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Kelly Says Trump "Uninformed" on Border Wall; Trump and the Porn Star; North and South Korea to March Under Unified Flag; Migrants Risk Death in the Alps to Cross into France; Autocratic Leaders Echo Trump's "Fake News" Phrasing; Donation Will Help Send Students to U.S. Colleges; CNN is First News Outlet to Inspect Houthi Missile; Large Price Drops for Bitcoin, Other Digital Currencies. Aired 1-2a ET

Aired January 18, 2018 - 01:00   ET




ISHA SESAY, CNN ANCHOR (voice-over): You're watching CNN NEWSROOM, live from Los Angeles.

JOHN VAUSE, CNN ANCHOR (voice-over): Ahead this hour, reality bites. The White House admits Mexico won't directly pay for a border wall and says the president's position is evolving on other key campaign promises.

SESAY (voice-over): North and South Korea will march under the same flag in next month's Olympics.

Is it pure symbolism or a sign of real progress?

VAUSE (voice-over): And few supplies, little hope but no shortage of desperation. The migrants who ignore all the warnings and try to cross the French Alps despite the danger.

SESAY (voice-over): Hello and thank you for joining us. I'm Isha Sesay.

VAUSE (voice-over): And I'm John Vause. This is NEWSROOM L.A.


SESAY: Well, as a presidential candidate, Donald Trump promised to cut immigration and build a border wall that Mexico would pay for. Now just days away from his first year in office, his chief of staff says Mr. Trump's attitude is evolving.

VAUSE: Trump clearly told lawmakers some of candidate Trump's positions on the border wall were not informed. He also addressed the president's stance on DACA, the program that protects hundreds of thousands of immigrants brought to the U.S. illegally as children by their parents.

(BEGIN VIDEO CLIP) JOHN F. KELLY, U.S. HOMELAND SECURITY SECRETARY: He's very definitely changed his attitude toward the DACA issue and even the wall. He has evolved in the way he's looked at things. Campaign to governing are two different things. And this president has been very, very flexible in terms of what is within the realm of the possible.


VAUSE: Joining us now, David Siders, senior reporter for Politico; Ethan Bearman, a California talk radio host and Lanhee Chen, research fellow at the Hoover Institute and former public policy director for Republican presidential nominee Mitt Romney.

Not every campaign promise is kept but not every campaign promise was like this one. (BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I will build a great, great wall on our southern border and I will have Mexico pay for that wall. Mark my words.

It will be a great wall. Mexico's going to pay for the wall.

Mexico is going to pay for the wall.

Mexico will pay for the wall.

And Mexico's going to pay for the wall and they understand that.

Mexico is going to pay for the wall. Believe me. 100 percent.

And who's going to pay for the wall?

And who's going to pay for the wall?



VAUSE: Yes, no, not now.

David, this is a big one to walk away from, acknowledging that the government won't directly pay for the wall. They're going to have to find other ways to do this. And on top of that, I'm trying to work out, is it a good idea to have the chief of staff break this news?

You know, presidents announce good news; cabinet secretaries announce bad.

But how is this going to go over with the Trump base?

DAVID SIDERS, POLITICO: Well, the chief of staff is breaking what I think most people knew all along, which is that Mexico was not. But this will not go over well with the Republican base.

So you're already seeing Trump surrogates outside the White House coalescing and saying, well, maybe in negotiations over NAFTA, that's how Mexico pays for the wall, which just isn't the case in any normal understanding of what it means for somebody to pay for the wall.

So it's a danger, I think, for the base. But we'll see. I mean, they haven't had a president with this kind of rhetoric on immigration ever. So I'm not sure that it diminishes him entirely in their view.

VAUSE: OK, so, Ethan, on David's point, everyone kind of realized that it was never going to happen. But there's this hardcore base that really thought that Mexico would pay for this. (INAUDIBLE). People genuinely believed that that was the plan.

ETHAN BEARMAN, TALK SHOW RADIO HOST: No question that it was going to be this gigantic, big, beautiful wall, because they're ignorant to the Big Bend region of Texas, for example. If you've ever been there, there's no way to build a wall there. It's ridiculous.

Secondly, that base doesn't care about reality, truth, facts. They don't matter. They still believe that Mexico will pay for the wall and they're going to spin it exactly as David just said. Well, it's going to be through NAFTA but they're going to pay for the wall.

VAUSE: Right, OK, so --


VAUSE: -- this is all part of the evolution, of the changing positions of Donald Trump on certain issues. This is what the Senate majority leader, Republican Mitch McConnell told reporters on Wednesday.


SEN. MITCH MCCONNELL (R), MAJORITY LEADER: I'm looking for something that President Trump supports. And he's not yet indicated what measure he's willing to sign. As soon as we figure out what is he for, then I would be convinced that we were not just spinning our wheels.


VAUSE: So, Lanhee, that was Mitch McConnell talking about Donald Trump's position or lack of position, when it comes to immigration.

Do the evolving views of the president mean that there should be hope that there can be (INAUDIBLE) some kind of compromise deal on immigration --


VAUSE: -- or does it just add to the confusion of where all this is heading?

LANHEE CHEN, THE HOOVER INSTITUTE: Well, I think that the president actually, because he has demonstrated a willingness to be flexible, let's say, on some of these things, suggests that there's a greater possibility or probability that there will actually be some kind of deal that can get struck on this.

