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Special Counsel to Lead Russia Investigation; New Report: Trump Knew Michael Flynn Was Under Investigation Before Inauguration. Aired 6-6:30a ET

Aired May 18, 2017 - 06:00   ET

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

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Everyone in this country should breathe a sigh of relief right now.

[05:58:48] JIM ACOSTA, CNN SENIOR WHITE HOUSE PRESS SECRETARY: Rod Rosenstein naming Bob Mueller as the special prosecutor in the Russia probe.

REP. JASON CHAFFETZ (R-UT), OVERSIGHT COMMITTEE: His credentials are impeccable.

UNIDENTIFIED MALE: It doesn't get any better than Robert Mueller.

NIA-MALIKA HENDERSON, CNN POLITICAL CORRESPONDENT: On January 4, Michael Flynn went to the transition team to tell them that he was under investigation for working as a paid lobbyist.

UNIDENTIFIED MALE: They knowingly brought in somebody who had access to almost every American secret and they knew was under federal investigation.

SEN. JOHN MCCAIN (R), ARIZONA: Another shoe drops now, it seems, almost daily.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: No politician in history, and I say this with great surety, has been treated worse or more unfairly.

(END VIDEOTAPE)

ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CHRIS CUOMO, CNN ANCHOR: All right. We want to welcome our viewers in the United States and around the world. This is NEW DAY. It's Thursday, May 18, 6 a.m. here in New York. Alisyn is off. Brooke Baldwin joins me. Thank you very much.

BROOKE BALDWIN, CNN ANCHOR: You got it.

CUOMO: You have brought breaking news with you. There is a lot of new information for the starting line. The investigation into Russia's election meddling now in the hands of a special counsel. Former FBI director Robert Mueller is the selection, creating rare agreement in Washington.

President Trump reacting to the news, vowing there was no collusion between his campaign and Russia. Deputy Attorney General Rod Rosenstein is going to brief the entire Senate today, the entire House tomorrow about the context and confines of the Russia probe.

Rosenstein's memo, why Comey should be released, helped to create the recent drama. Will the Mueller move help tamp it down?

BALDWIN: Now three separate congressional committees want Comey to testify about what President Trump told him, making him the most wanted man in Washington.

This as there are several new damning reports about fired national security adviser Michael Flynn that add to the crises facing the Trump administration.

We have it all covered for you this morning. Joe Johns, let's start with you there at the White House. Good morning.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Brooke. This is either a ray of hope for the Trump administration to finally put this thing behind them or it's the law of unintended consequences at work: How the firing of FBI Director James Comey could lead a top Trump administration official to name Bob Mueller, a towering figure in American law enforcement, to lead the investigation into Russian interference in the last election.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): The White House issuing a statement from President Trump, responding to the appointment of a special counsel. The president says, in part, "A thorough investigation will confirm what we already know. There was no collusion between my campaign and any foreign entity."

Deputy Attorney General Rod Rosenstein naming former FBI director Robert Mueller to oversee the investigation into Russia' election interference. Rosenstein signing the order before alerting Attorney General Jeff Sessions and only giving the White House less than an hour's notice before making it public.

The surprise announcement comes after mounting pressure for the deputy A.G. to appoint a special prosecutor after President Trump initially cited a memo Rosenstein wrote as the basis for why he fired James Comey.

TRUMP: He made a recommendation. But regardless of recommendation, I was going to fire Comey.

JOHNS: One source telling CNN, Rosenstein is throwing President Trump overboard with the special counsel, a move the White House opposed.

SEAN SPICER, WHITE HOUSE PRESS SECRETARY: There's frankly no need for a special prosecutor.

You have two Senate committees that are looking into this. The FBI is conducting their own review.

JOHNS: A statement from Rosenstein explaining, "The public interests requires me to place this investigation under the authority of a person who exercises a degree of independence from the normal chain of command."

