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ERIN BURNETT OUTFRONT

President Trump To Sign Bill ending Government Bill; W.H.: Trump Running The Show On Immigration, Not Stephen Miller; GOP Considers Releasing Intel Behind Memo Alleging FBI Abuse; Group: Porn Star's Alleged Hush Money Could Have Broken Laws. Aired 7-8p ET

Aired January 22, 2018 - 19:00   ET

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


[19:00:25] ERIN BURNETT, CNN ANCHOR: OutFront next, breaking news, the government up and running, but for how long? And why would Democrats believe the president on immigration when they say negotiating with him is like dealing with Jell-O.

Plus, hundreds of text messages between FBI agents in the Russia probe released to investigators five months of messages still missing. Republicans say they prove bias against Trump. Do they?

And reports of hush money to a porn star who had on a alleged relationship with Trump. Did this break campaign finance laws? Let's go OutFront.

Good evening. I'm Erin Burnett. OutFront tonight, shutdown victory. President Trump taking a victory lap as more than 30 Democratic senators joined nearly all Republicans in a vote to end the three-day government shutdown. The House voting moments ago to end the impasse. So it's done.

Now, the deal was done in Congress and it was done by senators. That's who made the deal. The president frankly was silent. And today, President Trump only issued a brief statement which said in part, "I am pleased the Democrats in Congress have come to their senses and now willing to fund our great military, border patrol, first responders and insurance for vulnerable children."

The short term spending deal came after Mitch McConnell, declared his "intention." Intention to hold a debate on the dreamers in the come weeks. That's it. Intention to hold a debate in a few weeks.

There is no formal mechanism to force McConnell to do this. It is simply his intention. And some progressives are livid saying the Minority Leader Chuck Schumer completely caved. Think about at this way. If McConnell lives up to his attention he will bring the dreamer issue to the floor. Is that a victory?

Well, why will Republicans work with Democrats on this issue when they have not done so before? Here's one thing we know. The president's current view on the dreamer issue, and in overall, the immigration issue is to link immigrants to murder. Here's his ad released this weekend.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: President Trump is right. Build the wall, deport criminals. Stop illegal immigration now. Democrats who stand in our way will be complicit in every murder committed by illegal immigrants.

(END VIDEO CLIP)

BURNETT: Illegal immigrants, murder, Democrats. If that's what the president thinks, it is very hard to imagine he would sign a legislation allowing the 700,000 plus dreamers who were brought to America as children through no choice of their own, to stay in America.

Now, here's what's amazing. You just heard that ad, right? So, it's not the president's voice. And the White House is trying to distance Trump from the ad saying it's being released by "outside group." The outside group is the Trump re-election campaign. And in case you did not see the full ad, let me just make it loud and clear who is behind it. Here's the last words in the ad.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm Donald Trump and I approve this message.

(END VIDEO CLIP)

BURNETT: OK. Case this point. Now the shutdown may be over. But in reality the countdown clock has simply been reset. Today's agreement is now up in 17 days. Pamela Brown is out front tonight at the White House. And, Pamela, what is the mood there tonight? You know, we thought the president may come out and speak after the vote, sort of take credit for this, but no.

PAMELA BROWN, CNN SENIOR WHITE HOSUE CORRESPONDENT: No. That's true. You would think that perhaps there would be some sort of victory lap from the president. We're told that that is not part of the plan right now. But inside the White House there is certainly a sense that the strategy worked. The strategy of saying that the immigration bit would be different from keeping the government running and funding it.

In fact, I was told by one White House official that throughout the day to day there had been congratulations exchanged with Marc Short, the legislative director. But of course, Erin, this could be a short lived victory depending on what happens over the next few weeks once funding runs out once again. It's unclear what could be worked out within that timeframe. But it is interesting to note, as you said, how low of a profile the president has kept over the last few days.

Now, White House officials say he was busy behind the scenes. He was making calls to Republicans. But you would think that perhaps now that this has been done, that the Senate was able to get the votes it needed that he might come out and face the cameras. We're told that's not going to happen. It's unclear as to why that is.

One official said that it's because, you know, they don't want it to make it about him. But it's still a little questionable. You heard Chuck Schumer, the minority leader say today, that the great negotiator has been on the side lines. We'll have to wait and see how active of a role he plays for the next few weeks. If the Senate does come up with a DACA deal that passes through the Senate, will the president be more active in terms of meeting the House Republicans on board. That's still an open question, Erin.

BURNETT: All right. Thank you very much Pamela. And OutFront now the Democratic Senator Jeff Merkley. Senator, thanks for your time.

SEN. JEFF MERKLEY (D), OREGON: You're welcome.

BURNETT: You stood your ground. You are not one of the Democrats that came around and voted for. You voted no, why?

[19:05:08] MERKLEY: Well because the defense department is saying they can't sign contracts with this lengthy CRs. They wanted to see something very short because also we know that the Republican leadership won't negotiate until the last two days during the continuing resolution, so therefore, what we're going to see is a couple weeks of wasted time. And I think the American people are very inpatient.

And certainly I wanted to send a message --

BURNETT: And another shutdown?

