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White House on Leaks; White House blames Hamas; Trump Vowing to save Chinese Company; China Gives Money to Indonesia Project; Interview with Rep. John Garamendi. Aired 1-1:30p ET

Aired May 15, 2018 - 13:00   ET

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

[13:00:00] SENIOR WHITE HOUSE CORRESPONDENT, "BLOOMBERG": The attack towards things you're actually (INAUDIBLE).

JOHN KING, CNN ANCHOR: (INAUDIBLE).

All right, thanks for joining us on INSIDE POLITICS. See you back here at this time tomorrow.

"WOLF" starts right now.

WOLF BLITZER, CNN ANCHOR: Hello, I'm Wolf Blitzer. It's 1:00 p.m. here in Washington, 8:00 p.m. in Gaza, 1:00 a.m. Wednesday in Beijing. Wherever you're watching from around the world, thanks very much for joining us.

Right now Senate Republicans here in Washington possibly confronting the president behind closed doors as the White House refuses to publically apologize for an aide's joke about Senator McCain and the president vowing to save Chinese jobs.

Plus, President Trump calling leakers inside his White House, and I'm quoting him now, cowards and traitors. And now CNN has new reporting about how far officials are going to crack down.

And as new clashes erupt one day after the deadly protests involving the U.S. moving its embassy to Jerusalem, the White House putting the sole blame on Hamas for the killings. We'll go there live to Gaza.

But we start with President Trump on Capitol Hill right now. He's meeting with Republican senator. The president facing plenty of questions from them on China and his tweets in favor of saving Chinese jobs, and a Chinese company under U.S. sanctions, as well as the lack of a public apology from a White House staffer who made an insensitive comment about an ailing senator. We're talking about Arizona Senator John McCain.

The White House is trying to change the narrative from the comment and non-apology to White House leaks. The president tweeting this, quote, the so-called leaks coming out of the White House are a massive over exaggeration put out by the fake news media in order to make us look as bad as possible. With that being said, leakers are traitors and cowards and we will find out who they are, closed quote.

Let's go to our senior White House correspondent, Jeff Zeleny. Jeff, the president says that the so-called leaks -- these are so-

called leaks, but then says the leakers are traitors and cowards. Which is it? What is the White House doing about this?

JEFF ZELENY, CNN CORRESPONDENT: Wolf, certainly no question this story is entering its fifth or sixth day here. And President Trump, on Capitol Hill, as you said, he was paying his respects to law enforcement officials at an event there. But it's the lack of respect for Senator John McCain that really has Republican senators all worked up and furious about this. So we do believe he is going to get an earful, or at least, you know, perhaps some pushback in that meeting he's having right now with Republican senators.

But the only comments the president has made about this has been about the leakers, has been about the fact that this leaked out, not about the substance of that remark, which we should remind people came last week when Senator McCain, who, of course, is battling brain cancer, he is opposing the nomination of the CIA director. The -- in a conversation about this, a White House aide said it doesn't matter, he's dying anyway. So that, of course, was leaked out, I guess.

But I'm not sure if this is the real definition of the word "leak," Wolf. It was -- you know, it came out through reporting that, you know, there were some comments being made here at the White House that were insensitive.

Now, we do know the president has long had a feud with John McCain, but so interesting that he has not spoken at all about the substance of this comment. So we'll see if that changes after that meeting on Capitol Hill.

But it's sort of a pattern here. The president often refuses, in fact almost always refuses to apologize for something, digs in his heels and blames it on something else. In this case the leaks and the fake news media, his word. But, interesting, as he was walking through the hallway there with Senator Mitch McConnell, he too has been at odds with Senator McCain over the years. He visited Senator McCain over the weekend and released a statement yesterday saying the country has nothing but respect for him. SO, you know, given everything else that's going on, this is one subject that I'm told will be discussed in that luncheon today, Wolf.

BLITZER: Yes, one of several subjects. And we're awaiting some members who will emerge from behind closed doors and we'll get the very latest on that. Jeff Zeleny, thanks to you.

Let's go to Gaza right now. Another day of violence there and -- as well as on the West Bank. The protests resumed after funerals were held for some of the 60 Palestinians killed in protests over the moving of the U.S. embassy from Tel Aviv to Jerusalem. The deadliest day, by the way, that Gaza has seen in some four years.

Meanwhile, United Nations Security Council held an emergency meeting to discuss the situation. The U.S. ambassador to the U.N., Nikki Haley, says the embassy move is not to blame for the violence.

