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The Situation Room

Jury Deadlock Forces Mistrial in Policeman's Murder Case; Trump Meets with Gore, Taunts China; China Warns Trump against 'Creating Troubles'; Trump's Daughter and Son-in-Law House Hunting in Washington. Trump to Continue Thank-You Tour in North Carolina; Police: Gunman Fired Multiple Shots in Pizza Restaurant. Aired 5-6p ET

Aired December 05, 2016 - 17:00   ET

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

[17:00:10] WOLF BLITZER, CNN ANCHOR: Happening now, mistrial. After days of deliberations, a Charleston jury gives up. They're unable to reach a verdict in the murder trial of a white police officer, who shot an unarmed African-American man in the back as the man was running away. The shooting was caught on video. Why couldn't the jury decide?

Thawing relations. Al Gore comes to meet with Ivanka Trump but spends most of his time with the president-elect. Did Donald Trump find common ground with the man who once predicted he'd cause a climate catastrophe?

True crime. Police say a man brought an assault rifle and fired multiple rounds inside a Washington pizza restaurant, because he believed conspiracy theories floating around on the Internet. Will fake news lead to real crimes?

And house hunters. CNN has learned Ivanka Trump and her husband, Jared Kushner, are looking for a home right here in Washington. But questions tonight about what role they'll play in the Trump administration.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: We're following breaking news. A mistrial just declared after a jury deadlocked in the murder case of former police officer Michael Slager. He was accused of murder for shooting Walter Scott in the back.

Even though jurors had the option of the lesser charge of manslaughter, they still could not reach a unanimous agreement.

We're also following new developments as president-elect Trump holds a sit-down with former vice president, Al Gore. Trump also is firing off new taunting to China, provoking a brand-new warning from the Chinese.

We're also following the investigation into a dangerous shooting incident at a Washington pizza restaurant. Police say the suspect told them he came to investigate a conspiracy theory he read on the Internet, a theory authorities label as fake news without a shred of truth.

Also, CNN has learned Ivanka Trump and her husband, Jared Kushner, they're house hunting in the Washington, D.C., area. Kushner is expected to play important roles in the upcoming administration, but questions remain about whether those roles could pose conflicts with government nepotism rules and the Trumps' business interests.

We'll discuss all of the day's developments with Congressman Darrell Issa. He's a prominent member of the Foreign Affairs and Judiciary committees. He's standing by live.

And our correspondents, analysts and guests, they will have full coverage of the day's top stories.

Let's begin with the mistrial in Charleston. An attorney for the family of Walter Scott, a man shot and killed by the police officer, Michael Slager, just now called it a missed opportunity for justice.

Let's begin with CNN's Brian Todd, who's covered this from the very beginning. What's the latest, Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, the latest is a statement from the lead prosecutor in this case, 9th Circuit Court solicitor Scarlet Wilson, issuing a statement just moments ago, saying, "We will try Michael Slager again."

And that is good news for the family of Walter Scott after such disappointing news just moments ago when we learned from the judge that there is a mistrial in this case.

You know, we were shocked on Friday, Wolf, when the jury was deadlocked 11-1. With 11, we were told, being in favor of convicting Officer Michael Slager. We're shocked tonight that they could not convince that one juror, that one hold-out juror who had handed a note to the judge on Friday, saying he could not, in good conscience, convict Michael Slager -- Michael Slager. We're shocked tonight that that one juror has still apparently held out, and that has caused the judge to declare a mistrial.

Of all the cases that we have covered in the past two years of police- involved deaths, from Ferguson to Eric Garner, to this case, that evidence that you're seeing on the screen there was really the most compelling for a conviction, Wolf. Michael Slager clearly shooting Walter Scott in the back several times, 18 feet away from him.

Our colleague Jeffrey Toobin on Friday said it was a slam-dunk. It really should have been a slam-dunk. Now they've got to retry him again in state court, as well as federal court. That's two trials coming up, and the prosecutor in this case, Scarlet Wilson, just now saying, "We will try Michael Slager again." That community, that family is going to have to go through this all over again.

BLITZER: All right. And Nick Valencia, you're there in Charleston for us. You were in the courtroom. Explain what's happening on the ground right now.

NICK VALENCIA, CNN CORRESPONDENT: Well, those in the community who support the Walter Scott family are disappointed. They're saying this and categorizing this as a missed opportunity for justice, a missed opportunity to heal the deep wounds within the black community in this country as a result of a series of police shootings across the country over the last two years.

I was speaking to an elder here in Charleston who says that he was surprised, given that cell phone video, shot by Feidin Santana, shows Walter Scott running away from Michael Slager and being gunned down, shot multiple times in the back. He said to him, that was enough evidence to prove that Michael Slager was guilty of first-degree murder.

Obviously, the jurors in this case did not think so. The day started with a series of question from the jurors, asking about what is imminent danger? What is self-defense? Is it different for an officer versus an ordinary civilian?

