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Australian Authorities Report 2 ISIS Terror Plots Uncovered; July Report: Jobless Rate at 16-Year Low, Unemployment Falls to 4.3 Percent; Intel Chief, DOJ Go After Leakers. Aired 2:30-3p ET

Aired August 4, 2017 - 14:30   ET


[14:30:00] BROOKE BALDWIN, CNN ANCHOR: I'm still back on bomb parts via airmail, Paul. Can you tell me more about that?

PAUL CRUICKSHANK, CNN TERRORISM ANALYST: These are alarming details with a capital "A." This is sort of like the IKEA model of terrorism. They managed to get this high-grade military explosive to Turkey and then dispatched it by air freight on some kind of jet carrying the cargo all the way to Australia, then were in touch through these online encryption apps with the cell, these two individuals in Sydney, in terms of finishing up what was already a partially-constructed device. And now that massively increases the capabilities of extremists on the ground. It's been a big challenge for extremists in the West to build sophisticated, powerful bombs. We've seen some devices created, the Boston attacks, for example, but that was a fairly low-grade explosive. That wasn't high-grade explosive. This was military-grade explosive, and they got it on a plane all the way to Australia.

It begs the question, Brooke, if they managed to send this partially constructed device to Australia, could they have sent other devices to other countries, including the United States, or might they try to do that in the future.

Now, what we understand is that this device, a replica was then created by the Australians and it wouldn't, they think, have beaten a security Sydney airport. But of course, the next time round, they get a chance to learn from this and to put something even more sophisticated, more difficult to detect together, Brooke

BALDWIN: Thank God they stopped this. But when I was reading into the details of this, and you think of all the terror attacks we've covered, the thwarted terror attacks, this is another example of brothers, Paul, working together.

CRUICKSHANK: Yes. And several brothers, because in fact, it was a brother in ISIS, actually, a senior figure in ISIS connected to these two men, a brother of one of the men in Sydney, who connected them in turn to a controller in ISIS in Syria, who very much was the guiding force behind this plot. And then yet another brother, an unsuspecting innocent brother, they were going to give this device to so he could take it on board and in the checked luggage and then the plane would have blown up. Now, at the last minute, they decided not to give it to him to take on the flight. He actually then traveled but without the bomb. One conjecture from the Australian police today is that the checked luggage was just too heavy to get on the flight and that's why they didn't proceed.

BALDWIN: Wow. Alarming with a capital "A," to quote you, Paul.

Paul Cruickshank, thank you so much.

Coming up, "We will find you, we will investigate you, and we will prosecute you." That is the message from the director of National Intelligence today to leakers. And the Attorney General Jeff Sessions had a special message for members of the media.


[14:37:15] BALDWIN: Some great news for President Trump. U.S. added more than one million jobs since he took office. The new numbers out today, 209,000 of them added in the month of July. That is more than what economists expected. And the unemployment rate is the lowest it has been in 16 years.

The president, he took to Twitter this morning. He was excited. He said, "Excellent jobs numbers just released and I have only just begun. Many job-stifling regulations continue to fall. Movement back to USA."

Peter Morici is back with us today, former economic director with the U.S. International Trade Commission, and international business professor at the University of Maryland. And Shelby Holliday -- he's also a Trump supporter. Shelby, politics and business reporter for the "Wall Street Journal."

Good to see both of you.

Peter Morici, this is huge, awesome news for the president. I mean, the man is six months in. Is this the kind of news, you know, some folks will say, well, Obama handed him a great economy? Six months in, is this fair to say it's his to fully own?

PETER MORICI, INTERNATIONAL BUSINESS PROFESSOR, UNIVERITY OF MARYLAND & FORMER ECONOMIC DIRECTOR, U.S. INTERNATIONAL TRADE COMMISSION: I don't think it's fair to say it's any president's to fully own after six months. But certainly, the climate has improved. If he could implement the balance of his program, mainly tax reform, not so much cuts but rationalizing the tax structure, I think that we could see substantially more jobs created next month, somewhere in the range of 250,000 I think is indeed quite possible.

BALDWIN: Are you worried at all that tax reform goes the same way as health care?

