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Special Counsel Zeroes in on Chaotic Oval Office Meeting Before January 6th Riot; Secret Service Probe into Cocaine Found in West Wing Expected to Wrap Early Next Week; Officials: U.S. to Send Cluster Munitions to Ukraine; Treasury Secretary Walks Diplomatic Tightrope in China. Aired 6-6:30a ET

Aired July 07, 2023 - 06:00   ET

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

BRITLEY RITZ, CNN METEOROLOGIST: But it can't be ruled out, as far North as Fargo.

[06:00:03]

And again, back into the Northeast. Take a look at the time frame, Friday morning. Here we are at 11 a.m. with them dialing down but ramping back up anywhere between, I'd say, 8 and 9 o'clock, holding onto that threat across the Central Plains, back down into the Texas Panhandle once again and rolling into tomorrow morning -- Rahel.

RAHEL SOLOMON, CNN ANCHOR/BUSINESS CORRESPONDENT: OK, Britley. Thank you.

And thank you for joining us. I'm Rahel Solomon. Have a wonderful weekend. Meantime, CNN THIS MORNING starts right now.

POPPY HARLOW, CNN ANCHOR: Good morning, everyone. So glad you're with us this Friday. There is a lot of news to get to.

Good morning, Victor.

VICTOR BLACKWELL, CNN ANCHOR: Good morning.

Glad to have you by my side. Let's start with "Five Things to Know" for this Friday, July 7. We begin with exclusive new CNN reporting on the investigation into efforts to overturn the 2020 election.

Prosecutors focusing on a chaotic Oval Office meeting less than a month before the January 6th riots. Topics that came up: declaring martial law and seizing voting machines.

BLACKWELL: And a first for the war in Ukraine. The U.S. will send cluster munitions, a controversial weapon of war that's banned by more than 100 countries. This is part of a greater new military package that's set to be announced today.

HARLOW: In perhaps the clearer sign yet that Twitter is feeling the heat, the company is planning to sue Meta as Mark Zuckerberg reports more than 30 million signed up for the Twitter competitor Threads on day one. BLACKWELL: The all-important jobs report is out in just a few hours

from now. Wall Street and the Fed are watching closely before it takes their next steps.

Britney Spears gives her side, and Victor Wembanyama gives his in a bizarre story that reportedly ends with the NBA star's security slapping the singer.

CNN THIS MORNING starts right now.

HARLOW: Here is where we begin this morning, with a CNN exclusive report. We're now learning that the special counsel, Jack Smith's prosecutors, are zeroing in on a chaotic Oval Office meeting as they near a decision on charges in the alleged scheme to overturn the 2020 election.

It is a now-famous meeting just 19 days before the January 6th insurrection, and that meeting devolved into a screaming match between White House lawyers and a group of outside advisers who are pushing extreme ideas to try to keep Trump in power.

Prosecutors have asked specifically about those outsiders, including former national security advisor Michael Flynn, also attorney Sidney Powell, and the former CEO of Overstock, Patrick Byrne.

They floated ideas like having the military seize voting machines in crucial states Trump lost; invoking martial law; and appointing Sidney Powell as a special counsel to investigate supposed voter fraud.

Rudy Giuliani was in that meeting, as well. Prosecutors asked him about it when he voluntarily met with him over two days last month. And we know that Trump's White House lawyers pushed back hard on those ideas.

(BEGIN VIDEO CLIP)

ERIC HERSCHMANN, FORMER SENIOR ADVISOR TO DONALD TRUMP: What they were proposing I thought was nuts.

PAT CIPOLLONE, FORMER TRUMP WHITE HOUSE COUNSEL: I don't think they were providing the president with good advice. And so I didn't understand how they had gotten in.

DEREK LYONS, FORMER TRUMP ATTORNEY: There were people shouting at each other, shouting insults at each other.

SIDNEY POWELL, FORMER TRUMP ATTORNEY: Cipollone and Herschmann and whoever the other guy was showed nothing but contempt and disdain of the president.

RUDY GIULIANI, FORMER TRUMP ATTORNEY: I'm going to categorically describe it as you guys are not tough enough, or maybe I'd put it another way: you're a bunch of (EXPLETIVE DELETED).

