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EARLY START

Whistleblower Complaint Alleges White House Cover-up of Ukraine Call; Former Ukrainian Prosecutor at the Center of Biden Rumor. Aired 4:30-5a ET

Aired September 27, 2019 - 04:30   ET

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


[04:30:33]

CHRISTINE ROMANS, CNN ANCHOR: A cover-up at the White House. A whistleblower says officials tried to hide damaging details about the president. And it wasn't the first time. What's next as the impeachment inquiry marches on? Welcome back to EARLY START this Friday morning. I'm Christine

Romans. Good morning.

DAVE BRIGGS, CNN ANCHOR: Good morning. Good morning to all of you. I'm Dave Briggs. 4:30 Eastern Time.

Big questions for this White House following a gripping day on Capitol Hill. The whistleblower complaint alleges a White House cover-up after President Trump pressed the leader of Ukraine to interfere in the 2020 election.

Overnight, CNN learned the Justice Department knew about the allegations soon after President Trump's July 25th call with the Ukrainian president. Officials briefed on the matter say whistleblower informed intelligence agency general counsel, who alerted the Justice Department as required. "The New York Times" reports the DOJ then told the White House. The timing of all of this raising more questions about the handling of the complaint and efforts to keep the details from Congress.

ROMANS: Overnight, "The Washington Post" reporting the White House has taken extraordinary measures to keep details of President Trump's calls with foreign leaders secret. A number of steps have been taken after embarrassing disclosures early in the administration. Among them, reducing the number of aides allowed to listen in on these calls and some officials who deliver call memos they now have to sign chain of custody records in case there's a leak.

Moments after the whistleblower complaints went public, acting spy chief Joseph Maguire testified to the House Intel Committee. He defended both the whistleblower and his own handling of the complaint.

(BEGIN VIDEO CLIP)

JOSEPH MAGUIRE, ACTING DIRECTOR OF NATIONAL INTELLIGENCE: I am not familiar with any prior instances where a whistleblower complaint touched on such complicated and sensitive issues including executive privilege. I believe that this matter is unprecedented. (END VIDEO CLIP)

ROMANS: The fallout from all of this has come fast and fierce.

CNN's Jessica Schneider is in Washington.

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Christine and Dave, the details of the whistleblower's complaint are now fully revealed and the stunning allegations are twofold. First, of course, that President Trump sought out Ukraine's assistance and interference for the benefit of his 2020 reelection campaign. And second, that the White House subsequently tried to cover it up.

The whistleblower laying it all out in stark detail, saying that senior White House officials intervened after the call to, quote, "lock down all records of that phone call." Now White House officials told the whistleblower that they were directed by White House lawyers to remove the electronic transcript from the regular computer system it would normally be on and transfer it to a separate system only normally used for highly sensitive materials that only certain officials have access to. All of this, in what some are saying amounts to a cover-up by the White House.

The whistleblower also recounting how White House officials said that they were deeply disturbed by what transpired in the July 25th phone call, where President Trump pressed the Ukrainian president to investigate Joe Biden and his son. And the whistleblower also saying that White House officials put it this way, that they had, quote, "witnessed the president abuse his office for personal gain."

And even more alarming, the whistleblower says this isn't the first time that a presidential phone call transcript was placed in the separate electronic system, leading to a lot of questions.

Now, the acting director of National Intelligence was on Capitol Hill for fierce questioning on Thursday. But he defended not only his handling of the complaint, but also the whistleblower, saying that that whistleblower did the right thing and followed the right steps to get that complaint into the right hands.

The whistleblower does want to talk to members of Congress, and if he is allowed to, that could, of course, be the next step in what has officially now become an impeachment inquiry -- Christine and Dave.

BRIGGS: Great reporting, Jessica. Thank you.

As for the next steps, Speaker Nancy Pelosi has assigned the House Intel Committee to take the lead on impeachment. She's telling members the probe will for now focus narrowly on allegations related to the Ukraine call.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA): The complaint reports a, quote, "repeated abuse" of an electronics record system designed to store classified, sensitive national security information, which the White House used to hide information of a political nature. This is a cover-up. This is a cover-up.

(END VIDEO CLIP)

[04:35:02]

BRIGGS: Democrats are hoping to vote on formal Articles of Impeachment before the holidays. For now, they don't plan to make Robert Mueller's report central to their investigation.

ROMANS: Mueller's work had been under the purview of the Judiciary Committee but its hearings on alleged Trump misconduct were widely panned for turning into a circus. More than half of House members now support an impeachment inquiry. Remember, impeachment requires only a simple majority in the House. Removal from office requires a vote of two-thirds in the Senate, which is of course controlled by the GOP.

