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Musk Visits Pentagon As It Weights Major Cuts To Top Of Military; Musk And Doge Backlash Fuels Tesla Crisis; DOJ Discussing Invoking Privilege In Deportation Flight Dispute; Trump Intensifies Attacks On Federal Judge Ahead Of Hearing. Aired 2-2:30p ET

Aired March 21, 2025 - 14:00   ET

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

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BORIS SANCHEZ, CNN HOST: A Pentagon visit today that is raising some eyebrows, Secretary of Defense Pete Hegseth welcoming billionaire Elon Musk for a closed-door meeting. What we know about the visit and why there are questions lingering over potential conflicts of interest.

BRIANNA KEILAR, CNN HOST: And tough times for Tesla, global sales falling, the cybertruck under recall, dealerships being vandalized, and now investors, some of them want new leadership. And minutes from now, Justice Department lawyers will be in court as President Trump is escalating his attacks on the judge overseeing this legal fight over deportation flights. We're following these major developing stories and many more, all coming in right here to "CNN News Central."

SANCHEZ: Billionaire Elon Musk's visit to the Pentagon did not last long today, but the unprecedented meeting is stirring up controversy. His closed-door sit down with senior military leaders, including the Defense Secretary Pete Hegseth comes amid sweeping cuts that the president's close ally is making throughout the federal government. But it's Musk's lucrative SpaceX contracts with the Defense Department and of course, his extensive business ties with China that are raising questions about possible conflicts of interest.

Adding to the concerns, this New York Times reporting that the meeting's original purpose was to brief Musk on the U.S. military strategy for a potential war with China. Today, Donald Trump and Pete Hegseth deny that the meeting was about China, saying that it was instead focused on DOGE reforms.

(BEGIN VIDEO CLIP)

DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES OF AMERICA: But I don't want other people seeing, anybody seeing potential war with China. We don't want to have a potential war with China, but I can tell you if we did, we're very well equipped to handle it. But I don't want to show that to anybody, but certainly you wouldn't show it to a businessman. You know, Elon has businesses in China and he would be susceptible perhaps to that. Elon was over there today to address costs. DOGE, thing called DOGE, which you've heard about.

(END VIDEO CLIP)

SANCHEZ: CNN's Natasha Bertrand is live for us, following this story. What are you hearing about this meeting, Natasha?

NATASHA BERTRAND, CNN NATIONAL SECURITY CORRESPONDENT: Well, Elon Musk entered the building here at around 9:00 a.m. this morning. He walked right upstairs to where the Secretary of Defense has his office, and he stayed for about an hour and 20 minutes. And when they emerged, we did shout questions at them, asking what they had discussed. Either -- Elon Musk and Pete Hegseth, they would not respond except to say that the meeting was great. And Elon Musk said that, of course, he has been here before.

Remember, as you said, he is a defense contractor. He has very lucrative contracts with the Defense Department, which is part of the reason why critics are raising questions about whether it could be a conflict of interest for him to be receiving these kinds of briefings, as well of course, because it could put him at a potential advantage over any other competitors. Now, apart from that, he also, of course, has a vested interest in China, something that he has talked about publicly.

So if this briefing was having to do with China, as the New York Times did report, then obviously that has raised some red flags for critics as well. But President Trump, Hegseth, Elon Musk, they're all denying today that China was, or at least classified briefing about China was on the table. And instead that this was mostly about the cuts that Elon Musk has been making as part of DOGE for the Department of Defense.

Now, at this point, we still don't know exactly what was discussed during this meeting. Again, Secretary Hegseth, when he was depart -- saying goodbye to Elon Musk at outside the Pentagon today, he did say, Elon Musk did say that he wanted to be helpful in the future and that he hoped to see Secretary Hegseth again. But at this point, it seems, look, they obviously had a very chummy relationship.

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They were smiling and laughing, a relationship that seems like it's going to be pretty solid moving forward, working together on this stuff.

