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THE LEAD WITH JAKE TAPPER

Dennis Hastert Indicted; More Texas Flooding; NSA Surveillance Debate; Ex-Speaker Accused of Lying to FBI. Aired 4-4:30p ET

Aired May 29, 2015 - 16:00   ET

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


[16:00:20]

JAKE TAPPER, CNN ANCHOR: Will burying the NSA surveillance program stop the president from stopping ISIS, or are these just scare tactics from a surveillance state?

I'm Jake Tapper. This is THE LEAD.

The national lead, President Obama trying to save a controversial law that allows the government to collect data from you and me, ordinary Americans, information the president says the U.S. needs to stop ISIS here at home. Abroad, meanwhile, ISIS fighters blowing up bombs and themselves in the center of Baghdad.

Also in national, the Texas tragedies triggered by flooding just keep coming, more deaths in Houston as the radar shows another storm rolling into town.

And then the politics lead. For nine years, this man was two heartbeats away from the highest office in the land. Now Former House Speaker Dennis Hastert, Republican of Illinois, finds himself indicted. Feds say he agreed to pay $3.5 million to someone to compensate for and hush up something. What possible skeleton could he have in his closet that would take millions of dollars to hide?

Good afternoon, everyone. Welcome to THE LEAD. I'm Jake Tapper.

Some breaking news in our national lead. President Obama and Attorney General Lynch sequestered in the West Wing as we speak, currently, they are strategizing how to rescue the NSA's bulk surveillance program from what seems like an increasingly certain death at hands of the U.S. Senate.

Let's get right to CNN's Michelle Kosinski. She's camped out on the West North Lawn.

Michelle, this meeting started a little under an hour ago. We're expecting to possibly hear from the president in just the next few minutes. What is the White House's plan to salvage these sections of the Patriot Act that the president insists are absolutely critical to national security?

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Right. We will hear from the president today on this. I mean, this is, maybe no surprise to anyone, truly down to the wire,

and this is the White House's last push. They have been contacting members of the Senate. They have also been ramping up their rhetoric, almost trying to shame members of the Senate into keeping these parts of the Patriot Act up and running that are set to expire.

One of them, of course, is the bulk collection of Americans' phone data by the federal government, but it appears that the Senate at least is only about three votes short of approving this bill that was already passed by the House, a bipartisan bill, that simply takes that collection responsibility out of the hands of the government, and puts it on the phone companies.

So, the White House keeps saying, well, the controversial part, the bulk collection of that data, that's been taken care of in this bipartisan bill. So, what the White House is saying today is, there's no rational reason for the Senate to keep holding this up, that they need to pass this bill, and not doing so is, in their words, national security Russian roulette -- Jake.

TAPPER: All right, Michelle Kosinski at the White House, stay there. We're going to back to you soon as we hear from President Obama.

Meanwhile, the potential sunsetting of those provisions of the Patriot Act and the NSA's bulk collection of data within that comes as law enforcement warns that the loss of these capabilities could worsen an already dark landscape in the battle against ISIS, the FBI saying yesterday even with the Patriot Act in place, they cannot keep tabs on would-be terrorists here in the U.S.

Now today, the Department of Homeland Security chief, Jeh Johnson, says nearly 200 Americans have made the terror pilgrimage to join ISIS within Syria and Iraq. The terror group now controls more than half of Syria, continuing to make gains there and next door in Iraq.

CNN chief national correspondent Jim Sciutto is closely monitoring all of these threats abroad and here in the U.S.

Jim, ISIS seeming to be reaching deeper and deeper and expanding in the Middle East. It's not just Iraq and Syria.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: No question.

In the starkest terms, it's a good week for ISIS and a bad week for the anti-ISIS coalition. For ISIS, you have these attacks outside of its bases in Iraq and Syria, in Libya and Saudi Arabia, along with the gain, the victory in taking Ramadi from Iraqi forces, and the question is, does this expose broader problems in the fight against ISIS led by the U.S.?

