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The Situation Room

Jack Smith Drops Trump's Federal and Criminal Cases; Israel- Hezbollah Ceasefire Almost Finalized; Menendez Brother's Resentencing Moved to January. Menendez Brothers' Resentencing Hearing Pushed Back To January; Rep. Pat Ryan (D-NY), Is Interviewed About Gabbard, Hegseth, RFK Jr. Expected To Face Bumpy Confirmations; Macy's: Employee Hid Up To $154 Million In Expenses. Aired 5-6p ET

Aired November 25, 2024 - 17:00   ET

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

[17:00:00]

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, Macy's stock fell by about two percent and partly because of this unusual news. Investors asking how was this so mismanaged. But also, we did get a preliminary look at their third quarter's earnings which showed that sales in third quarter slipped by 2.4 percent. So, mixed there and that's why you see that stock down about two percent today.

ERICA HILL, CNN ANCHOR: All right, Vanessa, appreciate it. Thank you. And thanks to all of you for joining me this hour. The news continues on CNN with Alex Marquardt in for Wolf Blitzer in "The Situation Room" next.

ALEX MARQUARDT, CNN HOST AND CHIEF NATIONAL SECURITY CORRESPONDENT: Happening now, a judge just granted special counsel Jack Smith's request to dismiss the 2020 election subversion case against Donald Trump. Smith also is seeking an end to the classified documents case. The president-elect escaping federal criminal prosecution, at least for now, because of his 2024 election victory.

Also this hour, the Israeli cabinet is preparing to vote on a ceasefire deal with Hezbollah in Lebanon. Sources say that Prime Minister Benjamin Netanyahu has approved the deal in principle.

Plus, the Menendez brothers make a rare court appearance in their new fight for freedom. What we've learned and did not learn about their fates three decades after they were sentenced to life in prison for murdering their parents.

Welcome to our viewers here in the United States and all around the world. Wolf Blitzer is off today. I'm Alex Marquardt and you're in "The Situation Room."

And let's get right to that breaking news. The 2020 election subversion case that Donald Trump has railed against, that just went away. We're breaking down that ruling by a federal judge after special counsel Jack Smith asked to drop those criminal charges, as well as withdrawing the government's appeal in the classified documents case. CNN senior justice correspondent, Evan Perez has all of these details. So Evan, what is Smith saying about this decision to drop both of these federal cases against Trump?

EVAN PEREZ, CNN SENIOR JUSTICE CORRESPONDENT: Well, Alex, what he's saying is that this has nothing to do with the strength of the case. This simply has to do with the verdict, essentially, that voters gave, re-electing Donald Trump to be the next president of the United States. Now, under Justice Department policy, longstanding Justice Department policy, the department is not allowed to prosecute a president, a sitting president of the United States.

And so, according to the Justice Department and according to Jack Smith, They consulted with the attorneys of the Office of Legal Counsel and they determined that prohibition, that shield essentially also applies to him as an elected president, as the president-elect, someone who is about to take office. And so I'll read you just a part of what the Smith filing said.

It says, "The department's position is that the Constitution requires that this case be dismissed before the defendant is inaugurated." And just a short while ago, Judge Tanya Chutkan granted that request, Alex. Now, this applies to both, to the January 6th case in which Judge Chutkan was overseeing, but the 11th Circuit is also hearing an appeal of a ruling down in Florida on the classified documents case. For now, what it appears is that the department is trying to preserve the two co-defendants, Donald Trump's two co-defendants in that case. Alex?

MARQUARDT: And Evan, aside from the two co-defendants, also for Trump, these cases could be revived after Trump serves this next term, right?

PEREZ: That's right. I mean, look at the language that the special counsel used and that the judge uses in deciding this. They say the following. They say that the Constitution requires dismissal in this context only while he is the sitting president and does not require dismissal without -- with prejudice, rather. So the terms, the use of that language without prejudice means that when Donald Trump is no longer president of the United States, these cases could be revived.

That's something also that the judge pointed out. She said that it expires when the president is no longer sitting. Now whether that's an actual possibility is an open question. And there's the other possibility, Alex, that could happen is that once Trump becomes president, the Justice Department, which answers to him... could also seek to make sure that these cases stay dead forever.

MARQUARDT: Yeah, a lot can change between now and four years from now. Evan Perez, breaking down all those new details. Thanks very much. Let's get more now on this with our legal and political experts. Thank you all for joining me. Ankush Khardori, I want to start with you. This was somewhat expected that these two cases would go away after Trump won, but now that the public will not know whether or not he's guilty, at least in the eyes of the law, what do you think the implications are of Jack Smith at least ending these cases for now?

