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The Situation Room

Stock Market Plunges as Trump Threatens New China Tariffs; New U.S. Sanctions Hit Wealthy Russians, Putin's Inner Circle; White House: Trump Met with Embattled EPA Chief Today; GOP Representative Blake Farenthold Resigns After Sex Scandal; Mueller Using Manafort Info For New Searches; Heavy Fighting As U.S. Consults Allies On Syria Pullout; Judge Gives Trump Attorney More Time To Respond To Porn Star Suit. Aired 5-6p ET

Aired April 06, 2018 - 17:00   ET

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

WOLF BLITZER, CNN HOST: Happening now, breaking news. Nosedive. Stocks plummet as President Trump raises the prospects of new tariffs on China, and his treasury secretary concedes there's a risk of a trade war. One Republican calls the president's latest statement nuts.

[17:00:24] Sanctioning Putin's pals. The Trump administration announces new sanctions on Russia, hitting a handful of billionaires close to Vladimir Putin and a group of senior government officials.

Active investigation. The special counsel's also stepping up pressure on wealthy Russians, along with Trump campaign officials and, reportedly, Trump business allies. Is Robert Mueller's team expanding its investigation?

And delaying the deposition. A judge grants President Trump's lawyer more time to respond to Stormy Daniels's lawsuit. Does the president's claim to know nothing about the hush-money payment offer a new opportunity to the porn star's lawyer?

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

ANNOUNCER: This is CNN breaking news.

BLITZER: Breaking news, President Trump doubling down on his threatened tariffs against China, helping to send the Dow down nearly 600 points, amid growing fears of a trade war. And the Trump administration steps up pressure on Russia, announcing news sanctions on billionaires from the Kremlin's inner circle, including President Vladimir Putin's son-in-law.

I'll speak with Congressman Gerry Connolly of the Oversight and Foreign Affairs Committees. And our correspondents and specialists, they're all standing by with full coverage.

President Trump is shrugging off damage his tariff policy may cause to investors. Let's immediately to go our senior White House correspondent Pamela Brown.

Pamela, what's the latest?

PAMELA BROWN, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Wolf, in response to the president's threat of additional tariffs against China, we've seen the stock market reacting. The White House paying close attention to the Dow being down more than 500 points. And today press secretary Sarah Sanders, when asked if the White House wants trade war with China, she said the White House does not want that.

(BEGIN VIDEOTAPE)

BROWN (voice-over): President Trump is not backing down, announcing Thursday night he is threatening an additional $100 billion in tariffs against China. Even if those threats rock an already volatile stock market.

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES (via phone): The easiest thing for me to do would be to just close my eyes and forget it. If I did that, I'm not doing my job. I'm not saying there won't be a little pain, but we're going to have a much stronger country when we're finished.

BROWN: The latest threats taking many by surprise, including some in the president's own party. Nebraska Senate Ben Sasse issuing a harshly worded state saying, "Hopefully, the president is just blowing off steam again. But if he's even half serious, this is nuts."

Larry Kudlow, the president's new top economic advisor, admitted to reporters he himself only found out about the president's decision to threaten more tariffs Thursday night.

UNIDENTIFIED MALE: When did the president first tell you that he was going to announce these additional potential $100 billion in tariffs?

LARRY KUDLOW, WHITE HOUSE CHIEF ECONOMIC ADVISOR: Last evening.

BROWN: Kudlow emphasizing those tariffs are merely a proposition.

KUDLOW: This is just a proposed idea which will be vetted by USTR and open for public comment. So nothing has happened. Nothing has been executed. I read about how -- there's no "there" there yet. But there will be.

BROWN: But today's stock market plunge accelerated after Treasury Secretary Steve Mnuchin said this on television.

STEVE MNUCHIN, TREASURY SECRETARY: There is the potential of a trade war. And let me just be clear: It's not -- it's not a trade war. The president wants reciprocal trade.

BROWN: The administration today also taking a tougher stand on Russia, announcing tough sanctions against Russian oligarchs and imposing new sanctions against 17 government officials for meddling in the 2016 U.S. elections.

SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: What we would like to see is the totality of the Russian behavior change. We want to continue having conversations and work forward to building a better relationship.

BROWN: All this as the White House is reeling about the future of EPA administrator Scott Pruitt.