(BEGIN VIDEOTAPE)

SCIUTTO (voice-over): Across the Mideast, this is ISIS on the offensive. In Saudi Arabia, the terror group claimed responsibility for a deadly bombing on a Shiite mosque, the second attack in the kingdom in the last week. In Libya, a growing base of ISIS support, the group says it has captured part of a civilian airport, and, in Baghdad, two massive suicide bombs on two prominent hotels, a shocking strike inside Iraq's highly protected capital, leaving shattered windows and a rattled government.

[16:05:00]

EDWARD DJEREJIAN, FORMER U.S. AMBASSADOR TO SYRIA AND ISRAEL: The regime in Baghdad is very much on the defensive because of the gains that ISIS has made in Ramadi and in Anbar province, and in Syria, in Damascus. There's been a very important shift in the last couple of weeks.

SCIUTTO: ISIS' attacks both inside and outside its bases in Iraq and Syria are a worrying sign for the U.S.-led anti-ISIS coalition. Islamic militants have also taken over Ariha, Syria, one of the last under control of government forces of Syrian President Bashar al- Assad, his regime now teetering.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: They believe that they are the true army of Islam that is coming to save Islam. And, you know, that also kind of explains their violence and their brutality. Anybody who stands in our way, this is what we will do to you.

SCIUTTO: With Iraqi forces overwhelmed, the U.S. is now considering arming Sunni tribes in Anbar province directly.

DJEREJIAN: Obviously arming the Sunni, arming the Kurds, arming the army, arming any side in Iraq who will fight against ISIS will be welcome.

(END VIDEOTAPE)

SCIUTTO: John Allen, who leads the anti-ISIS coalition for the U.S., has called ISIS' recent gains tactical momentum. He says, though, that the U.S. and its partners still has the upper hand in the fight, and he says it's going to take time.

But, really, when you look at the events of these last couple weeks, you see that there needs to some sort of policy review. The question is, are those small tweaks to the plan? Or do they need bigger changes to get the upper hand again?

TAPPER: Jim, stay right there.

I do want to note, as the Middle East is seemingly spiraling out of control, there is another big threat, the Obama administration forced to confront a threat from a sleeping giant. And, Jim, you just got back from China and you were on board a U.S. Navy flight scoping out China's military buildup on these manmade islands, and now this morning weapons spied from that exact plane have suddenly vanished.

What's going on here?

SCIUTTO: Well, here's the thing.

So, when we were flying this flight, the real concern of the Pentagon has been, one, China is manufacturing land 600 miles from its shore. That's already a concern. The next concern is that they're militarizing those islands and there's some evidence of that. For instance, when we were flying, we see this two-mile-long airstrip there, which is long enough to accommodate any aircraft in the Chinese military, deep-water harbor, early warning radar.

The concern was, in the next step, you will see weapons starting to turn up there, aircraft, et cetera. but now in the last week, these surveillance photos have shown there are indeed weapons on some of these islands, artillery within range threatening Vietnamese positions, not U.S. aircraft, but still hard evidence that they have taken, already taken the steps to militarize.

Now, what is interesting, I'm told by the Pentagon, that since the flight that we took, those artillery pieces have either been removed or hidden. So the idea of publicizing the U.S. surveillance of these areas and making the world aware that this is happening has caused China at least in this case possibly to make a bit of a change. Whether they're hiding it, though, or actually removing those weapons is still an open question.

TAPPER: Let's talk about the threat from China here.

Let's bring in Dr. Michael Pillsbury. He's a longtime Defense Department official, former head of China policy for the Pentagon, also the author of the new book "The Hundred-Year Marathon: China's Secret Strategy to Replace America as the Global Superpower."

Doctor, thank you so much for being here.

I guess the first thing is for our viewers who maybe have not been paying that much attention to what's going on with China right now, tell them as, I think your book title, "China's Secret Strategy to Replace America as the Global Superpower," highlights, why should they care? What's going on here that's so important?