[17:05:10] We had anticipated this verdict as of Friday when we heard about that lone juror holdout who said that, morally, he could not convict the officer in this first-degree murder case. Today, however, we learned that there was a majority of the jurors that were still undecided, as Brian Todd reported. However, the solicitor in this case is expected to retry it.

There's also still federal charges against Michael Slager. That case is expected to happen sometime next year.

BLITZER: So Laura, walk us through a little bit of the legal process, where we go forward right now, mistrial declared.

LAURA COATES, FORMER FEDERAL PROSECUTOR: Now remember, double hasn't attached when it comes to a mistrial. That's if somebody is found guilty or innocent. Here we're in a legal limbo.

But the real question that prosecutors have to face right now is, listen, I have a federal trial coming up sometime next year. This was a 55-witness, five-week trial. Will that come before or after that? Remember, federal trials are a little bit harder to prove whether or not the officer acted under the color of law to abuse his standing as a police officer. A little bit of a trickier case.

What this mistrial informs the prosecutor and the defense attorney going forward is how to structure the voir dire, how to choose a jury to figure out whether or not a moral obligation or a stance will allow the juror to believe an officer's testimony or a former officer more than an everyday civilian.

BLITZER: All right. Everybody stand by. We're going to continue to follow the breaking news. We'll get more reaction. But there are other important developments we're following here in THE SITUATION ROOM right now, as Donald Trump builds his administration and prepares to assume the presidency. CNN's Sunlen Serfaty is in New York City for us, where Donald Trump held a surprising meeting with the former vice president, Al Gore. Update our viewers, Sunlen.

SUNLEN SERFATY, CNN CORRESPONDENT: That's right. Well, it's certainly an intriguing evening on the schedule today. And Al Gore was originally only supposed to be meeting with Ivanka Trump about climate change here at Trump Tower, but he ended up also taking a meeting afterwards with the president-elect himself.

Gore afterwards calling it a lengthy and productive meeting, one that he says was a sincere attempt to find common ground on an issue they haven't always agreed on.

(BEGIN VIDEOTAPE)

SERFATY (voice-over): Today at Trump Tower--

UNIDENTIFIED FEMALE: Mr. Gore, (UNINTELLIGIBLE)

SERFATY: -- former vice president Al Gore sitting down with the president-elect and Ivanka Trump to talk about Gore's signature issue, climate change, something Trump has called a hoax.

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: The bulk of the time was with President-elect Donald Trump. I found it an extremely interesting conversation, and to be continued.

SERFATY: The president-elect also reaching out to a former rival, picking Dr. Ben Carson as secretary of Housing and Urban Development.

GOV. MIKE PENCE (R-IN), VICE-PRESIDENT-ELECT: We're excited to have Dr. Carson as our intended nominee for Housing and Urban Development. We're looking forward to another very productive week in the transition that's setting an historic pace.

SERFATY: Carson, a neurosurgeon, lacks significant experience in housing and urban development. During the primary, he criticized housing regulations to address segregation in public housing.

DR. BEN CARSON (R), HOUSING AND URBAN DEVELOPMENT SECRETARIAL NOMINEE: This is what you see in communist countries, where they have so many regulations encircling every aspect of your life that if you don't agree with them, all they have to do is pull the noose. And this is what we've got now.

SERFATY: As one cabinet selection moves forward, another seems to be taking a step back. Trump is now expanding his search for his secretary of state after narrowing his list to four contenders last week. Transition sources now say former Utah governor and ambassador to China Jon Huntsman is in the mix, as is ExxonMobil CEO Rex Tillerson and West Virginia Democratic Senator Joe Manchin, according to "The New York Times."

Former CIA director David Petraeus also still in the running, expressing regret for mishandling classified information. GEN. DAVID PETRAEUS (RET.), FORMER CIA DIRECTOR: I apologized for it. I paid a very heavy price for it. And I've learned from it. And again, they'll have to factor that in and also, obviously, 38 and a half years of otherwise fairly, in some cases, unique service to our country, in uniform and at the CIA.

SERFATY: Meantime, the president-elect's use of Twitter grabbing the attention of "Saturday Night Live."

ALEC BALDWIN, ACTOR (AS DONALD TRUMP): Kellyanne, I just retweeted the best tweet. I mean, wow, what a great, smart tweet.

KENAN THOMPSON, CAST MEMBER, NBC'S "SATURDAY NIGHT LIVE": We're in a security briefing.

BALDWIN: I know but this could not wait.

SERATY: Trump slamming the show as "Unwatchable, totally biased, not funny and the Baldwin impersonation just can't get any worse. Sad." And blasting the media on Twitter today, saying, quote, "If the press would cover me accurately and honorably, I would have far less reason to tweet."

Mike Pence defending another Trump tweet in which he claimed that millions of illegal votes were cast in the presidential election.

PENCE: It's his right to express his opinion as the president-elect of the United States. I think one of the things that's refreshing about our president-elect.