The move follows back-to-back bombshells from President Trump, including a damning memo from Comey, where he documented private conversations with President Trump, in which he says the president asked him to drop the investigation into fired national security adviser Michael Flynn just one day after Flynn was terminated.

And today, more bad news for the embattled administration. "The New York Times" reporting that President Trump knew Flynn was under federal investigation for secretly working as a paid lobbyist on behalf of Turkish interests, weeks before the inauguration, and yet still named him as one of his top advisers, giving him access to the nation's biggest secrets.

Another report by McClatchy connects the dots even further, alleging that Flynn stopped a U.S. military plan that Turkey opposed. The plan was eventually restored after Flynn was fired.

(END VIDEOTAPE)

JOHNS: And what is the president really thinking about the appointment of Bob Mueller as the special counsel? We may have an opportunity to find out today. The president is hosting the president of Colombia here at the White House, and a news conference is scheduled this afternoon -- Chris and Brooke.

BALDWIN: All right, Joe, thank you. We'll take that live this afternoon.

In the meantime, Robert Mueller's appointment as special counsel is drawing rare unity among both Republicans and Democrats because of his sterling record and expertise. CNN's Laura Jarrett is live in Washington.

Laura, good morning.

LAURA JARRETT, CNN CORRESPONDENT: Good morning, Brooke.

Well, as you said, this is a person with a truly stellar reputation. He's widely respected both within the FBI and the Justice Department. He was appointed first back in 2001 by President Bush just before 9/11, and he is largely credited with rebuilding the modern FBI and transforming the bureau into a key part of the country's national security infrastructure.

But he also has bipartisan appeal. President Obama asked him to stay on at the helm for an additional two years beyond the normal ten-year term before James Comey finally took over.

But I also want to highlight. You know, he's really supposed to have autonomy to run this investigation in a way unlike other federal prosecutors. The special counsel regulations say he's not subject to the day-to-day supervision of any official within the Justice Department. And the regulations also say he can only be removed by personal action of the deputy attorney general, Rod Rosenstein, in this case.

So of course, hypothetically, the president could try to direct Rod Rosenstein to fire Mueller. I know there's been a lot of confusion about what exactly the rules are here. But it is really his decision on what to happen with this investigation from now on -- Brooke and Chris.

CUOMO: And I'm sure that Rosenstein is going to be very slow to take up any new assignments from Sessions or the president to write any memos advising anyone's ouster.

Thank you for the reporting this morning.

Let's discuss with our panel. CNN political director David Chalian; CNN political analyst Maggie Haberman; and CNN senior legal analyst Jeffrey Toobin.

Jeffrey, legally, what does special counsel mean, as opposed to a special prosecutor? And what does Mueller mean in terms of confidence in justice?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: You know, the nomenclature, the terms have solved over the years. Archibald Cox in the '70s was a special prosecutor. Then there was law that Congress passed called the Ethics in Government Act that created something called the independent counsel. Laurence Walsh in the Iran-Contra investigation, for whom I worked, was an independent counsel.

Now the -- the law has -- that law has expired, and there is a special counsel. But independent counsel, special prosecutor, special counsel. It all basically means the same thing. Someone outside the supervision of the Justice Department who can investigate an area that is very much their own.

CUOMO: I ask because some of the skepticism was if there is no crime, how do you have a special prosecutor and the A.G. trying to explain. No, this is to investigate, not just prosecute.

Exactly. And it is -- it is very clear that Mueller can conclude. There are no cases to be brought and, you know, close up shop. What's interesting and somewhat unclear at this point is how much public disclosure of his work there will be.

In normal circumstances when -- when the Justice Department investigates something and declines to bring charges, there's nothing. You never hear anything. What Mueller decides to do about that and whether he simply has no report or he makes a report, the independent counsel law which -- or the Walsh, Kenneth Starr was also independent counsel in the Whitewater/Lewinsky. He -- that -- there was a provision for a report. So that's something that I think we need to keep an eye on. BALDWIN: OK. So we found out a little bit of the tick-tock. We know

that the White House found out, what, within the hour, as Mueller was named this special counsel, and just to tell all of you this morning, this is -- this is the president's response.

