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THE LEAD WITH JAKE TAPPER

Tillerson: Relationship Between U.S. & Russia "Strained"'; Trump's Week: NK Taunt, Bombshell Book, "Sloppy Steve"; Feds Revive Corruption Case Into Clinton Charity; Source: Bannon Knew WH Lawyers Misled Trump About Comey; Biden: Tell Howard Dean "I Can Take Him". Aired 4:30-5p ET

Aired January 5, 2018 - 16:30   ET

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


[16:30:00] REX TILLERSON, SECRETARY OF STATE: It's had none. It never comes up in our conversations or in my bilats or my dialogue with world leaders elsewhere. The domestic issues around the Russia involvement in our elections are not part of our dialogue elsewhere. I think the rest of the world recognizes it is a domestic issue. It's an important one. The Russians and we talk about it and we have said to them, look, it's a problem.

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Do you think they're going to try to meddle in 2018?

TILLERSON: I don't know. I hope they don't.

LABOTT: Do you have evidence that they are?

TILLERSON: We have none yet, but we do know that Russia has involved themselves in other elections in Europe and elsewhere, so it is a message we convey to the Russians. The way I convey it is I don't understand why you do this, I don't understand what you think you're getting for this because it's not evident to me as to how is this benefitting you --

(CROSSTALK)

LABOTT: Well, chaos in the United States benefits them, right?

TILLERSON: Has it damaging -- but it damages Russia because we're not making progress and they're not making progress with others. So, we try to stay focused on the really big issues between us, which is Syria and the situation there, the situation in Ukraine and Eastern Europe, and creating stability in Eastern Europe, and recognize what Russia's concerns are. And we have very important talks coming up on the START Treaty and the INF treaty as well.

(END VIDEO CLIP)

LABOTT: You know, I think a lot of people expected when the president came in it would be a very warm relationship with Russia. If you look at the policies on Ukraine, election meddling, some of these sanctions that aren't being lifted. U.S. just sold -- is just approving the sale of lethal arms to the Ukrainians. It's actually quite a tough policy and Secretary Tillerson is really pushing hard on the Russians.

JAKE TAPPER, CNN HOST: Let me ask you, this book "Fire and Fury" has prompted a lot of questions from people, including the author, about the president's mental fitness. Rex Tillerson infamously and allegedly referred to the president as a moron.

What did he have to say about the president's fitness?

LABOTT: Well, he said, listen, I spend more time than almost any cabinet secretary, along with Secretary Mattis, with the president and he said that the man that's described in the book is not the caricature that is portrayed and he said that the president is engaged and, you know, really pays attention. He's not, you know, bored or walking out of meetings with world leaders.

Take a listen to what he said when I asked him about the president's fitness.

(BEGIN VIDEO CLIP)

TILLERSON: I have no reason to question his mental fitness. My relationship with him, and it is a developing one, and I'd remind people and I think it's well-known that he and I did not know one another before he asked me to serve as secretary of state. So, we don't have a lot of history and past. So, part of this is us knowing -- coming to learn and understand one another.

(END VIDEO CLIP)

LABOTT: And I think, you know, the secretary was very candid and reflective in this interview, Jake, that it's been a rocky year, kind of getting to know Washington, getting to know this president. They have very different management styles. And he said he's, you know, starting to get his sea legs and said he's not going anywhere.

The reports of his demise that he'll be out any time soon are premature. The president has not given any indication whatsoever, in his words, he's going to be relieved of his duties anytime soon. He's staying through the year.

TAPPER: All right. Elise Labott, thank you so much.

It's not the first time people in the White House have trashed each other, but just how over the top is what we're witnessing right now? We're going to speak to one man who has served in several White Houses, next.

(COMMERCIAL BREAK)

[16:37:02] TAPPER: Welcome back to THE LEAD.

I want to reminder everybody that today, Friday, is only the fifth day of January, 2018, although the avalanche of news out of the White House this week might have you thinking that another year had passed this week. Joining me to talk about this week and the state of the Trump

administration, two experts in the American presidency, David Gergen and Douglas Brinkley.

Thank you so much for joining us.

David Gergen, let me start with you. What do you make of the news out of the White House this past week?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Astonishing. A complete disconnect between a rising stock market and a falling presidency. It's quite astonishing to watch.

Look, I -- the supporters for Donald Trump will tell you as "The Wall Street Journal" editorialized today that there is nothing here new, that's new in the Wolff book, it really just confirms what we've known all along. I beg to differ with that.