MERKLEY: Well, who knows what happens. I guess it depends on, you know, which Trump shows up. Is it going to be the Tuesday Trump with an angel on his shoulder who says I want to love immigration bill and bring me something and I'll sign it or is it going to be the Thursday version from two weeks ago who has Breitbart leading him around by the nose.

BURNETT: So let me ask you in this deal, right, the government was shut for three days. And from my understanding what has come out of it is exactly what the Republicans originally wanted plus McConnell saying he has the intention to bring the dreamer issue to the floor. Did Senator Schumer make a bad deal?

MERKLEY: Well it's a little more than that. Over the weekend what we had was a group of Republicans who went to Mitch McConnell and said we demand a debate on the floor. And he promised to them, which is much more important than promising to us, that he would do that with a neutral bill, with a full chance for both sides to offer amendments to basically create an immigration bill which means we do have the opportunity that we succeed in doing in 2013 where we came together, Democrats and Republicans to --

BURNETT: OK.

MERKLEY: -- forge a bipartisan bill. So that's the hope.

BURNETT: Right.

MERKLEY: That's the hope.

BURNETT: So why didn't you vote yes?

MERKLEY: Well, for the reasons I said, we need really a short term three-day and realize we repeatedly brought up this three-day bill to keep the government open but to force, you know, dedicated negotiations. Not two or two and a half weeks with doing nothing and then negotiations.

BURNETT: So you're saying it's only going to negotiate immigration for two or three days anyway, so force the two or three days right now? That's the point you're making?

MERKLEY: Absolutely.

BURNETT: OK.

MERKLEY: Look, this was all supposed to be done since October 1st of last year. The Republicans were too busy with that health bill destroying -- trying to destroy health care for some 30 million Americans and then the tax bill, which plundered the national treasury to deliver a trillion dollars to richest Americans. And they couldn't compel themselves to deal with the fundamentals of governing. A spending bill addressing children's health care, addressing community health centers --

BURNETT: OK.

MERKLEY: -- and the opioid crisis (ph).

BURNETT: So let's talk about this issue. Did you raise (INAUDIBLE). Sarah Sanders today pointed out that that is not only in this continuing resolution but that other things in it are also things that Democrats like you care deeply about. Here she is.

(BEGIN VIDEO CLIP)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: Look, I think Democrats realize that the position that they have taken frankly was indefensible and that they had to focus on first funding our military, protecting border patrol agents, funding vulnerable children through the CHIP program. These were things that they didn't disagree with. They agreed with everything in the CR.

(END VIDEO CLIP)

BURNETT: She brings up funding vulnerable children which is what you just brought up. I mean, doesn't she have a point?

MERKLEY: Well, our three-day resolution, continuing resolution also had the CHIP in it. And in fact, we've been fighting since last August to get this bill on the floor. This was forged and bipartisanship. It should have passed last September instantly but they held it out as a bargaining chip and really a shameful practice of holding 800,000 children hostage.

BURNETT: So you're saying that you believe Senator McConnell because he made this promise to members of his own party people including Jeff Flake and Lindsey Graham. Kamala Harris, your Democratic colleague though came out to the vote and she told reporters she does not believe McConnell made any real commitment to deal with immigration. Do you think she could be right or you truly do trust McConnell --

MERKLEY: No.

BURNETT: --that he's going to bring this to the floor and fair debate?

MERKLEY: I do not trust him at all. He has promised Lindsey Graham and Susan Collins, Jeff Flake. Made promises, commitments that he has not honored. However, realize Republicans control the presidency. Republicans control the Senate. The McConnell has decided to put the amendment box where we put amendments so they can be brought up on floor. He's decided to put his amendments in and lock the box so that no Democratic amendment can be considered. That's why we couldn't put up be bipartisan understanding we had with many members of the Republican Party for consideration.

And so in that type of dictatorial control --

BURNETT: OK.

MERKLEY: -- we realize our leverage is modest. We do hope to hold McConnell accountable for this promise but I'm not sure that we will succeed.

BURNETT: So, look, you're being honest here saying your leverage is modest. You don't know if can hold them to account. You don't trust him. So let me just put it to you straight, senator. The Congressional Black Caucus Chairman Senator Richmond today was very blunt. He said about Senate Democrats talking about you guys, they're getting their butts kicked. Is he right?

[19:15:04] MERKLEY: Well certainly we wanted to attach the Dream Act and opioids and the community health centers to a must pass bill that would get to the president's desk. We failed in that effort. Now we're on plan B, which is try to do what we did in 2013. Now, that plan didn't work in 2013 and we are going to carry that battle forward.

BURNETT: All right. Thank you so much senator. I appreciate. You're being so fine. Senator Merkley, thanks.

MERKLEY: Thank you.

BURNETT: And our senior political analyst Mark Preston is out front. Mark, I have to say, you know, at first he tried to say the promise was to Lindsey Graham by McConnell, so he's trying to be optimistic but then I thought he was even more frank later in the interview. I don't trust him. Our leverage is modest. I don't know if we'll get anything.

MARK PRESTON, CNN SENIOR POLITICAL ANALYST: Well, it's just a lot about how things are operating or not operating on Capitol Hill.

