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White House Blocks Ambassador Sondland's Testimony to Congress; Stocks to Open Lower Ahead of New U.S.-China Trade Talks. Aired 9-9:30a ET

Aired October 8, 2019 - 09:00   ET

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


[09:00:00]

POPPY HARLOW, CNN ANCHOR: Just moments ago the State Department has told Gordon Sondland, that ambassador, not -- not to testify this morning. Just over an hour before the U.S. ambassador to the European Union was set to appear before three House committees in closed-door depositions.

JIM SCIUTTO, CNN ANCHOR: And he flew in from Europe for this. His lawyer says Sondland wanted to testify, traveling to Washington from Belgium, but he will follow that order because it is coming from his employer. The State Department. Sondland was set to answer questions over his role in President Trump's dealings with Ukraine, including trading a White House visit for an investigation into the Bidens.

HARLOW: We will hear from congressional Democrats in just a few minutes on this. As we wait for that, let's go to Capitol Hill. Our CNN national correspondent Suzanne Malveaux joins us this morning.

So, I mean, Suzanne, the question becomes, once again, blocked for information by this White House, what are Democrats going to do? Will they move to hold the administration members in contempt?

SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: And they certainly could. That's a very good point. I mean, right now they're just trying to get over the stunning impact of all of this. Quite a surprise with less than an hour, you had staffers, you had members who had already been gathering, had been preparing for weeks, negotiations for this all-day affair, this closed-door session. This coming from the attorney Robert Luskin, Sondland -- saying Ambassador Sondland is profoundly disappointed that he will not be able to testify today.

Ambassador Sondland traveled to Washington from Brussels in order to prepare for his testimony and to be available to answer the committee's questions. Arrangements had already been made with joint committee staff regarding the logistics of his testimony. Ambassador Sondland believes strongly that he acted at all times in the best interest of the United States and he stands ready to answer the committee's questions fully and truthfully.

What we expect is to hear from House Intelligence chair Adam Schiff within about 20, 25 minutes or so to get their initial response, initial reaction. But I have to tell you this was of some concern to some members here. It was just last week that you have the U.S. special envoy to Ukraine, the former, Kurt Volker, who had resigned, and that really gave him an opportunity to be forthcoming with committee members and there was a question as to the fact, what would Sondland be able to tell them as currently being a State Department employee.

Also, it raises the question about what is to happen on Friday when you have the former ambassador to Ukraine who also has been recalled in May. But she is still at the State Department. So will her appointment also be blocked by the State Department as well? That is the question, whether or not they can even count on that. And the options are, is that, yes, they can hold him in contempt. They can also use this against the administration saying this just contributes to obstruction of justice and articles of obstruction of Congress -- Poppy.

HARLOW: Yes. Suzanne, all great points, especially what are we going to see come, you know, the testimony that we're supposed to hear, as you said, on Friday given what the president has said about the former ambassador to Ukraine.

Thank you very much.

We're just learning that the White House was engaged in late-night discussions about blocking Sondland's deposition.

SCIUTTO: Joe Johns is at the White House this morning. So, Joe, a last-minute decision. I mean, he was on a plane, he was expecting to testify today. Is this going to be the administration's approach to this inquiry as it goes forward, blocking all witnesses where they can?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Well, it does sound like this is the approach at least for now. And what we do know from the reporting of my colleague Kaitlan Collins here at the White House is that administration officials were talking about this late into the night and the conversations apparently centered on how much the White House ought to be involved in cooperating with the House of Representatives because there has not been a formal impeachment inquiry vote in the House of Representatives.

As we've reported before, of course, there is no constitutional requirement for an impeachment inquiry vote before things proceed. However, the past two inquiries involving Richard Nixon and Bill Clinton both did have votes. So, what that boils down to is a question of whether, if you have to go to court to get depositions or other documents, what is a judge going to say if the House of Representatives did not follow the past procedures, the past precedent.

So, this does two things for the White House. It helps them build a narrative of discrediting the impeachment investigation and it also creates delay. And that is something of course the White House has done again and again and again.

HARLOW: Yes. JOHNS: Even with the Mueller investigation.

HARLOW: Yes.

JOHNS: Back to you.

HARLOW: But public sentiment, as the "Washington Post" number show this morning, is changing and frustration seems to be growing about that delay, delay tactic.

Joe, thank you very much.

[09:05:01]

SCIUTTO: Yes, with the politics of this going forward. Joining now to discuss, CNN national security and legal analyst Susan Hennessey, CNN global affairs analyst Susan Glasser, and CNN political analyst Seung Min Kim.