(END VIDEOTAPE)

[17:10:06] SERFATY: And tomorrow Donald Trump will be holding at least one interview for the secretary of state job. Transition officials confirm that he will be sitting down with Exxon CEO Rex Tillerson. Then he will be hitting the road again to hold one of these thank-you tours, thank-you rallies, this time in North Carolina, where Wolf, he will be formally rolling out that nomination for secretary of defense, General James Mattis -- Wolf.

BLITZER: All right. Sunlen Serfaty reporting for us from New York. Sunlen, thanks very much.

Joining us here in THE SITUATION ROOM is California Republican Congressman Darrell Issa. He's a key member of both the Foreign Affairs and Judiciary committees.

Congressman, thanks very much for joining us.

REP. DARRELL ISSA (R), CALIFORNIA: Thanks for teeing it up, Wolf. It's -- it's all about the president-elect and his agenda as we speak.

BLITZER: Well, let's talk about some of the problems, potential problems, at least.

Al Gore, the former vice president, goes over to Trump Tower, meets with Ivanka Trump and has a long sit-down interview of meeting, whatever you want to call it, with the president-elect.

The question of Ivanka Trump, she says she's not going to be involved in the administration. She's going to handle the family business, the real estate, all the other business from the -- from the Trump Organization. Is it appropriate, though, during this transition for her to be meeting with someone like Al Gore just before the president- elect meets with him?

ISSA: Well, I think it's interesting is that -- the fact that he's meeting with one of the leaders of the Democratic Party should be something celebrated by everybody. He's casting his net far and wide. And, you know, I'm old enough, you're almost old enough to remember Nancy Reagan. They spent eight debating whether she had too much influence on the president.

I think you have to accept that unpaid family members, who have the best interests and the confidence of the president, will always play key roles in who gets to the president and what the president--

BLITZER: Aren't they going to try to separate that, the business? If she and her two brothers run the business, aren't they going to try to build some sort of separation between what they're doing and what the president of the United States is doing, given the potential for a conflict of interest?

ISSA: You know, the president-elect very much has said he's going to do exactly that. He's going to walk away from a business that he built, quite an empire, and he's going to announce the specifics of it, or at least the beginning of the specifics of it, next week.

We have a problem. I walked by the statute of George Washington today, and most people don't think about it, but he'd be a multi- billionaire with his holdings if he were there today. There is always a problem.

But George Washington, both as a general and as president, had to write home to Martha instructions on what to do for the farm. There is a reality when you -- when you, in fact, elect a person with substantial wealth and businesses. There's a reality that you can't fully separate, but at the same time, he's made it clear that he cares about this country. He cares about the presidency, and he doesn't care about those businesses anymore. He's going to turn over control, lock, stock and barrel.

BLITZER: Now that he's been elected president of the United States, in the -- in -- to try to get some more transparency for the American public, should he finally go ahead and release his tax returns? So at least people out there, the American people, will have a better understanding of what this -- this huge business he has entails?

ISSA: Well, I would expect that every year that he's the president, he'd be happy to make some disclosures of that year, and I think that's very appropriate, because that's the year in which his income needs to be scrutinized fairly against the activities in the White House. BLITZER: He said he's not going to take the $400,000 paycheck from

the federal government. He'll take a dollar a year. He doesn't need the money.

ISSA: Well, that is true, that he doesn't.

I think what's important, though, is that he's made it clear he's not going to run the business, and he'll do whatever the law requires, including he has a great deal of respect for Congress.

BLITZER: I ask the questions, because you did the Oversight Committee for a long time. And you did a lot of oversight as far as the Obama administration, concerning Hillary Clinton as secretary of state. If there were a Democratic president, wouldn't you be engaged in all this kind of activity, trying to find out, on behalf of not only Congress but the American people, what's going on?

ISSA: Wolf, regardless of the party, this Congress is going to have to, on a regular base, ask questions about things which occur in the business or are reported to be occurring in the business, which in fact, the president of the United States is setting the national policy.

You can count on it. You can count on that business having a significant cost, not born by the American people that is a cost not borne by the American people to support and account for their hits. Quite frankly, he's taken on a financial risk by becoming president of the United States, and he knows it.

BLITZER: Although a lot of his properties apparently they're booking um, these hotels, especially the one here in Washington, because he was elected president of the United States.

ISSA: He would have built a bigger hotel if he'd known.

BLITZER: Any legal -- the legal documents that he works out with his family, they're going to make this announcement December 15 at a news conference. Should all those legal documents be made public?

ISSA: I think the details of how he's going to de-conflict clearly should be reviewed, both by competent counsel and by Congress. And, as appropriate, made available to the American people.

[17:20:05] And I'm fully comfortable that the president-elect plans to do exactly that.

BLITZER: Strand by. We have more to discuss.

