the market and what people in the market think that means is that if the president pursues these trade wars and starts to really hurt the U.S. economy the Fed is going to be forced to come in and actually be the shock absorber and -- or if you want to use a different metaphor the foam on the runway to relate -- to cushion the fall here. So what the market is anticipating here is that the Fed after all of that cajoling from the president in the end would have to bail out the president.

SCIUTTO: The --

FAROOHAR: You know, it's interesting, Christine.

SCIUTTO: Sorry, go ahead, Rana.

FAROOHAR: To add to this, you know, it's interesting you're using the foam on the runway metaphor because that was used by Tim Geithner.

ROMANS: That's right.

FAROOHAR: The former Treasury secretary in the run up to the 2008 crisis. And I actually worry that we may be at a similar point. We're not going to see big banks falling, you're not going to see a Lehman Brothers moment. The banks have actually gotten in better shape. But corporations have more debt on their balance sheets than ever before in history. And I think that we could if you have a bigger effect on the trade war, if you have a bigger global slowdown you could start to see some dominoes fall where troubled companies go bankrupt, they can't pay back their debt, that starts to create a kind of ripple effect in the economy.

That's something to really watch out for. And also the fact that we can't even absorb a quarter point of an interest rate hike at this stage of a cycle says something that's fundamentally wrong in the underlying economy to me.

SCIUTTO: Chances, Rana, that the Fed cuts rates now as they watch these signals? FAROOHAR: I think the chances are high. I think that you probably

are going to see exactly what Christine said. Rate cuts going on into the year. The problem is that we have gotten addicted in our economy to debt, to cheap money.

ROMANS: Yes.

FAROOHAR: We cannot run an economy without rates that are in any way normal and that shows fundamental unhealthiness. And I think that you'll see that as a big issue in the 2020 campaign.

SCIUTTO: There have been folks warning about that for some time.

Rana Faroohar, Christine Romans, thanks very much.

ROMANS: You're welcome.

FAROOHAR: Thank you.

SCIUTTO: Still to come, top Democrat and House Judiciary chairman Jerry Nadler breaking with speaker of the House Nancy Pelosi at least behind closed doors. His private push to open an impeachment inquiry into President Trump despite Pelosi's opposition next.

Plus the deadline is looming. President Trump says the U.S. will implement a 5 percent tariff on Mexico on Monday, a move that could send the economies of both countries into turmoil. The latest on those ongoing negotiations.

Plus a man arrested and accused of plotting an attack on Times Square. He will be in court this morning. What police are saying he planned to do. The details ahead.

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[09:15:00] JIM SCIUTTO, HOST, NEWSROOM: Just minutes from now, President Trump will head back to Washington to a house still very much divided over whether to impeach him. It's remarkable. Heading the anti-impeachment camp is the Speaker Nancy Pelosi, no change there, but CNN has now learned Judiciary Committee Chair Jerry Nadler has emerged as a powerful voice behind the scenes supporting launching an impeachment inquiry.

CNN's Manu Raju is on Capitol Hill. So this private disagreement breaking out into public here. How hard is Nadler pushing his case right now.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, he's been increasingly making this case behind the scenes to the speaker, trying not to break with her publicly, but privately trying to convince her that this is the way to go.

At a closed-door meeting earlier this week, I am told that he made the case that this would add weight to their legal fights in court, saying that these efforts, the Democrats are trying to enforce their subpoenas, could -- get -- be boosted by arguing to federal judges that this is all part of an impeachment inquiry.

The real fear is that if they lose one of these cases, it could really set back efforts to oversee the administration and set back efforts by Congress to investigate.

[09:20:00] Also Nadler made the case that all this would centralize the investigations before his committee, the House Judiciary Committee, while freeing up other panels from -- to do legislation instead. But there was push-back, Nancy Pelosi, we now know said that she'd rather see the president in prison than impeach at that very meeting.

Also Adam Schiff; the House Intelligence Committee Chairman who has been investigating the president's conduct as well did not want to go for this approach. So Nadler is facing resistance from some of the top ranks of the leadership, namely Nancy Pelosi, even as the rank- and-file and people on his committee and he himself want to move forward with that impeachment inquiry. Jim?

SCIUTTO: Nadler is pushing a measure to streamline the process of getting court orders to enforce subpoenas here -- I mean, I imagine a reaction to what appears to be the White House strategy to kind of send this all to court, drag it out hopefully beyond 2020 if possible here. What is Nadler trying to accomplish?

RAJU: Yes, and to speed things up. The real concern among Democrats is that things have been going pretty slow so far in their fights with the White House. They've been trying to get a move, a vote on the floor to hold Bill Barr in contempt for weeks, but because of all the other legislation and all the priorities that the speaker has, instead that has sort of gone by the wayside.

But next week, what we're going to see is a resolution on the floor of the house to make it easier for all house committees to take their fights to court, avoid a vote on the house floor and essentially go directly to the courts and say, if someone is not listening to their subpoenas to try to get a court to enforce their subpoenas.

That could really speed things up, Jim, and give these committees significant new power, something that has some people concerned that it could set a precedent for some chairman if they want to be -- go all out and not listen to their leadership, they could do whatever they want. But they have -- there's a little bit of a check in that system, but nevertheless a significant new power that the house is poised to give their chairman next week.