MORICI: Absolutely. Because in order to do tax reform, I think there has to be some tax cuts so you don't have so many losers lobbying against it. And that will require some entitlements reform. And we've seen with health care, entitlements reform, there's not even agreement inside the Republican Party, never mind reaching across the aisle.

BALDWIN: Shelby, what do you think? SHELBY HOLLIDAY, CNN CONTRIBUTOR: I think I would -- there's a lot of

debate about whose economy this is and who should take credit for it. I think it's like running a relay race, each president handing off the baton to the next.


HOLLIDAY: Yes, President Obama left the economy in great shape for President Trump. A lot of economists describe our growth as sluggish right now. It is not hit that 3 percent mark. Still it's growing and people should be celebrating the fact that we are adding jobs every single month. President Trump hit the one million mark in his first six months. That's something President Obama did last year. If you look at the number of jobs created each month, on average, they're roughly the same. So you know, a lot of economists just say we should enjoy the fact that we are in a sweet spot, inflation is low, we're adding jobs. Wage growth is a little bit sluggish. Economists would certainly like to see that higher. But we're getting raises. We're not, you know, losing our jobs. So, in general --



HOLLIDAY: -- President Trump has reason to celebrate.

BALDWIN: But riddle me this, Peter. You have this strong economy, strong Dow. When was the last time a president had such strong economic news yet was so unpopular? I mean, normally the two go hand in hand.

[14:40:07] MORICI: Well, this president was elected under a cloud. We all acknowledge that because he didn't win an electoral majority. George W. Bush, he had a decent economy. They came out of the box a little slow, but then he had a decent economy and until he got past his first midterm elections and won some seats in the House, things didn't get better for him. And I suggest that things aren't really going to -- the clouds are not going to go away until the special prosecutor stops digging in -- I don't want to get into that -- but digging into his family's finances and going off on all kinds of rabbit warrens. And he has the midterm elections. He's going to have to do well in the midterm elections for the sun to really shine on his presidency.

BALDWIN: But the Dow, I mean, what was it, one day this week, it was above the 22,000 mark.

Shelby, the markets seem impervious to said cloud.

HOLLIDAY: Yes, and I do think President Trump can take credit with the stock market. We saw it shoot up after his election. It's the prospect of lower taxes. It's the prospect of infrastructure spending. It's the prospect of, at this point, of -- I mean, he has killed regulations, but mostly it's the promise of his agenda. And we have yet to really run -- get into the weeds in the tax debate. There are a lot of disagreements among Republicans about how much we should cut taxes, who we should cut taxes for. Big picture, it might not be so easy to get tax reform done. But it doesn't matter because investors say regardless, they think that the corporate tax rate will be lower. That is why the market's higher. That's why investors are plowing more and more money into it.

MORICI: Actually --

HOLLIDAY: And we'll see if it can get done, but generally, most people think something will be done.

BALDWIN: Go ahead, Peter.


HOLLIDAY: Maybe it's not as deep of cuts.

MORICI: I don't think it's fair to say we think it's just the prospect of tax cuts. Regardless of who might have been president now, I think the market would be stronger. Maybe not as strong as it is because Mr. Trump is cutting regulation back and promising tax cuts. But we can't deny the fact that corporate profitability is increasing substantially, not just from operations in the United States, but American companies earn a great deal of money abroad and they're doing very well abroad. It's not just that foreign economies are growing, but American companies are very well managed. They're very innovative. They come up with lots of new technologies. And that is broadly received, so I think that's a great strength of America. And it's not something we should quibble about or assign to any one president. We have a strong economy because we have a strong Fortune 500 or S&P 500 or what have you.

HOLLIDAY: That's true. And we heard Jamie Dimon, one of President Trump's economic advisers, actually say that on an earnings call. He said, Washington's a mess, they're not getting anything done, but businesses here in the U.S. are strong and economies abroad are strong. And so, you know, enjoy the sweet spot.

BALDWIN: We like it.

On that note, happy Friday. Thank you both so much, Peter Morici, Shelby Holliday.


HOLLIDAY: Happy Friday.

BALDWIN: We'll take that news.

