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Trump Denies He Changed His Story on Stormy Daniels; Trump: Would Meet with Mueller, But Only if Treated Fairly; Trump on Giuliani: He'll Get His Facts Straight About Stormy Daniels Saga; Some Conservatives Call Out Trump Over Stormy Daniels Payment; Kellyanne Conway: Never Heard About Stormy Daniels Payment During Campaign; Judge in Manafort's Case Says Mueller's Aim is to Hurt Trump, and Orders Mueller's Team to Turn Over Unredacted Rosenstein Memo; Giuliani Confirms Issuing a Statement to Clarify Stormy Daniels Payment Confusion; U.S. Unemployment Rate Drops for the First Time in 18 Years Below 4 Percent. Aired 12-12:30p ET

Aired May 04, 2018 - 12:00   ET

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

[12:00:00] JOHN KING, CNN HOST: Welcome to INSIDE POLITICS, I'm John King, thank you for sharing a beyond surreal day with us, at least so far, anyway.

The unemployment rate falls below 4 percent, and yet House Republicans are staring at a mid-term blue wave, why? The Trump effect which is on full display again today.

The president says Rudy Giuliani didn't get his facts straight about the Stormy Daniels hush money payment a day after the same president backed Giuliani's account.

The president also launched a sharp new attack on the special counsel, and then tried to put to rest any talk Chief of Staff John Kelly is headed for the exit door out of favor.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We have a great relationship. He's doing a great job as chief of staff, I could not be more happy.

JOHN KELLY, WHITE HOUSE CHIEF OF STAFF: It's an absolute privilege to work for a president that has gotten the economy going. We're about to have a breakthrough, I believe on North Korea, the jobs report today -- I mean, everything is going phenomenally well.

We're attacking the opioid crisis, it's nothing less than brilliant what's been accomplished in 15 months, I believe.

(END VIDEO CLIP)

KING: We begin the hour confused because that is where the president of the United States leaves us. He changed his story again on Stormy Daniels today, then moments later, he said he wasn't changing his story on Stormy Daniels. And he attacked the special counsel, too, leaving little doubt Robert Mueller is going to have to issue a subpoena if he wants to hear from the president in a controlled legal setting as opposed to whatever you want to call what we just heard at the White House and at Joint Base Andrews.

Let's start with dissecting to the degree we can, the latest twist in the Stormy Daniels saga and what it says about the president's credibility.

Remember, the president's new attorney Rudy Giuliani, the other night stunned everyone by saying, yes, the president was aware of the hush money payment to the porn actress late in the 2016 campaign.

And that the president paid his lawyer back for taking care of it. Then the president yesterday issued a series of tweets backing Giuliani up, and the former New York City mayor said he was setting the record straight with the president's blessing. Today? Well, never mind.

(BEGIN VIDEO CLIP)

TRUMP: Rudy is a great guy but he just started a day ago. But he really has his heart into it, he's working hard, he's learning the subject matter, and he's going to be issuing a statement, too.

He started yesterday, he'll get his facts straight -- he's a great guy.

(END VIDEO CLIP)

KING: Let's start with Jeff Zeleny at the White House. So Jeff, am I right? You asked the president, how is Rudy doing, and that's what followed?

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, John. The president shrugged his shoulders and then proceed to throw him under the bus.

Now it was really extraordinary, we were standing about, I would say, 10 feet or so from the president there, and he went on and on about Rudy Giuliani. Yes, he said, he's a great guy. He said he started yesterday -- he actually started about 15 days or so ago.

You know, a new member of the legal team here, but then proceeded to issue, you know, a pretty much a sharp and damning words as you can say, he didn't have his facts straight.

So he proceeded from there to not exactly say what those facts were. He said that Rudy Giuliani would be issuing a statement, we've not yet seen that.

But then at Joint Base Andrews after Marine 1 flew there, he essentially doubled down insisting he was not changing his story about Stormy Daniels.

So John, by the end of the day, it will be interesting to say, I wish I said my reporting could show an answer to what it's going to be.

