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Yates to Testify She Warned White House About Flynn; Clinton: Comey Cost Me; Trump Tackles Health Care; Trump Hosting Abbas at White House; Deadly Suicide Bombing in Kabul. Aired 4:30-5a ET

Aired May 3, 2017 - 04:30   ET



[04:30:35] CHRISTINE ROMANS, CNN ANCHOR: The White House says it was only given a heads up about Michael Flynn's talks with the Russians but the former acting attorney general, she is set to contradict that with new testimony.

DAVE BRIGGS, CNN ANCHOR: Hillary Clinton and her return to the spotlight says she accepts full responsibility for her election loss, while also pinning it on the Russians and FBI Director James Comey. How did President Trump respond?

ROMANS: And key members of the House summoned to meet with President Trump this morning. Could he sway them to support the latest bill to repeal and replace Obamacare?

Welcome back to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. Hi there.

ROMANS: Hi there. It's nice to see you.

BRIGGS: It's good to see you.

ROMANS: Are we halfway through the week? Almost?

BRIGGS: We are almost there. Almost over that hump.

But, you know, these comments by Hillary Clinton certainly raising a few eyebrows. We'll discuss this later in the program. But how do polls given last week contradict everything she was saying, right? Interesting.

President Trump and his administration are facing a major public rebuke from an official fired by Trump himself. Sources tell CNN, former Acting Attorney General Sally Yates is prepared to testify that she warned the White House, Michael Flynn was lying about talking to the Russian ambassador. A warning that came three weeks before Flynn was fired as national security adviser.

Yates is expected to tell a Senate Judiciary Committee she expressed grave concerns that Flynn could potentially be compromised, refuting the White House account that Yates gave officials a simple head's up.

With Yates testimony set for Monday, Russia returns to center stage on Capitol Hill today.

ROMANS: FBI Director James Comey goes before the Senate Judiciary Committee where he'll be grilled about his announcement just before election at the probe of Hillary Clinton's emails was back on.

Secretary Clinton now with her most pointed comments on Comey and the Russians and president Trump unleashes a late night tweet storm venting his frustration about that.

We begin our coverage with national security correspondent Jim Sciutto in Washington.


JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Sources familiar with her account tell CNN that former Acting Attorney General Sally Yates is prepared to testify before the Senate Judiciary Committee next week that she gave a forceful warning to the White House regarding then-National Security Adviser Michael Flynn nearly three weeks before he was fired. This contradicting the administration's version of events.

In a private meeting January 26th, Yates told White House counsel Don McGahn that Flynn was lying when he denied in public and private that he had discussed U.S. sanctions on Russia in conversations with Russia's ambassador to the U.S., Sergey Kislyak. His misleading comments, Yates explained, made him potentially vulnerable to being compromised by Russia. The Yates-McGahn meeting took place January 26th.

On February 10th, more than two weeks later, President Trump said he was unaware of reports on Flynn. Three days after that, on February 13th, "The Washington Post" published a story that Flynn had lied to Vice President Mike Pence about his conversations with the Russian ambassador. Flynn resigned that night.

Yates testimony on May 8th will be the first time the former acting attorney general will publicly speak about that White House meeting. A source familiar with the situation says that Yates will be limited on what she can tell the committee because many of the details involving Flynn remain classified. Yates previously scheduled appearance in front of the House Intelligence Committee was cancelled by Chairman Nunez. That news sparking outcry from Democrats who believes he was trying to shield the White House from damaging new revelations.

Jim Sciutto, CNN, Washington.


BRIGGS: Jim Sciutto there for us in D.C. -- thank you, sir.

Hillary Clinton meanwhile offering her most pointed comments yet on what she characterized as meddling in the election by Russians and by FBI Director Comey.

Speaking to CNN's Christiane Amanpour, the former candidate said, quote, "If the election had been held on October 27th, I would be your president."


HILLARY CLINTON (D), FORMER PRESIDENTIAL CANDIDATE: I was on the way to winning until a combination of Jim Comey's letter on October 28th and Russian WikiLeaks raised doubts in the minds of people who were inclined to vote for me but got scared off.


BRIGGS: Interviewed by Amanpour at a Women For Women International event in New York, Secretary Clinton did take what she called absolute personal responsibility for her loss.

[04:35:00] ROMANS: She says she's now back to being an activist citizen and part of the resistance. That's the word she used, the resistance.

She also took a swipe that is sure to irk President Trump.


CLINTON: I did win more than 3 million votes than my opponent. So, it's like, really?



CLINTON: Well -- fine. You know, better that than interfering in foreign affairs if he wants to tweet about me. I'm happy to be the, you know, the diversion.


ROMANS: So, what is behind her re-entry into the spot light? A confidant telling CNN, quote, "She's not running for anything, she's just not hiding."

