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Special Counsel Ending Election Subversion Case Against Trump; PM Spokesman: Israel Cabinet To Vote On Hezbollah Ceasefire Tomorrow; Special Counsel Ending Classified Documents Case Against Trump; Macy's Found A Single Employee Hid Up To $154M In Expenses. Aired 1:30-2p ET

Aired November 25, 2024 - 13:30   ET

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

[13:30:00]

PAULA REID, CNN CHIEF LEGAL CORRESPONDENT: -- she will try to weaponize the Justice Department.

And that's a big question, because that's something Trump made clear on the campaign trail, he wants to do that. He wants to go back after his political rivals and use the Justice Department to target people that he is unhappy with.

That is, of course, not the way the Justice Department is supposed to work. But there are concerns that Pam Bondi, who comes to the office potentially with decades of law enforcement experience, there are questions about whether she can be impartial.

Because she helps to amplify false claims about the election in 2020. So she's going to face some pretty tough questions about this idea of weaponizing the Justice Department at her confirmation hearing.

And, of course, the number-two official at the Justice Department is one of Trump's top defense attorneys, Todd Blanche. He's also put some of his other attorneys in top positions at the Justice Department.

So while today the Trump team is saying that they want to end the weaponization of the Justice Department, that is going to be a question that will linger over the Trump Justice Department, whether they really will put an end to that or whether they will try to weaponize that massive law enforcement agency.

I also want to talk about something the representative touched on, and that is an anticipated report from the special counsel, Jack Smith. He is required to submit a report to the attorney general.

I am told that the attorney general is expected to make that public, as he has with other special counsels reports. But I'm also told that because he has, of course, filed this indictment, the court has unsealed some other evidence in this case.

We shouldn't expect a lot of new evidence in that report. So we do have much of the evidence in the case that's in the public record.

The one place where we could potentially get some new information from Jack Smith is if he is called to the Hill to testify as the special counsel's before him, have all done.

BORIS SANCHEZ, CNN HOST: And, Paula, quickly, is there something that the incoming administration could potentially do to block the release of that report or to redact portions of it?

REID: So I expect that it will be submitted to Attorney General Merrick Garland before Trump takes office. And now we kind of expect that special counsel, Jack Smith, will be gone. It's unclear what happens to his office. But it looks like he's going to try to get out before Trump gets in.

But I am told that this is expected to go to Attorney General Merrick Garland. He is expected to release this report, as he has done with other special counsel reports, from John Durham and Special Counsel Rob Her, who investigated President Biden.

But again, I've been cautioned that there may not be a lot of new information here because, of course, there's already been an indictment that's been filed.

And then, of course, the judge in this case revealed -- allowed to be revealed some additional evidence in this case.

So I'm told there won't be a lot of new in that report, but it is still expected. It is required of a special counsel to submit that report.

BRIANNA KEILAR, CNN HOST: All right, Paula, thank you so much for the update. We appreciate it.

And we'll be right back with more.

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[13:36:59]

KEILAR: We have big developments out of the Middle East today. The spokesman for Prime Minister Benjamin Netanyahu says the Israeli cabinet will vote tomorrow on a ceasefire deal with Hezbollah in Lebanon, and the agreement would effectively end Israel's major military offensive that began in September.

SANCHEZ: A source tells CNN that Netanyahu has already approved the proposal at least "in principle."

CNN's Nic Robertson is live for us in Jerusalem.

Nick, what are you hearing about the contours of this deal?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, we're hearing from Israeli officials that they still have some reservations about it, but it appears that this may go ahead. It's a 60-day ceasefire.

What Israel wants is the right to respond and strike back at Hezbollah if they break the terms of that deal. The fact that the atmosphere, the military atmosphere is really

heating up, the home front command here may put in even more restrictions close to the border because they expect an uptick in rocket fire, and is absolutely symptomatic of a deal coming into land.

We know that the Prime Minister Benjamin Netanyahu's right-wing cabinet member, Itamar Ben-Gvir, the national security minister, he said today that his advice to the prime minister was: "Don't sign the ceasefire deal now. You've got Hezbollah on the run. Continue to smash them, continue, continue, continue." His words.