[17:05:01]

ANKUSH KHARDORI, FORMER FEDERAL PROSECUTOR: Well, look, you're absolutely right. These cases were going to come to an end with the election of Donald Trump. I'm a little surprised at the way in which they're coming to an end, to be honest, I mean, I think the position that, you know, the gravity of the charges is somehow irrelevant to the Justice Department is an odd one. If the charges were murder, would they have taken the same position?

But in terms of the implications, look, I think this case is a practical matter. It's dead. Um, the notion that would be revived after Trump leaves office faces several challenges. It's not even clear a Democrat will be in office next time. Statute limitations may be running courts have never considered that. And Trump could always pardon himself if he really feels like there's a threat.

MARQUARDT: And Smith may have the last word in that the cases may be going away, but we understand that he's going to be putting out a report. What would that look like?

KHARDORI: Yeah, I mean, look, we have seen very extensive reports in special counsel investigations, obviously the Robert Mueller one and the John Durham investigation. This one is different because there were two charged cases. It's not clear that Smith or the Justice Department are going to be releasing much more in the way of facts in this report.

It would be unusual under the circumstances, I think, and arguably quite unfair since Trump won't have a mechanism to defend himself against that. So I would not be expecting, I don't know what we'll see, but I would not be expecting a hundreds page long report.

MARQUARDT: Kristen Holmes, what kind of celebrations, champagne quarks are you hearing from Palm Beach?

KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT: Well, I mean they are celebrating. This was the goal all along, was that they would get these cases dropped, whether it be through Trump dropping them himself or getting his attorney general to do so, winning the election. And just to your point, one of the things that Trump's own attorneys have said, the idea of it actually being revived in their mind seems highly unlikely. This seems like the end of all this.

Now we have a statement from Donald Trump. He put this on True Social. He said, "These cases, like all of the other cases I have been forced to go through are empty and lawless and should have never been brought. It was a political hijacking and a low point in the history of our country. Such a thing could have happened and yet I persevered against all odds and won."

I mean, you know, this is just Donald Trump talking, of course, saying it's a political hijacking. He tried to make this the case throughout all of this. This was all political persecution. But that being said, it doesn't mean they're not celebrating. And they do feel like this is a huge victory for them. And again, they feel like this is the ending of the story. MARQUARDT: And we're also hearing some crowing from the future vice

president, J.D. Vance, who said in a tweet, quote, "If Donald J. Trump had lost an election, he may very well have spent the rest of his life in prison." Jeff Zeleny, to that point, how much do we think, do we know Trump's reelection bid was tied to his fears of potentially going to prison?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well, look, if you think back to when he announced his bid to run for president, it was unusually early. It was November 15, 2022, right after the midterm elections. And that was seen at the time as a way to make sure he was an active candidate for president when all of this was going on. So it was certainly an anthem of his candidacy. I mean, this is one way he ended up rallying the party around him to his defense.

I mean, you'll think back, there were so many different legal cases, but this specifically was one of them, of course, the most serious one you could argue. But just in terms of his candidacy sort of running alongside his legal cases. It was the Alvin Bragg case in Manhattan that actually was the moment that Republicans rallied around him and he started to emerge as the front runner in the Republican presidential nomination.

So I'm not sure we can say that he was running for president to escape jail time. I think he obviously wanted to serve a second term as president, but it happened certainly at the same time. And the fact that he got in so early certainly was by design.

MARQUARDT: And another notable voice that we're hearing from because he helped lead the impeachment against Donald Trump is Adam Schiff, now the senator-elect from California. He tweeted today, quote, "The Justice Department and the court system failed to uphold the principle that no one is above the law. DOJ by neglecting to promptly investigate the events of January 6 and the courts by willfully delaying progress of the case and providing immunity." Manu Raju, that does seem to be a bit of shade, a bit of a jab by this top Democrat against the Attorney General of America.

MANU RAJU, CNN CHIEF CONGRESSIONAL CORRESPONDENT: And we actually heard this from Schiff in the run-up to the naming of Jack Smith and how this investigation played out. In fact, I talked to him about this right after January 6, after Joe Biden took office. They were concerned at that time. They said he needs to get moving. He needs to begin this investigation, name a special counsel. It wasn't until 2022, late 2022, when Jack Smith actually became the special counsel. And then all the steps after that.

