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Deputy AG Rejects Suggestions that Special Counsel Cannot Dig into Trump Family Finances; Intrigue Builds Around 2020; North Korea's Largest Trading Partner Voted for the U.N. Sanctions; U.S. Dependent on Russia for Ceasefire in Syria. Aired 4-4:30a ET

Aired August 7, 2017 - 04:00   ET




ROD ROSENSTEIN, DEPUTY ATTORNEY GENERAL: Robert Mueller understands and I understand the specific scope of the investigation. So no, it's not a fishing expedition.


MIGUEL MARQUEZ, CNN ANCHOR: Special Counsel Robert Mueller can investigate any crime as he uncovers discovers in his Russia probe. That from the Justice Department after the president himself said his finances should be off limits.

CHRISTINE ROMANS, CNN ANCHOR: The vice president did a harsh rebuke to a "New York Times"' report that he's laying the groundwork for a White House run. He slams the suggestion as disgraceful, offensive, and absurd.


MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: I think it's quite clear in terms of there being no daylight among the international community as to the expectation that North Korea will take steps.


MARQUEZ: And global pressure is growing on North Korea to curb its nuclear program after sanctions are slapped on unanimously by the U.N. Security Council.

Good morning and welcome to EARLY START. Happy Monday. I'm Miguel Marquez in for Dave Briggs. Good morning.

ROMANS: Nice to see you. Good morning. And I'm Christine Romans. It is Monday, August 7th. It is 4:00 a.m. in the east. Good morning, everyone.

The second in command at the Justice Department rejecting suggestions that Special Counsel Robert Mueller cannot dig into Trump family finances. The deputy attorney general Rod Rosenstein saying Mueller can look into any crimes he might discover within the scope of his probe. Rosenstein's remarks to Fox News Sunday come days after President Trump said Mueller would cross a red line, a red line, if he digs into his family's finances.

MARQUEZ: Now, CNN reported last week that federal investigators are looking into potential ties between Russia and the president and his associates, viewing any such ties as fertile ground for their probe. Rosenstein authorized the special counsel after Attorney General Jeff Sessions recused himself. As Sunday, about the limits of Mueller's investigation, Rosenstein said he would have to approve any expansion.


ROSENSTEIN: The special counsel is subject to the rules and regulations of the Department of Justice. We don't engage in fishing expeditions. Now, that order that you read that doesn't detail specifically who may be the subject of the investigation because we don't reveal that publicly. But Robert Mueller understands and I understand the specific scope of the investigation. And so, no, it's not a fishing expedition.


ROMANS: Questions about the Russian investigation coming as intrigue builds around the White House and who may occupy it come 2020. Vice President Mike Pence emphatically denying a New York Times report that he is laying groundwork for a run for president if President Trump doesn't seek a second term, all this with the president beginning what he calls a working vacation at his golf club in New Jersey.

That's where we find CNN White House correspondent Athena Jones with the latest.

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Good morning, Christine and Miguel. Vice President Mike Pence is pushing back hard on this New York Times story, as are other White House officials. The vice president taking the unusual step of putting out an official statement on White House letterhead to respond to this story. In the statement, the vice president called the story disgraceful, offensive, categorically false, laughable, and absurd. Two Pence aides, a spokesperson, and his chief of staff, his chief of staff was mentioned in the New York Times story, also taking to Twitter to refute the story calling it fake news.

And White House counselor Kellyanne Conway appearing on ABC'S This Week called the story complete fiction. Watch.


KELLYANNE CONWAY, COUNSELOR TO THE PRESIDENT: It is absolutely true that the vice president is getting ready for 2020 for re-election for vice president.


CONWAY: And for 2018, zero concern. That is complete fiction. That is complete fiction. And I know his advisers who had comments attributed to them have pushed back very strongly, as has the vice president, and as am I right now unequivocally. Vice President Pence is a very loyal, very dutiful, but also incredibly effective vice president, active vice president with this president.


JONES: And I think the operative phrase in what Kellyanne Conway said was very loyal. White House officials want to make it very, very clear that the vice president has no designs on the president's job in 2020. And I think it's important to note that President Trump has made it quite clear that he plans to run again, that he hopes to be a two-term president. In fact, he filed the paperwork to do so early in his presidency and has held multiple campaign rallies. That is why we're seeing such strong pushback from the White House on this story. Christine, Miguel.

MARQUEZ: Thanks to Athena Jones.

A senior Republican official tells CNN Vice President Mike Pence is doing everything he can to avoid being seen measuring the drapes in the Oval Office. That includes keeping President Trump informed ever step of the way as he sets up his own -- raising his own PAC, the Great America Committee. In fact, Don, Jr., and Eric Trump even talked about possibly getting involved in raising money for Pence's PAC.

[00:00:00] ROMANS: The GOP official adding Pence may have been eager to put out his statement given the timing with the New York Times' story coming out days after the special counsel is issuing grand jury subpoenas. The president pushing back against news coverage that he doesn't like, now offering his own take on the news. A former CNN commentator Kayleigh McEnany is now giving campaign-style videos on the president's Facebook page. The first video cited positive news and credited Trump with the successes. If you don't like the real news, make your own broadcast.

