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Special Counsel Robert Mueller's Scope of Work; Vice President Mike Pence denies "New York Times" Report; Global Pressure on North Korea; Eight Days of Record Highs for the Dow; Ceasefire in Syria; City of Chicago Suing the Justice Department; No Let Up On Venezuela's Deadly Violence. Aired 4:30-5a ET

Aired August 7, 2017 - 4:30   ET




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


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

MIGUEL MARQUEZ, CNN ANCHOR: And the vice president with a harsh rebuke of "The New York Times" report saying he's laying the groundwork for a White House run. He slams the suggestion as disgraceful, offensive, and absurd.


REX TILLERSON, SECRETARY OF STATE: I think it's quite clear in terms of there being no daylight among the international community as to the expectations that North Korea will take steps.


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

Welcome back to EARLY START. I'm Christine Romans.

MARQUEZ: And I'm Miguel Marquez. Happy Monday to you.

ROMANS: Nice to see you.

MARQUEZ: Thirty-one minutes past the hour.

The second in command at the Justice Department rejecting any suggestions Special Counsel Robert Mueller can't dig into Trump family finances. Deputy Attorney General Rod Rosenstein says 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 if he digs into the family's finances.

ROMANS: CNN reported last week that federal investigators are looking into potential financial 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. Asked Sunday about the limits of Mueller's investigation, Rosenstein said he'd have to approve any expansion.


ROSENSTEIN: The special counsel is subject to the rules and regulations of the Department of Justice and we don't engage in fishing expeditions. Now that order that you read, that doesn't detail specifically who may be the subject of an investigation --


ROSENSTEIN: -- because we don't reveal that publicly. Bob Mueller understands and I understand the specific scope of the investigation. And so no, it's not a fishing expedition.


MARQUEZ: Questions about the Russia 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's laying the groundwork to run for president himself 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 find CNN White House correspondent Athena Jones.

ATHENA JONES, CNN WHITE HOUSE CORRESPONDENT: Good morning Christine and Miguel. Vice President 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 the story. In the statement, the vice president called the story disgraceful, offensive, categorically false, laughable, and absurd.

Two Pence aides, his 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 as vice president. GEORGE STEPHANOPOULOS, ABC HOST: So no concern he's setting up a

shadow campaign?

CONWAY: And he's also getting ready for 2018 -- zero concern. That is complete fiction. That is complete fabrication. And I know that his advisers who had comments attributed to them have pushed back very strongly and so 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 very early in his presidency and has held multiple campaign rallies.

[04:35:07] That is why we're seeing such strong pushback from the White House on this story. Christine, Miguel.

MARQUEZ: Thank you, Athena Jones.

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's ramping up the 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.


TILLERSON: 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 the sanctions but the operational execution of those sanctions.


ROMANS: All eyes now on China, North Korea's largest trading partner and neighbor. The Chinese voted for the U.N. Sanctions. The Chinese will be key to implementing them.

I want to go live to Manila and bring you CNN's Ivan Watson for the very latest. Good morning Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Christine. The Chinese foreign minister personally delivered this message to the North Korean foreign minister in their face to face meeting here on Sunday, that listen, you really have to stop firing these ballistic missiles off all the time that are banned under the United Nations Security Council multiple resolutions.

But now we're hearing from the North Korean regime itself. It put out a statement saying that the latest Security Council resolutions which ban North Korea's exports of iron and coal and even seafood, that they're basically an attack on North Korea's sovereignty, that nothing like this is going to stop North Korea from continuing to develop its nuclear weapons, which it argues is a legitimate and valued piece self-defense.

The U.S. and Rex Tillerson have succeeded somewhat in making North Korea's nuclear weapons program the focus of this diplomatic gathering here in Manila. You had Southeast Asian nations putting out a statement, a joint statement expressing grave concern about last month's two intercontinental ballistic missile launches by North Korea.

You had the Chinese with their message to the North Koreans as well. And also you've heard from Secretary of State Rex Tillerson himself saying that, listen, we would be willing to talk to the North Koreans if they would just stop firing these ballistic missiles, that that would be a strong signal.

It's not a message that seems to be resonating in Pyongyang, though, which continues to respond defiantly and continues to threaten the U.S. with one statement coming out saying that there is a mistake in the U.S. If you think that you're safe across the ocean from us. Christine?

ROMANS: All right. Fascinating. Thank you very much for that, Ivan Watson for us this morning in Manila.

MARQUEZ: Secretary Tillerson also met with Russian foreign minister Serge Lavrov in Manila. The two men agreed the U.S. and Russia can keep an open dialogue and still work together on a number of complex issues. But 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. and 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: Now the Kremlin has ordered the U.S. to cut its diplomatic staff in Russia buy about 60 percent in retaliation for new sanctions. Tillerson told Lavrov he would respond to that request officially by September 1.

