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Trump to Tap Tillerson Secretary of State; Trump Conflict-of- Interest Presser Delayed; Russian Hacking; The Fall of Aleppo. Aired 4:30-5a ET

Aired December 13, 2016 - 04:30   ET

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

(COMMERCIAL BREAK)

[04:31:30] GEORGE HOWELL, CNN ANCHOR: The president-elect's pick for secretary of state, a Texas oil CEO with ties to Russia's Vladimir Putin. Rex Tillerson recommended by two former secretaries of state.

CHRISTINE ROMANS, CNN ANCHOR: Donald Trump postpones his first press conference as president-elect. Instead, he tweets about turning over his business to two of his sons.

Welcome back to EARLY START. I'm Christine Romans.

HOWELL: And I'm George Howell. Thirty-one minutes past the hour.

And breaking overnight, Donald Trump now set to name his pick for secretary of state this morning. And multiple sources telling CNN the president-elect has chosen this man, the CEO of ExxonMobil Rex Tillerson for that job.

Even before that, the official announcement comes through, there are already signs of trouble ahead for Tillerson's nomination. There's uncertainty over his views on climate change, also the questions about his close relationship with the Russian President Vladimir Putin, raising concerns on both sides of the aisle.

We get more now from CNN's Phil Mattingly at Trump Tower.

(BEGIN VIDEOTAPE)

PHIL MATTINGLY, CNN CORRESPONDENT: Hey, George and Christine. Well, the pick is in. The president-elect will announce that Rex Tillerson, the Exxon CEO, will be his selection for secretary of state. He intends to nominate the Exxon CEO because sources say the two just hit it off. They found a hit with one another. They share similar world views. They share similar backgrounds as deal-makers.

But it really comes down to I'm told, three people, Condoleezza Rice, James Baker, and Robert Gates -- obviously, three individuals with extensive government experience and three individuals who all recommended Rex Tillerson to the president-elect. The two did not have a relationship before this process started. Now, he will be the president-elect's top diplomat. Now, that doesn't mean he's going to have clear sailing. Democrats

have already raised concerns about his potential nomination. Not just Democrats. Republicans have has well primarily because of Tillerson's ties to Russia.

Now, Exxon as an oil company has done numerous deals with the country of Russia and Tillerson himself has a relationship with Vladimir Putin. That relationship has drawn scrutiny, from individuals like by John McCain and Lindsey Graham, Marco Rubio. All individuals who could make this confirmation incredibly difficult, in a Senate where Republicans just hold a four-seat advantage.

Now, what does this mean for the other candidates? The many candidates who've seen cycled through over the course of the last couple weeks? Well, obviously, they didn't get the job. But most interestingly, Mitt Romney taking to Facebook, saying he was honored to have been considered for the position and saying he has very high hopes for the Trump administration.

This is a long way from when he called the president-elect a phony and a fake throughout the general election process. But the two formed a sort of mutual respect of one another over the course of this process, according to sources. The president-elect even calling Mitt Romney on Monday night to tell him he did not get the position, that he appreciated his willingness to participate at all.

Now, obviously, that is on the cabinet side of things. But there is a big question on the conflict of interest side of things. And the president-elect was supposed to answer questions this week, touting his news conference on December 15th where he was going to announce he would separate himself from his business interest.

Well, no longer. The reality, according to Trump advisers, is the president-elect has been almost solely focused on personnel, cabinet decisions. And certainly, that's been backed up by the steady stream of individuals who've seen going in and out of the building behind over the course of the last couple weeks.

But there's also this fact: this is an incredibly complicated process, according to Trump advisors.

[04:35:01] One that Trump's lawyers, the Trump Organization's legal team simply haven't gotten their heads around yet. Donald Trump himself wants to maintain his stake in the company. While he wants to remove himself from operational side of things, he wants to maintain a stake and obviously figure out a legal structure to pass this down to his children -- George and Christine.

