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AT THIS HOUR WITH BERMAN AND MICHAELA

WSJ Report: Trump Won't Remove Himself from Business; Trump Chooses David Friedman as Ambassador to Israel; Obama's Final News Conference; Vet Organization Leader Calls Out Trump for Meeting with Kanye West, Not Veterans. Aired 11:30a-Noon ET

Aired December 16, 2016 - 11:30   ET

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


(COMMERCIAL BREAK)

[11:30:19] KATE BOLDUAN, CNN ANCHOR: When it comes to completely untangling himself from his businesses, Donald Trump seems to be saying now not so much. A "Wall Street Journal" reporter is telling CNN Trump will not remove himself from his businesses when he enters the White House.

JOHN BERMAN, CNN ANCHOR: He will not divest, but he claiming he will not be involved with running the businesses, his adult sons will and will reportedly have no involvement with the Trump White House. That's even though they are currently involved in transition meetings right now, including interviewing prospective cabinet picks.

Want to bring in David Fahrenthold, a reporter with "The Washington Post."

David, thanks so much for being with us.

By not divesting, if that is what Trump chooses to do, that's a far cry from the type of separation that strict ethicists are calling for.

DAVID FAHRENTHOLD, REPORTER, THE WASHINGTON POST: That's right. This is one of the things Donald Trump should have known would be the biggest question for himself as president and as head of his business. How is he going to separate himself from his business? It seems like he did not make any sort of plan at all before the election and doesn't seem to have that kind of plan now. So, on the fly, he's trying to figure out some arrangement that will work for his business and the country. Doesn't seem like he's found anything close to it yet.

BOLDUAN: Also, word is there are now conflicting concerns about what it would mean if he would completely divest. They were caught off guard, if they were afraid if they put all the properties on the market, it would be a fire sale. And also, they were concerned there would be an appearance of conflict of interest because maybe foreign governments would want to buy it up, and no one would be happy no matter what they put out there, David.

FAHRENTHOLD: That's right. Again, this is something they could have planned for and did not. Trump talked about on the trail, I'm going to put it in a blind trust. A blind trust means he would give the assets over to management by somebody who wouldn't tell Donald Trump what was happening. So, that person could in theory sell the projects off in a way Trump wasn't aware of over time. He seems not to have chosen to do that. He wants to put his sons in charge. He also seems to want to keep his sons in the mix for choosing how he will run the government. So, yeah, it' doesn't seem he's worked -- like he's surprised by these things that should not have been surprises.

BERMAN: This is neither blind, nor a trust, as we like to say, the arrangement he's reportedly leaning towards right now.

Again, he had said that yesterday he was going to explain to the American people how he would do this. He canceled that news conference. Allegedly there will be one in January. But it does seem, David, he's settled on some legalisms which he thinks, and most lawyers do agree, that the president doesn't need to care about these conflicts of interest in the same way as other members of the government.

FAHRENTHOLD: Well, there's two ways that's wrong. One is the legal sense. The Constitution actually does have a written limit on what the president can do. It's called the emoluments clause. The president can't accept payments from a foreign state. If a foreign state starts renting out the ballrooms or buying up condos in Trump buildings, the money goes to Trump, he violated that. It's in the Constitution.

The other is the political calculation. For Trump's own sake, his political capital, for his ability to get things done, he can't work under a constant question of whether he's worried about retaliation from foreign governments against his businesses or trying to make some sort of money off of it. He can't have that and get things done in Washington. It's for his own good as well.

BERMAN: We are awaiting that news conference scheduled for yesterday.

David Fahrenthold, thanks so much. Appreciate it.

FAHRENTHOLD: Thank you.

BERMAN: The president-elect has made his decision on who he wants to be the ambassador to Israel. A man who has questioned the need for a two-state solution. We're live in Jerusalem coming up.

BOLDUAN: Plus, President Obama vows revenge for Russian hacks, but how? And what does that mean for the president-elect when he takes over that relationship in 30-plus days?

Be right back.

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[11:37:19] BERMAN: Donald Trump has selected the man he wants to be the next ambassador to Israel. This is one of the most sensitive diplomatic posts in the world. Lawyer David Friedman has not necessarily supported the two-state solution in the past. He wants to move the U.S. embassy to Jerusalem. This is a stance many Republicans, some Democrats have, but it runs counter to decades of U.S. policy.

BOLDUAN: Let's bring in CNN's Ian Lee, live in Jerusalem.