The challenge for Republicans, particularly the House and the Senate leadership, is that if the goalposts keep on moving, it's going to be very difficult for them to determine how much support they'll actually get from the Republican base, the Republican members of Congress.

So Mitch McConnell and Paul Ryan need to have a sense of where the president's going just for anything else to know how many votes they need, who they need to have in favor of a particular resolution.

So, yes, in one sense it does open the floodgates for a potential deal. On the other hand, it makes the job of Paul Ryan and Mitch McConnell that much more difficult.

VAUSE: Ethan, do you see this as a way toward a compromise deal or is it just adding to what's out there and no one knows where it's going?

BEARMAN: It's adding to what's out there. What makes this worse, when you listen to Mitch McConnell, e sounds like a Democrat. He could have been Nancy Pelosi or Chuck Schumer right there because the president -- we don't know what he's going to do.

Is he going to tweet out, oh, the Republicans are --


BEARMAN: -- it's terrible; this style of negotiation maybe worked for him in the real estate world. It's sure not working out for him very well in the political world. And I actually oddly feel badly for Mitch McConnell right now.

VAUSE: That's a first. OK.

We are learning more about John Kelly, the chief of staff. Here's part of our reporting on Kelly.

"He's a fierce advocate for hardline policies that drastically limit the number of people entering the U.S. and he'll remain so, even as the government barrels toward a potential shutdown over the issue.

"'Kelly is a hard ass,' said one Republican lawmaker, who requested anonymity to discuss Kelly's approach to immigration. 'Some people might think he's softer; he's a hard ass also and a straight, straight shooter. He doesn't sugar coat things.'"

David, it also seems Kelly is now playing a much bigger role in this administration, way beyond this guy who brought some discipline to this disorderly White House.

SIDERS: I think we've seen -- iterations of this over and over with Trump. There was going to be this person or this person or this person controlling Trump. And I do think you heard from lawmakers this week frustration with what they viewed as staff interference with the White House.

But the fact that we're talking about this right now, Donald Trump watches television and this is likely to infuriate him if he feels he's being undercut, especially in public, like we heard from General Kelly.

VAUSE: Here's how Kelly describes his relationship with the president.


KELLY: He and I talk constantly -- weekends, early mornings, late at night. We talk constantly. He bounces ideas off of me. I'm very proud of the fact that he respects my opinion.

But, again, he's the President of the United States. He's got his own way of doing business. But, again, I see a man who is -- can change his mind when the facts and the and the data and the staff work and the conversation brings him to a different conclusion.


VAUSE: Lanhee, is this an outsized role for a chief of staff?

Or is this pretty much business as usual?

CHEN: Well, I think a lot of Republicans, probably a lot of Democrats, too, are probably breathing a sigh of relief that General Kelly is the chief of staff. I think different administrations have had different models of what the chief of staff is like.

For some administrations, the chief of staff has been more of an administrator in chief, running the White House staff, thinking about the operation of the White House staff.

In others, the chief of staff has been more like the consigliere to the president. So it doesn't surprise me that General Kelly is playing multiple roles. It doesn't surprise me that he's in fact the one who's helping to steer the ship here. And I think actually we should all have some degree of comfort that this is going on.

VAUSE: OK, well, if there is no deal on immigration, the Democrats may not support a budget measure to keep the government funded past Friday, which is when the money runs out. If it gets to that point, the White House is pretty clear it knows who will get the blame.


SARAH HUCKABEE SANDERS, DEPUTY WHITE HOUSE PRESS SECRETARY: The president certainly doesn't want a shutdown. If one happens, I think you only have one place to look and that's to the Democrats.


VAUSE: David, history would indicate that Sarah Sanders is completely wrong about that, that it is the party in power; when you control the lower house, when you control the Senate, when you control the White House, as the Republicans do, they're the ones who are in charge. They're the ones to get blamed. SIDERS: I would say yes with one caveat. Republicans control Congress, obviously. But the reason that they will blame Democrats is on immigration. And it has been, for a long time, that I think immigration is a good talking point. It's a good issue for Republicans.

I'm not sure that that's the case anymore, now that we're into this land of television cameras, watching people getting deported out of a Detroit airport. I'm not sure that it's good anymore for them, even in the short term, that they have been using it. I never thought it was a good move long-term. But this will be a real test of that --


SIDERS: -- because it will be Democrats saying, you have the majority. And it will be Republicans putting their political lives really on the immigration issue.

VAUSE: And Ethan, if in fact the Republicans do get blamed for the shutdown, which, if history is a judge, that's what usually happens, what will be the consequences for the administration and for Republicans in Congress?

BEARMAN: Well, I think this is important. It's going to cost a lot of money. We learned it from Ted Cruz's stunt, that it was $21 billion was the cost of shutting down the government, is what it actually cost the American people.

I think that the Democrats can play that, we can demonstrate that this is going to cost a lot of money. And it's because the Republicans will be unwilling to compromise, to David's point, on issues like immigration.

Compromise, find some middle ground. I've been asking for this for a long time. We have such acrimony, nobody wants to compromise. I think we saw some inkling of it and then Donald Trump tweeted and it ruined it again.

VAUSE: Let me give you some bipartisanship, some middle ground on the issue of Steve Bannon, the former White House strategist, the former Trump campaign manager, the former editor of Breitbart.

