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Washington Awaits Mueller Probe Arrests; Questions Mount Over Puerto Rico Energy Contract; Top Administration Officials Talk Military Authority; Astros Lead Series After Epic Game Five. Aired 5:30-6a ET

Aired October 30, 2017 - 05:30   ET


[05:30:00] CHRISTINE ROMANS, CNN ANCHOR: They say the first arrest may be imminent in the Russia investigation after a federal grand jury has approved its first charges.

DAVE BRIGGS, CNN ANCHOR: The Trump administration bracing for the first arrest in the Mueller probe but the president is shifting focus -- where else, Hillary Clinton.

Thanks for getting an early start with us. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. It is Monday morning. It is 30 minutes past the hour. Nice to see you all this morning.

This morning, Washington is on edge waiting for a possible arrest in Special Counsel Robert Mueller's probe on Russian interference in the 2016 election.

CNN was first to report on Friday that a federal grand jury has approved the first charges in the Russia investigation but that indictment is still sealed. We don't know what those charges are or who they target.

BRIGGS: The special counsel's team has examined foreign lobbying by former Trump campaign chairman Paul Manafort and former National Security adviser Michael Flynn. They are also looking at whether the president's firing of FBI Director James Comey amounted to obstruction of justice.

ROMANS: Many are wondering whether the president might pardon some or all of Mueller's targets or whether he might fire Mueller, himself. This, as "The Wall Street Journal" editorial board calls on Mueller to resign.

BRIGGS: Meantime, some Republican leaders say the Trump administration should let the Mueller probe take its course and those targeted by the special counsel should take it seriously.


GOV. CHRIS CHRISTIE (R), NEW JERSEY: I think anybody who's been advised by the special counsel's office that they're a target in the investigation, which I'm sure he has done to those people who are, should be concerned. REP. TREY GOWDY (R-SC), CHAIRMAN, HOUSE OVERSIGHT COMMITTEE: I would encourage my Republican friends, give the guy a chance to do his job. The result will be known by the facts -- by what he uncovers. The personalities involved are much less important to me than the underlying facts, so I would say give the guy a chance to do his job.


BRIGGS: All right. We get the latest now from CNN crime and justice reporter Shimon Prokupecz.


SHIMON PROKUPECZ, CNN CRIME AND JUSTICE REPORTER: Dave and Christine, we expect to learn later today what charges were filed in connection with the special counsel investigation once a federal judge unseals the indictment.

A federal grand jury, as we reported on Friday, has approved these charges in Special Counsel Robert Mueller's probe, but the charges are sealed so we don't yet know who will be charged. We've been told that the expectation is that it was going to happen Monday.

Now, anyone who is facing the charges will be arrested and taken into custody by FBI agents and at some point will face a judge here in Washington, D.C.

Now this indictment, once it's unsealed, will give us a window into some of what the special counsel has been looking at and how it potentially relates to the Russia investigation -- Dave, Christine.


BRIGGS: All right, Shimon, thanks.

Joining us here is CNN senior political analyst Ron Brownstein, a senior editor at "The Atlantic" --


BRIGGS: -- fresh off of five hours and 17 minutes of baseball.

BROWNSTEIN: Less than five hours and 17 minutes ago.


BROWNSTEIN: Yes, that's right.

BRIGGS: So as much as I want to talk about our (INAUDIBLE) to say yes.

BROWNSTEIN: Right, right. I said I -- yes, I say yes.

BRIGGS: OK. We have to talk about how the president just might react to whatever these charges -- BROWNSTEIN: Right.

BRIGGS: -- are in the special counsel investigation.

We got perhaps a glimpse where else, on Twitter. The president went on this tweetstorm. We only have a couple of minutes but we'll put it up for you on the screen.


BRIGGS: It started with "Never seen such Republican anger and unity as I have concerning the lack of investigation on Clinton-made fake dossier" -- you can read the rest folks.

TEXT: "(now $12,000,000, the uranium to Russia deal, the 33,000-plus deleted e-mails, the Comey fix, and so much more. Instead, they look at phony Trump-Russia collusion, which doesn't exist.

The Dems are using this terrible (and bad for our country) witch hunt for evil politics, but the R's are now fighting back like never before. There is so much guilt by Democrats/Clinton and now the facts are pouring out. Do something!"

BROWNSTEIN: Yes, right.

BRIGGS: We only have so much time.

How do you expect the president to react and how key is that?

BROWNSTEIN: Well look, I think it's going to be -- it's going to be fascinating because the lawyers involved in the White House and the outside counsel have tried to push him toward a posture of at least public accommodation of the -- of the special counsel and avoid the confrontation.

