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Trump To Nominate Jeffrey Rosen As Deputy Attorney General; Barr Acknowledges Increased Scrutiny On Dept. Of Justice; Gillibrand Responds After Ranch Dressing Incident; Maryland's GOP Governor Mills Challenge To Trump; Judge Grant Request To Push Back Cohen's Jail Date; Trump Admin. Cancels $1 Billion In Funds For California Rail Project. Aired 12:30-1p ET

Aired February 20, 2019 - 12:30   ET

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

[12:30:00] MOLLY BALL, NATIONAL POLITICAL CORRESPONDENT, TIME: Door number two is, just like you say, he, you know, follows the letter of what he believes he should be doing. He does not quash the investigation or interfere with it in any way and that inevitably makes the President mad. I don't think there's any middle ground. I don't think he's going to, you know, go to the White House, sit the President down and somehow just convince him that this is the way things got to go. It's just very simple, I think, for the President. If this investigation is going on and it's going where it's been going, he doesn't like it.

JOHN KING, CNN ANCHOR: And we're talking about the Mueller investigation, but there's also, as we'd just discussed in the previous conversation, the Southern District of New York which has an investigation into Michael Cohen that is expanded into the hush money payments from the President -- potential campaign finance violations. Looking at the Trump organization, a separate Federal investigation into the Trump inaugural committee -- an Attorney General would have the power to say shut it down. There's no indication Bill Barr will do that which, again, I ask the question, when comes the tweet.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Yes, I think, there's two natural triggers. It's when the Mueller report is filed and the Mueller report is sent to Capitol Hill and how much of the Mueller report is sent to Capitol Hill. We're still kind of waiting to see where the Justice Department goes on the regulations on that. That would seem to be a natural point or tension the President might be frustrated about and the fact that SDNY for decades has been its own little private island that the Attorney General rarely has that much control over and therefore Bill Barr probably isn't going to try and exert control over that too.

Those are the two points of tension. And I think the interest in part -- you made the point about the testimony. When you talk to Democrats and they're being candid including Democrats who voted against Bill Barr, they acknowledged. This was probably the best that they could do in terms of having somebody on top the Justice Department.

The other thing is, the deputy attorney general is not supposed to be somebody that anybody knows who they are. Traditionally, had Jeff Sessions not recuse? Nobody would have known who Rod Rosenstein is. I think Rod Rosenstein's made that joke in the past and because Bill Barr will not be recuse he will likely be the primary target of whatever the President is frustrated, not Jeffrey Rosen. So I think it'll just be interesting to playout but I do think that those are probably the most likely triggers when the President starts to get frustrated.

KING: And here is now Senator Richard Blumenthal now, a Democratic senator fighting with the President all of the time. So consider the source but, since," William Barr has been Attorney General before but no Attorney General in our history literally has been under a President who has such contempt for the rule of law, the judicial process and law enforcement generally. It's buckle in because it's going to be a wild ride, Mr. Barr, you ain't seen nothing yet."

That's from a Democratic senator. Let's see on with this some, reason to understand that because of how the President treated Jeff Sessions and Rod Rosenstein. Bill Barr, kind of touches on this diplomatically in his first big memo to Justice Department employees.

The department has faced every increasing scrutiny from all quarters as news cycles have shrunk from days to hours to nanoseconds. And the Attorney General remains responsible for ensuring the Department's employees -- he goes out in the same bubble, work with utmost integrity, with that first sentence from all quarters.

That seems to be his way of saying I know before I got here, you've all been taking harpoons all of the time. I'm with you now.

TOLUSE OLORUNNIPA, WHITE HOUSE REPORTER, THE WASHINGTON POST: Yes and he realizes that the President's Twitter feed can put the laser on the department as it's been doing from the pasts couple of years and it could end up demoralizing workers in the Justice Department who have had to deal with the President saying, you know, the Justice Department, it was corrupt. There were all these Obama appointees and everyone who has been investigating me, and my inaugural committee, and my family and my organization, and my campaign are all just part of the deep state just trying to come after me and harass me and he use the words presidential harassment.

So, Barr has the dual challenges of making, you know, making sure that he stays on President Trump's good side while also making sure that the thousands of workers in the Justice Department do not see him as sort of the President's like here (ph), someone who's just working to protect the President from what are, you know, valid investigations into multiple areas of President Trump's life.

KING: And Rosenstein just hanging around for about another month, I think, to help with the transition so he brief the month with this all. Feels like when the incoming Coats (ph).

Up next, some quick updates. Important updates on the 2020 race and while Senator Elizabeth Warren, get this, sharing a late-night spotlight with 50 Cent.