BURNETT: Yes.

PRESTON: But what is interesting he said we're going to hold them accountable. In some ways, I'm going to throw something out at your curve ball here, in some ways, Senate Democrats did House Democrats a big favor by agreeing to this, basically allowing House Republicans to pass this bill, you know, this CR, this continuing resolution for a couple more weeks. It allows the House Democrats, all of them who are up for re-election this year --

BURNETT: To vote again.

PRESTON: -- to take a stand and vote against it force.

BURNETT: That's interesting. So I guess it's a long term, short term strategy here when it comes to the midterm. So, let me ask you though, Mark. You know, the president. I played the ad, right, where it's illegal immigrants, we're going to hold Democrats responsible for every murder they commit. The White House is trying to say an outside group get it and then you hear Trump say "I'm Donald Trump and I approved this message." Just to make it loud and clear, that's the most recent thing he said about immigration. However, here is speaking specifically about dreamers earlier this month and one of the meetings Senator Merkley referred to and during the campaign to talk about the tale of two Trumps.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: It should be a bipartisan bill. It should be a bill of love, truly, it should be a bill of love and we can do that.

I will immediately terminate the President Obama's illegal executive order on immigration. Immediately.

We're talking about dreamers for other people. I want the children that are growing up in the United States to be dreamers also.

(END VIDEO CLIP)

BURNETT: All right, so Mark, look. I mean you put that together with the ad and you hear Senator Merkley saying we just don't know which president is going to show up.

PRESTON: He's right.

BURNETT: Which president is going to show up?

PRESTON: Well, who knows. I mean it depends what happens tonight. It depends what happens tomorrow. As someone said to me, a Republican said this to me who is no fan of Stephen Miller said, listen, Stephen Miller is the last person that whispers this his ear and that's why we're in this problem right now.

Republicans are not happy about this. If you look at polls right now we know that overwhelmingly the majority of Americans want the DACA issue fixed. They want to take care of these dreamers. However, there's that small group of hard liners, specifically Stephen Miller and some cases the chief of staff right now who are whispering in Trump's ear as well as the likes (ph) of Senator Tom Cotton and that's why he's stuck on this. But nobody knows how to negotiate with the president, Erin, because they don't know who's going to come to the door.

BURNETT: All right, Mark Preston, thank you very much. And Mark just said it, Stephen Miller and the other president's yes man. Are they the ones pushing hard line on immigration and frankly, winning?

Plus, new pressure tonight, to release a controversial memo in the Russia probe. Republicans claiming it proves FBI wrongdoing and bias to Democrats.

And Trump's bragging about low unemployment among African-Americans. Does he and will he get the credit at the voter box?

(COMMERCIAL BREAK)

[19:17:19] BURNETT: New tonight the influencer in chief. The White House is pushing back against the idea that it is the president's 32- year-old senior advisor, Stephen Miller who is running the show when it comes to the president's completely inconsistent stance on immigration. When asked if Stephen Miller has veto power over any immigration deal today, Sarah Sanders said this.

(BEGIN VIDEO CLIP)

SANDERS: The only person I'm aware of with veto power in this country is the president.

(END VIDEO CLIP)

BURNETT: Tried to laugh it off but it's not laughing matter. It's a serious question. You just heard that discussed by Senator Merkley and by Mark Preston. OutFront now Paul Begala, former White House Counselor to President Clinton and Steve Cortes who is head of President Trump Hispanic Council or was, I'm sorry, during the campaign. And also our newest political commentator. So Steve, welcome to CNN. Glad to have you.

STEVE CORTES, TRUMP CAMPAIGN'S HISPANIC ADVISORY COUNCIL: Thank you. Thank you for having me.

BURNETT: All right. Paul, let me start with you though. You just heard an opted for CNN.com on this topic just published. Sanders, you just heard her, say, Stephen Miller is not running the show. Do you buy it?

PAUL BEGALA, FORMER WHITE HOUSE COUNSELOR TO PRESIDENT CLINTON: No. We thought the show was going to be the apprentice. It turns out to be who's the boss. Look, I worked for president so honored to serve President Clinton in the White House.

Every president has to defer on some issues. Say if this was agricultural policies, and our president is a real estate development from Manhattan, he has an Agriculture Secretary Sonny Perdue, I think it would be wise for him to defer, frankly, to Secretary Perdue.

But this is the president's signature issue and on it he has said many times, that he would sign legislation to regularize the dreamer status and yet now he has flip-flopped according to Senator Lindsey Graham who is in th room because Stephen Miller, the staff yanks it back. So this is -- we know who's running the show down there and it's President Stephen Miller.

BURNETT: Steve.

CORTES: Well, I would say to that Paul as long as we're talking television shows, when you say President Stephen Miller, I would tell you that's as laughable and fictional as the show Barney Miller. And I'm be dating myself a little bit. You probably remember that. Erin might be too young.

BURNETT: I'm thinking of a purple dinosaur.

CORTES: But look, anyone who observes, which is everyone in America, who observes President Trump knows whether it was from the apprentice, candidate Trump, President Trump knows, this is not a man who easily cedes authority and control. And I have the privilege of knowing him personally.

