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Special Counsel Named In Russia Probe; Bipartisan Praise For Bob Mueller; White House Reaction To Special Counsel; Damaging New Reports About Michael Flynn; Market Down After Trump Drama. Aired 5:30-6a ET

Aired May 18, 2017 - 05:30   ET


[05:30:10] DAVE BRIGGS, CNN HOST: A former FBI chief now in charge of the Russia investigation after his successor was fired while overseeing one. What Robert Mueller's appointment means for the new probe and for the Trump White House. Welcome back to EARLY START, everybody, I'm Dave Briggs. Is it Trump's worse nightmare? Some think it actually could be good news.

CHRISTINE ROMANS, CNN HOST: Yes, if the -- if -- right -- if you can to the bottom of this and get it closed and over and done, but how long will it take?

BRIGGS: Right.

ROMANS: That's the big question. I'm Christine Romans. It is 30 -- 31 minutes past the hour. So this investigation into Russia's meddling in the 2016 election is now in the hands of a former director of the FBI. Robert Mueller appointed special counsel overseeing the probe. He has the power to investigate, question, issue subpoenas, and prosecute federal crimes if any are discovered. Mueller appointed to the job by the Deputy Attorney General Rod Rosenstein.

BRIGGS: The appointment comes following a series of damaging headlines from the firing of FBI Director James Comey, to the president divulging sensitive intel to Russian officials, to Comey's memo saying the president asked him to end the investigation of Michael Flynn.

ROMANS: On Capitol Hill, the news of a special counsel is being greeted with relief, especially by Republicans. We begin this morning with our justice reporter Laura Jarrett, live in Washington working for us. Tell us how this all came down, Laura.

LAURA JARRETT, CNN JUSTICE REPORTER: It came together pretty quickly, Christine, and this is a really significant move here. I have to underscore this has only happened once before in history. This regulation has only been used once under Attorney General Reno.

And the deputy attorney general put out a press release in a one-page order yesterday that really highlighted the unique circumstances we find our self in, saying in a statement, "My decision is not a finding that crimes have been committed or any prosecution is warranted. I have made no such determination. What I have determined is that based upon the unique circumstances, the public interest requires me to place this investigation under the authority of a person who exercises a degree of independence from the normal chain of command."

We also heard from the White House last night who put out a pretty short statement. The president saying in part, "A thorough investigation will confirm what we already know, there was no collusion between my campaign and any foreign entity. I look forward to this matter concluding quickly." So, pretty strong defiance there from the president as well, Christine.

BRIGGS: All right, Laura, how broad is the scope of Mueller's investigation, and when it comes to the public learning about the findings will we only hear if there was a crime committed? Does everything else remain private?

JARRETT: Yes. We may never know exactly all the details here. It's going to really depend on how all of this goes down. But certainly, in the short term, all of this is going to be done under a cloak of confidentiality and Mueller really has wide latitude here. Under the order issued yesterday, he can look into any links or coordination between the Russian government and individuals associated with the Trump campaign, as well as any matters that may arise, indirectly or directly, from that investigation. So he's essentially been deputized to step in as the main prosecutor here and, as you mentioned, can issue subpoenas, convene a grand jury, conduct interviews. He is really in charge here and, you know, behind the wheel to take this investigation where he sees fit.

ROMANS: What is the first step for him as special counsel? We know he's already taken a couple of people with him from his law firm.

JARRETT: That's right. So, he's hired two people to come with him, former law partners from Wilmer Hale, but he can also request a budget within 60 days from the Justice Department, so he really can try to figure out how to run this in the way that he sees fit, as I mentioned. He can also choose to keep on other people who have been working on the investigation within the Justice Department or the FBI, so he doesn't have to start from scratch.

BRIGGS: All right. So whether he's the host of a reality show or the President of the United States we know Donald Trump likes firing people if he's not happy. Can Trump fire Robert Mueller?

JARRETT: Yes, so this is a question that came up a lot last night and the regulations are pretty clear here -- the ones that the deputy attorney general's relying on to do this. It says that the special counsel can be removed by the attorney general -- or the acting attorney general in this situation because the attorney general has recused -- so, Rod Rosenstein. But -- so Trump can't just fire him. He can't just call him up and do this. He could try to repeal the regulations here but that would be somewhat of a political show, but he could also try to direct Rosenstein to fire him. Again, would have political consequences. So this is not the same situation as James Comey. It is really the deputy attorney general who is running the show here.

