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Trump Threatens Shutdown in Tense Oval Office Meeting with Democrats; Trump's Former Attorney Michael Cohen to Be Sentenced; U.S. Futures Higher Amid U.S.-China Trade Talks. Aired 9-9:30

Aired December 12, 2018 - 09:00   ET

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

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[09:00:57] JIM SCIUTTO, CNN ANCHOR: Very good morning to you. I'm Jim Sciutto.

POPPY HARLOW, CNN ANCHOR: I'm Poppy Harlow in New York. We're glad you're with us. And this morning is a life changing morning for Michael Cohen. Most likely for the worse, much, much worse.

In just about two hours President Trump's former lawyer and formerly his chief problem solver will stand before a federal judge here in New York and learn his punishment for bank fraud, tax evasion, lying to Congress and paying off the president's alleged mistresses. All of which he admits, all of which could send him to prison for four or more years.

SCIUTTO: It's a big deal. The president's long-time lawyer, long- time fixer, going to jail. And of all the Trump aides or allies or associates investigated or charged so far none has been closer to this president for longer than Michael Cohen.

But we cannot forget Michael Flynn. He is the campaign surrogate turned National Security adviser to the president whose own day of legal reckoning is just days away. Overnight Flynn and his attorneys asked a judge not to send him to prison at all for lying to the FBI. Through it all, the president insists he does not fear impeachment. In a new interview with Reuters, he shrugs off campaign contacts with Russians as, quote, "peanut stuff."

We will dig in to all of this in the hour ahead, beginning with the final chapter in the Michael Cohen saga.

Kara Scannell, CNN's Kara Scannell is outside the federal courthouse in Manhattan.

The sentencing range here 50 months to 63 months up to about 5 years. Do we have any sense of where it will fall for him in that range?

KARA SCANNELL, CNN WHITE HOUSE CORRESPONDENT: No. It's ultimately going to be up to the judge today when he hears from both prosecutors and Michael Cohen. Michael Cohen will be asking for more leniency, saying that he intends to cooperate as he's been cooperating with the Special Counsel's Office. The U.S. attorney's office here which brought a lot of these charges

Michael Cohen pled guilty to nine charges. Eight of them were brought by the U.S. attorney's office here, including tax fraud, making false statements to banks and campaign finance violations. They are saying that Cohen committed serious crimes and he should do serious time for them. But the Special Counsel's Office, which has charged Michael Cohen with lying to Congress, they've said that Cohen has been cooperative to them and that he's helped them at the core of their investigation, which is Russian interference with the U.S. election.

So we'll wait to see how strongly the Special Counsel's Office makes their case for Cohen today. But certainly Michael Cohen's lawyers will be making the case that he should get a much lighter sentence, that he shouldn't serve four years or more in prison and that he is going to continue to try to repair the damage he's done from the crimes he's committed over these years.

You know, it's really a moment where the ultimate loyalist to the president now could be one of the most dangerous witnesses against him -- Jim.

HARLOW: Yes.

SCIUTTO: Yes.

HARLOW: Absolutely. And just looking at that week ahead, what a week it has already been and will be starting with this morning's sentencing.

Kara, thanks.

Now to Michael Flynn and his plea to a federal judge to avoid all prison time. Now that's what he's asking for no time behind bars, Mueller, the special counsel, and his team have revealed that Flynn's cooperation helped them with three separate investigations.

SCIUTTO: Jessica Schneider is covering this part of the case. And listen, we've got to keep track. There is so much going on now. Mueller filings, Southern District of New York related to Michael Cohen, Michael Flynn. But speaking about Flynn, tell us what the focus is here. His lawyers made a claim yesterday that he was somehow goaded into lying to the FBI.

What else are they arguing?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Yes, right, Jim. So they argued that -- I'll get to that in a minute. But Flynn's lawyers, they're really pointing out to his extensive cooperation as the big reason for no prison time. But as you mentioned, they're also suggesting that Flynn may have really been tricked into lying to the FBI. So Flynn's team in this sentencing memo filed overnight, they detailed how Flynn met with FBI agents inside the White House days after the inauguration.

Interestingly, one of the agents was Peter Strozk, who's been of course a frequent target of the president based on his anti-Trump text messages that he sent and he was actually fired earlier this year from the FBI. But Flynn's lawyers are making the point that when Flynn met with the FBI, he didn't have a lawyer, he didn't have the White House counsel with him at the time. And they argue that Flynn wasn't warned he could be prosecuted by making false statements.