(BEGIN VIDEO CLIP)

JORDEN CORDEN, THE LATE LATE SHOW HOST: Ma'am and you're a big 50 Cent fan?

SEN. ELIZABETH WARREN (D), PRESIDENTIAL CANDIDATE: Oh, absolutely.

CORDEN: Are you more -- are you more into tipsy or are you a classic in the club?

WARREN: In the club.

CORDEN: You're in the club. Of course you are.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[12:38:38] KING: Topping our political radar today. Republican Senator Susan Collins, and a message to the White House expressing support for Dan Coats. He's the national intelligence who according to a confidant of President Trump, might soon lose his job.

Senator Collins calls Coats, "A leader of integrity who's always served our country well".

Coats, you might remember contradicted the President in recent testimony before Congress is one factor that reportedly has put his job in jeopardy.

John James who ran for Senate in Michigan unsuccessfully as a Republican candidate is out pitching himself now for a prominent vacancy in the Trump administration. According to a source close to the White House, the President is considering James for the post of United Nations Ambassador. James making clear, offer me the job Mr. President and I'll take it.

(BEGIN VIDEO CLIP)

JOHN JAMES (R), FORMER MICHIGAN SENATE CANDIDATE: It's an honor to be considered for the U.S.-U.N. mission. I believe that having somebody with a business background who understands how to bring a lean management approach, reforms and business practices to make the U.N. run better, also a combat veteran who understands the consequences of war.

UNIDENTIFIED FEMALE: Sounds like you want the job.

JAMES: Of course, I do.

(END VIDEO CLIP)

KING: The Government Ethics Office is rejecting Wilbur Ross' financial disclosure form. The office says the commerce secretary violated his ethics agreement by reporting he'd sold stock held in a bank when in fact he had not done so. Ross' released statement saying he had thought the stocks were sold and once he realized his mistake he then did sell them.

Democratic Senator Kirsten Gillibrand will be in Texas today and tomorrow talking about health care, public education. This is her first visit to Texas since jumping into the 2020 Democratic Presidential race.

[12:40:08] Meanwhile, the senator now responding to that now internet famous ranch girl. A college senior named Hannah Kinney who brushed past Senator Gillibrand back far in Iowa looking for dressing.

(BEGIN VIDEO CLIP)

SEN. KIRSTEN GILLIBRAND (D), PRESIDENTIAL CANDIDATE: I don't think you should back away from those ideas that the debate and the grassroots care about.

HANNA KINNEY, SENIOR AT THE UNIVERSITY OF IOWA: Sorry, I'm just trying to get some ranch.

(END VIDEO CLIP)

KING: Senator Gillibrand says she's learned her lesson. Two important things I know about Iowa, the caucus-goers are engaged and wonderful and never get between a Midwesterner and their ranch. Pizza's on me during the next trip to Iowa City, Hannah Kinney.

Maryland Republican governor seen as the potential primary challenger to President Trump in 2020. Governor Larry Hogan is a vocal Trump critic and told CBS News, he thinks the President is, "Pretty weak in the general election". When asked if he would jump in and challenge Trump in 2020, Governor Hogan said this--.

(BEGIN VIDEO CLIP)

ED O'KEEFE, CBS NEWS CORRESPONDENT: Are you thinking about running for president in 2020?

LARRY HOGAN, MARYLAND GOVERNOR: I was just sworn in a month ago for my second term and might get a lot of work to do here in Maryland. I would say, I'm being approached from a lot of different people and I guess the best way to put it is I haven't thrown them out of my office.

(END VIDEO CLIP)

KING: What we want to talk about here, the Hogan threat, if there is one to President Trump or Phil Mattingly's pizza habits about the ranch. Ranch on pizza?

MATTINGLY: Look, I'm right and that's all that matters and just because everybody at this table doesn't agree with me doesn't mean that I'm not right which is the only way you should ever approach anything in life.

Look -- pizza Ranch is good guys. I'm from Ohio.

KING: OK, all right.

MATTINGLY: The Larry Hogan thing is actually very interesting. I think if you look at the polling and I think when you talk to Republicans, you watch other Trump campaign for 2020 has ramped up. You wonder where the window is. Obviously, there is a small number of disaffected Republicans but it remains a small number. And people look at the top line approval ratings like Larry Hogan noted in that interview and says, the President looks weak here. Maybe there is an opportunity.

But, I've yet to see the clear pathway for an opportunity. That said as, you know, is I've heard from many people who said they've been reaching out to him. They want another option there. But the question is would it be to play spoiler or would it be actually to win?

