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California Braces For More Storms; Inflation Easing; Special Counsel Appointed to Investigate Biden Documents. Aired 1-1:30p ET

Aired January 12, 2023 - 13:00   ET

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

[13:00:01]

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: And his commitment to service before self was literally inspiring.

(END VIDEO CLIP)

JOHN KING, CNN HOST: He was the mayor during 9/11. In the midst of tragedy, yes, he stepped up. But then what happened to that leader?

The CNN original series "Giuliani: What Happened To America's Mayor?" Sunday at 9:00 p.m. Eastern right here on CNN.

Thanks for your time today on INSIDE POLITICS. We will see you tomorrow.

Bianna Golodryga picks up our coverage right now.

BIANNA GOLODRYGA, CNN HOST: Hello, everyone, I'm Bianna Golodryga in New York.

We are standing by for Attorney General Merrick Garland, as he is expected to deliver a statement at any moment. Now, we don't know what this will be, but it comes as pressure mounts for Garland to appoint a special counsel to oversee an investigation into President Biden's handling of classified government records.

We are following this from every angle.

So let's begin with CNN's Evan Perez.

Evan, what are you learning about what we can expect to hear from the attorney general in just a few moments?

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, Bianna, we obviously know that the Justice Department, Attorney General Garland are in a very difficult position now, given the fact that we are learning still new details about these documents that the president's team says that they found now at multiple locations.

The Justice Department is facing the decision right now whether to appoint a special counsel, whether to open a fuller investigation. We know that, at least at this point, there was an initial review that was done by the U.S. attorney in Chicago, John Lausch. That part of the investigation is completed.

And so now the decision from Garland -- and we're going to -- we expect to hear from him in the next few minutes -- is what to do next. And as you as we have all been talking about, the fact that the -- this has to do with the sitting president, Merrick Garland's boss, really kind of puts him and others here in the department in a difficult position, one that could be solved by bringing in someone who can be viewed as independent.

There's a problem with perception that has been created by the fact that not only did you find documents in one place, but apparently in a subsequent location. So we expect, given the fact that there is already a special counsel looking into the matters related to the former President Trump, that this one will likely be have to be treated in the exact same manner -- Bianna.

GOLODRYGA: Yes, you're talking about the special counsel Jack Smith.

You also mentioned John Lausch. And we should note that Merrick Garland appointed him partly because he was nominated by former President Trump, so obviously wanting to reinforce the his objectiveness in all of this.

As we're waiting for this, Paula Reid, let's talk more about these classified documents. We know Biden's legal team announced that they found now a second batch. And we're learning more about where exactly they were located on his property. Can you tell us more about that?

PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: Absolutely.

In a statement, the White House says these additional documents were found at Biden's Wilmington residence. They say these documents were actually found in two different locations at the residence. The first, they say, was a garage and a storage space contained in that garage. The second piece of this pile of documents, they say, was a single document, a single page found in what is described as an adjacent room.

But a lot of questions still outstanding, how many documents, what exactly were they, and how did they get there? In the statement, the White House said it selected different locations to search, looking specifically at where files were shipped from the vice president's office during the 2017 transition.

Now, another big question is, how much of this was known to the U.S. attorney in Chicago? As Evan just noted, our reporting is that the U.S. attorney's review has been completed. So is this new information to him? When were these located? The Biden White House is making a strategic decision to let most of this information leak out through the media, and they're leaving a lot of unanswered questions in this swiftly escalating situation.

GOLODRYGA: Yes, and unclear if Merrick Garland will be taking any questions. Obviously, we will be taking him live when he does come out any moment now. But as we're waiting, Phil Mattingly, at the White House, I know

you're getting some new reporting on who the DOJ is talking to exactly in this probe. What are you hearing?

PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes.

Bianna, Evan and Paula were talking about the review that's been under way by John Lausch, who was appointed by the attorney general. And that review is critical because the information from that review was being passed up to Attorney General Garland as he weighed what his next steps were.

And White House officials from the president on down have made clear they were under strict instructions to be as cooperative as possible, the detailed timelines where they talked about how they immediately called the Justice Department or called investigators after reaching out to the National Archives in both of these instances.

And I'm told that cooperation also includes interviews that have been under way with individuals tied to then-Vice President Biden's office, particularly in the time period as they were closing up that office before he left office, the packing and the closing out of that office, which is where I think a lot of people have figured some of these documents came from, and who may have knowledge of how that was packed up, how it was done, and where those documents were sent.