Ladies, he's single.

He infuriated both Republicans and Democrats on Tuesday by refusing to answer questions about Russia and the Trump campaign. Listen to Republican congressman Trey Gowdy.


REP. TREY GOWDY (R-S.C.), CHAIRMAN, OVERSIGHT COMMITTEE: I am frustrated whenever people assert privileges that do not exist. And I am really frustrated when witnesses have all the time in the world to talk to the media on and off the record and they can help people write books but they can't talk to the representatives that are elected by their fellow citizens. I mean, picture that. He's happy to tell an author about treasonous,

unpatriotic acts but he won't tell members of Congress when he's pressed on it.


VAUSE: So, Lanhee, explain this, why is Bannon playing hardball with Congress but he plans to cooperate with the special counsel investigating the Russia collusion?

CHEN: Well, quite frankly, because the special counsel can actually bring charges that could cost Bannon some time and maybe his freedom. So you know, obviously he sees that as a much more serious threat than the threat from Congress, which he sees more as political.

And look, there's no one there anymore, to give Bannon even political cover, now that the president has turned on him, pretty much everyone in the Republican Party has turned on him as well. So Steve Bannon, as you alluded to, is the one figure that draws unanimity amongst Democrats and Republicans.

And that's unanimity with an element of scorn.

VAUSE: And, Ethan, there was this admission from the White House that it instructed Bannon not to answer questions from the House Intelligence Committee, which many are saying that amounts to a gag order.

BEARMAN: Yes, and I'm not sure I fully agree with Trey Gowdy. He is exceptionally intelligent. He's a prosecutor before becoming a congressman. But executive privilege does apply, if they were asking questions about times when Bannon was working with the president. There is executive privilege.

So I don't fully agree with him. It will be very interesting to see what happens, though, when Bannon goes and speaks with the Mueller team. And that is what really counts in all of this, is the criminal investigation with the Russia collusion and what Bannon might actually know about it.

VAUSE: And, David, how crucial or how key is Steve Bannon when he goes and talks to Robert Mueller?

How much damage, I guess, could this guy do to the administration?

SIDERS: Well, I think the answer to that question is in watching him today and how frequently his lawyer is on the phone with the White House. And that, I think, suggests that at least people in the White House are very concerned about what he might say and I think that plays out there.

VAUSE: OK, finally, the president and his physical exam, does he or does he not have heart disease?


DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: He does have heart disease, is that what you said?

DR. RONNY JACKSON, WHITE HOUSE PHYSICIAN: He does not have heart disease, no.

GUPTA: You have a CT scan on the report that showed his calcium and his coronary heart --

JACKSON: He does. He did. He had a -- so I think -- so, technically, he has nonclinical atherosclerotic coronary -- coronary atherosclerosis. So that's been mentioned in previous physical exams. So I think overall his coronary calcium score is very reassuring and goes along with the rest of his cardiac workup.


VAUSE: Ethan, it's not just Dr. Gupta who's raising this question about heart disease and it does raise the issue about that assessment.

How can Trump be in excellent health if he's at risk of heart disease with high cholesterol and doesn't do any exercise?

BEARMAN: It's a very interesting exchange; I'm not a doctor, so I can't address it from that end. But I think it's very interesting that we still are ignoring the elephant in the room, which is the psychiatric evaluation, that I would like to see somebody -- I think this should become part of the process for presidents to have a basic psychological evaluation that is done, so we can understand if these people are psychopaths, sociopaths, connected with reality or not.

Heart disease, look, a lot of men in that age group are at risk. So it's not as big a deal.

VAUSE: There's confirmation he had a heart. I guess --


VAUSE: -- about his mental situation.

OK, Ethan and David and Lanhee --


VAUSE: -- thank you all for being with us. Appreciate it.

OK, new details are emerging about an alleged affair between President Trump and an adult film star dating back to 2006. Details from CNN's Brian Todd.


BRIAN TODD, CNN CORRESPONDENT (voice-over): More news outlets are now coming forward, acknowledging they had information about an alleged affair between Donald Trump and a porn actress, who goes by the name Stormy Daniels.

New accounts that raise questions about President Trump's denial of the affair. CNN has learned that FOX News and ABC's "Good Morning, America" had information about the alleged affair in the weeks leading up to the 2016 presidential election but didn't publish it.

The "Daily Beast" and "Slate" say they had it, too, and didn't publish it. CNN was told about FOX's decision by four people familiar with the matter.

And despite FOX's pro-Trump leanings, a top editor at the network told CNN, "In doing our due diligence, we were unable to verify all of the facts and publish a story."

OLIVER DANCY, CNN MEDIA CORRESPONDENT: Despite the on-the-record confirmation from the porn actress's manager at the time and despite the reporter having seen documents about a settlement, it just did not meet their standard for publication.

TODD (voice-over): "Slate," the "Daily Beast" and sources at ABC News all say they communicated with Daniels shortly before the election about doing interviews but that Daniels suddenly stopped corresponding with them or backed out of interviews.

On Friday, "The Wall Street Journal" reported in October 2016, Trump's personal attorney, Michael Cohen, arranged a $130,000 payment to Daniels to keep her silent about the alleged affair.

Cohen, the White House and Daniels have denied the affair happened. Daniels in a statement sent by Cohen denied getting hush money.

