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Crisis Envelops White House; Comey Firing Sends Shockwaves through FBI; Acting FBI Director To Testify; Aetna Exits Obamacare; Rosenstein Threatened to Quit. Aired 8:30-9a ET

Aired May 11, 2017 - 08:30   ET

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

[08:30:00] GN. MICHAEL HAYDEN, CNN NATIONAL SECURITY ANALYST: Well, look, I'm instinctively opposed to special prosecutors and special processes when we face these kinds of problems. These things always seem to go longer, deeper and broader than you originally intended. But I must admit, the events of the last 48 hours, I now have a far more open mind about an extraordinary structure so that we can create something that we all can have confidence in when a final conclusion has been made.

CHRIS CUOMO, CNN ANCHOR: Last 48 hours? How about what happened with Devin Nunes? Him just showing up on the White House grounds and supposedly having a source and throwing a press conference, not telling his own commission? There's clear partisan bickering about everything. The silence from Ryan and relatively McConnell after something like this. You know, where is the confidence that Congress can oversee this? Where is the confidence that the FBI will be unfettered in reaching a conclusion?

HAYDEN: Chris, you know, when you look at that and some of the other events, you could create the hypothesis that the thread linking all of these is an attempt not to argue the facts on the part of the White House, but an attempt to destroy those other governmental structures that are discovering facts that the White House simply isn't comfortable with.

CUOMO: I mean, look, we know for a fact now that the president, on at least three occasions, either himself or had one of his agents, go to the head of the FBI and find out what was going on with him vis-a-vis the investigation. I mean that alone screams out that you need some kind of independence.

ALISYN CAMEROTA, CNN ANCHOR: And so, general, tell us, I mean what exactly - spell it out for us, what exactly are you calling for? What would that independent body look like?

HAYDEN: Well, look, there's a legal thicket that you have to hack your way through because the statutes that used to enable these kinds of things have expired. But I do think I am - look, my own personal view is I'm uncomfortable, as I said, with these kind of extraordinary structures. But we've reached a point where I think we do need something that all of the American people can have confidence in. And so I'll let legislators, maybe people in the Department of Justice, people in the FBI, suggest what kind of structure we need to have that right now I've got doubts that we'll have confidence in what we finally arrive at under our current circumstances.

CAMEROTA: General, always great to get your insights into this. Thanks so much for being here.

CUOMO: And the heavy words coming from General Michael Hayden.

CAMEROTA: Absolutely.

So James Comey's firing is said to be causing strife at the FBI. You think? Coming up, a former chief of staff of the bureau and our experts weigh in on what's going on inside the FBI.

Great to have you here.

CUOMO: People just walking in all over.

CAMEROTA: I know.

(COMMERCIAL BREAK)

[08:36:39] CAMEROTA: The firing of James Comey sending shockwaves through the rank and file of the FBI. This comes as the bureau's acting director is set to testify in this room before a Senate committee that starts at 10:00 a.m. Eastern. So we're following that.

Here to discuss is CNN counterterrorism analyst Phil Mudd and retired FBI chief of staff and supervisory special agent, James Gagliano.

Great to have both of you here.

James, what is the mood inside the FBI today?

JAMES A. GAGLIANO, RETIRED FBI CHIEF OF STAFF: Well, Alisyn, I'd say that the FBI agents are certainly down about this. And it's mostly related to the way that it transpired. I think if you look at the juxtaposition between the letter that the president sent to the FBI headquarters to announce his firing and the letter that James Comey sent out last night to my FBI colleagues that are still in the bureau, the juxtaposition was startling. One was full of grace, magnanimity and humility -

CAMEROTA: You mean the one from Director Comey.

GAGLIANO: Absolutely.

CAMEROTA: You thought it was filled with grace and -

GAGLIANO: Humility, absolutely. And then you juxtapose that with the letter from the president that appeared to be extremely self-serving in saying three times you met with me and stated I had nothing to worry about in regards to an investigation.

CAMEROTA: And what do you think about that? Let me just stop you right there because that's the one that people are having a hard time getting passed.

GAGLIANO: Sure.

CAMEROTA: Would the FBI director have met with the president to assure him that he was not the target of an investigation three times?

GAGLIANO: I find that highly unlikely. It's almost like the president's putting some type of exculpatory evidence inside the letter so that he come back and say, see, I said that you said this three times and you didn't rebut that. So in that instance, I think he is going to be able to use that politically. But what that does to the FBI, I think, the way that the director was sent out, I think FBI agents are universally - they're united in the sense of indignation we have over the way that our director was defrocked publically.

CUOMO: Phil, your thoughts.

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: Yes, I think that's correct. But let's make sure we're not confused here. There's a difference. And I've seen this confusion in the media over the past day. There's a difference in saying that this was a shock to the FBI. You can argue, and many of my FBI friends do, that the FBI director's actions over the last ten months, since July of last year, violated protocols. I've said that repeatedly. That's different than looking at an honorable man who led the FBI well in saying he was treated properly like the president. He was brushed off by the president in a completely unacceptable manner.