So the idea that he would somehow give up control to a sort of second president or a pseudo president is I think honestly kind of laughable in its face. I think what's really going on here is the left realizes that they lost clearly in this showdown over the shutdown.

And so what are they trying to do now. They're trying to create a boogeyman in Stephen Miller. Somebody who is supposedly completely out of step of the American people. And so here's the problem. President trump ran unambiguously on a program of controlling the border and reforming our immigration system as candidate. He was elected primarily probably on that basis and now he's following through on it. So, he may be out of step with the mainstream media. He's not out of step lot of the Senate.

[19:20:15] BURNETT: All right. So, I understand you all disagree on the power that he has. I will point out even Republicans like Lindsey Graham are saying Stephen Miller has that power. But, let's just point that point that yank the power or not for a second because sometimes it's not reality but it's perception that matters.

Paul, Stephen Miller is getting the same sort of headlines that upset the president who previously (ph) when they applied to Steve Bannon, OK? Here are some of them. The Daily Beast, President Miller Shutdown. Business Insider, report some now referring to Miller as President Stephen Miller. Esquire, President John Kelly or co- president Stephen Miller. John Kelly, of course, the chief of staff. How damning are these headlines for Stephen Miller and John Kelly's future, Paul?

BEGALA: Well, there's some reporting already that General Kelly is looking for the exits which I would not blame him. He's an American hero. I don't agree with him on issues but he's an American hero and deserves our respect.

Mister Miller, I think slightly less of a hero. Actually he's a 32- year-old guy, worked on the Hill. That's fine. But what he has done, what's unprecedented -- I never saw Steve Bannon overruled the president like this. The president sat down. We all saw it on national television. It was remarkable meeting like for an hour. He sat in the cabinet room.

BURNETT: The Tuesday meeting, yes.

BEGALA: Senator Dianne Feinstein of California said would you sign which she call a clean DACA bill that is allow the dreamers to stay with nothing else attached. No strings attached. The president said yes. Let me read you, it's my column on CNN.com, exactly what he said. He said "Yes and then move to phase two which would be comprehensive immigration reform but I think we need to do DACA first." That's the president speaking to a senator making a deal until Steve Miller overruled it. I think it's almost -- it certainly unprecedented in the Trump White House.

CORTES: The idea that Stephen Miller, who I really respect. But the idea that he --

BEGALA: That makes one of us.

CORTES: That he's the puppeteer. Well, no, that just one of us actually about 40 million of us who voted for President Trump.

(CROSSTALK)

CORTES: That Stephen Miller laid out in any case.

(CROSSTALK)

CORTES: The idea that he is somehow this puppeteer, that he is Geppetto and that the president is Pinocchio, all right, is just absurdity.

(CROSSTALK)

CORTES: He's an important voice among many important voices. And by the way, Steve Bannon, good friend of mine, not the president. He would be the first to say there are many voices in the White House, often very disparate voices as they're within the Senate. There's one president. There's one indispensable man who has the mandate of American people who is changing this country by the way particularly when it comes to the economy for the better and ways. I think people in Washington can't even think about it.

BURNETT: OK. And yet, Steve, when it comes to immigration Steve Miller, not only is being credited by Democrats and Republicans with having the final word on this, whether you want to say overruled or convincing or whatever. I'm not going to weigh in the politics of it.

He is passionate about immigration. He actually is the only one who has come out and take questions on immigration from the press. So this is clearly his signature. So here he is in a combative exchange with our own Jim Acosta in the press briefing room.

(BEGIN VIDEO CLIP)

JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT: Aren't you trying to change what it means to be an immigrant coming into this country if you're telling them you have to speak English. Can't people learn how to speak English when they get here?

STEPHEN MILLER, SENIOR ADVISER TO PRESIDENT TRUMP: First of all, right now it's a requirement to be naturalized you have to be English.

ACOSTA: Are we just going to bring in people from Great Britain or Australia?

MILLER: Well, actually, I'm honestly to say, I am shocked at your statement that you think that only people from Great Britain and Australia would know English.

ACOSTA: Sounds like you're trying to engineer the rational and ethnic flow of people into this country.

MILLER: Jim, that is one of the most outrageous, insulting, ignorant and foolish things you've said. And for you that's still a really -- the notion that you think that this is racist bill is so wrong and so insulting.

(END VIDEO CLIP)

BURNETT: Combative to say the least, Paul.

BEGALA: To say the least in that sense I do think he's reflecting the president. It's a tragic thing. The majority of Americans believe our president is racist in the polling, right. Quinnipiac poll over 50% Americans thinks he prefers white people to non-white people. Why? Because he said so. He was in that infamous meeting in the Oval Office and he said we need more immigrants from Norway and not from unflattering comment countries in Africa, the Caribbean or Central America. That's just racist. When you say you want more white immigrants if you're (INAUDIBLE). So in that sense Mr. Miller is simply repeating the president's view which is tragically racist view.

CORTES: You know what's actually racist is telling minorities, is telling -- I say this as a Hispanic, is telling minorities at election time we value you and value your vote and forgetting them between.