MICHAEL PILLSBURY, FORMER U.S. ASSISTANT UNDERSECRETARY OF DEFENSE: Well, I think the threat of war is one reason to care.

We're moving into a full-scale crisis. The American defense secretary asked China on Tuesday to stop this construction. On Wednesday and Thursday, the American government said, please, don't fortify or please promise you won't fortify these areas.

Military movements in China's past have been messages that are precursors to the use of force. So the Chinese ambassador here yesterday pretty much explicitly warned the Obama administration and criticized the CNN crew being on the plane as a provocative -- sort of a major provocation. I'm not sure if they're attacking CNN or they're attacking the Pentagon for inviting CNN to go on board, but moving towards a military crisis is something that the audience ought to be concerned about.

TAPPER: And, Jim, explain, what is the importance of the South China Sea? Why would the U.S. seemingly come to the brink of risking a -- some sort of military confrontation? SCIUTTO: Well, it seems a million miles away, right? It's on the

other side of the planet, but two-thirds, or 60 percent of the World Trade goes through the South China Sea and then on through the Straits of Malacca, so this is a major trading path here.

Plus, this is an area where the U.S. has shown its military presence for decades, since World War II. And it's something -- and, of course, the U.S. position is, it's not only a U.S. decision to do that, but that allies and other nations in the region want it, that that has helped keep the peace there.

[16:10:06]

So, you have both a business motivation, a trade motivation and a motivation in terms of the projection of power, but keeping the peace in the region. So, you have China now plunking down, literally manufacturing islands, 600 miles from its shore, well beyond the 100 mimes or so that are recognized as part of your zone of influence, and apparently making in effect unsinkable aircraft carriers there.

That is seen as a threat not just to trade, but to American influence there, which then puts the U.S. in direct conflict with China.

TAPPER: And, Doctor, do you actually this is going to come down to a military confrontation? The U.S. doesn't seem to be in the mood to start any new wars these days.

PILLSBURY: Well, despite what the Chinese of accusing us, of provoking this crisis, we're not. We're trying to enforce a 100-year doctrine of international law of the sea.

We don't recognize these fortifications as anything. We can -- technically speaking, our navy can sail right up to the dock and get off, or we can overfly them as much as we want. It's not a new principle to provoke China. It's a very old law of the sea, a principle that goes back to the British.

The problem is, if they succeed in fortifying the entire South China Sea, as Jim says, it's the artery. It's the most important global sort of chokehold of oil shipments in -- that we can imagine.

TAPPER: Yes.

PILLSBURY: They don't fortify now, they can't stop traffic going through. They don't even know what's there necessarily, but what they're moving toward in a military situation would be control of the South China Sea.

SCIUTTO: And the thing that always comes up when I speak to officials is, you don't have to make a decision to go to war, but when you put U.S. aircraft close to Chinese aircraft, U.S. Navy ships close to Chinese navy ships, you increase the potential of miscalculation.

One cuts off the other, they have a collision, an airplane gets too close to another.

PILLSBURY: Exactly.

TAPPER: Right.

SCIUTTO: You remember, that happened 15 years ago.

TAPPER: Right, in 2001, a bunch of U.S. personnel, U.S. military personnel.

SCIUTTO: And then does that escalate?

TAPPER: Yes.

PILLSBURY: And they have a doctrine of warning strikes in a crisis to get control of momentum.

They call it (SPEAKING CHINESE). And that's the kind of thing they would do to -- not with a CNN crew on board, God forbid, but they would do that to send a message to us. But then if our ship or plane has been attacked, President Obama is kind of handcuffed. He has to do something to respond. He can't say, gee, it's a misunderstanding.

(CROSSTALK)

TAPPER: OK. Dr. Michael Pillsbury, Jim Sciutto, thank you both so much.

In our politics lead, he was known as the squeaky clean one, but now former Speaker of the House Dennis Hastert facing charges of lying to the FBI and hiding thousands in bank withdrawals. The real question, what was he trying to hide by paying $3.5 million in hush money? We're just now getting new details. Stay with us.