Donald Trump seeking immunity, taking this to the Supreme Court. The Supreme Court taking several months to decide that everything delaying this down the line, making it clear, angering a lot of Democrats like Adam Schiff. What's also been noticeable today is that there's really been a lot of silence from top Democrats. They themselves both have resigned about this was going to happen.

[17:09:59] But also a sign that they want to fight different fights in the Trump era. No response yet from Chuck Schumer, the Senate Democratic leader. No response yet from House Democratic Leader Hakeem Jeffries. It just shows you where their mind is at this point.

MARQUARDT: Ankush, how about inside the DOJ? Are you hearing any frustration, any second guessing about these cases and whether they should have been brought sooner? What do you think would have happened if this had unrolled a bit that faster?

KHARDORI: Yeah. Well so first of all, it's unknowable what would have happened if it rolled a bit faster. I do think, I feel strongly, it should have rolled much faster in fact. In terms of people's views within and outside the department alums, I think it's the conventional wisdom at this point that they waited too long and people are quite upset about that.

And I've heard this, I'm sure folks at this network have heard this in various capacities from people within the department. It was a controversial decision for them to wait as long as they waited to move forward on these charges. It was not a consensus position within the department. There were people who objected and now we're paying a price for that. The country is unfortunately paying the price for that.

But, you know, Schiff is also correct. I just want to note that, you know, a lot of Republican politicians are responsible for kind of where we are today. Trump should have been convicted under his second impeachment. He was not. The Supreme Court's Republican appointees also sort of cleared the way for him in this final stretch of the general election campaign. So, you know, there are a lot of causes at play here.

MARQUARDT: And hanging over all of this now, as soon as Trump takes office, Jeff, is a question of retaliation. Do you think there is reason to think that Trump's DOJ would retaliate against people like, amongst others, Jack Smith?

ZELENY: Sure. I mean, there's definitely reason to believe it. I mean, there will be a long list of people who, the former president or the president-elect, a soon-to-be president who would like to retaliate after Jack Smith is certainly, I would say, near the head of that list. I think it depends who is running the department. I think it depends what choices they decide to make in terms of forward- looking things or backward-looking.

That's going to be a central question of the entire second term, I think. Is it going to be forward-looking to enact policy, or is it going to be backward-looking to do a retribution? It may be some of both. But sure, Jack Smith will be on that list, no doubt.

RAJU: And I also wonder if the House Republicans will try to bring in Jack Smith and have him actually testify. I'm not sure if that would actually be wise for them to do that. But maybe if Donald Trump wants his vengeance, perhaps he can do this from some sort of public shaming or have his people on the Hill kind of go after them. But that's going to be a big question, how they decide to pursue this as well.

HOLMES: And just one quick thing. I mean, Donald Trump has said that he thinks one of his first order of business is firing Jack Smith. Now, whether or not he actually follows through with that remains to be seen, but I see no indication that wouldn't happen. He is an animus for Jack Smith and now he's in a position of power and one of the things we know he wants to do anyway regardless of Jack Smith is clean house at the Department of Justice so likely that would start with Jack Smith.

MARQUARDT: Yeah, DOJ is certainly going to be a focal point from late January onwards. All right, thanks to you all. Appreciate your thoughts and perspective this evening.

Coming up, CNN's John King checks in with Kamala Harris supporters in Pennsylvania nearly three weeks after her loss to Donald Trump.

But first, the news from the Middle East. What we're learning about a potential ceasefire between Israel and Hezbollah in Lebanon. Stay with us in "The Situation Room."

(COMMERCIAL BREAK)

[17:15:00]

MARQUARDT: Turning now to the Middle East where we could finally be on the verge of a very long-awaited ceasefire deal between Israel and the Lebanese militant group Hezbollah. A Lebanese official has told CNN that an announcement is expected within the next 24 hours. CNN's Nada Bashir is following this from London and MJ Lee is at the White House for us. Nada, I want to start with you. Israeli officials have seemed rather confident in the past few hours and days that this will happen.

NADA BASHIR, CNN CORRESPONDENT: That's right. We are hearing positive indications certainly from the Israeli side, according to sources familiar with the ongoing discussions. The Israeli Prime Minister Benjamin Netanyahu has agreed in principle to the current deal on the table. That comes after a series of security consultations with Israeli officials over the weekend.

And of course, as you mentioned, we're also hearing positive messaging from the Lebanese side. Lebanese officials telling CNN that they could expect to see a deal within the next 24 hours. But of course, there is still the potential, still time for missteps which could potentially upend the ongoing negotiations. We certainly have seen an intensification of Israel's bombardment of Lebanon, including central parts of Beirut over the last weeks.

