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New Book on Early Trump Administration Published; White House Counsel Reportedly Attempted to Convince Attorney General Jeff Sessions not to Recuse Himself from Russia Investigation; Attorney General Jeff Sessions Ends Obama Era Rules on Pursuing Federal Drug Enforcement Prosecutions; Interview with Colorado Governor John Hickenlooper; Analysts Debate Value of Bitcoin. Aired 10-11a ET

Aired January 6, 2018 - 10:00   ET


[10:00:00] MICHAEL SMERCONISH, CNN ANCHOR: I'm Michael Smerconish in Philadelphia. We welcome our viewers in the United States and around the world. President Trump meeting at Camp David today with Senate GOP leaders, staff, and several cabinet members, but not Attorney General Jeff Sessions. He wasn't invited. This follows reports that the president asked several staffers to stop Sessions from recusing himself from the Russian probe, and a Sessions' aide was assigned to find dirt on FBI director James Comey. I'm going to break it all down with Jeffrey Rosen in a moment.

And Russian dossier author Christopher Steele accused by top Republicans of lying, and they want the Justice Department to pursue a criminal prosecution.

Trump's attacks on a new book about his White House have made it a number one bestseller, but are any of his supporters reading it? And do they even care?

Plus, is a pot war pending? The attorney general trying to turn back the clock on federal enforcement of marijuana. Does that mean that legal pot is in trouble? We'll talk with the governor of Colorado, where $100 million of marijuana is sold every month.

And --




SMERCONISH: The cyber-currency Bitcoin so big, it's even shaking up the world's richest list. One surge made Ripple cofounder Chris Larsen wealthier than Facebook founder Mark Zuckerberg. But is this digital gold or a huge Ponzi scheme? We'll hear from both sides.

But first, the new book by Michael Wolff and a Friday report in the "New York Times" by Michael Schmidt has renewed debate about whether special counsel Robert Mueller can assemble a case for obstruction of justice against President Trump. This is different than collusion. This is not a matter whether Trump campaign officials aided and abetted the Russian hack of the DNC server. The question here is whether Trump sought to impede an official with corrupt intent.

"The Times" story gave a behind the scenes accounting of what went on at the White House as President Trump contemplated firing FBI director James Comey in his early days in office. The reporting asserted that White House counsel Don McGahn tried to get Jeff Sessions not to recuse himself from the Russian investigation. It also said that a Sessions' aide was looking for negative press about the sitting FBI director.

Then the book by Michael Wolff asserts that during an Air Force One flight last summer the president was seeking to manage the response to reports about Don Jr.'s meeting with Russians at Trump Tower. According to Wolff, one Trump spokesperson quit because of concerns over obstruction of justice.

This all may have come as news to us, but you have to believe that by the time we're reading it, Mueller already knows about it. The relevant timeline has gained clarity, but in a moment I'll ask a constitutional expert if legal answers are any more clear.

Important milestones would seem to include the following, that January 27, 2017 dinner between the president and then-FBI director Comey, where Trump supposedly sought Comey's loyalty. Next, the February 14th meeting where the president asked the vice president, Mike Pence, and the attorney general, Jeff Sessions, to leave the room before asking FBI director Comey to let go of the Michael Flynn probe. A day later, Comey told Sessions he didn't want to be left alone with President Trump.

Then there's the report that Admiral Rogers and Dan Coats were asked by the president to push back against the FBI's Flynn investigation. Next came the May 9th firing of Comey based on an e-mail trail that asserted it was for the way in which he handled the Hillary Clinton e- mail probe. But then the president told NBC's Lester Holt he intended to fire Comey regardless. And, of course, he told his Russian visitors to the Oval Office that he fired the, quote, "nut job" to relieve pressure.

Now, defenders of the president note that he's acted within his legal authority in each of the noted instances, and the question for Mueller is whether any of the president's behavior was done for improper purpose, meaning with good reason and no corrupt purpose. Was the president seeking to derail the Russian probe? That's the issue.

Joining me now is Jeffrey Rosen, he's the president and CEO of the National Constitution Center. He's a professor at the George Washington Law School. Jeffrey, much of our attention up until now has been on the question of collusion, but this reporting suggests that the greater vulnerability to the president might come from this question of obstruction. Consider that Michael Schmidt in "The Times" yesterday reported that the president had instructed White House counsel Don McGahn to stop the attorney general from recusing himself. Now CNN is reporting it wasn't just McGahn, that it may have been Priebus, it may have been Sean Spicer, as well. Is there anything improper in that? [10:05:10] JEFFREY ROSEN, PRESIDENT AND CEO, NATIONAL CONSTITUTION

CENTER: Well, that is the simple question. And just as in Washington it's not the crime, it's the cover up, the question as you said so well, Michael, is did he have corrupt intent when he asked Sessions not to resign or when he asked other aides to ask Sessions not to resign?