Christiane Amanpour joins us at 5:30 to discuss her conversation with Clinton and more.

BRIGGS: She's writing a book, mind you.

Christiane nailed it when she predicted a tweet storm from President Trump. In fact, there were a couple, lashing back overnight at his former opponent. He wrote, quote, "FBI Director Comey was the best thing that ever happened to Hillary Clinton, in that he gave her a free pass for many bad deeds. The phony Trump-Russia story was an excuse used by the Democrats as justification for losing the election." He finished off referring to himself in the third person, "Perhaps Trump just ran a great campaign."

And Briggs loves some third person tweeting. Briggs loves those kind of tweets. Jimmy is getting upset for you Seinfeld fans.

ROMANS: Oh, funny.

No surprise that Russian election hacking did not come up when President Trump spoke with Russian President Vladimir Putin in their phone call yesterday. The White House says Syria was the focus of the first chat between two leaders since President Trump launched missile strikes against Syrian airbase, an attack the Kremlin you'll recall condemned.

A White House description of the call says Trump and Putin discussed the need to the end the violence in Syria, President Trump's proposal to create safe zones for refugees. President Trump agreed to send a representative to Syrian cease-fire talks that begin today in Kazakhstan. The two men talked about North Korea's nuclear program and, possibly, maybe, a future date meeting on the sidelines of the G20 Summit in July, a personal meeting.

BRIGGS: Boy, that be the interesting one. President Trump stepping directly into the health care fight today. He'll meet with two key Republican congressmen. Billy Long of Missouri and Fred Upton of Michigan, both are against the latest bill to replace Obamacare but they are working on an amendment that would protect Americans with pre-existing conditions in order to make the measure more palatable to moderates.

You see this balance continue to shift. Republican leadership and the White House making a hard sell to get the plan through the House.

CNN's Phil Mattingly has the latest whip count from Capitol Hill.


PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Dave and Christine, as it currently stands, according to a CNN tally, 22 Republicans are firmly and publicly in the no camp. Republican leaders can afford to lose all of 23. That means over the course of the next couple of days, they have major work to do primarily with moderates and centrists on the issue of pre-existing conditions, something Fred Upton, the congressman from Michigan and former chairman of the committee that oversees health care, laid out like this.

REP. FRED UPTON (R), MICHIGAN: You know, from day one, I've supported the rights of those with pre-existing illnesses to be covered. And in my view, this undermines that effort and I can't be a part of it. Yes, there are ways to fix it, but the proposal that's on the table now doesn't work.

MATTINGLY: The question right now is, can leaders -- can the White House persuade those who are either undecided still sitting on the fence or only lean no to come aboard over the next 24 to 48 hours? They want to have this vote before lawmakers leave Capitol Hill on Thursday for another recess. The reality remains the same, though, according to House leadership aides, they will not have the vote until they have the votes.

As it stands right now, they don't have the votes -- Dave and Christine.


ROMANS: All right, Phil Mattingly.

The U.S. auto boom might be over, just as President Trump is counting on to it add more jobs. Car sales saw a big drop in April. Look at the big three Detroit companies. Sales fell as much as 7 percent from last year. Overall U.S. sales were down 4.7 percent, almost 5 percent.

Now, the industry has been on a huge winning streak since bail outs rescued it in 2009, also helped by cheap gas prices. But demand has suddenly cooled after seven straight years of gains. Now, while consumer sentiment is high, spending is down in 2017, especially on big ticket items like cars.

And we don't actually know why. That's what's confounding about it. In fact, many analysts forecast auto sales will decline this year. An estimated 17.2 million in 2017, after hitting a record 17.5 million last year. That's still an awful lot of cars but it shows that boom, boom, boom has stalled.

[04:40:01] The slow down in sales raises the prospects companies may slow production, that runs counter to the president's plans. He's been pushing carmakers to produce more cars in the U.S. in an effort to create jobs. The White House has vowed to create 25 million new jobs over the next ten years.

BRIGGS: President Trump's pick for the secretary of army appears to be in serious jeopardy. Multiple sources telling CNN that nominee Mark Green could withdraw as early as this week. Democrats have slammed his comments on LGBT issues, Islam and evolution. Sources say his path to confirmation may be insurmountable. Green, a retired army flight surgeon, is the president's second pick for the post. A spokesman though says the notion that Green is dropping out is completely, absolutely untrue and he's prepping for his confirmation hearing.

ROMANS: All right. A surprise within the pages of Ivanka Trump's new book, "Women Who Work", released yesterday. In his book, she includes many inspirational quotes from celebrities and business moguls, but get this -- most of the people she quotes supported Hillary Clinton during the campaign, not her father.

