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ERIN BURNETT OUTFRONT

Awaiting Trump at Rally in North Carolina; Trump Slams Boeing Over Cost of New Air Force One. Aired 7-8p ET

Aired December 6, 2016 - 19:00   ET

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


[19:00:12] ERIN BURNETT, CNN ANCHOR: Good evening, I'm Erin Burnett. OUTFRONT tonight, the breaking news. Donald Trump and General James "Mad Dog" Mattis, the President-Elect, his pick for Defense Secretary about to appear on stage together for the first time.

Moments away, the first cabinet pick Trump has announced with the side by side appearance. And there is going to be tens of thousands there. Part of Donald Trump's tour around the country to thank voters in crucial swing states. Live pictures right now. Fayetteville, North Carolina. You can see that his PAC awaiting Trump who is on his way in his motorcade. Trump of course won that state by more than three- and-a-half percentage points over Hillary Clinton.

Fayetteville also home to Fort Bragg. Important for the Defense Secretary. A symbolic setting for Trump's former announcement of the retired Marine General James Mattis. It comes as Trump is claiming credit for what he is calling a $50 billion investment in the United States by Japanese Technology Company called soft bank. He said it is going to create more than 50,000 jobs and as the deal that Trump says would not have happened without him.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT-ELECT: This is Masa of SoftBank from Japan. And he's just agreed to invest $50 billion in the United States and 50,000 jobs.

(END VIDEO CLIP)

BURNETT: A great headline. Do the specifics though add up to anything even close? We're going to have much more on that ahead. My panel will be us with throughout the hour.

I want to begin though with Sunlen Serfaty OUTFRONT at that Trump rally in Fayetteville at this hour. Sunlen, people are awaiting Donald Trump and what you do expect from him tonight?

SUNLEN SERFATY, CNN CORRESPONDENT: Well, certainly we expect Erin a big show coming from the President-Elect informally announcing his Secretary of Defense here tonight. We know that last week he made a surprise announcement at his first thank you rally saying, yes, he's indeed choosing General James Mattis for Defense Secretary. But the fact that two will be up on stage together, certainly notable, especially given that is the military friendly town. So certainly Donald Trump hoping to cash in on the energy in support

of his town here almost to validate his pick for Secretary of Defense. And we know that Trump has many thank you tours and rallies ahead. Just two this week alone and Thursday, he will be in Iowa and Friday on Michigan -- Erin.

BURNETT: So, Sunlen, Trump today -- you just heard him taking credit for what he says will be a $50 billion investment by SoftBank which is a Japanese company. He says, it's going to be 50,000 jobs. What are you learning about this?

SERFATY: Well, I have to say not a lot of detail either coming from the Trump transition team or the company itself tonight. But certainly a little showmanship at play on the part of the President- Elect today really trotting out on the CEO of the company and Trump Towers today before cameras there gathered. Now, as Donald Trump tells it, the contours of the deal are exactly as you said $50 billion in investment in the U.S. by this tech firm, SoftBank, saying that that could create about 50,000 jobs, new jobs here in the U.S.

But the timing of the detail, how it was brokered, when it was formally brokered still very unclear tonight. It is notable that in October this company announced plans with the backing of Saudi Arabia for a hundred billion in new investments across the world --

BURNETT: Yes.

SERFATY: -- in tech companies so is still very unclear if that is part of this or a separate deal -- Erin.

BURNETT: All right. Thank you very much, Sunlen. Of course, the money already raised so far and the fast vast majority is from Saudi Arabia. A country that Trump has been very critical of in the past.

OUTFRONT now, retired U.S. Army Major General James "Spider" Marks. Maria Cardona, democratic strategist. Dan Senor, he was the senior foreign policy adviser to Governor Mitt Romney during the 2012 presidential election. Jeffrey Lord, former Ronald Reagan White House political director. Richard Quest, our international business chief correspondent. And Philip Bump, Washington Post political reporter.

So, Philip, let me start with you. It is a very significant event tonight. This is obviously going to be big for Donald Trump. But to have General Mattis by his side --

PHILIP BUMP, POLITICAL REPORTER, THE WASHINGTON POST: Right.

BURNETT: -- a very significant. So far he's announced several cabinet picks. None of them has he given this sort of star power of appearing side by side with him.

BUMP: Right. Sure. So, Michael Flynn is going to be his proposal for National Security advisor. I was with him on the campaign trail with some regularity. But yes, this is first time we've seen one of the cabinet picks actually go out and do this sort of event with Donald Trump. Granted he hasn't done many of these events. But it's interesting in part because Mattis is generally seen as one of the more obviously acceptable candidates for the cabinet as well.

BURNETT: Right.

BUMP: So this is not someone who necessarily needs to be bolstered by Donald Trump. You know by bringing him out and having the crowd gets to know him. He is generally seen as someone who probably won much for --

BURNETT: General Marks, Donald Trump is incredibly proud of James Mattis though and him being his pick. He has said very positive things about him over the past couple of few weeks behind closed doors using, you know, very strong adjectives to describe how much he likes him. He has to get a waiver though to serve. Right? He's used to be a civilian around the Department of Defense. He was in the military just three years ago and that obviously would require a waiver. Any issue with him getting that that you see?

[19:05:12] MAJ. GEN. JAMES "SPIDER" MARKS, U.S. ARMY (RET.): Oh, I don't think there is any political capital that is too high to expend on this one. Frankly, this is an easy pick for the President. But I think what's important, to go to Philip's point is that job one for our commander-in-chief is National Security. He is now bringing forward his pick to be the Secretary of Defense responsible for job one.

Secretary of Education is important. It's also ramped (ph). Let's be frank. Transportation, yes, got it. Also ramped. HUD got it. Yes. But when you think about it, you know, you're going to spend money in the whole bunch of places, you better spend money accurately, you better have it right guy who's in charge of the Defense Department.

BURNETT: I say this is the best day you have.