BALL: Well and if it is a place where there is already somebody there. There already is a Republican challenger in, Bill Weld. So if you're just looking for a name to be on those ballots in the primaries just to prove that there's another option, there is somebody. He's got to think that he actually has a chance and to your point, the path is hypothetical at this point. The idea has got to be that the political calculus is going to change based on unforeseeable events.

KING: Right. Do you think lightnings going to strike or you trying to make a statement about the post-Trump Republican Party? There are different ways to do it. But, we'll see they have to actually get in before we can answer that question.

Up next, the Trump administration picks a $1 billion fight with California.

(COMMERCIAL BREAK)

[12:47:09] KING: New news just in to CNN, former Trump attorney and fixer Michael Cohen will be a free man for just a little longer. Today, a judge granting a new request for Cohen's lawyers to delay his surrender day to prison.

CNN's Kara Scannell has more. Kara, why did the judge sign off on this request and how long is Michael Cohen now free?

KARA SCANNELL, CNN REPORTER: That's right, John. So the federal judge in New York overseeing Michael Cohen's case has signed off on this agreement by Michael Cohen, or this request from Michael Cohen to the latest sentencing by 60 days.

Now, Cohen's attorney say that the prosecutors with the U.S. Attorney's Office in Manhattan did not object to this and they're requesting because they say that Cohen has some post-surgical physical therapy that he needs to undergo at the supervision from his doctor from that shoulder surgery which is why Cohen has delayed testifying at least before some of the committees on Capitol Hill. And they also said because he needs to prepare for these testimonies before the committees which he's supposedly going to testify before three committees on Capitol Hill by the end of the month. Now, Cohen has already delayed these testimonies. He was supposed to go and to see the House Oversight Committee and a public hearing as well how to behind the scene hearings with the Senate Intel Committee and the House Intel Committee. Those hearings have been postponed and delayed.

Now, Cohen saying he needed this extra time. The prosecutors are not objecting to this. They say one-time 60 days delay. So the judge has giving him until May 6 before he has to report to prison, John.

KING: Kara Scannell, appreciate that. I guess, now we can call Capitol Hill and so when you're going to schedule those hearings but there if it get you to the 60-day window to get them in there. Kara, I appreciate that news there.

A quick break, when we comeback, the President is in a new war of words with the governor of California. Is it about high-speed rail or is it really about the border?

(COMMERCIAL BREAK)

[12:53:22] KING: President Trump stoking a fight today on Twitter with the California's Democratic Governor. The President says this is about wasteful spending on high-speed rail. The Governor says, it's about something else to the something in a minute.

The Department of Transportation did announced yesterday, it is cancelling a nearly $1 billion grant in Federal funding for a high- speed rail system in California, that after good after Governor Gavin Newsom announced he's scaling back the project because of cost overruns.

The President on Twitter this morning demanding California, "Send the Federal government back the billions of dollars wasted". Now, it's a surprise decision to cut off funding to this infrastructure project. The governor says look at the timing. One day, after California joined with 15 other states to sue the Trump administration over the President's national emergency declaration at the U.S-Mexico border.

Gavin Newsom, the Democratic Governor says, it's no coincidence and he's getting back in the President's face. Fight between the two of them. Says the Governor, "This is clear political retribution by President Trump and we won't sit idly by. This is California's money and we are going fight for it".

To the substance in a minute and the politics here, if you're the Democratic governor, relatively new in office, picking the fight with the President is unpopular in your state, probably not bad politically, and if you're President Trump, you're not going to win California in 2020, picking a fight with the liberal Democratic governor of California, probably not so good for you either.

BALL: Yes, I mean, this isn't the first time that Trump has gone after California for exactly that reason. Now, if he's actually subjecting California to policies based on political retribution that's quite troubling but it certainly isn't the first time that any Republican politician has used California as a punching bag for, you know, the scary liberal governance that they stand against.

[12:55:04] KING: There is couple of issues here though in the sense that Newsom did scale back the project. So, is that an opening for the Federal Government to say, all right, you're going to scale back your project? We're going to give you less money?

ARIT JOHN, CONGRESSIONAL REPORTER, BLOOMBERG: Right, I mean, they've restricted -- this is supposed to be a high-speed rail that goes from San Francisco to L.A. Now it appears it's going from Bakersfield to Merced. So, Newsom tried to defend and in saying, oh this is Central California which needs the investment but this is going to be a problem in California. And then you factor in the Green New Deal and here in Washington, discussions of how do we reduce carbon emissions. How do we like change the way that we travel?

