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Stormy Daniels Raising Money for Lawsuit; Interview With Connecticut Senator Richard Blumenthal; Larry Kudlow Tapped as New White House Economic Adviser; Interview With Texas Congressman Joaquin Castro. Aired 6-7p ET

Aired March 14, 2018 - 18:00   ET

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

[18:00:01]

WOLF BLITZER, CNN HOST: Porn star Stormy Daniels is raising money for her lawsuit against President Trump. The first hearing in the case has just been set for July, and now one of her friends is speaking out. What does he know about Mr. Trump's phone calls to Stormy Daniels?

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BLITZER: The breaking news tonight, the White House confirming that President Trump has picked cable TV host Larry Kudlow as his next top economic adviser.

Kudlow replaces Gary Cohn, who resigned over the president's decision to enact new tariffs, but Kudlow, who doesn't have an economics degree, also opposes tariffs, placing him at odds with both the president and Mr. Trump's top trade adviser.

We will talk about that and much more this hour with Senator Richard Blumenthal of the Judiciary Committee and Congressman Joaquin Castro of the Intelligence and Foreign Affairs Committees. And our experts and analysts, they are all standing by.

First, let's go to our senior White House correspondent, Jeff Zeleny.

He has the latest on the ongoing shakeup of the Trump team.

Jeff, there's no sign that changes are over yet.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: Wolf, that's right.

The president has told aides he's furious and frustrated with members of his Cabinet and other top officials here. And that there is a sense that the White House is on edge, waiting for something else to happen, perhaps as early as tomorrow, when the president returns from his trip to Saint Louis and California.

But, Wolf, all of this is coming as the president seems to be in a firing mood. (BEGIN VIDEOTAPE)

ZELENY (voice-over): Another day of churn at the White House. President Trump tapping longtime friend and TV financial analyst Larry Kudlow as his chief economic adviser, even as other top aides are on the hot seat tonight.

As a CNBC commentator, Kudlow has been sharply critical, but always loyal to the president. Lately, he's been outspoken in opposing the controversial trade policy.

LARRY KUDLOW, CNBC: My problem with the steel and aluminum tariffs as they were originally announced is that it might do harm to American users of steel and aluminum. I made that point on the air. I made it to him. I just don't like blanket tariffs.

ZELENY: But that's the specific issue that caused Gary Cohn to quit last week, raising questions of how comfortable the president is with dissenting points of view.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We don't agree on everything, but in this case I think that's good. I want to have a divergent opinion.

ZELENY: The president is rebuilding his team as Republicans are bracing for what many fear will be a brutal midterm election, following the outcome of a special congressional race Tuesday.

After campaigning last week in Pennsylvania...

TRUMP: The world is watching. I hate to put this pressure on you, Rick. They're all watching, because I won this district like by 22 points.

ZELENY: But Republican Rick Saccone did not, running 600 votes behind moderate Democrat Conor Lamb, who declared victory in the deeply red district.

CONOR LAMB (D), PENNSYLVANIA CONGRESSIONAL CANDIDATE: I'm a Pennsylvania Democrat. A proud Western Pennsylvania Democrat. This is the party of my grandfather.

ZELENY: A day after abruptly firing Secretary of State Rex Tillerson, CNN has learned the president is furious at the conduct and performance of other members of his Cabinet, and more changes are likely coming.

TRUMP: We helped Wall Street, we helped Main Street, we helped everybody.

ZELENY: At a stop in Saint Louis today, the president talking up the country's economic stability, but it's the stability of his administration that's raising questions in Washington and around the world.

Before leaving the White House on Tuesday, the president signalled he's still trying to put his team in order, 14 months after taking office.

TRUMP: I'm really at a point where we're getting very close to having the Cabinet and other things that I want.

ZELENY: The president is or has been furious at many members of his Cabinet. VA Secretary David Shulkin is in his crosshairs over poor management and misuse of taxpayer money. National Security Adviser H.R. McMaster over foreign policy differences. Interior Secretary Ryan Zinke over excessive spending on travel.

EPA administrator Scott Pruitt over pricey hotels and first-class airfare. HUD Secretary Ben Carson over that $31,000 dining set. Education Secretary Betsy DeVos for a poor performance on "60 Minutes." Attorney General Jeff Sessions over the Russia investigation. And Chief of Staff John Kelly for exerting too much control over the West Wing.

The president, aides say, is disturbed by how his team has become a punchline.

UNIDENTIFIED ACTOR: Baby, I scared.

UNIDENTIFIED ACTRESS: It's OK. you're going to make a great surgeon general.

UNIDENTIFIED ACTOR: No. I run the Department of Housing and Urban Development.

(LAUGHTER)

UNIDENTIFIED ACTRESS: That's hilarious.