MARQUEZ: I hear this all the time, though. The real news isn't getting out.

ROMANS: That's right. So, now, you can see Kayleigh McEnany in Facebook with the new program.

Secretary of State Rex Tillerson says the international community is united in its expectation that North Korea will take steps to denuclearize. Tillerson is in the Philippines at a forum of Southeast Asian nations. He is ramping up pressure on North Korea just days after the U.N. Security Council unanimously approved the toughest sanctions to date against the Kim Jong-un regime.


REX TILLERSON, U.S. SECRETARY OF STATE: So the next steps obviously are to see that the Security Council resolution sanctions are enforced by everyone. We will be monitoring that carefully. And certainly having conversations with any and all that we see who may not be fully embracing not just the spirit of those sanctions, but the operational execution of those sanctions. (END VIDEO CLIP)

MARQUEZ: All eyes now are on China. North Korea's largest trading partner, the Chinese, voted for the U.N. sanctions. It will be key to implementing them.

We'll go to Manila and bring in CNN's Ivan Watson. Ivan, there's such a heavy sanctions regime on North Korea already. They've said in a recent statement just a short time ago that they are going possibly to retaliate. What's in it for the North Koreans? How do the sanctions get any closer to shutting down their nuclear program?

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, the argument is that the sanctions ban North Korea's coal, iron, and even seafood exports. And Washington says that that may deprive North Korea of up to one-third of its export revenue, which could be potentially very punitive. But North Korea's already responded in characteristic style saying that these sanctions are a violent violation of North Korea's sovereignty. That there's no chance that North Korea will put its nuclear weapons program on the negotiating table, and that if the U.S. thinks it's safe overseas, that its land is safe, it's sorely mistaken.

So it doesn't look like this will change Pyongyang's behavior even though in addition to the sanctions, you've had Southeast Asian nations here at the conference I'm at, they've put out a statement expressing grave concerns about North Korean intercontinental ballistic missile launches. The Chinese foreign minister face to face with the North Korean foreign minister yesterday, he said, listen, you've got to stop firing missiles. We're still waiting to hear what the Russian foreign minister said to this North Korean diplomat. But judging by what we're hearing out of Pyongyang right now, it doesn't seem like any of this diplomatic pressure that the U.S. is succeeding in helping lead, it doesn't look like it's making a dent against the North Korean regime.

MARQUEZ: I tell you, past experience, if we draw from that, every time the U.S. or international community has cracked down on North Korea, it has only furthered their efforts to have a successful nuclear program.

WATSON: I mean, they've made it clear that they're willing to endure economic hardship, whatever it takes, because they view having nuclear weapons as their only real deterrence against not only the U.S., which has you know tens of thousands of troops stationed across the demilitarized zone in South Korea, but also against South Korea, as well. But what's been truly interesting about the last weekend is seeing despite all the enormous differences that Washington has with both Russia and China that they were able to get these two other powers to sign on to this unanimous approval of new sanctions against North Korea, and to also hear the Chinese government stepping in and saying, OK, sanctions aren't the end result, but what we do need to get is an end to the missile launches.

And perhaps, perhaps the U.S. Secretary of State Rex Tillerson, the fact that he is also offering to talk to the North Koreans, if they at least stop launching missiles every kind of week or so, perhaps that's part of what has helped convince the Russians and the Chinese to join the U.S. in this latest diplomatic effort. We'll be watching closely to see will Rex Tillerson at least make eye contact or even shake hands with his North Korean counterpart at this great big Asian regional forum meeting that's taking place as we speak.

That's a time when dozens of diplomats will be under the same roof. So it will be interesting to hear if there's any interaction between these two leaders.

[04:10:11] MARQUEZ: Very interesting that the North Koreans have long wanted those direct talks with the U.S. Ivan Watson for us in Manila. Thank you.

ROMANS: Also there in Manila, Secretary Rex Tillerson, the Secretary of State, met with Russian Foreign Minister Sergei Lavrov. The two men agreed the U.S. and Russia can keep an open dialogue, can still work together on a number of complex issues. The Secretary of State says he made it clear a lot of harm has been done by the Kremlin.


TILLERSON: Russian meddling in the elections was certainly a serious incident. Trying to help them understand just how serious this incident had been and how seriously it had damaged the relationship between the U.S., the American people, and the Russian people, that this had created serious mistrust between our two countries, and that we simple have to find some way to deal with that.


MARQUEZ: The Kremlin has ordered the U.S. to cut its diplomatic staff by 60 percent in retaliation for new sanctions. Tillerson told Lavrov he would respond to that request officially by September 1.

ROMANS: It is Monday, it is 11 minutes past the hour. Let's check your money this morning.

The benefits of charitable giving might change if lawmakers push through tax reform. That's according to new analysis from the Congressional Budget Office. Now, most people do not donate to charity just because of the tax breaks they'll get. But the Republicans plan to double the standard deduction, lower income tax rates, and repeal the estate tax, has charity experts concerned. Let me explain why.