And the quote, "As I stated many times, a thorough investigation will confirm what we already know. There was no collusion between my campaign and any foreign entity. I look forward to this matter concluding quickly."

In the meantime, I will never stop fighting for the people and the issues that matter most for the people of our country. I mean, these are the words are pretty much all we have, Maggie, from the White House. This is a man who has gone silent. You know, crickets on Twitter.

What do you make of this statement, and what do you anticipate this afternoon when he's at the White House?

MAGGIE HABERMAN, CNN POLITICAL ANALYST: Crickets are very welcomed by his staff, certainly. In terms of the statement, I think it was pretty clear. I think it was respectful. I think the tone was something that they had talked about. They needed something to be sort of calm and deliberative. I don't know how he's going to react, because as we know, with President Trump, he tends to have a reaction that evolves over time.

I think that he probably was a bit relieved yesterday, because I think they do believe in the White House that this gives them space. This lets them basically say, "We can't talk about this."

I mean, Sean Spicer's daily briefings behind the podium have just become sort of a tomato ball being thrown at him about Russia questions. I think they're happy to be able to say, "Look, we've answered this. We can't talk about it because of this work." We don't know what it means for the Senate investigation or the House investigation. I have no idea whether that gives them room for them to say, "We have to let the special counsel do their work."

I think that it is helpful for Trump mentally to have, and this will sound strange. But I think he likes having a focused single opponent. I think right now he has felt like he is getting it at all angles, and this actually crystalizes one thing to focus on. But he tends to double down or triple down.

BALDWIN: Which person is the opponent.

HABERMAN: I think Mueller is the opponent. You will see him under attack.

CUOMO: That would be a huge mistake.

HABERMAN: Correct. Correct.

CUOMO: For the president.

HABERMAN: Yes.

CUOMO: I hope that he understands that. Saying that he knows how the investigation is going to come out is wrong. It's inappropriate. He shouldn't do it. But these are Trump rules.

BALDWIN: Well, he mentioned to Lester Holt "this Russia thing," right?

Cuomo: Right.

BALDWIN: It's nothing.

HABERMAN: I mean, he said this for days.

CUOMO: Right. But this was a chance for a new start. It's a window into the fact that the president is not a victim, David Chalian. Everything that he's dealing with that's negative has been self- generated. Even this saying, yes, Mueller, that's great. He's not going to find anything. He didn't need to say that. It is a chance to say nothing going forward.

[06:10:04] And to Maggie's point, how much does Mueller's appointment as special counsel lower the temperature of concern around the White House?

DAVID CHALIAN, CNN POLITICS DIRECTOR: I think that it lowers temperature to a far greater degree for Republicans on Capitol Hill than it does in the White House. No doubt there is a sigh of relief at the White House also, for all the reasons Maggie stated, though I would go back and look at Mike McCurry's press briefings during Lewinsky and see that he stopped getting questions, just because there was an independent counsel. That was not the case.

So I don't imagine that this is going to go away as a question entirely. I think, in addition to the tone in the president's statement, Chris, which Maggie is right. It was sort of uncharacteristically noncombative. It was, although, he made focus that he has an enemy now or an opponent to focus on, he didn't do his "when I get hit, I hit back harder" yet. We will see if, indeed, that reaction changes.

BALDWIN: Why is this time so different, David Chalian? There have been so many opportunities, and there have been statements and mixed messaging and then there's the tweet the next morning from the president. Why is this different?

CHALIAN: Well, I think that Donald Trump is in a different place now, and perhaps he's getting different kind of counsel from lawyers that he's heeding in a way now because this new -- new procedure is up there.