ZELENY: The president once praised Shulkin for his commitment to reforming the VA.

TRUMP: I have no doubt it will be properly implemented, right, David? It better be, David. We will never have to use those words.

[18:05:06]

ZELENY: Those words, of course, are ones he often said in his previous life on "The Apprentice." You're fired.

TRUMP: You're fired.

We will never use those words on you, that's for sure.

ZELENY: The president's anger at odds with campaign promises of recruiting the best team.

TRUMP: The Cabinet, we're going to have all the best people. We're going to have the best people in the world.

(END VIDEOTAPE)

ZELENY: So the president is flying back to Washington tonight from an event in Saint Louis. He's raising money right now for Republicans there. Of course, keeping his eye on the critical midterm elections.

But all eyes here at the White House certainly tomorrow and on Friday, Wolf, are on any potential staff changes. Now, a White House spokesman said a short time ago the president has confidence in all of his Cabinet officials. When he doesn't, we will let you know -- Wolf.

BLITZER: All right, Jeff, thank you, Jeff Zeleny at the White House.

There's also breaking news tonight in the Russia investigation. The top Democrat on the Senate Intelligence Committee telling CNN there are growing questions of collusion between the Trump campaign and Russia, despite the findings of Republicans on the House Intelligence Committee.

Let's go to our senior congressional correspondent, Manu Raju, who's working the story for us.

Manu, Democrats on both panels believe the work on these investigations is far from over.

MANU RAJU, CNN SENIOR POLITICAL CORRESPONDENT: No question about it. You're seeing a growing divide between Republicans and Democrats over some key questions.

One, whether or not there was any collusion between Russian officials and Trump officials. Republicans on the House Intelligence Committee say no. And even some Republicans on the Senate Intelligence Committee, including Richard Burr, the chairman of the committee, said he's seen no evidence yet of collusion.

And another key question, whether or not there's evidence to support that 2017 finding by the intelligence community that Russia was -- ordered a campaign to help Donald Trump become president. Republicans on the House side say there's no evidence to supporting that. Democrats disagree.

(BEGIN VIDEOTAPE)

TRUMP: There is no collusion. You know why? Because I don't speak to Russians.

RAJU (voice-over): More than 30 key witnesses have yet to be interviewed, subpoenas for Trump financial records yet to be issued and scores of leads yet to be pursued.

This is a conclusion of Democrats, who accuse Republicans of prematurely shutting down the House Intelligence Committee's Russia probe.

REP. ADAM SCHIFF (D), CALIFORNIA: This is no way to run an investigation.

RAJU: Democrats say the committee has yet to explore a proposed business deal in Moscow. They say the Trump Organization was "actively negotiating" in Moscow with a sanctioned Russian bank as Donald Trump was running for president. A source tells CNN that's a reference to efforts to pursue a Trump

Tower Moscow project by Trump's personal lawyer, Michael Cohen, a project that was later abandoned. Cohen's partner in the effort, Felix Sater, said he worked out financing with Russia's VTB Bank, according to "The New York Times." The bank has denied this.

The Democrats also say an associate of Russian pop star Emin Agalarov had prior knowledge of the June 2016 meeting with Donald Trump Jr. and senior campaign officials, which, according to e-mails, was to provide dirt on the Clinton campaign. And Democrats say they have a -- quote -- "good-faith reason" to believe that the White House possesses documents about conversations the president had with James Comey before his firing last year as FBI director.

Comey has alleged that Trump asked him for loyalty, something the president has denied. But Democrats concede they don't have the evidence yet.

REP. MIKE QUIGLEY (D), ILLINOIS: I would like to be able to give you a definitive answer. We're living with the evidence we have. The bigger issue here is our being able to find out exactly what took place.

RAJU: This all comes as Republicans contend in their report that there was no evidence of collusion between Trump associates and Russia in 2016.

And, they say, there's no evidence to support the intelligence community's 2017 assessment that Vladimir Putin ordered a campaign to meddle in the elections with the goal of helping Donald Trump win.

Republicans now acknowledge Russians did try to hurt Hillary Clinton, but they quibble with how the CIA reached its conclusion that Putin wanted Trump to win.

(on camera): But isn't hurting Hillary Clinton the same thing as helping Donald Trump?

REP. MIKE CONAWAY (R), TEXAS: Again, glass half full, glass half empty. You can pitch that either way.

RAJU (voice-over): But the Senate Intelligence Committee has so far reached a different conclusion, according to the Democrat, Mark Warner.

SEN. MARK WARNER (D), VIRGINIA: I believe in the intelligence community's assessment that they spent months working on across the board, saying that the Russians had a favored candidate. That candidate was Mr. Trump. That candidate won.