Yes, there is a lot it confirms, but I had never understood that people in the White House were actually as concerned as they are about the mental health of the president. That they watched him -- his capacity, you know, when they first came in, he was telling the same story three times over the course of 30 minutes. Perhaps not remembering he had already told it before. That's now down to ten minutes. That was very disturbing.

And I think the second thing that came out was that he claims, Wolff claims, may be wrong, but he claims that 100 percent of the inner circle believe the president is not fit for the office. That was very disturbing.

TAPPER: Professor Brinkley, what about you?

DOUGLAS BRINKLEY, CNN PRESIDENTIAL HISTORIAN: I agree with what David said. You know, I've never seen a book like what Michael Wolff's produced here. I mean, we've had people from inside the White House get fired or leave and write a disgruntled memoir. I mean, David remembers well Donald Regan during the Reagan years saying Nancy Reagan has an astrologer and all of that.

But this is one after another, it's a beehive of stings that Donald Trump has taken from Wolff here and that Steve Bannon turned on his friend and boss Donald Trump so quickly. You'd have to think that Bannon thought that Judge Roy Moore was going to win in Alabama and it was going to be a fight for the soul of the Republican Party. Trump versus Bannon. And he was going to win.

And Steve Bannon now is an island unto himself. The left doesn't trust him or like him. The right doesn't trust or like him. Breitbart might run him out.

It's just been a very strange week. And the nut of it all I think is this notion of the German Deutsche Bank and what, you know, that the Mueller investigation may be looking at financial transactions.

TAPPER: Yes, there is the effect on the president, the effect on the Trump presidency and then there's the effect on the American people of all of this.

Earlier this week, Ohio Governor John Kasich was on the show and he warned about the effect all of this drama is having on the American public. Take a listen.

(BEGIN VIDEO CLIP)

GOV. JOHN KASICH (R), OHIO: We're not even through the first year and there is just so much chaos and so much disruption that has been circling around the administration.

[16:40:04] And, Jake, the problem with this is over time, people either tune it out or they tune it in and it even polarizes people more.

(END VIDEO CLIP)

TAPPER: Do you agree with that, David?

GERGEN: I do. I do.

I think what certainly happens in politics that grow up over time and that this is a presidency for -- who is really changing a lot of those habits and we've become even more polarized. But particularly, I think distrustful of each other depending on our respective points of view. And I think that is -- I think it's bringing our politics to a new low, a new contemporary low.

It's also, Jake, to go back to your last story with Secretary Tillerson, this book is having major repercussions overseas. When people woke up today in Frankfurt in Germany and the most conservative, respected newspaper in Europe, the major headline was: is Trump still sane? "The Times of London", a Murdoch paper, raises questions on the front page about the president's mental health. And you find increasingly a number of countries openly talking about some of our best allies, can they still trust the president?

So, I think these are damaging. Even as the economy does very well, and you have to give him some credit for that, there is such a disconnect. At some point, I worry that the economy is going to be affected by our politics, too.

TAPPER: Professor Brinkley, it is extraordinary how much access the author, Michael Wolff, was given to the West Wing, to the inner workings of the White House, including access to the president himself.

Michael Wolff has said he's not sure what the president thought was happening when they met, but the two spent about three hours cumulatively over the course of the campaign and in the White House. How could the president's staff allow this guy who had this reputation beforehand?

If they just asked Rupert Murdoch what he thought of the biography Wolff did on him, how could they let him in line that? BRINKLEY: Isn't it amazing? It's almost hard to fathom that he was

kind of, you know, trolling around the White House, talking willy- nilly to whoever he wanted to, talking to the president of the United States and the president says it wasn't an interview for the book. But my goodness, either you are talking to this guy who has written for "Vanity Fair," written -- you know, he's a deep digging investigative reporter.

I mean, it all gets back to Steve Bannon. This is Bannon's creature, Michael Wolff. It's a lot like Bob Woodward's style, where you might get one or two people who work with you. But imagine if Woodward was living in the Nixon White House, living in the Oval Office during the Watergate years.

So, it is just -- it shows a big error on Trump and the White House to have allowed I think a reporter that kind of roaming access. Our country may be benefitting from it. We may be able to see now that perhaps the president isn't mentally stable.

TAPPER: Wow. All right. Professor Douglas Brinkley and David Gergen, it's always a pleasure to talk to you. Thanks so much for being here.

GERGEN: Thank you, Jake.

TAPPER: Republican senators recommending charges publicly for the first time in the Russia investigation, but who are they going after? Next.