BRIGGS: President Trump reacted angrily to the whistleblower complaint suggesting whoever spoke to the whistleblower is a traitor and alluded to execution as a punishment.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I want to know who's the person that gave the whistleblower, who is the person who gave the whistleblower the information? Because that's close to a spy. You know what we used to do in the old days when we were smart, right, with spies and treason. Right? We used to handle them a little differently than we do now.

(END VIDEO CLIP)

BRIGGS: CNN has learned inside the White House some are now second- guessing the decision to release the whistleblower complaint and the Ukraine call summary under the belief it would de-escalate the situation.

ROMANS: Two Republican governors now publicly support the impeachment inquiry. Vermont Governor Phil Scott and Massachusetts Governor Charlie Baker. Among Republicans in Congress, criticism of the president and support for impeachment is rare. Instead the party strategy involves trying to discredit the whistleblower.

(BEGIN VIDEO CLIP)

REP. KEVIN MCCARTHY (R-CA): What in this case rises to impeachment? This is a president of the United States that had a conversation with a leader in another country.

REP. MIKE CONWAY (R-TX): Find anybody out there who third and fourth hand information could build their allegation that they want to -- that they're concerned about. My guess is, based on the reporting that you guys do, there's a lot of folks out there who --

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: The inspector- general said that this was an urgent and credible concern.

CONWAY: Well, under the pure definition. Not urgent the way we normally consider urgent.

(END VIDEO CLIP)

ROMANS: A handful of Republicans in the House and Senate have criticized the president but most are deflecting. Many influential GOP senators say they hadn't even read the complaint as of late yesterday. It's about nine pages.

BRIGGS: Yes. You can do it.

ROMANS: It's a brisk read.

BRIGGS: It is your duty.

One big question, is Trump's personal attorney Rudy Giuliani in legal jeopardy? According to the whistleblower complaint, multiple U.S. officials said they were deeply concerned by Giuliani's circumvention of national security decision-making processes. The whistleblower says Ukrainian leaders believe they needed to play ball with Giuliani and that contact with Mr. Trump would depend on their receptiveness to investigating the Bidens. Giuliani's involvement could violate the Logan Act which makes it a crime for private citizens to intervene and dispute with foreign governments without authorization.

ROMANS: The complaint says at least two State officials called Giuliani trying to contain the damage he was doing. Giuliani claims the State Department reached out to him first, a claim CNN has not been able to verify. "The New York Times" reports Secretary of State Mike Pompeo is frustrated with Giuliani and here's how Giuliani responded.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, PRESIDENT TRUMP'S PERSONAL LAWYER: In fact, I'm a legitimate whistleblower. I have uncovered corruption that this Washington swamp has been covering up effectively for years. And his State Department, you know, asked me to do this.

So, Mike, if you're unhappy with me, I'm sorry. But I accomplished my mission.

(END VIDEO CLIP)

ROMANS: Giuliani also told "The Atlantic," "It is impossible that the whistleblower is a hero and I'm not. And I will be a hero. These morons -- when this is over, I will be the hero."

BRIGGS: And there is new intrigue around a former top Ukrainian prosecutor whose allegations against the Bidens were central to Giuliani's efforts. He inadvertently set a trap for President Trump.

CNN's Matthew Chance live from Kiev with more on that.

Matthew, good morning.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, good morning to you as well, Dave. That's right. I mean, his name is Yuriy Lutsenko. He features prominently in the whistleblower report that we've been wading through here. And of course over there, as well, to try and get some information about how this actually unfolded. It seems that Lutsenko was the main point of contact with the Trump administration, particularly Rudy Giuliani when it comes to all those rumors, the speculation, the conspiracy theories that were circling around, particularly the one about Joe Biden's propriety when as vice president he urged the sacking of a prosecutor general here in Ukraine, supposedly according to the conspiracy, to protect his son's boss.

Those rumors were already circulating but Yuriy Lutsenko crystallized those for the Trump administration, for Rudy Giuliani. And he wasn't just some random guy walked in off the street. He was the prosecutor general of this country. And so this was something that Rudy Giuliani and the Trump administration clearly couldn't resist. They thought it was great to the extent that on that phone call, on July 25th, from the White House has issued a transcript of that now, first that Trump actually advocated for Yuriy Lutsenko on that call.

[04:40:01]

President Zelensky here, I know they started the process of removing him, they didn't trust him. They thought he was corrupt. They thought he was a political operator and was too soft on corruption. But in that call, President Trump asked for a restarting of this investigation and he says look, good, I heard you had a prosecutor who was very good and he was shut down. And that's really unfair.

That's what President Trump said to President Zelensky, basically advocating for Yuriy Lutsenko, somebody who -- his personal lawyer, Rudy Giuliani, had been in close contact with about all these things. To his credit, President Zelensky didn't bow to that pressure. He got rid of him within a month. And appointed his own guy but it could have been a point of conflict, contention and tension between the Ukrainians and the American administration.

