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The Situation Room

FEMA Employees Issue Readiness Warning; Trump National Guard Order Raises Controversy; Trump Attempts to Fire Federal Reserve Member. Aired 11-11:30a ET

Aired August 26, 2025 - 11:00   ET

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

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PAMELA BROWN, CNN HOST: Happening now, breaking news: President Trump is about to begin a Cabinet meeting as he pushes the limits of his power. This meeting comes just after he signed a sweeping executive order expanding the National Guard's role in law enforcement and says that he fired a governor at the Federal Reserve.

Welcome to our viewers in the United States and around the world. I'm Pamela Brown. Wolf Blitzer is off and. You're in THE SITUATION ROOM.

ANNOUNCER: This is CNN breaking news.

BROWN: Soon, at the White House, President Trump will convene a meeting of his Cabinet. It is the first one in six weeks. And, of course, we will bring that to you live.

And new this morning, Trump says he has fired this woman as his battle with the Federal Reserve intensifies. That board member, Lisa Cook, denies his allegations of mortgage fraud and vows to fight the case that raises concerns over the Central Bank's independence. And it could go all the way to the Supreme Court.

CNN chief national affairs correspondent Jeff Zeleny is at the White House.

Jeff, what more can you tell us about the president's accusations here and what's at stake?

JEFF ZELENY, CNN CHIEF NATIONAL AFFAIRS CORRESPONDENT: Well Pamela, President Trump is escalating his long running-feud with the Federal Reserve's Board of Governors by saying in a letter last evening it's his intention to fire Lisa Cook.

She responded that she is not going anywhere. So this is going to set up a battle about the very independence of the Federal Reserve. Now, several judges and court cases have been litigated through the first several months of the Trump term which give the administration wide latitude. However, the Federal Reserve is separate and apart from agencies that

the president has a complete latitude over. So when you look at the federal Board of Governors, the Federal Reserve Board of Governors, there are seven members who are appointed by the president and confirmed by the Senate.

And there are also members from across the country who weigh in from the separate Board of Governors, from the regional Board of Governors. So President Trump is making the extraordinary step. No president has ever fired a member of the board of reserve before. Lisa Cook has been on the board since May of 2022, appointed by President Biden, confirmed by the Senate, the first black woman to appear on the board, to serve on the board.

And, Pamela, what's at issue here is a question of mortgage fraud, alleged mortgage fraud. President Trump says that Lisa Cook committed mortgage fraud when she was submitting her paperwork. She says that is not true.

But what is also at stake here, again, is the independence of the Federal Reserve, the Board of Governors, that sets the rate. Several other administration officials, as you see there on screen, Letitia James, the New York attorney general, California Senator Adam Schiff, and Lisa Cook, they have all been accused by various Trump administration officials of mortgage fraud.

It's one of the latest and most prevalent accusations that the Department of Justice is investigating. So, as all of this gets worked out, there are two things to keep in mind. One, the president has been very frustrated with the Federal Board of Reserve for not lowering interest rates, and, two, does the president have the authority to do this?

So, Pamela, this is not necessarily going to come up at the Cabinet meeting, which, of course, will be convening in the coming minutes here. The president likes to have his Cabinet around him. As we have seen in previous meetings, the Cabinet secretaries go around the room quite literally and offer praise for the president and his policies.

We are expecting to see that as well. But this Federal Reserve case is one that is likely to drag on for some weeks or months to come and perhaps ultimately end up in the Supreme Court -- Pamela.

BROWN: Yes, it's unprecedented, as you noted. Jeff Zeleny, thank you so much.

ZELENY: Sure.

BROWN: And new this morning, city officials across the country are reacting strongly to one of President Trump's new executive orders in particular.

This one tasks his defense secretary with creating these specialized units in the National Guard to deal with public order. Now, critics say it is the clearest sign yet that Trump intends to expand the military's role in domestic law enforcement. CNN senior national security reporters Zach Cohen is here.

So, how exactly would this work, Zach?

ZACHARY COHEN, CNN NATIONAL SECURITY REPORTER: So, Pam, that's really the big question.

This is a clear sign of what the president wants to do. And that's to expand the role of the National Guard in playing law enforcement and conducting law enforcement activities across the country, not just in Washington, D.C., but perhaps using that as a model of sorts.

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Now, this does direct Pete Hegseth, the secretary of defense, to establish these specialized units that are specifically focused on issues of public order. It's vague language and the order does contain -- does not contain very many specifics, but it does call for certain things like establishing a quick reaction force that can be deployed at a moment's notice to nationwide.