[05:35:00] ROMANS: All right, Laura, thank you so much. You're going to have another long day in Washington as the sun comes up. That's a beautiful shot behind her.


ROMANS: The sun coming up behind here.

BRIGGS: Yes. Go get some coffee, though. You're going to need it.

ROMANS: I know. Thanks, Laura.

JARRETT: Thanks, guys.

ROMANS: All right. Joining us this morning, "CNN POLITICS" reporter Tal Kopan and Shannon Pettypiece, both in D.C. for us this morning. Shannon is the White House reporter for "Bloomberg News." Good morning.

Let's talk here first -- "The Wall Street Journal" editorial. Let's get you right into the papers this morning and get everybody read in who's watching. "Wall Street Journal" editorial, "While the decision will provide some short-term political relief, it also opens up years of political risk to the Trump administration with no guarantee that the public will end up with any better understanding of what really happened."

That's a little dash of cold water, Shannon, on what I feel like was some relief in Washington yesterday that this has now entered a new phase. It's no longer headlines in papers, and leaks, and media, and Democratic and Republican drama about this -- now entering a new phase. What do you make of it?

SHANNON PETTYPIECE, WHITE HOUSE REPORTER, BLOOMBERG NEWS: Well, at least no more drama for the moment. I think that, theoretically, this could be very good for the White House if there was no collusion -- if they did nothing improper, if there was no obstruction of justice. Now, you have a very well-respected, seasoned, impartial investigator leading this whose, you know, report is not going to be tainted in any questions or politics, you know, at least if it goes as it's supposed to go. However, if there is something here they're trying to hide, Mueller is probably the last person in the world you would want investigating this.

But as far the drama, it should, in the near term, quiet things down and the hope in the White House is that they can get back to talking about their agenda. That's the hope. I don't know if that's going to happen because, you know, every day is a new, exciting adventure in Washington lately, but they're hoping this turns the page a little bit, at least, in the near term.

BRIGGS: Yes, only if the Trump team committed a crime is this bad news but anything improper, anything even unethical, that would not be made public a special counsel. So, again, to Shannon's point, Tal, is this Trump's worst nightmare or can you say with surety that this is good news for the Trump administration?

TAL KOPAN, REPORTER, CNN POLITICS: I honestly think the most relieved people in Washington are probably Congress because, you know, this takes some of the heat off them in terms of constant questions about whether there should be a special committee convened and, you know, the special prosecutor thing was shaping up to be quite a fight. You know, the White House may be relieved that this takes some of the heat off their FBI director search as well.



KOPAN: This probably makes it a little bit easier to get someone confirmed. So, you know, there are areas of short-term relief in terms of cooling the temperature just a little bit. There's now an adult in the room that -- I mean, everyone in Washington -- my inbox was flooded --


KOPAN: -- with statements just praising Mueller, saying he's such a great choice -- even people who opposed a special counsel.


KOPAN: So that cools the temperature just a little bit. But as we've been discussing, this investigation has a broad scope and no end date in sight. It doesn't remove the cloud from the White House so while it cools the temperature I don't know that it provides really long- term relief.

ROMANS: And there are -- there are a bunch of investigations so this is a special counsel but there is an FBI investigation still going on. There's inspector general of the Department of Defense, which is a related but different kind of investigation.


ROMANS: There's a Senate Select Committee, a House Committee, a Senate Judiciary Subcommittee, a House Oversight Committee. You get -- you can see what it's like.

BRIGGS: You get the picture.

ROMANS: Now, the Trump -- listen -- Shannon, I want to read the Trump statement on the special counsel. Brief -- you know, they didn't have much notice this was going to happen, right?

BRIGGS: An hour.

