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The Source with Kaitlan Collins
Senator Accuses Trump Admin. Of Lying About Man Mistakenly Deported: "Put Up In Court, Or Shut Up"; IRS Head Replaced After Musk- Bessent Power Struggle; NY Times: Trump Officials Blame Mistake For Setting Off Confrontation With Harvard. Aired 9-10p ET
Aired April 18, 2025 - 21:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[21:00:00]
(BEGIN VIDEOTAPE)
CHRISTOPHER LAMB, CNN VATICAN CORRESPONDENT (voice-over): And he thanked the medical team who saved his life.
POPE FRANCIS, HEAD OF THE CATHOLIC CHURCH, SOVEREIGN OF THE VATICAN CITY STATE (through translator): Thank you all. I pray for you. Please do so for me.
LAMB (voice-over): He even appeared casually dressed while greeting visitors at Saint Peter's Basilica.
Good Friday is when Christians remember Christ suffering and death on the cross, and then celebrate His resurrection on Easter Sunday.
This year, the world's more than 1 billion Catholics will also pray for their leader, frail in health, but strong in faith.
POPE FRANCIS: (FOREIGN LANGUAGE).
LAMB (voice-over): Christopher Lamb, CNN, Rome.
(END VIDEOTAPE)
JIM SCIUTTO, CNN HOST, ANDERSON COOPER 360: Our best to the Pope, this Easter.
That is all for us. The news continues. "THE SOURCE WITH KAITLAN COLLINS" starts now.
KAITLAN COLLINS, CNN CHIEF WHITE HOUSE CORRESPONDENT, CNN HOST, THE SOURCE WITH KAITLAN COLLINS: Straight from THE SOURCE tonight.
A U.S. Senator accuses the Trump administration of lying about Kilmar Abrego Garcia's case, and El Salvador's government of a margarita setup. I'll speak with the mistakenly deported man's attorney, as the White House says, in all-caps, He's never coming back.
Plus, President Trump promised to end Russia's war in Ukraine in one day after he took office. Now his administration is starting to walk away with no deal. And Elon Musk, tonight at the White House, just lost a major power struggle that was playing out behind-the-scenes. Why his pick, to lead the IRS, is out of the job after just 72 hours.
I'm Kaitlan Collins. And this is THE SOURCE.
Put up in court, or shut up. Those were the searing words of a sitting U.S. Senator, who says he just became the first person to meet with Kilmar Abrego Garcia, after he was mistakenly deported by the Trump administration's own admission to a notorious megaprison in El Salvador.
Except, Maryland senator, Chris Van Hollen, just revealed he's actually no longer being held there.
(BEGIN VIDEO CLIP)
SEN. CHRIS VAN HOLLEN (D-MD): He told me, and this was yesterday, that eight days ago or so, I guess nine days ago from today, he was moved to another detention center, in Santa Ana, where the conditions are better. But he said, despite the better conditions, he still has no access to any news from the outside world, and no ability to communicate with anybody in the outside.
(END VIDEO CLIP)
COLLINS: Now, given the fact that he has been relatively cut off, as the Senator put it there, Senator Van Hollen, of course, one of the first people to speak with him, he had to actually inform him about just how much his case has become the center of a major battle.
(BEGIN VIDEO CLIP)
VAN HOLLEN: This case is not just about one man.
If you deny the constitutional rights of one man, you threaten the constitutional rights and due process for everyone else in America.
The Trump administration wants to flat-out lie about what this case is about. Wants to say that those who are fighting to stand up for our Constitution don't want to fight gang violence. That is an outright lie.
I say to the President and the Trump administration, if you want to make claims about Mr. Abrego Garcia and MS-13, you should present them in the court, not over social media.
UNIDENTIFIED FEMALE: That's right.
UNIDENTIFIED FEMALE: That's right.
VAN HOLLEN: Not at press conferences where you just rattle stuff off.
In other words, put up in court, or shut up.
(END VIDEO CLIP) COLLINS: As he stood next to Abrego Garcia's wife there, Senator Van Hollen also revealed, the Trump administration is paying El Salvador, $15 million, to detain prisoners, while also addressing those odd photos that we saw released by El Salvador's President, last night.
We showed you them here, alleging that the Senator and Abrego Garcia were having margaritas in paradise, as he put it, instead of talking about his due process rights as he's being held in a foreign country.
(BEGIN VIDEO CLIP)
VAN HOLLEN: Here's what happened. When I first sat down with Kilmar, we just had glasses of water on the table, I think maybe some coffee.
And as we were talking, one of the government people came over and deposited two other glasses on the table with ice, and I don't know if it was salt or sugar around the top.
(LAUGHTER)
VAN HOLLEN: But they look like margaritas. And if you look at the one they put in front of Kilmar, it actually had a little less liquid than the one in me -- in front of me, to try to make it look, I assume, like he drank out of it.
Let me just be very clear. Neither of us touched the drinks.