But as you see, he is drawn to two messages. One, undermining -- trying to undermine the credibility of the investigation itself and second, shifting the focus to Democrats.

I think, particularly, that second message about, you know, Hillary Clinton -- who is not the president, we should underscore -- goes with the larger communication strategy we've seen since day one which at least from the president himself, has been focused overwhelmingly on energizing and mobilizing his base rather than trying to persuade or enlarge -- push voters outside that base or enlarge that base.

ROMANS: Well, but there's real policy stuff happening this week, too.

BROWNSTEIN: Real stuff.

ROMANS: You know, we've got tax reform. We're going to see a bill on Wednesday about tax reform. You say it's going to be tax cuts, not tax reform.


ROMANS: Why do you say it's just tax cuts?

BROWNSTEIN: Because tax -- because it's not going to be revenue- neutral, right? I mean, what they said was they wanted permanent tax reform which requires them to raise enough money to offset the cost of the tax cuts. That's the rules under reconciliation.

They're not going to get anywhere near that. There's no remote indication this White House has the kind of the dexterity and the political kind of wrangling skills to do what they did in 1986, which was a revenue-neutral changing the tax code. This is a big tax cut.

And part of the problem they've got is the distribution tables and the early analysis from the Tax Policy Center show that it provides pretty minimal benefits to people around the median and below and actually raises taxes on a majority of families between $150,000 and $350,000 who are many of the same white-collar voters who have been pulling back from the president on cultural and behavioral grounds, all in the service of a tax cut for people at the very top.

[05:35:05] Eighty percent of the benefits in the unified --


BROWNSTEIN: -- in the framework to people in the top one percent by 2027.

And I said, raising taxes on the upper-middle-class, particularly the high tax states and local jurisdictions -- I mean, that is a very tough political equation.

BRIGGS: Paul Ryan is getting a lot of pushback --

ROMANS: Right.

BRIGGS: -- about the Tax Policy Center.

ROMANS: And the president --

BROWNSTEIN: Right, right.

BRIGGS: He's done it in a very wonky way.


BRIGGS: He clearly doesn't like their format.

BROWNSTEIN: And he says the corporate tax cuts will, you know, trickle down into wages.


BROWNSTEIN: Look, they're going to put out a specific bill on Wednesday.

ROMANS: We'll see.

BROWNSTEIN: They'll be another round -- they'll be another round, yes.

ROMANS: It will be -- we're calling it corporate hunger -- I've heard it called corporate hunger games.


ROMANS: You're going to have all of these lobbyists now all trying to fight to save their -- because if you look -- if you've got the effective tax rate of American companies is what, 18 -- profitable American companies is 18 percent. The president wants 20 percent -- well, he actually wants 15 percent tax rate, but 20 percent is what's in this bill, you know. They're all going to be fighting over how that's going to happen.

BROWNSTEIN: The National Association of Homebuilders, which wins a lot of fights on Capitol Hill --

ROMANS: Is against this.

BROWNSTEIN: -- has already said they're against the -- against the bill.

And look, this is a bill that is -- you know, the offsets are still leaving them $1.5 trillion short which in the long run -- I mean, the kind of paradox here is that in the long run, if you do a tax cut that enlarges the deficit that much, you are going to put more pressure, over time, on the entitlement programs at a point -- at a time when a majority of Donald Trump's votes came from whites over 45. Two-thirds of everybody 45 to 65 is white. Eight percent of the senior population is white.


BROWNSTEIN: Most of those people are voting Republican and in the long run, it is those programs that will face pressure if the deficit grows as much as projected.

ROMANS: And stock markets are at record highs and companies are making more money than they've ever made before, so it's kind of like -- the argument that you must reform the tax code immediately to juice the economy. The economy's doing great right now.


BRIGGS: But it -- all this has left the president at 38 percent --


BRIGGS: -- despite those numbers --


BRIGGS: -- Christine just gave out. Where do you see the numbers slipping for the president?

BROWNSTEIN: Well, what's fascinating is you're seeing it really on both ends of the coalition now.

As I said, if you compare Donald Trump to other Republican presidents his most conspicuous weakness is that he's only in the mid-thirties among college-educated white voters, and that -- they were skeptical of him to begin with. They've gotten more skeptical in office, mostly around behavior.

I think what's got to be more worrying for Republicans is that you look at both the Fox and MSNBC -- and NBC-Wall Street Journal poll, he's down around 50 percent among college-educated -- among white voters without a college degree. That was his core constituency. He won 67 percent of those voters in 2016.