[13:05:18]

There are also individuals, I'm told, outside of the vice president's office who may have knowledge of those matters that have also been interviewed. It's not clear whether or not those interviews are done. And it will be interesting to see, obviously, what the attorney general says about next steps, if there are any, when he speaks.

But it just underscores that there has been a process under way. The White House and the White House Counsel's Office has made clear they have been trying to cooperate with that process. What they haven't been able to navigate is the fact that the information like this has become public.

And the public element of this, particularly as the White House lawyers have been very clear that they want to maintain limitations on what officials can speak about publicly, have certainly put the Justice Department and the attorney general, who we will hear from in short order, in a very complicated political position, not to mention the legal issues that are obviously still playing out.

GOLODRYGA: Yes.

And we should remind viewers that the first batch of documents, we now know, were discovered in early November of last year, so over two months ago.

Phil, the president addressed this or attempted to address this in what appeared to be a written statement today. He was hoping to tout the economy and some positive news that we will get to in just a moment, but instead, no surprise, the questions that he was asked pertain to this specific issue. Yes,

MATTINGLY: I mean, it's -- it gives you a great window into the moment this White House is currently in that just started three days ago.

Inflation, which had been the biggest political and policy problem they faced for more than a year, is now easing for a sixth consecutive month, very clear, tangible signs that the grip is starting to ease for perhaps the long term, massive implications from the economy perspective.

And yet the issue the president is dealing with, the issues the president is being asked about are these classified documents. Take a listen.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: As I said earlier this week, people know I take classified documents and classified material seriously. I also said we're cooperating fully and completely with the Justice Department's review.

As part of that process, my lawyers reviewed other places where documents might -- from my time as vice president were stored, and they finished the review last night. They discovered a small number of documents with classified markings in storage areas, in file cabinets in my home in my -- in my personal library.

(END VIDEO CLIP)

MATTINGLY: Bianna, the president also said he looks forward to hopefully, at least in his words, being able to talk more in detail about what has happened here and how this all came to be at some point in the future.

Lawyers making very clear they don't want him to talk about anything related to this, beyond what he said publicly, until they know what any next steps or the end of any review would actually transpire. We will see if they get that information today or kind of how this plays out going forward.

GOLODRYGA: And, as noted, we are expecting to hear from the attorney general at any moment now. Of course, when he comes out, we will bring you his comments live.

Phil, Paula and Evan, thank you so much.

Well, as just noted, in the face of his mounting classified documents controversy, this morning, the president seized on some good economic news, as the year's first inflation report showed prices dipped last month.

(BEGIN VIDEO CLIP)

BIDEN: The data is clear. Even though inflation is high in major economies around the world, it's coming down in America month after month, giving families some real breathing room.

Today's inflation numbers are good news, good news about our economy. But we have more work to do.

(END VIDEO CLIP)

GOLODRYGA: The president, of course, is talking about this.

Inflation cooled for the sixth month in a row, and prices fell slightly from November to December.

CNN's Matt Egan is here to break it all down for us.

Matt, good to see you.

So, inflation slowed to its lowest level in more than a year. How is this specifically impacting consumers? Where are we seeing prices really take a dip here?

MATT EGAN, CNN REPORTER: Well, Bianna, the cost of living is still high, but it's getting better.

Let's look at the numbers here. Consumer prices are up by 6.5 percent year over year. That's not good. That's not healthy. But everything is relative. Let's look at the trend. This line chart shows that consumer prices actually are cooling off. Of course, it's higher than it was in 2020, but things are getting better.

This is well below the peak of 9.1 percent last year. Let's look at where things are cooling off. Gas prices, look at this, cheaper. Used car prices, remember the chip shortage, shortage of cars. Now we see prices coming down sharply. Televisions, also a good time to buy TVs. We see a sharp decline in prices there.

Of course, the cost of living remains high elsewhere. Shelter, this is painful, this is rent, big part of people's budgets, going up at a very fast pace, grocery store prices. And, of course, we have to talk about eggs, egg prices up by 60 percent from a year ago. We have not seen anything like that since 1973.

So, inflation is cooling off, but it hasn't gone away.

[13:10:00]

GOLODRYGA: Eggs aside -- and that may be an anomaly because there's an avian flu that we're watching right now as well affecting prices -- does this, in your view, give the Fed any pause, perhaps even reversing course or changing course, and at least pausing in terms of raising interest rates?

EGAN: Well, I think the big number that the Fed is going to be looking at is this month-over-month price drop, right?