(END VIDEOTAPE)

ROMANS: All right. Phil, thanks for that.

You know, the president-elect says he does want to disentangle himself from the business empire. There is a plan. He underscored that point in a series of tweets. Quote, "Even though I'm not mandated by law to do so, I will be leaving my business before January 20th, so that I can focus full time on the presidency." Of course, January 20th is the inauguration. "Two of my children, Don and Eric, plus executives, will manage them."

And he added this. "No new deals will be done during my terms in office." Term or terms in office.

In a final tweet, Mr. Trump agreed to hold that conference in the near future to discuss cabinet picks and all of the topics of interest. Busy times.

HOWELL: Tweeting about that but again hasn't held a news conference in questions from reporters.

ROMANS: Live, right.

HOWELL: Yes.

Also, as Phil mentioned, there are concerns in the Senate about the likely pick for secretary of state and his close business ties to Russia. Some of those concerns so great, he might not even get past the committee hearing stage.

CNN's Manu Raju spoke about Rex Tillerson's nomination with retiring Senate Democratic leader Harry Reid. And Reid says if Tillerson's nomination does make it to the floor for a full vote, bipartisan opposition could very well kill it.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MINORITY LEADER: Well, I don't know if he can get 50 votes or not. I think it may be a little hard for him to do that.

MANU RAJU, CNN SENIOR POLITICAL REPORTER: Did reports you are seeing about the Russian connections concern you in any way given Russia's role here?

REID: It's in keeping with Trump. He has already stated he likes Putin better than he likes Obama. So, it's obvious he likes Russia. And that's fairly concerning to the world and certainly concerning to America and it's concerning to me.

(END VIDEO CLIP)

ROMANS: All right. We will look for that announcement later today about the official nomination. Now, the Kremlin flatly rejecting the CIA assessments that Russian hackers meddled in the U.S. election with the aim of helping Donald Trump. State media has reported that Vladimir Putin's press secretary called the claims of Russian interference allegations unsupported by any evidence.

Let's go live to Moscow and bring in CNN's Matthew Chance.

Good morning, Matthew.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Christine.

That's right. That's the position the Russian government has had and Kremlin has had since these allegations first floated back in October, at the height of the U.S. presidential campaign. They've always said, look, this is something that is just out there by critics of Russia to try to make the country look bad, particularly to the president-elect as he tries to form his new administration and tries to work out which positions to adopt with Russia.

They've also said there is no evidence of this. They've said that repeatedly, and, of course, Trump is repeating that line like on other issues. The Trump incoming administration and Kremlin singing from the same song book when it comes to the issue of hacking. Of course, they have both a point. I mean, there isn't digital footprint. There isn't the concrete evidence that would be necessary categorically prove a straight line between the hacking and the Kremlin.

But, of course, no one doubts that the Kremlin is motivated. It has been motivated and try to alter the election, to intervention in the election and its favor. It made no secret to the fact that throughout the campaign, it supported Donald Trump and had antagonism towards Hillary Clinton, who they saw as extremely anti-Russian in their criticism. It's just the extent to which they went to, to try and make that a reality. That's what's being debated, that's the subject of the allegations at the moment.

ROMANS: Matthew Chance, I've got you, you know, you and I have both covered Rex Tillerson, ExxonMobil, petro diplomacy for years now. What's the reaction in Russia about this talk that there will be a nomination today of Rex Tillerson to be secretary of state?

CHANCE: I mean, they love him over here. I mean, they already been -- Russian officials have already been heaping praise on the Texas oil man even before the nomination has been announced. The Kremlin spokesman told us yesterday, told CNN yesterday, that he was a pragmatic man and that he's got contacts at the highest level in the Russian government.

And the head of the Russian parliamentary affairs committee, he's like one of the top parliamentarians in Russia said that, you know, this is a sensation and it proves the seriousness of Trump. And so, there's a great deal of expectation of Rex Tillerson as secretary of state, if that nomination is confirmed, it could be a sea change in the relationship between Washington and Moscow.