Nobody drank any margaritas or sugar water, or whatever it is. But this is a lesson into the lengths that President Bukele will go to deceive people about what's going on. And it also shows the lengths that the Trump administration and the President will go to, because when he was asked about -- a reporter, about this, he just went along for the ride.
(END VIDEO CLIP)
[21:05:00]
COLLINS: The Senator also said that that initial proposal for the meeting had its stage not at the hotel's restaurant where they did meet, but at the hotel's pool.
And that comes as at the White House today, we saw President Trump responding to this visit by Senator Van Hollen, criticizing him for making the trip at all. As officials there have been mocking Democrats for objecting to Abrego Garcia's removal.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT, UNITED STATES OF AMERICA: He's a fake, I know him. I know them all. They're all fake. And they have no interest in that prisoner.
That prisoner's record is unbelievably bad.
Abrego Garcia is an illegal alien, MS-13 gang member, and foreign terrorist.
This is the man that the Democrats are wanting us to fly back from El Salvador to be a happily-ensconced member of the USA family. Isn't it a shame?
(END VIDEO CLIP)
COLLINS: My first source tonight is Rina Gandhi, who is a partner at the immigration law firm, Murray Osorio, and is one of the attorneys representing Kilmar Abrego Garcia.
And it's great to have you here.
I noted that Senator Van Hollen says he's the first person, he believes, that has spoken to Abrego Garcia since he was detained and flown to El Salvador. Have you or anyone on the legal team had a chance to speak with him yourself?
RINA GANDHI, ATTORNEY FOR KILMAR ABREGO GARCIA, PARTNER, MURRAY OSORIO IMMIGRATION LAW FIRM: Unfortunately, not. No one from our legal team, no one from his family, no one else outside of that meeting Senator Van Hollen had with him, have had a chance to speak with him.
COLLINS: So does that mean that you weren't aware, or were you, that he had been transferred out of CECOT, that notorious megaprison, nine days ago, and sent to another facility?
GANDHI: We were not aware. No.
COLLINS: So you found that out in real-time, when you -- when you heard from the Senator himself?
GANDHI: From his team, yes.
COLLINS: And do you know, or have any indication, beyond the area of where your client is being held right now?
GANDHI: We do not.
COLLINS: And I assume, that that means you don't know how long he'll be held. I mean, the question has been, is this, a weeks, months, or could he be detained for potentially years?
GANDHI: It's a great question. I wish I could give you and his family a better answer than, I don't know.
Obviously, through this next discovery phase that we're currently under, we're hoping to push the government to actually facilitate his release from custody in El Salvador, just like the Supreme Court ordered. But I don't know how long that's going to actually take in reality.
COLLINS: I mean, it's pretty remarkable that he has been detained for this long, that this case has been at the center of dominating news headlines for this long, and the legal team still hasn't had a chance to speak with him or even know where he's being held. GANDHI: Absolutely. And it's not just us here in the U.S. There are -- there's part of the team in El Salvador. We've had non-profit humanitarian organizations that we've worked with, to try to reach out to speak with him. And they have all been declined.
COLLINS: One thing that we have heard from the legal team, and against this allegation from the White House, is about his history.
I know that you have said he doesn't have a criminal history, that he had never been arrested for anything before. People at the White House have pointed out to me, they say, That doesn't mean that he wasn't a member of MS-13. There's not always criminal activity on someone's record, if they are in a gang.
And I want to show you something that the President posted tonight. It's a photo of what he says is your client's left hand. You can see his knuckles there. And the President is showing these tattoos that the White House alleges, reveals that he's a member of MS-13.
I should note, the photo has been doctored, because those -- the actual M-S-1-3--
GANDHI: Yes.
COLLINS: --that you see at the top, that's not actually a tattoo. That's what they're saying, the tattoos portray.
What is your reaction to this photo?
GANDHI: Yes. My reaction is, this is just a continuation of the distraction.
This case is not about whether Mr. Abrego Garcia is good or bad, whether he is or isn't in MS-13, whether he should be able to remain for the rest of his life in the U.S. or not.
This case is about the simple fact that he was removed without due process. And if it can happen to him, and the government pushes back at every turn, despite three different courts ordering them to return him, then who's next?
COLLINS: We had the border czar, Tom Homan, on last night. And his argument that he made to me was one that that 2019 ruling from an immigration judge, who technically was working for President Trump, was meaningless. But he also said that if your client is brought back to the United States, he'll just be deported again to a third country.
If that happened, legally, do you think you'd be able to prevent that?
[21:10:00]
GANDHI: Yes. So, what is actually the process is that the government has to move to reopen his case, because he was granted relief by a judge, as you mentioned, under the Trump administration.
More importantly, that the Trump administration government, DHS, did not appeal, and chose to release him after. Keep that in mind.
But they can move to reopen, they can introduce evidence, give him the opportunity to present his case and let a judge decide.
And a judge's decisions are not meaningless. Otherwise, we have no rule of law.