But we also understand that Netanyahu will be meeting with his party, his coalition party groups, individually. That will include Ben-Gvir's group. And that's where he would hope to persuade them of his opinion.

I think the expectation is, when that vote comes tomorrow afternoon, it is going to go through.

SANCHEZ: Nic Robertson, live for us in Jerusalem. Thank you so much for the update.

Let's talk about this more with former deputy assistant secretary of defense for the Middle East and research director for the Washington Institute for Near East Policy, Dana Stroul, and the former director for Syria and Lebanon at the White House National Security Council, Hagar Chemali.

Thank you both for being with us.

Hagar, first to you. Do you expect that the ceasefire deal between Israel and Hezbollah will get over the finish line?

HAGAR CHEMALI, FORMER DIRECTOR FOR SYRIA AND LEBANON, WHITE HOUSE NATIONAL SECURITY COUNCIL: I definitely think there's a very close and certainly closer than they would be with Gaza.

And the reason is because the Israelis are dealing not with the terrorist group, actually, but they're dealing with the Lebanese government and the Lebanese armed forces, who very much want to make a deal. You don't have hostages included.

Biden is pushing it very hard on his end. This is the one win that the Biden administration could get before the end of his term.

And as -- and in general, Israel has already decimated Hezbollah significantly, not to the point of eradication. But we don't want to underestimate the extent to which they've killed off those leaders and how much that weakens them.

So in order for them to be able to focus on Gaza, I do think there's interest on both sides to make this deal happen. And I think that there's real hope there.

KEILAR: And, Dana, what are the practical implications of the ceasefire, which we're hearing could last 60 days? DANA STROUL, FORMER DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR THE

MIDDLE EAST & RESEARCH DIRECTOR FOR THE WASHINGTON INSTITUTE FOR NEAR EAST POLICY: Well, first of all, this is a big test for Israel, for the government of Lebanon, for the Lebanese Army and for the international community.

In those first 60 days, Hezbollah will need to move very far away from the Israeli border. And the Lebanese Army will need to come in with the U.N. and disarm Hezbollah and turn those weapons over to the U.N. or to the government of Lebanon. And we'll see whether or not we can do that.

[13:40:13]

And of course, the big challenge here is whether or not communities on both sides of the border, but especially in Israel, very eager to get their communities back to their homes in northern Israel, will feel that this ceasefire is effective enough. And to make it safe for them to go home.

SANCHEZ: Dana, Barak Ravid is reporting that a U.S. envoy warned Benjamin Netanyahu that if Israel didn't move towards a deal in the coming days, he would withdraw from negotiations.

What does that tell you about the current posturing from the Biden administration toward Netanyahu?

STROUL: Well, I think, first of all, Biden has empowered some of his closest advisers to be negotiating. One has worked very hard to get Israeli hostages out of Gaza, to get a ceasefire in Gaza.

And Amos Hochstein has been working for more than a year now on a ceasefire that would allow both sides to de-escalate and Hezbollah to be disarmed when it comes to Lebanon.

It's very hard to negotiate when there's leaks every other hour about what they're trying to do. And at this point, if the Israelis -- I think, the view is they have accomplished so much militarily, the test is whether they can now transition that into a political process.

KEILAR: And, Hagar, the ICC's arrest warrants for Netanyahu, as well as Yoav Gallant, the former defense minister, really affecting these negotiations, or at least momentarily.

Talk to us a little bit about that, specifically, about France's role and why that created issues.

CHEMALI: Well, the G-7 at the moment is trying to get a collective position on these arrests and -- and figure out their view on it.

Europe, as a whole, is a member -- they're all members of the ICC. The E.U. has said that they will respect the ICC's jurisdiction, which means that if Gallant or Netanyahu were to travel to Europe, they would be arrested.

Some members have -- have rejected that. Like, for example, Viktor Orban of Hungary, the prime minister there, has said, no, he wouldn't.

The U.S. has made a statement that -- that these -- that not only do the ICC arrests bear no jurisdiction in the United States because the U.S. is not a member of the ICC, but they reject it altogether.