(END VIDEO CLIP) BLACKWELL: Well, the night ended with Trump sending out this tweet, calling on his supporters to gather in D.C. on January 6th for a big protest. He told them, "Be there, will be wild!"

Let's bring in Katelyn Polantz. Katelyn, this is a very crucial meeting, and the hours between the meeting and that tweet, of course, will be a big focus. What are we learning?

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Yes. So this meeting had a level of drama that was -- really stuck out in a period of a lot of drama after the election.

And it was because it was the moment where these people, who had believed that there was fraud in the election so desperately, Michael Flynn, Sidney Powell, Patrick Byrne, get into the White House without the -- having others around them who were White House advisers to Donald Trump. And they're trying to convince Trump that there's election fraud and that he can use his powers of the presidency to do things like seize voting machines and appoint Sidney Powell as a special counsel.

And then these others come and intervene. And it ends with the shouting. There are meatballs served. They're in the residence of the White House, and Trump ends up tweeting, "will be wild," that tweet that prosecutors we know have looked at quite a lot as they have prosecuted rioters in the January 6th insurrection.

[06:05:08]

And so this focus of this meeting, what Trump was being told, and also what others were bringing to him and what they were -- why they believed that there was election fraud, or perhaps didn't believe it but wanted to convince him to do something about it, that is now so important to prosecutors. Because it's such a moment in time that gathers everyone there right in the room with Donald Trump pretty well after the election.

And so we know that they have asked Rudy Giuliani about that. He sat down with prosecutors for two days voluntarily to do an interview, and there are several other people. This is something prosecutors have been asking about for some time.

But now, they do have a renewed focus on this particular moment after the 2020 election.

HARLOW: And to get inside what was going on in that meeting really gets the things, Katelyn, right, like beyond fake electors. What other efforts were there around Trump.

Also, another very important day: four days prior in December that prosecutors are focusing on. What day and why?

POLANTZ: Yes, so that's December 14th, and everything after December 14th, essentially, comes after the Electoral College voting is done.

Now, it's not the certification by Congress. But on December 14th, that's when all of the states certified their own election results with their Electoral College votes. And it's also when the fake electors for Donald Trump were submitting that Trump won seven battleground states that he did not win, right, having a separate slate of fake electors on top of the rightful electors for Joe Biden in those states.

So December 14th is where all of the paperwork is done. And then what happens after that is important, because it's when prosecutors get to see who is still in disbelief. Who still does not want these electoral votes to go forward for Joe Biden to make him the president of the United States.

So December 14th is a crucial day for prosecutors. And then, of course, that meeting happens just four days later.

BLACKWELL: Katelyn Polantz, thank you for the reporting. Let's now bring in political commentator and political anchor at Spectrum News, Errol Louis; and CNN senior legal analyst Elie Honig. Welcome to you both.

Elie, what does it suggest to you that not just this meeting but these three people -- Sidney Powell, Michael Flynn, Patrick Byrne -- are the focus of Jack Smith now?

ELIE HONIG, CNN SENIOR LEGAL ANALYST: Well, a couple of things. First of all, this tells me prosecutors are looking at this very broadly. They're looking at all of this, all the things that we've learned largely from the January 6th Committee last year are in play for prosecutors.

It's not only this admission of fake electoral forms. It's not only the speech at the Ellipse and then the storming of the Capitol. It's all this planning and scheming that went up to this.

And the lawyers you named are really going to be the fulcrum here, because they're the ones who hatched this idea. They're the ones who sold Donald Trump on it. They're the ones who were told by many other lawyers, you can't do that. That's illegal. That's unconstitutional, and still pushed ahead with it.

So they're in a really interesting position here. They could find themselves as defendants. They could find themselves as witnesses, or they could find themselves as neither of the above.

HARLOW: What about Rudy Giuliani? Because it's notable -- we just played the sound from people over in that meeting and Rudy Giuliani sort of explaining the tone or the overarching theme of the meeting.

But I also don't want to group him in with what those three people were allegedly pushing for. He is an attorney. He's a former mayor of New York City. You've covered him for years.

Do you think that he could be cooperating here, because he's now sat voluntarily twice with prosecutors?

ERROL LOUIS, CNN POLITICAL COMMENTATOR: It's interesting. I would be very surprised if that was the case.

