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Early Start with John Berman and Zoraida Sambolin

Trump's Kids Sit on Tech Meeting; Aleppo Evacuations; Big New Yahoo Hack; Cavs Sit LeBron, Irving, Love Last Night. Aired 5-5:30a ET

Aired December 15, 2016 - 05:00   ET

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

ALISON KOSIK, CNN ANCHOR: Donald Trump meeting with the top tech CEOs of the country, discussing presumably, the nation's business. Why is it that his kids and son-in-law were also sitting at the table?

JOHN BERMAN, CNN ANCHOR: Rebels in eastern Aleppo, they have announced a new cease-fire. The evacuations and civilians and the wounded set to get under way perhaps, but will the deadly airstrikes and attacks continue?

Good morning, everyone. Welcome to EARLY START. I'm John Berman.

KOSIK: Good morning. I'm Alison Kosik. It is Thursday, December 15th. It's 5:00 a.m. in the East.

And Silicon Valley invades Trump Tower for a high powered meeting with the president-elect. And even with all the big time CEOs in the room, the story everyone is talking about this morning is, who else was sitting at the table?

Sources tell CNN the meeting focused on jobs, it focused on China where many American tech products are actually made. And it focused on immigration. Trump's three adult children and his son-in-law were sitting right in the middle of it all, raising questions about potential conflicts of interest in the West Wing.

CNN's Phil Mattingly with the latest from Trump Tower.

(BEGIN VIDEOTAPE)

[05:00:00] PHIL MATTINGLY, CNN CORRESPONDENT: Hey, John and Alison.

Well, look, there's no secret President-elect Donald Trump and Silicon Valley didn't exactly get along over the course of the campaign, the primary, the general election. A lot of the individuals have showed up in Trump Tower for his big tech summit weren't just opposed to certain policy issues, they were opposed to him all together. They didn't hide it. Some of them raised and donated money for his opponent.

The president-elect welcoming them to Trump Tower is kind of the latest of a series of individuals coming to pay homage, if you will, but also recognize that if they want to move forward business-wise, they need the president-elect in his team. But the president-elect willing to let them, their business is doing

well and he thinks he's the reason why. Take a listen.

DONALD TRUMP (R), PRESIDENT-ELECT: I'm here to help people do well. You are doing well right now and I'm very honored by the bounce. They are all talking about the bounce. So, right now, everybody in the room has to like me at least a little bit. We're going to try to have that bounce continue. And perhaps even more importantly, we want you to keep going with the incredible innovation. There's nobody like you in the world.

MATTINGLY: Now, guys, one of the most interesting things of the meeting wasn't discussed or even the policies that both sides agree or disagree. It's actually who was in the room and not just on the tech titans side, but also from the Trump side of things.

If you took a look when the camera sprayed around the room, you saw Ivanka Trump, her husband, Jared Kushner, you saw Eric Trump, you saw Don Jr. Now, look, it's no secret that the Trump children are very close to their father, are very close advisers to their father.

But here's what's changed over the course of the last couple of days -- the president-elect announced on Twitter that he would be handing the reins to the Trump Organization to Don Jr. and Eric. And yet, they are still in the meetings. It is not just the tech summit. They are also helping to vet candidates for secretary of state and secretary of interior.

This is the issue that is raising a lot of concerns both sides of the aisle, but also from people inside the Trump operation. They are very wary of what this could mean going forward and recognize that there needs to be some kind of a separation. The details of the separation is being worked on. The details obviously delayed until at least the New Year as to what that might actually be.

But every time you see something like this, you recognize that this is an issue that the Trump team isn't exactly running away from. The president-elect seems to be welcoming it. Whether it is meetings in last couple weeks with foreign leaders or it's meeting with cabinet officials, or whether it's the tech summit on Wednesday night, it's one thing is clear, they don't believe this is as big an issue as everybody else, and that could only spell problems in the future -- John and Alison.

(END VIDEOTAPE)

BERMAN: All right. Phil Mattingly, thanks so much.