[09:05:05] Of course that's something that Flynn probably knew or should have known. But nonetheless, his lawyers are arguing that Flynn was unguarded when he met with FBI agents and that he really viewed them as allies. So that's one point of their memo.

The memo also makes the case that while others who have pleaded guilty have faced prison time, like George Papadopoulos, for instance, they say Flynn's different because his cooperation was much more extensive. He owned up much more to his actions.

So, really, Jim and Poppy, we'll see if the judge takes these recommendations into account of both Flynn and the special counsel who are recommending no prison time. The sentencing will be on Tuesday. They want no prison time, but Flynn has offered to do 200 hours of community service -- guys.

SCIUTTO: Jessica Schneider, thanks very much.

Joining us now CNN legal analyst Elie Honig and CNN national security and legal analyst Susan Hennessey.

Elie, if I could begin with you. Michael Flynn was former director of the Defense Intelligence Agency, one of the U.S. intelligence agency for more than a generation, served in military uniform, achieved the rank of three-star general. He was the president's National Security adviser. Does he need to be told or does any American or someone, interviewee by the FBI need to be told that lying to the FBI is a crime?

ELIE HONIG, CNN LEGAL ANALYST: No and no. That argument that he was somehow goaded or tricked into lying to FBI, that is a weak argument. I was not impressed when I read that. As you say, first of all, there is never an obligation by the FBI if they go to someone's place of residence or work to say, you should know, don't lie to us, it's a crime.

HARLOW: Right.

HONIG: They do not have to say that. Second of all, I think most people know that, especially somebody who spent his career at the highest levels of military and public service. So I was not impressed by that argument. That said, Flynn is not going to jail. He was convicted of one crime. The sentencing guideline range is zero to six months. He has no priors. And he gave full and credible cooperation. So all of that --

SCIUTTO: Yes.

HONIG: When you take it together, there's no way he is going to jail.

HARLOW: Susan, when you look to Michael Cohen, again less than two years now he will likely be sentenced to likely years in prison. We'll see. Two separate cases here. Two separate guilty pleas. Two very different recommendations from prosecutors. I mean, the Southern District of New York says he was sort of half hearted, at best, in being helpful to them. Mueller's team says he went to, quote, "significant lengths to help."

Is he going to prison? And if so, for how long? And we know that this judge is a tough one and may hold him to account even more because he's an attorney.

SUSAN HENNESSEY, CNN NATIONAL SECURITY AND LEGAL ANALYST: Yes. I mean, I think it's almost certain that he's going to serve some substantial prison term. The judge's sort of test today is going will be reconciling not actually two, but three different accounts. One is the account that Michael Cohen himself offered in his sentencing memorandum, saying, you know, that he provided all of this cooperation, really painting himself as contrite.

Then we have the SDNY sort of response to that saying no, he attempted to be selective in his cooperation. He wasn't fully forthcoming. And then of course we have the special counsel's filing that sort of takes, you know, the sense that he was helpful, you know, to their investigation.

You know, one thing to keep in mind is of course the campaign finance violations go directly to the president. You know, Cohen had said and now prosecutors have also said in their own filings that President Trump directed him to do that. But Cohen is also being charged with totally separate offenses here, tax evasion, bank fraud. You know, serious crimes that are motivated, you know, by greed, have nothing to do with sort of the current political environment which you would expect to see substantial jail time for.

SCIUTTO: Yes. Elie, I want to dig down on what Susan brought up there is the tie to the president. First of all, it does implicate him because it's in the court documents. He says that he was directed by the president to do this. Now that is already being dismissed by the president and his allies as a purely personal thing. It was my money. It was my personal affairs. You know, this is what's being portrayed. But tell us about campaign finance law. Because if you hide something like this to influence an election, that is violating the law; is that right?

HONIG: So let's break it down into two questions. The first one is, was it a campaign contribution or was it something else? And the question there is, was it intended to influence the election, to silence these people?

HARLOW: That's the Edwards question, right?

HONIG: Yes. Exactly. And in the Edwards case there wasn't enough evidence. The evidence was a little more mixed. The payments were made well before the election really kicked in.

SCIUTTO: More than a year in Edwards' case.

HARLOW: Yes.

HONIG: Exactly.

SCIUTTO: This was a couple of months.

HONIG: And I think the timing is key. In Edwards' case there was this big gap or not as much of a gap. In the case here, though, the affairs were a decade ago, and when did they make the payments? October of '16.

HARLOW: Right.

HONIG: Right in the run-up to the election. And remember that tape that Cohen made that he put out in the media. They're talking on the tape, the president and Cohen, about we just need to hold them over a couple more weeks, right, past November 6th or whatever the election date is.