And is it -- the Republican argument has been, you know, this is expensive. You can't get the government involved in this and now we see in California which is supposed to be the leader of progressive policies, yes, high-speed rail was too expensive. It didn't work out. We had to scale it back.

KNG: And so to your point, is it political retribution? The President probably not helping the cause of Department of Transportation lawyers who would like to argue, now we're doing this on the merits. You scale back the project. You get less Federal money or you cost overruns. We don't like that. We can get less Federal money.

The President tweeting, as I predicted, 16 states led mostly by open border Democrats and the radical left have filed the lawsuit and of course the 9th Circuit of California. The state that wasted billions of dollars on their out of control fast train with no hope of completion, seems in charge.

So the President there linking the issues that I'm guessing the Department of Transportation would prefer not be put together.

MATTINGLY: Yes, I believe there's a three-page memo from the Department of Transportation giving the rationale for why they were pulling $990 some odd million in grants. The President often says the quite thing out loud where you're supposed to let other people connect the dots for you when you're trying to do something, he goes ahead and tweets about it.

I think the interesting thing. Two things, first up, the initial grant that the Department of Transportation pulling back is likely going to end up in a court fight. Keep a close eye on the California delegation which is very large and the United States Congress has a lot of Jews particularly in the House. There is a Speaker from California, couple committee chairs as well.

KING: And now the Republican leader in California.

MATTINGLY: I don't know if he's going to be enough on this one, but they will get involved and they can make life very painful for the Department of Transportation if they want to. The other thing is, there's already $2.5 million in grant money that's in use and there's been some murmurings that maybe that what the President is trying to say here is, they should go after trying deobligate that money. And how you would possibly do that, I'm not even sure what the mechanism would be.

But if you want real fight, pulling $1 billion in grant money is a fight, trying to pull money that's already in use for the project would be in a massive fight of that -- my proportions which should be really interesting to see for a President perspective how everything turns out.

KING: It is a tactic the President has been accused of using before. We'll show you some of political story from July 2018. I'm not going to read the whole thing but this is when there was a big spending bill planned and the President apparently was mad at Chuck Schumer. Now, the, you know, the Democratic leader in the Senate and wanted to kill this so called gateway project -- money for new tunnel for New York and New Jersey.

That President openly signed a deal. There was a back and forth about this. But, if again, if you're -- to Molly's point is the President do this, there are certainly some evidence in the past that this is the way he's done his business in the past. I get mad at you politically, I'm going to try to take your money.

OLORUNNIPA: Yes, the President has done the same thing with Puerto Rico. He said that, no, there's just Democrats down there and even the Federal Government shutdown. He said that, you know, all of the government workers are just Democrats. So, you know, we can keep the government shut down for weeks at a time.

So, this is something that the President is very vulnerable to this charge that he is using Federal dollars, taxpayer dollars with a political casual to, you know, attack people that he thinks don't vote for him or people that aren't part of his base.

KING: And there is a flip side. California is about as blue as you get and so the governor has not been shy about saying I don't like you, Mr. President.

(BEGIN VIDEO CLIP)

GOV. GAVIN NEWSOM (D), CALIFORNIA: You know, it's been a tough two years. To those agents of anger determined to divide us instead of unite us, it's time to pack it up and for you to pack it in.

We will offer an alternative to the corruption and the incompetence in the White House.

The answer to the White House, with all due respect, no more division, no more xenophobia, no more nativism.

(END VIDEO CLIP)

KING: We were just talking about the Trump potential political calculation here. He's got one too.

BALL: Of course, I mean it's funny, I just kept hearing in my head thinking of when Obama was president and you heard a lot of the same things from the Governor of Texas, right? Saying this is going to be our political identity is we're the opposite of what you see in Washington and so, you know, with the parties flipped that's California's role now.

MATTINGLY: And it's also to some degree what Republican Attorneys General did during the Obama administration with their lawsuits, you've seen Xavier Becerra in California who's also involved with the border wall lawsuit. It was done from the travel ban, the border wall on and on. You've seen a similar almost take the playbook from the Republican Attorneys General that can help you politically but it also can help push back against the administration on policies to disagree with.

KING: I think the playbook is a good way to put it because it worked in some of those cases, so they should make a political point. Sometimes you went in court.

Thanks for joining us today in INSIDE POLITICS. Have a great afternoon, don't go anywhere. A lot of breaking news still ahead, Brianna Keilar starts right now.

BRIANNA KEILAR, CNN ANCHOR: I'm Brianna Keilar live from CNN's Washington headquarters and underway right now, we begin with breaking news. We have the clearest indication yet that Special Counsel Robert Mueller is nearly done with this almost --