(COMMERCIAL BREAK)

[16:45:00] TAPPER: And we're back with the "POLITICS LEAD." As the Russia investigation looms over the Trump administration, his former adversary Hillary Clinton faces a new cloud herself. Federal authorities are reviving an investigation into allegations of corruption related to the Clinton Foundation. The FBI and federal prosecutors want to know if donors were promised policy favors or special access to Hillary Clinton when she was Secretary of State. CNN's Laura Jarrett joins me now. Laura, these allegations have lingered for quite some time. What's igniting this case again?

LAURA JARRETT, CNN JUSTICE REPORTER: Yes, that's exactly right, Jake. And the big question right now is what exactly has changed? And it's unclear precisely what new evidence ignited the current federal investigation after the FBI's initial inquiries fizzled out prior to the 2016 election. But what we do know is this, the investigation is being led by the FBI and federal prosecutors in Little Rock, Arkansas, and not only are they looking into whether the foundation engaged in some sort of pay to play scheme with donors, but also looking into whether tax laws were followed.

The Clinton camp has dismissed these allegations as a sham and the spokesperson for the foundation said to us from time to time, the Clinton Foundation has been subjected to politically motivated allegations and time after time these allegations have been proven false. But the move to take additional steps at this time is particularly tricky for the Justice Department as the President continues to demand the agency investigate his former political rival and the Department tries to stay out of the fray while also running an inquiry it considers legitimate from the prior administration.

TAPPER: The President not doing them any favors there. Exactly why was the investigation into the Clinton Foundation put on the backburner in the first place?

JARRETT: Right. So there are two big factors at play here. The FBI agents in different field offices, including in Arkansas, had been digging around but the Justice Department under the Obama administration didn't think they had found sufficient evidence to move forward with subpoenas or other major significant investigative steps. We also reported back in 2016 that there was a sensitivity and an internal disagreement between the Justice Department and the FBI about opening a full-blown investigation in the midst of a presidential election, something we had heard before. But clearly, in this case, something changed.

TAPPER: All right, Laura Jarrett, thank you so much. My panel's back with me. And Hilary, you were telling us that this is not necessarily unexpected, at least as far as Hillary Clinton is concerned.

HILARY ROSEN, CNN POLITICAL COMMENTATOR: Right. The thing that's changed, of course, is that you know, the calls for the Clinton investigations from the Republicans is Donald Trump's favorite division from his open problems, but the Clintons actually anticipated this at the end of the campaign, I'm told. There was some -- a little money that had come in late wasn't spent at the end of the campaign. There was some pressure on the Clintons to give that money all to the DNC and they held some back knowing they were going to face some legal bills and of course they are now with this sort of fishing expedition that Jeff Sessions is encouraging to, you know, save his relationship with Donald Trump.

[16:50:00] TAPPER: And Mary Katharine, I mean, what's interesting is you heard Laura expressing the concern of people in the Justice Department.

MARY KATHARINE HAM, SENIOR WRITER, THE FEDERALIST: Right.

TAPPER: They think this is legitimate. And yet the President's calls publicly for the FBI and the Justice Department to go after his political opponent, Hillary Clinton, puts a cloud over the investigation itself because of what he's saying, regardless of how legitimate it is.

HAM: Right. Yes. It puts them in a bad position. Also, the talk about the sensitivities of the political nature of it before -- during the candidacy is also a politically influenced decision so we have to be wary of that. And like, look, I think Washington has to decide whether the FBI is full of great public servants who are doing exactly what they're supposed to do and honorable people or that they're a bunch of political hacks who are going after whoever they go after.

TAPPER: They're hacks when they go after the politicians you like. HAM: That is the lesson.

JACKIE KUCINICH, CNN POLITICAL ANALYST: But when -- but when your -- one of your campaign slogans was "lock her up," I mean, you do have to view this with a little bit of a healthy skepticism. And the idea that he is going after a political opponent after he won, it's disturbing.

ROSEN: And let's just be clear, because I think you raised the right point, which is, you know, can we -- should we be mad the FBI if they legitimately believe there's something there?

HAM: Sure.

ROSEN: But that -- here's the thing. The FBI looks into hundreds of things all the time. They don't go out and confirm them publicly. They don't engage the House Republicans in, you know, potential collaborative hearings. They don't talk to the Attorney General's office. This is clearly a political operation.

HAM: Unless it's the Steele Dossier, in which case they do.

TAPPER: Well, we don't know. We don't know. I want -- I want to bring something else up. Today a source close to the White House told me that Steve Bannon had been aware that a White House lawyer misled President Trump about his authority to fire former FBI Director James Comey. And this source noted, helpfully for me, that this detail, which we know -- which has been reported in The New York Times, only ended up in The New York Times after President Trump had started attacking Steve Bannon publicly. So I guess the question is, is it smart when there is somebody like Steve Bannon, who knows a lot about you, to go after him in such a way?