TRUMP: I think that Scott has done a fantastic job. I think he's a fantastic person.

BROWN: CNN has learned the president recently floated the idea of replacing Attorney General Jeff Sessions with Pruitt, despite controversy surrounding Pruitt, and that Trump's own chief of staff, John Kelly, had advocated for firing the embattled EPA administrator before the headlines get worse for the administration. So far that advice has not been heeded.

The president is outright defending Pruitt, implying the multitude of negative stories surrounding him are all made up, tweeting, "Do you believe that the fake news media is pushing hard on a story that I'm going to replace A.G. Jeff Sessions with EPA chief Scott Pruitt, who is doing a great job but is totally under siege? Do people really believe this stuff? So much of the media is dishonest and corrupt."

[17:05:03] SANDERS: The president feels that the administrator has done a good job at EPA. He's restored it back to its original purpose of protecting the environment. It's gotten unnecessary regulations out of way, and we're continuing to review any of the concerns that we have.

(END VIDEOTAPE)

BROWN: And a White House official confirming that the White House did meet with his EPA administrator at the White House today, though the source would not detail the conversations. T

Also, this just in from Russia's foreign ministry, issuing a statement saying that there will be a, quote, "harsh response" to the Trump administration sanctions on Russian oligarchs -- Wolf.

BLITZER: People are bracing to see what the Russians do. Pamela, thank you very much.

The United States is slapping new sanctions on that group of wealthy Russians, along with their companies and high-ranking government officials. The move reaches deep into Vladimir Putin's inner circle.

Let's bring in our senior congressional correspondent, Manu Raju. Manu, what's behind this action?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Wolf, tensions have been mounting between Washington and Moscow in the wake of that poisoning of a former Russian spy and his daughter on British soil. The U.S. joining European allies in expelling Russian diplomats from American soil, and the Russians responding in kind.

Today's move, an aggressive attempt to go after prominent Russians over a range of Kremlin-backed actions, including meddling in the U.S. elections, even as the president himself has continued to downplay Russian interference in the 2016 campaign.

(BEGIN VIDEOTAPE)

SANDERS: Good afternoon

RAJU (voice-over): The new sanctions the Trump administration announced today will hit several prominent Russians who have ties to President Trump's associates and could be of interest to Special Counsel Robert Mueller.

Included on the list, billionaire Oleg Deripaska, who owns one of the largest aluminum producers. Deripaska has longstanding business ties to former Trump campaign chairman Paul Manafort, who according to the "Washington Post," reached out to the Russian oligarch, offering private briefings on the campaign during his tie as Trump's campaign chairman.

Also, Viktor Vekselberg, owner of a major Russian conglomerate, who had a prominent role in the Bank of Cyprus at the same time that Commerce Secretary Wilbur Ross had a large investment in the bank.

Two of the oligarch's American associates donated handsomely to the president's inauguration, which Vekselberg also attended.

And the administration also targeted Alexander Torshin, a top official at the Central Bank of Russia. Torshin has longstanding ties to the National Rifle Association, which spent millions to help Trump win the presidency.

In 2016, Torshin had a brief interaction with the president's eldest son, Donald Trump Jr. and also played a role in an effort to arrange a meeting between Trump and Putin that same year.

The tough new moves may have been announced by Trump's administration, but the president himself has been mostly quiet in condemning Russia's behavior. The White House today said actions speak louder than words.

SANDERS: We speak on behalf of the president day in, day out. Again, the president has signed off and directed these actions. I think that that speaks volumes, actually, on how the president feels and exactly underscores what he said earlier this week when he said no one has been tougher on Russia.

RAJU: Mueller's investigation also is putting pressure on prominent Russians.

After indicting 13 over allegations they sought to interfere in the 2016 campaign, his investigators in recent weeks have questioned Russian oligarchs traveling to the United States, including one who landed in the New York area and had his electronic devices searched.

New court filings also show that Mueller's team is seizing on information gathered during a raid last year of Manafort's Virginia home and from a storage locker. Investigators used a warrant from March 9 to get information on five AT&T phone numbers to aid ongoing investigations that are not the subject of either of the current prosecutions involving Manafort, who was indicted on federal charges last year but has denied any wrongdoing.

