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EARLY START

Sources: Trump Revealed Classified Intel To Russians; White House Pushes Back On Intel Story; Russia Ridicules Report Of Trump Sharing Info; US: Syria Building Huge Crematorium; Trump Hosting Erdogan At The White House. Aired 5:30-6a ET

Aired May 16, 2017 - 05:30   ET

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


[05:30:00] (BEGIN VIDEO CLIP)

H.R. MCMASTER, NATIONAL SECURITY ADVISER: The story that came out tonight, as reported, is false. I was in the room, it didn't happen.

(END VIDEO CLIP)

DAVE BRIGGS, CNN ANCHOR: That's what the White House says but sources tell CNN and others the president shared classified information with the Russians in the Oval. How did it happen? What's the danger here for the U.S. and allies around the world?

Welcome back to EARLY START, everybody. I'm Dave Briggs.

CHRISTINE ROMANS, CNN ANCHOR: And I'm Christine Romans. What a morning. Thirty minutes past the hour. Just when it seemed the optics of the president's relationship with Russia couldn't get worse, the White House pushing back fiercely against these reports that the president shared classified -- highly classified information with Russia's foreign minister and ambassador to the U.S. in a White House meeting last week in the Oval Office.

CNN has now confirmed the key points of the story first reported by "The Washington Post" -- a story that is on the front page of major American newspapers this morning. One official acknowledged telling the "Post" Trump said, "I get great intel. I have people brief me on great intel every day." And then he relayed the intelligence details to the Russians.

BRIGGS: Now, the president did not directly reveal the source of the information but intelligence officials tell CNN the concern is Russia will be able to figure out the highly sensitive source -- highly sensitive, in part, because the information came from a foreign ally. The White House, once again, spinning into damage control. Here is CNN's Sara Murray at the White House.

(BEGIN VIDEOTAPE)

SARA MURRAY, WHITE HOUSE CORRESPONDENT: Good morning, Dave and Christine. Another day at the White House and another damaging headline. One Monday evening, administration officials were sent scrambling, insisting the president did not jeopardize classified information and share it with Russian officials. MCMASTER: There's nothing that the president takes more seriously than the security of the American people. The story that came out tonight, as reported, is false. The president and the foreign minister reviewed a range of common threats to our two countries, including threats to civil aviation. At no time -- at no time were intelligence sources or methods discussed, and the president did not disclose any military operations that were not already publicly known. I was in the room, it didn't happen.

MURRAY: Those comments from President Trump's National Security Adviser H.R. McMaster coming after "The Washington Post" broke the story that President Trump shared classified information with Russia's foreign minister and ambassador in a meeting at the White House last week. Now, CNN has confirmed the main details of this story. One thing is clear. Despite the White House' denial, this has certainly sent the White House off of its message. They were hoping to reset this week after the president's controversial firing of FBI director James Comey and, instead, focus on their new FBI director, focus on the upcoming foreign trip. But if Monday is any indication it's clear that's not going to come easy. Back to you guys.

(END VIDEOTAPE)

ROMANS: It's been a long night for Sara Murray at the White House. Thanks, Sara. H.R. McMaster will be at the podium at today's White House briefing. You just heard him refer to the story "as reported." The national security adviser essentially saying that if there is so much as a single detail in the "Post" report that's wrong he can dismiss the whole thing. But one of the story's authors, the national security correspondent Greg Miller, he tells CNN that the White House claim that the president didn't reveal sources and methods pushes back against something the "Post" never reported.

(BEGIN VIDEO CLIP)

GREG MILLER, NATIONAL SECURITY CORRESPONDENT, THE WASHINGTON POST: I think that the White House is playing word games here to that effect to try to -- to try to blunt the impact of this story nor do any of these White House officials who are denouncing this story, nor have any of them offered any explanation why if this was all so above-board and not problematic in any way why did the National Security Council, coming out of this meeting, feel it was necessary to contact the CIA director and the director of the National Security Agency to give them a heads up on what Trump had just told the Russians?