(BEGIN VIDEO CLIP)

NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: As our president said when he announced the decision in December, the location of our embassy has no bearing on the specific boundaries of Israeli sovereignty in Jerusalem or the resolution of contested borders. It has no bearing on Jerusalem's holy sites. It does not prejudge whatever the parties might negotiate in a peace agreement. It does not undermine the prospects for peace in any way. And yet, for some, this is supposedly a cause for violence. But let's remember that the Hamas terrorist organization has been inciting violence for years, long before the United States decided to move our embassy.

(END VIDEO CLIP)

[13:05:20] BLITZER: Let's go to our senior international correspondent, Ben Wedeman. He's joining us from Gaza right now.

Ben, you spent a lot of time covering this story in the region. First of all, have you seen any reaction to the United States officially, publically blaming Hamas for the deaths of the Palestinian protestors?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: No, we have not so far, Wolf. I think many people here, whether they're with Hamas or against Hamas or favor these protests or oppose them, many feel that the United States long ago took the side of Israel and, therefore, this statement about Hamas, I don't think, really has much weight here in Gaza. Where we saw today's smaller demonstrations, and certainly yesterday we've gotten one report from Palestinian medical sources of one person killed by gunfire, a few wounded, but certainly nothing compared to the more than 60 killed in yesterday's demonstrations.

And, of course now we're trying to understand if there's going to be more such demonstrations. There are none publicly planned or announced at the moment. This may be, now that the ceremony to inaugurate the American embassy in Jerusalem is past, now that today the 70th anniversary of Nukbud (ph) day, the day of the catastrophe where Palestinians marked their dispossession from their historic homeland is past, perhaps calm will return. But as we know here in the Middle East, here in Gaza, calm may go -- come for a little while, but trouble is always on the horizon.

Wolf.

BLITZER: It's a really, really tense situation right now. We'll stay in close touch to you. Ben Wedeman in Gaza for us, thank you.

Once again, the U.N. Ambassador Nikki Haley also saying today that recognizing Jerusalem as the capital of Israel makes peace, in her words, more achievable.

Let's bring in retired Rear Admiral John Kirby, our CNN military and diplomatic analyst. We also have CNN political analyst April Ryan and Shannon Pettypiece, White House reporter for "Bloomberg News."

You know, John, you were the spokesman over at the State Department during the Obama administration, spokesman over at the Pentagon as well. What do you make of the way the U.S. government, the State Department, the White House, the U.S. ambassador to the U.N., have now officially responded to all the violence we saw yesterday.

REAR ADMIRAL JOHN KIRBY (RET.), CNN MILITARY AND DIPLOMATIC ANALYST: Well, they're not wrong in saying that Hamas is responsible here. They -- this is a classic Hamas playbook, no question about that. And they're also right to reaffirm the fact that Israel has a right to defend itself. It's a tough neighborhood. They have every reason to want to be vigilant and to defend their citizens.

The question isn't that. The question really is, how do you do it in such a way that doesn't fuel the Hamas narrative? We know Hamas likes to hid behind civilians. We know that they like to help incite violence and cause civilian casualties, to blame it all on Israel. So how does the United States and Israel do this in a way and advocate a way that doesn't play into Hamas' hands?

BLITZER: I know the Obama administration would not have moved the U.S. embassy from Tel Aviv to Jerusalem. That was always a final status.

KIRBY: Right.

BLITZER: But how do you think, if there was violence along the border and there was in 2014, as you well know. There was a -- almost a war between the Israelis and Hamas. And I spent a little time over there as well. But how do you think the Obama administration would have responded? Because the Trump administration didn't even urge restraint on the part of the Israelis.

KIRBY: Yes. I can assure you, Wolf, having been at the podium at the State Department during the -- that timeframe, we did condemn -- no, actually, condemn is too strong a word, but we did urge restraint by Israeli forces against targets inside Gaza and we got criticism for that. But we did -- there was some urging of it and there was certainly a lot of back channel communications with the Israelis about how to do this in a more retrained, more discrete, more -- more precise way. But those are tough conversations to have, particularly with somebody who's a close ally like Israel.

BLITZER: You know -- I just want to point out that while this was going on, Shannon, the -- there was a celebration at the new U.S. embassy in Jerusalem and there were a lot of distinguished guests there as well, including Ivanka Trump. I don't' know if you saw the -- the front page, the cover of "The New York Daily News" today. There it is, "Daddy's Little Ghoul," g-h-o-u-l. "Daddy's Little Ghoul." Fifty- five slaughtered in Gaza, but Ivanka all smiles at Jerusalem embassy unveiled. That's the headlines in "The Daily News" in New York.