(END VIDEOTAPE)

RAJU: Now, after issuing a subpoena to the Trump Organization, Mueller's team also appears to be targeting Trump business partners. Investigators showed up unannounced at the home of a Trump business associate who witnessed multiple transactions connected to Trump's efforts to expand his brand abroad. Now, that's according to a McClatchy report.

Now, that same report also says investigators seem to be especially interested in transactions involving Trump's personal attorney, Michael Cohen. The Trump Organization, of course, pursued deals in Georgia, Kazakhstan and Russia; and that's one thing that the investigators appear to be looking at, as well.

Now, Cohen has denied any wrongdoing. His attorney, who we reached out to, has not responded to our request for comment. And ultimately, Wolf, the question is whether that will breach -- these efforts by the Mueller team will breach the president's red line that he drew last year when he said that Mueller should not be investigating the president's finances. Now that it appears that perhaps they are, what will the president do? And what will he do? Will he actually sit down with Mueller, too? It's still an open question.

[17:10:05] BLITZER: Yes. He's clearly interested in some of those Trump Organization business deals. We'll see what happens on that front. Manu, thanks for that report.

Joining us now, Democratic Congressman Gerry Connolly of Virginia. He's a member of the House Oversight and Foreign Affairs Committees. Congressman, thanks so much for joining us.

REP. GERRY CONNOLLY (D), VIRGINIA: Good to be with you, Wolf.

BLITZER: Do you give the Trump Organization credit for these latest sanctions against these individuals, these companies, these oligarchs, these pals of Putin?

CONNOLLY: Well, I think there are a lot of people in the administration, in both the foreign policy world and the intelligence and law enforcement world, who have long wanted to do this. This is a belated action. And generally, it's been the president who's been out of step on the subject of Russia with his own administration.

BLITZER: But now that he's finally authorized this, do you give him credit?

CONNOLLY: I give the administration credit for doing this. I just wish it had been a year ago. This president has been sending mixed messages to the Russians and to Vladimir Putin personally that make you wonder, is there a consistent policy? And I'm sure it makes Vladimir Putin wonder the same.

BLITZER: The Russian Foreign Ministry has just issued a very tough statement saying that the U.S. will get a, quote, "harsh response" to these sanctions against Russia. Quote, "Washington continues to frighten with the rejection of American visas and threaten business with freezing property and financial assets, forgetting that the seizure of private property and other people's money is called robbery." They say, "We would like to advise Washington to get rid of illusion that we can be spoken to with the language of sanctions."

What's your reaction to that tough Russian response?

CONNOLLY: Well, I think that's sort of par for the course in terms of Russian language and rhetoric. This is the same country that's been accused, and there's pretty compelling evidence, of poisoning two former Russian intelligence agents, or at least one and his daughter, on sovereign territory in Great Britain. And they were sanctioned by over 20 countries for that including us.

So I'm not moved by the Russian rhetoric. It's a smoke screen to, frankly, hide the Mafioso-like behavior of the Russian government and the Russian oligarchs in moving money.

BLITZER: You know, everything the U.S. does to Russia, they will do -- they will retaliate in kind. When the U.S. expels 60 diplomats, they'll expel 60 American diplomats.

Now, the U.S. has imposed these sanctions on these wealthy Russians, people close to Putin. Russian business. You know they're going to respond with sanctions against wealthy Americans, with individuals close to the president of the United States. Maybe even the president's son-in-law, because Putin's son-in-law was among those sanctions.

When they do that, and you know they will, what should the U.S. do then?

CONNOLLY: Well, I think the United States has to continue on multiple fronts. We have to insist on sanctions post-Crimea. We have to insist on tough sanctions post interference in the 2016 election. We have to insist on sanctions and tougher behavior after the poisoning in Great Britain. And we can't be intimidated by Russian rhetoric or, frankly, their tit for tat.

In the long run it's going to be Russia that loses, because they don't have credibility, and frankly, they don't have a lot of economic leverage. We do.

BLITZER: Let's turn to another important issue that I know you're working on. The Environmental Protection Agency Administrator Scott Pruitt. You serve on the Oversight Committee.

Your colleague, the ranking Democrat, Congressman Elijah Cummings, is calling for a hearing with Pruitt to investigate all these ethics concerns. Do you think that chairman Trey Gowdy will agree to that?