We've also seen a ramping up of Hezbollah's targeting of Israeli territory as well. But of course there has been that mounting international pressure and we have seen that real buildup of diplomatic momentum certainly when it comes to mediators within the U.S. and of course French officials as well.

We've heard from a spokesperson within the French presidency saying that there has been significant progress in these discussions, that the aim for mediators is to ensure protection of all population involved, to ensure them safe return of those who have been forced to evacuate their homes, including tens of thousands in northern Israel and of course hundreds of thousands who have been forced to flee their homes in parts of southern Lebanon.

And of course this is all really set within the framework of a UN resolution established back in 2006 in an attempt to end the war there while it hasn't been entirely upheld. That is the hope. And what this current deal on the table proposes, according to the information that we have received from sources and officials, is a 60-day cessation. of hostilities with the hope that this would then lead to a lasting ceasefire between Israel and Hezbollah.

It also would call for the withdrawal of Israeli forces from Lebanese territory, a respect for Lebanese sovereignty and also for a pullback of Hezbollah forces from parts of southern Lebanon, particularly below the Litani River, where they would then hope to see a strengthening of the presence of U.N. peacekeeping forces.

[17:20:00]

So that is the understanding of the current deal on the table. Whether we see an agreement, that of course remains to be seen. But as you said, positive indications from both sides at this stage.

MARQUARDT: Yeah, a lot of moving parts there. Nada, stay with us. MJ Lee is over at the White House. So MJ. What are Biden administration officials saying about this deal?

MJ LEE, CNN CORRESPONDENT: Yeah, there are certainly a number of signs that seem to indicate that as you said, we seem to be perhaps on the brink of a ceasefire deal. The Israeli cabinet, as Nada was laying out, expected to take a vote tomorrow. And here in the U.S., U.S. officials are sort of carefully indicating that there has been some real progress that has been made.

We heard White House spokesperson John Kirby telling reporters earlier that the trajectory has been very positive. Keep in mind that U.S. envoy Amos Hochstein just returned from the region after trying to help this deal and these negotiations get closer to the finish line. This is what Kirby told CNN on this call with reporters earlier about how the U.S. is seeing the state of the talks right now and also why U.S. officials are continuing to talk about this with caveats. Take a listen.

(BEGIN AUDIO CLIP)

JOHN KIRBY, WHITE HOUSE NATIONAL SECURITY COMMUNICATIONS ADVISER: We believe we've reached this point where, you know, where we're close. But again, I want to be careful and cautious here in how I characterize it, because until you get everything done, you don't have you don't have a deal.

(END AUDIO CLIP) LEE: And of course, important context here is that the U.S. and a number of its allies had actually put out a ceasefire proposal going back to September. And at the time, Alex, you and I covered this. U.S. officials basically talked about this as a done deal, and only hours later, Israeli Prime Minister Benjamin Netanyahu came out and outright rejected this deal to the great frustration of a lot of the officials here within the Biden administration.

And the hostilities across the Lebanon border have, of course, continued since then. And now what the White House is saying is that they are hoping that this potential deal could actually be a catalyst for a ceasefire deal in the Gaza conflict as well. There are plenty of people, as you know very well, who would say that seems to be a very optimistic view right now.

MARQUARDT: Yes, the goal not just to end this fighting, but to allow tens of thousands of Lebanese and Israelis to go back to their homes along that border. MJ Lee at the White House, Nada Bashir in London, thank you both very much for your reporting.

Up next, a live report from Los Angeles where the infamous Menendez brothers are awaiting a decision on whether they will be re-centered.

(COMMERCIAL BREAK)

[17:25:00]

MARQUARDT: New details in the case of Lyle and Eric Menendez, the Menendez brothers, who are serving life sentences without parole for killing their parents three decades ago. The brothers were back in court today for the first time since then, but any hope that the two brothers would be released before the holidays was put on hold by the judge. CNN's Nick Watt was inside that hearing today. So Nick, what happened?

NICK WATT, CNN NATIONAL CORRESPONDENT: Well Alex, we were supposed to see the brothers via video link, there was a technical snafu, but we did hear the voice of a Menendez brother in a courtroom for the first time in about 28 years. What else we heard and saw today was testimony from the aunts of those two boys.

So Kitty and Jose Menendez were murdered. We heard from both of their siblings. Both of their siblings say, it's enough now. The boys have served 35 years. We miss them. We want them out. And Kitty's sister said those boys suffered so much at the hands of their father.