Coming up next, a warning from Attorney General Jeff Sessions to the media with regard to leaks. Could the Justice Department force journalists to give up their sources?

Plus, President Trump, any moment now, leaving the White House for a 17-day working vacation. What will he be up to in August? Stay with me.



[14:47:14] DAN COATS, DIRECTOR OF NATIONAL INTELLIGENCE: We will find you. We will investigate you. We will prosecute you to the fullest extent of the law. And you will not be happy with the result.


BALDWIN: Strong warning today for White House leakers from the director of National Intelligence, Dan Coats, who calls leaks a national security threat. The Trump administration making it crystal clear these leaks have to stop. This, coming after those transcripts of two of the president's phone calls with world leaders, both the Mexican president and the Australian prime minister, were leaked, verbatim, to "The Washington Post."

But the White House also has its eyes on us, we, the media, when we publish leaks.

I want you to hear what the attorney general, Jeff Sessions, announced at that very news conference.


JEFF SESSIONS, U.S. ATTORNEY GENERAL: We're reviewing policies affecting media subpoenas. We respect the important role that the press plays, and will give them respect, but it is not unlimited. They cannot place lives at risk with impunity. We must balance the press' role with protecting our national security and the lives of those who serve in the intelligence community, the armed forces, and all law-abiding Americans.


BALDWIN: Senior media correspondent and host of "RELIABLE SOURCES," Brian Stelter, is with us. And CNN legal analyst and former prosecutor, Paul Callan, is with me as well.

Paul Callan, the deputy attorney general wouldn't answer which leaks supposedly put lives on the line. Pam Brown was there and she pushed him as to whether the DOJ would change its practice of not prosecuting journalists, and Rosenstein would not rule out the possibility. Legally, how far can they take this?

PAUL CALLAN, CNN LEGAL ANALYST: You know, the Supreme Court often uses a phrase called "having a chilling effect on free speech," and any attempt, I think, to prosecute the press aggressively to try to change their coverage of politics in America would not be met kindly by the courts. So that was rather a chilling, dangerous threat, I think, to a free press. And we haven't seen that, you know, happen in quite some time. There have been -- I can only think of one reporter arrested in the last five years or so on any kind of a serious charge.

BALDWIN: Brian Stelter, when you think in the last week of the stories that were broken because of leaks, there's a multitude. I mean, how do you balance this with the public's right to know?

[14:49:44] BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT & CNN HOST, RELIABLE SOURCES: Certainly, I think, what Attorney General Jeff Sessions was doing today was trying to communicate through the cameras to his boss, the president of the United States, to Donald Trump, who has been so angry about leaks and frankly angry at Jeff Sessions, partly today was about Sessions trying to keep his job by saying to the president, saying to the public, we are taking this really, really seriously, basically threatening, warning people not to leak. But as you pointed out, there's a lot we wouldn't know were it not for leakers. Some people inside the government might be motivated out of pettiness, out of anger or bitterness. But some are motivated out of a sense of purpose, a public service, to tell people about, for example, Mike Flynn's misbehavior, the meetings that he didn't disclose, the Donald Trump Jr meeting with the Russian lawyer. We have learned so much via leaks about the Russia investigations, about troubling behavior inside the White House, even things that bring up President Trump's emotional state. And these leaks, these leaks, even though, you know, the leak sounds like a negative word, has a negative connotation, nobody wants leaks, even in their own home, but these leaks do make the public better informed about what's going on inside the governments.

BALDWIN: But do you think --


STELTER: That's certainly the intention.

BALDWIN: Do you think, using Paul's word of the chilling effect, will this warning have a chilling effect? Will it make members of the media double down?

STELTER: The reporters -- the investigative reporters at CNN, "The Post," "The New York Times," all the big news outlets, they are very careful about communicating with sources. For example, not using cell phones in some cases or using really secure apps or drop boxes. There's a variety of ways that journalists communicate with sources. And I think that's partly why the government's having such a hard time investigating these cases. There's only been one prosecution, that we know of, of a leaker this year, and her name was Reality Winner, a contractor who allegedly leaked to "The Intercept." That's the only case we know where Sessions and the government has been able to prosecute a leaker. It's been difficult. And I think that's a credit to the journalists who are being very careful communicating with sources. That will definitely not change.