You can be sure, it's clear that Israel -- Israeli officials have been watching this pick very closely and what move the president-elect would be making here. What is the reaction there tonight?

IAN LEE, CNN CORRESPONDENT: Well, that's right. We have instantly had reaction from across the spectrum of Israeli politics when this announcement was made. From the far right, you had Neftali Bennett, who welcomed the idea, calling Friedman a friend of Israel. On the far left, you had some express concern that someone who would be so vocal about not having a two-state solution, about politics in Israel, would say all these things while being in the United States in the comfort of their couches, instead of here in Israel.

But this could be a seismic shift for U.S. policy regarding Israel, the Palestinians, and the peace process, because David Friedman, in the past, has said he is a supporter of the settlement project and settlements, from the U.S. point of view, in the past, has been that these are illegitimate and their obstacles to peace. He's also been a supporter of moving the U.S. embassy from Tel Aviv to Jerusalem, again, going against previous U.S. administrations. And finally, he's even questioned the need for a two-state solution.

So, the Palestinians are watching this. And I spoke with one Palestinian politician, of the Palestinian Liberation Organization, and he expressed a lot of concern for this, wondering where this leaves the Palestinians, where this leaves the peace process, especially if there is not going to be a two-state solution. That he said this could make a very dangerous situation in Israel and the Palestinian territories.

BOLDUAN: Ian Lee for us in Jerusalem. Ian, thank you so very, very much.

BERMAN: In just a few hours, President Obama will hold his final news conference of the year. Just days really left in office. This could be a reflective moment about the state of the country. Listen to what he told NPR earlier.

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[11:39:56] BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I can say that I have had a conversation with the president-elect about our foreign policy, generally, and the importance of us making sure that in how we approach intelligence gathering and how we think about fighting terrorism and keeping the country secure, that we recognize America's exceptionalism, our indispensability in the world, in part, draws from our values and our ideals.

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BOLDUAN: Let's bring in NPR's Steven Inskeep, of NPR, who conducted that interview; and CNN presidential historian, Douglas Brinkley.

Great to see both of you.

Steve, you sat down with the president for a lengthy interview there. How would you describe his state of mind? You have interviewed him before.

STEVEN INSKEEP, CORROSPONDENT, NPR: He's a cool guy. He has been cool every time that I have talked with him, ten of them now during the time that he's been in the White House. And he keeps essentially the same demeanor. But his passion comes through from time to time and I think you hit on one of the moments there in that bit of video you just played because the president is concerned about the rule of law, concerned about the reputation of the United States, and you hear him not saying he thinks that President-elect Trump is going to go beyond the law. He's not explicitly saying that. But he's calling out that responsibility of the new president that's one of many, many things on his mind at this moment of transition.

BERMAN: So a lot of the people around him are actually now increasingly critical of Donald Trump. Josh Earnest, his press secretary; Michelle Obama, his wife, saying basically there's no hope right now.

Do you get the sense, two hours or so from now, the dam will break for the president, he won't be as careful as he has been to this point?

INSKEEP: Well, he was a little less careful, or let's say a little bit more forceful in this interview, because he's being more explicit about the fact that he is concerned, first, about Russian intervention in the election, which he was very quiet about even in October when they made a statement saying Russia had interfered in the U.S. election by being behind a hack of the Democratic National Committee and other targets. He's saying that more explicitly. He's still not fully endorsing that CIA finding that you have reported on that Russia had a motivation to elect President-elect Trump. But he's insisting this is a problem, that it needs to be addressed. And he made news in this interview by saying we will respond. Ad it's coming out of the mouth of the president. He's committing to do that at a time and place of our own choosing. We still don't know what the president intends to do, but he's putting his word on the line that he intends to retaliate in some manner here against Moscow, which cannot be welcome news to President-elect Trump, who has made a big deal of trying to have a new and better and different relationship with Russia.

BOLDUAN: Doug, that leads us to his final press conference of the year this afternoon, and his legacy on the line. How does he deal, how does the president deal with his legacy on the line, and the final weeks that he is in office, when you see, as he told Steve, he will be moving and vowing to retaliate against Russia?

DOUGLAS BRINKLEY, CNN PRESIDENTIAL HISTORIAN: Well, this is not the December he imagined. I think, just a month ago, he would have thought Hillary Clinton would be coming in. He would be able to do victory laps, talk about how we got out of the Great Recession, how the economy is humming and unemployment below 5 percent and the like. Instead, he's going to be consumed with this issue of Russian hacking, the whole general issue of cybersecurity, and how dangerous it is.