It very specifically notes that these specialized units should be used and be applied across the country, not just in D.C. Now, that's a good example, though, because the National Guard already has a reaction force that really does operate in a similar way that's described in the executive order, but the one key distinction is that force usually operates under the control of the governors who request them, not the president of the United States.

So we're going to have to see how the president potentially uses this to take action in other states, but there are some questions of authority and practicality here.

BROWN: Right. I mean, there are some exceptions for when the president can step in with the National Guard to, for example, repel an invasion.

And, of course, city leaders in some of these other places where President Trump wants to send the National Guard say, look, we're happy to work with you, but we're doing what we can be doing like in Chicago to lower the crime. Crime is down 30 percent. So what's the state of play there?

Z. COHEN: Yes, in Chicago, we are hearing from Democrats who are really forcefully pushing back on the idea of sending the National Guard there to combat crime.

Domestic law enforcement, these politicians are saying, should not be conducted by the U.S. military. Frankly, Donald Trump has said that he may just do it anyway. And he has said as much yesterday. Take a listen to what he responded to questions from reporters when he was asked, are you going to send the Guard to Chicago?

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QUESTION: Are you prepared to order National Guard troops, though, into American cities if those governors don't request the federal deployment?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I am. But I also think that, look, Chicago, everybody knows how bad it is. Everybody standing there knows. We know. You don't have to be doing any studies.

They should be saying, please come in. Pritzker should be saying that.

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Z. COHEN: So police officials in Chicago do point to crime statistics that show homicides are down 35 percent in July of this year as compared to last year. Shootings are down 26 percent. Robbery is down 36 percent.

So this is something similar to what we have heard from D.C. officials as well, saying that the crime stats don't reflect the kind of emergency scenario that Donald Trump has used to justify deploying the National Guard.

Now, we heard Donald Trump say, though, that he may just go ahead and send the Guard to Chicago anyway. We saw him do something similar in Los Angeles earlier this year when he federalized the Guard to deal with the immigration crack down there. That, of course, was litigated in court after the fact.

But there are mechanisms Donald Trump could use to send the National Guard without these governors necessarily requesting it.

BROWN: It's one of those things, where if he does it, it's hard to roll it back, right? And so that's a big question here.

All right, Zach Cohen, thank you so much.

So, Republicans in Congress are looking into the D.C. Metro Police Department and its crime statistics. We were just listening to this conversation with Zach about how city officials are pointing to crime statistics to make the case that crime is going down, like in D.C.

Well, a House committee wants to know if data was manipulated in D.C. to make the rates appear lower.

CNN's Brian Todd been reporting on this.

So how is the committee framing this probe at a time when you still have the National Guard now with weapons patrolling the streets of D.C.?

BRIAN TODD, CNN CORRESPONDENT: Well, they're framing it as they want to know if the claims of D.C. officials that crime has been going steadily down for a year, Pamela, are really true or if they have been manipulated.

We should note this is the second investigation now launched into the alleged manipulation of D.C. crime stats in about a week. Last week, the Department of Justice announced its own investigation into whether D.C. crime stats were manipulated. This time, it is the Republican-led House Oversight Committee launching an investigation.

Now, in a letter from the House Oversight Committee chairman, James Comer, to D.C. Police Chief Pamela Smith yesterday, Comer asked for these things -- quote -- "all crime reports, audit trail and memoranda for crimes whose classification has been changed." Also, he asked for communications records regarding discussions between Metropolitan Police Department leaders and city officials.

And he asked for communications related to weekly district commander meetings. In addition, that letter asks Chief Smith to make all seven police district commanders in Washington, D.C., available for interviews by the House Oversight Committee on several dates between September 23 and October 20.

All of this, these two investigations, follow reports that a former D.C. police commander was placed on administrative leave amid accusations that the department was falsifying crime data in one police district. We need to stress that, allegedly making offenses seem as lower level than they really were.

Now, D.C., officials have stressed that this was one police commander and that this was regarding one police district. And they say the investigation there, the internal investigation, is ongoing.

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Now, Mayor Muriel Bowser in recent days was asked about her response to the idea, the implication that there was widespread manipulation of crime data in Washington. Take a listen to what she said.

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MURIEL BOWSER (D), MAYOR OF WASHINGTON, D.C.: We know that crime has gone down in our city and it has gone down precipitously over the last two years because of a lot of hard work, changes to our public safety ecosystem, including changes to the law. And we know that those facts don't comport to what some people are saying, but those are the facts.