COLLINS: Rina Gandhi, please keep us updated if you do get a moment to speak with your client. And of course, as we're following this very closely. Thank you for your time.
GANDHI: Thank you so much.
COLLINS: Also joining me here is CNN's Senior Legal Analyst, Elie Honig.
Elie, I mean, it is striking to hear her say, No contact. They have no idea where he's being held. They didn't know that he had been moved, until the Senator who went down there and basically waited outside of CECOT, and asked for the administration to let him meet with Abrego Garcia, until that could happen.
ELIE HONIG, CNN SENIOR LEGAL ANALYST, FORMER FEDERAL PROSECUTOR: When we talk about a lack of due process, this is what we're talking about.
I mean, it is astonishing to see a lawyer for a man, who is fighting for his liberty here, who doesn't know where he is, doesn't know that he was moved nine days ago and has had no contact with him. That is unheard of in our legal system, here in the United States.
And the fact that they're having to fight this battle, without access to their client, just underscores how lawless this is. A complete lack of due process, I think that's a great illustration of it.
COLLINS: How do you, in improper English, how do you lawyer if you cannot get in touch with your client?
HONIG: I mean, it's a great question. This whole case, part of what's so ridiculous about this is it's not being litigated through the courts.
Look how this is being litigated. Donald Trump's holding up a photo in the Oval Office. DHS is issuing press releases that it's putting on its website. That's not the way our legal system works.
The other thing that's so important to keep in mind, and Ms. Gandhi just said this, is, let's remember how this started. The administration erroneously deported Abrego Garcia. They've admitted that. Clerical error, administrative error.
COLLINS: To be fair, they fired the guy who had done that (ph).
HONIG: Right. God forbid, the guy told the truth in court. That's why he's now out of a job at DOJ.
And now, what we're seeing is almost a day-by-day, hour-by-hour, post hoc, after the fact attempt (ph) to go, Well, look at this old police report, look at this photo. That is not the way we litigate in this country.
COLLINS: We asked Tom Homan about that last night. And he repeatedly said, That's a Pam Bondi thing. That's a Justice Department thing. That's an attorney that -- something for the attorney general.
Because they do keep showing all this stuff, publicly or in briefings. But they're not actually, as the judge in Maryland noted, they have not connected him to MS-13. I don't understand, if they have all this evidence, why would they not put that in a court filing?
HONIG: The strat -- the consistent strategy that we're seeing from Tom Homan, from Pam Bondi, from Stephen Miller, from the President, is to try to just win this with volume, with repetitive statements of what they want the facts to be.
If he's an MS-13 member, if he's involved in human trafficking? That's the newest allegation now. Maybe he is, maybe isn't, but prove it. You don't get to make it so just by asserting it. You have to go into a court, whether an immigration court, want to charge him with a crime in a federal court, and prove it. That's the way our courts work.
COLLINS: Yes. Elie Honig, thank you for that, and being our lawyer here on set.
Joining me now, Congressman Jamie Raskin of Maryland, who is the top Democrat on the House Judiciary Committee.
And Congressman, just on hearing the attorney for Abrego Garcia say that they didn't know that he had been moved nine days ago, they don't know where he's being held now, exactly, they have not been able to speak to him. What does that say to you about whether or not you feel that Senator Van Hollen's visit was worth it.
REP. JAMIE RASKIN (D-MD): Was totally worth it. Otherwise, we wouldn't know anything about the situation.
Look, this is a complete obliteration of due process, which guarantees you have a right to a lawyer, you have a right to hear the charges against you. As far as we know, he hasn't been charged with anything. You have a right to be in touch with your family. And you should be released if you're not being charged.
He's being held incommunicado, when the administration has admitted that he was falsely arrested and removed from the country. So now they're making up all this stuff about MS-13.
Or, you know, let's say he was responsible for the January 6th attack, and he coordinated the assault on 140 police officers. Come back and prove that in court.
But right now, what we've got is a President, who has 34 actual felony criminal convictions, who actually had every benefit of due process, right to counsel, and he was convicted. And they deny the reality of that. But they're making up things against a guy who's never been prosecuted, much less convicted of anything criminal.
COLLINS: What do you say to the administration's argument that the 2019 withholding of removal order, which said, Basically, he could be deported to anywhere except El Salvador, the one place that they sent him, they're arguing that that's meaningless for two reasons.
[21:15:00]
One, they say that Bukele has changed El Salvador, and the conditions in the country are different now. Because he feared for persecution. And two, they say, because they have designated MS-13 as a terrorist organization, that he is therefore considered a terrorist, and therefore it basically doesn't matter, is their argument.
RASKIN: Nobody has proven that he's an MS-13. That's just an allegation that's thrown out there. In any event, this is a binding decision by an administrative law judge, and they would have to go back to an immigration judge within Homeland Security, in order to get that reversed, and then due process operates.