BRIGGS: Why is he losing them?

BROWNSTEIN: Well, I think it's more policy. I think it was -- I think the big decline we saw was around the health care bill, especially among women.

Non-college, white women, you know -- probably the biggest single reason he's president is how many non-college, white women and working-class, white women voted for him over the first white woman nominee and particularly, in the Midwestern states. They're down a 40 percent approval in that NBC/Wall Street Journal.

They did not like the health care bill. They did not like the idea of pulling back on government attempts to provide -- you know, these are economically strained voters. And they're hoping that the tax cut will bring back a lot of these voters, but the initial reaction is that they see it as something that's primarily going to benefit the wealthy and corporations rather than them. They might not get as much bang for that buck --

ROMANS: Right.

BROWNSTEIN: -- as they are expecting.

BRIGGS: All right. Ron Brownstein, enjoy game six --


BRIGGS: -- in Los Angeles.

ROMANS: Up early for us. Thanks, Ron.

BROWNSTEIN: I'm looking forward.

BRIGGS: Good luck to the Astros and --

ROMANS: Nice to see you this morning. Happy Monday.

BRIGGS: -- your Dodgers.

Questions mounting in Puerto Rico where 70 percent of the island is still without power. These questions over a $300 million contract made with a small Montana energy company. We'll have the latest from San Juan, next.


[05:42:35] BRIGGS: This morning, Puerto Rico's electric company is set to cancel its huge power restoration contract with the Montana- based utility company at the request of the island's governor.

Questions have been swirling around the hiring of Whitefish Energy. The company is just two years old and had only two full-time employees on the day the contract was signed.

Many of the questions relate to the fact that Whitefish is based in the small hometown of U.S. Interior Secretary Ryan Zinke.

CNN's Leyla Santiago in San Juan with the latest.


LEYLA SANTIAGO, CNN CORRESPONDENT: Dave and Christine, Puerto Rico's power authority has said that it wants to cancel the controversial contract with Montana-based utility company Whitefish Energy.

And this comes on the same day that the governor of Puerto Rico has not only said that this contract should be canceled, but he also said that there should be a full investigation into the $300 million deal -- the contracting process behind it and the details that led to where we are today.

Remember, this is a controversial contract that many believed was a big task for a company that just perhaps wasn't ready to take it on to restore Puerto Rico's very vulnerable power grid. A company that's only two years and with very few employees.

Now, the contract is not canceled just yet but Puerto Rico has already said that it plans to exercise that cancellation clause in the contract. It will let Whitefish carry out its work here in the meantime.

And as I've been on the streets just today talking to Puerto Ricans, there is a sense of frustration that is just palpable. It is more than a month since Hurricane Maria and many are still without power, frustrated because many have lost their jobs because of businesses that cannot open at this time, on a day when only 29.7 percent of the power-generated capability is up and running.

Puerto Rico -- Puerto Ricans, rather, continue their frustration with the power system -- Christine, Dave.


ROMANS: All right, Leyla Santiago.

And again, the governor of Puerto Rico will be on "NEW DAY" later this morning so we'll get to hear from him directly on what's happening there. Defense Secretary Jim Mattis and Secretary of State Rex Tillerson set to testify today before the Senate Foreign Relations Committee. Lawmakers are looking at whether there's a need for a new, possibly more specific authorization for the use of military force.

The hearing comes amid mounting questions about the extent of military operations in Niger following that ambush that left four American soldiers dead.

[05:45:04] CNN's David McKenzie is live for us this morning in Niger.

You know, David, lawmakers -- they continue to have questions about what happened there in Niger. What's the latest on the investigation?

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Well, the details are coming out day after day but still, many questions, Christine, about what exactly happened earlier in October just pretty close to where I'm standing right now in the capital.

Now, it was on the border region of Niger and Mali. As we all know, those U.S. Special Forces led by the Green Berets came under sustained ambushed attack. U.S. officials saying that that convoy split up during the attack, some American soldiers trying to get out of their vehicles to outflank the enemy when they were really up against superior firepower.

The Nigerian government says -- since we've been here for several days hasn't said much at all, not responding to queries from their point of view.

We did speak to the Nigerian soldier who said he was surprised at the level of support that the Green Berets and other American soldiers had on the way out to that scene. We shouldn't necessarily read too much into that. This has been a very volatile border for some time, multiple attacks by ISIS and al-Qaeda-linked militants on both Nigerian soldiers and just village outposts.

And it begs the question is what is the solution to this insecurity within this region of Africa? The U.S Africa Command says it's vital to have American forces here on the ground, but many I'm speaking to here say that developments and other issues needs to be helped to get this region out of this instability -- Christine, Dave.