Susan, I want to start with you just on a basic kind of legal question here, you know, because this gets to the fundamental questions about Congress and oversight. What is Congress' play here? I mean, can they hold someone like Ambassador Sondland in contempt? Because if this is a template for how the White House is going to deal with this going forward, they have to address this. Otherwise there's no inquiry.

SUSAN HENNESSEY, CNN NATIONAL SECURITY AND LEGAL ANALYST: Well, significantly, Sondland was actually agreeing to voluntarily appear for this deposition so he actually -- there hasn't been a subpoena issued yet. And so we would expect that the next sort of step for the House to take is actually issue of formal subpoenas. Set a deadline. See if Sondland misses that deadline and then attempt to actually enforce it in court.

Now we've seen it sort of play out in the past, right, you know, issuing subpoenas, people refusing to testify from the administration. This is a little bit of an unusual situation because Sondland himself has said he wants to testify. Mike Pompeo, the secretary of State, has sort of indicated that he was attempting to protect State Department employees. The fact that these are State Department officials essentially saying we want to go to Congress, I want to tell my story, and the State Department is now intervening to actually block that testimony, you know, that makes it look a lot more like the secretary of State is protecting himself and the president, you know, rather than actually sort of trying to protect those officials.

SCIUTTO: And we should be clear, Sondland is a political appointee. He was a donor to President Trump's inauguration.

HARLOW: Yes.

SCIUTTO: It's not like he's a lifetime State Department --

HARLOW: Never a diplomat. Gave a million bucks.

SCIUTTO: Yes.

HARLOW: It's a good point. To the president. To that inaugural committee.

Susan Glasser, to you, when you look at where this goes from here, and Seung Min, you also have some reporting on this. At this point do Democrats have any other choice? They are being blocked at nearly every effort, whether it's documents, whether it's testimony. At what point do you believe the page turns here and they draft at least one Article of Impeachment of obstruction?

SUSAN GLASSER, CNN GLOBAL AFFAIRS ANALYST: Well, look, they are headed down that road already. And I think that's pretty clear. Not only because of the political shift but the facts that have emerged already are very specific and damning. Arguably, President Trump has already testified in the court of public opinion. What he said publicly combined with the release of the transcript is actually what's triggered this inquiry in many ways. So I do think they're headed down the road of including a sort of obstruction.

Remember, that was specifically in the letters that they sent to these witnesses. They essentially said produce these documents, come and testify. Failure to do so will be considered obstruction of our probe. So they already put down their warning on the front end. So I think they're going in that direction. But again, Gordon Sondland is a key witness because he appears to be the link between the professional diplomats and President Trump.

"The Wall Street Journal," I think, it's very important to note, reported that he spoke with President Trump in that very crucial, nearly five-hour period between answering the text from the senior diplomat on the station in Ukraine who was saying, wait a minute. This looks like we're making a political show of holding up our aid here and that's a scandal. And Sondland talked directly with President Trump in that time. So I think he's a crucial witness for this investigation.

I also think it's amazing that the White House doesn't even assert any particular executive privilege. They're just refusing to show up.

SCIUTTO: Quick note. Just so our viewers know what's happening. That was the State Department -- that was the Secretary of State Mike Pompeo meeting with the Estonian foreign minister, I believe, there as we spoke. Sorry. Just didn't want to interrupt you. Just so folk know what we were looking at there.

GLASSER: Well, you know, again, Secretary Pompeo, as you pointed out, Poppy, is really in the middle of this story, too. And I think there's an interesting question, again, about in previous inquiries putting aside the rules and procedures being followed. The idea that the White House would simply refuse to show up, period. Not to send any witnesses. In the past they might have asserted an executive privilege in the middle of the questioning and said well, I can't answer that particular question. What is the privilege that they're asserting right now? They're just saying, no. We refuse. HARLOW: And Seung Min, to you, look, in that critical text message

exchange between Bill Taylor and Sondland, with the five-hour gap in it, right, where Sondland responds and says, no, there's no quid pro quo here. We're not withholding aid for an investigation, et cetera. There's that. But then there's "The Wall Street Journal" reporting that you point out about what Ambassador Sondland told Wisconsin Republican Senator Ron Johnson on Friday.

The recording is that Mr. Sondland told him, Ron Johnson, in August the decision to hold up nearly $400 million in aid to Ukraine was contingent on the investigation that the president desired. So there's not even a straight story to a Republican senator and as shown in these text messages.

[09:10:02]

SEUNG MIN KIM, CNN POLITICAL ANALYST: That's exactly right. And what Sondland apparently told Senator Johnson was so striking that the senator, who has been very defensive of the administration and of President Trump throughout all of this, it made him wince. It's just that he just did not want those two issues tied together. And that's why Ambassador Sondland was going to be such a critical witness for House Democrats to kind of straighten out that story, to get -- to fill in the blanks that are continuing to be there as House Democrats continue to investigate.