[13:10:00] Do you think the White House should be concerned about the optics of all of this?

SHANNON PETTYPIECE, WHITE HOUSE REPORTER, "BLOOMBERG NEWS": I mean the optics do nothing to help relieve these tensions. What you're talking about, I mean the goal should be here to relieve tensions. It should be to prevent violence. If you can -- as you're saying, though the back channels, pick up the phone to your allies and say, let's take the temperature down, come on here. If you can, you know, maybe make this less of a big celebration. Maybe take the temperature down on the celebratory nature of it. All of these things that could be done in a more subtle way. But, I mean, this administration -- and they are a year and a half in, so you can say some of these -- lessons maybe they should have learned or should have more appreciation to. But I think they are maybe also things in foreign policy that are hard to learn. And you only learn about through these sort of tough moments.

BLITZER: You want to make a point?

APRIL RYAN, CNN POLITICAL ANALYST: Yes, Wolf, the optics are terrible but the stakes are very high, as we all know. But really the here and now should have happened months ago when they talked about the unveiling and talked about the U.S. embassy in Jerusalem. And the issue is for many of my sources in the intelligence community, they said, what should have happened? They should have also said something for the Palestinians. They should have said, we will -- we'll be willing to work with you on this or that or give you something. There was nothing given. So that one side feels neglected and that has been what I have been hearing. So it could have happened a long time ago, even as this new embassy was placed in Jerusalem that could have been something to kind of quell the upset, the conflict (ph) (INAUDIBLE) --

PETTYPIECE: Right, you knew it was going to be a flashpoint.

KIRBY: And nothing -- and nothing received (ph) from the Israelis either. I mean we gave them -- we moved the embassy there and really didn't get anything in return from the Israelis, much less giving anything to the Palestinians.

RYAN: Right.

KIRBY: The timing is also quizzical, Wolf. I mean I understand the desire to do this around the 70th anniversary. I get that. And that's, obviously, to be something commemorated there. But --

BLITZER: The 70th anniversary of Israel's independence.

KIRBY: Of Israel's -- of independence, yes, thank you.

I get that. But they had to also know that these protests are not just about the embassy. They are about that anniversary, very much so. And so it doesn't seem like this had to happen right when it did.

PETTYPIECE: Right, and not to mention the Iran deal too just coming days after pulling out of Iran.

KIRBY: Right after -- right after pulling out of the Iran deal, yes.

PETTYPIECE: So, I mean, right, tensions are already high and then you throw something on it even more. And --

RYAN: The stakes are so high at this moment, yes.

KIRBY: Right. BLITZER: Let's shift gears, talk about Senator McCain and the refusal by the White House to publically apologize for what that aide said. You had this exchange yesterday at the White House briefing. Let me play it.

(BEGIN VIDEO CLIP)

RYAN: Where does decency and morality come into play on -- in the workplace? I mean she still has a job. She made that statement about an American hero. No matter what the political feelings about him, he was broken and bruised overseas for the freedoms of this country. And to say those thing, I mean --

RAJ SHAH, DEPUTY WHITE HOUSE PRESS SECRETARY: Again, that's an internal matter and has been addressed internally.

RYAN: (INAUDIBLE)

SHAH: Yes.

(END VIDEO CLIP)

BLITZER: What was your reaction when you got that statement from the deputy White House press secretary?

RYAN: Well, I was surprised, actually, because prior administrations would admonish or there would be some serious repercussions from someone, a lower level staffer to go out and say something like that about someone. And it wasn't even out. It was inside. It was in the inner circle. But for it to leak out, there would be some repercussions.

We don't know the repercussions. She still has her job. And, I mean, Senator John McCain, it's not about politics, it's not about party. This is a man who was in the military, who was broken, battered -- I mean military family. You know, broken, battered, bruised for this nations for our freedoms. And then for a staffer to say that and for someone, a whistle blower, I'm not going to say it's a leaker, a whistle blower to say this because whoever leaked it knew it was wrong, wanted people to know, I was shocked because I understand the dynamics and the nuances of White Houses covering four now. So I was kind of shocked and taken aback.

BLITZER: I want you listen to what two Republican senators, Marco Rubio and Susan Collins, said about this whole uproar over a lack of a public apology involving Senator McCain. Listen to this.

(END VIDEO CLIP)

SEN. MARCO RUBIO (R), FLORIDA: And I find them to be offensive and I think more indicative of what our politics has become so angry and bitter. And, I mean, there are just things you don't say and shouldn't say. And it's unfortunate that it -- if it was said, that it was said. And if it was said, someone should say they don't agree with it.