Now new accounts are surfacing. Alana Evans, a porn actress who says she is a friend of Daniels, described to NBC's Megyn Kelly what she said Daniels told her about Daniels' alleged first encounter with Trump at a Lake Tahoe, Nevada, resort in 2006.


ALANA EVANS, ADULT FILM ACTOR: And she says, well, picture this, Donald Trump chasing me around the bedroom in his tighty whities -- isn't something that you ever forget.


TODD (voice-over): No one is saying the alleged affair wasn't consensual. And now the gossip magazine, "In Touch Weekly," is out with a personal first-hand account from Daniels, whose real name is Stephanie Clifford, about the alleged affair.

Daniels describes in some detail her alleged first sexual encounter with Trump in 2006 and says, quote, "He told me once that I was someone to be reckoned with, beautiful and smart, just like his daughter."

An editor at "In Touch" tells CNN, they had this information back in 2011.

Why didn't they publish it then? UNIDENTIFIED MALE: Why wasn't it published before? I can't really speak to. In fact, I don't have the answer. But when I was made aware of it just a few days ago, I immediately realized that had to be the next cover at "In Touch."

TODD: "In Touch" magazine would not tell us whether they pay for interviews or not but the magazine's editor said they did not pay Stormy Daniels. Trump's attorney, Michael Cohen, sent us a new statement, saying, quote, "This is not breaking news. This is old news that wasn't true then and isn't true now. An old and debunked story that Ms. Clifford denied in 2011, 2016 and 2018," end quote.

Another attorney who represents Stormy Daniels did not return our calls -- Brian Todd, CNN, Washington.


SESAY: Quick break here, North and South Korea find common ground in talks about the upcoming Winter Olympic Games. How they'll stand together -- ahead.

VAUSE: Plus, migrants have already crossed the desert and the Mediterranean Sea and must now brave the bitter cold of the Alps, sometimes on foot and barefoot, rather, all in search of a better life in France.





VAUSE: North and South Korea have reached a diplomatic breakthrough in their latest round of talks.

SESAY: Both countries have agreed to form a joint women's ice hockey team. And athletes from the North and South will march together at the Winter Olympics' opening ceremony under a unified flag. That hasn't happened since the 2006 Winter Games in Turin, Italy.

(INAUDIBLE) joins us now from Seoul with more.

Paula, North and South Korea marching together under that single unified Korea flag.

Is this anything more than symbolism?

I mean, put the significance of the development in some kind of context for us.

PAULA HANCOCKS, CNN CORRESPONDENT: Well, certainly when you consider, Isha, what we've seen on the peninsula just over the last year, the last two years, it has been incredibly tense here. There have been discussions about whether there should be a so-called

preemptive strike by the United States, what would happen if another Korean War broke out. But now, just a few weeks after we've been talking about that, you have both sides agreeing to play nice, agreeing to be under the same flag.

So it is a massive change from what we've been talking about. It is a significant development. Now of course whether it lasts beyond the Olympics, we simply don't know. But for the Olympics, the fact that they'll come out under this flag, which shows an undivided Korean Peninsula, is significant.

It first happened in 1991. I think the first Olympics was the Sydney Olympics in the summer of the year 2000. And the fact that there's going to be an inter-Korean team as well, this women's ice hockey team, shows that North and South Korea are serious at least when it comes to the Olympics, about working together.

Of course they do have to get through one more hurdle, meet with the IOC on Saturday in Switzerland and they'll decide exactly what they can do because obviously the registration for the Olympics has passed.

SESAY: The leaders of both countries obviously on the same page, going ahead, making this deal to do the flag, to get the orchestra in town, get the joint women's ice hockey team.

But what about the South Korean public, are they behind all of these moves?

HANCOCKS: For the most part, it seems as though South Korea is behind this, not least because we're talking about cooperation with the northern neighbor, as opposed to being concerned about what could happen with a conflict with the northern neighbor.

So certainly from a simple peace and successful games point of view, the majority of the South Koreans are happy.

Now of course, there will always be a small, conservative, more right- wing contingency that's not going to be pleased that there's any kind of cooperation with North Korea.

And certainly from the allies' point of view, others in the region, Japan, for example, at that meeting in Vancouver, Canada, said that the international community has to be clear-eyed when they're thinking about why North Korea is doing this.

What are the motivations behind Pyongyang wanting to, all of a sudden, play nice and be friends with South Korea?

And, of course, the other question is, what happens after the games, what happens once the athletes go home?

If the U.S.-South Korea military drills start, which anger North Korea every single year, do we then just go back to the status quo of tensions on the peninsula --Isha.

SESAY: Yes, as we said, is this anything more than just symbolism.

Paula Hancocks joining us from Seoul, always appreciated, Paula. Thank you.

VAUSE: Well, first they tried to cross the desert, then survived crossing the Mediterranean. But many African migrants trying to reach France will face a whole new challenge in Europe: the bitter cold of the Alps.

SESAY: They make the perilous trek through heavy snow, often without proper shoes, hoping to find a better life. Our own Melissa Bell has seen firsthand the dangers they're facing.


MELISSA BELL, CNN CORRESPONDENT (voice-over): It's been the longest of treks. With a determined step, these 16- and 17-year-old boys have already crossed from West Africa to Northern Italy in search of a better life. Ahead of them now, the French border and a perilous, nearly two-kilometer high mountain pass. But this is not the --


BELL (voice-over): -- first obstacle they faced on their journey and they say they're ready for anything.