I will say, though, Brooke, if you look at the statement and you listen to what is coming out of the White House, they are very focused on saying there was no collusion. Well, this investigation is not just about collusion anymore. That's -- that's where it started. But if you look at the Rosenstein announcement of this, it goes well

beyond that Mueller is going to be able to investigate any avenue that grows out of this investigation. So this isn't just to say that there's just no collusion, I think that really is limiting in its response. Because Mueller has a much wider berth than just that.

CUOMO: Jeffrey, how do you see it?

TOOBIN: Well, if there's one thing we know about these independent investigations, is that where they end is not necessarily where they begin. And of course, the classic example of that is the so-called Whitewater investigation by Kenneth Starr of a land deal in Arkansas wound up being about Monica Lewinsky. So things can go in many directions.

CUOMO: That is the concern. That's why they didn't like the legislation. That's why Congress didn't renew it when it went out in '98, '99. That was a big criticism.

TOOBIN: Among other reasons. But the key thing is it's up to Mueller now to define his jurisdiction. It's not -- it's completely out of the White House's hands. It's out of the Justice Department's hands. And that's a vulnerable feeling to be investigated by someone who has no limits on his jurisdiction.

CUOMO: True. It's never been just about collusion. I mean, one of the political problems for the president is that he's been denying the existence of Russia's interference. Because in his mind, it equated with him having done something wrong, him having been artificially installed as president, which was never the case in fact. But in his head, that's where it's been.

We've also never seen him on the canvas before. The president has been on the canvas this week in this fight that he's waging. And maybe -- what are you hearing about that, having created any kind of shift in perspective?

HABERMAN: It's an interesting point. I mean, you saw his speech yesterday in New London and Connecticut before the Coast Guard graduates, which was supposed to be -- typically is an uplifting speech. It's either about foreign policy or it's about sort of directional about the presidency. He gave what my colleague would Mark Leibovich call a "me-note" speech. It was really all a self-pity fest about how, you know, he was under attack and he had been treated more unfairly than anybody. That is how he sees this.

And to go back to the original question that you asked, I think that, while we have heard silence for the last 12 hours, I would not say that this is therefore the end of it; this is going to be the last we hear of him. He stews over these things, and he lashes out.

The big question is what this means for his mindset going on an international trip that he already wasn't really looking forward to, and it was already fraught with potential danger. I'm not sure what this means, you know, just day after day. I know they think this gives them distance. To David's point earlier, day after day of dealing with this.

Yes, this takes it out of, you know, whether there's a question of his own government investigating him and mishandling something. But it's not going to make anything end.

BALDWIN: Let's finish by talking about Rod Rosenstein, who is the deputy attorney general, who's the person who ultimately appointed Bob Mueller to lead this process and David Chalian, to you, I mean, Dana Bash had amazing reporting just on color from the senior Republican source, saying, you know, sources believe Rosenstein is throwing Trump overboard with this special counsel. He is to testify today at the Senate briefing and the House tomorrow. What do you expect from him today?

CHALIAN: Well, he clearly wanted to get this done before going up to the Hill to brief the Senate and the House members. Because now he can say, "Look, I've appointed a special counsel here."

Remember our reporting here at CNN last Friday night was that Rosenstein was disinclined still at that point to appoint a special counsel. Something changed from Friday night until Wednesday. That's a short time frame for something to change, but something clearly shifted. And Rosenstein also knows no doubt what a huge reputational hit he was taking with the whole Comey firing. And he is no doubt building back up or at least fortifying and building walls around his reputation, trying to rehabilitate a little bit.

CUOMO: Well, as Jeffrey Toobin has been mentoring all of us along in this process, the big reason for a special counsel is that there is an appearance of conflict. And it seems that there's a competing set of interests. If this doesn't define that as the situation, I don't know what does. Panel, stick with us.

Coming up on NEW DAY, we're going to talk about all of this and what is to come? This big foreign trip with some big guests. We've got Republican Congressmen. They're out of the woods. They're back on the show. Charlie Dent. Carlos Curbelo, Peter King. And we have Democratic senators Joe Manchin and Dick Durbin. We also have former secretary of state Madeleine Albright. You couldn't ask for a better task to give you the range of perspective on this move.