SCIUTTO: Look, judges are going to have a lot of power in deciding how this goes forward. Manu Raju on the Hill, thanks very much. I'm joined now by former federal prosecutor and CNN legal analyst Shan Wu. So Shan, what do you think of Nadler's attempt here? First of all, does it have a shot in terms of streamlining this whole process? Listen, I see the argument for it, imagine folks at home too, they're like just give us an answer, where is this all going?

SHAN WU, FORMER FEDERAL PROSECUTOR: Right, I think generally, people feel like, I thought they were already holding him in contempt. SCIUTTO: Right --

WU: So I think it's a good idea to streamline it, but I would agree with Manu, there's some potential for abuse there. I mean, if you have all these various committee chairs all going to court, it doesn't necessarily mean that the courts are going to advance at the same time. Different judges --

SCIUTTO: Sure --

WU: Different time tables. They actually could end up slowing things up some, because you'd have a whole shotgun effect of these different small cases going on with contempt.

SCIUTTO: Right --

WU: It also, I think, lends itself to the White House, saying this is more political. Look at all these people --

SCIUTTO: Right --

WU: Issuing these subpoenas and trying to get us all on contempt on every little thing.

SCIUTTO: OK, on the impeachment question, Nadler's argument to Pelosi in effect is one, it will help us streamline all these investigations under one process here, impeachment proceedings. But also there's the argument that it gives you more investigative powers, et cetera. I mean, explain --

WU: Yes --

SCIUTTO: It from a lawyer's perspective how that would work.

WU: It's a notion that the impeachment power for Congress is kind of at the -- it's the low star, heart of low star, heart of their powers, and once they commence that, they believe that the courts are going to be much more sympathetic to what they're asking for in terms of enforcement --

SCIUTTO: Right --

WU: Of contempt and such. And that's why there is a push which I think is hard for people to follow of open the impeachment inquiry. Doesn't necessarily mean they will vote to --

SCIUTTO: Right --

WU: Quote, "charge him with impeachment articles and of course still different from actually convicting him in the Senate which is that third step.

SCIUTTO: Yes, but is it true then that judges traditionally see investigations under the impeachment umbrella as more protected if that's the right word?

WU: I think -- well, very little history of that in terms of precedent --

SCIUTTO: Right --

WU: But if you look to the Watergate area -- Watergate era, it seems like they would --

SCIUTTO: OK --

WU: Look at that more seriously.

SCIUTTO: I want to play for you because this is one of the many instances during this broader investigation -- sorry, I'm going to quote for you, where it appears an attempt of at least interference, I don't know if legally it's obstruction. But this is the president's lawyer at the time John Dowd asking Michael Flynn's then lawyer just before Flynn signed his plea agreement to keep the White House apprised of whatever Flynn told Mueller.

Dowd says in part, I'm quoting here, "if there's information that implicates the president, we need some kind of heads up. Remember what we've always said about the president and his feelings towards Flynn and that still remains." What the heck? You know what? His feelings towards the president has always liked him, so please give us a heads up and, by the way --

WU: Yes --

SCIUTTO: You know, remind you of the friendship here. Is that not obstruction?

[09:25:00] WU: That looks pretty obstructive to me. If I were representing Dowd, I'd argue you've got to look at the overall context of things. But really, in that situation, I've been in that situation where you think the other lawyer's client may be cooperating, you're really very limited.

Really, you should only say, are they cooperating?

SCIUTTO: Yes --

WU: That's about it. So he's clearly trying to send a message here. In fact, it -- I've listened to the actual audio of it as well, and when you put in the tone, it's really problematic because what he's really saying is if you're thinking of implicating the president the president, realize this could have repercussions for the whole country.

SCIUTTO: Yes --

WU: So think twice about that -- and oh, by the way, remember he likes you, too, wink-wink.

SCIUTTO: Why isn't that construction? I just -- and I'm not a lawyer, but I mean, the intent seems to be to deliver a message and get a cooperating witness not to cooperate. WU: I think the problem in prosecuting Dowd for that would be trying

to understand what his direction was from his client. And if -- again, if I was representing Dowd, I'd say, look, you don't understand the context of this. This was part of other conversations we've had, this is just one point in your contacts --

SCIUTTO: Yes, but this is a president who has tweeted things about cooperating witnesses and made --

WU: Yes --

SCIUTTO: Public comments, and then you consider this other web of the ten instances that --

WU: Oh, yes --

SCIUTTO: Bob Mueller found --

WU: Yes --

SCIUTTO: Of at least what he said was evidence of possible obstruction.

WU: I think for overall obstruction on the president's part, looks pretty open and shut. There's so many attempts on that. Here in particular with Dowd's communication, I think is a little bit -- a little tricky to go after Dowd because he's going to really hide behind the attorney-client privilege aspect --

SCIUTTO: Yes --

WU: And say that there's stuff I can't tell you, there's things you don't understand --

SCIUTTO: Right --

WU: About this, but the message certainly seems intended to corruptly persuade.

SCIUTTO: He was working for the U.S. president at the time.

WU: That's right --

SCIUTTO: Shan Wu, always good to have you on.

WU: Thanks.

SCIUTTO: Running out of time, this morning, U.S. and Mexico officials are meeting once again, attempting at least to strike a deal to avoid President Trump's threatened tariffs. A decision must be made by today.

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