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EARLY START

White House Defends Firing Rationale; Michael Flynn Subpoenaed; Trump Hosts Russian Officials at White House; Snap's $2.2 Billion Loss. Aired 4:30-5a ET

Aired May 11, 2017 - 04:30   ET

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


(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[04:30:10] REPORTER: Why did you fire Director Comey?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Because he wasn't doing a good job, very simply. He was not doing a good job.

(END VIDEO CLIP)

ALISON KOSIK, CNN ANCHOR: OK, that's what the president says, but we have new insight into what he was really thinking, and it wasn't because of Hillary Clinton's e-mails.

DAVE BRIGGS, CNN ANCHOR: Plus, Michael Flynn told to hand over documents to the Senate. Will he respond to the subpoena, and how will it change this Russia investigation?

Welcome back to EARLY START. I'm Dave Briggs, on a very busy news day on Capitol Hill.

KOSIK: It really is, absolutely. I'm Alison Kosik, good morning. It's 30 minutes past the hour.

And new details this morning painting a startling picture of a scorned President Trump increasingly consumed by a now-former FBI director whose Russia investigation was picking up too much steam for the president's comfort. A source close to Comey telling CNN's Jake tapper James Comey was fired for two reasons.

BRIGGS: First, Comey never gave the president any assurance of personal loyalty. Second, the FBI investigation into possible collusion by team Trump with Russia was accelerating. That may explain the timing here. Sources tell CNN that Comey was fired just a week after asking for more resources to investigate this Russia connection.

The White House for its part denies Comey made that request. Regardless, there's progress reported in that probe. A Senate committee issuing a subpoena to former national security adviser Michael Flynn. More on that in a moment. KOSIK: OK, first, the White House doggedly defending its rationale

for Comey's firing.

Deputy Press Secretary Sarah Huckabee Sanders using blunt language to describe the FBI director's handling of the investigation into Hillary Clinton's e-mails.

(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, DEPUTY WHITE HOUSE PRESS SECRETARY: I think one of the big catalysts that we saw was last week. On Wednesday, Director Comey made a pretty startling revelation that he had essentially taken a stick of dynamite and thrown it into the Department of Justice by going around the chain of command. Having a letter like the one that he received and having that conversation that outlined the basic, just atrocities in circumventing the chain of command in the Department of Justice.

(END VIDEO CLIP)

BRIGGS: Today, the new acting director of the FBI, that's Andrew McCabe, is set to testify to a Senate committee after meeting face-to- face with the president on Wednesday. It's likely he'll face questions about Comey's firing as the White House intensifies its search for a new FBI director.

Our coverage begins now with CNN White House correspondent Athena Jones.

(BEGIN VIDEOTAPE)

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Good morning, Alison and Dave.

The White House's explanation of the Comey firing has been evolving over the last couple of days. Now, we're learning the White House says that the president was considering letting Comey go starting from the day he was elected to the office.

And so, late Wednesday afternoon, the White House put out a timeline trying to clarify how this all went down, starting with the president losing confidence in the director over the last several months, then being angered by the director's testimony last Wednesday on Capitol Hill. And then, the president having a conversation, having a meeting with the attorney general, Jeff Sessions, and the deputy attorney general, Rod Rosenstein, to talk about reasons for removing Director Comey.

Now, that's a little more information than we had before. Before, the White House wasn't really answering the question of whether the president had asked Rosenstein to write up that memo that he wrote in the end. One thing, of course, the White House not eager to address, certainly not in this timeline, is the issue of the attorney general having recused himself, having played a role in the firing of the man in charge of the Russia investigation.

So, there's still a lot more explaining to do -- Alison, Dave.

(END VIDEOTAPE)

KOSIK: OK, Athena, thanks very much.

And James Comey refusing to dwell on his dismissal in a farewell letter to his former colleagues at the FBI. He writes this: I have long believed that a president can fire an FBI director for any reason or for no reason at all. I'm not going to spend time on the decision or the way it was executed. I hope you won't either. It is done and I will be fine, although I will miss you and the mission deeply.

