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Trump Talks Tough at Prayer Breakfast; Soon: Secretary of State Tillerson Addresses State Department; Trump Slams "Dumb" Refugee Deal with Australia; Iran: Will "Vigorously Continue with Missile Activity"; "Tough Hombres" talk with Mexican President. Aired 10- 10:30a ET

Aired February 2, 2017 - 10:00   ET



CAROL COSTELLO, CNN ANCHOR: -- as America's foreign policy takes on a more combative tone. Just minutes ago, at the National Prayer Breakfast, the president ignoring the conciliatory tone typical of this long time presidential tradition, instead, Mr. Trump dismissed concerns and said it's time for U.S. diplomacy to get tougher.

Also, this hour, his new Secretary of State Rex Tillerson is speaking to a crowd of employees at the State Department. That will happen at any moment. The agency has been rocked by dissent and resignations over Trump's new policies like that travel ban and the diplomatic tensions only growing. Today, we have more details of the president's newest clashes with important allies, Australia and Mexico and of course, the nuclear deal and Iran.

And there are reports of high civilian casualties in that Yemen raid that killed a U.S. Navy SEAL. It was the first counterterrorism mission ordered by the new commander in chief. And today, we know a lot more about what went wrong. But let's begin with the latest diplomatic concerns. CNN's Jeff Zeleny, live at the White House. Good morning.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good morning, Carol. We heard the tough talk from the president throughout his bid for the presidency. And his tough talk also has been extending to his calls with foreign leaders. The latest, as you said, is a dust-up with the Australian Prime Minister in a call last week that we are just learning about. It was a very confrontational phone call.

Well, this morning actually, just a few minutes ago, the president talked about how he is going to give tough talk and straight talk to, he says, straighten out the world. Let's listen.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The world is in trouble, but we're going to straighten it out, OK? That's what I do, I fix things. We're going to straighten it out. Believe me. When you hear about the tough phone calls I'm having, don't worry about it. Just don't worry about it. They're tough. We have to be tough. It's time we're going to be a little tough, folks. We're taken advantage of by every nation in the world virtually. It's not going to happen anymore.


ZELENY: Now, that may sound good as campaign rhetoric, but as a -- diplomatic matter, that's quite a different situation. The Secretary of State is going to be speaking at the State Department in just a short time. He's going to have to compel with all that tough talk and how our allies receive that. But then, in a different moment, at the Prayer Breakfast again this morning, the president also asked for a prayer for Arnold Schwarzenegger. Take a listen.


TRUMP: We had tremendous success on "The Apprentice." And when I ran for president, I had to leave the show. That's when I knew for sure I was doing it. And they hired a big, big movie star, Arnold Schwarzenegger, to take my place. And we know how that turned out. The ratings went right down the tubes. It's been a total disaster. And Mark will never, ever bet against Trump again. And I want to just pray for Arnold, if we can, for those ratings, OK?


ZELENY: So of course, Carol, that was a moment of humor, I believe, but we didn't hear much humility from the president there in that National Prayer Breakfast. Of course, that's a bipartisan meeting of senators, Congress men and women from across the country gathered there in the room but interesting that he essentially confirmed our reporting this morning about those confrontational calls with foreign leaders. Carol that is something the world is getting used to this president, as Washington is as well. Carol?

COSTELLO: All right, by the way, Arnold Schwarzenegger has responded. But we're not going to get into that for now because well -- it's just different, isn't it? Jeff Zeleny, thank you so much.

ZELENY: It is.

COSTELLO: Trump's Secretary of State pick Rex Tillerson, begins his first full day on the job, facing a slight depressing international concerns, this growing fallout from that call between Trump and the Australian Prime Minister. It ended abruptly that call as the two sparred over a refugee deal. Tough new talk on Iran with Trump formally putting the country on notice after it carried out a ballistic missile test.

All of this coming just a day after Trump's phone call with the Mexican president, where he complained that Mexico isn't tough enough on, quote, "tough hombres." We're covering this from every angle for you both here in the United States and abroad. But let's begin with that heated exchange between Trump and the Australian Prime Minister. CNN's Michelle Kosinski is at the State Department with more on that. Good morning.

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Hi, Carol. Yes, "The Washington Post" had some detailed reporting on this, quoting a transcript and talking to U.S. officials who said that during this phone call, which was with one of America's closest allies and a Prime Minister that in many ways is aligned with Donald Trump's views including on immigration and refugees. That Trump was angry about a prior agreement to take more than a thousand refugees from Australia, that Trump boasted about his win, and talked about the call not going well, and saying that he had talked to other world leaders, but that this call with the Australian Prime Minister was the worst one he had had.