(BEGIN VIDEO CLIP)

JOAN VANDERMOLEN, KITTY MENENDEZ'S SISTER: They should never have been in such situations as presented themselves. What can a kid do when his father's -- oh, I can't stand it.

(END VIDEO CLIP)

WATT: That is Kitty Menendez's sister and this is Jose Menendez's sister. (BEGIN VIDEO CLIP)

MARTA CANO, JOSE MENENDEZ'S SISTER: Thirty-five years is a long time.

(END VIDEO CLIP)

WATT: They want their nephew's home.

(BEGIN VIDEO CLIP)

MARK GERAGOS, ATTORNEY: The judge has now set January 30th and 31st as the days for a plenary or fulsome hearing on the resentencing. We're hoping that by the end of that or sometime sooner that we will in fact get the brothers release.

(END VIDEO CLIP)

WATT: Today the brothers were supposed to make their first public appearance in nearly 30 years, but apparent technical difficulties meant they did not appear in this L.A. court via video link. All we heard is one brother say Riley we've had video access all along. Back in the mid-1990s this was a sensational televised trial after a sensational crime. Prosecutors said the boys wanted their parents' money. The brothers said they feared for their lives after enduring years of emotional, physical and sexual abuse by their father. And that's why they killed their parents.

(BEGIN VIDEO CLIP)

LYLE MENENDEZ: He would put me on my knees and he would guide me, all my movements and I would have oral sex with him.

(END VIDEO CLIP)

WATT: Lyle and Eric were sentenced to life without the possibility of parole. Then, a 2023 docu-series alleged Jose Menendez, a powerful record exec, had also molested a member of a boy band.

(BEGIN VIDEO CLIP)

UNKNOWN: I know what he did to me in his house.

(END VIDEO CLIP)

WATT: The brothers' lawyers pushed for their case to be reopened. Then a Netflix drama and documentary reignited public interest.

[17:29:57]

L.A.'s D.A. asked a judge to reconsider sentencing, which might see the brothers released immediately, saying that a jury might react very differently now than they did back in the 1990s.

GEORGE GASCON, LOS ANGELES COUNTY DISTRICT ATTORNEY: I believe that they have paid their debt to society. WATT (voice-over): But DA George Gascon, a progressive, was just ousted in November's election. The tougher on crime, Nathan Hochman will take office December 2nd.

NATHAN HOCHMAN, LOS ANGELES COUNTY DISTRICT ATTORNEY-ELECT: I won't rely on just a Netflix documentary or a Netflix docu-series as the source of my information to make this a very -- very important decision.

(END VIDEOTAPE)

WATT (on camera): Now, those Netflix documentaries and dramas and other documentaries and social media have reignited interest in this case to such a degree that we are now going through this legal process.

And also, outside the court today, there was a lottery for seats in the public gallery. Many of the people standing in line weren't even born when the crime took place or the trial took place.

One of the most emotional moments today was when Kitty's sister, 85 years old in ill-health, got up on the stand and she said this. No children should have to live in fear day by day that their dad would come and rape them. It breaks my heart that my sister, Kitty, knew but did nothing about it. Alex?

ALEX MARQUARDT, CNN HOST: Yes, Remarkable comments from those two women. Nick Watt in Los Angeles, thank you so much.

Joining me now is CNN legal analyst, Joey Jackson and the founder of UnchainedTV, Jane Velez-Mitchell. Thank you both for being with me. Joey, I want to go to you first. There is now a delay in possible re sentencing, as you heard there in -- in Nick's report, until the end of January. So that this new district attorney can review 17 boxes of case files. Do you think that that delay until the end of January is more of a legal or political one?

JOEY JACKSON, CNN LEGAL ANALYST: So I think it's a -- legal and somewhat political. And here's why I say that, Alex. Good to be with you and Jane. The reality is just that you are a new prosecutor and it wasn't your motion, right? Remember the motion to resentence came from the outgoing district attorney as we look at the brothers there. And so you do need, if you're the new district attorney to have an opportunity to review and evaluate to see if you're on board with everything.

So from that sense, it's factual and the political comes in where during the trial it was alleged by the newly elected DA that the outgoing DA was just doing this to gain notoriety. It's clear now that he has a lot of public support for doing this, that it is very well grounded in facts and new evidence. And it's something potentially, Alex, that could carry the day in terms of a Judge really granting this, doing the resentencing and allowing the brothers to go home.

MARQUARDT: So Jane, to that point, the incoming -- in -- incoming district attorney, he said that the current DA who has just voted out that his decision to recommend this resentencing was a political move. How much do you think the -- that this new DA is going to play a role in whether these brothers now go free after 30 years?