CONNOLLY: Trey Gowdy is a friend, but he's been the Torquemada of Benghazi. But when it comes to scandal in the Trump administration, whether it be Tom Price or Mr. Pruitt at EPA, it's been crickets. It's been silence. No interest in seeing, hearing or talking any kind of evil. And so I think that's scandalous. The Oversight Committee has an independent role for the United States Congress as an institution, and we're not doing our job.

I'm not hopeful that Chairman Gowdy will do anything with respect to Mr. Pruitt, Administrator Pruitt. And that's why I think Pruitt's just got to go. I think the ethical behavior issues have now built up to the point, he's no longer credible.

BLITZER: Congressman Cummings, as you know, also wants Trey Gowdy, the chairman, to subpoena the EPA for documents. They've been slow to hand over. Do you think that Gowdy will issue those subpoenas?

CONNOLLY: So far we've had several dozen subpoena requests to Chairman Gowdy on numerous subjects. Conflicts of interest, ethical lapses, travel, security clearances in the White House. He has responded to not one. He has not issued a single subpoena.

[17:15:07] I think that's a record for a chairman of our committee. When President Obama was in office, they were working overtime, issuing subpoenas and launching investigations, trying to make, actually, hay where there was none to be made. But nonetheless, quite active. We have been quite inactive.

BLITZER: You've just written an opinion piece in "The Hill" newspaper here in Washington. Let me quote a sentence from it. "I can think of no better gift for the American people than for the president to dump Mr. Pruitt."

Tell us why you believe that.

CONNOLLY: Well, there's the policy aspect of Mr. Pruitt, and he's on a wrecking mission to essentially dismantle environmental protections across the board, and that's sort of his career. Suing the EPA to try to block positive regulation to protect air quality, water quality, and the like.

Now that he's in the job, heading an agency whose mission he doesn't really believe in, he's been, you know, systematically trying to dismantle regulatory protections for American safety and health.

But his ethical behavior goes way beyond the pale. You know, he's -- he's given raises to two employees after being told not to by the White House. And used a special authority and fund to do it, circumventing the normal process. And then lying about whether he knew about it.

And of course, he's demoted five people who questioned his ethical behavior. He's got a security detail 24 hours a day, which is very unusual for an EPA administrator. As many as 20, it is said, in his security detail. That's unheard of. The speaker of the House doesn't have that kind of security detail.

You know,, he built a special soundproof room for his headquarters office. No other administrator has ever said they even needed such a thing. He's not in the intelligence world. And of course, his travel, had to flight first-class travel,

ostensibly, because somebody once questioned him with he got on an airplane, and that was pretty spooky. Well, welcome to the world of public servants and accountability.

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

CONNOLLY: My pleasure, Wolf.

BLITZER: Breaking news coming up. President Trump meets with his embattled EPA chief, Scott Pruitt. He's up to his neck, as you just heard, in some scandalous allegations. Will the president eventually stand by him?

And a judge gives President Trump's lawyer more time to respond to the lawsuit by Stormy Daniels. Now that the president has broken his silence on the porn star, does that help her case?

(COMMERCIAL BREAK)

[17:22:18] BLITZER: We're following breaking news. According to a senior White House official, President Trump met with his embattled Environmental Protection Agency administrator, Scott Pruitt, earlier today. Although the White House won't say what they talked about, Pruitt is facing numerous calls for his resignation because of questions about his expensive travel and other ethics issues.

Sara Ganim is joining us now with more on Pruitt's problems.

Sara, what are you learning?

SARA GANIM, CNN CORRESPONDENT: Well, even today, as press secretary Sarah Sanders gave him this boost in confidence, saying that the president thinks he's doing a good job, as that was happening, another scandal was breaking.

The lobbyist landlord that Pruitt got in trouble for late last week, as it emerged that he was renting a $50 a night apartment from someone whose lobbying firm was lobbying the EPA, it comes out that that landlord said they had to force him out by changing the locks. That he was late to pay rent and didn't quite get the hints when they said it was time for him to move out and find a new place to live.

Politico first reporting the story, saying that he was the Kato Kaelin of Capitol Hill. You know, this comes after a week of just one scandal after another for Scott Pruitt.

BLITZER: And besides the apartment scandal, there have been numerous other scandals, right?