They've been divided, of course, as we know, over so many issues over the past couple of years, with Rex Tillerson at the State Department and Donald Trump in the White House, the expectation here in Moscow is that that could really start to change.

ROMANS: Interesting.

All right. Thanks very much for that, Matthew Chance, for us this morning in Moscow.

[04:40:01] HOWELL: The Donald Trump "Thank You" tour is hitting the road again. The president-elect makes a stop in Wisconsin later today and he will be joined by the vice president-elect Mike Pence and the Speaker of the House Paul Ryan.

The next stop on the "Thank You" tour is Hershey, Pennsylvania. And it's set for Thursday.

ROMANS: All right. Donald Trump has a message for CEOs: Look out. With his tweet yesterday about Lockheed Martin's F-35 program and a similar tweet last week directed at Boeing, Trump is firing a warning to business leaders, in stark contrast to the optimism, though, many businesses are feeling optimism right now.

Look at this, the stock market is up 6 percent the election, since the election. Record highs. Jobless rate down 6 percent. The survey of CEOs last week shows their outlook for sales and hiring is the best it's been in years.

So, what can business leaders do? An expert negotiator tells us that CEOs should not take Donald Trump's tweets literally. But they should find out what he is serious about and working toward reaching agreement that both sides can live with. Carrier did this with the deal to save some jobs in Indianapolis. Ford did it as well, keeping production of a mildly popular Lincoln model in the U.S.

But this is what the business community is really grappling with. Donald Trump fires off a tweet. Stock will fall.

But overall, they want tax reform. They want to see inflation in the economy quite frankly. They want to see strong growth policies.

So, on the one hand, Trump can hit a business, but on the other hand, overall, they think that he's going to be good for business.

HOWELL: Not to take him literally.

ROMANS: Exactly.

HOWELL: Interesting.

President-elect Trump pushing Beijing's buttons now by talking about the One China Policy on Taiwan. Beijing is pushing back, too. We go live there in a moment.

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[04:45:26] ROMANS: All right. Welcome back.

The chairman of the Joint Chiefs of Staff is set to meet with the president-elect here in New York in the coming days. General Joseph Dunford is the chief military advisor to the president. We're told that he is finalizing a new classified military strategy to present to the president-elect and also plans to discuss how U.S. forces are being deployed around the world.

HOWELL: The Republican Party chairwoman in Michigan, Ronna Romney McDaniel, is Donald Trump's pick to become the next head of the RNC. The transition source tells CNN the announcement is expected this week. Romney McDaniel would take over from Reince Priebus, who is now the president-elect's chief of staff. She is the niece of former GOP presidential nominee Mitt Romney.

ROMANS: Donald Trump is making it clear he will not back down from China. That has officials in Beijing seriously concerned. The president-elect continuing to question whether the U.S. should adhere to the longstanding policy that Taiwan is part of one China. He is showing a willingness to provoke Chinese officials until they agree to talks on trade and North Korea.

CNN's Matt Rivers tracking the latest developments live from Beijing.

And it's remarkable. This is a president-elect who seems to want to include the recognition of one China as leverage for some trade concessions, perhaps.

MATT RIVERS, CNN CORRESPONDENT: That's absolutely right. What you are hearing from the Chinese side is they flat out absolutely not. We will not even entertain the notion of bringing up the One China Policy when it comes to any sort of negotiations, be it about trade, be it about military expansion in the South China Sea, be it about Chinese/American cooperation on North Korea nuclear deterrent in the North Korea development programs.

So, what you're hearing from Beijing over the last two days is a consistent line that the One China policy is not up for sale. And there's just very negative reaction officially and unofficially from the communist party. So, yesterday, we heard from the spokesperson that the ministry of the foreign affairs, another way the communist party tends to get out its more provocative messaging here in China is through state run media.