UNIDENTIFIED MALE: (Speaking French).

BELL (voice-over): Simon, a local mountain rescuer, tries to convince them not to go. But the boys head up nonetheless. So, too, does Simon. He doesn't find the group but later learns that they had to turn around near the top.

This winter, for the first time, he says, he spent more time rescuing migrants than skiers.

SIMON BOBBIO, ALPINE RESCUE VOLUNTEER: They don't have the experience, you know. They don't know much about snow.

BELL (voice-over): But the rescuers don't always find the migrants. Often all they can do is follow their tracks until they get too dangerously high and night falls.

BELL: The footsteps of the very luckiest migrants will lead here, to the French side of the border on the other side of that mountain. It is, as you can see, extremely treacherous. It is very late at night, which is when they'll arrive, after a long night's walk. And it is - 10. I'm extremely well equipped.

They arrive here, of course, with nothing, often frostbitten but always cold and exhausted and confused. And even now, after all they've been through, it is still on the kindness of strangers that they depend for their very survival.

BELL (voice-over): Strangers like Jeff and Gaspar, who are heading off on their evening round. UNIDENTIFIED MALE: (Speaking French).

BELL (voice-over): They're part of a group of local volunteers that got together this winter to try and save the migrants coming over the mountain. They worry that only the melting of the snow will tell how many have been lost.

On average, they find about 10 a night. Although tonight it's been quieter than usual, until their phone rings.

UNIDENTIFIED MALE: (Speaking French).

BELL (voice-over): A desperate voice on the other end tries to describe where his group is. And so we set off in the car in search of a tunnel.

But after a couple of hours of fruitless searching, Gaspar realizes that the tunnel the migrants are at is in fact the one at the very top of the mountain.

So after a very short night, we set off to scale it from the French side. But once at the top, there is no one there.

BELL: We're now at the very top of the mountain and overlooking Italy down below. This is probably the most dangerous part of the crossing and you can see how treacherous conditions are as a result of the snowfall of the last few days.

Large risks of avalanches and you can see the pass has been cut off, which is why these groups that we've been trying to reach over the course of last few days, have just been getting stuck on that side of the tunnel, unable to pass this way and therefore obliged to head back down to Italy.

At other times, though, this is also where migrants have been getting stuck and with disastrous consequences.

BELL (voice-over): Manadu Bai (ph) is of those who made it to France. But after a night spent trapped at the top of the mountain, he lost his feet to frostbite.

UNIDENTIFIED MALE: (Speaking foreign language).

BELL (voice-over): Manadu (ph) made his crossing before the current wave of migrants. But he has not made it far. A year and a half on, he continues to live in the shadow of the mountain that he still can't bear to look at -- Melissa Bell, CNN, in the Alps.


VAUSE: Short break here, when we come back, two Republican senators are calling for an end to the U.S. president's attacks on the media, warning American democracy, no less, is at risk.



VAUSE: You're watching CNN NEWSROOM live from Los Angeles. I'm John Vause.

SESAY: And I'm Isha Sesay. The headlines this hour:

After their latest meeting at the DMZ, delegates from North and South Korea agreed that athletes from both countries will launch together in the upcoming Olympics under a unified Korean flag. They also agreed to form a joint women's ice hockey team.

VAUSE: French police have raided the headquarters in a nearby factory of dairy giant Lactalis over a tainted baby milk scandal. The company has recalled powdered milk in 83 countries after salmonella was found in one of its factories. Hundreds of families have filed lawsuits alleging tainted milk reach store shelves despite the recall. Lactalis said it's cooperating with the investigation.

The U.S. government could shut down Friday without a new funding package. Reporters asked President Trump about that and the deal to protect hundreds of thousands of illegal immigrants to the U.S. children. His response, "We're working on it."

VAUSE: Two senior Republican senators have called out the U.S. president demanding an end to his war of the media. Jeff Flake delivered an impassioned speech to the Senate on warning no less that American democracy is at risk.


SEN. JEFF FLAKE, (R) ARIZONA: For without truth and a principled fidelity of the truth and the shared facts, Mr. President, our democracy will not last. 2017 was a year which saw the true objective, empirical evidence-based truth, more battered and abused than at any time in the history of our country at the hands of the most powerful figure in our government.

It was a year which saw the White House and shrine alternative facts into the American lexicon as justification for what used to be simply called old fashioned falsehoods.


VAUSE: And in an Op-Ed for the "Washington Post" John McCain warned the U.S. president has emboldened dictators around the world writing this, "Whether Trump knows it or not, these efforts are being closely watched by foreign leaders who are already using his words as cover as they silence and shutter one of the key pillars of democracy."

To that point, here's a Syria and dictator, Bashar al-Assad last year trying to discredit an amnesty international report on human rights abuses.


BASHAD AL-ASSAD, SYRIAN PRESIDENT: They haven't been to Syria, they only based their reports on allegation, they make anyone, doesn't matter what's his title, you can forge anything these days. And we're living in a fake news era as you know.


VAUSE: And a similar line from Venezuela's President, Nicholas Maduro during an interview on "Russia Today."


NICHOLAS MADURO, VENEZUELA PRESIDENT (through interpreter): Venezuela is now target to the witch hunt, some global media of persecutions, this spread lies and deception about us. This is the real fake news, the post-truth era.