But Rudy is in a different category, just as you suggest, where I could see Rudy cooperating in the sense of saying, like, yes, I did it. And, you know, yes, it's outside the lines, and, yes, it's bold. And I stand by every word of it.

He's never backed down from anything that he's put forward, you know, in general in law and in politics. And even in this case, even after being suspended from the practice of law in D.C. and now in New York. He's -- I mean, I've interviewed him after the fact. He doesn't -- he -- you know, no regrets, no backing down.

HARLOW: All worth it.

LOUIS: That's what Trump was looking for. That's what he got from Rudy. And to this day, I think, if you asked Rudy, he would say, Look, this is a plausible case. You may not like it. It might not be successful. I wasn't polite about it. I used a lot of vulgar language, and I pushed back as hard as I can. But that's what my client wanted, and that's what I did, and it's not illegal.

And that's what we're going to determine.

HONIG: I think that's a great explanation of who Rudy is and what he's likely to do. I cannot, for the life of me, figure out what DOJ is doing with Rudy Giuliani.

Here's what I mean. If you saw someone as a target, someone who's likely to be indicted, you would not just have them come in for a friendly proffer.

And Rudy's lawyer is an experienced federal prosecutor, Bob Costello, who would never bring Rudy in if he was told or understand that his client was likely to be charged.

[06:10:09]

On the flip side, I don't see any prosecutor ever banking any piece of a case on Rudy Giuliani for exactly the reasons Errol says. I mean, his credibility is zero.

The guy has lied publicly about election fraud and other things for years. So I cannot imagine prosecutors saying, We're going to call to the stand in the trial of United States versus fill in the blank, our next witness is Rudy Giuliani. I just cannot see that scenario.

BLACKWELL: You talk about the breadth of, the scope of this investigation. As it relates to the classified documents, there were two alleged co-conspirators, the president and Walt Nauta.

When you look at the potential illegalities across the January 6th case, are we talking dozens of potential defendants?

HONIG: It's sort of mind-boggling here. Prosecutors, I assure you, are wrestling with this right now, if we're going to charge this case.

Are we going to charge it as one overarching conspiracy? Are we going to break it down into maybe two or three smaller conspiracies?

And how wide do you cast that net? I mean, we all know the names here. We all know the cast. It's dozens and dozens of people. You can't bring -- you're allowed to, but practically, you're not going to bring a 50-person indictment here.

The question is, how wide do you want to cast your net? How deep do you want to go on the indictment? And how strongly do you want the focus to be, if they're going to charge him on Donald Trump or other people?

HARLOW: Final thought?

LOUIS: I would hope that at the end of all of this -- and I understand prosecutors are not in the business of just surfacing policy and allowing Congress to sort of make some changes.

But I hope if nothing else is learned from this entire progress, that there's some guidance for Congress to really sort of button up and tighten up what the procedures are and draw some clear lines.

Because it is unclear. If you're some -- you know, you're politically active in Arizona, and you're just trying to do the right thing and you're getting all kinds of conflicting advice about something that actually matters a lot, we need to give these people much stricter guidance about what is and is not allowable when the next group of crazy lawyers come forward for a future candidate.

HARLOW: It's such a good point.

LOUIS: Let's go seize election machines, and let's --

HARLOW: Don't think it can't happen again, so how are we going to protect against it? Stay with us.

New overnight, we're told the Secret Service investigation into how that bag of cocaine wound up in the West Wing of the White House. That investigation should wrap up early next week.

Investigators have been reviewing security camera footage and waiting for the results of DNA and fingerprint analysis of the bag.

Priscilla Alvarez joins us at the White House. Good morning to you.

I was interested in this headline, because Jeremy Diamond's reporting and your team's reporting is that it's going to end next week but yet, they don't have a lot of the information, right, from the DNA test, et cetera.

PRISCILLA ALVAREZ, CNN WHITE HOUSE CORRESPONDENT: That's right, Poppy. And this is on track to end whether or not a suspect is identified.