So, here in Beijing this morning, we saw an editorial that caught our eye in the tabloid newspaper called "The Global Times" again censored by the communist party. And in that editorial, it read in part, quote, "The truth is this president-elect is inexperienced in diplomatic practices probably has no idea of what he's talking about. He has greatly overestimated the U.S.'s capability of dominating the world and fails to understand the limitation of U.S. powers in the current era."

So, while you probably wouldn't hear a government official get up on a podium and say that, it's worth noting that anything that makes into these newspapers is sanctioned by the communist party. Some very, very strong rhetoric in the editorial pages this morning here in Beijing -- Christine.

ROMANS: And, Matt, before he is even the president of the United States, he's already sort of moved the starting line in negotiations. I mean, the Chinese can say it is not up for negotiation, but the fact we are talking about it means that the parameters of the debate have already shifted.

Matt Rivers in Beijing -- thank you so much.

Forty-eight minutes past the hour.

Two big names, tech titans are joining a group of Silicon Valley leaders that will meet with Donald Trump tomorrow. Here's a hint: they both love launching rockets into space. We'll tell you who's in. That's next.

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[04:52:27] HOWELL: Humanitarian groups in Syria are pleading for help as government forces there enter the final stages of recapturing the city of Aleppo. Thousands of civilians are trying to escape and we are hearing from several humanitarian groups that large numbers of people with ties to rebel forces are all being executed. CNN, though, has not been able to verify those reports.

CNN's Jomana Karadsheh is following the situation and is live this hour.

Jomana, what's the latest?

JOMANA KARADSHEH, CNN CORRESPONDENT: George, according to residents (VIDEO GAP) Syrian Observatory for Human Rights, that's the monitoring group, they say they have reports that CNN cannot verify these reports, that there have been mass executions that took place after the regime captured several neighborhoods from the rebels yesterday. They say that people, civilians, including women and children, were rounded up and executed. These people are relatives of rebel fighters.

Now, the United Nations has also received these reports as well. They say they cannot independently verify them. But they say these reports are mass atrocities committed against civilians, including women and children.

It is a very grim situation right now as you can imagine in eastern Aleppo. The people we have been speaking to are absolutely terrified. The territory that the rebels hold is shrinking. There are thousands of people who are crammed into this little area. They are currently living under heavy intense, really indiscriminate and relentless shelling that has been going on. And people really fear these may be the final moments alive as the regime closes in on this area, George.

HOWELL: Jomana, speaking of that, you have done reporting over the weekend of a family of a 7-year-old girl and her mother who have been tweeting from east Aleppo. What are we hearing from her this morning?

KARADSHEH: Well, George, 7-year-old Bana and her mother have been trying to tweet daily out of eastern Aleppo to let people know what the situation is like, especially for children there. Now, a couple of weeks ago, their house was bombed. The family has been on the run for a couple of weeks. And we have been in touch with them.

And yesterday, the house that they have been in where they took shelter in another neighborhood was also hit. Bana's father was injured according to the family and they had to flee again to the small portion of eastern Aleppo where there are thousands of civilians right now.

And they are telling us the children, because Bana has two brothers, one is three and one is five.

[04:55:00] They're all there. They are absolutely terrified.

And Bana just tweeted. Her mother did under Bana's name, and there's a message from Bana, she says a short time ago saying, "My name is Bana. I'm 7 years old. I'm talking to the world now live from east Aleppo. This is my last moment either live or die. Bana."

And these are messages, George, we are hearing from people who still have access to social media, sending out what they say are these are their final messages and that they have nowhere else left to run right now.

HOWELL: Jomana Karadsheh, live for us, thank you, Jomana.

ROMANS: All right. Fifty-five minutes past the hour.

Major developments in the Bill Cosby sex crimes case. His criminal trial is months away but this morning, a Pennsylvania judge will hear arguments on whether to let as many as 13 accusers confront him in court. Prosecutors in the Andrea Constand say they want to show a pattern of behavior over decades. Cosby's defense expected to argue only Constand should be allowed to testify.