SANCHEZ: Natasha Bertrand, live for us at the Pentagon, thank you so much. Brianna?

KEILAR: With us now is retired Army General Wesley Clark, the Former NATO Supreme Commander. Sir, thanks for being with us. And when they're talking about these potential cuts, plans under consideration include consolidating combatant commands, possibly eliminating a directorate that oversees development, training and education for the joint force, and halting the expansion of U.S. Forces Japan. I think the layperson looking at that list of things doesn't really understand perhaps what that means. What would that impact be?

GEN. WESLEY CLARK (RET.), FORMER NATO SUPREME COMMANDER: Well, what that does is it takes small bites out of very important functions. So these training commands, first of all, are a huge factor in multiplying the effectiveness of a force. If you look at the Russian army and Ukraine say, well, that's not doing very well. That's right, because they don't do training. It's not just a matter of putting weapons in the hands of soldier, sailors and airmen. You've got to have training. You've got to have training.

And then the second thing is these commands are really important because they coordinate with host nations. So that command in Japan is really important for Northeast Asia and dealing with China. And then the third thing is, what I'm worried about is, the wax (ph) on major weapon systems. Maybe Musk thinks that you can do this all with some very super-duper drones and high-tech stuff, but ultimately you've got to have a whole range of capabilities.

You know, we never thought Ukraine, for example, would be like trench warfare and heavy artillery, but it is. You can't totally predict. And so, the United States has global responsibilities. You have to have the capability to fight anywhere on that spectrum from counter- terrorist operations all the way up to major warfare on land and sea.

KEILAR: OK. So, the Pentagon does have an $800 billion a year budget, and there are also -- there are some Republicans who do want to see it cut. And there is this plan to cut a significant amount over the next five years. If DOGE is looking for these cuts, where should they look?

CLARK: Well, I don't think they should cut.

(LAUGH)

CLARK: I don't think there are very many places you can make those cuts. In fact, the Congressional studies and the Armed Services Commission and Chairman Roger Wicker said the defense budget needs to be doubled. The fact is the defense budget has been squeezed over the last 12 years, since 2013, under President Barack Obama. It hasn't kept up with the rate of inflation. We have a four adversary -- four- nation adversary coalition lining up against the United States.

It's no time to cut the defense budget. It's just not. You got to look at what are you -- what are you going to do with the tax cut? I mean, if this is all about tax cuts, we're back in the situation of the 1930s where the United States faces major challenges and cuts its military forces. And that's a big mistake in the nuclear missile, hypersonic and space age.

KEILAR: What concerns does it raise to you that Elon Musk, obviously, as Head of SpaceX has this conflict of interest? Because SpaceX has huge relationships, a relationship with DOD and contracts with the federal government?

CLARK: I'm concerned about conflicts of interest, but it's not unusual for contractors to come into the Pentagon and get briefings. He's going to put Golden Dome up, probably a bunch of satellites that can hit missiles in a boost phase around the world. This is what President Trump wants. No problem giving him a general impression of what the Chinese threat is. We do this for contractors and he has a basic security clearance, not the highest clearance. But the conflict of interest, I'm more worried about his relationships with nations abroad. He talks to Vladimir Putin; he's got business in China. So, when people have these complex relationships, it's not that they're bad people necessarily, but they're subject to other considerations and those considerations impact their decisions.

So, that's to me the greater problem as far as the conflict of interest in the United States is concerned. Look, the administration is cutting a lot of corners on a lot of legal restrictions. We've done away with the Foreign Corrupt Practices Act enforcement. We've cut a lot of fair -- free trade, fair trade considerations out of the Justice Department enforcement. So conflict of interest, yeah, sure, stack it on.

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But I'm more worried about Elon Musk coming into the Pentagon and saying, well, I know high tech and I've got really smart guys in Silicon Valley, and these old admirals and generals, they don't know anything. But the truth is that we do learn, we do learn a lot from experience. And so, we got to be really careful not jumping on the next -- on the next shiny object and saying this is going to solve the problem.

