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Early Start with John Berman and Zoraida Sambolin
White House Threatens to Block Release of Trump's Tax Returns; Boeing Acknowledges MCAS Role in Crashes; Trump to Nominate Herman Cain to Fed Board; Prime Minister Theresa May Seeks Another Brexit Postponement. Aired 4-4:30a ET
Aired April 05, 2019 - 04:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[04:00:19] CHRISTINE ROMANS, CNN ANCHOR: House Democrats versus the White House. Neither side giving any ground on how much to reveal of the Mueller report or the president's taxes.
BORIS SANCHEZ, CNN ANCHOR: And breaking overnight, not one but two major software flaws on the Boeing 737. Boeing's CEO says the company owns the responsibility to fix these issues.
ROMANS: Does a former pizza executive belong on the board of the powerful Federal Reserve? The president looking to install loyalists as he battles his Fed chair.
SANCHEZ: And MacKenzie Bezos is now the world's fourth richest woman. What he got and what she lost in the divorce from the Amazon founder.
Good morning, and welcome to EARLY START. I'm Boris Sanchez, in for Dave Briggs.
ROMANS: A $35 billion divorce. Unbelievable. I'm Christine Romans. It is Friday. Nice to see you. April 5th.
SANCHEZ: Great to see you.
ROMANS: It is 4:00 a.m. in the East.
So let's get started here with the White House and House Democrats gearing up to fight each over on two fronts -- the Mueller report and President Trump's tax returns.
First on Mueller, House Judiciary Chairman Jerry Nadler demanding communications between the Justice Department and Robert Mueller's office about the special counsel's report.
SANCHEZ: Yes. Nadler wants to clear up a purported discrepancy between two different summaries of the 400-page report. Attorney General Bill Barr's widely discussed four-page summary and the still secret summaries actually written by Mueller's team.
(BEGIN VIDEO CLIP)
REP. JERRY NADLER (D-NY): I can say I think it's inevitable that Mr. Mueller is going to testify at some point. But the first thing we need is all -- is the release of the report and the documents.
MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You think it's inevitable that Mueller is going to come before your committee?
NADLER: At some point, yes.
(END VIDEO CLIP)
ROMANS: Sources tell us several of Mueller's investigators are expressing frustration with the way Barr summarized the special counsel's findings, in particular on obstruction of justice. The DOJ not commenting on Nadler's demand but it is defending the attorney general's deliberate pace in releasing some version of the report. The Justice Department saying every page of the report was marked as possibly containing information that should not be publicly released.
SANCHEZ: The president you may recall had encouraged the release of the report. He changed his tune. He tweeted, quote, "There is nothing we can ever give to the Democrats that will make them happy. This is the highest level of presidential harassment in the history of our country."
Meantime the White House is threatening to block Democrats' demand for the release of the president's tax returns. And the president himself is suggesting that the Justice Department could become involved.
For more, let's turn to White House correspondent Abby Phillip.
ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: Christine and Boris, President Trump is now facing the full brunt of this new reality in Washington as Democrats who now control the House of Representatives are using their oversight power to ask for a number of things. One of them being the full Mueller report to be released to the public and to the relevant committees, and also now the president's tax returns.
They are asking for six years of tax returns, personal and from his businesses, and the president is responding to all of that by essentially dismissing it saying that he's not inclined to allow them to have access to those returns.
The problem for President Trump may be that this request was not made to him personally, but rather was made to the IRS using an obscure part of the U.S. code that allows select committees on Capitol Hill to gain access to certain people's tax returns. Now it's clear that the White House and the president's allies on Capitol Hill are going to be pushing back on both of these requests.
(BEGIN VIDEO CLIP)
UNIDENTIFIED REPORTER: Are you asking the commissioner of the IRS not to disclose to the House Ways and Means Committee your tax bill?
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: They'll speak to my lawyers. They'll speak to the attorney general.
(END VIDEO CLIP) PHILLIP: It's not clear what exactly he meant by that and what role he believes Bill Barr will have in this. But either way, the White House continues to insist that President Trump is still under audit and that those tax returns won't be released until those audits are completed -- Christine and Boris.
ROMANS: All right, Abby Phillip. Thanks for that.
Breaking overnight, Boeing acknowledging a second -- a second software issue in the 737 MAX flight control system. The new issue separate from the anti-stall system under investigation in those two recent crashes. Boeing tells "The Washington Post" the new problem involves software that affects flaps and other hardware. Now Boeing calls this issue relatively minor, but regulators have ordered Boeing to fix it. Its discovery delayed the planned software update last week.