CALLAN: You know, I think -- I think that also the reason it's difficult is because the laws, people don't understand that it's very difficult -- it's not a crime to leak information unless that information is classified or protected in some way.


CALLAN: If you are simply a disloyal employee of the president, well, tough luck.


STELTER: It might get you fired but not prosecuted.

CALLAN: Right. Maybe you hired the wrong person. You're not going to get a prosecution out of that.

So, you know, I think the Trump administration has tried to turn everything into criminal activity or criminal leaks, and it really isn't that at all.

BALDWIN: This is just what I wanted to jump in and say, and then we'll go, just for perspective, the Obama Justice Department was criticized for the high number of leak cases that it prosecuted. It brought more espionage act related charges against leakers than all previous administrations going back to 1945.

Paul Callan and Brian Stelter, gentlemen, thank you.

STELTER: Thanks.

CALLAN: Thank you.

BALDWIN: Coming up next, President Trump taking a new approach to the allegations of Russian collusion with the 2016 campaign. What he is telling you, the voter.

And last Friday, really, was it just last Friday? We were talking about Anthony Scaramucci and Reince Priebus. But this week has been all about General John Kelly, the new chief of staff, how he's making his presence known and felt in the West Wing.



[14:57:16] BALDWIN: When Lindsey Bittorf, a Wisconsin police officer, saw that an 8-year-old boy in her area needed a kidney transplant to live, she decided to go "Beyond the Call of Duty.



ALISON KOSIK, CNN CORRESPONDENT (voice-over): From the day Jackson was born, his mom, Kristi, didn't know how many birthdays he would have.

KRISTI ARNESON, MOTHER OF JACKSON: A life expectancy for him, it wasn't very positive.

KOSIK: Jackson was diagnosed with a condition that causes his kidneys to slowly stop working. His mother knew that a kidney transplant was inevitable. ARNESON: His labs just weren't showing that he was going to be

healthy through another winter. I think it was that day I think I put something on Facebook right away and said, please contact me if you'd be interested in being a living donor. This would be the very best gift we could ever receive. I was looking for Jackson's hero.

KOSIK: In the next town over, Milton Police Officer Lindsey Bittorf saw Kristi's plea on Facebook.

LINDSEY BITTORF, MILTON POLICE OFFICER: I saw it, looked at my at that time 2-year-old child and said if it were him and I needed someone to save my kid's life, I would hope somebody like me would do it.

KOSIK: After an agonizing month-and-a-half wait, hope landed in Kristi's inbox.

BITTORF: I sent her a Facebook message saying, I don't want to get your hopes up, but I am in the process, I got tested.

KOSIK: After more tests and more waiting to see if she was a match, Lindsey learned it was a go.

Jackson and his family had no idea Bittorf was a match, so Bittorf and her husband decided to surprise them with the news.

ARNESON: The doorbell rang.

BITTORF: My husband and I walked in, and I saw Kristi and I said, I have these for you.

ARNESON: I had no idea what was going on, but she had given me a gift and then she gave Jackson a gift. And I ripped open the gift, and the first word when I tore the little edge of the gift, it said, kidney. And I knew that that's what it was.

KOSIK (on camera): What was it?

ARNESON: It was her saying, here, I'm -- I'm here to save Jackson's life.

KOSIK (voice-over): After a successful surgery, she did just that.

(on camera): What kind of person puts themselves out there like that to a total stranger?

BITTORF: These days, not many people do anymore.

KOSIK: Can you believe that just happened?

ARNESON: No. Like it's just amazing that somebody is willing to do that for you.

KOSIK (voice-over): Bittorf says the risks of donating her kidney are less than what she faces on the job.

BITTORF: I took an oath to serve and protect my community and now my kidney will serve and protect you.

Alison Kosik, CNN, Janesville, Wisconsin


[15:00:00] BALDWIN: Top of the hour. You're watching CNN. I'm Brooke Baldwin. Thank you for being with me.

In just a couple of minutes, President Trump will head off for a vacation, 17 days of a little R&R in New Jersey at a golf club there. But as he takes a break, federal investigators will not.