GANIM: Yes, almost too many to count at this point. You know, it's to keep track of them all.

The big one, you know, they haven't, as the week came to a close, was the emergence of a narrative inside the EPA where there's a huge rift among senior staff. You know, people who were upset about things like unauthorized pay raises. Security detail being asked to use lights and sirens. Expensive air charters that they considered to $100,000 air charter that he wanted to or he considered hiring. A $70,000 bulletproof desk that they considered buying.

And as people began to push back, both career staff and political staff within the EPA, a rift began to -- to emerge among those senior staff members. Some of them say that they were demoted, reassigned or iced out because they raised concerns or refused to cooperate with some of these requests.

BLITZER: At least for now the president says he's doing a fantastic job. He's on the job. We'll see how long that lasts. Sara, thank you very much.

Coming up, President Trump wants to end the U.S. military presence in Syria. But as the U.S. consults with allies about a withdrawal of troops, heavy fighting continues. We'll take you inside the war zone.

And a judge grants President Trump's lawyer more time to respond to Stormy Daniels' lawsuit. But now the president has broken his silence about the porn star, does that give her case a boost?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

[17:29:45] BLITZER: We're following multiple breaking stories. A senior White House official confirms President Trump met with his embattled Environmental Protection Agency, Director Scott Pruitt, earlier today. Also breaking just now, another member of Congress resigns amid a sexual harassment scandal.

Texas Republican Blake Farenthold used $84,000 in taxpayer funds to settle a sexual harassment claim and never paid taxpayers back that money. He promised he would. He never did.

[17:30:00]

Let's bring in our experts. David Chalian, what do you make of this development?

DAVID CHALIAN, CNN POLITICAL DIRECTOR: Well, he had already announced, Farenthold, that he wasn't going to run for reelection and that was a big headache for Republicans at the time because he did have these claims against him. But even at that time, there were demands that he pay back this taxpayer money that he used -- $84,000 -- to settle a former staffer who had sued him, and they settled out of court about his behavior in office, Wolf. And today, upon news of his resignation, his own chairman of the NRCC, the Republican campaign arm, issued a statement that said, I hope Blake is true to his word and pays back the $84,000 of taxpayer money he used as settlement. Going on to say, Congress must hold themselves to even higher standards here. So, Republicans do have now with this notion that he's leaving Congress without having paid that back, a little bit of a scar now from this congressman that was embroiled in this scandal. BLITZER: He's now, I think, the fourth member of the house and senate

to resign amid allegations of sexual harassment. Other issues, you take a look at the picture there: Representative Conyers, Senator Franken, Representative Trent Franks, Representative Blake Farenthold, and Ruben Kihuen as you there from Nevada. So, there are five, all together.

ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: I mean, it's really surprising, it's more surprising that it's taken this long for Farenthold to finally leave Congress as a result of this. I mean, some of those members left for lesser offenses than actually having a case settled and then saying you're pay it back and then never actually doing that. Republicans need to clear the decks ahead of 2018. They need to make sure that any outstanding problems that are not last-minute things, acts of god that they can't control are out of the way, so that they can be in the best possible position. Things are improving slightly in some of these generic ballots, but Democrats still have an advantage. They know it's going to be a tough cycle, and stories like that clearly not going to help them going into the mid-terms.

BLITZER: As of today, he's no longer a United States congressman -- Blake Farenthold. You know, let me get back to you, David, because the more these scandals emerge about the EPA Administrator Scott Pruitt, you think it's over but then every single day more emerge. How much longer can this guy survive?

CHALIAN: When you said you think it was over, I didn't know if you meant his tenure or that these stories come to an end. When you get to a question of can 'x' survive in the Trump administration, there's only one person that can answer that question -- that's the president. So, I don't know the answer to that. What I do know is that the job Scott Pruitt is doing with getting rid of a lot of regulations, especially Obama-era regulations, is a job that unifies Republicans across the board. And so, he's doing exactly at the EPA, what the president, his advisors, his supporters, and establishment Republicans had hoped an EPA administrator would do. That's why I don't think we were so quick to see him sort of leave this week. Now, we do know the president does not like these kinds of distracting bad headlines. And you're right, Wolf. the stories don't seem to end. I think that's why we can't conclude that he's ultimately safe. But clearly, the president would like him to be safe. He just -- we'll see if the president can withstand more negative headlines for someone on his team.

