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EARLY START

Trump Lawyers Looking To Limit Mueller Probe; Trump Legal Team Reshuffled; ExxonMobil Fined For Violating Russian Sanctions; Simpson To Go Free; Earthquake Kills Two On Greek Island Of Kos. Aired 5:30- 6a ET

Aired July 21, 2017 - 05:30   ET

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


(COMMERCIAL BREAK)

[05:30:25] MIGUEL MARQUEZ, CNN ANCHOR: Will the special counsel probe lead to presidential pardons? The new reports breaking down the White House's new battle plan.

CHRISTINE ROMANS, CNN ANCHOR: Shaking things up. The reason behind big changes in the president's legal team.

MARQUEZ: And, he's set for parole but still creating controversy. What O.J. Simpson said about his past before a panel decided his future.

Welcome back to EARLY START. I'm Miguel Marquez.

ROMANS: And I'm Christine Romans. It is Friday morning.

MARQUEZ: Nice word, Friday --

ROMANS: Nice to have you here.

MARQUEZ: -- isn't it?

ROMANS: Dave has the day off but I get Miguel for the next half hour. Five thirty in the East.

Up first, explosive new reporting this morning. The president's lawyers are looking for ways to undermine the Russia investigation by Special Counsel Robert Mueller.

"The Washington Post" and "The New York Times" report attorneys and aides are scouring the backgrounds of Mueller and his staff searching for conflicts of interest they can use to undercut the Russia probe. The papers cite several sources familiar with this research effort.

MARQUEZ: Now, "The Washington Post" reporting the president has asked about his power to pardon aides, family members, even himself. One adviser told the "Post" the president was simply curious about the reach of his pardoning authority.

This follows the president's earlier attacks on Mueller and other officials connected to the Russia investigation. ROMANS: Now, with all that in mind the president is reshuffling the legal team charged with helping him navigate the Russia probe. Two sources tell CNN the president's longtime personal attorney Marc Kasowitz will see his role as lead lawyer on the Russia investigation diminish.

Now, veteran attorney -- Washington attorney John Dowd and another Trump lawyer, Jay Sekulow, will take the lead as the president's personal attorneys on the Russia inquiry.

MARQUEZ: Now, sources say by working outside the White House, Dowd and Sekulow's dealings with the president will be protected by the same attorney-client privilege afforded all U.S. citizens.

Inside the White House, Attorney Ty Cobb will take the lead on legal and communication strategy for Russia. He'll be effectively replacing communications strategist Mark Corallo who resigned on Thursday.

ROMANS: All right.

Let's break all of these new developments down this morning.

MARQUEZ: It's a lot of them.

ROMANS: Political economist Greg Valliere is here -- chief strategist at Horizon Investments.

And part of his job is to look at what's happening inside the Beltway and what's happening, you know, in global markets and figure out what each means for the other, so he's deeply sourced here for us. Glad to have you here this morning.

I want you to listen to something that yesterday we heard from Sarah Huckabee Sanders, one of the president's spokeswomen, about the special counsel and the scope of the investigation in particular.

(BEGIN VIDEO CLIP)

SARAH HUCKABEE SANDERS, DEPUTY WHITE HOUSE PRESS SECRETARY: I think that the president -- the point he's trying to make is that the clearer purpose of the Russia investigation is to review Russia's meddling in the election and that that should be the focus of the investigation. Nothing beyond that.

The president is making clear that the special counsel should not move outside of the scope of the investigation.

(END VIDEO CLIP)

ROMANS: Greg, I want to quote something that was in "The Washington Post" that I think is fascinating about his tax returns, in particular, and I think they relate here.

"Trump has been fuming about the probe in recent weeks as he has been informed about the legal questions that he and his family could face. He has told aides he was especially disturbed after learning Mueller would be able to access several years of his tax returns."

The president has Russia fever. He blames the press for making this about nothing but he has Russia fever here.

GREG VALLIERE, POLITICAL ECONOMIST, CHIEF STRATEGIST, HORIZON INVESTMENTS: Christine, he almost single-handedly is keeping the story alive. He reignited this firestorm with "The New York Times" two or three days ago in the interview.