And there are many reasons for that. And that has -- by the way, that's something that's transcended among both administrations. A lot of the ICC and their jurisdiction because they have typically targeted Israel, in particular, and the United States as well.

Otherwise, by the way, you would see arrest warrants for -- for the Sudanese leaders dealing -- leading the humanitarian crisis and war there.

And so I don't expect those warrants, on one hand, to be carried out unless the -- unless Gallant and Netanyahu travel to Europe.

But on the other hand, it undermines the credibility of the ICC. It's -- it's not totally symbolic. It is important. But I also don't expect the arrest to be carried out.

KEILAR: Hagar, Dana, thank you so much to both of you. Obviously, we are at a point to watch and we appreciate your insights.

And ahead, the numbers, they just weren't adding up. What a former Macy's employee is accused of intentionally hiding for years. You'll see why the numbers weren't adding up. How the retail giant is responding.

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[13:47:20]

KEILAR: More breaking news. We just told you that special counsel Jack Smith had dropped the election subversion case against Donald Trump.

Let's get to Paula Reid, because now he is ending the classified documents case, the federal case against Trump, Paula.

REID: That's exactly right. They are asking to dismiss the federal classified documents case against President-Elect Trump.

But they are going to continue the case, which is currently being appealed against his two co-defendants.

Because, as you may remember, Judge Aileen Cannon, the Trump-appointed federal judge who is overseeing this case, tossed the classified documents case, siding with defense attorneys who said that special counsel, Jack Smith, was improperly appointed.

So this was a pending appeal before the U.S. Court of Appeals for the 11th Circuit. Jack Smith is saying they are going to stop the case against Trump, but they will continue with this appeal as it pertains to his two co-defendants.

So the case lives. But the Trump part is being removed because, as president-elect, the special counsel's office believes he is entitled to the same protections from indictment from prosecution as a sitting president.

But this is going to be an interesting question for the incoming Justice Department.

Because if they decide to either pardon the two co-defendants or toss the case, you will have this decision, this precedent sitting out there from Judge Aileen Cannon saying that the special counsel was improperly appointed, something that really shocked most legal experts and even most federal attorneys that I spoke with.

And it is expected that Trump's Justice Department may want to avail themselves of appointing special counsels to look into certain matters.

So it's going to be really interesting to see how they handle what remains of this case. And this is part of the complexity, the Jack Smith was facing after Trump was reelected.

As we reported a few weeks ago, the special counsel's office and the Justice Department, they needed to -- to get together and really discuss the mechanics of what to do.

Because, of course, these cases don't just involve the president elect. You also, in the Mar-a-Lago case, you have these two co- defendants.

So after these conversations between top leaders of the Justice Department and the special counsel, you can see they've decided to completely toss the D.C. case, the election subversion case, against Trump, dismissed Trump's part of the classified documents case.

But they say they're going to continue with those two co-defendants. And it'll be interesting to see how that progresses and what the Trump Justice Department decides to do in that case.

Because either they continue to prosecute two Trump associates or they kind of undermine the legitimacy of special counsels that they may want to appoint.

SANCHEZ: And couldn't they simply pardon --

REID: Yes.

SANCHEZ: -- couldn't Trump simply pardon those two co-defendants at some point?

REID: They certainly could. And that would be my expectation that they would certainly get pardons. They both sort of played a long game here.

But the problem is that you have Judge Aileen Cannon's decision sitting down there in Florida saying that the special counsel was improperly appointed by the Justice Department.

[13:50:08]

And as expected, based on statements that Trump has made on the campaign trail, that his Justice Department may want to appoint their own special counsels.

Now, they don't have to appoint a special counsel. Usually do a special counsel if you believe you can't be impartial for some reason.

They may just allow their Criminal Division or their National Security Division to pursue the investigations that they have suggested they will pursue into some of Trump's political rivals.

But this all goes into sort of the big questions for Trump's attorney general nominee, Pam Bondi. How will you handle this? Will you be able to be impartial?

And the Trump team, again, saying today that these dismissals represent an end to the weaponization of the Justice Department. Well, are you really going to end what you perceive as the weaponization of the Justice Department?