BRIGGS: Sources inside the White House tell CNN, President Trump kept his decision to fire Comey very close to the vest in the 48 hours before dropping this bombshell. He did not seek a wide range of viewpoints and grew increasingly angry with the FBI director after reaching the conclusion Comey was, quote, his own man, and could not be trusted.

A longtime friend who spoke to the president over the weekend described him as white-hot angry and complaining repeatedly about, quote, Russia, Russia, Trump and Russia.

[04:35:02] That friend says the president has regularly expressed frustration that they can't make this all go away, apparently referring to Comey and his staff, among others.

KOSIK: The president also particularly angry with Comey for testifying he was mildly nauseous about the possibility that he himself influenced the presidential election. The president also upset that Comey was not putting enough emphasis on investigating leaks.

Also developing, the White House closely monitoring the performance of Deputy Press Secretary Sarah Huckabee Sanders. She's been filling in this week for Sean Spicer, who is out for Naval Reserve duty, but multiple administration sources say Spicer has been benched and could be replaced.

BRIGGS: There's also new, intense reaction to Comey's firing this morning from both sides of the aisle. Some criticism from Republicans, including Congressman Jason Chaffetz, a Trump supporter, calling on the Justice Department inspector general to review the firing.

Chaffetz says in a statement, quote: Previously, I asked inspector General Horowitz to review the FBI's actions in advance of the 2016 elections. Today, I sent a letter urging IG Horowitz to expand the scope of his review to include the decision to fire Director Comey. I look forward to receiving the IG's findings.

KOSIK: Other top Republicans coming to the president's defense, like House Speaker Paul Ryan, in his first comments since the firing. Listen.

(BEGIN VIDEO CLIP) REP. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: James Comey, who is a worthwhile and dedicated public servant, I think he had basically just lost the confidence of a lot of Republicans and a lot of Democrats based upon his conduct, his actions, and some of the comments that he had made. And most importantly, he lost the confidence of the president. And it is entirely within the president's role and authority to relieve him, and that's what he did.

(END VIDEO CLIP)

KOSIK: And Democratic Senator Richard Blumenthal, who Trump personally targeted on Twitter, suggesting this could become a crisis, along the lines of Watergate.

(BEGIN VIDEO CLIP)

SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: It is a looming constitutional crisis because it involves a potential confrontation, as did Watergate, between the president and other branches of government. It may well produce impeachment proceedings, although we're very far from that possibility.

(END VIDEO CLIP)

KOSIK: Meantime, President Trump still hanging tough on his decision, taking to Twitter last night to post a video of Democrats who have been critical of Comey, tweeting this: The Democrats should be ashamed. This is a disgrace. #draintheswamp.

BRIGGS: While Director Comey's firing was dominating the headlines, former national security adviser Michael Flynn was being subpoenaed by the Senate Intelligence Committee. Lawmakers demanding all documents related to his interactions with Russian officials. The subpoena was issued once Flynn's lawyer informed the senators he would not be voluntarily turning over any of the information they requested in late April.

On Tuesday, CNN learned several of Flynn's associates had been previously subpoenaed.

We get more now from CNN's Manu Raju.

(BEGIN VIDEOTAPE)

MANU RAJU, CNN SENIOR CONGRESSIONAL REPORTER: Good morning, Alison and Dave.

Now, the Senate Intelligence Committee's investigation into the Russia meddling and any of those ties that exist with Trump associates starting to ramp up now that the intelligence committee has subpoenaed Michael Flynn, the former national security adviser, for documents related to anything, any of his ties to Russia. This is because Flynn apparently did not abide by the committee's request for records.

Now, I am told that, really, the committee has only gotten a handful of requests back from those Trump associates, and some of them have not even satisfied what the committee is looking for, including Carter Page, that former Trump adviser, foreign policy adviser, not giving details that the committee wants. So, expect some more subpoenas, potentially, in the coming days.

Now, this comes as later today a major hearing happening in the Senate Intelligence Committee where national security leaders will come and testify about concerns they have worldwide.