We actually saw prices decline. We haven't seen that since this inflation crisis started. So that's a big deal. If we keep seeing tame numbers like this, that will bring inflation down closer to the 2 percent level that the Fed is targeting.

Now, investors seem to liked this inflation report. We see U.S. stocks up pretty significantly today. Markets are betting that the Fed is going to be able to slow the pace of interest rate hikes. Instead of slamming the brakes on the economy, maybe they can tap the brakes.

And, of course, that would be a big deal. And that would lower the risk that they overdo it and accidentally cause a recession.

GOLODRYGA: And that next decision expected early February. So we will be watching closely.

Matt Egan, thank you.

EGAN: Thanks.

Well, we turn to the deadly California storms now, a much-needed break from the rain today. But, sadly, more is coming. A new system hits in just hours as millions clean up from the last one. Across the state, weeks of flooding, mudslides and falling trees have killed at least 18 people. And in the mountains, eight feet of snow has fallen since Christmas alone. Five more feet are possible within this next storm.

CNN's Veronica Miracle is in Salinas, California.

So, Veronica, what's the concern where you are now?

VERONICA MIRACLE, CNN CORRESPONDENT: Well, Bianna, here in Monterey County, there has already been a significant amount of flooding. You can see it just right over here.

This water has overtaken this area, including this house right here. You can see the water level has almost reached that top of the windowsill here at the front of the house. And just to show you beyond this the significance of how much water has flooded this area, I want you to take a look at those trees in the distance, those trees way out there.

It is normally on the other side of those trees that the river channel is. And that's how much water has flooded this zone, including this house and a house in the distance there. Officials here have been concerned about this. There are two major highways that the Salinas River also crosses over. And they're concerned that it could be over -- both of those roadways could be overtaken later this afternoon, potentially through the weekend, which means that traffic in and out of the peninsula could be blocked and damaged.

And they're asking people to be aware of that. This comes, of course, as a major storm is about to come into California after weeks of a fire hose of rain has just sprayed over the state with very little respite, very little relief, and very little time in between all of this damage and all of this destruction.

It has proven to be deadly; 18 people at least have been killed, including a 5-year-old boy who was swept away from his mother's arm -- mother's arms, rather, in floodwaters. And this all comes after years of a historic drought in the state of California.

It has been incredibly dry, and now all of the water reservoirs are filling up. The snowpack, which also feeds into those reservoirs, is at a historic level. So if there is any good news, it is there's water in a state that needs it very badly.

However, at this rate and at this pace, it is proving to be very dangerous, deadly and costly here for the people in California -- Bianna.

GOLODRYGA: Just a horrific story, 18 now reported dead and just so terrifying and sad about that 5-year-old boy.

Veronica, thank you.

Well, we are now just moments away from Attorney General Merrick Garland, who is set to make a rare statement. We will bring that to you live.

Plus, the pressure is building on the man elected to Congress on a fake resume, George Santos dodging yet more questions and being more defiant, as he faces more calls to resign.

Plus, the man accused of killing four University of Idaho students is back in court today. What went down? And wait until you hear what the suspect's neighbor just said about him.

(COMMERCIAL BREAK)

[13:16:25]

GOLODRYGA: We're going to take you straight to Washington, where Merrick Garland is now speaking. Let's listen in.

(JOINED IN PROGRESS)

MERRICK GARLAND, U.S. ATTORNEY GENERAL: ... pursuant to the Department of Justice regulations governing such matters.

In keeping with those regulations, I have today notified the designated members of each house of Congress of the appointment.

I'm joined today by John Lausch, the U.S. attorney for the Northern District of Illinois, who conducted the initial investigation into the matter that I will describe today.

On the evening of November 4, 2022, the National Archives office of inspector general contacted a prosecutor at the Department of Justice. It informed him that the White House had notified the Archives that documents bearing classification markings were identified at the office of the Penn Biden Center for Diplomacy and Global Engagement located in Washington, D.C.

That office was not authorized for storage of classified documents. The prosecutor was also advised that those documents had been secured in an Archives facility. On November 9, the FBI commenced an assessment, consistent with standard protocols, to understand whether classified information had been mishandled, in violation of federal law.

On November 14, pursuant to section 600.2B of the special counsel regulations, I assigned U.S. attorney Lausch to conduct an initial investigation to inform my decision whether to appoint a special counsel. Mr. Lausch has served as the U.S. attorney in Chicago since 2017. Before that, he spent more than a decade as an assistant U.S. attorney in that same office.