SANCHEZ: All of this coming a day after the release of the preliminary report on the Ethiopian Airlines crash that was obtained first by CNN. Boeing CEO acknowledges the company has a major issue to fix.
(BEGIN VIDEO CLIP)
DENNIS MUILENBURG, BOEING CEO: It's apparent that in both flights, the Maneuvering Characteristics Augmentation System, known as MCAS, activated in response to erroneous angle of attack information. It's our responsibility to eliminate this risk.
[04:05:01] We own it and we know how to do it.
(END VIDEO CLIP)
SANCHEZ: Dennis Muilenburg also extended his sympathies for the 346 people who died. The back-to-back disaster is raising questions of whether years of looser oversight at the FAA was a factor.
CNN's Tom Foreman has more.
(BEGIN VIDEOTAPE)
TOM FOREMAN, CNN CORRESPONDENT (voice-over): The report says the trouble starts right after takeoff with airspeed and altitude readings from the left side of the 737 MAX 8 that don't match the readings from the right side, and two sensors on the front disagreeing about the angle of the aircraft's nose. A sensor on the right shows steady readings around 15 degrees, but the one on the left swings wildly from 11 to nearly 75 degrees steep, as if the plane is rocketing upward.
ALASTAIR ROSENSCHEIN, AVIATION CONSULTANT: What stands out and is significant is the difference in angle attack indication between the left-hand side and the right-hand side of the aircraft. There was a 60-degree difference. And this feeds directly into the MCAS computer system, the system which forces the nose down in the event of a perceived stall. This is the same as the Lion Air accident.
FOREMAN: The report does name MCAS, but Boeing has now acknowledged it was involved. The captain asked the first officer to pitch up together, to pull back on their controls simultaneously. It does not work. Instead, the flight data recorder shows the plane diving. In all four times without pilots' input. An impact warning sounds in the cockpit, "Don't sink, don't sink."
The report says the cockpit crew even figures out what is wrong and disables the MCAS system. Then the captain asks his first officer about a key part of the plane needed to regain control. The trim. The reply, "It is not working."
(On camera): Still, only a couple of years ago, Boeing was talking about how much it appreciated the government's new streamlined approach to regulation, particularly in regard to the MAX line of planes. And now these planes are surrounded by investigations into how they were developed, how they were tested, how they were certified, and whether people should ever really trust them again.
(END VIDEOTAPE)
ROMANS: All right, Tom Foreman, thank you for that.
A controversial choice for President Trump on who he wants to fill the last seat on the Fed's powerful seven-member policy-making board.
(BEGIN VIDEO CLIP)
TRUMP: I recommended Herman Cain. He's a very terrific man, a terrific person. He's a friend of mine. I would think he would do very well there.
(END VIDEO CLIP)
ROMANS: This president, if Herman Cain and Stephen Moore are confirmed by the Senate, would be reshaping the most powerful central bank in the world, reshaping it to his liking, away from peer reviewed, academic PhD economists and toward men who know less about monetary policy but want the Fed to support this president.
So what is the Fed? It is an independent body meant to be the shock absorber for the U.S. economy. It's basically in charge of America's printing press. It has two goals, maximum employment and price stability. That means supporting the jobs market and making sure inflation is not too high or not too low. That's very destabilizing. It's about making the economy good for American workers and American families.
Now Cain has some experience with the central bank. He once served as a director on one of the 12 regional Fed bank boards, the Kansas City Fed. That's not an uncommon role for a business executive. That's typically where you see that kind of a background.
Trump also appointed Jerome Powell, of course, and he's been complaining about it ever since.
(BEGIN VIDEO CLIP)
TRUMP: I think we have much more of a Fed problem than we have a problem with anyone else.
My biggest threat is the Fed because the Fed is raising rates too fast.
I think the Fed is far too stringent and they're making a mistake.
(END VIDEO CLIP)
ROMANS: This is why the Fed is meant to be an independent body because every president would like loose money, right?
SANCHEZ: Right.
ROMANS: Heading into an election, make the economy artificially pumped up, you know, to make them look good. So that's why the Fed has to be so independent and why there are so many concerns about the president trying to put two insiders.
SANCHEZ: Yes.