One person who will not be there: James Comey. Now, he was scheduled to testify there. Also next week, Comey invited to testify before the Senate Intelligence Committee, but one catch, this is going to happen in a closed-door session and will not be open to the public, so we may not know what questions Comey is presented with and what answers he gives, particularly behind why he was fired by President Trump -- guys.

(END VIDEOTAPE)

KOSIK: All right. Our thanks to Manu Raju for that.

And the big question on Wall Street -- what does Comey's firing mean for the Trump rally? The so-called Trump bump is essentially a bet that the White House will pass pro-business policies, especially tax reform, but the thing is, investors see the current turmoil in Washington as just another distraction.

After a historic run since the election, stocks have barely budged since April 26th, and that's the day the administration released its tax outline. Investors want to know more details. They want a guarantee the White House will work with lawmakers to pass reform.

And the president's commerce secretary is blaming Congress for the holdup.

[04:40:00] He said this speaking to "Reuters". Wilbur Ross says, 3 percent growth won't happen this year because Congress has been slow- walking everything." Ross added that target growth could happen next year, if the administration's policies get passed. But we got an indication with this whole Comey mess that you're seeing Senate Democrats saying, listen, we're going to stall legislation --

BRIGGS: Put the brakes on everything.

KOSIK: We're going to put the brakes on any nominees that need confirmation. So, you are going to see kind of this slowing --

BRIGGS: Of course, they can't stop health care at this point. That looks like they're going to do that with just Republican support.

KOSIK: Yeah, but they're looking to slow things down, unless the president agrees to have a special prosecutor.

BRIGGS: I think Senate's going to slow things down on their own. The Senate Republicans want to take their time with this health care bill, and until it gets through, they can't do tax reform because they need the savings. KOSIK: They need the money, yep.

BRIGGS: So, it looks like a slow slog.

Coming up, President Trump meeting Russian President Putin in just a few months, after a private sit-down between the president and Russia's top diplomat. The foreign minister's bizarre reaction to the firing of James Comey, just ahead.

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(BEGIN VIDEO CLIP)

[04:45:17] REPORTER: Did the Comey firing cast a shadow of your talks --

SERGEY LAVROV, RUSSIAN FOREIGN MIINISTER: Was he fired? You are kidding. You are kidding.

(END VIDEO CLIP)

(LAUGHTER)

BRIGGS: Oh, surreal day at the White House once again.

KOSIK: It was kind of the cherry on top of it all, wasn't it?

BRIGGS: Yes, it was.

KOSIK: Despite all the upheaval in the White House, it is business as usual in the Oval Office for the Russians. The president hosting Russia's foreign minister, Sergey Lavrov, and Ambassador Sergey Kislyak. Remember, it was Michael Flynn's meetings with Kislyak that led to the downfall of the former national security adviser.

BRIGGS: U.S. intelligence officials consider Kislyak a top Russian spy, but that didn't stop a warm welcome from President Trump, unlike the greeting he had for German Chancellor Angela Merkel, a key U.S. ally. How about them for some optics?

The U.S. press pool was not allowed into the White House for the meetings with the Russians. Russian state media was permitted inside, and these photos were taken by them and released by them. And just this morning, Russian state media announced President Trump will meet with Russian President Vladimir Putin in July.

So, let's go live to Moscow and bring in CNN's Diana Magnay.

Diana, good morning to you. What is the reaction to all of this in Moscow?

DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Hi, Dave.

Well, President Putin was asked about it on his way to a hockey match, and he acted as though it was a real surprise that he should be asked. He said this has nothing to do with us, and it's entirely within the president's competency to fire who he wants.

But you could hear the tone that Sergey Lavrov dismissed all of these allegations, batting off the U.S. press corps as though they were irritants, gives you a sense of the scorn that Russia has to a certain extent for the political chaos that they're seeing in the U.S.