I selected him to conduct the initial investigation because I was confident his experience would ensure that it would be done professionally and expeditiously. On December 20, President Biden's personal counsel informed Mr. Lausch that additional documents bearing classification markings were identified in the garage of the president's private residence in Wilmington, Delaware.

President Biden's counsel informed Mr. Lausch that those documents were among other records from the period of the president's service as vice president. The FBI went to the location and secured those documents.

On January 5, 2023, Mr. Lausch briefed me on the results of his initial investigation and advised me that further investigation by a special counsel was warranted. Based on Mr. Lausch' initial investigation, I concluded that, under the special counsel regulations, it was in the public interest to appoint a special counsel.

In the days since, while Mr. Lausch continued the investigation, the department identified Mr. Hur for appointment as special counsel. This morning, President Biden's personal counsel called Mr. Lausch and stated that an additional document bearing classification markings was identified at the president's personal residence in Wilmington, Delaware.

When I first contacted Mr. Lausch about this matter, he said he could lead the initial investigation, but would be unable to accept any longer-term assignment because he would be leaving the department in early 2023 for the private sector. U.S. attorney Lausch and his team of prosecutors and agents have conducted this initial investigation with professionalism and speed.

I am grateful to them. Earlier today, I -- signed an order appointing Robert Hur as special counsel for the matter I have just described. The document authorizes him to investigate whether any person or entity violated the law in connection with this matter. The special counsel will not be subject to the day-to-day supervision of any official of the department, but he must comply with the regulations, procedures, and policies of the department.

[13:20:16]

Mr. Hur has a long and distinguished career as a prosecutor. In 2003, he joined the department's Criminal Division, where he worked on counterterrorism, corporate fraud and appellate matters. From 2007 until 2014, Mr. Hur served as an assistant U.S. attorney for the District of Maryland, where he prosecuted matters ranging from violent crime to financial fraud.

In 2017, Mr. Hur rejoined the department as the principal associate deputy attorney general. In 2018, he was nominated and confirmed to serve as a U.S. attorney for the District of Maryland. As U.S. attorney, he supervised some of the department's more important national security, public corruption and other high-profile matters. I will ensure that Mr. Hur receives all the resources he needs to conduct his work.

As I have said before, I strongly believe that the normal processes of this department can handle all investigations with integrity. But under the regulations, the extraordinary circumstances here require the appointment of a special counsel for this matter.

This appointment underscores for the public the department's commitment to both independence and accountability in particularly sensitive matters and to making decisions indisputably guided only by the facts and the law.

I am confident that Mr. Hur will carry out his responsibility in an even-handed and urgent matter, and in accordance with the highest traditions of this department.

Thank you all.

QUESTION: Have you ever spoken to the president about this investigation, sir?

GOLODRYGA: And there we just heard from the attorney general. Yet another special prosecutor has been announced and appointed in regards to classify documents found in yet another now current president's residence.

I want to bring in our panel.

Let's go to Andrew McCabe first.

And, Andy, you know the special counsel, Robert Hur. He was appointed by former President Trump. It doesn't appear that was a coincidence as to why the attorney general appointed him. He also went through a list of dates in terms of the sequence of events and when the DOJ was notified about this batch of documents.

The initial batch was found November 4. And, November 14, he appointed John Lausch. And December 20, now they were informed that an additional batch of documents were found. Tell us what you make of what we just heard from the attorney general, specifically with regards to Robert Hur being named as special prosecutor.

ANDREW MCCABE, CNN SENIOR LAW ENFORCEMENT ANALYST: Well, I think the selection of Rob Hur is a logical and sound one.

As you can see from the brief resume that the attorney general laid out, Mr. Hur is a -- essentially was a career Department of Justice prosecutor and attorney, both served as an assistant U.S. attorney in the District of Maryland, which is, of course, located in Baltimore, and then spend some time, significantly, working at DOJ main and DOJ headquarters.

I worked with Rob when he was appointed as the principal assistant deputy attorney general in 2017. Always found him to be well-informed, industrious, hardworking guy. And, as you mentioned, Bianna, I think it's not insignificant that he was an appointment from the Trump administration, served in the Trump administration as a very, very high-level official in the Department of Justice.

So that goes to maybe disarming some of the political criticisms that might come from the right as a result of whatever results come of this investigation.

GOLODRYGA: And, John Miller, I want to bring you in.

John Lausch was the U.S. attorney in Illinois who was first tapped investigate one and then the second batch of classified documents that were found. We heard from the attorney general that he was briefed on January 5 by John Lausch that he would support further investigation and the appointment of a special prosecutor.