(COMMERCIAL BREAK)

[16:17:00] TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

Time now for our politics lead, in a massive fall from grace for a prominent politician, Dennis Hastert, former speaker of the House, second in line to the presidency from 1999 to 2006, has been indicted on charges that he lied to the FBI about alleged hush money used to cover up what prosecutors referred to as, quote, "past misconduct." And the sheer amount of hush money is making everyone want to know, what could he have possibly done?

Let's get right to CNN justice correspondent Pamela Brown.

Pamela, what's the longest running Republican House speaker accused of actually having done?

PAMELA BROWN, CNN JUSTICE CORRESPONDENT: Well, we've learned from sources briefed on the investigation the former Speaker of the House Dennis Hastert was paying a former student in order to keep quiet about allegations of sexual misconduct from the time when Hastert was a teacher and wrestling coach in Illinois.

(BEGIN VIDEOTAPE) DENNIS HASTERT (R), FORMER HOUSE SPEAKER: I do hope that I have left a few footprints behind.

BROWN (voice-over): He was the longest serving Republican speaker of the House. Now, he was accused by the Justice Department of lying to the FBI about alleged hush money.

S.E. CUPP, CNN POLIITCAL ANALYST: The reason he became speaker was because of his pristine reputation. He was squeaky clean.

BROWN: Hastert abruptly resigned from this Washington, D.C. lobbying group, as well as a Chicago derivatives firm, but he is yet to respond publicly to the allegations. The indictment says Hastert agreed to pay an unnamed individual $3.5 million to cover up his past misconduct. The indictment does not specify what the misconduct was, leading to much speculation about what he may be hiding.

The FBI did say Hastert lied to authorities when questioned, saying he was keeping the cash for himself. But authorities say he was actually giving the money to silence someone else he knew when a Yorkville, Illinois, high school teacher and wrestling coach.

HASTERT: Who would have guessed a wrestling coach from Kendall County in Illinois would be the longest serving Republican speaker of the house.

BROWN: According to court records, the investigation started two years ago when the FBI started investigating mystery transactions made by Hastert. Bank withdrawals more than $950,000. The FBI alleges several of the withdrawals were less than $10,000, so he could evade IRS detection.

PAUL CALLAN, CNN LEGAL ANALYST: Banks have an obligation to record when you are withdrawing close to $10,000 and there's a pattern of doing this. It's called structuring. That's why they would be looking into this.

(END VIDEOTAPE)

BROWN: We've been told by the Department of Justice he has not been arrested, because he does not pose a flight risk or a danger to the community. It's unclear when he will appear before a federal judge.

Again, we are learning from these sources that this was sexual misconduct, allegations he was trying to cover up according to authorities. But it's important to note here that asking people, why wasn't that specified in the indictment? I'm told because the charges he's facing don't necessarily relate directly to the misconduct.

TAPPER: All right. Pamela Brown, thanks.

Joining me to talk about the indictment of the former House Speaker Dennis Hastert is CNN's senior legal analyst Jeffrey Toobin.

[16:20:02] Jeff, thanks for being here. So, Hastert's in trouble right now for allegedly lying to the FBI, for trying to hide hush money he was taking out of the bank, but the indictment does not say what the misconduct was, although Pamela just reported it has to do with a former student and alleged sexual misconduct.

Is this like the feds going an Al Capone for tax evasion? In other words, this is what they could get him on?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Not necessarily, because investigation of currency transaction reports, that's what those forms that the banks are required to file for large cash transactions, that's been going on for decades. I prosecuted, that was the kind of case I prosecuted when I was an assistant United States attorney and it's really just a matter of course that banks report to law enforcement when there are suspicions, patterns of cash transactions in -- when there are -- when they are filed and when transactions are structured in a way to avoid those requirements.