BEGALA: We just shut down the government for them. How can you forget about them.

CORTES: No, did he for Hispanic Americans. No, did not. He shut down government or excuse me, the Democrats shutdown the government for illegal immigrants. And by the way, illegal immigrants have done tremendous harm to the economic prosperity of legal Hispanic Americans, of legal African-Americans.

[19:25:11] So what the president is doing is saying America first no matter your creed, no matter your color. Your economic prosperity -- BEGALA: Norway first he said.

CORTES: It's going to my first priority. And by the way, there's nothing racist about it. That's actually the opposite of racist. It's saying we're not here to exploit you. We're here to improve your lives, all right. And that's what President Trump has done. That's why the economy accelerating. That's why optimism bound (ph) in this country right now, that's why we have a bright future, whatever your color is.

BURNETT: All right. Thank you both. You'll get the last word because Paul you have the first. I appreciate both of your time.

BEGALA: Thank you, Erin.

BURNETT: And next, Republicans pushing harder tonight on that controversial memo alleging FBI wrongdoing in the Russia probe. So, why won't they let the FBI see it and respond?

And a new twist in the Stormy Daniels affair and her alleged relationship with Donald Trump. Did report of a pay off to the porn star violate campaign laws? My guest is going to court.

(COMMERCIAL BREAK)

BURNETT: New tonight in the Russia investigation, House Republicans ramping up their push to release information tied to a memo spearheaded by House Intelligence Committee Chairman Devin Nunes. The memo accuses the FBI of wrongdoing during the 2016 campaign. And the memo claims it's the same -- it says there was a bias towards democrats. Democrats say the memo is full of partisan talking points and it's nothing more than an attempt to distract from the Russia probe.

Manu Raju in out front. And Manu, obviously this memo on the hashtag release the memo has gotten national attention. What is the latest on the push to release it and what's in it?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, I am told, Erin, by key Republicans they are pushing very hard to release this memo very soon presumably as soon as next week when the House returns --

ERIN BURNETT, CNN HOST: -- gotten national attention.

[19:30:02] What is the latest on the push to release it and what's in it?

MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, I'm told, Erin, by key Republicans tonight that they are pushing very hard to release this memo very soon, presumably as soon as next week when the House returns to session after a recess that it's taking now.

Now, in this Republican memos, about four pages long and it alleges that the FBI acted improperly in obtaining warrants to surveil at least one associate of the Trump campaign by not telling the FISA judge who has overseen the warrant that they are using part of the justification that the Trump-Russia dossier that included those allegations that was compiled by that British agent, Christopher Steele.

This is something the FBI has requested to review this memo, full of these Republican allegations. But the chairman of the committee, Devin Nunes, will not give the FBI an opportunity to review this memo. I talked to one key Republican earlier tonight about why the FBI should not review it. This is what he said.

(BEGIN VIDEO CLIP)

REP. MARK MEADOWS (R), NORTH CAROLINA: I'm not in favor of looking at DOJ and FBI weighing in. They've been less than cooperative on a number of fronts.

RAJU: But they need to have a role in reviewing the memo first?

MEADOWS: No. They know more about what's in the memo than perhaps anybody else. At this point, I think they understand the wrongdoing that certainly the memo would highlight.

(END VIDEO CLIP)

RAJU: Now, Erin, to release the memo, the process is this. The House Intelligence Committee would vote to do that. It would go to the president who would decide whether or not to declassify it. If he does declassify it, then the memo is public.

BURNETT: All right. So, we got these questions about the memo. We also have this, lawmakers are seeing nearly 400 new pages of text messages involving FBI agent that was removed from Bob Mueller's team, what, from 50,000 messages. I mean, what do they show?

RAJU: Yes, these are showing. According to Republicans, they're saying that it shows an effort by these two FBI agents. They said that they were biased against then candidate Trump as part, as the investigation over Trump and Russia was taking shape. They say that it alleges that then attorney General Loretta Lynch knew they were not going to move forward on some of these charges against Hillary Clinton as part of that Clinton e-mail investigation, even as Lynch said publicly that she would accept whatever recommendation the FBI came to her with.

And Republicans are raising concerns about five months of worth of missing text messages that were not turned over to Congress. But tonight, Erin, Democrats are saying it's part of an effort to distract from the Russia-Trump investigation as Republicans are starting to pursue this new line of inquiry going forward.

BURNETT: All right. Manu, thank you very much.

And this is all important stuff. So, let's go now to retired FBI supervisory special agent, James Gagliano, and former ethics lawyer for George W. Bush, Richard Painter.

James, you're with me, so, let me start with you.

Let's talk about the text messages Manu referred to that we have. Put aside the ones that are missing. Let's talk about the ones we have first. As he points out, some of them seem to raise red flags in exchange between Peter Strzok and Lisa Page, the two FBI agents who were having an affair, where they suggest Loretta Lynch who was then the attorney general knew the conclusions of the FBI's investigation when she seemed to imply, oh, I'll accept whatever it is, right?