DAN SENOR, SENIOR ADVISER TO ROMNEY, RYAN 2012 CAMPAIGN: Look, I find this very reassuring. For those who are critical of Trump for the Right or the Left concerned about how he would be as commander-in- chief. This -- we should all be behind this waiver. We should all be encouraging the Senate to give this waiver. Because we want, you know, the competent, serious people in this administration.

And Donald Trump has chosen an exceptionally competent and serious person. You're going to say, Jim Mattis, is one of the most revered generals of his generation. He is a big thought leader. He is an amazing following in the Pentagon and with the military.

BURNETT: Yes.

SENOR: And he has some views that differ from Trump. And so the fact that Donald Trump is willing to put this leader out, side by side with him. I don't think he's building him up. I think he's making a statement that these are the sorts of people that are going to populate my National Security team.

BURNETT: Right.

SENOR: I think I find a reassurance. BURNETT: Different than him obviously on waterboarding. General

Mattis does not support it.

SENOR: Different on Russia.

BURNETT: Yes.

SENOR: Right.

BURNETT: There is multiple, multiple places. Maria though, tonight, you have -- what's going to happen -- Donald Trump, this is what we understand got this, he's going to walk up on that stage. He's going introduce the General.

MARIA CARDONA, DEMOCRATIC STRATEGIST: Right.

BURNETT: The General is going to speak and then Donald Trump is going to speak to the crowd. So, General Mattis is going to have time to speak to this crowd.

CARDONA: Yes.

BURNETT: And then Donald Trump is. But Donald Trump is coming out here again, where he trails by 2.6 million votes in the popular vote.

CARDONA: Yes.

BURNETT: Obviously, easily won the Electoral College. Can he reach out to those people tonight? You know, last time he did this, there was one other time they chant lock her up.

CARDONA: Right.

BURNETT: He kind of tried to ignore it.

CARDONA: Right. And I think that is one of Trump's biggest challenges. That he still has not shown us how he is up to facing that challenge. And the challenge I'm talking about is bringing people together. I think what's important about tonight is that here you have two very distinguished gentlemen who aren't necessarily Trump supporters who are saying, what a great pick Mattis is. That is why I think this is a very important momentum not just for Mattis but also for Trump. But I do think that there are clearly some things that we're going to have to think about with this pick. As we do with all confirmations. Right? We already have General, I'm sorry -- Senator Gillibrand saying he's not going to vote for this waiver.

BURNETT: Right.

CARDONA: So, that is going to be something that will be discussed because this issue of separating military service from the head of the Defense Department with the civilian is a very important point in American politics --

BURNETT: And so, you are going to have obviously him trumpeting General Mattis. General Mattis is going to speak and it will be interesting to see how long he speaks for whether it's a quick acknowledgment of Trump or something more than that. And then Trump is no doubt going to talk about this $50 billion investment.

JEFFREY LORD, CNN POLITICAL COMMENTATOR: Right.

BURNETT: It is not an investment yet.

LORD: Right.

BURNETT: OK? Because they don't even necessarily have the money raised so it is very unclear where it's going to be Jeffrey. But what we understand is that $50 billion SoftBank as Japanese company says, they are going to invest in the United States. Trump tweeted Masa, SoftBank of Japan is agreed to invest $50 billion in the U.S. towards businesses and 50,000 new jobs. Masa said he would never do this had we, Trump, in case you're wondering who he's talking about, not won the election. Look, it's a good headline. And by the way, $50 billion to be a stunning number never before seen. It's a stunning number.

LORD: Yes. What we're going to see. I mean, Donald Trump as we all know by now is unconventional. This is going to be an unconventional presidency with an unconventional president. He's the only one in -- of the 45 presidents 44 people. Grover Cleveland twice. That has a business background. All the others were politicians to some degree. Or generals. This is the first person to go directly from the private sector without any stops in politics before that. So you are going to see a lot of this kind of thing I think as we go through here. And his businessman mind working. Now sure, is he going to use its political advantage? Yes. But it is going to help him without doubt.

BURNETT: So Richard, here is my question about this though. When I saw the $50 billion. I said, I don't get it.

LORD: Right.

BURNETT: And I still don't get it. OK? Because there is a lot of questions here. Not all of it's been raised. The part that has been raised $40 billion, it comes from Saudi Arabia. Which historically wouldn't be a country Trump would want to be putting a --

RICHARD QUEST, CNN INTERNATIONAL BUSINESS CORRESPONDENT: Let me stop you. You are trying to take several decades of business journalism and bring it to bear to the facts of what happened today. Like myself. I've spent all day grappling with an attack on Boeing.

(LAUGHTER)

You know, out of the blue on a random Tuesday in December. Fifty billion, out of nowhere. Who knows who the money is coming from, where it is going to be spent. When it is going to be spent and even if it is going to be spent.

BURNETT: Right.

QUEST: But we have to give him the benefit of doubt. And I'm not saying that to be nice to Jeffrey here. I'm saying that --

(LAUGHTER)

LORD: Not that there's anything wrong with that.

[19:10:21] QUEST: Well maybe not. But we have to do that. Because this is the way as Jeffrey has just said it is going to be. Now, where we have to be very careful of is remembering today in six months' time, in a year's time and saying, where was that 50 billion, what happened to it?

LORD: Not unlike -- not unlike when President Obama said these jobs are going to be shovel ready and then much later said, well, they wanted to shovel ready as we thought.

QUEST: Right. But at least he said they wanted to shovel ready.

LORD: Right.

QUEST: Let's see if Donald Trump says in six months, nine months, a years' time, well that 50 billion was only three billion and we weren't able to invest it there.

LORD: Or he'll actually get it done. How about that?

QUEST: Well, I don't think anybody --

BURNETT: That's great --

(CROSSTALK)

MARKS: I don't think the media will find it difficult to go hold the mirror in front of the President and say --

LORD: No, I'm sure of that.