BLITZER: All right. Michael Zeldin, let's talk about Robert Mueller's investigation. Right now, it seems to be accelerating, moving in all sorts of directions. We've now learned as recently as March 9th -- a month ago or so -- Mueller used a warrant for five more phone numbers. What does that tell you about the investigation right now?

MICHAEL ZELDIN, CNN LEGAL ANALYST: It's moving relatively. He looks at evidence he gets. He determines if there's more evidence that that initial evidence leads to and he pursues it. In this case, I believe it was the day before the secondary indictment against Manafort that he got this new warrant out for information. So, he's just moving methodically through his investigation. We see this. We see stopping of Russian oligarchs at airports. We see plea and cooperation agreements. This is just moving in a textbook matter about how a professional prosecutor team moves. It is not slowing down. All the indications that we had, this going to end in November, December, Valentine's Day, were all false leads. He's moving forward and it's expanding.

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: There's an inside piece of this on the intelligence side and that what we used to call link analysis. So, I pick up you, Wolf Blitzer, as a target of investigation. I look at your phone, your e-mail, your financial information. All of a sudden, I realize you're in contact with David Chalian, he's also involve, unsurprisingly, in criminal activity. It's like, if you've ever gotten your house repaired and you realized you have termite damage, you take wall out, and have this happened twice, and you realize there's a network, there's a web behind it. Link analysis especially in the age of data allows you to go chain phone numbers, which I'm sure would happen in this case. The one most interesting piece of this to me, is we're now, what, a couple years into the investigation and they are finding so much with dozens of lawyers and more investigators, and that they're still uncovering new phone numbers, which I'm sure what happened in this case. The one, most interesting piece of this to me is we're now what, a couple of years in the investigation and they are finding so much with dozens of lawyers and more investigators than that that they're still uncovering new phone numbers. That tells me that we have an investigation that's really broad.

[17:35:19] BLITZER: And you know, Abby, we've been reporting on these new sanctions that the Trump administration has imposed against Russian oligarchs, high-ranking government Russian officials, people close to Putin, seven oligarchs, 12 companies that they've control, 17 senior government officials -- one of those individuals, the son-in- law of Putin. You know the Russians are going to respond at the White House. Are they bracing for a tough response and a total deterioration in U.S.-Russian relations even as the president keeps on saying he would like to have good relations with Russia, and he would like Putin to, perhaps, come over to the White House.

PHILLIP: I think up until this point, we had wondered, justified, whether the White House was willing to go far enough on Russia in order to risk further deteriorating the relationship. And I think this latest step is probably an indication that they are willing to go there. And it has -- as much to do with the Russian interference as it does to do with that nerve agent attack in the U.K., which forced U.S. ally to really put pressure on Washington to stand by them. I think the White House is finally showing the willingness to do that, at least at the administrative level. Today, Sarah Sanders faced some questions about why the president himself still doesn't seem to be willing to go there, doesn't seem to be willing to utter the words with his own mouth. But the effect is really going to be: the Russia will probably retaliate and they are ready for that.

BLITZER: You think they might retaliate since Putin's son-in-law has been sanctioned? The Russians, all sanctioned, Jared Kushner, the president's son-in-law.

PHILLIP: It's entirely possible. I mean, what effect that will have is unknown. But Russia has up until this point tried to do tit for tat. We expelled 60 diplomats, they expelled 60 of ours. We sanction the son-in-law, and he might very well sanction --

BLITZER: What do you think, Phil?

MUDD: Well, I'd be worried if I'm sitting in the White House about whether there are retaliatory sanctions by the Russians and they roll out some dirt. In other words, they say, you want to come after friends of Putin? We got some dirt on people who are associates of -- Trump campaign members, Trump family members, and they were allowed some sanctions, with some dirt. I think there are implications here beyond diplomacy about whether the Russians finally say, we thought the president was a chance. It looks like he's going to roll in the face of pressure for more sanctions, so we're going to squeeze in by rolling out some nasty things.

BLITZER: And Abby you make an important point of very tough sanctions authorized by the president of the United States, but he doesn't personal tweet about it or say anything about it in contrast with so many other issues.