ROMANS: All right, time for an EARLY START on your money. A phenomenal run for stock market investors who have generally ignored the political headlines in Washington over the first 200 days of President Trump's tenure. It is 200 days today, folks. The two things that are driving the gains here -- hope for tax reform and stellar corporate profits. Let's look at how the stock market has reacted to President Trump's first 200 days.

U.S. Futures right now, slightly higher. The Dow gaining 66 points Friday after a stronger than expected jobs report. That makes it eight straight days of record highs for the Dow. Since the president took office, the Dow has gained more than 11 percent. That is a nice return for investors. Call it the cherry on top of the bull market that started in March of 2009 under President Obama. That's the long view right there, folks.

Now, this president taking credit for stock market records and for strong jobs growth, more than a million jobs created since the president took office.

[04:40:03] Just about matching the pace of jobs created under the final six months of the Obama administration. I can tell you exactly what it is. The first six months of Trump's presidency, 1,074,000 jobs created. That' a nice strong jobs phase. The last six months of the Obama administration, 1.1 million jobs, so just about matching the Obama administration.

MARQUEZ: It's amazing how long it's taken to get out of that 2008 recession --


MARQUEZ: -- and get the jobs back up. All right, the presidential wedding crasher strikes again, taking a break from his August break. President Trump greeted guests at the wedding party at his New Jersey golf club wearing khakis and a white golf shirt and his trademark "Make America Great Again" hat.

president asked, is everyone having a good time, and shook guest hands for a few minutes. One guest who posted pictures on social media and the White House then declined to comment. But it looks like he's having a good time on vacation.

ROMANS: Look how a beautiful day at Bedminster. Working vacation. They're under construction in the west wing, so he's taking meetings and he's working --

MARQUEZ: Fixing the A.C., which I'm sure is sorely needed in Washington this time of year.

ROMANS: All right, 41 minutes past the hour. A besieged Syrian city finding some normalcy thanks to a cease-fire. It was brokered by the U.S. and Russia. In a CNN exclusive, we're going to take you inside Syria where locals tell us who they give the credit for this newfound quiet.


ROMANS: The city of Chicago getting ready to sue the Justice Department. Mayor Rahm Emanuel is challenging new stipulation placed on federal grant money. They require local police departments to assist with federal immigration enforcement. The city arguing those stipulations federalized local detention facilities and violates the fourth amendment.

The Trump administration threatening to cut off funding for sanctuary cities like Chicago. Last year Chicago police received $2.3 million from justice assistance grants using the money to buy S.W.A.T. equipment, radios and tazers.

MARQUEZ: Excessive corrosion caused a ride to malfunction at the Ohio State Fair last month, killing a teenager and injuring seven others. The manufacturer of the Fireball, KMG, says the interior gondola support beam eroded so badly over 18 years it caused a catastrophic failure. The ride broke apart, launching some people 20 feet through the air. The Fireball had been checked several times in the days before the accident. A new inspection protocol has been developed by KMG to prevent similar incidents.

ROMANS: A nationwide manhunt underway for an Ohio man who overpowered a sheriff's deputy last week after a visit to a psychiatric hospital. Thirty-two year-old Brandon Lee Powell of Antwerp, Ohio, a rape suspect, was restrained by leg shackles and handcuffs in the back of a transport van, but he manage to jump 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 deputy's wallet and weapon.

Heavy rains today in the northeast with possible flooding and Philly and Washington. Meteorologist Pedram Javaheri has more.

PEDRAM JAVAHER, AMS METEOROLOGIST: Good morning, Miguel and Chtistine. Watching the soggy pattern here to start off the week and a lot of cooler temperatures expected as well across the Midwest, on in two parts of the northeast with the cloud cover, with the wet weather, the one good element at least to start off the week will be the cooler temperatures.

Some severe weather concerns that's mainly confined towards parts of the Delmarva -- about 4.5 million in line for this, and I think damaging winds and large hail really the main threat across this region. But notice, when you talk about flooding the next couple of days, not just over parts of the central states, but also around parts of the Delmarva. You could see as much as four to six inches inside the next two days.

With that said, notice the trend will want to gradually warm those temperatures up. New York, up to 81 to 82 degrees on Tuesday and Wednesday. In Cleveland, we see a warming trend. Back in Chicago also seeing temps climb back toward seasonal values, as well. Into the tropics, we're watching an area of disturbance with a low probability of formation in the next five days.

Franklin has already formed as a tropical storm. And at this point, threatening not only parts of Cozumel just south of Cancun there. Could potentially impact areas of eastern Mexico as we go in toward the latter portion of this week. Guys? ROMANS: All right. Thank you so much for that. All right, and then

there's this -- a Google engineer's sexist memo saying women are not suited for tech jobs for biological reasons.


ROMANS: Oh, uh, let's just say outrage ensues, but we get to check that in CNN Money, next.