So the classic smoking gun would be Nixon's June 23rd tape -- FBI, stop investigating Watergate. We don't have that yet. The benign investigation, as you said, is he tried to stop Sessions from recusing himself because he believed the investigation was an unfair smear job that called into question the legitimacy of his victory even though he was confident there was no collusion.

The counterargument is that he was trying to stop an investigation because he had known he'd done something bad or his campaign staff had done something bad and he was trying to prevent it. And although it's troubling that he tried to ask a lot of people to stop the A.G. from recusing himself, it's not yet a smoking gun.

SMERCONISH: But what if I'm President Trump or Sean Spicer or Reince Priebus, and I believe that on the merits Jeff Sessions' conduct does not warrant he recuse himself from the Russian probe? Forget the merit of the Russian probe. I just don't think, my opinion is I don't think Sessions did anything that necessitates him getting out. Do I not have the right to say, hey, Jeff, stick around.

ROSEN: Absolutely. Anyone can express his opinion, and the president, of course, can ask him to stick around or not for any reason or for no reason as long as it's not corrupted by the intent to impede in an investigation.

SMERCONISH: Then my point, Jeffrey, is that I'm trying to highlight, I think, the discretion that Robert Mueller, if these are the only known facts to him, will ultimately have in determining whether he can assemble an obstruction case.

ROSEN: Obstruction cases are very difficult to assemble because they turn on this question of what is in the person's mind. There are a lot of dots to connect. You mentioned some of them. Did he know that Flynn lied to the FBI when he fired Comey. When he ordered Senate Republicans to stop the investigation, does that show corrupt intent? When he drafted the statement with Donald Trump Jr. that may have been misleading, that was troubling enough that, as you said, at least one White House staffer according to the Wolff book resigned because he thought that was obstruction.

But ultimately the only way of proving it is to get in the president's head. You'd almost have to call him before a grand jury and interview him and ask him what he was thinking and then they can judge based on that in order to really try to make a case.

SMERCONISH: I don't want to lead you. You are a constitutional scholar, an awfully smart guy, you're as read-in as they come. When you saw the "Times" story, when you read the CNN story today with new developments, what jumps off those pages to Jeffrey Rosen? ROSEN: Both that there are increasing pieces of the puzzle that have

troubled staffers within the White House enough for them to think that there might be a plausible case of obstruction, and, on the other hand, that there is not yet a smoking gun, there may not be one, and that ultimately this is not a legal, but a political question. It would not be brought in a court of law, but it would be an impeachment proceeding, and in that proceeding any ambiguity about corrupt intent is going to turn on the politics.

SMERCONISH: Why might this be better suited for an impeachment proceeding than for a legal proceed something.

ROSEN: That's just a great question, Michael, and it is better suited for an impeachment because impeachment proceedings do not require evidence of wrongdoing. As Cass Sunstein shows in his great new book which I recommend for viewers, impeachment can be for things not illegal, like if the president went to Mar-a-Lago and golfed for a year and didn't do his job, or they can not be for things that are illegal, like jaywalking. So if the president in this case tried to shut down an investigation because he was embarrassed by it, because he was trying to protect himself from what he viewed was a stain on his presidency but that had the effect of making it impossible to figure out whether his campaign colluded with Russia, for example, the House might well judge that was a high crime or misdemeanor, or not, depending on the politics.

SMERCONISH: And Jeffrey, that's perhaps a dangerous precedent to set, is it not?

ROSEN: Well, the precedence of impeachment are that the bar is very high, that obstruction of justice absolutely is an impeachable offense. Both President Nixon and President Clinton were impeached or about to be impeached on the grounds of obstruction. But the founders believed that impeachment was ultimately a political remedy. But you're right, it depended on a certain trust in the virtue of representatives and their ability to defend the public interest.

[10:10:00] And that's why it's so terribly important that if ultimately this did come to an impeachment, people try to set aside their partisan views and decide, was the public interest served or were there grave crimes and misdemeanors against the United States of America?

SMERCONISH: Final question, based on that which is in the public domain, which seems more perilous potentially to this White House, collusion or obstruction?