RAJU (on camera): Do you have evidence that substantiate the intelligence community's assessment that Putin tried to help Trump?

WARNER: We have been on this for now about 14 months. We have seen nothing that takes away from the unanimous intelligence community's assessment. The Russians had a preferred candidate. (END VIDEOTAPE)

[18:10:07]

RAJU: Now, in that Mueller indictment that came out last month of the Russians who tried to allegedly conspire to meddle in the United States elections, of course, it also mentions that the Russians tried to help Donald Trump become president.

When I asked Mike Conaway about that yesterday, he said, well, that's irrelevant to our investigation. We found something completely different.

Now, on a separate matter, but related, regarding the Mueller indictments of Paul Manafort, the former Trump campaign chairman, the judge in that case warning that Manafort could face up to 305 years in prison, all raising questions about whether or not Manafort may change his plans to plead guilty and cooperate with the Mueller investigation.

Right now, we're not getting any indication he will do that, but putting pressure on him to maybe consider taking a different route because right now the judge warning a very steep price if he's found guilty in that trial, Wolf.

BLITZER: Yes, if he pleads guilty and cooperates, he could get a reduced sentence, something that would be pretty significant. Thanks very much, Manu Raju, for that report.

Let's get some more on all of this. Democratic Senator Richard Blumenthal of Connecticut is joining us. He's a member of the Judiciary Committee.

Senator, the House and Senate Russia investigations clearly haven't been on the same page for some time now, but how significant is it, in your opinion, that House Republicans are now rejecting the U.S. intelligence community's conclusion that the Russians were trying to help President Trump win the election?

SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: This premature shutdown of the House Intelligence Committee investigation is deplorable. Even more so is the discrediting or attempted discrediting of the intelligence community.

And, clearly, there is profoundly powerful evidence that the Russians not only interfered and meddled in the elections, but did it to aid Donald Trump. That fact is denied by the House Intelligence Committee.

But one need only read the penetrating indictment of 13 Russian individuals and three entities provided by the special counsel to see that in fact they did it to communicate denigrating information about Clinton and support Trump.

Those words are almost exactly from the indictment. And that view of the intelligence community is confirmed by that indictment, but also by the information that's been provided to the Judiciary Committee and to the Senate Intelligence Committee. So it is a gift to Donald Trump. It's a gift to Vladimir Putin that, unfortunately, the House on purely partisan grounds has provided this gift to those two individuals.

BLITZER: Yes, that's the conclusion of the House Intelligence Committee's Republicans, not the Democrats.

Do you believe, Senator, that President Trump could use the House Republicans' report to fire the special counsel, Robert Mueller?

BLUMENTHAL: He would meet a firestorm of opposition. It would be a constitutional confrontation and conflagration if he fires the special counsel and uses the House Intelligence Committee politically motivated shutdown to do so.

And I think my Senate colleagues would move quickly to stop it. I certainly hope so. We have legislation that is made all the more necessary and important by this premature political shutdown of the House Intelligence Committee investigation. That legislation would protect the special counsel. It is bipartisan.

I hope the Judiciary Committee will move it forward.

BLITZER: There was another dramatic development today. The attorney general, Jeff Sessions, we're told, is now considering whether to fire the FBI deputy director, Andrew McCabe, only days before his retirement -- he's supposed to retire in a few days -- due to the results of an inspector general's report.

Would that be appropriate under FBI protocol rules to fire McCabe and as a result after 22 years of service in the FBI, he would lose his pension?

BLUMENTHAL: As a matter of fairness and probably also FBI protocol, his years of very dedicated work on behalf of our nation and the FBI merit his continuing to his retirement date.

And I hope that the attorney general will think twice about the reflection on the FBI and its professionals that would be the result of this politically motivated, again, partisan motivated action on his part.

BLITZER: What do you think, Senator, of President Trump's decision to nominate Mike Pompeo, the CIA director, to become the next secretary of state?

BLUMENTHAL: I want to hear from Mike Pompeo whether or not he will use and support diplomacy in an effective way, as opposed to military force. He has a record of supporting military tactics over diplomatic force.

[18:15:03]

The State Department has been hollowed out. Many of our key ambassadorships have not been filled. Its budget is in jeopardy. The State Department needs a forceful advocate of diplomacy.

And President Trump needs an advocate of diplomacy, as opposed to military force, in situations like Korea, where some of his advisers are advocating a preemptive strike that would be devastatingly costly to this nation, in the view of many of the Pentagon's top leaders.

So I think that Mike Pompeo has a lot of questions to answer before I, at least, would support him.

BLITZER: I want to get to another sensitive issue. You joined some student protesters today on the National Mall here in Washington in support of gun control. What's the message you heard from those students?