So as of yesterday afternoon, Secret Service was still looking through security footage and visitor logs, and they still had not received the results of the DNA test, as well as the fingerprint analysis. So all of that is still under way. But what makes this very challenging is that where this baggy of

cocaine was found is a highly-traveled part of the White House. This is on the ground floor of the West Wing. It was near the entrance in cubbies. So it was in a cubby that visitors use when they are going on staff-led tours, as well as ones that staff can use if they have to leave their cell phones behind to go into an area to review classified materials.

Now these tours happened over the weekend. Those are led by staff. And so there is at least a time frame that they can look at. And, of course, this was also a finding that led to a temporary evacuation on Sunday evening.

But the investigation is still under way, as we know. And the time line could still be fluid. But as of now, it is still very much on track to end early next week.

And all that we have heard to this point is that it just may be very difficult to identify who brought this in and then how it got in to begin with, Poppy.

HARLOW: So just to be clear: It might end without answers, right?

ALVAREZ: That's right.

HARLOW: OK. In other news, President Biden set to make an announcement today about lowering healthcare costs for Americans. What's going to change?

ALVAREZ: So this is part of the Biden-omics agenda that the administration has been touting and has described as helping the middle class and working class. So here's what the announcement is going to look like.

It's a crackdown on something that the Trump administration tried to do in expanding short-term health insurance plans. So the change here is going to be that the Biden administration is going to propose a three-month option with a one-month extension.

How is that different? Well, the Trump administration in an attempt to chip away at the Affordable Care Act, had made this a one-year plan that people could sign up for, with an even longer extension.

And the reason that the Biden administration is going after this and cracking down on it is that they say it essentially gives people or leaves people with big medical bills. And it's not always clear to folks who are signing up for it what exactly they're going to get with those benefits.

So all of this is a move to provide more clarity ton consumers as they shop for health insurance.

[06:15:02]

HARLOW: OK. Priscilla Alvarez at the White House, thank you. For a second straight day, Russian fighter jets again harassed an

American drone. This happened over Syria. What that new encounter captured, and how a top Air Force commander responded.

BLACKWELL: Plus, the U.S. is expected to announce new military aid package for Ukraine, which we're told will include cluster munitions. What more we're learning about the controversial weapon. We're live at the Pentagon.

(COMMERCIAL BREAK)

BLACKWELL: Russian fighter jets harassed a U.S. drone over Syria for the second day in a row. The Defense Department released this video of the exchange yesterday.

Officials say a U.S. drone was conducting a mission against ISIS in Syria when one of the Russian jets started flying dangerously close to it.

Well, then, they say the jet started dropping flares in what appeared to be an attempt to hit the drone.

It comes one day after three Russian jets harassed three U.S. drones also over Syria. The U.S. Air Force is now calling on Russia to stop what it called reckless behavior.

HARLOW: Meantime, a significant development in terms of U.S. aid to Ukraine. We are expecting the Biden administration to announce that it will send controversial weapons to Ukraine as this war-torn nations struggles to make gains against Russia in a counter-offensive.

Defense officials tell CNN the White House is set to unveil a new military aid package for Ukraine as it faces an ammunition shortage. And officials say that package includes cluster munitions, which scatter tiny bomblets when they drop.

[06:20:04]

CNN national security reporter Natasha Bertrand is live from the Pentagon this morning. It's controversial, because it's banned by so many countries; and it looks like Biden has to waive a law here, essentially, to allow it to happen. Explain why. I think people think about land minds. And is it -- can it be akin to that?

NATASHA BERTRAND, CNN NATIONAL SECURITY CORRESPONDENT: That's right, Poppy. So there is a convention on cluster munitions that is signed by over 100 countries, essentially banning them.

And U.S. -- the U.S. Congress has placed some statutory restrictions on the export of cluster munitions that have a greater than 1 percent dud rate. Right? That is where the danger to civilians comes in here.

If those bomblets land and they fail to explode, then they can pose a long-term risk to civilians.

But the president can overrule that. And so what we are learning is that, according to Pentagon press secretary Patrick Ryder, who spoke to reporters yesterday, the cluster munitions that the U.S. would provide to Ukraine would have a lower than 2.5 percent dud rate.

And that is something that is important, because it means that fewer of those little bomblets as they scatter on the ground would fail to explode and pose that long-term risk to civilians in a way similar to land mines. That is why they're banned by so many countries, because they could pose that danger.