[10:05:10] The reporting was also that that call ended abruptly. Although in an interview, the Australian Prime Minister said it wasn't rude, Trump didn't hang up on him, it ended cordially, although you know it was supposed to be at least an hour along and it ended after about 25 minutes.

Well, Trump tweeted last night about this, saying, "Do you believe it? The Obama administration agreed to take thousands of illegal immigrants from Australia. Why? I will study this dumb deal!" Well, according to both the White House now and Australia, during that call, and now, Donald Trump agrees with this preexisting agreement, that he is going to take these refugees. I'm not sure how long that process is going to take. It still needs to go through the vetting process. But that agreement is set and Trump isn't going to try to stop that.

But this isn't the only contentious call with a world leader. There is also one with Mexico that raised eyebrows. And part of that was, in the call, this is according to a transcript that CNN got ahold of, President Trump said, "You have some pretty tough hombres in Mexico that you may need help with. We're willing to help with that big league, but they have to be knocked out and you have not done a good job knocking them out."

At this point, both the U.S. and Mexico are saying, you know, this is a strong relationship. We are going to work together on these issues even though we have our differences. So, I mean, world leaders are trying to make the best face possible on the relationships and on the phone calls that have happened. But it's definitely become another topic of conversation.

Meanwhile, here at the State Department, hundreds of employees are waiting for the new Secretary of State who was just sworn in last night. He should be here at any minute now. And they're eager to see how much his views will mesh with the Trump administration, how much more clarity he'll be able to add for them, as they now go about their business, Carol.

COSTELLO: All right, Michelle Kosinski reporting live from the State Department, who we'll return to shortly when Rex Tillerson begins to speak to State Department employees there. Now, the tough talk on Iran, the White House saying the country is officially on notice after it carried out a ballistic missile test. CNN's Fred Pleitgen is just back from Iran. He's in London with more on that. Hi, Fred.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIOANL CORRESPONDENT; Hi, Carol and certainly some tough talk now coming from both sides. We heard the statement from National Security Advisor Michael Flynn last night where he was saying, as you said, that Iran was on notice, of course, criticizing that ballistic missile test that the Iranians apparently conducted last Sunday.

Well, the advisor to Iran's supreme leader Ayatollah Ali Khamenei has come out and said that Iran will continue to test ballistic missiles and will do so vigorously. He also called Donald Trump an inexperienced politician and said that it wasn't the first time the Iranians had been threatened in this way.

So, certainly, you're seeing neither side really back down. And the big question now is, how could this possibly escalate, what happens if the Iranians do in fact continue to test ballistic missiles. They, by the way, say that they believe that they have the right to do that, and that it does not violate any sort of U.N. resolution as long as those ballistic missiles are not capable of carrying nuclear warheads. The Iranians said they're not. The U.S. obviously has a very different view on that. But certainly it seems as though the relations, if there ever were any, between the U.S. and Iran that seemed to be warming up a little bit in the Obama years, seemed to really be getting off to an extremely rocky start.

And I can tell you, Carol, those many people in Iran right now, who are quite concerned as to which way all of this could go. It was interesting because I was just there a couple of days ago. And even the hardliners at that point said, look, we really don't know very much about Donald Trump. We don't know what he's going to do when he actually is president, what his presidency is going to be like. Some of them even thought that because he's a former businessman, that he might be willing to deal with Iran and do deals with Iran.

Because of course, the country has great oil wells. It's a country that needs to invest a lot in the coming years. Boeing wants to sell about a hundred planes to Iran and in fact, has a deal with Iran. But certainly, right now, it seems everything is called into question, as Michael Flynn has made those comments and the Iranians certainly, not backing down even an inch at this point, Carol.

COSTELLO: All right, Frederik Pleitgen, reporting live from London. I want to go back to this subject of Australia for just a second because we're getting reaction out of that country now. With more on that, our CNN international diplomatic editor Nic Robertson. Hi, Nic.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Hi there, Carol. Well, the Prime Minister of Australia has said that he doesn't really want to get into the details as being publicly. He said that it's better to be able to speak frankly and privately in these sorts of conversations. However, what he has said is that -- the call, while it may have ended abruptly, he said it did end courteously. This is how he put it.

[10:10:04] (BEGIN VIDEO CLIP)

MALCOLM TURNBULL, AUSTRALIAN PRIME MINISTER: The report that the president hung up is not correct. The call ended courteously. And as far as the nature of the discussion, it was very frank and forthright. I stand up for Australia's interests. I make Australia's case as powerfully and persuasively as I can, wherever I am.