BLUMENTHAL: This day was profoundly moving, not only on the steps of the Capitol and around the country, where we're seeing students and young people making a movement, a social movement, much like the civil rights movement, the women's health care movement, the anti-war movement, beginning a groundswell of grassroots support for commonsense, sensible measures in favor of gun violence prevention.

And these young people clearly are walking out of school, but they're going to be walking into the ballot box and voting with their feet and with their hearts. And the signs that I have seen, like "Our blood, your hands," will tell a powerful story and send a message to the American people that it's time for change. Enough is enough.

And the time has come for effective, commonsense measures that will break the grip of the gun lobby and the NRA on Congress. Congress has been complicit. It must change.

BLITZER: Senator Blumenthal, thanks for joining us.

BLUMENTHAL: Thank you.

BLITZER: Just ahead, a hearing set for the lawsuit pitting a porn star against the president. And tonight, a friend of Stormy Daniels is speaking out about Donald Trump's phone calls to her.

Plus, a CNN exclusive. We go on board as U.S. and allied nuclear submarines face down Russia in the Arctic. Is the melting ice giving Moscow a new path to war?

(COMMERCIAL BREAK)

[18:21:58]

BLITZER: The breaking news this hour, the top Democrat on the Senate Intelligence Committee telling CNN that he stands by the intelligence community's assessment that Russian President Vladimir Putin wanted to help Donald Trump win the election.

Senator Mark Warner says he's seen no evidence to the contrary. And as Republicans on the House Intelligence Committee shut down their investigation, Warner says there are growing, he says growing questions of collusion. Let's get more from Democratic Congressman Joaquin Castro of Texas.

He's a member of the House Intelligence Committee.

Congressman, the Republicans on your committee, they say they're shutting down their investigation. Will your fellow Democrats try to keep it going? Can you keep it going if the Republican majority says it's over?

REP. JOAQUIN CASTRO (D), TEXAS: You're right.

It's a shame, Wolf, that Republicans are shutting down this investigation. It is a betrayal of the public trust to get to the bottom of what happened.

And, as Democrats, we're going to do everything that we can, obviously, within our limitations, being in the minority party, to try to collect more information, find out facts, invite folks who may know something that's relevant to our investigation to reach out.

BLITZER: What does that mean, to try to do more, to try to do whatever you can?

If the majority on the committee says there's no more House Intelligence Committee investigation into Russian meddling in the U.S. presidential election, you don't have the authority to do anything, do you?

CASTRO: Well, to hold formal hearings, that may be true, that we're limited in not being able to do that.

But we certainly can hear from folks who may have relevant information and members of Congress, and also the committee staff can continue to do its own investigation and research on the information that we do have.

BLITZER: Some of your Republican colleagues on the committee seem to acknowledge that Vladimir Putin wanted to hurt Hillary Clinton in the election, but they reject the U.S. intelligence community's assertion that the Russian campaign's goal was to help Donald Trump be elected president.

Why do they say that?

CASTRO: I'm not sure. I'm baffled by that.

When you look at even just a few facts, first that George Papadopoulos, who, of course, is under indictment now, was approached by "The Professor," a Russian operative, who clearly said that they had dirt on Hillary Clinton, had e-mails that could be damaging to her, the idea there was perhaps they could turn these over to the campaign.

Remember, they knew that he was part of the Trump campaign. You consider also the fact that Roger Stone, who was one of the first Trump campaign employees and is a longtime associate of the president, knew ahead of time about the Clinton e-mail dump, was in communication, it appears, with WikiLeaks and Julian Assange, when you consider those two facts and many others, it's clear that there was collusion and that the Russians were trying to help Donald Trump.

BLITZER: He denies that. You don't believe him?

CASTRO: Well, he's actually gone back and forth and said that he knew. And then he said he didn't know. And it looks as though the evidence suggests that he did know.

[18:25:02]

BLITZER: The person, the Republican who's been in charge of this Russian investigation, Mike Conaway, the congressman, he thinks that Democrats will still sign on to some of the Republican majority committee findings.

What do you think? Will you sign on?

CASTRO: Well, I don't want to shut the door 100 percent, because what we have looked at so far in our committee is their draft report.

And we just got it yesterday, so we haven't had a chance to pore through it 100 percent. But, right now, I have got to say that the chances for that look pretty slim.

BLITZER: Do you believe the special counsel, Robert Mueller, will eventually reveal information that contradicts the conclusions in the House Intelligence Committee's Republican report?

CASTRO: I think he already has by indicting the folks, the Russians who he's gone after and also the Americans who cooperated with them. That by itself speaks volumes.

BLITZER: Congressman Castro, thanks so much for joining us.

CASTRO: Thank you.