What do you make of this in terms of where this investigation stands?

JOHN MILLER, CNN CHIEF LAW ENFORCEMENT AND INTELLIGENCE ANALYST: Well, I think the discussion that we have all been having over the last couple of days is, what is the difference in scope and scale between the Trump documents at Mar-a-Lago, which involved possible obstruction and attempts to hide them and denials that they exist, and a case where the president's lawyers were going through spaces looking for files and found them and immediately reported it?

But the special counsel regulations say, does the matter merit investigation, which clearly this did, which is why it was referred to the U.S. attorney in Chicago, but, also, are their extraordinary circumstances?

[13:25:01]

And I think it was the judgment of the attorney general at this point that, rather than doing backflips and tortured explanations about it not warranting a special counsel, that the single extraordinary circumstance was, it involved a sitting president.

GOLODRYGA: Yes.

MILLER: And those two things came together.

The choice of the special prosecutor in Rob Hur is a particularly well-thought-out one, in that you have a person who served in the Department of Justice under Democratic administrations at a very high level, as the principal associate deputy attorney general during the Trump administration, who then really made a name for himself as U.S. attorney in Maryland prosecuting the former mayor of Baltimore, the former police commissioner of Baltimore, delegates, and a state senator, a lot of Democrats on corruption matters.

But, most importantly, if you're going to pinpoint this case, he did two very significant investigations into the NSA, two employees, both of whom carried large amounts of classified documents out of the NSA. One of them stored them in his home, in his car. Another had massive information electronically.

So he is very adept at how to navigate the care, handling, proper handling of classified information, and where the lines are between a crime.

GOLODRYGA: Evan Perez, I want to bring you in because, listen, the road to how we got to the attorney general appointing a special prosecutor in these two cases are quite different.

The attorney general, we should remind viewers, signed off on a search warrant of Mar-a-Lago in terms of President Trump and the return of those documents. From everything that we have heard thus far, President Biden and his team have been cooperating and his lawyers reached out directly to DOJ to notify them that these documents were found.

That having been said, now we have two special prosecutors investigating these two instances. Talk about the timing of this announcement today.

PEREZ: Well, one of the things that the attorney general just clarified for us is that, at the time that the White House told us on Monday about the initial batch of documents, classified documents, that were found, it appears they already knew that there had been a second batch that had been -- had been found.

And they had notified the FBI. The FBI had gone back in December to go retrieve those documents. So that's an important thing, because it raises the question as to why the White House didn't just disclose everything at the time that they did on Monday.

But it appears that the Justice Department was already way past the point where they believed they needed to do a special counsel. According to the attorney general, the recommendation from John Lausch, the U.S. attorney who was standing next to him, who had done the initial review, he had concluded already by that point that this was a step that needed to be taken to make sure that the department and its decisions are viewed, essentially, that they are handling this in an independent manner.

And I think that's the important thing, certainly for the Justice Department. For Merrick Garland and Chris Wray, two people who are very much attuned to the idea that it is important for the Justice Department to be seen to be handling these cases in an independent manner, and whatever happens, they're going to follow the law, they're going to follow the rules.

And the White House, I'm sure, is not pleased that this is the direction things have gone, but it appears that the decision was made here very, very early on, and not as a result of the communication snafu that we have seen unfold from the White House in the last few days.

GOLODRYGA: Yes, the decision may have been made early on.

But, Phil Mattingly at the White House, the public found out about it a bit later, just this week, in fact, thanks to reporting not from this White House being transparent about it. What do you make of that? And what are you hearing about the strategy behind how this was announced?

MATTINGLY: Yes, look, I mean, listening to Evan, I think he's kind of hitting on all the critical points here.

That was a very enlightening timeline presentation from the attorney general, as somebody who has been on the White -- at the White House and been reporting on this for the better part of the last four days.

The fact that they -- look, let's take the timeline for a minute. This news came out on Monday. On Monday night, the president's special counsel from the White House Counsel's Office put out a very detailed statement related to those 10 documents that were found at the Penn Biden Center.

There was no implication that any other documents were around. There was no implication of the possibility that other documents could have been around. white House officials -- or -- sorry -- the president's private attorneys, according to the attorney general, informed the Justice Department in December, nearly 15, 20 days before this news broke publicly, that there were additional documents.

There's also an additional document that was reported to the Justice Department, I think, either yesterday or today as well. So, the fact that the White House put out a very detailed statement related to one set of documents, even though they had known for several weeks that there was another set of documents out there, which we ended up finding out