Darrell Issa is here. Lots going on. We'll take a quick break. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: We're back with the Republican Congressman Darrell Issa of California as we follow a brand-new warning to Donald Trump from China. Let's first go to our chief national security correspondent, Jim

Sciutto. Jim, tell us about the new reaction from China.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Well, Wolf, great concern there. Remember that after the Taiwan call, Trump advisers and Trump himself dismissed it as just another congratulatory call from another head of state.

But since then, he and his team have been doubling down on confrontation with Beijing in what would be a significant shift in U.S.-China policy.

(BEGIN VIDEOTAPE)

[17:20:07] SCIUTTO (voice-over): Today Beijing issuing a blistering response to Donald Trump's increasingly anti-China rhetoric. An editorial in China's state-run "People's Daily," said, quote, "Trump and his transition team should realize that making trouble for China- U.S. ties is making trouble for themselves," adding with a poke at the president's "make America great again" slogan, quote, "Creating troubles for China won't make the U.S. great."

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: Good afternoon, everybody.

SCIUTTO: The White House added its own criticism.

EARNEST: It's unclear what the strategic effort is, what the aim of the strategic effort is, and it's unclear exactly what potential benefit could be experienced by the United States.

TODD: The storm started with a call between Trump and Taiwan's president, the first between a U.S. president or president-elect and Taiwan's leader since the U.S. first recognized Beijing in 1979.

Trump then doubled and tripled down on his tougher stance over the weekend, tweeting, "Did China ask us if it was OK to devalue their currency, making it hard for our companies to compete? Heavily tax our products going into their country. The U.S. doesn't tax them. Or to build a massive military complex in the middle of the South China Sea? I don't think so!" Exclamation point.

DONALD TRUMP (R), PRESIDENT-ELECT OF THE UNITED STATES; They take our money. They take our jobs.

SCIUTTO: Trump had targeted China throughout his campaign.

TRUMP: China respects strength. And by letting them take advantage of us economically, which they are doing like never before, we have lost all of their respect.

SCIUTTO: But now it is increasingly clear that this more confrontational stance towards a nuclear armed China that is America's second largest trading partner will continue in a Trump presidency.

PENCE: I think you're going to see, in a President Donald Trump, a willingness to engage the world but engage the world on America's terms.

SCIUTTO: One close Trump adviser took the new posture a step further, Steven Moore telling a Chicago radio station--

STEPHEN MOORE, TRUMP TRANSITION ADVISOR: Taiwan is our ally and we ought to back our ally, and if China doesn't like it, screw 'em!

(END VIDEOTAPE)

SCIUTTO: It is true that the U.S. and China -- Taiwan, rather, have a long and close relationship. The U.S., for instance, sells weapons to Taiwan, including M-16s intended specifically to deter a Chinese invasion. China and Taiwan, they have a close relationship, as well. But it is a delicate peace based on decades of diplomatic norms, which Trump is signaling now, Wolf, that he may significantly change, and that has risks associated with it.

BLITZER: They certainly do. They do, indeed. Jim Sciutto reporting. Thanks very much.

We're back with the Republican Congressman Darrell Issa. He's a member of the House Foreign Affairs Committee.

You agree with Steven Moore, if they don't like it, screw 'em?

ISSA: Well, Steven has a way with words. I think a better way to put it is that President Obama announced and began a pivot to Asia. That was really about Japan and other countries seeing China as an emerging power that was beginning to threaten a status quo, that had military and economic reach intent. And nothing has changed as a result of that declaration by President Obama.

With President-elect Trump, what you're seeing is he's using levers -- we can agree or disagree on whether they're right. He's clearly using levers: the meeting with Japan's leader, the meeting -- the call from Taiwan's leader, and a recognition that China is not the only place there are levers of power in Asia. And I'll tell you, I'd rather use the levers he just used than a military lever.

BLITZER: So you think it's appropriate for the president-elect to use Twitter to taunt China and issue these threats as he did over the weekend?

ISSA: Well, we can all talk about -- about his tweets for the rest of his presidency. What I would say, though, in this case is what you're seeing is non-military threats.

When you remember both President W. Bush and before him, President Clinton. They both came in, and they said things that actually led to troops and ships moving, because the China Straits is not a stable area. These are moves that I think are much more benign and much more intended to show China that he will use the levels of diplomacy.

BLITZER: But is it OK, from your perspective, to sort of upend 40 years of diplomatic protocol like that, without any advance warning to U.S. allies in the region, any serious consultations with veteran U.S. diplomats and to simply go ahead and tweet this kind of stuff?

ISSA: Well, there's two things there, and we can talk again about the tweet. But let's talk about this.

If we sell $2 billion worth of F-16s to Taiwan, and doesn't destabilize, does a phone call really destabilize? And if it does, isn't this too stable a region for us to say that it's a good, if you will, balance.

A good balance with China is that we have serious talks about their respecting intellectual property, about their keeping their membership in the WTO, which they're reneging on.