ROSEN: Absolutely obstruction. As you said, Michael, that is the adage in Washington, that it's not the crime, it's the cover up. Obstruction is easier to prove than collusion ordinarily because presidents are really trying to protect themselves and shut down investigations. But even obstruction isn't that easy to prove, as we have been discussing, because of the need to prove corrupt intent.

SMERCONISH: Jeffrey Rosen, thank you as always.

ROSEN: Thank you so much, Michael.

SMERCONISH: What are your thoughts? Tweet me @Smerconish or go to my Facebook page and I will read responses throughout the course of the program. Katherine what do you got? "Smerconish, you are being naive if you think the Republican Congress is going to go against Trump." Nancy, I take it that that's a holdover comment to me saying that I do not believe that this Congress would sit idly by if there were an attempt to get rid of Mueller. That is my opinion. I might be wrong.

Next. "As to your running subject, is president guilty of obstruction, yikes, that's about all he does day in and day out." What I've tried to do with a constitutional scholar and a pretty bright bulb in Jeffrey Rosen is to break down that which is in the public domain again recognizing that we know a heck of a lot less than Mueller does. But I think it's a subjective question in the end. And what I would encourage people to do is not suit up in their usual armor of a Democrat wishing for this outcome or a Republican wishing for this outcome, but assess the facts and try to apply the law. And having done so as a lawyer based on what's in the public domain, I don't think there's an easy answer.

One more, quickly, if we have time. "The problem with Trump, he deliberately gives false information and that is a huge problem as a leader of the free world. He should just resign." I don't know what to say to that because it really doesn't address my point of the obstruction case.

Up ahead, you can't make this stuff up, this stuff up, amazing details from Michael Wolff's blockbuster new book. But will the president's base read it, will they care? And what's behind the move of top Republicans calling for a Justice Department investigation of Russian dossier author Christopher Steele? And is Elizabeth Warren planning a 2020 run? She's amassing a war chest, but could a challenge from the senator that the president derisively calls "Pocahontas" be good news for the White House?


[10:15:54] SMERCONISH: Two top Republican senators asking the Justice Department to pursue possible criminal prosecution of the author of the disputed Trump Russia dossier, Christopher Steele, for allegedly making false statements to investigators. Senate Judiciary Committee Chair Chuck Grassley, Senator Lindsey Graham accusing Steele of what they described as potentially false statements about the distribution of claims from the dossier.

Joining me now, Gabriel Debenedetti, the national political reporter for "Politico," McKay Coppins, a staff writer at "The Atlantic," Joe Watkins, a former White House aide under President George H. W. Bush. He's got a brand new book, it's titled "The New PC, Practical Consideration."

I'll get to the dossier story in a moment. But Joe Watkins, let me put on the screen a tweet that I set out at the end of the week. I had just been on Brooke Baldwin's program and I said this, "If you were the White House and you wanted to sell more of this book, you'd threaten legal action against its release and keep trashing it." Joe Watkins, the best possible thing for your new book would be a cease and desist letter from the White House.


SMERCONISH: What do you make of the whole strategy, the way they handled Michael Wolff?

JOE WATKINS, FORMER GOP CANDIDATE FOR LIEUTENANT GOVERNOR IN PENNSYLVANIA: Well, it just underscores what Wolff is saying about the disorganization of this White House. First of all, allowing him in to the White House, giving him that kind of access without having strict rules, without knowing who he -- what he was going to write and giving him free access to everybody just shows the dysfunction of this current White House. No White House that I know of, certainly the president for whom I worked at the White House nor the president for whom my daughter worked at the White House, would allow that kind of unrestricted access to any author.

So, this is -- I wish that I had written a book that was so inflammatory that the White House would have the White House lawyer try to do a cease and desist on me. I'm not so lucky to have that, at least not yet anyway. But at the end of the day, it points to the dysfunction in the White House. They should have just left it alone and let it be. Now they've made it the main story.

SMERCONISH: Gabriel, what was your one takeaway among many, I'm sure, about the Wolff book thus far?

GABRIEL DEBENEDETTI, NATIONAL POLITICAL REPORTER, "POLITICO": Well, as you say, there are many, many takeaways, and I think the next few weeks will have even more takeaways from this book as the president continues to react to it. But the big one is what we saw this morning the president tweeting about. For the longest time people in Washington behind the scenes have been talking about this question of his mental fitness, Democrats in particular have been talking about this but don't want to talk about it in public.

But this book says that members of the White House are constantly concerned about this, and it's a frequent topic of conversation among them. By tweeting about it this morning, of course, by calling himself the very stable genius, the president ensures that this is a topic of conversation in Washington and in New York. But the big takeaway is that this is now something we have to talk about and people in Washington have been talking about behind the scenes for a very long time.