BLITZER: Just ahead, porn star Stormy Daniels now raising money for her lawsuit against President Trump.

Plus, we go to the new front line of the global conflict between the U.S. and Russia, the Arctic, where American and allied nuclear submarines are facing down Moscow's military machine. It's a CNN exclusive.

(COMMERCIAL BREAK)

1830

(COMMERCIAL BREAK)

WOLF BLITZER, CNN ANCHOR: We're following breaking news. The White House now making it official, President Trump has picked cable TV analyst Larry Kudlow to be his new economic advisor, despite his opposition to new tariffs recently enacted by the president. Let's get some more with our experts and our analysts.

Ryan Lizza, what do you think, Larry Kudlow replacing Gary Cohn?

RYAN LIZZA, CNN POLITICAL ANALYST: Yes, I think -- the first thing I think people will point out is that he disagrees with the president, obviously, on the issue of some of the protectionist measures, whether they're tariffs or other -- or free trade agreements that Trump seems to support.

The thing that I'm -- you know, that I think Trump hasn't realized about this position is that the national economic council director is a kind of boring facilitating job. Right? You're the person in the White House who gets the views of all the other economic advisers and agencies; and you're sort of an honest broker. And then you sort of -- you help present those ideas to the president, who makes a final decision.

From what I know about Larry Kudlow, those are not his core strengths and experiences. He's mostly been a sort of doctrinaire, you know, low-tax, Laffer Curve traditional conservative on taxes. And frankly, I think Trump picked him, because he is extremely lavish and has been in his praise for Trump over the last few years and he's on TV a lot.

BLITZER: Let's get to some other issues with Shawn. What do you think? We just heard Congressman Joaquin Castro saying, despite the Republican majority in the House Intelligence Committee saying it's over, they're going to conclude their investigation, there's still stuff that the Democrats, the Democratic minority can do to come up with, presumably, evidence of, let's say, collusion between the Trump campaign and the Russians.

SHAWN TURNER, CNN NATIONAL SECURITY ANALYST: Yes, I think that, look, you know, the Democrats need to continue to look into the evidence that the House Intel Committee looked at.

This -- there is a lot of information that we know that the House Intel Committee report did not include. You know, there's been a lot of discussion about whether or not people were interviewed, whether or not they actually answered questions in those interviews, and so there is more information that should be looked at.

And on this issue of collusion, this is not necessarily -- this doesn't necessarily have to be an investigation about collusion. Look, we need to understand what happened between people on the campaign trail and people associated with the president, not because we -- you know, people are against the president but because we need to understand that from a national security perspective.

So while I know this is largely a partisan issue between Democrats and Republicans, there's a lot of information out there that still needs to be looked at and analyzed.

BLITZER: And I'm sure they will be. And Robert Mueller, you know, Rebecca, he's looking into all of this, as well. You heard Castro, Congressman Castro say that Mueller already has what he described as evidence of collusion.

REBECCA BERG, CNN POLITICAL ANALYST: Right. Well, we don't know that yet. Obviously, there have been indictments that have come down from Mueller, and there could be more to come. There are grand jury interviews that are continuing. So this is still very much in progress.

It could, as our analysts such as Jeffrey Toobin have predicted, it could extend throughout this year. And from a political perspective, it's important to remember that's going to coincide, potentially, with this election in November.

So I think when you're hearing these Democrats in Congress, Wolf, saying what they're going to try to continue doing, in spite of Republican opposition, especially on the House Intelligence Committee, this is also, for them, a preview for voters of what they would do if they were in the majority and something that they can use as a selling point, potentially, for people who are on the fence.

BLITZER: Phil, we're just getting a statement in from the White House press secretary, a statement by the press secretary on the United Kingdom's decision to expel Russian diplomats because of the poisoning of an ex-Russian spy and his daughter.

Let me read a couple of sentences to you and get your reaction: "The United States stands in solidarity with its closest ally, the United Kingdom. The United States shares the U.K.'s assessment that Russia is responsible for the reckless nerve-agent attack on a British citizen and his daughter; and we support the U.K.'s decision to expel Russian diplomats as a just response. This latest action by Russia fits into a pattern of behavior in which Russia disregards the international rules-based order, undermines the sovereignty and security of countries worldwide, and attempts to subvert and discredit Western and democratic institutions and processes. The United States is working together with our allies and partners to ensure that this kind of abhorrent attack does not happen again."

[18:35:25] Very strong statement from the press secretary at the White House.

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: No, it's not a strong statement. It's missing two pieces.

Look, the prime minister of Britain gets out and speaks. This is not simply about the incident that happened in terms of poisoning the father and his daughter in the U.K. This is about a transatlantic partnership that dates from World War II and before.