But I think there's also a note of concern there. Dmitry Peskov, the Kremlin's spokesman, said that he hoped that this doesn't affect Russian/U.S. relations. And I think that Russia with its foreign policy concerns being Syria and the fight against international terrorism needs a cooperation from the U.S. and needs in that case a reliable partner who it knows how it will respond, and President Trump, certainly as we saw from the U.S. missile strike, is entirely unpredictable on those sorts of issues.

We're now hearing that they will be meeting, presidents Trump and president Putin, on the sidelines of the G-20 summit in July in Germany. They will clearly be discussing Syria, the fight against terrorism. We know that Rex Tillerson and Sergey Lavrov discussed that, that Russia brought up its proposal of de-escalation zones, but there's a lot of details still to be worked out on that matter, and there are major issues that the Americans are concerned with, namely the role of Iran and the role of Assad.

BRIGGS: Diana Magnay, great reporting live from Moscow. Thank you.

KOSIK: Oh, snap! I had to say it that way.

Come on, I'm talking about Snapchat. Its first earnings report not good. And now, it's watching investors disappear. We're going to show you just how bad it is on "CNN Money Stream," next.

(COMMERCIAL BREAK)

[04:52:40] KOSIK: Welcome back.

Betsy DeVos, no doubt, hoping her next commencement speech goes better than her first as secretary of education. DeVos addressing a hostile crowd of graduates at Bethune-Cookman University. That's a historically black school in Florida.

(BEGIN VIDEO CLIP)

BETSY DEVOS, SECRETARY OF EDUCATION: Dr. Jackson, board of trustees, thank you so very, very much for this great honor and privilege.

(BOOS)

I am honored to --

(INAUDIBLE)

(END VIDEO CLIP)

KOSIK: As you can hear there, the graduates booed, they stood up, they turned their backs on her as she spoke, drowning out some of her remarks.

BRIGGS: The rude reception prompting the university president to intervene.

(BEGIN VIDEO CLIP)

EDISON JACKSON, PRESIDENT, BETHUNE-COOKMAN UNIVERSITY: If this behavior continues, your degrees will be mailed to you. Choose which way you want to go.

(END VIDEO CLIP)

BRIGGS: Students had petitioned school officials to choose another commencement speaker. The primary reason for protesting DeVos' appearance is her statement which she later recanted, that founders of historically black colleges and universities were, quote, real pioneers of school choice, which they certainly were not.

After the speech, DeVos tweeted, I have respect for all those who attended Bethune-Cookman, including those who demonstrated their disagreement with me today.

So, take the high road, huh? Hopefully.

KOSIK: The Department of Homeland Security appears close to announcing an expanded ban on laptops and other large electronics, which could include all flights from Europe to the U.S. Officials are meeting today with representatives of the airline industry to discuss security issues. The initial ban on laptops and tablet devices applied only to U.S.-bound flights from ten airports in the Mideast and North Africa. It was based on fears that terrorists have found a way to convert laptops into bombs capable of bringing down a commercial airliner.

BRIGGS: The ACLU protesting the arrest of a reporter in West Virginia who shouted questions at Health Secretary Tom Price, calling it a direct assault on the First Amendment.

[04:55:01] "Public News Service" reporter Dan Heyman tried to get a comment from Price on the effort to replace Obamacare. After persistent questioning and reaching over Secret Service agents with his recorder, he was charged with willful disruption of government processes.

Heyman spent eight hours behind bars before being released on bond. He could face up to six months in jail, if found guilty of the misdemeanor. Heyman says he was just doing his job. Secretary Price commended the police for doing what they felt was appropriate.

KOSIK: Hmm.

BRIGGS: Likely have not heard the last of that story.

KOSIK: I think you're right.

All right, a risk of severe storms today in the central U.S. Let's get the latest from meteorologist Derek Van Dam.

Good morning.

(BEGIN VIDEOTAPE)

DEREK VAN DAM, AMS METEOROLOGIST: Good morning, Alison and Dave.

Wednesday was yet another busy day for severe weather across the central parts of the U.S. Nine confirmed tornado reports from Oklahoma to Texas, parts of Illinois and Iowa. Look at the hail and wind reports as well.