Everybody, stick around. There's more news. A CNN crews close-up look at today's very heavy fighting in Syria, even though President Trump insists ISIS is nearly 100 percent defeated, and U.S. troops should come home very soon. We're also getting details about a judge's late breaking ruling in the Stormy Daniels lawsuit against President Trump.

(COMMERCIAL BREAK)

[17:42:34] BLITZER: Breaking this afternoon over at the Pentagon, the Defense Secretary James Mattis told reporters: The United States is in consultation "with our allies and partners about the implications of President Trump's desire to bring all U.S. forces home from Syria very soon". Even though the president says nearly 100 percent of the territory once held by ISIS has been liberated, we're still seeing very heavy fighting. Let's go to our Senior International Correspondent Fred Pleitgen. He's joining us from Damascus right now. He's just returned from the front lines. Tell us what you saw, Fred.

FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, saw that going on, Wolf. The Russians and the Syrians government are pushing an offensive here in the eastern parts of Damascus. We witnessed a lot of airstrikes today against the last rebel packets in the east of Damascus. And then, we got to a place, Wolf, that was recently taken back by Syrian government forces. It had been under siege for a very long time. When we got on the ground in this place called Eastern Ghouta, it was just absolutely flattened. We drove from the streets there; I didn't see a single building, Wolf, that was completely intact. Many of them totally flattened all together. And then, it was interesting to see, because the rebels were obviously overmatched as far as fire power was concerned. They dug tunnels underneath there. We found whole place to be almost like a swiss cheese. These tunnels were very elaborate, very big, and they led to underground hospital, underground weapons storage facilities, and even weapons making facility. It was only way that the rebels managed to escape, at least for a while, that onslaught by the Russians and the Syrian government, Wolf.

BLITZER: You've been reporting all week for us from inside Syria, Fred. From what you've seen, the people you've spoken to on the ground, what's the state of the war right now?

PLEITGEN: Well, look, I think to us it's become completely clear that the Syrian government backed by the Russians is making a lot of gains, and that Russian is by far the most powerful player here on the ground. And if you look around the Damascus area here, the U.S. really doesn't play a role at all, neither in the war, nor in any way shape or form diplomatically, nor would the Syrian government at this point care about what the United States thinks about this war, and whether or not it can do anything. The Russians are by far the most powerful player. We're on the ground here, and you have an offensive by the Syrian government, and it seems as though some rebel forces might be trying to negotiate an exit from here, but they're not negotiating with the Syrian government, Wolf, they're negotiating with the Russians. So, it shows just how powerful Vladimir Putin and his armed force are here on the ground, just how much they've been marginalizing the position of the U.S. here in the Syrian conflict, Wolf.

BLITZER: Let's not forget there are perhaps half-a-million Syrians have been killed in the course of the civil war over the past half- dozen years or so, and millions, millions have been left homeless refugees as a result of this with no end in sight right now. Fred Pleitgen joining us from Damascus. Fred, thank you very much.

[17:45:30] There's more breaking news coming up, including how a judge's new ruling affects Stormy Daniels' lawsuit against President Trump.

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[17:50:18] BLITZER: More breaking news now as a judge makes an important move affecting Stormy Daniels lawsuit against the president and his lawyer. Let's go to our National Correspondent, Athena Jones. Athena, what's the latest?

ATHENA JONES, CNN CORRESPONDENT: Hi, Wolf. Well, it's another win; a procedural won for the Trump side in this case. A federal judge in California saying President Trump doesn't have to respond to Daniels' lawsuit until the court rules on whether this case should be tried in a courtroom or behind closed doors in arbitration. And in a sign of the apparent acrimony between the legal teams, the judge noted in his ruling that the two sides failed to reach agreement on this extension on their own in part because Daniels' lawyer was traveling. The judge made a point of saying, this dispute could and should have been resolved in a civil matter by the parties without intervention by the court.

(BEGIN VIDEOTAPE) JONES: More time, that's what President Trump's legal team wants to respond to the Stormy Daniels lawsuit. A California judge today granting a request by lawyers for the president and a company formed by his personal attorney, Michael Cohen, to push back the date by which they must respond to the suit until after a ruling on whether the case must be settled outside a courtroom in private arbitration. They argued that if a judge approves their motion to compel private arbitration in the case, that is to move it out of a courtroom behind closed doors, they won't need to respond. Daniels' attorney, Michael Avenatti, is opposing the request. Adult film actress is fighting to be released from an agreement not to the to talk about a 2006 sexual encounter with Trump. She argues the deal in invalid because Trump didn't sign it. Cohen paid Daniels $130,000 as part of the deal, which just days before the presidential election.