That's what everybody at every level of this case, and the related cases, about these false deportations has said, whether it's D.C. District Court, Maryland District Court, the Fourth Circuit where there's a beautiful opinion by a very conservative judge, Judge Wilkinson, there, about the central importance of due process, and all the way up to the Supreme Court, where there was a nine-to-zero decision that the executive branch has got to facilitate his return to the country. So, what are we talking about here?
They've totally painted themselves into a corner. The entire judiciary is against them. All of the constitutional law's against them. International law's against them.
COLLINS: Well--
RASKIN: This is not how we proceed.
So, they can keep throwing spaghetti at the wall, but nothing is going to work. People, no matter how much we hate gang violence, whether it is MS-13, or the Proud Boys, or the Oath Keepers, and we all hate gang violence, no matter how much, everybody is entitled to due process. Whether it's somebody who beat up a police officer on January 6th, or someone who they're now alleging, in the wake of their administrative error--
COLLINS: Yes.
RASKIN: --is a member of MS-13.
COLLINS: And that's a Reagan appointee, that judge, Judge Wilkinson, that you mentioned there.
I do have a question, though. If -- and let's talk politically, not legally. If they do show in court that he is a member of MS-13, they actually make that argument in court filings? Which, again, they have not done so far. Are you worried this could backfire on your party, politically?
RASKIN: It's so funny, Kaitlan, how everybody wants to talk about the politics of it. It's so far beyond that.
Due process is the essential core element of our constitutional system. If we don't have due process for everybody in the country, all is lost, because anybody can be swept off of the street, and deported, and taken out some place.
And so, I hope I still live in a country right now, where the vast majority of the people support the Constitution and due process. And I'm glad to see that there are some Republican senators, like Rand Paul, who I think does believe in the Constitution, who's got up and said, like, This cannot be what's taking place in America.
COLLINS: Yes.
RASKIN: So, I think more and more people are going to come around to that view.
And when Donald Trump says he's never coming back to the country, that reminded me of when he said, I'm not going to back down at all on the tariffs. And of course, a couple days later, it was over. So, he tries to go as far as he can. But when we reassert the central primacy of the Constitution, and the rule of law, he's got to give up.
COLLINS: But on that front, I mean, what we have seen playing out in the courts is the White House seeming to say, We're not going to give up. Because look at what the White House account posted today. They took The New York Times frontpage, they corrected it, and called Abrego Garcia, an illegal alien. And then, instead of -- at the end, wrote, Who's never coming back.
When you see that, though, does that sound like a White House that's going to abide by a nine-zero Supreme Court order about facilitating his return to you?
RASKIN: Well, they shouldn't be firing the guy who told the truth to the court about how Abrego Garcia was wrongfully and erroneously removed. They should be firing the person, who is scrolling graffiti and posting it in the name of the White House. It did not look like Donald Trump's handwriting to me.
But in any event, no, they have got to comply with the Constitution. Under the Supremacy Clause of the Constitution, it binds all of us, the Congress, the President, the Supreme Court. Everybody is abiding by due process here, except for the Trump administration, and they're going to have to accept reality.
COLLINS: Congressman Jamie Raskin, thank you for your time tonight.
RASKIN: You bet.
COLLINS: Tonight, also at the White House, we're seeing the administration get rid of the acting IRS commissioner, who literally was put in that job three days ago. Elon Musk is at the center of this, and just lost a major power battle over it. Our White House insiders are here with details, next.
[21:20:00]
(COMMERCIAL BREAK)
COLLINS: A power struggle between Elon Musk, and the Treasury Secretary, Scott Bessent, has resulted in the acting head of the IRS being ousted, after only 72 hours on the job.
After just three days, Gary Shapley will no longer be the agency's acting commissioner. It's what our sources are telling us tonight. And instead, the third acting leader this week will take over.
Now, Shapley is the best-known as an IRS whistleblower. He accused the Justice Department of slow-walking that Hunter Biden tax investigation. That's why he'll look familiar to you. He was appointed by the President, on Tuesday. But clearly, as the reporting has shown, not everyone in the administration was happy about that.
Our sources say that Treasury Secretary, Scott Bessent, had reservations. And according to The New York Times, who first reported this, he complained to President Trump that Elon Musk, quote, Had done an end run around him to get Shapley installed as the interim head of the IRS, even though the tax collection agency reports to him.
Now clearly, as we've learned tonight, Bessent ultimately got his way and Trump's approval to unwind the decision.
My White House insiders are here.
[21:25:00]
And Alex, let me start with you.
Because just in the terms of how this played out, actually says so much more than just about this one incident, but about how maybe a lot of the Cabinet Secretaries, or at least, I'll say, several, have been viewing Elon Musk's undefined kind of role, and trying to have oversight over their agencies.
ALEX ISENSTADT, SENIOR POLITICAL REPORTER, AXIOS, AUTHOR, "REVENGE": Yes, for sure. He's starting to rub people along -- the wrong way. It's actually have been going off for several weeks now.
The one thing though, that really appears to be the case is that the more that Elon Musk comes under attack from other people, including those in the administration, the more Trump seems willing to come to his defense.