Unfortunately for him, he cannot pick and choose what gets investigated. That's up to Mueller.

And I do think that there's something about Trump's tax returns that gets him extremely agitated. I don't think it's that he didn't pay any taxes. I think we all know that.

I think his tax returns list sources where he has money -- where he owes money and I think some of those sources are in Russia.

MARQUEZ: It seems so simple. The more you tell the cop don't look in the basement, the more the cop wants to look in the basement.

VALLIERE: Right.

MARQUEZ: It's absolutely bizarre.

ROMANS: And any investigator -- follow the money is rule number one of any investigation. Follow the money, right?

MARQUEZ: Indeed.

In that "New York Times" article and wide-ranging interview you mention he didn't exactly express his love for the attorney general who has been with him, Jeff Sessions, through thick and thin very early on in his campaign. Basically said he wouldn't have picked him if he knew that he was going to recuse himself from Russia.

[05:35:05] Here's what Jeff Sessions had to say about that.

VALLIERE: Yes.

(BEGIN VIDEO CLIP)

JEFF SESSIONS, U.S. ATTORNEY GENERAL: I have the honor serving as attorney general. It's something that goes beyond any thought I would have ever had for myself. We love this job, we love this department, and I plan to continue to do so as long as that is appropriate.

(END VIDEO CLIP)

MARQUEZ: As long as it's appropriate.

VALLIERE: Right.

MARQUEZ: Reading the tea leaves, even from this distance, it doesn't sound exactly like confidence. VALLIERE: No, Miguel, and I would say that when it -- when it comes to Sessions this is still another example of how a lot of quality people don't want to go to work in this administration because if the president is willing to throw Sessions under the bus, what does that say about other people who may decide maybe it's not worth my while to join this group.

ROMANS: There are some -- there are some Republicans who have been telling me that while all this is happening there's real work being done behind the scenes.

VALLIERE: Yes.

ROMANS: That Steven Mnuchin is moving forward on plans for tax reform. That Paul Ryan is working on, you know -- with House Republicans on their budget proposal -- or their budget that they -- that they -- that they've actually -- the committee's already passed.

Is that true? Is there work being done and do you see the president's policy agenda slowly moving forward or is all of this noise slowing his policy agenda?

VALLIERE: I think the agenda is moving a bit on taxes, maybe in spite of him rather than because of him. But I do think that there's some real progress being made by Mnuchin, Congressman Brady, head of the Ways and Means Committee --

ROMANS: Yes.

VALLIERE: -- Paul Ryan. I do think that we'll get a tax outline this fall and we'll see progress there.

Unfortunately for them, they first have to get some budget issues resolved and that could be almost as contentious as the health care stuff.

ROMANS: You know, Greg, we've seen these theme weeks. This week is 'Made in America' week. And sometimes, you know, they have -- they have these like nice events where they can promote something. You know, they promoted this new injectable glass thing yesterday --

VALLIERE: Yes.

ROMANS: -- which is -- you know, which is fair. It could be 4,000 jobs, you know. That's legit.

Yet, on the same day, Mar-a-Lago and another -- and a golf course in Jupiter, Florida owned by the Trump family, they're filing for more foreign workers, so the 'Buy American, Hire American' except if you're one of my companies.

Does that stuff undermine his message?

VALLIERE: It does. I think that it's really hard for him to stay on message. That's one of the problems. But I should say for the markets you made a really good point. I think there's some progress being made behind the scenes. I think there's a very pro-business climate here in Washington. The economic fundamentals are really quite excellent right now so there are a lot of positives for the markets.

The one thing that I think could really unnerve the markets is if it started to look like tax reform was dead. We're not there yet. I think we'll get a tax bill but chances of a big tax bill have diminished over the last month or so.

ROMANS: Three months until open enrollment, also, for Obamacare. We don't know what's happening there.

MARQUEZ: And midterms coming up and health care not happening so you're not going to have all those savings that they were counting on from health care. It just -- it looks like whatever they were going to do on tax reform is going to be a heck of a lot smaller than they were imagining just a few months ago.

VALLIERE: That's right, yes.

MARQUEZ: All right.