MARQUEZ: Welcome back. The U.S. and Russia recently brokered several cease-fire deals in Syria. But critics say those so-called de- escalation zones enforced by the Russians make the U.S. Dependent on Russia for its policy in Syria. How is it going to work out on the ground? CNN was the first international network to visit the most recent and controversial zones.

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


FRED PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): It was one of the most violent battlefields in Syria. Syrian Army videos shows fighting between government forces and rebels in Quneitra, right on Israel's doorstep. But now there's a cease-fire. Tanks are parked, soldiers relaxed.

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

PLEITGEN: This is the front line, right in the heart of town. While both the U.S. and Russia brokered this truce, the Syrian government troops feel its Russia that has the upper hand.

"Russia has helped a lot," he says. "They laid the groundwork for the cease-fire. 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 cease-fire'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 battlefield means more commotion at the barber shop where Hadi al-Asaad works and many soldiers and townspeople now come to get a trim.

[04:55:00] "We want this to be solved for good," he says. "We just want our lives to be the way they were before." Farming is also ramping up again. Nasir al Sayed 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. "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, Israel is observing things with growing unease. The Israelis fear the cease-fire could allow its archenemies, Iran and Hezbollah, supporters of the Assad government, to move forces into this 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: All right Fred, thank you for that.

The deadly violence erupting in Venezuela showing no signs of letting up this morning. At least two people were killed as the government put down an anti-government attack at a military base. Authorities called it a paramilitary attack. But one of the uniformed leaders of the revolt identified himself as an army officer, calling it a legitimate rebellion against the government of President Nicolas Maduro.

MARQUEZ: Well, for his part, Maduro addressed the violence n his weekly TV show saying, quote, a week ago we won with votes and today we had to beat terrorism with bullets. Maduro was referring to the new constituent assembly which met for the first time Saturday. The body promptly fired Venezuelan Attorney General Luisa Ortega Diaz after she promised to investigate allegations of fraud in last week's votes. Ortega is vowing to press on saying she is still attorney general.

ROMANS: Just misery for millions of people in Venezuela as that economy craters.

Let's get a check CNN "Money Stream" this morning. U.S. Futures slightly higher right now. The Dow gained 66 points Friday after a stronger than expected jobs report. The U.S. added 209,000 jobs in July. The unemployment rate ticked down to 4.3 percent. That matches a 16-year low. We are nearing here what economists call full employment.

But wage growth still sluggish. Wages grew only 2.5 percent. The Federal Reserve would like to see wage growth kick up to 3.5 percent. Investors this week are eyeing earnings. Snapchat's parent company Snap reports on Thursday. The Wall Street is not holding its breath for anything positive. In May the company revealed a $2.2 billion loss in its first quarter.


ROMANS: Also a big week for retailers like Macy's, Nordstrom, Kohl's, which have been struggling against online retailers. We'll hear from all of those this week.

More bad news for Wells Fargo. It says there could be even more unauthorized accounts created than it originally reported. That was 2.1 million accounts. There could be more. The bank says it expanded its investigation to review accounts opened between 2011 and 2015. Wells Fargo has been trying to fix its battered image, its battered reputation since the scandal broke in September last year.

The bank was hit with $185 million fine. It has fired more than 5,000 employees tied to the scam. Earlier this month, Wells Fargo apologized for charging more than half a million customers for car insurance they never needed.

All right, an engineer at Google circulating a sexist memo. The male engineer says women aren't suited for tech jobs based on biological reasons. The document has been circulating inside Google for some time. It was made public this weekend. A CNN tech has not been able to identify the author just yet. He's reportedly a rank-in-file software engineer at Google.

The memo says that Google doesn't have more female engineers because men have a higher drive for status. That Google's commitment to hire more women will make the company less competitive. And that the gender wage gap is a myth. In the letter to employees this weekend, Google's diversity V.P. said, like many of you, I found that the document advanced incorrect assumptions about gender. It's not a viewpoint that I or this company endorses, promotes, or encourages.

MARQUEZ: Do you think this guy is still employed there?

ROMANS: I mean, wow.

MARQUE: It is a wow moment.

ROMANS: This is the programmer culture, right? We keep talking about why there's so much trouble for women in silicon valley, women in tech. I mean, every industry has its own kind of different version of this problem. But it's really stark in Silicon Valley. You've got somebody brave enough to go out there and put out a document explaining --

MARQUEZ: On paper.

ROMANS: -- why women can't hack it and shouldn't hack it because for biological reasons -- I mean, just like, hello, 1950.

MARQUEZ: My guess is women will strike back.


MARQUEZ: Guess what? What else is striking back in EARLY START. It continues right now.


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

(END VIDEO CLIP) [05:00:00] ROMANS: Special Counsel Robert Mueller can investigate any crime he uncovers in his Russia probe. That clarity from the Justice Department after the president himself said his finances should be off limits.