ROBERTSON: So, this is actually done, the Australian Prime Minister, some good at home, this has put him up -- in the popularity stakes, if you will. He was criticized over the weekend for the initial readout of that phone call right on the back of the refugee travel restrictions. That he wasn't being strong enough. That he wasn't being a strong leader.

So, once this revelation came out in Australia, at least, Malcolm Turnbull is now looked upon as being a stronger, firmer leader. For other leaders around the world right now, they will look to that conversation and realize there is a potential for any conversation they have with President Trump, that it may be leaked, and that they may be judged by their people by the strength of that conversation.

But let's not forget, the United States and Australia have strong counterterrorism ties. There are hundreds of marines based in the northern city, of Darwin. It's an important location -- for the Pacific's League. So, this relationship with Australia is an important one at many levels, counterterrorism being a very important narrative for President Trump right now, very important in that context. This is strained. It's not a conversation the Australians will want to jump into again quickly.

COSTELLO: All right, Nic Robertson reporting live for us with the reaction from Australia. Now, let's talk about Mexico, shall we? According to a phone call transcript, President Trump actually made an offer to the Mexican president to help him deal with their drug cartel problems using the term "bad hombres." CNN's Shasta Darlington, live in Mexico City with reaction on that. Good morning.

SHASTA DARLINTON, CNN INTERNATIONAL CORRESPONDENT: Good morning, Carol. That's right, you know what's interesting about this conversation is that it was supposed to lower the temperature after Donald Trump signed an Executive Order saying the wall is going to go up. And after Mexican president Enrique Pena Nieto cancelled a trip to Washington.

So, this was supposed to be their way to sort of agree on some issues. And what is interesting about this excerpt that we saw is a very colorful language. Basically, the President of the United States telling the President of Mexico, you've got some tough hombres, we're willing to help, but they've got to be knocked out and you're not doing a good enough job. So, yes, it is an offer of help, but it is being interpreted here as also, another humiliation, another slight against the president, you're not doing a good job.

At the same time, this contradicts some reports out there that Trump had threatened to actually send the army in. That -- officials on both sides have said that is not true. What we have seen is Mexicans are beginning to unite behind what was a very unpopular president. So, when we see these kinds of humiliations, it certainly doesn't help him. He's busy trying to figure out what can be renegotiated with Mexico, what's on the table, and what isn't. And he needs all the support he can get, Carol.

COSTELLO: All right, Shasta Darlington reporting live from Mexico City. Now, let's turn to another potential diplomatic hit to U.S. diplomacy, reports of high civilian casualties in the anti-terror raid in Yemen that left one U.S. Navy SEAL dead. CNN's Ryan Brown is at his post at the Pentagon to tell us more. Hi, Ryan.

RYAN BROWNE, CNN NATIONAL SECURITY PRODUCER: Good morning, Carol. Yes, that's right, this raid which is kind of referred to as a site exploitation operation was months in the works. But because of certain operational requirements, mainly the need for the absence of moonlight to conceal the Special Operations Team's movements, the operation was actually delayed until after Donald Trump became president. And Trump green lit the mission.

Now, we're finding that the mission did encounter some problems while they were entering Yemen. One, they were detected. The UAE Navy SEAL Teams were detected by the al Qaeda group there early. And so, a gun battle broke out involving grenades, heavy weapons, airstrikes, and this was a very intense fight. - Of course, the Navy SEAL fatally wounded, 3 additional SEAL's wounded, 14 al Qaeda fighters killed.

And as well, we're learning now, a number of civilians were likely killed. The military is still working to confirm that. But yesterday, last night, they released a statement saying that the initial information showed that civilian casualties were likely, including children a possibility. So, local reports also showing that there were a number of civilian casualties as well, pictures of that being released.

So, we're trying to understand a little bit what happened there. But the military is actually fairly happy with some of the intelligence that was gathered. We know they recovered hard drives that the military says is already yielding intelligence into the terror group, al Qaeda in the Arabian Peninsula which is considered the al Qaeda franchise that's most capable, most able to attack western targets. Carol?

[10:15:05] COSTELLO: All right, Ryan Browne thanks so much. We're seeing the new Secretary of State Rex Tillerson. He's arrived at the State Department now. He's going to be speaking to State Department employees. This is actually the lobby there. State Department has been through much turmoil. Lots of people have left in light of the new Trump administration. So, Rex Tillerson will presumably - come down there and talk about Mr. Trump's foreign policy and how exactly that foreign policy will be carried out. Let's listen to Secretary of State Rex Tillerson.