The Republican Party spokesperson says that worries over Trump family conflicts of interests are not a problem. RNC communications director Sean Spicer says that conflicts of interest only arise, quote, "when you are sneaky or shady about it." Spicer says that the president- elect has been clear from the start about his children's roles in his campaign and his business. Spicer suggests the voters knew exactly what they were getting.

(BEGIN VIDEO CLIP)

SEAN SPICER, CHIEF STRATEGIST & COMMUNICATIONS DIRECTOR, RNC: Every one of those people listed on the transition team website. They're all been named, the senior part of it. So, this is a totally transparent process. The people he trusted, he's made it very clear how he values the input of his family. He put their names on the transition committee.

But he has been unbelievably transparent in the role his family will play in this. I think from day one, not just recently, since going back to that debate in August of last year, he was very clear of the role that his family was going to play in the campaign and the government and in his business.

(END VIDEO CLIP)

BERMAN: A Trump transition source says that Sean Spicer is now a leading candidate to be White House press secretary.

KOSIK: More new details on the incoming first family.

Ivanka Trump is likely to handle some of the duties typically undertaken by the first lady. A source telling CNN that with Melania Trump spending much of her time in New York with 10-year-old Baron, Trump's daughter is poised to play the part of Washington hostess.

She will also likely advise her father on a range of issues from family leave to climate change. An office of the first family is already in the works for the East Wing, where the current office of the first lady is located.

BERMAN: This morning, the White House is arguing that President-elect Trump was, quote, "obviously aware" that Russia was interfering in the election and that was to his benefit. Press Secretary Josh Earnest reports that the clearest evidence was Trump's remarks over the summer urging Moscow to locate and publish missing e-mails from Hillary Clinton's private server.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: There is ample evidence that is known long before the election and in most cases, long before October, everything from the Republican nominee himself calling on Russia to hack his opponent. It might be an indication that he was obviously aware and concluded based on whatever facts or sources he was -- he had available to him that Russia was involved.

(END VIDEO CLIP)

KOSIK: A federal judge has ordered President-elect Trump to sit for a deposition in early January. This is part of the ongoing dispute with celebrity chef Jose Andres.

[05:05:00] The questioning will take place in New York and could last up to seven hours. Trump sued Andres for breach of contract after the chef backed out of plans for a restaurant in the president-elect's luxury hotel in Washington. Andres claims that he canceled the deal after Trump made disparaging remarks about Mexicans.

BERMAN: The president-elect will visit Hersey, Pennsylvania, tonight. He will hold a rally there at 7:00 as part of his thank you tour. Vice President-elect Mike Pence will be along for the ride. Of course, Pennsylvania, along with Michigan, Wisconsin, they were key victory, shattering the so-called "blue wall", that phrase coined by Ron Brownstein to describe states the Democrats have won dating back to, you know, in some cases, 1988.

KOSIK: All right. Let's talk more about the transition, the Trump transition. Let's bring in CNN politics reporter Eugene Scott. He is joining us live in Washington.

Thanks for waking up early.

EUGENE SCOTT, CNN POLITICS REPORTER: Thanks for having me.

KOSIK: So, let's talk a little more about this big meeting that Trump had at Trump Tower with these top tech executives. What you are seeing happen now because you saw this being a family affair, you are seeing Sean Spicer come out, the Republican Party spokesman come out and really defend why his family members were there. Listen to what he told our Kate Bolduan.

(BEGIN VIDEO CLIP)

SPICER: Conflicts of interest arise when are you sneaky about it, when you're shady about it. When you're not transparent about it.

(CROSSTALK)

SPICER: No, no, if you tell everyone here is what is going on and the process and the people playing a role, that's not -- that's being transparent.

(END VIDEO CLIP)

KOSIK: And then this tweet from Don Jr., him saying, "Honored to have sat in on this meeting. The most impressive group of minds I have seen, assembled all, looking to fight for America and U.S. jobs."

So, what do you think? If this is happening in plain sight, it's got to be legit, right?

SCOTT: Well, no is what the critics would say, right? I think what's really interesting as what's mentioned earlier is this is not the first time the Trump family has been criticized for appearing to blur the lines. And it seems like they are doubling down. It seems like this is something that we will continue to see more of despite the criticism.