ROMANS: Greg Valliere, have a great weekend.

MARQUEZ: Thank you.

VALLIERE: All right, you, too.

ROMANS: Thanks for stopping by this morning.

All right.

The U.S. is fining ExxonMobil for violating Russian sanctions while Secretary of State Rex Tillerson was still in charge. The Treasury Department is slapping a $2 million fine on Exxon claiming it demonstrated reckless disregard for those Russia sanctions.

This all stems from a 2014 deal between Exxon executives and this man, Igor Sechin. Sechin runs Rosneft. That's the Russia state-run oil company. He's a close ally of Russian President Vladimir Putin.

MARQUEZ: The Treasury Department didn't specify which Exxon executives were involved and didn't name Tillerson. Tillerson stepped down as CEO last year but had personal business dealings with Sechin when he ran ExxonMobil, and this move raises concerns over his deep business ties to Russia.

Exxon says the fine is fundamentally unfair.

ROMANS: Another record high for the Nasdaq. The Nasdaq has never been this high. It's the third record in a row. This is the longest winning streak since 2015.

It's evidence investors are unfazed by President Trump's political troubles because huge corporate profits are driving stocks higher. More on that in a few moments.

It is still 'Made in America' week and the president is wrapping it up by touting a deal between these three companies -- pharmaceutical companies Pfizer and Merck, and manufacturer Corning. Together, they will produce a new type of glass for injectable drugs.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Pharmaceutical glass packaging will now be made in America. That's a big step, that's a big statement. I'm very proud of that.

[05:40:03] Thank you very much, by the way. And I know they wouldn't have done it under another -- under another administration.

(END VIDEO CLIP)

ROMANS: OK, that's an important deliverable for 'Made in America' week. Until now, 98 percent of pharmaceutical glass packaging was made overseas.

But this program has been in the works since 2012, so the president -- that last sort of unscripted comment he made doesn't hold there.

Now, Corning will invest $500 million initially but that investment is expected to grow to $4 billion, creating at least 4,000 new high-tech jobs.

The CEO's of Pfizer, Merck, and Corning were present at the announcement. The company still needs federal government approval to move forward with the deal, including approval from the FDA for the product itself.

MARQUEZ: And, O.J. Simpson, he will be out of prison later this year.

(BEGIN VIDEO CLIP)

O.J. SIMPSON: I've done my time, you know. I've done it as well and as respectfully as I think anybody can.

(END VIDEO CLIP)

MARQUEZ: Next, come see the moment when Simpson found out he'd be able to walk free.

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[05:45:22] (BEGIN VIDEO CLIP)

CONNIE BISBEE, CHAIRMAN, NEVADA BOARD OF PAROLE: Mr. Simpson, I do vote to grant parole when eligible and that will conclude this hearing.

SIMPSON: Thank you.

(END VIDEO CLIP) ROMANS: O.J. Simpson will soon be a free man. The Nevada Parole Board ruling in his favor, granting the 70-year-old early release from prison now that he has served nine years behind bars.

The former football star making the case for himself.

(BEGIN VIDEO CLIP)

SIMPSON: I've done my time, you know. I've done it as well and as respectfully as I think anybody can.

I think if you talk to the wardens there they'll tell you I've been -- I gave them my word. I believe in the jury system. I've honored their verdict. I have not complained for nine years.

All I've done is try to be helpful and encourage the guys around there. Hey man, do your time, fight in court, and don't do anything that's going to extend your time.

And that's the life I've tried to live because I want to get back to my kids and my family.

(END VIDEO CLIP)

ROMANS: Simpson was locked up in 2008 on charges, including armed robbery and kidnapping related to the theft of Simpson memorabilia. He could be released as early as October first.

MARQUEZ: And this breaking news.

Two companies that operate tours in North Korea say the U.S. government is preparing to ban American tourists from visiting there. The U.S. has not yet confirmed the move but Koryo Tours says it will be officially announced July 27th and will go into effect 30 days later.

Another company, Young Pioneer Tours, tweeted it has also been informed of the ban.

Young Pioneer is the agency that took American student Otto Warmbier to North Korea. He was arrested there, sentenced to 15 years hard labor.