Among some of the heavy hitters, Oprah Winfrey, Jane Goodall, Cynthia Nixon, Richard Branson, Warren Buffett, Sheryl Sandberg, and former Secretary of State Colin Powell. Just to be clear, the inspirational quotes weren't provided specifically for the book. The first daughter used them with citations and credit. The founder and CEO of Girls Who Code, she turned to Twitter and said, "Don't use my story in 'Women Who Work' unless you're gong to be stop being #complicit." Ouch.

BRIGGS: She's one of the more intriguing figures in this White House --

ROMANS: I do so, too.

BRIGGS: -- because you hear she's one of his most trusted advisers, the president. But we just don't know how.

ROMANS: I know. And she's said she's easing into the role. She's learning how to be this adviser on the job. So, it'd be interesting to see how that role evolves.

BRIGGS: Where she moderates. Her father.

All right. Palestinian President Mahmoud Abbas set to visit the White House today. Can he and President Trump find common ground on the Middle East? A live report is next.


[04:46:16] BRIGGS: President Trump hosting Palestinian Leader Mahmoud Abbas at the White House today. Palestinian officials describe Abbas as hopeful and eager to engage Mr. Trump despite the president's divisive rhetoric about Muslims on the campaign trail.

So, let's bring in CNN's Ian Lee live from Ramallah, on the West Bank.

Good morning to you, Ian. What are they hopeful and eager about?

IAN LEE, CNN REPORTER: Good morning, Dave.

You know, this is the first time that President Abbas and President Trump have met. So, expect them a little bit meet and greet, get to know each other better.

But Mahmoud Abbas is bringing a laundry list of things that he wants to talk about that. On top of that list is settlements. He wants the United States to put more pressure on Israel. Also, they will be talking about the embassy. Mike Pence yesterday said that they are electronically considering moving it from Tel Aviv to Jerusalem.

That's not only deeply unpopular with the Palestinians but also key U.S. regional allies like Jordan, Egypt and Saudi Arabia. They are also going to be talking about the prospect for a Palestinian state, Mahmoud Abbas would like to see that within the 1967 borders with east Jerusalem as its capital. Also, the Arab peace initiative is likely to be brought up as well where the Arab League would recognize Israel with a peace deal.

Now, expect President Trump to possibly bring up the stipends for Palestinian families who have someone either killed or jailed by Israelis. This is within the context of the conflict.

Now, Israel says this is just the sponsorship of terror. But President Trump has said that this is the ultimate deal. So expect him to push hard either way, Dave.

BRIGGS: Massive meeting. All eyes on the White House today. Ian Lee, thank you.

ROMANS: Breaking news out of Afghanistan: a deadly suicide attack near the U.S. embassy in Kabul. At least eight people were killed and dozens more hurt, this according to Afghan officials. U.S. military officials say three members of the international coalition serving in Kabul suffered nonlife threatening injuries. The attack struck a convoy of NATO armored personnel carriers during the morning rush hour.

The bombing coming on the heels of threat by the Taliban to target foreign forces in a spring offensive.

The U.S. pulling out of its role in the hunt for elusive African warlord Joseph Kony. He's wanted by the International Criminal Court for war crimes, including killing thousands of civilians and abducting thousands of children during his decades-long uprising in Uganda and neighboring countries. The Pentagon says the U.S. backed mission to capture him which began in 2011, cost the U.S. at least $780 million.

BRIGGS: Embattled Venezuelan President Nicolas Maduro responding to violent anti-government protests by suspending the right to bear arms across the country for six months. Government officials say the move is needed to guarantee safety, peace and internal order. It's not clear, though, what consequences it will be for violators.

Meantime, General Motors is now officially ceased operations in Venezuela.


BRIGGS: The moving coming after the automaker's plant was seized by Venezuelan authorities last month.

ROMANS: That -- American businesses working in Venezuela have for a couple of years have been very, very concerned about the turn of events there.

BRIGGS: Yes, huge development.

ROMANS: All right. Bad news for Apple. IPhone sales are not looking so hot. How bad was it? And why won't they buy an iPhone 7? Guess what? Hint: people want to know what the 8 is going to look like.

BRIGGS: I knew.

ROMANS: We'll fill you in. CNN Money Stream next.


[04:54:02] BRIGGS: Breaking news, an intense manhunt under way after two police officers were shot on Chicago's south side. Authorities say the officers were sitting in their cruiser when two cars pulled up alongside them and started shooting. The officers were able to return fire but one was shot in the arm, and hit the other in the back. Both are expected to recover. Authorities say it appears tube targeted attack.

ROMANS: According to media reports, the Justice Department is not expected to pursue civil rights charges against two white police officers in the shooting death of a black man, Alton Sterling in Baton Rouge last summer. "The New York Times" and "The Washington Post" reporting federal authorities have decided to close their investigation into that shooting, a shooting that was captured on tape and set off days of protests.