Now, that chance of severe weather slowly shifting to the east. Here's our threat today. Anywhere from Dallas to Little Rock, Louisville, and into parts of the mid-Atlantic, large hail, damaging winds the primary concern, but we can't rule out the potential for an isolated tornado. Look at the showers and storms erupting across this region, again, the Ohio River Valley into the Plains.

But as we head through the course of the weekend, we really start to see the rain shift to the New England coast, 2 to 4 inches, perhaps locally higher amounts from the nation's capital through the Big Apple. And look how this impacts our temperatures as well. Lower 50s as we head into Saturday, starting to rebound as we reach Mother's Day by the end of the weekend, but it's not only the Big Apple that cools down. We're staying well below average for Washington and we cool down even into Atlanta.

Back to you.

BRIGGS: Derek, no, no cool-down. We're ready for a real spring.

KOSIK: Absolutely.

BRIGGS: All right, well, it appears Dwayne "The Rock" Johnson has something cooking for 20. The wrestler-turned-actor tells "GQ" magazine he's been asked quite a bit over the last year about a run for the White House. His response, quote, I think that's a real possibility.

KOSIK: Whoa!

BRIGGS: That's right, folks. It comes after the "Washington Post" wrote an op-ed last year calling the world's highest paid movie star a viable candidate. How would the action hero do in the rough and tumble of a presidential campaign? Well, one producer calls his smile a weapon.

KOSIK: I would agree.

BRIGGS: An uncanny ability to make audiences feel safe. You got to love The Rock.

KOSIK: I agree with the smile.

BRIGGS: Well, he was in a movie called "Central Intelligence," so that totally qualifies this day in age, right?

KOSIK: It does?

BRIGGS: Today?

KOSIK: Oh!

BRIGGS: All bets are off. I think that will do it. The rock, this guy can do anything, I do believe. His success in several different realms, don't count him out.

KOSIK: All right, let's get a check on "CNN Money Stream" this morning. U.S. futures down this morning, global markets mostly lower after Wall Street finished mixed. The S&P and NASDAQ closing at records, the fourth in a row, while the Dow clipping lower as investors digesting the firing of FBI Director James Comey.

So, investors want the White House to focus on passing policy, not politics. Good luck with that. And the market is essentially waiting to make a move until that happens.

On deck today, more earnings as Wall Street gets close to the end of a strong earnings season, in fact, the best since 2007.

Oh, Snap! Snapchat's parent company --

BRIGGS: There you go.

KOSIK: -- losing $2.2 billion last quarter. That's a lot of money. Investors are not happy.

In its first report as a public company, Snap announcing that staggering loss and weak user growth, its worst in two years, although my daughter is always on it, so I don't get it.

BRIGGS: Mine, too. Always, all day.

KOSIK: We saw shares yesterday plummet as much as 25 percent overnight, erasing all stock gains since it went public in March. Ugh!

Tesla, it's got a new product. It's not an electric car. The company is now accepting deposits for solar panels. Founder Elon Musk's latest plan for clean energy is in your home. So, unlike most solar panels, Tesla's looks no different from normal roof tiling, and Musk says it will be cheaper than traditional roofing, eventually because get this, sticker shock here, some roofs will cost you more than $75,000.

Now, you get tax credits here and there. You've got to put out a lot of money up front.

BRIGGS: Hopefully, save on the back end.

Tesla and Amazon continuing to take over the world.

KOSIK: Yes, the world.

BRIGGS: World domination in sights.

All right. EARLY START continues right now.

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(BEGIN VIDEO CLIP)

REPORTER: Why did you fire Director Comey?

TRUMP: Because he wasn't doing a good job, very simply. He was not doing a good job.

(END VIDEO CLIP)

KOSIK: The reasoning, hmm, sounds simple enough. But we've got new details this morning about the president's rationale for firing James Comey and it has nothing to do with Hillary Clinton.

BRIGGS: Plus, Michael Flynn subpoenaed by Congress. We'll he finally hand over documents to his lawyers who declined to provide?