When Pyongyang released him in June he was in a coma. He died a few days after returning to the U.S.

ROMANS: A stunning loss in the music world as the lead singer of the rock band Linkin Park has died.

(BEGIN VIDEO CLIP)

CHESTER BENNINGTON, SINGER, LINKIN PARK (Singing)

(END VIDEO CLIP)

ROMANS: Forty-one-year-old Chester Bennington was found dead Thursday according to a spokesman for the Los Angeles County Coroner. Authorities say they're treating the case as a possible suicide. Bennington had been open about troubles in his life, including drug addiction.

Linkin Park's latest album "One More Light" was released in May. The band was set to kick off a tour in Boston next week.

Linkin Park climbed to success in 2000 with its album "Hybrid Theory."

MARQUEZ: Now, a group of Florida teens who taunted and filmed a man as he drowned will not face criminal charges, according to police.

In a video more than two minutes long, five teenage boys could be heard laughing as 31-year-old Jamel Dunn struggles to stay afloat in a pond. They're heard not only laughing but they warn him that he's going to die and that they were not going to help him.

Police are calling the boys' actions beyond heartless but there is no law in Florida requiring citizens to summon help for someone in distress -- shocking.

ROMANS: That's very disturbing.

MARQUEZ: Yes.

ROMANS: All right. Who doesn't care about all the Russia headlines? Wall Street. The stunning winning streak for investors, next.

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[05:52:38] MARQUEZ: At least two tourists were killed when an earthquake struck the Greek island of Kos this morning. Officials say the quake registered magnitude 6.7 with its epicenter about 10 miles north of the island. An estimated 200,000 people in Greece and Turkey felt some degree of shaking.

CNN producer Gul Tuysuz is live in Turkey for us with the latest -- Gul.

GUL TUYSUZ, CNN PRODUCER: The 6.7 magnitude earthquake really shook a whole lot of people that were just on their summer vacations.

This part of the Aegean is very idyllicnormally and both locals and foreigners go to both the Greek and the Turkish side of the island to enjoy the beach in the summer but unfortunately, they had to go through this nightmare scenario.

Turkish officials coming out about an hour ago and saying that 80 people were injured on the Turkish side with no reports of casualties, and that there have been more than 160 aftershocks that have affected the people that already went through that nightmare of 6.7 magnitude earthquake.

They're also saying that there was a small tsunami that washed up onto the Turkish shores near the resort town of Bodrum. About 30 to 40 centimeters of water washed up and on its way back was carrying -- we saw pictures on Turkish televisions of cars being pulled back into the water.

On the Greek side, of course, we have those two causalities. One is a Swedish national, the other is a Turkish national. Both of them were there as tourists.

Five people there are seriously injured and three of them are in critical condition. And one man has, in fact, had his legs amputated.

A lot of the people who were wounded in this earthquake were wounded as they were trying to get out of buildings. In the case of one man, when he jumped out of the window of a building that he was in, in panic.

So really, this is a very, very terrible scenario for all those tourists who are there visiting.

MARQUEZ: Gosh, and that video, you can just see the panic. It must have been quite a shock to people on vacation.

Gul Tuysuz for us live in Istanbul. Thank you very much.

ROMANS: All right, about 55 minutes past the hour.

Time for "CNN Money Stream" this morning.

Global stock markets are mixed after the Nasdaq hit another record high. That's its third in a row. It's longest winning streak since 2015. All the major U.S. stock market averages hit highs this week.

[05:55:07] Wall Street's string of records is the latest evidence investors are unfazed by President Trump's political troubles and more interested in a very pro-business stance from this administration.

Even as his economic agenda appears to stall the economy is strong here and corporate profits are pushing stocks higher. Remember, stock prices reflect how much money companies are making and earnings seasons has been strong.

We're going to have more earnings on the way. Among them -- among them today, General Electric and Honeywell.

All right. Amazon has been crushing Sears. Sears even telling investors recently it might not be able to stay in business. It turns out Amazon could be its savior.

Sears striking a deal to sell its Kenmore appliance line on Amazon. It will connect its smart appliances with Amazon's personal assistant, Alexa. This could boost sales as foot traffic dwindles.