I don't know that, what the clarification to all of this will be. But we do know the president wanting to send a signal that in his eyes, at least for today, John Kelly, the White House chief of staff, who is often the one being thrown under the bus, he is up in the president's eyes, and Rudy Giuliani, who just yesterday was, you know, his favorite lawyer, he's down in his eyes.

Where this all stands from here, the president not wanting to sit down with Bob Mueller, says it won't be fair, and said witch-hunt more times than I can count. John?

KING: Not your fault, Jeff, but that did not help clear up the confusion. Certainly not your fault. And with me here --

ZELENY: All right --

KING: In the studio to share their reporting and their insights, Cnn's Nia-Malika Henderson, Michael Shear with the "New York Times", Michael Bender with the "Wall Street Journal" and Cnn's Kaitlan Collins.

And we're laughing about this because it is absurd in some ways. But there are both political implications and potentially much more dramatic legal implications.

Rudy Giuliani goes on "Hannity" the other night and he says, oh, yes, the president was aware of the payment, the president paid Michael Cohen back for making the payment.

And then he made clear, I'm here with the president's blessing to clear this up. Now what everybody thought then was this is a legal strategy, take your lumps because if that's the truth, Michael Cohen is going to say that.

When he's in some legal setting, you might as well get out ahead of it. Now the president comes out and says, Rudy didn't get -- and then I should add, the president tweeted three times yesterday backing up Mayor Giuliani's account.

NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yes --

[12:05:00] KING: Now he comes out and says the president didn't get his -- I mean, Giuliani didn't get his facts straight -- what?

KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: So when Giuliani does issue this statement, whatever this correction is, the president says when he does finally have his facts straight, what are we supposed to take from that?

Are we supposed to wait for that statement to also be corrected tomorrow, because that's what we're getting from the president and Rudy Giuliani right now.

We thought we could take what Rudy said on Wednesday night, well, then, the president backed it up. Well, now the president is saying that Rudy didn't have everything correct and that they should question why the president backed it up.

There is no one to believe right now because the story changes on a near --

KING: Sure --

COLLINS: Hourly basis --

HENDERSON: Yes --

MICHAEL SHEAR, "THE NEW YORK TIMES": Sure, and remember what happened all day yesterday which was that the White House was -- you know, as reported, for going to them and saying, explain this, explain what Rudy said, explain what the truth is.

They kept referring back to Rudy's --

HENDERSON: Yes --

SHEAR: Appearances, right? Sarah Sanders, when -- I mean, how many times did she say, when we asked her for questions yesterday --

MICHAEL BENDER, WALL STREET JOURNAL: Because she wasn't in the loop.

COLLINS: Right!

KING: This was a deal hatched between the president and Rudy and the president is apparently unhashing it.

SHEAR: But if the president thought yesterday that Rudy had gotten his facts wrong, then why didn't he tell --

KING: Right --

SHEAR: Sarah Sanders then that, you know, let's go out and clarify this stuff --

KING: And part of that is because of the headlines today --

COLLINS: That's right --

KING: From let me say real lawyers, not TV lawyers saying that by doing this, they may have exposed the president wither to an FEC violation, if there was a conscious effort to do this to help the campaign, you have to disclose it.

As a --

(CROSSTALK)

Essentially owed Michael Cohen money for legal services, it's supposed to be on his financial disclosure form. Now, I thought yesterday, watching this play out, I was in Indiana covering the Senate primary, I thought, OK, there's some bigger goal they're trying to achieve by taking a smaller hit like an FEC violation or a financial disclosure violation -- apparently not? HENDERSON: Yes, I mean, one of the things you know with the president

does is watch a lot of TV, and if he's watching TV yesterday, even "Fox News", the reviews of this rollout and this strategy that was supposedly hatched by the president and Rudy Giuliani, the reviews were terrible.

Laura Ingraham was like, this is a problem. Neil Cavuto had a whole editorial about -- if this is a president who is supposed to be draining the swamp, he's actually muddying it and contributing to the chaos.

I think that is part of the reason why he's coming out now because the reviews from friends and foes alike were not good in terms of the politics --

KING: Right --

HENDERSON: Of it or the legality -- the legal part of it.

KING: To that -- to that point and I want to talk the legal issues and the political issues. But to that point, the president using a safe haven on "Fox News". Rudy Giuliani made this news, stunning, yes, the president's other lawyers.