In many ways, Dwight Eisenhower famously gave a Farewell Address about the industrial-military-complex back in 1961. We are going to see Barack Obama the next 30 days I think having to really awake people, almost like Paul Revere, about the problems of hacking and cybersecurity and particularly regarding Putin's Russia. So, this is not -- then we have Syria, as I'm talking, in shambles, a huge humanitarian human rights debacle going on over there. He's going to be hit by a lot of hard questions on these two fronts, cyber and Syria.

BERMAN: Doug, he's got days left in office, really weeks, I should say. How much presidenting can you do with so little time left?

BRINKLEY: Well, you can do some if the climate was different, meaning, I think he's now operating in a crisis mode dealing with the Russian hacks. Sometimes, like Jimmy Carter, let's say, after the Reagan Revolution in 1980, signed all these wilderness bills, saving Alaska lands, he was able to get some things through. Carter was also able to keep working about releasing the hostages in Iran before Reagan got in. You stay busy to the very last day. But this is such a diametrically different character, Donald Trump. I mean, here's President Obama's injected climate change in both his inaugurals, made a big deal of going to Paris and the accords, and now Trump is putting people who are skeptical of climate, if not outright deniers, about the issue. So, he's watching some of his legacy pieces starting to crumble in front of his very eyes. It cannot be a very happy December for him.

[11:45:34] BOLDUAN: So, Steve, today is a big moment for the president. From your conversation, do you think -- because it's going to be at least a major focus or the major focus, or the major focus will be obviously Russia and the president-elect. From your conversation with the president, do you think his target is Donald Trump or do you think his target is Putin today?

INSKEEP: Well, he is a politically savvy guy. I'm sure he's aware this brings down Donald Trump to some extent, and he is trying to keep him within limits. But the president has insisted this is not about delegitimizing the president-elect. He has insisted this is about the security of the United States, that it is about Russia, about avoiding interference in elections.

It's interesting to hear Doug Brinkley talk there, because he's at a moment where he's still thinking long-term and he doesn't have a long- term. In our interview, there's a very interesting passage where he said, "There's a new game here, where people have taken traditional propaganda and traditional covert operations and are intensifying them on the Internet. It's a new situation that needs to be addressed by the international community with international agreements as they have done with nuclear weapons." That's a long-term international collaborative Barack Obama-kind of project that he would have to leave to his successor, who has got a very different style from what we have seen so far.

BERMAN: Hard to play the long game when time is running out on the clock.

Steven Inskeep, Douglas Brinkley, thanks so much for being with us. Appreciate it.

BOLDUAN: Great interview, Steve. Thank you for being it to us.

INSKEEP: Thank you.

BERMAN: An Iraq war veteran is slamming the president-elect for meeting with Kanye West. The veteran says, why Kanye, but not any leaders from veterans groups that he approves of? He joins us next.

BOLDUAN: Plus, this is what it feels like to not have hope. That's what First Lady Michelle Obama said about this moment in time. You can be pretty sure what she's talking about. Details ahead.

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[11:51:11] BOLDUAN: A top leader of a veterans organization calling out Donald Trump for having time to meet with, that guy, Kanye West, but not veterans. This, despite Trump promising vets there were a top priority throughout the campaign.

BERMAN: Paul Rieckhoff is the founder of the Iraq and Afghanistan Veterans of America. He joins us now.

Paul, a dramatic reading what you put down on paper over the last month, "Lots of folks visiting Trump Tower, including rapper, Kanye West, but not a single leader from our nation's leading veteran service organizations have been invited upstairs."

Why did you write this? What's your concern here?

PAUL RIECKHOFF, FOUNDER, IRAQ AND AFGHANISTAN VETRANS OF AMERICA: I think it speaks for itself. A parade of people from all industries and not a single leader from a leading veteran organization, not the VFW, American Legion, IAVA. And throughout the campaign, Trump said veteran would be a priority. That's a good thing. We want to make sure they're be a priority of his presidency as well.

The V.A. secretary is one of two remaining positions to be named. We've heard names ranging from Sarah Palin to Rick Perry. We've got no direction on what kind of person is he going to pick. Is he listening to the veteran service organizations? We think we could be a resource, help guide him in the right direction, help him understand what's really happening at V.A., and what veterans really need.