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TODD: So, Mayor Bowser, Chief Smith, Pamela, and others are pointing to crime stats that they say have been going consistently down and they say these stats are legitimate.

And here's just a couple of them. Homicides, they say, are down 15 percent from a year ago, sex abuse cases down 48 percent from a year ago, assault with a dangerous weapon down 19 percent, robberies down 31 percent.

Pamela, they point to these stats almost every day. They put these stats out there. And they claim that, for the most part, of course, these stats are legitimate. They say, D.C., officials say this is one police commander in one district being investigated for allegedly manipulating crime data in one district. And they say that investigation is ongoing.

So whether these two investigations are going to really uncover some massive manipulation of data, that really remains to be seen.

BROWN: And I know you will be tracking all of that. Brian Todd, thank you so much.

TODD: Yes.

BROWN: Well, just to end the CNN, the Justice Department is asking a federal court to dismiss a lawsuit brought by the Proud Boys. They say their January 6-related convictions were the result of -- quote -- "political prosecution."

CNN crime and justice correspondent Katelyn Polantz is here.

Tell us what's going on.

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Well, the Justice Department, they're standing behind the work of the Justice Department, even in the Biden administration after January 6, 2021.

In this situation, this is about the five Proud Boys members that were accused of seditious conspiracy in court, went to trial. Four were convicted of that crime related to the Capitol riot in 2021. One of them was convicted for assaulting police and destruction of the federal property.

When Trump took power then, on January 21, four of those men, they had their sentences commuted. So they were released from prison by the president. And Enrique Tarrio, the leader of the Proud Boys, he was pardoned by Donald Trump. And then they sued; $100 million is what they asked for, and they accused the U.S. government of malicious prosecution.

What the U.S. government says now, despite what Donald Trump has said about January 6, despite the political speech around that attack and what was done there, the U.S. government in court in Florida is responding to this lawsuit saying, we're not going to pay any damages that these people want, and we have immunity for it. There was no malicious prosecution here that we're accused of.

It's one of those examples, Pam, where politics is politics, but court is court, and the Justice Department is not willing to undo the cases that they brought and tried against the Proud Boys, even though those men have received presidential clemency from Donald Trump.

BROWN: That is really interesting, because obviously Donald Trump issued all those pardons to the January 6 rioters, and a big argument then was so many of them were political prosecutions.

But now, in this case, DOJ is saying, no, actually we weren't involved and these political prosecutions were valid.

POLANTZ: Yes, and the Justice Department is saying that because the Proud Boys are trying to unwind something even more than they had already gotten it unwound. They had gotten the pardons or the clemency from Donald Trump. But in this situation, where they're going and suing, trying to bring

a case against the government, trying to collect millions of dollars from the U.S. government, that just isn't going to fly with this Justice Department, even if it is the Trump administration.

BROWN: All right, Katelyn Polantz, thank you so much.

Well, new this morning, the search for a former soldier suspected of killing his three young daughters is picking up steam. The FBI has now launched an intense search for Travis Decker. These are his little girls. They're looking for clues near the Washington state campground where these little girls were found dead.

Decker has alluded authorities since early June. And authorities have expressed their own frustration with this investigation. Listen.

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MIKE MORRISON, CHELAN COUNTY, WASHINGTON, SHERIFF: We want to bring closure. We want to bring answers. We understand the frustration. We're feeling it as well. It's been three months. We would love to have Travis Decker in custody standing in front of a judge.

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BROWN: Investigators say it's unknown if Decker is alive. The U.S. Marshals Service is offering up to $20,000 for any information leading to his arrest.

And still ahead right here in THE SITUATION ROOM: Almost 20 years after Hurricane Katrina, nearly 200 FEMA employees have a dire warning about how ready the agency is for future disasters.

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And what if you could take a pill, instead of a shot, to lose weight? Well, it may be one step closer to reality.

Stay with us. We will be right back.

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BROWN: Well, this Friday marks 20 years since Hurricane Katrina began devastating the Gulf Coast. Nearly 1,400 people died in one of the deadliest and costliest natural disasters in American history.

Katrina exposed fatal flaws in the federal government's emergency response system and led to sweeping reforms. And now, in a new letter to Congress, current and former FEMA employees warned that the Trump administration is undoing two decades of progress since Katrina.

CNN's Gabe Cohen is here.