But the confusion I want to avoid, Alisyn, is if you think analysts and agents layers below the FBI director's office, involved in the Russia investigation today are somehow saying, I'm not going to follow the facts where they take us -

CAMEROTA: Yes.

MUDD: That's nonsense. They will continue.

CAMEROTA: Well, I am worried about that, Phil. I mean I am worried about that because that is the heart of the matter. But, I mean, I know that you're shaking your head. But when the man who is spearheading the investigation is, you know, summarily dismissed, then how do the rank and file know what they're supposed to be investigating and the direction they're supposed to be going?

MUDD: It's a question of leadership and the leadership I saw at the lower levels of the bureau was excellent.

One thing to watch, is the new director nominee going to be someone who's seen as a political hack who will act at the behest of the attorney general, or is it a seasoned practitioner, somebody I mentioned yesterday like John Pistol, the former deputy director, who they believe will take them where the facts go?

One thing nobody's mentioned, Alisyn, James Comey watched this for ten months since July. I guarantee that investigation has proceed a long way. He's getting at least weekly, if not daily briefings. It's - even if the investigation were to stop today, and it won't, the facts are eventually going to come out. You can't escape this one. [08:40:14] CAMEROTA: Yes, but hold on a second, James, I still don't

quite understand. If a political appointee or if somebody who is a friend to President Trump becomes the director of the FBI, then what's not to say that he doesn't say, you know what, this investigation into Russia, there's nothing there, you can all stand down.

GAGLIANO: Sure. I can't speak to who is going to be selected. I have some -

CAMEROTA: But that is a possibility. My scenario is possible.

GAGLIANO: Well, it's not in this sense. The folks underneath the director from the deputy director on down, they're career investigators and the career prosecutors at the Department of Justice. And you know how conspiracies work. You know, they never work unless there's only one person involved. It would get out into the press. It would be leaked. There's no way that somebody could come in now. Even a special prosecutor. If one is appointed, Alisyn, the FBI is still the investigative arm that will be handling the evidence and going in the direction that the evidence takes them.

CAMEROTA: OK. Got it. Both of your words are heartening. That is very good to know that you both have so much confidence in how it would actually work.

Andrew McCabe, the acting FBI director, I want to start with you, James, you know him well. So he's about to go meet in front of a Senate committee. What do we need to know about this person?

GAGLIANO: A man of the stoutest character. I mean many, many years ago he was a SWAT team operator when I led the SWAT team for the New York City FBI office. And I can't say enough good things about Andy. Whether or not the president elects to keep him on, I think in the history of the bureau, that has only happened a couple of times, when J. Edgar Hoover died, L. Patrick Gray was the deputy and assumed the position. It doesn't happen often. The president will usually find somebody different, somebody outside the bureau.

I got a couple of dark horses for you.

CAMEROTA: Go ahead.

GAGLIANO: Mary Joe White, who is obviously the former United States attorney in the southern district. Phil obviously mentioned John Pistol. He's got a relationship with Vice President Pence because they're both from Indiana and John Pistol could be one. And the third and my dark horse and a man that's universally revered within the bureau, Tim Murphy, who is retired. He retired as the deputy director. And is a man that I think is quite bipartisan and is - enjoys a lot of support on both sides of the aisle.

CAMEROTA: OK, we have to leave it there.

Phil, thank you very much, as always.

MUDD: Thank you. CAMEROTA: James, thank you for being here.

All right, another blow to Obamacare. Aetna pulling out of two states. So we will break down the insurance giant's move, next.

(COMMERCIAL BREAK)

[08:46:02] CAMEROTA: Time for "CNN Money Now." Another big health insurer is leaving Obamacare. CNN business correspondent Cristina Alesci is in our Money Center with more.

What's happening, Cristina?

CRISTINA ALESCI, CNN MONEY BUSINESS CORRESPONDENT: That's right, Alisyn.

Aetna is leaving Obamacare. Starting next year, the insurance giant will no longer sell policies on exchange in Delaware and Nebraska. Those were the last two states where it was offering these plans.

Some context here, Alisyn. Aetna has been scaling back for a while. And it's just the latest insurer to abandon Obamacare. Humana and United Health already left most markets. Look, these companies, they blame cost. For example, Aetna says it will have lost $900 million on Obamacare from 2014 through this year. That's because policyholders are racking up bigger bills than the premium covers.

Another big problem here, Alisyn, insurers want clarity. The program is already costing them and the current GOP bill removes a lot of the subsidies that help pay for lower income Americans. Bottom line, there are way too many questions left unanswered for these companies to do their planning.

Chris.

CUOMO: And those White House threats about whether or not they're going to put in matching funds is also creating some instability in the markets.

ALESCI: Right.

CUOMO: Cristina, thank you very much.

ALESCI: Yes.

CUOMO: So, the acting director of the FBI is going to testify before the Senate in just minutes. What can we expect to hear just two days after the president fired James Comey and America is craving confidence in the administration of justice. "The Bottom Line," next.