JANE VELEZ-MITCHELL, FOUNDER, UNCHAINTEDTV: Well, he's a tough on crime guy. A former prosecutor. And he did accuse the outgoing DA of making a political move to get his face in the headlines right before the election.

To me, the big question is this a case of celebrity justice? What about the thousands of other people who are doing life without the possibility of parole who have their reasons for doing what they did?

So all of this is coming to a head because the Menendez brothers have two hit shows on Netflix and the outgoing DA said as much. That's the big problem I had with this. I think that they make a good case. Look, the evidence is mounting. It's becoming overwhelming that their -- claims that they were sexually abused by their father were not a made up story.

The former member of the Menudo boy band did a signed declaration, extremely graphic, saying he was raped twice by Jose Menendez and fondled in another way on a third occasion. And then Erik Menendez wrote a letter to his cousin eight months before the murder saying, he's doing it again. He's still doing it. I'm afraid to go to sleep at night. He could come into my room at any time.

So all of that indicates that there's a real case to be made, that if all that had gone into the trial, they wouldn't have been convicted. On the other hand, it was an extremely gruesome killing. They shop for guns. They ambushed their parents while they were sitting and watching television and eating ice cream. They fired 16 rounds. They blew their father's brains out. They blew their mother's face off. They even paused to reload when Kitty was crawling away to fire the final shot.

So when you think of all that, you have to weigh the allegations of molestation versus this horrific crime. And that's up to now the DA to do.

[17:35:03]

MARQUARDT: Joey, it was quite remarkable to hear there from these two aunts, the -- the sisters of either Menendez parent, talking about why the brothers should be released now. How impactful do you think those statements from these family members will be?

JACKSON: You know what, Alex? So they are impactful. I think judges certainly want to hear the sentiment of the family, particularly when they're the siblings of those who are deceased. It matters. That's why you have things called victim impact statements at the time where someone's convicted, right. Where the victims a -- family members can get -- give their sense of justice and what that looks like.

But I think ultimately it depends upon three very brief critical things. One, is punishment and is punishment appropriate? Is 35 years enough? Right. So, is a measure of punishment. Number two, does that serve as an appropriate deterrent from -- not only for them but in general, for other people that might commit crimes. And number three, and this is critical, rehabilitation. Are they sufficiently rehabilitated? That's going to be critical.

They say they're doing great in jail, have helped other people. And so that's going to be weighed. All those factors will go into the decision of whether they're released.

MARQUARDT: Jane, Joey, we know you'll be watching closely when this picks up two months from now. Thank you both for joining me.

JACKSON: Absolutely. Thank you

MITCHELL: Thank you.

MARQUARDT: And just ahead, we will be taking you to a game of mahjong inside a Pennsylvania home where seniors on opposite ends of the political spectrum are grappling with Trump's win and what it means for the country's future.

(COMMERCIAL BREAK)

[17:40:39]

MARQUARDT: CNN is returning to the key battleground state of Pennsylvania to check back in on a group of seniors who supported Vice President Kamala Harris. Our chief national correspondent John King is here with us. So John, how are those residents reacting to Trump's victory?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Alex, this is a group we visited three times over the past year. And the Harris supporters in it are stunned. They are shocked. They think a Donald Trump presidency means a retreat for women rights, democracy at risk, a retreat for civil rights. Most of all though, Alex, they are just saddened that Donald Trump will be president in their twilight.

(BEGIN VIDEOTAPE)

MARVIN BOYER, PENNSYLVANIA VOTER: Good deal of it goes to our food pantry.

KING (voice-over): Lifelong Easton resident Marvin Boyer is still shocked at the size of Trump's win, but not shocked he won.

BOYER: There's any number of reasons why it went the way it did, the economy being one. I believe racism played a role in it, misogyny.

Can't have Thanksgiving without the turkey.

KING (voice-over): Boyer is a lifelong civil rights and community activist. These Thanksgiving meal bags filled in a room dedicated to his mother.

BOYER: There's a hero. That's the one.

KING (voice-over): The Easton Community Garden, another way to lend a hand. Helping others helps Boyer channel his disappointment, and he urges angry Democrats to do the same.

BOYER: Because I often run into people who complain a lot, you know, and I'm a doer. And I say be the change that you want to see in the community. Get involved in a local organization. Be more of an activist.

DARRELL ANN MURPHY, PENNSYLVANIA VOTER: You're not going to believe this, ladies. Look at the jokers

KING (voice-over): Darrell Ann Murphy, is already doing just that.