But we're learning that, you know, the administration has been considering providing these munitions for quite some time now. The Ukrainians have essentially been begging for them as they run low on artillery ammunition and as they say these munitions could provide a boost to Ukrainian forces on the battlefield.

But the administration really did not start shifting its tune on these cluster munitions until very recently when that Ukrainian counter offensive did not appear to be making as significant gains as the Ukrainians and as the Biden administration and the West, writ large, had wanted.

And so the idea is that these munitions might be able to help turn things around, but also importantly, they could provide key ammunition to Ukraine at a time when they really need it, Poppy.

HARLOW: And will they get there quickly?

BERTRAND: Well, these can be provided fairly quickly. We are expecting them today to announce a new military aid package to Ukraine that would include these munitions. The U.S. has them in their stockpile, including some in Europe. So they could potentially be transferred fairly quickly, Poppy.

HARLOW: Natasha Bertrand at the Pentagon, thanks very much.

BLACKWELL: Happening right now, Treasury Secretary Janet Yellen is attending a dinner with leading Chinese economists in Beijing. She's working to calm tensions between the two nations.

Earlier today, Yellen expressed concerns over China's latest export conditions on critical raw materials used in the tech industry.

CNN's Marc Stewart joins us live from Tokyo.

Marc, hello to you. Give us more on Yellen's message in China.

MARC STEWART, CNN INTERNATIONAL CORRESPONDENT: Hi there, Victor. Good morning.

Look, Janet Yellen has one task, one chore, and that's really to cool things down, to lower the temperature in this very tenuous relationship right now between the United States and China.

We've recently heard from one observer who pointed out that right now, diplomatic relations aren't so hot. There is no military relationship. However, the business/economic relationship could possibly serve as a portal to some broader discussions about this United States/American/Chinese relationship.

Earlier today, Secretary Yellen met with a number of Chinese counterparts on the economic front. She met with an official from the People's Bank of China. She met with Liu He, a former official who served in a very similar capacity as hers. That meeting was described as informal but substantive.

However, she also took time to meet with leaders of the business community, the American business community in China, which has invested a lot over the years.

This included invites to officials from Boeing, from Bank of America, from Medtronic. There was a lot of concern about these punitive actions, these punishments by China toward corporations, toward the tech sector because of policy disputes.

Take a listen to part of that conversation from earlier today.

(BEGIN VIDEO CLIP)

JANET YELLEN, U.S. TREASURY SECRETARY: I've been particularly troubled by punitive action that have been taken against U.S. firms in recent months. I'm also concerned about new export controls recently announced by China on two critical minerals used in technologies like semiconductors.

(END VIDEO CLIP)

STEWART: Expectations from this visit from the start have been set very low, but Victor and Poppy, it is seen, perhaps, as a new starting point amid all of this contentious conversation.

BLACKWELL: All right, Marc Stewart for us there. Thank you, Marc.

HARLOW: Up next, a major announcement from the company OceanGate. Of course, what the owner of the Titan submersible is now saying about any future dives after that sub imploded and killed all five people.

(COMMERCIAL BREAK)

[06:29:04]

HARLOW: The company behind the Titan submersible that catastrophically imploded last month has suspended all exploration and commercial operations. That's according to the company, OceanGate's website.

They didn't provide any other details. The website still shows promotional videos and information on the Titan expedition. Five people, including the company's CEO, died when that sub imploded on the trip to see the Titanic wreckage about two and a half weeks ago.

Investigators say they're still looking into how this happened.

BLACKWELL: A reunion 18 years in the making. A firefighter in Georgia goes beyond the call of duty and reunites with a woman he saved and the daughter she was pregnant with at the time of that dramatic rescue.

CNN's Isabel Rosales has their story and the invitation that brought them back together nearly two decades later.

(BEGIN VIDEOTAPE)

ISABEL ROSALES, CNN CORRESPONDENT (voice-over): April 2005. It's the end of a long shift for air-traffic controller Mary Majcunich-Beasley at Savannah Hilton Head International Airport. Mary and her colleague were headed down the elevator of this air-traffic control tower when a noise stopped them cold.

MARY MAJCUNICH-BEASLEY, RESCUED BY FIREFIGHTER: It was like a repeat of a bad movie where you just -- you just drop.