McKay, I thought I was particularly witty on Twitter this week. I'm going to hit you with one more of my tweets. Put it up on the screen and I want you to react to this. I said the following, if we can quickly find it. Where is it? We don't have it. Come on, guys. Here's what I said. "The only thing that's more problematic for this president than a salacious book about him is a salacious book that's not about him." For all the reports of him fuming behind the scenes, do you buy into that, or do you think he thrives on this kind of chaos? MCKAY COPPINS, STAFF WRITER, "THE ATLANTICS": I don't think those two

things are mutually exclusive. I think he absolutely is probably upset with Michael Wolff. He clearly thought Wolff was an ally. He had reason to believe that, by the way, given the things that Wolff had written proceeding this book.

But I had an experience with Trump like this back in 2014 when he brought me to Mar-a-Lago and I wrote a long profile of him he didn't like. He thought because he had invited me into his home that I would write a puff piece, and when I didn't, he was offended.

[10:20:05] But at the same time he clearly then and now basked in the kind of fallout from it. He loves that we're talking about right now on CNN. He loves that the media is covering this wall-to-wall. This is, arguably, the thing Trump likes most about the presidency, is all this attention. And so I think for that reason he probably is enjoying it, while still being upset with some of the things that are in the book.

SMERCONISH: Joe Watkins, I'm looking at a headline in "The Times" today, "GOP senators pursuing author of file on Trump." What's really going on in this dossier story?

WATKINS: Well, it provides a little bit of cover, I think, to President Trump. It throws him a bone so to speak, because it's meant to divert some of the attention of the Russia investigation by attacking Steele. By the way, they don't attack the voracity of what he said in the dossier. They just attack the fact he may have lied to the FBI and the FBI needs to be just as much on top of this as they would for anybody else that lies to them.

SMERCONISH: Gabriel, Elizabeth Warren in 2020, you say that she's going through all of those steps one would normally take to be ready to run. Tell me about it quickly.

DEBENEDETTI: Well, we don't yet know if she's actually going to run, but it's pretty clear that she's spent the last year doing a lot of things that if she wanted to be in prime position to run for 2020 she would get there. One of the big things is raising campaign money. She's currently sitting on more campaign cash than almost any other sitting senator at this point in a campaign cycle, and that's raised a lot of eyebrows.

But also she's also been doing other things like sitting down with other Democrats who have been skeptical of her in the past, hiring up a bigger than usual campaign staff, basically doing things that are raising eyebrows across Washington, because when she was considering running for president or when people wanted her to run in 2016, before she decided against doing that, she hadn't done any of this.

SMERCONISH: And Gabriel, those cheers that you hear are probably from the West Wing. I mean, isn't this the scenario they'd most want apart from Hillary coming back in 2020 and running against Trump?

DEBENEDETTI: Well, there are two sides to this. Certainly, the White House wants you to think THAT they'd be very happy about this. The reality is Elizabeth Warren does occupy some of the president's time when he thinks about the Democrats, he often talks about her, refers to her derisively as Pocahontas.

On the other hand, plenty of Democrats think that she would be able to beat him pretty easily. If you look at head to head numbers, she is of course ahead at this point. But let's take a step back again and say it's very, very early. We don't know what a primary would look like, we don't know if she's going to run. But the reality is, yes, the president would love to take someone like Elizabeth Warren on because he's shown that he wants to do it in the past. There's no reason to believe he wouldn't want to do it in the future.

SMERCONISH: McKay, you just wrote about Mitt Romney. The last time that I thought about Romney and Trump in the same breath is when they were having dinner. I think it was at the 21 Club just before Trump was sworn in. At that time somebody was courting somebody. What went wrong here, and is Romney really going to run for the hatch seat?

COPPINS: Yes, Mitt Romney had obviously been an outspoken critic of Trump during the campaign, and then there was this moment that looked like Romney might actually end up in the Trump administration back in January or December, I think. You know he was being talked about as a potential secretary of state. And at the time I'm told Romney didn't want to disown any of his criticisms of Trump but felt like it was possible that some really, you know, irresponsible and unqualified people would end up in the administration and Romney felt like it was worth exploring, you know, taking one of those slots.