CARDONA: But here is -- there are a couple of things that concern me about this. The first one, you know, I worked under Commerce Secretary Ron Brown and he announced deals likes this all the time. But first of all, they were American companies, to announce these deals where they would bring American jobs. It is fine that -- and it is good for him from a marketing perspective is this is really going greet 50,000 jobs. We don't know that yet.

BURNETT: With all of these, let's just be honest -- I mean, there is no rigor to that. Whether it is true or not, time will tell.

CARDONA: Right. But the reason the Commerce Secretary or the President announced these deals is because they actually had something do with it. Did Trump have anything to do with this deal? And secondly, what concerns me is, is Trump going make any money off of this deal? Do we know, he is invested at all in anyway shape or form through a business partnership or anything else in this company? We have no clue. That is what concerns me.

SENOR: Look, we can all agree, this isn't a bad thing. It is probably at the minimum --

(CROSSTALK)

SENOR: We can debate how much but this cannot be the sole focus of his economic strategy.

CARDONA: That's exactly --

SENOR: That's terrible. He's going to have to reduce rates. Eliminate loopholes.

CARDONA: Right. I agree.

SENOR: He's going to have to deal with the regulatory form. I mean, that's going to be the key of the economic growth.

BURNETT: Right.

SENOR: Without that announcing these deals is not sufficient. But announcing these deals isn't a bad thing.

(CROSSTALK)

BURNETT: No, but I won't say -- hold on -- go ahead. Go ahead.

QUEST: Announcing these deals is not a bad thing per se but as it is a bad thing if it is nothing more than as our correspondent there delicately put it showmanship. I think round this table, I think we could a few more choice words.

(LAUGHTER)

(INAUDIBLE)

BURNETT: Well, there is also the question of, you know, I mean, SoftBank, the Japanese company, look, the leader here of this company just everyone understands. He says, I am going to raise a hundred billion dollars, biggest fund ever. And he is in the process of raising it. And 40 billion that's been committed so far comes from Saudi Arabia.

BUMP: Right.

BURNETT: That actually usually is highly relevant in this country.

BUMP: Sure.

BURNETT: You know, when you look at the merger and whether it is going to get approved. If you are a Chinese company buying in, you generally don't get approved. Saudi Arabia putting in this kind of money, a lot of people would be very critical of.

CARDONA: Right.

BUMP: I mean, it's absolutely the case. This is so nebulous right now that Donald Trump is getting up and saying more jobs and that's -- BURNETT: Who knows?

BUMP: Yes. Exactly. We'll see what happens. I think it is definitely worth noting though that on SoftBank's part, there is some showmanship as well with this giant bank. But also, this is a company that owns a major stake in Sprint that was trying to figure out how to do this key merger earlier this year that was kind (INAUDIBLE) by the -- or not officially but was seem down his way to being --

And you know, it seems very likely, Wall Street Journal reporting, it seems likely they are going to try this again under the Trump administration. So, there are politics all over the place here. We're going to see what sort of, you know, how it shakes out in terms of money, in terms of jobs but I mean, this is not a beneficent gentlemen coming to the United States and saying, here I am giving you all these jobs for no reason. Again, not to be a cynic myself.

(LAUGHTER)

BURNETT: All right. All are staying with me. Next, we're standing by for Donald Trump as I said live with General Mattis, his pick for Defense Secretary both going to speak. And then Trump and his battle today with Boeing. He came out and slammed frankly America's biggest exporter over Air Force One.

Plus, Trump's choice for National Security advisor under fire for spreading wild conspiracy theories. Should Trump dump Michael Flynn?

And the breaking news. Live pictures of protesters gathering on the camp of Texas A&M University at this hour. You see them. A white supremacist is speaking there tonight and we will go there live.

(COMMERCIAL BREAK)

[19:18:35] BURNETT: Breaking news. Donald Trump about to speak as you there in North Carolina. Also speaking tonight for the first time his pick for the Secretary of Defense, General James Mattis. Tonight's event coming as Donald Trump is now demanding the Defense Department cancel a contract with Boeing for the construction of the new presidential planes.

(BEGIN VIDEO CLIP)

TRUMP: Well, the plane is totally out of control. It is going to be over $4 billion for Air Force One program. And I think it is ridiculous. I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money but not that much money.

(END VIDEO CLIP)

BURNETT: Boeing's official releasing a statement to CNN which reads in part. "We are not sure where he's getting that number from. Right now Boeing only has a contract with the government for design and development of the new Air Force One."

My panel is back with me. Again, let me start with you. Boeing like is at the mercy of Donald Trump in a lot of ways here. OK. Look, that is part of the reality. However they are the biggest exporter from the United States. They are the second biggest defense contractor in this fight.

SENOR: Yes.

BURNETT: Who wins?

SENOR: Well, I think that they are in some respect to the mercy of Donald Trump. But there is a whole sort of very entrench procurement process that occurs, exists in the Pentagon. You can't just sign a way a massive contract.

BURNETT: And can't get in the contract.

SENOR: And there is also, you know, major repercussions for the U.S. economy, I mean, if another defense contractor say, Aerobus (ph), one of the European contractors, replaced a lot of the foreign business that -- or U.S. business Boeing would get. So, obviously this is probably not a good idea. Look, I think tonight, Trump being up there with Mattis, very good. Fantastic image. Trump and Pence meeting with Congressional leaders like Paul Ryan and Mitch McConnell talking about things they want to get past in the first hundred days, health care reform packs, really good images. Tweets like this not a great image. So, I would strongly recommend the ladder not the form.

BURNETT: Okay. So, let's go through the timeline here because I think this is very interesting. Look, the Chicago Tribune today wrote up some comments that the Boeing CEO said about Donald Trump. The CEO said these on Friday but he appeared this morning for the first time in print. The Chicago Tribune which wrote about the CEO of Boeing, Dennis Muilenburg, they said, he is suggesting, quote, "The Trump teen and Congress back off from the 2016 anti-trade rhetoric and perceived threats to punish other countries with higher tariffs of fees."