ROMANS: People close to him right there on a powerful board.
SANCHEZ: This is yet another way that the president breaks with tradition.
ROMANS: Absolutely.
SANCHEZ: The kind of unorthodox. The way that --
ROMANS: Absolutely.
SANCHEZ: There were reports about him potentially firing Jerome Powell because he didn't like the way he was operating the Fed.
Speaking of President Trump, he's set to Calexico, California, near the U.S.-Mexico border today. Ahead of his trip, President Trump seemed to flip-flop on his threat to close the border. Early Thursday, he said this.
(BEGIN VIDEO CLIP)
TRUMP: We're going to give them a one-year warning and if the drugs don't stop or largely stop, we're going to put tariffs on Mexico and products, in particular cars. And if that doesn't stop the drugs, we close the border.
(END VIDEO CLIP)
SANCHEZ: Just a few hours later, Trump back-pedaled on ever closing the border. Listen.
(BEGIN VIDEO CLIP)
TRUMP: I don't think we'll ever have to close the border because the penalty of tariffs on cars coming into the United States from Mexico at 25 percent will be massive. (END VIDEO CLIP)
[04:10:13] SANCHEZ: Last week Trump had said he would give Mexico one week to increase apprehensions of migrants headed toward the U.S. from Central America. He threatened to close the border if that didn't happen. He also tried to shift the burden of fixing the border crisis on to Democrats.
ROMANS: All right. Hopes raised then shattered for the family of Timmothy Pitzen. DNA tests reveal the person who told police he had escaped kidnappers and claimed to be Pitzen is not. The news another blow for the family of the boy who vanished in 2011 at age 6.
(BEGIN VIDEO CLIP)
KARA JACOBS, TIMMOTHY PITZEN'S AUNT: It's devastating.
ALANA ANDERSON, TIMMOTHY PITZEN'S GRANDMOTHER: Yes.
JACOBS: It's like reliving that day all over again, and Timothy's father is devastated once again.
ANDERSON: He's a wonderful little boy and I hope he has strength of personality to do whatever he needs to do to find us. My prayer has always been that when he was old enough he would find us if we couldn't find him.
(END VIDEO CLIP)
ROMANS: Police say the young man found in Kentucky who identified himself as Pitzen is actually 23-year-old Brian Michael Rini from Medina, Ohio.
SANCHEZ: He has a criminal history, including prison time for burglary. He was released last month and was on supervised parole. Rini's brother says that Brian has mental issues and it's not the first time that he's assumed a false identity.
(BEGIN VIDEO CLIP)
JONATHAN RINI, BROTHER OF BRIAN RINI: He's been doing stupid stuff, not this serious, but he's been doing stupid stuff for as long as I can remember. He used my name in a traffic stop in Norton, and then skipped court, and I received a traffic warning for it.
(END VIDEO CLIP)
SANCHEZ: Timmothy Pitzen's family has searched for him ever since his mother's reported suicide on a road trip with him nearly eight years. She left behind a note saying her son was with people who loved him and that, quote, "You will never find him."
ROMANS: Yes. She went to school, pulled him out of school, went on a three-day road trip to Wisconsin Dells, and then he's never been seen again. SANCHEZ: Confounding, sad story.
Jussie Smollett refusing to re-pay the city of Chicago for investigating a purported hate crime. So now the city will take him back to court.
(COMMERCIAL BREAK)
[04:16:23] ROMANS: Welcome back. Sixteen minutes after the hour this Friday morning.
The legendary head fencing coach at Harvard is under investigation for transactions involving the family of current and former student athletes. Officials at the university are focusing on Peter Brand's real estate and nonprofit deals. According to the "Boston Globe," a wealthy Maryland businessman purchased Brand's home for $989,000 when the home was valued at just over half that amount.
The businessman's son was eventually accepted at Harvard. The school says it became aware of allegations against the coach on Monday, and all applications for student athletes are reviewed thoroughly.
BRIGGS: The divorce has been finalized between Amazon founder Jeff Bezos and his wife MacKenzie. The agreement makes her one of the richest women in the world. On Thursday she tweeted she would be keeping 25 percent of the couple's Amazon stock, giving her a 4 percent stake in the company. Based on Amazon's current market value, that stock is worth about $35 billion.
Jeff Bezos retains voting control over all of her shares. He'll also maintain his interest in the "Washington Post" and Blue Origin, a private space company.