Since then he's continued to be critical of Trump, and I report that Romney has very seriously laid the groundwork for a potential Senate bid with Hatch's retirement. Most people in Utah are expecting Mitt Romney to run, so the question now is what kind of senator Mitt Romney will be. If he does run, he will almost certainly win. He's very popular in Utah. The question is, what kind of senator will he be? Will he want to hold Trump accountable, or will he use his influence to try to pass major Republican legislation, in which case he would probably be trying to mend fences with the White House. Time will tell.

SMERCONISH: Right. And Joe Watkins, finish us up on that. Is it the severe conservative? That's what mitt Romney described himself as in 2012, or is it the progressive who governed a blue state in Massachusetts? By the way, can I just say this? Can you imagine if ultimately the fate of the affordable care act in a 51/49 scenario comes down to the senator who truly was the godfather of it in Massachusetts? Joe Watkins.

WATKINS: That's right. Of course, politics is like theater, and Mitt Romney is a very smart guy. He will be who he has to be, and what he had to be or who he had to be in Massachusetts may be different from who he is able to be in Utah, a state that's heavily Mormon, that has values that he understands deeply.

[10:25:11] So, yes, Mitt Romney is in great position here. This seat is his for the asking, by the way. If he wants the seat, he's the next senator from Utah. And, indeed, he may be the one to put the finishing touches on a health care vote if he gets the chance in the Senate to do that.

SMERCONISH: Gentlemen, I appreciate all of your work. Joe, the White House just called to ask people not to buy your book. I hope that helps you.


SMERCONISH: Thank you all very much.

WATKINS: It's a bestseller now, it will be a bestseller.


SMERCONISH: Right. On Amazon, boom.

Let's see what you're saying on my Smerconish Twitter and Facebook pages. What do we have, Katherine? "Smerconish, could absolutely care less about Wolff book. I'll laugh at those who take it seriously." You know Josh, thus far, and by the way, Michael Wolff is scheduled to be here a week from today with me. I'm paying close attention, I see that some dates are wrong, some names are wrong, a lot of little stuff is wrong. But what I've noticed is this, Bannon didn't disavow the treasonous comment, right, because that's the big substantive issue in the book, and the president clearly thinks that Bannon said that, or the president would not have gone after Bannon the way that he did. So, you know, you've got to acknowledge that where it matters thus far, it seems like people are agreeing that he got it right.

One more, do we have time? Yes? "Smerconish, why the fascination with his base? There's another two-thirds or so of America that's going to decide his fate come November. His base can't save him from that." I don't know, Bobby, I'm fascinating by, and frankly you're pointing out the fact I wanted to get into that issue and I neglected to ask my guests about it. I'm just fascinated by the fact that the base seems to be holding firm. And the idea that a, you know, liberal writer publishes a tell-all book about the administration, I don't think it's going to resonate with folks in the red states, but I want to know.

Next, is a pot war looming between the feds and pot-loving states? Going to ask the governor of Colorado. And then is the Bitcoin craze digital gold or a Ponzi scheme that's going to crash and burn? Two major players in the industry are coming up.


[10:30:45] SMERCONISH: Attorney General Jeff Sessions has long been an opponent of marijuana, and this week he took a step to turn those words into policy and possibly override the drug's legalization in several states, most recently in California. Sessions announced the repeal of a 2013 Obama-era policy that protected legalized marijuana programs in various states from federal intervention. The statement regarding his directions to federal prosecutors reads, quote, "It is the mission of the department of justice to enforce the laws of the United States and the previous issuance of guidance undermines the rule of law."

Now, this could create problems for the 29 states that have legalized medical marijuana and the eight which have legalized the recreational use of pot and turned it from a criminal enterprise into a regulated means of generating revenue. I spoke recently with the governor of one of those states, John Hickenlooper of Colorado.


SMERCONISH: Governor, in my mind, Jeff Sessions is acting against states' rights, but I know others will say there's a federal law on the book, it's his job to enforce the federal law. Respond to that.

GOV. JOHN HICKENLOOPER, (D) COLORADO: Well, I do think this is an issue where states' rights is valuable, and this notion that all the states are laboratories of democracy. But in this case, and I had met with Attorney General Sessions, and he had assured me, again, I take him at his word, he thinks anyone doing any more drugs in America doesn't make America stronger, it makes it weaker. But he has higher priorities. He's got heroin issues, he's got sex trafficking, and like all government, limited resources.

So our understanding was that he was focused on the higher priorities, and as long as we weren't creating cartels, as long as we were making sure these, you know, dispensaries for marijuana and the growers were obeying local laws, he didn't think that they would have the resources to pursue them.

SMERCONISH: Is he the real culprit, or is Congress?