He is criticizing the Trump administration. That was 7:30 a.m. Right? Central Time. So, 8:30, at 8:52, Trump tweets, "Boeing is building a brand new 747 Air Force one for future presidents. But costs are out of control, more than $4 billion. Cancel order!" Was that coincidence?

BUMP: It's impossible to know. I mean, Donald Trump knows probably some of his advisors know whether or not it's coincidence. But look, we saw last week he had this random out of blue tweet about flag burning. It turned out it was because he had been watching FOX News. There was some kids burning flags on FOX News. He has this history of responding to things that he's engaged with in the media through Twitter. Right?

The problem is that this causes Boeing's stock price to plummet $2 during -- before markets opened it. It recovered by the end of the day and actually closed a little bit higher which is the good news in part of I think because Boeing had some push back on it. But now like CNBC is reporting that there are people who are trying to figure out and thinking developed algorithm that can respond when Trump tweets about a company to buy or sell stock based on it. Right. I mean, like these is -- these are market moving things that he is doing and if he is doing it because he read something he didn't like the Chicago Tribune, that's iffy.

BURNETT: Cancel order!

QUEST: Not the first time he's taken on the U.S. company. He took on Ford. And another analysis even before the election. Verizon. So, it's not the first time he's done this. The issue we have to decide is how everybody responds. He's clearly going to continue to do this. It is not reasonable for us to believe that suddenly on January the 20th, this is going stop. We have to decide how we look at this. And people have to decide what to take on board and how to deal with --

BURNETT: But if I take a step back and you say, how would someone at that rally tonight see this? General Mark, they might say, well, look, if the costs are out of control with $4 billion. He's done it right. Cancel that order. They can't build the plane for -- this is exactly the kind of cost control that I want in Washington.

MARKS: The folks in that crowd will respond exactly that way. And they will also respond and say, you know, I've been on Air Force One. That is a really wonderful aircraft. Twenty people can take a shower at once. Six hundred people can get that --

BURNETT: Twenty people can take a shower at once?

[19:23:02] MARKS: I'm being facetious, Erin. My point is, it can withstand electromagnetic pulses. I mean, this is a phenomenal piece of kit. But there are costs associated with it. Four billion -- I think the President-Elect is probably correct. Let's put some green eye shades on and look into that. But that crowd is going to respond very, very favorably. But also, I would say, he's not the first President-Elect who when he opens his mouth, there are going to be markets that move accordingly. So we all realized that. So, to Rich's point, I mean, it is going to happen.

BURNETT: Jeffrey?

LORD: The problem that millions of Americans have with Washington, D.C. And the government is that this kind of situation where we're overpaying -- Air Force One I mean is terribly symbolic. But I mean we could -- I used to work on the House Budget Committee. And we could watts through thousands of pages of things where there are just cost overruns galore. This is part of the problem. And so they are looking at this and saying, yes. This is exactly what I want the President --

BURNETT: But they also say, it is dated. It needs to be updated. I mean, that could be the greatest country in the world with a plane that reflects that.

BUMP: I mean, yes, it's absolutely true. But I mean, to the point, there was a story in the Washington Post yesterday about how the Defense Department sought out places they could cut money. They found a $125 billion a waste and then they buried the report and said they didn't want to make the cuts. BURNETT: Yes.

BUMP: Donald Trump could have tweeted about that this morning.

BURNETT: Yes.

BUMP: The question is, does the government spent money on -- of course it does. The question is, why is Donald Trump tweeting about Boeing? We don't know why it's tweeting about Boeing. It affected Boeing. It affects the Boeing stockholders and yes, the spin will be good but that's --

LORD: To go back, I mean, as we all know Donald Trump fights back. And I think one of the problems with the Bush administration --

BURNETT: So you are saying he did do it because of Boeing?

LORD: Well, it wouldn't surprise me in the least. One of the problems I think that Karl Rove later admit it with the Bush 43 White House was, all these opponents were out there with Bush live and all this sort of thing. And the White House didn't fight back because apparently the President felt, you know, it was beneath him to get in all of this kind of stuff et cetera. Donald Trump isn't going to do that. He's not going to sit there and let somebody attack his trade policies and just be quiet.

CARDONA: But come on, Jeffrey. And you know what, Jeffrey is right. His supporters will eat this up. But this is the problem that Donald Trump has not yet understood. He's not just the President now of the people who supported him who got him elected. Right? He's the president even of the 2.5 million people who now Hillary Clinton is winning by the popular vote. He has to prove -- he has to prove that he wants to be the President for everybody. They eat this up at this rally but from the standpoint of those people who were terrified of electing him. This underscores why that terror exists, because he is lashing out. There is no question he is lashing out.

LORD: He's taking issue with the American people.

BURNETT: All right. We hit pause. To your point --

(CROSSTALK)

Everybody should have been gotten behind that because that was atrocious. All right. All staying with me next. Waiting for Donald Trump on stage for the first time with his pick for defense secretary. That is going start any moment from now. The motorcade arriving in Fayetteville and calls for Trump to dump his controversial choice for the National Security advisor job. He and his son who was his chief of staff and involved with the Trump's transition was spreading false news and conspiracy theories.

Plus, students at a Texas University at this hour bonding together. They're protesting a Neo-Nazi who was speaking tonight on that campus just around the corner from where they were. We'll be there live. We'll be back. (COMMERCIAL BREAK)

[19:30:22] BURNETT: Breaking news: President-elect Donald Trump and his pick for defense secretary, James nicknamed "Mad Dog" Mattis, will appear on a stage together in Fayetteville, North Carolina, in just a few moments from now. We understand they are nearby now.

This is Trump's first side by side appearance with a cabinet pick. He's announced others but this is the first one he's actually said, come stand with me, let's do this together.

Meanwhile, Trump's transition team is in damage control tonight. His national security adviser pick, Michael Flynn, and Flynn's son are both under fire for pushing conspiracy theories online, which include spreading a story which was not true about a D.C. pizza parlor where a gunman opened fire.