Trump doesn't like it when people who are close to him are under attack. And so, that's why you saw Trump go out and have that event, a few weeks -- a few weeks back, with Elon and the Teslas. Trump wants to defend those people who he sees as besieged, who are close to him.
COLLINS: Yes, he certainly has. And obviously, in public indications, Elon Musk travels with him often on Air Force One, rides with him in The Beast.
Seung Min, but on this -- on the Bessent-Musk power struggle here, it is pretty remarkable to see just what a quick turnaround this was, in terms of, on Tuesday, he was picking him to be the IRS commissioner in an acting capacity. And now, by Friday, he's out.
SEUNG MIN KIM, WHITE HOUSE REPORTER, ASSOCIATED PRESS, CNN POLITICAL ANALYST: Right, exactly. It also sets to be the kind of growing influence that the Treasury Secretary is having in Trump's orbit. Obviously, he got his way with the latest leadership at the IRS.
And he's been at his side, he's been at the President's side, a lot, recently, when it comes to, for example, his tariff policy. He made it a point to point out that he was with the President in Mar-a-Lago, the weekend when the team was dealing with the fallout from the April 2nd tariffs. He was brought out to us, at the West Wing driveway, to talk to us about the pause when the President instituted that.
And reportedly, he's also advising President that -- the President, that it will be a bad idea to fire Federal Reserve Chairman, Jerome Powell, which is another thing that we've seen the President float a lot this week.
So, in one sense, you do see Scott Bessent, who's going to be a very important figure, later this year, especially when Congress really takes up the issue of tax cuts and reconciliation, you really do see him kind of digging in and really spreading his influence, especially with the President.
COLLINS: Yes, and that says a lot, actually, about what Elon Musk is doing in response. He's been reposting things that are critical of Bessent's Treasury Department, tonight, on X.
MIN KIM: Sure.
COLLINS: We'll see, obviously, how that shakes out.
But on the term -- the point about, that Seung Min made about how often Bessent is by Trump's side and the influence he's having.
Alex, tonight, our friends over at The Wall Street Journal are reporting that Bessent and Lutnick basically had to wait until Trump's hardline trade adviser, Peter Navarro, was in another meeting with Kevin Hassett, to rush into the Oval Office to see Trump and propose that pause on those 90-day tariffs, without Navarro there to argue or to push back.
And they report that they stayed until Trump actually made it official, when he tapped out that Truth Social post, which The Wall Street Journal says actually surprised Peter Navarro in the end.
ISENSTADT: So much of this is starting to feel similar to what happened during Trump 1.0.--
COLLINS: Yes. ISENSTADT: --when you had people angling to get into the Oval Office, seeing when other people were coming into the Oval Office, when they were coming out. You're starting to see those knifings (ph). You're starting to see more leaks. You're starting to see more palace intrigue.
And it felt for a while, like in the beginning of this administration, that things were operating a bit more tightly. And to some extent, it is still more tight than Trump 1.0. But you're starting to see some cracks starting to emerge, for sure.
COLLINS: Yes, Seung Min, that was the first thought I had, reading this Journal story about them waiting, that this meeting--
MIN KIM: Right.
COLLINS: --with Bessent and Lutnick was not on Trump's public -- or his schedule that the other staff can see.
Just speaks to the power dynamics of getting in front of Trump, being the person to make that argument without others to push back in the room, is really, clearly, an effective way that people thought to get to him in round one, and is proving to be that in round two as well.
MIN KIM: Right. We saw so many examples, during the first administration, of why it was so important to be the last person in President Trump's ear and making that argument. And President Trump, as his aides will tell you, he likes the kind of debating, the fighting. He wants to hear all sides.
But it was really important for his aides to, again, be that last person, making that argument, and making sure that the other counter- perspectives were not in the room, or did not have the opportunity to make that case.
Every official wants to be the last person before a president consults or makes a decision. And with Trump -- in the Trump White House, that's just a new level of that.
COLLINS: Yes.
But Alex, what does it say about Peter Navarro, in the sense of who's actually in the room, when these decisions are being made? Because Peter Navarro has been there for quite some time. Obviously, he was around before, where he went to prison defying a congressional subpoena.
[21:30:00]
I mean, he does have -- if someone is listening to this and thinking, Well, Peter Navarro is out. There's also a certain sector of people who would say, Don't count Peter Navarro out, in terms of getting in the President's ear and having that influence.
ISENSTADT: Yes. And one thing's clear, which is that Trump doesn't seem to have the same appetite, this time around, for firing people and for turnover. We're now in April, and we haven't seen that many major departures. We did -- we did see that departure out of the IRS. But in terms of high-profile people who play major roles, in the West Wing, we haven't seen too much of that.
Now, there is a lot of anger, within people in the White House, towards Peter Navarro, who believes that he played a role in terms of bungling the rollout of the tariffs. That much is clear. But -- and it's pretty clear that Navarro has been sidelined, to some extent, but not clear that he's going to be pushed out at this rate.