ROMANS: All right. David McKenzie for us in Niger this morning. Thank you so much for that.

BRIGGS: All right. Somebody's who's been all over the authorization of use of military force is Chris Cuomo. He joins us this morning for a look at what's coming up on "NEW DAY." Good morning, Chris.

ROMANS: Good morning, Chris.

CHRIS CUOMO, CNN ANCHOR: Good morning, my friends.

I mean, look, this will be an important process today, you know. The way this was supposed to work isn't the way it's going to play out right now. This is going to all kind of happen kind of tail first.

You're going to see that there are going to be hearings held in the committee where military leaders, including Mattis, are going to come in and they're going to talk about Niger. They're going to talk about what's going on and that's supposed to -- it's supposed to start a process of looking at the broader question, the bigger question.

Do our lawmakers know what the strategy is? Have they voted on it? The answer to that is no. And, should they -- and the answer to that is yes.

So we'll be following that.

We're also going to take a look at kind of like big boxes we need to check. What's going on with Mueller's investigation? We're going to take you through the timing of how we got to where we are right now, and we're going to talk about what could be expected.

We won't speculate too much thought about it because that's a waste of time, guys, let's be honest.

ROMANS: Right. I agree.

CUOMO: So we'll take a look at what it could be.

And here's the main point. There are two big ways that prosecutions start at a place of where we are right now. There are two ways you can go, big and small, and build. So we're going to talk about which one may make more sense in this situation.

ROMANS: All right.

BRIGGS: Jeffrey Toobin -- a lot of questions for him. He'll be on "NEW DAY" as well.

Chris, looking forward to it.

ROMANS: Thanks, Chris.

BRIGGS: See you in a bit.

CUOMO: Be well.

ROMANS: All right. Maryland is investigating part of Jared Kushner's family business. Why the state's attorney general is looking at certain apartments.

A check on "CNN Money Stream," next.


[05:52:49] ROMANS: All right. The Astros just one game away from winning the World Series after a phenomenal game in Houston ending just a few hours ago.

It was looking like a home run derby mid-game as the Astros' Yuli Gurriel tying the game with this three-run home run. The Dodgers fired back with another grand slam taking the lead in the fifth, but the Astros weren't done. Another three-run home run by Jose Altuve tying the game yet again.

BRIGGS: All right. So in the ninth, the Astros led 12-9. The Dodgers managed to stay alive. A two-run shot by Yasiel Puig.

Twenty-two home runs in this five-game series. That's a record.

Then they tied the game on that shot to center. Back come the Astros. Alex Bregman sealing Houston's victory in the tenth, a walk-off.

Astros lead the series 3-2. Dodgers hope to even the score back home in L.A. on Halloween, tomorrow night. Five hours, 17 minutes --


BRIGGS: -- in that one.

ROMANS: All right.

Academy Award winner Kevin Spacey apologizing to fellow actor Anthony Rapp and coming out as gay in the process.

Rapp, who now stars on CBS "STAR TREK DISCOVERY" -- he says Spacey came onto him -- an unwanted advance when he was 14 and Spacey was 26 years old.

Spacey apologized in a statement on Twitter saying he was horrified by the allegation. He said he did not recall the encounter.

He wrote this. "If I did behave as he describes, I owe him the sincerest apology for what would have been deeply inappropriate drunken behavior."

BRIGGS: Spacey then answered the question he's been resolutely coy about his entire career, saying quote, "I have had relationships with both men and women. I choose now to live as a gay man. I want to deal with this honestly and openly, and that starts with examining my own behavior."

ROMANS: Two women from Hawaii who were lost at sea for five months with their dogs say they would have been dead if the crew of the USS Ashland had not rescued them. Speaking on board the Ashland Sunday, the women thanked the crew who found them 900 miles off the coast of Japan, thousands of miles from their intended destination of Tahiti.


JENNIFER APPEL, RESCUED AFTER FIVE MONTHS ADRIFT IN PACIFIC OCEAN: Had they not been able to locate us we would have been dead within 24 hours. These fine men and women behind us took us into their care, brought us under their wing, gave us safety, took care of our animals, gave us toothbrushes -- things that we didn't even think about bringing with us when we left.


[05:55:22] BRIGGS: Toothbrush?

ROMANS: That is quite a story. Five months at sea. I can't even imagine.

BRIGGS: They didn't bring a toothbrush?

ROMANS: I know. You're like -- they had enough food for a year but not a toothbrush.

BRIGGS: All right. If I sailed one day I'd have brought a toothbrush.