Government sources tell CNN the transition team requested a security clearance for Flynn's son. They're saying Flynn's son had nothing to do with anything, but they requested security clearance for him. So, that's not true.

Moments ago, Vice President-elect Mike Pence refused multiple times to answer whether he was aware of this request for security clearance.

(BEGIN VIDEO CLIP)

JAKE TAPPER, CNN ANCHOR: You must be aware of the transition team put in for security clearance for Michael J. Flynn, the son of Lieutenant General Flynn.

MIKE PENCE (R), VICE PRESIDENT-ELECT: Well, I'm aware in talking to General Flynn that his son was helping with scheduling, Jake.

TAPPER: No, but you put in for security clearance for him.

PENCE: He's helping his dad arrange for meetings and provide meetings. But that's no longer the case.

TAPPER: But do you need security clearance because you're scheduling?

PENCE: I think that is the appropriate decision for us to move forward, avoid any further distraction.

(END VIDEO CLIP)

BURNETT: And Jim Sciutto is OUTFRONT.

So, Jim, let's start with what the controversy is here. Some of these tweets proving to be so controversial and damaging for both Michael Flynn and his son.

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: And let's be clear, these tweets are not isolated. They're part of a series from both father and son that have pushed conspiracy theories, Islamophobia. They have been anti-Semitic retweets. So, let's make that clear. But let's just look at the couple of them.

First the son, Michael Flynn Jr. This is one here that he tweeted on Sunday about this false news story about a D.C. pizzeria and on Sunday after a man took a gun into that pizzeria based on these false stories. He said, "Until pizza-gate is proven to be false, it will remain a story. The left seems to forget Podesta e-mails and the many coincides tied to it.

I mean, this is just outright B.S. for lack of a better term. I had my son's birthday party in this pizzeria. And yet he stuck to it, a day after a man brought a gun into there based on that fake story.

Let's go to the father, Michael Flynn, who's the nominee to be national security advisor. This is something, a tweet he sent out one week before Election Day, "You decide. NYPD blows whistle on new Hillary e-mails money laundering, sex crimes with children, et cetera. Must read."

So, this is the man now who will be national security adviser, barring any changes, tweeting out a fake story about the Democrat nominee one week to Election Day. So, serious allegations and to be clear part of a pattern, Erin.

BURNETT: So, Jim, that is what is causing this controversy. But now what about the role of Michael Flynn's son, because you shared one of his tweets. He obviously was his father's chief of staff. Earlier today, the Trump transition said that Michael Flynn's son had no role with the transition. But clearly that is not the case.

SCIUTTO: That's right. So, he's now been removed. So, we know he had a roll because he's been removed from that role. And it's Jake's reporting that it was president, or president-elect, rather, Trump who made that decision. The way it is described and Vice President Pence described it this way and others I've spoken with that he was basically a scheduler. They say he did administrative work for his father.

But enough work related to the transition that they requested a security clearance for him, which implies serious work. But that process now stopped and he's no longer in that role. But to be clear, Michael Flynn Sr., nothing to interrupt him at this point becoming the closest national security advisor to the president.

BURNETT: All right. Thank you very much, Jim.

My panel is back with me.

Dan, let me start with you. Is it time for Donald Trump to say all right, forget it, no to Michael Flynn?

SENOR: No, first of all, he won't. These are not Senate confirmable positions. These are positions to the executive office of the president and there is really no way to force his hand on this.

I think it is important here -- by the way, these tweets are atrocious, so I'm not going defend the tweets. It is important to separate Michael Flynn from his son. His son was doing the stuff and it looks as if Michael Flynn was doing, Senior, pushing these bad tweets was in the context of the campaign.

Again, not defending it, you know, in campaigns, things get pretty emotional. Get pretty heated. It may make sense for Michael Flynn Sr. to address that at some point and to say he's turning off his Twitter account and move on.

[19:35:02] But in terms of saying there be some kind of mechanism to force the president-elect's hand on who he chooses for his national security advisor, I just think it's not going to happen. And assuming Flynn stops pushing this kind of stuff, I think this storm is going to pass.

BURNETT: OK. General Marks, let me ask you, though, because you worked with Michael Flynn. He worked for you. You know him very well.

He's going the man next to Donald Trump, right? His guy on national security. That is going to be the first voice Donald Trump hears. He's promoted these false news stories as if they were true. You say during the campaign but he still did those things.

And how much does this concern you? Is he the right man for the job?

MARKS: Yes, the concern really is one of judgment and contextually how are you going to perform. As you've indicated, I know Mike Flynn very well. He's an immensely gifted guy. Truly, our nation should be grateful that we got guys like Mike Flynn who agreed to do what he did in our defense. I mean, he's a tremendous asset.

The president and as Dan indicated has a personal relationship with his national security advisor. That guy can do what he wants him to do. And we can't be captured by what previous national security advisors have done.

If you look at Brent Scowcroft, if you look at Henry Kissinger, if you look at Condi Rice, or Susan Rice, that isn't necessarily the model that this president might have in store for Mike Flynn. He might want Mike Flynn not to synchronize national security policy. He may want him to be a bomb thrower.

He may say, Mike, I don't want you to bring all this together. I'm going to get Jim Mattis do that, for example. What I want you to do is poke holes in all of these good ideas, because you can speak to me honestly, you are a provocative guy and I want you to kick this stuff around before it gets to me.

BURNETT: Right.

MARKS: Maybe a different role.

CARDONA: If Donald Trump actually had that kind of strategy I would feel a tiny bit better about this. I don't think he puts that kind of thought into the people he has around him. And that is why this is so freaking scary, because this is the guy who will have Donald Trump's ear.

One of the things that Donald Trump has proven during this campaign is that he acts out a lot of times based on who the last person he had in his ear was. And the fact that this guy, Michael Flynn, who himself tweeted and retweeted 16 times since August, flagrant outright conspiracy theories and lies about Hillary Clinton, about the Obamas. I mean, is this someone who can't tell truth from a lie? Or is his ideology that whacko that he actually believe this is stuff? Either way, it's incredibly terrifying.