REX TILLERSON, SECRETARY OF STATE: Well, good morning, all. We apologize for being late. It seemed that this year's Prayer Breakfast, people felt the need to pray a little longer.


But I certainly welcomed them all. So, thank you for such a warm reception. And it's a pleasure to be here, obviously. I've been anxious to be here and I'm so pleased to have my wife, Renda, of more than 30 years. And she has been just steadfast through this process, encouraging me on and reminding me of what this is really all about. And so thank you.


I also want to thank Acting Secretary Tom Shannon, who has just been superb through this entire process. And Tom, thank you so much.


It was truly and indeed an honor that Tom joined us in the Oval Office last night for my swearing in, and appreciated that he was there.

Obviously, I also want to recognize and thank all of you here at headquarters of our State Department, the staff and partners around the world, who have faithfully performed your duties regardless of who was in charge. It was so important.

I know many of you have assisted ambassadors and other officials during the Senate confirmation process. And indeed, some of you have been through it yourself. Having just come through it for the first time, I can assure you the Senate still takes it as serious as ever. They're as energetic as ever. They're as thorough as ever, but we're here.



So in the days and weeks ahead, we're going to have plenty of opportunity to discuss in more detail the goals, the priorities and the strategic direction for our organization. But for now, I really want to take a few minutes to communicate my high regard for the men and women of the State Department, and share with you some principles for all of us to live by as we pursue our shared mission.

The individuals who comprise this department are among the finest public servants in the world. Many of you serve our nation abroad and have served our nation abroad. State Department staffers in the field are not just conduits for policies and plans, you are our emissaries of our nation and the ideals we stand for. When people see you, they see America.

When I wake up each morning, the very first thing I ask myself is: Are all of our people safe? The safety of every single member of our State Department family regardless of where he or she is posted, is not just a priority for me. It's a core value. And it will become a core value of this department.


This means the State Department family here in the U.S. and all those agencies serving under chief of missions abroad, including Civil Service, Foreign Service officers and specialists, locally engaged staff of host country and third-country nationals, interns, fellows, support contractors and implementing partners, and not least of all, the family members who support us at home and in our service to our country overseas.

The Foreign Service is not the only component of the State Department. The Civil Service workforce at the State Department plays an indispensable role in all we achieve, and we cannot attain success without the mission-critical services that you provide. Though we often live in a world of headlines, working outside of the public eye does not make you any less essential to our operations.

Your dedication, your intelligence, and your sound judgment are the brick-and-mortar elements of all we do. We all depend on your good work and I know it will continue.

TILLERSON: One of the great...


One of the great challenges and thrills for the State Department staff is deciding how to confront changing conditions in every corner of the world. And I encourage all of you to use your natural and well developed skills to adapt to changes here at home as well. I know this was a hotly contested election and we do not all feel the same way about the outcome.

Each of us is entitled to the expression of our political beliefs. But we cannot let our personal convictions overwhelm our ability to work as one team. Let us be understanding with each other about the times we live in as we focus our energies on our departmental goals.

As secretary, I will deploy the talent and resources of the State Department in the most efficient ways possible. That may entail making some changes to how things are traditionally done in this department. Change for the sake of change can be counter productive, and that will never be my approach. But we cannot sustain ineffective traditions over optimal outcomes. I will gather information on what processes should be reformed and do my part to make sure we are functioning in the most productive and efficient way possible.

Regardless of the circumstances shaping our country or our department, we must all remain focused on the mission at hand before us. I remind you that our undertakings are larger than ourselves or our personal careers.

Our duty is to faithfully represent our nation in the arena of foreign affairs. If we stay focused on the work before us, I promise I will work to ensure you achieve your own personal success and your professional satisfaction in what you're doing.

For every individual who works at the State Department, I ask that we adopt a few core principles. First I believe that any organization runs best when all of its members embrace accountability. From the mail room to the board room every member of team has a job to do. I know nobody will always be perfect and that certainly includes me, but I ask that everyone strives for excellence and assume responsibility for their actions and their decisions. The New England Patriots have signs posted all over their team facilities that simply say do your job. It is a brief message, but one with profound importance. If we all do our jobs and embrace a willingness to be held accountable for our performance, we work better as a unit, move closer to attaining our goals. It's worked pretty well for the Patriots over the years as I must admit.


Secondly I want us to be honest with one another. We're on the same team. We share the same mission. Honesty with undergird our foreign policy and we'll start by making it the basis of how we interact with each other.

Lastly we're going to treat each other with respect. No one will tolerate disrespect of anyone. Before we are employees of the State Department, we are human beings first. Let us extend respect to each other, especially when we may disagree.