We should expect, though, more Democratic lawmakers and even some conservatives that are quite frankly worried about conflict of interest to press him on this. It's s not about preferences or politics. There are reasons that we have laws in place that want people's families and their businesses separated from their government responsibilities. It will be interesting to see if the Trump family abides by those.

BERMAN: Not to get ontological here, but you can have a transparent conflict of interest. The two things are not mutually exclusive despite what Sean Spicer says. Let's divide a couple of things here, shall we? On the one hand, there is the issue of Ivanka Trump maybe taking over the White House hostess roles or Washington hostess roles. There is precedence for that. I mean, this is something that's happened for presidents, you know, who are widowed. You know, James Buchanan never married. It's happened in the past. That's something that's happened in the past.

What is unusual is the president coming in with so many entangled business interests. What's unusual is a president-elect who said he was going to hold a news conference today to explain what the divisions would be, you know, and then postponing it until January. There are open questions, Eugene.

SCOTT: And what's also unusual regarding both of those issues is for a president to enter the White House at least in the last several decades without releasing his tax returns. So, we still do not understand or know the depth of these entangled businesses. I think one thing that was very interesting about Sean's interview yesterday is him saying that the American people knew what they were getting.

Well, the American people who voted for Trump knew what they were getting. The nearly 3 million people who voted against him also knew and decided this was not something they wanted in their president- elect or their president. So, it remains to be seen how they will respond to the ongoing criticism.

KOSIK: And President-elect Trump has certainly come out defending his daughter Ivanka for the issues giving us a hint of what she will -- she could very well carry through once he is in office. Listen to what he said on FOX.

(BEGIN VIDEO CLIP)

TRUMP: If you look at Ivanka, you look at it. She is strong with the women's issue and child care. Nobody could do better than her. I just have to see whether or not we can do that. She would like to do that.

(END VIDEO CLIP)

KOSIK: So could we see a more gentler approach to policies if Ivanka takes a role in the administration?

SCOTT: What we do know is that the policy areas she is interested in are of great interest to multiple Americans, voters and people who did not vote in the election, especially regarding affordable child care and women's issues. I think this will be an opportunity as you said, a softer opportunity for some real bipartisanship in this administration as people come together to find solutions to these problems.

BERMAN: Just to be clear, she has business interests which she has not explained how she will divest herself or separate from either. And, Eugene, there's word that Jared Kushner, the son-in-law to Donald Trump, Ivanka Trump's husband, that he's going to have a role, not just, you know, in the first family office in the East Wing, you can see him on the left there, Jared Kushner, but also in some advisory role in the West Wing.

[05:10:09] And they haven't explained to us, the transition team, how this gets around some of those nepotism laws, have they?

SCOTT: They have not. And these entanglements are certainly problematic for many people. But quite frankly, transparency starts at the top. So, I cannot imagine we would expect to see those types of revelations from Ivanka or Jared, if we haven't seen them from the president-elect.

BERMAN: Well, it's our job to keep on asking. Maybe they will give us an explanation.

SCOTT: Maybe.

KOSIK: And maybe they will.

BERMAN: They say maybe in January. But we will keep on pressing. Thanks, Eugene.

SCOTT: Indeed. Thank you.

KOSIK: All right. The Federal Reserve just made borrowing money more expensive. Janet Yellen and company deciding to raise interest rates by a quarter of a point yesterday. It is now at a range of .5 percent to .75 percent of a percent. You can expect three rate hikes next year. That's one more than Wall Street expected.

And despite the 3.2 percent growth in the third quarter, the Fed sees GDP increasing at just a 2.1 annual rate next year. So, that is half of the 4 percent growth that President-elect Trump has proposed, has promised.

All right. So, we all want to know what these rate hikes mean for you. What does it mean for us? So, mortgage rates are already rising. Overnight, the nationwide average for a 30-year fixed rate mortgage jumping to 4.27 percent. That will move higher in the coming days. And just a month ago, for perspective here, it was 4.02 percent.