SENOR: I've been critical of Trump, so I agree with a lot of what you are saying but when you say who's this guy going to be around him? Who's going to be advising him? He's going to have like Mike Pompeo, very distinguished military veteran, leader in Congress on national security issues leading the CIA. Jim Mattis, leading the Pentagon. I mean, what about those people?

CARDONA: Well, let's hope that those guys are the last one's whispering in Donald Trump's ear, because, clearly, that is how he acts.

BURNETT: We're going to hit pause. We're going to get to this table in a moment. We're going to take a brief break. Live picture as we are awaiting Donald Trump just a couple of moments away from this big rally where he'll be speaking to voters across this country, some of whom obviously voted for him. This is his "thank you" tour and, of course, introducing General Mattis, his defense secretary.

And more breaking news: we're going to go to Texas. Protesters gathering on the campus of the Texas A&M. Right now, there is a white supremacist speaking there tonight and protesters gathers en masse.

As President Obama touts his record on the war on terror, his major final speech today, warning against Donald Trump.

(COMMERCIAL BREAK)

[19:42:01] BURNETT: Breaking news, standing by for Donald Trump. President-elect will be speaking at a rally. His pick for secretary of defense, James Mattis, is going to be with him. We understand they are there now. So, any moment here, we'll be going to Fayetteville where they will be speaking.

And we understand the General Jim Mattis will speak. Trump will introduce him. He'll then speak, the general, and then Donald Trump. We'll bring it all to you live.

At this hour in the meantime, outrage over a white supremacist speaking on campus in Texas, half a country away. Live pictures of protesters gathering.

Rich Spencer is the man who's going to be speaking moments from now that they are protesting. He's been cheering Trump's victory saying it's emboldened him and empowered him and he's done so using anti- Semitic language.

(BEGIN VIDEO CLIP)

RICHARD SPENCER, NEO-NAZI GROUP LEADER: Hail Trump, hail our people, hail victory.

(APPLAUSE)

(END VIDEO CLIP)

BURNETT: Sara Ganim is OUTFRONT from College Station right now.

And, Sara, this event about to begin. Obviously, you got a lot of protesters who are out to protest in this evening.

SARA GANIM, CNN CORRESPONDENT: That's right. These are Aggie students. These are Texas A&M students who are upset that Richard Spencer is here. They say he doesn't stand for what they stand for and they call his rhetoric hate speech, and you can see there are several hundred of them out here protesting.

And the president of the universities agrees with them. He says that he finds Richard Spencer to be abhorrent as well, but felt like he couldn't stomp on the First Amendment and kick him out.

Richard Spencer was invited here by a private citizen. It is a private event. Even still these people are very upset. They are angry and I have to tell you, Erin, after sitting down with Richard Spencer myself today, it's easy to understand why.

(BEGIN VIDEOTAPE)

GANIM: Would you describe yourself as a white supremacist.

SPENCER: I'm not a white supremacist, no.

GANIM (voice-over): But there is really no mistaking his racist message.

SPENCER: Hail Trump, hail our people. Hail victory.

GANIM: No matter how much he tries to talk around it.

SPENCER: The fact is only white people can support what we call western civilization.

GANIM: Richard Spencer is the self professed leader of what we calls the alt-right movement. He comes across as polished and he seems to be trying to dial back the neo-Nazi imagery he's become infamous for, without much success.

(on camera): So, what would that look like if you had your way in the United States, how would you go through a process of removing people who are not white?

SPENCER: They have come here and therefore they could go home. You can go home again. There are ways of whether it is a direct payment. GANIM: What would you say though if Mexican-Americans or African

Americans said, hey, we're going pay all the white people to leave and go back to Europe?

SPENCER: An interesting prospect. I'm very flexible.

[19:45:01] GANIM (voice-over): Obviously, that's not like toy to happen. And Spencer is even banned from traveling to most European countries because of his views.

(on camera): You studied history, right? A lot of people, the reason they don't like you is because they have studied history too, and they see a lot of the things that you say as being very similar to Hitler and other leaders who were responsible for mass genocide.

SPENCER: I find this all very amusing. And this is the social justice lawyer who will say, you literally Hitler, and yes, I've heard this. We all live in a shadow of Hitler.

GANIM: Do you think he's right? Do you agree with his point of view?

SPENCER: No, I think Hitler in a way now is history. He did many things that are absolutely terrible that I would never support.

(END VIDEOTAPE)

GANIM: Now, Erin, we're told there are only a couple dozen people inside the event space where Richard Spencer is going to begin speaking in a few minutes and some of those are probably protesters, they are students that are inside the event space. It's hard to see how many people he actually drew in. But it is never more apparent than when you were out here standing in a crowd like this covering a story like this, how divided feelings are right now -- Erin.

BURNETT: All right. Sara, thank you very much.

My panel is back.

You know, Jeffrey, what is your reaction when you hear some of those jaw-dropping comments from that young man and hear him say Donald Trump has made him feel emboldened to come out and say this things?

LORD: Look, the head of the Communist Party USA said that Hillary Clinton was the person that he was supporting for president. That didn't make Hillary Clinton a communist or the heir to Joseph Stalin.

This guy is a racist. I mean, there's no other way to say this. And, frankly, to be perfectly candid, I think the media is giving him way more attention than he deserves. The rally that was shown at the beginning, I think there was something at "The Washington Post" somebody said like there were like 235 people in the room.

I mean, this guy is so far on the fringe of American politics. He has nothing do with Donald Trump I don't care how much he talks about it. And Donald Trump certainly doesn't want anything do with him, or should. BUMP: Right. I mean, I think the challenge here is not that there is

a racist speaking to college campus and college students are upset. When I was in college, that stuff happened half all the time. The challenge is it's happening in the context of what's going on in 2016.