Rudy Giuliani did this apparently with the president's blessing, although now the president is trying to unhash it, stunned everybody, to your point, Sarah Sanders didn't know about it, other people at the White House didn't know about it.

Listen to Neil Cavuto, again, this is normally a safe haven for the president of the United States, and even on "Fox News", they say, Mr. President, we can't believe you.

(BEGIN VIDEO CLIP)

NEIL CAVUTO, FOX NEWS HOST: So let me be clear, Mr. President, how can you drain the swamp if you're the one who keeps muddying the waters.

Again, didn't know about that $130,000 payment to a porn star, I think you did. I'm not saying you're a liar, you're a president, you're busy, I'm just having a devil of a time figuring out which news is fake.

Let's just say your own words on lots of stuff give me, shall I say lots of thoughts. Your base probably might not care, but you should. I guess you're too busy draining the swamp to ever stop and smell the stink you're creating.

That's your doing. That's your stake.

(END VIDEO CLIP)

KING: Amen.

COLLINS: Yes -- KING: Amen, and that is sad, you know, sometimes I go after "Fox

News" for I think sometimes here when the president says down, and he's clearly up.

And he says left and the facts stay right, I go after them, Amen. What the president is doing here is -- I don't know the goal. Is it just -- on Air Force 1, he said he didn't know nothing about the payment.

Rudy Giuliani goes on TV and he says he knew everything about the payment and he paid Michael Cohen for it. Rudy Giuliani says -- he went on national television and said the president lied on Air Force 1, on the symbol of America's democracy, the president lied and I'm here to fix it.

I assume that was being done for a reason. Sometimes that happens, I went to the Clinton White House, they had to do that on occasions. And listen, I thought it was being done for a reason, the president today saying --

BENDER: Yes, and I think that's kind of a reaction again today inside the White House is that, there isn't a lot of response to what -- to clarify what statement this is going to be, what the topic is.

So the -- so some of the confusion we saw from the podium yesterday in the White House, that hasn't been resolved 24 hours later, which is telling in itself.

I think there's some confusion, that confusion continues with Mr. Trump's own team, and you know, this is at a time when --

KING: Yes --

BENDER: We have rapid developments in the Stormy Daniels case, right? There are -- this summit is decided, right? I mean, the president said today that he has a date and time, pretty high stakes meeting there, and the Mueller investigation.

I mean, this is a moment of real consequence in the presidency, at the same time, we see a lot of confusion more than usual within his own cabinet --

[12:10:00] KING: And listen to his own counselor Kellyanne Conway make her way at the White House driveway today. I want you to listen, this sounds funny on the other side, again, there're both political and legal reasons why this answer is important.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Kellyanne, when did you first learn that the president had reimbursed Michael Cohen for that pay-up -- payment made to Stormy Daniels?

KELLYANNE CONWAY, COUNSELOR TO DONALD TRUMP: I have no comment on that. UNIDENTIFIED FEMALE: You -- did you know about it before, Sarah?

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I never heard about that during the campaign. The campaign manager right across my desk --

(CROSSTALK)

UNIDENTIFIED FEMALE: Did you know about it last year in the White House?

CONWAY: I did not.

UNIDENTIFIED FEMALE: Did the president make (INAUDIBLE).

CONWAY: The president sent out three tweets on the matter.

(CROSSTALK)

UNIDENTIFIED FEMALE: Wait, can't the president be honest?

CONWAY: The president is very honest.

(END VIDEO CLIP)

KING: Says the president is very honest I think --

HENDERSON: She might be real on one who's ever said that.

KING: Yes, the president is not honest about these things, he's not transparent about these things. But Kellyanne Conway, in her defense, she was the campaign manager.

If this stuff was going on and it was done deliberately to help the campaign, she is liable as an executive in the campaign for the reports that are filed.

COLLINS: That was me questioning her. I didn't ask if she knew about it during the campaign, I asked if she knew about it when she was in the White House.

So she volunteered that answer on her own after saying she wasn't going to comment on it. She did comment to say I didn't know about this during the campaign.