SEN. SUSAN COLLINS (R), MAINE: The best way for this to be put to rest, and it should have happened immediately, would have been for the White House to issue a public apology to the entire McCain family. I think it would be helpful if the president made clear that those kinds of comments are not acceptable, rather than criticizing the leaker.

(END VIDEO CLIP)

BLITZER: So, Shannon, what do you think? Are they going to finally publically apologize? Because I'm sure the president's getting a little earful during this closed door meeting with Republican senators right now.

[13:15:01] : I mean they haven't apologized about anything yet. I mean I can't think of any. I mean from day one of the campaign, I remember people inside the campaign telling me when the president -- then the candidate Trump made those remarks about Mexicans being murders and rapists and, you know, he was told, just apologize, walk it back. He didn't. And he saw there was a groundswell of support of people who liked that he didn't back down, that he stood by what he was saying. And that's been his operating mode ever since then.

Charlottesville, there was no apology after that. There was a conscious decision. They could have come out -- Sarah could have come out to the podium, Raj could have come out to the podium the other day and apologized and ended this. There has been a conscience decision not to. I don't see that changing now.

And really for the White House, I mean, they're getting into a fight with John McCain, who is someone that there is no love loss between him and President Trump. So --

RYAN: But a man who is dying, though, that is --

PETTYPIECE: Right.

RYAN: Or who's fighting for his life, brain cancer. And he even said, because of that strained relationship, he doesn't want him at his funeral. I mean this is -- it's different (ph).

PETTYPIECE: And to your point, in any other -- in any other White House, if someone disrespected --

RYAN: Yes.

PETTYPIECE: Not only, you know, a war hero and someone who's dying, but a senator, a congressman, a sitting congressman.

RYAN: A man who ran for president.

PETTYPIECE: Right. Anyone -- any member of Congress who would be criticized like that by a staffer, that staffer would no longer work there in past White Houses.

BLITZER: Yes. All right. Well, John McCain deserves only the best.

RYAN: Yes. Yes.

BLITZER: He is a war hero and all of us are wishing him only, only the best.

RYAN: Yes.

BLITZER: All right, guys, thanks very much.

RYAN: Coming up, as President Trump vows to save a Chinese telecom from U.S. sanctions, a top U.S. intelligence chief sounding the alarm on the security threat the company poses to Americans.

Plus, sucked halfway out of the plane at 30,000 feet. It's just the latest terrifying example of airline windows malfunctioning mid- flight. There are new details. Stay with us.

And royal drama. Who will walk Meghan Merkle down the aisle on Saturday. That's what the world is asking as her father's attendance, at least right now, remains in question.

(COMMERCIAL BREAK)

[13:21:07] BLITZER: President Trump may let a Chinese company accused of violating sanctions against North Korea and Iran off the hook. The U.S. banned smartphone maker ZTE from buying parts from American companies for seven years. But over the weekend, the president surprisingly tweeted this, quote, President Xi of China and I are working together to give massive Chinese phone company, ZTE, a way to get back into business fast. Too many jobs in China lost. Commerce Department has been instructed to get it done, closed quote.

Democratic Congressman John Garamendi of California is with us. He's been studying this issue now for quite a while. What's your -- I was surprised by the reversal from the president. He's anxious now to save jobs in China. What was your reaction?

REP. JOHN GARAMENDI (D), CALIFORNIA: Make China great again? Is that what this is all about? This makes no sense at all. This company is a very serious problem in several respects. First of all, it's breaking the sanctions against North Korea, Iran, Sudan, a couple of other countries. So it is a bad player out there cheating all along the way.

Secondly, there is reason to believe -- serious reason to believe that their phones, smartphones and other devices, are an espionage device.

BLITZER: Now, what do you mean by an espionage device?

GARAMENDI: I mean that the devices that they're selling are now banned, or will -- and should be banned on military bases and military personnel enlisted in civilian that have -- they have to get rid of them.

BLITZER: You mean U.S. military (INAUDIBLE).

GARAMENDI: Well, U.S. military, exactly, have to get rid of them because there's evidence that the Chinese can use their devices to gather information from our military or from anybody else for that matter. BLITZER: There was that moment when all the U.S. intelligence chiefs were testifying before the Senate, and Senator Tom Cotton asked them to raise their hands if they would ever use this kind of equipment from ATE. Nobody raised their hands.

GARAMENDI: That's right.

BLITZER: They were asked if they should raise their hands in their constituents should buy this kind of equipment from ZTE. Nobody raised their hands. So it's clearly the U.S. intelligence community concerned. So that raises the question, why is the president anxious now to lift the sanctions and let the jobs flow to ZTE?

