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EARLY START

Russia Probe's Next Steps; Future of Travel Ban; South Korean Presidential Election; Grudge Match: Bouchard Versus Sharapova. Aired 5-5:30a ET

Aired May 9, 2017 - 05:00   ET

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


CHRISTINE ROMANS, CNN ANCHOR: And Bumble Bee Foods pleading guilty for price-fixing tuna. The company will pay $25 million for its role in a conspiracy to raise and maintain prices between 2011 and 2013.

[05:00:05] That's according to the Department of Justice.

The company said in a statement, it takes the matter very seriously and has fully cooperated during the investigation. Tuna price-fixing.

DAVE BRIGGS, CNN ANCHOR: Got it.

All right. EARLY START continues right now.

(MUSIC)

BRIGGS: President Trump lashing out after two former officials give crucial details about the investigation into Russian meddling in the 2016 election.

ROMANS: And the president's travel ban once again in the hands of an appeals court with tough questions about some statements about Muslims. Will the ban survive this latest legal scrutiny?

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

BRIGGS: I'm Dave Briggs. It is Tuesday, May 9th. It's 5:00 a.m. in the East.

In a bit, we'll discuss a new term from Republicans on the health care bill. Is it Obamacare 2.0? That's an interesting way to describe it. How will it work in the Senate?

Fierce pushback, meanwhile, though, by the president to forceful testimony from former acting Attorney General Sally Yates. Testifying to a Senate committee, Yates made it clear the Justice Department was seriously concerned about then-national security adviser Michael Flynn. Yates said she told the White House that Flynn's talks with the Russian ambassador and his lies to the vice president about those talks made Flynn vulnerable to blackmail.

ROMANS: Yates said she gave those warnings in meetings with the president's lawyer expecting some action, but nothing happened.

(BEGIN VIDEO CLIP)

SALLY YATES, FORMER ACTING ATTORNEY GENERAL: We felt like it was critical that we get this information to the White House, because -- in part because the vice president was unknowingly making false statements to the public, and because we believed that General Flynn was compromised with respect to the Russians.

(END VIDEO CLIP)

ROMANS: The Senate hearing came moments after we learned that last November, President Obama personally warned President-elect Trump against hiring Flynn as his national security adviser. With Yates now on the record and persistent leaks about Flynn, it makes sense to wonder what might emerge next.

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

(BEGIN VIDEOTAPE)

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Christine and Dave, it was a hearing full of headlines, really. The former acting attorney general, Sally Yates, sharply contradicting the White House version of events regarding fired national security adviser Michael Flynn. In fact, Yates said before the hearing that she made clear that the president's closest national security adviser was in danger of being blackmailed by Russia.

YATES: The underlying conduct that General Flynn had engaged in was problematic in and of itself. The Russians also knew about what General Flynn had done, and the Russians also knew that General Flynn had misled the vice president and others. That created a compromise situation, a situation where the national security adviser essentially could be blackmailed by the Russians.

SCIUTTO: Now, the hearing was intended to focus on Russian interference in the U.S. election. On the key question of whether Trump advisers colluded with Russia in that interference, the former Director of National Intelligence James Clapper said that he had not seen evidence. Yates, however, was less definitive. CNN's own reporting is that the FBI continues to investigate both communications between Trump advisers and Russian officials as well as possible collusion.

Clapper confirmed that Russia collected on Democratic and GOP targets but only leaked on the Democrats. He and Yates both expect Russia to continue to attack U.S. elections and both parties in U.S. elections going forward -- Christine and Dave.

(END VIDEOTAPE)

BRIGGS: Thank you, Jim.

President Trump's travel ban now hanging in the balance after a critical federal appeals court hearing. Both sides under intense questioning from judges in the fourth circuit. Administration lawyers were repeatedly pressed on statements the president made during the campaign about a Muslim ban.

CNN's Laura Jarrett was at the hearing. She joins us this morning from Washington.

Good morning, Laura.

All right. What did we hear yesterday in the hearing?

LAURA JARRETT, CNN JUSTICE REPORTER: Well, good morning, Dave. Well, those judges pressed for nearly two hours, but the arguments in the case really highlight a tension between the courts trying to defer to the president's national security judgment on the one hand and safeguarding constitutional rights on the other. The judges challenged the plaintiff's lawyer specifically to explain how exactly the president is ever supposed to ever protect the country if his campaign statements about Muslims are forever going to taint his policy goals, Dave.