So what more did this letter say, Gabe? GABE COHEN, CNN CORRESPONDENT: Yes, so, Pam, what they're calling

this is the Katrina Declaration.

And what they're essentially saying is that, after Katrina, a lot of progress was made to strengthen emergency management in this country and specifically to strengthen FEMA. And what we're seeing today is this overhaul of FEMA at the hands of the Trump administration that they argue is really reversing the progress that we saw.

So, just a flashback 20 years. You may remember Congress investigated what had happened in New Orleans. They felt that there had been a federal failure. And so they passed legislation to try to empower FEMA to give the agency more authority and to also raise standards for its leadership.

But what we have seen here in recent months is DHS, including Homeland Security Secretary Kristi Noem, institute strict spending oversight on FEMA, even for disaster funds, and also appoint a head of FEMA, an acting administrator who has no experience dealing with emergency management, who came from the Countering Weapons of Mass Destruction office.

I will read you an excerpt from this letter. The authors say: "Our shared commitment to our country, our oaths of office, and our mission of helping people before, during, and after disasters compel us to warn Congress and the American people of the cascading effects of decisions made by the current administration."

So they are very concerned that we could see the next Katrina-level disaster based on the stripping away of FEMA that we have seen.

Now, for DHS and FEMA's part, officials disagree with the messaging here. They said in a statement, FEMA did: "For too long, FEMA was bogged down by red tape, inefficiency, and outdated processes that failed to get disaster dollars into survivors' hands. The Trump administration has made accountability and reform a priority, so that taxpayer dollars actually reach the people and communities that they are meant to help."

And they certainly are reforming the agency and we're expecting to see more in the months ahead. But there's a lot of concern about what's been undone, not just those policies, the legislation that was put in place, but also the amount of workers that have left, including senior leaders who help write FEMA's playbook for disasters after Katrina.

There's been a mass exodus, morale has plummeted, and this letter is just the latest testament to that.

BROWN: And it's interesting. In FEMA's response, it says, we're working on efficiency, streamlining how FEMA works, but some of the current employees you have spoken to actually say that the protocols they have put in place are adding bureaucratic hurdles, right?

G. COHEN: Exactly.

And that's something they said they saw in Texas, where FEMA staff could not preposition assets like search-and-rescue. They couldn't pre-deploy them early because it had to be approved, that type of contract, by Secretary Noem.

BROWN: Like $10,000 or more?

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G. COHEN: It's more than $100,000.

BROWN: More than $100,000. OK.

G. COHEN: But that is pennies, they say, when it comes to disaster response. They're used to spending millions, if not billions of dollars pretty quickly.

And I will also add, it's not just internal FEMA employees who are critiquing these actions by DHS. We have this tweet now this morning from Cameron Hamilton, who was the Trump-appointed first FEMA chief of this term. Noem fired him in May essentially for getting too cozy with FEMA.

Well, he tweeted just a couple hours ago saying: "Stating that FEMA is operating more efficiently and cutting red tape is either uninformed about managing disasters, misled by public officials, or lying to the public to prop up talking points. FEMA staff are responding to entirely new forms of bureaucracy now that is lengthening wait times for claim recipients and delaying the deployment of time-sensitive resources."

Again, Trump put him in charge in January.

BROWN: Right.

G. COHEN: He is conservative, and yet he clashed with Noem and with Corey Lewandowski, who's working at DHS now. And you can hear in these tweets he's essentially saying FEMA is going in the wrong direction.

BROWN: All right, Gabe Cohen, thank you so much for bringing us the latest.

Well, new this morning, a record drug haul on display in Florida. The Coast Guard says it seized more than 61,000 pounds of cocaine. Officials say it's enough to fatally overdose, get this, the entire population of Florida; 14,000 pounds of marijuana was also seized. Authorities say it is the largest amount of drugs off-loaded in Coast Guard history.

And this was part of 19 seizures across the Eastern Pacific Ocean and Caribbean this summer. And all the drugs carry a street value of $473 million. Wow.

Up next: GLP-1 pills for weight loss may be closer to reality.

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New reporting just ahead in THE SITUATION ROOM. (COMMERCIAL BREAK)

BROWN: Well, happening now, look at this unbelievable video of Oregon's Flat Fire. Over 1,000 firefighters are battling this blaze.

Rapid expansion of the fire is driven by dry, hot weather. Authorities at one point ordered evacuations for more than 4,000 homes. And while officials say firefighters now have protective lines of some sort around the entire fire, the threat remains, at just 5 percent containment.