GARAMENDI: Well, some people says it has to do with trade negotiations. I think it may have a lot to do with $500 million that the Chinese government invested in a project in which the Trump Organization is deeply involved in, in Indonesia. There's a new project going in. Some sort of a theme park. Trump Organization, the hotel, the golf courses, condominiums, all the rest, just got $500 million for that development. Not directly to Trump, but most definitely to the benefit of the Trump Organization.

BLITZER: Well, we do know that Chinese state enterprises will provide $500 million --

GARAMENDI: Exactly.

BLITZER: To help develop this project, this Trump Organization project in Indonesia.

The president had said earlier that he wasn't going to allow the Trump Organization, the business part of the president, to have foreign dealings, but clearly this is a major foreign dealing.

GARAMENDI: Oh, my, one more lie. One more lie out of this man. I mean there is no way you can tell where the truth is with this gentleman.

BLITZER: So you -- just to be precise, congressman. So you're saying this decision by the president to tweet about lifting the sanctions against ZTE may have been the result of the $500 million loan to this Trump Organization business in Indonesia?

GARAMENDI: Isn't it curious. Isn't it curious that the tweet comes out and then within a day or two we get an announcement that $500 million is going to an organization in which the Trump enterprises clearly benefit. They benefit with a hotel, they benefit with a golf course, they benefit with condominiums. Is there something curious about this?

BLITZER: Is Congress investigating this as far as you know?

GARAMENDI: The Republican Congress investigating Trump? You got to be kidding. That doesn't happen.

But this is clearly something that, in my view, is contrary to the U.S. Constitution, which is absolutely clear about emoluments. It says article one, section nine, no one, in the employment of the government, including the president and members of Congress, can take a -- something beneficial from a foreign government, king or prince.

[13:25:15] BLITZER: The deputy White House press secretary, Raj Shah, was asked about this $500 million loan to this Trump organization deal in Indonesia yesterday. He said go talk to the Trump Organization. He didn't want to discuss it from the White House.

The other argument I've heard -- and I'm anxious to get your response, congressman --

GARAMENDI: Yes.

BLITZER: Is that maybe the president is trying to improve relations with China and lift the sanctions on ZTE in order to get them more involved in setting the stage in a positive way for the summit he's going to have June 12th in Singapore with Kim Jong-un.

GARAMENDI: Well, we know this. We know that ZTE is a company -- a major company owned in various ways by the Chinese government. Kind of hidden, but nonetheless it's there. We know that that company was doing business with North Korea. That they were contrary to the American sanctions. Is there some sort of a deal here that's in the background that the Trump Organization -- that the president is giving a big, big prize to the Chinese government in exchange for their help? Perhaps. But there's many, many other things involved here that really concern me.

BLITZER: Because China does have -- President Xi does have some influence over North Korea.

GARAMENDI: Oh, absolutely. Without a doubt.

BLITZER: So to improve U.S. relations with China, that could be beneficial.

GARAMENDI: Well, let them make that argument. Let the White House, let the president say, oh, no, this deal, this $500 million, which directly benefits the president, has nothing to do with it. We've not heard them say anything about the North Korea thing yet. Maybe there's something there. Maybe there's something about trade negotiations back and forth.

But we do know this. We do know that this company is a bad actor. We do know that this company has broken American law, not just recently but in the past. We also know that this company is -- there equipment can be used for espionage.

BLITZER: We know that the national security community here, the intelligence community --

GARAMENDI: Absolutely.

BLITZER: Is deeply concerned about ZTE.

GARAMENDI: And in the National Defense Authorization Act, which is coming up on the floor soon, we'll see if the Republicans put forth an amendment to honor the president's commitment of Xi about removing ZTE.

BLITZER: And you're a key member of the Armed Services Committee, as we know.

GARAMENDI: Well, we're going to take it up.

BLITZER: All right, congressman, as usual, thanks very much.

GARAMENDI: Thank you.

BLITZER: Lots of unanswered questions that deserve to have some answers right now.

GARAMENDI: Absolutely. We need to get to the bottom of it.

BLITZER: Yes. All right, thanks very much.

GARAMENDI: Thank you.

BLITZER: Coming up, terror in the sky. How a co-pilot of a major Chinese airline got sucked halfway out of the cockpit yet survived.

Plus, new questions surrounding the health of the first lady, Melania Trump, as she remains in the hospital after undergoing a kidney procedure.

(COMMERCIAL BREAK)