BRIGGS: So, did the judges seem persuaded by that government argument that campaign statements should not matter?

JARRETT: The majority of them didn't seem to buy this. The position, just so we have it, is that the statements from the campaign are different than once he's president. He's taken an oath of office to protect the Constitution. Most of the judges on the court were skeptical at best about this because the claim seems to fly in the face of common sense.

One judge saying, look, this is the single most important issue in the case. Another remarking it would almost be willful blindness to ignore Trump's statements, Dave.

BRIGGS: Boy, you wonder if this could change the way people campaign for president in the future aware that their statements could impact their orders, their legislation.

Laura Jarrett, fascinating case. Thank you.

ROMANS: All right. Joining us this morning, a new face for EARLY START, Sarah Westwood, White House correspondent for "The Washington Examiner".

Good morning. Welcome to the program. Early birds -- we are all early birds here.

And I want to pivot back to the main event yesterday. The James Clapper/Sally Yates hearing on the hill, I want to listen to a little sound from Sally Yates that we think kind of crystallizes her putting her voice behind what we've been hearing so long about Michael Flynn. Listen.

(BEGIN VIDEO CLIP) YATES: I had two in-person meetings and one phone call with the White House counsel about Mr. Flynn. We told them that we were giving them all of this information so that they could take action -- the action that they deemed appropriate. I remember that Mr. McGahn asked me whether or not General Flynn, and I told him that that really wasn't our call, that was up to them, but that we were giving them this information so that they could take action.

(END VIDEO CLIP)

ROMANS: Morning after, Sarah, where does this leave the controversy over Michael Flynn and Russia's involvement in American election?

SARAH WESTWOOD, WHITE HOUSE CORRESPONDENT, WASHINGTON EXAMINER: Well, we didn't learn anything particularly new from Sally Yates' testimony. We did put some meat on the bones of earlier reports that she had contacted Don McGahn, the White House counsel, to inform them of Flynn's underlying conduct, which is that he did, in fact, discussed sanctions with the Russian ambassador prior to telling the vice president and other senior administration officials that he did know such thing.

Now, it remains to be seen how that information ended up in the public domain and why the White House waited 18 days between learning that Flynn had misled administration officials and dismissing him? Those are the two key questions that were not answered by Yates' testimony.

BRIGGS: Right. So, you've got the Republicans concerned about leaks. You've got the Democrats concerned about collusion. Let's throw all those out. In the middle, shouldn't both parties be concerned about the judgment of a president who repeatedly just put the ear muffs on, did not listen to Sally Yates, did not listen to his predecessor?

WESTWOOD: Well, we just don't know what went on behind the scenes during those 18 days. We don't know how that information was relayed by Don McGahn to the president. We don't know exactly what evidence Sally Yates presented to the White House.

Another key part of her testimony was that she said she had arranged for White House counsel to view the underlying evidence that the Department of Justice had compiled against Flynn, and those preparations were underway at the time she was fired from the Justice Department. So, she was not aware, at the least the White House ever even viewed the evidence that had been compiled against Flynn. So, there are a lot of questions about what took place in those 18 days, how that information ended up leaking.

But you're right, both parties are focusing on separate issues that are sort of on the fringes and in the middle. There's the fundamental issue of how the Russians were able to hack the Democrats and that's not getting as much attention.

ROMANS: And, no, you're absolutely right. But you know what? The president, though, coming out stronger last night in a series of tweets and he says, you know, the whole Trump Russia collusion story is a big hoax, and the fake news media, and, you know, you can -- you know, all the usual suspects there for the president.

But the White House continues to hit back and Sean Spicer did yesterday too saying like, look, you know, the Obama administration gave this guy the highest level of clearance, you know? Not our fault, not our fault, sort of. But it just looks like every new development paints Michael Flynn as a toxic hire and the White House, you know, seemingly kind of bumbling along about him.

WESTWOOD: Well, certainly, that has been their line, right, that the Obama administration initially approved his security clearance and they renewed in April 2016. But at the end of the day, it was the transition team's responsibility to vet Michael Flynn for the very high level position which he was given, of national security adviser. And by all accounts, it's clear that didn't happen, or at least it didn't happen to the extent that it should have.

This was a new team. It didn't have experience in government. But the way that they've handled this situation has been subpart, they haven't had an explanation for why that vetting didn't take place and why it took so long to ask for Flynn's resignation.