And earlier this year, plunged to historic lows to 3.34 percent. So, expect rates on home equity lines of credit to go up. Car loans and credit cards to increase as well.

Savers, though, are winners in this. They could benefit slightly from these higher interest on their deposits, but we have to wait for banks to actually move on that for us.

BERMAN: They can put their money back in banks, like things like savings accounts. What are they?

KOSIK: CBs.

BERMAN: All right. A new cease-fire declared in Aleppo, but the last one ended with air strikes and bloodshed. So, will the 50,000, maybe 100,000 civilians trapped inside this city, will they be able to get out while the whole world stands by? A live report next.

(COMMERCIAL BREAK)

[05:15:19] BERMAN: We have breaking developments in Syria. Rebel forces in Eastern Aleppo have announced that a new cease-fire has been reached and civilian evacuations can begin, allegedly.

Earlier this week, a Syria brokered with Turkey and Russia collapsed in a wave of deadly air strikes. Syria's second largest city, you can see it right there, just now in ruins. An estimated 50,000 residents are still trapped without food, water or medicine.

CNN's Jomana Karadsheh is tracking the latest developments for us. She joins us now live.

And, Jomana, as for watching Aleppo literally, the world watching, doing much, the question is, are these people getting out?

JOMANA KARADSHEH, CNN CORRESPONDENT: Well, John, it does seem that we are seeing some sort of movement right now. That's according to activists and also some live pictures from Syrian state TV that these buses supposed to be there to evacuate the residents, the civilians out of eastern Aleppo are moving. They are there ready to load the civilians and take them out.

But we have seen time and time again, the process getting so close to this evacuation taking place and falling apart. So, we're going to have to wait and see if this does happen. This comes after the dangerous developments that we saw earlier today, about three hours ago when we saw the first convoy carrying the wounded out of eastern Aleppo. That is according to activists, the doctor in eastern Aleppo and the rescue group, the White Helmets, who said that this convoy came under fire, that they were shot at and at least one person killed and four others were wounded as they were approaching the regime held areas and to that crossing where they are supposed to be these transfers and take these wounded people out.

We have not heard anything from the Syrian regime, its allies, the Russians and the others, including the Iranians, when it comes to these allegations at the convoy. But we did hear from Syrian state saying that all preparations are under way to evacuate what they describe as the terrorist. That's the term that the Syria regime describes -- uses to describe the rebels in Syria. They are saying the buses are ready and they are prepared to evacuate them and their family members out of besieged eastern Aleppo.

This has been a very fast changing situation on the ground. It is so complex and this deal is fragile as we have seen over the past 24 hours. So, it remains to be seen if we'll be seeing them moving out anytime soon, John.

BERMAN: Yes, 50,000 or 100,000 people. Their lives hang in the balance.

All right. Jomana Karadsheh, thanks so much.

KOSIK: A new security breach at Yahoo and this one is huge. Yahoo confirming more than 1 billion user accounts have been hacked. This security breach is believed to be one of the largest ever. It comes less than three months after Yahoo admitted data from 500 million accounts had been stolen as well.

CNN Money's Samuel Burke live for us from London with the latest.

So, just when you think it couldn't get any worse for Yahoo.

SAMUEL BURKE, CNN MONEY CORRESPONDENT: Yes, and what's absolutely insane about all of this, according to cyber security experts. Yahoo didn't realize this hack happened, even though it occurred back in 2013. They are just finding out about it now.

So, think about what hackers have been able to do with that information over these past three years. Let me just put up a list on the screen to show you what we believe was stolen as part of this breach, information includes names, e-mails, phone numbers, passwords and dates of birth, what it does not include is credit card data or bank account information. You may be breathing a sigh of relief, but it would be better if it were reverse, because remember, you can change your credit card number. You can't change your date of birth. You're likely not going to change your name, and the hackers use that information to go into valuable accounts you may have.

So, what you want to do immediately if you have a Yahoo account, or if you're parents do in my case, you want to get them to change their password and everybody should be using two factor authentication. That's where you receive a text message from your bank or your email account, with a code every time you log in, annoying, but it will keep you safe from these.