(END VIDEO CLIP)

BRIGGS: The report has since been confirmed by "The New York Times," "The Wall Street Journal," "Reuters" and "BuzzFeed." But in the hours after the "Post" report the White House response was mostly confused. Before McMaster even spoke, the administration issued several statements mostly focused on those sources and methods. One statement from Secretary of State Rex Tillerson caught the State Department completely by surprise. It issued its own similar statement 20 minutes later, after seeing Tillerson's on CNN. ROMANS: All right. Joining us this morning as we break down this story, "Weekly Standard" senior writer Michael Warren, again live from our Washington bureau. So nice to see you. So, top of the fold of every major American newspaper this morning, Trump exposes ally's secrets to the Russians again and again and again. The White House response -- and we'll be hearing from H.R. McMaster, we're told, again later today at the podium at the White House press briefing. The White House response was nope, this didn't happen. All of these things can be true. It's hanging here on this -- the sources and methods characterization, isn't it?

MICHAEL WARREN, SENIOR WRITER, THE WEEKLY STANDARD: Yes, that's absolutely right. If the president did share information, share intelligence, that's a completely different thing from sources and methods. And again, it's sort of an important piece of the puzzle for any other foreign actors like, say, Russia, who are operating in the region -- in the Middle East region to sort of put everything together. And this is problematic because this information that allegedly the president revealed, came from an intelligence sharing --

[05:35:20] ROMANS: Right.

WARREN: -- with a foreign government. And again, this is a -- this is a red line. This is something that many intelligence officials say really just isn't done. There's an example nearly 10 years ago where the George W. Bush administration had actionable intelligence, they believed, from a foreign government regarding a chemical weapons plant in Syria that Bashar al Assad had that ultimately the government decided not to act on because they could not justify based on information they did not have permission to use from this foreign government. So this is something that intelligence officials take seriously and they're looking at what the president's alleged to have done and saying what -- this is not with -- you know, in line with protocol.

BRIGGS: Now, important to point out it is not illegal. The President of the United States can declassify anything he wants, but interesting that the United States and Russia, you could argue, have different objectives in the war in Syria.

ROMANS: Absolutely.

BRIGGS: But if it's not illegal, how serious is it? Here are some quotes in "The Washington Post" to Jennifer Rubin.Thomas Wright, of the Brookings Institution -- that is a highly respected non-partisan think tank says, "This is quite literally the sum of all fears," ending with, "We are blind and dancing on the precipice." Former State Department official Eliot Cohen, Republican, says, "For anyone else, if accidental it would be a firing offense. If deliberate, though, it would be treason." Again, this is not illegal but how serious a charge is this?

WARREN: Well, it -- if the reasons that he revealed it were inadvertent, that he was boasting about this as some of the reports suggest, then it is pretty serious because then there would seem to be no national security interest for the United States to reveal this information.

ROMANS: Right.

WARREN: Look, I think it's important to realize that there is a lot of intelligence sharing between the United States and Russia. I think a lot of people would be surprised about that, particularly in this part of the world where both of our countries are fighting to contain ISIS in Syria and Northern Iraq. So it's not as if this is sort of unheard of for intelligence to be shared, but I think it's the nature in which the intelligence was shared, again, without the permission from the foreign government.

And then it's sort of -- the sort of cavalier way in which the president is said to have offered it suggests that it wasn't planned out. And we've seen now with the CIA scrambling afterward that this was not something that really anybody was prepared for and it does make you question whether or not the president really understands the gravity of sharing information --

ROMANS: Right.

WARREN: -- that he receives in his intelligence briefings.

ROMANS: You know, I want to real quick bring you up to speed with something that's happening while we're talking right now. The Foreign Ministry -- Russia's Foreign Ministry spokesman has weighed in. Maria Zakharova is ridiculing these reports, Michael, saying in part, "Have you read American newspapers again? Do not read them. They can be used in different ways but you do not need to read them. Lately, it's not only harmful but also dangerous." She did not specifically deny the substance of these reports but we should say this whole fake news mantra which, you know, is a moniker that the Russians in part of their disinformation campaign --

BRIGGS: Yes.

ROMANS: -- against American democratic institutions loves to point about fake news. But talk to me a little bit about how important this is or how as a damaging headline how this goes beyond what we have seen so far in this young administration.