So definitely this is -- so, and we're seeing that from everyone in the White House. Privately, staffers are telling themselves, frustrated they are, they feel like throwing the dart.

Rudy undermines everything they were working for, Rudy who doesn't work in the White House, but we see it is all coming from the president himself.

He spoke with Rudy before that interview on Sean Hannity. He spoke with him after Rudy said that the president was not upset about anything he said, and then today the president comes out and he's like, well, he just got started.

He was hired two weeks ago, he doesn't know all the facts, he's still learning the subject matter, all of this confusion is being blamed on people at the White House, people outside the White House like Rudy Giuliani, but it is coming from the president.

KING: Right, and the president said Rudy Giuliani -- now, that's a punch back, at least politically, we thought there were some legal strategy there as well. We're waiting Mr. Mayor, for your statement, the president says you have for us to clear all this up once and for all.

I'm sure that's coming sometime today. A quick break, when we come back, the president also went after the special counsel today more significantly, so did a federal judge in court.

We'll have that story in just a minute.

[12:15:00] (COMMERCIAL BREAK)

KING: Welcome back. Some important news about the special counsel investigation. First, a political attack again from the president this morning outside the White House.

But then a short time later, sharp legal questions from a federal judge in the court case against the former Trump campaign Chairman Paul Manafort.

The judge questioning the authority whether the special counsel was in a broad overreach of his mandate trying to pressure Mr. Manafort. Shimon Prokupecz joins us with the highlights from that. Shimon, what did the judge say and how significant is this?

SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: John, a pretty stunning development here, in that the judge really challenging the special counsel, the prosecutors in court there today.

This was a hearing brought by Paul Manafort's attorney seeking to dismiss some of these charges, and really stunning words from the prosecutor here, Judge Ellis.

He is known to be somewhat conservative in the Eastern District of Virginia. And let me just tell you, get right to what he said here, and here's how it went.

Basically the judge in response to something the prosecutor had said, told him, you don't really care about Mr. Manafort's bank fraud case.

Bank fraud prosecutors, the -- basically saying that prosecutors were interested in Manafort because of what he could provide that would lead potentially to Trump's prosecution or impeachment.

That's what you're really interested in, the judge said to the prosecutor. And then he went on to really say -- kind of review what Manafort's attorneys have been arguing all along, in that this case had nothing to do with collusion or Russian interference in the election.

And here's what the judge had to say about that. And this was also in response to an argument from the prosecutor. And the judge says that "none of that information has to do with information related to Russian government coordination and the campaign of Donald Trump."

Now, John, as you know, Manafort's attorneys have been arguing this point since this case was brought, saying that this had nothing to do with the Russia investigation, that this was an overreach by the special counsel.

But of course we know that the special counsel was granted permission by the Department of Justice, by Rod Rosenstein in that memo. All of this is not -- does not give us any indication on how the judge is going to rule.

But certainly from a political perspective, these are some choice and interesting words from the judge who just said this, you know, a short time ago in court in the Eastern District of Virginia.

KING: And I suspect we'll be hearing them soon, the judge being quoted by the president's political allies. To make that point, Shimon, thanks for the reporting.

Now, let's bring in Cnn legal analyst Michael Zeldin. Michael, you have experience with special counsel investigations. I want to read you one more quote from this judge.

"We don't want anyone in this country with unfettered power, it's unlikely you're going to persuade me the special prosecutor has the power to do anything he or she wants."

Is that in your view, this is a regular point to hear conservative judge, does this raise the pressure on Bob Mueller essentially to, you know, move this case faster if he's starting to face skeptical judges.

MICHAEL ZELDIN, CNN LEGAL ANALYST: Well, it's hard to tell. This is a motion to dismiss the indictment on overreaching his mandate. But as Shimon reported on August the 2nd, the Justice Department gave Mueller this expanded mandate when he asked the Justice Department what do you want me to do with this case?

[12:20:00] So in some sense, the judge's complaint should be directed at the main Department of Justice to say why did you give this aspect of the case to Mueller when it seems untethered to the Russia investigation, you should have done what you did in New York and give that to the (INAUDIBLE) of New York.

That all said, it has political, you know, sort of legs, but I don't think it has legal legs unless the judge says that Rosenstein lacked the authority under the regulations to expand Mueller's mandate.