I know you guys are wondering, so what's going to happen with the $4.8 billion deal for Verizon to buy Yahoo? Well, at this point, Verizon is saying that they are going forward, though they're going to evaluate this situation, as they review more of these hacks. But keep in mind, Alison, it's estimated that the company should pay $220 per account stolen in a hack. That would be $220 billion. I have a feeling nobody is going to be paying that and the consumer will suffer.

KOSIK: Yes, talking about suffering consumers. I think this revelation is going to -- certainly inspire consumers who have Yahoo accounts to ditch them.

[05:20:03] Samuel, thanks so much.

BERMAN: All right. A big disappointment for NBA fans in Memphis. The defending champion Cleveland Cavaliers, they were in town last night, but they were unrecognizable. The three biggest stars on the team stayed home. This is the little bit of a problem for the league. So, what are they going to do about it? There might be an answer. Andy Scholes with this morning's "Bleacher Report", next.

(COMMERCIAL BREAK)

BERMAN: So, imagine living in Memphis and you pay hundreds of dollars at least for tickets to come see LeBron James and the Cleveland Cavaliers are in town. But not only does he not play, he doesn't even show up.

KOSIK: Andy Scholes has more in this morning's "Bleacher Report".

Good morning.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, guys.

You know, the Cavs only play in Memphis once a year. So, this is arguably the Grizzlies biggest home game of the season. Now, this game was on the second half of the back to back wit the Cavs. So, head coach Tyronn Lue, he decided to rest LeBron, Kyrie Irving and Kevin Love. Those three did not make the trip to Memphis.

Fans really upset about spending hundreds of dollars to not to see LeBron play. There's some great signs out there. That one saying, "LeBron, thanks for ruining my Christmas." Another said, "Michael Jordan would have been here." At least the fans in Memphis did get to see their team win. Grizzlies beat the Cavs, 93-85.

The NBA and its players union reaching a tentative agreement on a new collective bargaining agreement. The seven-year deal guarantees labor peace through the 2023-2024 season.

[05:25:01] The agreement calls for the players to receive 51 percent of basketball related reviews with the owners getting 49 percent. Now, with the new CBA, the league's average salary is expected to jump from the $5 million range to nearly $9 million annually. Great time to be an NBA player.

All right. The Seahawks Richard Sherman not happy about playing on three days rest. But he'll be out there tonight as Seattle hosts the L.A. Rams. This is the first game for the Rams since they fired Jeff Fisher. John Fassel is the interim head coach. Kickoff for this one is 8:25 Eastern. Surprisingly, the Rams have beaten the Seahawks three times in a row.

All right. Finally, Dwyane Wade returned home to Chicago this past off season. He is serious about using his first season with the Bulls as a vehicle for change in Chicago. Wade and Gatorade joining forces on a short film called sounds of hope, highlighting Wades' traumatic upbringing.

(VIDEO CLIP PLAYS)

SCHOLES: Wade is working with partners including Gatorade to create programs through his Spotlight On Initiative which bring attention to inner city youth that are making good choices and out of the classroom. Definitely good to see Wade back in Chicago doing great things for the city that he grew up in.

BERMAN: That's a little (INAUDIBLE) background also.

And, Andy, my understand is part of the collective bargaining agreement, the season will be longer and players could get more days off. When the Spurs don't show up with all their stars and the Cavs, that may happen less, is that the plan?

SCHOLES: Yes. And you know, if they take away back-to-backs, this would happen less. John, it irks me as a basketball fan. You know, I always wanted to see the stars when they came to my city. If these guys are going to sit out, they need do it at home. So, these visiting fans get to see the players when they come to their city.

Like I said, you know, LeBron is going to Memphis once this year. So, those kids who look up to him and he's like their hero, not even going to see him during the season, which is just a big shame.

BERMAN: That's a good point. And no one wants to see Andy Scholes irked. So, they better do something. Thanks, Andy.

KOSIK: Thanks very much.

SCHOLES: All right.

KOSIK: Donald Trump discussing China and jobs with the American titans of technology. So, why were the president-elect's three grown children in the meeting? That's next.

(COMMERCIAL BREAK)