BRIGGS: Indeed. Matthew, just a quick question. Obviously it goes without saying or showing, this is front page news on every paper here, and talked about, and the people are aware of it. How much is it covered there locally? And how much are the people aware of the story?

CHANCE: No, I mean, it's top news here, as well, obviously. I mean, this is a massive story. But they're not the same angle you're getting over there. I mean, the story here, and the concern here, is how does this affect Ukraine? They're fighting a war in the east, with Russian-backed rebels. They're engaging a diplomatic campaign, that's to secure Crimea back from Russia which was annexed by Moscow in 2014. To what extent they're all thinking is this damaging the cross-party support we have in the United States, in order to prosecute those -- that conflict and that campaign? They're worried about what it means for them and it is not good news.

BRIGGS: Indeed. All right. That's great reporting. Matthew Chance live for us from Kiev this morning. Appreciate it. ROMANS: Safety, the whistleblower's now a big concern. Top House

Democrats are now warning President Trump to stop what they call reprehensible witness intimidation. Three committee chairmen write, "Threats of violence from the leader of our country have a chilling effect on the entire whistleblower process, with grave consequences for our democracy and national security." A GoFundme to cover legal fees for the whistleblower. It's now reached more than $125,000. And I'm interested to see, Senator Chuck Grassley from Iowa has long

been a champion of protections for government whistleblowers.

BRIGGS: Yes.

ROMANS: It'll be interesting to see for those in the Republican Party who've long wanted to make sure that whistleblowers can freely call out wrongdoing in the government if they're going to be protected.

BRIGGS: Yes. The internet was not happy with "The New York Times" reporting on the identity or background of the analyst. Cancel "The New York Times" trending all day on Twitter for that.

Ahead, the number of refugees allowed into the United States will hit a record low. New rules from the White House, next.

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[04:47:18]

ROMANS: In the midst of the longest economic expansion in American history, the gap between rich and poor is at an all-time high. The Census Bureau's genie index, it measures income inequality, climbed to 0.485. What's that mean? Well, a score of one indicates total inequality and this is the highest it's ever been. Nine states saw spikes in inequality. Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas and Virginia. Even with unemployment rates at historic lows, the federal minimum wage is only $7.25, has been there for over a decade. Economists say that's one of the reasons the gap between the rich and the poor is increasing.

Income inequality has become one of the issues for 2020 Democratic candidates. Senators Bernie Sanders and Elizabeth Warren have called for a wealth tax while the gap between the rich and poor is in all- time high. The median household income tops $63,000 for the first time. "The Washington Post" reports it's roughly the same as it was about 20 years ago.

BRIGGS: A record low number of refugees will be admitted to the United States. The Trump administration says only 18,000 refugees will be allowed in next fiscal year. That's compared to 30,000 this year, which was the lowest level since 1980. More than 100,000 refugees were admitted in the final years of the Obama presidency. Some in the White House wanted to let in no refugees at all. The head of the International Rescue Committee responding in a tweet, "This is a very sad day for America."

ROMANS: The State Department says Syria's Assad regime carried out a poison gas attack against its own people last May. Secretary of State Mike Pompeo announcing the government's conclusion that Assad hit the city of Idlib with chlorine gas. Pompeo called it part of the regime's ongoing violent campaign in Idlib which has killed more than 1,000 innocent Syrians. He said the U.S. will not allow these attacks to go unchallenged, without specifying what the response might be.

BRIGGS: Military suicides keep rising. A new Pentagon report shows 541 service members died in 2018, that's up from 511 the year before. The report shows a particular increase among active service members, 325, up from 285. Pentagon officials say they don't see a direct correlation between suicides and combat deployments.

ROMANS: All right. Peloton is officially on Wall Street. Clip in, boys and girls. Hear what the CEO told me about the bike and what he hopes for the future of Peloton, next.

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[04:54:11]

ROMANS: Two more deaths related to vaping, bringing the nationwide total to 13. The CDC says there are now 805 confirmed and probable cases of lung illness associated with e-cigarette use in 46 states. That is up sharply from 530 cases just last week. The 13 deaths are spread across 10 states. Later today Washington Governor Jay Inslee is expected to announce a vaping-related executive order. Several states have put a hold on the sale of vaping products.

BRIGGS: Another escalation between the White House and the state of California. President Trump said he would go after the state last week for water pollution that he blames on its growing homeless population. The warning became real Thursday with an EPA letter to the governor saying he is failing to enforce the Clean Water Act. The agency has given the state 30 days to respond to a list of deficiencies. White House recently revoked the state's ability to set stricter auto emissions.

[04:55:03]

It also threatened to withhold billions of dollars and highway improvement funds over the state's air quality.