UNIDENTIFIED FEMALE: Mr. President, did you know about the $130,000 payment to Stormy Daniels?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No, no. What else?

JONES: All this as the president himself weighs in on the matter for the first time after weeks of uncharacteristic silence, denying he knew anything about that $130,000 payment.

UNIDENTIFIED FEMALE: Then why did Michael Cohen make those if there was no truth to her allegations?

TRUMP: Well, you have to ask Michael Cohen. Michael is my attorney and you'll have to ask Michael Cohen.

UNIDENTIFIED FEMALE: Do you know where he got the money to make that payment?

TRUMP: No, I don't know.

JONES: That handful of words potentially opening Trump up to legal trouble down the road, says Daniel's lawyer.

MICHAEL AVENATTI, ATTORNEY FOR STORMY DANIELS: It's like Christmas and Hanukkah all rolled into one. You can't have an agreement if one party claims they knew nothing about one of the principle terms of the agreement. So, the president just shot himself in the foot. This is a man that is not disciplined.

JONES: And after a judge last week denied Avenatti's request to question Trump and Cohen under oath on procedural ground, he is vowing to refile the motion, Monday, and said he's eager to test the truthfulness of Trump's comments. The legal wrangling coming as new details emerge about the relationship between Cohen and Daniels' former lawyer, Keith Davidson, who negotiated the 2016 deal, including a recent phone call.

KEITH DAVIDSON, FORMER ATTORNEY FOR STORMY DANIELS: Michael Cohen called me within the last week or two.

SARA SIDNER, CNN CORRESPONDENT: And what did he say to you? DAVIDSON: He suggested that it would be appropriate for me to go out

into the media and spill my guts.

SIDNER: Are you here at the behest of Michael Cohen?

DAVIDSON: No, no. No. Not in any way, shape or form.

SIDNER: But he did tell you to go out and spill your guts?

DAVISDSON: Right, yes.

JONES: Davidson now telling CNN, Cohen referred a client to him after he sealed the deal for Stormy Daniels. That client, Chuck LaBella, needed help dealing with the Tom Arnold.

THOMAS ARNOLD, ACTOR: I checked my Twitter feed, and I swear it says: OMG, Tom Arnold does not wash his hands in the bathroom.

JONES: Who tweeted several times last fall, that LaBella, a producer on "The Apprentice" and the Miss USA, and Miss Universe pageants possessed damning information about Trump that Arnold claims involved Russian President Vladimir Putin. Davidson says, he wrote a cease and dissent letter to Arnold's attorney on LaBella behalf. LaBella told CNN, a friend did call Davidson on his behalf, but he never considered Davidson his attorney because he never paid him. Then, just last month, Arnold tweeted: "Michael Cohen had Chuck LaBella hire Keith Davidson to try to keep me quiet about Trump, Russia, Miss Universe 2013.

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JONES: And Arnold ended that tweet with the words: Mueller knows -- a reference to the Special Counsel Robert Mueller who's looking in the Russia meddling in the election among other things. What's not clear is just what Arnold knows, what information he has about all of this, if he has any at all, and how he got it, Wolf?

BLITZER: Athena Jones, thanks very much.

[17:54:56] Coming up, there's more breaking news. Russia vows a harsh response to new U.S. sanctions on high-ranking Russian officials and billionaires in Vladimir Putin's inner circle. I'll talk to a man who's campaigned for sanctions against the Kremlin and says he's been the target of death threats.

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BLITZER: Happening now, breaking news. Russian retaliation. The Kremlin is promising payback tonight for new U.S. sanctions on wealthy cronies of Vladimir Putin, including his former son-in-law. Why is the Trump administration taking a tougher stand against Russia's election meddling now?

[17:59:58] Seeking Clinton's e-mails. A Trump campaign adviser thought he had access to e-mails deleted from Hillary Clinton's server and want top government agencies to verify them so they could be used against her. Stand by for a CNN exclusive.