VAUSE: And then the controversial Philippines President, Rodrigo Duterte.


RODRIGO DUTERTE, PHILIPPINES PRESIDENT: Since you are a fake news outlet, then I am not surprised that your article is not also fake. We can debate now, tell me where is our lies and I'll tell you where are yours.


VAUSE: For more, CNN Senior Media Correspondent and Host of RELIABLE SOURCES, Brian Stelter is with us now from New York. Brian, good to see you.


VAUSE: Just to pick up on that last point about the dictators and other leaders around the world, it seems the White House just willing to recognize or even acknowledge that these leaders with a track record of human rights abuses are using Donald Trump's favorite words and expressions and no acknowledgement of the potential harm which comes with that.

STELTER: Right. They're learning from President Trump, they're learning all the wrong lessons. In the past when the White House has been asked about this issue, about President Trump's fake news or is being used by leaders of other countries and including leaders in some autocratic countries in some repressive regimes that imprisoned journalists, the White House has voted off, basically dismissed the question.

But I think a year into the Trump presidency, it is clear that we are hearing echoes of his words all around the world. I went back and counted, John, President Trump used the word fake more than 400 times in the past year usually to demean, diminish, and discredit the news media.


VAUSE: OK. Well, here is the response from White House Press Secretary Sarah Sanders to that speech by Senator Flake. Listen to this.


SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: Not criticizing the president because he's against oppression, he's criticizing the president because he has terrible poll numbers and he is I think looking for some attention. I think it's unfortunate and certainly, I think our position here at the White House is that we welcome access to the media every day.


VAUSE: Does that reflect the reality within the administration just brushes off, nothing to see here? Or are there some within the Trump White House who have really serious concerns about members of the president's own party questioning if Donald Trump has a belief in basic democratic values?

STELTER: I don't expect standards to stand there and agree with everything Jeff Flake said but it is weird to hear her say that Flake is doing this because of his poll numbers, because Flake is not running for reelection, he feels free to speak out.

What he was really doing with this speech on the floor of the Senate was trying to encourage his GOP colleagues to stand with him, to pick up the torch and keep running with it to try to stand up to the president's falsehoods and conspiracy theories and be a real check and balance. I thought what's most notable by Flake's speech was that he was really imploring Congress to do its job.

Now, John McCain, certainly one of his colleagues also from Arizona has -- had a similar message about President Trump's media attacks but for the most part, GOP leaders have remained quiet about this issue. And so Flake was trying to encourage them to change their mind. I think in private what we've heard is that there are many GOP leaders who are worried about Trump's rhetoric, who do think that it's poisonous and damaging but they don't say so publicly. And that's partly why I think Flake was trying to encourage them on the floor of the Senate.

VAUSE: Well this is exactly what Flake said, this was the call that he put out to fellow Republicans in Congress, listen to this.


FLAKE: No longer can we compound attacks -- the attacks on truth with our silent acquiescence, no longer can we turn a blind eye or a deaf ear to those assaults on our institutions and Mr. President, an American president who cannot take criticism, who must constantly deflect and distort, and distract.

Who must find someone else to blame is charting a very dangerous path and a Congress that fails to act as a check on the president adds to that danger.


VAUSE: What he did not say though is some Republicans in Congress haven't just remained silent, they ought to join the president in undermining the Russia investigation for example, or even provide a cover as we saw over the weekend with the S--hole controversy.

STELTER: And that's why I think so many Americans who are not members of Trump's base appreciated Flake's speech and share a lot of his concerns. What was Flake is doing here in the first of a series of speeches is zooming out and trying to look at the big picture of the Trump presidency?

And the big picture is concerning partly because of this divide in the United States about fact, about truth. A lot of people don't know who to believe, what to believe, or when to believe it. And President Trump is making that worst with his constant fake news attacks or fake news awards or whatever it is on a daily basis.

I think Flake is trying to hone in on that point because sometimes we can get numb to it, right John, the daily criticism of the press, the daily claims of the Russia investigation is just a giant hoax, it's easy to get numb to it. And I think Flak is trying to zoom out and assure people really recognize how destabilizing this could be.

VAUSE: Yes, it is relentless, it is day-after-day, hour-after-hour. But how much blame is on us? Because it seems Donald Trump is exploiting what many see has been a credibility problem with the mainstream media, it was long before he was elected president.

STELTER: Yes. Partly, media's weakness that contributes to this, Newsrooms is reluctant sometimes to acknowledge errors or correct them clearly. Sometimes lack newsrooms of recognizing the full diversity of use in the United States.

I think what is even more apparent though is a lack of media literacy, news literacy in the United States. And this is for another countries as well. As the news cycle has sped up and as digital media and digital technologies make it possible for all of us to have the news in our hands, on our phones at all times, new literacy has to catch up.

It's easy for a president or another world leader to point and say, "That story is fake, it's made up, it's bogus." If you don't know how newsrooms really work, then you might believe that person and I think that goes to the heart of this matter.

VAUSE: Brian, good to see you. Thank you.

STELTER: Thanks.

SESAY: Well said. Well, the protest against President Trump's vulgar comment during the immigration debate will lead to an Ivy League education for some African students. The U.S. College Board is donating hundreds of thousands of dollars to a unique academy in South Africa. David McKenzie explains how the money will be used.



DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Raise your hand if you're going to go to a university. These are Africa's best and brightest minds.

DANIEL DANG, STUDENT: Harvard, Yale, Columbia, and Amherst, and Babson.

MCKENZIE: So your safety school would be? Daniel Dane is a refugee from South Sudan.

DANG: Everybody deserves dignity in their capacity as human beings.

MCKENZIE (voice-over): In the wake of President Trump's offensive comments about Africa --

UNIDENTIFIED FEMALE: Africa is much more than poverty and famine.

MCKENZIE: U.S. admissions testing giant college board and ETS both have donated to the African Leadership Academy.

HATIM ELTAYEB, DEAN, AFRICAN LEADERSHIP ACADEMY: I'm surprised every single day. Without a doubt --

MCKENZIE: This school's dean is from Sudan by way of Harvard. His students come from deeply challenging backgrounds thrown together from across the continent, most are on scholarships. They have just a five percent acceptance rate here. Are you excited to go to Harvard?

Handpicked future leaders for a two-year bridge program, many are headed to U.S. colleges. Would it be a lost opportunity if people from certain countries wouldn't be able to go and study in the U.S.?

ELTAYEB: Undoubtedly. The more we build walls and the more we close doors, the more opportunities for magical connections and inspirational discovery we miss out on.

MCKENZIE: Felix Morara is off to Yale. He says he would rather respond to Trump with action, not words.

FELIX MORARA, STUDENTS: Common strategy stands from the perception that a lot of Africans or immigrants come to take from the country but I don't think that's what a lot of us are aiming to do. A lot of us, instead of getting something hope that that country will make us something.

MCKENZIE: A hope that the 263 students at that the academy all share. David McKenzie, CNN Johannesburg.

SESAY: It's a remarkable --

VAUSE: Something good came of it after all. SESAY: So remarkable academy. Next on NEWSROOM LA, a CNN exclusive, evidence which Saudi Arabia says its proof that Houthi rebels in Yemen are receiving advanced weapons from Iran.


SESAY: U.S. Secretary of State, Rex Tillerson, predicts that U.S. forces will remain inside Syria for the foreseeable future. He said keeping U.S. troops there is necessary to counter Iranian influence in the country plus assured that ISIS, Al-Qaeda, and other terror groups do not have a chance to regroup.

VAUSE: Tillerson also says he supports the U.N. plan to restore stability in the country notably without President Bashar al-Assad in power.

SESAY: Well the Iranian influence in the region also extends into Yemen for the past two years, Saudi Arabia has led a coalition against Houthi rebels in the Yemen that it says are backed by Iran.

VAUSE: (INAUDIBLE) say they can prove Iran's support for the Houthis, the evidence they say is a shuttered remnants of a missile intercepted and destroyed. This exclusive report from CNN's Nic Robertson.



NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Laid out in a Saudi military base, the remains of a ballistic missile fired from Yemen. Some of the missile fragment like these are tiny. The Saudi say they were scattered across the desert from where their antiballistic missile system shut this down as it was flying towards the capital.

CNN is the first news crew to be shown this Houthi rocket brought down last month about 15 miles from Riyadh. It is evidence officials here say Iran is backing the Yemeni rebels for increasing attacks targeting Saudi civilians.

It's the positioning of these valves on the side of the missile that convince the Saudis this is Iranian manufactured. They say they have to do a lot more testing on this scientific analysis of the metals, they have to look at the explosives, look at the electronic circuit boards here as well, examine the wiring, figure out for example, where the chips on this circuit board were made. Their immediate worry though, a missile hits the capital, population more than 7.5 million people.

COL. TURKI AL-MALKI, SAUDI-LED COALITION SPOKESMAN: The Houthis, he has to know if (INAUDIBLE) there is a red line.

ROBERTSON: What's the red line?

AL-MALIKI: We cannot declare the red line but if our vital point or our people, they have been affected because of the ballistic missile, the Houthi, he has to assume is going to be very painful to him.

ROBERTSON: It's not the only recent escalation that's worry the Saudis. This month, Saudi official say they stopped an Iranian aided Houthi attack on an oil tanker in the Red Sea. The Houthis vow more attacks may come. But both the shipping and missile attacks point to a potential dangerous overspill of Yemen's civil war.

The Saudis say they believe this massive missile was smuggled into Yemen in separate parts and the clue they say is in the welding here. Different types of welding covered with different shades of paint.

AL-MALIKI: The last been fired and intercepted 30 minutes ago or one hour ago, now we are reaching up to 88. The Kingdom of Saudi Arabia have received 88 ballistic missiles from the Houthi.

ROBERTSON: In the past few months, the pace of missile attacks has picked up with more fired at major cities. Officials won't say precisely what they'll do should their lines be crossed. Nic Robertson, CNN Riyadh, Saudi Arabia.


VAUSE: Next here on NEWSROOM LA, the allure and dangers of the digital currency craze.


VAUSE: Well Apple has just spent a multibillion-dollar commitment to the United States and President Trump is taking the credit.

SESAY: The company plans to create 20,000 jobs, invest $30 billion in U.S. facilities and pays $28 billion in taxes on cash it keeps overseas. Apple will build a new campus in a yet to be determined location.