COLLINS: Yes, we'll see, and stay tuned.
Alex Isenstadt. Seung Min Kim. Great to have you both here tonight.
ISENSTADT: Thank you.
MIN KIM: Thank you.
COLLINS: Though, tonight, a tumultuous week at the Pentagon is being capped off by the departure of Joe Kasper, the Chief of Staff to the Defense Secretary, Pete Hegseth -- excuse me.
Politico is reporting tonight that Kasper is leaving for a new role at the agency, as three other Pentagon appointees were placed on leave this week amid an investigation into unauthorized leaks. Now, a source tells us tonight -- and we're going to continue to follow that story, as we're watching the Pentagon very closely.
Meanwhile, as Seung Min just mentioned there, the President has taken another swipe at Jerome Powell. He's blaming the Fed chair for high interest rates. My next source was on the Federal Reserve Board with Powell, and we'll get his thoughts next.
[21:35:00]
(COMMERCIAL BREAK)
COLLINS: Tonight, President Trump is looking into whether or not he can legally do something that no other president has ever tried before. Remove the Chair of the Federal Reserve. That is, according to his top economic adviser, Kevin Hassett.
Even though Kevin Hassett said something very different, just a few weeks ago, when I asked him if the President could fire the Fed chair.
(BEGIN VIDEO CLIP)
KEVIN HASSETT, NATIONAL ECONOMIC COUNCIL DIRECTOR: We very much respect the independence of the Fed, and there's a massive literature that independent central banks perform better for economies. And so, I don't think that's a decision--
COLLINS: So he doesn't think he can fire the Fed chair?
HASSETT: I think that that's been resolved in the previous administration. You could go back and find a clip where I talked about it right in this space.
REPORTER: Do you think firing Jay Powell is an option now in a way that it wasn't before?
HASSETT: The President and his team will continue to study that matter.
(END VIDEO CLIP)
COLLINS: Now, the President has been lashing out at Jay Powell, to put it lightly, for refusing to cut interest rates, which could cushion the blow from his trade war.
(BEGIN VIDEO CLIP)
TRUMP: I keep hearing about prices and inflation. Prices are coming down, not going up. Only the fake news says they're going up. The only thing that's even are interest rates. And if we had a Fed chairman that understood what he was doing, interest rates would be coming down too. He should -- he should bring them down.
(END VIDEO CLIP)
COLLINS: My source tonight served on the Federal Reserve Board with Jay Powell. They were nominated together by President Obama. Of course, it was President Trump, who made him the Chair of the Federal Reserve initially.
Jeremy Stein, thank you for being here.
First off, just on the matter at hand here, do you think that the President can fire the Fed chair?
JEREMY STEIN, FORMER MEMBER, FEDERAL RESERVE BOARD OF GOVERNORS: So, to be clear, I'm not a lawyer, but everything I've seen and read suggests he doesn't have that authority, that the Fed chair cannot be removed, except in cases of sort of extreme malfeasance, which is not what we're talking about here. We're talking about a policy disagreement.
I have a little more confidence in saying that if he were to move to try to do that, it would create really tremendous havoc in financial markets. I mean, the Fed's independence, I think, is widely recognized, even them -- you had the clip from Kevin Hassett there, is widely recognized to be sort of an anchor of the Treasury market. And we've seen already a little bit of nervousness in Treasury markets.
And I mean, think about Secretary Bessent, who spent a lifetime in financial markets and said, I think earlier this week, that monetary policy independence was a jewel in a box. I just hope that message is being communicated forcibly to the President.
COLLINS: Yes, so what -- I mean, we've focused so much on the legal aspect of this.
STEIN: Yes. COLLINS: But practically speaking, because this White House has shown a willingness--
STEIN: Yes.
COLLINS: --to fire people that maybe they can't fire. It's in the courts right now.
STEIN: Yes.
COLLINS: But what would that look like, tomorrow, to the markets, if that happened tonight? What do you -- what would your best guess be?
STEIN: I think it would be terribly destabilizing. There's a ton of both academic research and practical experience that says that central bank independence is basically crucially important, to insulating the Fed from the kind of political pressure that can ultimately force you to be too accommodative in the short run, ultimately creates inflation.
And look at other countries that have had their central banks bullied around by politicians. It's not a pretty picture. You tend to get inflation, market volatility, ultimately very damaging to the real economy. I don't think we want to go -- I don't think we want to go down that route.
COLLINS: Given that you know Chair Powell.
STEIN: Yes.
COLLINS: When Trump says that he doesn't understand what he's doing with interest rates? What would you say, in response to that?
[21:40:00]
STEIN: Well, I would say, first of all, I mean, the tariff situation has put the Fed in a very, very difficult spot.
If you think back even to, over the last couple decades, even to the really tough, tough times that we've had, like the financial crisis, the onset of the pandemic, as bad as they were, at least the Fed knew what direction to row the boat in, right? In other words, the economy was weak, but inflation was soft at the same time. So it was a difficult job, but it was clear you wanted to go pedal to the metal.