ROMANS: Chicago teachers set to walk off the job as early as October 7th. The teachers' union voting Thursday to authorize a strike by 29,000 educators. 94 percent of its membership approved the potential strike. They've been working for nearly three months under an expired contract. A teacher's strike could affect the approximately 360,000 students in Chicago public schools.

BRIGGS: A Delta employee arrested on charges of stealing a bag with $250,000 in cash from JFK Airport. Quincy Thorpe, a Delta ground services employee, was responsible for scanning and loading eight bags on to a plane bound for Miami. But according to the complaint, only seven made it on the plane. Thorpe called out sick from work over the next two days. He's admitted to the FBI. He knew the bags contained valuables. ROMANS: In what can only be described as a freak accident, a skydiver

was killed on descent, when she crashed into a big rig trailer on a highway in central California. Police say the 28-year-old woman collided with the back of a truck and then hit the highway shoulder. She was pronounced dead at the scene. Local news report says she was parachuting with a group of seven people. The rest landed safely.

BRIGGS: Want to avoid sitting next to a crying baby on your next flight? Japan Airlines has a plan for you. The carrier introduced a new feature on its Web site's booking system that shows you where young children are seated. A child icon appears where a passenger is traveling with a child up to 2 years old. However, the airline warns that the tool is not fool-proof. The icon may appear if a ticket was booked through a third party or if there's a last-minute change in aircraft.

ROMANS: As a frequent business traveler, a crying baby, it does not matter where you sit on a plane, a crying baby you can hear -- just put on the big can headphones.

BRIGGS: Yes. But five or six rows --

ROMANS: Noise-cancelling headphones.

BRIGGS: -- allows a little more peace and quiet for the business traveler.

ROMANS: I love babies. Even when they cry.

BRIGGS: Not that much.

ROMANS: Let's get a check on CNN Business this morning. A look at your global markets here. You can see European chairs have opened a little bit higher here. But Asian mostly fell on poor Chinese economic data and uncertainly surrounding U.S.-China trade talks. I think every day, that's going to be the headline.

Optimism today on trade talks. Pessimism today on trade talks. Until that is resolved. On Wall Street right now futures just a little bit higher here. The stock market finished lower Thursday, as investor ss shrugged off the impeachment inquiry into President Trump. The Dow only down about, I don't know, 80 points. The S&P 500, the Nasdaq also down a little bit.

Investors turned to the economy. The final estimate of second quarter GDP unchanged at 2 percent. In line with expectations. But you can see that is slower than the pace in the first quarter of the year.

Peloton is the latest company to go public in this year's unicorn parade. Peloton shares, though, skidded 11 percent lower in its debut. The business model, it's a fitness, media, technology, music, social media hybrid and it's addictive for its core users. 95 percent of people who sign up are still working out a year later. It's got 1.4 million members and the CEO told me the company, he thinks they could reach 45 million households or more pretty quickly. The critics wonder if that many Americans will actually pay $2400 for

a bike or $4,000 for a treadmill and $39 a month for the programming. The Peloton CEO John Foley says it's not just an expensive product for one percenters. He did some math and says it's the opposite.

(BEGIN VIDEO CLIP)

JOHN FOLEY, CEO, PELOTON: We are trying to shift the optics on affordability on the Peloton membership. And for the value you get, for effectively $29 per person, for the hardware. So we think it's crazy affordable.

(END VIDEO CLIP)

ROMANS: So he takes the $2400 bike, divides it by two for two members of the household, right?

BRIGGS: Yes.

ROMANS: And then divides it by 12 and says it's like 58 bucks a month. That's less than gym membership if he does that math.

BRIGGS: That is true. If you have that kind of money to lay out in the beginning.

ROMANS: To lay out, right. He told he was disappointed by the opening performance but he's looking ahead to when big investments pay off by turning a profit.

(BEGIN VIDEO CLIP)

FOLEY: We believe we are investing in the future, we're investing in new categories in the trend and yoga and other categories we will bring to market in the coming years.

(END VIDEO CLIP)

ROMANS: He teased a new product that he said he shouldn't be telling me about. So I don't know what it's going to be but they're testing a new product right now, too.

BRIGGS: What time are we clipping in and riding? Not a product endorsement. But what time are we riding?

ROMANS: I can ride with you today at 3:00 in the afternoon.

BRIGGS: OK. We're going to grind today on a Friday.

ROMANS: Yes.

BRIGGS: EARLY START continues right now.

ROMANS: A cover-up at the White House. A whistleblower says officials tried to hide damaging details about the president and it wasn't the first time. What's next as the impeachment inquiry marches on? Good morning, everyone. Welcome to EARLY START. I'm Christine

Romans.

BRIGGS: Good morning. Good morning to all of you. I'm Dave Briggs. It is Friday, September 27th, 5:00 a.m. in the East. Major news. Big questions.

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