Because that contradicts what Trump said on the campaign trail. On the campaign trail, he has suggested that he wants to use his DOJ to go after his perceived political rivals.

SANCHEZ: Paula, I'm also curious because we're talking about these co- defendants in the federal classified documents case. But in Georgia, where he's facing another election subversion case, that's a state- level case.

Probably wouldn't be surprising if Trump's -- the indictments against Trump went away there. But he has more than a dozen other co- defendants in that case.

And that's state court. So he theoretically wouldn't be able to pardon them there. What happens to Rudy Giuliani and all those other folks?

REID: So I want to differentiate. Trump faced four criminal cases, two at the state level, one in New York, one in Georgia, and these two federal cases from Jack Smith.

The federal cases are being dismissed here. Jack Smith wants them to be dismissed because he knows, one, internal justice formal guidance says he can't really proceed with them now that Trump is president- elect.

Even if he did proceed, he knows, once Trump gets into office, he can either pardon himself or have his attorney general dismiss Jack Smith and cases.

The state cases are different. While Trump is protected from some proceedings at the state level, it doesn't mean that the cases go away. They're sort of in limbo.

So in New York right now, we're waiting for the judge to weigh in on the state of that case. But Trump, even as president, he has no power to make those cases go away.

Instead, right now, he's asking his lawyers to kind of litigate and make them go away. Unclear what will happen in New York.

And the Georgia case is sort of the same. There's this outstanding question of whether the D.A. down there, Fani Willis, has to be removed from the case because of her involvement with the top prosecutor on that case, Nathan Wade. That's an open question.

So I would describe both of those cases against him as being in limbo. They can't proceed while he's president-elect, but he also can't make them go away like he can with federal cases.

KEILAR: All right, Paula Reid, thank you so much.

The special counsel now ending both of these federal cases, the classified documents case as well as the federal election subversion case.

We'll be right back.

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[13:55:33]

SANCHEZ: So Macy's is delaying its quarterly earnings report after discovering a single employee hid up to $154 million in expenses over several years.

KEILAR: That's a boggling amount.

And the retail giant says the employee intentionally made these accounting errors related to small package delivery expenses. It's a person that's no longer with the company.

We have CNN's Vanessa Yurkevich who is with us now on this.

Vanessa, what are you learning about this? And that is a lot of money. What kind of impact is it having?

VANESSA YURKEVICH, CNN BUSINESS CORRESPONDENT: It certainly is. We are learning that as Macy's was preparing their third-quarter's earnings report, they found some accounting discrepancies within the small packages delivery expenses.

And they launched an investigation, an independent investigation and found that there was a single individual who was making erroneous entries into the accounting of these small packages expenses.

The -- Macy's, for their part, says that they are still investigating this, which is why they pushed pause on doing their third-quarter's full-scale earnings report and conference call. They pushed it to December 11th.

Now we don't know exactly why this employee was hiding this money, $154 million, or how they were hiding this money. But Macy's says, for their part, it did not affect any cash management or vendor payments.

And during that same three-year time period that this employee was hiding this money, all expenses accounted for, about $4.3 billion. So a fraction of the cost, but still hundreds of millions of dollars.

The CEO of Macy's, Tony Spring, said, quote, "Macy's -- At Macy's, we promote cultural -- a culture of ethical conduct while we work diligently to complete the investigation as soon as practicable and ensure this matter is handled appropriately.

"Our colleagues across the company are focused on serving our customers and executing our strategy for a successful holiday season."

This raises a lot of questions, especially among investors, who are wondering, how did Macy's not catch this for three years?

We know in their preliminary earnings report, Macy's sales were down about 2.4 percent. And the market's not really liking to hear this news either. The shares of Macy's down 3 percent today in trading.

But the investigation still continues as this individual, though, is no longer with the company --- guys?

SANCHEZ: Yes. It makes you wonder who's watching the finances, if somebody just took 150 million bucks and snuck it under the rug.

Vanessa Yurkevich, thank you so much for the update.

Stay with CNN NEWS CENTRAL. We're back in just a few minutes.

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