ROMANS: An hour notice. Paul Ryan was alerted ahead of time, but not the rank and file and not very long ahead of time. "A thorough investigation will confirm what we already know, there was no collusion between my campaign and any foreign entity. I look forward to this matter concluding quickly." I don't think it's going to conclude very quickly. I mean, they've got to rent office space. They've got to, you know -- they've got to staff up. They've got to get a budget. They've got a lot to do here. PETTYPIECE: Yes. No, it's not going to conclude quickly but, you know, I think they would like it to conclude with less drama. And to your point about how this came together so quickly, the insight we were able to get in was that the White House lawyer was called by Rosenstein about a half hour before the announcement was made. Doug McGahn, the White House lawyer, told the president. They called a lot of the principals in the room and the president is the one who dictated that statement, himself, with some feedback and input --

ROMANS: Really?

PETTYPIECE: -- from staff, and then -- yes, and then they were the -- you know, then the White House put it out. And then for the rest of the night they were kind of -- you know, they were able to say -- you know, there was initial panic but then able to say all right, here's our statement. Address the statement and let's, you know -- the hope is let's move on and let's start being able to talk about something else here. At least that's the hope. Of course, now there's all these stories about Michael Flynn, so he's sort of the gift that keeps on giving for the -- you know, the Democrats and opponents to Trump.

BRIGGS: Thank you for the transition. Tal, let's ask about that. It's front page news on "The New York Times." They're reporting that Michael Flynn told the Trump transition team that he was the subject of a federal investigation for lobbying on behalf of Turkey. How does this change the equation and we're left to ask why -- why was the Trump team so committed to Michael Flynn?

[05:40:20] KOPAN: Yes, that's absolutely right and that's a really big, open question, you know. There were plenty of warnings about the relationship with Michael Flynn and the Trump transition. You know, Obama officials -- some reports say even the president, himself -- the former president may have expressed concern about how closely Michael Flynn was brought into this administration. Keep in mind the Obama administrationbasically fired Michael Flynn over some issues they had with him and he was sort of on the outs in Washington before, you know, sort of attaching himself and being, you know, brought into the Trump campaign.

And so he was, you know, sort of touching everything. I mean, he was the National Security adviser. He had, you know, the last line of filter before Trump in terms of getting him his intelligence and national security information. And so, you know, the Trump campaign -- the Trump -- excuse me, the Trump administration statement says that they hope the investigation will show there was no collusion between Russia and the campaign. But keep in mind, you know, these continued reports that various members of the Trump team may have had at least improper contact or suspect contact with folks overseas. That's a major finding --

ROMANS: Right.

KOPAN: -- that the American people are going to be interested in. So again, it's a question of smoke and fire but even if there's no major roaring blaze in the Trump campaign -- you know, these questions that keep coming up about Michael Flynn are going to continue to cause these headaches for the White House.


ROMANS: Just quickly, Shannon, the president -- are we going to hear from the president today? He's got -- he's hosting the Colombian president at the White House, right?

BRIGGS: Two questions, typically.

ROMANS: Two questions --


ROMANS: There are here -- I mean, when are we going to hear from the president next?

PETTYPIECE: So, we will hear from him this afternoon. They'll be two questions by the U.S. press, two questions by the foreign press. This will be his first chance to really make a public statement about this. Obviously, you can guess what the questions are going to be, probably --



PETTYPIECE: -- in advance. So --

ROMANS: They'll be about tax reform, I'm sure.


PETTYPIECE: -- at the Coast Guard, too.

ROMANS: All right. Thanks, guys.

PETTYPIECE: Tal Kopan, Shannon Pettypiece, we love having you. Let's make this a weekly thing.

ROMANS: Right, come back. We'll be right back.

BRIGGS: We'll be right back.


[05:46:32] ROMANS: All right. The calm broken on Wall Street. Markets tanking on news the president may have asked James Comey to end the FBI's probe into his ex-National Security adviser. The Dow plummeted 373 points, the harshest sell-off since September. The U.S. dollar also erasing all post-election gains. Money flowed into so- called safe havens like gold and bonds. That means people were afraid. That means Wall Street's fear gauge, the VIX index, spiked 42 percent from the lowest levels in a decade -- decades, rather.

Until now, markets ignored Washington headlines high on the promise of tax cuts and deregulation, but for investors, the news of a possible Comey memo didn't just signal uncertainty about the president's economic agenda but even the future of his presidency. In fact, former Federal Reserve chief Ben Bernanke told a group of investors "The concern over stability in the White House is reasonable," adding that, "Markets are blase about political risk, until the very last moment and a changing mood could mean more losses."