BRIGGS: All right. That story continues, as does the health care battle, where the bills basically in a holding pattern, as the Senate waits for a CBO score before they take up their work. But now, the House headed home to hear from town halls, and some heated interviews like this one from Iowa Congressman Rod Blum, trying to defend this house health care bill. Listen.

(BEGIN VIDEO CLIP)

REP. ROD BLUM (R), IOWA: I don't represent all Iowans. I represent the first district of Iowa. That be like saying, shouldn't I be able to, even though I live in Dubuque, vote in Iowa City?

REPORTER: Would you still take donations from a Republican in Iowa City?

[05:10:00] BLUM: I'm done. This is ridiculous.

REPORTER: We --

BLUM: You're going to just sit here and just badger me.

(END VIDEO CLIP)

BRIGGS: So, Sarah, at the heart of this, Rod Blum prescreened the audience, which some say is exactly what these town halls should be, his own constituents. But he also called the bill Obamacare 2.0. He was screamed down in this town hall, how do you expect Republicans to defend the bill they passed through the House?

WESTWOOD: Well, it's interesting. Obamacare 2.0 was initially used as a criticism by conservatives who said that the bill didn't do enough to dismantle the regulatory framework of Obamacare. It was a knock on the bill, Obamacare light, Obamacare 2.0. Now, it's being used as a defense by some conservatives, saying they

didn't actually change that much in the health care legislation, that actually what they did was just tweaked on the margins of Obamacare. But really, they left much of the law intact. So, it's interesting how that particular phrase has transformed.

BRIGGS: Yes.

ROMANS: Right.

WESTWOOD: And because the deal that was negotiated with Republicans ended up leaving a lot of people not getting what they wanted in the bill, there are a lot of Republicans who are struggling to defend it.

ROMANS: I think it really shows the tension for these congress members in their town halls. You know, some of them are doing quick pop-up town halls, so that they're not really advertised, so you can get a better sense, a real feel of what people think right there. Others are really worried about bussing, you know, protesters in and --

BRIGGS: But at least Blum is having town halls and listening to that controversy. So credit him.

ROMANS: Interesting. You know, I think he's a former coach. I think he's actually coached in that very gym.

BRIGGS: Basketball coach in that gym, that's right.

ROMANS: In that very gym in Dubuque, Iowa. So, there you go.

All right. Sarah, thanks. Come back in about half an hour. We'll talk more about all these headlines.

BRIGGS: OK. Coming up, South Korea heads to the polls in an election that could change how the world deals with North Korea. We're live from Seoul, next.

(COMMERCIAL BREAK)

[05:16:01] BRIGGS: South Koreans going to the polls to elect a new leader after a corruption scandal led to the impeachment of the former president back in March. The vote coming at a time when tensions with North Korea are high. The two leading candidates have vastly different approaches to dealing with Pyongyang.

CNN's Paula Hancock is following developments live from Seoul.

And, Paula, for the United States -- this is about the THAAD missile system and talks with North Korea. But is that the case for people in Seoul, or is it altogether different issues?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, Dave, it is one of the issues. That's certainly concerned with North Korea. But the fact is, South Korea has been technically at war with its northern neighbor for decades now, so it is a constant but distant threat. So, a recent poll says it's number three when it comes to the concerns

of voters here in South Korea. The number one concern at this point is corruption. Remember, the previous president was impeached because of corruption. She was in prison, she's currently on trial on charges, and people here want to make sure that their next president is clean. So that is the number one issue they're looking at. On top of that, they're also looking at economy and jobs, the usual things you would expect voters to be looking at.

But, of course, North Korea cannot be ignored. The frontrunner at this point, liberal Moon Jae-in, he is pro-engagement, he is pro- dialogue with North Korea which could potentially put him at loggerheads with the U.S. Trump administration, although recently when Trump suggested he would be honored to meet North Korean leader Kim Jong-un in a Bloomberg interview, certainly the Moon camp was delighted with that, telling that they believe that there was at least common ground between the two sides.

Also, North Korea couldn't help but get involved in the South Korean election today. The state-run newspaper, "Rodong Sinmun", saying that they believe that South Korean electorate should be able to wait for conservatives, saying if you want new politics, new life, new society, don't vote conservative. Clearly, North Korea insinuating that they would be happy with the liberal Moon Jae-in as he is pro-engagement with them -- Dave.

BRIGGS: Paula Hancocks, live for us in Seoul -- thank you.

ROMANS: All right. President Trump won his election by promising to shut down borders, but his son-in-law's family is touting a visa program critics say simply allows wealthy foreigners to, in effect, buy U.S. green card. Many are criticizing Kushner companies for this -- name-dropping Jared at an event to drum up Chinese investment.