[17:25:07] So as much as I have different terms than President Trump or Steven Moore, they both have a point, which is China has been a bad actor. They've threatened their neighbors, and there is a new pivot to Asia.

BLITZER: But the White House made an important point today, and I assume you agree with them, that these 40 years of this "one-China" strategy, the status quo, Keeping this protocol, not having direct conversations between the President of Taiwan and the president, or president-elect of the United States.

It has, of course, the White House said, benefited the people of Taiwan. Taiwan, after all, is the ninth largest trading partner of the United States. They certainly benefit from peace and stability in the strait. To upend that, potentially could threaten Taiwan and other U.S. allies in the region.

ISSA: There were other steps that would be provocative. But taking a call for real or under the guise of simply being a courtesy, I think that's a pretty good way to say that he knows Taiwan that is a good actor, and that China, at least in trade, is a bad actor.

And in the case of those islands, President-elect Trump throughout the campaign made it clear that those are the antagonism in the region what's destabilizing everyone's feelings about Asia. And rather than sending another fleet to the region, he's been able to tell China that they better reconsider some of their policies.

I certainly would prefer that tools like diplomacy, a good ambassador to China, forcing China back to living up to things they've already agreed to in trade, I think all of that is important. But that doesn't start until after Donald Trump is sworn in.

BLITZER: If you had your way, you'd stop the tweeting, right?

ISSA: You know, I didn't get elected. I didn't run. But if I had run, I probably wouldn't have been smart enough, aggressive enough to tweet as often and as well as he has. It has made him the president- elect.

Having said that, I think we all wish that his good tweets would work and the ones that sometimes become the story of the day wouldn't. But let's remember, this is somebody who is communicating more than any president in our lifetime, and he's communicating more directly. And as a result, he's won over a generation of people that used to belong to other parties.

BLITZER: He still hasn't held a news accordance since becoming president-elect of the United States, even though other presidents- elect, within two, three, four days, they've all had a formal news conference with the reporters covering them.

ISSA: Wolf, you'd be much better on a one-on-one. We should set that up.

BLITZER: I'd be happy to do that, as well.

ISSA: I'll do what I can do.

BLITZER: As well. Thanks very much. Darrell Issa joining us from California, all the way here in THE SITUATION ROOM. Coming up, fake news, a real gun and the growing danger posed by Internet conspiracy theories that are widely believed but totally untrue.

And we're also following up on reports that Trump's daughter and son- in-law may be move out of their posh home in New York City. They seem to be house hunting right here in the Washington, D.C., area.

(COMMERCIAL BREAK)

BLITZER: Donald Trump will be hitting the road once again tomorrow. He'll be continuing his thank-you tour with a rally in North Carolina.

[17:32:31] Today he was very busy with meetings, also busy with some tweets. We have plenty to discuss with our political experts.

Let's start with David Axelrod. He seems to be suggesting, Dave, that he's going to move beyond the conventional rules, if you will, in terms of dealing with the American press.

He tweeted this: "If the press would cover me accurately and honorably, I would have far less reason to tweet. Sadly, I don't know if that will ever happen." You worked in the West Wing for four years.

DAVID AXELROD, CNN POLITICAL ANALYST: I don't know how sad he actually is about that. But--

BLITZER: You worked in the West Wing. Newt Gingrich is suggesting he can simply ignore what they call the mainstream media if he wants to. Is that at all realistic?

AXELROD: Look, I don't know any president who loves the press that covers him, because the job of the media is to be -- to take a critical look at the administration. But Donald Trump is epically thin-skinned.

And his notion is that, if you write nice things about me or if you say nice things about me, then I will play with you. But if not, I will go over your head and tell my version of the truth. And there's real danger in this for our democracy, because part of the

check on unbridled power is a free press. And for a president to say, "You know what? I don't really believe in that," is a little bit frightening.

BLITZER: But could he go, you know, over the heads if he wants to, S.E., go over the heads of the press and deal in other ways, if you will, in order to sell his agenda?

S.E. CUPP, CNN POLITICAL COMMENTATOR: I think he thinks his agenda has been sold. I think he thinks he closed the deal by winning the election, and that now that there's a Republican Congress and a Republican in the White House, who is he selling this agenda to?

I don't think he understands that the agenda then has to be sold to the electorate and that actually, Congress does have to be sold, because they have constituents back home who might disagree with some parts of it. He might learn that pretty quickly.

But actually, I also think what he -- what he forgets is that presidents have also used press pools to their great advantages at times. Having them around, having them handy has turned out to be both good for their own security but also good for photo ops and for capturing those moments that you want to be seen, unless he's planning on having, you know, Jared Kushner follow him around with a home recorder or an iPhone all day, I would convince him to have those guys around.

BLITZER: Let's talk about China with Richard Quest. You're with us today. Unprecedented phone call. Forty years, no Taiwanese president has spoken directly with a president of the United States or a president-elect of the United States.