SCIUTTO: Interesting.

HONIG: So first it has to be a campaign contribution. If it is a campaign contribution where you get the crimes is really on two levels. One, the amounts are way above the maximums permitted under law. It's $2700 for an individual. Here you're talking $130,000, $150,000, and then disclosure.

[09:10:01] You have to disclosure your campaign contributions. Obviously they're not writing (INAUDIBLE) --

SCIUTTO: They in fact made an effort specifically and explicitly to not disclose it, right?

HONIG: Yes.

SCIUTTO: They wanted to hide it.

HONIG: Correct.

HARLOW: Susan, to you, last night in this interview that the president did with Reuters, he brushed off these payments to Stormy Daniels and Karen McDougal as, quote, "only civil" in terms of violation of campaign finance laws. But let me read you from the president, quote, "And even if it's only civil, there was no violation based on what he did."

Talk to me about the potential legal implications of those last three words, what we did.

HENNESSEY: Yes. So I think we've seen again and again that the president is sort of his own worst enemy, his inability to not sort of comment of these matters and potentially make things worse for himself. So the president is attempting to spin here by saying, you know, it wasn't a crime. You know, we didn't do it and if it wasn't -- if we did do it, then it wasn't crime. He's sort of -- he's attempting to argue in the alternative but sort of on PR grounds. Now I think Elie is right. The -- you know, the concern here is that,

you know, the president -- there is much stronger evidence than we've seen in past cases. You know, the other thing is that the president in the past has actually tweeted about the Edwards case. So that final element of it being a knowing and willful violation that he actually knew it was a crime at the time, you know, he has the Edwards case to look to. And so that's why I do think that there is a much stronger case here against the president.

You know, one of the most substantial pieces is of course that Michael Cohen himself has now testified and has now told prosecutors about the principal purpose, and so he is also -- you know, testimony is evidence against the president here. And so, you know, I do think that the president understands that he is potentially in very, very substantial trouble.

HARLOW: Susan Hennessey, Elie Honig, thank you both. We appreciate it.

All right. We do have some breaking news. British Prime Minister Theresa May in the fight of her political life for sure this morning. She is vowing to battle with everything she has. Within hours she faces a no confidence vote by members of her own Conservative Party. If she loses, she is out. And what happens to Brexit, who knows.

SCIUTTO: Lawmakers are furious over her handling of Britain's withdrawal from the European Union known of course as Brexit. This morning, the prime minister defiantly facing down her critics.

(BEGIN VIDEO CLIP)

THERESA MAY, BRITISH PRIME MINISTER: The biggest threat, the biggest threat to people and to this country isn't leaving the E.U. It's a Corbin government.

(END VIDEO CLIP)

SCIUTTO: CNN's Nic Robertson is in London outside the prime minister's residence with more.

So, Nic, I guess the real question here is if she survives or doesn't survive, what does that mean for the exit?

HARLOW: Right.

SCIUTTO: Nic, because it's almost counterintuitive, right? If she survives, that might mean a softer exit. And if she doesn't survive, might increase the chances of a no deal Brexit? Do I have that right?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: You do. But of course we are in a situation with a huge number of variables. And this is just one of them but this is the argument that she's been making today that if you go into a leadership contest, which has to play out over a matter of weeks at the very least, then you get much closer to that deadline of leaving the European Union. If you don't have support for it within parliament, which there has to be a vote and that's essentially why this vote of no confidence was triggered in her, because she delayed that particular vote.

It was supposed to be yesterday. She delayed it. But if you get into a whole matter of something else, the leadership contest, then you get closer to the deadline. And if you get close to that deadline there is a possibility of reaching the deadline without having an agreement.

She was asked the very question, when will you have that vote? That vote on the Brexit deal so far, the so-called meaningful vote, she was asked that by the leader of the opposition, Jeremy Corbin, today. She gave a very, very robust answer, but didn't give a date.

(BEGIN VIDEO CLIP)

MAY: I'll tell members on the other side when we've had a meaningful vote. We had it in the referendum in 2016.

(CHEERS)

MAY: And if -- and if he wants a meaningful date, I'll give him one. 29th of March, 2019 when we leave the European Union.

(END VIDEO CLIP)

ROBERTSON: But if she does win the vote this evening, that vote of confidence, then of course that date of when the meaningful date will be will become very significant again. Significant as well that Jeremy Corbin didn't call a vote of no confidence in the government. That challenge may yet come -- Poppy, Jim.

SCIUTTO: The possibility of another election.

HARLOW: Right.

SCIUTTO: Nic Robertson, thanks very much for following.