Increasing the standard deduction would mean fewer people would itemize and claim the break. Lowering tax rates would then make the deduction less worthwhile for those who still take it. How much could donations drop by? Between $5 billion and $13 billion a year, according to one study, that's about 4.6 percent. But those in favor of these tax proposals say this could lead the people actually giving more to charities. They say if a person has to pay less to the government, they're more likely to give more money to charity.

MARQUEZ: If we ever get to tax reform.

ROMANS: Assuming that there is.

MARQUEZ: The budget's up next, yes?


MARQUEZ: The budget looks like it's going to be heavy lifting.

ROMANS: There are a lot to cross and to dot before tax reform.

MARQUEZ: Interesting. The city of Chicago plans to sue the federal government today. Why the city says changes to sanctuary city funding are a federal overreach.


[04:16:43] MARQUEZ: The city of Chicago getting ready to sue the Justice Department. Mayor Rahm Emanuel is challenging new stipulations placed on federal grant money that require local police departments to assist with federal immigration enforcement. The city is arguing those stipulations federalize local detention facilities and violate the Fourth Amendment. This as the Trump administration threatens to cut off funding for sanctuary cities like Chicago. Last year, Chicago police received $2.3 million from justice assistance grants using money to buy SWAT equipment, radios, and tasers.

A nationwide manhunt is underway for an Ohio man who overpowered a sheriff's deputy in a transport van last week after a visit to a psychiatric hospital. A 32-year-old Brandon Lee Powell of Antwerp, Ohio, a rape suspect, was restrained by leg shackles and handcuffs in the back of the van when he jumped over a seat, put the deputy in a headlock, and caused the van to crash. Powell then got hold of the deputy's gun, forced him to unlock the restraints, and handcuffed him to the steering wheel, making off with his wallet and weapon. Amazing.

ROMANS: The governor of Minnesota declaring Saturday's bombing at a Minneapolis area mosque a cowardly act of terrorism. About a dozen men were praying nearby when an improvised explosive device detonated and set Imam's office on fire. No one was injured. The Islamic Community Center suffered extensive damage. On Sunday morning, the Governor Mark Dayton and other lawmakers visited the center in a show of solidarity along with more than 100 neighbors.

All right. Next, a CNN exclusive. Inside a besieged Syrian city just finding some normalcy, thanks to a ceasefire. It was brokered by the U.S. and Russia, but who are locals giving the credit to? We go on the ground to Syria next.


[04:23:02] ROMANS: Welcome back. Good morning.

The U.S. and Russia recently brokered several ceasefire deals in Syria, but critics say the so-called de-escalation zones enforced by the Russians make the U.S. dependent on Russia for its policy in Syria. How's that working on the ground? CNN was the first international network to visit the most recent and controversial zones.

In an exclusive report here, CNN senior international correspondent Fred Pleitgen found residents and the Syrian army saying they are happy with the deal and thanking Russia for it.


FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: It was one of the most violent battlefields in Syria. Syrian army video shows fighting between government forces and rebels in Quneitra, right on Israel's doorstep. But now, there is a ceasefire. Tents are parked, soldiers relaxed.

The fighting has significantly decreased since the ceasefire, this officer tells me, you totally notice that. We don't hear shelling anymore, but sometimes the Al-Nusra Front breaks the troops. Al-Nusra is not part of the agreement. If they start shooting, we have to retaliate.

This is the frontline right in the heart of town. While both the U.S. and Russia brokered this truce, the Syrian government troops feel it's Russia that has the upper hand.

UNIDENTIFIED MALE (THROUGH TRANSLATOR): Russia has helped a lot, he says. They laid the groundwork for the ceasefire. They have the most power.

Quneitra is one of three areas in Syria where the U.S. and Russia negotiated truces between government and opposition forces. The people here say of course they appreciate the calm since the ceasefire's been put in place, but they also say it's had almost an immediate impact on life here, with more people venturing out and many businesses opening their doors once again.

A lull on the baffled means more commotion at the barbershop, where soldiers and townspeople now come to get a trim.

HADI AL-ASSAD (THROUGH TRANSLATOR): We want this to be solved for good, he says. We just want our lives to be the way they were before.

[04:25:15] Farming is also ramping up again. Nassir al-Sayyed spends hours in the blazing sun threshing wheat. While he commends both Russia and America for brokering the truce, he's grateful only to Moscow.

NASSIR AL-SAYYED (THROUGH TRANSLATOR): If America would have wanted to solve this, they could have done it a long time ago, he says. Russia is working hard. They are strong allies.

From posts on the Golan Heights, Israelis are observing things with growing unease. The Israelis fear the ceasefire could allow its archenemies, Iran and Hezbollah, supporters of the Assad government, to move forces into the area.

But, at the moment, the people in this town aren't worried about bigger Middle Eastern security concerns. They're just enjoying the calm while it lasts. Fred Pleitgen, CNN, Quneitra, Syria.


ROMANS: So fortunate to have Fred there on the ground able to talk to people about what it's like. Thanks for that, Fred.

ROMANS: President Trump calls the Russia probe a total fabrication, but the second in command at the Justice Department says the investigation is expanding, and it won't be limited as the president hopes.

That, plus Mike Pence firing back at reports that he's readying for a White House run. We'll explain all that coming up.