Donald Trump, Richard, followed up with this. This is a tweet. "Did China ask us if it was OK to devalue their currency, making it harder for our countries to compete? Heavily tax our products going into their country? The U.S. doesn't tax them. Or to build a massive military complex in the middle of the South China Sea? I don't think so."

Here's the question, this little exchange that he's had with Taiwan now, is that going to endanger U.S.-China relations? What's your analysis?

RICHARD QUEST, CNN CORRESPONDENT: Not immediately. Those I've been talking to, who actually have negotiated with China, for instance, the former Australian prime minister, Kevin Rudd, he was telling me that in Beijing, there will be different views on this, but the prevailing view will be that they're being tested.

Even before January 20, he is -- he's either highly naive and highly ignorant of the way these things are played, or he's testing them. He is prodding to see what sort of initial reaction comes back. In either case, Wolf, until -- at this stage, until he's had a chance to see and truly understand the ramifications of the entire region, most people believe it's a dangerous strategy.

BLITZER: What do you believe, David Axelrod?

AXELROD: I absolutely do, and I'd like to believe that it was some sort of sophisticated tragedy, but I think Richard's second interpretation may be more -- more apt. I don't think he really understands the implications of all of this. He's used to firing these tweets off without regard, and presidents can send armies marching and markets tumbling with the wrong set of words, and he simply doesn't have an appreciation for that.

BLITZER: You know, interesting, Mark Preston, Donald Trump, he did have this meeting with the former vice president, Al Gore, today. Al Gore went over to Trump Tower to meet with Ivanka Trump, but then he had a separate meeting with the president-elect.

And Al Gore emerged from that meeting complimentary, saying it was very interesting, very important, wants to continue this dialogue with President-elect Trump. That's a surprise, given the very serious disagreements they've had over climate change over this past year and a half.

MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: Yes, no doubt, Wolf. And surely is going to drive some of Donald Trump's supporters crazy. We've seen Donald Trump in the past say that climate change was a hoax, but he has ebbed (ph) that on a little bit. In the "New York Times," in an interview a few weeks ago.

It shows that Donald Trump is going to be an unconventional president. We can't put him in a box and say that he's going to be a conservative Republican; nor can we put him in a box and say he won't work with Democrats, necessarily.

We should note, though, that he does -- or at least has surrounded himself with folks that tend to be conservative on these issues, including Myron Elbow -- Ebo (ph), who is doing the transition to the EPA on his behalf. But the fact of the matter is, this is not a meeting, necessarily, that's going to be embraced by some of the hard- core activists that backed Donald Trump.

BLITZER: S.E., you remember, it's not that long ago that Trump tweeted that climate change was a Chinese-created hoax.

CUPP: Yes, he's -- as Preston said, he's sort of walked that back.

But I'd like to give him credit for meeting with and building a team of rivals. He'd met with Democrats. He's met with Republicans who have spurned him. He's -- it's this open-minded approach that I think people are really encouraged by. Whether he ultimately puts these people in positions of power, we have to see, but I think that's actually something that we should -- we should commend him on.

BLITZER: Yes, and Richard Quest, what's your analysis?

QUEST: Look, you're starting off -- your starting point is a president-elect and a president-to-be who has had no governmental experience and doesn't know how these games are interacted. That is the starting point.

But as David was saying, the reality of it is -- you -- the analogy I've used is that you've got to ballroom dance when you're doing these negotiations at global levels. You've both got to be doing the same dance. He can't be doing a fox trot while the Chinese are doing a rumba. If you do, you're going to tread on each other's toes, and it's going to end very badly and there will be -- and messily.

That's the risk here, and as David points out, in these situations on the other side of the world, armies move, and repercussions follow.

BLITZER: Could be "Dancing with the Stars" episode as we're -- we're hearing.

Everybody stand by for a moment. We're getting some new developments in an investigation of a very frightening incident here in Washington, D.C. Police now say a North Carolina man fired multiple -- multiple shots inside a pizza restaurant, and he was motivated by a fake news conspiracy theory.

I want to go immediately to our justice correspondent, Evan Perez. Evan, what are your sources telling you?

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: That's right, Wolf. The suspect in this case, 28-year-old Edgar Madison Welch, appeared in D.C. Court, D.C. superior court, in the past hour, and he's now formally charged with assault with a dangerous weapon, carrying a pistol without a license, and unlawful discharge of a firearm.

The Metropolitan Police here in Washington says that he walked into Comet Ping-Pong restaurant and fired multiple rounds. Now, this is a pizza restaurant popular with families, and patrons and employees quickly evacuated, and luckily no one got hurt.

But a police report says that the suspect told officers that he traveled from his home in North Carolina to the restaurant to see whether there were any child sex slaves there. He surrendered peacefully, Wolf, after not finding any evidence of that.

BLITZER: And this, Evan, is all because of this fake news story. Tell us what you know about that.