And I recognize that you are a big Donald Trump supporter, but I think a lot of people who oppose Donald Trump, particularly people of color, do not see what he's done before and after the election as reassuring that he's distancing himself from people like Spencer. The reason why is because whenever he's pressed on it, he seems to grudgingly or with annoyance say --

BURNETT: And Spencer is not alone, right? KKK and --

(CROSSTALK)

BURNETT: This is not one guy.

BUMP: But Trump's response has not been normally we might expect a president or president elect say something like what's happening there in Texas is abhorrent and repulsive and I wish this guy would shut his mouth and it's just gross. But Donald Trump's tendency is to --

(CROSSTALK)

LORD: He said something like this in his speech the other day.

BUMP: Yes, no, I know --

QUEST: It has to be dragged out of him. That is the point.

BUMP: He read it off the teleprompter and we all need --

(CROSSTALK)

LORD: Paying way too much attention to these kind of things.

QUEST: That is the conundrum here though, Jeffrey. Do you pay attention to them and therefore shine the spotlight of awfulness or on it? Do you ignore them with the potential that it festers and grows? Which is it?

LORD: It is not going to fester and grow.

BUMP: Yes, we're paying attention but people of color who take a different perspective than you and I did.

LORD: There are no people of color in this country, Philip. There are only Americans, and therein lies the problem.

BUMP: OK, you just made my argument for me, I think.

LORD: Are you truly saying we need to divide people by race in this country?

BUMP: I think the people of the target have a very different perspective that when he saying than you and I do --

LORD: What this guy is about --

BUMP: -- expect things from the president.

LORD: What this is about is identity politics which I have said repeatedly a is racist. And you have Hillary Clinton and others separating people by race and there is --

CARDONA: Jeffrey, the reality is the following. You as a white American have had a very different experience in this country than me as a Latina, OK? I am sure people do not come up to you to say you should be deported. Your children should be deported because they're anchor babies, OK?

LORD: They did to my other ancestors.

CARDONA: OK. That is why this president has an obligation, because while you might say that he has nothing to do with these white supremacists, the fact of the matter is he campaigned with a wink and a nudge to them because he never ever said and has yet to say --

LORD: Maria, your party and Hillary Clinton as a nominee never apologize for slavery yet. Can we get on with this?

(CROSSTALK)

CARDONA: He's yet to say in the international speech which is what he should do which is what a real leader would do or at least in an op-ed to say definitively the white supremacists and everybody who has felt I was speaking to in the campaign are absolutely wrong.

[19:50:06] It is abhorrent. Everything that he has to have dragged out of him every time this comes, he should say it proactively and strongly at every time, every moment he has the opportunity to do that. Until he does that, you will have Latinos, African American, Muslims, everybody who felt degraded by his campaign.

LORD: That don't want to view themselves as Americans but want to divide themselves by color or race and it is wrong.

CARDONA: I feel like I am as American as you, Jeffrey. OK?

LORD: Exactly. That is the point.

CARDONA: But I am not treated as ones by the people who feel emboldened by your president-elect. That's the problem.

LORD: But there are always people like this in American life.

CARDONA: And there should be lead who are speak against it. And Donald Trump has not done us.

LORD: He denounced David Duke in 2000, said he was a racist.

CARDONA: During this campaign he did it begrudgingly after four times.

(CROSSTALK)

LORD: Hillary Clinton was out there calling Americans baskets of deplorables (INAUDIBLE) half the population.

CARDONA: He was asked to say no to David Duke. He refused until the fourth time he was asked to.

LORD: That is not true. He did it decades ago.

BUMP: Although --

LORD: When is the last time Hillary Clinton denounced the Ku Klux Klan in the last 24 hours?

BUMP: Hillary Clinton lost --

LORD: My point is we're playing a game here.

(CROSSTALK)

BUMP: It's not a dumb game.

CARDONA: It is not a dumb game.

BUMP: Donald Trump's goal and his goal as it should be would be to be the president of the United States of America. Half of the country didn't vote for him, right? There's a lot of people would point out he lost the popular vote as well. People of color have a different perspective on the president elect than you and I do, right?

(CROSSTALK)

BUMP: Yes, they are Americans as well.

LORD: Do you think Ben Carson has a different opinion because he's black?

BUMP: That is true. Literally every person.

CARDONA: How about the majority of people of color?

BUMP: My point is this, the president elect if he wants to lead a unified United States where everybody feels confident in the decisions he's making, he needs to do better I think than what he's doing now.

CARDONA: No question.

BURNETT: And what he's done is Ben Carson is now going to be the secretary of Housing and Urban Development. That is his nomination. He's putting Ben Carson in there. The things he's doing. The actions he's take --

SENOR: I think you will see other names emerging. Different cabinet -- subcabinet. BURNETT: That will be --

SENOR: It will be diverse. Look I'm listening to this debate and I sort of agree with both sides. I agree with you that more needs to be done by the leaders of our country, including Donald Trump to speak out against this, to make a point that the leadership of this country does not stand or traffic in that stuff.

I'm not -- we should -- but Donald Trump is not a racist. We shouldn't create these characters of him. He's not a racist. He's, in pursuit of the presidency he's probably trafficked in some of this stuff and given it oxygen than it deserves. But he's not a racist.

And in that sense, I think we all should right now take a deep breath and not give so much coverage to these nut cases are that sucking up so much --

LORD: Nut cases.

BUMP: The president elect who gives any oxygen to racists is not something that people who are the target of the racist actions are going to be comfortable.

(CROSSTALK)

SENOR: We're giving him oxygen right now.

LORD: Champion anti-Semites as Al Sharpton who's been in the Obama White House according to your paper 72 times. Hello? Is that not trafficking to the racists?

BUMP: Al Sharpton is just an American.

LORD: He's anti-Semite.

BUMP: We were talk about the President-elect Donald Trump. That's all.

LORD: We were talking about the Richard Spencer.