But we did see signs that this was going to be a much more difficult testimony than perhaps Kurt Volker, the former special envoy to Ukraine, who appeared before Congress last week. We reported over the weekend that while those text messages, those damning text messages that were released by the House committees late last week, Kurt Volker had turned them over to the committees voluntarily. He did not route them through State so that's why the committees had them and were able to release them to the public.

Now what Ambassador Sondland did was actually turned over all his documents to the State Department. The State Department already from the outset had control over the documents we see this morning that they're having control over the testimony. And you're going to see that frustration from House Democrats boiling over. My colleague Rachel Bade who has been doing great reporting on this, and I reported over the weekend just how Democrats are going to move at this point, going to rapidly move toward an obstruction of Congress article because they know that, for example, if they defer to the courts, they had been winning in the courts over the last several months but it just takes time and they know they don't have time.

They know that they have to, you know, continue the investigation. They can't wait for them to -- they cannot wait for this to work out through the legal path. So while they do have options, the most likely path at least for now does seem to be just short -- you know, just short-cutting straight to packaging all the -- all the defiance into an article -- an obstruction or Article of Impeachment.

HARLOW: OK. All right. There's a lot to get to this morning. Thank you, one and all. Still to come, chairman of the House Intelligence Committee Adam

Schiff is going to hold a press conference in just a few minutes. Obviously, they were expecting to question this ambassador. So he'll respond to that. From Ambassador Sondland who was supposed to appear on the Hill this morning.

SCIUTTO: And up next, we're going to speak to Congressman Mike Quigley. He's a member of the House Intelligence Committee. We're going to get his reaction to Sondland being blocked from speaking on the Hill this morning. Stay with us.

(COMMERCIAL BREAK)

[09:15:00]

SCIUTTO: The Trump administration is now blocking EU Ambassador Gordon Sondland from testifying to Congress. This happened just moments before he was to appear on Capitol Hill. CNN has learned that administration officials were in discussions late last night about blocking Sondland's testimony. Of course, the decision made this morning.

HARLOW: Joining us now to talk about this, Democratic Congressman Mike Quigley of Illinois, of course, he sits on the House Intelligence Committee that is leading this probe. All right, I know you thought this morning would play a lot differently. I think everyone certainly did. So, the question now becomes, what are you going to do about it?

Congress has the power to subpoena, he's there, he's ready for testimony. You have the power to hold the ambassador in contempt. What will your move be?

REP. MIKE QUIGLEY (D-IL): I think the first step would be to subpoena. That's going to be up to leadership, but I do think we have to follow all the orders, the due diligence that's required. Obviously, the White House hasn't ever paid much concern to subpoenas, but I'd like to think that the ambassador recognizes their power and in the end, he's going to be impacted by all of this.

But if anyone is surprised by the White House actions, they have not been paying attention. The house Russian investigation was obstructed by this White House. The special counsel's report details just how the president obstructed this investigation. It's gone on since today is just another step in the president's efforts.

SCIUTTO: OK, so you issue a subpoena later today. If the White House blocks Sondland or Sondland himself refuses to comply, do you hold him in contempt?

QUIGLEY: I think that's a decision we take step-by-step. I think it's the natural order that we would move toward, but I don't want to blow it all up if there's any hope. I may be wildly optimistic, but you know, we're here and ready to listen. This is obviously a critical witness. I think if I feel anything after today is, I feel a sense of panic in the White House.

And for the first time, the public mood about this has changed. For the first --

HARLOW: Right --

QUIGLEY: Time, it's not just smoke, it's the fire that the public can see. And I think the president is reacting as such.

HARLOW: Well, speaking about the mood in the White House, Jim Acosta has some new reporting this morning from someone familiar with the discussions inside of the president's impeachment team, quote, "the days of playing nice are done", unquote. So what do you think then, Congressman, let's fast forward to Friday when you're supposed to hear from the former ambassador to Ukraine Marie Yovanovitch. What do you think portends for the possibility of that testimony happening?

QUIGLEY: I smile because if they have been playing nice so far, as sure as heck like to know what playing dirty is. They have broken the law. They have done everything they possibly can to obstruct the Congress' constitutional right to oversight, they have attacked the rule of law.

They have done irreparable damage to the integrity and independence of the Justice Department, the State Department and the entire intelligence community. So, what will this president do to protect himself? Apparently anything.