PEREZ: That's right. This all walked stems from a false story that's circulated on the Internet and extreme right-wing websites, claiming that members of Hillary Clinton's campaign were associated with a child sex ring at this restaurant. Police say the claims are fictional, and the restaurant and other businesses in the area say that they've been receiving threats and harassing phone calls for weeks.

Now, police found two guns believed to belong to the suspect inside the restaurant and one more inside his car. Now clearly, this is a dangerous situation that went beyond fake news, Wolf.

BLITZER: Certainly is. Very, very dangerous indeed.

All right, Evan. Thanks very much. Let's get back to our political experts.

David Axelrod, fake news is one thing, but once the fake news creates a threat like this, it becomes perilous.

AXELROD: Yes. You know, it seems quaint now. Pat Moynihan once said to an opponent, "You're entitled to your own opinion, but you're not entitled to your own facts." We live in an era now where everybody has their own facts, and some of them are very pernicious. And we have people in positions of responsibility who are embracing that. One of these crazy rumors related to this child pornography or -- was apparently retweeted by General Flynn, who's going to be the--

BLITZER: No, it was retweeted by his son.

AXELROD: Oh, I see, by his son. That's right.

BLITZER: Who's one of his aides.

AXELROD: But--

CUPP: Yes.

AXELROD: Who is one of his aides. Exactly. We have to -- this is a whole new universe, and it is very pernicious; and it's not clear how to get our hands around it. And I think it's a deeply concerning thing.

BLITZER: S.E., what do we do about this?

CUPP: Well, where this particular incident is concerned, any Republican in a position of influence or power who allows this to fester, unrebuked, will have blood on their hands. It is incumbent upon Republicans, whether that's in the Trump organization, within the RNC, within elected office, to say, "This story is false. Please move on. Please do not do anything based on this false story."

The fact that so many haven't is deeply concerning and sort of allows this to grow for whatever sort of political expedience that they can benefit off of it.

BLITZER: Mark Preston, any indication that Donald Trump or his senior advisers, spokespeople, they're going to directly address this problem? Because all of a sudden, fake news has created a serious problem right here in Washington.

PRESTON: Right, and we haven't heard anything, necessarily, to that effect yet, Wolf.

But going back to something that S.E. said about having the power of the press pool around them, Donald Trump understands how to use the media to his advantage. He understands how to use Twitter to try to get his message out. When he fully grasps the ability to stand in front of a camera, behind the podium at the White House and to deliver a message, it is going to be pretty powerful. And he'll be able to do that very easily on an issue like this, to come out and to get behind that podium, or to go to the Rose Garden or to the East Room or wherever he may do it, and to knock down stories like this, to try to put his stamp on some things right now.

When he starts doing that, I really do think that Donald Trump will start becoming embraced by even more people, because they'll see an inkling of leadership that perhaps they don't see there right now.

BLITZER: Richard, do you want to weigh in on this?

QUEST: I've just come back from a sort of a 10-day assignment. It took me to the UAE, to Morocco, to Russia, to Finland, to the U.K. And I think I've said before to you, Wolf, that the rest of the word is watching, as, indeed, are Americans, with something approaching awe that borders on being aghast at what might happen next.

And this is, for the rest of the world, the ultimate in reality television that is happening in front of their very eyes, and they have absolutely no idea how this plays out.

The one question I was asked in all of these trips and travels that I've been doing is, "What are the Americans thinking? What's going to happen? Is Donald Trump serious about what he says?"

And even before January the 20th, we are seeing policy shifts, even though the old adage goes the U.S. only has one president at a time.

BLITZER: David Axelrod, there was a lot of wonder what -- when you went into the White House, eight years ago during that transition, what this junior senator from Illinois was going to do. The world was watching, but it seems to be more intriguing right now.

AXELROD: Well, the world had two years to watch him as a candidate, and what they saw was someone who was very discreet about the way he used language. That's not the case here.

And as to Mark's point, yes, it would be very powerful to see him as President use that podium to denounce this kinds of tactics. But what we've seen are allies of Donald Trump weaponized this fake news in a way to advantage him politically, and so it'll be a big test as to whether he really will renounce it.

BLITZER: Do you think that Donald Trump is going to address this issue of the fake news?

CUPP: I would hope so. I would hope that there are people around him who'll say, look, you have a real opportunity here to do something to express a position of leadership and calm the country down.

BLITZER: All right. Everybody, stay with us. There is a lot more happening right now. Also, CNN has learned that Ivanka Trump and her husband, Jared Kushner, may leave their New York home. They are seen to be house hunting right here in the Washington, D.C. area. Kushner is expected to play a very important role in the upcoming Trump administration. Will there be problems?

(COMMERCIAL BREAK)

[17:50:38] BLITZER: We're looking into reports that Ivanka Trump and her husband, Jared Kushner, are house hunting right here in the Washington, D.C. area. Let's go to CNN's Brian Todd.

Brian, what are you learning?