BALDWIN: So that's to come this morning here on NEW DAY. Also this new report claims President Trump's transition team knew Michael Flynn was under investigation weeks before the inauguration. So the question: why was Flynn still appointed to become national security adviser? What did President Trump know and when? We're going to dig deeper here on NEW DAY next.

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BALDWIN: There are several damning reports out today about fired national security adviser Michael Flynn. Pick up "The New York Times" this morning. Their reporting is that President Trump knew that Flynn was being investigated by the federal government before the inauguration.

McClatchy News reveals that Flynn stopped a military plan that Turkey opposed after being paid by Turkey as a foreign agent.

So let's bring back our panel. Maggie Haberman, Jeffrey Toobin and David Chalian. First, David Chalian, beginning with the warnings on Flynn, we learned recently that President Obama himself had warned Mr. Trump about Flynn. We know that Sally Yates had warned -- warned the general counsel and the White House about Flynn, potential blackmail opportunity with Russia. And now we're learning about this. Why, despite all of that, did Donald Trump hire him on?

CHALIAN: Right. So President Obama warned against this. And as you said, now we're learning that Michael Flynn told the transition, told Don McGahn in early January that he was under federal investigation for his work with Turkey throughout the campaign.

And yet, none of that was red flag enough to not be named his national security adviser. Sally Yates's warning, of course, comes after he already starts in that job and after the inauguration.

But -- but there were early warnings here. And that -- those weren't the only people. There were people in the transition operation that was set up during the campaign that were saying to, well, then- candidate Trump, you know, "I'm not sure Michael Flynn is the right guy for the White House. You may want to keep your distance from this guy." So the warnings were there.

And guess what? Listen to what Comey says in his memo that he says Trump was still saying after he fired him. We're now in the middle of February, long after these warnings. Hey, you know, let this go.

Mike Flynn's a good guy. He said publicly the day he was fired, the day he resigned that he talked about Flynn's character. Donald Trump has -- has seen in Michael Flynn, in his entire relationship with him, a loyal soldier who was with him, who was on the campaign with him. Stood up with him, always impressed by the general factor. And there was nothing -- no matter how many red flags -- that were swaying Donald Trump away from that opinion.

CUOMO: You know, two observations. The first one is the president, part of his learning curve is that his duty is to the people, not to the people that he likes around him.

Second, remember, Flynn has always said through counsel and friends, "I told them. They knew. I was open about what my situations were." Maybe he didn't disclose the money, but "People knew I wasn't hiding this." So remember that about Flynn on the ledger of him.

But Maggie, take us inside this reporting. What does this say about what was known but what was heard and acknowledged and respected by the White House?

HABERMAN: Look, it was heard and acknowledged and not respected. Right? I want to take it back a little bit as I was thinking about it when David was talking. Remember that Mike -- Mike Flynn was loyal, and that was his main category. Mike Flynn was considered for V.P. very briefly. Did very poorly on a Sunday show outing, which is what -- you know, a key factor for this president. And that was the end of that.

You have to look at a major moment that accelerated Mike Flynn. And that was when Chris Christie was sacked as the head of transition. Christie, and as I understand it, along with Jeff Sessions, had not recommended Flynn for any higher appointment. They thought he could do ODNY. He did not -- Flynn did not think that was up to his potential. He wanted the State Department. One other job, I think defense or national security.

And when Christie was gone, Flynn was able to push for those with the Trump family, with other members of the transition. And that is -- that was the accelerant.

So I don't actually know how much of this is Donald Trump personally saying, you know, "I've got to really be loyal to my guy," versus the advice that he was getting. But either way, you've seen time and again where the White House counsel's office has not taken the steps that I think we are used to seeing White House counsel take to say, "This is a problem."

Flynn telling the White House, "I'm under investigation for having registered as a foreign -- I've been a foreign agent for another government" and helping to kill certain proposals, as far as we understand it, from other reporting. That is enormously problematic. And it does make you wonder what else might come out as this starts being pulled out.