It's important. Forget pinning the blame on Democrats for a government shutdown. A tense meeting the president said that he would proudly do it.

HARLOW: Plus, "The New York Times" reporting this morning Chinese hackers are behind that massive data breach into the Marriott Hotel chains and that it's part of a much broader spy campaign to amass America's personal data. How will President Trump respond this key trade on the line. And Russia claims that accused agent Maria Butina, is, quote, "a political prisoner in the United States. The exclusive CNN reporting is ahead.

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[09:15:00] HARLOW: One day in a morning after a very ugly and very public meeting. The president this morning is taking aim at Democrats once again over the spending showdown less than 24 hours from when President Trump had the meeting, said he'd gladly take the blame for the shutdown.

SCIUTTO: Yes, thirsty is an understatement for how that meeting -- HARLOW: Oh, yes --

SCIUTTO: Went yesterday. But for all the back and forth, and let's admit it, theatrics on both sides, sources on Capitol Hill say that the government shutdown is not necessarily a lock, and that the Oval Office spectacle may be a good thing to help both sides reset to work on a deal.

That's putting a rosy story --

HARLOW: All right --

SCIUTTO: Let's discuss now with Ron Brownstein; Cnn senior political analyst and Matt Lewis; Cnn political commentator. Matt, I want to begin with you, because the "Wall Street Journal", of course, conservative editorial page, they seem to say that the Democrats got the better of this meeting by the president taking ownership of a potential shutdown.

I'm going to quote here, "whether Mr. Trump was merely following his script or erupted at Mr. Schumer's goading, the president abruptly took political ownership of shutting down the government next week over funding for his border wall." Do you agree?

[09:20:00] MATT LEWIS, SENIOR COLUMNIST, DAILY BEAST & CNN POLITICAL COMMENTATOR: Well, look, I think that they're operating under a normal traditional paradigm which Donald Trump is playing a completely different game. So yes, what they're saying is basically, I think, conventional wisdom.

You know, you should never say you want a shutdown because shutdowns are bad. And if you get blamed for a shutdown, there will be consequences. You will lose in the court of public opinion.

SCIUTTO: Yes --

LEWIS: And there you may lose election. I think my argument, which is a contrarian argument, is that all of those things matter to normal politicians, but they don't matter to Donald Trump. I think if you watch the theatrics yesterday, it was Chuck Schumer who looked very uncomfortable.

I think Donald Trump came across as actually dominant. I mean, he's the president, so that makes sense. It's -- he's playing a home game --

SCIUTTO: All right --

LEWIS: There, his turf. I think that --

SCIUTTO: I thought Pelosi did a pretty good job pushing back against it --

LEWIS: She was OK, she's tougher --

(CROSSTALK) HARLOW: I think it was Mike Pence who said so much --

SCIUTTO: Yes --

(LAUGHTER)

LEWIS: The last thing I'll say and then I'll shut up is, what does Donald Trump have to lose, right? And he just lost the House, there's not going to be another election for two years. He looks authentic. He looks like he wants transparency by bringing in the cameras, and he's tough.

He's always been a base player. He wants -- his base wants this wall, and guess what? If impeachment becomes a reality, if it starts to get serious, he will need his base, that's what this is about.

HARLOW: So, Ron --

RON BROWNSTEIN, SENIOR EDITOR, THE ATLANTIC & CNN SENIOR POLITICAL ANALYST: Hello --

HARLOW: Let me just jump in here --

BROWNSTEIN: Yes --

HARLOW: I want you to respond --

BROWNSTEIN: Yes --

HARLOW: But you've been tweeting about these numbers, and I want to bring them --

BROWNSTEIN: Yes --

HARLOW: To our viewers as well --

BROWNSTEIN: Exactly --

HARLOW: Because the president --

BROWNSTEIN: Right --

HARLOW: Said, let me quote more of him yesterday after this meeting. "If we close down the country, by the way, I will take it because we're closing it down for border security. I think that wins every single time, no, it doesn't, not among the American people."

Look at the new Marist poll, "Npr", "Pbs" poll out this morning, 50 percent of Americans think the wall is not a priority at all, 19 percent think it's not an immediate priority, Ron, that's almost 70 percent of Americans --

BROWNSTEIN: Right --

HARLOW: Who don't see it the president's way. So this is a --

BROWNSTEIN: Right --

HARLOW: Big gamble, no?

BROWNSTEIN: Absolutely, look, the message of this last election is very clear. That it isn't only the base of the Republican Party that votes. I mean, Republicans lost the House popular vote by almost 10 million votes by a bigger margin than Democrats did in '94 or 2010.