But corporate earnings are strong. Stocks hit records just two days ago. All three indices are up for the year and, again, that big sell- off, Dave, on Wall Street was before the news of today --

BRIGGS: Right.

ROMANS: -- which is a special counsel. It will be fascinating to see how Wall Street responds to that.

BRIGGS: Which is, as we've described, it seems to be a turning down of the temperature just as it reaches 90 degrees on the East Coast, so you wonder how the markets react to that news.

ROMANS: We will find out --

BRIGGS: We'll see.

ROMANS: -- in three hours.

BRIGGS: All right. An Oklahoma jury returning a not guilty verdict in the police shooting of an unarmed black man last year. Officer Betty Shelby faced a first-degree manslaughter charge for the fatal shooting of 40-year-old Terence Crutcher. Video showed Crutcher with his arms in the air before being shot.

ROMANS: Shelby, who is white, testified in her own defense that he acted bizarrely and she feared for her life. The Crutcher family having a hard time with this verdict.


JOEY CRUTCHER, TERENCE CRUTCHER'S FATHER: I have four grandchildren that are at home now that have lost their daddy. I said that I would accept whatever the verdict was and I'm going to do that, but let it be known that I believe in my heart that Betty Shelby got away with murder.


ROMANS: Following that verdict, dozens of people protested outside the courthouse, blocking a road, chanting "no justice, no peace." Police say the protests did remain peaceful.

BRIGGS: All right, time for a look at what's coming up on "NEW DAY." Chris Cuomo joining us. Chris, all right, two different realities. Is this Trump's worst nightmare or is it a blessing in disguise that Robert Mueller has been assigned special counsel?

CHRIS CUOMO, CNN HOST: Well, look, I think that at the end of the day you have to see any drive towards clarity as a positive -- ROMANS: Yes.


CUOMO: -- and anything that has people in D.C. agreeing is a positive. And Mueller is a respected guy, we all know his tenure. You've been talking about it this morning. We'll take you into detail about who he is and what he was about this morning and why people believe this was a positive development.

Also, we're going to, you know, kind of talk about what it is and what it isn't, you know. There's a lot of misinformation in the air about the need for a special prosecutor. You know, you have a prosecutor because you have an underlying crime and there's a worry about conflict. This is about an investigation and the right term was always "special counsel" because that was an entity that the attorney general could create on their own, without legislation, without the need for Congress getting their hands into it, and that's exactly what happened. So I don't know how you don't see it as a positive.

[05:50:05] The president, himself, has said he wants closure on this and I know that they're been developments that call that into question. They need to be looked at as well, and they will, especially in light of two other big reports that we're going to tell you about this morning. Did the White House know that former National Security Adviser Michael Flynn was under investigation when they appointed him? The answer seems to be yes. We have the reporters on who are breaking that news to discuss it.

And to Christine's point about stability, I was surprised that the Hang Seng and the other overseas indexes didn't get a pop. They wound up red, you know, in the overnights thus far, at least by about 3:00 in the morning, despite the news.

ROMANS: This is the first big dent in the Trump confidence, honestly. Yesterday, the Comey -- the Comey memo news was the first big dent and there's just a lot -- there's just a change. There's something about the sentiment that has changed a little bit here. It's going to be critical --


ROMANS: -- for him to show some progress on his economic agenda or I think you've got a lid on the market here.

CUOMO: I think you're right. But then, again, you know the brothers and sisters love volatility. They love volatility, you know. When the markets dip they get a chance to trade -- make some of that money for their books, so there's that, too.

ROMANS: You and your big Wall Street friends -- you know, Chris.

CUOMO: They ain't Main Street, I'll tell you that much, Romans. They ain't Main Street.

BRIGGS: All right, Chris. We'll see you in a little bit. Thank you. CUOMO: All right.

ROMANS: One of the president's favorite talking points, 94 million Americans not working and new research finds most of them don't want a job. Who are the 94 million? You will be surprised.


[05:55:45] ROMANS: Candidate Trump vowed to rip up the Iran Nuclear Deal but the U.S. deal will remain part of it for now.