These texts, let's just be clear, between these two agents, were sent before Comey made the announcements of the outcome, so it's before anyone publicly knew and ostensibly before Loretta Lynch knew. Strzok writes to Page in part, quote: Timing looks like hell. It will appear to be choreographed.

It is her reply which seems to damning. She writes back, yes, it's real profile in courage since she knows no charges will be brought.

That's the operative text. How damning is it?

JAMES GAGLIANAO, CNN LAW ENFORCEMENT CORRESPONDENT: Does it look bad? Absolutely. And I think whatever end of the political continuum you come down on, you're going to read the tea leaves the way you want to.

Let's look at it chronologically. In June of 2016, you have that Phoenix tarmac meeting between Attorney General Lynch and the former president.

BURNETT: Yes.

GAGLIANO: That's what Comey uses as the basis for coming out on July 5th and doing something unprecedented, weighing in and saying, we're not going to bring charges but here are things that happened. The FBI has never done that before.

BURNETT: Right.

GAGLIANO: We have been around for 110 years. We always follow the evidence. We don't investigate with peer favor.

Erin, does it look bad? Absolutely. It absolutely looks bad. I think a lot of people are uncomfortable with it. And I think the only way we're going to get to the bottom is some folks are brought forward and asked to testify under oath.

BURNETT: What do you say, Richard?

RICHARD PAINTER, FORMER WHITE HOUSE ETHICS LAWYER FOR PRESIDENT GEORGE W. BUSH: Well, I think these two people maybe shouldn't be working for the government. They shouldn't be using their official texts, phone lines to be sending messages to each other, for having an affair or talking about politics or anything else.

But big picture is that there was absolutely no legal precedent for charging someone criminally in the context of what happened to Hillary Clinton. We've been over and over and over this. [19:35:00] And that's a 2016 story that they are trying to dig up in

2018. No legal precedent for charging someone for negligently handling classified information in an e-mail account like that. Zero.

It wasn't going to happen. We all knew they weren't going to be criminal charges. Second, the FBI did conduct itself inappropriately in the election. One week before the election, Director James Comey sent a letter to Capitol Hill, talking about a computer with Hillary Clinton e-mails on it.

BURNETT: Yes.

PAINTER: And that was used to spread the rumor that they are re- opening investigation. So, they threw the election for Trump. I thought the complaint with the office of special counsel against the FBI, but the notion that they were favoring Clinton is just laughable after what happened in 2016 that last week of October.

BURNETT: Which is a fair point.

PAINTER: Absolutely.

BURNETT: Now, let's talk about the texts we don't have, because I think the other issue here, James, is we have five months of texts that we do not have, OK? The start date for the missing messages is December 10, 2016, which is about a month after Trump won the election and it goes until May 17th, which is eight days after Trump fired Jim Comey and the day that Robert Mueller was named special counsel and everything in between, right?

GAGLIANO: Sure.

BURNETT: All the inappropriate phone calls to the Russian ambassador, the national security advisor, Michael Flynn. That's a strange time line, let's just say the least. They say these are missing because they were switching their Samsung phones. Have not answered clearly whether it's just these two people's messages that are missing or perhaps others.

Do they owe it to us to get to the bottom of that?

GAGLIANO: I think they do. And I think at a minimum, it fuels conspiracy theories. They look at this and they go five months. One month after the election through the transition, which is the greatest period of time we're looking at this counter intelligence investigation into Russia meddling into our election.

So, yes, it's going to have a huge impact. Under normal circumstances, and I'll disagree with Richard on this. On normal circumstances, I would leave this in the office of inspector general of the Department of the Justice. They are apolitical and they do great work. Under the current set of circumstances we're dealing with right now in our bifurcated country, I think a special prosecutor needs to be appointed.

BURNETT: Special prosecutor. Now, Richard, I want to give you chance to respond to that because when you put the missing text together with the memo, and the memo writes, this is coming from Republicans and they say it's information about the FBI. They won't give it to the FBI for the FBI to look at. Democrats say it's political who have seen it.

But when you put all this together, is there any reason to have a second special counsel or is that ceding to conspiracy theorists?

PAINTER: I would have a special counsel on this.

I have been a Republican for 30 years. And what I blame President Obama for is not having the FBI be on top of the situation with the Russians interfering in our election. It's not these two lovebirds. I mean, they can go off and do whatever they want to do. They aren't relevant.

What's relevant is the Russians interfering in our election. The Russians doing that --

BURNETT: But you're saying you would do a special counsel relate --

PAINTER: No. I think Congress, needs to investigate why the FBI wasn't on top of the Russians messing in our election in 2016. Why was the Obama administration so slow to deal with this? Were they afraid of being accused of interfering with election?

Well, you know, we had the Russians interfering in our election, the FBI was aware of it. They just sat around in 2016 and did nothing. That's I'm blaming the FBI for. It's not this stuff in this report. This is irrelevant to the big picture of what happened in 2016.

BURNETT: All right. I give you the last word because you have the first. I know you disagree on the FBI but --

GAGLIANO: The only inaccuracy in that is there was an investigation. Just because the president didn't push it at the time because he thought, President Obama thought it would tilt the election. There was an investigation --

BURNETT: Or he thought Hillary was going to win.