WARREN: Well, I think we should exercise a little caution here as well and suggest that perhaps all of the reporting that CNN and "The Washington Post" and "New York Times" has gotten something wrong. It is a fact that the Intelligence Community in the United States has -- some may have a bone to pick with the president -- the way the president has spoken about the Intelligence Community. Perhaps that's the case. But I don't think that the reporting is -- there are any holes in what the reporting has said so far. And I think that what that reflects here is that there is this sort of big disconnect, I think, between the president and the Intelligence Community --

ROMANS: Oh, yes.

WARREN: -- about the importance of keeping this information close to the vest, particularly with an adversary. And Russia really is, in many ways, an adversary --

BRIGGS: Right.

WARREN: -- with the United States.

BRIGGS: So, as we wait to hear from H.R. McMaster at 1:30, here's a tweet from Paul Ryan back in 2016. "It's simple. Individuals who are extremely careless with classified info should be denied further access to it." That's a problem, certainly, for the speaker. How about Bob Corker, the chairman of the Foreign Relations Committee, saying in part, "This White House is in a downward spiral." Will others follow what Bob Corker is echoing today?

[05:40:05] WARREN: I have to imagine so, particularly as we learn more from the White House. If the White House continues to dissemble the way they have been with this whole sources and methods argument I think you're going to see a lot of Republicans, particularly in the Senate where senators feel a little more independence you're going to hearing some of this.

Look, the criticism of Hillary Clinton during the campaign, I think was sound. The problem is, is that what President Trump is purported to have done is even worse than passing classified information --

ROMANS: Right.

WARREN: -- through a server that could be hacked. So this is a -- you know, turnabout is fair play in politics but I think Republicans, to sort of save face here and really to get to the bottom and the truth of this, are going to need to exercise some of their independence in Congress and investigate what exactly was revealed.

ROMANS: You know, we look at these tweets. You know, we showed you the Paul Ryan tweet. Reince Priebus has one like that. Donald Trump, himself, on the campaign trail when tweeting over and over and over again, talked about how Hillary Clinton's behavior was so careless with classified information, and yet we have this situation here. Are we in a case, though, where what happened on the campaign trail stays on the campaign trail and we've just started -- we've started anew in this presidency?

WARREN: Yes, look -- I mean --

ROMANS: We could hold them to their statements from last year?

WARREN: I mean, I don't see what the real point of that is. I mean, again, this is sort of -- the game has changed now.

ROMANS: Right.

WARREN: Donald Trump is president.

ROMANS: Right.

WARREN: And again, as I said, what he's alleged to have done is much more serious, if it's true, than what we know about Hillary Clinton. That doesn't take away from what Sec. Clinton did but we're in a new administration and Donald Trump is the president, not Hillary Clinton.

BRIGGS: All right. Michael Warren of "The Weekly Standard," we appreciate your insights this morning. We will stay on this story and check back with you later in the week -- appreciate it.

WARREN: Thanks a lot.

ROMANS: Yes. If you want to hear more about this there's a Dave Brooks piece -- opinion piece in the "Times" which is just exploding this morning.

BRIGGS: In which he likened the president to a 7-year-old child.

ROMANS: Yes, or six fireflies bumping around in a jar for his brain activity. All right, a quick programming note here. Two must-see events tonight on CNN. First, an exclusive -- a CNN exclusive. The former acting attorney general Sally Yates, fired by President Trump for refusing to enforce the travel ban, now she speaks out on that. Her testimony about Michael Flynn and more. She speaks to Anderson tonight at 8:00 Eastern only here on CNN.

BRIGGS: And then, CNN's debate night returning. Ohio Gov. John Kasich, Vermont Sen. Bernie Sanders both found a voice but fell short in the 2016 race. Now they face off on health care, the economy, and other issues facing the country. A live CNN debate tonight at 9:00 Eastern time following the Sally Yates exclusive, both right here on CNN.

ROMANS: All right. A key meeting for the president today. Turkey's president heads to the White House with growing differences on big challenges in the region -- we're live.