Is the president going to serve as a partner for Theresa May and as a messenger to the rest of Europe? Who will stand up to the Russians? Is the president going to speak or not?

And the second question is equally basic. Are we going to do something or not? This looks tough; it's not. The president has to speak, and he has to stay what we're going to do to support Theresa May. It's no more complicated than that, and -- BLITZER: What do you want the U.S. to do?

MUDD: I want the president to get out and say, "We support Theresa May, and here's the actions," whether it's our own expulsions or partnered economic sanctions with the Europeans.

BLITZER: So if this statement had been written and signed by the president, you would have been more impressed?

Mudd: No, I want him to speak. I want him in front of a microphone. I want him to say, "These are the actions, not the words, the actions we will take that support the U.K. prime minister." It's not complicated.

BLITZER: And you want the U.S. to do what the U.K. did, starting with expelling Russian diplomats?

MUDD: At least. I think that's a pretty weak measure, actually.

BLITZER: What do you think, Shawn?

TURNER: You know, to Phil's point, there's another piece of this that's a little peculiar.

One of the most important intelligence sharing relationships the United States has is with our partners in the U.K. And the way this typically works is, if the U.K. has intelligence of -- that suggests that something like this happened, they share that intelligence with the United States and with the U.S. intelligence community.

So, you know, what we saw -- what we see is we see today that the administration is acknowledging that this happened through looking at the intelligence. But the way this would typically work is that they would have already known that this happened, and they would have already validated that intelligence a couple of days ago when Sarah Sanders stood at the podium and refused to kind of acknowledge it. So there is a timeline issue here.

BLITZER: Yes, what's significant is that the statement says, "The U.S. shares the U.K.'s assessment. Russia is responsible for the nerve agent attack."

Everyone stand by. There's more news we're following. The porn star Stormy Daniels turns to the public to help finance her lawsuit against President Trump as the first hearing date is set in her case.

Plus, in a CNN exclusive, CNN is there as the U.S. And its allies patrol the arctic where Russia seeks to rule. We're going inside a U.S. nuclear submarine.

(COMMERCIAL BREAK)

[18:42:26] BLITZER: A court hearing is now set for July in porn star Stormy Daniels' lawsuit against President Trump. She's trying to dissolve the deal that bought her silence about an alleged affair she claims they had more than a decade ago. Let's go to our national correspondent, Sara Sidner, who's working the

story for us. Sara, there are several new developments tonight. Update our viewers.

SARA SIDNER, CNN CORRESPONDENT: Yes. New tonight there is a hearing that is set for July 12 here in Los Angeles. We will be there to find out the details of what that will mean.

There is also a crowdfunding site that Stormy Daniels has now put out there. An attorney has tweeted. Michael Avenatti tweeting today this site here that has now crossed $43,000 in just the one day that it's been up, quite a bit of money. The crowd justice site, basically she explains here why she needs the money. She says it's to help her in her legal battle against President Trump. And she says specifically that she's attempting to speak honestly and openly to the American people about the relationship with now President Donald Trump and the intimidation and tactics used against her.

That is what she is saying in this crowdfunding site. And we know that those allegations have been put forth in that lawsuit that was filed last week.

We can also tell you a little bit about what a friend of hers has confirmed to us. They have been friends for years. He says Stormy is a wonderful person, that she's very smart and very funny. He says he was also there when Donald Trump would call her. Stormy was staying at his house for a bit. The two of them, she said, would listen into phone calls, because Stormy would put Donald Trump on speakerphone back between 2006 and 2007 when the affair was allegedly still going on.

And he says, look, they often talked very business-like. It was all about Stormy, her career, and what was happening with it. That Donald Trump would talk for hours, he confirmed to us, and that he promised her some things, like potentially going on "The Apprentice." Also saying, "Look, you know, I'll give you a condo in New York. Why don't you go into my new building in Tampa," those things Stormy Daniels' friend says she refused to do.

He also said he was there when Donald Trump sent a limo to Stormy Daniels' home to pick her up to go to the Miss USA pageant that was in Hollywood in 2007.

He said that he did finally realize many years later -- we're talking about ten years ago -- that eventually he was on that NDA. His name is one of four listed as people having some knowledge of the relationship between Donald Trump and Stormy Daniels.

BLITZER: Yes, new developments unfolding. All right, Sara, thanks very much.

Rebecca Berg, where is this going from here?

BERG: Well, clearly, there's the legal battle ahead this summer, which pretty much ensures, [18:45:01] BLITZER: Wolf, that this is going to stay in the news for weeks and months to come. Not exactly the outcome you want if you are President Trump. If you are working in this White House, clearly this is a story that is damaging for them and they want it to go away.