GAGLIANO: There's always -- exactly. There's always been an investigation into that. We worry about China, North Korea, we worry about Russia meddling in our election. So, that investigation was under way.

BURNETT: All right. Thank you both.

And next, new tonight, a complaint just filed with the Justice Department over Stormy Daniel and alleged hush money paid to silence her about an affair with Donald Trump. Did the reported payoff break the law?

And Trump taking credit for gains that benefit African-Americans. Does he deserve it? (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Personally, I don't see a lot of what he's doing that is affecting the black community.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[19:43:09] BURNETT: A developing story tonight. Did Donald Trump's lawyer break campaign finance laws when he reportedly paid a porn star hush money to keep her quiet about an alleged affair with Trump?

A watchdog group Common Cause says yes, filing a complaint today with the Department of Justice and the Federal Elections Commission.

Common Cause is pointing to a "Wall Street Journal" report that said Trump's lawyer Michael Cohen paid Daniels $130,000 a month before the election. According to "The Journal", Cohen set up a shell company to pay her.

OUTFRONT now, Common Cause vice president for policy and litigation, Paul Ryan.

Paul, thanks very much. I appreciate your time.

We spoke to a former FEC lawyer Larry Noble. He says this is a legitimate case. But Michael Cohen has just told me that your complaint is, quote, baseless along with the allegation that President Trump filed a false report.

What is your argument?

PAUL S. RYAN, VICE PRESIDENT FOR POLICY & LITIGATION, COMMON CAUSE: The argument is that Michael Cohen is an agent of President Trump. He's President Trump's personal lawyer. He was the head lawyer at the Trump Organization at the time of this payment to Stormy Daniels.

So, we allege two violations. One -- two different types of violations. One is pretty clear that the president or someone closely related to him spent $130,000 to influence the election. Hush money to prevent embarrassment of the president with an individual with whom he had an affair and -- who was talking to major media outlets at the time. And remember, this came about a week after the "Access Hollywood" tape went public.

So, violation number one, failure to disclose an expenditure by the Trump Campaign Committee in its receipt of an in-kind contribution in the amount of $130,000.

And the second violation that we allege is possibly having occurred is that if this money did not come from President Trump, there was an illegal campaign contribution, too. If it came from the Trump Organization, that's an illegal corporate contribution. If it came from some other individual, that's just an illegally excessively large contribution, well above the $2,700 -- [19:40:04] BURNETT: Right, because the $2,700 for campaign

contribution.

RYAN: Correct.

BURNETT: That's your logic there.

RYAN: Yes.

BURNETT: OK. As I said, you know, Michael Cohen is telling me your suit here is baseless. Obviously, Stormy Daniels has denied the affair via Michael Cohen, Trump's attorney. And Trump also denied via Trump's attorney.

I guess the question for you is, Paul, if you cannot prove it was hush money that was paid to her, does that take away your case? Do you have to prove it was money to shut her up?

PAUL: Well, first of all, we don't have to prove anything. The legal standard for filing a complaint like this one at the Federal Election Commission is it's there reason to believe the law was broken here? It's the FEC's job to investigate. They have subpoena power. It's the Department of Justice's job to investigate. They likewise have subpoena power.

So, we don't have to prove anything. But it certainly looks pretty obvious to me that this was hush money payment given the timing, given the reporting that Ms. Stormy Daniels was talking to major media outlets. This came above three weeks before the election.

BURNETT: She was negotiating with media outlets about appearing and, of course, she had given an interview a few years prior we've all now read to "In Touch" magazine with great detail about the alleged affair.

Paul, does it matter if Donald Trump knew about the money? Like if Michael Cohen went and did this without Trump's knowledge, does that take away any concern about the campaign if it was not done with campaign donations, the Trump's personal money?

RYAN: It definitely matters. If Michael Cohen was acting completely without Donald Trump's knowledge and authorization and completely without any knowledge or authorization by other Trump campaign committee staffers, if this was truly independent activity, then this will not be. This is not a contribution to the Trump campaign. And our complaint is invalid. It should not be prosecuted if there's no involvement of Trump or any Trump campaign people.

I highly doubt that was the case, though. Again, we're talking about Donald Trump's personal lawyer who seemingly orchestrated this whole thing. He set up the LLC. He put the money into the LLC. I'm pretty sure an investigation would reveal that Donald Trump was fully knowledgeable about this.

BURNETT: All right. And, of course, as you point out, it was done just before the election. Thank you very much, Paul. I appreciate your time.

RYAN: Thanks so much for having me.

BURNETT: And ext, some gains for African-Americans in the past year on unemployment which Trump is taking loud credit for. Does he deserve it?

And the White House spending out pictures of Donald Trump working. I don't know if that's what this is. OK. Can I just call it out people, sometimes you just have to say that what you see looks a little strange? Was he posing?

(COMMERCIAL BREAK)

[19:51:22] BURNETT: Tonight the president taking credit for the record low African American unemployment rate. Does he deserve the credit? And the most important question is, does it translate to votes?

Athena Jones is OUTFRONT.