(COMMERCIAL BREAK)

[08:51:07] CUOMO: "The Washington Post" has a really troubling report that Deputy Attorney General Rod Rosenstein threatened to quit over the White House's narrative about his role in the firing of FBI Director James Comey. Alisyn spoke to the reporter behind the story just minutes ago. Here's what she had to say.

(BEGIN VIDEO CLIP)

SARI HORWITZ, "THE WASHINGTON POST" (voice-over): The president, in his meeting with Jeff Sessions and with Rod Rosenstein, laid out an outline of his rationale for why Comey should be fired and did direct them to file a memo.

CAMEROTA: So is it your understanding and reporting that Rod Rosenstein now feels sort of thrown under the bus?

HORWITZ: He - what I understand is that he did and he threatened to resign over this.

(END VIDEO CLIP)

CUOMO: He didn't resign, at least not yet. So let's get ""The Bottom Line" with CNN chief political correspondent Dana Bash.

I mean the reporting seems pretty clear with uncharacteristic volumes of leaks going on here that this was not happenstance and this was not a surprise to Donald Trump. It was at his urging. It was at his direction. So you could argue Rosenstein should have known what he was getting into. But how unsettling is this - you know, all of this feedback from this move by the president in the White House?

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Look, we knew from the moment the White House tried to sell this notion that it was Rod Rosenstein who decided that this firing should happen because of what happened in the Clinton years - I mean the Clinton e-mails. I mean we knew that that was just not even remotely believable.

But the fact that we are now hearing through "The Washington Post," and we have not confirmed this, but that Rod Rosenstein said he was going to resign, that leaves the question - and this is something that I'm hearing from my sources, people who know him and I -- we should say that this is not just kind of a political appointee. He is somebody who had credibility, a lot of credibility with Democrats because he was a career guy, is a career guy, worked for the Bush administration, also in the Obama administration. The question is whether or not he is still angry enough and still sees that his integrity is hurt enough and integrity I'm told is - I mean it's obviously important to everybody, but to him it is really crucial - whether he is going to come out and in a more public way say, I was duped, or at least tell the story of what happened because, obviously, it was not this deputy attorney general who decided that the FBI director should go and we know now, now that we've had time to do reporting, it was, of course, the president of the United States.

CAMEROTA: Dana, you're absolutely right, it would be really helpful to hear from Rod Rosenstein about all of this and -

BASH: And the fact that we haven't heard from him I think is quite telling.

CUOMO: Well, but he's also - I mean, look, he's the sitting deputy director.

CAMEROTA: Sure, and he's new. And, I mean, understood, but this is -

BASH: That's fair, but I - I can tell you from my reporting he -

CAMEROTA: Yes.

BASH: That the allies of the White House were encouraging them as soon as this whole thing blew up in their face to get Rod Rosenstein out in front of the press. And he didn't go.

CAMEROTA: You know -

BASH: Instead they sent Kellyanne Conway and others.

CAMEROTA: By the way, what was Jeff Sessions doing in these meetings? I mean the way the White House has spelled it out is that Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein were there and that they spelled out their concerns about Comey and then President Trump said, OK, put that in writing. But isn't Jeff Sessions supposed to be recused from these discussions?

CUOMO: No, but that's why they said it was about the Clinton thing because of his general role of oversight.

BASH: Right. Right.

CUOMO: The White House said that's why the A.G. would be involved.

BASH: Right, that it was beyond - that it was beyond the Russia investigation and the Russia investigation is what he was recused from.

CUOMO: Yes.

BASH: But let's - but we're talking in the realm of the real and the realm of the real sets the policy of, of course he shouldn't have been in these meetings. But that is all out the window given what we are even beginning to understood about what really happened here and whether or not it was about the Russia investigation, whether or not it was about the fact that the FBI asked for more resources and signaled to the White House that this is getting real and maybe even getting closer to the White House, or whether it was an attack on the president's ego and maybe his sweetest, sweetest spot, which is the integrity of his election when he watched James Comey a week ago testify and talk about being mildly nauseous at the notion of potentially changing the outcome of the election and making Donald Trump president.

[08:55:37] CUOMO: Right.

BASH: That is what I am told really made the president in - get into a humongous rage.

CUOMO: But now he's got a situation where he may have caused more trouble than he solved by getting rid of Comey. BASH: You got it.

CUOMO: And we just had some FBI - former FBI guys on here and they said, hey, the investigation will be fine. These are hard working men and women. The people in that agency, as you know and I know from working our sources, are worried that this will change everything.

CAMEROTA: Dana, sorry to cut you off.

BASH: You're good.

CAMEROTA: Thank you.

BASH: Have a great day, guys.

CAMEROTA: Thanks for "The Bottom Line."

CNN "Newsroom" with Poppy Harlow and John Berman will pick up after this very quick break.

(COMMERCIAL BREAK)

[09:00:03] ANNOUNCER: This is CNN breaking news.

JOHN BERMAN, CNN ANCHOR: All right, the breaking news this morning, live pictures from Capitol Hill where in just moments we will hear from the acting FBI director.