ROMANS: Because you have toothbrush --

BRIGGS: It's a great story. I don't mean to get sidetracked.

All right. More than a million people without power this morning after a huge storm hit the northeast Sunday and right now, about 45 million people under a flash flood watch on this, the fifth anniversary of Superstorm Sandy. All this means a very tough morning commute across the region.

Meteorologist Karen Maginnis with the latest.


KAREN MAGINNIS, AMS METEOROLOGIST: There are going to be a lot of frustrated business travelers, Dave and Christine, this morning as our powerful storm system continues to pull away from the northeast and New England. But in its wake, boy, have we seen quite a bit of damage with the high wind, the heavy rainfall.

Here's some of the wind reports. Well, Mt. Washington up around 6,000 feet, wind was gusting up to 124 miles per hour. But, Charleston, Rhode Island, and Taunton, Massachusetts, we had wind gusts close to that 70 miles per hour mark.

Well, the rainfall is still persistent across this region and as of late, two to four additional inches of rainfall expected in coastal regions of Massachusetts, so kind of a soggy start to the work week.

Take a look at the winds. Some of the winds are gusting up near hurricane force. But as it pulls away into southern Canada we'll start to see that begin to taper off and the temperatures will start to rebound.

New York City, you go from the fifties into the upper sixties towards the end of the work week. And for Atlanta, back again into the low seventies.

Back to you guys.


ROMANS: All right.

A million without power. Check those school listings, folks. You might have some late starts here.

Let's get a check on "CNN Money Stream" this morning.

Global stock markets are mixed. U.S. futures looking kind of flat here.

We're expecting stocks to take a breather after Friday's power rally on the Nasdaq. The Nasdaq up more than two percent, it's biggest one- day gain in almost a year.

Great, strong quarterly results from some of these big tech names like Amazon, Microsoft, Google parent Alphabet. All of them showing really strong earnings. And the S&P 500 hit a record high as well.

Maryland is investigating one the Kushner family's real estate businesses. Earlier this year media reports surfaced about an alleged abusive debt collection practices and poor conditions at some of its properties there.

The Kushner Company says it is cooperating with Maryland's attorney general and says it is in compliance with all state and local laws.

Jared Kushner, of course, stepped down as CEO of Kushner Companies when he joined the White House in January. He is the president's son- in-law and a top adviser to the president.

Kushner has recused himself on certain policy issues but his family's real estate business remains under increased scrutiny given his proximity to the president.

All right. Facebook is outlining now new steps to make ads more transparent. The move comes amid ongoing concern Russia used Facebook to influence last year's election.

The social media giant will require political advertisers to verify their identities and will label who paid for the ad. Users then can click on the disclosure to see even more information about the advertisers. Facebook is also building an archive of election ads. The new efforts will begin testing in Canada next month.

This week, Facebook, as well as Twitter and Google, are set to appear on Capitol Hill to answer questions about Russian meddling in the election. All three companies acknowledge they sold ads to Russian agents.

There's some criticism of all of these companies that they have been --


ROMANS: -- slow to police their own platform.

BRIGGS: But we need the consumer -- we need the user to be more scrutinized.

ROMANS: We'll see -- we'll see if you'll be able -- you know, where it came from.


ROMANS: A lot of people read something they -- there's an old saying, don't believe everything you read, you know?

BRIGGS: Unfortunately, people do and will continue to do.

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

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


UNIDENTIFIED FEMALE: The first arrest in special counsel Robert Mueller's Russia investigation could happen as early as today.

CHRISTIE: Anybody who's been advised that they're a target of the investigation should be concerned.

REP. ADAM SCHIFF (D), CALIFORNIA: There's some press reporting that it's likely to be either Mike Flynn or Paul Manafort.

RICK SANTORUM (R), CNN CONTRIBUTOR, FORMER PENNSYLVANIA SENATOR: We still don't have any evidence on collusion.

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: The president, in a series of tweets, fired up what he calls a lack of investigations into Hillary Clinton and the Democrats.

JENNIFER GRANHOLM, FORMER GOVERNOR OF MICHIGAN: He's doing everything possible to distract and now this undercurrent to get rid of the prosecutor.

UNIDENTIFIED MALE: Are you considering firing Robert Mueller?


UNIDENTIFIED MALE: Donald Trump is still obviously obsessed with playing the Clinton card.

SEN. SUSAN COLLINS (R), MAINE: Perhaps there's something more going on here.


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

CUOMO: Welcome to our viewers in the United States and around the world. This is NEW DAY. It's Monday, October 30th, 6:00 here in New York, and here is our "Starting Line."