We've watched this for many, many years in the defense reform movements, starting with the effort to get rid of aircraft carriers in the 1980s from Gary Hart and Bill Lind, and turns out aircraft carriers are pretty useful even today. So we have to really keep a balance of capabilities. Got to recognize that anything you cut out a defense, it's going to take years to build it back if we need it.

KEILAR: Yeah. We should note, the president seemed to emphasize and shoot down that New York Times reporting, that this had to do with China, but that is what that reporting was. So, and also, not a lot of contractors going in there who would get to make cuts. You have a lot of concerns about the cuts for sure. General Clark, great to have you. Thank you so much.

CLARK: You bet.

KEILAR: Boris?

SANCHEZ: Thank you. The blowback over Elon Musk's unprecedented power inside the Trump administration and his promotion of far-right politics and conspiracies on X is fueling a full on brand crisis for Tesla. Musk's signature company is grappling with falling global sales, a crumbling resale market, a major cybertruck recall, and it is one of the worst performing major stocks on the S&P 500 so far this year.

President Trump and his administration have been working hard to try and give Tesla a boost. Last week, we saw Trump and Musk turn the White House South Lawn into a temporary Tesla showroom. And this week, Commerce Secretary Howard Lutnick went on Fox News, making a pitch for the company telling viewers to buy Tesla stock. Adding to its economic woes, Tesla is also reeling from recent vandalism on its vehicles, dealerships, and other properties. Today, President Trump suggested that those involved could be sent to prisons in El Salvador for 20 years. He also made this comparison. Listen.

(BEGIN VIDEO CLIP)

TRUMP: Well, I view these people as terrorists just like others. These, when I looked at those showrooms burning and those cars, not one or two, like seven, eight, 10 burning, exploding all over the place. These are terrorists. You didn't have that on January 6th, I can tell you. You didn't have anything like that on January 6th.

(END VIDEO CLIP)

SANCHEZ: It follows Attorney General Pam Bondi announcing the arrests of three people charged with using Molotov cocktails to target Tesla properties across three states. CNN's Matt Egan is covering the economic side of the Tesla crisis and he joins us now live. Matt, what can you tell us?

MATT EGAN, CNN REPORTER: Well, Boris, Trump 2.0 started with a bang for Tesla. The stock price went to the moon and Elon Musk's net worth went almost straight up. But now, it feels like almost everything is going wrong for this company. We've seen vehicles and dealerships get attacked. Sales in Europe have plunged. The market for resale, for used Teslas has imploded. And yes, the stock price, it has lost about half its value since mid-December.

It's the second worst performer in the entire S&P 500 so far this year. Now the problem, of course, is that Tesla is Elon Musk and Elon Musk, his brand has become inextricably linked to President Trump's for maybe half the country. That's a great thing, right? That could be a reason to buy another Tesla. But for the other half the country, not so much. Veteran Tech Analyst, Dan Ives, he summed it up best this week.

He said that by Musk spending 110 percent of his time with DOGE and not as Tesla CEO, this is essentially turning Tesla into a political symbol and this is a bad thing. Now, Ives issued a warning to Tesla and keep in mind that Ives is one of the biggest Tesla bulls on the planet. But he said that Tesla is facing a "brand tornado crisis." And he said that Elon Musk has to come out and announce a plan to balance his time between Tesla and between DOGE to prevent permanent brand damage.

Another investor for Tesla, Ross Gerber, he went a step further. He told CNN's Erin Burnett that he thinks the board has to find a new CEO. Musk seems to be hearing some of the criticism. He had an all- hands meeting with employees last night. He acknowledged the storm facing the stock. He urged employees to hold on. Look, Tesla remains the number one brand for EVs. This is still an almost $800 billion company. And in the past, betting against Tesla or Musk really has not paid off, right?