ROMANS: Jeff and MacKenzie Bezos both tweeting they're looking forward to the future. The couple first announced plans to separate in January, ending a 25-year marriage. The separation quickly morphed into a media frenzy with reporting on Bezos infidelity. Bezos published a tell-all blog accusing the "National Enquirer" of trying to blackmail him. Bezos' net worth is estimated at $150 billion.
The $35 billion settlement for MacKenzie Bezos makes her the fourth richest woman in the world behind heiress Francoise Bettencourt Meyers, Alice Walton, and Jacqueline Mars.
SANCHEZ: Ohio Congressman Tim Ryan is joining the party, announcing that he's decided to jump in on the crowded field of Democratic presidential candidates for 2020. Ryan entered the ring on Thursday, touting his working class roots and how they have shaped his political world view.
(BEGIN VIDEO CLIP)
REP. TIM RYAN (D-OH), PRESIDENTIAL CANDIDATE: Coming from the industrial Midwest, I think first and foremost, I believe that I could win western Pennsylvania, Ohio, Michigan, Wisconsin. We've got the highest stock market we've ever had. We've got the lowest unemployment almost we've ever had, and yet 40 percent to 50 percent of the American families can't withstand a $400 or $500 emergency.
This economy is not working. People understand that message. We can get them to vote for Democrats, and we could send Trump packing.
(END VIDEO CLIP)
SANCHEZ: Ryan will officially kick off his 2020 campaign with a rally in Youngstown tomorrow.
Meantime, this might be the sure sign yet that former vice president Joe Biden is about to jump into the race. A man in Scranton posted the photo on social media of Biden outside his childhood home with a film crew. There's no comment yet from the Biden camp as to what the former vice president was filming.
ROMANS: The Biden watch.
All right. The city of Chicago says it will sue Jussie Smollett for $130,000. The actor missed the Thursday deadline to pay a bill the city sent. It wants him to cover the cost of the police investigation into his claim he was the victim of a hate crime.
More than two dozen police personnel spent weeks working the case. Detectives ultimately concluded Smollett staged the attack to bolster his profile and career. He has insisted he was telling the truth about the attack. The charges against him were dropped after he forfeited his bail and performed community service.
All right. Breaking just moments ago the British prime minister requests another Brexit delay. How long now? We go live to London.
(COMMERCIAL BREAK)
[04:24:21] SANCHEZ: Some breaking news this morning, British Prime Minister Theresa May formally requesting a delay on Brexit from April 12th to June 30th.
Nina dos Santos is outside the Houses of Parliament. She joins us now.
Nina, isn't this just delaying the inevitable? Is there a chance they can get an actual deal in only a couple of months after they've struggled to get something done for so long?
NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: Well, in short, the E.U. seems to think probably no, and that's why even ahead of Theresa May issuing this letter just half an hour ago, Boris, what we saw was the head of the European Council who she's actually writing to already starting to brief reporters in Brussels that they are considering a much longer what they called flex-tension here.
[04:25:05] So a delay of about a year which could be cut short if the U.K. did manage imagines to pass that famous withdrawal agreement that's now been rejected three times. Theresa May's unpopular Brexit deal, if it passes, then that delay could be shortened significantly but at least it would give the E.U. the time here to take Brexit off the cards rather than having the distraction of the U.K. consistently having to ask for one short delay upon another.
But Theresa May, of course here, has yet again brought up this date of June the 30th. June the 30th came up at the last E.U. summit a couple of weeks ago. The E.U. flatly rejected that. Even earlier on this week, Jean Claude Junker, the head of the European Commission, the other part of the E.U. apparatus here that will be at the summit, said that they were in no mind to consider a short delay.
What's probably happening here, Boris, is that what we're seeing is Theresa May earlier on this week taking an about turn in her negotiating strategy, at least on a domestic level, and bringing in the head of the opposition. She is probably saying now, well, look, I need to ask for the shorter delay even if I'm going to get the longer one.
The optics of it is all about domestic politics rather than international ones but it's looking at the longer delays is probably what she's going to get even if she's asked for the shorter one on June 30th.
SANCHEZ: The Brexit saga continues. Nina dos Santos reporting from London. Thank you.
ROMANS: All right, 26 minutes past the hour this Friday. The White House and House Democrats going to battle over the Mueller report and the president's taxes. The Democrats want to see it all. The White House, not so much.
(COMMERCIAL BREAK)
END