VAUSE: On Twitter, President Trump said his policies in tax cut were the reason for Apple's decision. Adding, it's a huge win for American workers and the country.

Well, Wall Street celebrates record highs this week, it's a different story for so-called Cryptocurrencies, there's volatile digital currencies that make absolutely no sense to anybody.

SESAY: Bitcoin hit its lowest level since November on Tuesday and it is down almost 30 percent this weekend alone --

VAUSE: Because it's not worth anything.


SESAY: Part of the reason could be the intense regulatory scrutiny it's now getting --

VAUSE: Because it's not worth anything.

SESAY: -- causing investors to play it safe before placing any further bets. For more, we're joined by Jeffrey Sachs. Jeffrey is a professor of Economics and the Director of the Center for Sustainable Sustainable Development at Colombia University. Professor Sachs, welcome.


SESAY: The price of Bitcoin dropped below $10,000 on Wednesday and is now 50 percent off the Cryptocurrency's all-time high. How much of this is due to fears of government regulatory control versus the correction of a currency that has been overbought?

SACHS: There is no intrinsic value to Bitcoin. So there is no absolute reason to say why it should be worth $20,000 as it approached or $11,000 as it is approximately right now, or $1,000 as it was a year ago.

The whole run-up in Bitcoin value is arbitrary and the collapse or the reversal is perfectly plausible as well. The fact that China is cracking down on Bitcoin and South Korea which is an epicenter of Bitcoin speculation right now, Bitcoin fever is also talking about cracking down certainly is having an hour-to-hour and day-to-day effect on the price.

But if Bitcoin return to what it was a year ago where $1,000 or even less, you'd almost have to shrug and say there was no reason for it to go up, for it to go down as arbitrary as well. Why it has value, it's even a bit of a mystery, any value.

SESAY: Yes, no. I think that is a very, very salient point. One of the things I've been thinking about as I look at the value of Bitcoin and others, Ethereum and Ripple as well, other Cryptocurrencies for is this question of whether government regulation automatically is a bad thing.

I mean, you've already made the point there's no rhyme or reason really to -- the value ascribed to these cryptocurrencies but -- I mean, the fear is clearly moving some to selloff and I guess my question really more from your point of view as an economist is government regulation when it comes to currency is always a bad thing.

SACHS: Well there's two kinds of regulations that you can think about. One is that governments can really require that people pay their taxes in the national currency. Our currency is the U.S. dollar in the United States is a legal tender, Bitcoin is not.

So legal tender has an advantage and governments don't give up that advantage, that's in a way giving resources away from what the government is able to accrue by the monopoly right to issue its legal tender. So, that's not going to go away and I think these Cryptocurrencies have a hard time competing in the long-term with the legal tender of the nations.

The second reason for regulation is to stop illegal transactions to clamp down in the black market to stop the movement of money for terrorism or for other illegal activities and governments I think have a legitimate interest in doing that as well and the word on the street or online is that Bitcoin is used for a lot of illicit transactions. It's used for anonymity or pseudonymity, hiding the name of the real owners, it's used for dark purposes which are not recorded and governments are saying, "No, we don't want that. We want to have control over especially large transactions."

SESAY: Let me read one more piece, one more excerpt from your piece. You say, "As government's ties in their grip, Bitcoin prices will most likely fall and perhaps collapse, though the timing is impossible to judge. Bitcoin seems too prone to illicit use and too vulnerable to government regulation to survive for the long-term."

So given all that you said that you don't hold out much hope for Bitcoin and the end will come at its appointed time, I mean what would the fallout be from the possible collapse of Bitcoin? What might that look like? Might it have any implications for traditional financial markets somehow speculated?


SACHS: Either way, by tomorrow Bitcoin, could have gained value, have collapsed, our point is how arbitrary it is.


SACHS: And therefore, how vulnerable it is to reversal. One thing I've learned as an economist watching financial markets for decades is that when something looks too good to be true or you scratch your head and say, "Why did that happen?" Usually, there is no good reason.

So if you ask why did Bitcoin go up 10 times during the year 2017, probably because it's a bubble that will collapse. When you hear a bit of gabble, we talked about why it set its current value or people are confused but they say, "Boy, it's really an innovation, I need to jump in on that, that's also a sign of bubble and I haven't heard a coherent explanation of why it would have this value.

If it collapses, will it have a big effect? No. Not at this stage because even $200 billion of value which is a lot to get out of basically nothing is a lot of money but it's not a huge amount in the global scheme of things will make a lot of people very unhappy, it will make those who came in late to Bitcoin feel very bad, individuals will suffer and lose their money especially if their recent investors that are jumping in at the pop of the bubble that is bursting if that's indeed what's happening which I think is probably happening. But it would not have macroeconomic consequences most likely.

SESAY: Professor Jeffrey Sachs, it is such a pleasure to speak to you and to gain some of your insight into this world of virtual currency. It's fascinating. Thank you so much.

SACHS: Pleasure to be with you. Thanks a lot.


VAUSE: Told you it's worth nothing. SESAY: Yes. But it makes more sense when it comes from Jeffery Sachs.

VAUSE: Which is true. It's worth nothing.

SESAY: You know what -- yes. According to Jeffrey Sachs and John Vause, they're worth nothing. You're watching NEWSROOM LA -- what is that?


SESAY: I'm Isha Sesay.

VAUSE: I'm John Vause. We will be back right after this.