And the fact is, not only are government shutdowns unpopular, the president is proposing to shut down the government over an idea that is deeply unpopular, 60 percent of the public has consistently invariably opposed the idea of building a wall every time it has been polled in his presidency.

And that includes preponderant majorities of all the groups that just gave Democrats control of the House. Three-quarters of millennials oppose building the wall, two-thirds of independents opposing building the wall, 60 percent of college-educated whites oppose building the wall.

So again, I think this is an indication as Matt I think correctly says, that the president is invariably focused on his base. But the base are not the only people who vote, as we were just ready to point --

SCIUTTO: Yes --

BROWNSTEIN: And reminded. And I also note that in 2020, you have Republican senators, unlike this and unlike the 2018 environment in places like Maine and Colorado that are trending Democratic and where this kind of base first politics I believe is kind of a, you know, a sentence for ending their careers.

SCIUTTO: You know, Matt, you have seen some Republican commentators who say that in the data -- forget their opinions, but in the data from the midterms, that the wall issue, the immigration issue did not do as well for Republicans as the president and other Republicans imagined. Now, I wonder if you share a similar concern.

LEWIS: Well, look, first of all, I would say, we're two years out. I think this is probably part of Donald Trump's calculus. Here, Republicans shut down the government and got blamed, I think rightly blamed for it in 2014 in September. They ended up doing pretty good two years later.

So there's a lot of time between now and whenever --

SCIUTTO: Yes --

LEWIS: The Republican senators are going to be up for re-election. I also think -- I don't want to say I don't believe the polls, but I think that they don't fully capture the immigration issue and the intensity. I saw polls for the last five years even on the Republican side.

You would look at external polls or -- you know, talk to people who voted in a Republican primaries, they would never rank immigration as a top issue. You know, they really said they don't care that much about immigration. They're actually -- they're OK with a pathway to citizenship, and yet Donald Trump, every single time I think exploited that issue --

SCIUTTO: You know, but I'm not talking purely about the poll --

LEWIS: Thank you --

SCIUTTO: I'm talking about how people voted in the midterms on this --

HARLOW: Yes --

BROWNSTEIN: Yes --

SCIUTTO: Not an express to an issue --

LEWIS: And --

SCIUTTO: Which is the more operational data, right?

BROWNSTEIN: And the wall -- you know, look, the wall has become some -- you know, it's become say much more than an immigration. It really has become a symbol of whether or not you accept a changing or welcome or fear a changing America.

[09:25:00] And the idea that this is not an intensity issue on the other side, on the Democratic side, I think it may have been true once, no longer true. I think it is an absolute symbol for the Democratic coalition of resisting --

LEWIS: What if he gives them DACA --

BROWNSTEIN: The kind of --

LEWIS: What if he gives them DACA though, what if they turn --

BROWNSTEIN: Well, you know --

LEWIS: Down DACA?

HARLOW: We're waiting and waiting always down there --

BROWNSTEIN: Yes, well, don't forget, last year that -- don't forget that last year that --

HARLOW: Guys --

BROWNSTEIN: Deal was on offer when the White House also demanded massive cuts in legal immigration. And I don't think there is a wall deal with the Democratic House majority. I just --

SCIUTTO: Yes --

BROWNSTEIN: Think it is too overwhelmingly opposed by the groups that created that majority.

LEWIS: I agree, and that's why I think Trump actually could end up winning this one, because if he offers DACA, and says look, all I want is some funding for border security for a fence --

SCIUTTO: Right --

LEWIS: A fence, but I'll give you DACA. Is Nancy Pelosi going to be in a position to say yes to that? So I don't think it's --

BROWNSTEIN: Well, look --

SCIUTTO: That's a fair, that would be a lot tougher thing --

BROWNSTEIN: Last year, that deal was on offer --

SCIUTTO: That -- also, but that would be a lot tougher thing clearly for the Democrats to turn down. But hasn't been a lot of talk --

BROWNSTEIN: Right --

SCIUTTO: About that, we'll see, who knows? The president is a deal maker, Ron Brownstein, Matt Lewis, thanks very much.

LEWIS: Thanks --

SCIUTTO: President Trump's former attorney and fixer could face a lengthy term in prison. We're on top of that story.

HARLOW: Right, that's in less than two hours. We're also just minutes away from the opening bell on Wall Street. Futures pointing slightly higher this morning. Investors pointing to a renewed optimism about U.S.-China trade negotiations.

But there are a lot of other major issues between the U.S. and China that could severely complicate that. We'll get into all of it ahead.

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