What I ask of you and what I demand of myself, I will embrace accountability, honesty, and respect, no less than anyone. Before President Trump called me, I thought I'd be entering retirement this spring after four decades of business experience. Renda and I were ready to head off the ranch and enjoy our grandchildren. But when I came back from my first meeting with President Trump and he asked me to do this, Renda said you didn't know it, but you've been in a 41 year training program for this job.


So despite our own dreams, she said you're supposed to do this. Well my first days here, I'm on the job, hi I'm the new guy.


As such, I will depend on the expertise of this institution. There are over 75,000 members of the State Department workforce, both foreign and civil service employees with an average of over 11 years of service in the department; I have 25 minutes.


TILLERSON: You have accumulated knowledge and experience that cannot be replicated anywhere else. Your wisdom, your work ethic, and patriotism is as important as ever. And as your secretary, I will be proud to draw upon all these qualities in my decision-making.

I ask that you join me in upholding high standards of ethics and professionalism, committing to personal accountability and honesty, and respecting your colleagues.

There will undoubtedly be times of victory, but there will also be many times of difficulty. Let's go forward as a team through all of it. Let's make the American people proud of what we do in this building and beyond.

Inscribed on the walls in this lobby are the names of fallen Foreign Service personnel who, in the words of Abraham Lincoln, gave their last full measure of devotion. They died in service of causes far greater than themselves. As we move forward in a new era, it is important to honor the sacrifices of those who have come before us and reflect on the legacy that we inherit.

In closing, I'm honored to be serving alongside each of you as I serve our nation as the secretary of state.

So now I'm going to take a moment and pay my respects to those individuals that are memorialized on this wall and then I look forward to making the rounds and greeting you personally. It may take me a few days.


But in all sincerity, I do hope to have the opportunity to shake the hand of every one of you that's here.

Thank you so much.


COSTELLO: All right. Secretary of State Rex Tillerson talking to State Department employees. And now he's going to go down and meet and greet them. Hopefully a lot of them individually, because morale has not been great at the State Department. But we certainly got a taste of who the man -- of who Rex Tillerson is.

Here to talk about that is Ryan Lizza, Washington correspondent for "The New Yorker", and Julian Zelizer, Princeton University historian and professor, and retired Air Force Lieutenant Colonel Rick Francona. Welcome to all of you.

Julian, I'll start with you. Rex Tillerson is certainly very charming. You can see why so many people liked him on Capitol Hill leading up to his confirmation.

JULIAN ZELIZER, PRINCETON UNIVERSITY HISTORIAN & PROFESSOR: yes, his demeanor is in some ways the opposite of President Trump. And so I think many senators certainly are looking for someone in the inner circle of the president who can balance the other attitude that we've seen in the phone calls and in the statements in the last few weeks.

There's a question of how influential he'll be, though. Given the direction of this White House, diplomacy seems low on the list. So he's got a big challenge if he's going to have his say in those Oval Office meetings.

COSTELLO: He certainly does have big challenges and we'll get to those in just a second.

I want to concentrate on just his demeanor, because I think for a lot of people watching, it was very comforting, the message he sent to the employees, Ryan, you know, these principles that they were to follow, embrace accountability, be honest with each other, treat each other with respect. Employees like to hear those things from their bosses.

RYAN LIZZA, "THE NEW YORKER": Yes, he's walking into a State Department that has just been part of what is probably the most widespread dissent channel cable since that was set up in 1971. And for viewers who don't know what that is, in the middle of Vietnam War, the State Department created an official channel so that employees could offer official dissent. It was a way so that employees wouldn't leak things or go to the press.

That channel has been used numerous times. But by far, from what we know publicly, and not all of these dissents are made public -- but from what we know, the 900 to 1,000 State Department employees who signed onto this dissent this week is probably the most widespread use of that channel in its history.

So he's walking into a State Department that has deep reservations about the President of the United States, deep reservations about the executive order ban on immigration. That's what the dissent was about. And so I think he walked a fine line there in his speech between sort of reaching out to those employees and saying, look, I understand the culture of this place. But also at one point saying let's not let our personal views about politics interfere with the job we have.

So I think that's the balance he struck there, and was frankly probably reassuring to a lot of employees. Much different, Carol, than the White House earlier in the week, which said that if people had differences of opinion, they should go.

COSTELLO: Right. OK, so I want to get the military protector from Colonel Francona, because much of the world is very confused by Donald Trump's actions.

[10:30:03] You would expect Rex Tillerson to have world leaders calling him, reaching out to him, on day one like perhaps the president of Mexico, the prime minister of Australia, to name a few.