But Stormy Daniels is showing that she has a command of the media much like Donald Trump. She can command attention. She knows how to play the fiddle of the media just like he does. And so, she is in a sense a worthy adversary for the president in this case.

BLITZER: The nightmare scenario for the president, Ryan, as you know, is that he will be called to testify, whether a deposition or whatever in this case.

RYAN LIZZA, CNN POLITICAL ANALYST: If the case goes forward. And I agree with Rebecca, she is doing some of the things that Trump did in business many times. One, she's trying this case in the press, and I don't think if she didn't have the press attention, I don't think her case would be very strong.

I mean, the way I look at it, she accepted $130,000, entered into a contract and is now trying to get out of it. Frankly, not all that different than the way Trump would try and get out of contracts when he was in business, often using the press to his advantage. But I don't know if -- maybe this is a minority view on this, but I sort of see Trump here as more of the victim in this.

He -- they did enter into an agreement. She did take the cash. And now she is, you know, using the press to sort of argue that that contract is somehow null and void.

BERG: Although, the White House would have us believe that President Trump knows nothing about this, knew nothing about it, was not a party to this.

LIZZA: They are clearly lying about that.

BLITZER: How do you see it, Phil?

PHIL MUDD, CNN COUNTERTERRORISM ANALYST: I want a stormy question every night.

Let me make this easy. This is not about the law and it's not about the truth. This is about cash. She's sitting there, I would wager, and I would do the same thing if I were in her shoes, which I would guess is unlikely.

Look, the issue is she's sitting saying this might cost me some money if I violate the hush agreement. By contrast, if you look at her Instagram account and how many appointments she's got and her schedule is stacked. And if you look at what she said publicly about how much money she's making per appearance, three or four times what she used to make, I think she's saying the longer I keep this going, I don't care how much the court charges me, I don't care if I've got to pay 130k, I'm going make a lot of money going out with the schedule I've got. SHAWN TURNER,CNN NATIONAL SECURITY ANALYST: I just say, Wolf, we

understand that the president can't let these kinds of things just kind of happen in the background. He has to -- he has to get in the fight. From my perspective as a guy who focuses on national security, the president will focus on this and it will distract him from the business of governing.

And while I think that we can all look at this and there's some laughs to be had and I understand we have to look at this from a legal perspective, the president is not able to do his job of leading the country when he's focused on this.

BLITZER: Yes, there are serious national security potential ramifications if he's preoccupied with stuff like this.

All right, guys, stick around.

We're getting ready for a CNN exclusive. CNN is there as U.S. and allied nuclear submarines patrol the Arctic in the face of Russia's quest for dominance. Our own Jim Sciutto, he's on the scene as America's most sophisticated underwater weapon gets ready for use.

(COMMERCIAL BREAK)

[18:53:09] BLITZER: Now a CNN exclusive: the growing battle for dominance in one of the world's final frontiers, the Arctic.

Our chief national security correspondent Jim Sciutto is back from assignment.

Jim, you were onboard a nuclear submarine training to take on adversaries like Russia.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: That's right. It's certainly a message to Russia. It's a message to China. It's a message to the world that the U.S. Navy can operate and demonstrate military power all over the world, even in the harshest environments, arguably the harshest, in the Arctic, particularly attention growing there, as the ice melts, and opportunities to demonstrate military power.

(BEGIN VIDOETAPE)

UNIDENTIFIED MALE: Weapon 2-1 power up now.

UNIDENTIFIED MALE: Stand by, 2-1.

UNIDENTIFIED MALE: Ice pick submarine, bearing, 182, 200 yards.

SCIUTTO (voice-over): The USS Hartford, Los Angeles class nuclear attack submarine, readies to fire.

UNIDENTIFIED MALE: Fire 2-1.

UNIDENTIFIED MALE: Shoot 2-1.

SCIUTTO: In an instant, a two-ton 20-foot long torpedo shoots toward an enemy submarine. Target acquired and destroyed.

UNIDENTIFIED MALE: (INAUDIBLE) operations on progress.

SCIUTTO: Hartford is training for primary mission, hunting and killing enemy ships and submarines.

UNIDENTIFIED MALE: One-eight-zero feet, zero angle.

SCIUTTO: But these exercises with CNN was given exclusive access to are taking place in the harshest environment in the world, under the Arctic Ice.

UNIDENTIFIED MALE: Keeping the watch, vertical surface, vertical surface, vertical surface.

(INAUDIBLE)

SCIUTTO: It's an arena where even surfacing requires enormous power and skill.

UNIDENTIFIED MALE: Five degree up angle, 0.23, upper velocity and increasing.

SCIUTTO: We were onboard as the submarine stalks to the surface with full force of its 60,000 tons.