So I think, you know, it was not a good day from a political optic standpoint, but I'm not sure that the judge has legal standing to dismiss the indictment on the basis of his, you know, sort of political belief that prosecutors need to be closely tethered to a mandate more so than Mueller seems to be, in his estimation.

KING: And let me ask you quickly on another issue but it's related. The president made it pretty clear today he's not going in voluntarily to talk to the special counsel.

If you're Robert Mueller, I know you're pursuing a legal investigation, and I know about his integrity and his credibility. However, this is the president of the United States -- if the president is making clear he's not coming in voluntarily, and your end decision would be to issue a subpoena, should he get about that business sooner rather than later?

ZELDIN: Well, I think that it's not foregone, John, that they are not going to reach some accommodation on a voluntary interview. Because I believe that the lawyers representing Trump -- not Giuliani, the real lawyers representing Trump understand that the law favors the interview.

The grand jury --

KING: Right --

ZELDIN: Subpoena probably would be upheld. So I'm not sure that they want to take that fight and lose it, so they may still try hard, flood and the two rancid attorneys, they may still try hard to reach some accommodation which is narrowing scope, narrowing duration.

So yes, I hear what the president said today, but I'm not sure that's outcome determinative of what will be the final decision.

KING: Michael Zeldin, I appreciate your insights. So let's come back into the room here, we're talking about Bob Mueller here, while we've been talking, we -- in the previous, we all talked about Rudy Giuliani, the president saying he's going to issue a new statement.

Josh Dawsey of the "Washington Post" tweeting out, he spoke to Giuliani, he said "Giuliani confirms he would be issuing a new statement. It's a question of misinterpretation. He says of the president, he said, he loves me.

OK, yes --

BENDER: That doesn't --

HENDERSON: Yes --

BENDER: Clears anything --

KING: Yes, and that doesn't --

HENDERSON: Yes --

KING: It doesn't clear anything up, which may be the strategy --

BENDER: Yes -- KING: Is to just keep things confused, I'm not so sure. What do we

make -- let's start with -- none of us were in the courtroom, so we have to be careful.

But a federal judge looking at a special counsel's team and saying essentially, I'm a little worried, you guys are using your power to be over zealous in prosecuting Mr. Manafort, hoping you can flip him on the president of the United States.

We need checks and balances, and whatever your political views at home, you want judges asking these tough questions. Are we sure we're doing the right thing here?

Are you sure you have a real case? Are you sure you're not using your power as a lever against Mr. Manafort? To Michael Zeldin's point, there's a legal argument, the lawyers can make those better than any of us at the table.

It does show you, though, that Mueller has to produce, right?

BENDER: Yes, and I think at the very least, you sort of hinted at this before is that we're going to see this from the president's allies --

KING: Right --

BENDER: Not Trump itself, right? This is where the president is good at saying no collusion, a point that he's brought up a couple of times.

But I do think that as much as we've -- as much as the confusion that Giuliani has sewn around a number of issues in the last few days, it does seem to me that, that one strategy he has is probably to undermine the Mueller investigation, which has been the Trump's MO for a while.

But what he's been doing is sort of using the North Korea summit and some of these other to juxtapose it against the Mueller investigation --

KING: Right --

BENDER: We've seen that from the White House too --

KING: I've got work to do.

HENDERSON: Yes --

KING: This is, you know, I've got very important work to do, what are you doing?

BENDER: This is a guy that is --

KING: Right --

BENDER: Basically all but won the Nobel Peace Prize versus someone who wants a silly deposition over a case we know nothing -- that the Trump campaign was, couldn't have colluded with Pennsylvania.

That sort of messaging is coming from Giuliani and a little from Sarah yesterday at the podium.

HENDERSON: And the longer it goes, you imagine, all the public starts to go along with Donald Trump, and some of the ways you've seen are some of the polling particularly among Republicans are more and more skeptical of Mueller.

And you wonder if the same thing will happen with the broader public. The strategy does seem to be through a lot of mud on everybody, really. I mean, and you saw him do that today when he talked about Mueller basically being a Democrat who worked for Obama for eight years and the people around him being angry, Democrats, and why would he go in and sit down and talk to angry Democrats who are just throwing mud on everybody.