BALDWIN: What we are now learning from the McClatchy report that apparently, you know, right around the early days, the first move to take the ISIS stronghold of Raqqah would be, you know, using the Kurds, Syrian Kurds. And because Turkey apparently opposed that and, you know, Flynn was getting paid by Turkey.

CUOMO: And because Turkey has real concerns about the arming of the Kurds. There's a huge dispute that's been going on there for generations.

BALDWIN: Therefore, then President Trump opposed that move.

HABERMAN: Yes.

CUOMO: On the advice of Flynn.

HABERMAN: That is our understanding of it. That is all, I suspect, going to be part of what gets looked at as we go forward. But again, we know that this is a president who is often swayed by whoever he last talked to, whether he had the full information of exactly whose interests Flynn was acting on. It's not clear.

[06:25:06] But certainly, at that point, as we understand it from our reporting, about what Flynn had warned the White House counsel about the investigation into him because of Turkey, this should have been on somebody's mind.

CUOMO: Right. It's also a window into what the standard usually is. Right now, we're talking a lot about how, well, it wasn't a crime. You know, this is like the new standard of behavior in government. It's not. It's semblance of impropriety. The appearance of conflict.

Ordinarily, something like, well, I work for Turkey, but I disclosed it. Ordinarily, there's a huge red flag. Now, because it means you're a bad person or you're compromised, but it means people may think that you're compromised when the Raqqah operation comes up. You can be against it for a million good reasons. But that....

BALDWIN: Looking through the lens. Sure.

CUOMO: Isn't that the issue?

TOOBIN: Yes, it's just a question of judgment. How can you hire this person?

CUOMO: He's a good guy. He's a loyal guy. He likes me. He's got a great pedigree. He went against Obama.

HABERMAN: Those are his -- those are the things that Donald Trump looks for.

TOOBIN: This is the national security adviser. I mean, this is the most important job at the fulcrum of American foreign policy.

CUOMO: This is not Donald Trump. This is someone trying to tell you what they were thinking at the time. Perspective.

HABERMAN: Right. But this is one of the things we have seen with this president over and over, is that he's been very good over the course of his life and certainly the course of the campaign and the transition to bending reality toward how he wanted it to be. That becomes really impossible with a special prosecutor, the special counsel in place right now. And it is why you seen sort of the reaction that I think that you're having. I hear repeatedly about Trump. This is who he is so you can go back to the last time he did something like this or the tie before that. He's never going to change. And this is the way he views the world, through the prism of who is loyal to him.

CHALIAN: Can I make one more point, Chris, about Don McGahn now. I think this is really interesting. Don McGahn gets this warning from Flynn himself January 4 and says, "I'm under federal investigation."

And now after we heard Sally Yates in detail telling Anderson Cooper this week about her experience. So Sally Yates then three weeks later is in the White House sending up a flare about the same person to Don McGahn who clearly doesn't perceive it to be as urgent.

But it's not been the first time that sort of the red flag of Michael Flynn comes across Don McGahn's desk. And he still didn't think the Yates thing was so urgent enough. I just find that really interesting about how Don McGahn was perceiving this.

CUOMO: Well, key insight. You know, and it makes me think back to what Leon Panetta, former secretary of defense and other major posts said here. I said, well, what would you do in a situation like this? He said you go to the president and you tell him don't do this. This

is a problem. He says you're disloyal. You're out. Now what? He goes, "Then you leave." And your duty is to the Constitution, to the American people. That's the question that you have to ask, is what were people choosing as a priority? Staying in place, pleasing the president, or saying what they thought?

All right. Panel, thank you very much. All of the drama in the White House rattling Wall Street. Stocks took a dive. The dollar weakening. This had been known, this recent rally, as the Trump bump. Is it over, or is this just jittery nerves that may be corrected by the Mueller announcement? We have details ahead.

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