BRIAN TODD, CNN CORRESPONDENT: Wolf, tonight, we do have word that Jared Kushner and Ivanka Trump are house hunting here in Washington. Their planned move here really bolsters the expectation that Jared Kushner is going to take on a prominent role as a White House adviser to Donald Trump, but it also raises questions about where the couple may settle in this city, about security challenges, and about how Ivanka Trump will run the family business if she's here in Washington.

(BEGIN VIDEOTAPE)

TODD (voice-over): A custom made table with high-end light fixtures hovering above. A designer blue lacquer desk in the study. In the living room, a velvet upholstered sofa with vintage armchairs. This, according to the Web site, elledecor.com, is the apartment in Manhattan's Upper East Side occupied by Ivanka Trump and her husband, Jared Kushner, an apartment they may soon be vacating.

Tonight, CNN has learned Kushner and Ivanka Trump are house hunting in Washington.

TODD (on camera): Specifically, what are they going to have to do regarding security at a place like this or a condo?

ALLISON GOODHART, DIRECTOR OF SALES, MCENEARNEY AND ASSOCIATES: They're going to have several Secret Service cars lined up probably in front and behind the property. They may have some sort of occasional aerial monitoring, as well.

TODD (voice-over): Realtor Allison Goodhart has sold homes in Washington's exclusive Kalorama neighborhood. Average price, she says, $4 million to $10 million.

TODD (on camera): Are they in for some complaints from neighbors almost no matter where they go, security and gawkers?

GOODHART: It's likely there might be some complaints. It depends on the neighborhood they choose. I think there are certain neighborhoods where they are used to high profile Republicans and Democrats coming in.

TODD (voice-over): Another important factor in their home search, Jared Kushner is an Orthodox Jew. Ivanka Trump converted to Judaism. Their family strictly observes the Sabbath and may want to be within talking distance from an Orthodox synagogue in the city.

The most upscale condo in D.C., this suite in The Ritz-Carlton in Georgetown, on sale for $12 million.

Tonight, questions also persist about what role Kushner will have in the Trump administration. He's expected to serve as an adviser to his father-in-law. Kushner was seen walking with White House Chief of Staff Dennis McDonough on the White House grounds during Donald Trump's meeting with President Obama. MONICA LANGLEY, SENIOR WRITER, THE WALL STREET JOURNAL: Steve Bannon

and Reince Priebus, who will be the strategic adviser and Chief of Staff, also want Jared badly because he's such a good mediator between their different styles and their different positions.

TODD (voice-over): Questions also linger tonight about how Ivanka Trump might balance her role as an executive V.P. of the Trump Organization with whatever she does in Washington. That role could also be controversial. Melania Trump plans on staying in New York with their son, Baron, at least until the spring.

LANGLEY: Because Melania will not be here until after Baron finishes the school year, I think that there will be a lot of pressure on Ivanka to perform kind of a de facto first lady role.

(END VIDEOTAPE)

TODD: Now, residents of D.C.'s high-end neighborhoods like this one you're seeing here in these pictures, well, they're going to be used to having diplomats and other top officials with heavy security in their midst?

President Obama is actually going to be living in this house in this house in this D.C. neighborhood of Kalorama once he leaves office.

Now, we asked the Trump transition team where in D.C. Ivanka Trump and Jared Kushner might be looking for a home and how Ivanka Trump might juggle her role with the Trump Organization with what she might be doing in Washington, we never heard back from them -- Wolf.

BLITZER: You know, it's no secret, Brian, that the Secret Service details, that they will be directly involved, no doubt. Neighborhood gawkers, other logistics that might be challenging for Ivanka Trump and Jared Kushner, if in fact they wind up moving here to Washington. There are other factors involved, as well.

TODD: That's right, Wolf. You can add potential protesters to that list of factors that this family is going to have to deal with. About a week ago, more than 100 artists gathered outside the Puck Building in Manhattan to protest Donald Trump's policy. That building is owned by Jared Kushner and it's where he and Ivanka Trump have that apartment. So neighbors here in D.C. might have another complaint to lodge if protesters show up on their street.

BLITZER: We'll watch all of this closely together with you. Brian Todd reporting. Thanks very much.

Coming up, China takes notice of Donald Trump's latest string of provocations and issues a warning of its own. We have details.

[17:54:55] And the death toll continues to rise after a catastrophic fire. Will there be criminal charges?

(COMMERCIAL BREAK)

BLITZER: Happening now, breaking news. Deadlock. A mistrial declared in the murder case against former police officer Michael Slager, who shot an unarmed Black man in the back killing him. Will prosecutors retry him?

Carson in the cabinet. Donald Trump picks former rival Dr. Ben Carson for Housing Secretary, despite questioning his sanity and comparing him to a child molester during the campaign. How is Trump now calling -- he's now calling him brilliant.

[17:59:55] False story, real crime. A wild conspiracy theory about Hillary Clinton prompts a gunman to fire multiple shots inside a Washington, D.C. parlor. Is the fake news that thrived during the campaign now posing a real threat to public safety?