[09:20:00]

SCIUTTO: So, as you know, the White House, some Republicans making the point that they will not comply until there's been a vote in the full house --

HARLOW: Right --

SCIUTTO: Launching an impeachment inquiry that did happen in both the Nixon and Clinton impeachment proceedings. Is that something that you're opposed to? And would you support such a vote?

QUIGLEY: Look, I have supported a vote in the house involving an impeachment inquiry or whatever anyone wants to call it. But I wouldn't take the Republican effort as an act in good faith. They're playing games here. They're trying to make it difficult for Democrats to move forward from a political point of view.

Now, they understand the circumstances, they can also read the newspapers and understand exactly what this president has done so far. If they want the truth to go out, they should tell the White House to comply and let people testify. It is their power. If the tables were turned, they would want people who were brought forth to Congress to testify. They're establishing a case here where people can if they want to or not.

Now, when you testify in Congress, you're testifying to the American people. That's an extraordinary power they seem to be willing to give up.

HARLOW: Congressman, to Jim's point about having a formal vote on this, it's something that former Congressman Beto O'Rourke said last night on this network he thinks would be appropriate and good, given the weight of a moment like this. But if you look back at the impeachment inquiries into President Nixon and President Clinton, in both of those, there was a stipulation that the minority was allowed to subpoena their own witnesses.

So, some are saying that is a reason, perhaps, why Nancy Pelosi has not called for this vote that would potentially give Republicans that power. Is that your read?

QUIGLEY: Look, no, I think the speaker is doing this because she understands that the Republicans are playing a game. Again, I have no problem with this vote. I think it should move forward especially with the news that we've learned in the last several weeks and the actions by the administration today. All bets are off. Let's move forward. And let's take the Republicans up on this game because the numbers are moving in the opposite direction.

And again, that's why I think the president is starting to panic.

SCIUTTO: Will this refusal or blocking rather of Ambassador Sondland testifying, will that end up in a potential article of impeachment --

HARLOW: Yes --

SCIUTTO: For obstruction of justice?

QUIGLEY: You know, I heard it said best the other day when the president obstructs, it makes one article weaker because you don't have as much evidence to present. But it makes the obstruction article so much stronger. And at this point in time, I believe there's multiple obstruction articles that this president would have to answer to. And today, if they go forward is just one more part of that evidence.

HARLOW: All right, congressman, we have 15 seconds left. Do you expect that Ambassador Yovanovitch will testify now?

QUIGLEY: Look, as I said, I'm an optimistic guy, after all, I'm a Cubs fan. So, I'll be here ready to go because that's my job. I hope that they believe in the constitution as much as I do.

SCIUTTO: Yes, although optimism endangers species in Washington, so good for you --

HARLOW: Jim is an optimistic Mets fan, so there you go.

QUIGLEY: It's more productive to be optimistic.

SCIUTTO: I hear you --

HARLOW: There you go, Congressman Mike Quigley, appreciate your time this morning, thank you so much.

QUIGLEY: Thank you -- HARLOW: So, we're just a few minutes away from the House Intelligence

Chairman Adam Schiff speaking. Of course, he's going to take questions for the first time since the State Department just this morning blocked the EU Ambassador Gordon Sondland from testifying before Congress.

SCIUTTO: We're also moments away from the opening bell on Wall Street. It's looking like it will be a lower open because optimism dimming over U.S.-China trade talks. A new round of talks is going to begin on Thursday. Investors also will be watching for any news from Fed Chief Jerome Powell when he speaks this afternoon. On Monday, Powell pushed back on President Trump's continued pressure to aggressively cut interest rates, even quoting a past Fed chief when saying the Central Bank must be free from politics.

(COMMERCIAL BREAK)

[09:25:00]

SCIUTTO: Events moving quickly this morning on Capitol Hill. The Democratic chairman of the House Intelligence Committee, he's expected to speak at any moment now.

HARLOW: This is after at the 11th hour, truly, the State Department just an hour ago blocked Ambassador Gordon Sondland from testifying before three key house committees. Now, a text message exchange between Sondland and the U.S. ambassador to the European Union, Bill Taylor, and former special envoy to Ukraine Kurt Volker, of course, that's now at the heart of all of this. Manu Raju join us on Capitol Hill.

Look, I don't know where Congress goes from here. I suppose they subpoena, but they just cannot get the answers they're trying to get to the bottom of.

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Yes, and what they've been warning a lot about for some time now is that if they continue to get -- and what they view as clear obstruction from this administration, denial of getting witnesses, they will use that as evidence of obstruction of Congress in an article of impeachment.

So, while we've seen for months Democrats engage in a long fight -- drawn-out fight that had led to court battles such as.

[09:30:00]