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The company has faced a lot of challenges. They've come out stronger after each of them. But Boris, look, this is a brand facing a massive backlash and a company very much in crisis.

SANCHEZ: A brand tornado crisis, unique combination of adjectives there. Matt Egan, thank you so much for that. Let's now go to CNN's Hadas Gold for the latest on the attacks on Tesla vehicles and dealerships. Hadas, Elon Musk is now citing no evidence linking the vandalism to trans people. Tell us about those posts.

HADAS GOLD, CNN MEDIA CORRESPONDENT: Yeah, Musk has been re-tweeting posts saying things like three out of the four people arrested are trans or non-gender conforming, that there are claims circulating online that some of the people who have been arrested are trans or non-binary, and people are taking this off of social media accounts. We have not confirmed this ourselves and authorities have not confirmed anything about their gender identity.

And what Musk is doing as he often does, he's just seeing things crossing his timeline and he re-tweets them and he posts them without seemingly doing much research, even though he is sitting at the White House and he could probably get the best stats and research on what's happening. He also though began reposting claims that trans people are more violent than non-trans people, but here is a fact. Trans people are more than four times as likely to be victims of violent crime. That is a fact.

Now, his comments about trans people actually came the same day as his estranged daughter, who herself is trans, gave her second ever interview. This was to Teen Vogue. Her name is Vivian Wilson. She petitioned the court, if you remember a few years ago, to drop the name, her last name as Musk because she is estranged from her father. She hasn't spoken to him in several years. And she spoke up very forcefully against her father's politics. And remember, Musk has said that Vivian, who he says that his son was "killed by the woke mind virus."

While Vivian said in this interview that getting gender conforming care, she said, literally saved her life. She said that she learns about her father's actions in the news, including any new half siblings that she may have. And she actually made also a comment about that gesture we saw Elon Musk made during Trump's inauguration that got a lot of attention. This is what she said. The Nazi salute shoot (ph) was insane. That shoot (ph) was definitely a Nazi salute. She also called her father a pathetic man-child. We should also note though that Musk has denied that that gesture was a Nazi salute. Boris?

SANCHEZ: Hadas Gold, thanks so much for bringing us that part of the story.

Still to come to "CNN News Central," DOJ lawyers returning to court this hour as President Trump escalates his attacks on the judge overseeing the migrant deportation flights case. And later, the impact of cuts to the federal budget hitting food banks nationwide, what that means for the tens of millions of food insecure Americans who rely on them. Stay with us. We're back in just a few minutes.

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SANCHEZ: We are watching a key hearing set to begin just moments from now. Justice Department lawyers are meeting face-to-face with the judge who blocked President Trump from deporting hundreds of migrants using wartime powers. We're learning the DOJ may invoke privilege to keep details about those flights secret after Judge James Boasberg demanded more information about why the planes continued to El Salvador last weekend, even though he ordered that they return.

The Trump administration has alleged those who were removed are tied to a Venezuelan gang, but it has provided limited evidence of that. An attorney for one of the migrants, for example, says that a tattoo of a soccer team's logo and a hand gesture commonly used as a rock and roll symbol was used to identify their client as a gang member.

KEILAR: In the meantime, Trump is escalating his attacks against Boasberg just hours before today's face off.

(BEGIN VIDEO CLIP)

TRUMP: We can't let a judge say that he wants to -- he didn't run for president. We just can't let that happen. It'd be so bad for our country. I won on the basis of getting criminals out of our country. You can't stop that with a judge sitting behind the bench that has no idea what goes on, who happens to be a radical left lunatic.

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KEILAR: We should note Judge Boasberg was initially appointed to the bench by George W. Bush. With us now to discuss this more is Deborah Pearlstein, a Constitutional Law Professor at Princeton University and Harry Litman, a former U.S. attorney and Deputy Assistant AG, who now hosts the 'Talking Feds' podcast.