HAM: He doesn't care if it's smart or not. The ethos for both of these men is just fight, fight, fight, fight, fight. And they will continue to do so both legally and rhetorically. And I don't think there is any particular strategy to it. It's just #war. I mean, that's what Steve Bannon was all about and I think it's what Trump is about.

TAPPER: But Bannon knows things, Jackie, so, I mean, it seems like, OK, criticize Bannon and then you drop it. You don't have to come up with sloppy Steve or whatever, but like --

KUCINICH: But don't you?

TAPPER: Sure, you do.

KUCINICH: But again, we're talking about President Trump who feels this compulsion to hit back harder and to, you know, go after someone who dares be (INAUDIBLE). The White House also said we're trying to get Bannon -- the President's lawyer is trying to get Bannon to shut up.

TAPPER: A cease and desist letter.

KUCINICH: A cease and desist letter. But I thought everything in that book was fake.

TAPPER: Right.

KUCINICH: So there is that, (INAUDIBLE) too. The kind of -- I don't know, there's no -- there's no consistency here.

HAM: Also, the more --

ROSEN: I think Mary Katherine's right, that there -- when it comes to Donald Trump, the one thing the book feels most accurate about is he is jumping from the gut on everything. There's not a strategy here. And in fact, that is the thing that drives his team the most frustrated. Facts don't get in the way, legal liability doesn't get in the way, relationships don't get in the way. It is just pure --

TAPPER: the U.S. Constitution.

ROSEN: It's pure pugilism.

KUCINICH: And then there's this issue that Bannon actually was going to issue a statement before Trump came after him that was an -- that basically was saying the President is great, blah-blah-blah and decided not to do it.

TAPPER: Everyone, stick around. We have a lot more to talk about, including smoking Joe Biden. The former Vice President telling Howard Dean he's still young enough to take him. What sparked that feud? Stick around.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[16:55:00] JUDY WOODRUFF, ANCHOR, PBS NEWSHOUR: Howard Dean said this morning, former Democratic Party Chair, he said the old people in the party need to, "get the hell out of the way.

JOE BIDEN, FORMER VICE PRESIDENT, UNITED STATES: Well, tell Howard I can take him physically, OK?

(END VIDEO CLIP)

TAPPER: All right. That was former Vice President Joe Biden responding to ex-DNC Chair Howard Dean saying it's time for a younger generation of Democrats to take the Hill. I guess it's on. My panel is back with me. Hilary, you're a Democratic Strategist, what do you think?

ROSEN: I think Joe Biden can take Howard Dean for sure.

TAPPER: But can he take -- but can he take Donald Trump?

ROSEN: Oh, no question about it. Because Donald Trump does not seem to me like he's in good shape at all.

TAPPER: I didn't mean that. I meant like an election. I meant in an election.

HAM: First of all --

ROSEN: But, absolutely, I think he could beat him in an election.

HAM: First of all, I would totally pay-per-view that slow-mo slugfest. But --

TAPPER: That would be a grim fight.

HAM: Look, I think -- I think, aside from Biden who I think is charming enough to maybe pull something off, they're right about the Democratic Party. There is an issue where there's this upper echelon of much older candidates and a lot of the middle guys were sort of wiped out who are up and coming during the democratic -- during the Obama years when a lot of people in those state offices lost their seats.

TAPPER: I mean, in the modern era, Democrats win the presidency when they put younger candidates out. And when they don't, when they put the Mondales out there or whatever, they lose.

KUCINICH: Well, right, and it's not only --

TAPPER: I guess Mondale was younger than Reagan I should say.

KUCINICH: But no, your point is taken. But it's also -- it's not only a problem. You're not only hearing complaints from the 2020 crowd, you're hearing it from the leadership of the House and the Senate as well. And from the younger members mostly who want to rise up and bring some new blood into the party. But, you know, they can't -- until -- you can't get rid of them.

TAPPER: You can't throw grandma from the train.

(CROSSTALK)

TAPPER: Everyone, thanks so much for being here. Have a wonderful weekend. Mary Katharine, Jackie, Hilary, thanks so much. Be sure to tune in to CNN this Sunday morning for "STATE OF THE UNION." We have a jam-packed show including much more on the bombshell Trump book Fire And Fury that all starts at 9:00 a.m. and noon Eastern Sunday morning. You can follow me on Facebook and Twitter @JAKETAPPER or tweet the show @THELEADCNN. That's it for me. Turning you over to WOLF in "THE SIT ROOM." Thanks for watching.