What happened here, it appears is that the FBI was informed, the FBI went to Hastert and Hastert told them what frankly seem as ridiculous story, which was he was using the money for himself and even more incredibly, that he didn't trust the banking system. That's why he was taking out so much money.

TAPPER: This alleged sexual misconduct, against a former student. Theoretically, it might have been criminal. But I suppose also a possible statute of limitations on such a charge?

TOOBIN: Certainly there's, those are both possibilities. There's also a possible defense here, which is an extortion defense, which Hastert could say, look, this guy came to me making outrageous false accusations but to protect my family, I decided to pay him this money.

That is a theory -- a defense that could be tried in front of a jury. It's got plenty of potential problems, you know, why didn't you just go to law enforcement like David Letterman did when he was -- when he was extorted? Why didn't you -- why did you have to lie to the FBI about it? But, you know, an extortion defense certainly is possible here.

TAPPER: Jeff, do you expect former Speaker Hastert to do any jail time if he is found guilty?

TOOBIN: You know, I think a lot of that depends on whether he goes to trial or not. I think if he cuts a deal, if there's a plea bargain, I think it's extremely unlikely that he will do jail time. But if he does go to trial and if this turns into an ugly, long, drawn out fight, where the Justice Department, you know, has to throw everything it has at him and all of this dirty laundry gets aired, I do think he could do some jail time.

TAPPER: And, Jeff, lastly, is it illegal to pay somebody hush money? If Speaker Hastert hadn't allegedly lied to investigators and hadn't tried to hide the money being withdrawn, would it have been legal to just have given $3.5 million to this former student and that would have been fine?

TOOBIN: Based on what I know now, I think it would have been perfectly legal. You know, we can give money to anyone we want basically for almost any reason. Either there might be some gift tax implications, but that's not a criminal matter.

The charge here exclusively relates to the currency transaction reports. The structuring of the money, and -- and the lying to the FBI. If he had simply written a check to this person and that was the end of it, I think -- I don't think there's any possibility we would be here in a criminal matter at all.

TAPPER: Jeffrey Toobin, thank you so much.

Coming up, the rain refusing to let up in Texas. Highways turned into lakes. Rivers overflowing their banks and expected to get worse tonight and into the weekend.

Plus, he called his victims, quote, "collateral damage". The murderer who killed 12 people in a movie theater talking about the horrific act. His lawyer says he's mentally ill. But now, a doctor says, no. He knew exactly what he was doing.

(COMMERCIAL BREAK)

[16:28:30] TAPPER: Welcome back to THE LEAD. I'm Jake Tapper.

Our national lead today, the deluge of rain and rising rivers killing even more Texans. An 87-year-old man is now the seventh killed in Houston alone. His body found after many attempted water rescues in that area this morning. High waters stranded drivers for hours. On a busy Dallas highway, the traffic backed up for miles.

In that same area, car after car submerged in the water. Crews had more than 270 water rescues just in the Dallas area. Now, further south in Texas, the voluntary evacuations in that town of Wharton that we told you about yesterday, they're now mandatory. And the rising Colorado River could push water into homes and overpower everyone in its path.

CNN's Dan Simon joining us near Houston, where streets looked like rivers.

Dan, this call for more rain has created a dire situation.

DAN SIMON, CNN CORRESPONDENT: No question about it, Jake. The wettest month in history for the state of Texas is about to get even wetter with more rains forecast and for this week, and the fear is that more residential streets could look just like this one and with what we saw in Dallas, it's clear that this flooding has touched many aspects of the state.

(BEGIN VIDEOTAPE)

SIMON (voice-over): A highway turned into a parking lot near Dallas this morning. The rains coming down so fast, the freeway turning into a lake.

In a desperate rescue mission for a police officer stuck in the same downpour, a helicopter pulls him to safety.

Same story in Oklahoma, where water rushed in taking cars with it.

UNIDENTIFIED FEMALE: We didn't know that this was a flood zone. Now, my car's all drowned.

SIMON: Cars are one thing, but check out these homes in Liberty, Texas, surrounded entirely by water.