HOWELL: Cubans will soon enjoy a benefit of restored relations with the United States. Faster starting YouTube videos. Very important.

Google just inked the new deal with the Cuban government to speed up access to the services like Gmail and YouTube. This agreement won't expand access to the Internet on the island. That is something Google offered, but the Cuban government rejected. Cuba has some of the most restricted web access in the world.

ROMANS: Let's get a check on CNN Money Stream.

Dow futures higher. The focus is Federal Reserve. The Federal Reserve begins its two-day policy meeting this morning.

Stock markets in Europe are higher. Shares in Asia closing with gains overnight. Oil, look at this, oil back now above 52 bucks a barrel.

Dow hitting a record high at Monday's close. The NASDAQ and S&P 500 finishing lower. Since the election, the Dow has hit 15 record highs. All of that over just 24 trading days.

All eyes on the Fed. By the way, the Fed is expected to announce raising rates. We will get that decision sometime tomorrow afternoon.

Donald Trump's pick to lead the National Economic Council is a top executive at Goldman Sachs. Gary Cohn is currently the president and chief operating officer of the powerful Wall Street firm. As NEC chief, he would work inside the White House to frame the debate on Trump's biggest economic goals. He joins three other Goldman Sachs alums now close to the incoming

administration. Treasury Secretary pick Steve Mnuchin worked at Goldman Sachs for 17 years as a partner, before embarking on a pretty diverse business strategy after that. Chief strategist Steve Bannon worked at Goldman in the 1980s, Anthony Scaramucci is also rumored to be in the running for a top job. He is currently an adviser to the transition team. He's had two stints at Goldman.

You'll recall, Donald Trump criticized Goldman Sachs for gutting the middle class during the election.

Two space cowboys are set to meet with Donald Trump tomorrow along with a slew of other Silicon Valley titans. Amazon CEO Jeff Bezos is one. He joked during the campaign he'd like to send Donald Trump into space in one of his rockets. Trump targeted him on Twitter, criticizing "The Washington Post" coverage. Bezos bought that paper back in 2013.

And then there's the SpaceX CEO Elon Musk. He also runs Tesla. Just before the election, he told the business network that Trump was probably not the right guy for the presidency. The two will join the CEOs of Apple, Google parent company Alphabet, Microsoft, along with Facebook chief operation officer Sheryl Sandberg and a handful of other tech executives. They will meet with president-elect tomorrow.

HOWELL: Big meetings.

EARLY START continues right now.

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HOWELL: Donald Trump poised to pick the CEO of ExxonMobil as his secretary of state, but there's already push back about Rex Tillerson and it's not just coming from Republicans.

ROMANS: A late night tweet from president-elect, vowing to leave his businesses before January 20th. Does that mean he will no longer own the Trump Organization?

Good morning and welcome to EARLY START. I'm Christine Romans.

HOWELL: And I'm George Howell. It is Tuesday, December 13th, 5:00 a.m. in the East.

And breaking overnight: Donald Trump now set to name his pick for the role of secretary of state this morning. And multiple sources telling CNN the president-elect has chosen the man you see here, the CEO of ExxonMobil Rex Tillerson as the man for that job. Even before, though, the official announcement comes out, there are already signs of trouble ahead for Tillerson's nomination. There is uncertainty over his views on climate change, also the questions about his close relationship with the president of Russia, Vladimir Putin, raising concerns on both sides of the aisle.

We get more now from CNN's Phil Mattingly at Trump Tower.

(BEGIN VIDEOTAPE)

MATTINGLY: Hey, George and Christine. Well, the pick is in. The president-elect will announce that Rex Tillerson, the Exxon CEO, will be his selection for secretary of state. He intends to nominate the Exxon CEO because sources say the two just hit it off. They found a hit with one another. They share similar world views. They share similar backgrounds as deal-makers.