Sears has closed more than 20 percent of its stores this year and competitors are feeling the heat from this deal. Shares of Home Depot, Whirlpool, and Lowes all fell on the news.

All right. How would you like to get from New York to D.C. in 29 minutes?

MARQUEZ: I'd like that.

ROMANS: Tesla founder Elon Musk wants to make that a reality. In a series of tweets, Musk says he has a verbal agreement to build his Hyperloop. That's Musk's design for an ultra, high-speed underground rail system.

Now, no government agency has officially confirmed this. Musk sort of walked it back a little bit. He tweeted he still has work to do to receive formal approval, but he said he got a verbal go-ahead to build this Hyperloop under Baltimore, New York --

MARQUEZ: Philly.

ROMANS: -- Washington, D.C., Philly.

MARQUEZ: The pneumatic tube.

ROMANS: The pneumatic tube.

MARQUEZ: I love it.

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

MARQUEZ: And I'm Miguel Marquez.

New reports this morning the president is looking to undermine the Russia probe. How is he looking to discredit Robert Mueller?

"NEW DAY" starts right now.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's inappropriate for the president to try to dictate the boundaries of the investigation.

ROMANS: "The Washington Post" reporting Trump's legal team working to discredit the special counsel investigation.

UNIDENTIFIED MALE: Bob Mueller should look at anything that falls within the scope of the special counsel's mandate.

UNIDENTIFIED MALE: If the president steps in by firing Bob Mueller I think he will pay a very heavy price.

UNIDENTIFIED FEMALE: What you can feel coming out of this White House is a tension and an anxiety.

SIMPSON: I've done my time. I've basically have spent a conflict- free life.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: His statements were self- justifying, showing no remorse.

UNIDENTIFIED MALE: If you take a look at what they're supposed to consider it's a slam-dunk.

SIMPSON: Thank you.

(END VIDEO CLIP)

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

ALISYN CAMEROTA, CNN ANCHOR: We want to welcome our viewers in the United States and around the world.

This is NEW DAY. It is Friday, July 21st, 6:00 here in Washington, D.C.

Chris is off and John Berman joins me from New York. Great to see you, John.

JOHN BERMAN, CNN ANCHOR: Nice to see you.

CAMEROTA: Here's our "Starting Line."

"The New York Times" and "The Washington Post" reporting that President Trump's legal team is trying to undermine Special Counsel Robert Mueller by looking for conflicts of interest in order to discredit his Russia investigation.

"The Washington Post" also reporting that the president is asking advisers about his ability to pardon his aides, his family members, and even himself.

BERMAN: Meantime, one day after President Trump warned the special counsel not to dig into his family's finances, "Bloomberg" reports that Special Counsel Mueller's investigation is expanding to do just that.

All this as CNN learns that President Trump is shaking up his legal team. The president unhappy with how his lawyers are fighting back against the daily Russia revelations.

We have this all covered for you. A lot going on.

We're going to begin with CNN senior Washington correspondent Joe Johns live at the White House. Good morning, Joe.

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: Good morning, John.

The reshuffling of the president's legal team comes around the same time he's sending signals that he's gearing up for a fight against Special Counsel Robert Mueller's legal team, citing conflicts in an interview with "The New York Times."

This comes amid reports the president is seeking to undermine the investigation.

(BEGIN VIDEOTAPE)

JOHNS (voice-over): "The New York Times" and "Washington Post" are reporting that the president's lawyers and aides are looking to undermine the special counsel's investigation. The "Times" says Trump's team is scouring the professional and political backgrounds of Robert Mueller and other investigators, looking for conflicts of interest they can use to discredit the investigation.

The "Post" also reporting that the president has been asking about his authority to pardon aides, family members, and even himself, in connection with the probe.

Attorney General Jeff Sessions refusing to answer questions about whether he's discussed pardons with the president in testimony before Congress last month.

SESSIONS: I'm not able to comment on conversations with high officials within the White House.

JOHNS: All this as the Russia investigation appears to be widening. "Bloomberg" reporting that Mueller is expanding his probe to include a broad range of financial transactions involving Trump businesses and --