BOLDUAN: Paul, do you think it was lip service during the campaign or do you think Donald Trump cares about veteran issues?

RIECKHOFF: I'm sure he cares, but a lot of things are on his plate right now. And he said they would be a priority. They weren't name as part of his first 1000 days, he hasn't met with vet service organizations, and he has time for rappers. So how you spend your time is a reflection of your priorities. BERMAN: He has been talking to candidates here. Scott Brown, he was just a candidate. He's talk to Sarah Palin. You may not approve of her, but he has been meeting with people.

(CROSSTALK)

RIECKHOFF: There's a pretty wide spectrum here.

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BERMAN: And he has spoken about it at rallies. I understand he may not be speaking to the groups you want, but it's not like he's ignored the issue or this post completely?

RIECKHOFF: He hasn't knocked out candidates. It's a bit disconcerting to have a wide range now. I think we're over a dozen candidates that have been reported in the press. We haven't seen that range around any other cabinet position.

These are leading veteran service organizations representing tens of millions of members. They helped educate you all during the V.A. scandal and educate America to do service programs. They are here to be a resource. If he wants to get it right, he should listen to them, including considering the current V.A. secretary, Bob McDonald.

(CROSSTALK)

RIECKHOFF: Who has support from many of the organizations, and at least should be in consideration.

BOLDUAN: Why do you want him to stay on?

RIECKHOFF: I think all the groups have seen the work he's done. It's not perfect. There have been bumps. But he's finally getting momentum.

A big challenge at V.A. is they keep rotating leaders over and over again. This is not a small job. We're talking about 300,000 employees, almost $200 billion in the budget allocated to V.A. And Bob McDonald has gotten the trust of veteran service organizations. He's a former CEO, came from Procter & Gamble. He's a Republican and he's a Washington outsider. So, if he wasn't at V.A., he'd probably be Donald Trump's short list right now.

(CROSSTALK)

RIECKHOFF: But we argue that Donald Trump should also meet with Bob McDonald. Talk to him. Find out what's going on under the hood of V.A. As you all have reported for the last 10 years, there's serious issues that need tackling from the president.

BERMAN: Last I heard, he hadn't been contacted. I don't know if that's changed.

Paul, thanks for being with us. RIECKHOFF: Thanks, guys. Appreciate it.

BOLDUAN: Thanks, Paul. Thank you for bringing this to us.

[11:54:15] BERMAN: Very soon, we'll hear from President Obama himself. This is his final news conference of the year, and it comes at a fascinating pivot point in this country. He will face questions about Russian hacking into the U.S. election system, alleged hacking, questions about Donald Trump and how he's approaching this issue. We'll bring you the news conference live.

(COMMERCIAL BREAK)

BERMAN: All right, in the season of giving, we want to show you how can help our 2016 top-10 "CNN Heroes" continue their important work.

Anderson Cooper has more.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, CNN ANCHOR, A.C. 360: I'm Anderson Cooper. Each of this year's top-10 "CNN Heroes" proves that one person really can make a difference. Again, this year, we're making it easy for you to support their great work. Go to ccheroes.com and click donate beneath any 2016 top-10 "CNN hero" to make a direct contribution to that hero's fundraiser. You'll receive an e-mail confirming your donation, which is tax deductible here in the United States. No matter how small, it can make a big difference in helping the person who inspires you to continue their work. CNN is proud to celebrate all these every-day people changing the world. And through December 31, offers a simple way to support their causes. Right now, your donations matched dollar for dollar up to $50,000 for each of this year's honorees. Donate from your laptop, tablet or phone. Go to CNNheroes.com. Your donation will help them help others. Thanks.

(END VIDEO CLIP)

BOLDUAN: If you know someone who deserves to be a "CNN Hero," we're not stopping at '16, we're moving into '17, folks. Nominations for 2017 heroes are open and waiting to hear from you. You can go to cnnheroes.com to nominate something right now.

Thank you for joining us AT THIS HOUR, everybody.

BERMAN: NEWSROOM with Brianna Keilar starts right now. Have a great weekend.

[12:00:00] BRIANNA KEILAR, CNN ACHOR: Hi, there. And welcome to CNN NEWSROOM. Thanks for joining me. I'm Brianna Keilar.

We are a little more than two hours away from President Obama's last formal news conference of this momentous year, and very possibly his last as president. The world will be watching anyway. But now there is added --