(COMMERCIAL BREAK)

[05:46:55] ROMANS: All right. Finally, the news Wall Street has been waiting for. The president's top officials meeting with moderate Republicans to talk tax reform. According to sources familiar with the matter, national economic director Gary Cohn and the Treasury Secretary Steven Mnuchin plan to meet with moderate GOP members Wednesday. That's ahead of the first major hearing on tax reform. The group will be crucial in passing any tax package and that is what investors want to hear.

Tax reform is the Holy Grail. It is the gift that Wall Street wants. Companies stand to make lots of money on corporate tax cuts so Wall Street wants details, and soon. Experts want details on how the government will pay for it. So far, the White House insists these tax cuts will pay for themselves through growth. However, the tax policy center estimates the proposal, so far that we see here, could reduce revenue by $4 trillion in the first decade.

Speaking of taxes, we probably won't be seeing the president's tax returns anytime soon but White House officials say his personal financial disclosure will be filed in a short period of time, so we'll bring that to you when we get it. BRIGGS: All right. The U.S. says the Syrian regime has built a huge crematorium near a notorious military prison as part of an effort to cover up what the U.S. officials call mass atrocities happening there. The State Department revealing newly-declassified intelligence photos showing the crematorium, saying the Assad government may be killing as many as 50 detainees a day at the prison. Amnesty International says the regime has killed thousands at the prison as part of its crackdown on dissent. The U.S. says the burden is now on Russia to rein in the Assad regime.

ROMANS: A lot on the table when Turkey's controversial leader meets with President Trump at the White House today. President Recep Erdogan is critical to nearly everything the U.S. hopes to accomplish in the Middle East, but the meeting comes a week after Erdogan was angered by the U.S. decision to arm Kurdish fighters in Syria. CNN's Muhammad Lila has a preview for us this morning -- good morning.

MUHAMMAD LILA, CNN INTERNATIONAL CORRESPONDENT: Well, good morning, Christine, and you know, quite frankly, this is a much more important meeting for Turkey's president than it is for President Trump. Look, a few days ago the United States -- the Trump administration made a strategic and a tactical decision to start providing heavy weapons to Kurdish fighters on the ground in order to help dislodge ISIS in Syria.

Now, for the United States, that's a strategic policy. They're the group that they're putting their efforts behind, but for Turkey, that's really an insult and people in Ankara are outraged because they consider that Kurdish group on the ground to consist of terrorist groups as well. Some of those Kurdish groups have launched terror attacks across the border into Turkey, so Turkey is furious that the United States would make that decision.

It's certainly something that's going to come up today in this meeting between President Erdogan and President Trump, as well as Turkey demanding the extradition of a religious cleric by the name of Fethullah Gulen that they believe is behind the failed military coup that took place last year. Fethullah Gulen, of course, is living in the United States and Turkey wants him extradited back to Turkish soil. So, two very contentious points that will surely come up today in this meeting between President Trump and President Erdogan -- Christine.

ROMANS: Absolutely and we know you'll monitor it for us. Thank you so much, Muhammad Lila, this morning.

[05:50:03] All right, 50 minutes past the hour. Job cuts coming to Ford. We're going to tell you how many and why, next.

(COMMERCIAL BREAK)

BRIGGS: Missile tests and a nuclear threat may not be the only concerns about North Korea. Security expertstracking the global ransomware attack that affected 150 countries say the trail of clues could lead back to the North Korea regime which has a long record of computer criminality. CNN's Alexandra Field live for us in Seoul where they take cybersecurity extraordinarily serious, do they not, Alexandra?

ALEXANDRA FIELD, CNN CORRESPONDENT: Yes, they certainly do and so do governments around the world, and you're now talking about some 150 governments that want answers to who conducted this global cyberattack. The responsibility for figuring that out falls largely on researchers and security firms, and what they do is they take the code from this malware attack and they try to match it to codes used by known hackers. That seems to have led a top researcher at Google to find similarities between the code used in this attack and codes used by a well-known group from North Korea, the Lazarus Group.

[05:55:15] Now, two other major security firms are backing up these findings, also agreeing that there are similarities here. But they say this isn't conclusive yet, this is just the beginning of a long investigation, and they say these similarities are still too weak. They need to find a stronger connection to North Korea. They say the similarity here just isn't unique enough to make this link yet.