All right, Deborah, DOJ says there are cabinet-level talks about invoking state secrets privileges in this deportation flight dispute. What impact could that have? What information would that cover?

DEBORAH PEARLSTEIN, CONSTITUTIONAL LAW PROFESSOR, PRINCETON SCHOOL OF PUBLIC AND INTERNATIONAL AFFAIRS: So, I take it if that's what the court is discussing now, the court has given, or as of this morning, the court gave the administration until Monday to decide whether or not it was going to invoke state secrets privilege. Typically, that's a privilege that you see arise in cases involving the military or otherwise classified information. Here what we're talking about is civil immigration, deportation proceedings.

In a subject of current and ongoing litigation in front of the courts, it would be unusual to say the least, to see the Justice Department attempt to invoke state secrets privilege here. If they did do that, what it would mean is further proceedings in the case.

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It wouldn't necessarily change the ultimate outcome depending on what the court rules. There are ways of continuing litigation, even if privilege around certain information is invoked.

I think the merits of the case will continue to go forward regardless. The merits being whether it was lawful for the President to use the Alien Enemies Act here at all in the first instance. But it is an added delay in adjudicating the issue that's before the court right now, which is did the president refuse to comply or defy the orders of the federal court?

SANCHEZ: And Harry, our Priscilla Alvarez spoke with multiple family members and immigration attorneys who say that several Venezuelan migrants who don't have any affiliation with Tren de Aragua have been swept up in these deportations. Can DOJ, in this case, be compelled to provide more information to substantiate the claims from the government that these were in fact gang members?

HARRY LITMAN, FORMER U.S. ATTORNEY: They say they can't and it's a great point, Boris. Imagine if it's true, people completely innocent are now down there in this most brutal El Salvadoran prisons. It's not just that that's controversial in his invocation of the act, which has only been done in wartime. He's saying that this group, this transnational drug group is the equivalent of a foreign country that has invaded the U.S. Lots of stuff there that courts always have to determine.

But as Deborah is saying, right now, what Boasberg is saying is, look, last Saturday, I told you to turn those planes around. You didn't do it. I want to know why. And he's not letting that go. And this state secrets idea is about the sixth different thing the department has said. So he said, you know, fish or cut bait on it, let me know. But the details he's asking for are like, when did the planes leave? When did they leave U.S. airspace? Many things they've already made public.

So, the general notion that we can't even tell you these little snippets of information because of national security concerns seems really overplaying their hand, and part and parcel of an effort to just shut everything down as soon as the president, for whatever reason, intones the words national security.

SANCHEZ: Deborah, how does the fact that they're now an El Salvador complicate all of this?

PEARLSTEIN: It complicates it enormously, especially when it comes to thinking about whether there's any remedy if a court ultimately concludes that the president did act unlawfully, that the department did act unlawfully in sending these people who were in the United States, alleged Venezuelans who were in the United States, to El Salvador unlawfully. Now, they're in custody of another foreign power, right? So these involve not just questions of statutory law and constitutional law under the United States, they involve questions of international law as well, that become increasingly complicated.

This is a case that's going to take for that reason, among others, a long time to play out in the best of circumstances. The administration has tried already repeatedly, to move the case to the appeals court in the District of Columbia. The appeals court just today said in a panel, a divided panel, two of the judges were appointed by Republican presidents, one by a Democratic president. The panel said, no, we're going to wait till Monday. The district court is moving forward with the two enormous different issues that are still being litigated. Number one, was this lawful in the first place? And number two, did the administration defy a court order? We're going to wait at least until Monday, before we even consider intervening in the case. It's likely we're going to see this continue for some weeks to come.

KEILAR: Deborah Pearlstein, Harry Litman, thank you so much to both of you. One of Canada's leading political parties is seeing a major bump in the polls, in part thanks to President Trump. We'll explain next.

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