It would be pretty hard for the public to tell --

COLLINS: And neither, doesn't start through either.

HENDERSON: Right ---

COLLINS: Robert Mueller is a Republican and he was not in the Obama administration for four years, and he also was in the Bush administration four years before that.

KING: Right --

HENDERSON: Yes --

KING: There are -- there are some people on Robert Mueller's staff who are registered Democrats. There are some people on Robert Mueller's staff, apparently a couple who were going to go to the Hillary Clinton "victory celebration".

[12:25:00] Those are facts, but they're also career prosecutors and public servants who have a right just as the Republicans serving in government have a right to their own lives outside of government.

But the president uses this -- he has no evidence that they've done things -- you know, prove they're bias is my point.

BENDER: Right --

KING: If you can prove that they're bias, prove it, don't just start out high, you're a Democrat, therefore you're angry and again --

SHEAR: But let's remember that there's historical precedent to this. I mean, you remember Monica Lewinsky --

KING: Right --

SHEAR: The Clintons did very much the same kind of thing --

KING: Savage, can start (ph) -- SHEAR: Right, and the strategy of doing a public opinion strategy

while the legal process is marching forward with something that the Clintons practically invented during that whole thing.

It's not surprising, it shouldn't surprise anybody that some judges are going to push back a very powerful special counsel.

That doesn't mean that the law is pretty -- that it is a pretty powerful law and then President Clinton found that too, that his -- for all the public relations that he did and for all the legal fire power that he had, he still ended up having to sit down for the deposition and he still had to face the legal power that can start --

HENDERSON: And he still got impeached --

SHEAR: And still got impeached.

HENDERSON: Right --

SHEAR: And so, you know, we shouldn't treat this as something radically new, but -- and we should look to history to see where this is probably headed.

KING: Right, and as this all plays out, and we're waiting for the clarification on the Stormy Daniels matter from Rudy Giuliani -- you heard Michael Zeldin say he's not sure the president has made up his final mind yet about the decision.

When the president listens to his friends out there politically, here's Mark Levin, they say do not sit down with Robert Mueller, and they prefer that he would just fire him.

(BEGIN VIDEO CLIP)

MARK LEVIN, RADIO HOST: Let me be clear, the constitution is on the president's side. Embrace it. Kiss it. Use it. Run with it. Take the information from the Department of Justice.

Litigate it -- you don't even have to hurry. Take your time, get it to the Supreme Court, show the Supreme Court the kinds of questions that Mueller wants to ask. He needs to protect not only himself but the office of the presidency and separation of powers or no future president is going to be able to escape this.

The system would have been changed forever!

(END VIDEO CLIP)

KING: I think the Nixon and the Clinton presidents will challenge Mark Levin's legal analysis there. But that's more of a political statement because they don't want the president going anywhere near this special counsel.

BENDER: Right, and their theory, that strategy there is to kick -- is to make the political argument, to focus on the political strategy here -- KING: Right --

BENDER: You know, right like the Bannon strategy here of fire everybody --

HENDERSON: Yes --

BENDER: Create a constitutional crisis on purpose in order to -- in order to continue to muddy the waters. The problem with -- one problem with that is what's happening in New York with the Michael Cohen piece.

That is -- that is already separate from any constitutional crisis that the president can create in Washington D.C., so it's a strategy I'm not sure that it's -- will be like -- it necessarily will be the most --

HENDERSON: And just in time for the mid-terms, right? A perfect strategy --

BENDER: It's definitely --

KING: Right, or you have to -- you have to -- you have to watch the base Mueller investigation, you have the New York base criminal investigation, you also have what some people thought originally was just a sort of a, you know, a civil suit by Stormy Daniels.

So one who cares, but now again, the more they -- the more they muddy the waters and change their stories, the more standing Michael Avenatti has to go into court and say, we need to sit the president down to get to the truth.

And so this is going to go on and on and on. Which brings me to this point, we're talking about this because the president is talking about this on a day with the employment rate was reported below 4 percent for the first time in nearly 20 years.

So why aren't Republicans happy?

(COMMERCIAL BREAK)