HICKENLOOPER: Well, I think we see now, because I think it's a fair argument to say maybe this produces the nudge so that Congress can go and, again, states being laboratories of democracy, we should be able to do this in concert with the federal government and be able to use banking. I'm worried about yesterday, you know, banks are as skittish as a young colt. I'm afraid they are going to spook some of these banks out of the business completely, and then we're in an all-cash business. That's a way to get more cartels and underworld activity. If we could do this and Congress could help us get the law so we could do this legally in a controlled way, in only those state that is voted for it or want to vote for it, then I think we could really begin to make some progress.

SMERCONISH: So, in your state of Colorado, Robert Troyer, correct me if I'm wrong, but he's the interim United States attorney, and from reading your statements, I don't think you're concerned that he's going to seek to enforce federal law. But what if and when he's replaced, if the Trump administration should put someone in that position who doesn't see it the way that Colorado voters see it?

HICKENLOOPER: Well, I find that troubling. But again, I'm not sure I see what benefit there is to the Trump administration or the Department of Justice by flaunting the will, the votes, of more than two-thirds of Americans. How much better it would be to come together and say, all right, we'll work with Congress and the Justice Department. We're not -- we don't think this is a great idea, but the states are the laboratories of democracy. These states have voted for it. Let's work with them to see if maybe there is a better system.

And I think Bob Troyer, our interim U.S. attorney, I think you're exactly right. He is really focused on the black market, the gray market. He's focused on sex and drug trafficking. He's got his focus where it needs to be. I hope they let him stay and continue, you know, and they are doing great work to keep Colorado safer.

SMERCONISH: On January 1st, California came online, and I know, Governor Hickenlooper, that you addressed the California general assembly and tried to share some of the wisdom you've acquired from the Colorado experience. What was most important that you told those legislators?

[10:35:12] HICKENLOOPER: Well, I think we tried to give them the real examples of the mistakes we'd made and what we'd done to repair those mistakes, you know, making sure if you're going to have edibles, which are very difficult to deal with, have them in reusable or tamper-proof containers that are re-closeable. Really focus on making sure that teenagers when their brains are growing rapidly, we're told again and again that high THC marijuana can take a sliver of your long-term memory all the time, so focus on teenagers.

And really make sure that you stamp out the underground, you know, black market, because drug dealers don't care who they sell to. If you want to keep pot out of the hands of kids, get rid of that black market.

SMERCONISH: Isn't part of the problem now with Attorney General Sessions' move relative to the cold rule, the cold memo, that you're going to have a more difficult time from people who are trading in the black market from coming into the legalized system because they'll see uncertainty in the federal standing?

HICKENLOOPER: Well, that's exactly right. And I do worry that this is going to make a difficult situation more difficult. It's going to create more uncertainty and really more anxiety. And there are some studies that are beginning to come out. A few months ago, the journal, I think it was "The American Journal of Public Health" did a study, focused on Colorado where they compared Colorado and the legalization of recreational marijuana to opioid use and abuse. And this was normalizing for some of the stuff we've been doing to fight opioid abuse already, and also normalizing against states that had only legalized -- had only legalized medical marijuana. And they showed about I think 6.5 percent reduction in opioid abuse and opioid deaths by having that legalized recreational marijuana.

So again, this is -- I think this is going to be one of the great experiments of this century, great social experiment at least. And, again, I don't tell other governors to rush into action unless their voters are pushing them that way, but I say let's continue to gather data. But let's be open to maybe -- the old system was certainly not a great system. We sent millions of kids, mostly Latinos and African- Americans, we sent millions of kids to prison for nonviolent crimes. Maybe this system has the potential, maybe not yet, but we're continuing to improve it every year, maybe this is a better approach long term. SMERCONISH: Governor, good luck. Thank you so much for being here.

HICKENLOOPER: You bet, Michael. Nice to talk to you.


SMERCONISH: And let's check in on your tweets and Facebook comments. What do we have? "Smerconish, please understand even though the states say it's legal, companies can still not hire you and still fire you because it's still against the federal law." Mystified, I get it, and in fact I did a radio segment this week on Sirius XM trying to identify and talk about those gray areas or those areas of vulnerability for people who are caught in the kind of conundrum between a state that has said yes and a federal government that still says no. And each of those issues needs to get resolved.

Two of them I just discussed with governor Hickenlooper. One is that the banking community is sort of hamstrung. And also one of the ideas here is to bring people into the system who up until now have been involved illicitly in the marijuana industry. And both will be hampered until we iron out the differences between federal and state law.