The officers were placed on administrative leave after the shooting. The Baton Rouge mayor expressing outrage that the decision was leaked without being relayed to the Sterling family first.

BRIGGS: Former South Carolina Police Officer Michael Slager now facing up to 25 years in prison after pleading guilty to using excessive force in the death of Walter Scott.

[04:55:10] Reversing his account in court Tuesday, admitting, the officer, the 2015 shooting was not self-defense. Video showed the unarmed black man running away when Slager shot him five times following a traffic stop.

As part of the plea deal, state murder chargers and two other federal charges were dropped. Walter Scott's mother says she has forgiven Slager, calling his admission of guilt a victory for Walter and justice for the family.

ROMANS: The police officer involved in the fatal shooting of a Texas teenager has been fired. Police telling reporters that body camera footage shows the car that Officer Roy Oliver shot into killing 15- year-old Jordan Edwards, that car was moving away from the officers, not toward them. Police say Oliver violated several departmental policies. As of now, he's not been arrested or charged. He now has ten days to appeal his termination.

So many of the details, Dave, of that shooting are just heartbreaking.


ROMANS: The car moving away from police officers. Police officers were breaking up a party.

BRIGGS: Underage drinking party. An AR-15 was the weapon.

ROMANS: Seems wrong on all levels.

BRIGGS: You just wonder as we approach the summer if what's happening in Dallas and Baton Rouge, Jeff Sessions being the attorney general, do we have the makings of a volatile situation across the country.

ROMANS: All right. Fifty-six minutes past the hour. Time for check on CNN Money Stream.

U.S. futures lower this morning. Most global markets are down, too. Wall Street closed pretty flat yesterday, but it was enough for the NASDAQ to make it another record close. The market being helped by a robust earning season.

Wall Street keeping an eye on the conclusion today of the Fed's two day policy meeting. We're not expecting a rate hike but looking for comments about the recent, you know, slow down in economic growth.

Apple's iPhone sales are down. The tech giant reported earnings after the close. And overall sales rose, but iPhone sales fell 1 percent from last year. Apple CEO Tim Cook blames rumors of an upcoming iPhone 8 for the drop. Sales for the smartphone went into a slump last summer earning Apple's first decline in sales since 2001.

There's plenty of good news though for Apple. The company reported $256 billion in its stockpile. How much money is that? That's more than he entire value of companies like Walmart, Coca-Cola and Disney. Just in cash. Like a bank in its own right. Most of that cash, by the way, sitting overseas.

ROMANS: Airline passengers paid a million dollars more a day in baggage fees last year according to Department of Transportation. Airlines collected $4.2 billion in baggage fees in 2016. This news came out of the heads of several airlines testified before Congress about customer service. Among the complaints, overbooking and those high fees. The airline said those fees keep fares low, but perhaps legroom should be added to the list of grievances as well.

American Airlines is cutting two inches of leg room from its economy class seat. You're watching Oscar Munoz there. He's the CEO of United and he was talking yesterday to Congress about how they screwed up, they screwed up. They had all their employees had to go by the book and not allowed to use common sense, and that's going to change.

BRIGGS: Southwest the one that does not collect --

ROMANS: JetBlue.

BRIGGS: JetBlue.

ROMANS: Yes, I don't know if Southwest does. I have to look into that.

BRIGGS: Not Southwest, but, yes, $4.2 billion in baggage fees, folks. They are doing all right.

EARLY START continues right now.


ROMANS: The former acting attorney general set to contradict the White House on who knew what and when about Michael Flynn's talks with the Russian ambassador.

BRIGGS: And Hillary Clinton and her return to the spotlight said she accepts full responsibility for her election loss, while also pinning it on the Russians and FBI Director James Comey. How did the president respond? ROMANS: And President Trump summons key House members to the White

House to talk health care. Can he finally get this repeal and replace bill through the House? Here we go again.

Good morning again. Welcome to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. It's Wednesday, May 3rd, 5:00 a.m. in the East.

Interesting comments from Hillary Clinton, right, that she would win the election if it were held on October 27th.

ROMANS: That's right.

BRIGGS: Christiane Amanpour will join us shortly. We'll talk about all of this. She's the one who sat alongside Hillary Clinton.

But, first, President Trump and his administration facing major public rebuke from an official fired by Trump himself. Sources tell CNN, former Acting Attorney General Sally Yates is prepared to testify she warned the White House, Michael Flynn was lying about talking to the Russian ambassador. A warning that came three weeks before Flynn was fired as national security adviser.

Yates expected to tell a Senate Judiciary Committee she expressed grave concerns, Flynn could potentially be compromised, refuting the White House account that Yates gave officials a simple head's up.