BURNETT: All right. So, Trump -- I just want everyone to know, Donald Trump has just arrived here at this rally. He's going to be going on stage at the moment. As I said, what's going to happen here is Donald Trump is going to come out, going to speak and then he's going to introduce General Jim Mattis, his nominee for secretary of defense. General Mattis will speak for a few minutes we're not sure how long and actually that could be one of the most interesting things of the night, is how long Jim Mattis speak for.

And then Donald Trump is going to speak to voters, everyone in that room there as you can see, thousands of them are there. People who voted forward Donald Trump to give him that resounding victory in North Carolina.

And, General Marks, this is a crucial evening for Donald Trump because he's doing this thank you tour. All Americans are going to be listening to him. This is the second one of these but the first one where he's appeared with someone else. He's appearing with someone else who's seen as -- respected in a bipartisan manner, seen as a real leader among generals in the country, someone whose not controversial, which is significant.

MARKS: I think with President-elect Donald Trump and Jim Mattis, General Jim Mattis together on the stage, they both will be able to bolster themselves in a very positive way by being in the presence of the other. Mr. Trump gets as much out of this as Jim Mattis does. This is not singularly a spotlight on Jim Mattis. This is an opportunity to put the president-elect next to a highly regarded warrior that has done some immense heavy lifting for us in the course of an entire lifetime, but most recently during these wars in Iraq and Afghanistan.

[19:55:07] BURNETT: And as we wait, Donald Trump just behind the stage there with General Mattis.

Sunlen Serfaty is inside the room at that event.

And, Sunlen, what is the mood like there? Moments away from Trump, obviously, he's a few minutes late. But you've got thousands of people there who are waiting to hang on he and General Mattis' every word.

SERFATY: That's right, Erin. Well, people are certainly anxious given that this rally is starting over an hour late. But we do know the president-elect has just arrived and he'll appear on stage with General Mattis is in a few minutes.

So, people are anxious, but the mood here is all the trappings of a campaign rally we would have seen during the campaign. You have many people holding up "Trump for President" sign, those recycled signs from the campaign. You also have some homemade signs.

Notable that we just saw one sign in the crowd that said "expose the pizza-gate scandal". Of course, that being a big story in Washington D.C. this week about a Washington pizzeria being the subject of many conspiracy theory, fake news stories.

So, interesting that is trickling its way here into the Trump rally. But people certainly anxious to hear him speak. We know this could turn into a pep rally of sorts for his nominee of secretary of defense, Jamie Mattis, appearing together on stage in just a few minutes -- Erin.

BURNETT: All right. Sunlen, thank you.

And as we await them, Richard, you know, the other thing I think you are going to have here is safe to assume, if we know Trump will be taking a victory lap for saying he's got another 50,000 jobs on his tab.

QUEST: Yes, counting them up. Carrier first and now this another 50,000. And let's wait to see whether they actually arrive or not. And that's going to be the hard point again. You know, I'm trying not to be cynical nor skeptical nor expressing

disbelief. I'm merely trying to be realistic, and say, where is this $50 billion coming from, when is it going to be invested, which jobs will be created?

BURNETT: And yet, Philip, Donald Trump has the political momentum. He understands the showmanship, OK, you announce Carrier, you get your announcement there, then you announce the next thing, you announce the next thing. It is steady drum beat now.

BUMP: Yes, no, absolutely. He's very good at getting attention on the things he would like to have attention on. And quite frankly, the Carrier issue in this prospect of having 50,000 more jobs that is something he deserves to get some attention on. These are the sorts of things a lot of voters were looking are when they vote forward Donald Trump. And the fact he's doing this, you know, a month after he won the election I think is sort of the impressive thing it is warranted for him to come out and talk about even though the jobs don't yet exist.

BURNETT: And can he take, Dan, the spotlight away from General Flynn?

SENOR: Oh, yes, absolutely.

BURNETT: Thinks he can sail through peddling fake news and then just move?

SENOR: Yes, he's a master of this. And tonight, he actually, and again, I can be quite critical of Trump, but tonight, he deserves credit for what's doing. Because by featuring General Mattis it takes the spotlight off his other problems.

And Generally Mattis, as you heard General Marks talked about, is worthy of that kind of praise. This is a guy who has bipartisan support, supports across the military, support the military veterans community, has taken different positions from Donald Trump. I mean, he's an impressive individual and the fact he's giving him this kind of air time is something.

BURNETT: And does it help someone like, Maria, and people like you who voted against him when you see General Mattis come out and one would presume he's going to be very straight in terms of what he talked about and then tonight Donald Trump take two, another opportunity to reach out for the people who did not vote for him?

CARDONA: I do actually and I agree about what was said here about General Mattis' background and his service to this country. He's a kind of person I hope Donald Trump actually listens to, more than the others Donald Trump has around him, especially Michael Flynn.

But, you know, moving forward I think the question is what is he going to do with these folks? Is he going to take their advice? And more importantly tonight, we've seen situations where you think the focus is going to be on, for example, tonight, General Mattis but that the focus becomes Donald Trump, right, and the focus becomes something completely different than what it was supposed to be. So, we'll see. MARKS: You know, if he doesn't cake the counsel and the input from

these guys, Maria, they'll be gone. They'll walk.

CARDONA: Good. I mean --

MARKS: No, no, no. These are some incredibly gifted folks.

(CROSSTALK)

LORD: Your point. This is unusual in the sense. Secretary of defense, state, and attorneys general are generally not taken out to political rallies of this nature. By doing it, he does set them up --

BURNETT: And you see the crowd cheering. Donald Trump being introduced as you see, waving to the crowd, getting ready to walk out. As I said, we anticipate he will introduce General Mattis, first. General Mattis will speak briefly, and then Donald Trump will be taking the stage for his extended remarks to voters.

And as he walks up to the stage, as you can see, relishing and enjoying his moment with the crowds. We know this is something Donald Trump truly enjoys and let's hand it off now to Anderson as Donald Trump begins his speech in Fayetteville.