The so-called Golden Ticket Visa Program isn't new to controversy. I want to tell you how it works. It's called the EB-5 program. It allows people to apply for green cards if they invest in the U.S. at least $5,000, and the project must create ten jobs.

It attracts tens of thousands of applicants, particularly from China. In fact, Chinese citizens have snapped up 80 percent of these visas since 2011. That translates into billions of dollars for developers like Kushner companies. It's also why both sides of the aisle want reform. Critics say it's mainly used for high-end luxury projects, instead of bringing jobs to rural areas, or distressed urban areas, the original intention. Reformers want strict rules for the areas targeted.

The Department of Homeland Security says it is currently reviewing the rules, but will President Trump's vow to tighten work visa includes EB-5, considered an investor visa? A White House spokesman says the administration is reviewing the program to ensure that investment is being spread to all areas of the country.

BRIGGS: So, now, a lot of attention on whether the Trump administration continues that program or slows it somewhat in the months ahead.

ROMANS: All right. Nineteen minutes to -- after the hour. A grueling grudge match between five-time grand slam champion Maria Sharapova and the world's 60th ranked player. Maria Sharapova banned for life for doping.

Coy Wire with the details with the "Bleacher Report", next.

(COMMERCIAL BREAK)

[05:24:00] BRIGGS: All right. We're talking tennis in a moment, but first, Steph Curry and the Golden State Warriors looking invincible right now in the playoffs, sweeping the Jazz, four minutes away from another LeBron rematch.

ROMANS: Ooh, Coy Wire has more in this morning's "Bleacher Report".

Hey, Coy.

COY WIRE, CNN SPORTS CORRESPONDENT: Good morning, Christine and Dave.

The Warriors and Cavs looked destine to meet in the finals. Both teams have a combined for a perfect 16-0 in the playoffs. Golden State and Cleveland have been well-oiled machines, to the point that some fans and commentators have complained that the playoffs are boring, that the Warriors and Cavs are winning too easily.

And after last night's 121-95 over the Jazz, Draymond Green with Kevin Durant beside him was asked if he thinks his team has been boring.

(BEGIN VIDEO CLIP)

REPORTER: Basketball playoffs are boring, and these two dominant teams on a collision course. What do you think about that?

DRAYMOND GREEN, GOLDEN STATE WARRIORS: Blah, blah, blah, blah, blah, blah, blah, blah.

(END VIDEO CLIP)

WIRE: Nothing boring about the Penguins-Capitals playoff series. Scary moment in game six when Sydney Crosby violent headed into the boards, clearly showing signs he's not completely OK.

[05:25:01] This is just one week after a concussion forced him to this game 4. His competitive nature not letting him leave the game, but many unable to understand how league spotters and the club didn't force him to be removed immediately to be evaluated for concussion. Capitals win this one 5-2, tying up the series. Game 7 is tomorrow night.

The Madrid Open, Maria Sharapova on her so-called comeback tour after serving a 15-month doping suspension versus Canadian Genie Bouchard. Thrilling play on the clay made more riveting by the backstory. Bouchard has called Sharapova a cheater, saying she should be banned from tennis forever. Well, Bouchard beats the former world number one for the first time in

her career, staring her down. As they shake hands after the match, Bouchard said she's had tons of support for speaking out the way she did.

(BEGIN VIDEO CLIP)

EUGENIE BOUCHARD, #60 WORLD RANKED TENNIS PLAYER: I was actually quite inspired before the match because a lot of players coming up to me privately, wishing me good luck, players I don't normally speak to, and getting a lot of texts from people in the tennis world that were just rooting for me, which showed me that most people have my opinion and they were just maybe scared to speak out but privately, you know, I've gotten a lot of support.

(END VIDEO CLIP)

WIRE: After the match, guys, Bouchard was asked if she still thinks Sharapova should be banned for life. She said, my opinion has not changed.

BRIGGS: Strong. Hey, regardless of where you stand, it's good to have outspoken athletes. Both of those are good for tennis.

ROMANS: All right.

BRIGGS: Thank you, Coy.

ROMANS: Thanks, Coy.

WIRE: You're welcome.

ROMANS: Speaking about spoken, President Trump dismissing Capitol Hill hearings as a total hoax after former officials revealed new details about the investigation into Russian hacking. What the White House knew about Michael Flynn, next.

(COMMERCIAL BREAK)

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