One more if I have got time for it, please. "I don't want to buy weed from a smiling girl in a brightly lit shop who is getting paid by an hour. I want mine from the gloved hand of a stranger in an alley who may or may not kill me." Myles, I have to say I was in Vegas giving a speech a couple of months ago, and I went into a place, it was called The Apothecary, I think, and it was a shopping experience that was like a combination between Barney's and CVS. It was remarkable. This was a fact-finding mission. I should have said that up front. But it was just remarkable to go and to see the way in which it's being handled in such a sophisticated fashion. And I get your tongue-in- cheek comment even if others will not.

Still to come, you can't touch it like dollar bills or gold, but just thinking about Bitcoin makes many dream big.





[10:43:09] SMERCONISH: The soaring value of Bitcoin is making some people giddy, but it's a virtual commodity unlike gold or oil. It's a kind of electronic surrogate for actual money created and transferred by network computers. The boom of the so-called crypto-currency has mirrored other famous market frenzies, the famous Dutch tulip bulb mania of the 1630s, the more recent U.S. stock market booms of the 1920s and 1990s.

As word spread about Bitcoin, its value kept going up, up, and up, closing above $16,000 on Friday after a volatile end of year, and the boom in virtual currency is reshaping Forbes' list of the richest people. The cofounder of Ripple, that's another crypto-currency, Chris Larsen, was worth $59 billion on Thursday, pushing him briefly above Facebook's Mark Zuckerberg.

So, is this a happy boom, or have we reached the point where, as with most of these alleged sure-thing money speculations, it will inevitably go bust? Joining me now, people with two opposing views, Dan Morehead. He founded the first Bitcoin-focused hedge fund Pantera Capital after he began his career at Goldman Sachs. He got in early. He is way up. As "The New York Times" headlined, 25,000 percent, that wasn't a typo. In fact, it's higher today, 27,000 percent. Vivek Wadhwa is a distinguished fellow and professor at Carnegie Mellon University and a director of research at the Center for Entrepreneurship and Research at Duke. He wrote a piece at "The Washington Post" two years ago warning "RIP Bitcoin, it's time to move on."

Hey Dan, is it fair to say that you bought and you held, in other words, you didn't use Bitcoin as a currency, and so the rising price is not a reflection of increased use, but rather speculation? And if so, doesn't that make you nervous?

[10:45:06] DAN MOREHEAD, FOUNDER AND CEO, PANTERA CAPITAL: I think the thing with technology is that everyone wants an analog, and they call it a crypto-currency. Bitcoin is something entirely new and can do dozens of different use cases, one of which is currency, but it's also great as a store of wealth, and that's what most people have been using it for in the last eight years. And most of our investors are buying it to hold it as a store of wealth.

SMERCONISH: But, ultimately, to hold its value, and I'll get to Vivek in a second, doesn't it actually need to be a form of currency? It doesn't seem to be used as a form of currency, as I understand it.

MOREHEAD: It's definitely being very much used in cross-border money movement, that's one of the early use cases. If you think about it, all cross-border money movements are very expensive and very slow, and with Bitcoin you can send any amount of money to anyone, anywhere on earth, basically instantaneously and essentially free. That's pretty disruptive.

SMERCONISH: Vivek, you think the party is about to end. Make your case.

VIVEK WADHWA, DISTINGUISHED FELLOW, CARNEGIE MELLON UNIVERSITY: I think that it's the greatest scam of modern times. Talk about transferring money, you can send money across borders. It costs you about $30 right now to send $5 across. It's not digital currency. It died as digital currency two years ago.

Now it's people like this saying, hey, hold on to it, trust us, it's this magical thing to increase in value, and it does because everyone is believing these people. And the trouble is that the poor, the average, you know, mom and pop, the truck driver and barbers put their life savings into this are going to lose their money and told to keep holding on, trust us, the value will go up, and they're going to go bankrupt. They're going to lose their life savings while the rich people here in Silicon Valley and who are hyping it cash out just in time. This is what happened with the dot-com boom. Grandma, grandpa lost their life savings. History is repeating itself.

SMERCONISH: Dan Morehead, respond.

MOREHEAD: I did read your piece on the way to the studio, and it said "It's time to move on, Bitcoin will soon go the way of MySpace and" I would say there is a chance, I'm a trader, I can never be sure of anything as you are as a writer, but when that piece was written, that was two years ago, and since then $100,000 in Bitcoin would be worth $4.5 million. There's certainly going to be some volatility going forward, but the point is very asymmetric bets like this, you don't have to be sure it's going to go up if you think there is a high likelihood you have a very large return, potential upside.