MURPHY: Friends of mine have started groups. We're calling it the Quiet Resistance. It's -- I feel like I'm standing on the edge of a cliff and like, everything's kind of falling down around me. It's falling down. What happened to the foundation? What happened? Will America fall down? I never had thought this. I never thought this. This is just a -- this is just a huge shock to seniors, John, huge.

OK, now we're going to rack them and see what we got.

KING (voice-over): Murphy teaches the Chinese tile game Mahjong. Our third time at the table over the past year. Third time Murphy and Catherine Long have sparred with Pam Aita.

PAM AITA, PENNSYLVANIA VOTER: I don't have to have dinner with Donald Trump. I don't care what he does. Just keep me safe, keep my grandkids safe and have money in our pockets. That's all.

CATHERINE LONG, PENNSYLVANIA VOTER: I'm scared to death of what he's going to do. And some of that comes from what's happening with his cabinet choices.

AITA: I think we have to just knock it off. He's president for four years. We'll have another election --

LONG: We hope.

AITA: -- and then, you know.

LONG: I have fears that he won't leave.

AITA: Oh come on. That's ridiculous.

LONG: I'm not kidding. I have fears that he won't leave.

KING (voice-over): A debate for the next four years.

MURPHY: If we're still here on this earth.

AITA: Yes. We might not even be here, John. Do you ever think of that?

KING: I'm not -- I'm not going to allow myself to think about.

KING (voice-over): Back to the game. Won on this day --

AITA: Mahjong. KING: -- by the Trump supporter.

(END VIDEOTAPE)

KING: Perhaps fitting, Alex. The Trump supporter did win the game that day because consider this, they live in Northampton County, Pennsylvania. Now, one of only 15 counties across the country. Only 15 with this distinction voted twice for Barack Obama, then for Donald Trump, flipped to Joe Biden in 2020, then flipped back to the winning side and Donald Trump in 2024. Fifteen counties like that, a good place to start, 2028 coverage, I guess.

MARQUARDT: And great to see them all get along so civilly. John King, thanks as always for that terrific reporting.

Here with me now is Democratic Congressman Pat Ryan. He's the vice ranking member on the House Armed Service Committee. Congressman, thank you so much for joining me. I want to pick up on something that was just mentioned there in -- in John's piece, and that is the Cabinet selections that Trump has made so far, specifically in the national security sphere that you and I watch so closely.

On the defense side, for the Defense Department, we've got Fox News host Pete Hegseth. And you have called on him to withdraw from consideration. This weekend, there were several Republican senators who would have to confirm him. They have been defending him. I want to take a listen to one of those senators.

(BEGIN VIDEO CLIP)

SEN. DAN SULLIVAN, (R-AK): We need to get back to the mission of the Pentagon, which is to win our nation's wars. And I think Pete Hegseth is very focused on that. And that is a refreshing change.

(END VIDEO CLIP)

MARQUARDT: So Congressman, that was Senator Dan Sullivan of Alaska. What's your reaction to what he said?

REP. PAT RYAN (D-NY): I've never met Senator Sullivan. Certainly appreciate his ability to advise and consent as he's allowed. Look, regardless of what anybody else says or any elected official says. To me, this is about our men and women in uniform. They are owed a serious secretary of defense at a time where the world is incredibly serious, dangerous, complex.

[17:45:18]

And Pete Hegseth, who has not ever led an organization anywhere near the scale and scope and seriousness, is just not a serious candidate. And by the way, that's on top of credible and -- and again, very serious allegations of sexual predatory behavior in an organization in -- in the Pentagon, where that's been a real problem. And we need a leader who can be clearly above board when it comes to preventing sexual assault and harassment. MARQUARDT: Yes, Defense Department, biggest employer in the country, some 3 million people working there. I want to ask you about another national security pick, Tulsi Gabbard, former Democrat, former Democrat from the House, a very unorthodox choice for the director of National Intelligence. Here is what another Republican senator said about her -- about that pick of -- of her for DNI. Take a listen.

(BEGIN VIDEO CLIP)

SEN. JAMES LANKFORD (R-OK): Well, we'll have lots of questions. She met with Bashar Assad. We'll want to know what the purpose was and what the direction for that was. As a member of Congress, we want to get a chance to talk about past comments that she's made and get them into full context. So, sure, there -- there's -- there's comments that are floating out there, but we want to be able to know the rest of the story.