(BEGIN VIDEOTAPE)

ATHENA JONES, CNN CORRESPONDENT (voice-over): At Frederick's Wine and Dine outside Cleveland, high hopes for the New Year.

FREDERICK PARKS, RESTAURANT OWNER: I think things are good.

JONES: Owner Frederick Parks who already employed 50 people says he plans to hire more in the coming months in part to help serve the roughly 2,000 new workers at an Amazon fulfillment center set to open in this majority black community.

PARKS: We should have a big creation of jobs from a neighborhood of chefs, bartenders as well as server. And hopefully even more management staff.

JONES: It's the kind of economic boost President Trump has been eager to take credit for, along with the surging stock market and a record low African American unemployment rate.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And we just reported African-American unemployment is at its lowest level in history. I'm very proud of that.

JONES: The jobless rate among black slipped to 6.8 percent in December, though part of that drop could be attributed to fewer people looking for jobs. And the black unemployment rate has consistently been about twice as high as the rate for whites.

Still, the latest good news as part of a long-term trend that began under President Obama, a fact not lost on Parks.

PARKS: I think president Trump is sitting if a position where things have been set and the road map was already there.

JONES: Parks says Trump does deserve credit for the record setting stock market.

PARKS: I have seen it definitely rise. So, it is only fair to give him the credit for that.

JONES: But what about other promises Trump has made?

PARKS: I don't see a whole lot. To me, he's made a lot of promises and a lot of things have not been answered.

JONES (on camera): Do you feel like the president genuinely wants to help the black community?

PARKS: That's a tough question for me to answer.

JONES (voice-over): Parks is one of the 88 percent of black Ohioans who did not vote for Trump in 2016 and he does not appreciate some of his rhetoric when talking about black people, including recently calling some African countries shithole nations.

According Shirley Stevens shares Parks' views on Trump.

SHIRLEY STEVENS, ACCOUNTANT: He's shown that he wants to tear a part of a nation.

JONES: Her tax preparing business was hit hard during the great recession but has bounced back. STEVENS: We regrouped and we've managed to grow.

JONES: But while she deserves Trump deserves credit for the skyrocketing stock market, Stevens doesn't think the president's policies, including the massive tax bill the White House touts as a middle class tax cut are going to help her.

STEVENS: I believe it's going to help the very rich.

(END VIDEOTAPE)

BURNETT: I mean, Athena, it's pretty incredible because they are giving credit but credit and votes, how big is the gap between the two?

JONES: I think it could be big. And as you mentioned, they are giving credit but on the stock market only. And those people who are saying this is the one bright spot for them for President Trump say they are not in the stocks. So they're not benefitting directly.

And we didn't find on balance a whole lot of people saying positive things about the president. We spoke to several black voters off camera, as well as the one we spoke to on camera. Not of them were Trump fans. None of them credit him with bringing down the black unemployment rate. And so, you are not seeing a lot of support growing at all for President Trump.

BURNETT: Which, of course, that's the bottom line that matters the most.

Athena, thank you so much.

And next, is this Donald Trump working hard during a shutdown?

[19:55:00] Is that what working hard looks like? Jeanne Moos is next.

(COMMERCIAL BREAK)

BURNETT: Tonight, some people are saying the president who loves to put on a show is doing just that during the shutdown. Here is Jeanne Moos.

(BEGIN VIDEO CLIP)

JEANNE MOOS, CNN NATIONAL CORRESPONDENT: There was a time when President Trump was proud of his messy desk.

TRUMP: Look at my desk. Papers.

MOOS: Whether in the Oval Office or Trump Tower.

TRUMP: Successful people have a lot going on on their desk.

MOOS: Not much going on in this photo released by the White House to show the president working during the government shutdown. Online critics weren't buying it. I do conduct most of my most important work with a phone in my hand and nothing on my desk while staring vacantly off into space.

Tweeted something else, this the photo you'd take if you're visiting the White House and they let you sit at the desk.

The president's desk was compared to the one used by that other genius, Einstein's desk, Trump's desk, you decide.

The White House probably decided to release the desk photo because everyone kept saying the president --

UNIDENTIFIED MALE: The president has been cut out --

UNIDENTIFIED FEMALE: Missing in action --

UNIDENTIFIED MALE: He's been absent.

UNIDENTIFIED MALE: I don't think that Donald Trump did a heck of a whole lot.

MOOS: One historian compiled photos of other president's desk. Nixon could have used a dozen paper weights.

But, hey, Trump wasn't the only president to have his desk sanitized for a photo-op.

Tempted by that vast, expansive empty desk space, critics on Twitter put stuff there. Stuff like a toy train, a toy phone, a cheese burger and Diet Coke. Some imagined he was calling his wife, hi, Melania, do you know where my hat is? Or maybe on hold with the White House comment line.

UNIDENTIFIED FEMALE: We look forward to taking your calls as soon as the White House re-opens.

MOOS: And once it reopened, the president can make his desk cluttered again.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BURNETT: The best part is the hat. That he put the hat on for the picture.

All right. Thanks to all of you for joining us. And don't forget you can watch OUTFRONT any time. You just have to go to CNN Go.

"AC360" begins right now.