But the Lazarus Group might sound familiar to people and that's because the Lazarus Group, from North Korea, was linked to a major hack of Sony Pictures back in 2014 when Sony was putting out a spoof film about North Korea, "The Interview." This is a group that has also been linked to attacks on banks worldwide.

South Korean officials were asked if they think that North Korea is behind this. Don't forget, they are closely monitoring North Korea's cyberattack capabilities as best they can from this distance. They're not pointing fingers at North Korea just yet. They are agreeing that this is an investigation that needs to unfold and that all possibilities need to be considered. But, as I said, they do closely try and understand North Korea's cyberattack capacity and capability. In the past, defense officials in this country have linked about 10 different cyber plots to North Korea and they estimate that North Korea now has about 6,800 people working on their cyberattack capabilities -- Dave.

BRIGGS: Frightening. Alexandra Field live for us in Seoul. Thank you.

ROMANS: All right, let's get a check on CNN Money Stream this morning. U.S. futures and global markets mixed after the S&P and Nasdaq hit record highs. Oil prices rallied two percent after Russian and Saudi energy ministers agreed to extend a production cut. The Dow also now just less than 200 points from its own record high, ending a four-day losing streak after Cisco Systems rose off of that worldwide cyberattack.

Investors today looking ahead to Trump officials' meeting with GOP lawmakers about tax reform. That's Wall Street's main concern -- the main event even as we near the end of the bestearnings season since 2011. Profits from S&P 500 companies up about 15 percent this quarter -- that's good.

While the Trump administration calls on U.S. automakers to add jobs, Ford is planning to cut them -- cut 20,000 jobs worldwide. That's about 10 percent of its global staff. This is according to a report in "The Wall Street Journal" citing people familiar with the matter. Now, Ford is not cutting staff on assembly lines -- key here. Reportedly, we're talking about salaried workers without union protection. Ford would not confirm or deny the report to CNN, saying only that becoming "lean and efficient is a key priority." The company announced last month plans to reduce costs after profits sank 35 percent in the first quarter.

All right. Tuition-free college is spreading. College, tuition-free, is already a reality in Tennessee, New York, and Oregon. Now, lawmakers around the country are considering similar programs. Here's how it works. Tuition is paid mainly in scholarships with age or income limits and in most places taxpayers shoulder the cost, so in Tennessee that's lottery winnings that are going to pay for it. So why are statesconsidering it? Jobs. College grads make more money so states think if they invest in these folks, then they'll have better tax revenue later on. The average pay for a new college grad hit $49,785 this year. That's the highest in at least a decade.

BRIGGS: I'm sure the question for states like Tennessee is will those graduates stay in the state --

ROMANS: That's right.

BRIGGS: -- or take their degree elsewhere?

ROMANS: Thanks for joining us. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. Nebraska Sen. Ben Sasse starting with "NEW DAY" right now.

ANNOUNCER: This is CNN breaking news.

CHRIS CUOMO, CNN ANCHOR: All right. We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Tuesday, May 16th, 6:00 here in New York. Alisyn is off. Once again, Poppy Harlow by my side. Good to have you.

POPPY HARLOW, CNN ANCHOR: Good to be here.

CUOMO: Another big day with you here. We begin with breaking news, what could be the worst charge ever leveled against a sitting president. Sources telling CNN President Trump revealed highly classified information to Russian diplomats during an already controversial Oval Office visit last week.

HARLOW: The White House is calling this story false, denying discussing intelligence sources with the Russians. Lawmakers, though, on both sides of the aisle this morning expressing shock, and anger, and concern over the president's disclosure. The latest firestorm will overshadow the president's first trip overseas, which takes place this week. He has some key meetings with foreign leaders today at the White House. Let's begin our coverage there at the White House with Joe Johns. Joe, what can you tell us?

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, Poppy. The damage to U.S. intelligence interests is being viewed as incalculable this morning on an issue of utmost importance and something brought about by a president who harped on the sanctity of classified information on the campaign trail only to be accused of coughing it up in his meeting with two senior Russian diplomats here at the White House last week.