(END VIDEO CLIP)

MARQUARDT: So Senator Lankford there of Oklahoma, talking about her meeting a couple years ago with the Syrian dictator Bashar al-Assad, one of many concerns that Democrats have. What -- what do you think about that pick?

RYAN: Well, these aren't just concerns of Democrats. These are concerns of serious national security professionals from both parties that have seen her for over a decade now, essentially propagating as almost a puppet of Putin. His language, Russian propaganda, other dictators and authoritarian propaganda on T.V. including, you know, right -- right here.

And that's given again, the threats arrayed where we see China, North Korea, Russia and Iran all cooperating and she's -- any question about where her loyalty might lie is incredibly dangerous. It's a moment. Are we going to see these Republicans that seem to be dodging in the Senate, giving actual answers, find a backbone and do what's right, not as partisans but as patriots. And I hope that we'll see that on Hegseth. I hope we'll see it on Tulsi Gabbard. Thankfully, we did. It looks like see it with Matt Gaetz. And now there's a precedent.

MARQUARDT: We also heard Republican Senator Markwayne Mullin talking about the promotion or rather blocking the promotion of a lieutenant General named, Chris Donahue. He was made famous because he was the last soldier, U.S. soldier out of Afghanistan during that chaotic withdrawal in August of -- of 2021. So Senator Mullin has now blocked his promotion to a four star general. What do you make of that?

RYAN: This is deeply problematic and it kind of echoes what we saw from Senator Tuberville. That was very harmful to our troops, harmful to our national security. They're politicizing what has to be an apolitical organization, the United States military.

When given a lawful order, senior officers and junior officers, I served 27 months in combat, must follow that order. That's what these generals were doing. They were also, I'm sure, giving their advice. Not publicly and privately and I'm sure very directly to the President and -- and the Commander in Chief and other senior leaders, to now punish someone for that. It starts us down this slippery slope. We've seen talk of these purges. "The Wall Street Journal" first reported on this. You all have reported on this. That's so contradictory to our Constitution where you -- you take an oath to support and defend our Constitution, not a dictator or an elected official or a political party.

MARQUARDT: Yes, lots of reporting that those involved in that withdrawal may be -- be targeted by the incoming administration. Congressman, thank you so much for joining us this -- this evening.

RYAN: Thanks for having me.

MARQUARDT: Appreciate it.

[17:49:02]

Coming up, the meltdown at Macy's. How one employee was able to hide more than $150 million in expenses from one of the nation's biggest retailers?

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MARQUARDT: Macy's has discovered that one single employee somehow managed to hide up to $154 million in their expenses. CNN's Vanessa Yurkevich has been following this story for us. So, Vanessa, how on earth did this happen?

VANESSA YURKEVICH, CNN BUSINESS & POLITICS CORRESPONDENT: That is the question that Macy's is asking themselves right now. But essentially, they were putting together their third quarter's earnings report and they found that the numbers simply were not adding up.

And so they launched this independent investigation and found that a single employ was fudging the numbers on delivery expenses to the tune of $154 million. Now, the company says that they are still investigating, so they're pushing their earnings call, which would have happened tomorrow to December 11th, to try to figure out just how and why this employee was hiding all of this money.

Now Macy's, for their part, says that this did not affect cash management and it did not affect payouts to their vendors. To put it into context, Alex, expenses during that three-year period totaled $4.3 billion. So $154 million is a fraction of that, but still, it's millions of dollars.

I want to read to you a statement from Macy's CEO this morning, Tony Spring, who said, quote, at Macy's Inc. We promote a culture of ethical conduct while we work diligently to complete the investigation as soon as practicable and ensure this matter is handled appropriately. Our colleagues across the company are focusing on serving our customers and executing our strategy for a success -- successful holiday season.

[17:55:20] But of course, Alex, this raises so many questions. How did this go on for so long? How did the internal auditing team not catch this? And we got a little bit of a preliminary earnings report from Macy's showing that sales slipped by 2.4 percent. You saw that reflected in the stock market today. Macy's stock down about 2 percent on this unusual news and on those preliminary earnings, Alex.

MARQUARDT: That's extraordinary. I'm guessing that employee isn't getting invited to the -- to the parade on Thursday.

YURKEVICH: They're not with the company anymore, Alex. Let's just say that.

MARQUARDT: Vanessa Yurkevich, thanks so much for that report.

YURKEVICH: Thanks.

MARQUARDT: Coming up, back to our top story. Special counsel Jack Smith has dropped the federal criminal cases against Donald Trump. Stay with us here in the CNN Newsroom -- Situation Room, excuse me.

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