BRIGGS: Yes. The Trump administration renewing sanctions relief for Iran as required under the deal while also imposing new sanctions related to Iran's ballistic missile program. This comes ahead of Friday's presidential election in Iran. We're very fortunate to have CNN senior international correspondent Frederik Pleitgen live for us in Tehran -- don't often have a reporter live there. And Fred, once again, are we hearing about a Trump factor involved in their elections?

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: You know, it's interesting, Dave. Good morning, first of all. I did ask an analyst about this and he said yes, absolutely, there is a Trump factor here in the election in Iran and it's really hurting the moderate candidate, Hassan Rouhani, who's also currently the president.

He's the guy who negotiated the nuclear agreement between the U.S. and some other countries, and Iran, to sideline Iran's nuclear program and at the same time give sanctions relief. And they say that the sanctions relief is not coming fast enough for the Iranians. At the same time, they're seeing a lot of things that the Trump administration is doing with these new sanctions -- with the tough talk -- and that really is something that's emboldening the hardliners. They're saying look, Hassan Rouhani, you negotiated this. Where are the benefits? They want to take a tougher line on America. Right now, here, the polls are too close to call. It's certainly going to be an interesting election. The outcome, of course, very important for America as well.

ROMANS: All right, Fred Pleitgen live for us in Tehran this morning. Thank you, Fred.

BRIGGS: All right, some said news for rock music fans. The lead singer of "Soundgarden," Chris Cornell, died overnight.


SOUNDGARDEN "Black Hole Sun" (playing).


BRIGGS: Unforgettable sound. Cornell was performing in Detroit with the band which launched the U.S. tour back in April. Cornell's representatives said in a statement that the death was sudden and unexpected, but did not specify a cause. Cornell was also front man for "Audioslave." Chris Cornell dead at the age of 52.

ROMANS: It's a shame. All right, 57 minutes past the hour. A quick check on money this morning. Big stock market sell-off yesterday on the Comey memo news. Will stocks bounce back today on news of a special counselor to investigate? Well, futures right now down a little bit this morning. We'll know for sure at 9:30 Eastern Time.

It's one of the president's favorite talking points. Ninety-four million Americans not working but new research shows that's not because they don't want -- that's not because they want to. Most of them are retired, disabled, or in their teens. Here's the breakdown. The majority, 44 million, are retired. The rest aren't working for understandable reasons. Now, that still leaves about seven million people without a job. Well, the majority of those make up the unemployment rate. That means there are only about two million Americans unaccounted for -- those lost workers in the economy. So that is something that has been overstated many times by President Trump and his supporters.

Thanks for joining us. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. "NEW DAY" starts right now. We'll see you tomorrow.


REP. JACKIE SPEIER, (D) CALIFORNIA: Everyone in this country should breathe a sigh of relief right now.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: Rob Rosenstein naming Bob Mueller as a special prosecutor in the Russia probe.

REP. JASON CHAFFETZ, (R), UTAH: His credentials are impeccable. It doesn't get any better than Robert Mueller.

UNIDENTIFIED FEMALE: And on January 4, Michael Flynn went to the transition team to tell them that he was under investigation for working as a paid lobbyist.

UNIDENTIFIED MALE: They knowingly brought in somebody who had access to almost every American secret and they knew was under federal investigation.

SEN. JOHN MCCAIN, (R) ARIZONA: Another shoe drops and now it seems almost daily.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No politician in history, and I say this with great surety, has been treated worse or more unfairly.


ANNOUNCER: This is NEW DAY with Chris Cuomo and Alisyn Camerota.

CUOMO: All right. We want to welcome our viewers in the United States and around the world. This is NEW DAY. It's Thursday, May 18th, 6:00 here in New York. Alisyn is off. Brooke Baldwin joins me. Thank you very much.


CUOMO: You have brought breaking news with you.


CUOMO: There is a lot of new information for the starting line. The investigation into Russia's election meddling now in the hands of a special counsel. Former FBI director Robert Mueller is the selection creating rare agreement in Washington. President Trump reacting to the news, vowing there was no collusion between his campaign and Russia.

Deputy Attorney General Rod Rosenstein's going to brief the entire Senate today, the entire House tomorrow about the context and confines of the Russia probe.