WADHWA: Well, I was right that it did die as a digital currency. No one is using it to send money to each other anymore. Here in Silicon Valley, people are hyping it. You have a PayPal director talking about it going to $1 million a coin, which is ridiculous. So we have these scamsters basically hyping the heck out of it while all it's being used for is for illegal money laundering.

Yes, it's being used for sending money across borders when you have corrupt officials in, you know, crooked countries sending it over to their bank accounts and so on. It's being used for crime and it's being used for speculation. It died as a digital currency. If you want to look at digital currency, go to China and now look at India. In China there's a 5.5 trillion digital currency which is based on, they already are years ahead of us. Bitcoin is never going to be a digital currency. It's simply going to implode before you know it, and regular people who trust you are going to lose their shirts.

SMERCONISH: Dan, will you respond? I've heard this not only from Vivek, but also from other critics of Bitcoin who say it is synonymous with an underground economy.

MOREHEAD: Yes, I think that's a silly thing to say. Bitcoin has a permanent paper trail of every transaction that has ever been done. That is a terrible feature for committing crimes. And it's well known that the Silk Road guy was using Bitcoin. It's not as well-known that there were two federal agents that went rogue and were extorting money from him and other people in the dark web, and it was a Bitcoin company, Bit Stamp, that reported them to the authorities and they are both in prison because every single crime they committed was a permanent paper trail. If the government had the choice today to approve either cash or Bitcoin, there's no way they'd approve cash. Cash is great for crimes. Bitcoin is terrible.

SMERCONISH: Hey, Vivek, I know you made reference, Dan made reference to the technological control. Technology worries you. In other words, you see the technological side of Bitcoin as being problematic. Quickly tell me why.

WADHWA: Mike, when you put your life savings into digital currency, you lose a password, you've lost everything, there's no way of getting it back. There's no bank to call up, there's no government to protect you. That's what this thing is. Again, these people saying trust me. The value is going to keep going up when they know it's going to crash in burn.

[10:50:02] We're in the year 2000 right now, it's January, the price is still going to increase most likely because they are going to cause people to buy it, and then it crashes and it goes to zero and people lose their life savings. Don't do it. Get out of it rather than losing everything you have. Yes, the price might increase, but more likely or not it's going to be zero before you know it.

SMERCONISH: Dan, you get the final word. Go ahead.

MOREHEAD: Yes, I'd say when people call it a fraud or Ponzi scheme, I don't think they've really read anything about it. A fraud is a deception intended for personal gain. Bitcoin is an open-source piece of software. How can that be a fraud or deception? We can all audit it.

In terms of, you know, Charles Ponzi invented his scheme by defrauding people for his own wealth. Satoshi Nakamoto hasn't taken a penny out of Bitcoin. He has a million Bitcoins, he or she, whatever it is, has a million Bitcoins worth $20 billion. And I challenge you to find one CEO of one company in the world that has $20 billion net worth that has never filed a 13-F selling any of his shares. This is not for personal gain. He's contributed it to the world as an open source piece of software so people can move money more cheaply around the world without paying all these data monopolists and payments monopolists.

SMERCONISH: Gentlemen, I appreciate this level of conversation. You're both invited back in, say, six months, because I want to revisit and see exactly where we are with this. So, thank you, I appreciate it.

MOREHEAD: Thank you.

SMERCONISH: Still to come, your best and worst tweets and Facebook comments, like this one, "So, we're talking about buying Bitcoin and smoking weed on @Smerconish this morning. What a time to be alive."


SMERCONISH: And that's not even all the news relative to the White House and the Wolff book which we've also gotten into. Back in a second.


[10:55:30] SMERCONISH: The president very active at the crack of dawn via Twitter. There are a couple of his tweets. "Now the Russian collusion after one year of intense study has proven to be a total hoax on the American public, the Democrats, and their lapdogs. The fake news mainstream media are taking out the old Reagan playbook and screaming mental stability and intelligence," et cetera, et cetera. Do you have my retweet? Because I retweeted after he started tweeting

this morning. Yes, that's it. I said, "Mr. President, my 9:00 a.m. show is all put together. Every time you do this, it up-ends lots of planning. Kindly entertain this 2018 resolution, no early Saturday morning tweeting." Can I just say, Mr. President, I'm asking for an armistice agreement, that's what it is, because this week and next I'm doing a two-hour show on CNN and I can't have you get up at 6:00 a.m. and start tweeting. We do too much planning.

I will see you all back here next week. Stick around.