The issue with tariffs is basically, we're very likely to have both elevated inflation and a weak economy. So it's very unclear just the direction that monetary policy should take. That's why they're on hold right now.
I think it's the right thing for them to be doing. But there's no easy way, and there's really not much the Fed can do, to avoid the fact that there's going to be pain on at least one side of their -- one side of their mandate.
COLLINS: Yes. Well, and that was what he kind of laid out the other day. He said that they weren't lowering interest rates yet, or prepared to do so, because also, the chaotic nature of the tariffs. They're on, they're off, they're suspended, they're implemented. He said, that actually had a lot to do with it.
But in addition to the pressure of that, and navigating the U.S. economy, what do you think it's like for him to have to deal with the President publicly berating him, every single day, as he's been doing this week?
STEIN: One thing I'll say, during my time at the Fed, one of what I thought was the -- was really the thing that I most appreciated and admired was that the staff at the Fed is so deeply and resolutely non- partisan and apolitical, and really try to do the best they can, kind of drowning out, or not listening to the political noise.
And Jay Powell is about as well-suited intellectually, temperamentally, to lead that kind of an organization, I really think, I mean. And I think if anyone can -- you know, look, anybody's going to make mistakes in the job. But in terms of doing, you know, following his best judgment, about what's appropriate for the economy, and not listening to the politics? He's about as well-wired, as anyone I can imagine, to do that.
COLLINS: Do you think if Trump fired him, he'd fight it?
STEIN: I think he'd fight it. I think he's been quite clear on that.
COLLINS: Yes. I mean--
STEIN: I think he'd (ph) take it to court.
COLLINS: --that would be an uncomfortable position for a Fed chair.
STEIN: It would be an uncomfortable position for a Fed chair. I think it would be, importantly, a much more uncomfortable position for the economy and for financial markets, for the global role.
I mean, again, we've seen some of that this past couple weeks with the, for the first time in my memory, the role of the dollar as the central, as the sort of center, and the Treasury market as the center of the global financial system, that's been starting to maybe be questioned. I think if he moves on Powell, that's going to be amplified tremendously.
And by the way, he will make the job -- he is, in a little over a year, going to have the opportunity to name a successor to Jay Powell. He will make the job for that successor much, much more difficult as well, if that successor is operating under the cloud that he or she too can be replaced.
COLLINS: Yes. And Secretary Bessent--
STEIN: So, I think that the President will do himself no favors.
COLLINS: Secretary Bessent said they're going to start interviewing people, this fall, for that. We'll see if that timeline gets moved up. STEIN: That's right.
COLLINS: Jeremy Stein, it's great to speak with you, especially someone who knows Chair Powell. Thank you for your time tonight.
STEIN: Thank you for having me. Thanks very much.
COLLINS: Meanwhile, the President's team is now threatening to abandon efforts that have been underway, since he took office, to bring an end to Russia's war in Ukraine, with the administration, so far, unable to do so, and make good on the President's promise to quickly broker peace. What they're saying now.
And President Trump's answer to this question.
(BEGIN VIDEO CLIP)
REPORTER: Do you think Russia is playing you?
(END VIDEO CLIP)
[21:45:00]
(COMMERCIAL BREAK)
COLLINS: Some breaking news tonight, from The New York Times, revealing that the White House is now blaming the escalating showdown with Harvard University on a mistake.
Apparently, according to The New York Times, the Harvard University got this letter on April 11th. It had all these demands for major policy changes, like government oversight of admissions, hiring, the ideology of students and staff. We've been covering that here all week.
But we are learning, tonight, courtesy of The New York Times, that the Trump administration now says that letter was actually shared without authorization, and should not have been sent to Harvard on Friday.
The New York Times reports that some people at the White House believed it had been sent prematurely. Others in the administration thought it had been meant to be circulating among the task force members, rather than sent directly to Harvard.
CNN's Senior Legal Analyst, Elie Honig, is back with me on the phone.
And Elie, I just want to walk people through essentially what happened here.
Because what The New York Times is saying is that, on Friday, Harvard got this letter. It had all these demands. They had been in negotiations about what they were going to do here.
On Monday came that response from Harvard, saying, We're not going to capitulate. We're not going to sign on to this. We don't agree with this. It threatens academic freedom. And The New York Times reports that after they came out with that statement, they got a frantic call from the White House, saying, We actually didn't mean to send you that list of demands.
[21:50:00]
HONIG (On Telephone): Well, Kaitlan, it makes perfect sense to me that this was sent out in error, because the letter itself is so outrageous, it's so obviously unconstitutional, it so obviously violates the First Amendment.
I mean, this letter has a series of 10 demands, one more onerous than the next. One of the demands, just for example, is the White House, the U.S. government, instructing Harvard, a private college university, You have to do a full audit of your student body, of your faculty, for their ideology, and you have to make sure that you have whatever we deem is an appropriate balance of political ideology.