[18:55:02] UNIDENTIFIED MALE: Impact.

UNIDENTIFIED MALE: One-1,000, two-1,000, three-1,000.

SCIUTTO (on camera): We have just broken through 2 feet of Arctic Ice. The North Pole is this way. Russia is this way. And Alaska is this way. Mission like this is all about sending a message, that U.S. Navy can operate or wage war, if necessary, in the harshest environment in the world.

(voice-over): The Arctic is the newest and most daunting front in the expanding global competition between U.S. and Russia. These 5.5 million square miles are under dominance as ice shrinks and opens new oil exploration, and shipping lanes and new paths to wage war.

REAR ADM. JAMES PITTS, COMMANDER, UNDERSEA WARFIGHTING DEVELOPMENT CENTER: We are well aware we are in a great power competition environment. And the arctic is one piece of that.

SCIUTTO (on camera): Great power competition, talking principally about Russia, but also China?

PITTS: Russia and China two of great powers that are trying to catch up with us as fast as they can.

SCIUTTO (voice-over): This year these exercises called Ice X are taking on new emergency. British joined in first time in a decade, and U.S. submarine forces are refocusing on mission dating to the Cold War. UNIDENTIFIED MALE: What is our primary missions, the submarine

forces, is to be able to leverage our offensive weapon like a torpedo against a threat. So, there has been a shift in emphasis in our ability to do that.

SCIUTTO: Operating under the arctic presents unique challenges with no access to GPS navigation, limited communications, and dangers from below and above.

UNIDENTIFIED MALE: Ice keels depth times 0-7, 55 feet.

SCIUTTO: Ice keels as long as 150 feet extend down from the ice sheets.

America's biggest challenge, however, comes from Russia. The Russian military has assembled in arc of steel along Arctic Coast, comprising dozens of military bases, ports, and air fields and it is building and deploying faster, quieter and more capable subs of its own.

COMMODER OLLIE LEWIS, SUBMARINE SQUADRON 12: In every case, they are trying to get faster and better at what they do and integrating technology into their platforms and it's really set them on a ramp to where if we don't continue to do the same, we'll find ourselves in the place of falling behind.

SCIUTTO: For now, Navy commanders say maintains a technological advantage.

UNIDENTIFIED MALE: (INAUDIBLE) ramming.

UNIDENTIFIED MALE: Clear forward.

UNIDENTIFIED MALE: Ramming.

SCIUTTO: Subs like the Hartford are virtually invisible and silent to enemies, allowing them to strike without warning against targets below and above the surface.

(on camera): These are two of the four torpedo tubes but you could launch a lot more from a sub than torpedoes. You have 12 vertical launch tubes. They can launch cruise missiles. From those torpedo tubes, you can also launch unmanned underwater vehicles, drones, becoming more of a focus in this Navy, and some submarines like this equipped to send out SEAL team delivery vehicles as well. These subs designed to project power in many, many ways.

(voice-over): However, Russian and increasingly Chinese submarines are getting better at doing the same.

(on camera): Is the navy becoming more reliant on subs as platform?

LEWIS: We do expect submarines will get to places and conduct action where other units may not be able to right off the bat. We're going to need the submarine force to kick the door in, and other forces to flow behind.

SCIUTTO (voice-over): That is the firm message to audiences in Moscow and beyond.

(END VIDEOTAPE)

SCIUTTO: The motto of the submarine forces is on scene, unseen, the idea being they can get anywhere in the world unseen by others, virtually invisible. And right now, the U.S. Navy considers submarines more and more of priority. In fact, they're asking for 15 more. They want to increase the size of the sub forces by the middle of the century. And that's no cheap thing. It's $3 billion or so for attack submarine like the Virginia classes.

So, they're talking about a lot of money, and it's happening at a time when very real and daunting competition from countries like Russia and China.

BLITZER: It's really amazing. How cold was it when you walked out there?

SCIUTTO: It was -- with the wind chill when we got out of the sub, it was minus 42 degrees Fahrenheit. And I'll tell you, there is a reason why it could have been anyone behind the mask there, because if you exposed any skin to that, it froze like that.

BLITZER: In a minute. It's tight quarters on a submarine.

SCIUTTO: It's very tight quarters. One thing I'll note because submariners, this is tough duty, there are fewer bunks on board than there are crew. So bunks are tiny and sometimes they've got to share those bunks, rotating, depending on shifts. It's tough duty.

BLITZER: I give those submariners a lot of credit. They spend months below the water. They got a few days up. It's really amazing work.

SCIUTTO: Absolutely.

BLITZER: Great. Thanks very much for doing that.

That's it for me. Thanks very much for watching.

"ERIN BURNETT OUTFRONT" starts right now.