I mean, this is so flagrantly against the First Amendment. It actually doesn't surprise me. In a way, it's reassuring that there were people in the White House who did not intend for this to go out.
COLLINS: Well, and the White House is responding to this report tonight, a senior policy strategist, May Mailman, says, quote, "It was malpractice on the side of Harvard's lawyers not to pick up the phone and call the members of the antisemitism task force who they had been talking to for weeks." She said, "Instead, Harvard went on a victimhood campaign."
But as the Harvard officials noted here, it was on official letterhead, it was in line with what they'd been hearing from the officials, and it came from a federal government employee.
So, I mean, it's not -- it's not surprising that they thought it was legitimate here.
HONIG (On Telephone): OK. So, the White House's position is, it was malpractice by Harvard to not realize that this letter was so outrageous, it probably wasn't true.
I mean, that letter came from -- I mean, I think that statement actually just sort of gives away the whole game. Essentially, the argument that we're hearing there from May Mailman, at the White House, is they should have known, they should have known there was something wrong. They should have picked up the phone and said to us at the White House, Hey guys, this looks like a mistake.
I think it's pretty obvious where the fault lies though.
COLLINS: I mean, Elie, could you imagine if Harvard had responded to this letter by saying, OK, we'll meet these demands, and actually that they had been sent in error to them?
HONIG (On Telephone): Well -- yes, I mean, exactly. Look, this is serious stuff. I mean, this is a major showdown that is escalating by the day. If Harvard had acquiesced to these demands, I mean, it would have changed the institution and compromised the institution forever.
But I'm interested to see now what happens next. Now, does the White House withdraw this? Or do they sort of decide, Whoops, we're part- committed (ph) now, and we're going to have to have this fight through to the end?
COLLINS: Elie Honig, thank you for hopping back on with us on this breaking news.
HONIG (On Telephone): Thanks, Kaitlan. All right.
COLLINS: Up next. The White House is now threatening to abandon efforts to end the Russia's war in Ukraine. What we heard from the Secretary of State and President Trump on this front today?
[21:55:00]
(COMMERCIAL BREAK)
COLLINS: Tonight, we are left with major questions about attempts to broker a ceasefire in Ukraine, after the Secretary of State, Marco Rubio, issued a stark warning this morning as he left Paris.
(BEGIN VIDEO CLIP)
MARCO RUBIO, SECRETARY OF STATE: I'm talking about a matter of days, not a matter of weeks.
If it's not possible, if we're so far apart that this is not going to happen, then I think the President is probably at a point where he's going to say, Well, we're done.
So if they're serious about peace, either side or both, we want to help. If it's not going to happen, then we're just going to move on.
(END VIDEO CLIP)
COLLINS: Hours after the Secretary of State rattled allies, with that warning there, the President also suggested that the United States could walk from a deal, though he did keep an open timeline.
(BEGIN VIDEO CLIP)
TRUMP: No specific number of days, but quickly, we want to get it done.
If, for some reason, one of the two parties makes it very difficult, we're just going to say, You're foolish, you're fools, you're horrible people. And we're going to just take a pass.
(END VIDEO CLIP)
COLLINS: My source tonight is David Sanger, the White House and National Security Correspondent for The New York Times.
And David, you write tonight, quote, "Whatever Mr. Rubio's meaning, his words were the latest American gift to Mr. Putin's cause."
Trump did not mention Putin by name, in that moment there. But what do you make of what's unfolding here?
DAVID SANGER, CNN POLITICAL & NATIONAL SECURITY ANALYST, WHITE HOUSE & NATL. SECURITY CORRESPONDENT, THE NEW YORK TIMES: Well, one of two things is happening, Kaitlan.
Either they're just giving up on the negotiations, and they're going to let the killing go on. And the President has been very clear, and I think, completely right, it's hard to justify the fact there are 2,500 or more casualties between the two sides, each week, or dead, each week.
The other option is, they're not just giving up on the negotiations. They're giving up on Ukraine. And President Trump has made no secret of the fact that he just wants to get back to a normal relationship with Russia, a nuclear power, make his business deals and so forth. And what's getting in the way of that is Ukraine. So he may say, Well, I tried to put a deal together, but I couldn't do it.
COLLINS: And so what do you think happens next here?
SANGER: Well, it'll be a few days for both sides to figure this out. I think they're going to be pressuring the Ukrainians to give up more, maybe Crimea and those four provinces that the Russians have declared to be their own and that they are partly occupying now.
[22:00:00]
But the real question is, what kind of pressure do you put on Russia itself? And maybe the way they go do that is to announce that they're going to be providing more arms and more help to Ukraine, until the Russians get serious. And it's sort of hard to imagine this administration doing that.
COLLINS: Yes, a lot of questions about just the impact of that statement, and where this goes from here.
David Sanger, thank you for your reporting tonight.
SANGER: Thank you.
COLLINS: And thank you all so much for joining us.
"CNN NEWSNIGHT WITH ABBY PHILLIP" is up next.
